Fidel Softech Ltd

Dear Shareholders,

Your directors are pleased to present the Twentieth Annual Report of FIDEL SOFTECH LIMTED along with the Audited Financial Statement for the Financial Year ended March 31, 2025.

1. Highlights of Financial Performance

The Company has recorded the following financial performance, for the year ended March 31, 2025:

Revenue Growth: The company experienced a significant revenue increase from 40.09 crore in FY23–24 to 55.04 crore in FY24 25, reflecting a robust demand for its services and successful market expansion.

EBITDA Improvement: EBITDA rose from 8.24 crore to 12.66 crore, indicating enhanced operational efficiency and effective cost management.

Profit Before Tax (PBT): PBT increased from 8.02 crore to 12.50 crore, with the margin improving from 20% to

22.72%, showcasing the company's ability to generate higher profits from its operations.

Profit After Tax (PAT): PAT grew from 6.06 crore to 9.33 crore, with the margin rising from 15% to 16.96%, reflecting effective tax management and improved profitability.

Earnings Per Share (EPS): EPS increased from 4.41 to 6.79, indicating enhanced shareholder value and consistent profitability.

Your Company has demonstrated exceptional financial growth in FY24 25 compared to the previous fiscal year. The significant increases in revenue, EBITDA, PBT, PAT, and EPS underscore the company's effective strategic initiatives, operational efficiency, and strong market positioning.

2. SUMMARY OF OPERATIONS

Revenue Growth: Achieved a significant revenue increase from 40.09 crore in FY2023–24 to 55.04 crore in

FY 2024 25, reflecting robust demand and market expansion.

Operational Excellence: Maintained a consistent profit margin, with PBT margin at 22% and PAT margin at 16.5%, demonstrating effective cost management and operational efficiency.

Strategic Initiatives: Continued focus on AI/ML-driven localization services, multilingual prompt engineering, and expansion into new markets, including Malaysia.

Technological Advancements: Implemented the Translation Management System (TMS) Plunet to optimize operations and enhance service delivery.

Human Resources: Focused on strategic hiring and employee satisfaction to support growth and maintain a functional team.

Industry Recognition: Received multiple awards for innovative and niche services in the global market.

Looking ahead, Fidel Softech aims to sustain its growth trajectory by: Leveraging AI and localization technologies to drive new business opportunities.

Expanding market presence through strategic partnerships and geographic diversification Focusing on operational excellence and process optimization to maintain profitability. Investing in employee development and satisfaction to foster a high-performing team.

With a solid foundation and strategic initiatives in place, Fidel Softech is poised for continued success in the coming fiscal year.

3. RESERVES

The Board of Directors have not proposed to transfer any amount to any Reserve. Therefore, entire profits of 9.33 cr. (before distribution of dividend) earned during the financial year 2024-25 have been retained in profit and loss account.

4. DIVIDEND

Your directors are pleased to recommend a dividend of 2 per share for the current financial year.

5. STATEMENT OF DEVIATION(S) OR VARIATION(S) IN ACCORDANCE WITH REGULATION 32 OF SEBI LISTING OBLIGATION AND DISCLOSURE REQUIREMENTS (LODR) REGULATION, 2015

In accordance with the offer document of the Initial Public Offer, the Company had estimated utilization of 455.46 Lakhs towards Funding Working Capital requirements of the Company and 163.30 Lakhs towards General Corporate Purposes for the financial year ended 2024-25. During the year the Company has utilized 149.57 Lakhs towards Funding Working Capital requirements and 92.89 Lakhs towards General Corporate Purposes.

Actual utilization since inception was 836.89 Lakhs in total and 376.37 Lakhs still remained unutilized. There was a shortfall in utilization of funds as the Company had undertaken a conservative approach of spending the funds raised. The Company believes that spending has to be made on the right opportunities and at the right time, rather than spending to meet targets. It was a strategic call to delay the spending.

6. ANNUAL RETURN

As per the Companies (Management and Administration) Amendment Rules, 2020 dated 28^th August, 2020, of the

Companies Act, 2013 (the Act), the Annual Return of the Company is uploaded on the website of the Company at https:// www.fidelsoftech.com/other-disclosures/

7. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

As on March 31, 2025, the Company has 6 Directors with an optimum Combination of Executive and Non-Executive including Women Director. The detailed profile of the Board of Directors is available on the website of the Company at this link: https://www.fidelsoftech.com/board-of-director/ . The constitution of the Board Committees is given elsewhere in this report.

