7Seas Entertainment Ltd Directors Report

To the Members of 7Seas Entertainment Limited

The Board of Directors presents the 35th Annual Report of the Company together with the audited standalone financial statements for the financial year ended 31 March 2026.

1. Financial results

(Rs. in lakh, except earnings per share)

Particulars	FY2025-26	FY2024-25
Revenue from operations	2,011.55	1,634.29
Other income	2.18	11.81
Total income	2,013.72	1,646.10
Total expenses	1,790.82	1,466.52
Profit before tax	222.90	179.58
Tax expense	Nil	13.11
Profit after tax	222.90	166.47
Basic earnings per share	Rs. 0.96	X0.75
Diluted earnings per share	X 0.96	X0.75

2. State of affairs and performance

During FY2025-26, the Company recorded revenue from operations of Rs. 2,011.55 lakh as compared with X1,634.29 lakh in the previous financial year, representing growth of approximately 23.1%. Profit after tax increased from X166.47 lakh in FY2024-25 to Rs. 222.90 lakh in FY2025-26, representing growth of approximately 33.9%.

The Company continued to focus on software development, game development and digital-content creation. During the year, it strengthened its mobile and casual-gaming portfolio and continued building capabilities in sports, racing and simulation-based gaming experiences.

The Company also expanded the use of selected AI-assisted tools in its development, design, testing and quality- assurance workflows. These tools are intended to improve development efficiency, accelerate iteration and enhance testing. Creative, commercial, legal, data-protection and final-release decisions continue to remain subject to human review and management oversight.

3. Change in nature of business

There was no change in the principal nature of the Companys business during the year.

4. Dividend

Having regard to the Companys growth plans, working-capital requirements and capital-allocation priorities, the Board has not recommended a dividend for FY2025-26.

5. Transfer to reserves

The Board has not proposed any transfer to the General Reserve for FY2025-26. The profit for the year has been carried forward in retained earnings under Other Equity.

6. Share capital

During FY2025-26, the authorised share capital of the Company was increased from Rs. 23.00 crore to Rs. 25.00 crore.Asat31 March 2026, the authorised share capital of the Company was Rs. 25.00 crore divided into 2,50,00,000 equity shares of 10 each.

As at 31 March 2026, the issued, subscribed and paid-up equity share capital of the Company was 23,11,22,450, comprising 2,31,12,245 equity shares of Rs. 10 each.

7. Preferential issue

Pursuant to the approval of the Board of Directors at its meeting held on 5 September 2025, the approval of the members at the 34th Annual General Meeting held on 30 September 2025 and the in-principle approval granted by BSE Limited on 11 February 2026, the Company, on 25 February 2026:

• allotted 7,90,000 equity shares of Rs. 10 each at an issue price of Rs. 80 per equity share, aggregating to Rs. 6.32 crore; and

• allotted 13,75,000 convertible warrants at an issue price of Rs. 80 per warrant, aggregating to ^11.00 crore.

Of the 7,90,000 equity shares allotted, 6,00,000 equity shares, aggregating to Rs. 4.80 crore, were allotted against cash consideration and 1,90,000 equity shares, aggregating to X1.52 crore, were allotted upon conversion of unsecured loans. The conversion of loans into equity represented a non-cash transaction.

The Company received Rs. 2.75 crore, representing 25% of the issue price of the convertible warrants, as upfront warrant-subscription money. The balance consideration of Rs. 8.25 crore is receivable upon exercise and conversion of the warrants in accordance with their terms and applicable law.

The Company received aggregate cash proceeds of Rs. 7.55 crore, comprising Rs. 4.80 crore towards equity shares allotted for cash and Rs. 2.75 crore towards upfront warrant-subscription money. The conversion of unsecured loans amounting to Rs. 1.52 crore into equity was a non-cash transaction and did not result in receipt of cash by the Company.

