Sonata Software Ltd Management Discussions

This Management Discussion and Analysis (MD&A) pertains to Sonata Software Limited (Sonata, or the Company) and its subsidiaries on a consolidated basis, unless otherwise stated. The MD&A should be read in conjunction with the companys financial statements included herein and the notes hitherto.

The financial statements have been prepared in accordance with the Generally Accepted Accounting Principles in India (GAAP) to comply with the Indian Accounting Standards specified under Section 133 of and other relevant provisions of the Companies Act, 2013 as applicable. The companys management accepts responsibility for the integrity and objectivity of these financial statements, as well as for various estimates and judgments used therein. The estimates and judgments relating to the financial statements have been made on a prudent and reasonable basis, in order that the financial statements reflect in a true and fair manner the form and substance of transactions and reasonably present the companys state of affairs and profits for the year.

Introduction

In FY25, despite macro and industry level headwinds,

Sonata Software continued to make strides towards its ambition of being a top quartile growth company, accelerating modernization at the intersection of Al and enterprise transformation.

Opportunities remained buoyant for Modernization Engineering and our big bets - Al and Microsoft Fabric. We continued to win Large Deals, added marquee logos and our Invest Verticals - Flealthcare and Life Sciences (HLS) and Banking, Financial Services and Insurance (BFSI) delivered promising growth. In addition, our India business (SITL), with its focus on annuity business, continued to deliver consistent strong growth with industry leading ROCE.

Customer satisfaction remains at the heart of our business; Sonata achieved an impressive, aggregated Customer Satisfaction (CSAT) score.

Our deep collaborations with hyper-scalers like Microsoft, AWS, Salesforce, and Snowflake strengthened our ability to deliver cutting-edge Al solutions.

While Sonata remained a proud member of Microsoft Partner Al Council, achieving AWS Advanced Tier Services Partner and Gen Al Competency Partner status was no less feat.

FY25 witnessed Sonata Software crossing 7,000-headcount mark globally during the financial year and we continued to focus on building a gender/ethnically diverse talent pipeline.

Industry recognition and accolades kept us steadfast. Brand Finance India 100 2024 adjudged Sonata as one of the Top 3 fastest-growing Indian brands with an 83% increase in its brand value. HFS featured Sonata in Fastest Six Service Providers list. And winning a WOW (Workplace of Winners) Award, in IT, ITeS and GCC category was particularly meaningful as it reflects the sentiments of Sonatians and our pride in being part of this organization.

We remain committed to conducting business in a socially, economically, and environmentally responsible manner while considering the interests of all stakeholders, including the wider community.

Global Macro Environment

According to World Economic Outcome Update, economic uncertainty seems to be the biggest factor determining the path that countries take in 2025. But numbers will remain mostly in growth territory, barring a few exceptions.

Global growth is projected at 3.3% both in 2025 and 2026, below the historical (2000-19) average of 3.7%. While Global headline inflation is expected to decline to 4.2% in 2025 and to 3.5% in 2026.

With economic and geopolitical uncertainty business leaders will focus on agility and profitability.

Global IT Spending would be influenced by Gen Al

According to Gartner, Worldwide IT spending is projected to total $5.61 trillion in 2025, growth of 9.8% from 2024.

Global IT spending would be driven by rise of Gen Al is forecasted to surpass $7 trillion in 4 years. By 2028, Gen Al will account for over $1 trillion in spending, including the new markets, such as Al models, specialized Al-managed services and Al-optimized laaS. Al expectations is driving CIOs focus to shift toward Gen Al solutions delivered from technology partners in 2025.

Worldwide IT Spending Forecast (Billions of U.S. Dollars)

	2024 Spending	2024 Growth (%)	2025 Spending	2025 Growth (%)
IT Services	1,588.1	5.6	1,731.5	9.0
Data Centre Systems	329.1	39.4	405.5	23.2
Devices	734.2	6.0	810.2	10.4
Software	1,091.6	12.0	1,246.8	14.2
Communications Services	1,371.8	2.3	1,423.8	3.8
Overall IT	5,114.8	7.7	5,617.8	9.8

Source: Gartner (January 2025)

The Top Strategic Technology Trends for 2025

Agentic Al

Agentic Al systems autonomously plan and take actions to meet user-defined goals. It offers a virtual workforce that can offload and augment human work.

Agentic Al has the potential to realize CIOs desire to increase productivity across the organization. This motivation is driving both enterprises and vendors to explore, innovate and establish the technology and practices needed to deliver this agency in a robust, secure and trustworthy way.

According to Gartner prediction Agentic Al will resolve 80% of common customer service issues without human intervention by 2029 leading to a 30% reduction in operational costs.

Al Governance Platforms

Al governance platforms have the capability to create, manage and enforce policies for responsible Al use, explain how Al systems work and provide transparency to build trust and accountability.

Gartner predicts that by 2028, organizations that implement comprehensive Al governance platforms will experience 40% fewer Al-related ethical incidents compared to those without such systems.

Disinformation Security

Disinformation Security aims to provide methodological systems for ensuring integrity, assessing authenticity, preventing impersonation and tracking the spread of harmful information.

By 2028, Gartner predicts that 50% of enterprises will begin adopting products, services or features designed specifically to address disinformation security use cases, up from less than 5% today.

Hybrid Computing

Hybrid computing combines different compute, storage and network mechanisms to solve computational problems. This form of computing helps organizations explore and solve problems which helps technologies, such as Al, perform beyond current technological limits. Hybrid computing will be used to create highly efficient transformative innovation environments that perform more effectively than conventional environments.

(source: Gartner):

According to Gartner prediction Agentic Al will resolve 80% of common Customer service issues without human intervention by 2029 leading to a 30% reduction in operational costs.

Enterprises leveraging agentic Al, the service experience will undergo transformation. Al agents will not only provide information but will also act, such as navigating websites to cancel memberships or negotiating optimal shipping rates on behalf of business customers. Beyond these delegated tasks, agentic Al holds the potential for proactive issue identification and resolution.

Agentic Al leads a new paradigm where Al systems possess the capability to act autonomously to complete tasks. Both customers and organizations will leverage this technology to automate interactions with Al agents.

Service organizations must look for changes in the nature and volume of interactions, which will redefine the relationship between service teams and their customers, open new avenues for value delivery, and alter the landscape of customer data collection. To prepare, customer service and support leaders should:

• Prepare for Automation:

Anticipate more automated interactions from Al agents and invest in scalable infrastructure and optimize self-service channels to manage agent traffic.

• Revise Service Models:

Update models to handle Al-driven service volume and implement dynamic routing to differentiate between human and Al interactions.

• Set Al Interaction Policies:

Develop guidelines for Ailed interactions, addressing data privacy, security, and escalation.

• Collaborate with Product Teams: Partner to integrate agentic Al into products for proactive issue detection and reduced reliance on external Source: Gartner.

Verticals & Markets

Accelerating Al-Powered Transformation with Purpose

USA

As part of our growth strategy, weve reimagined our US operations to drive innovation and modernization through Al-creating seamless, intelligent ecosystems that work in concert across industries.

Guided by our Responsible-first philosophy and powered by Harmoni.AI, we are orchestrating Al across two strategic verticals:

Invest Verticals - Banking, Financial Services and Insurance (BFSI) and Healthcare and Life Sciences (HLS) - where Al acts as a transformative force, fostering resilience, intelligence, and adaptability.

Harvest Verticals - Telecom, Media and Technology (TMT) and Retail and Manufacturing - where Sonata Software fine- tunes Al to optimize operations, enhance customer experiences, and shape future-ready businesses.

Together with our partners, we are creating a symphony of innovation, ensuring Al serves as a force for good- harmonizing people, processes, and technology to unlock new possibilities.

Al Transformation in BFSI: Shaping the Future of Financial Services

In FY25, the BFSI industry faced significant headwinds, from a slowing global economy to rising interest rates and growing competition from fintech disruptors. Banks are under increasing pressure to innovate and find new revenue streams while managing costs, navigating regulatory changes, and addressing the rising threat of cyberattacks. With customers demanding more personalized services and seamless digital experiences, BFSI companies must balance efficiency with innovation to stay ahead. With a sharp focus on customer retention, cost optimization, and driving innovation, Sonata is primed to partner with BFSI clients to advance these priorities with cutting-edge Al solutions.

Key Focus Areas

• Elevating Customer Experience

Sonatas Customer360 Al platform offers an integrated view of customer interactions across various banking products and channels (both structured and unstructured). By leveraging Al-driven analytics, we help banks unlock deeper insights into customer behavior and preferences, allowing them to deliver highly personalized experiences. This enables banks to optimize marketing efforts, recommend relevant products, and build stronger, more engaging relationships with customers-ultimately driving loyalty, increasing revenue, and improving customer satisfaction.

. AI-Powered Operational

Our Gen AI Modernization Framework is transforming the lending and mortgage process by automating document validation and accelerating credit decisions. With pre-built accelerators and Al-driven data models tailored for lending,

Sonata enables banks to streamline operations, reduce processing time, and make faster, smarter decisions.

• Strengthening Cybersecurity and Compliance

Sonatas Gen Al-powered regulatory framework is helping banks address governance, risk, and compliance (GRC) needs across regions. Our partnership with industry experts ensures that banks leverage Al to stay ahead of the evolving regulatory landscape and maintain compliance with ever-growing regulations.