The following changes have been made to the Board of Directors of the Company during the year: a. Mr. Shyamak Kulkarni (DIN 09552445) is liable for retirement by rotation and, being eligible, offers himself for re-appointment at the ensuing Annual General Meeting

Mrs. Prachi Kulkarni (DIN: 03618459), was re-appointed as the Managing Director of the Company by the Board of Directors for a further period of five years with effect from 1^st April, 2025.

The approval of the members for her re-appointment as Managing Director and the remuneration payable to her was duly obtained at the Extra-Ordinary General Meeting of the Company held on 14^th April, 2025, in accordance with the applicable provisions of the Companies Act, 2013, read with the relevant Rules framed thereunder and Schedule V to the said Act.

Based on the recommendations of the Nomination and Remuneration Committee, Dr. Girish Desai (DIN: 08328701) and Mr. Pradeep Dharane (DIN: 02313403), Independent Directors of the Company, have been re-appointed for a second term of two years, in accordance with the provisions of the Companies Act, 2013.

Dr. Apurva Joshi ceased to be an Independent Director of the Company upon completion of her first term of 3 years on 14^th April 2025.

The Board places on record its sincere appreciation and gratitude for the valuable contributions made by her during her tenure.

Upon the recommendation of the Nomination and Remuneration Committee, Mrs. Prajakta Kotasthane (DIN: 00713512) has been appointed as an Additional Director in the category of Independent Director of the Company with effect from 14^th April 2025.

Based on representations received from the Directors, none of the Directors of the Company are disqualified as per section 164(2) of the Companies Act, 2013 and rules made thereunder or any other provisions of the Companies Act, 2013. The Directors have also made necessary disclosures as required under provisions of section 184(1) of the Companies Act, 2013. All members of the Board of Directors and senior management personnel affirmed compliance with the Company's Code of Conduct policy for the financial year 2024-2025.

All Independent Directors of the Company have given a declaration under Section 149(7) of the Act, that they meet the criteria laid down in Section 149(6) of the Act. The Board is of the opinion that all the Independent Directors

of the Company possess the requisite qualifications, experience, expertise including proficiency in their respective fields of study.

Further, their names are included in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014.

In compliance with Schedule IV of the Companies Act, 2013 a meeting of the Independent Directors of the Company was

held during the year. The evaluation process for the Board of Directors pertaining to the Financial Year 2024-25 has been carried out and the same was shared with the Chairman of the Company and Nomination and Remuneration Committee of the Board.

8. FORMAL ANNUAL EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

The Board of Directors has carried out an annual evaluation of its own performance, board committees, and individual directors pursuant to the provisions of the Act and SEBI Listing Regulations. The performance of the board was evaluated by the Board after seeking input from all the directors on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc. The performance of the committees was evaluated by the Board after seeking input from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc. The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017. In a separate meeting of Independent Directors, performance of non-independent directors, the Board as a whole and Chairman of the Company was evaluated, taking into account the views of executive directors and non-executive directors. The Board and the Nomination and Remuneration Committee reviewed the performance of individual directors based on criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. At the board meeting that followed the meeting of the independent directors and meeting of Nomination and Remuneration Committee, the performance of the Board, its committees, and individual directors was also discussed. Performance evaluation of independent directors was done by the entire Board, excluding the independent director being evaluated.

9. MEETING OF BOARD OF DIRECTORS

1. Mr. Sunil Kulkarni, Chairman and Executive Director

2. Mrs. Prachi Kulkarni, Managing Director

3. Mr. Shyamak Kulkarni, Non-Executive Director

4. Mr. Pradeep Dharane, Independent Director

5. Dr. Girish Desai, Independent Director

6. Dr. Apurva Joshi, Independent Director

Total of 7 (Seven) Board Meetings were held during the financial year ended March 31 2025, detailed as under. The maximum gap between any two Board Meetings was less than 120 days.

The Board Meeting attended by each Director is as follows

Your Directors have constituted the Audit committee in accordance with Section 177 of the Companies Act, 2013 read with rule 6 of Companies (Meetings of Board and its Powers) Rules, 2014 on April 15, 2022. The members of the

Committee are as follows:

1. Dr. Apurva Joshi, Independent Director, Chairperson of the Committee

2. Mrs. Prachi Kulkarni, Managing Director

3. Mr. Girish Desai, Independent Director

Total of 7 (Seven) meetings of the Committee were held during the period ended March 31, 2025; detailed as under:

The Committee meeting attended by members are as follows:

1. Mr. Pradeep Dharane, Independent Director, Chairman of the Committee

2. Dr. Girish Desai, Independent Director- Member of the Committee

3. Mr. Sunil Kulkarni, Executive Director - Member of the Committee

Further, there were no such instances where the recommendation of the Audit Committee were not accepted by the Board during the financial year under review.

