Fidel Softech Ltd Management Discussions

MANAGEMENT DISCUSSION ANALYSIS REPORT

The fiscal year 2025-2026 marked the fourth year since Fidels listing on the National Stock Exchange SME platform and represented a significant milestone in the Companys growth journey. Over the last sixteen consecutive quarters, Fidel has consistently delivered sustained quarter-on-quarter growth, reflecting the strength of its business model, execution capabilities, and long-term strategic vision. At the time of listing, the Company had recorded revenues of approximately INR 25 Crores and had embarked upon an ambitious vision of achieving "5X growth in 5 years." We are proud to state that Fidel has surpassed INR 100 Crores in revenue within just four years, achieving this milestone ahead of schedule. During the year, the Company also completed three strategic acquisitions and delivered an impressive 85% year-on-year growth in revenue. Despite this strong operational and financial performance, the Companys stock price remained impacted due to broader geopolitical uncertainties and overall market disruptions. This Management Discussion and Analysis (MD&A) report provides a comprehensive overview of the Companys performance, key factors influencing financial outcomes, and managements strategic outlook for the future.

1. GLOBAL & INDIAN ECONOMY

1.1 Global Economy-FY 2025-26

The global economy during FY 2025-26 continued to navigate a complex and evolving landscape shaped by geopolitical tensions, economic fragmentation, persistent inflationary pressures, elevated crude oil prices, and rapid technological disruption driven by Artificial Intelligence (AI). Uncertainty across major economies, coupled with supply chain realignments, changing trade dynamics, and cautious business sentiment, influenced investment decisions and growth trajectories worldwide.

While inflation moderated in several markets, it remained above desired levels in some economies, impacting consumer spending patterns, interest rate expectations, and business operating costs. Rising energy prices and continued geopolitical developments further added pressure on global markets, particularly emerging economies.

FY 2025-26 also represented a significant inflection point in the ? adoption of Artificial Intelligence, with enterprises globally moving - beyond experimentation and increasingly integrating AI into core business strategies. Organizations across industries accelerated investments in Al-led transformation initiatives focused on improving operational efficiency, automation, customer experience, data-driven decision-making, and productivity. This transition from AI exploration to enterprise-scale adoption is expected to create significant opportunities for technology and digital service providers as businesses increasingly seek specialized capabilities to implement, manage, and scale Al-driven solutions.

1.2 Indian Economy - FY 2025-26

The Indian economy demonstrated resilience and continued to remain one of the fastest-growing major economies globally during FY 2025-26, supported by strong domestic consumption, sustained infrastructure investments, digital transformation initiatives, and a growing focus on innovation-led growth. Despite global uncertainties, India maintained relative economic stability due to its diversified economic base, improving business environment, and policy measures aimed at strengthening manufacturing, technology adoption, and ease of doing business.

Indias technology sector continued to play a critical role in the countrys economic growth story, supported by increasing demand for digital transformation, cloud adoption, cybersecurity, artificial intelligence, automation, and industry-specific technology solutions. Enterprises across sectors continued to invest in modernization initiatives, creating opportunities for IT services companies with strong domain expertise and specialized capabilities.

At the same time, FY 2025-26 marked a period of transition for the Indian IT industry. The rapid advancement of AI and automation technologies created discussions around evolving job roles, changing skill requirements, and new models of technology delivery. While these developments introduced short-term uncertainty in certain areas, they also created opportunities for organizations to build deeper expertise in AI, data engineering, cloud technologies, cybersecurity, and domain-driven solutions. The industry is expected to witness a shift toward higher-value services, increased automation-led productivity, and demand for specialized talent capable of supporting next-generation digital initiatives.

Looking ahead, the global and Indian economic outlook remains closely linked to the pace of AI adoption, geopolitical developments, inflation trends, energy price stability, and enterprise investment cycles. As businesses worldwide transition toward more resilient, technology-enabled operating models, companies with strong digital capabilities, industry expertise, and the ability to deliver innovative solutions are well positioned to benefit from emerging growth opportunities.

2. INDUSTRY STRUCTURE AND DEVELOPMENTS

Fidel Softech is a technology-led consulting and services company that enables enterprises to expand globally through a unique combination of language technology, digital transformation, data-driven solutions, and AI- powered innovation. The global language localization and language technology market has continued its strong growth trajectory and is now estimated to exceed USD 90 billion ( Source is The Business Research Company (TBRC)), driven by increasing globalization, multilingual digital content, software internationalization requirements, and the rapid adoption of Artificial Intelligence across industries.