Details of the preferential issue, cash proceeds received, non-cash conversion of promoter loans and the Monitoring Agencys findings, including the reported deployment of unutilized proceeds as at 31 March 2026, are provided in Section 15, “Preferential Issue and Convertible Warrants”, of the Corporate Governance Report forming part of this Annual Report.

8. Annual return

Pursuant to Sections 92(3) and 134(3)(a) of the Companies Act, 2013, the Annual Return of the Company is available on the Companys website at https:// www.7seasent.com/annual-return

9. Board meetings

During FY2025-26, the Board of Directors met six (6) times on 5 April 2025, 15 May 2025, 12 August 2025, 5 September 2025, 14 November 2025 and 14 February 2026. Details of the meetings and Director-wise attendance are provided in the Corporate Governance Report forming part of this Annual Report.

10. Directors and Key Managerial Personnel Changes in Directors and Key Managerial Personnel Changes during the financial year

During FY2025-26, Mr. Bommineni Mohan Rao (DIN: 07233665), Non-Executive Director, and Mrs. C. Sita Visalakshi (DIN: 06380062), Independent Director, resigned from the Board with effect from the close of business on 5 September 2025. The Board took their resignations on record and approved the reconstitution of the Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee.

Changes after the close of the financial year

Mr. K. Pradeep Kumar (DIN: 07062498), Non-Executive Director, resigned with effect from the close of business on 18 April 2026. The Board took note of his resignation at its meeting held on 29 May 2026.

Mr. N. Mahender Reddy (DIN: 09389493), Independent Director, resigned with effect from the close of business on 14 August 2026, citing personal reasons and other commitments. He confirmed that there were no other material reasons for his resignation. Consequently, he also ceased to hold his positions on the committees of the Board with effect from the same time.

The Board places on record its appreciation for the contributions made by the outgoing Directors during their respective tenures.

Board composition at 31 March 2026

Director	DIN	Category at 31 March 2026
Mr. Lingamaneni Maruti Sanker	01095047	Managing Director?Executive, Promoter
Mrs. Lingamaneni Hemalatha	02226943	Whole-time Director and Chief Financial Officer?Executive, Promoter
Mr. K. Pradeep Kumar	07062498	Non-Executive, Non-Independent Director
Mr. Gandra Srinivas Rao	03502650	Non-Executive, Non-Independent Director
Mr. Kiran Kumar Bodla	07499895	Independent Director
Mr. N. Mahender Reddy	09389493	Independent Director
Mrs. Pasala Anupama	02328744	Independent Director
Mrs. Surabhi Verma	09725877	Independent Director

11. Director retiring by rotation

Mrs. Lingamaneni Hemalatha (DIN: 02226943), Whole-time Director and Chief Financial Officer, retires by rotation at the ensuing Annual General Meeting and, being eligible, offers herself for reappointment. The relevant particulars of Mrs. Hemalatha are provided in the Annexure to the Notice convening the Annual General Meeting.

12. Audit Committee

The Audit Committee has been constituted in accordance with Section 177 of the Companies Act, 2013 and Regulation 18 of the SEBI Listing Regulations.

During FY2025-26, the Audit Committee met four (4) times on 15 May 2025, 12 August 2025, 14 November 2025 and 14 February 2026. The composition of the Committee during the financial year, changes in its composition and member-wise attendance are disclosed in the Corporate Governance Report forming part of this Annual Report.

During FY2025-26, all recommendations made by the Audit Committee were accepted by the Board of Directors.

Consequent to the changes in the composition of the Board after the close of the financial year, the Audit Committee was reconstituted with effect from 14 August 2026. The composition of the reconstituted Committee is provided in the Corporate Information section of this Annual Report.

13. Independent Directors

The Company has received declarations from its Independent Directors confirming that they meet the criteria of independence prescribed under Section 149(6), read with Section 149(7), of the Companies Act, 2013 and Regulation 16(1)(b), read with Regulation 25(8), of the SEBI Listing Regulations.

