Tera Software Ltd Directors Report

DEAR MEMBERS,

Your Directors have the pleasure in presenting the Thirty Second (32nd) Annual Report together with the Audited Financial Statements of your Company for the Financial Year ended March 31, 2026.

1.

FINANCIAL PERFORMANCE

The financial statements have been prepared in accordance with Ind AS in terms of the provisions of Section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time.

(Rs. in Lakhs)

PARTICULARS	Standalone		Consolidated
	Financial Year 2025-26	Financial Year 2024-25	Financial Year 2025-26	Financial Year 2024-25
Income from Operations	23804.53	10764.38	23804.53	10764.38
Oher Income	392.99	406.11	392.99	406.11
Total Income	24197.52	11170.49	24197.52	11170.49
EBITDA	4063.43	1634.97	4063.04	1634.38
Less: Finance Cost	744.57	379.18	744.57	379.18
EBTDA	3318.86	1255.79	3318.47	1255.2
Less: Depreciation	70.83	13.59	70.83	13.59
EBT	3248.03	1242.20	3247.64	1241.61
Less: Exceptional Items	0.00	4.26	0.00	4.26
Less: Tax Expenses	767.56	295.86	767.56	295.86
EAT (Earnings After Tax)	2480.47	942.08	2480.07	941.49
Profit/Loss carried to B/S	2477.67	995.89	2477.28	995.30
EPS (Basic & Diluted)	19.82	7.53	19.82	7.52

Achieved a growth of 121% in operation performance

Earnings After Tax (EAT) and Earnings Per Share (EPS) recorded a significant increase of 163%.

Standalone Financial Performance

Comparison of key standalone financial indicators for FY 2024-25 and FY 2025-26.

The Company recorded a strong improvement in financial performance during FY 2025-26 on both Standalone and Consolidated bases. Income from Operations increased by approximately 121%, while EBITDA increased by approximately 149% on the Standalone basis. Profit Before Tax and Earnings After Tax increased by approximately 161% and 163%, respectively. The Consolidated results followed a similar trend, with only marginal differences from the Standalone results.

STATE OF COMPANYS AFFAIRS

The financial year 2025-26 represented a transitional year amid spread of generative artificial intelligence wherein data centres have become a critical part of infrastructure that supports a digital society and Indias push to become the worlds third largest economy by 2030, with a targeted GDP of over $ 7 trillion, underpinned by stepped up investment in infrastructure.

As the world is moving from efficiency driven globalisation to resilient driven globalisation, the Company is gearing up to adapt these changes, leveraging both local strength and global opportunities. The Company has diversified supply chains, trusted technology partnership, strong domestic capabilities and agility to serve customers across jurisdictions. At the same time, the Company continues to lay focus on improving operational resilience, prudent capital allocation, strengthening cash flows and building future-ready capabilities across high-growth infrastructure and technology-led sectors.

OPERATIONAL HIGHLIGHTS

During the financial year 2025-26, the Company recorded a significant increase in its Standalone Operational Revenue, which stood at Rs. 23804.53 Lakhs, as compared to Rs. 10764.38 Lakhs in the previous financial year. This growth reflects the strong operational performance and effective execution of strategic initiatives and reflecting the growth of 121%.

The Standalone Profit after Tax for the reporting year also demonstrated substantial improvement, rising to Rs. 2480.47 Lakhs from Rs. 942.08 Lakhs in the previous year, indicating enhanced operational efficiency and profitability and reflecting notable growth of 163%. There were no operations from its subsidiary company.

2. TRANSFER TO RESERVES

During the year under review, the Company has not transferred any amounts to the General Reserve. For complete details on movement in Reserves and Surplus during the financial year ended March 31, 2026, please refer to the Statement of Changes in Equity included in the standalone and consolidated financial statements of the Annual report.

3. SHARE CAPITAL

The paid-up Equity Share Capital of the Company as at March 31, 2026 stood at Rs.12,51,18,750/-. During the year under review, the Company has neither issued shares with differential rights as to dividend voting or otherwise nor has

granted stock options or sweat equity under any scheme. Further, none of the Directors of the Company holds investments convertible into equity shares of the Company as on March 31, 2026.