Key Success Stories

• Sonata started a large CRM migration engagement with one of the leading Mortgage service providers in US. As part of the engagement, Sonata will migrate multiple

LOBs onto Dynamics CRM from a competing CRM solution. One LOB has already gone live and has received rave reviews from business users. The entire engagement will go-live in nine months. This engagement is critical as it aligns strongly with one of Microsofts key initiatives of migrating from competing CRMs onto D365.

• Sonata signed an agreement with one of the largest retail Banks in Central America and Caribbean to set up their Strategic Transformation Unit. As part of the engagement. Sonata will help the bank in driving key priorities of the bank from a business and technology standpoint. It will also help in laying out the three years roadmap and manage the execution of the projects. The Sonata team will also help the bank transform their business processes through Gen Al initiatives. This engagement will support the bank operations across Latin America, Caribbean and Africa.

Sonatas growing stature within Banking and Financial Services industry and the aggressive growth it is poised to have in FY26.

Sonata remains deeply aligned with the BFSI sectors evolving priorities, committed to driving its digital transformation journey with innovative Al solutions that fuel growth, efficiency, and security.

Revolutionizing Healthcare and Life Sciences (HLS) with Gen Al and Automation

Across the Healthcare and Life Sciences (HLS) industry, enterprises across the care continuum face significant challenges driven fragmented and siloed systems, data overload from variety/velocity and volume, and the increasing complexity of regulatory compliance. Especially in the US, the cost to care for the patients has been exponentially rising, from cost of specialty drugs to HCPs out-of-pocket fees and rising health insurance premiums. While on the Enterprise front, the margins are continuously declining, with major Providers at low-single digit margins, to Health Insurance finding it difficult to sustain low teens margins. On the other hand, Pharma and MedTech firms, continue to face challenges due to supply chain issues, rising R&D costs due to delayed Clinical trials, increasing cost in compliance and regulatory.

To address these hurdles, HLS organizations increasingly turn to novel solutions that streamline and automate business operations, integrate systems for faster decision making, and create personalized patient and user experiences.

HLS being an Invest Vertical at Sonata, we have invested extensively to build industry solutions that address these challenges by bringing in Industry mindset and apply practical approaches, proprietary technology frameworks. We work with Industry advisors across the care continuum to ensure our solutions are practical and can drive the change. Sonata HLS is at the forefront of driving Al innovation across the value chain, improving patient outcomes, boosting business performance, and ensuring regulatory compliance. Also focusing on optimizing workflows, reducing costs, and empowering healthcare professionals to deliver better care while staying ahead of regulatory changes.

Key Focus Areas

• Preclinical and Clinical Operations support: Enhanced Drug Discovery and Proactive risk identification in Clinical Trials

For Preclinical - Sonata is Leveraging Al-powered intelligent assistants, to provide curated insights and data to accelerate the research process. By streamlining research workflows, summarizing critical insights from pre-existing scientific journals and whitepapers we have reduced time/effort for the R&D scientists and lab technicians by upto 24%. For Clinical Operations - we are working with a leading Pharma and Clinical Trials platform company to build a state-of-art integration platform which can break silos in a Clinical Operations setup, seamlessly integrate multiple systems and provide critical insights that can help proactive risk identification for Studies, Sites, Subjects thereby potentially reducing delays in Clinical Trials that can cost millions of dollars to the

Pharma/MedTech enterprises and optimize time-to-market for life saving drugs.

• Automation-Focused Operational Efficiency

In response to the cost pressures facing HLS organizations, we offer Al-powered solutions like Pharma 4.0, driven by Harmoni.AI and IntelliQA. These solutions optimize workflows, reduce waste, and enhance regulatory compliance, all while lowering operational costs and increasing overall productivity.

• Improving Patient Outcomes with Automation

Partnering with Digital Health (DxP) companies, we develop Al-based solutions that empower healthcare professionals to make data- driven decisions. These innovations improve patient care by providing real-time insights, enhancing diagnosis, and reducing overall healthcare costs.

• Al-Powered Compliance and Risk Management

Our Gen Al-powered GxP framework and SDLC platform simplify compliance for HLS organizations, ensuring seamless integration with regulatory standards.

Our data-driven risk and compliance framework uses Al to continuously assess and enhance security, safeguarding sensitive health data and ensuring regulatory adherence.

Through these Al-driven innovations, Sonata continues to lead the charge in transforming the HLS industry, helping organizations navigate challenges, deliver exceptional patient outcomes, and thrive in an increasingly digital and regulated world.

Key Success Story

HLS is one of the fastest growing Business Unit for Sonata and in FY25, we successfully closed one of the largest deals in the history of the organization with a leading Healthcare Provider. Moreover, we acquired many marquee logos across Pharma, Digital Health and Healthcare Insurance/Payers. This underscores our commitment to being a top-quartile growth company and reinforces our investment philosophy towards an industry where we can apply Sonatas deep technology expertise to solve business critical problems. We are confident that this approach would consistently differentiate us in the long term, as is evident from the Analyst recognitions we received in FY25 for Healthcare Payer survey conducted by HFS.

We won one of the largest contracts in Sonatas history with a leading Healthcare client, which focuses on providing mental and care services. As part of the deal. Sonata would provide end- to-end IT services for the client, from Infrastructure. Applications, Data and Transformation. Sonata has also rebadged most of the clients IT teams to ensure business continuity, while driving tech modernization at scale across the landscape. Sonata would also be leveraging strong Healthcare Provider proprietary technology frameworks to ensure seamless integration with partner ecosystem for on-time care delivery to patients.

Powering Retail, Manufacturing, Travel and Distribution

Retail: Building the Future of Connected Commerce

Retailers are operating in a dynamic environment shaped by hyper-personalization, omnichannel demands, and rapid technological advancement. The convergence of Al, predictive analytics, and automation is redefining how brands engage customers and manage operations. Sonatas Connected Retail framework is designed to help retailers reimagine experiences across the value chain-from customer touchpoints to fulfillment centers.

Strategic Focus Areas in Retail

• Al-Enabled POS Modernization:

Intelligent point-of- sale systems integrated with real-time analytics enable retailers to deliver personalized experiences, optimize inventory, and enhance customer loyalty at the checkout.

• Digitized In-Store Experiences:

Al and automation technologies are transforming physical stores into data-driven environments, improving associate productivity and customer engagement through intelligent service delivery.

• D2C (Direct-to-Consumer) Enablement:

With Al-powered segmentation and behavioral insights, retailers can tailor product offerings, streamline D2C channels, and boost brand affinity and conversion rates.

• Resilient, Data-Driven Supply Chains:

Al-powered predictive analytics help retailers proactively manage risks, reduce lead times, and optimize logistics operations for greater agility and resilience.

• Automated Fulfillment and Logistics:

Smart automation and realtime inventory intelligence drive efficient order orchestration, ensuring faster, more accurate fulfillment across channels.

Manufacturing: Enabling Al-Optimized Operations

Manufacturing enterprises are increasingly adopting intelligent automation to address challenges such as supply chain volatility, mass customization, and cost pressures. Sonata delivers scalable Al-driven solutions that support Smart Manufacturing, Industry 4.0, and predictive decision- making-transforming traditional production lines into adaptive, digital ecosystems.

Strategic Focus Areas in Manufacturing

• Al-Driven Supply Chain Optimization:

End-to-end visibility and advanced forecasting powered by machine learning enable manufacturers to make data-informed decisions, reduce disruptions, and improve service levels.

• Automated and Adaptive Production:

By deploying Al and robotics, Sonata helps manufacturers enhance throughput, reduce waste, and optimize equipment utilization while maintaining quality standards.

• Intelligent Distribution Networks:

Our Al-enhanced platforms enable real-time response to market demand and logistics variables, allowing for dynamic routing and capacity planning across distribution hubs.

• Customer-Centric Product Innovation:

Leveraging real-time consumer insights, manufacturers can personalize offerings, innovate faster, and improve lifecycle value through continuous feedback loops.

By blending cutting-edge Al with real-time data analytics, Sonata is enabling the next generation ofConnected Retail and Al-Optimized Manufacturing, while also helping businesses across industries unlock new revenue streams and operational efficiencies. Our solutions are designed to adapt to evolving market dynamics while delivering enhanced customer satisfaction and stronger business.

Key Success Story

Sonata Software has had the privilege of partnering with a leading shipping, transportation, and logistics company for over a decade. This long-term commitment reflects their confidence in Sonata Softwares expertise and our ability to continue delivering high-quality services. It stands as a testament to our deep client relationships and dedication to driving business success. Leveraging our proven track record and the trust weve built; we successfully secured a three-year multi-million dollar large deal.

Technology Media and Telecom: Empowering Digital Transformation with Al

The Technology Media and Telecom, (TMT) sector is at the forefront of digital innovation, adapting to changing consumer behaviors and emerging technologies. With cloud computing laying the foundation for scalability, cost-efficiency, and data security, these sectors are embracing Al and automation to drive growth, improve customer experiences, and enhance product development.

In an increasingly data-driven world, Al, machine learning, and Gen Al are becoming pivotal tools for transforming how companies engage with customers, design products, and operate efficiently. From personalized content recommendations to real-time decision-making powered by edge computing, Al is reshaping every facet of the TMT sector.

