Nucleus Software Exports Ltd Management Discussions

ManagementRs. s Discussion and Analysis of Financial Condition and Results of Operations of
Nucleus Software Exports Limited

ManagementRs. s discussion and analysis of the financial
condition and results of operations include forward-
looking statements based on certain assumptions and
expectations of future events. The Company cannot assure
that these assumptions and expectations are accurate.
Although the Management has considered future risks as
part of the discussions, future uncertainties are not limited
to Management perceptions.

A. INDUSTRY STRUCTURE AND DEVELOPMENTS
Global Industry Overview

The global banking and financial services industry
continues to undergo structural transformation
driven by digital acceleration, evolving customer
expectations, regulatory modernization, and the
growing adoption of Artificial Intelligence (AI) across
financial ecosystems.

Financial institutions globally are increasingly
transitioning from legacy operating environments
towards cloud-enabled, API-first, and intelligence-led
platforms that enable greater agility, scalability, and
customer-centricity. This shift is redefining how banks
originate loans, manage risk, engage customers,
process transactions, and operate enterprise-wide
banking ecosystems.

According to McKinsey, Generative AI alone has the
potential to create up to US$340 billion annually
in additional value for the global banking industry,
accelerating investments across underwriting,
servicing, fraud management, collections, and
operational automation.

At the same time, transaction banking ecosystems
are also evolving rapidly with increasing focus on
real-time payments, treasury digitization, API-led
integration frameworks, embedded banking services,
and operational resilience. Financial institutions
across developed and emerging markets continue to
prioritizing scalable digital architectures, ecosystem
interoperability, and intelligent automation to improve
operational efficiency and customer experience.

These structural shifts continue to create long-term
opportunities for financial technology organizations
capable of combining domain expertise, scalable
platforms, operational resilience, and future-ready
innovation.

India Banking & Financial Services Landscape

India continues to strengthen its position as one of the
worldRs. s fastest-growing digital financial ecosystems.

The rapid expansion of digital public infrastructure,
increasing smartphone penetration, growth in real-
time digital payments, and policy-led financial inclusion
initiatives continue to accelerate digitization across
banking and lending ecosystems. According to RBI
data, digital payments accounted for approximately
99.8% of total payment transaction volumes in India
during H1 2025, highlighting the scale and maturity of
IndiaRs. s digital financial infrastructure.

IndiaRs. s banking ecosystem is witnessing increasing
investments across retail and MSME lending
digitization,co-lending frameworks,embeddedfinance
ecosystems, AI-led underwriting and collections,
and digital onboarding and servicing platforms. The
continued expansion of UPI ecosystems, Account
Aggregator frameworks, consent-based data sharing
models, and digital identity infrastructure is further
reshaping customer acquisition and servicing models
across the industry.

Financial institutions are increasingly focusing on
improving customer experience, accelerating loan
turnaround times, strengthening fraud and risk
controls, modernizing collections ecosystems,
and enabling multilingual and inclusive banking
experiences.

Key Market Trends

Several structural and technology-led trends
continued to shape the global financial technology
landscape during the year.

Artificial Intelligence and Machine Learning are
increasingly moving from experimental adoption
to enterprise-wide implementation across banking
operations. Financial institutions are leveraging
AI across underwriting, fraud detection, customer
servicing, collections optimization, operational
automation, and predictive analytics. The emergence
of Generative AI and Agentic AI frameworks is further
accelerating discussions around intelligent banking
ecosystems and workflow automation.

Cloud adoption continues to remain another
major industry priority, with financial institutions
accelerating investments in cloud-native and
hybrid-cloud environments to improve operational
resilience, deployment agility, scalability, and cost
optimization.

Simultaneously, customer expectations continue
to evolve rapidly. Customers increasingly expect
seamless, intuitive, and real-time digital banking
experiences across channels, leading financial
institutions to strengthen investments in digital
onboarding, omnichannel engagement, multilingual
servicing, personalized lending journeys, and self-
service ecosystems.

Cybersecurity and data governance also continue
to remain strategic priorities across global banking
ecosystems.

Competitive Dynamics

The financial technology landscape continues to
remain highly competitive and innovation-driven.

Nucleus Software competes with a diverse set of
global banking technology providers, enterprise
platform companies, specialized lending technology
firms, digital-first fintech players, and emerging AI-led
banking solution providers.

The CompanyRs. s competitive positioning continues to
be strengthened through deep lending and transaction
banking expertise, enterprise-grade product
capabilities, scalable and extensible architectures,
long-standing customer relationships, and AI-led
innovation across banking operations.

The Company continues to differentiate itself through
its ability to combine domain expertise, operational
resilience, customer-centric innovation, and strong
execution capabilities across diverse banking
environments and geographies.

Regulatory Environment

The regulatory environment across global banking
ecosystems continues to evolve rapidly, driven
by increasing focus on data privacy, operational
resilience, cybersecurity, responsible AI adoption,
financial inclusion, and consumer protection.

In India, regulatory developments across digital lending
guidelines, data privacy frameworks, co-lending
structures, and Account Aggregator ecosystems
continue to shape technology investments across the
banking sector.

Across markets, regulatory modernization is
accelerating demand for technology platforms capable
of supporting configurable compliance frameworks,
secure data management, audit-ready workflows, and
scalable governance mechanisms.

Market Expansion Strategies

The Company continues to adopt a focused and region-
specific market expansion approach aligned with
evolving customer priorities, regulatory environments,
and levels of digital maturity across markets.

The CompanyRs. s strategy continues to focus on
strengthening its presence across Asia-Pacific,
the Middle East, North America, Africa, Europe,
and developed markets through deeper customer
engagement, ecosystem partnerships, strategic
industry participation, and regional delivery
capabilities.

"The future of financial services will be shaped
by institutions that combine agility, intelligence,
resilience, and trust at scale."

B. COMPANY OVERVIEW

The Company was incorporated on January 9, 1989
as Nucleus Software Exports Private Limited with its
registered office at 33-35 Thyagraj Nagar, New Delhi,
India. Subsequently in October 1994, it was converted
into a Public Limited Company. In August 1995,
Nucleus made an Initial Public Offer and is currently
listed at National Stock Exchange of India Ltd. and
BSE Ltd.

Nucleus operates through integrated and well
networked subsidiaries in India, Japan, Netherlands,
Singapore, USA, Australia, Vietnam and South Africa.
Since 1995, product development has been our forte
and the Company has chosen to exclusively develop
products and further add value through dedicated
Research and Development initiatives.

Over the years we have gained deep experience
working closely with Global leaders in the Banking and
Financial Services industry. The Company has eight
subsidiaries, as described below:

Date of Incorporation	Name of Subsidiary Company	Location	Percentage of Shareholding
February 25, 1994	Nucleus Software Solutions Pte. Ltd.	Singapore	100%
August 05, 1997	Nucleus Software Inc.	USA	100%
November 02, 2001	Nucleus Software Japan Kabushiki Kaisha	Japan	100%
February 03, 2006	Nucleus Software Netherlands B.V.	Netherlands	100%
April 21, 2008	Nucleus Software Ltd.	India	100%
February 03, 2014	Nucleus Software Australia Pty. Ltd.	Australia	100%
February 10, 2015	Nucleus Software South Africa (Pty) Ltd.	South Africa	100%
February 05, 2026	Nucleus Software Vietnam Company Limited	Vietnam	100%

The Company has Corporate office in Noida and
branch offices in Chennai, Pune and Mumbai in India
and Overseas locations in London and Dubai.

The Singapore subsidiary has a representative office
in Jakarta in Indonesia and in Manila in the Philippines.
These subsidiaries/branch offices help the Company
in providing front-end support to customers and
explore new opportunities.

Nucleus Software is a global provider of enterprise
lending and transaction banking solutions, serving
more than 200 banks and financial institutions across
50 countries. With over four decades of domain
expertise, the Company continues to enable financial
institutions to accelerate digital transformation
while strengthening operational resilience, customer
experience, and regulatory readiness.