The Independent Directors have also confirmed their registration in the Independent Directors Databank maintained by the Indian Institute of Corporate Affairs and compliance with the online proficiency self-assessment requirements, wherever applicable.

Based on the declarations and disclosures received, the Board is of the opinion that the Independent Directors meet the applicable independence criteria, possess the requisite integrity, expertise and experience, and are independent of the management.

14. Board evaluation and familiarization

Pursuant to Sections 134(3)(p) and 178(2) and Schedule IV to the Companies Act, 2013, read with the applicable SEBI Listing Regulations, the Board carried out an annual evaluation of its own performance, the performance of its committees and that of individual Directors. The evaluation covered Board and committee composition, effectiveness of meetings, quality and timeliness of information, participation and contribution of Directors, strategic guidance, risk oversight and discharge of governance responsibilities. The performance of each Independent Director was evaluated by the Board, excluding the Director concerned.

A separate meeting of the Independent Directors was held during FY2025-26 without the presence of Non-Independent Directors or members of management. The Independent Directors reviewed the performance of the Non-Independent Directors and the Board as a whole and assessed the quality, quantity and timeliness of information provided by management.

The Company conducted familiarisation programmes covering its business and operations, financial performance, governance framework, regulatory developments and the roles, rights and responsibilities of Independent Directors. The Companys familiarisation programme is available on its website at: https://www.7seasent.com/ 7SeasManagerHR/uploads/investors/independent-director/FAMILIARIZATION-PROGRAMME.pdf

15. Policy on appointment and remuneration

The Companys Nomination and Remuneration Policy provides the framework for identifying and appointing Directors, Key Managerial Personnel and senior management, determining qualifications, positive attributes and independence, and recommending remuneration.

The Policy seeks to ensure that remuneration is reasonable and sufficient to attract, retain and motivate suitable personnel, is aligned with responsibilities and performance, and complies with applicable statutory provisions and shareholder-approved limits.

Following the close of the financial year, the Board approved the current Nomination and Remuneration Policy on 21 July 2026 as part of its review of the Companys corporate policies.

The Policy is available on the Companys website at https://www.7seasent.com/investor-relations/Policies-and- Codes/10_Nomination_and_Remuneration_Policy.pdf

16. Directors Responsibility Statement

Pursuant to Section 134 (5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that

a) In the preparation of the annual accounts for the financial year ended on 31 March 2026, the applicable accounting standards have been followed, and there are no material departures;

b) They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as at 31 March 2026 and of the profit and loss of the Company for the financial year ended 31 March 2026;

c) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) They have prepared the annual accounts for the financial year ended on 31 March 2026 on a going concern basis;

e) They have laid down internal financial controls to be followed by the Company, and that, to the best of their knowledge, examination and analysis, such internal financial controls have been adequate and were operating effectively; and

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

17. Statutory Auditors and Auditors Report

M/s. Sathuluri & Co., Chartered Accountants (ICAI Firm Registration No. 006383S), Hyderabad were appointed as the Statutory Auditors of the Company for a period of five consecutive years, commencing from the conclusion of the 34th Annual General Meeting held on 30th September, 2025 until the conclusion of the 39th Annual General Meeting to be held in the year 2030. Their appointment was made in accordance with the provisions of Section 139 of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014. As per the Companies (Amendment) Act, 2017, ratification of auditors appointment at every Annual General Meeting is no longer required.

The Audit Report issued by the Statutory Auditors for the financial year ended 31st March, 2026, does not contain any qualifications, reservations, adverse remarks, or disclaimers. Accordingly, no explanation or comment by the Board is required under Section 134(3)(f) of the Companies Act, 2013.

18. Fraud reporting

During FY2025-26, no fraud was reported by the Statutory Auditors or the Secretarial Auditor under Section 143(12) of the Companies Act, 2013. Accordingly, there are no particulars of fraud reported by the auditors, other than those reportable to the Central Government, requiring disclosure under Section 134(3)(ca) of the Act.

