Megasoft Ltd Directors Report

To,

The Members,

Your Directors have pleasure to present their Report of your Company on the business and operations for the year ended March 31, 2025.

FINANCIAL HIGHLIGHTS:

(? in Lakhs)

Particulars	Standalone		Consolidated
	For the year ended 31 March 2025	For the year ended 31 March 2024	For the year ended 31 March 2025	For the year ended 31 March 2024
Revenues from operations	0.00	0.00	0.00	0.00
Other Income	4,128.44	3,734.65	4,156.28	3,739.53
Expenditure	1,012.85	889.83	1,043.42	892.22
Finance cost	1,821.49	1,706.30	1,821.54	1,706.30
Depreciation	446.59	318.82	446.59	318.82
Operating profit/ (loss)	(3,280.93)	(2,914.95)	(3,311.55)	(2,917.34)
Profit before Exceptional items and Tax	847.51	819.71	844.73	822.19
Exceptional Items	0.00	0.00	0.00	0.00
Profit before tax	847.51	819.71	844.73	822.19
Less: Taxes	0.00	63.64	0.00	63.64
Profit after tax	847.51	756.06	844.73	758.55
Share of Profit /(Loss) of Associate	-	-	(3,838.47)	(2,033.21)
Profit/(Loss) for the period	847.51	756.06	(2,993.74)	(1,274.67)
Other Comprehensive Income/ (Loss)	5.68	0.20	5.68	0.20
Total Comprehensive Income	853.19	756.26	(2,988.06)	(1,274.47)
Share of Other Comprehensive Income from Associate	-	-	(702.36)	0.00
Total Comprehensive Income (includes Associates Comprehensive income)	853.19	756.26	(3,690.42)	(1,274.47)
Earnings per share
(equity shares, par value Rs. 10 each)
Basic (Rs.)	1.15	1.02	(4.06)	(173)
Diluted (Rs.)	1.15	1.02	(4.06)	(173)

OVERVIEW:

During the financial year ended 31 March 2025, your company recorded Standalone Profit of ? 847.51 lakhs as compared to ? 756.06 lakhs for the financial year ended 31^st March 2024. The consolidated loss was ? (2,993.74) lakhs during the current year as compared to ? (1,274.67) lakhs Loss in the previous year.

In recent years your company has made strategic inroads into the Aerospace and Defence sector. The companys business strategy is focused on becoming a global leader in the defence sector by combining inhouse expertise with the strengths of carefully selected acquisitions. Recognising the vast opportunities in this industry, the company is actively targeting acquisitions in the US and UK · two of the most advanced defence markets in the world. These acquisitions bring not only cutting-edge technologies and products but also established customer networks, enabling the company to quickly scale its presence and enhance its competitiveness in both domestic and international markets. The company plans to grow organically and inorganically through such acquisitions.

With multi-dimensional strategy · built on acquisitions, innovation, manufacturing strength, and strategic market access · your company aims at delivering sustained growth, operational excellence, and longterm value creation. By bringing together the right companies, the right people, and the right vision, the company is firmly on its path to becoming a recognised global force in defence technology. Your Company is poised to deliver sustained growth and create value for the stakeholders and contribute positively through innovative solutions and products.

CHANGE IN THE NATURE OF BUSINESS, IF ANY:

There has been no change in the nature of Business of the Company during the year under consideration.

TRANSFER TO RESERVES IN TERMS OF SECTION 134(3) (J) OF THE COMPANIES ACT, 2013:

For the financial year ended on March 31, 2025 the Company transferred ? (2,993.74) lakhs (Consolidated) to Reserves & Surplus.

DIVIDEND:

As the Company is intending to ploughing back of profit, Board of Directors of the Company do not recommend any dividend.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND:

The provisions of Section 125(2) of the Companies Act, 2013 do not apply as there was no dividend declared and paid last year.

SHARE CAPITAL:

a) Authorized Share Capital:

The Authorized Share Capital of the Company as on March 31, 2025 stands at ? 2,00,00,00,000 (Rupees Two Hundred crore only) comprising of 20,00,00,000 (Twenty Crore only) equity shares of ?10 (Rupees Ten only) each.

b) Paid up Share Capital:

The paid-up equity share capital of the Company as on March 31, 2025 was ?73,77,00,410 (Rupees Seventy Three Crores Seventy Seven lakhs Four Hundred Ten only) comprising of 7,37,70,041(Rupees Seven Crores Thirty Seven Lakhs Seventy Thousand and Forty one only) no. of fully paid Equity shares of face value of ?10 (Rupees Ten only) each.

During the year under review, the company has not issued shares with differential voting rights nor granted stock options or sweat equity shares or bonus shares. The Company has not bought back any of its securities during the year under review.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

The company has received declarations from all the independent directors of the company confirming that they meet the criteria of independence as prescribed under section 149(6) of the Companies Act, 2013 and Schedule IV of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

During the financial year, the Board of Directors of the Company was duly constituted and except the following, no other changes were effected therein:

1. Dr. Uma Garimella was appointed as Independent Woman Director w.e.f., December 20, 2024

2. Mr. Anish Mathew ceased to act as Director upon completion of the two consecutive tenure of 5 years as Independent Director w.e.f., December 25, 2024.

