Your Directors have pleasure to present their Report of your Company on the business and operations for the year
ended 31 March 2026.

FINANCIAL HIGHLIGHTS: (h in lakhs)

OVERVIEW:

During the financial year ended 31 March 2026, your company recorded Standalone Profit of Rs. 20,062.91 lakhs as
compared to Rs. 2,529.67 lakhs for the financial year ended 31 March 2025. The consolidated profit was Rs. 26,804.31
lakhs during the current year as compared to Rs. (1,398.46) lakhs Loss in the previous year.

During the year under review, your Company has completed a transformational phase pursuant to the Scheme of
Amalgamation ("Scheme") sanctioned by the Hon''ble National Company Law Tribunal, Chennai Bench dated
16 December 2025, Sigma Advanced Systems Private Limited was amalgamated with Megasoft Limited. Consequent
to the Scheme the appointed date is 01 April 2024 and the Scheme becoming effective from 31 December 2025

This strategic integration has established a unified
aerospace and defence enterprise with end-to-end
capabilities spanning design, engineering, precision
manufacturing, systems integration and lifecycle support
for mission-critical defence and aerospace applications.
Your Company continues to strengthen its position as a
trusted partner to defence forces, defence public sector
undertakings, global original equipment manufacturers
(OEMs) and international customers. With a diversified
portfolio encompassing aerospace structures,
precision engineering, avionics, naval systems, defence
electronics, radar systems, communication systems
and advanced manufacturing solutions, the Company
remains focused on delivering high-quality, technology-
driven products that support national security and global
defence requirements.

The following are the significant changes with effect
of Scheme:

¦ Change of Name of the Company from Megasoft
Limited to Sigma Advanced Systems Limited with
effect from 12 January 2026

¦ Change in Authorised Share Capital of the Company
from Rs. 2,00,00,00,000 (Rupees Two Hundred
Crore only) comprising 20,00,00,000 (Twenty Crore)
Equity Shares of Rs. 10/- (Rupees Ten) each to
Rs. 2,50,00,00,000 (Rupees Two Hundred and Fifty
Crore only) comprising 25,00,00,000 (Twenty Five
Crore) Equity Shares of Rs. 10/- (Rupees Ten) each.

¦ Indrajaal Drone Defence India Private Limited has
become an Associate Company and lndorus Systems
Private Limited has become the Subsidiary Company

CHANGE IN NATURE OF BUSINESS, IF ANY:

During the year under review, your Company undertook
significant strategic initiatives to strengthen its global
presence, expand manufacturing capabilities and
enhance its product portfolio, thereby reinforcing its
long-term competitiveness and creating sustainable
value for all stakeholders.

Accordingly, the principal business of the Company
now comprises the design, development, engineering,
precision manufacturing, systems integration and
lifecycle support of aerospace and defence products
and solutions.

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

For the financial year ended on 31 March 2026 the
Company transferred Rs. 26,804.31 lakhs (Consolidated)
to Reserves & Surplus.

DIVIDEND

In view of the Company growth plans, the Board
of Directors of the Company do not recommend
any dividend.

TRANSFER OF UNCLAIMED DIVIDEND TO
INVESTOR EDUCATION AND PROTECTION
FUND:

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

SHARE CAPITAL:

a. Authorised Share Capital

During the year under review the Authorized Equity
Capital of the Company was increased pursuant to
Scheme of Amalgamation, from Rs. 2,00,00,00,000
(Rupees Two Hundred Crore only) comprising

20.00. 00.000 (Twenty Crore) Equity Shares of Rs. 10/-
(Rupees Ten) each to Rs. 2,50,00,00,000 (Rupees
Two Hundred and Fifty Crore only) comprising

25.00. 00.000 (Twenty Five Crore) Equity Shares of
Rs. 10/- (Rupees Ten) each.

b. Paid-up Share Capital:

During the year under review the paid-up equity
capital of the Company was increased pursuant to
Scheme of Amalgamation from Rs. 73,77,00,410
(Rupees Seventy Three Crores Seventy Seven
lakhs Four Hundred Ten only) comprising of
7,37,70,041(Seven Crores Thirty Seven Lakhs
Seventy Thousand and Forty one only) no. of fully
paid Equity shares of face value of Rs. 10 (Rupees
Ten only) each to Rs. 1,76,23,97,050 (Rupees One
Hundred Seventy-Six Crores Twenty-Three Lakhs
Ninety-Seven Thousand and Fifty only) comprising
of 17,62,39,705 (Seventeen Crore Sixty-Two Lakhs
Thirty-Nine Thousand Seven Hundred and Five Only)
fully paid-up Equity Shares of face value of Rs. 10
(Rupees Ten only) each.

Your Company has not issued any shares with
differential voting rights, sweat equity shares or
bonus shares during the year under review and has
not bought back any of its securities during the year.

DIRECTORS AND KEY MANAGERIAL
PERSONNEL:

Your Company has received declarations from all the
independent directors of the company confirming that
they meet the criteria of independence as prescribed
under section 149(6) of the Companies Act, 2013 and
Schedule IV of the Companies Act, 2013 and Regulation

16(1)(b) of the SEBI (Listing Obligations & Disclosure
Requirements) Regulations, 2015.

During the financial year under review, the composition
of the Board of Directors was in compliance with the
provisions of the Companies Act, 2013 and the SEBI
Listing Regulations. During the year, the following
changes took place in the composition of the Board:

1. Mr. Cheemarla Damodar Reddy (DIN: 01643638)

was appointed as Non-Executive, Non-Independent
Director with effect from 22 December 2025 and
was subsequently re-designated as Whole-time
Director (Executive, Promoter Category) with effect
from 14 February 2026 and subsequently received
the shareholders'' approval on 20 March 2026

2. Lt. Gen. Raju Somashekar Baggavalli (DIN: 11482140)
was appointed as Non-Executive, Independent
Director with effect from 16 January 2026 and
subsequently received the shareholders'' approval on
15 April 2026

3. Mr. Kartheek Raju Chintalapati (DIN: 02921819)
was appointed as Non-Executive, Non-Independent
Director with effect from 16 March 2026 and
subsequently received the shareholders'' approval on
15 April 2026

4. Amb. Dr. Venkata Nagendra Prasad Thatipamula
(DIN: 11499183) was appointed as Additional Director
(Non-Executive, Independent) w.e.f. 16 March 2026
subsequently received the shareholders'' approval on
15 April 2026

BOARD MEETINGS:

The Board of Directors met Twelve (12) times during the
financial year. Also, a separate meeting of Independent
Directors as prescribed under Schedule IV of the Act,
was held during the year under review. For details of the
meetings of the Board and its Committees, please refer
to the Corporate Governance Report forming part of
this Report. The provisions of Companies Act, 2013 and
Regulation 17(2) of SEBI (Listing Obligations & Disclosure
Requirements) Regulations, 2015, Secretarial Standard
- 1 issued by The Institute of Company Secretaries of
India were adhered to in respect of meeting of Board of
Directors of the company.

COMPLIANCE WITH
SECRETARIAL STANDARDS:

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

NOMINATION & REMUNERATION POLICY:

The Board had, on the recommendation of the Nomination
& Remuneration Committee, framed a policy for selection

and appointment of Directors, Senior Management and
their remuneration. The Remuneration Policy is available
on the website of the company at https://sigmaadvsys.
com/investors-services/corporate-governance/ and the
terms of reference are given separately in the Corporate
Governance Report, which forms an integral part of this
Annual Report.

BOARD EVALUATION:

The Board, in accordance with the applicable provisions
of the Companies Act, 2013 and the SEBI (Listing
Obligations and Disclosure Requirements) Regulations,
2015, carried out an annual evaluation of its performance,
the performance of individual Directors and the
effectiveness of its committees. The evaluation process,
including the criteria and methodology adopted, is
described in the Corporate Governance Report, which
forms an integral part of this Annual Report.

PERFORMANCE EVALUATION CRITERIA FOR
INDEPENDENT DIRECTORS:

The Nomination and Remuneration Committee has laid
down the criteria for evaluating the performance of the
Independent Directors in accordance with the provisions
of the Companies Act, 2013 and the SEBI (Listing
Obligations and Disclosure Requirements) Regulations,
2015. The evaluation was based on various parameters,
including participation and contribution in Board and
Committee deliberations, commitment and attendance,
application of knowledge, skills and expertise, integrity,
experience and proficiency, exercise of independent
judgment, safeguarding of confidentiality, adherence
to ethical standards, and overall contribution towards
effective corporate governance.

DIRECTORS'' RESPONSIBILITY STATEMENT:

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

i. in the preparation of the annual financial statements
for the year ended 31 March 2026, the applicable
accounting standards had been followed along with
proper explanations relating to material departures,
if any;

ii. the Directors selected such accounting policies and
applied them consistently and made judgments and
estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of the
company as at the end of the financial year and of
the profit/loss of the company for the year;

iii. the Directors had taken proper and sufficient
care for the maintenance of adequate accounting
records in accordance with the provisions of this
Act for safeguarding the assets of the company

and for preventing and detecting fraud and
other irregularities;

iv. the Directors had prepared the annual accounts on a
"going concern basis";

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

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

SIGNIFICANT CORPORATE DEVELOPMENTS:

During the financial year under review, the following were
the significant Corporate Developments:

¦ Setting up of a Wholly Owned Subsidiary ("WoS")
in the United Kingdom (UK). Pursuant thereto, the
Company successfully incorporated its WoS under
the name Sigma Advanced Systems UK Ltd on 18
July 2025

¦ Sigma Advanced Systems UK LTD, had signed a
Share Purchase Agreement for acquisition of 100%
Stake (Shareholding) in Nasmyth Group Limited, UK
on 27 October 2025 and the said acquisition was
completed on 31 October 2025

¦ The corporate office and the place of keeping the
books of accounts and other relevant papers of the
company was changed from "8^th Floor, Unit No. 801
B, Jain Sadguru Image''s Capital Park, Plot No. 1, 28
& 29, 98/4/1 to 13, Image Gardens Rd, Madhapur,
Hyderabad, Telangana 500081 Telangana, India" to
"Survey No 1/1, Plot No 24/A, Hardware Park, Srisailam
Road, Kancha Imarat, Raviryala Village, Maheswaram
Mandal, Hyderabad, 501510 Telangana, India w.e.f.
16 January 2026.

¦ The Registered Office of the Company was changed
from "No. 85, Kutchery Road, Mylapore, Chennai,
Tamil Nadu, India, 600 004" to "No. 43/1 (#129
to #140), Prestige Palladium, 8^th Floor, Greams
Road, Nungambakkam, Chennai, 600 006, Tamil
Nadu, India" within the local limits of the city, w.e.f.
16 January 2026

¦ The Share Subscription and Purchase Agreement
for Investment / Acquisition of AS Strategic Private
Limited was executed on 10 February 2026 and the
same was completed after the end of Financial Year.

OUTLOOK:

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

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

Pursuant to the provisions of Section 134(3)(m) of
the Companies Act, 2013 read with Rule 8(3) of the
Companies (Accounts) Rules, 2014, the particulars
relating to conservation of energy, technology
absorption and foreign exchange earnings and outgo are
furnished below:

a) Conservation of Energy

The Company continues to focus on the efficient
utilization of energy and natural resources across
its operations. During the year under review, the
Company undertook various initiatives to improve
energy efficiency, optimize resource consumption
and promote environmentally sustainable practices.

The key measures undertaken include:

¦ Continuous monitoring and optimization of
energy consumption across operational facilities.

¦ Use of energy-efficient lighting systems,
electrical equipment and utility infrastructure.

¦ Preventive maintenance of plant, machinery and
utilities to enhance operational efficiency and
reduce energy losses.

¦ Encouraging responsible energy consumption
through operational controls and employee
awareness initiatives.

The Company remains committed to adopting
sustainable practices and continuously exploring
opportunities for improving energy efficiency across
its operations.

b) Technology Absorption

The Company continues to strengthen its
technological capabilities through continuous
innovation, adoption of advanced engineering
practices and enhancement of its manufacturing
processes. During the year, emphasis was placed
on improving product quality, operational efficiency
and engineering excellence through the adoption of
modern technologies and process improvements.

The Company also continued to invest in employee
training and skill development to facilitate
effective utilization of new technologies and
strengthen its research, design, engineering and
manufacturing capabilities.

c) Foreign Exchange Earnings and Outgo

The details of foreign exchange earnings and outgo
during the financial year under review are provided
in Note No. 35 forming part of the Standalone
Financial Statement

PARTICULARS OF CONTRACTS OR
ARRANGEMENTS WITH RELATED PARTIES
UNDER SECTION 188 OF THE COMPANIES
ACT, 2013

All related party transactions entered into during the
financial year under review were in the ordinary course
of business and on an arm''s length basis. The Company
did not enter into any materially significant related party
transaction with its Promoters, Directors, Key Managerial
Personnel or other related parties that could have a
potential conflict with the interests of the Company or
its stakeholders.

All related party transactions are placed before the Audit
Committee for its review and approval in accordance
with the applicable provisions of the Companies Act,
2013 and the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015.

The Board has, on the recommendation of the Audit
Committee, adopted a Policy on Related PartyTransactions
to regulate transactions between the Company and its
related parties. The Policy is in compliance with the
provisions of the Companies Act, 2013, the rules made
thereunder and Regulation 23 of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations,
2015, as amended from time to time. The said Policy is
available on the Company''s website https://sigmaadvsys.
com/investors-services/corporate-governance/ .

The Details of related Party Transaction on arm''s length
basis has been annexed as ''Annexure-1'' appended hereto
and which forms an integral part of this Annual Report

PARTICULARS OF LOANS, INVESTMENTS
& GUARANTEE:

Your Company has passed a special resolution under
Section 186 and other applicable provisions of the
Companies Act, 2013 and the rules made thereunder to
make investments, give loans, guarantees and security
up to a limit not exceeding Rs. 800 crores (Rupees Eight
Hundred crores) over and above the aggregate of the
paid-up capital and free reserves (that is to say, reserves,
not set apart for any specific purpose) of the Company

Details of Loans, Investments and Guarantees covered
under the provisions of Section 186 of the Companies Act,
2013 are given in Note no. 36 of the Notes forming part
of the standalone financial statements of the company.

RISK MANAGEMENT:

The Company has established a comprehensive and
proactive Risk Management Framework to identify,
assess, monitor, and mitigate risks that may have an
impact on its business operations, financial performance,
or strategic objectives. The framework facilitates a
systematic evaluation of risks based on their likelihood
of occurrence and potential impact, thereby enabling the

Company to prioritize risks and implement appropriate
mitigation measures in a timely manner.

While risk mitigation has always been an integral part
of the Company''s business practices, the increasing
complexity of the business environment and evolving
regulatory landscape have necessitated a more
structured, consistent, and well-documented approach
to risk management.

The primary objective of the Risk Management
Framework is to strengthen the Company''s resilience,
safeguard stakeholder interests, support sustainable
business growth, and ensure preparedness to effectively
respond to emerging risks and uncertainties.

The Audit, Risk Management and Compliance Committee,
chaired by Mr. Kalyan Vijay Sivalenka, oversees the
Company''s risk management processes. The Committee
periodically reviews the risk matrix, assesses the
adequacy and effectiveness of mitigation measures, and
provides relevant updates and recommendations to the
Board of Directors.

The Company remains committed to fostering a strong
risk-aware culture across the organisation by enhancing
risk awareness, strengthening internal processes, and
continuously improving its risk identification, assessment,
monitoring, and mitigation mechanisms

INTERNAL CONTROL SYSTEMS AND
THEIR ADEQUACY:

The Company has established a robust internal
control framework comprising appropriate policies,
processes, and procedures to safeguard its assets,
ensure operational efficiency, maintain accuracy and
reliability of financial reporting, and ensure compliance
with applicable statutory, regulatory, contractual, and
internal requirements.

The Audit Committee, in coordination with the
Internal Auditor, periodically reviews the adequacy
and effectiveness of the internal control systems.
Identified gaps, if any, are appropriately evaluated and
corrective measures are undertaken to strengthen the
control environment.

INTERNAL FINANCIAL CONTROL WITH
REFERENCE TO THE FINANCIAL STATEMENTS:

The Company has in place adequate internal financial
controls with reference to financial statements. During

the year no material weakness in the design or operation
was observed.

VIGILMECHANISM/WHISTLEBLOWERPOLICY:

The Company is committed to maintaining the highest
standards of ethical conduct, integrity, transparency,
and accountability across all levels of its operations.
In furtherance of this commitment, the Company has

established a formal Vigil Mechanism, also referred to
as the Whistle Blower Policy, to provide a structured
and confidential channel for employees and other
stakeholders to report any actual or suspected instances
of unethical conduct, misconduct, violation of applicable
laws or regulations, or other activities that may adversely
affect the interests of the Company.