As organizations accelerate their digital transformation initiatives, there is growing demand for integrated solutions that combine language expertise, data intelligence, automation, and advanced technology implementation. Enterprises are increasingly investing in multilingual customer experiences, Al-enabled applications, data modernization, analytics platforms, cloud transformation, and intelligent automation to enhance operational efficiency and global market reach.

Fidel has strategically evolved its service portfolio to address these emerging market opportunities. By combining deep expertise in language technologies, enterprise software engineering, data engineering, analytics, and AI implementation, the Company delivers end-to-end solutions that help clients modernize operations, improve customer engagement, and scale globally.

3. SEGMENT-WISE / PRODUCT-WISE PERFORMANCE

During FY 2025-26, Fidel Softech continued to strengthen its position across both its core business segments—Language Localization & Engineering Services and IT & Consulting Services. The Company successfully executed several large-scale and complex projects, demonstrating its domain expertise, delivery excellence, and ability to scale operations across geographies and industries.

3.1 Language Localization & Engineering Services

The Localization business witnessed strong momentum during the year, supported by increasing demand for multilingual content, software globalization, digital learning, and Al-driven language solutions.

Fidel successfully delivered localization projects involving complex language combinations such as Dutch-Chinese, Papiamento-English, Arabic-Japanese, English-Bisaya, and several low-resource languages, reinforcing its capability to manage diverse linguistic and cultural requirements.

The Company completed a large-scale medical devices localization project involving translation, desktop publishing (DTP), and quality assurance of over 2,000 pages into 28 languages across Asia, Europe, and Africa. This project demonstrated Fidels ability to manage highly regulated multilingual content while maintaining quality and consistency across markets.

In the education sector, Fidel commenced localization of teacher training and educational content for a state education board, helping improve accessibility and learning outcomes for regional educators through localized learning materials.

The multimedia localization practice recorded significant growth with projects involving transcreation, dubbing, subtitling, and multimedia adaptation. Fidel successfully localized two video series into Hindi and partnered with a leading e-learning content provider to localize more than 500 training videos into Spanish within a compressed timeline of eight weeks. The project encompassed transcription, translation, voice-over generation, on-screen text localization, and final video integration.

The Company further strengthened its leadership in Japanese language services by delivering over 5,000 pages of high-speed railway engineering documentation and technical drawings, amounting to approximately three million Japanese characters within a three-month period. Additionally, Fidel completed a large-scale Manga publishing localization assignment involving more than three million Japanese characters within a similarly demanding timeframe.

Fidel also demonstrated its scalability by processing over four million words in a single month for a major client in the real estate sector across multiple Indian languages. The project highlighted the Companys ability to combine linguistic expertise, technology platforms, and project management capabilities to deliver high-volume multilingual content within stringent timelines.

The Company continued its engagement with leading digital content and OTT ecosystem players by providing localization and linguistic testing services for mobile applications, content metadata, user interfaces, and streaming content, helping clients enhance user experience and linguistic accuracy across global markets.

3.2 IT & Consulting Services

The IT & Consulting Services segment continued to expand its customer base and strengthen recurring revenue streams through long-term managed services and specialized consulting engagements.

During the year, Fidel added two new UK-based customers, contributing to recurring business opportunities and strengthening its presence in the European market.

The Company successfully delivered specialized consulting and training services on the Financial Information exchange (FIX) Protocol for the Baku Stock Exchange, Azerbaijan, reaffirming its expertise in capital markets technology and financial systems consulting.

Fidel continues to strengthen its position as a trusted managed services partner for global enterprises operating in Japan. The company provides server replacement and ongoing infrastructure maintenance services for the Japanese subsidiary of a leading Indian banking institution.

In addition, Fidel delivers comprehensive bilingual (Japanese-English) Level 1 and Level 2 end-user support services to a major global insurance organization in Japan, supporting a workforce of more than 6,000 employees. The scope of services includes service desk operations, support for call center personnel, endpoint lifecycle management, device migration and upgrade projects as well as cloud and data center support services.