3. Mr. Krishna Yeachuri, Non-Executive Director resigned from the position w.e.f., March 31, 2025.

Further, CS Srivalli Manda resigned from the position of Company Secretary & Compliance Officer w.e.f., August 31, 2024. CS Thakur Vishal Singh has been appointed as Company Secretary & Compliance Officer w.e.f., September 1, 2024.

In accordance with the provisions of the Companies Act, 2013 and in terms of the Memorandum of Association and Articles of Association of the Company, Mr. Sunil Kumar Kalidindi [DIN- 02344343] Director of your Company, retiring by rotation at the ensuing Annual General Meeting (AGM) and eligible offers himself for reappointment.

BOARD MEETINGS:

The Board of Directors met Eight (8) times during the financial year. Also, a separate meeting of Independent Directors as prescribed under Schedule IV of the Act, was held during the year under review. For details of the meetings of the Board and its Committees, please refer to the Corporate Governance Report forming part of this Report. The provisions of Companies Act, 2013 and Regulation 17(2) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, Secretarial Standard - 1 issued by The Institute of Company Secretaries of India were adhered to in respect of meeting of Board of Directors of the company.

COMPLIANCE WITH SECRETARIAL STANDARDS:

During the year under review, the provisions of Secretarial Standard - 1 (Board Meetings) and 2 (General Meetings) issued by the Institute of Company Secretaries of India (ICSI) were adhered to while conducting the respective Meetings.

NOMINATION & REMUNERATION POLICY:

The Board had, on the recommendation of the Nomination & Remuneration Committee, framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is available on the website of the company and the terms of reference are given separately in the Corporate Governance Report.

BOARD EVALUATION:

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its committees. The manner in which the evaluation has been carried out has been detailed out in the Corporate Governance Report.

PERFORMANCE EVALUATION CRITERIA FOR INDEPENDENT DIRECTORS:

The performance evaluation criteria for independent directors are determined by the Nomination and Remuneration Committee. An indicative list of factors on which evaluation was carried out includes participation and contribution by a director, commitment, effective deployment of knowledge and expertise, integrity, experience (including the proficiency) and maintenance of confidentiality and Independence of behavior and judgment.

DIRECTORS RESPONSIBILITY STATEMENT:

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of section 134(3)(c) of the Companies Act, 2013:

i) in the preparation of the annual financial statements for the year ended March 31, 2025, the applicable accounting standards had been followed along with proper explanations relating to material departures, if any;

ii) the Directors 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 the end of the financial year and of the profit/loss of the company for the year;

iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv) the Directors had prepared the annual accounts on a “going concern basis”;

v) the Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

vi) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

SIGNIFICANT TRANSACTIONS:

During the financial year 2024-25 your Board of Directors in their meeting held on October 18, 2024 approved the Scheme of Amalgamation of Sigma Advanced Systems Private Limited (“SASPL” or “Transferor Company”) into and with Megasoft Limited (“MSL” or “Megasoft” or “Transferee Company”). Further, the Company received the No-objection Letters / Observation Letters from the BSE Limited and National Stock Exchange of India Limited bearing letters dated May 16, 2025.

Pursuant to the order of the Honble National Company Law Tribunal, Chennai Bench - I. (NCLT) dated July 11, 2025 read with Order dated July 16, 2025 (“Order”), the Company has conducted a meeting of the Equity Shareholder on August 30, 2025 and received the approval of the Shareholders on the Scheme.

Further, the Company is in process of obtaining the approval from the Honble NCLT on the Scheme. OUTLOOK:

A detailed discussion on the performance of the company, industry outlook, opportunities, risks and concerns, future outlook and strategy is given separately in the Managements Discussion and Analysis section, which forms a part of this annual report.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

In terms of Section 134(3)(m) of the Companies Act, 2013 and the rules framed thereunder, your Directors furnish the required details below:

The Company continues to remain committed to optimizing the utilization of energy and natural resources across all operations. As part of our sustainability initiatives, we consistently strive to reduce energy and water consumption and promote environmentally responsible practices within our workspaces.

a) Energy Conservation:

The key measures undertaken includes:

1) Regular energy audits to identify opportunities for reducing consumption and enhancing efficiency.

2) Deployment of energy-efficient systems such as LED lighting, high-efficiency HVAC units, and low- power computing devices.

3) Automation of utilities using programmable timers, automatic level controllers, and motion-based lighting sensors to minimize energy wastage.

We recognize that energy conservation is not only an operational imperative but also a fundamental responsibility toward environmental stewardship. The Company shall continue its efforts to embed sustainability into its core operations.

b) Technology Absorption: Technology absorption means adopting and using new, advanced technologies to improve the way tasks are performed. It involves acquiring the latest tools and systems, customizing them to meet specific needs, and training people to use the technology effectively. Your company is actively investing in modern technologies and digital tools to stay competitive. It is also conducting regular training programs to ensure employees are well-equipped to use these technologies efficiently

Technology absorption involves the adoption, integration, and effective use of advanced technologies to enhance capabilities and operations. This process includes acquiring cutting-edge tools and systems, customizing them for specific needs, and training personnel to ensure optimal use.

c) Foreign exchange earnings and outgo: The details of foreign exchange earnings and outgo are given in note no. 36 and 37 of the Notes forming part of the standalone financial statements of the company.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES UNDER SECTION 188:

All related party transactions that were entered into during the financial year were on an arms length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with the promoters, directors, key managerial personnel or other designated persons which may have a potential conflict with the interest of the company at large.

