Your Directors are pleased to present the Board’s Report along with the Audited Financial Statements of the Company for the
financial year ended March 31, 2025.

1. FINANCIAL PERFORMANCE

The Audited Financial Statements of your Company as on March 31, 2025, are prepared in accordance with the
relevant applicable Accounting Standards (“AS”) and Regulation 33 of the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”) and the provisions of the
Companies Act, 2013 (“Act”).

The financial performance of the Company based on Audited Financial Statements for the financial year 2024-25 is
summarized below:

(Rs. in Lakhs)

• Achieved a growth of 27% in operation performance.

• Earnings After Tax (EAT) and Earnings Per Share (EPS) recorded a significant increase of 140%.

2. OPERATIONAL HIGHLIGHTS AND STATE OF COMPANY’S AFFAIRS

During the financial year 2024-25, the Company recorded a significant increase in its Standalone Operational Revenue,
which stood at Rs. 10764.38 Lakhs, as compared to Rs. 8448.25 Lakhs in the previous financial year. This growth
reflects the strong operational performance and effective execution of strategic initiatives and reflecting notable growth of
27%.

The Standalone Profit after Tax for the reporting year also demonstrated substantial improvement, rising to Rs. 942.08
Lakhs from Rs. 391.95 Lakhs in the previous year, indicating enhanced operational efficiency and profitability and
reflecting notable growth of 140%. There were no operations from its subsidiary company.

3. DIVIDEND

The Board of Directors, at its meeting held on August 12, 2025, has recommended a Final Dividend of 10% i.e. '1/-
(Rupee One only) per equity share of face value '10/- (Rupees Ten only) each, for the financial year ended on March 31,
2025, out of reserves.

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

The provisions of Regulation 43A of SEBI (LODR) Regulations, 2015 regarding formulation of a Dividend Distribution
Policy are not applicable to the Company, as it is not among the top 1,000 listed entities by market capitalisation as on
March 31, 2025.

4. TRANSFER TO RESERVES

Your Company has not transferred any amount to General Reserve under the head Reserves & Surplus for the financial
year ended on March 31, 2025.

5. LISTING OF EQUITY SHARES

As on date of this report, 1,25,11,875 Equity Shares of Rs.10/- each of the Company are listed on the BSE Limited
(BSE) - Scrip Code : 533982 and National Stock Exchange of India Ltd (NSE)- Scrip Symbol : TERASOFT. The Annual
listing fees of both the stock exchanges have been paid.

6. CHANGE IN NATURE OF BUSINESS

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

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

There have been no material changes and commitments which have occurred between the end of the financial year to
which the financial statements relate and the date of this Report, affecting the financial position of the company. Hence
no further disclosures are made pursuant to Section 134(3)(l) of the Companies Act, 2013.

8. SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES

During the year under review, M/s TS Innovations Private Limited continued to be a subsidiary of Tera Software Limited,
in which the Company holds 74% of the equity shares. The remaining 26% equity shares are proposed to be acquired by
the Company, and the necessary actions in this regard are currently in process.

Statement containing salient features of financial statements of said Associate Company in terms of provisions of Section
129(3) of the Companies Act, 2013 in the prescribed Form AOC-1 is annexed to the Board Report as Annexure - A.

9. CONSOLIDATED FINANCIAL STATEMENTS

Your Directors have pleasure in attaching the Audited Consolidated Financial Statements for the year under review
pursuant to Companies Act, 2013 read with SEBI (LODR) Regulations. The Consolidated Financial Statements presented
by your Company have been prepared as per Accounting Standards. The Financial statements of the Company have been
consolidated with the Financial Statements of its Subsidiary Company i.e. M/s TS Innovations Private Limited.

10. CORPORATE GOVERNANCE REPORT

Pursuant to Regulation 34 read with Schedule V of the SEBI Listing Regulations, a report on Corporate Governance
is annexed as “Annexure - B” and forms part of the annual report.

11. DIRECTORS AND KEY MANAGEMENT PERSONNEL AND RELEVANT DISCLOSURES

• Composition of Board:

As on March 31, 2025, your Board consists of 6 Directors comprising of (i) Two Executive Directors, (ii) One Non¬
Executive Director and (iii) Three Independent Directors. The Board of the Company is compliant with provisions
of Companies Act 2013 and SEBI (LODR) Regulations 2015.