4. LISTING OF EQUITY SHARES

As on date of this report, 1,25,11,875 Equity Shares of Rs.10/- each of the Company are listed on the BSE Limited (BSE) and National Stock Exchange of India Ltd (NSE). The Annual listing fees of both the stock exchanges have been paid.

5. DIVIDEND

The Board of Directors, at its meeting held on August 11, 2026, has recommended a Final Dividend of 12% i.e. 1.20/- (Rupee One and Twenty Paise Only) per equity share of face value 10/- (Rupees Ten only) each, for the financial year ended on March 31, 2026, out of profits.

The recommended dividend amounts to a total payout of 1,50,14,250/- on 1,25,11,875 equity shares, and is subject to approval of the members at the ensuing Annual General Meeting (AGM). The dividend, upon approval, will be paid in compliance with applicable provisions and shall be subject to deduction of tax at source in accordance with the provisions of the Income-tax Act, 1961.

The provisions of Regulation 43A of SEBI (LODR) Regulations, 2015 regarding formulation of a Dividend Distribution Policy are not applicable to the Company, as it is not among the top 1,000 listed entities by market capitalisation as on March 31, 2026.

6. UNPAID DIVIDEND

The disclosure relating to year wise amount of unpaid/unclaimed dividend lying in the Unpaid Dividend account and the corresponding shares which are liable to be transferred to the Investor Education and Protection Fund (IEPF) and the due date of such transfer is provided in the Corporate Governance Report which forms a part of the Annual Report.

7. DEPOSITS/FINANCE

During the year under review, your Company has not accepted any public deposits within the meaning of Section(s) 73 to 76 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 and as such no amount on account of principal or interest on public deposits was outstanding as on the date of the Balance Sheet.

8. CHANGE IN NATURE OF BUSINESS

There has been no change in the nature of business carried on by the company. The Company continued to be in the business of IT, Fibernet, Telecom Infra Services, Digitalisation of Records, Power bills distribution and collection of payments etc.,

9. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF YOUR COMPANY

There have been no material changes in the nature of business and commitments affecting the financial position of the Company between the end of the financial year under review and date of this Report.

Subsequent to the close of the financial year, the Company acquired the remaining 26% equity shares of TS Innovations Private Limited with effect from 13 June 2026, pursuant to which it became a Wholly-Owned Subsidiary of the Company.

10. SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES

During the year under review, TS Innovations Private Limited became a Wholly-Owned Subsidiary of the Company. At the beginning of the financial year, the Company held 74% of the equity share capital of TS Innovations Private Limited. The remaining 26% equity shares were acquired by the Company with effect from 13 June 2026, pursuant to which TS Innovations Private Limited became a Wholly-Owned Subsidiary of the Company.

A statement containing the salient features of the financial statements of the Wholly-Owned Subsidiary, in accordance with Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, in Form AOC-1 , is annexed to this Boards Report as Annexure - A .

The Company does not have any joint venture or associate company as on the date of this Report.

11. CORPORATE GOVERNANCE

Pursuant to Regulation 34(3) read with Para C of Schedule V of the Listing Regulations, the Report on Corporate Governance is annexed as Annexure - B and a Certificate by the Managing Director & CEO confirming compliance by all the Board Members and Senior Management Personnel with Companys Code of Conduct and Auditors Certificate regarding compliance of conditions of Corporate Governance form part of the Annual Report.

12. MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis of financial condition and results of operations of the Company for the year under review, as per SEBI (Listing Obligations and Disclosure Requirements), 2015, as amended from time to time (Listing Regulations), is presented in a separate section, which forms a part of the Annual Report is set-out in Annexure-C .

13. CONSOLIDATED FINANCIAL STATEMENTS

Pursuant to the provisions of the Companies Act, 2013 read with the applicable provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Directors have pleasure in presenting the Audited Consolidated Financial Statements of the Company for the financial year ended 31 March 2026.

The Consolidated Financial Statements have been prepared in accordance with the applicable Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time.

The Consolidated Financial Statements of the Company comprise the financial statements of Tera Software Limited and its subsidiary, TS Innovations Private Limited.