Over the years, Fidel has successfully established a robust onsite managed services practice in Japan, encompassing endpoint support, cloud infrastructure management, device lifecycle services and cybersecurity operations. Building on this foundation, the company is expanding its delivery capabilities from India to provide scalable, cost-effective managed services to global clients across multiple geographies. This strategic expansion strengthens Fidels ability to offer integrated global delivery models while deepening its expertise in digital workplace services, cloud operations and cybersecurity support.

The Company continues to leverage its deep understanding of Japanese business culture, bilingual delivery capabilities, and technology expertise to support customers in their digital transformation initiatives, managed services requirements, and enterprise technology modernization programs.

Overall, both business segments delivered consistent growth during FY 2025-26, supported by strong customer relationships, diversified industry exposure, expanding service offerings, and continued investments in technology, Al-enabled solutions, and multilingual delivery capabilities.

These achievements underscore Fidels commitment to delivering high-quality services and expanding its reach across different geographies and industry segments.

6. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

Financial Year 2025-26: A Year of Transformation, Scale and Strategic Expansion

FY 2025-26 was a defining year in Fidels growth journey. The Company successfully crossed the ?100 crore revenue milestone while maintaining healthy profitability, positive cash flows, and a disciplined approach to growth. The performance reflects the strength of Fidels diversified business model, expanding international footprint, strong customer relationships, and continued focus on operational excellence.

The year witnessed robust demand across the Companys core service lines, including localization, managed services, digital transformation, enterprise technology solutions, and consulting services. Growth was driven by a combination of deeper engagements with existing customers, successful acquisition of new clients, expansion into new markets, and the integration of strategic acquisitions.

A key contributor to the Companys performance was the continued expansion of its strategic customer base. Fidel ended the year with approximately 35 strategic clients, with the top 12 customers contributing nearly 60% of total revenue. This reflects both the strength of long-term client relationships and a healthy diversification of revenue sources. The Company also successfully onboarded more than 60 new clients during the year across multiple geographies and industry segments, creating a strong foundation for future growth and recurring business opportunities.

The Companys international business continued to gain momentum, particularly in Japan and the United States. These markets remain central to Fidels long-term growth strategy and contributed significantly to overall revenue expansion. The Japan business, in particular, continues to be a strategic differentiator owing to the Companys deep market understanding, specialized localization expertise, long-standing customer relationships, and high entry barriers that limit competition. During the year, the Company witnessed increasing demand for managed services, digital transformation initiatives, and Al-related consulting engagements from customers in the region.

Strategic Acquisitions

To further strengthen its global presence and accelerate growth, Fidel executed a series of strategic acquisitions during FY 2025-26. In June 2025, the Company acquired 100% ownership of Fidel Technologies KK, Japan, establishing it as a wholly owned subsidiary and strengthening its direct operational presence in one of its most important markets. Subsequently, Fidelsoft Inc., the Companys wholly owned U.S. subsidiary, acquired Techvine Consulting LLC, USA, enhancing the Groups customer reach and delivery capabilities in North America. In January 2026, Fidel Technologies KK acquired a majority stake in IM Corporation, Japan, providing access to new customer relationships, local expertise, and operational synergies. These acquisitions are expected to support long-term growth through cross-selling opportunities, enhanced service capabilities, and deeper market penetration.

During the year, the Company continued to invest in future-ready capabilities and service offerings. Significant efforts were directed towards strengthening competencies in Artificial Intelligence, Data Analytics, Enterprise Applications, ERP solutions, and Digital Transformation services. Fidel also established strategic partnerships with technology solution providers across the BFSI, AI, ERP, and analytics domains, enabling the Company to offer broader and more integrated solutions to its customers.

As part of its diversification strategy, Fidel established a dedicated business division focused on digital transformation solutions for small and medium-sized manufacturing enterprises. The initiative aims to help manufacturing organizations improve visibility into business and operational data, enabling informed decision-making, enhanced productivity, and improved operational efficiency. The Company believes this segment offers significant long-term growth potential as digital adoption accelerates among SMEs.

Operationally, the Company continued to focus on efficiency, scalability, and disciplined execution. Investments in automation, process optimization, delivery excellence, and resource management enabled Fidel to support rapid business growth while maintaining service quality and customer satisfaction. These initiatives contributed to healthy cash generation and strengthened the Companys ability to invest in growth opportunities without compromising financial stability.