Key Focus Areas

• Optimizing Engineering and Product Development with Al

We leverage Al, machine learning, and Gen Al to revolutionize engineering processes, enabling faster, smarter development of products and platforms that meet evolving customer expectations. ^•

• Enhancing Customer Experience Across Touchpoints

Al is enhancing customer lifecycle management by driving personalization, ensuring tailored experiences,

• Boosting Developer Productivity with Al

Al-driven development tools and automation streamline the development process, accelerating time-to-market and enabling developers to focus on high-value tasks.

• Unlocking the Power of Data

Our comprehensive data products harness Al to drive insights, streamline processes, and fuel decision-making across organizations, ensuring greater operational efficiency.

Through these initiatives, Sonata is empowering TMT companies to stay ahead in an Al-first world, delivering tangible results and accelerating their digital transformation journey.

Key Success Story

A global technology leader partnered with Sonata to elevate customer experience and technical support across its diverse product portfolio. Sonata is providing on-demand technical product support through a globally distributed network, enabling timely, localized assistance. By continuously refining support processes based on real-time feedback, our team is helping the client drive customer engagement, improve response times, and optimize overall support operations in an evolving digital landscape.

Sonata Software and Microsoft: Leading Al Innovation for Global Enterprises

Sonata Software is a strategic, long-standing partner of Microsoft, proudly ranked as one of our top five Platinum accounts. Celebrating a 30-year legacy of delivering cutting- edge solutions across business applications, data and Al (Azure), digital and app innovation, infrastructure, modern work, and security, this enduring partnership allows us to leverage the power of Microsoft technologies, driving the digital transformation of enterprises worldwide.

As the exclusive Indian SI partner for the launch of Microsoft Fabric, we are at the forefront of helping organizations modernize their global data estate with this game-changing platform. Our unique combination of intellectual property (IPs) and global capabilities enables us to speed up adoption, transforming how businesses manage and process data with speed, efficiency, and intelligence.

Sonata is also honored to be a member of the Microsoft Al Partner Council, a select group of global partners advancing Al adoption on Microsoft Azure. Through our Sonata Harmoni.AI platform, we empower enterprises to accelerate their Al journey, integrating seamlessly with Microsofts Al services to unlock new possibilities in automation, machine learning, and data- driven decision-making.

Global Presence

Our global presence across delivery centers in India, the US, Canada, Mexico, Malaysia, and Egypt, enables us to provide unparalleled support for Microsoft projects across the globe. With a team of Microsoft- certified professionals, we deliver high-quality, cost-effective solutions, ensuring seamless execution of Al initiatives and digital transformations.

Sonata is committed to expanding our partnership with Microsoft, addressing new challenges, and driving the future of Al innovation. Together, we continue to push the boundaries of whats possible in the Al and digital transformation landscape, empowering enterprises to thrive in a rapidly evolving world.

UK and Ireland

The UK IT services market, valued at approximately ?60 billion, stands as a key player in the region, ripe for growth fuelled by digital transformation, cloud adoption, and emerging business demands.

In this dynamic landscape,

Sonata UK is harnessing its expertise in modernization engineering, alongside strategic investments in Al, cloud, and analytics, to help customers thrive in an increasingly complex environment.

Amidst the challenges of the macroeconomic climate, organizations are looking to automation and Al to enhance productivity, streamline operations, and create exceptional customer experiences.

Sonata is strategically positioned to lead businesses through their transformation journey, capitalizing on emerging trends across diverse industries such as Retail and Consumer Goods, Manufacturing, Telecom,

Health and Life Sciences, Travel, Transport, Hospitality, and Banking, Financial Services, and Insurance.

Our tailored, industry-centric approach, powered by global best practices and a hybrid workforce, ensures were the trusted partner for organizations seeking to leverage automation and Al-driven innovation in:

Al-Driven Business Transformation

• Al & Automation Adoption

Harnessing the power of Al and machine learning to optimize operational processes, drive efficiency, and deliver a personalized customer experience.

• Modernization of Legacy Systems

Replacing outdated infrastructure with cutting- edge, Al-enhanced platforms to enhance scalability and performance.

Cloud-Enabled Growth

• Cloud Computing for Flexibility and Efficiency

Delivering Al-powered, scalable cloud solutions to maximize flexibility and cost- efficiency while optimizing business operations.

• Seamless Hybrid and Multi-Cloud Strategies

Utilizing Al to streamline cloud management, optimize workloads, and ensure continuous service availability.

Data Analytics and Predictive Intelligence

• Actionable Insights with Al Analytics

Leveraging big data, Al, and machine learning for smarter, predictive decision-making and automation of critical workflows.

• Data-Driven Performance Enhancement

Using Al-powered insights to refine strategies, improve productivity, and accelerate time-to-market.

Al-Powered Managed Services

• Intelligent Automation for Cost Efficiency

Reducing operational costs through intelligent outsourcing and automation across IT functions. ^•

• Expertise on Demand

Accessing Al-driven tools and expertise through managed services, enabling faster innovation and digital maturity.

Sonata is helping organizations in UK and Ireland to navigate their digital transformation and scale new heights in productivity, operational efficiency, and customer satisfaction.

Key Success Stories

In FY25, Sonata helped many of its clients in the UK and Ireland market to successfully modernize their legacy platforms to move to new Ailed, scalable, and future-ready platforms.

* For a global fragrance manufacturing client, the core ERP platform was modernized to a cloud- based Microsoft Dynamics enterprise platform across many of its entities and countries. Sonata modernized the legacy platforms for a B2B client in the beverage industry to improve time-to-market.

• For one of Europes largest information technology providers dealing with h/w and s/w provisioning and services, Sonata deployed a robust data encryption framework to enable data security.

By blending Al, cloud computing, data analytics, and automation,

• Sonata helped its client in the QSR industry to optimize the supply chain to improve store efficiencies. We also redesigned and re-architected their Disaster Recovery processes to drive 100% availability during the peak business season.

• We won a large end-to-end Al-driven managed services contract spanning across their global locations with one of the worlds largest packaging enterprises.

Europe

In the Europe region, Sonata has undergone a strategic evolution, focusing on harnessing emerging Al and automation capabilities to fuel growth and innovation across multiple industries. This focused approach has enabled us to capitalize on significant business opportunities, leveraging the power of Gen Al, cloud, and data analytics to deliver transformative solutions to our clients.

Accelerating Client Success with Al and Automation

A cornerstone of our growth has been the successful deployment of Microsoft D365 across a global clients entities, showcasing our expertise in driving seamless digital transformations at scale. This deployment not only strengthened our relationship with Microsoft but also exemplified our ability to help clients enhance operational efficiency and streamline their business processes through Al- powered automation.

Breaking New Ground in Telecom

Our entry into the Telecommunications sector has been marked by strategic partnerships with one of Europes largest telecom providers. Through the infusion of Al, machine learning, and automation, we are helping transform telecom operations, driving network optimization, and enhancing customer experiences. This breakthrough sets the stage for expanding our Telecom business across Europe, with a strong emphasis on Al- driven operational efficiency.

Expanding Strategic Alliances in the Al Space

Sonatas collaboration with Microsoft continues to grow, particularly in the Nordics, where weve played a key role in bringing Microsofts Fabric to life for our clients.

We are also extending our Al-focused offerings in the broader European market, with solid partnerships established in Sweden and Germany, as demand for Al-driven data analytics, automation, and cloud solutions soars. This partnership strengthens our position in the marketplace and positions us as a trusted Al partner for global organizations navigating their digital journeys.

Additionally, Sonatas commitment to advancing Al and cloud technologies is further evidenced by our partnership with Snowflake, positioning us as a key player in the European data cloud ecosystem. This collaboration will enable us to empower businesses with Al- powered data analytics and cloud solutions that are crucial for modernizing their data strategies and unlocking new business value.

Investing in Al-Centric Infrastructure

As demand for Al and automation solutions continues to rise, Sonata has made a strategic investment in a new nearshore development center in Poland. This center is designed to meet the increasing need for Al and automation expertise, providing organizations across Europe with access to cutting- edge Gen Al technologies. This expansion further strengthens our ability to deliver cost- optimized, innovative solutions and modernize legacy infrastructures to drive efficiency and growth for our clients.

In essence, Sonata Europe is on a transformative journey, driven by Al, automation, and cloud technologies, positioning us at the forefront of the industry. Our continued focus on innovation and client success ensures that we are well-equipped to support businesses in embracing the future of Al-powered transformation.

Key Success Stories

* Sonata won a multicountry ERP transformation program for a large global technology company specializing in the manufacturing of underground equipment and applications.

• For a large manufacturing company headquartered in the Netherlands with its operations spread across the globe. Sonata successfully modernized its legacy business applications through Al-driven cloud- based ERP platform following its Platformation™ methodology.

ANZ

The ANZ market is evolving at a rapid pace, with businesses increasingly turning to technology to stay competitive. The regions growth is driven by the need for innovation and efficiency, while businesses must navigate economic fluctuations, rising operational costs, and complex decision-making landscapes. Organizations are adopting innovative solutions to enhance operational efficiency, drive growth, and deliver exceptional customer experiences.

Sonata is at the forefront of this transformation, harnessing the power of advanced Al and automation to help businesses across key sectors such as Retail and Manufacturing unlock their full potential. By aligning cutting-edge technology with strategic business needs, we are enabling organizations to thrive in a dynamic and ever-changing landscape.

Empowering Retail and Manufacturing with Al and Automation

The Retail and Manufacturing sectors in ANZ are undergoing rapid transformation, with Al and automation leading the way. The rise of e-commerce, omnichannel integration, and data-driven personalization has changed how businesses interaci with consumers.