14. DIRECTORS AND KEY MANAGEMENT PERSONNEL AND RELEVANT DISCLOSURES • Composition of the Board:

As on 31 March 2026, the Board of Directors comprised six (6) Directors, consisting of two Executive Directors, one Non-Executive Director and three Independent Directors. The composition of the Board is in compliance with the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Appointment and Cessation of Directors during the Year:

The details of appointment and cessation of Directors during the financial year under review are as follows:

Name of the Director	DIN	Designation	Nature of Change	Effective date of change
Sri. Veera Brahma Rao Arekapudi	07540040	Independent Director	Appointed as an Additional Independent Director and members approved through Postal Ballot on 25-03-2026	February 10, 2026
Sri. Divakar Atluri	00033386	Independent Director	Ceased to hold office upon completion of his first term and was not re-appointed	February 11, 2026
Sri. T. Gopichand	00107886	Chairman and Managing Director	Re-appointed as Chairman and Managing Director by the members at their AGM held on 26/09/2025.	w.e.f. September, 01, 2026

• Sri. Veera Brahma Rao Arekapudi was appointed as an Additional Independent Director by the Board with effect from 10 February 2026. The Members approved his appointment as an Independent Director through Postal Ballot, the results of which were declared on 26 March 2026, and his appointment is effective from 10 February 2026.

Key Managerial Personnel (KMP)

Pursuant to Section 203 of the Companies Act, 2013, the following were the Key Managerial Personnel of the Company during the year under review and as on the date of this Report:

Sri. T. Gopichand	Chairman and Managing Director
Sri. T. Madhu Mitra	Whole-Time Director
Smt. D. Pravallika	Chief Financial Officer (resigned and relieved from the services of the Company with effect from June 30, 2026)
Sri. Ch. Mallikarjuna	Company Secretary & Compliance Officer
Sri. G. Anil Kumar	Chief Financial Officer (appointed by the Board of Directors with effect from September 07, 2026)

Smt. D. Pravallika resigned from the position of Chief Financial Officer and was relieved from the services of the Company with effect from 30 June 2026. Subsequently, the Board of Directors, at its meeting held on August 11, 2026, appointed Sri. G. Anil Kumar as the Chief Financial Officer of the Company with effect from September 07, 2026.

Declaration by Independent Directors:

The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended. The Board is of the opinion that the Independent Directors possess the requisite integrity, expertise, experience and proficiency and

fulfil the conditions specified under the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and are independent of the management.

The terms and conditions of appointment of the Independent Directors are available on the Companys website and can be accessed at: https://terasoftware.com/terms-and-conditions-of-appointment-of-independent-directors.

• Directors Appointment / Re-Appointment at the ensuing AGM:

Pursuant to the recommendation of the Nomination and Remuneration Committee and in accordance with the provisions of Section 152, Section 178 of the Companies Act, 2013 and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors, at its meeting held on August 11, 2026, recommended the following proposal for approval of the Members at the ensuing Annual General Meeting:

• Sri. T. Bapaiah Chowdary (DIN: 00107795), Non-Executive Director, who retires by rotation in accordance with the provisions of Section 152(6) of the Companies Act, 2013 and being eligible, has offered himself for reappointment.

The Notice convening the ensuing Annual General Meeting forms part of this Annual Report and contains the requisite details of the aforesaid Director seeking re-appointment, as required under the Secretarial Standard on General Meetings (SS-2) and Regulation 36 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

15. BOARD AND COMMITTEE COMPOSITION AND THEIR MEETINGS

• Board Meeting and Composition:

During the financial year 2025-26, the Board of Directors met four (4) times in compliance with the provisions of the Companies Act, 2013, the rules made thereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The intervening gap between any two consecutive meetings did not exceed the period prescribed under the Companies Act, 2013 and the SEBI (LODR) Regulations.

The requisite quorum was present throughout all the meetings. The Directors actively participated in the deliberations and provided valuable guidance on the matters placed before the Board.