• Appointment and Superannuation of Directors during the year:

Details of Appointment, Superannuation of Directors and/ or Key Managerial personnel of the Company during
the year under review, are as under:

• Key Managerial Personnel (KMP)

Details of Key Managerial Personnel of the Company:

• Declaration by Independent Directors:

The Company has received declaration from the Independent Directors confirming that they meet the criteria
of independence as prescribed under the Companies Act 2013 and SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 (“the Listing Regulations”). The terms of appointment of Independent Directors
are in compliance with the Code of Conduct prescribed under Schedule IV of the Act and the Code of Business
Conduct adopted by the Company. (Policy link: https://terasoftware.com/terms-and-conditions-of-appointment-
of -independent-directors)

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

Pursuant to the recommendation of the Nomination and Remuneration Committee (NRC) in accordance with the
provisions of Section 178 of the Companies Act, 2013 and Regulation 19 of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 (“SEBI LODR”), the Board, at its meeting held on August 12, 2025,
considered and approved the following proposals:

• Mr. T. Madhu Mitra (DIN: 07124242), Whole-time Director, who is liable to retire by rotation in terms of Section
152(6) of the Companies Act, 2013, is eligible for re-appointment.

• The first term of five years of Mr. Divakar Atluri, Independent Director, will conclude on February 11, 2026. In
accordance with Sections 149(10) and 149(11) of the Companies Act, 2013, read with Regulation 25(2A) of
the SEBI (LODR) Regulations, he is eligible for re-appointment for a second term as an Independent Director.
However, he has expressed his unwillingness to be re-appointed and has informed the Company that he is unable
to continue due to his pre-occupations.

• The current term of Mr. T. Gopichand (DIN: 00107886), Chairman and Managing Director, will conclude on
August 31, 2026. In accordance with Sections 196, 197 and 203 of the Companies Act, 2013 read with
Schedule V thereto and Regulation 17(6)(e) of the SEBI LODR, he is eligible for re-appointment for a further term.

The Notice convening the Annual General Meeting forms part of this Annual Report and includes the above proposals for
the appointment / re-appointment of Directors, along with the required disclosures pursuant to Secretarial Standard-2 on
General Meetings and Regulation 36 of the SEBI LODR.

12. BOARD AND COMMITTEE COMPOSITION AND THEIR MEETINGS

• Board Meeting and Composition:

The Board of Directors held Four (04) meetings during the financial year 2024-25 in compliance with the
provisions of the Companies Act, 2013 and rules made thereunder. The prescribed quorum was present during all
the meetings and Directors of the Company actively participated in the meetings and contributed valuable inputs
on all the agenda items of the Board Meeting.

The details of Board Meeting and records of presence during the meeting are as under:

i) May 27, 2024, ii) August 03, 2024, iii) November 07, 2024 and iv) February 11, 2025

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

• Meeting of Independent Directors:

During the year under review, three Independent Directors duly met on February 11, 2025 and reviewed the
performance of Non-Independent Directors and the Board as a whole taking into account the views of the other
Directors.

13. COMMITTEES OF BOARD

The Company has formed following Committees of the Board in compliance with provisions of Companies Act 2013 and
SEBI (LODR) Regulations 2015. In order to adhere to the best corporate governance practices, to effectively discharge its
functions and responsibilities and in compliance with the requirements of applicable laws:

i) Audit Committee, ii) Debtors Review Committee (a sub-committee of Audit committee), iii) Nomination and Remuneration
Committee, iv) Stakeholders Relationship Committee, iv) Corporate Social Responsibility Committee, v) Borrowing
Committee and vi) Management Committee.

The details of the Committees and its Meeting are provided in Corporate Governance Report in Annexure-B

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

Pursuant to provisions of Section 178 read with 134(3)(e) of Companies Act 2013, The Nomination and Remuneration
Committee (NRC) has approved the criteria and process for identification/ appointment of Directors.

The NRC has formulated a policy on Director’s appointment and remuneration including recommendation of remuneration
of the key managerial personnel and senior management personnel and the criteria for determining qualifications, positive
attributes and independence of a Director. There has been no change in the said Policy during the year under review.

15. EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

The evaluation of the Board, its Committees and Individual Directors was carried out as per the process and criteria laid
down by the Board of Directors. The proforma formats for facilitating the evaluation process of the Non-Independent
Directors and the Board as a whole and the Committees were sent to the respective Directors. Based on the response
received from the respective Directors, brief presentation was placed before the Board containing the outcome of their
evaluation.

Based on the feedback, the Board expressed satisfaction on overall functioning of the Board, the Committees and
performance of the Directors.

16. MANAGEMENT DISCUSSION AND ANALYSIS

As stipulated under Regulation 34(2)(e) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, the Management Discussion and Analysis Report is annexed herewith as Annexure - C and

forms an integral part of this Annual Report.

The report provides an overview of the industry structure, developments, opportunities and threats, operational and
financial performance, internal control systems, and other material developments during the year under review.

17. CORPORATE SOCIAL RESPONSIBILITY

In accordance with the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate
Social Responsibility Policy) Rules, 2014 (as amended), your Company has constituted a CSR Committee to oversee the
implementation of its CSR initiatives.

The details of the Committees and its Meeting are provided in Corporate Governance Report in Annexure-B

Your Company has a longstanding commitment to social responsibility and has undertaken several philanthropic and
community development initiatives.

The CSR Policy of the Company, as recommended by the CSR Committee and approved by the Board of Directors, is
available on the Company’s website at: https://terasoftware.com/investors/corporate-social-responsibility-policy

A brief outline of the CSR Policy and the Annual Report on CSR Activities undertaken during the financial year,
as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 (as amended), is provided in
Annexure - D to this Report.

18. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has in place adequate internal financial controls with reference to financial statements. The Board has
inter alia reviewed the adequacy and effectiveness of the Company’s internal financial controls relating to its financial
statements. During the year, no reportable material weakness was observed.

19. ANNUAL RETURN

In compliance with the provisions of Section 92(3) read with Section 134(3)(a) of the Act, the draft annual return as
on the March 31, 2025 is uploaded on the website of the company and is available at https:// terasoftware.com/
annual-return.

20. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirement Clause (c) of Sub Section (3) of Section 134 of the Companies Act, 2013 with respect to
Director’s Responsibility Statement, it is hereby confirmed that-

a) In the preparation of the annual accounts for the year ended on March 31, 2025 the applicable accounting
standards had been followed along with proper explanation relating to material departures, if any.

b) 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 on March 31, 2025 and of the profit of the company for that period.

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

d) The directors had prepared the accounts for the year ended on March 31, 2025 on a “going concern” basis.

e) the Directors have laid down internal financial controls to be followed by the Company and that such internal
financial controls are adequate and are operating effectively; and

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

21. AUDITORS

(A) Statutory Auditors:

M/s Narven Associates, Chartered Accountants were the statutory auditors of the Company for the FY 2024-25.
They have appointed for a term of five years i.e. to hold office from the conclusion of 28th AGM held on 24-09¬
2022 till the conclusion of 33rd AGM of the Company to be held in the year 2027.

Board’s Comment on the Statutory Auditor’s Report:

The statutory Auditors’ Report forms part of the Annual Report for the FY 2024-25. The report is self-explanatory.
The report does not contain any qualification, reservation or adverse remark.

(B) Cost Auditor:

The provisions of Section 148, read with Companies (Cost Record and Audit) Rules, 2014, are not applicable to
the Company.

(C) Secretarial Auditor:

Pursuant to Section 204 of the Act read with the Rules thereof, the Board of Directors have appointed M/s C.V.
Reddy K & Associates, the Practicing Company Secretaries, Peer Reviewed Firm, Hyderabad for conducting a
secretarial audit of secretarial records of the company for the financial year 2024-25. The Secretarial Audit
Report for F.Y.2024-25 along with Annual Secretarial Compliance Report is annexed herewith as Annexure
- E. Their term is completed with the FY 2024-25.

Board’s Comment on the Secretarial Audit Report:

There are no adverse observations in the secretarial Audit Report for the F.Y. 2024 25 and hence does not call for
any explanation.