The Company maintained a prudent approach to capital allocation throughout the year. Strategic acquisitions were undertaken through a balanced funding approach while preserving financial flexibility and maintaining a healthy balance sheet. Management also continued to actively monitor currency movements, geopolitical developments, and global economic conditions, implementing appropriate measures to mitigate risks arising from international operations.

The strong operational performance achieved during FY 2025-26 demonstrates the effectiveness of Fidels growth strategy and its ability to scale sustainably. With a strengthened international presence, expanded customer base, enhanced technology capabilities, strategic acquisitions, and a growing portfolio of recurring business, the Company is well positioned to capitalize on emerging opportunities and deliver sustainable value to all stakeholders in the years ahead.

Financial Performance (FY26 vs FY 25) (Standalone)

Ratios	FY25-26	FY24-25 %	Variance	Reason for variance
Current Ratio	5.58	8.63	-35%	The decline in current ratio is mainly attributable to reduction in current assets namely current investments and trade receivables, coupled with increase in current liabilities namely short -term borrowings and other current liabilities as compared to previous year.
Debt-Equity Ratio	0.29	NIL	29%	In Current Year, Borrowings are there for Acquisition purpose.
Return on Equity Ratio	0.18	0.20	-12%	NA
Trade payables turnover ratio	9.52	11.28	-16%	NA
Trade Receivables turnover ratio	3.48	3.90	-11%	NA
PBIT %	27%	23%	+17%	PBIT % Increased as some reductions in Cost during current year along with Accrual of Foreign Gain

7. OUTLOOK

Fidel enters FY 2026-27 with renewed confidence, supported by a strengthening order pipeline, expanding customer relationships, and increasing demand for language, localization, and technology-enabled business solutions. The Company has demonstrated consistent momentum across key markets and believes that the investments made in recent years in delivery capabilities, technology platforms, and international market development position it well for the next phase of growth.

The Company also continues to expand its presence in emerging growth areas through partnerships with technology solution providers across banking and financial services, artificial intelligence, data analytics, enterprise resource planning (ERP), and digital transformation ecosystems. These collaborations are expected to enhance Fidels market reach and create opportunities to deliver integrated solutions to a wider customer base.

Geographically, Fidel continues to strengthen its presence in both Japan and the United States. The Japan market remains a strategic differentiator for the Company, supported by deep domain expertise, longstanding customer relationships, and high entry barriers that limit competition. The Companys unique positioning in this market provides a strong foundation for sustainable growth and recurring business opportunities.

Looking ahead, management remains focused on driving profitable growth through operational excellence, customer retention, technology-led innovation, and disciplined execution. The Company expects continued improvement in profitability through scale efficiencies, automation initiatives, and operating leverage as revenues expand.

Over the medium term, Fidel remains committed to its vision of building a significantly larger and more diversified business. Management believes that the current growth trajectory, expanding service portfolio, and strengthening international presence provide a solid platform to achieve its strategic objectives and create sustainable value for all stakeholders.

While global economic conditions, geopolitical developments, and evolving regulatory environments may continue to create uncertainties in the near term, the Company remains vigilant and proactive in managing risks. Supported by a resilient business model, diversified customer base, and strong execution capabilities, Fidel is confident of sustaining its growth momentum and capitalizing on emerging opportunities across its target markets.

8. OPPORTUNITIES AND THREATS

Fidel Softech Limited continues to strengthen its position as a technology-led organization with deep expertise across Localization, Capital Market Technology, and Al-enabled IT Services. With over two decades of industry experience, the Company has built a reputation for delivering specialized solutions to global clients while maintaining high standards of governance, transparency, and operational excellence.

The rapid advancement of Artificial Intelligence is creating transformative opportunities across all business segments. During the year, the Company significantly increased its investments in AI capability development, internal productivity platforms, intelligent automation, and workforce upskilling. The emergence of Large Language Models (LLMs], Agentic AI, Retrieval-Augmented Generation (RAG), and Al-assisted software development presents new avenues for enhancing service delivery, accelerating project execution, and creating innovative products for customers.

In the Localization business, the growing demand for multilingual digital content, global software products, and cross-border communication continues to drive opportunities. Fidels unique combination of linguistic expertise and technology capabilities positions the Company to leverage Al-powered translation, content management, and language technology solutions while maintaining the quality and domain expertise required by enterprise customers.