Sonatas Al-powered solutions are helping businesses optimize supply chains, streamline operations, and deliver contactless shopping experiences that increase efficiency while reducing costs.

By using Gen Al and machine learning algorithms, we assist clients in anticipating market trends, enhancing product recommendations, and improving customer service.

Our solutions are transforming supply chain management with predictive analytics, enabling smarter decisions and faster, more resilient operations.

Optimizing Legacy Operations

Our strategy focuses on modernizing IT infrastructures using Al and automation to enhance customer and employee experiences. From applications to data and infrastructure, Sonata is helping organizations optimize their systems, reduce operational costs, and improve business processes. By integrating Al into core operations, we are providing the tools necessary for businesses to automate manual tasks, streamline workflows, and significantly improve overall engagement with their stakeholders.

Strategic Partnerships to Accelerate Innovation

Sonatas collaboration with strategic partners such as Microsoft enables us to deliver cutting-edge Al solutions. With technologies like MS Data Fabric and cost-reduction tools, we are driving Al-led business transformations across ANZ. Our goal is to continuously deliver value to our clients by ensuring their businesses benefit from innovative, Al-driven solutions that lower operational costs and foster growth.

Transitioning to Al-Centered Revenue Models

Sonata is transforming its revenue mix by shifting from a project-centric model to a more predictable, annuity- based approach. This transition, powered by Al and automation, ensures continuous value delivery to clients through subscription- based models and ongoing support. This strategy is aligned with our focus on securing larger, long-term engagements in Retail, Manufacturing, and Financial Services, with an emphasis on Al- driven solutions for sustainable growth.

Investment in Automation IP and Tools

Sonata remains committed to investing in Al-driven intellectual property (IP) and tools that deliver cost-effective solutions to our clients. Our focus is on creating scalable, Al-powered platforms and products that enable businesses to harness the power of automation and data analytics. With these investments, we aim to increase operational efficiencies, improve service delivery, and ensure long-term success for our clients in ANZ.

Sonata is poised to lead the Al-driven transformation across the ANZ region. By integrating cutting-edge Al and automation solutions, we are enabling businesses to drive cost efficiency, streamline operations, and improve customer experiences, ensuring sustainable growth even in a challenging market.

Key Success Stories

The ANZ business continues to grow with several new logo wins and growth through expansion into existing accounts. However, the true value of Sonata is in the delivery of these projects.

FY25 saw several of our clients realise value in their investments with their projects going live and supporting their business, a few examples are: ^•

• Large Earthmoving Equipment Distributor- We continue to grow with this client across several areas, what started off as a support multi-year contract as taken us into a number of new initiatives which were won and implemented last year. A key initiative was to help build functionality on their Dynamics ERP to cater for a new regulatory compliance requirement in Malaysia. This went live successfully within the timelines and earned Sonata much praise from the client. Last year we also won and delivered in the areas of Automation, Integration, Testing and Infrastructure managed services for them

• Large Homeware Retailer

- This was a marque Transformation Project that was involved with the revamp of their customer relationship and data management platforms creating a new Customer Hub system to meet their operational and customer experience requirements. The objective of this program was to enhance data accuracy, streamline operations, and improve the overall customer experience. This program also helped them significantly reduce cost of doing business

• Large Packaging Manufacturer - Sonata delivered successfully on time and budget for this client a D365 based Finance and Operations system for their Sri Lanka operations.

• A Large Fashion Retailer with over 100 outlets - Sonata delivered for this client a new D365 Finance and Operations system to run their store and online business.

• A Large Jewellery Chain

- We delivered a very successful testing program that enabled them go-live on their transformation initiative this year.

APAC

India has established itself as a powerhouse for Global In- house Centers (GICs) in the APAC region. This is largely due to its dynamic talent pool, strong IT infrastructure, and cost- effectiveness, making it a hub for innovation and operational excellence. Sonata recognizes the immense potential of this landscape and is strategically aligning its Al-driven solutions to help businesses in APAC leverage advanced technologies for enhanced efficiency and scalability.

Sonatas approach is designed to take GIC engagements to the next level, moving beyond traditional models and tapping into the power of Al and automation. With a strong foundation in managed services and professional services, we are transforming how businesses optimize their operations, accelerate digital adoption, and achieve measurable outcomes.

Key Focus Areas

• Al-Powered BOT Models

For GICs looking to establish and scale their operations in India, we offer Al-driven Build Operate Transfer (BOT) models to optimize the setup and seamless transition.

• Rebadging and Automation

With Al and automation, we provide a streamlined approach to take over and manage captives, improving operational efficiencies and reducing costs.

By integrating Al technologies into every layer of the business, Sonata is helping companies enhance productivity, lower costs, and unlock new growth opportunities across APAC.

Our deep expertise in Al and automation makes us a trusted partner for organizations aiming to modernize their operations, optimize business processes, and stay ahead in the digital age. Through these initiatives, Sonata is committed to driving meaningful business outcomes in one of the worlds most dynamic regions.

Sonata CX

Sonata CX is at the forefront of modern customer experience management. We help global brands elevate every customer interaction by combining advanced analytics, automation, and Al. Our proprietary omnichannel platform empowers businesses to continuously monitor, measure, and improve performance across physical and digital touchpoints - at scale.

Our approach is insight-led and outcome-focused. We go beyond traditional CX measurement to deliver a realtime, holistic understanding of the customer journey. By integrating data from multiple channels - including overt and covert compliance audits, panel research, social media listening, employee engagement and voice-of-customer feedback - we give businesses the intelligence they need to drive engagement, operational excellence, and brand growth.

Key Focus Areas

• Omnichannel Intelligence Platform

A unified, Al-powered platform that ingests and analyses structured and unstructured data from all CX channels, enabling consistent performance tracking across markets.

• CX Analytics Linked to Business Impact

We connect customer experience metrics with operational KPIs to quantify ROI - ensuring CX initiatives directly support revenue growth, cost efficiency, and customer retention.

• Contextual and Predictive Insights

Leveraging Al, we surface actionable insights that help clients not only understand whats happening but also predict emerging trends and opportunities.

At Sonata CX, we dont just measure experiences - we modernize them. Backed by over 30 years of expertise, global coverage across 100+ markets, and our enterprise-grade GDX platform, we equip clients with the tools and intelligence needed to deliver brand-defining moments that build trust, drive loyalty, and fuel sustainable growth.

Key Success Story

• One of Americas elite financial institutions partnered with Sonata to modernize its analytics ecosystem. Sonata is driving the end-to-end migration, focusing on performance enhancement, cost efficiency, improved Al and advanced analytics capabilities, and strengthened security and compliance. By streamlining management and user experience, this transformation will future- proof the clients analytics infrastructure, enabling agility and innovation in the rapidly evolving financial landscape.

Operational Review International

Business Harmonizing Innovation

Al-Powered Growth on a Global Scale

Sonata Softwares international business is experiencing unprecedented momentum, driven by a strategic focus on high-impact, Al-led transformation. With major wins across industries, we are rapidly expanding our global footprint, unlocking new opportunities, and setting the stage for even bigger victories.

As businesses worldwide embrace Agentic Al, Sonata is at the helm of this transformation - leveraging automation, advanced analytics, and next- gen intelligence to redefine enterprise modernization and scalability. Our Al-powered solutions are accelerating digital evolution, empowering organizations to drive efficiency, agility, and innovation at scale.

By embedding intelligence-first strategies across industries, we arent just adapting to change- we are pioneering it, shaping the Al-driven enterprises of tomorrow.

Accelerating Global Growth Through Al and Modernization

In FY25, Sonatas international business showcased resilience, achieving industry-leading expansion as a direct result of our strategic shift toward a verticalized structure, allowing us to deepen engagement and maximize value for our clients.

• Harvest Verticals:

Focused growth in Retail, Manufacturing and Distribution (RMD) and Technology, Media and Telecommunications (TMT) has strengthened our market leadership.

• Invest Verticals: Strategic investments in Banking, Financial Services and Insurance (BFSI) and Healthcare and Life Sciences (HLS) have fueled expansion into high-growth sectors.

Sonata s strategy refresh in FY25 has not only scaled our business with existing clients but also enabled us to deliver new, high-value services- reinforcing our position as a trusted partner in enterprise transformation.

Strategic Expansion and Market Focus

As part of our global expansion strategy, our new delivery center in Krakow, Poland, is now operational. This nearshore hub strengthens our ability to drive business transformation, cloud modernization, and cost optimization for clients across Europe, reinforcing our commitment to scaling innovation worldwide.

Al-Led

Modernization and Business Impact

Our Al-driven modernization solutions are transforming enterprises by aligning with their strategic priorities and accelerating digital evolution.

By delivering cutting-edge modernization services, we empower businesses to enhance customer experiences, drive scalable growth, and unlock new revenue streams. Simultaneously, our cost-optimization frameworks improve operational efficiency and free up capital to enable enterprises to fund future transformation.

Large Deals and Enterprise Growth

Our sharp focus on high-value engagements has fueled strong momentum, with 11+ major deal wins in FY25. This foundation of success strengthens our ability to deliver large-scale digital transformation projects and drive sustained business impact for our clients.

Shaping the Future of Digital Enterprises

With modernization at the core of our approach, we enable businesses to enhance customer experiences, drive agility, and fund their transformation journeys through cost- effective Al-driven solutions.