The Vigil Mechanism is intended to foster an environment
of openness and responsible reporting, wherein
individuals are encouraged to raise genuine concerns
in good faith without fear of retaliation, victimisation,
intimidation, or harassment. The mechanism facilitates
the appropriate review and investigation of reported
concerns and supports the Company in ensuring that
its business activities and conduct remain consistent
with the principles of honesty, fairness, integrity, and
professional responsibility.

The Policy forms an integral part of the Company''s overall
corporate governance framework and demonstrates its
commitment to preventing, identifying, and addressing
unethical practices and misconduct, while promoting a
culture of transparency, accountability, and responsible
business conduct.

Details of the Vigil Mechanism and procedures for
reporting concerns are outlined in the Corporate
Governance Report, and the full policy is available on
the Company''s website at: https://sigmaadvsys.com/
investors-services/corporate-governance/

ENHANCING SHAREHOLDER VALUE:

The Company remains focused on creating sustainable
and long-term value for its shareholders through a
balanced approach to growth, operational excellence,
and prudent capital management. During the year, the
Company continued to undertake strategic initiatives
aimed at strengthening revenues, improving cost
efficiencies, and deploying capital towards projects that
offer sustainable and attractive returns.

The Company remains committed to maintaining financial
discipline and evaluating appropriate measures for capital
allocation, including dividends and share buybacks,
as may be considered suitable. The Company has also
continued to strengthen its governance framework and
enhance transparency in its operations and disclosures,
thereby fostering greater stakeholder confidence.

The Board will continue to closely monitor the Company''s
performance, financial position, and strategic priorities to
ensure that business decisions remain aligned with the
interests of shareholders and support sustained value
creation over the long term.

SUBSIDIARIES, ASSOCIATES AND JOINT
VENTURE COMPANIES:

The Company has following Subsidiaries & Associates as
on year end

List of Subsidiaries:

1) Velapan Systems Private Limited

2) lndorus Systems Private Limited

3) Sigma Advanced Systems UK Limited

Subsidiaries of Sigma Advanced Systems
UK Limited:

i. Nasmyth Group Ltd

Subsidiaries of Nasmyth Group Ltd

i. Nasmyth Bulwell Ltd

ii. Nasmyth Asia (IN) Private limited

iii. Nasmyth Technologies Ltd

iv. Nasmyth IEC Ltd

v. Nasmyth Doughty Ltd

vi. GEB Surface Treatments Ltd

vii. Nasmyth Coventry Ltd

viii. Nasmyth Enterprises Ltd

xi. Nasmyth Henton Ltd

x. Nasmyth Industries Ltd

xi. C&M 2016 Ltd

xii. Nasmyth Engineering Ltd

xiii. Nasmyth Composites Ltd

xiv. Nasmyth West Middlesex Plating Company Ltd

xv. Professional Welding Services Ltd

Subsidiaries of Nasmyth Bulwell Ltd:

i. L.M.D. Process Ltd

ii. Swift & Wass Ltd

iii. Excel Calibration & Test Ltd

List of Associate:

1. Indrajaal Drone Defence India Private Limited

PERFORMANCE AND FINANCIAL POSITION OF
EACHOFTHESUBSIDIARIES,ASSOCIATESAND
JOINT VENTURE COMPANIES INCLUDED IN
THE CONSOLIDATED FINANCIAL STATEMENT:

The Consolidated Financial Statements relate to
the Company''s subsidiaries as stated above. The
Financial Statements of the Subsidiaries covered in
the Consolidation process are drawn up to the same
reporting date as that of the Company i.e., 31 March
2026. The Financial Statements of the Company and its
Subsidiaries have been combined on a line-by-line basis
by adding together like-items of assets, liabilities, income
and expenses, after eliminating intra-group balances,
intra-group transactions and resulting unrealized
profits or losses, unless cost cannot be recovered. The

statement pursuant to Section 129 of the Companies
Act, 2013 in respect of subsidiaries and associates is
annexed as ''Annexure-2'', which forms an integral part of
this Annual Report.

DEPOSITS:

The Company has neither raised nor renewed any
Deposits as on 31 March 2026 or received any other
monies construed to attract the provisions of Section 73
of the Companies Act, 2013 read with the Companies
(Acceptance of Deposits) Rules, 2014 as amended from
time to time.

ANNUAL RETURN:

The Annual Return pursuant to the provisions of Section
92(3) of Companies Act, 2013 read with Rule 12 of the
Companies (Management and administration) Rules,
2014 can be accessed at https://sigmaadvsys.com/
investors-services/financials-reports/

AUDITORS:

STATUTORY AUDITORS:

M/s. N.C. Rajagopal & Co., Chartered Accountants (Firm
Registration No. 003398S), were appointed as the
Statutory Auditors of the Company at the 22^nd Annual
General Meeting to hold office until the conclusion of the
27^th Annual General Meeting of the Company.

The Statutory Auditors have confirmed their eligibility
under Sections 139 and 141 of the Companies Act, 2013
and that they satisfy the criteria relating to independence
prescribed under the Companies Act, 2013 and the Code
of Ethics issued by the Institute of Chartered Accountants
of India. The Statutory Auditors also continue to hold a
valid Peer Review Certificate issued by the Peer Review
Board of the ICAI

INTERNAL AUDITOR:

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

SECRETARIAL AUDITOR:

M/s. M. Damodaran & Associates LLP, (COP-5081/
FCS-5837), were appointed as the Secretarial Auditors
of the Company at the 25^th Annual General Meeting to
hold office until the conclusion of the 30^th Annual General
Meeting of the Company.

The Secretarial Auditors'' Report, in the prescribed
format, for the year ended 31 March 2026 is annexed

as ''Annexure-3'', which forms an integral part of this
Annual Report.

ANNUALSECRETARIALCOMPLIANCEREPORT:

Pursuant to the provisions of Regulation 24A of the
SEBI (LODR) Regulations, 2015 the Board of Directors
of the Company have appointed M/s. M. Damodaran
& Associates LLP, (COP-5081/FCS-5837), Practicing
Company Secretary to undertake the Audit of Annual
Secretarial Compliance of the Company for the year
ended 31 March 2026. The Annual Secretarial Compliance
Report is annexed as ''Annexure- 4'', which forms an
integral part of this Annual Report.

CORPORATE GOVERNANCE:

A report on Corporate Governance as per Schedule V
of SEBI (Listing Obligations & Disclosure Requirements)
Regulations, 2015, is annexed as ''Annexure-5, which
forms an integral part of this Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS:

A detailed report relating to the Management Discussion
and Analysis has been annexed herewith as ''Annexure
-6'', which forms an integral part of this Annual Report.

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

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

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

GST:

The company has filed a Writ Petition in 2023 before the
Hon''ble High Court of Telangana challenging notifications
relating to taxation of Joint Development transactions
under which the Central GST authorities made a claim
/ demand. The company has also filed Writ Petition in
October 2024 in the matter of order from the State GST
relating to the same subject matter. The matter is sub-
judice. Further, the above case has no impact on the
going concern status and company''s operations in future.

Income Tax:

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

(b) The company has filed an appeal before CIT(A) in
respect of order dated 21.03.2024 in respect of issue of
disallowances of Capital Losses. (c) The company has
filed an appeal before CIT(A) in respect of order dated
03.03.2025 in respect of penalty demand on Refund
(d) The company has filed an appeal before CIT(A) in
respect of order dated 27.03.2026 in respect of issue of
disallowances of Business Expenses (e) The company
has filed an appeal before CIT(A) in respect of order
dated 06.05.2026 in respect of issue of disallowances of
Business Expenses

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

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

¦ Preferential Issue:

Your Company undertook fund raising activity
through preferential issue of equity shares to eligible
investors to the tune of about Rs. 460 crores and
added 1,32,56,760 equity shares to the paid up equity
capital. Further, 4,32,777 equity shares were issued
for consideration other than cash. These allotments
were made in accordance with the provisions of the
Companies Act, 2013, the SEBI (Issue of Capital and
Disclosure Requirements) Regulations, 2018 and
other applicable laws.

Consequent to the above allotment of equity shares,
the paid-up equity share-capital of the Company
increased to 1,89,92,89,520 (Rupees One Hundred
Eighty-Nine Crore Ninety-Two Lakh Eighty-Nine
Thousand Five Hundred Twenty Only) comprising
of 18,99,28,952 (Eighteen Crore Ninety-Nine Lakh
Twenty-Eight Thousand Nine Hundred Fifty-Two
Only) equity shares of Rs. 10 each

¦ Acquisitions:

¦ Your Company has acquired 76% equity stake in
AS Strategic Private Limited as below:

^ Tranche 1 - 51% stake on 20 April 2026
^ Tranche 2 - 25% stake on 04 August 2026

¦ Your Company has acquired 100% Stake
(Shareholding) in Bromford Precision Solutions
Limited in the United Kingdom on 22 July 2026

Except as disclosed elsewhere in this report, there have
been no other material changes and commitments, that
has occurred between the end of the financial year of the

Company and date of this report which can affect the
financial position of the Company.

HUMAN RESOURCES:

The Company considers its employees as one of its most
valuable assets and remains committed to fostering a
professional, inclusive and supportive work environment,
with focus on employee engagement, skill development,
training and career growth.

Pursuant to the Scheme all employees of Sigma
Advanced Systems Private Limited in employment as
on the Effective Date have become employees of the
Company, without any break or interruption in service
and with continuity of service, on terms and conditions
not less favourable than those applicable to them prior to
the Effective Date.

The Company has also recognised the uninterrupted
past services of such employees for the purpose of
computation and payment of compensation, gratuity and
other terminal benefits, as and when payable.

The Company''s human resource practices are designed
to encourage merit-based performance, employee
engagement, accountability and continuous capability
development, while ensuring compliance with applicable
labour laws and organisational policies. The Company
also strives to provide a safe, inclusive and supportive
workplace that promotes employee well-being and
professional development.

As on 31 March 2026, the industrial relations remained
cordial and harmonious

PARTICULARS OF EMPLOYEES:

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

EMPLOYEE STOCK OPTION SCHEME:

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

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

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

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

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

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

(d) during the year under review the ICC has not received
any complaints.

STATEMENT BY THE COMPANY WITH
RESPECT TO THE COMPLIANCE WITH THE
MATERNITY BENEFIT ACT, 1961:

The Company has complied with the provisions of the
Maternity Benefit Act, 1961 and the rules made thereunder,
as amended from time to time. Appropriate policies and
procedures are in place to ensure that eligible women
employees are provided maternity benefits and other
statutory entitlements in accordance with the applicable
legal requirements. The Company remains committed to
fostering a safe, inclusive and equitable workplace for all
its employees.

AUDITORS CERTIFICATE ON CORPORATE
GOVERNANCE:

Your Company has obtained a certificate relating to
compliance of conditions of Corporate Governance for
the year ended 31 March 2026, as stipulated in terms
of Regulation 34(3) and Schedule V of SEBI (Listing
Obligations and Disclosure Requirements) Regulations
2015. from N.C. Rajagopal & Co. Statutory Auditors,
is annexed herewith as ''Annexure -7'', which forms an
integral part of this Annual Report

CORPORATE SOCIAL RESPONSIBILITY:

The provisions for corporate social responsibility ("CSR")
under the Companies Act, 2013, are applicable to the
company for the current financial year. The Company
had incurred CSR expenditure of Rs. 18,06,697 during
the financial year 2025-26. The Annual Report on CSR
activities is annexed herewith as ''Annexure-8'', which
forms an integral part of this Annual Report.

The Chief Financial Officer of the Company has furnished
the certificate under Rule 4 of the Companies (CSR)
Rules, 2014.

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

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

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

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

LISTING OF EQUITY SHARES:

The Company''s equity shares are listed on the following Stock Exchanges:

The Company has paid the annual listing fees to the said stock exchanges for the financial year 2026-27.

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

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

ACKNOWLEDGMENTS:

The Board of Directors places on record its sincere appreciation and gratitude to the shareholders, customers, bankers,
investors, regulatory authorities, Central and State Governments, statutory and secretarial auditors, Registrar and
Share Transfer Agent, vendors, technology partners and all other stakeholders for their continued trust, guidance and
support extended to the Company during the year.

The Board also acknowledges the commitment, dedication and valuable contribution of the employees across all
levels, whose collective efforts have been instrumental in driving the Company''s growth, operational excellence and
sustained progress.

The Board looks forward to the continued support, confidence and cooperation of all stakeholders as the Company
continues its journey of growth, innovation and value creation in the years ahead.

For and on behalf of Board of Directors of
Sigma Advanced Systems Limited

(Formerly Megasoft Limited)

Sd/- Sd/-

Sunil Kumar Kalidindi Kalyan Vijay Sivalenka

Place: Hyderabad Executive Director & CEO Independent Director

Date: 08 September 2026 DIN: 02344343 DIN: 06404449

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

FINANCIAL HIGHLIGHTS:

(f in Lakhs)

OVERVIEW:

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

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

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

CHANGE IN THE NATURE OF BUSINESS, IF ANY:

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

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

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

DIVIDEND:

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

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION
FUND:

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

SHARE CAPITAL:

a) Authorized Share Capital:

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

b) Paid up Share Capital:

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

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

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

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

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

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

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

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

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

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

BOARD MEETINGS:

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

COMPLIANCE WITH SECRETARIAL STANDARDS:

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

NOMINATION & REMUNERATION POLICY:

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

BOARD EVALUATION:

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

PERFORMANCE EVALUATION CRITERIA FOR INDEPENDENT DIRECTORS:

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

DIRECTORS’ RESPONSIBILITY STATEMENT:

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

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

ii) the Directors selected such accounting policies and applied them consistently and made judgments and
estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the
company as at the end of the financial year and of the profit/loss of the company for the year;

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

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

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

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

SIGNIFICANT TRANSACTIONS:

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

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

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

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

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

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

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

a) Energy Conservation:

The key measures undertaken includes:

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

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

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

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

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

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

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

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

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

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

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

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

PARTICULARS OF LOANS, INVESTMENTS & GUARANTEE:

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

RISK MANAGEMENT:

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

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

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

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

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

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

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

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

INTERNAL FINANCIAL CONTROL WITH REFERENCE TO THE FINANCIAL STATEMENTS:

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

VIGIL MECHANISM / WHISTLE BLOWER POLICY:

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

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

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

ENHANCING SHAREHOLDER VALUE:

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

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

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES:

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

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

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

DEPOSITS:

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

ANNUAL RETURN:

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

AUDITORS’ REPORT:

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

AUDITORS:

STATUTORY AUDITORS:

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

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

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

INTERNAL AUDITOR:

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

SECRETARIAL AUDITOR:

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

ANNUAL SECRETARIAL COMPLIANCE REPORT:

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

CORPORATE GOVERNANCE:

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

MANAGEMENT DISCUSSION AND ANALYSIS:

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

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

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

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

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

GST:

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

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

Income Tax:

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

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

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

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

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

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

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

c) Update on Scheme of Amalgamation:

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

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

Further, the Company is in process of obtaining the approval from the Hon’ble NCLT on the Scheme.

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

HUMAN RESOURCES DEVELOPMENT:

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

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

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

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

PARTICULARS OF EMPLOYEES:

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

EMPLOYEE STOCK OPTION SCHEME:

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

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

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

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

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

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

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

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

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

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

AUDITORS CERTIFICATE ON CORPORATE GOVERNANCE:

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

CORPORATE SOCIAL RESPONSIBILITY:

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

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

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

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

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

LISTING OF EQUITY SHARES:

The Company’s equity shares are listed on the following Stock Exchanges:

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

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

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

ACKNOWLEDGMENTS:

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

For and on behalf of Board of Directors of Megasoft Limited

Sunil Kumar Kalidindi Kalyan Vijay Sivalenka

Executive Director & CEO Independent Director

Place: Hyderabad DIN: 02344343 DIN: 06404449

Date: September 2, 2025

Your Directors have pleasure to present their Report of your Company on the business and operations for the year ended 31^st March, 2024.

FINANCIAL HIGHLIGHTS:

(? in Lakhs)

OVERVIEW:

During the financial year ended 31^st March, 2024, your company did not have revenue. The consolidated loss was ? (1274.47) lakhs during the current year as compared to ? 880.26 lakhs profit in the previous year.

In response to the evolving market conditions and the need for sustainable growth, your company made a strategic decision in 2022-23 to transition from IT business to exploring opportunities in other high-potential sectors. Having made an investment in Extrovis AG, in addition to pharmaceuticals, your company is making strategic inroads into the defence sector.

Your company has been actively working to establish a strong foothold in the defence sector, recognizing the opportunities that can be leveraged in defence technologies. Over the coming years, we anticipate that our efforts in the defence sector will begin to bear fruit, contributing to overall growth and success.