The Capital Market Technology segment also presents significant growth opportunities. Increasing modernization initiatives by stock exchanges, brokerage firms, and financial institutions are driving demand for FIX connectivity, testing tools, protocol adapters, and trading infrastructure solutions. The Companys continued investments in modernizing its Nintei-X platform and expanding support for emerging market connectivity protocols strengthen its ability to participate in these evolving opportunities.

The Companys strategic focus on Al-enabled IT Services further expands its addressable market. By leveraging internally developed AI platforms, semantic indexing capabilities, intelligent agents, and accelerated development methodologies, Fidel aims to deliver faster, cost-effective, and higher-value technology solutions to customers across industries.

While these opportunities are substantial, the Company operates in a highly dynamic and competitive environment. Rapid advancements in AI technologies are reshaping business models and customer expectations across industries. Organizations that fail to continuously innovate risk losing relevance in increasingly technology-driven markets. Fidel therefore remains committed to sustained investment in research, product development, and skill enhancement to remain competitive and future-ready.

The Company also faces risks associated with global economic uncertainty, changing customer spending patterns, and geopolitical developments that may impact investment decisions and project timelines. Increasing competition from both global technology companies and Al-native service providers may exert pressure on pricing and margins across business segments.

Cybersecurity, data privacy, and protection of confidential customer information continue to be critical priorities. As AI adoption increases and digital ecosystems become more interconnected, maintaining robust security frameworks, governance controls, and compliance standards remains essential to preserving customer trust and business continuity.

Talent remains a key differentiator in the Companys growth strategy. The demand for professionals skilled in AI, cloud technologies, capital markets, and specialized language services continues to rise globally. Attracting, developing, and retaining high-quality talent while continuously upskilling existing teams is essential to sustaining long-term growth and innovation.

Despite these challenges, the Company views technological disruption as an opportunity rather than a threat. Through its continued investments in AI capabilities, domain-focused products, capital market solutions, and human capital development, Fidel is well-positioned to capitalize on emerging opportunities while effectively managing operational, technological, and market-related risks.

The management remains confident that its balanced approach of innovation, customer focus, prudent risk management, and continuous capability enhancement will support sustainable growth and long-term value creation for all stakeholders

9. EMPOWERING PEOPLE, DRIVING GROWTH

At Fidel Softech, our people remain the foundation of our success. As the Company continues to expand its capabilities across Localization, Technology Services, Data Engineering, Analytics, and Artificial Intelligence, we remain committed to building a high-performance, inclusive, and future-ready workforce. Our human resource strategy focuses on attracting, developing, engaging, and retaining talent while fostering a culture of collaboration, innovation, and continuous learning.

During FY 2025-26, Fidel strengthened its global talent base and organizational capabilities to support its expanding business operations. The Company now has a global workforce of more than 500 employees and consultants across its delivery and business locations. During the year, Fidel successfully onboarded 131 new professionals across various functions, including technology, localization, sales, project management, data engineering, and corporate services, further enhancing its delivery capacity and domain expertise.

The Company continued to strengthen its human capital practices through structured talent management initiatives, employee engagement programs, leadership development efforts, and process-driven HR operations. Regular communication from the HR team ensured employees remained informed about organizational developments, policy updates, learning opportunities, and wellness initiatives, promoting transparency and alignment across the organization.

Performance management remains an integral part of our people strategy. The Company follows a structured framework comprising goal setting, periodic reviews, quarterly performance discussions, and annual appraisal cycles to align individual contributions with organizational objectives. Quarterly performance awards and annual recognition programs were conducted to celebrate excellence, innovation, teamwork, and customer-centricity, reinforcing a culture of meritocracy and achievement.

Employee well-being continues to be a key priority. Comprehensive Mediclaim insurance coverage, employee assistance initiatives, wellness awareness programs, and a supportive work environment contribute to the overall physical, emotional, and financial well-being of our workforce. The Company also conducted regular

Prevention of Sexual Harassment (POSH) awareness programs to reinforce its commitment to maintaining a safe, respectful, and inclusive workplace for all employees.

The Company maintained a strong focus on compliance and employee welfare by proactively incorporating changes arising from evolving labour regulations. During the year, HR policies and compensation structures were reviewed and updated to align with applicable statutory requirements, including revisions related to wage structures, gratuity calculations, and other employee benefits, ensuring continued compliance and employee protection.