19. Secretarial Auditor and Secretarial Audit Report

Pursuant to Section 204 of the Companies Act, 2013, Regulation 24A of the SEBI Listing Regulations and the applicable rules, the members of the Company, at the 34th Annual General Meeting held on 30 September 2025, appointed M/s. Chakravarthy & Associates, Practising Company Secretaries, as the Secretarial Auditors for five consecutive financial years, commencing from FY2025-26 and ending with FY2029-30. M/s. Chakravarthy & Associates conducted the Secretarial Audit for FY2025-26. Their report in Form MR-3, together with its accompanying letter, is annexed as Annexure II and forms an integral part of this Report. The Secretarial Auditor has reported non- filing of Forms MGT-15, MGT-14 and ADT-1.

Boards response: The non-filing of Forms MGT-15 and ADT-1 referred to in the Secretarial Audit Report has since been rectified by filing the respective forms with the Registrar of Companies.

20. Internal Auditor

M/s Patcha & Associates, carried out internal-audit reviews under the scope approved by the Audit Committee. Findings, corrective actions and status were reviewed by management and the Audit Committee.

21. Cost Records and Cost Audit

Considering the nature of the Companys business activities, the maintenance of cost records prescribed under Section 148(1) of the Companies Act, 2013, read with the Companies (Cost Records and Audit) Rules, 2014, was not applicable to the Company during the financial year under review. Accordingly, the requirement relating to cost audit was also not applicable for FY 2025-26.

22. Internal Financial Controls

The Company maintains internal financial controls commensurate with the size and nature of its operations. The framework covers authorisation, segregation of duties, financial close, asset safeguarding, user access, management review and internal audit. The Audit Committee reviews significant observations and remediation.

23. Risk Management

The Board oversees strategic, product, platform, financial, working-capital, technology, cybersecurity, intellectual- property, compliance, people and reputation risks. Management identifies material exposures, assigns ownership and reports significant matters to the Board and relevant committees.

24. Vigil Mechanism

The Company maintains a vigil mechanism for directors and employees that permits protected reporting of concerns and access to the Chairperson of the Audit Committee. No person was denied access to the Audit Committee during the year.

25. Related-Party Transactions

All related-party transactions entered into by the Company during FY 2025-26 were in the ordinary course of business and on an arms-length basis. The transactions were placed before the Audit Committee for its review and approval in accordance with the Companies Act, 2013, the SEBI Listing Regulations and the Companys Policy on Related-Party T ransactions.

During the year under review, the Company did not enter into any contract or arrangement with related parties requiring disclosure under Section 134(3)(h) of the Companies Act, 2013, read with Rule 8(2) of the Companies (Accounts) Rules, 2014. Accordingly, disclosure in Form AOC-2 is not applicable.

There were no materially significant related-party transactions that could have a potential conflict with the interests of the Company at large. Disclosures relating to related-party transactions, as required under Indian Accounting Standard 24, are provided in the notes to the financial statements.

26. Loans, Guarantees and Investments

Particulars of loans, guarantees and investments under Section 186 are disclosed in the notes to the audited financial statements. The Company did not enter into any transaction in contravention of the applicable provisions.

27. Deposits

The Company did not accept deposits within the meaning of Sections 73 to 76 and the applicable rules during the year. No unpaid or unclaimed deposit was outstanding at year end.

28. Subsidiaries, Associates and Joint Ventures

The Company had no subsidiary, associate or joint venture during FY2025-26 and was not required to prepare consolidated financial statements on that account.

29. Corporate Social Responsibility

The provisions of Section 135 of the Companies Act, 2013 relating to Corporate Social Responsibility were not applicable to the Company for FY2025-26, as the Company did not meet the prescribed applicability thresholds.

In July 2026, the Company provided uniform kits to the Telangana State Senior Water Polo team as a voluntary community initiative. This contribution was made after the financial year-end and does not form part of statutory CSR expenditure for FY2025-26.