The CompanyRs. s platforms support a wide range of
banking and financial services operations including:

- Retail Lending

- Corporate & SME Finance

- Islamic Finance

- Automotive Finance

- Captive Automotive Finance

- Cash Management

- Mobile & Internet Banking

- Transaction Banking

Nucleus SoftwareRs. s transaction banking platforms
process transactions exceeding US$15 trillion
annually, enabling over 26 million transactions daily
through globally integrated banking ecosystems. Its
lending platforms manage loan portfolios exceeding
US$1.2 trillion globally, while supporting more than
500,000 daily users log in across banking operations
worldwide.

By combining deep banking expertise, enterprise-
grade platforms, and future-focused innovation,
Nucleus Software continues to strengthen its position
as a trusted global technology partner for financial
institutions navigating the next phase of digital
banking transformation.

The CompanyRs. s core offerings include:

FinnOne Neo?

FinnOne Neo? is the CompanyRs. s next-generation
digital lending platform designed to enable intelligent,
scalable, and customer-centric lending ecosystems.

FinnAxia?

FinnAxia? is the CompanyRs. s integrated global
transaction banking platform supporting payments,
liquidity management, cash management, and
corporate banking operations.

Nucleus Software Digital Services

Nucleus Software Digital Services supports
financial institutions in their digital transformation
and modernization journeys through consulting,
implementation, integration, transformation, and
managed services capabilities.

A brief on the functionality of our products is given
below:

FinnOne Neo? - Powering the Future of Digital
Lending

FinnOne Neo? is Nucleus SoftwareRs. s flagship AI-
enabled digital lending platform, designed to help
banks, financial institutions, and lenders transform the
entire lending lifecycle-from customer acquisition
and credit assessment to loan servicing, collections,
and portfolio management.

Built on more than four decades of global lending
expertise, FinnOne Neo? combines deep domain
knowledge with modern technology architecture to
enable financial institutions to deliver faster, more
intelligent, and customer-centric lending experiences.
The platform supports a wide range of lending
businesses, including retail lending, SME finance,
commercial lending, automotive finance, housing
finance, Islamic finance, and emerging digital lending
models.

Today, financial institutions operate in an environment
defined by increasing customer expectations, evolving
regulatory requirements, rising risk complexity, and
rapid technological change. FinnOne Neo? addresses
these challenges through a unified platform that
combines process automation, data-driven decision-
making, ecosystem connectivity, and operational
scalability.

Designed around an API-first and cloud-ready
architecture, the platform enables seamless
integration across core banking systems, fintech
ecosystems, credit bureaus, digital channels, and
third-party service providers through more than
540 ready APIs. This extensible architecture allows
institutions to accelerate innovation while maintaining
governance, security, and operational control.

FinnOne Neo? brings together a comprehensive suite
of capabilities across:

- Customer Acquisition System (CAS)

- Loan Management System (LMS)

- Collections Management

- Collateral Management System (CMS)

- Enterprise Content Management (ECM)

Together, these capabilities provide a unified digital
lending ecosystem that helps financial institutions
improve operational efficiency, strengthen risk
management, accelerate decision-making, enhance
customer engagement, and drive sustainable portfolio
growth.

FinnOne Neo? GA 8.5

During the year, the Company announced the global
release of FinnOne Neo? GA 8.5, introducing significant
advancements across security, governance, AI-driven
decisioning, automation, customer engagement, and
operational scalability.

The GA 8.5 release reinforces the CompanyRs. s long-
standing commitment to trust, governance, and
regulatory alignment, through key foundational
enhancements:

- Enhanced Data Security and Governance:

Advanced PII masking, encryption frameworks,
and role-based access controls ensuring
compliance with global data protection standards.

- Regulatory-Ready Servicing Frameworks:
Structured workflows supporting subsidy
management, co-lending operations, and audit-
ready servicing processes.

- Operational Standardization: Embedded rule
engines and automated workflows delivering
consistency, traceability, and auditability across
lending operations.

- Inclusive Customer Engagement: Multilingual
communication frameworks and real-time
statements improving accessibility and customer
trust.

These enhancements further strengthen the
platformRs. s enduring foundation of reliability, security,
and compliance, critical for large-scale financial
operations.

Accelerating the Future with Intelligent Capabilities

Complementing its strong foundation, FinnOne Neo?
GA 8.5 introduces next-generation capabilities that
accelerate the transition towards intelligent, real-time
lending:

- AI-Driven Decisioning: Behavioral risk scoring,
fraud intelligence, and automated rule-based
decisioning enhancing credit assessment
accuracy.

- Real-Time Data and Insights: Instant verification,
dashboard intelligence, and real-time analytics
supporting faster and informed decisions.

- Lifecycle Automation: Straight-through

processing, automated document handling,
and workflow orchestration reducing manual
intervention and turnaround time.

- Advanced Collections Intelligence: AI-enabled
sentiment analysis, predictive scoring, and
speech-to-text capabilities improving recovery
outcomes.

These capabilities enable financial institutions to
shift from process-driven execution to insight-driven
decision-making at scale.

FinnOne Neo? - Integrated Enhancements Across
Core Modules

s Customer Acquisition System (CAS)

Enhancements focused on speed, accuracy,
and compliance, including real-time verification,
fraud detection, automated data extraction, and
digital execution frameworks, enabling faster
onboarding and improved customer experience.

s Loan Management System (LMS)

Enhancements delivering flexibility and
transparency, including restructuring support,
moratorium configurations, co-lending servicing,
and multilingual statements, ensuring efficient
servicing and regulatory compliance.

s Collections Management

AI-led collections intelligence with predictive
scoring, sentiment analysis, and automated
workflows, enabling improved recoveries and
operational efficiency.

s Collateral Management System (CMS)

A key addition to the platformRs. s capabilities is the
enhanced Collateral Management System (CMS),
which brings structured governance and lifecycle
control to collateral operations.

FinnOne Neo? CMS acts as a centralized
repository and single source of truth for collateral
data, providing a comprehensive 360-degree
view across all lending operations.

Key capabilities include:

- End-to-End Collateral Lifecycle
Management: From onboarding, verification,
and valuation to monitoring and release

- Seamless Integration: API-driven integration
with origination, servicing, and collections
systems for unified operations

- Automated Verification and Investigation:
Rule-based initiation of collateral checks and
validations

- Collateral De-duplication and Review
Mechanisms: Ensuring data accuracy and
reducing operational risks

- Support for Static and Dynamic Collateral
Types: Enabling flexibility across lending
products

These enhancements significantly improve risk
visibility, operational control, and turnaround
time, while ensuring standardized collateral
processes across the enterprise.

s Enterprise Content Management (ECM)

The release also introduces a strengthened
Enterprise Content Management (ECM) System,
designed to streamline document processing and
enhance operational efficiency.

FinnOne Neo? ECM enables financial institutions
to manage, store, index, and retrieve documents
seamlessly, while maintaining structured
workflows across the lending lifecycle.

Key capabilities include:

- Workflow-Based Document Processing:
Ensuring consistency and efficiency across
operations

- Centralized Document Repository: Unified
storage and indexing for easy retrieval and
audit readiness

- Advanced Search and Classification: Text
and image-based search capabilities for
faster access to information

- Seamless Integration: Ability to function
independently or integrate with core lending
systems

- Automated Archival and Policy Management:
Supporting compliance and long-term record
management

These capabilities enable institutions to move
towards paperless, efficient, and audit-compliant
operations, significantly improving productivity
and governance.

FinnAxia? - Enabling the Future of Transaction
Banking

FinnAxia? is Nucleus SoftwareRs. s integrated

transaction banking platform, designed to help banks
modernize, scale, and transform their corporate
banking operations across payments, receivables,
liquidity management, trade finance, and supply chain
finance.

As transaction banking continues to evolve from a
processing function into a strategic driver of customer
engagement and revenue growth, financial institutions
are increasingly seeking platforms that can provide
real-time visibility, intelligent automation, ecosystem
connectivity, and seamless customer experiences.
FinnAxia? addresses these evolving requirements
through a modular and scalable architecture that
enables banks to transform their transaction banking
operations while responding rapidly to changing
market and regulatory demands.

FinnAxia? supports financial institutions in delivering:

- Real-time payments and collections ecosystems

- Enhanced corporate cash visibility and liquidity
optimization

- Digital trade finance and supply chain finance
capabilities

- Intelligent reconciliation and receivables
management

- API-enabled ecosystem connectivity

- Improved treasury and working capital
management

- Regulatory-ready and globally compliant
transaction banking operations

The platform brings together a comprehensive suite
of capabilities including:

Global Receivables

Designed to simplify collections and accelerate
reconciliation through virtual account structures,
automated cash application, real-time dashboards,
and enhanced visibility across payment channels.