Fidel continued to enhance operational efficiency through a process-driven HR management approach. Key employee lifecycle processes—including recruitment, onboarding, attendance management, leave administration, payroll processing, performance management, and employee separation—are governed through standardized procedures and technology-enabled workflows, ensuring consistency, transparency, and compliance.

Leadership development and organizational alignment remained important focus areas during the year. Senior management participated in strategic offsite meetings to review business priorities, strengthen crossfunctional collaboration, and align leadership teams with the Companys long-term growth objectives and transformation initiatives.

Employee engagement continued to play a vital role in strengthening workplace culture and fostering a sense of belonging. Throughout the year, Fidel organized a variety of cultural, social, and team-building activities, including the Annual

Awards Ceremony, Independence Day celebrations, Ganesh Chaturthi festivities, Monsoon Tour, Fit & Fun wellness initiatives, Christmas celebrations, Makar Sankranti, Republic Day celebrations, International Womens Day events, and the celebration of the acquisition of IM / Corporation, Japan. These initiatives provided opportunities for employees to connect, collaborate, and celebrate organizational achievements while reinforcing Fidels values and culture.

The Company remains committed to creating an environment where employees are empowered to grow professionally, contribute meaningfully, and achieve their full potential. By investing in talent development, employee well-being, workplace culture, and operational excellence, Fidel continues to build a resilient and engaged workforce capable of supporting its long-term growth ambitions and delivering exceptional value to customers worldwide.

The management believes that its people-centric approach, combined with strong governance, continuous learning, and employee engagement, will continue to be a key differentiator in driving sustainable growth and organizational success.

10. EVENTS PARTICIPATION, MARKETING AND INDUSTRY ENGAGEMENT

During FY 2025-26, Fidel Softech continued to strengthen its market presence and industry positioning through a comprehensive program of global event participation, thought leadership initiatives, digital marketing campaigns, strategic partnerships, and customer engagement activities. The Company follows a structured annual marketing calendar designed to enhance brand visibility, generate business opportunities, strengthen industry relationships, and showcase its capabilities across Localization, Technology Services, Data Engineering, Analytics, and Artificial Intelligence.

Throughout the year, Fidel maintained an active presence across digital and physical channels through regular website enhancements, industry-focused blogs, case studies, newsletters, search engine optimization (SEO) initiatives, social media campaigns, outbound lead generation programs, webinars, and customer engagement activities. The Company further strengthened its marketing effectiveness through the use of integrated CRM platforms and analytics-driven lead management processes, enabling systematic tracking and nurturing of business opportunities.

Fidel actively participated in several prestigious industry conferences, exhibitions, business forums, and technology events across India, Japan, Southeast Asia, Europe, and North America. These engagements provided valuable opportunities to showcase the Companys expertise, engage with existing and prospective customers, and stay aligned with emerging market trends and technological developments.

Key events attended during the year included India FIX Conference, Startup Maha Kumbh, GITEX Asia x AI Everything Singapore, TiEcon USA, ET GCC Growth Summit, FBC ASEAN Thailand, Auto Cluster Customer Meet, LocWorld Malmo, Infer Tokyo Velocity Day, Global Fintech Fest, Japan Electronic Trading Conference, Tokyo International Industry Exhibition, NASSCOM Technology and Leadership Forum, India AI Impact Expo, Global FinTech Network Forum, and several Indo-Japan business and technology forums.

The Company also expanded its thought leadership initiatives through webinars, industry discussions, and strategic collaborations. A notable highlight during the year was the webinar on "Scaling Global Products in the Age of AI," which brought together industry leaders and technology professionals to discuss the evolving role of Artificial Intelligence in global business expansion and localization.

FY 2025-26 was also marked by several strategic milestones that received significant industry attention. The successful acquisition of IM Corporation, Japan, along with related press conferences, customer outreach activities, and integration initiatives, enhanced Fidels presence in the Japanese market and strengthened its position as a trusted partner for global enterprises. The Company further announced strategic initiatives including the launch of an Al-focused incubation centre through a Memorandum of Understanding (MoU) with Pimpri Chinchwad University (PCU), the acquisition of exclusive rights to Spoggle to strengthen its AI and Data Analytics offerings, and a strategic partnership with RhythmFlows to deliver Al-powered digital transformation solutions.

