Fidel Softech Ltd

Dear Shareholders,

Your directors are pleased to present the Nineteenth Annual Report of FIDEL SOFTECH LIMTED along with the Audited Financial Statement for the Financial Year ended March 31, 2024.

1. Highlights of Financial Performance

The Company has recorded the following financial performance, for the year ended March 31, 2024:

Cr

During the year, your Company experienced a remarkable increase in net revenue from operations, rising by 20% from 33.37 Cr to 40.09 Cr. The PAT attributable to the shareholders for FY 2024 was 6.06 cr registering a growth of 15% over the PAT of 5.39 cr for FY 2023.

A detailed analysis of the financials is given in the Management's discussion and analysis report that forms part of this

Annual Report.

2. SUMMARY OF OPERATION

Year 2023-24 was a pivotal year for Fidel, marked by second year of our listing on the NSE EMERGE platform. Throughout the year, Fidel maintained a strong growth trajectory, a reflection of the faith our investors have placed in us. The stock market showed positive movements, leading to a change in lot size in the latter half of the year.

Our topline revenues for the year reached 40.09 crore, with a PBIT of 8.02 crore, representing a 20% year-over-year growth in revenues. We generated positive cash flow from operations and demonstrated continuous growth quarter after quarter. Despite a slight dip in one quarter, we achieved sustainable growth over eight consecutive quarters, progressing from revenue of the 6.5 crore range to the 11-12 crore range this year. This growth enabled us to stabilize processes, focus on key hiring, and refine our operations, with the setup of our new Hyderabad office being a key highlight.

Fidel's growth was driven by effective sales, marketing, and account mining efforts. Our top 10+ clients contributed to 80% of our revenues, achieved through quality and timely delivery, as well as strong communication channels maintained by our sales and account management teams. Throughout the year, we participated in various industry events, kept our website updated with blogs, case studies, relevant social media posts, and periodic newsletters to reach clients and prospects.

We delivered various innovative projects using cutting-edge technologies such as AI/ML and Chat GPT wrappers. Last fiscal year, we conducted demos and POCs for clients developing AI engines needing multilingual support. We anticipate that investments in these demos/POCs will convert into billable revenues this year. Fidel has begun seeing AI-related engagements in areas such as multilingual prompt engineering, vetting multilingual AI output, and creating specialized wrappers around AI engines. Additionally, we continued our work in ServiceNow, Infor Syteline, managed services, and initiated engagements in Malaysia.

Operationally, Fidel remained process-oriented, technology-driven, and focused on continuous improvement to achieve smooth and efficient operations. This year, we implemented the Translation Management System (TMS) Plunet to optimize operations and delivery, enhancing our service to the global market.

Our human resources team played a crucial role in our growth by hiring key roles and team members, ensuring that HR practices kept employees happy and rewarded. Our HR policies and activities were designed to maintain a satisfied and functional team.

This year, Fidel received multiple awards and recognition for our innovative and niche services in the global market. Looking ahead, we anticipate a strong growth trend with the right sales and marketing efforts, established processes, and adherence to compliance. We will continue to focus on strategies that drive accelerated growth, balancing investment required for growth with profitability, and maintaining a clear focus on positive cash flow.

3. CHANGE IN NATURE OF BUSINESS, IF ANY

During the year, there was no change in the nature of business of the Company.

4. CHANGE IN CAPITAL STRUCTURE

During the year under review there was no change in the capital structure of the Company.

5. RESERVES

The Board of Directors have not proposed to transfer any amount to any Reserve. Therefore, entire profits of Rs. 6.06 cr. (before distribution of divided) earned during the financial year 2023-24 have been retained in profit and loss account.

6. DIVIDEND

Your directors are pleased to recommend a dividend of 1.10 per share for the current financial year.

7. 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 943.32 Lakhs towards Funding Working Capital requirements of the Company and 269.95 Lakhs towards General Corporate Purposes for the financial year ended 2023-24. The actual utilization since inception was 594.42 Lakhs in total and 618.84 Lakhs still remained unutilized. There was a shortfall in utilization of funds as the Company had undertaken a conservative approach to spending the funds raised. Fidel 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.

8. 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/

9. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

As on March 31, 2024, 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.

1. Mr. Sunil Kulkarni (DIN 00752937) is liable for retirement by rotation and, being eligible, offers himself for re-appointment at the ensuing Annual General Meeting.