Global Payments

Enabling seamless domestic and international
paymentsthrough high-volumetransaction processing,
real-time payment tracking, multi-currency support,
ISO 20022 readiness, AML compliance, and intelligent
payment orchestration.

Global Liquidity Management

Providing corporate treasuries with real-time
visibility into enterprise-wide cash positions through
automated sweeps, balance forecasting, notional
pooling, and liquidity optimization capabilities.

Virtual Account Management (VAM)

Enabling banks to offer granular account visibility and
streamlined reconciliation without requiring physical
account proliferation, improving operational efficiency
and customer control.

Electronic Financial Supply Chain Management
(E-FSCM)

Supporting supplier finance, distributor finance,
invoice discounting, purchase order financing,
and working capital optimization through digitally
connected supply chain ecosystems.

Trade Finance

Digitizing end-to-end trade operations across Letters
of Credit, Bank Guarantees, Documentary Collections,
and Open Account Trade, enabling faster processing,
improved visibility, and reduced operational overhead.

Electronic Bill Presentment and Payment (EBPP)

Supporting end-to-end digital billing ecosystems
through electronic invoice presentment, multiple
payment options, automated reconciliation, and self-
service customer experiences.

Today, as corporate banking customers increasingly
demand real-time insights, intelligent automation,

integrated treasury services, and frictionless digital
experiences, FinnAxia? continues to evolve to help
banks strengthen customer relationships, improve
operational efficiency, optimize liquidity management,
and unlock new growth opportunities.

FinnAxia? GA 9.0

Accelerating the Future with Enhanced Transaction
Capabilities

FinnAxia? 9.0 introduces a comprehensive set of
enhancements that significantly improve transaction
processing, integration capabilities, and customer
experience:

Advanced Transaction Processing and Ecosystem
Integration

- Bulk Transactions Processing and Notification
Framework: Enables execution and completion
tracking of high-volume transactions with unified
notifications, improving operational visibility and
control.

- Bulk Transaction API Enablement: Facilitates
seamless processing of bulk payments through
single API calls, enhancing automation and
scalability.

- E-Commerce Integration: Gateway-driven

architecture enabling external platforms to
initiate transactions directly, supporting a unified
and scalable payments ecosystem.

- Support for Sub-Member Banks: Extends platform
capabilities to support sub-member banking
structures, enabling decentralized operations
and ecosystem expansion.

- Front-End Transaction Status Updates
(Exceptional Cases): Empowers authorized users
to modify transaction status directly, ensuring
continuity and operational flexibility.

Enhanced Customer Experience and Workflow
Efficiency

- Simplified Transaction Screens: Configurable
transaction interfaces enabling improved
usability, reduced complexity, and enhanced user
experience.

- Quick Transfer and Payee Management
Enhancements: Faster transaction initiation and
improved payee setup workflows supporting
operational efficiency.

- Regulatory Payee Lookup Integration: Ensures
compliance with regulatory mandates while
enhancing transaction validation processes.

- Self-Authorization Framework: Enables straight-
through authorization workflows for defined
thresholds, reducing dependency on manual
approvals.

- Multi-Factor Authentication (MFA) Flexibility:
Provides configurable authentication methods
at user and transaction levels, strengthening
security.

- File-Level Authorization: Allows bulk authorization
or rejection of transaction files, improving
operational productivity.

- Next Authorizer Visibility: Enhances workflow
transparency by displaying authorization
hierarchy.

- Deferred Processing for Non-Business Hours:
Enables automatic scheduling of transactions for
next business day processing, ensuring seamless
execution.

- Enhanced Profile Switching: Allows operational
teams to troubleshoot and support customers
efficiently by switching profiles securely.

Driving Operational Excellence through Configurability
and Automation

- Configurable Transaction Screens and Workflows:
Enables institutions to tailor transaction journeys
as per customer and business requirements,
improving adaptability.

- Enhanced API Ecosystem: Introduction of new
APIs for transaction initiation, validation, and
enquiry, enabling seamless integration with ERP
and external systems.

- Automated Role-Based Account Mapping:
Eliminates manual configuration through system-
driven mapping of accounts to user roles,
reducing errors and improving efficiency.

- Bulk Customer Onboarding via APIs: Enables
onboarding of multiple corporate accounts in a
single step, significantly reducing turnaround
time and operational effort.

The release of FinnAxia? 9.0 reflects your CompanyRs. s
continued focus on combining strong foundational
capabilities with forward-looking innovation.

Nucleus Digital Services

Enabling Transformation Beyond Platforms

Nucleus Digital Services acts as a strategic enabler,
helping financial institutions modernize, integrate, and
scale their digital ecosystems.

It combines deep domain expertise with advanced
engineering to deliver:

Application & Platform Modernization

Transforming legacy systems into cloud-ready, API-
driven architectures.

AI, Data & Automation

Enabling decision intelligence, predictive analytics,
and cognitive automation across operations.

Cloud & Infrastructure Transformation

Building secure, scalable, and resilient infrastructure
aligned with regulatory requirements.

Ecosystem Integration

Enabling API-led connectivity with fintechs, partners,
and enterprise systems.

Accelerators & Platforms

Including enterprise solutions such as ELMS, RMS,
IDMS, and NucSpark (Agentic AI framework).

Delivering Measurable Outcomes

Nucleus Digital Services enables financial

institutions to:

- Accelerate modernization cycles

- Improve operational efficiency

- Enhance decision-making through AI

- Build scalable, compliant digital ecosystems

Nucleus Software continues to build integrated,
AI-driven platforms and transformation capabilities
that enable financial institutions to navigate
complexity, scale with confidence, and deliver
meaningful outcomes across lending and transaction
banking.

As the industry evolves, the Company remains focused
on enabling a shift from systems to platforms, from
processes to intelligence, and from local execution to
global scalability-anchored in enduring foundations
and accelerated by innovation.

C. AWARDS & RECOGNITIONS

- The Company was honoured with the "Best Global
Fintech Pioneer - India to the World" award at
the 6th edition of the PICUP Fintech Conference
& Awards 2026, a premier industry platform
organised by the Indian BanksRs. Association and
FICCI, with Boston Consulting Group as the
Knowledge Partner.

- Nucleus Software Annual Report for FY
2024-25 received the Gold Award for
Excellence in Technology - Software at
the League of American Communications
Professionals LLC Annual Report Awards.
This recognition highlights the CompanyRs. s
commitment to high standards of transparency,
clarity, and stakeholder communication.

- The Company was also conferred the
Technical Achievement Award for Annual
Report FY 2024-25 by League of American
Communications Professionals LLC, reaffirming
its focus on innovation and excellence in
corporate reporting practices.

- The CompanyRs. s flagship digital lending platform
FinnOne Neo?, was recognised as the Best
Enterprise Collections Platform 2026 at the
Bharat Collections Summit & Awards 2026.
This accolade reflects the platformRs. s ability to
deliver structured, scalable, and intelligence-led
collections capabilities across large and complex
lending portfolios.

- Saudi Finance Company (SFC), in partnership
with the Company, was recognised with the
"Excellence in Digital Consumer Transformation"
award at the Finnovex Saudi Arabia 2025 summit.
This recognition highlights the successful
transformation of consumer financing across
auto, personal, and SME segments, powered by
your CompanyRs. s lending platform.

- Nucleus Software was honoured at the IBSi
Global FinTech Innovation Awards (GFIA) 2025,
receiving the recognition for "Best-in-Class
Transaction Banking Platform" for its work with
Federal Bank Ltd. This recognition highlights
the strength of FinnAxia? in enabling scalable,
API-led transaction banking capabilities across
payments, liquidity management, and corporate
banking operations.

- The Fintech Partner Award at Asia Fintech Awards
2024 for Nucleus Software flagship solution
FinnOne Neo?, revolutionizing digital lending
with AI-powered automation and seamless
integrations.

- Best Fintech & NBFC Collaboration at 17th NBFC
& Fintech Conclave Awards 2024, in partnership
with TATA Capital Ltd., showcasing our role in
strengthening the fintech ecosystem through
strategic alliances.