Your company’s financial performance for the year ended 31^st March, 2024, reflects the transitional phase we are undergoing. Despite the current consolidated losses, we remain confident in our strategic direction and in potential defence sector. By focusing on the emerging opportunities in the defence area, we are poised to deliver sustained growth and create significant value for our stakeholders.

CHANGE IN THE NATURE OF BUSINESS, IF ANY:

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

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

For the financial year ended on 31^st March, 2024 the Company transferred ? (1274.47) lakhs to Reserves & Surplus.

DIVIDEND:

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

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND:

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

SHARE CAPITAL:

a) Authorized Share Capital:

The Authorized Share Capital of the Company as on 31^st March, 2024 stands at ? 2,00,00,00,000 (Rupees Two Hundred crore only) comprising of 20,00,00,000 (Twenty Crore only) equity shares of ?10 (Rupees Ten only) each.

b) Paid up Share Capital:

The paid-up equity share capital of the Company as on 31^st March, 2024 was ?73,77,00,410 (Rupees Seventy Three Crores Seventy Seven lakhs Four Hundred Ten only) comprising of 7,37,70,041(Seven

Crores Thirty Seven Lakhs Seventy Thousand and Forty one only), fully paid Equity shares of face value of ?10 (Rupees Ten only) each.

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

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

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

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

BOARD MEETINGS:

The Board of Directors met Six (6) times during the financial year. Also, a separate meeting of Independent Directors as prescribed under Schedule IV of the Act, was held during the year under review. For details of the meetings of the Board and its Committees, please refer to the Corporate Governance Report forming part of this Report. The provisions of Companies Act, 2013 and Regulation 17(2) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, Secretarial Standard - 1 issued by The Institute of Company Secretaries of India were adhered to in respect of meeting of Board of Directors of the company.

COMPLIANCE WITH SECRETARIAL STANDARDS:

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

NOMINATION & REMUNERATION POLICY:

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

BOARD EVALUATION:

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

PERFORMANCE EVALUATION CRITERIA FOR INDEPENDENT DIRECTORS:

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

DIRECTORS’ RESPONSIBILITY STATEMENT:

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

i) in the preparation of the annual financial statements for the year ended 31^st March, 2024, the applicable accounting standards had been followed along with proper explanations relating to material departures;

ii) the Directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at the end of the financial year and of the profit/loss of the company for the year;

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

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

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

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

SIGNIFICANT TRANSACTIONS:

During the financial year 2023-24 your Board of Directors took your approval, through a postal ballot, for the sale of the company’s property situated at Knowledge Capital, Nanakramguda, Hyderabad.

OUTLOOK:

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

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

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

a) Conservation of Energy: Your company remains dedicated to the continuous improvement of resource utilization, striving to minimize the consumption of energy, water, and natural resources. We rely on electric energy for operating equipment such as air conditioners, computer terminals,

lighting, and utilities within our work premises. To conserve energy, we have implemented several measures:

• Conducting periodic energy audits to identify potential areas for savings

• Incorporating energy-efficient equipment

• Automating processes with timers, automatic level controllers, and more

We are committed to sustainable business practices, actively contributing to environmental protection, and view energy conservation as a crucial pillar in preserving natural resources.

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

Through successful technology absorption, your company improves its operational efficiency and maintains a technological edge over potential adversaries. However, some of the challenges are high costs, complex integration with existing systems, and ensuring the security and reliability of new technologies. Your company is equipped to deal with such challenges in an efficient and timely manner.

c) Foreign exchange earnings and outgo: The details of foreign exchange earnings and outgo are given in note no. 34 and 35 of the Notes forming part of the standalone financial statements of the company.

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

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

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

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

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

PARTICULARS OF LOANS, INVESTMENTS & GUARANTEE:

Details of Loans, Investments and Guarantees covered under the provisions of Section 186 of the Companies Act, 2013 are given in note no. 3, 4 and 32 of the Notes forming part of the standalone financial statements of the company.

RISK MANAGEMENT:

Your company has a comprehensive Risk Management framework designed to identify, assess, and mitigate risks effectively. These risks are prioritized based on their significance and likelihood.

Historically, the company has adhered to the principle of risk minimization, a standard practice across industries. However, it has now become imperative to formalize this approach.

In line with Section 134(3)(n) of the Companies Act, 2013, and Regulation 17(9) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Board members have formally adopted steps to frame, implement, and monitor the company’s risk management policy.

A disciplined approach to risk is crucial for a diversified organization like ours to ensure alignment with our strategic objectives and to accept only those risks for which we are adequately compensated. We assess risk at the individual transaction level and evaluate aggregated risk across customers, industries, geographies, and collateral types where applicable.

The primary objective of our risk management policy is to ensure sustainable business growth with stability and to encourage a proactive approach in reporting, evaluating, and resolving business-related risks. To achieve this objective, the policy establishes a structured and disciplined approach to risk management, guiding decisions on risk-related issues. The risk governance structure is led by the Audit/Risk Compliance Committee, chaired by Mr. Kalyan Vijay Sivalenka.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit (IA) function is defined in the Internal Audit Charter. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit/Risk Compliance Committee of the Board.

The Internal Audit monitors and evaluates the efficacy and adequacy of 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 internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit/Risk Compliance Committee of the Board. The details on Internal Control Systems and their adequacy are provided in the Management’s Discussion and Analysis which forms part of this Report.

INTERNAL FINANCIAL CONTROL WITH REFERENCE TO THE FINANCIAL STATEMENTS:

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

VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The Company is committed to fostering a culture of integrity, safety, and ethical behavior across all its business activities. To this end, the Company has implemented a mechanism for reporting any instances of illegal or unethical conduct. Therefore, the Company has a Vigil Mechanism/Whistle Blower Policy under which the employees are encouraged to report any violations of applicable laws and regulations without fear and to promote a culture of accountability, transparency, and ethical conduct. This policy aims to ensure that

the company’s activities and the actions of its employees are carried out in a fair and transparent manner, adhering to the highest standards of professionalism, honesty, integrity, and ethical behavior. This policy is explained in the corporate governance report and also posted on the website of the company which can be accessed at https://www.megasoft.com/corporate-governance.html.

ENHANCING SHAREHOLDER VALUE:

Your company considers its shareholders among its most important stakeholders. Consequently, Company’s operations are dedicated to achieve high levels of performance and cost competitiveness, fostering growth, and enhancing corporate reputation. Enhancing shareholder value is the core principle guiding all our activities, from innovating new products to successful restructuring efforts and improving working capital.

Delivering value to our shareholders has always been and will continue to be a top priority as we manage business. However, in recent years, declining revenues and performance have prevented the Company from declaring dividends. Company’s corporate actions are primarily focused on creating value for all stakeholders. Additionally, we are committed to considering socio-economic and environmental factors, contributing to sustainable growth and development.

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES:

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

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

The Consolidated Financial Statements relate to the Company’s subsidiary Velapan Systems Private Limited. The Financial Statements of the Subsidiaries covered in the Consolidation process are drawn upto the same reporting date as that of the Company i.e., 31^st March, 2024. The Financial Statements of the Company and its Subsidiaries have been combined on a line-by-line basis by adding together like-items of assets, liabilities, income and expenses, after eliminating intra-group balances, intra-group transactions and resulting unrealized profits or losses, unless cost cannot be recovered. The statement pursuant to Section 129 of the Companies Act, 2013 in respect of subsidiaries and associates is annexed as ‘Annexure-2’.

DEPOSITS:

The Company has neither raised nor renewed any Deposits as on 31^st March, 2024 or received any other monies construed to attract the provisions of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 as amended from time to time.

ANNUAL RETURN:

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

AUDITORS’ REPORT:

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

AUDITORS:

STATUTORY AUDITORS:

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

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

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

INTERNAL AUDITOR:

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

SECRETARIAL AUDITOR:

Pursuant to the provisions of Sections 204 of the Companies Act, 2013 and the rules framed thereunder, the company has appointed M/s. M. Damodaran & Associates LLP, (COP-5081/FCS-5837), to undertake the Secretarial Audit of the company. The Secretarial Auditors’ Report, in the prescribed format, for the year ended 31^st March, 2024 is annexed as ‘Annexure-3’.

ANNUAL SECRETARIAL COMPLIANCE REPORT:

Pursuant to the provisions of Regulation 24A of the SEBI (LODR) Regulations, 2015 the Board of Directors of the Company have appointed M/s. M. Damodaran & Associates LLP, (COP-5081/FCS-5837), Practicing Company Secretary to undertake the Audit of Annual Secretarial Compliance of the Company for the year ended 31^st March, 2024. The Annual Secretarial Compliance Report is annexed as ‘Annexure- 4’.

CORPORATE GOVERNANCE:

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

MANAGEMENT DISCUSSION AND ANALYSIS:

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

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

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

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

During the year 2022-23, the GST authorities made a demand in respect of TDR in relation to JDA, in respect of company property at Nanakramguda, Hyderabad. The officials of the Company had acted in accordance with law and had submitted the requisite documents, and cooperated with the agency. The Company preferred a writ petition in the Hon’ble High Court of Telangana challenging the above action and basis of demand by the GST department. The case is on going and the Company has been regularly filing disclosures with the exchanges in this matter.

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

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

HUMAN RESOURCES DEVELOPMENT:

Human Assets play a critical role in the success of any organization. As one of the foundational pillars, a strong HR department ensures that a company can achieve its desired results and growth. By supporting employees in their professional development, HR contributes significantly to both individual and organizational success. Your company’s commitment to providing a healthy work-life balance is a key strategy to optimize each employee’s contribution, recognizing that balanced employees are more productive and engaged.

Rewarding and motivating employees is another essential aspect of your company’s HR strategy. The organization firmly believes in recognizing the hard work and achievements of its staff. By offering rewards and incentives, the company not only acknowledges employee contributions but also encourages continuous high performance and dedication.

Understanding the importance of employee well-being, your company is committed to supporting its staff and their families during challenging times. This commitment is reflected in the provision of comprehensive medical health and life insurance policies. These benefits ensure that employees and their families have adequate financial support in the event of health issues or other difficulties, providing peace of mind and security.

In addition to financial support, the company prioritizes regular health awareness programs. These initiatives help employees manage their lifestyles and reduce workplace stress, contributing to their overall well-being. By promoting health awareness, the company fosters a culture of care and proactive health management.

PARTICULARS OF EMPLOYEES:

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

EMPLOYEE STOCK OPTION SCHEME:

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

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

Your company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Internal Complaints Committee (“ICC”) has been set up to redress the complaints received regarding sexual harassment. All employees are covered under this policy. During the year under review the ICC has not received any complaints.

AUDITORS CERTIFICATE ON CORPORATE GOVERNANCE:

Your Company has obtained a certificate relating to compliance of conditions of Corporate Governance for the year ended 31^st March, 2024, as stipulated in terms of Regulation 34(3) and Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. from N.C. Rajagopal & Co. Statutory Auditors, the is annexed herewith as ‘Annexure -7’.

CORPORATE SOCIAL RESPONSIBILITY:

The provisions for Corporate Social Responsibility (“CSR”) under the Companies Act, 2013, are applicable to the company for 2022-23. The Company had incurred CSR expenditure of Rs 10.81 lakhs during the financial year 2023-24. The Annual Report on CSR activities is annexed herewith as ‘Annexure -8’ The Chief Financial Officer of the Company has furnished the certificate under Rule 4 of the Companies (CSR) Rules, 2014.

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

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

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

During the year ended under the review, no such settlements and valuation were undertaken.

LISTING OF EQUITY SHARES:

The Company’s equity shares are listed on the following Stock Exchanges:

The Company has paid the annual listing fees to the said stock exchanges for the financial year 2024-25.

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

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

ACKNOWLEDGMENTS:

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

For and on behalf of Board of Directors of Megasoft Limited

Sunil Kumar Kalidindi Kalyan Vijay Sivalenka

Executive Director & CEO Independent Director

^Place: Hyd^erabad DIN: 02344343 DIN: 06404449

Date: 15^th May, 2024

The Directors have pleasure to present their Report of your Company on the business and operations for the year ended 31 March 2023.

Financial Highlights

Overview

During the financial year ended 31 March 2023, your company recorded consolidated revenues of ^ 197.10 lakhs as compared to ^ 5239.61 lakhs for the financial year ended 31 March 2022. The consolidated profit was ^ 880.26 lakhs during the current year as compared to ^ 449.49. lakhs in the previous year.

Further, during the year under review there were changes in the nature of business of the company. The Company has altered its main objects from IT business to pharmaceuticals pursuant to resolution passed by the members of the Company on June 04,2022. Your Company has plans to diversify in other industries as well as per the latest MOA of the Company and work towards its success and growth in the coming years.

Transfer to Reserves in terms of Section 134(3) (j) of the Companies Act, 2013

For the financial year ended on 31^st March 2023, the Company transferred ^ 1147.84/- lakhs to Reserves & Surplus.

Dividend

As the Company is intending to ploughing back of profit, Board of Directors of the Company does not recommended the dividend.

Transfer of Unclaimed Dividend to Investor Education and Protection Fund

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

Share Capital

The paid-up equity share capital as on 31 March 2023 was ^ 7377.00 lakhs comprising 7,37,70,041 equity shares of ^ 10 each. During the year under review, the company has not issued shares with differential voting rights nor granted stock options or sweat equity shares or bonus shares. The Company has not bought back any of its securities during the year under review.

Directors and Key Managerial Personnel

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

During the year under review, the following changes were effected in the composition of the Board of Directors of the Company:

• Mr. Sunil Kumar Kalidindi has been regularized as a Whole-time Director (Executive & CEO) of the Company by members of the Company through postal ballot dated 04^th June,2022 with effect from 10^th December,2021

• Mr. Krishna Yeachuri, has been appointed as an Additional Director of the Company with effect from 31^st December,2022 and his appointment was regularised by the members of the Company as a Director (Professional, Non-Executive & NonIndependent) by way of postal ballot results dated 27^th March,2023 with effect from even date.

• Mr. Anil Kumar Sood, Director of the Company tendered his resignation with effect from 07^th October,2022.

• Mr. Suryanarayana Raju Nandyala has been regularized as a Director (Independent) of the Company by members of the Company in AGM held on 23^rd September,2022 with effect from 23^rd September,2022.

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

Board Meetings

The Board of Directors met Nine (9) times during the financial year. Also, a separate meeting of Independent Directors as prescribed under Schedule IV of the Act, was held during the year under review. For details of the meetings of the Board and its Committees, please refer to the Corporate Governance Report forming part of this Report. The provisions of Companies Act, 2013 and Regulation 17(2) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, Secretarial Standard - 1 issued by The Institute of Company Secretaries of India were adhered to in respect of meeting of Board of Directors of the company.

Compliance with Secretarial Standards

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

Nomination & Remuneration Policy

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

Board Evaluation

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

Performance Evaluation Criteria for Independent Directors

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

Directors'' Responsibility Statement

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

(i) in the preparation of the annual financial statements for the year ended 31 March 2023, the applicable accounting standards had been followed along with proper explanations relating to material departures;

(ii) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at the end of the financial year and of the profit of the company for the year;

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

(iv) the Directors had prepared the annual accounts on a "going concern basis";

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

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

Significant Transactions

A. Divestment of 100% Equity stake/investment held in its wholly owned subsidiary company and divestment of Company''s Software Product Division

The Board of Directors in its meeting held on 4th May,2022 had approved the Divestment of 100% Equity stake / investment held in its ultimately wholly owned subsidiary viz., Nelatop Systems Private Limited ("NSPL") for an aggregate consideration of INR 5.50 Cr and also approved Sale of its Indian software product division housed within the Company by way of slump sale for an aggregate consideration of INR 1 Cr subject to approval of members of the company. Accordingly members of the Company approved through postal ballot dated 04th June, 2022 and based on members approval Company divested its 100% Equity stake / investment held in its ultimately wholly owned subsidiary viz., Nelatop Systems Private Limited ("NSPL") and sold its Indian software product division housed within the Company by way of slump sale.

B. Investment in Extrovis AG

The Board of Directors in its meeting held on 04th May,2022 has also approved the acquisition of a 40% stake in Extrovis AG in one or more tranches. Accordingly, the Company has acquired 40% stake in four tranches for a consideration of USD 16,780,000.