As organizations worldwide embrace Agentic Al, Sonata continues to lead, pioneering the future of intelligent enterprise growth.

Al-Driven Success: Transformational Client Partnerships

Deal 1: Parcel Spend Optimization SaaS

A leading provider of parcel spend management solutions partnered with Sonata to develop a cutting-edge cloud- based SaaS platform. Specializing in optimizing shipping strategies to enhance profitability and efficiency, the enterprise aimed to expand its services and revenue streams through digital transformation.

Sonata leveraged Microsofts data and analytics solutions to design and build a scalable, Al-driven platform that enables businesses to gain deeper insights, reduce costs, and improve logistics efficiency.

This 14-month engagement establishes a foundation for long-term business growth, helping the client transition from a service-based model to a technology-driven SaaS offering.

Deal 2: Strategic Customer Support Renewal

Sonata successfully secured a critical renewal for Customer Support Services (CSS) from July 2024 to June 2025, reinforcing our commitment to delivering exceptional service and long-term value. Our teams deep technical expertise, proactive problem-solving, and customer- first approach resulted in consistently high CSAT scores, solidifying our position as a trusted partner.

By anticipating challenges and implementing swift, effective resolutions, we strengthened customer confidence and enhanced operational efficiency. This renewal not only validates our strategic impact but also paves the way for sustained growth, deeper collaboration, and future expansion opportunities.

Deal 3: Enhancing Customer Experience and Technical Support

A global technology leader partnered with Sonata to elevate customer experience and technical support across its diverse product portfolio.

With a strong focus on digital transformation, the client sought a strategic partner to provide seamless, reactive customer support, ensuring enhanced satisfaction and operational efficiency.

Sonata is providing on- demand technical product support through a globally distributed network, enabling timely, localized assistance. By continuously refining support processes based on real-time feedback, our team is helping the client drive customer engagement, improve response times, and optimize overall support operations in an evolving digital landscape.

Deal 4: Digital Transformation for Underground Operations

A world-leading, innovative technology company defining the future of underground operations in mining, tunnelling, and civil engineering solutions partnered with Sonata to drive process standardization and enhance operational transparency. The client sought to scale globally, while maintaining localized agility to improve customer experience. After evaluating multiple vendors, they selected Sonata as their strategic partner to implement the SMART 365 program.

This three-year engagement focuses on standardization, enabling seamless global operations, while providing deeper business insights. With multiple opportunities for stack modernization, Sonata is driving end-to-end digital transformation, optimizing efficiency, and positioning the client for sustained growth in a competitive industry.

Deal 5: IT Transformation for Healthcare Services

A leading provider of medical and mental healthcare for correctional and mental health facilities in America partnered with Sonata to drive a comprehensive IT transformation. Post-COVID challenges, including rising healthcare costs, necessitated a strategic shift in technology operations. Following a rigorous vendor evaluation, the client selected Sonata to lead this critical transition.

As part of a seven-year engagement, Sonata takes full responsibility for IT delivery and support operations, including the rebadging of employees. This long-term partnership focuses on continuous modernization, leveraging innovative IT solutions to enhance operational efficiency, optimize resources, and drive sustainable growth.

Deal 6: Long-Term Strategic Partnership in Logistics

Sonata Software has had the privilege of partnering with a leading shipping, transportation, and logistics company for over a decade. This longstanding relationship has given us deep insights into their business needs, operations, and performance metrics, enabling us to collaborate closely with their management and finance teams to drive long-term value.

Leveraging our proven track record and the trust weve built, we successfully secured a three- year deal worth $24 million.

This milestone underscores the strength of our partnership, our teams ability to deliver tailored solutions, and the commitment to aligning with a clients strategic goals.

By working closely with their teams, we have ensured that the agreement is well-structured to support their growth and operational priorities. This longterm commitment reflects their confidence in Sonata Softwares expertise and our ability to continue delivering high-quality services. It stands as a testament to our deep client relationships and dedication to driving business success.

Deal 7: Enterprise Data Modernization for one of the Top 10 banks in USA

An American commercial bank partnered with Sonata to drive large-scale data transformation, migrating from Netezza to Snowflake. This strategic initiative is aimed at enhancing performance, scalability, and cost efficiency while modernizing the banks data infrastructure.

As part of this engagement, Sonata is leading the migration across key areas, including infrastructure, code and model migration, data integration, job scheduling, security, Bl and reporting, and production support. With a comprehensive approach that includes validation, testing, and change management, this transformation will empower the client with a modern, cloud- based data platform, ensuring agility, security, and long-term innovation in financial services.

Deal 8: Advanced Analytics Transformation for an Elite Financial Institution

One of Americas elite financial institutions partnered with Sonata to modernize its analytics ecosystem by migrating from SAS Grid to SAS Viya.

Sonata is driving the end-to- end migration, focusing on performance enhancement cost efficiency, improved Al and advanced analytics capabilities, and strengthened security and compliance. This strategic initiative is designed to accelerate decisionmaking, enhance Al-driven insights, and optimize operational efficiency, while ensuring.a secure, scalable, and cloud-ready analytics environment.

By streamlining management and user experience, this transformation will future-proof the clients analytics infrastructure, enabling agility and innovation in the rapidly evolving financial landscape.

Deal 9: Standardizing Global Operations for Access Solutions

A global leader in access solutions and security systems partnered with Sonata to drive business process transformation across 13 APAC countries. Seeking to integrate and standardize operations, the client aimed to enhance real-time engagement with customers, suppliers, distributors, and partners.

After evaluating multiple vendors, the client selected Sonata to modernize its existing Dynamics AX 2012 R3 to the advanced D365 Finance and Supply Chain Management platform. Additionally, Sonata is implementing an intelligence layer using Microsoft Fabric, accelerating the clients data-to- decision journey. This transformation will enable seamless operations, greater efficiency, and data- driven decision-making at scale.

India Business

SITL had a very good year of growth. Our business grew by 20 % in revenue and 15 % in GC.

Our ongoing focus on Hybrid Cloud Infrastructure Management and technology expertise has positioned us as the preferred partner for digital transformation for many of our customers. Achieving the highest level of certifications across all major Cloud platforms has played a key role in building trust with both our OEM partners and customers.

This year, we dedicated significant efforts to strengthening our IT Security competency, which has led to deeper engagements with customers as they address their growing IT and Cloud security needs across their enterprises. Additionally, weve seen increased interest in our SOC solutions from existing clients. We successfully renewed multi-year contracts with several long-term clients and saw opportunities for upselling various software products within our current customer base.

As Al adoption gains momentum among Indian enterprises, we have shifted focus toward Al- related products and tools offered by our OEM partners. Together with our OEMs, weve been actively involved in supporting our customers through their Al adoption journeys and initiatives.

Case Study 1: Re-platform Cloud Native Application

A Customer Services Platform Company partnered Sonata to Re-platform a Cloud Native GCP based Application to Azure, migrating Application, Serverless services, Integration Pipelines etc. to Azure.

Clients Objective

• Re-platform the existing application to Azure to leverage cost efficiencies.

• Execute with minimum bandwidth of existing Application team.

• Adhere to InfoSec requirements.

Sonatas Approach

• Design and build a secure landing zone as per InfoSec requirements.

• Assess existing GCP Architecture, understand codebase for Serverless services.

• Create a GCP to Azure service mapping.

• Rewrite the Python codebase for Azure classes and schema.

• Test and validate the rewritten services and push to GitHub repo.

• Deploy the codebase to Azure Functions through Azure DevOps.

• Understand GCP Flow and design and build a corresponding Logic App workflow.

• Deploy and migrate the PostgreSQL database.

• Test integration of all services.

• Provide support to Application team for customer onboarding including data migration.

Outcomes Delivered

• 15% cost reduction achieved

Case Study 2: Security Operations Consolidation

An Indian Conglomerate with interests across Automobile Manufacturing, BFSI, ITeS, Healthcare partnered Sonata for Design and Implementation of Microsoft Sentinel across multiple entities of the Group.

Clients Objective

To build a SOC platform where each entitys compliance requirements are met and at the same time Group-wide visibility and consolidation of Security Operations is achieved.

Sonatas Approach

• Discovery and assess IT Landscape and Compliance requirements for each of the 16 entities.

• Design an architecture to include tenants of each of the entities for SIEM and SOAR platform.

• Build a Log Analytics workspace in each of the tenants and connect it to the group cluster to provide group wide visibility.

• Integrate 22000+ devices across all entities into Microsoft Sentinel SIEM.

• Understand 750+ Use Cases existing in source SOC platform and design corresponding ones in Sentinel.

• Integrate with Lighthouse for operating the SOC centrally.

• Create Custom Connectors and Custom Detection Rules and Response Templates.

• Document, provide KT and handover to Group SOC Team.

Outcomes Delivered

• 15+Companies Onboarded

• 22,000+ Devices Onboarded

• 1TB + Logs Processed Every Day

Delivery Excellence

Orchestrating Al in Harmony

Ai Enabled Workforce

Building a Strong Gen Al Workforce at Sonata

At Sonata, we have made significant strides in fostering a highly capable Gen Al (Gen Al) workforce. With 88% of our employees holding Gen Al Level 1 certifications, we have successfully delivered specialized training on platforms such as Harmoni.AI Enterprise, OpenAI ChatGPT, Azure OpenAI, AWS, and Prompt Engineering. This training spans across multiple business units and competencies, ensuring a company-wide focus on innovation and advanced Al adoption.