- Best FinTech of the Year at 17th NBFC &
Fintech Conclave Awards 2024, recognizing
our unparalleled contributions to the financial
services industry and our impact on digital
transformation.

- Best Digital Lending Implementation: Best Tool
& Practices Adopted at IBSi Global Fintech
Innovation Awards 2024, for our cutting-edge
work with Ambit Finvest, delivering efficiency,
compliance, and next-gen digital lending
experiences.

- Nucleus Software Annual Report for the
Year Ended March 31, 2024 won the Silver
Award for Excellence within the Technology
Software industry by the League of American
Communications Professional (LACP).

- Dr. Ritika Dusad, Executive Director and was
honored with the prestigious "DE&I in Tech
Leadership Award" at "The Rising 2024".
Emerging victorious from a pool of over 100
nominees. Dr. DusadRs. s outstanding contributions
have transformed the tech industry, instigating
impactful change at every juncture.

- Nucleus Software was honored with a prestigious
award in 2023 from IBS Intelligence (IBSi) for
the "Best Digital Lending Implementation - Most
Impactful Project" category. This recognition is
a testament to our dedication to innovation and
excellence in the realm of digital lending. Our
collaborative efforts with Poonawalla Fincorp not
only transformed digital lending but also left a
lasting impact on the industry.

- Nucleus Software Annual Report for the Year
ended March 31, 2023, won the Silver Award
for Excellence within the Technology-Software
industry and Technical Achievement Award
from League of American Communication
Professionals (LACP). The Annual Report was
also ranked 99th among the top 100 Annual
Reports worldwide by League of American
Communications Professionals LLC (LACP).

- FinnOne Neo? won the Banking Frontiers
Technoviti Award 2023. FinnOne Neo? is the
next-generation digital lending solution built on
an advanced technology platform designed to
shape the future of lending across Retail and
Corporate finance. The multi-channel solution
helps digitize the complete loan lifecycle end-
to-end and supports both cloud and on-premise
deployments.

- Nucleus Software received IBSi Global Fintech
Innovation Awards 2023 for Most Effective
Digitization / Paperless Initiative - Best Project
Implementation for Mirae Asset Financial
Services

- Nucleus Software earned the IBSi Global Fintech
Innovation Awards 2023 under category Best
Transaction Banking implementation for BRAC
Bank Ltd.

- Nucleus Software along with Mirae Asset
Financial Services India Pvt Ltd. showcased
ground-breaking achievement by winning the
IBS Intelligence Global Fintech Innovation Awards
2022, in the innovative category Implementation
of the Most Effective Paperless Digitization
Project.

- Nucleus Software Annual Report for the Year
ended March 31, 2022 won the Platinum Award
for Excellence within the Technology- Software
industry and Technical Achievement Award
from League of American Communication
Professionals (LACP). The Annual Report was
also ranked 49th amongst the WorldRs. s Top 100
Annual Reports within the Technology-Software
industry by LACP.

- Nucleus Software received first position at

the "Corporate Governance and Sustainability
Vision Awards 2021", held by Indian Chamber of
Commerce.

- Nucleus Software Annual Report for the Year

ended March 31, 2021 won the Platinum Award
for excellence within the Technology- Software
industry and the Technical Achievement Award
from League of American Communication

Professionals (LACP).

- Nucleus Software was awarded the "Best

Technological Innovation in Payments
(B2B)" award at the Seamless Middle East
2020 conference in Dubai.

D. FUTURE OUTLOOK

Building for a Financial Ecosystem Defined by
Intelligence, Agility, and Trust

The global Banking, Financial Services, and

Insurance (BFSI) industry continues to undergo
structural transformation driven by accelerating
digital adoption, Artificial Intelligence (AI), evolving
customer expectations, regulatory modernization,
and the growing need for operational resilience across
financial ecosystems.

Financial institutions globally are increasingly
transitioning from legacy operating environments
towards cloud-enabled, API-first, and intelligence-
led platforms designed to improve agility, scalability,
customer experience, governance, and ecosystem
interoperability.

According to McKinsey, Generative AI alone has
the potential to create between US$200 billion
and US$340 billion annually in additional value for
the global banking industry, reflecting the growing
adoption of AI-led capabilities across underwriting,
customer servicing, fraud management, compliance,
software engineering, and operational workflows.
This shift is expected to fundamentally redefine how
financial institutions manage growth, efficiency, and
customer engagement in the years ahead.

The future of banking is also being shaped by the
rapid evolution of:

- API-led and composable banking architectures

- cloud-ready and hybrid-cloud ecosystems

- embedded finance models

- real-time payments infrastructure

- intelligent collections and servicing frameworks

- digital identity and consent-based ecosystems

- AI-enabled risk and fraud monitoring systems

The global digital lending platform market continues
to witness strong long-term growth momentum.
According to Grand View Research, the market was
valued at approximately US$10.55 billion in 2024 and
is projected to reach approximately US$44.49 billion
by 2030, growing at a CAGR of approximately 27.7%.

Simultaneously, transaction banking is undergoing
significant modernization globally. Financial
institutions are increasingly prioritizing real-time
payments, treasury digitization, liquidity optimization,
API-enabled ecosystems, and integrated corporate
banking experiences. Modern transaction banking
platforms are expected to provide greater
interoperability, automation, analytics, scalability,
and customer-centricity across enterprise banking
operations.

India Outlook: Banking the Vision of Viksit Bharat
2047

India continues to strengthen its position as one of the
worldRs. s fastest-growing and most digitally advanced
financial ecosystems.

The rapid expansion of Digital Public Infrastructure
(DPI), UPI-led payment ecosystems, Aadhaar-
enabled identity infrastructure, Account Aggregator
frameworks, and policy-led financial inclusion
initiatives continues to accelerate the digitization of
banking and lending ecosystems across the country.

IndiaRs. s digital payments infrastructure has emerged
as a globally benchmarked ecosystem. According to

the Press Information Bureau (PIB), UPI transactions
increased from approximately 92 crore transactions in
FY 2017-18 to 13,116 crore transactions in FY 2023-
24, representing transformational growth in digital
financial adoption across the country. PIB further
highlighted that UPI now accounts for nearly 49%
of global real-time payment transaction volumes,
reinforcing IndiaRs. s emergence as a global leader in
digital payment innovation.

The continued expansion of:

- UPI ecosystems

- Consent-based data-sharing frameworks

- Account Aggregator infrastructure

- Embedded finance ecosystems

- AI-led financial services innovation

- MSME digitization initiatives

is fundamentally reshaping customer acquisition,
servicing, lending, and transaction banking models
across the industry.

IndiaRs. s digital lending ecosystem also continues to
witness strong growth momentum. According to
Grand View Research, the India digital lending platform
market was valued at approximately US$486.6 million
in 2024 and is projected to reach approximately
US$2.45 billion by 2030, growing at a CAGR of
approximately 31.5%.

The Indian banking sector is expected to continue
investing significantly across:

- retail and MSME lending digitization

- AI-led underwriting and collections

- co-lending and embedded finance ecosystems

- digital onboarding and servicing frameworks

- fraud prevention and risk management systems

- multilingual and inclusive banking experiences

- governance and compliance automation

As India progresses towards its long-term vision of
Viksit Bharat 2047, the BFSI sector is expected to play
a foundational role in driving financial inclusion, credit
expansion, digital commerce enablement, MSME
growth, and economic formalization.

Future of Lending and Banking Transformation

The future of lending is increasingly expected to
be shaped by AI-assisted decisioning, intelligent
automation, embedded finance, digital identity

ecosystems, alternative data models, automated
document processing, and real-time risk
monitoring.

Financial institutions are progressively moving away
from fragmented and siloed lending operations
towards unified digital lending ecosystems integrating
customer acquisition, underwriting, loan management,
collateral management, servicing, and collections
within scalable and interoperable platforms.

Banks are increasingly prioritizing:

- faster loan turnaround times

- AI-enabled underwriting support

- automated verification workflows

- real-time fraud detection

- intelligent collections ecosystems

- personalized customer journeys

- digital self-service capabilities

- regulatory-ready servicing frameworks

Regulatory and Compliance Outlook

Regulation will continue to remain one of the most
important drivers shaping technology investments
across global BFSI ecosystems.