30. Employees and Remuneration

The disclosures required under Section 197(12) of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are set out in the annexure titled “Disclosure under Section 197(12) of the Companies Act, 2013 and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014”, which forms an integral part of this Report.

31. Prevention of Sexual Harassment at Workplace

The Company maintains a policy and Internal Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has always believed in providing a safe and harassment free workplace for every individual working in its premises through various policies and practices. The Company always endeavors to create and provide an environment that is free from discrimination and harassment including sexual harassment.

The Company has adopted a policy on prevention of sexual harassment at the workplace and constituted an Internal Committee to address complaints. The status of complaints during FY2025-26 was as follows:

Particulars	Number
Complaints pending at the beginning of the financial year	Nil
Complaints received/filed during the financial year	Nil
Complaints disposed of during the financial year	Nil
Complaints pending as at 31 March 2026	Nil
Complaints pending for more than 90 days	Nil

32. Maternity Benefit Act

The Company is compliant with the applicable provisions of the Maternity Benefit Act, 1961 and has policies, systems and processes in place to ensure ongoing compliance.

33. Conservation of energy, technology absorption and foreign exchange

The particulars required under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014, are set out in the annexure titled “Conservation of Energy, Technology Absorption and Foreign-Exchange Earnings and Outgo”, which forms an integral part of this Report.

34. Significant orders

No significant or material order of any regulator, court or tribunal affecting the going-concern status or future operations of the Company was reported during the year.

35. Insolvency and Bankruptcy Code

No application was made and no proceeding was pending against the Company under the Insolvency and Bankruptcy Code, 2016 during the year.

36. One-time settlement and valuation

There was no one-time settlement with any bank or financial institution during the year and the corresponding valuation-disclosure requirement did not arise.

37. Secretarial Standards

The Company states that it complied with Secretarial Standards on Meetings of the Board of Directors and General Meetings.

38. Listing fees and Depository System

The equity shares of the Company are presently listed on the BSE Limited. The Company confirms that it has paid the Annual Listing Fees due to the Bombay Stock Exchange for the financial year 2026-27. As the Members are aware, the Companys equity shares are compulsorily tradable in electronic form, and the Company has established connectivity with both National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). In view of the various advantages offered by the depository system, members are requested to avail the facility of dematerialisation of the Companys shares through NSDL and CDSL.

The ISIN allotted to the Companys equity shares is INE454F01010. The Company continues to pursue shareholders holding shares in physical form to convert their holdings into dematerialised form.

39. Material Changes and Commitments and Other Subsequent Developments

The following developments occurred after 31 March 2026 and up to the date of this Report:

a) Mr. Kamisetti Pradeep Kumar (DIN: 07062498), Non-Executive Director, resigned from the Board with effect from the close of business hours on 18 April 2026.

b) During May 2026, the Company expanded its focus on AI-enabled gaming and digital-content development under the “7Seas AI” positioning, supporting AI-assisted game development, testing, design iteration and content production.

c) In July 2026, the Company provided uniform kits to the Telangana State Senior Water Polo Team participating in the 79th Senior National Aquatic Championship. This was a voluntary community-engagement initiative undertaken after the financial year.

d) Mr. N. Mahender Reddy (DIN: 09389493), Non-Executive Independent Director, resigned from the Board and its committees with effect from the close of business hours on 14 August 2026, citing personal reasons and other commitments. He confirmed that there were no other material reasons for his resignation.

No material changes or commitments affecting the financial position of the Company occurred between 31 March 2026 and the date of this Report.

40. Acknowledgement

The Board records its appreciation for the contribution of employees and the support of shareholders, players, platform partners, bankers, advisers, service providers and regulatory authorities.

For and on behalf of the Board of Directors
7Seas Entertainment Limited
Sd/-	Sd/-
Lingamaneni Maruti Sanker	Lingamaneni Hemalatha
Managing Director	Whole-time Director & CFO
DIN:01095047	DIN: 02226943
Place: Hyderabad
Date: 14 August 2026