In addition, over 20% of our employees have applied their learning by completing Proof of Concept (PoC) projects for identified Gen Al use cases.

Driving Innovation through TechFest and SPARK Hackathon

At TechFest 2024, Sonata showcased 27 innovative ideas focused on Gen Al and automation. The top three ideas were awarded recognition, with participants featured across internal communications and Sonatas social media platforms.

The SPARK Hackathon 2024, centered on Al, attracted 23 idea submissions, with 10 teams advancing to the Grand Finale. The event saw participation from 80 individuals, including 20 mentors, and culminated in storytelling workshops for finalists, provided by a renowned business storytelling company. Winning ideas received funding following business pitch presentations to a panel of judges, along with cash prizes and coverage on Sonata Viva Engage and social media channels.

A panel discussion on Generative Al-Driven Modernization: The Future of Business Transformation was also held, engaging a large audience of Al enthusiasts.

Al Enabled Project Execution

We have made substantial progress in expanding Al adoption across business units, with a focus on Gen Al in 35+ top accounts. Key highlights include:

Cost and Revenue Impact

We are capturing cost savings through role reductions in fixed- price projects

Key Gen Al Solutions Deployed

Procurement Automation:

Developed a Gen Al solution for the procurement function of a global leisure, travel, and tourism company. By automating the extraction of key contractual clauses from Statements of Work (SOWs) and Master Service Agreements (MSAs), this solution reduced effort and cycle time significantly.

NextGen Support Bots

Implemented Al-driven bots fora leading global data communications service provider, saved effort by automating basic ticket resolution

o Self-Help Bot for end users via MS Teams, allowing resolution of basic issues from a repository of solution guides.

o Knowledge Bot for agents, providing quick solutions from a comprehensive database of documents.

Testing Automation with IntellQA

Deployed the Harmoni.AI- powered IntellQA platform for a large multinational leisure, travel, and tourism company, reducing testing efforts and cycle times by 50%.

CRM Optimization

Implemented a Copilot enabled CRM solution for a leading fashion and retail company, resulting in reduction in call center agents, faster ticket resolutions, and enhanced customer satisfaction. Features included context-based responses, automated email/ text drafting, and translation capabilities.

o Pharmaceutical Chat Bot

Created a conversational Al for a multinational pharmaceutical company, enabling the bot to interact with databases via SQL queries to deliver tailored, up-to-date responses.

o Independent Technology Provider Solutions

Delivered multiple Gen Al solutions for an independent technology provider, including a Gen Al chatbot for Level 1 support, automatic incident routing, and automation of repetitive issue resolution.

Al Enabled Systems

We continue to build Al-driven systems to enhance operational efficiency and business insights:

• M&A Solution

Developed an Al-assisted solution for generating insights, FAQs, and actions through data extraction from call recordings, email threads, and public sources, aiding in M&A target deal summaries.

• Financial Analysis

Built an Al-driven tool for trend analysis, data insights, and peer comparison from historical financial statements.

• Resource Demand Mapping

Created an Al tool for selecting the best profiles from Sonatas global talent pool, optimizing resource allocation based on job descriptions.

• Vendor Onboarding

Implemented a Gen Al -enabled platform to streamline vendor onboarding, fast-tracking document submission, validation, and capturing vendor details in a structured manner.

• Forecasting Utility

Developed a Gen Al solution for estimating missing bill rates by matching employees with similar profiles in terms of competency, band, and customer.

Customer Delight through Delivery Excellence

Customer satisfaction remains at the heart of our business; in 2024, Sonata achieved an impressive, aggregated Customer Satisfaction (CSAT) score of 4.3 out of 5. Nearly 90% of our clients rated us 4 or above, with one-third awarding a perfect score of 5/5.

In addition, our Net Promoter Score (NPS) survey, conducted by a professional research firm, revealed that more than 60% of client stakeholders are strong promoters of Sonata and would recommend us to others. This reinforces our ongoing commitment to understanding client needs and delivering exceptional value.

In 2024, Sonata successfully completed an Integrated Management System Audit, earning certifications across various standards, including:

• Quality, Security and Business Continuity: ISO 9001, ISO 20000-1, ISO 27701, and ISO 22301 certifications, affirming our commitment to maintaining high-quality standards, securing client data, and optimizing certification costs.

• Environmental, Health and Safety: ISO 14001 and ISO 45001 certifications, underscoring our dedication to sustainable growth and the health and safety of our associates.

Sonata has successfully completed SOC 2 audit which provides reasonable assurance for meeting service commitments and system requirements based on applicable trust services criteria. Sonata has successfully completed the annual progress audit and met all the requirements for the Azure Expert MSP Program from Microsoft.

We also launched K-Harness 2.0, a centralized repository application for managing reusable assets across projects and competencies. This platform streamlines asset reuse, boosts productivity, and provides visibility into effort savings and benefits across teams.

Marketing Initiatives

Highlights of Strategic Brand-enhancing Initiatives during FY25.

• Launched the Brand Campaign to strengthen Sonatas positioning as The Modernization Engineering Company. ^•

• Received multiple recognitions from leading Analyst Firms like Everest Group, HFS for Sonatas solutions in Gen Al, Cloud Modernization, Data Modernization, and Dynamics space. Sonata made it to HFS Fastest Six Service Providers list, twice during the year.

• Organized Bespoke events in USA and UK and also participated in our Partner events in USA and Europe to increase mindshare and demand among clients and prospects.

• Published Thought leadership articles, authored by our CTO, CDO, CHRO and key SMEs (Subject Matter Experts) in Cloud, Data and Gen Al space, in India and USA.

• Our intense PR efforts yielded significant traction from the Senior Journalists of Tier 1 publications in India. We were also successful in publishing Thought leadership articles in US and UK publications.

• Sonatas Official Linkedln handle witnessed a 30% jump in followers. Our Social Media posts on Linkedln continued to witness industry best engagement rate.

• Marketing team supported multiple org-wide initiatives like D&l, Sonata Spark Hackathon, TechFest, 5K Marathon to build mindshare, interest and participation among Sonatians.

Our commitment to invest in human capital development to fuel growth, continues in the form of attracting, retaining and skilling talent. During FY25, we onboarded Sonatians including DETs from campus. Further, 25 highly credible leadership talent across different functions were onboarded globally to further strengthen our leadership pipeline, which set us on course to deliver our strategic growth objectives. We also invested significantly in training and skilling of our talent pool.

Learning and Development

As technology continues to evolve at an unprecedented pace, the need for continuous learning and upskilling has never been more critical. Recognizing this imperative, Sonata University was established to provide our workforce with access to world-class learning programs, equipping them with the skills necessary to navigate the digital future.

Now, in its second year, Sonata University has been instrumental in furthering our efforts to foster a culture of continuous learning, enabling our workforce to stay ahead in the rapidly transforming landscape of Gen Al and digital innovation going beyond technical advancements, focusing on the ethical, responsible, and governance aspects of Al adoption. Our Gen Al-related learning aims at ensuring transparency, fairness, and accountability in Al development and deployment, both within our business and for our clients.

Cementing our efforts to remain abreast with emerging technology, our Gen Al initiative has been structured into multiple training programs, each targeting different employee groups and skill levels. The initiative includes comprehensive courses, assessments, and practical projects to ensure a thorough understanding and application of Gen Al technologies. To date, over 93% of our employees are Level-1 certified. On average, 30% to 40% of our eligible employees have been trained on Level 2 certification. Additionally, on average more than 40% of our identified talent is certified at Level 3.

We have consistently strengthened Sonata Universitys learning infrastructure and expanded on the cutting-edge programs offered created and curated in-house and in collaboration with leading content and platform partners.

In another significant milestone, our active learner percentage increased from 87% in the last financial year to 92%, in 2024-2025. Our learning hours increased by 8% reaching 350,000 plus hours.

A key pillar of our initiatives is the Sonata Mandatory Training Program (SMTP), a highly customized, role-specific learning program for Project Managers, Delivery Managers, and Delivery Directors, designed to provide targeted upskilling in both emerging digital technologies like Gen Al, Data, MS Fabric along with behavioral and leadership skills, to our leaders. Over 300 leaders including Project Managers, Delivery Managers, and Delivery Directors, have completed SMTP learning journeys over the last year.

Our signature Unified Programs (UPs) are getting Al-fied while evolving to map employees to a proficiency grid based on their roles, experience, and skill levels. They are also embedded with Sonata IPs and our flagship Harmoni. Al, the Responsible- first Al for Enterprise. This is not only to ensure we continue building future-ready capabilities to meet evolving business needs and drive our modernization programs with cutting-edge expertise but also to make our talent future-ready, fungible, and grow in their careers. More than 1/3rd of our eligible employees are UP certified.

Our strong focus on external certifications enables employees to gain industry- recognized credentials, enhancing both their expertise and aligning Sonata to best industry practices. With more than 26% of our employees earning industry and partner- aligned certifications, we continue to strengthen our talent pool, ensuring alignment with evolving business and technology landscapes.

Our commitment to continuous learning is reflected in the high engagement and utilization of our learning platforms to upskill themselves on managerial, behavioral, and leadership skills. Through SCALE, our digital learning ecosystem, in partnership with Skillsoft, our e-learning partner, we have achieved an impressive 90% plus license utilization, demonstrating the deep integration of learning into our organizational DNA.