Pursuant to the provisions of the amended Listing Regulations, the Board of Directors of the Company (“the Board”)
at their meeting held on May 16, 2025, considering the experience and expertise and on the recommendation of
the Audit Committee, has recommended for the approval of the Members of the Company, appointment of M/s.
RPR & Associates, Hyderabad, as the Secretarial Auditor of the Company, for a period of Five (5) consecutive
years from commencing from Financial Year 2025-26 till Financial Year 2029-30.

(D) Internal Auditor:

Pursuant to Section 138(1) of the Companies Act, 2013 the company appointed M/s. Darapaneni & Co., a
firm of practicing chartered accountants as the Internal Auditors to conduct an internal audit of the functions
and activities of the company for FY 2024 -25. The Internal Auditor observations and corrective measures were
presented to the Board during their meeting.

22. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The information required under Section 197(12) of the Act read with Rule 5(1), 5(2) and 5(3) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, is attached as Annexure - F

23. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY THE COMPANY

The Company has complied with the provisions of section 185 and 186 of the Companies Act, 2013 to the extent
applicable for providing Loans or Guarantee or for making an investment.

24. DISCLOSURE OF INFORMATION REGARDING RELATED PARTY TRANSACTION UNDER SECTION 188
OF COMPANIES ACT, 2013

All Contracts/transactions entered by the Company during the financial year with related parties were in its ordinary
course of business and on an arm’s length basis.

During the year, the company had not entered into Contract/ Transaction with Related parties which could be considered
as material Related Party Transaction pursuant to the Regulation 23 of SEBI (LODR) Regulations 2015 as amended from
time to time. The details of material related party transaction are reported in the prescribed Form AOC-2 under the
Annexure - G.

25. COMPLIANCE WITH SECRETARIAL STANDARD

The Company has Complied with the applicable Secretarial Standards on meetings of the Board of Directors and Meeting
of the shareholders, issued by The Institute of Company Secretaries of India and approved by Central Government under
section 118(10) of the Companies Act, 2013 and the Board of Directors confirms the compliance of the applicable
Secretarial Standards.

26. CONSERVATION OF ENERGY, ABSORPTION OF TECHNOLOGY AND FOREIGN EXCHANGE

The Company is not engaged in manufacturing of goods and hence Company does not conserve energy. Company has
neither adopted any Technology nor has spent amount for adoption of Technology during the year. There is no amount
of Foreign Exchange inflow or outflow during the year and hence no disclosures have been made in this regard.

27. RISK MANAGEMENT

The provisions related to the Risk Management Committee as stated in SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 are not applicable to the Company. The Audit Committee oversight the framework to
identify, evaluate, mitigate and monitor the risk management, financial risk and controls in the Company.

The Board of Directors monitor the above mentioned or any other unforeseen / unexpected risks and ensure the smooth
and clinical implementation of mitigation measures as are in the best interest of the company under the circumstances.

28. VIGIL MECHANISM

As required under Companies Act and SEBI (LODR) Regulations, the Company has put in place Vigil Mechanism /
Whistle Blower Policy for Directors and Employees so that the Directors and employees can report concerns about
unethical behaviour, actual or suspected fraud or violation of the Company’s Code of Conduct Policy and SEBI Insider
Trading Regulations. Whistle Blower Policy is disclosed on the website: https://terasoftware.com/uploads/VIGIL-
BLOWER-POLICY.pdf

29. CODE FOR PREVENTION OF INSIDER TRADING

Your Company has adopted a Code of Conduct (“PIT Code”) to regulate, monitor and report trading in your Company’s
shares by Company’s designated persons and their immediate relatives as per the requirements under the Securities
and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015. The Code, inter alia, lays down the
procedures to be followed by designated persons while trading/dealing in Company’s shares and sharing Unpublished
Price Sensitive Information (“UPSI”).

The PIT Code covers Company’s obligation to maintain a digital database, mechanism for prevention of insider trading
and handling of UPSI, and the process to familiarise with the sensitivity of UPSI. Further, it also includes code for practices
and procedures for fair disclosure of unpublished price sensitive information which has been made available on your
Company’s website and link https://terasoftware.com/investors/code-of-practices-and-procedures-for-fair-disclosure-of-
upsi

30. ACCEPTANCE OF DEPOSIT

The Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 read with
the Companies (Acceptance of Deposit) Rules, 2014. Hence no further disclosure made under Rule 8(5) of Companies
(Accounts) Rules 2014.