The dates of the Board Meetings held during the financial year were as follows:

• 16 May 2025

• 12 August 2025

• 11 November 2025

• 10 February 2026

The attendance of the Directors at the Board Meetings is given below:

Name of Director	Desig nation	Category	No.of Board Meetings eligible to attend During the year	No.of Board Meetings attended during the year
Sri. T. Gopichand	CMD	Promoter	4	4
Sri. T. Madhu Mitra	WTD	Promoter Group	4	4
Sri. Divakar Atluri	NED	Independent Director	4	4
Prof. Dr. Braja Bandhu Nayak	NED	Independent Director	4	4
Smt. V. Usha Rani	NED	Independent Director	4	4
Sri. T. Bapaiah Chowdary	NED	Promoter Group	4	4
Sri. A. Veera Brahma Rao	NED	Independent Director	1	1

CMD - Chairman and Managing Director, WTD - Whole Time Director, NED - Non- Executive Director.

• Meeting of Independent Directors :

Pursuant to Schedule IV to the Companies Act, 2013 and Regulation 25(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate meeting of the Independent Directors was held on 10 February 2026, without the attendance of the Non-Independent Directors and members of the management.

At the meeting, the Independent Directors, inter alia, reviewed:

• the performance of the Non-Independent Directors and the Board as a whole;

• the performance of the Chairman of the Company, taking into account the views of the Executive and NonExecutive Directors; and

• the quality, quantity and timeliness of the flow of information between the management and the Board necessary for the Board to effectively and reasonably perform its duties.

16. AUDIT AND OTHER COMMITTEES OF BOARD

As required under Section 177(8) read with Section 134(3) of the Companies Act, 2013 and the Rules made thereunder, the composition of the Audit Committee and the conduct of its meetings were in compliance with the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations). During the financial year under review, all the recommendations made by the Audit Committee were accepted by the Board of Directors.

In accordance with the provisions of the Companies Act, 2013 and the Listing Regulations, the Company has also constituted various Committees of the Board, namely, the Debtors Review Committee (Sub-Committee of the Audit Committee), Nomination and Remuneration Committee, Stakeholders Relationship Committee, Corporate Social Responsibility Committee, Borrowing Committee and Management Committee.

During the financial year under review, consequent upon the completion of the term of Mr. Divakar Atluri as an Independent Director with effect from 11 February 2026 and the appointment of Mr. Veera Brahma Rao Arekapudi as an Additional Independent Director with effect from 10 February 2026, the Board reconstituted the composition of its Committees, wherever required, in compliance with the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The details of the Committees of the Board, including their terms of reference, composition, number of meetings held during the financial year and attendance of the members thereat, are provided in the Report on Corporate Governance, which forms an integral part of this Annual Report.

17. POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION, INCLUDING CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES AND INDEPENDENCE OF A DIRECTOR

Pursuant to the provisions of Section 178 read with Section 134(3)(e) of the Companies Act, 2013 and the applicable provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Nomination and Remuneration Committee has formulated and recommended to the Board a Policy on the appointment and remuneration of Directors, Key Managerial Personnel and Senior Management Personnel.

The Policy lays down the criteria for appointment, qualifications, positive attributes, independence of Directors and remuneration payable to Directors, Key Managerial Personnel and Senior Management Personnel. The Policy also provides the criteria for evaluation of the performance of the Board, its committees and individual Directors.

There was no change in the said Policy during the financial year under review. The Policy is available on the Companys website at: https://terasoftware.com/investors.

18. PERFORMANCE EVALUATION OF BOARD, COMMITTEES & DIRECTORS

Pursuant to the Provisions of the Companies Act, 2013 and Listing Regulations and the Guidance Note on Board Evaluation issued by SEBI, the Board of Directors of the Company carried out the annual evaluation of its own performance and that of its committees and individual Directors as per mechanism for such evaluation evolved by the Board, inter-alia, to assess the skill set and contribution that are desired recognising that competencies and experiences evolves over time. The manner in which annual evaluation has been carried out by the Board of Directors is provided in the Report on Corporate Governance which forms a part of the Annual Report.

As part of the evaluation process, the Board of Directors also considered the criteria for performance evaluation of Independent Directors and the Board of Directors as formulated by the Nomination and Remuneration Committee.