The Companys participation in industry events was complemented by continuous engagement with customers, partners, technology providers, educational institutions, and industry associations. These initiatives enabled Fidel to generate new business opportunities, strengthen strategic alliances, enhance brand recognition, and reinforce its position as a leading provider of language technology, digital transformation, data engineering, analytics, and Al-driven solutions.

Looking ahead, Fidel remains committed to expanding its global outreach, strengthening its thought leadership presence, and actively participating in industry ecosystems that drive innovation and business growth. Through a combination of physical events, digital engagement, strategic partnerships, and content- driven marketing, the Company aims to further strengthen its market presence and create sustainable longterm value for all stakeholders.

11. MEMBERSHIPS

Fidel recognizes that membership in a professional organization can provide numerous benefits, from access to valuable resources and recognition to advocacy and influence within the industry. Some of these associations include:

12. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Fidel Softech Limited maintains a comprehensive internal control framework designed to provide reasonable assurance regarding the safeguarding of assets, accuracy and reliability of financial reporting, operational efficiency, and compliance with applicable laws, regulations, and internal policies. The Companys internal control systems are commensurate with the nature, size, and complexity of its business operations and are continuously reviewed to ensure their effectiveness in a dynamic business environment.

The Company has established well-defined financial, operational, compliance, and information technology controls supported by documented policies, standard operating procedures, delegated authority matrices, and periodic management reviews. These controls facilitate effective monitoring of business activities, prudent resource utilization, risk management, and timely decision-making.

Financial controls include robust budgeting processes, periodic performance reviews, variance analysis, approval mechanisms, and regular monitoring of financial transactions. Operational controls encompass structured project management practices, quality assurance processes, service delivery standards, and defined organizational responsibilities across business functions. Compliance controls ensure adherence to statutory requirements, corporate governance norms, and regulatory obligations applicable to the Companys operations.

Given the technology-driven nature of its business, Fidel places significant emphasis on information security and data protection. The Company maintains secure IT infrastructure, access management controls, data backup and disaster recovery mechanisms, cybersecurity monitoring processes, and business continuity measures to protect critical information assets and ensure uninterrupted service delivery.

The effectiveness of the internal control framework is further reinforced through periodic internal audits, statutory audits, secretarial audits, and management reviews. Independent audit observations and recommendations are reviewed by the management, and necessary corrective actions are implemented in a timely manner. During the year under review, no material weaknesses or significant deficiencies were identified in the design or operation of the Companys internal control systems.

The Companys commitment to quality, information security, and process excellence is reflected through internationally recognized certifications, including ISO 9001:2015 for Quality Management Systems, ISO/IEC 27001:2022 for Information Security Management Systems, ISO 17100:2015 for Translation Services, and ISO 18587:2017 for Machine Translation Post-Editing Services. These certifications demonstrate the Companys focus on maintaining globally accepted standards across its service delivery and operational processes.

As part of its enterprise risk management framework, the Company has also maintained comprehensive insurance coverage, including Cyber Insurance, Commercial General Liability (CGL) Insurance, and Professional Indemnity (PI) Insurance policies, providing protection against a broad spectrum of operational, professional, and cyber-related risks.

The Board of Directors and management believe that the Companys internal control systems are adequate and effective and provide reasonable assurance regarding the reliability of financial reporting, operational effectiveness, protection of assets, and compliance with applicable laws and regulations.

13. CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES

At Fidel, Corporate Social Responsibility (CSR) is viewed as an integral part of sustainable business growth and social development. The Companys CSR philosophy is centered on creating long-term societal impact through initiatives that promote education, skill development, employability, entrepreneurship, and inclusive growth. By supporting organizations working at the grassroots level, Fidel aims to empower individuals and communities with the knowledge, skills, and opportunities required to build sustainable livelihoods.

During FY 2025-26, the Company continued to align its CSR efforts with the broader objective of enhancing human capital development and fostering economic self-reliance. Particular emphasis was placed on supporting educational institutions, vocational training programs, initiatives for differently-abled individuals, and entrepreneurship-oriented projects that contribute to employment generation and innovation.

The Company spent ^18.20 lakh towards CSR activities during the year, fully meeting its statutory CSR obligation. Key initiatives supported during the year included:

Skill Development and Employability Enhancement: Financial support was extended to organizations conducting vocational training and employment-oriented skill development programs, helping individuals improve their employability and access better livelihood opportunities.