C. Change in Promoter Company

Company had received a letter dated April 04, 2023 from Ramanagaram Enterprises Private Limited (REPL), informing that the Hon''ble National Company Law Tribunal, Hyderabad Bench (NCLT) vide its order dated January 30, 2023 has approved the Scheme of Amalgamation between Sri Power Generation (India) Private Limited (SPGIPL) (Promoter of the Company prior to above Amalgamation), Solar Integration Systems India Private Limited and Nimbha Biotech Private Limited, (Transferor Companies) with Ramanagaram

Enterprises Private Limited (REPL) (Transferee Company) (Promoter of the Company after the Amalgamation). SPGIPL was holding 3,22,86,926 equity Shares of the Company (constituting 43.77% of Equity Share capital of the Company) which subsequent to the aforementioned amalgamation has ceased to exist and is no longer the promoter of the Company.

Pursuant to and in accordance with the aforementioned NCLT Order sanctioning the Scheme of Amalgamation all the investments held by SPGIPL in the Company shall be deemed to have been transferred to REPL, the transferee Company and accordingly the latter is the Promoter of the Company holding the aforementioned stake, which was originally held by SPGIPL. Accordingly, the Company has reported REPL as Promoter of the Company in the shareholding pattern as on 31.03.2023.

Outlook

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

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo

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

(a) Conservation of Energy: The Company continues to focus on continual improvement for optimum utilization of resources, minimise consumption of energy, water and natural resources.Your Company uses electric energy for all its equipments such as air conditioners, computer terminals, lighting and utilities in the work premises. All possible measures have been taken to conserve energy:

? through periodic energy audits to identify potential areas for saving

? by incorporating energy-efficient equipment

? through automation i.e. using timers, automatic level controllers, etc.

The Company is committed to sustainable business practices by contributing to environment protection & considers energy conservation as one of the strong pillars of preserving natural resources.

(b) Research Mitigation : At the end of each year, management and the Board jointly develop a list of major risks that the company plans to prioritize in the next year. Key areas of Risk management for the year 2023-24 include market access risk, supply chain risk, revenue risk, protection of intellectual property and Foreign currency fluctuations .

(c) Foreign exchange earnings and outgo: The details of foreign exchange earnings and outgo are given in note no. 34 and 35 of the Notes forming part of the standalone financial statements of the company.

Particulars of Contracts or Arrangements made with Related Parties under section188

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

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

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

The details of the Related Party Transactions on arm''s length basis has been provided in Annexure-1 appended hereto and forms part of this report.

Particulars of Loans, Investments & Guarantee

Details of Loans, Investments and Guarantees covered under the provisions of Section 186 of the Companies Act, 2013 are given in note no. 3, 4 and 32 of the Notes forming part of the standalone financial statements of the company.

Risk Management

Your Company has an elaborate Risk Management framework, which is designed to enable risks to be identified, assessed and mitigated appropriately. Risks are prioritized according to significance and likelihood.

Although the company has long been following the principle of risk minimization as is the norm in every industry, it has now become a compulsion.

Therefore, in accordance with Section 134(3)(n) of the Companies Act, 2013 and Regulation 17(9) SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 the Board members formally adopted steps for framing, implementing and monitoring the risk management policy for the company.

A disciplined approach to risk is important in a diversified organization like ours in order to ensure that we are executing according to our strategic objectives and that we only accept risk for which we are adequately compensated. We evaluate risk at the individual transaction level, and evaluate aggregated risk at the customer, industry, geographic and collateral-type levels, where appropriate.

The main objective of Your Company''s risk management policy is to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the business. In order to achieve the key objective, the policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on risk related issues. The risk governance structure is led by the Audit/Risk Compliance Committee, chaired by Mr. Kalyan Vijay Sivalenka .

Internal Control Systems and Their Adequacy

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit (IA) function is defined in the Internal Audit Charter. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit/Risk Compliance Committee of the Board.

The Internal Audit monitors and evaluates the efficacy and adequacy of 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 internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit/Risk Compliance Committee of the Board. The details on Internal Control Systems and their adequacy are provided in the Management''s Discussion and Analysis which forms part of this Report.

Internal financial control with reference to the financial statements

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

Vigil Mechanism / Whistle Blower Policy

In order to ensure that the activities of the company and its employees are conducted in a fair and transparent manner by adoption of the highest standards of professionalism, honesty, integrity and ethical behavior, the company has adopted a vigil mechanism policy. This policy is explained in corporate governance report and also posted on the website of the company which can be accessed at http://www.megasoft.com/corporate-governance.html.

Enhancing Shareholder Value

Your Company believes that its shareholders are among its most important stakeholders. Accordingly, your company''s operations are committed to achieving high levels of operating performance and cost competitiveness, building for growth and nurturing overall corporate reputation. Enhancing Shareholder Value is the common thread that runs through everything we do as a company from innovating new products and broadening our existing portfolio, to successful restructuring efforts and improving our working capital.

Throughout our history, delivering value to our shareholders has been and will continue to be uppermost in our minds as we manage our business. However, in the last few years, due to declining revenues and performance, the company has been unable to declare dividends. Your company''s corporate actions are primarily aimed to create value for all its stakeholders. In addition, your company is committed to keep in mind the socio-economic and environmental dimensions and contribute to sustainable growth and development.

Corporate Social Responsibility

The provisions for corporate social responsibility ("CSR") under the Companies Act, 2013, are not applicable to the company for the current financial year. However, your company has been,over the years, pursuing as part of its corporate philosophy, an unwritten CSR policy voluntarily which goes much beyond mere philanthropic gestures and integrates interest, welfare and aspirations of the community with those of the company itself in an environment of partnership for inclusive development.

Corporate Governance

A report on Corporate Governance including the relevant Auditors'' Certificate regarding compliance with the conditions of Corporate Governance as stipulated in Regulation 34(3) and Schedule V of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, is annexed. Management''s Discussion and Analysis is also annexed.

Subsidiaries, Associates and Joint Venture Companies

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

Nelatop Systems Private Limited (NSPL) was incorporated as a wholly owned subsidiary of the Company on March 14, 2022. The Company during the year under review, based on members approval through postal ballot dated 04th June, 2022, the Company divested its 100% Equity stake / investment held in its ultimate wholly owned subsidiary viz., N elatop Systems Private Limited ("NSPL") for an aggregate consideration of INR 5.50 Cr and Company has sold its Indian software product division housed within the Company by way of slump sale for an aggregate consideration of INR 1 Cr.

During the year, Company invested in Extrovis AG as its Associate Company. Total investment of Rs.135,35,66,600/- have been made for 40% of shareholding in Extrovis AG.

Performance and Financial Position of each of the Subsidiaries, Associates and Joint Venture Companies included in the Consolidated Financial Statement

The Consolidated Financial Statements relate to the Company''s subsidiary Velapan Systems Private Limited. The Financial Statements of the Subsidiaries covered in the Consolidation process are drawn upto the same reporting date as that of the Company i.e., 31^st March, 2023. The Financial Statements of the Company and its Subsidiaries have been combined on a line-by-line basis by adding together like-items of assets, liabilities, income and expenses, after eliminating intra-group balances, intra-group transactions and resulting unrealized profits or losses, unless cost cannot be recovered. The statement pursuant to Section 129 of the Companies Act, 2013 in respect of subsidiaries and associates is attached as Annexure-2.

Deposits

The Company has neither raised nor renewed any Deposits as on March 31, 2023 or received any other monies construed to attract the provisions of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 as amended from time to time.

Annual Return

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

Auditors'' Report

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

AuditorsStatutory Auditors

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

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

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

Internal Auditor

Mr. R Balasubramanian (FCA-220677), Chartered Accountants, performed the duties of Internal Auditors of the Company for FY 2023-23 and their reports are reviewed by the audit committee from time to time. R. Balasubramanian has tendered his resignation of the Company and Board has appointed Mr. Vijay Parthasarathy of M/s. Vijay R & Co.as internal auditor of the company for FY 2023-24.

Secretarial Auditor

Pursuant to the provisions of Sections 204 of the Companies Act, 2013 and the rules framed thereunder, the company has appointed M/s. M Damodaran & Associates LLP, (COP-5081/FCS-5837), to undertake the Secretarial Audit of the company. The Secretarial Auditors'' Report, in the prescribed format, for the year ended 31 March 2023 is annexed to this Directors'' Report and forms part of the Annual Report (Annexure-3).

Details in respect of frauds reported by Auditors other than those which are reportable to the Central Government

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

Details of Significant & material orders passed by the Regulators or Courts or Tribunal impacting the going concern status and company''s operations in future

During the financial year under review, the GST authorities issued summons regarding non-payment/evasion of GST/ Contravention of the Provisions of CGST Act,2017. The officials of the Company have been acted in accordance with law and have attended the summons sent by the GST department, submitted all documents, and cooperated with the agency. The Company filed a writ petition in the Hon''ble High Court of Telangana challenging the notification and basis of demand by the GST department. The Company has been regularly filing disclosure with exchange in this matter.

Material changes from end of financial year to date of this report

Company has received letter dated April 04, 2023 from Ramanagaram Enterprises Private Limited (REPL), informing that the Hon''ble National Company Law Tribunal, Hyderabad Bench (NCLT) vide its order dated January 30, 2023 has approved the Scheme of Amalgamation between Sri Power Generation (India) Private Limited (SPGIPL) (Promoter of the Company prior to above Amalgamation), Solar Integration Systems India Private Limited and Nimbha Biotech Private Limited, (Transferor Companies) with Ramanagaram

Enterprises Private Limited (REPL) (Transferee Company) (Promoter of the Company after the Amalgamation). SPGIPL was holding 3,22,86,926 equity Shares of the Company (constituting 43.77% of Equity Share capital of the Company) which subsequent to the aforementioned amalgamation has ceased to exist and is no longer the promoter of the Company.

Pursuant to and in accordance with the aforementioned NCLT Order sanctioning the Scheme of Amalgamation all the investments held by SPGIPL in the Company shall be deemed to have been transferred to REPL, the transferee Company and accordingly the latter is the Promoter of the Company holding the aforementioned stake, which was originally held by SPGIPL. Accordingly, the Company has reported REPL as Promoter of the Company in the shareholding pattern as on 31.03.2023.

However, the above change in Promoters is not likely to have any significant financial impact on the Company.

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

Human Resources Development

Your Company recognises the important of human resources and has created a performance driven environment where innovation is encouraged, performance is recognised and employees are motivated to realise their potential. People are the key assets for any organization. Your company has a robust Human Resource system and well-structured policies for the holistic development of this asset. The company believes in having cordial relationships with employees and it strives to provide them with a professionally rewarding and enriching work environment. The company possesses an effective performance management system that focuses on employee development, measuring key result areas, competencies and training needs.

Your Company provides necessary induction, training and proper guidance to meet the operational needs of the organization from time to time.

Apart from the Medical Insurance and Life Insurance for the benefit of the employees and their families, the company organizes health awareness program and webinar for the wellbeing of the employee. On several cultural occasions your company conducts team building activities and events to build team spirit and keep the employees motivated. Your company has career progression policy for employee growth. Your Company strongly believes that happy and a satisfied employee will lead the Company to success.

Particulars of Employees

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

Employee Stock Option Scheme

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

Disclosure as per Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Your company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Internal Complaints Committee ("ICC") has been set up to redress the complaints received regarding sexual harassment. All employees are covered under this policy. During the year under review the ICC has not received any complaints.

Corporate Social Responsibility

During the year under review, the Company is not required to constitute a Corporate Social Responsibility Committee as it does not fall within purview of Section 135(1) of the Companies Act, 2013 and hence it is not required to formulate policy on corporate social responsibility.

The details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 during the year along with their status as at the end of the financial year.

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

Disclosure about the difference between the amount of the valuation executed at the time of one time settlement and the valuation done while availing loan from the Banks or Financial Institutions along with the reasons thereof.

During the year ended under the review no such settlements and valuation were undertaken while availing loan from the Banks or Financial Institutions.

Listing with Stock Exchanges

Your company''s equity shares are listed on BSE [532408] and NSE [MEGASOFT]. Necessary stock exchange regulations are complied with from time to time.

Acknowledgments

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

The Directors have pleasure to present their report of your company on the business and operations for the year ended 31 March 2018.

Financial Results

(Rs. lakhs)

Overview

During the financial year ended 31 March 2018, your company recorded consolidated revenues of Rs. 6625.94 lakhs as compared to Rs.7,014.21 lakhs for the financial year ended 31 March 2017. The consolidated profit was Rs.169.14 lakhs during the current year as compared to Rs.271.88 lakhs in the previous year.

Further, during the year under review there were no changes in nature of business of the company.

Dividend

On account of inadequacy of profits during the financial year ended 31 March 2018, the Board of Directors of the company have not recommended dividend.

Share capital

The paid-up equity share capital as on 31 March 2018 was Rs.4,426.73 lakhs comprising of 4,42,67,293 equity shares of Rs.10 each. During the year under review, the company has not issued shares with differential voting rights nor granted stock options or sweat equity.

Material changes from end of financial year to date of this report

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

Directors and Key Managerial Personnel

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

In accordance with the provisions of the Companies Act, 2013 and in terms of the Memorandum and Articles of Association of the company, Mr GV Kumar [DIN-00059107] and Mr D Sudhakar Reddy [DIN-00047707], directors of your company, retire by rotation at the ensuing AGM and are eligible for reappointment.

Board Meetings

The Board of Directors met four (4) times during the financial year. The provisions of Companies Act, 2013 and Regulation 17(2) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, Secretarial Standard - 1 issued by Institute of Company Secretaries of India were adhered to in respect of meeting of Board of Directors of the company.

Nomination & Remuneration Policy

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

Board Evaluation

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

Directors'' Responsibility Statement

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

(i) in the preparation of the annual financial statements for the year ended 31 March 2018, the applicable accounting standards had been followed along with proper explanations relating to material departures;

(ii) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at the end of the financial year and of the profit / loss of the company for the year;

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

(iv) the directors had prepared the annual accounts on a "going concern basis";

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

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

Significant Transactions

Pursuant to the Shareholders'' approval via postal ballot in March 2016 and the Joint Development Agreement entered into by the Company with M/s. Darshita Infrastructure Ltd (A Salarpuria Sattva Group Company), the Company during the period under review, commenced the setting up of a large IT facility at its property at Nanakramguda (which was registered in the company''s favour in May 2015 by TSIIC through a conditional sale deed). The Company also obtained necessary Statutory approvals from TSIIC and other regulatory authorities and the construction is in progress.

Outlook

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

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo

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

(a) Conservation of Energy: Your Company uses electric energy for all its equipment''s such as air conditioners, computer terminals, lighting and utilities in the work premises. All possible measures have been taken to conserve energy:

- through periodic energy audits to identify potential areas for saving

- by incorporating energy-efficient equipment

- through automation i.e. using timers, automatic level controllers, etc.

(b) Research and Development (R&D): Being considered a market leader in Mobile Infrastructure space for virtual operators and Mobile Payments, Your Company further strengthened its Products and Solutions to launch services for multiple Customers based on a Cloud Offering for both Its MSP and Payment Manager offerings. Furthering our focus on building and expanding Your Company''s expertise in latest technologies, your company now built an Enterprise Mobile Data Core Platform as well as additional Mobile Wallet functionalities.

(c) Technology Absorption: In our quest to offer all our products in cloud environment, Your Company re-architected and designed multiple components and technologies to enable porting of the services on to cloud. With our intent to offer all flagship products in cloud, our products require higher configurability, auto scaling and data security frameworks. Your company has made significant progress in this regard during last year.

(d) The details of foreign exchange earnings and outgo are given in note no. 29 and 30 of the Notes forming part of the standalone financial statements of the company.

Quality certifications

Your company''s quality management system (QMS) has its foundation on decades of experience and industry best practices that are aligned with international standard quality models and certifications. This assures that the company maintains confidentiality, integrity, availability of corporate, and client information

ISO 9001:2015 - Quality Management System

QMS enhancing customer satisfaction.

Your company is certified for ISO 9001:2015 by BSI, India. Our products & solutions therefore ensure customer satisfaction.

ISO 27001:2013 - Information Security Management System

Information security management system enhancing Confidentiality, Availability and Integrity.

Risk Management

Although the company has long been following the principle of risk minimisation as is the norm in every industry, it has now become a compulsion.

Therefore, in accordance with Section 134(3)(n) of the Companies Act, 2013 and Regulation 17(9) SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 the Board members formally adopted steps for framing, implementing and monitoring the risk management policy for the company.

A disciplined approach to risk is important in a diversified organization like ours in order to ensure that we are executing according to our strategic objectives and that we only accept risk for which we are adequately compensated. We evaluate risk at the individual transaction level, and evaluate aggregated risk at the customer, industry, geographic and collateral-type levels, where appropriate.

At the end of each year, management and the Board jointly develop a list of major risks that company plans to prioritize in the next year. Key areas of Risk Management for the year 2018-19 include Data Security and Privacy, Technology obsolescence, Service Delivery, retention and development of Human Resources, Business competition and continuity, Foreign exchange fluctuations & new compliances.