All related party transactions are placed before the Audit/ Risk Compliance Committee as also the Board for approval.

The Board ofDirectors of the company has, on the recommendation of the Audit/Risk Compliance Committee, adopted a policy to regulate transactions between the company and its related parties, in compliance with the applicable provisions of the Companies Act, 2013, the Rules framed thereunder and Regulation 23 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. This Policy was considered and approved by the Board and has been uploaded on the website of the company.

The Details of related Party Transaction on arms length basis has been annexed as ‘Annexure-1 appended hereto and forms part of this report.

PARTICULARS OF LOANS, INVESTMENTS & GUARANTEE:

Details of Loans, Investments and Guarantees covered under the provisions of Section 186 of the Companies Act, 2013 are given in note no. 35, 41 and 42 of the Notes forming part of the standalone financial statements of the company.

RISK MANAGEMENT:

The Company has instituted a robust and forward-looking Risk Management Framework aimed at proactively identifying, evaluating, and mitigating potential threats that could impact its business operations or strategic goals. Risks are assessed based on their probability of occurrence and potential impact, enabling prioritized and timely intervention.

While risk minimization has been a foundational element of our operations in the past, the evolving regulatory environment and business complexities necessitated a more structured and documented approach.

The overarching objective is to support sustainable growth, protect stakeholder interests, and ensure resilience in an increasingly dynamic and uncertain business environment.

Oversight of the risk management process is vested with the Audit-Risk Management and Compliance Committee, chaired by Mr. Kalyan Vijay Sivalenka. The committee periodically reviews the risk matrix, validates the effectiveness of mitigation plans, and reports key insights to the Board.

The Company remains committed to strengthening its risk culture, promoting awareness across all levels, and continuously improving its risk assessment and mitigation capabilities.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

Your company believes that strong internal controls are essential for the smooth and secure functioning of any organization. These controls include processes, policies, and procedures that help protect the companys resources from risks and threats. They ensure that transactions are approved properly, recorded accurately, and carried out in line with company policies and this would reduce the chances of mistakes, fraud, or incorrect financial reporting. Your companys internal control framework is designed to ensure accuracy, transparency, and accountability across all business processes, with a strong focus on risk mitigation and adherence to statutory, contractual, and security requirements.

A key part of this system is the role of the Audit Committee. Working closely with the Internal Auditor, the Audit Committee regularly reviews the companys internal controls. These reviews take place at fixed intervals and are aimed at checking whether the controls are effective. If any gap is found, the Audit Committee recommends corrective action to fix it. The company also carries out regular risk assessments for both existing processes and any new workflows introduced. This proactive approach helps identify risks early so that preventive measures can be taken before issues arise. By constantly reviewing and updating its risk management strategies, the company stays prepared for changing business needs and external factors.

INTERNAL FINANCIAL CONTROL WITH REFERENCE TO THE FINANCIAL STATEMENTS:

The Company has in place adequate internal financial controls with reference to financial statements. During the year no material weakness in the design or operation was observed.

VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The Company maintains a strong commitment to ethical conduct, corporate transparency, and fostering a secure work environment where integrity is upheld at all levels. As part of this commitment, a formal Vigil Mechanism, commonly referred to as the Whistle Blower Policy, has been instituted to enable employees and stakeholders to raise concerns regarding any actual or suspected unethical behavior, violation of legal or regulatory requirements, or any other wrongful conduct.

The mechanism is designed to promote a culture of openness and accountability, encouraging individuals to report concerns without the risk of retaliation, intimidation, or harassment. This ensures that all business practices and employee actions align with the Companys values of honesty, fairness, and professional integrity.

This policy is an essential element of the Companys governance framework and reflects its zero-tolerance stance toward misconduct. Details of the Vigil Mechanism and procedures for reporting concerns are outlined in the Corporate Governance Report, and the full policy is available on the Companys website at: http://www.megasoft.com/corporate-governance.html”

ENHANCING SHAREHOLDER VALUE:

The company remains committed to enhancing shareholder value through a balanced approach that prioritizes sustainable growth, operational efficiency, and prudent capital allocation. Strategic initiatives have focused on driving revenue growth, optimizing cost structures, and investing in high-return projects that align with our long-term vision. The company will continue to maintain a disciplined approach to capital management, including dividend payouts and share repurchase programs where appropriate. Additionally, the company have strengthened governance practices and improved transparency to build investor confidence and support

long-term value creation. The Board will continue to monitor performance closely to ensure alignment with shareholder interests and market expectations.

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES:

The Company has one wholly owned subsidiary company i.e., Velapan Systems Private Limited. The Company has one Associate Company i.e., Extrovis AG, Switzerland.

PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENT:

The Consolidated Financial Statements relate to the Companys subsidiary Velapan Systems Private Limited. The Financial Statements of the Subsidiaries covered in the Consolidation process are drawn upto the same reporting date as that of the Company i.e., March 31, 2025. The Financial Statements of the Company and its Subsidiaries have been combined on a line-by-line basis by adding together like-items of assets, liabilities, income and expenses, after eliminating intra-group balances, intra-group transactions and resulting unrealized profits or losses, unless cost cannot be recovered. The statement pursuant to Section 129 of the Companies Act, 2013 in respect of subsidiaries and associates is annexed as ‘Annexure-2.