Across geographies, regulators are increasingly
focusing on:

- digital lending governance

- operational resilience

- data privacy and protection

- cybersecurity frameworks

- consumer protection and transparency

- AI governance and explainability

- auditability and traceability

- fraud prevention and financial integrity

In India, regulatory developments around digital
lending guidelines, Account Aggregator ecosystems,
data protection frameworks, co-lending structures,
and consent-led financial ecosystems are expected to
continue shaping technology modernization priorities
across banks and NBFCs.

As banking ecosystems become increasingly
interconnected and AI-driven, financial institutions are
expected to prioritize platforms capable of balancing
innovation with governance, agility with compliance,
and scalability with operational resilience.

E. OPPORTUNITIES AND THREATS

Opportunities for Nucleus Software

The ongoing transformation of global banking
ecosystems presents significant long-term
opportunities for Nucleus Software.

The modernization of lending and transaction banking
infrastructure across global markets continues to
create demand for platforms capable of supporting
intelligent automation, AI-enabled decisioning,
composable architecture, regulatory compliance, and
ecosystem interoperability.

The increasing adoption of AI across banking
workflows presents substantial opportunity across:

- underwriting and credit assessment

- fraud detection and risk monitoring

- intelligent collections

- customer engagement and servicing

- workflow automation and analytics

- operational optimization

The continued evolution of FinnOne Neo? and
FinnAxia?, combined with investments in API-first
architecture, AI-led capabilities, cloud enablement,
and ecosystem integration, positions the Company to
participate meaningfully in this next phase of banking
transformation.

Emerging markets across Asia-Pacific, the Middle
East, and Africa continue to present long-term
opportunities driven by financial inclusion, SME
financing, digital lending expansion, and banking
modernization initiatives. Developed markets continue
to present opportunities around legacy modernization,
operational resilience, governance-led AI adoption,
and transaction banking transformation.

India also continues to represent a strategically
important long-term growth market supported
by digital public infrastructure, financial inclusion
initiatives, and rapid digitization across banking and
financial services ecosystems.

Threats and Risks

The evolving global environment also presents certain
risks and challenges.

Regulatory complexity across multiple geographies

may increase localization requirements, compliance
expectations, and implementation timelines for
financial technology providers. Evolving regulations
around digital lending, AI governance, cybersecurity,
and data privacy may require continued investments
in product modernization and compliance frameworks.

Cybersecurityrisks also continue toincrease as banking
ecosystems become more digital, interconnected, and
data-intensive. Financial institutions are expected to
place increasing emphasis on operational resilience,
security frameworks, fraud prevention systems, and
governance-ready technology ecosystems.

The financial technology landscape also remains
highly competitive, with participation from:

- global banking technology providers

- enterprise software companies

- digital-first fintech players

- specialized lending technology firms

- AI-led emerging platforms

Macroeconomic uncertainty, geopolitical
developments, inflationary pressures, and shifts in
global interest rate environments may also impact
technology spending priorities and investment cycles
across financial institutions.

Rapid advancements in AI, cloud computing,
embedded finance, and ecosystem banking models
may require sustained investments in innovation,
talent, partnerships, and platform evolution to remain
competitive and future-ready.

F. THE WAY FORWARD

Looking ahead, the financial services sector is
expected to continue evolving in a measured yet
decisive manner, shaped by structural shifts in
technology adoption, regulatory expectations, and
changing customer behaviour across markets.

A few clear themes are emerging across the industry:

- AI-led automation and analytics are increasingly
becoming integral to decision-making across
lending, risk management, and collections.
Financial institutions are moving beyond
experimentation towards practical deployment of
AI to improve efficiency, enhance credit quality,
and support faster, more informed decisions.

- Platform-based and composable architectures
are gaining wider adoption as institutions look
to modernize legacy environments without
disrupting ongoing operations. The focus is on
building flexible, API-led ecosystems that allow
for faster product innovation and seamless
integration with partners.

- Cross-border financial services and regional
expansion continue to gather momentum,
particularly across emerging markets. Institutions
are looking to scale beyond domestic boundaries,
while managing regulatory diversity, data
requirements, and operational complexity.

- Regulatory and compliance-driven transformation
remains a key priority. Increased oversight,
governance requirements, and focus on data
privacy and security are driving investments
in systems that are not only efficient but
also transparent, auditable, and aligned with
regulatory expectations.

In addition, areas such as MSME financing, co-lending
models, embedded finance, and ESG-linked lending
are expected to see sustained traction, supported by
both regulatory push and market demand.

In this context, Nucleus Software is well positioned to
respond to these developments through a balanced
and disciplined approach, supported by continued
investments in:

- Product innovation, with a focus on strengthening
core platforms and enhancing capabilities aligned
with evolving business requirements

- Platform scalability, enabling financial institutions
to manage growth, complexity, and multi-market
operations efficiently

- Market expansion, leveraging global presence
and partnerships to deepen engagement across
key regions

- Organizational capability, including talent
development and execution frameworks, to
support sustained delivery and innovation

Overall, while the operating environment may continue
to present both opportunities and challenges, your
Company remains confident of its ability to navigate
this phase through strong fundamentals, disciplined
execution, and a clear strategic direction.

G. RISKS AND CONCERNS

These are discussed in detail in the Risk Management
chapter provided later in this Integrated Annual
Report.

H. INTERNAL CONTROL SYSTEMS AND THEIR
ADEQUACY

Internal control systems are a set of policies,
processes and procedures put in place to help achieve
the strategic objectives of an organization. At the
same time internal controls also enhance the reliability
and accuracy of accounting data. The Company has
an Internal Control System commensurate with the
size, scale and complexity of its operations. This has
been designed to provide reasonable assurance with
regard to recording and providing reliable financial and
operational information, complying with applicable
statutes, safeguarding assets from unauthorised
use, executing transactions with proper authorisation
and ensuring compliance of corporate policies. The
Company employs an advanced Enterprise Resource
Planning (ERP) system that connects all parts of
the organization, to record data for accounting,
consolidation and management information purposes.
It has continued its efforts to align all its processes and
controls with global best practices. The management
assessed the effectiveness of the CompanyRs. s
internal control over financial reporting (as defined
in Regulation 17 of SEBI Regulations 2015) as of
March 31, 2026.

ASA & Associates LLP, the statutory auditors of the
Company, have audited the financial statements
included in this Intigrated Annual Report and have
issued an unmodified opinion on the adequacy and
operating effectiveness of the CompanyRs. s internal
financial controls over financial reporting.

The Board of Directors also re-appointed Internal
Auditors i.e. Varma & Varma Chartered Accountants,
as recommended by the Audit Committee with a well-
defined internal audit scope. The audit is based on an
internal audit plan, which is reviewed and approved by
the Audit Committee. The Internal Auditor reports to
the Chairperson of the Audit Committee and presents
significant audit observations to the Audit Committee.
Based on the report of the Internal Auditor, process
owners undertake corrective action in their respective
areas and thereby strengthen the controls.

The Audit Committee also meets statutory auditors
to ascertain, inter alia, their views on the adequacy
of internal control systems and keeps the Board
of Directors informed of its major observations
periodically. Based on its evaluation [as defined in
Section 177 of the Companies Act, 2013 and Regulation
18 of Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements)
Regulations, 2015], the Audit Committee noted that,
as of March 31, 2026, the CompanyRs. s internal financial
controls were adequate and operating effective.

The CEO/CFO certification provided elsewhere in
this report also places responsibility on the CEO and
CFO to continuously ensure adequacy of our internal
control systems and procedures.

I. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES

During FY 2025-26, Nucleus Software continued
to strengthen organizational culture, leadership
capability, employee experience, and workforce
readiness through focused investments in capability
building, leadership development, organizational
effectiveness, and Lean transformation initiatives.
Employee engagement, wellbeing, rewards, Diversity,

Equity & Inclusion (DEI), and innovation-led talent
programs remained key priorities, further reinforcing
a high-performance and inclusive workplace culture.

Nucleus Software was certified as a Great Place to
Work? in India, reflecting its continued commitment to
employee experience and workplace excellence. The
Company remains focused on fostering continuous
learning, inclusive leadership, innovation, and
operational excellence to support sustainable growth
and long-term value creation.