The main objective of Your Company''s risk management policy is to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the business. In order to achieve the key objective, the policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on risk related issues.

The risk governance structure is led by the Audit/Risk Compliance Committee, chaired by Mr. Anil Kumar Sood. This committee is responsible for the effective management of the risks facing the Company. The Committee meets on a quarterly basis and reports to the Board. As a matter of policy, these risks are assessed and steps as appropriate are taken to mitigate the same.

Internal Control Systems and Their Adequacy

The company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit (IA) function is defined in the Internal Audit Charter. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit/Risk Compliance Committee of the Board.

The Internal Audit monitors and evaluates the efficacy and adequacy of 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 internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit/Risk Compliance Committee of the Board.

Vigil Mechanism / Whistle Blower Policy

In order to ensure that the activities of the company and its employees are conducted in a fair and transparent manner by adoption of highest standards of professionalism, honesty, integrity and ethical behaviour, the company has adopted a vigil mechanism policy. This policy is explained in corporate governance report and also posted on the website of the company.

Related Party Transactions

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

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

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

Enhancing Shareholder Value

Enhancing Shareholder Value is the common thread that runs through everything we do as a company from innovating new products and broadening our existing portfolio, to successful restructuring efforts and improving our working capital. Throughout our history, delivering value to our shareholders has been and will continue to be uppermost in our minds as we manage our business. However, in the last few years, due to declining revenues and performance, the company has been unable to declare dividends. Your company is also committed to creating value for all its stakeholders by ensuring that its corporate actions positively impact the stock price and creation of Shareholder Value.

Corporate Social Responsibility

The provisions for corporate social responsibility ("CSR") under the Companies Act, 2013, are not applicable to the company for the current financial year. However, your company has been, over the years, pursuing as part of its corporate philosophy, an unwritten CSR policy voluntarily which goes much beyond mere philanthropic gestures and integrates interest, welfare and aspirations of the community with those of the company itself in an environment of partnership for inclusive development.

Corporate Governance

A report on Corporate Governance including the relevant Auditors'' Certificate regarding compliance with the conditions of Corporate Governance as stipulated in Regulation 34(3) and Schedule V of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, is annexed. Management''s Discussion and Analysis is also annexed.

Particulars of Loans, Guarantees & Investments

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in note no. 3, 9 and 27 of the Notes forming part of the standalone financial statements of the company.

Subsidiary Companies

The statement pursuant to Section 129 of the Companies Act, 2013 in respect of subsidiaries is attached as Annexure-1. The annual accounts of these subsidiaries and the related detailed information will be made available to any member of the company seeking such information at any point of time and are also available for inspection by any member of the company at the registered office of the company. The company shall furnish a copy of annual accounts of subsidiaries to any member on demand.

Consolidated Financial Statements

The consolidated financial statements of the company prepared in accordance with the prescribed Accounting Standards form part of this Annual Report pursuant to the Regulation 34(2) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

Fixed Deposits

The company has not accepted any deposits from the public, and as such, there are no outstanding deposits in terms of the Companies (Acceptance of Deposits) Rules, 2014.

Particulars of Employees

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

Employee Stock Option Scheme

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

Extract of Annual Return

The details forming part of the extract of the Annual Return in form MGT-9 has been given in the Annexure-2 appended hereto and forms part of this report.

Auditors'' Report

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

Remark by Auditors: "There have been delays by the Company during the year in depositing Statutory Dues with the appropriate authorities. As at 31st March, 2018, under this clause, there has been arrears of outstanding of ''33,80,855 towards TDS under the Income Tax Act, 1961. However, as on the date of this report this outstanding has been paid by the Company."

Explanation: Due to operational difficulties and short term challenges in collections, there were delays in payment of statutory dues. However we have taken steps to strengthen timely collection process to overcome such delays.

Auditors

Statutory Auditors

Members at its 17th Annual General Meeting held on July 28, 2017 Appointed M/s. N. C. Rajagopal & Co., [Firm Registration No.003398S], Chartered Accountants to hold office as auditors of the company till the conclusion of the 22nd Annual General Meeting to be held in the year 2022.

In accordance to the provisions of section 139 of the Companies Act, 2013, The Board of Directors on the recommendation of the Audit Committee has proposed to ratify the appointment of M/s. N. C. Rajagopal & Co., Chartered Accountants, Firm Registration No. 003398S as Statutory Auditors. Further, the Company received a declaration from M/s. N. C. Rajagopal & Co., Chartered Accountants in accordance with the provisions of Section 141 of the Companies Act, 2013 and the Rules framed there under.

Internal Auditor

Mr R Balasubramanian (FCA-220677), Chartered Accountants, perform the duties of internal auditors of the company and their reports are reviewed by the audit committee from time to time.

Secretarial Auditor

Pursuant to the provisions of Sections 204 of the Companies Act, 2013 and the rules framed thereunder, the company has appointed M/s M Damodaran & Associates (CoP-5081/FCS-5837), Practicing Company Secretaries, to undertake the Secretarial Audit of the company. The Secretarial Auditors'' Report, in the prescribed format, for the year ended 31 March 2018 is annexed to this Directors'' Report and forms part of the Annual Report (Annexure-3). There are no qualifications or adverse remarks made by the secretarial auditor.

Human Resources Development

Your Company is committed to provide a holistic experience to employees that fosters a culture of high performance led by innovation. Your Company believes that while Technology can enable processes but it is People who lead the company towards its goals and successes. There is a significant focus on creating a fun-filled, high-energy work environment where personal milestones, organizational successes and special occasions are celebrated with fervor and enthusiasm.

Disclosure as required under Section 22 of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Your company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Internal Complaints Committee ("ICC") has been set up to redress the complaints received regarding sexual harassment. All employees are covered under this policy. During the year under review the ICC has not received any complaints.

Listing with Stock Exchanges

Your company''s equity shares are listed on BSE [532408] and NSE [MEGASOFT]. Necessary stock exchange regulations are complied with from time to time.

Acknowledgments

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

For and on behalf of the Board of Directors

GV Kumar D Sudhakar Reddy

Managing Director Executive Director

Place : Hyderabad

Date : 29 May 2018

The Directors have pleasure to present their report of your company on the business and operations for the year ended 31 March 2017.

Financial Results ,

(Rs. lakhs)

Overview

During the financial year ended 31 March 2017, your company recorded consolidated revenues of Rs.7,014.22 lakhs as compared to Rs.6,568.29 lakhs for the financial year ended 31 March 2016. The consolidated profit was Rs.266.63 lakhs during the current year as compared to Rs.129.81 lakhs in the previous year.

Dividend & Reserves

On account of inadequacy of profits during the financial year ended 31 March 2017, the Board of Directors of the company have not recommended dividend. Your Company has transferred the consolidated profit of Rs.266.63 Lakhs to Reserves during the financial year under review.

Share capital

The paid-up equity share capital as on 31 March 2017 was Rs.4,426.73 lakhs comprising of 4,42,67,293 equity shares of Rs.10 each. During the year under review, the company has not issued shares with differential voting rights nor granted stock options or sweat equity.

Changes in Nature of Business, if any

During the period under review there was no change in the business of the Company.

Details of Significant and Material Orders passed by the Regulators or Courts or Tribunals Impacting the going concern Status and company''s operations in future:

During the period under review there were no significant and material orders passed by the Regulators or Courts or Tribunals which impacts the going concern Status and company''s operations in future.

Material changes from end of financial year to date of this report

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

Directors and Key Managerial Personnel

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

In accordance with the provisions of the Companies Act, 2013 and in terms of the Memorandum and Articles of Association of the company, Mr GV Kumar [DIN-00059107] and Mr D Sudhakar Reddy [DIN-00047707], directors of your company, retire by rotation at the ensuing AGM and are eligible for reappointment.

Board Meetings

The Board of Directors met four (4) times during the financial year. The provisions of Companies Act, 2013, Secretarial Standard - 1 issued by the Institute of Company Secretaries of India (ICSI) and Regulation 17(2) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 were adhered to while considering the periodicity and time gap between two meetings.

Nomination & Remuneration Policy

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

Your company has received the approval from Central Government for the resolutions passed by the Members of the Company vide Postal Ballot on 22nd March 2016 for Reappointment of Mr. GV Kumar as Managing Director and Re-Appointment of Mr. D Sudhakar Reddy as Whole-time Director of the Company and the remuneration payable there to.

Board Evaluation

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

Directors'' Responsibility Statement

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

(i) in the preparation of the annual financial statements for the year ended 31 March 2017, the applicable accounting standards had been followed along with proper explanations relating to material departures;

(ii) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at the end of the financial year and of the profit of the company for the year;

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

(iv) the directors had prepared the annual accounts on a "going concern basis";

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

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

Significant Transactions

After the Shareholders'' approval through the postal ballot dated 22nd March 2016 for the same, during the period under review, the company initiated the process of setting up a large IT facility at its property at Nanakramguda (which was registered in the company''s favour in May 2015 by TSIIC through a conditional sale deed) through a Joint Development Agreement with a new partner and has settled the old building contractors and vendors through proceeds of Madhapur property and other cash accruals. The company sold the land at Vishakhapatnam for a consideration of Rs.43.50 crores. The entire proceeds of this sale have been utilized for repayment of its loans and debts.

Outlook

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

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo

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

(a) Conservation of Energy: Your Company uses electric energy for all its equipment''s such as air conditioners, computer terminals, lighting and utilities in the work premises. All possible measures have been taken to conserve energy:

- through periodic energy audits to identify potential areas for saving

- by incorporating energy-efficient equipment

- through automation i.e. using timers, automatic level controllers, etc.

(b) Research and Development (R&D): Being considered a market leader in Mobile Infrastructure space for virtual operators, Your Company further strengthened its platform ability to launch services for multiple tenants connected differentiated networks. Furthering our focus on building data core elements, your company now built a deep packet inspection platform, which will play a pivotal role in data / content charging, data throttling, lawful intercept, content Analytics and cyber security. Expertise built on business analytics is now being actively merged with our core platforms to enable enhanced service value for our customers. During the year, we have further strengthened our 4G portfolio by enhancing our HSS and PCRF Products to support advanced 4G services like VOLTE and VOWIFI.

(c) Technology Absorption: In our quest to offer all our products in cloud environment, Your Company rearchitected and designed multiple components and technologies to enable porting of the services on to cloud. With our intent to offer all flagship products in cloud, our products require higher configurability, auto scaling and data security frameworks. Your company has made significant progress in this regard during last year.

(d) The details of foreign exchange earnings and outgo are given in note no. 26 and 27 of the Notes forming part of the standalone financial statements of the company.

Quality certifications

Your company''s Quality Management System (QMS) has its foundation on decades of experience and industry best practices that are aligned with international standard quality models and certifications. This assures that your company maintains confidentiality, integrity, availability of corporate, and client information.

ISO 9001:2008 - Quality Management System

QMS enhancing customer satisfaction

Your company is certified for ISO 9001:2008 by BSI, India. Our products & solutions therefore ensure customer satisfaction.

ISO 27001:2013 - Information Security Management System

Information security management system enhancing Confidentiality, Availability and Integrity.

Your company has applied for renewal of its ISO 27001:2013 by Bureau VERITAS Certification, India.

Risk Management

Although the company has long been following the principle of risk minimization as is the norm in every industry, it has now become a compulsion.

Therefore, in accordance with Section 134(3)(n) of the Companies Act, 2013 and Regulation 17(9) SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 the Board members formally adopted steps for framing, implementing and monitoring the risk management policy for the company.

A disciplined approach to risk is important in a diversified organization like ours in order to ensure that we are executing according to our strategic objectives and that we only accept risk for which we are adequately compensated. We evaluate risk at the individual transaction level, and evaluate aggregated risk at the customer, industry, geographic and collateral-type levels, where appropriate.

At the end of each year, management and the Board jointly develop a list of major risks that company plans to prioritize in the next year. Key areas of Risk Management for the year 2017-18 include Data Security and Privacy, Technology obsolescence, Service Delivery, retention and development of Human Resources, Business competition and continuity, Foreign exchange fluctuations & new compliances.

The main objective of Your Company''s risk management policy is to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the business. In order to achieve the key objective, the policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on risk related issues.

The risk governance structure is led by the Audit/Risk & Compliance Committee, chaired by the Mr. Anil Kumar Sood. This committee is responsible for the effective management of the risks facing the Company. The Committee meets on a quarterly basis and reports to the Board. As a matter of policy, these risks are assessed and steps as appropriate are taken to mitigate the same.

Internal Control Systems and their Adequacy

The company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit (IA) function is defined in the Internal Audit Charter. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit/Risk & Compliance Committee of the Board.

The Internal Audit monitors and evaluates the efficacy and adequacy of 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 internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit/Risk & Compliance Committee of the Board.

Vigil Mechanism / Whistle Blower Policy

In order to ensure that the activities of the company and its employees are conducted in a fair and transparent manner by adoption of highest standards of professionalism, honesty, integrity and ethical behaviour, the company has adopted a vigil mechanism policy. This policy is explained in corporate governance report and also posted on the website of the company.

Related Party Transactions

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

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

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

Enhancing Shareholder Value

Enhancing Shareholder Value is the common thread that runs through everything we do as a company from innovating new products and broadening our existing portfolio, to successful restructuring efforts and improving our working capital. Throughout our history, delivering value to our shareholders has been and will continue to be uppermost in our minds as we manage our business. However, in the last few years, due to declining revenues and performance, the company has been unable to declare dividends. Your company is also committed to creating value for all its stakeholders by ensuring that its corporate actions positively impact the stock price and creation of Shareholder Value.

Corporate Social Responsibility

The provisions for corporate social responsibility ("CSR") under the Companies Act, 2013, are not applicable to the company for the current financial year. However, your company has been, over the years, pursuing as part of its corporate philosophy, an unwritten CSR policy voluntarily which goes much beyond mere philanthropic gestures and integrates interest, welfare and aspirations of the community with those of the company itself in an environment of partnership for inclusive development.

Corporate Governance

A report on Corporate Governance including the relevant Auditors'' Certificate regarding compliance with the conditions of Corporate Governance as stipulated in Regulation 34(3) and Schedule V of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, is annexed. Management''s Discussion and Analysis is also annexed.

Particulars of Loans, Guarantees & Investments

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in note no. 22 and 12 of the Notes forming part of the standalone financial statements of the company.

Subsidiary Companies

The statement pursuant to Section 129 of the Companies Act, 2013 in respect of subsidiaries is attached as Annexure-1. The annual accounts of these subsidiaries and the related detailed information will be made available to any member of the company seeking such information at any point of time and are also available for inspection by any member of the company at the registered office of the company. The company shall furnish a copy of annual accounts of subsidiaries to any member on demand.

Consolidated Financial Statements

The consolidated financial statements of the company prepared in accordance with the prescribed Accounting Standards form part of this Annual Report pursuant to the Regulation 34(2) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

Fixed Deposits

The company has not accepted any deposits from the public, and as such, there are no outstanding deposits in terms of the Companies (Acceptance of Deposits) Rules, 2014.

Particulars of Employees

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

Employee Stock Option Scheme

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

Extract of Annual Return

The details forming part of the extract of the Annual Return in form MGT-9 has been given in the Annexure-2 appended hereto and forms part of this report.

Auditors'' Report

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

Auditors

Statutory Auditor

Members at its 16th Annual General Meeting held on September 26, 2016 ratified the appointment of joint statutory auditors, M/s Srikanth & Shanthi Associates [Firm Registration No.004006S], Chartered Accountants and M/s TN Rajendran & Co. [Firm Registration No.005080S], Chartered Accountants, hold office as auditors of the company till the conclusion of the 17th Annual General Meeting to be held on 28th July 2017.

In accordance to the provisions of section 139 of the Companies Act, 2013, The Board of Directors on the recommendation of the Audit Committee has proposed to appoint M/s. N.C. Rajagopal & Co., Chartered Accountants[Firm Registration No. 003398S as Statutory Auditors in place of the retiring auditors. Further, the Company received the consent thereto along with a declaration from M/s N.C. Rajagopal & Co., Chartered Accountants [Firm Registration No. 003398S] to the effect that if they will be appointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013 and the Rules framed there under for appointment as Statutory Auditors of the Company. Further, M/s. N.C. Rajagopal & Co., Chartered Accountants [Firm Registration No. 003398S] have confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India (ICAI) as required under the SEBI (LODR), 2015.

Internal Auditor

Mr R Balasubramanian (FCA-220677), Chartered Accountants, perform the duties of internal auditors of the company and their reports are reviewed by the audit committee from time to time.