DEPOSITS:

The Company has neither raised nor renewed any Deposits as on March 31, 2025 or received any other monies construed to attract the provisions of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 as amended from time to time.

ANNUAL RETURN:

The Annual Return pursuant to the provisions of Section 92(3) of Companies Act, 2013 read with Rule 12 of the Companies (Management and administration) Rules, 2014 can be accessed at http://www.megasoft . com/annual-return.html

AUDITORS REPORT:

Except as specified and explained below, there are no other qualifications, reservations, or adverse remarks or disclaimers in the Auditors Report. Observations made in the Auditors Report are self-explanatory and therefore do not call for any further comments under Section 134(1) of the Companies Act, 2013.

AUDITORS:

STATUTORY AUDITORS:

Members at its 22nd Annual General Meeting held on September 23, 2022 Appointed M/s. N. C. Rajagopal & Co., [Firm Registration No.003398S], Chartered Accountants to hold office as auditors of the company till the conclusion of the 27th Annual General Meeting to be held in the year 2027.

Further, M/s. N.C. Rajagopal & Co. Chartered Accountants (Firm Registration No. 003398S) have confirmed that they hold a valid certificate issued by the Peer review Board of the Institute of Chartered Accountants of India (ICAI) as required under the SEBI (Listing Obligations Disclosure Requirements), 2015.

The Statutory Auditors have confirmed that they satisfy the independence criteria required under Companies Act, 2013 Code of Ethics issued by Institute of Chartered Accountants of India.

INTERNAL AUDITOR:

Mr. Vijay Parthasarathy of M/s. Vijay R & Co (FCA-235012), Chartered Accountants, performed the duties of Internal Auditors of the Company and their reports are reviewed by the audit committee from time to time.

SECRETARIAL AUDITOR:

Pursuant to the provisions of Sections 204 of the Companies Act, 2013 and the rules framed thereunder, the company has appointed M/s. M. Damodaran & Associates LLP, (COP-5081/FCS-5837), to undertake the Secretarial Audit of the company. The Secretarial Auditors Report, in the prescribed format, for the year ended March 31, 2025 is annexed as ‘Annexure-3.

ANNUAL SECRETARIAL COMPLIANCE REPORT:

Pursuant to the provisions of Regulation 24A of the SEBI (LODR) Regulations, 2015 the Board of Directors of the Company have appointed M/s. M. Damodaran & Associates LLP, (COP-5081/FCS-5837), Practicing Company Secretary to undertake the Audit of Annual Secretarial Compliance of the Company for the year ended March 31, 2025. The Annual Secretarial Compliance Report is annexed as ‘ Annexure- 4.

CORPORATE GOVERNANCE:

A report on Corporate Governance including the relevant Auditors Certificate regarding compliance with the conditions of Corporate Governance as stipulated in Regulation 34(3) and Schedule V of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, is annexed as ‘Annexure-5.

MANAGEMENT DISCUSSION AND ANALYSIS:

A detailed report relating to the Management Discussion and Analysis has been annexed herewith as ‘Annexure -6

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT:

During the year under review, the Statutory Auditors of the Company have not reported any frauds to the Audit Committee or to the Board of Directors as prescribed under Section 143(12) of the Companies Act, 2013 and rules made thereunder.

DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNAL IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE:

During the financial year under review, the following are the pending cases:

GST:

The company has filed a Writ Petition in 2023 before the Honble High Court of Telangana challenging notifications relating to taxation of Joint Development transactions under which the Central GST authorities made a claim / demand. The company has also filed another Writ Petition in October 2024 in the matter of order from the State GST relating to taxation of Joint Development transactions. The matter is sub-judice.

Further, the above case has no impact on the going concern status and companys operations in future.

Income Tax:

(a) The Income Tax Department has gone on appeal against the order of the ITAT dated 21.09.2022 in ITA No.733/CHNY/2017 which was in favour of the Company.

(b) The company has filed an appeal before CIT(A) in respect of order dated 21.03.2024 in respect of issue of disallowances of Capital Losses.

Further, the above case has no impact on the going concern status and companys operations in future.

MATERIAL CHANGES FROM END OF FINANCIAL YEAR TO DATE OF THIS REPORT:

a) Disposal of Property Asset: On April 4, 2025, the Company executed the Sale of its share in the Property situated at Knowledge Capital, Plot No. 8 (Part), Survey No.115/2, 3, 4, 5, 35, Nanakramguda Village, Serilingampally Mandal, Ranga Reddy District, Telangana - 500032, India. Further, the sale consideration was INR 400,39,17,061/- (Rupees Four Hundred Crores Thirty-Nine Lacs Seventeen Thousand and Sixty-One Only).

The Company repaid the outstanding loan as on that date, out of the Sale consideration received.

b) Approval and Execution of Sale of Investment in Extrovis AG: On July 1, 2025, the Board of Directors of the Company has approved the Sale of Investment of Megasoft Limiteds holding of 36.52% in Extrovis AG, Switzerland. Consequently, the Company received the Shareholders Approval for the aforesaid sale on August 6, 2025. The Company has executed the Share Purchase Agreement (SPA) with Refex Life Sciences Private Limited on July 2, 2025 for a consideration of US $ 15,000,000.

c) Update on Scheme of Amalgamation:

During the financial year 2024-25 your Board of Directors in their meeting held on October 18, 2024 approved the Scheme of Amalgamation of Sigma Advanced Systems Private Limited (“SASPL” or “Transferor Company”) into and with Megasoft Limited (“MSL” or “Megasoft” or “Transferee Company”). Further, the Company received the No-objection Letters / Observation Letters from the BSE Limited and National Stock Exchange of India Limited bearing letters dated May 16, 2025.