The Independent Directors, after taking into account the views of the Non-Executive Non-Independent Directors, and the Managing Director, carried out the annual evaluation of the Chairman. They have also undertaken the evaluation of the Board as a whole, its committees, and individual Directors. The outcome of this evaluation was reviewed and deliberated by the Board of Directors.

The performance evaluation of Independent Directors was carried out by the entire Board of Directors, excluding the Directors being evaluated. The results of the evaluations reflected a high level of commitment, engagement, and effective functioning of the Board and its various Committees. In conclusion, the Board of Directors expressed satisfaction with the overall performance of the Board, its committees, and individual members.

19. CORPORATE SOCIAL RESPONSIBILITY

As a part of its initiative under Corporate Social Responsibility (CSR), your Company has undertaken CSR activities, projects and programs broadly in accordance with Schedule VII of the Companies Act, 2013, applicable provisions of the Companies (Corporate Social Responsibility Policy) Rules, 2014 and CSR Annual Action Plan 2025-26 read with the Companys CSR Policy.

The Annual Report on CSR activities giving brief outline of the Companys CSR Policy and CSR initiatives undertaken during the year under review in the prescribed format as per the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 is set-out in Annexure-D which is attached hereto and forms a part of the Boards Report.

The CSR Policy of the Company is available on the Companys website at: https://terasoftware.com/investors/corporate- social-responsibility-policy.

20. RISK MANAGEMENT AND ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The provisions relating to the constitution of a Risk Management Committee under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are not applicable to the Company. The Audit Committee oversees the Companys framework for identification, evaluation, mitigation and monitoring of business, operational, financial and compliance risks.

The Companys internal financial controls with reference to the Financial Statements are commensurate with the size, scale and complexity of its operations and are designed to provide reasonable assurance regarding the orderly and efficient conduct of its business, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records, and timely preparation of reliable financial information.

The Audit Committee and the Board of Directors periodically review the risk management framework to identify, evaluate, prioritize and mitigate key business risks. They also monitor the effectiveness of the internal control systems, governance processes, compliance with applicable laws and regulations, and the implementation of appropriate risk mitigation measures.

The Company has established a process for periodically placing before the Audit Committee the risk assessment reports, risk minimization initiatives and the measures taken to mitigate identified risks. The key elements of the Companys risk management framework are discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report.

21. ANNUAL RETURN

A copy of the Annual Return of the Company prepared in accordance with Section 92(1) of the Companies Act, 2013 read with Rule 11 of the Companies (Management and Administration) Rules, 2014 is placed on website of the Company in pursuance to Section 92(3) of the Companies Act, 2013 and the same can be accessed at the weblink: https://www. terasoftware.com/annual-return.

22. DIRECTORS RESPONSIBILITY STATEMENT

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

(a) that in the preparation of the annual financial statements for the year ended March 31, 2026, the applicable accounting standards (Ind AS) read with requirements set out under Schedule III to the Companies Act, 2013 have been followed and there are no material departures from the same;

(b) that such accounting policies as mentioned in Notes to the financial statements have been selected and applied consistently and judgement and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2026 and of the profit of the Company for the year ended on that date;

(c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) that the annual financial statements have been prepared on a going concern basis;

(e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; and

(f) that proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.

23. AUDITORS

(A) STATUTORY AUDITORS

In terms of the provisions of Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 as amended vide the Companies (Amendment) Act, 2017 and the Companies (Audit and Auditors) Amendment Rules, 2018 respectively, M/s Narven Associates, Chartered Accountants (Firm Registration

No.005905S) were appointed as Statutory Auditors of the Company to hold office for a term of five (5) years until the conclusion of the 33rd Annual General Meeting (AGM) of the Company to be held in the year 2027. The Auditors have confirmed to the Company that they continue to remain eligible to hold office as the Auditors and are not disqualified for being so appointed as Statutory Auditors under the Companies Act, 2013, the Chartered Accountants Act, 1949 and the rules and regulations framed thereunder. .

(B) AUDITORS REPORT

The Auditors Report on the financial statements of the Company for the year ended March 31, 2026 forms a part of the Annual Report. There is no qualification, reservation, adverse remark, disclaimer or modified opinion in the Auditors Report that calls for any further comments or explanations.