Secretarial Auditor

Pursuant to the provisions of Sections 204 of the Companies Act, 2013 and the rules framed there under, the company has appointed M/s M Damodaran & Associates (CoP-5081/FCS-5837), Practicing Company Secretaries, to undertake the Secretarial Audit of the company. The Secretarial Auditors'' Report, in the prescribed format, for the year ended 31 March 2017 is annexed to this Directors'' Report and forms part of the Annual Report (Annexure-3).

Human Resources Development

Your Company is committed to provide a holistic experience to employees that fosters a culture of high performance led by innovation. Your Company believes that while Technology can enable processes but it is People who lead the company towards its goals and successes. There is a significant focus on creating a fun-filled, high-energy work environment where personal milestones, organizational successes and special occasions are celebrated with fervor and enthusiasm.

Disclosure as required under Section 22 of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Your company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Internal Complaints Committee ("ICC") has been set up to redress the complaints received regarding sexual harassment. All employees are covered under this policy. During the year under review, no complaints were reported to the Board.

Listing with Stock Exchanges

Your company''s equity shares are listed on BSE [532408] and NSE [MEGASOFT]. Necessary stock exchange regulations are complied with from time to time. Applicable listing fee for the year 2017-18 has already been paid to the respective stock exchanges.

Acknowledgements

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

For and on behalf of the Board of Directors

GV Kumar D Sudhakar Reddy

Managing Director Executive Director

Place : Hyderabad

Date : 30 May 2017

The Directors have pleasure to present their report of your company on the business and operations for the year ended 31 March 2016.

Financial Results

(Rs. lakhs)

Overview

During the financial year ended 31 March 2016, your company recorded consolidated revenues of Rs. 6,568.29 Lakhs as compared to Rs. 10,072.85 Lakhs for the period of 15 months ended 31 March 2015. The consolidated profit was Rs. 129.81 Lakhs as compared to Rs. 73.82 Lakhs in the previous year comprising 15 months.

Financial Year Comparison

The financial statements present the results of operations of the company and its subsidiaries for the financial year ended 31 March 2016 (12 months period) and are not directly comparable for the period ended 31 March 2015 (15 months period).

Dividend

On account of inadequacy of profits during the financial year ended 31 March 2016, the Board of Directors of the company have not recommended dividend.

Share capital

The paid-up equity share capital as on 31 March 2016 was Rs 4,426.73 lakhs comprising of 4,42,67,293 equity shares of Rs 10 each. During the year under review, the company has not issued shares with differential voting rights nor granted stock options or sweat equity.

Material changes from end of financial year to date of this report

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

Directors and Key Managerial Personnel

Your company appointed Uma Garimella (Ms.) [DIN-02847624] as an Additional Director (Non-executive Independent Woman Director) with effect from 07 November, 2015 and Independent Director with effect from 22 March 2016 to hold such office for a term of five years and Mr GV Kumar [DIN-00059107] and Mr D Sudhakar Reddy [DIN-00047707] were reappointed as Managing Director and Whole Time Director of the Company respectively, through a postal ballot process under the Companies Act, 2013.

The company has received declarations from all the independent directors of the company confirming that they meet the criteria of independence as prescribed under section 149(6) and Schedule IV of the Companies Act, 2013 and clause 49 of the Listing Agreement with the stock exchanges (till 30 November, 2015) / SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (Listing Regulations) (applicable w.e.f 01 December, 2015).

Mr Janardhana Reddy [DIN-02544300], a Non-Executive Independent Director of your company resigned on 7 November, 2015. The Board of directors places on record their sincere appreciation for the contribution and valuable service rendered by Mr Janardhana Reddy during his tenure.

Mr Shridhar Thathachary was appointed as Chief Financial Officer of the Company with effect from 11 August, 2015.

In accordance with the provisions of the Companies Act, 2013 and in terms of the Memorandum and Articles of Association of the company, Mr GV Kumar [DIN-00059107] and Mr D Sudhakar Reddy [DIN-00047707], directors of your company, retire by rotation at the ensuing AGM and are eligible for reappointment.

The position of Company Secretary (KMP) which had fallen vacant by end of the current financial year was filled up by appointment of CS Rakhee Jain (Ms.), a Member of ICSI, as Company Secretary and Compliance Officer of the Company with effect from 10 May, 2016.

Board Meetings

The Board of Directors met four (4) times during the financial year. The provisions of Companies Act, 2013 and listing agreement with stock exchanges / SEBI Listing Regulations were adhered to while considering the time gap between two meetings.

Remuneration Policy

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

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement/SEBI Listing Regulations, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its committees. The manner in which the evaluation has been carried out has been detailed out in the Corporate Governance Report.

Directors'' Responsibility Statement

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

(i) in the preparation of the annual financial statements for the year ended 31 March 2016, the applicable accounting standards had been followed along with proper explanations relating to material departures;

(ii) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at the end of the financial year and of the profit of the company for the year;

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

(iv) the directors had prepared the annual accounts on a "going concern basis";

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

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

Outlook

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

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo

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

(a) Conservation of Energy: Your Company uses electric energy for all its equipments such as air conditioners, computer terminals, lighting and utilities in the work premises. All possible measures have been taken to conserve energy:

- through periodic energy audits to identify potential areas for saving

- by incorporating energy-efficient equipment

- through automation i.e. using timers, automatic level controllers, etc.

(b) Research and Development (R&D): Your Company being a technology products company, Research and Development is the single most important investment into securing the future of the company. Especially in the area of Mobile technologies, which requires constant innovation to be ahead of market and competition, research and development becomes a necessity. This is also reflected in your company Brand Tag Line "Innovate. Lead." During the past year we have spent over 30% of resources on building technologies in not only enhancing our Core MSP Platform Capabilities but also in the areas of Predictive Analytics, 4G packet core, convergent billing, policy management, mobile banking and wallet products. Apart from building new products and components, past year significant time has been spent in enhancing the capabilities of existing products making them more feature rich, flexible to manage and at the same time robust to handle higher performance demands. In an effort to further develop exclusivity of the technologies your company is actively seeking patent grants on some of these areas. Addition of a new patent in MSP (Mobile Service Platform) area in April 2015 is an example of the same.

(c) Technology Absorption: Your Company operates in the High Technology area of software products and hence new technology absorption is a constant process. Your Company has adapted newer technologies in the Area of Data Rating & Management, Analytics, 4G core, Near Field Communications (NFC) and newer API''s & Interfaces. Additionally, Your Company is strongly focussed on Cloud enablement &is actively working towards moving large part of its test labs to cloud based environments there by reducing future capital investment needs.

(d) The details of foreign exchange earnings and outgo are given in note no. 29 and 28 of the Notes forming part of the standalone financial statements of the company.

Quality certifications

Your company''s quality management system (QMS) has its foundation on decades of experience and industry best practices that are aligned with international standard quality models and certifications.

ISO 9001:2008 - Quality Management System

QMS enhancing customer satisfaction

Your company is certified for ISO 9001:2008 by BSI, India. Our products & solutions therefore ensure customer satisfaction.

ISO 27001:2013 - Information Security Management System

Information security management system enhancing Confidentiality, Availability and Integrity

The company is also certified for ISO 27001:2013 by Bureau VERITAS Certification, India. This assures that the company maintains confidentiality, integrity and availability of corporate and client information.

Risk Management

Although the company has long been following the principle of risk minimization as is the norm in every industry, it has now become a compulsion.

Therefore, in accordance with clause 49 of the listing agreement / SEBI Listing Regulations the Board members were informed about risk assessment and minimization procedures after which the Board formally adopted steps for framing, implementing and monitoring the risk management plan for the company.

A disciplined approach to risk is important in a diversified organization like ours in order to ensure that we are executing according to our strategic objectives and that we only accept risk for which we are adequately compensated. We evaluate risk at the individual transaction level, and evaluate aggregated risk at the customer, industry, geographic and collateral-type levels, where appropriate.

At the end of each year, management and the Board jointly develop a list of major risks that company plans to prioritize in the next year. Key areas of Risk Management for the year 2016-17 include Data Security and Privacy, Technology obsolescence, Service Delivery, retention and development of Human Resources, Business competition and continuity, Foreign exchange fluctuations &New compliances.

The main objective of Your Company''s risk management policy is to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the business. In order to achieve the key objective, the policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on risk related issues.

The risk governance structure is led by the Audit/Risk Compliance Committee, chaired by the Mr. Anil Kumar Sood. This committee is responsible for the effective management of the risks facing the Company. The Committee meets on a quarterly basis and reports to the Board. As a matter of policy, these risks are assessed and steps as appropriate are taken to mitigate the same.

Internal Control Systems and Their Adequacy

The company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit (IA) function is defined in the Internal Audit Charter. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit/Risk Compliance Committee of the Board.

The Internal Audit monitors and evaluates the efficacy and adequacy of 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 internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit/Risk Compliance Committee of the Board.

Vigil Mechanism / Whistle Blower Policy

In order to ensure that the activities of the company and its employees are conducted in a fair and transparent manner by adoption of highest standards of professionalism, honesty, integrity and ethical behaviour, the company has adopted a vigil mechanism policy. This policy is explained in corporate governance report and also posted on the website of the company.

Related Party Transactions

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

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

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

Enhancing Shareholder Value

Enhancing Shareholder Value is the common thread that runs through everything we do as a company... from innovating new products and broadening our existing portfolio, to successful restructuring efforts and improving our working capital. Throughout our history, delivering value to our shareholders has been and will continue to be uppermost in our minds as we manage our business. However, in the last few years, due to declining revenues and performance, the company has been unable to declare dividends. Your company is also committed to creating value for all its stakeholders by ensuring that its corporate actions positively impact the stock price and creation of Shareholder Value.

Corporate Social Responsibility

The provisions for corporate social responsibility ("CSR") under the Companies Act, 2013, are not applicable to the company for the current financial year. However, your company has been, over the years, pursuing as part of its corporate philosophy, an unwritten CSR policy voluntarily which goes much beyond mere philanthropic gestures and integrates interest, welfare and aspirations of the community with those of the company itself in an environment of partnership for inclusive development.

Corporate Governance

A report on Corporate Governance including the relevant Auditors'' Certificate regarding compliance with the conditions of Corporate Governance as stipulated in SEBI Listing Regulations is annexed. Management''s Discussion and Analysis is also annexed.

Particulars of Loans, Guarantees & Investments

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in note no. 23 and 13 of the Notes forming part of the standalone financial statements of the company.

Subsidiary Companies

The statement pursuant to Section 129 of the Companies Act, 2013 in respect of subsidiaries is attached as Annexure-1. The annual accounts of these subsidiaries and the related detailed information will be made available to any member of the company seeking such information at any point of time and are also available for inspection by any member of the company at the registered office of the company. The company shall furnish a copy of annual accounts of subsidiaries to any member on demand.

During the year the Company closed down the operations of Megasoft Consultants Pte Ltd, Singapore a wholly owned subsidiary as business operations were not viable. The necessary legal formalities under the provisions of Singapore Companies Act have been completed and the Business Registry and Facilitation Department of Accounting & Corporate Regulatory Authority (ACRA), Singapore had issued Certificate of Striking off the name of the Company from their records.

Further, the Company also closed down its Indian Subsidiary i.e., BCGI Wireless Private Limited, Hyderabad, India as business operations were not viable. Hence, the Company applied to the Registrar of Companies, Telangana& Andhra Pradesh, Government of India, Ministry of Corporate Affairs seeking striking off of the name of the Company from their records. Accordingly, a Certificate of Striking Off the same dated 15 October, 2015 has been received from the said Registrar of Companies.

Consolidated Financial Statements

The consolidated financial statements of the company prepared in accordance with the prescribed Accounting Standards form part of this Annual Report pursuant to the SEBI Listing Regulations.

Fixed Deposits

The company has not accepted any deposits from the public, and as such, there are no outstanding deposits in terms of the Companies (Acceptance of Deposits) Rules, 2014.

Particulars of Employees

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

Employee Stock Option Scheme

The company had two stock option plans viz Associates Stock Option Plan 2004 and Employees Stock Option Plan 2007 which provided for the granting of stock options to employees / directors of the company and its subsidiaries (not being promoter directors of the company). The said plans lapsed during the financial year under review in accordance with the terms of the shareholders'' resolutions dated 18.06.2004, 10.05.2005, 22.06.2006 and 08.06.2007.

Extract of Annual Return

The details forming part of the extract of the Annual Return in form MGT-9 has been given in the Annexure-2 appended hereto and forms part of this report.

Auditors'' Report

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

The qualification made by the Auditors in their Standalone & Consolidated Report following is the explanation as under:

Qualification : In respect of Bad debts written off amounting to '' 28,02,11,164/- these have not been debited to the statement of profit & loss and have been directly adjusted against the opening general reserves which in our opinion is not in accordance with "Accounting Standard No. 5, Net Profit or loss for the period, prior period items and changes in accounting policies." Accordingly the statement of profit & loss has been affected.

Explanation : The subject bad debts in question were pertaining to very old period and having no chances of recovery, have been adjusted directly against the profits generated in earlier years.

Auditors

Statutory Auditor

The company''s joint statutory auditors, M/s Srikanth & Shanthi Associates [Firm Registration No.004006S], Chartered Accountants and M/s TN Rajendran & Co. [Firm Registration No.005080S], Chartered Accountants, hold office as auditors of the company till the conclusion of the 17th Annual General Meeting to be held in the year 2017, subject to ratification at this ensuing AGM. Accordingly, pursuant to the proviso of section 139 of the Companies Act, 2013, the appointment of auditors is placed for ratification by the members at every annual general meeting.

Internal Auditor

Mr R Balasubramanian (FCA-220677), Chartered Accountants, perform the duties of internal auditors of the company and their report is reviewed by the audit committee from time to time.

Secretarial Auditor

Pursuant to the provisions of Sections 204 of the Companies Act, 2013 and the rules framed there under, the company has appointed M/s M Damodaran & Associates (CoP-5081 / FCS-5837), Practicing Company Secretaries, to undertake the Secretarial Audit of the company. The Secretarial Auditors'' Report, in the prescribed format, for the year ended 31 March 2016 is annexed to this Directors'' Report and forms part of the Annual Report (Annexure-3).

Human Resources Development

The Company has a vast reservoir of highly skilled and experienced work force. With a corporate philosophy that considers Employees as central to the organization, it''s natural for Megasoft to continually hone employee skills, enhance their knowledge and their expertise and their aspirations to fruition. Even as the Company goes about conducting its business activities, it lays emphasis on constant enhancement of knowledge and skills through regular training programmes.

To meet the technological challenges, employees are trained for technology up-gradation, modernization, computerization, etc in the Company. Your company fosters a culture of open communication that empowers employees to articulate their thoughts and feelings freely, exchange ideas and contribute to organizational growth. Regular HR connects session''s helps the company understand the pulse on the ground and take necessary steps to keep the workforce engaged and motivated.

A number of initiatives have been taken up that serve as effective platform for employees to connect and interact and share their goals and aspirations. Employees also receive feedback on technical, behavioural, other professional and personal areas on a regular basis.

Disclosure as required under Section 22 of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

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

Listing with Stock Exchanges

Your company''s equity shares are listed on BSE [532408] and NSE [MEGASOFT]. Necessary stock exchange regulations are complied with from time to time. Applicable listing fee for the year 2016-17 has already been paid to the respective stock exchanges.

Acknowledgements

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

For and on behalf of the Board of Directors

GV Kumar D Sudhakar Reddy

Managing Director Executive Director

Place : Hyderabad

Date : 28 May 2016

The Directors have pleasure to present their report of your company on the business and operations for the 15 months period ended 31 March 2015.

Financial results (Rs.lakhs)

Particulars Standalone

For the 15 months For the period ended year ended 31 March 2015 31 December 2013

Revenues 5,337.13 5,061.82

Total expenditure 4,775.76 4,293.17

Finance cost 316.45 541.61

Depreciation 304.08 276.92

Operating profit/(loss) (59.16) (49.88)

Profit before tax 11.53 311.30

Less: Taxes (50.02) 20.98

Profit after tax 61.55 290.32 Earnings per share (equity shares, par value Rs. 10 each)

Basic C) 0.14 0.66

Diluted f) 0.13 0.62

Particulars Consolidated For the 15 months For the period ended year ended 31 March 2015 31 December 2013

Revenues 10,072.85 10,550.75

Total Expenditure 7,596.87 8,297.53

Finance Cost 1,202.59 1,119.43

Depreciation 1,354.74 1,187.04

Operating profit/(loss) (81.35) (53.25)

Profit before tax 24.44 291.69

Less: Taxes (49.37) 23.94

Profit after tax 73.82 267.74

Earning per Share (equity shares,par value 10 each)

Basics() 0.17 0.60

Diluted() 0.16 0.57

Overview

During the financial period ended 31 March 2015 (15 months), your company recorded consolidated revenues of Rs. 10,072.85 lakhs as compared to Rs. 10,550.75 lakhs in the previous year. The consolidated profit was Rs. 73.82 lakhs as compared Rs. 267.74 lakhs in the previous year.