Pursuant to the order of the Honble National Company Law Tribunal, Chennai Bench - I. (NCLT) dated July 11, 2025 read with Order dated July 16, 2025 (“Order”), the Company has conducted a meeting of the Equity Shareholder on August 30, 2025 and received the approval of the Shareholders on the Scheme.

Further, the Company is in process of obtaining the approval from the Honble NCLT on the Scheme.

Except as disclosed elsewhere in this report, there have been no other material changes and commitments, that has occurred between the end of the financial year of the Company and date of this report which can affect the financial position of the Company.

HUMAN RESOURCES DEVELOPMENT:

Your company has strong HR policies and systems that ensure employees work in an environment that supports their growth, well-being, and overall development. Through continuous guidance, training programs, and access to the right resources, we help our team build skills and confidence to excel. Our performance management system encourages goal setting, regular feedback, and career development, enabling individuals

to reach their full potential. As a measure for employee welfare we provide comprehensive medical and life insurance coverage for employees and their families, ensuring their health and financial security in times of need. Company conducts mandatory health check-ups to monitor employees well-being and provide support in taking necessary corrective measures.

Your company conducts yearly performance assessments to evaluate employee contributions and growth. Appraisal processes are fair and transparent, linking achievements to career progression. Constructive feedback is provided to help employees improve and reach their full potential. Megasoft is committed to providing career progression opportunities so our people can grow alongside the company. Our policies are transparent, fair, and focused on attracting, developing, and retaining people.

Your company believe that when the people succeed, the company succeeds.

PARTICULARS OF EMPLOYEES:

There are no employees falling within the provisions of section 134(3)(q) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

EMPLOYEE STOCK OPTION SCHEME:

The company has not issued any employee stock option during the year under review.

DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

Your company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Internal Complaints Committee (“ICC”) has been set up to redress the complaints received regarding sexual harassment. All employees are covered under this policy.

(a) number of complaints of sexual harassment received in the year: Nil

(b) number of complaints disposed off during the year: Nil

(c) number of cases pending for more than ninety days: Nil

During the year under review the ICC has not received any complaints.

STATEMENT BY THE COMPANY WITH RESPECT TO THE COMPLIANCE OF THE PROVISIONS RELATING TO THE MATERNITY BENEFIT ACT 1961:

The Company has complied with the provisions of the Maternity Benefit Act, 1961, including all applicable amendments and rules framed thereunder. The Company is committed to ensuring a safe, inclusive, and supportive workplace for women employees. All eligible women employees are provided with maternity benefits as prescribed under the Maternity Benefit Act, 1961, including paid maternity leave, nursing breaks, and protection from dismissal during maternity leave.

The Company also ensures that no discrimination is made in recruitment or service conditions on the grounds of maternity. Necessary internal systems and HR policies are in place to uphold the spirit and letter of the legislation

AUDITORS CERTIFICATE ON CORPORATE GOVERNANCE:

Your Company has obtained a certificate relating to compliance of conditions of Corporate Governance for the year ended March 31, 2025, as stipulated in terms of Regulation 34(3) and Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. from N.C. Rajagopal & Co. Statutory Auditors, the is annexed herewith as ‘Annexure -7.

CORPORATE SOCIAL RESPONSIBILITY:

The provisions for corporate social responsibility (“CSR”) under the Companies Act, 2013, are applicable to the company for the current financial year. The Company had incurred CSR expenditure of Rs 15.39 lakhs during the financial year 2024-25. The Annual Report on CSR activities is annexed herewith as ‘Annexure -8 The Chief Financial Officer of the Company has furnished the certificate under Rule 4 of the Companies (CSR) Rules, 2014.

THE DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 DURING THE YEAR ALONG WITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR:

During the financial year, no application was made by or against the Company or any proceeding is pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016).

DISCLOSURE ABOUT THE DIFFERENCE BETWEEN THE AMOUNT OF THE VALUATION EXECUTED AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE AVAILING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF:

During the year ended under the review, no such settlements and valuation were undertaken and no loans were availed from the Banks or Financial Institutions.

LISTING OF EQUITY SHARES:

The Companys equity shares are listed on the following Stock Exchanges:

i) BSE Limited (BSE), BSE Scrip Code	ii) National Stock Exchange of India Limited
[532408]	(NSE),
Address: Phiroze JeeJeebhoy Towers,	NSE [MEGASOFT]
Dalal Street,	Address: Exchange Plaza, Floor 5, Plot No. C/1,
Mumbai - 400 001, Maharashtra, India.	G Block, Bandra - Kurla Complex,
	Bandra (East), Mumbai - 400 051,
	Maharashtra, India.

The Company has paid the annual listing fees to the said stock exchanges for the financial year 2025-26.

MAINTENANCE OF COST RECORDS SPECIFIED BY THE CENTRAL GOVERNMENT UNDER SECTION 148 OF THE COMPANIES ACT, 2013:

The Central Government has not prescribed the maintenance of cost records under sub section (1) of section 148 of the Companies Act, 2013 for the products/services of the company.