2. Mrs. Neha Amod Joshi (ACS 24974) resigned as Company Secretary w.e.f 30th October, 2023 and Mrs. Sneha

Ratnaparkhi (ACS 42657) was appointed as Company Secretary and Compliance Officer with effect from 15^thDecember, 2023.

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 2023-2024.

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 2023-24 has been carried out and the same was shared with the Chairman of the Company and Nomination and Remuneration Committee of the Board.

10. 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.

11. MEETING OF BOARD OF DIRECTORS

The composition of Board of Directors is as follows-

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 5 Board Meetings were held during the financial year ended March 31, 2024, 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

12. COMMITTEES OF THE BOARD I. AUDIT COMMITTEE

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

Four (4) meetings of the Committee were held during the period ended March 31, 2024 on May 18, 2023, August 1,

2023, October 27, 2023 and February 6, 2024 ; detailed as under:

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.

II. NOMINATION AND REMUNERATION COMMITTEE

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. Mr. Pradeep Dharane, Independent Director

Two (2) meetings of the Committee were held during the period ended May 18, 2023 and on December 15, 2023, detailed as under:

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/ 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 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.

13. DETAILS OF SUNSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES

The Company neither has any Subsidiary, Joint Venture nor Associate Company.

14. INTERNAL FINACIAL CONTROL AND RIKS MANAGEMENT

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.

15. DIRECTORS RESPONSIBILITY STATEMENT:

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; 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, 2024 and of the profit of the Company for that period.

2. 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.

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

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

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

16. WHISTLE BLOWER MECHANISM

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.

17. DISCLOSURE REQUIRED UNDER SECTION 134(3) (e)

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/

18. AUDITORS a. Statutory Auditors-

The Statutory Auditors, M/s. Kirtane & Pandit, Chartered Accountants, Firm Registration No. 105215W/W100057, were

appointed to hold office for five years from April 1, 2021.

i. With reference to point no 2(h) (vi) in Report or other regulatory requirements of the Auditors Report, your directors wish to clarify that-

Due to technicality, adoption of system took twelve days.

ii. With reference to point no III (b) Annexure A to Independent Auditors Report, your Directors wish to submit that,

the company has entered into revised Memorandum Of Understanding(MOU) and henceforth the principle

Repayment and interest payment will be as per the said MOU.

The Unmodified opinion of Auditors on the Financial Statement of the Company for Financial Year 2023-24 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. b. Secretarial Auditors

The Company had appointed M/s Dakhawe Apte & Associates, Company Secretaries (UCN PH2022MH090400) as Secretarial Auditors of the Company for FY 2023-24, however, due to the death of Mr. Raghunath Apte, Partner,

Dakhawe Apte & Associates, the Secretarial Auditors expressed their inability to continue.

The Company appointed CS Yogesh Kandalgaonkar (FCS No. 6197, CP No. 20316) as Secretarial Auditor of the Company in the Board Meeting held on 8^th May, 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 2023-24.

The report of the Secretarial Auditor MR-3 for the financial year 2023-24 is enclosed as Annexure ‘III' to this Board's

Report, which is self-explanatory. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

C. Internal Auditors

The Company has appointed M/s 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 2023-24.

19. LOANS AND INVESTMENT

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. There were no new Loans or Guarantees of Investments 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).

20. RELATED PARTY TRANSACTION

All related party transactions (RPT) that were entered into during the Financial Year ended 31^st March 2024 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.

Also, there were no materially significant related party transactions during the year under review made by the Company with Promoters, Directors, or other designated persons. Thus, disclosure in Form AOC-2 is not required. However, the disclosure of transactions with related parties for the year, as per Accounting Standard-18 Related Party Disclosures is given in Note no 29 to the Financial Statements as on 31^st March 2024.

21. SECRETARIAL STANDARDS

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.

22. TECHNOLOGY AND CONSERVATION OF ENERGY

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.

23. FOREIGN EXCHANGE AND OUTGO

The Company had a total foreign exchange earnings and outgo as provided below during the year ended 31stMarch 2024:

Amount in

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 II 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 supported early-stage startups by contributing to Incubation centers and support the "Make in India" philosophy.

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.

26. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL ) ACT, 2013

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.

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 I to this report.

Disclosures as required under Section 197(12) of the Act read with the applicable rules and details as per Rule 5(2) of the Companies (Appointment and Remuneration of Personnel) Rules, 2014 are given as Annexure to this Report.

1. Cash Flow Statement for the financial year ended March 31, 2024, 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, 2024.

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 no 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.

30. REPORTING OF FRAUDS BY AUDITORS:

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.

31. ACKNOWLEDGEMENT

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.