Change in financial year

In compliance with the provisions of the Companies Act, 2013, your company decided to change its financial year from "January- December" to "April-March". Accordingly, the last financial year of your company was extended up to 31 March 2015 covering a period of fifteen months commencing from 1 January 2014. Your company shall henceforth follow its financial year commencing from 1 April and ending on 31 March, every year.

Dividend

On account of inadequacy of profits during the financial year ended 31 March 2015, the Board of Directors of the company have not recommended dividend.

Share capital

The paid-up equity share capital as on 31 March 2015 was Rs. 4,426.73 lakhs comprising of 4,42,67,293 equity shares of Rs. 10 each. During the year under review, the company has not issued shares with differential voting rights nor granted stock options or sweat equity.

Material changes from end of financial year to date of this report

The company received the title and completed the registration formalities on 23 May 2015 for lands situated at Madhapur (0.75 acres) and Nanakramaguda, Hyderabad (acquired through amalgamation of Visual Soft Technologies Limited in 2006-2007) allotted by TSIIC (previously APIIC). Out of 15.61 acres originally allotted at Nanakramguda, Hyderabad, as per the directions of Government of Telangana, your company surrendered 7.29 acres and retained the balance land.

Directors and Key Managerial Personnel

Your company re-appointed Mr R Janardhana Reddy [DIN- 02544300], Mr Anil Kumar Sood [DIN-00086577] and Mr Anish

Mathew [DIN-02545538] as Independent Directors with effect from 26 December 2014 to hold such office for a term of five years through a postal ballot process under the Companies Act, 2013. The company has received declarations from all the independent directors of the company confirming that they meet with the criteria of independence as prescribed both under section 149 (6) and Schedule IV of the Companies Act, 2013 and clause 49 of the Listing Agreement with the stock exchanges. Mr SV Ramkumar [DIN-00460119], a Non-Executive Independent Director of your company resigned on 13 August 2014. The board of directors places on record their sincere appreciation for the contribution and valuable service rendered by Mr SV Ramkumar during his tenure.

Ms Leona Ambuja [DIN-07138817] was appointed as an Additional Director with effect from 31 March 2015 to fulfill the requirement of appointing a Woman Independent Director on the Board of your company and now it is proposed to appoint her for a period of five years at the ensuing Annual General Meeting. In accordance with the provisions of the Companies Act, 2013 and in terms of the Memorandum and Articles of Association of the company, Mr GV Kumar [DIN-00059107] and Mr D Sudhakar Reddy [DIN-00047707], directors of your company, retire by rotation and are eligible for reappointment. The KMP positions, CFO and Company Secretary, have fallen vacant by end of the current financial year and the company is in the process of filling these positions within the prescribed time limits under the applicable laws.

Board meetings

The Board of Directors met five (5) times during the financial year. The provisions of Companies Act, 2013 and listing agreement were adhered to while considering the time gap between two meetings.

Remuneration policy

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

Board evaluation

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its committees. The manner in which the evaluation has been carried out has been detailed out in the Corporate Governance Report.

Directors' responsibility statement

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

(i) in the preparation of the annual financial statements for the year ended 31 March 2015, the applicable accounting standards had been followed along with proper explanations relating to material departures;

(ii) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at the end of the financial year and of the profit and loss of the company for the year;

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

(iv) the directors had prepared the annual accounts on a "going concern basis";

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

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

Outlook

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

Energy conservation, technology absorption and foreign exchange earnings and outgo In terms of Section 134(3)(m) of the Companies Act, 2013 and the rules framed thereunder, your Directors furnish the required details below:

(a) Conservation of Energy: Your company uses electric energy for all its equipments such as air conditioners, computer terminals, lighting and utilities in the work premises. All possible measures have been taken to conserve energy:

- through periodic energy audits to identify potential areas for saving

- by incorporating energy-efficient equipment

- through automation i.e. using timers, automatic level controllers, etc.

(b) Research and Development (R&D): Your company being a technology products company, Research and Development is the single most important investment into securing the future of the company. Especially in the area of Mobile technologies, which requires constant innovation to be ahead of market and competition, research and development becomes a necessity. This is also reflected in your company Brand Tag Line "Innovate. Lead." During the past year we have spent around 30% of resources on building technologies in packet core, convergent billing, policy management, 4G capabilities, mobile banking and wallet products. Apart from building new products and components, past year significant time has been spent in enhancing the capabilities of existing products making them more feature rich, flexible to manage and at the same time robust to handle higher performance demands. This has enabled your company not only to launch newer products but also enhance existing products during the year. Your company believes this will culminate into enhanced customer satisfaction and revenue there by. In an effort to further develop exclusivity of the technologies company is actively seeking patent grants on some of these areas. Addition of a new patent in Mobile Service Platform area in April 2015 is an example of the same.

(c) Technology Absorption: As the communication protocols and technologies are evolving, your company is keeping up the speed with them and actively absorbing them into product line as well as infrastructure planning. During the year, your company has adapted newer technologies like 4G, NFV, SIP, Cloud and Diameter into its product line and enhanced the capabilities of the products to match the demands of the market. Further your company also made conscious attempt to build technologies on Inter-operation between 3G and 4G, Wifi to GSM and Wifi to LTE areas.

(d) Foreign Exchange Earnings and Outgo: The details of foreign exchange earnings and outgo are given in note no. 29 and 28 of the Notes forming part of the standalone financial statements of the company.

Quality certifications

The company's quality management system (QMS) has its foundation on decades of experience and industry best practices that are aligned with international standard quality models and certifications.

ISO 9001:2008 - Quality Management System

QMS enhancing customer satisfaction The company is certified for ISO 9001:2008 by bsi, India. Our products & solutions therefore ensure customer satisfaction.

ISO 27001:2005 - Information Security

Information security management system enhancing Confidentiality, Availability and Integrity

The company is also certified for ISO 27001:2005 by Bureau VERITAS Certification, India. This assures that the company maintains confidentiality, integrity and availability of corporate and client information.

Risk management

Although the company has long been following the principle of risk minimisation as is the norm in every industry, it has now become a compulsion.

Therefore, in accordance with clause 49 of the listing agreement the Board members were informed about risk assessment and minimisation procedures after which the Board formally adopted steps for framing, implementing and monitoring the risk management plan for the company.

The main objective of this policy is to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the business. In order to achieve the key objective, the policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on risk related issues.

In today's challenging and competitive environment, strategies for mitigating inherent risks in accomplishing the growth plans of the company are imperative. The common risks inter alia are: Regulations, competition, Business risk, Technology obsolescence, Investments, retention of talent and expansion of facilities.

Business risk, inter-alia, further includes financial risk, political risk, fidelity risk, legal risk.

As a matter of policy, these risks are assessed and steps as appropriate are taken to mitigate the same.

Internal control systems and their adequacy

The company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit (IA) function is defined in the Internal Audit Charter. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board.

The Internal Audit monitors and evaluates the efficacy and adequacy of 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 internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

Vigil mechanism / whistle blower policy

In order to ensure that the activities of the company and its employees are conducted in a fair and transparent manner by adoption of highest standards of professionalism, honesty, integrity and ethical behaviour, the company has adopted a vigil mechanism policy. This policy is explained in corporate governance report and also posted on the website of the company.

Related party transactions

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

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

The Board of Directors of the company has, on the recommendation of the Audit Committee, adopted a policy to regulate transactions between the company and its related parties, in compliance with the applicable provisions of the Companies Act, 2013, the Rules framed thereunder and the Listing Agreement. This Policy was considered and approved by the Board and has been uploaded on the website of the company.

Enhancing shareholder value

Your company believes that its shareholders are among its most important stakeholders. Accordingly, your company's operations are committed to achieving high levels of operating performance and cost competitiveness, consolidating and building for growth, enhancing the productive asset and resource base and nurturing overall corporate reputation. In the last few years, due to declining revenues and performance, the company had been unable to declare dividends and these issues have also impacted negatively on the share price of the company. However, your company is also committed to creating value for all its stakeholders by ensuring that its corporate actions positively impact the stock price and creation of Shareholder Value. In addition, your company is committed to keep in mind the socio- economic and environmental dimensions and contribute to sustainable growth and development.

Corporate social responsibility

The provisions for corporate social responsibility ("CSR") under the Companies Act, 2013, are not applicable to the company for the current financial year. However, your company has been, over the years, pursuing as part of its corporate philosophy, an unwritten CSR policy voluntarily which goes much beyond mere philanthropic gestures and integrates interest, welfare and aspirations of the community with those of the company itself in an environment of partnership for inclusive development.

Corporate governance

A report on Corporate Governance including the relevant Auditors' Certificate regarding compliance with the conditions of Corporate Governance as stipulated in Clause 49 of the listing agreement with the stock exchanges is annexed. Management's Discussion and Analysis is also annexed.

Particulars of loans, guarantees & investments

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in note no.24 and 13 of the Notes forming part of the standalone financial statements of the company.

Subsidiary companies

The statement pursuant to Section 129 of the Companies Act, 2013 in respect of subsidiaries is attached (Annexure-1). The consolidated financial statements duly audited are presented as part of this report in accordance with the prescribed accounting standards and the Listing Agreement with the Stock Exchanges, wherever applicable. The Ministry of Corporate Affairs has granted general exemption from attaching the Balance Sheet, State of Profit and Loss and other documents of the subsidiary companies with the Balance Sheet of the company. The Board of Directors of the company has by a resolution given consent for not attaching the Balance Sheet of the subsidiaries concerned. A statement containing brief financial details of the company's subsidiaries for the financial year ended 31 March 2015 is included in the Annual Report. The annual accounts of these subsidiaries and the related detailed information will be made available to any member of the company seeking such information at any point of time and are also available for inspection by any member of the company at the registered office of the company. The company shall furnish a copy of annual accounts of subsidiaries to any member on demand.

Consolidated financial statements

The consolidated financial statements of the company prepared in accordance with the prescribed Accounting Standards form part of this Annual Report.

Fixed deposits

The company has not accepted any deposits from the public, and as such, there are no outstanding deposits in terms of the Companies (Acceptance of Deposits) Rules, 2014.

Particulars of employees

There are no employees falling within the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 [corresponding provisions - section 134(3)(q) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014] as amended and applicable to your company.

Employee stock option scheme

As required by clause 12 of the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, the particulars of the stock option schemes are furnished as annexure to this report (Annexure-2).

Extract of annual return

The details forming part of the extract of the Annual Return in form MGT-9 has been given in the annexure appended hereto and forms part of this report (Annexure-3).

Auditors' Report

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

Auditors Statutory Auditor

The company's joint statutory auditors, M/s Srikanth & Shanthi Associates [Firm Registration No.004006S], Chartered Accountants and M/s TN Rajendran & Co. [Firm Registration No.005080S], Chartered Accountants, hold office as auditors of the company till the conclusion of the ensuing Annual General Meeting, and being eligible, offer themselves for reappointment. They have confirmed their eligibility in terms of Section 141 of the Companies Act, 2013 and the rules framed thereunder for reappointment as Auditors of the Company. The Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India as required under the provisions of revised Clause 49 of the Listing Agreement with the Stock Exchanges. Pursuant to the provisions of section 139 of the companies act, 2013, the auditors are proposed to be reappointed for a term of two years, subject to ratification by the members at every annual general meeting.

Internal Auditor

Mr R Balasubramanian (FCA-220677), Chartered Accountants, perform the duties of internal auditors of the company and their report is reviewed by the audit committee from time to time.

Secretarial Auditor

Pursuant to the provisions of Sections 204 of the Companies Act, 2013 and the rules framed thereunder, the company has appointed M/s M Damodaran & Associates (CoP-5081 / FCS-5837), Practicing Company Secretaries, to undertake the Secretarial Audit of the company. The Secretarial Auditors' Report, in the prescribed format, for the fifteen months period ended 31 March 2015 is annexed to this Directors' Report and forms part of the Annual Report (Annexure-4).

Human resources development

Your company recognises the importance of human resources and has created a performance driven environment where innovation is encouraged, performance is recognised and employees are motivated to realise their potential. Your company reinforced the best HR practices to attract, develop and retain talented employees. Your company has framed a strong, structured, and systematic recognition programs, which motivates the employees to excel.

Your company fosters a culture of open communication that empowers employees to articulate their thoughts and feelings freely, exchange ideas and contribute to organisational growth. Regular HR connect sessions helps the company understand the pulse on the ground and take necessary steps to keep the workforce engaged and motivated. A number of initiatives have been taken up that serve as effective platform for employees to connect and interact and share their goals and aspirations. Employees also receive feedback on technical, behavioral, other professional and personal areas on a regular basis.

Disclosure as required under section 22 of Sexual harassment of women at workplace (prevention, prohibition and redressal) Act, 2013 Your company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Internal Complaints Committee ("ICC") has been set up to redress the complaints received regarding sexual harassment. All employees are covered under this policy.

Listing with stock exchanges

Your company's equity shares are listed on BSE [532408] and NSE [MEGASOFT]. Necessary stock exchange regulations are complied with from time to time. Applicable listing fee for the year 2015-16 has already been paid to the respective stock exchanges.

During the year, your company's equity shares have been delisted from the Madras Stock Exchange (MSE) on a voluntarily basis in terms of regulations 6 and 7 of the SEBI (Delisting of Equity Shares) Regulations, 2009, and due to proposed closure of the regional stock exchanges.

Acknowledgements

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

Disclaimer

The Ministry of Corporate Affairs vide its Circular No. 08/2014 dated April 4, 2014 clarified that the financial statements and the documents required to be attached thereto, the Auditor's and Boards' Report in respect of the financial year under reference (financial year commencing on or before 1 April 2014) shall continue to be governed by the relevant provisions of the Companies Act, 1956, schedules and rules made thereunder. Accordingly, whilst the financial statements and the Auditor's Report as aforesaid are prepared as per the requirements of the Companies Act, 1956, the company, as per its commitment to transparency and good governance, has to the extent possible provided the information in the Board's Report and the Corporate Governance Report as per the Companies Act, 2013.

For and on behalf of the Board of Directors

GV Kumar D Sudhakar Reddy

Managing Director Executive Director

Place: Hyderabad

Date : 26 May 2015

The Directors are pleased to present their report on the business and operations of your company for the financial year ended 31 December 2012.

Financial Results (Rs. millions)

Standalone Consolidated 31st December 31st December 2012 2011 2012 2011

Revenues 462 501 1,154 1,504

Total expenditure 409 394 939 1,098

Finance cost 33 28 106 98

Depreciation 34 41 123 129

Operating profit / (loss) (14) 38 (14) 179

Profit before tax 16 61 16 181

Less: Taxes 4 6 4 6

Profit after tax 12 55 12 175

Earnings per share (equity shares, par value Rs. 10 each)

Basic (Rs.) 0.27 1.25 0.26 3.95

Diluted (Rs.) 0.26 1.22 0.25 3.87

Overview

During the financial year ended 31 December 2012, your company recorded consolidated revenues of Rs. 1,154 million as compared to Rs. 1,504 million in the previous financial year. The consolidated profit was Rs.12 million as compared to Rs. 175 million in 2011.

Dividend

Your Directors do not recommend any dividend on equity shares for the year under review.

Outlook

A detailed discussion on the performance of your company, industry structure, threats, opportunities, risks, future outlook and strategy is given separately in the Management Discussion and Analysis (MDA) section, which forms a part of this annual report.

Subsidiary Companies

Pursuant to the provisions of Section 212(8) of the Companies Act, 1956, the Ministry of Corporate Affairs vide its circular dated 8 February 2011 has granted general exemption from attaching the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies with the Balance Sheet of the company, provided such companies publish the audited consolidated financial statements in the annual report. Accordingly, a statement containing brief financial details of your company''s subsidiaries for the financial year ended 31 December 2012 is included in the annual report. The annual accounts of these subsidiaries and the related detailed information will be made available to any member of the company / its subsidiaries seeking such information at any point of time and are also available for inspection by any member of the company / its subsidiaries at the registered office of your company. The annual accounts of the said subsidiaries will also be available for inspection, as above, at the head office / registered office of the respective subsidiary companies. Your company shall furnish a copy of the annual accounts of subsidiaries to any member on demand.

Corporate Governance

In accordance with Clause 49 of the Listing Agreement with the stock exchanges, a separate report on Corporate Governance and Management Discussion & Analysis together with a certificate from your company''s auditors are provided as part of this annual report.