The streak continues with our in-house learning platform, SCOPE, which offers tailored learning journeys across technical and behavioral skills. Designed to support specific project requirements, dedicated learning academies, and universal learning pathways, SCOPE provides a structured approach to upskilling at scale. With a comprehensive library of over 1600 courses, it ensures that employees at all levels have access to role-relevant learning and self-development opportunities, fostering a culture of continuous growth and excellence. Over the past financial year, our workforce has collectively logged more than 40,000 learning hours, across our learning platforms, reinforcing our focus on building future-ready skills at scale.

We also gamified our learning under the umbrella of The Invest in Yourself Challenge. We have seen active participation reflecting the strong "I Own My Learning" mindset within our organization. Our people actively seek opportunities to expand their skills and drive personal and professional growth.

Our commitment to compliance remains unwavering. Our learners have shown a strong focus on key areas such as the Prevention of Sexual Harassment (POSH), Information Security, Environmental, Social, and Governance (ESG), and Gen Al. We are proud to report an impressive compliance rate of approximately 90% in these critical domains.

In our ongoing pursuit of excellence, we are dedicated to enhancing our trainee onboarding programs. Our focus is on cross-skilling and upskilling to achieve relevant proficiency levels, business relevance, and faster deployment. The trainee onboarding program is highly structured, encompassing five tracks, Sonata Stepping Stones (organizational orientation), Launchpad (covering professional skills),

Tech Foundation, Tech Generic, and Competency Specific. Additionally, our sustained investment in campus recruit training ensures accelerated readiness, equipping new talent with the critical skills and knowledge needed to thrive in a rapidly changing digital landscape.

Diversity & Inclusivity

Building on last years progress, Sonata remains steadfast in its commitment to Diversity & Inclusion, and we have further strengthened our D&l initiatives, ensuring a more equitable and inclusive workplace.

Our D&l vision has paved the way for a robust D&l charter in the organization.

At Sonata Software, we are committed to fostering an environment where diversity of thoughts and perspectives are encouraged and valued.

We strive to ensure that all employees, customers and partners feel respected and empowered to realize their full potential. By embracing diversity, we aim to grow together.

While remaining committed to building a diverse workplace by broadening representation and creating a diverse talent pipeline, a key component of our D&I efforts is The Placing Fair our flagship training program designed to equip leaders with the skills needed to foster an inclusive work environment. More than 500 senior managers and executives have completed this program, gaining practical insights into overcoming unconscious bias in team management and communication. The training focuses on developing inclusive leadership competencies, enabling managers to create collaborative, high-performing teams that value diverse perspectives.

By embedding inclusively into our leadership development framework and workplace policies, we continue to cultivate a culture of belonging, where every employee feels valued, empowered, and supported in their growth.

Sonata Womens Advocacy Network (SWAN) continued its efforts to further its mission to inspire, engage, and create impact through its various regional chapters to foster a more inclusive workplace. The North America Chapter addressed work-life balance, while the India Chapter extended its outreach by organizing a Tech Talk at a local college campus, where a woman leader from Sonata led a session on Gen Al, inspiring young minds and fostering greater participation of women in technology. Also, aligning with our 2025 CSR focus on Digital Literacy, SWAN is partnering with the Functional Vocational Training and Research Society (FBTRS) to sponsor scholarships for meritorious girl students.

At Sonata, Diversity & Inclusion (D&l) is deeply embedded in our learning and development initiatives, ensuring that inclusively is not just a value but a practiced skill. Through our Hiring Fair and Playing Fair programs, we have trained and sensitized 400+ managers, fostering greater awareness of unconscious bias, inclusive hiring practices, and equitable team management.

These initiatives equip leaders with the knowledge and tools to create a more diverse, fair, and collaborative workplace, reinforcing our commitment to building an organization where everyone can thrive and contribute meaningfully.

Corporate Social Responsibility

Our Focus Areas

At Sonata, our CSR vision is centered on creating long-term value for the community by fostering sustainable growth through our services, ethical practices, and initiatives. We are committed to conducting business in a socially, economically, and environmentally responsible manner while considering the interests of all stakeholders, including the wider community. We recognize the interconnected nature of sustainability-actions in one area influence outcomes in another-making it essential to balance social, economic, and environmental priorities.

• Diversity and Inclusion

We actively promote inclusively through various social initiatives, including digital skilling, education, healthcare, and livelihood support. Our efforts extend to providing assistive technology for children with cerebral visual impairment and training programs for para-athletes, ensuring equal opportunities for all.

• Digital Skilling & Research

As a technology-driven organization, we focus on equipping underprivileged students with vital digital skills. Our specialized programs in Java development, data analytics, and cybersecurity help bridge the digital divide and prepare individuals for thriving careers in the tech industry. Additionally, we invest in research and development in Software Engineering and Responsible Al to drive technological advancements.

• Environmental Sustainability

Our commitment to environmental conservation is reflected in impactful CSR projects, including large-scale tree plantations. By integrating ecological responsibility into our initiatives, we aim to protect natural resources and ensure a sustainable future for generations to come.

Highlights of Projects Aimed at Achieving Sustainability Goals

CENTUM FOUNDATION

Empowering Underprivileged Youth through IT Training

We are committed to promoting education and enhancing employment opportunities for economically weaker sections in semi-urban areas.

As part of this initiative, 250 beneficiaries, including 90% women, received training in Data Analytics (125 students) and Microsoft Dynamics 365 (125 students) from industry experts. Additionally, 70% of participants were provided with placement assistance. This program aims to equip underprivileged and diverse youth with essential IT skills, ensuring access to quality and affordable resources while creating a pool of employable professionals for the industry.

FVTRS

Sonata is committed to empowering underserved youth through technical skilling and digital transformation initiatives. Our training programs equip 250 beneficiaries with essential digital skills, preparing them for employment in the IT industry. Certified trainees are made job-ready through a placement-linked training program, improving their standard of living while meeting the growing workforce demand. Additionally, we have developed the FVTRS website to enhance NGO operations, ensuring better accessibility and efficiency. By providing access to quality and affordable resources, we are creating a pool of employable professionals and driving sustainable social impact in the communities we serve.

Advancing Research and Innovation in Software Engineering and Al

Sonata is driving cutting-edge research and development in Software Engineering, Responsible Al, and Customer Experience through education, outreach, and infrastructure development. Our initiatives include Al literacy programs, research collaborations, and startup incubation to foster innovation. Through workshops and summer schools, students and professionals are trained in advanced Al topics. We have established state-of-the-art labs and classrooms, increasing research output by 30%. Our Al solutions in healthcare and finance have enhanced efficiency and accuracy. Additionally, our startup incubation efforts have led to five successful product launches and strategic partnerships, strengthening the Al ecosystem.

Arvind Eye Hospital

Android-Based Assistive Technology for Children with Cerebral Visual Impairment (CVI)

Sonata has developed an innovative Android-based assistive technology app to support children with Cerebral Visual Impairment (CVI), enhancing early diagnosis and therapy options for those with special visual needs. The app serves as both a diagnostic and therapeutic tool, featuring interactive exercises and games designed to improve visual awareness and perceptual skills. By fostering cognitive and visual development, this technology empowers children with CVI to engage more effectively with their surroundings, providing them with better opportunities for learning and growth. This initiative reflects our commitment to leveraging technology for inclusive and impactful healthcare solutions.

Bangalore Little Theatre

Sonata , in collaboration with Bangalore Little Theatre, developing a web portal for the NGO which focuses on life skills training for underprivileged children. Using theatre techniques, the project aims to enhance socio-emotional development, helping children manage emotions, stress, and develop coping mechanisms.

The initiative plans to scale up through a comprehensive web portal.

Agastya International Foundation

Sonata is driving impactful initiatives in education and cultural preservation through technology. In collaboration with Agastya International Foundation, we have developed the Welearn App, providing technical support to bridge educational gaps for rural school students. With 290,183 downloads, the app ensures widespread access to quality learning resources, empowering students for a brighter future.future.

Industree Crafts Foundation

Our partnership with Industree Crafts Foundation has led to the creation of the Co-Create App, an online repository for artisans to store and showcase their designs. This initiative not only preserves traditional art forms but also enhances artisans visibility, creating economic opportunities and fostering cultural sustainability.

Segment-wise Overview

The Group is engaged in providing IT Services and Solutions to its customers globally, with a presence in the USA, UK, Europe, ANZ, APAC, and distribution of software products and licenses in India. The companys consolidated operations include Indian and overseas subsidiaries under two distinct segments:

• International IT Services contributed 28% of total revenues and 58% of PAT

• Domestic Products and Services with 72% of the total revenues and 42% of PAT

During the year, the International IT services revenues stood at Rs 282,970 Lakhs (USD 335.5 million), an increase of 5.6% on Y-o-Y basis. Domestic products and services stood at Rs 732,755 Lakhs (USD 868.7 million). The total consolidated revenue stood at Rs 1,015,725 Lakhs (USD 1,201.2 million) a growth of 17.9% on Y-o-Y basis.

The Company added 47 new logos during the year across verticals and regions in the International Services segment.