(C) COST AUDITORS

The provisions of Section 148 of the Companies Act, 2013, read with the Companies (Cost Records and Audit) Rules, 2014, relating to the maintenance of cost records and appointment of Cost Auditors, are not applicable to the Company.

(D) SECRETARIAL AUDITORS

M/s RPR & Associates, Practicing Company Secretaries (Unique Identification No. S2017TL469100 and Peer Review Certificate No. 8237/2026) were appointed as the Secretarial Auditor of the Company pursuant to Regulation 24A of the Listing Regulations to undertake the Secretarial Audit of your Company for the first term of Five (5) consecutive years from financial year 2025-26 till financial year 2029-30. M/s RPR & Associates has confirmed that they are not disqualified from continuing as Secretarial Auditor of the Company in terms of provisions of the Companies Act, 2013 & Rules framed thereunder and Listing Regulations.

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules thereunder, the Secretarial Audit Report for the financial year ended March 31, 2026 issued by Secretarial Auditor, M/s RPR & Associates, Practicing Company Secretaries is given in the prescribed form in Annexure-E which is attached hereto and forms a part of the Directors Report.

The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer. The observation of Secretarial Auditor is self-explanatory in nature and does not require any comment or explanation from the Board of Directors.

(E) INTERNAL AUDITORS

Pursuant to the provisions of Section 138 of the Companies Act, 2013, the Company had appointed M/s. Darapaneni & Co., Chartered Accountants, as the Internal Auditors of the Company to conduct the internal audit of its functions and activities for the Financial Year 2025-26. The Internal Auditors submitted their reports periodically, and their observations together with the corrective actions taken by the Management were placed before the Audit Committee for its review.

24. PARTICULARS OF EMPLOYEES

The disclosure required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, in respect of employees of the Company are given in Annexure-F which is attached hereto and forms a part of the Annual Report Report.

25. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The particulars of Loans, Guarantees and Investments in pursuance to Section 186 of the Companies Act, 2013 have been disclosed in the standalone financial statements read together with Notes annexed to and forming an integral part of the standalone financial statements.

26. RELATED PARTY TRANSACTIONS

All Related Party Transactions entered into by the Company during the financial year under review were at arms length and in the ordinary course of business and were in compliance with the applicable provisions of the Companies Act, 2013 read with the Rules made thereunder, the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) and the Companys Policy on Related Party Transactions.

During the financial year under review, the Company did not enter into any Related Party Transactions that were material under the provisions of the Companies Act, 2013 or the Listing Regulations. Accordingly, the disclosure of Related Party Transactions in Form AOC-2, as required under Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014, is not applicable. However, Form AOC-2 is voluntarily enclosed as Annexure-G .

There were no materially significant Related Party Transactions entered into by the Company with its Promoters, Directors, Key Managerial Personnel or other designated persons that could have a potential conflict with the interests

of the Company or be prejudicial to the interests of the minority shareholders. Details of the Related Party Transactions entered into during the financial year are disclosed in the Notes forming part of the Standalone Financial Statements for the financial year ended 31 March 2026.

The Audit Committee grants prior omnibus approval on an annual basis for Related Party Transactions that are repetitive in nature and in the ordinary course of business. A statement containing the details of all Related Party Transactions entered into pursuant to such omnibus approval, together with the relevant documents and information, is placed before the Audit Committee on a quarterly basis for its review.

Pursuant to Regulation 23 of the Listing Regulations, the Company submits disclosures of Related Party Transactions in the prescribed format to the Stock Exchanges every six months along with the publication of its standalone and consolidated financial results.

The Companys Policy on Materiality of Related Party Transactions and on Dealing with Related Party Transactions, as approved by the Board of Directors, is available on the Companys website at https://www.terasoftware.com/related- party-transactions.

27. COMPLIANCE WITH APPLICABLE SECRETARIAL STANDARDS

The Company has in place adequate systems and processes to ensure compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI). During the financial year under review, the Company has complied with the applicable Secretarial Standards, namely SS-1 relating to Meetings of the Board of Directors and SS-2 relating to General Meetings.