Disclosure as per the Companies (disclosure of particulars in the Report of Board of Directors) Rules, 1988

In terms of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, your Directors furnish the required details below:

(a) Conservation of Energy

The nature of your company''s operations is not energy intensive. Your company believes that it forms part of the duty to save energy and also install necessary apparatus which will help conserve energy. Your company''s computer terminals, air conditioning systems, lighting and utilities are modern technology-enabled to facilitate the optimal use of energy and power.

(b) Research and Development (R&D)

Your company is actively engaged in the research and development of software. Your company''s management team performs an end-to-end function by acting as the sounding board and mentors for the R&D team to develop their ideas to facilitate market launch. The teams will develop a unique approach and strengthen our positioning through tools, frameworks and methodologies to provide value-added services to clients.

(c) Technology Absorption

Your company believes that in addition to progressive thought, it is imperative to invest in research and development to ascertain future exposure and prepare for challenges. In its Endeavour to obtain and deliver the best, your company entered into alliances with major global players in the industry to harness and tap the latest and the best of technology in its field, upgrade itself in line with latest technology globally and deploy / absorb technology wherever feasible, relevant and appropriate. Your company also attached tremendous importance to indigenous development and technology up gradation through its extensive Research and Development operations. The benefits derived from these processes are phenomenal and improved the quality of your company''s world-class services.

(d) Foreign Exchange Earnings and Outgo

The details of foreign exchange earnings and outgo are given in note no. 28 & 27 - Notes to financial statements, forming part of the Balance Sheet and Profit & Loss Account of your company.

Particulars of Employees

There are no employees falling within the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended.

Fixed Deposits

Your company has not accepted any fixed deposits and as such no amount of principal or interest was outstanding as on the date of the Balance Sheet.

Explanation to qualification by Auditors in their Report

The auditors of your company have mentioned about the delays in remittances of statutory dues in their annexure to the auditors report at clause 9(a). Your company faced cash flow constraints during the year due to loss of one of the major customers in the last quarter of 2011. This resulted in delayed statutory payments. However, your company has remitted all the statutory payments due as on year end and does not have any pending dues on this account. To improve the cash flows, your company initiated and implemented several economic measures to reduce the gap.

Directors

Mr Anil Kumar Sood and Mr D Sudhakar Reddy, directors of your company, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment.

Mr S Ravindra Babu and Mr P Mukunda Reddy resigned during the year. Your Board of Directors place on record their appreciation for the services rendered by them during their tenure as directors of your company.

Human Resources Development

Your company recognises the importance of human resources as it represents the backbone of corporate success. Your company believes in nurturing human resources. Its focus is to enhance employee professional value and create a win-win for both. Your company reinforced the best HR practices to recruit and retain talented employees. Your company is confident of reaping the best from its talent pool and sharing benefits with employees on an equitable basis.

Auditors

The joint statutory auditors, M/s Srikanth & Shanthi Associates and M/s TN Rajendran & Co., Chartered Accountants, retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office, if re-appointed.

Directors Responsibility Statement

As required under Section 217(2AA) of the Companies Act, 1956, it is hereby stated that:

(i) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanations relating to material departures;

(ii) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at the end of the financial year and of the profit of the company for the year;

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

(iv) the directors had prepared the annual accounts on a "going concern basis".

Employee Stock Option Schemes

As required by Clause 12 of the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, the particulars of the stock option schemes are furnished as annexure to this report.

Acknowledgements

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

For and on behalf of the Board of Directors

Hyderabad G V Kumar D Sudhakar Reddy

23 February 2013 Managing Director Executive Director

The Directors are pleased to present their report on the business and operations of your company for the financial year ended 31 December 2010.

Financial Results

Rs. million

Standalone Consolidated

for the year ended 31 December 2010 2009 2010 2009

Revenues 624 887 1679 3030

Total Expenditure 383 460 1145 2644

Finance Cost 70 134 151 228

Depreciation 57 143 143 243

Operating Profit / (Loss) 114 150 240 (85)

Profit / (Loss) before tax 50 (5) 214 (250)

Less: Taxes (3) (29) (3) (29)

Profit / (Loss) after tax 53 24 217 (221) Earnings per share (equity shares, par value Rs. 10 each)

Basic (Rs.) 1.20 0.55 4.90 (4.99)

Diluted (Rs.) 1.20 0.54 4.90 (4.89)

Overview

During the financial year ended 31 December 2010, even as your company recorded consolidated revenues of Rs. 1679 million compared to Rs. 3030 million in the previous financial year, net profit was Rs. 217 million compared to a net loss of Rs. 221 million in 2009. The turnaround was achieved partly through the sale of a business, enhanced focus on core business areas and a decline in interest outflow.

Dividend

Your Directors do not consider it prudent to recommend any dividend on equity shares for the year under review. Conservation of cash at this juncture and corresponding reinvestment in the companys business will translate into stronger returns over the foreseeable future.

Outlook

A detailed discussion on the performance of the company, industry structure, threats, opportunities, risks, future outlook and strategy has been provided separately in the Management Discussion and Analysis (MDA) section, which forms a part of this Annual Report.

Disposal Of Property at Hyderabad

Your company felt that the surest way of enhancing corporate value would be from exiting unsynergic assets and the proceeds from this invested either in the companys core business or debt liquidation. In this regard, the company obtained the consent of shareholders through a postal ballot process for the sale of the land and building (including furnishings & fittings) at Hyderabad and land at Vishakhapatnam. The result of this ballot was announced on 15 October 2010. In line with this consent, the company sold / disposed the Hyderabad property. As the said property was acquired through the amalgamation of VisualSoft the company, set the loss off to the amalgamation reserve (grouped under general reserve) created in terms of the scheme of amalgamation.

Subsidiary Companies

In accordance with the provisions laid down in Section 212 of the Companies Act, 1956, your company is required to attach the Directors Report, Balance Sheet and Profit and Loss Account of the subsidiary companies to its Balance Sheet. As per the requirements under Section 212(8) of the Companies Act, 1956, your company made necessary application to the Central Government, which was conferred the power to grant exemption from this requirement. In this regard, your company received approval from the Government of India, Ministry of Corporate Affairs, vide their letter no.47/715/ 2010-CL-III dated 9 December 2010, granting exemption from attaching the audited accounts of the subsidiary companies to the Annual Report for the financial year ended 31 December 2010. A statement, as directed by the Ministry, furnishing particulars of the subsidiary companies, forms part of this Annual report. Audited accounts of all the subsidiary companies are available at the registered office of the company for inspection by the members. The company will make these documents available upon request by any member of the company.

Corporate Governance

In accordance with clause 49 of the Listing Agreement with the Stock Exchanges, a separate report on Corporate Governance and Managements Discussion & Analysis, together with a certificate from the companys Auditors, are provided as a part of this Annual Report.

Disclosure as per the companies (Disclosure of particulars in the report of board of directors) Rules, 1988

In terms of Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, your Directors furnish the required details below:

(a) Conservation of Energy:

The nature of your companys operations is not energy-intensive. Your company considers its duty to conserve energy through relevant and modern asset investments like computer terminals, air conditioning systems, lighting and utilities to optimize energy use.

(b) Research and Development (R&D):

Your company is actively engaged in software research and development. The companys management team mentors R&D activity leading to market launch. The R&D team focuses on unique approaches that strengthen positioning with a blend of tools, frameworks and methodologies leading to value-added services.

(c) Technology absorption:

Your company believes that in addition to strategy, it is imperative to invest in business- strengthening research and development. In this regard, your company entered into alliances / tie-ups with major global players to access or deploy cutting-edge technologies wherever appropriate. Your company also invested in captive technology development through its extensive Research and Development, strengthening service quality.

(d) Foreign Exchange Earnings and Outgo:

The details of foreign exchange earnings (Rs. 623 million) and outgo (Rs. 79 million) are given in note no.10 & 9 of Schedule 17 - Notes to Accounts, forming a part of the Balance Sheet and Profit & Loss Account of your company.

Particulars of Employees

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are set out in the annexure to the Directors Report. Having regard to the provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the company.

Fixed Deposits

Your company has not accepted any fixed deposits and as such no amount of principal or interest was outstanding as on the date of the Balance Sheet.

Explanation to observation by auditors in their report

In respect of the auditors observation on delays in repayment of dues to a bank in their annexure to the auditors report at clause 11, your directors wish to state that, the companys cash flow constraints during the year resulted in delayed repayments to the bank. However, the company has no overdue as of date. Directors

Mr S Ravindra Babu and Mr Anil Kumar Sood, Directors of the company, retire by rotation at the ensuing Annual General Meeting and, being eligible, offer themselves for re-appointment.

Mr G V Kumar is being reappointed as the Managing Director for a further period of five years with effect from 1 April 2011, subject to the approval of the members at the ensuing Annual General Meeting.

Mr D Sudhakar Reddy is being reappointed as an Executive Director for a further period of five years with effect from 1 April 2011, subject to the approval of the members at the ensuing Annual General Meeting.

Human Resources Development

Your company recognised the importance of human resources as a catalyst of success. Your company reinforced HR practices to recruit and retain talent leading to organisational value.

Auditors

The joint statutory auditors, M/s Srikanth & Shanthi Associates and M/s TN Rajendran & Co., Chartered Accountants, retire at the ensuing Annual General Meeting and confirmed their eligibility and willingness to accept office, if re- appointed.

Directors responsibility statement

As required under Section 217(2AA) of the Companies Act, 1956, it is hereby stated that:

(i) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanations relating to material departures;

(ii) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at the end of the financial year and of the profit of the company for the year;

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

(iv) the directors had prepared the annual accounts on a "going concern basis".

Employee Stock Option Schemes

As required by clause 12 of the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, the particulars of the stock options schemes are furnished as annexure to this report.

Acknowledgements

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

For and on behalf of the Board of Directors

Hyderabad GV Kumar S Ravindra Babu

28 February 2011 Managing Director Chairman

The Directors are pleased to present their report on the business and operations of your company for the financial year ended 31 December 2009.

Financial Results

Rs million Standalone Consolidated For the year ended 31 December 2009 2008 2009 2008

Revenues 887 1238 3030 3262

Total Expenditure 460 1108 2644 2772

Finance Cost 134 84 228 219

Depreciation 143 164 243 260

Operating Profit / (Loss) 150 (118) (85) 11

Profit / (Loss) before tax (5) 178 (250) 368

Less: Taxes (29) 42 (29) 42

Profit / (Loss) after tax 24 136 (221) 326 Earnings per share (equity shares, par value Rs 10 each)

Basic (Rs) 0.55 3.08 (4.99) 7.36

Diluted (Rs) 0.54 3.10 (4.89) 7.33

Overview

During the financial year ended 31 December 2009, your company recorded consolidated revenues of Rs 3030 million compared to Rs 3262 million in the previous financial year. The Profit / (Loss) before tax at (Rs 250) million was lower compared with Rs 368 million in 2008.

Dividend

Your Directors do not recommend any dividend on equity shares for the year under review as the companys consolidated financials resulted in a loss.

FCCB

Your company issued 8,000 1.5% Foreign Currency Convertible Bonds ("FCCB") of US$ 1,000 each on a preferential basis on 16 September 2005 in terms of the approval of the shareholders of the Company at the Extra-ordinary General Meeting held on 26 August 2005 aggregating US$ 8 million. Following the conversion of FCCBs aggregating US$ 6 million into equity shares during earlier year, the balance FCCB aggregating US$ 2 million payable to the FCCB holders on redemption was negotiated and settled during the year.

Divestment of IT Services (BlueAlly) division

The Board of Directors of your company at its meeting on 19 August 2009 approved the divestment of the companys IT Services Division to an overseas company and in this regard the approval of the shareholders was sought and obtained through a postal ballot process. Your company disposed the IT Services division with effect from 1 October 2009 following the approval of shareholders.

Subsequent to the divestment of the IT Services division, the Board of Directors at a meeting held on 24 October 2009 approved the creation of a Business Reconstruction Reserve Account of Rs 1250 Million by appropriating Rs 450 million from the Securities Premium Account and Rs 800 million from General Reserve. The creation of the reserve account was to provide for diminution in the value of investments, impairment in the value of assets (including goodwill) and offsetting a loss from the sale of investments.

The Scheme of Arrangement was approved by the equity shareholders of the company at the Extraordinary General Meeting (Court Convened) of the company held on 4 January 2010. Pursuant to the petition filed by the company, the High Court of Judicature at Madras sanctioned the Scheme on 30 March 2010. The Appointed Date under the Scheme was 31 December 2008 and became effective on the date of filing the Court Order with the Registrar of Companies, Tamilnadu on 30 March 2010. The scheme has been duly given effect to in the accounts and the Board of Directors of the Company at its meeting held on 31 March 2010 has approved the utilization of the reserve to the extent of Rs 1246 Million for the year ended 31 December 2009.

Outlook

A detailed discussion on the performance of the company, industry structure, threats, opportunities, risks, future outlook and strategy has been given separately in the Management Discussion and Analysis (MDA) section, which forms a part of this Annual Report.

Subsidiary Companies

In accordance with the provisions laid down in Section 212 of the Companies Act, 1956 your company is required to attach the Directors Report, Balance Sheet and Profit and Loss Account of the subsidiary companies to its Balance Sheet. As per the requirements under Section 212(8) of the Companies Act, 1956, your company had made the necessary application to the Central Government which has been conferred with the power to grant exemption from the aforesaid requirement. In this regard, your company has received an approval from the Government of India, Ministry of Corporate Affairs, vide their letter no.47/722/2009-CL- III dated 7 January 2010 granting an exemption from attaching the audited accounts of the subsidiary companies to this Annual Report for the financial year ended 31 December 2009. A statement, as directed by the Ministry, furnishing particulars of the subsidiary companies, forms part of this Annual report. Audited Accounts of all the subsidiary companies are available at the registered office of the company for inspection by members. The company will make available these documents upon request by any member of the company.

Corporate Governance

In accordance with clause 49 of the Listing Agreement with the Stock Exchanges, a separate report on Corporate Governance and Management Discussion & Analysis together with a certificate from the companys Auditors are provided as part of this Annual Report.

Disclosure as per the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988

In terms of Section 217(l)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, your Directors furnish the required details below:

(a) Conservation of Energy: The nature of your companys operations requires a very low level of energy consumption.

(b) Research and Development (R&D): Your company is actively engaged in the research and development of Software.

(c) Technology Absorption: Your company has not imported any technology during the year.

(d) Foreign Exchange Earnings and Outgo: The details of foreign exchange earnings and outgo are given in note no.11 & 10 of Schedule 17 - Notes to Accounts, forming part of the Balance Sheet and Profit & Loss Account of your company.

Particulars of Employees

We present the abridged accounts under Section 219 of the Companies Act, 1956. Pursuant to the Rules and Forms read with Section 219 of the Companies Act, 1956, the particulars of employees as required by Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employee) Rules, 1975) have not been provided in this report. These details are set out in the Annexure to the Directors Report, forming part of the complete version of Annual Report and are available for inspection at the Registered Office of the Company and upon written request from a shareholder, we will arrange to mail these details.

Fixed Deposits

Your company has not accepted any fixed deposits and as such no amount of principal or interest was outstanding as on the date of the Balance Sheet.

Explanation to observation by auditors in their report

In respect of the auditors observation on delays in repayment of dues to a bank in their annexure to the auditors report at clause

11, your directors wish to state that, during the year your company faced cash flow constraints due to the adverse global economic scenario which resulted in delayed payments to the bank. However, the company has no overdue as on the date of this report.

Directors

Mr D Sudhakar Reddy and Mr P Mukunda Reddy, directors of the company, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

Human Resources Development

Your company recognises the importance of human resources as it represents the backbone of corporate success. Your company believes in nurturing human resources. Its focus is to enhance employee professional value and create a win-win for both. Your company reinforced the best HR practices to recruit and retain talented employees. Your company is confident of reaping the best from its talent pool and sharing benefits with employees on an equitable basis.

Auditors

The joint statutory auditors, M/s Srikanth & Shanthi Associates and M/s TN Rajendran & Co., Chartered Accountants, retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office, if re-appointed.

Directors responsibility statement

As required under Section 217(2AA) of the Companies Act, 1956, it is hereby stated that:

(i) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanations relating to material departures;

(ii) the directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at the end of the financial year and of the profit of the company for the year;

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

(iv) the Directors had prepared the annual accounts on a "going concern basis".

Employee Stock Option Schemes

As required by clause 12 of the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, the particulars of the stock options schemes are furnished as annexure to this report.

Acknowledgements

Your directors take this opportunity to thank investors, customers, vendors, banks, regulatory and Government authorities for their sustained support. Your Directors also wish to place on record their appreciation of the contribution made by employees at ail levels.

For and on behalf of the Board of Directors

Chennai GV Kumar S Ravindra Babu

31 March 2010 Managing Director Chairman