ACKNOWLEDGMENTS:

Your directors place on records their appreciation of the shareholders, customers, bankers, Government of India and of other countries, Government of Telangana, Government of Tamil Nadu, Secretarial Auditors, Registrar and Share Transfer Agent, vendors and technology partners for the support extended. Your directors also wish to place on record their appreciation of the contribution made by employees at all levels without whom the growth of the company is unattainable. Your directors seek and look forward to the same support during future years of growth.

“Annexure-1”

Form No. AOC-2

(Pursuant to clause (h) of sub-section (3)of section 134 of the Act and Rule 8(2) of the Companies

(Accounts) Rules, 2014)

Form for disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto

1. Details of contracts or arrangements or transactions not at arms length basis: Not Applicable

a) Name(s) of the related party and nature of relationship

b) Nature of contracts/arrangements/transactions

c) Duration of the contracts / arrangements/transactions

d) Salient terms of the contracts or arrangements or transactions including the value, if any

e) Justification for entering into such contracts or arrangements or transactions

f) date(s) of approval by the Board

g) Amount paid as advances, if any:

h) Date on which the special resolution was passed in general meeting as required under first proviso to section 188

2. Details of material contracts or arrangement or transactions at arms length basis: During the year, none of the transactions were material in nature.

a) Name(s) of the related party and nature of relationship

b) Nature of contracts/arrangements/transactions

c) Duration of the contracts / arrangements/transactions

d) Salient terms of the contracts or arrangements or transactions including the value, if any:

e) Date(s) of approval by the Board, if any:

f) Amount paid as advances, if any:

“Annexure-2”

Form AOC-1

(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2O14)

Statement containing salient features of the financial statement of subsidiaries or associate companies or Joint ventures

Part A Subsidiaries

(Information in respect of each subsidiary to be presented with amounts in Rs.)

1. S. No. 1

2. Name of the subsidiary - Velapan Systems Private Limited

3. The date since when subsidiary was acquired / Incorporated - 10^th March 2022

4. Reporting period for the subsidiary concerned, if different from the holding companys reporting period. - No

5. Reporting currency and Exchange rate as on the last date of the relevant financial year in the case of foreign subsidiaries. - NA

6. Share capital - INR 66.00 Lakhs

7. Reserves and surplus - INR (11.07 Lakhs)

8. Total assets - INR 55.31 Lakhs

9. Total Liabilities - INR.0.38 Lakhs

10. Investments-0

11. Turnover - 0

12. Profit before taxation - INR (2.78 Lakhs)

13. Provision for taxation - 0

14. Profit after taxation- INR (2.78 Lakhs)

15. Proposed Dividend - 0

16. Extent of shareholding (in percentage) - 100%

Notes: The following information shall be furnished at the end of the statement:

1. Names of subsidiaries which are yet to commence operations - NA

2. Names of subsidiaries which have been liquidated or sold during the year. - NA

Part B Associates and Joint Ventures

Statement pursuant to Section 129 (3) of the Companies Act, 2O13 related to Associate Companies and Joint Ventures

Name of Associates or Joint Ventures	Details
	Extrovis AG
1. Latest Balance Sheet Date	March, 2025
2. Date on which the Associate or Joint Venture was associated or acquired	20th September, 2022
3. Shares of Associate or Joint Ventures held by the company on the year end	36.52%
Number of Shares	80,000
Amount of Investment in Associates or Joint Venture	INR 13,535.67 Lakhs
Extent of Holding (in percentage)	36.52%
4. Description of how there is significant influence	Not Applicable
5. Reason why the associate/Joint venture ls not consolidated.	Consolidated as an Associate
6. Net worth attributable to shareholding as per latest audited Balance Sheet	INR 18,802.38 Lakhs
7. Profit or Loss for the year	INR (10,235.38 Lakhs)
i) Considered in Consolidation (In proportion to the Companys Shareholding)	INR (3,838.47 Lakhs)
ii) Not Considered in Consolidation	Not Applicable

1. Names of associates or joint ventures which are yet to commence operations. - NA

2. Names of associates or joint ventures which have been liquidated or sold during the year. - NA

“Annexure-3”

Form No. MR-3

SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED MARCH 31, 2025

(Pursuant to section 204(1) of the Companies Act, 2013 and Rule No.9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A (1) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015)

To,

The Members,

MEGASOFT LIMITED

(CIN: L24100TN1999PLC042730)

No.85, Kutchery Road, Mylapore,

Chennai - 600 004.

We, M Damodaran & Associates LLP, Practicing Company Secretaries, Chennai have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by M/s. MEGASOFT LIMITED (hereinafter called ‘the Company). The Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.

Based on our verification of the Companys books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on March 31, 2025 (‘Audit Period), complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on March 31, 2025 according to the provisions of:

i) The Companies Act, 2013 (the Act) and the rules made thereunder;

ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA) and the rules made thereunder;

iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed there under;

iv) Foreign Exchange Management Act, 1999 and the rules and regulations made there under to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;

v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act) wherever applicable; including amendment/ re-enactment made thereto:

a) Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

b) Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;

c) Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018;

d) Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act, dealing with client;

e) Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018;

f) Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘SEBI LODR);

vi) Other laws, as may be applicable specifically to the company - NIL.