Your directors have constituted a Nomination and Remuneration Committee as required under the provisions of Section

178 of the Companies Act, 2013. The Nomination and Remuneration Committee consists of following members:

1. Dr. Girish Desai, Independent Director, Chairman of the Committee

2. Dr. Apurva Joshi, Independent Director

3. Pradeep Dharane, Independent Director

Total of 2 (Two) meetings of the Committee were held during the period ended March 31,2025; detailed as under:

The Committee meeting attended by members are as follows:

Mr. Shamak Kulkarni, Non -Executive Director has been appointed as a member of Nomination and Remuneration

Committee with effect from 10^th April, 2025.

Policy on Nomination and Remuneration for the Board and Senior Officials is available on the website of the Company at https://www.fidelsoftech.com/corporate-policies/

1. Dr. Girish Desai, Independent Director- Chairman of the Committee

2. Mr. Pradeep Dharane, Independent Director- Member of the Committee

3. Mrs. Prajakta Kotasthane Independent Director- Member of the Committee

4. Mr. Shyamak Kulkarni, Non-Executive Director - Member of the Committee

III. STAKEHOLDERS RELATIONSHIP COMMITTEE

Your Board has constituted Stakeholders Relationship Committee under the provisions of Section 178(5) of Companies

Act, 2013 on April 15, 2022. The Committee consists of following members:

1. Mr. Pradeep Dharane, Independent Director, Chairman of the Committee

2. Mrs. Prachi Kulkarni, Managing Director

3. Dr. Apurva Joshi, Independent Director

The Stakeholders Relationship Committee is Reconstituted wef 14th April 2025 as under

1. Mrs. Prajakta Kotasthane Independent Director- Chairman of the Committee

2. Mr. Pradeep Dharane, Independent Director- Member of the Committee

3. Mrs. Prachi Kulkarni, Managing Director- Member of the Committee

No Meeting held during the year under report.

This Committee is primarily responsible for reviewing all matters connected with the Company's transfer/ transmission of securities and redressal of shareholder's / investor's / security holder's complaints.

In September 2024, the company established a wholly owned subsidiary, FidelSoft Inc., based in Austin, USA." Further details are mentioned in the form AOC-1 attached as Annexure I.

PERFORMANCE OF SUBSIDIARIES, ASSOCIATE AND JOINT VENTURE COMPANIES AND THEIR CONTRIBUTION

FidelSoft Inc., a wholly owned subsidiary of the Company, was incorporated in September 2024 and has recently commenced its business operations. The financials have been consolidated, and the subsidiary has already contributed approximately 0.62% to the overall turnover. The Company remains optimistic about the growth potential of the subsidiary and is confident of its positive contribution to the topline in the current financial year.

The Company has in place adequate internal financial control commensurate with its size and operations. During the year, no reportable material weakness was noticed.

The Company has an annual Internal Audit plan in place specifying the scope of the work, independence, and responsibility of the Internal Auditors. The periodic Internal Audit reports are reported to the Audit Committee along with Management response.

The Company has developed and implemented a risk management framework which identifies major risks which may threaten the existence of the Company. A risk mitigation process and measures have also been formulated.

Pursuant to Section 134(3) (c) of the Companies Act, 2013 the Board of Directors of the Company to the best of its knowledge and ability confirm that:-

1. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

2. they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31,2025 and of the profit of the Company for that period.

3. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4. they have prepared the annual accounts on a ‘going concern' basis.

5. they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively.

6. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Pursuant to Regulation 34 (2) (e) read with Schedule V of SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015, Management Discussion & Analysis Report for the year under review forms the part of this report and is marked as

Annexure II, to this report.

The Company has in place a Whistle Blower Policy establishing a vigil mechanism, to provide a formal mechanism to the Directors, employees, and others to report their concerns about unethical behavior, actual or suspected fraud or violation of the Company's Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail such mechanism and provide for direct access to the Chairman of the Audit Committee. Whistle Blower policy is available on the website of the Company at this link https://www.fidelsoftech.com/corporate-policies/

There were no complaints received under this mechanism during the Financial Year under review.

The Board has adopted a Board Diversity Policy which sets the criterion for appointment as well as continuance of Directors, at the time of re-appointment of director in the Company. As per the policy, the Board has an optimum combination of members with an appropriate balance of skill, experience, background, gender and other qualities of directors required for the effective functioning of the Board.