J. FINANCIAL PERFORMANCE

Consolidated financial statements have been prepared
in accordance with the Indian Accounting Standards
(Ind AS) as per the Companies (Indian Accounting
Standards) Rules, 2015 notified under Section 133 of
the Companies Act, 2013 (the Rs. ActRs. ) and other relevant
provisions of the Act.

The Company has eight subsidiary companies, all
of which are wholly owned. The Company discloses
stand-alone audited financial results on a quarterly
and annual basis, consolidated un-audited financial
results on a quarterly basis and consolidated audited
financial results on an annual basis.

An overview of the consolidated financial results for FY26 and FY25 is given below
The consolidated financial results are as below:

For the Year Ended March 31,	2026	% of Revenue	2025	% of Revenue	Growth (%)
Revenue From Operations	876.03	100.00	832.25	100.00	5.26
Expenses
a) Employee benefit expense	589.41	67.28	534.64	64.24	10.24
b) Operating and other expenses	161.05	18.39	129.26	15.53	24.59
c) Finance costs (Bank charges)	1.41	0.16	0.75	0.09	88.00
Total Expenses	751.87	85.83	664.65	79.86	13.12
Operating Profit (EBITDA)	124.16	14.17	167.60	20.14	(25.92)
Depreciation & Amortization	16.49	1.88	14.81	1.78	11.34
Operating Profit after Interest and Depreciation	107.67	12.29	152.79	18.36	(28.43)
Other Income	64.16	7.32	66.26	7.96	(3.17)
Exceptional Items	21.95	2.51	-	-	-
Profit Before Tax	149.88	17.10	219.05	26.32	(31.58)
Tax Expenses	33.14	3.77	56.05	6.73	(40.87)
Profit After Tax	116.74	13.33	163.00	19.59	(28.38)
Other Comprehensive Income	9.40	1.07	(3.56)	(0.43)	(364.04)
Total Comprehensive Income for the year	126.14	14.40	159.44	19.16	(20.89)

Revenue from Operations

Our revenues from software development comprise of income from fixed price and time and material contracts.
Revenue from fixed price contracts comprising of license, related customization and implementation is recognized
in accordance with the output method based on percentage completion. Revenue from time and material contracts
is recognised as the services are rendered. Revenue from annual technical service contracts is recognized on a pro
rata basis over the period in which such services are rendered.

During the year, revenue from operations is Rs. 876.03 crore, as compared to Rs. 832.25 crore for the previous year.
Revenue from Various Geographies

Nucleus Software Group parent Company is incorporated in India and caters to customers situated all across the
globe. We operate in seven main geographical segments: India, Far East, Southeast Asia, Europe, Middle East, Africa
and Australia, which represent the reportable segments. These segments are based on location of customers of the
Company.

For the year, around 42% of revenue was derived from overseas customers. The graph below presents a geography-
wise distribution for the year as well as the previous year.

Revenue from Products and Services

Our Revenues are further disaggregated into Products
and Services. "Products", comprises of license fee,
revenue from customization and implementation of
products and postproduction maintenance support.
Product revenue for the year is Rs. 740.56 crore, 85% of
the total revenue, against Rs. 713.79 crore, 86% of total
revenue, in the previous year.

Software services rendered by the Company typically
consist of development of software to meet specific
customer requirements. These services consist of
application development & maintenance, testing,
consulting and infrastructure management services
with a strong banking domain focus. Revenue from
Software projects and services including other
revenue for the year is Rs. 135.47 crore, 15% of the
total revenue, against Rs. 118.46 crore, 14% of the total
revenue in the previous year.

EXPENSES

Employee Benefit Expense

Employee benefit expenses include salaries paid to employees globally which have fixed, variable and incentives
components; provision for retirement benefits, contribution to provident fund and expense on staff welfare activities.
The employee benefit expenses have increased by 10.24% to Rs. 589.41 crore, 67.28% of revenue against Rs. 534.64 crore,
64.24% of revenue in the previous year.

in crore)
For the Year Ended March 31,	2026	% of Revenue	2025	% of Revenue	Growth (%)
Salaries	536.65	61.26	448.10	58.65	9.95
Contribution to provident and other funds	35.13	4.01	31.52	3.79	11.44
Gratuity expense	9.00	1.02	6.70	0.80	34.26
Staff welfare	8.63	0.99	8.32	1.00	3.77
Total Employee Benefit Expenses	589.41	67.28	534.64	64.24	10.24
Revenue	876.03	100.00	832.25	100.00	5.26

Operating and Other Expenses

Operating and other expenses primarily consist of expenses such as travel expenses, sales and marketing related
expenses, outsourced technical service expenses, legal and professional, training & recruitment, information technology
expenses, infrastructure charges, contribution to CSR activities etc.

Operating and other expenses are at Rs. 161.05 crore, 18.38% of revenue for the year, increased by 24.59% in comparison to
Rs. 129.26 crore, 15.53% of revenue in the previous financial year.

C in crore)

For the Year Ended March 31,	2026	% of Revenue	2025	% of Revenue	Growth (%)
Advertisement, business development and promotion	10.18	1.16	5.61	0.67	81.43
Commission to channel partners	0.41	0.05	0.82	0.10	(49.95)
Communication	1.78	0.20	1.68	0.20	6.02
Conference, exhibition and seminar	9.26	1.06	7.27	0.87	27.40
Conveyance	1.20	0.14	0.89	0.11	34.24
Cost of software purchased for delivery to Clients	0.17	0.02	0.14	0.02	17.39
DirectorsRs. remuneration	2.51	0.29	3.01	0.36	(16.56)
Expenditure on Corporate Social Responsibility	3.69	0.42	2.77	0.33	33.31
Insurance	0.85	0.10	1.12	0.13	(24.20)
Information technology expenses	44.11	5.04	41.24	4.96	6.95
Legal and professional	16.48	1.88	16.43	1.97	0.31
Miscellaneous expenses	2.47	0.28	2.07	0.25	19.24
Outsourced technical service expense	11.91	1.36	6.16	0.74	93.39
Power and fuel	4.06	0.46	3.83	0.46	6.08
Provision for doubtful trade receivables/advances/ other current assets	0.05	0.01	(1.60)	(0.19)	(103.13)
Rates & Taxes	0.43	0.05	0.81	0.10	(47.10)
Rent	3.07	0.35	2.60	0.31	17.98
Repair and maintenance	5.74	0.66	5.21	0.63	10.25
Travel expense	26.38	3.01	18.04	2.17	46.26
Training and recruitment	11.33	1.29	6.49	0.78	74.48
Withholding tax charged off	4.97	0.57	4.67	0.56	6.43
Total Operating and Other Expenses	161.05	18.39	129.26	15.53	24.59
Revenue	876.03	100.00	832.25	100.00	5.26

The Increase in Operating and other expense for FY 2026 from FY 2025 is primarily due to higher Advertisement
and business promotion expenses, Traveling Expenses, Information Technology Expenses, Training and Recruitment,
Conference, Exhibition & Seminar expenses, Outsourced technical service expenses.

The Company has set up Nucleus Software Foundation, a trust for the purpose of undertaking CSR activities of the
company. During the year, the Company contributed Rs. 3.69 crore towards CSR activities to the trust. The details of CSR
initiatives undertaken by the trust has been provided in a separate section in the Integrated Annual Report.

Finance Cost

Finance cost during the year is at Rs. 1.41 crore, 0.16% of revenue against Rs. 0.75 crore, 0.09% of revenue in the previous
year

(Rs. in crore)

For the Year Ended March 31,	2026	2025
Bank Charges	0.62	0.43
Interest Expense on lease liability	0.64	0.32
Unwinding of discount (discounting)-security deposit (received)	0.02	-
Interest Others	0.13	-
Total	1.41	0.75
Operating Profit (EBITDA)
Operating Profit during the year at Rs. 124.16 crore, 14.17% of revenue against Rs. 167.60 crore, 20.14% of revenue in the
previous year.
Depreciation & Amortization
Depreciation & Amortization on fixed assets is Rs. 16.49 crore, 1.88% of revenue for the year, against Rs. 14.81		crore, 1.78%
of revenue in the previous year.
Other Income
Other Income includes interest income, profit on sale of investments, gain/(loss) on exchange fluctuation, MTM gain on
Mutual Funds etc.		(Rs. in crore)
For the Year Ended March 31,	2026	2025
Dividend on investment	-	0.44
Interest income	30.49	25.86
Net Gain / (Loss) on exchange fluctuation	5.94	0.57
Net Gain/ (Loss) on sale of investments	-	1.22
MTM Gain/ (Loss) on mutual funds	27.13	38.00
Others	0.60	0.17
Total	64.16	66.26

The other income for the year is Rs. 64.16 crore, 7.32% of revenue against Rs. 66.26 crore, 7.96% of revenue in the previous year.
Foreign Exchange Gain / (Loss)

Foreign Exchange Gain (Loss) includes gain (loss) from translation of current assets and liabilities at month end rates,
those arising from realization/payments of receivables/payables. During the year the Company had a net foreign exchange
gain of Rs. 5.94 crore against gain of Rs. 0.57 crore in the previous year.