We have also examined compliance with the applicable Clauses of the following:

i) The Listing Agreements entered into by the Company with the National Stock Exchange of India Limited and BSE Limited under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and

ii) Secretarial Standard -1 (SS-1) for Board Meeting and Secretarial Standard -2 (SS-2) for General Meeting issued by The Institute of Company Secretaries of India (ICSI).

During the audit period, the Company has complied with the applicable provisions of the Acts, Rules, Regulations, Circulars, Notifications, Guidelines, Standards, etc. mentioned above and there are no other specific observations requiring any qualification on non-compliances.

We further report that the Board of Directors of the Company is duly constituted with proper balance of Executive, Non-Executive and Independent Directors. There were changes in the composition of the Board of Directors during the audit period.

Adequate notice was given to all directors to schedule the Board and Committee Meetings. Agenda and detailed notes on agenda were sent at least seven days in advance for meetings other than those held at shorter notice with the consent of all the Directors, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting. As per the minutes of the meetings duly recorded and signed by the respective Chairman, the decisions of the Board were unanimous and no dissenting views have been recorded.

We further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

We further report that the shareholders of the Company, inter alia, has,

i) passed a special resolution under Sections 149, 196, 197, 198, 203, Schedule V and other applicable provisions of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Companies (Appointment and Qualification of Directors) Rules, 2014 and Regulation 17(1), other applicable regulations of Securities and Exchange Board of

India (Listing Obligations and Disclosure Requirements) Regulations, 2015, at the 24th AGM held on September 27, 2024 for re-appointment of Sunil Kumar Kalidindi (DIN-02344343) as Executive Director & CEO of the Company for a period of three (3) years, commencing from December 10, 2024 to December 9, 2027 without any change in the remuneration i.e., Rs. 75 lakhs per annum as approved earlier in the 22nd Annual General Meeting of the Company held on September 23, 2022.

ii) passed a special resolution through postal ballot on 8th March, 2025 under sections 149 and 152, Schedule IV and other applicable provisions of the Companies Act, 2013, and the Rules made thereunder and the applicable provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 for Appointment of Dr. Uma Garimella (DIN: 02847624) as an Independent Director (Woman) of the Company for a term of 5 consecutive years w.e.f. December 20, 2024.

We further report that the board of directors of the Company, inter alia, has,

i) considered and approved, subject to requisite approvals at its meeting held on October 18, 2024, the draft scheme of amalgamation of Sigma Advanced Systems Private Limited and Megasoft Limited and their respective shareholders.

ii) considered and appointed vide Circular Resolution dated December 20, 2024, Mrs. Uma Garimella (DIN: 02847624), as an Additional Director (Non-Executive, Independent Woman) of the Company with effect from December 20, 2024 up to a period of 5 years i.e., Upto December 19, 2029.

iii) took note vide Circular Resolution dated December 20, 2024, the completion of term of Mr. Anish Mathew (DIN: 02545538) as an Independent Director of the Company w.e.f December 25, 2024.

Annexure A

To,

The Members,

MEGASOFT LIMITED

(CIN: L24100TN1999PLC042730)

No.85, Kutchery Road, Mylapore,

Chennai - 600 004.

Our Secretarial Audit Report of even date is to be read along with this letter.

1. Maintenance of secretarial record is the responsibility of the management of the Company. Our responsibility is to express an opinion on these secretarial records based on the audit conducted by me.

2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on a test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices We followed provide a reasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the company.

4. Wherever required, We have obtained the Management representation about the compliance of laws, rules and regulations and happening of events etc.

5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedures on the test basis.

6. The Secretarial Audit report is neither an assurance as to the future viability of the company nor of the efficacy or effectiveness with which the management has conducted the affairs of the company.

“Annexure-4”

SECRETARIAL COMPLIANCE REPORT OF MEGASOFT LIMITED FOR THE FINANCIAL YEAR ENDED 31.03.2025

(Pursuant to Regulation 24A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with SEBIMaster Circular No. SEBI/HO/CFD/PoD2/

CIR/P/0155 dated November 11, 2024)

We have conducted the review of the compliance of the applicable statutory provisions and the adherence to good corporate practices by Megasoft Limited (hereinafter referred as ‘‘the listed entity), having its Registered Office at No.85, Kutchery Road, Mylapore, Chennai - 600 004. Secretarial Review was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and to provide our observations thereon.

Based on our verification of the Listed entitys books, papers, minutes books, forms and returns filed and other records maintained by the listed entity and also the information provided by the listed entity, its officers, agents and authorized representatives during the conduct of Secretarial Review, we hereby report that the listed entity has, during the review period covering the financial year ended on March 31, 2025 complied with the statutory provisions listed hereunder in the manner and subject to the reporting made hereinafter:

We, M Damodaran & Associates LLP Practicing Company Secretaries, Chennai have examined:

a) all the documents and records made available to us and explanation provided by the listed entity,

b) the filings/ submissions made by the listed entity to the stock exchanges,

c) website of the listed entity,

d) any other document/ filing, as may be relevant, which has been relied upon to make this certification, for the year ended March 31, 2025 (“Review Period”) in respect of compliance with the provisions of:

i) Securities and Exchange Board of India Act, 1992 (“SEBI Act”) and the regulations, circulars, guidelines issued there under; and

ii) Securities Contracts (Regulation) Act, 1956 (“SCRA”), rules made there under and the regulations, circulars, guidelines issued there under by the Securities and Exchange Board of India (“SEBI”);