The Secretarial Auditor has also confirmed such compliance in the Secretarial Audit Report, which forms part of this Annual Report.

28. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is provided below:

(a) Conservation of Energy:

The Company is engaged in the business of software development and IT-enabled services and is not involved in any manufacturing activities. Accordingly, the provisions relating to conservation of energy are not materially applicable to the Companys operations.

(b) Technology Absorption:

The Company has neither imported nor absorbed any new technology during the financial year under review. Accordingly, no expenditure was incurred towards technology absorption.

(c) Foreign Exchange Earnings and Outgo:

There were no foreign exchange earnings or outgo during the financial year under review.

29. VIGIL MECHANISM/WHISTLE BLOWER POLICY

In terms of the provisions of Section 177(9) of the Companies Act, 2013 and Regulation 22 of the Listing Regulations, the Company has implemented a Vigil Mechanism/Whistle Blower Policy to deal with instances of fraud and mis-management, if any, and conducting business with integrity including in accordance with all applicable laws and regulations. No employee has been denied access to the Vigilance Officer as well as direct access to the Chairperson of the Audit Committee in appropriate or exceptional cases. The details of the Vigil Mechanism and Whistle-Blower Policy are explained in the Report on Corporate Governance. The said Policy is uploaded on the website of the Company and can be accessed at weblink: https://www.terasoftware.com/uploads/VIGIL-BLOWER-POLICY.pdf.

30. CODE FOR PREVENTION OF INSIDER TRADING

The Company has adopted a Code of Conduct to Regulate, Monitor and Report Trading by Designated Persons (PIT Code) in accordance with the provisions of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, as amended. The PIT Code regulates trading in the Companys securities by its Designated Persons and their Immediate Relatives and, inter alia, lays down the procedures to be followed while trading in the Companys securities and for handling and dissemination of Unpublished Price Sensitive Information (UPSI).

The Company has also adopted a Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information in compliance with the SEBI (Prohibition of Insider Trading) Regulations, 2015. The PIT Code, inter alia, provides for maintenance of a structured digital database, preservation of confidentiality of UPSI, internal controls for prevention of insider trading and procedures for handling and communicating UPSI.

The Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information is available on the Companys website at https://terasoftware.com/investors/code-of-practices-and-procedures-for-fair-disclosure-of-upsi

31. DECLARATION / CERTIFICATE PURSUANT TO SCHEDULE V OF THE SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015

In terms of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a declaration by the Managing Director confirming that all the Members of the Board of Directors and the Senior Management Personnel have affirmed compliance with the Companys Code of Conduct for the financial year ended March 31, 2026 is annexed to this Boards Report as Annexure-H .

32. DISCLOSURE WITH REGARD TO DEMAT SUSPENSE ACCOUNT / UNCLAIMED SUSPENSE ACCOUNT

Pursuant to the applicable provisions of the Companies Act, 2013, the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and SEBI Circular No. SEBI/HO/MIRSD/MIRSD_RTAMB/P/CIR/2022/8 dated 25 January 2022, the Company has opened a Suspense Escrow Demat Account for crediting securities in cases where the security holder/claimant fails to submit the dematerialisation request within the prescribed period.

During the financial year under review, no equity shares were transferred to or held in the Suspense Escrow Demat Account. Accordingly, there were no outstanding shares lying in the Demat Suspense Account / Unclaimed Suspense Account as on March 31, 2026.

33. INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to the provisions of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (IEPF Rules), dividends remaining unpaid or unclaimed for a period of seven consecutive years are required to be transferred by the Company to the Investor Education and Protection Fund (IEPF). Further, in accordance with the IEPF Rules, the equity shares in respect of which dividends have remained unpaid or unclaimed for seven consecutive years or more are also required to be transferred to the Demat Account of the IEPF Authority.

During the financial year under review, there were no unpaid or unclaimed dividends or equity shares that were required to be transferred to the Investor Education and Protection Fund (IEPF).

Un claimed Dividends/Shares for the FY 2024-25 is as follows:

Year	Type of Dividend	Unpaid/ unclaimed dividend lying in the Unpaid Dividend Account(s) as on March 31, 2026 (In Rs.)	Corresponding Shares	Due date for transfer to IEPF
2024-25	Equity	1,03,768	109042	02/11/2032

34. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Company has complied with the provisions relating to the constitution of Internal Complaints Committee(s) under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH Act) and rules framed thereunder.