The Company follows a well-defined policy of hedging close to receivables through Forward Contracts which are
designated as Highly Probable Forecast Transactions. The Company has a conservative approach and does not speculate
in foreign currency markets. Forwards are held to maturity and regular reporting and monitoring systems are in place
including quarterly updates to the Audit Committee.

Currency-wise revenues for the year along with a comparison for the previous year is as follows:

(in %)

Currency	FY26	FY25
Indian Rupee	58.31%	57.68%
US $	28.57%	27.51%
Singapore $	5.61%	4.81%
Australian $	2.23%	2.93%
Japanese Yen	2.28%	1.81%
Euro	0.68%	1.60%
Malaysian Ringgit	1.61%	1.62%
British Pound	-	1.08%
Arab Emirates Dirham	0.37%	0.96%
Saudi Ryal	0.17%	-
Vietnamese Dong	0.17%	-
Total	100.00%	100.00%

Taxation

It represents a provision for corporate & income taxes determined in accordance with tax laws applicable in countries
where the Company and subsidiaries operate.

C in crore)

For the Year Ended March 31,	2026	2025
- Current Tax Expense	36.55	47.63
- Deferred Tax Credit (net)	(3.41)	8.42
Total	33.14	56.05

Total effective tax for the year is 22.11% of Profit before tax, in comparison to 25.59% of Profit before tax for the
previous year.

Profit After Tax

Profit after tax for the year is Rs. 116.74 crore, 13.33% of revenue, against Rs. 163.00 crore, 19.59% of revenue in previous year.

This age of competition necessitates overall revenue growth, earned in an optimal cost environment. We remain committed
to achieving higher productivity and generate better margins. Our sales and marketing efforts are focused on increasing
our customer base and hence the market share, which would ultimately yield better realizations. Emerging markets
across the world will continue to provide stability and growth would be led by larger engagements and value offerings.

Other Comprehensive Income (OCI)

Other comprehensive income represents

a) Items that will not be reclassified to profit or loss: Equity instruments through OCI - this is on account of fair valuation
of investment for which the Company has made an irrevocable option to present the same in the OCI. For the year it
is Rs. 4.67 crore, against Rs. (1.93) crore in the previous year. Remeasurements of the defined benefit plans- For the year
it is Rs. 3.74 crore, against Rs. (4.38) crore in the previous year.

Tax on above is Rs. (1.61) crore for the year, against Rs. 1.48 crore in the previous year

b) Items that will be reclassified to profit or loss: Effective portion of gains and loss on hedging instruments in a cash
flow hedge, net - when a derivative is designated as a cash flow hedging instrument, the effective portion of changes
in the fair value of derivative is recognized in OCI. For the year it is Rs. (1.14) crore, against Rs. 0.02 crore in the previous
year. Exchange difference on translation of foreign operations for the year it is Rs. 3.47 crore, against Rs. 1.27 crore in
the previous year.

Tax on above is Rs. 0.27 crore for the year, against Rs. (0.02) crore in the previous year

Total Other comprehensive income/(loss) net of tax for the year is Rs. 9.40 crore, against Rs. (3.56) crore in the previous
year.

Share Capital

The Paid-Up Share Capital of the Company, as on March 31, 2026, is 2,63,25,306 equity shares of Rs. 10 each, as compared
to 2,63,25,306 equity shares of Rs. 10 each as on March 31, 2025.

Subsidiaries

The Company has eight subsidiary companies, all over the world, all of which are wholly owned. Its gross investment in
Paid-up Share Capital of the Subsidiaries as on March 31, 2026 is as per the below table.

Name of Subsidiary Company	Currency	As at March 31, 2026		As at March 31, 2025
		In foreign Currency	Eqv. Rs. (in crore)	In foreign Currency	Eqv. Rs. (in crore)
Nucleus Software Solutions Pte. Ltd., Singapore 6,25,000 equity shares of SGD 1 each	SGD	6,25,000	1.63	6,25,000	1.63
Nucleus Software Inc., USA 10,00,000 equity shares of US$ 0.35 cents each	USD	3,50,000	1.63	3,50,000	1.63
Nucleus Software Japan Kabushiki Kaisha, Japan 200 equity shares of JPY 50,000 each	JPY	1,00,00,000	0.41	1,00,00,000	0.41
Nucleus Software Netherlands B.V., Netherlands* 7,800 equity shares of Euro 100 each (as at March 31, 2025: 7,500 equity shares of Euro 100 each)	Euro	7,80,000	5.19	7,50,000	4.89
Nucleus Software Limited, India 1,50,00,000 equity shares of Rs. 10/- each	INR	-	16.94	-	16.94
Nucleus Software Australia Pty. Ltd, Australia 1,00,000 Equity share of 1 AUD each	AUD	1,00,000	0.55	1,00,000	0.55
Nucleus Software South Africa (Pty.) Limited, South Africa 10 Equity shares of ZAR 61,200 each	ZAR	6,12,000	0.32	6,12,000	0.32
Nucleus Software Vietnam Company Limited, Vietnam**	-	-	-	-	-
Total			26.67		26.37

The profits/losses of the Subsidiary Companies are fully reflected in the consolidated accounts of the Company and
Subsidiaries.

Note:

* During the year, the Company infused additional capital of Euro 30,000 in equity share capital of Netherlands Subsidiary.
**The Company incorporated a wholly-owned subsidiary, Nucleus Software Vietnam Company Limited, in the Socialist
Republic of Vietnam on February 05, 2026. As at 31 March 2026, the Company did not infuse any share capital into the
subsidiary. The Company infused USD 1,00,000 equivalent to VND 261,68,00,000 on 06 May 2026 in the Charter Capital
of Vietnam subsidiary.

Other Equity

The movement in the components of Other Equity is as below: (Rs. in crore)

Particulars	Closing Balance as on March 31, 2026	Additions/ (Deletions) during the year	Opening Balance as on April 01, 2025
General Reserve	-	-	-
Capital Reserve	0.89	-	0.89
Capital Redemption reserve	6.06	-	6.06
Retained Earnings	853.62	83.83	769.79
Remeasurement of the defined benefit plans	(0.77)	(2.13)	(2.90)
Hedging Reserve	(0.82)	(0.87)	0.05
Foreign Currency Translation Reserve	7.74	3.47	4.27
Equity instrument through other comprehensive income	14.40	4.67	9.73
Total	881.12	93.23	787.89

Non-Current Fixed Assets

As at March 31, 2026, Net carrying amount of Property, Plant and Equipment, Intangible assets, Furniture and fixtures,
capital work in progress, right of use of assets etc. is Rs. 89.15 crore, against Rs. 61.29 crore as on March 31, 2025.

(Rs. in crore)

As at March 31,	2026	2025	Inc/Dec (%)
Gross Carrying Amount
Freehold land	0.34	0.34	-
Leasehold improvements	0.14	0.14	-
Buildings	36.16	25.13	43.89
Plant and equipment	11.93	10.24	16.50
Computer equipment	70.55	57.14	23.47
Vehicles	1.72	1.95	(11.79)
Furniture and fixtures	4.12	3.76	9.57
Software	25.38	22.62	12.20
Total Gross Carrying Amount	150.34	121.32	23.92
Less: accumulated depreciation	86.83	79.69	8.96
Net Carrying Amount	63.51	41.63	52.57
Capital work in progress	0.06	0.22	(72.73)
Intangible Assets under Development	0.02	0.03	(33.33)
Right of use Assets (net of Amortisation)	13.15	6.70	96.27
Investment Property (net of Depreciation)	12.41	12.71	(2.36)
Total Non-Current Fixed Assets	89.15	61.29	45.46

As permitted by Ind AS 101, the Company has elected to continue with the carrying values under previous GAAP as
deemed cost for all the items of property, plant and equipment and Intangible assets etc.