From a geographical perspective, Sonata Softwares services revenue were contributed by different regions. The USA accounted for 74% of the services revenue, followed by Europe (including the UK) contributing 17%, and the Rest of the World (RoW) making up the remaining balance. In terms of verticals, Technology, Media and Telecom (TMT) contributed 31%, Retail, Manufacturing and Distribution (RMD) contributed 30%, Healthcare and Life Sciences (HLS) contributed 11%, Banking, Financial Services and Insurance (BFSI) contributed 23%, and remaining 5% of the revenues came from the Emerging sector.

Financial Overview

The Group is engaged in the business of providing IT Services and Solutions to its customers in the USA, UK, Europe, ANZ, APAC, and distribution of software products and licences in India. The Groups consolidated operations include Indian and Overseas subsidiaries under the two distinct segments.

Below are the Consolidated Financial Highlights

Particulars	2024-25	2023-24	Y-o-Y Growth
	Rs in Lakhs	Rs in Lakhs	in %
Total Income	1,022,840	873,861	17
Revenue	1,015,725	861,306	18
EBITDA	76,040	85,298	-11
Interest & Depreciation	18,674	21,694	-14
PAT	42,467	30,850	38
EPS (Rs)	15.30	11.12	38

Total Income: Total income increased by 17% from Rs 873,861 Lakhs in 2023-24 to Rs 1,022,840 Lakhs in 2024-25 largely owing to the increase in revenue from International IT services and domestic products and services.

EBITDA: The EBITDA margin stood at 7% in 2024-25.

Profit After Tax: The Net Profit margin stood at 4% in 2024-25.

Interest and Borrowings: The interest cost for the year 2024-25 is Rs 6,525 Lakhs, out of which interest expense on lease liability as per Ind AS 116 is Rs768 Lakhs. The Group has a Net Cash balance of Rs 48,086 Lakhs (including investment in Mutual Funds and net of bank borrowing repayable in one year).

Capital Employed: The Capital Employed is Rs 214,750 Lakhs in 2024-25. The Return on Average Capital Employed (ROCE) for the year ended 31^st March, 2025 is at 23%.

Net Worth: The Net Worth is Rs 170,594 Lakhs in 2024-25. The Return on Average Net Worth (RONW) for the year ended 31^st March, 2025 is at 27%.

Fixed Assets: The Groups fixed assets which includes property, plant, equipment, intangibles and goodwill is Rs 183,490 Lakhs as at 31^st March, 2025 and accumulated depreciation / amortization as at 31^st March, 2025 is Rs 26,899 Lakhs.

Below are the Standalone Financial Highlights

Particulars	2024-25	2023-24	Y-o-Y Growth
	Rs in Lakhs	Rs in Lakhs	in %
Total Income	117,523	128,434	-8
Revenue	99,131	95,030	4
EBITDA	26,075	40,582	-36
Interest & Depreciation	2,598	2,605	0
PAT	21,377	35,880	-40
EPS (Rs)	7.70	12.93	-40

Total Income: Total Income decreased by 8% from Rs 128,434 Lakhs in 2023-24 to Rs 117,523 Lakhs in 2024-25.

Dividend income in 2024-25 is Rs 15,800 Lakhs as against Rs 30,185 Lakhs in 2023-24.

EBITDA: EBITDA decreased by 36% from Rs 40,582 Lakhs in 2023- 24 to Rs 26,075 Lakhs in 2024- 25.

Profit After Tax: Profit after Tax decreased 40% from Rs 35,880 Lakhs in 2023-24 to Rs 21,377 Lakhs in 2024-25.

Interest and Borrowings:

The interest cost for the year 2024-25 is Rs 469 Lakhs, out of which interest expense on lease liability as per Ind AS 116 is Rs 284 Lakhs. The Company has a Net Cash balance of Rs 9,990 Lakhs (including investment in Mutual Funds net of borrowings).

Capital Employed: The Capital Employed is Rs 80,330 Lakhs in 2024-25. The Return on Average Capital Employed (ROCE) for the year ended 31 ^st March, 2025 is at 29%.

Net Worth: The Net Worth is Rs 80,330 Lakhs in 2024-25. The Return on Average Net worth (RONW) for the year ended 31^st March, 2025 is at 28%.

Fixed Assets: The Companys fixed assets which include property, plant, equipment and goodwill is Rs 6,287 Lakhs as of 31^st March, 2025 and accumulated depreciation / amortization as of 31^st March, 2025 is Rs 3,999 Lakhs.

The key financial ratios are forming part of Financial Statements.

Risks & Concerns

• Volatile Global Political and Economic Situation

Changes in the global economic landscape, political developments, and regulatory shifts can impact client technology budgets, leading to changes in demand patterns To address these challenges, the Company is taking proactive measures by collaborating closely with clients and prospects as they reassess their strategies for geographic diversity and workload distribution. Where possible, we are exploring right-shoring option to enhance efficiency and reduce exposure to external disruptions.

• Client Concentration

Client Concentration Risk refers to the potential threat posed by a disproportionate amount of revenue being generated from a limited number of clients. To address this concern, the Company keeps looking to diversify our client portfolio and deepens relationships across a broader base to mitigate this risk. Moreover, the Company continually monitors concentration risk within its Direct Core business and takes necessary steps to mitigate it.

• Cyber and Privacy Risk

Company mitigates cyber and privacy risks through a robust information security and privacy management system. Company provides comprehensive data privacy solutions to ensure compliance with global regulations. Our risk- based approach focuses on practical, scalable strategies to protect client data and infrastructure from evolving threat.

• The Transformative Impact of the Artificial Intelligence (Al) on Corporate Operations

The rapid adoption of Al presents challenges such as workforce skill gaps, integration complexities, and ethical concerns around data privacy and decision-making. These issues can hinder the seamless transformation of corporate operations and slow down the realization of Als full potential. To address these challenges, Company has invested in upskilling employees, adopting scalable and flexible Al platforms, and implemented robust governance frameworks focused on ethics and data privacy. Close collaboration between competency teams and business units ensures effective Al integration and maximizes operational benefits.

• Legal & Compliance Risks

The company regularly monitors regulatory changes, evaluates their impact and addresses any discrepancies. We utilize compliance tools, training modules and conduct periodic reviews and audits by both internal and external auditors to effectively manage and mitigate these risks.

Outlook

As we look ahead to FY26, we anticipate strong momentum fueled by four key tailwinds:

1. The acceleration from large deals

2. Rapid adoption of Al - both Generative and Agentic

3. Growth in Cloud and Data transformation programs

4. Expanding opportunity Microsoft Fabric and Dynamics

These will collectively propel us toward our ambitious growth aspirations. At the same time, we remain watchful of two potential headwinds: a volatile global macro-economic environment and delayed decision-making in the Retail, Manufacturing, and Distribution (RMD) vertical.

Despite these challenges, we are confident in maintaining a leadership position and targeting top-quartile performance in revenue growth and in margins.

Our strategy for FY26 is centered on enabling our clients modernization journeys while unlocking future growth through seven focused priorities:

1. Enhancing verticalized, Al domain-led solutions

2. Sustaining momentum in large deals

3. Scaling our delivery, competency and operations

4. Deepening leadership capabilities

We will continue to invest aggressively in our big bets—Al (both Gen Al and Agentic Al) and Microsoft sell-with while prioritizing growth in our Invest Verticals (Banking, Financial Services & Insurance and Healthcare & Life Sciences), and scaling our presence in Harvest Verticals (Technology, Media & Telecom and RMD).

With these focused initiatives, we are well-positioned to deliver top quartile growth in FY26.

Internal Control Systems

Our company has a proper and adequate system of internal controls. These controls ensure transactions are authorized, recorded, and reported correctly and assets are safeguarded and protected against loss from unauthorized use or disposition.

An extensive program of internal audits and management reviews supplements the process of the internal financial control framework.

To maintain its objectivity and independence, the Internal Auditor reports to the Chairperson of the Audit Committee of the Board.

The Audit committee defines the scope and authority of the Internal Auditor. The Internal Auditor monitors and evaluates the efficacy and adequacy of the internal control system in the Company, its compliance with operating systems, accounting procedures, and policies at all locations of the Company and its subsidiaries.

Based on the report of the Internal Auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and the necessary corrective actions are presented to the Audit Committee.

The internal financial control framework design ensures that the financial and other records are reliable for preparing financial and other statements.

In addition, the Company has identified and documented the key risks and controls for each process that has a relationship to the financial operations and reporting. The internal financial control framework entails the following:

• Authorization, Recording, and Reporting

Ensuring all transactions are properly authorized, accurately recorded, and reported in compliance with accounting standards and regulatory requirements.

• Safeguarding of Assets

Implementing controls to protect assets against loss, theft, or unauthorized use, including physical assets, financial assets, and intellectual property.

• Compliance with Regulatory Requirements

Adhering to all applicable laws, regulations, and standards relevant to the industry and geographic locations in which the company operates, including those set forth by regulatory bodies such as the Securities and Exchange Board of India (SEBI).

• Accuracy of Financial Reporting

Emphasizing the accuracy and integrity of financial reporting, including compliance with accounting principles and disclosure requirements prescribed by regulatory authorities.

• Risk Management

Identifying, assessing, and managing risks that could potentially impact the achievement of business objectives, including financial, operational, and strategic risks.

• Board Oversight

Providing oversight of the internal control system by the Board of Directors, including regular review and assessment of its effectiveness and responsiveness to emerging risks.

• Segregation of Duties

Implementing proper segregation of duties to prevent conflicts of interest and fraud, with clear delineation of responsibilities among different individuals or departments involved in financial transactions and reporting.