The Nomination & Remuneration committee recommends remuneration of the Directors, subject to overall limits set under the Act, as outlined in the Remuneration Policy. The Nomination and Remuneration Policy is available on the website of the Company at https://www.fidelsoftech.com/corporate-policies/

The Statutory Auditors, Kirtane & Pandit LLP Firm Registration No. 105215W/W100057, were appointed to hold office for five years from April 1, 2021.

The Unmodified opinion of Auditors on the Financial Statement of the Company for Financial Year 2024-25 is enclosed along with this report. There were no cases of fraud detected and reported by the Auditor under Section 143(12) during the financial year.

The Company has appointed CS Abhijit Dakhawe (FCS No. 6126, CP No. 4474) as Secretarial Auditor of the Company in the Board Meeting held on 7th November, 2024 in accordance with the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 for the Financial Year 2024-25.

The report of the Secretarial Auditor MR-3 for the financial year 2024-25 is enclosed as Annexure ‘III' to this Board's

Report, which is self-explanatory. The Secretarial Audit Report has following remarks

1. During the year under audit, the company submitted form FC-GPR in respect of allotment to overseas investor made in year 2007, the same was rejected by Reserve Bank of India / AD Bank i.e. Bank of India for want of correct FIRC and KYC. Further, Bank of India vide its letter dated 7th December 2024 has expressed its inability to issue original FIRC and KYC as transaction being too old. As informed to me by the management, the Company has decided to approach Reserve Bank of India for compounding the delay in the said matter.

The Company acknowledges the audit observation regarding the delayed submission of Form FC-GPR for the allotment made to an overseas investor in the year 2007. Due to the considerable time elapsed since the transaction, the Authorised Dealer (AD) Bank Bank of India has expressed its inability to issue the original

FIRC and KYC documents, which are essential for processing the form. Consequently, the submission was rejected by the Reserve Bank of India (RBI).

Considering the circumstances and as per current regulatory requirements, the Company has decided to initiate compounding proceedings with the RBI to regularize the delay in compliance. Necessary documentation and applications are in the process of being prepared for submission to the Foreign Exchange Department of the RBI.

The Company remains committed to full compliance with all applicable FEMA regulations and will take appropriate measures to prevent the recurrence of such delays in the future.

2. During the course of our Audit, we have observed that there are occasional delays in reporting certain required disclosures on NSE Emerge platform as required under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. Management Response: We acknowledge the observation regarding occasional delays in reporting certain required disclosures on the NSE Emerge platform. The Company remains committed to complying with all regulatory requirements under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

We have since taken corrective steps to strengthen our internal compliance framework, including the implementation of a compliance calendar, enhanced training for relevant personnel, and periodic internal reviews to ensure timely and accurate disclosures.

Going forward, we are confident that these measures will help us ensure full compliance with all applicable listing regulations in a timely manner.

The Company has appointed Milind Sangoram and Co, Chartered Accountants, Pune (Membership No 151555) as the Internal Auditors of the Company under the provisions of section 138 of the Act, for conducting the internal audit of the Company for the financial year 2024-25.

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

During the year, the Company incorporated a wholly-owned subsidiary in the United States in September 2024 with an initial investment of USD 50,000.

There were no new Loans made by the Company in the current Financial Year.

The details of all loans, guarantees and Investment are available in the Register maintained under Section 186 of the Act, which is available for inspection during business hours on all working days (except Saturday and Sunday).

All related party transactions (RPT) that were entered into during the Financial Year ended 31^st March 2025 were at an arm's length basis and were in the ordinary course of business. Therefore, the provisions of Section 188 of the Act were not applicable.

In compliance with the provisions of the Act, each transaction as entered by the Company with its related parties is placed before the Audit Committee. Prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions which are foreseen and repetitive in nature. The transactions pursuant to the omnibus approval so granted, are audited and a detailed quarterly statement of all such RPTs is placed before the Audit Committee for its review.

The details of transactions with Related Parties in the Form No. AOC-2, as prescribed by the Rule 8(2) of the Companies (Accounts) Rules 2014 are attached to this report and marked as Annexure-IV.

The Company generally complies with all applicable secretarial standards, issued by the Council of the Institute of Company Secretaries of India and made applicable as per Section 118(10) of the Act.

Details of Technology Absorption are given elsewhere in the report. We recognize the urgent need to address environmental challenges, and we have implemented several initiatives to reduce our ecological footprint.