Investments

The Company continues to remain debt-free and we believe that cash generated from operations and reserves and surplus
are sufficient to meet our obligations and requirements towards capital expenditure and working capital requirements.

a. Non-current investments is Rs. 352.75 crore as on March 31, 2026 against Rs. 403.62 crore as on March 31, 2025.

(Rs. in crore)

As at March 31,	2026	2025
Investment in equity shares of a listed company at FVOCI	14.65	9.98
Investment in tax free bonds at amortised cost	21.43	32.81
Investment in Target maturity fund (quoted) at amortised cost	87.37	142.40
Investment in unquoted mutual funds at Fair value through profit or loss (FVTPL)	229.30	218.43
Total	352.75	403.62

b. Current investments is Rs. 291.03 crore as on March 31, 2026 against Rs. 237.06 crore as on March 31, 2025.

C in crore)

As at March 31,	2026	2025
Investment in unquoted mutual funds at Fair value through profit or loss (FVTPL)	248.36	236.53
Investment in tax free bonds at amortised cost	10.69	0.53
Investment in Target maturity fund (quoted) at amortised cost	31.98	-
Total	291.03	237.06

Cash and Bank Balances

As on March 31, 2026 the cash and bank balances (including fixed deposits) is at Rs. 123.11 crore against Rs. 122.67 crore
on March 31, 2025.

C in crore)

As at March 31,	2026	2025
Cash in hand	-	-
Balances with Bank
In Current Accounts	43.21	38.74
Remittance in Transit	3.31	0.04
In Deposit Account with original maturity of less than 3 months	33.49	11.68
In Deposit Account with original maturity of less than 12 months*	42.82	71.93
Balance in earmarked accounts	0.28	0.28
Total	123.11	122.67

*Balance with scheduled banks in deposit accounts include Rs. 0.31 crore (31 March 2025Rs. 0.55 crore) which are
under lien.

Operating Cash Flow

As a part of the financial policies, the Company believes in maintaining high level of liquidity as it provides immense
support against contingencies and uncertainties.

Our net cash flow from operating activities before working capital changes is Rs. 111.12 crore for the financial year 2026
against Rs. 172.50 crore in the previous year. After considering working capital changes, operating cash flow for the
year is Rs. 117.46 crore against Rs. 150.94 crore in the previous year.

To summarize the CompanyRs. s liquidity position, given below are few ratios:

As at March 31,	2026	2025
Operating Cash Flow as % of Revenue	13.41	18.14
Cash and Equivalents including current investment as % of Total assets	32.71	31.20
Cash and Equivalents including current investment as % of Revenue	47.27	43.22

Trade Receivables

Our trade receivables (net of provision) as on March 31, 2026 is Rs. 121.12 crore, against Rs. 137.41 crore as on March 31,
2025.

The age profile of the debtors (net of provision) is given below:

As at March 31,	2026	2025
Less than six months	95.94%	98.69%
Between 6 months and 1 Year	4.04%	1.31%
More than 1 Year	0.02%	-
Loans and Other Financial Assets
Loans and Other Financial assets have been classified	into Non-Current and Current based on their period of
realization.		C in crore)
1 As at March 31,	2026	2025
Non - Current
Loans Receivables considered good	0.01	0.08
Security deposits	2.44	1.38
Long-term deposits	220.40	124.17
Total	222.85	125.63
C in crore)
1 As at March 31,	2026	2025
Current
Loans Receivables considered good	0.08	0.34
Security deposits	1.53	1.74
Mark-to-market gain on forward contracts	-	0.06
Expenses recoverable from customers	0.93	0.16
Total	2.54	2.30
Total Loans and other Financial Assets	225.39	127.93

 

Security Deposits is primarily for hiring of office premises amounts to Rs. 3.97 crore as on March 31, 2026 against Rs. 3.12 crore as on March 31, 2025. Long term deposits amounting to Rs. 220.40 crore as on March 31, 2026 include deposits held with banks / financial institutions for maturity more than 12 months from the balance sheet date. Other Assets Other Assets include Income tax asset, Service income accrued but not due, Supplier and capital advances, Prepaid expenses etc. Other assets have been classified into Non -Current and Current based on their period of realization.
		Rs. in crore)
As at March 31,	2026	2025
Non - Current
Advance Tax	11.58	8.75
Capital Advances	0.03	8.04
Prepaid Expenses	0.54	1.26
Total	12.15	18.05

 

		in crore)
As at March 31,	2026	2025
Current
Service income accrued but not due	30.81	21.11
Employee Advances	0.35	0.34
Prepaid Expenses	11.87	15.64
Contract cost	0.06	0.01
Balances with Government authorities	0.48	0.62
Supplier advances	7.84	7.14
Deferred Expenses	0.02	0.06
Total	51.43	44.92
Total Other Assets	63.58	62.97

Current Liabilities

Current liabilities include Trade payables, Short-term provisions, Employee payable, Deferred revenue, Advances
from customers / Advance billing, Statutory liabilities etc. As on March 31, 2026 the Current liabilities are Rs. 282.24
crore against Rs. 282.55 crore as on March 31, 2025.

C in crore)

As at March 31,	2026	2025
Financial liabilities
Lease Liabilities	3.64	1.12
Trade Payables	18.21	12.90
Unpaid dividends	0.28	0.28
Payable for purchase of fixed assets	-	1.78
Mark to Market gain on forward contracts	1.09	-
Employee payable	73.29	50.06
Other current liabilities
Advances from customers/Advance Billing	45.19	61.58
Deferred Revenue	116.14	122.80
Statutory Liabilities	16.09	17.22
Short term provisions
Compensated absences for employees	6.92	5.34
Provision for asset retirement obligations	0.26	0.22
Provision for Income tax	1.13	9.25
Total	282.24	282.55

Trade payables represent the amount payable for providing goods & services and is Rs. 18.21 crore as on March 31,
2026 against Rs. 12.90 crore as on March 31, 2025. Advances from customers / Advance billing as on March 31, 2026
is Rs. 45.19 crore against Rs. 61.58 crore as on March 31, 2025. These consist of advance payments received from
customers, for which related costs have not been yet incurred or product license delivery is a later date. Deferred
revenue represents the advance invoicing for annual maintenance charges for which services are to be rendered in
the future. As on March 31, 2026 it is Rs. 116.14 crore against Rs. 122.80 crore as on March 31, 2025.

Employee Payables includes the provision for accrued salaries, incentives, bonus and retention bonus payable to
employees. It is Rs. 73.29 crore as on March 31, 2026 as against Rs. 50.06 crore as on March 31, 2025.

Statutory dues are the amounts accrued for taxes deducted at source by the Company, staff provident fund,
employee state insurance liabilities, GST, etc. As on March 31, 2026 it is Rs. 16.09 crore against Rs. 17.22 crore as on
March 31, 2025.

Short-term provisions for Compensated absences and provision for Income taxes are those for which liability is
expected to arise in the near future. Sum of all these short-term provisions as on March 31, 2026 is Rs. 8.31 crore
against Rs. 14.81 crore as on March 31, 2025.

The Company has made contributions to Nucleus Software Employees Group Gratuity Assurance Trust, which has
made further contributions to Employees Group Gratuity Scheme of Life Insurance Corporation of India.

Non-Current Liabilities

Non-Current Liabilities as on March 31, 2026 is Rs. 76.44 crore against Rs. 56.18 crore as on March 31, 2025:

(Rs. in crore)

As at March 31,	2026	2025
Financial liabilities
Lease Liabilities	4.91	0.88
Deferred Tax liabilities	12.75	14.99
Security Deposit	0.30	-
Other non-current liabilities
Deferred lease income on Security deposit received	0.12	-
Long-term Provisions
Compensated absences for employees	31.03	23.50
Gratuity	27.30	16.78
Asset retirement obligations	0.03	0.03
Total	76.44	56.18

A liability or provision is recognised when there is a present obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of the obligation.

The Company based on actuarial valuation determines provision for Compensated absences.