Education and Student Support: Contributions were made to educational institutions and student welfare organizations that provide academic assistance, scholarships, and learning support to deserving students from economically weaker sections, enabling them to pursue higher education and professional development.

A notable social-impact initiative undertaken during the year involved supporting a global organization in expanding AI education to remote communities across India.

Support for Differently-Abled Communities: The Company supported institutions working for visually impaired individuals, including educational and developmental programs aimed at improving accessibility, learning opportunities, and social inclusion.

Entrepreneurship and Innovation Promotion: Fidel contributed towards initiatives that encourage innovation, technology-led research, and entrepreneurship development, including support for incubation and emerging technology programs. These initiatives are expected to foster future job creation and strengthen the innovation ecosystem.

Community Development and Social Awareness: The Company also supported selected community welfare initiatives focused on social development, awareness creation, and improving quality of life for underserved sections of society.

Beyond financial contributions, Fidel continues to encourage employee participation in social initiatives through knowledge-sharing, mentoring, and volunteering activities. The Company believes that meaningful engagement between employees and communities amplifies the impact of CSR efforts and contributes to creating sustainable social value.

Going forward, Fidel remains committed to deploying its CSR resources in areas that deliver measurable outcomes in education, skill enhancement, entrepreneurship, and employment generation, thereby contributing to inclusive and sustainable development.

14. SHAREHOLDING AND INVESTOR COMMUNICATION

Fidel remains committed to maintaining high standards of corporate governance, transparency, and proactive engagement with its shareholders and the broader investment community. The Company believes that consistent communication and timely dissemination of information are essential for building long-term investor trust and creating sustainable shareholder value.

The promoter group continues to maintain a significant stake in the Company, reflecting its long-term commitment to Fidels growth strategy and confidence in the future prospects of the business. During the year, the Companys shareholder base remained stable and supportive, with several long-standing stakeholders continuing their association with the Company.

A notable reflection of stakeholder confidence is that several of Fidels key customers have also continued as shareholders of the Company. Many of these strategic customers have maintained their investments over the years while simultaneously expanding their business engagements with Fidel, underscoring ssterm vision.

As a company listed on the NSE SME platform, Fidel places strong emphasis on timely and transparent disclosures. The Company regularly communicates material developments, business milestones, corporate announcements, and other relevant information through the NSE platform in accordance with applicable regulatory requirements. Management believes that keeping investors informed about significant business developments contributes to greater transparency and stronger stakeholder relationships.

To strengthen investor outreach, the Company continues to conduct structured investor interactions, including half-yearly and annual investor conference calls, where management provides updates on business performance, strategic initiatives, industry trends, and future growth opportunities. These interactions also provide investors with an opportunity to directly engage with management and seek clarifications on matters relating to the Companys operations and performance.

In addition to formal investor communication channels, the management team remains accessible to existing and prospective investors throughout the year. The Company actively responds to investor queries through meetings, conference calls, and one-on-one interactions, ensuring that stakeholders have a clear understanding of the Companys business model, growth strategy, and long-term objectives.

The Company remains focused on delivering sustainable value creation for its shareholders through profitable growth, prudent capital allocation, and disciplined execution. Reflecting its confidence in the business and commitment to shareholder returns, FY 2025-26 marks the fourth consecutive year in which the Company has recommended a dividend, subject to shareholder approval. The consistent dividend track record demonstrates managements commitment to balancing growth investments with shareholder rewards while maintaining financial prudence.

Going forward, Fidel will continue to strengthen its investor communication practices and uphold the principles of transparency, accountability, and responsible corporate governance as it pursues its next phase of growth.

• Summarize the current shareholding structure (Promoters, Institutional Investors, Public Shareholding),

o Promoters

#No. Name of the Person	No. of Shares	% Of Share Capital
1 Sunil Kulkarni	7637996	55.54%
2 Prachi Kulkarni	2408000	17.51%

15. CAUTIONARY STATEMENT

The statement in the Management Discussion and Analysis Report cannot be construed as holding out any forecasts, projections, expectations, invitations, offers, etc. within the meaning of applicable securities, laws and regulations. This report basically seeks to furnish information, as laid down within the different headings to meet the requirements of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.