The Company has zero tolerance towards sexual harassment at workplace and has adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace. All employee (permanent, contractual, temporary, trainees) as well as consultants are covered under the Policy. The framework ensures complete anonymity and confidentiality.

The details as required under Rule 8(5)(x) of the Companies (Accounts) Rules, 2014 for the calendar year 2025 are given as under:

(a) Number of complaints of sexual harassment received in the year - NIL

(b) Number of complaints disposed off during the year - N.A.

(c) Number of cases pending for more than ninety days - NIL.

35. CERTIFICATE OF NON-DISQUALIFICATION OF DIRECTORS

Pursuant to Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has obtained a certificate from M/s. RPR & Associates, Practicing Company Secretaries, confirming that none of the Directors on the Board of the Company has been disqualified from being appointed or continuing as a Director as on 31 March 2026. The said certificate forms part of this Annual Report as Annexure-I .

36. COMPLIANCE CERTIFICATE ON CORPORATE GOVERNANCE

Pursuant to Schedule V (Part E) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the

Compliance Certificate received from the Statutory Auditors confirming compliance with the conditions of Corporate Governance for the financial year ended 31 March 2026 forms part of this Annual Report as Annexure-J .

37. COMPLIANCE CERTIFICATE SIGNED BY THE CEO AND CFO

Pursuant to Regulation 17(8) read with Part B of Schedule II of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Compliance Certificate signed by the Chief Executive Officer and the Chief Financial Officer for the financial year ended 31 March 2026 forms part of this Annual Report as Annexure-K.

38. GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following matters as there were no transactions or events concerning the same during the year under review:

(a) The Managing Director of the Company does not receive any remuneration or commission from any of the subsidiaries of the Company.

(b) No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status of the Company and its operations in future.

(c) There have been no material changes and commitments which affect the financial position of the Company that have occurred between the end of the financial year of the Company to which the financial statements relate and the date of this Report.

There has been no material change in the nature of business of the Company.

(d) The Statutory Auditors, Internal Auditors and the Secretarial Auditors have not reported any instance of fraud committed in the Company by its officers and employees in terms of Section 143(12) of the Companies Act, 2013. Accordingly, no detail is required to be disclosed in pursuance to Section 134(3)(ca) of the Companies Act, 2013.

(e) The Company has neither filed any application under the Insolvency and Bankruptcy Code, 2016 (31 of 2016), as amended from time to time, nor has availed one time settlement with respect to any loans from banks or financial institutions.

(f) There were no revisions made in the financial statements and Boards Report of the Company.

(g) All the material events have been duly disclosed to the stock exchanges during the year under review.

(h) The company is in compliance with respect to the provisions relating to the Maternity Benefit Act, 1961.

39. CAUTIONARY STATEMENT

Statements in this Annual Report, including those contained in the Management Discussion and Analysis Report, describing the Companys objectives, projections, estimates, expectations or predictions may constitute forward-looking statements within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed or implied in such statements due to various risks and uncertainties, including changes in economic conditions, government policies, taxation laws, market conditions and other incidental or consequential factors beyond the control of the Company.

The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable laws.

ACKNOWLEDGEMENT

Your Directors wish to place on record their sincere appreciation for the valuable support, guidance and cooperation received from the Central and State Governments, regulatory authorities, bankers, financial institutions, investors, customers, vendors, business associates and all other stakeholders during the financial year under review. The Board also expresses its gratitude to its valued customers and business partners for their continued trust and confidence in the Company.

The Directors also place on record their deep appreciation for the dedication, commitment, hard work and valuable contributions of all the employees of the Company, whose sustained efforts have significantly contributed to the Companys growth and performance during the year. The Board looks forward to their continued support and commitment in the years ahead.

For and on behalf of the Board

	T. Gopichand	T. Madhu Mitra
Date : 11th August, 2026	Chairman and Managing Director	Whole-Time Director
Place: Hyderabad	DIN:00107886	DIN: 07124242