The specific Regulations prescribed under the SEBI Act whose provisions and the circulars/guidelines issued thereunder, (wherever applicable), have been examined, include:-

a) Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘SEBI LODR)

b) Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018.

c) Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.

d) Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015.

e) Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client.

f) Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018. and based on the above examination, we hereby report that, during the review period:

a) The listed entity has complied with the provisions of the above regulations and circulars/ guidelines issued thereunder.

b) The listed entity was not required to take any actions as there were no observations made by the Secretarial Auditor in previous year report.

c) The listed entity has taken sufficient steps to address the concerns raised/ observations made by the Secretarial Auditor in the reports pertaining to the periods prior to the previous years.

d) We hereby report that, during the review period the compliance status of the listed entity with the following requirements:

I hereby further report that, during the review period the compliance status of the Company with the following requirements:

Sr. No.	Particulars	Compliance Status (Yes/No/NA)	Observations/ Remarks by PCS
1.	Secretarial Standards: The compliances of the listed entity are in accordance with the applicable Secretarial Standards (SS) issued by the Institute of Company Secretaries India (ICSI).	Yes	Nil
2.	Adoption and timely updation of the Policies: • All applicable policies under SEBI Regulations are adopted with the approval of board of directors of the listed entity • All the policies are in conformity with SEBI Regulations and has been reviewed & timely updated, as per the regulations/ circulars/ guidelines issued by SEBI.	Yes	Nil
3.	Maintenance and disclosures on Website: • The listed entity is maintaining a functional website. • Timely dissemination of the documents/ information under a separate section on the website. • Web-links provided in annual corporate governance reports under Regulation 27(2) are accurate and specific which re-directs to the relevant document(s)/ section of the website.	Yes Yes Yes	Nil
4.	Disqualification of Director: None of the Director(s) of the listed entity are disqualified under Section 164 of Companies Act, 2013 as confirmed by the listed entity.	Yes	Nil
5.	Details related to Subsidiaries of the Company have been examined w.r.t.: a) Identification of material subsidiary companies. b) Requirements with respect to disclosure of material as well as other subsidiaries.	Yes	The Listed entity does not have any material subsidiary.
6.	Preservation of Documents: The listed entity is preserving and maintaining records as prescribed under SEBI Regulations and disposal of records as per Policy of Preservation of Documents and Archival policy prescribed under SEBI LODR Regulations, 2015.	Yes	Nil
7.	Performance Evaluation: The listed entity has conducted performance evaluation of the Board, Independent Directors and the Committees at the start of every financial year as prescribed in SEBI Regulations.	Yes	Nil
8.	Related Party Transactions: a) The listed entity has obtained prior approval of Audit Committee for all related party transactions;	Yes	Nil
	b) In case no prior approval obtained, the listed entity shall provide detailed reasons along with confirmation whether the transactions were subsequently approved/ratified/rejected by the Audit Committee.	NA	The related party transactions have the prior approval of the Audit Committee
9.	Disclosure of events or information: The listed entity has provided all the required disclosure(s) under Regulation 30 along with Schedule III of SEBI LODR Regulations, 2015 within the time limits prescribed thereunder.	Yes	Nil
10.	Prohibition of Insider Trading: The listed entity is in compliance with Regulation 3(5) & 3(6) of SEBI (Prohibition of Insider Trading) Regulations, 2015.	Yes	Nil
11.	Actions taken by SEBI or Stock Exchange(s), if any: No actions has been taken against the listed entity / its promoters/ directors/ subsidiaries either by SEBI or by Stock Exchanges (including under the Standard Operating Procedures issued by SEBI through various circulars) under SEBI Regulations and circulars/ guidelines issued thereunder.	NA	Nil
12.	No additional non-compliances observed: In case of resignation of statutory auditor from the listed entity or any of its material subsidiaries during the financial year, the listed entity and / or its material subsidiary(ies) has / have complied with paragraph 6.1 and 6.2 of section V-D of chapter V of the SEBI Master Circular No. SEBI/HO/CFD/PoD2/CIR/P/0155 dated November 11, 2024 on compliance with the provisions of the LODR Regulations by listed entities.	Not Applicable	No resignation of statutory auditor during the review period
13.	Disclosure of Employee Benefit Scheme Documents: The listed entity has complied with the requirements for disclosure of Employee Benefit Scheme Documents in terms of regulation 46(2)(za) of the SEBI LODR as mentioned in Clause 11 of SEBI Circular No. SEBI/HO/ CFD/CFD-PoD-2/CIR/P/2024/185 dated December 31, 2024.	Not Applicable	The listed entity does not have Employee Benefit Schemes
14.	No additional non-compliances observed: No additional non-compliance observed under any of the SEBI regulations/circulars/guidance notes etc.	Yes	Nil

Assumptions & Limitation of scope and Review:

1. Compliance of the applicable laws and ensuring the authenticity of documents and information furnished, are the responsibilities of the management of the listed entity.

2. Our responsibility is to report based upon our examination of relevant documents and information. This is neither an audit nor an expression of opinion.

3. We have not verified the correctness and appropriateness of financial Records and Books of Accounts of the listed entity.

4. This report is solely for the intended purpose of compliance in terms of Regulation 24A (2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and is neither an assurance as to the future viability of the listed entity nor of the efficacy or effectiveness with which the management has conducted the affairs of the listed entity.