The Company had a total foreign exchange earnings and outgo as provided below during the year ended 31st March 2025: ,

Your company has always believed in giving back to society in a meaningful way. The Company has formulated a Corporate Social Responsibility Policy and the Corporate Social Responsibility Committee of the Board oversees formulating, implementing, monitoring and reviewing the impact of the Corporate Social Responsibility (CSR) initiatives of the Company.

A detailed report on the Corporate Social Responsibility is enclosed as an Annexure V to this report.

Your Company firmly believes in the importance of Corporate Social Responsibility (CSR) and strives to make a positive impact on society and the environment. We believe in empowering communities and making a meaningful difference in people's lives. We have partnered with local educational institutions and organizations to provide educational opportunities and skill development programs for underprivileged communities. By focusing on education, we aim to empower individuals and enhance their employability.

We are committed to fostering a diverse and inclusive work environment. We promote equal opportunities, respect for all individuals. Our diversity and inclusion initiatives aim to create a workplace that celebrates differences and ensures fairness and equality.

Factors such as a pleasant and safe working environment, fair wages, and opportunities for growth and development contributed to a healthy attrition rate. The details of various Human Resource initiatives are provided elsewhere in the report.

Your Company has complied with the provisions relating to constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. (POSH Act). During the year under review, there were no cases filed pursuant to this Act. Training was conducted to raise awareness for rights and obligations, code of conduct under POSH Act.

The Internal Committee is committed to ensure that all the provisions and best practices under the POSH Act are implemented in law and spirit.

Your Company has its fully functional website LangTech for AI-ML IT Services Custom Software Dev - Fidel which has been designed to exhibit all the relevant details about the Company. The site carries a comprehensive database of information of the Company including the Financial Results of your Company, Shareholding Pattern, details of Board Committees,

Corporate Policies/ Codes, business activities and current affairs of your Company. All the mandatory information and disclosures as per the requirements of the Companies Act, 2013, Companies Rules, 2014 and as per Regulation 46 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

Since the Company is listed on NSE Emerge, the Company is exempt from applicability of certain regulations pertaining to ‘Corporate Governance' under Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements)

Regulations, 2015.

The Company has been practicing sound Corporate Governance and takes necessary actions at appropriate times for enhancing and meeting stakeholders' expectations while continuing to comply with the mandatory provisions and strive to comply non-mandatory requirements of Corporate Governance.

Report on Corporate Governance Practices and the Auditors Certificate regarding compliance of conditions of Corporate Governance and certification by CEO/Whole time Director & CFO is not applicable to your Company as per regulation 15(2) (b) of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.

The details of Managerial Remuneration, Key Managerial Personnel and employees of the Company as required under

Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of

Managerial Personnel) Rules, 2014 has been set out as Annexure VI to this report.

1. Cash Flow Statement for the financial year ended March 31, 2025, is attached to the Financial Statements.

2. No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statement relates and the date of this report.

3. No significant and material order has been passed by the regulators, courts, tribunals impacting the going concern status and Company's operations in future.

4. There is nothing report under the Insolvency and Bankruptcy Code, 2016 this for the Financial Year ended March 31, 2025.

5. Nil Disclosures: Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

I. The Company has not accepted any deposits during the year under review.

II. The Company is not required to maintain Cost Accounting records as per Rule 8(5)(ix)(d) of the Companies (Accounts) Rules, 2014.

III. There were no shares Issued (including sweat equity shares) to employees of the Company under any scheme.

IV. The Company has subsidiary and neither the Managing Director nor the Whole-time Directors of the Company

receive any remuneration or commission from any of its subsidiaries.

V. There was no instance of a difference between amount of the valuation done at the time of one-time settlement

and the valuation done while taking loan form the Banks or Financial Institutions.

During the year under review, neither the Statutory Auditors nor the Secretarial Auditor have reported to the Audit Committee, under Section 143(12) of the Act, any instances of fraud committed against the Company by its officers or employees, hence, there is nothing to be mentioned in the Board's report in this regard.

As we move forward, we remain committed to transparency, accountability, and delivering sustainable returns on investments of our shareholders. Your feedback and insights continue to shape our strategies and guide our decision-making processes. We value your perspectives and will always strive to uphold the highest standards of corporate governance.

The Directors express their gratitude to the employees and partners for their dedication and contribution to the company's success. We also extend our appreciation to our valued customers, suppliers, and shareholders for their continued support and trust.

We are excited about the future and the opportunities it holds. Together, we will continue to build a brighter and more prosperous future.