Nettlinx Ltd Management Discussions

1. Forward-Looking Statements

Statements in this Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations, or predictions may be forward-looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include economic conditions affecting demand/supply, price conditions in the domestic and overseas markets, changes in Government regulations, tax laws, and other incidental factors.

2. Industry Structure and Developments

The Information Technology (IT), Broadband, and Internet Service Provider (ISP) sectors in India are undergoing rapid convergence. Standalone internet bandwidth is increasingly becoming a commoditized service. To sustain market position, modern operators must deliver bundled value propositions, particularly combining high-speed fiber-to-the-home (FTTH) infrastructure with Internet Protocol Television (IPTV) and Over-The-Top (OTT) entertainment platforms.

Concurrently, corporate IT environments have pivoted heavily toward capital discipline. Operators are shifting away from long-gestation, high-risk public sector deployments toward agile, highly secure, cashflow-positive private enterprise and retail consumer models.

3. Opportunities and Threats Opportunities

- IPTV Ecosystem Rollout: The integration of digital entertainment platforms with existing high-speed networks opens immediate incremental average revenue per user (ARPU) expansion channels.

- Private Sector Transition: A highly active private enterprise and SME market allows the company to secure short-cycle, high-predictability recurring contracts.

Threats

- Extended Public Sector Working Capital Cycles: Delayed realizations and payment uncertainties on state government contracts continue to severely stress operational liquidity.

- Intense Telecom Aggression: Massive infrastructure bundling by major national telecom entities creates constant pressure on retail pricing structures.

4. Segment-wise or Product-wise Performance

The Company operates primarily within the Internet, Telecom, and Digital Communication Services segment. During the year under review, the Company intentionally discontinued new business under high- risk state government verticals. Operational focus was forcefully re-anchored around high-yield private corporate accounts and preparing the infrastructure layout for advanced consumerdigital media products.

5. Outlook

The outlook for the latter half of the upcoming fiscal year remains highly encouraging. With operations streamlined via technological integrations and cash-flow leakages firmly plugged, the Company is positioned to aggressively expand its private enterprise marketfootprint. Furthermore, our newly developed IPTV Strategy is scheduled to launch in the second half of the year (H2 FY 2026-27), which is expected to immediately expand revenue streams and bear measurable operational results before the close of the next financial year.

6. Risks and Concerns

The primary risk exposures for the Company remain centered around legacy working capital recoveries and technological adaptability. The Management has mitigated these risks by ending exposure to unpredictable

government business and establishing rigid credit-control policies across all active private market segments.

7. Internal Control Systems and Their Adequacy

Nettlinx Limited maintains an exhaustive internal financial control registry designed to align perfectly with the size and operational scope of its business model.

Strategic ERP Migration: To radically enhance internal controls, eliminate operational silos, and deliver superior service delivery to our clients, the Company has successfully implemented and migrated to the open-source ERPNext platform. This unified deployment provides the Management with real-time visibility over inventory, billing, project lifecycle tracking, and client touchpoints, materially strengthening our corporate governance framework.

8. Financial Performance & Strategic Restructuring Review Leadership Transition & Core Context

The financial year 2025-26 was deeply defined as a transition year due to highly unforeseen circumstances surrounding our leadership. The Company experienced an abrupt operational disruption following a severe head injury sustained by ourformer Managing Director. While stakeholders will be reassured to note that his health is steadily improving, the lingering effects of the concussion to the head unfortunately mean he is unable to return to the organization in a working capacity. The Management places on record its profound gratitude for his historic leadership.

Consolidated Performance Impact & Government Receivables

This sudden leadership transition directly coincided with a deliberate, aggressive clean up of our balance sheet. On a consolidated basis, Total Revenue stood at Rs20.95 Crore (down from Rs33.52 Crore in the previous fiscal year), and the Company recorded a Net Loss of Rs5.17 Crore.

This contraction in revenue and profitability is primarily a direct result of our discontinuation of state government business, where collection cycles had become highly unpredictable and payment certainties remained low.

- Collection Strategy: Our current high receivables are entirely concentrated within these legacy state government accounts. Having entirely stopped any further business exposure with these entities, the Company is now actively and aggressively pursuing all legal and executive channels to collect these old overdues.

- Private Sector Pivot: Moving forward, the Companys business growth will be driven entirely on the private corporate and retail consumer side, governed by an acute, uncompromising focus on immediate cash flow and tight collection turnaround metrics.

Accelerated Asset Monetization & Roadmap to Zero Debt

- Continuous Non-Core Asset Sales: The strategic sale and monetization of non-core activities executed during the year will continue actively into the next financial year. This ongoing divestment ensures that underutilized assets are rapidly transformed into liquidity.

- On Track for Zero Debt: Capital realized from these ongoing asset sales continues to be funneled directly into debt elimination. Backed by this leaner business plan and an optimized operational cost-base, Nettlinx Limited confidently reaffirms its timeline to become entirely debt-free by the end of the next financial year (FY 2026-27).

9. Material Developments in Human Resources/ Industrial Relations Front

Industrial relations across all operational offices remained completely peaceful and harmonious. Human resource training during the year was focused heavily on cross-functional on boarding onto the new ERP Next system, improving multi-tiered technical support capabilities. As of March 31, 2026, our employee framework stands optimally right-sized to support our private-sector expansion.

10. DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREFOR, INCLUDING:

SI No	Particulars	Year Ended 31 -03-2026	Year Ended 31-03-0215	Variance	Reason
1.	Debtors Turnover	0.70	1.05	-33%	Receivables pending from Govt authorities Long pending
2.	Inventory Turnover	-	-	-	NA
3.	Interest Coverage Ratio	-2.15!	5.29
4.	Current Ratio	2.56	1.29	99%	Due to reduction in Current liabilities
5.	Debt Equity Ratio	0	0.01	-56%	Due to decrease in borrowings
6.	Operating Profit Margin (%)	4.25	45.12
7.	Net Profit Margin (%)	-38%	25%	-250%	-

11. DETAILS OF ANY CHANGE IN RETURNON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIALYEARALONG WITH ADETAILED EXPLANATION THEREOF:

SI No	Particulars	Year Ended	Year Ended	Variance	Reason
		31-03-2026	31-03-2025
1.	Return on Equity Ratio	-18.805%	23.5%	-180%	Due to loss on sale of subsidiary
2.	Return on Capital employed,	2%	17%	-89%
	(Earnings before interest and taxes (EBIT), by capital employed)
	Capital Employed = Total Assets - Current Liabilities

12. CAUTIONARY STATEMENT:

Certain statements in the Management Discussion and Analysis describing the Companys views about the industry, expectations/predictions, objectives etc, may be forward looking within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed in the statement. Companys operations may inter-alia affect with the supply and demand situations, input prices and their availability, changes in Government regulations, tax laws and otherfactors such as Industrial relations and economic developments etc. Investors should bearthe above in mind.

For and on behalf of the Board of Directors Nettlinx Limited

	Sd/-	Sd/-
	Rohith Loka Reddy	Jeeten Anil Desai
Place: Hyderabad	Managing Director	Independent Director
Date: 26.05.2026	(DIN: 06464331)	(DIN: 07254475)