31. SIGNIFICANT AND MATERIAL ORDERS AS PASSED BY THE REGULATORS OR COURTS

There are no significant and material orders passed by the regulators/court that would impact the going concern status of
the company and its future operations.

32. DETAILS IN RESPECT OF FRAUD

The Auditors have not reported any Fraud under the provisions of Section 143(12) of Companies Act 2013.

33. DETAILS OF APPLICATION MADE OR PROCEEDING PENDING UNDER INSOLVENCY AND BANKRUPTCY
CODE 2016

During the year under review, there were no application made or proceeding pending in the name of the company under
the Insolvency Bankruptcy Code, 2016.

34. DETAILS OF DIFFERENCE BETWEEN VALUATION AMOUNT ON ONE TIME SETTLEMENT AND
VALUATION WHILE AVAILING LOAN FROM BANKS AND FINANCIAL INSTITUTIONS

During the year under review, there has been no one-time settlement of loans taken from banks and financial institution.

35. DECLARATION / CERTIFICATE PURSUANT TO SCHEDULE V OF SEBI (LODR) REGULATIONS 2015

Declaration Certificate that the Members of the Board of Directors and senior management personnel have affirmed
compliance with the code of conduct of Board of Directors and Senior Management is attached to the Board
Report as Annexure - H.

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

In accordance with the applicable provisions of Companies Act, 2013, LODR Regulations and as per SEBI Circular
No. SEBI/HO/MIRSD/MIRSD_RTAMB/P/CIR/ 2022/8, dated January 25, 2022, the Company opened a ‘Suspense
Escrow Demat Account’ to credit the securities to the Suspense Escrow Demat Account of the Company, in case the
securities holder/claimant fails to submit the demat request within the specified period.

37. INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

In accordance with the applicable provisions of Companies Act, 2013 read with Investor Education and Protection
Fund (Accounting, Audit, Transfer and Refund) Rules, 2016 (“IEPF Rules”), all unclaimed dividends are required to be
transferred by the Company to the IEPF, after completion of seven (7) years. Further, according to IEPF Rules, the shares
on which dividend has not been claimed by the shareholders for seven (7) consecutive years or more shall be transferred
to the demat account of the IEPF Authority.

During the period under review, the Company does not have any unclaimed Dividend or Unclaimed Shares.

38. PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

Our Company has always believed in providing a safe and harassment free workplace for every individual working in the
Company premises. Company always endeavors to create and provide an environment that is free from any discrimination
and harassment.

The policy on prevention of sexual harassment at workplace aims at prevention of harassment of employees {whether
permanent, temporary, ad-hoc, consultants, interns or contract workers irrespective of gender} and lays down the
guidelines for identification, reporting and prevention of undesired behaviour. During the financial year ended March 31,
2025, there were no complaints recorded pertaining to sexual harassment.

39. MATERNITY BENEFIT

The Board confirms that the Company has complied with the applicable provisions of the Maternity Benefit Act, 1961,
including those relating to maternity leaves facilities. The Company remains committed to ensuring a safe, inclusive, and
supportive working environment for all women employees.

40. CERTIFICATE OF NON-DISQUALIFICATION OF DIRECTORS

In accordance with the Listing Regulations, the Company has received a certificate from M/s RPR & Associates, Practicing
Company Secretaries, confirming that none of the Directors on the Board of the Company has been disqualified
from acting as a Director for the year ended March 31, 2025. The said certificate is annexed as Annexure - I”.

41. COMPLIANCE CERTIFICATE BY AUDITORS ON COMPLIANCE OF CONDITIONS OF CORPORATE
GOVERNANCE

The Compliance Certificate from the Auditors on compliance with the conditions of Corporate Governance, as
stipulated in Part E of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, for
the year ended March 31, 2025, is annexed as Annexure - J.

42. COMPLIANCE CERTIFICATE SIGNED BY CEO & CFO

The Compliance Certificate signed by the CEO and CFO for the financial year ended March 31, 2025, pursuant to
Regulation 17(8) read with Part B of Schedule II of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015, is annexed as Annexure - K.

ACKNOWLEDGEMENT

The Directors place on record their sincere thanks to the Bankers, Business associates, consultants, customers, employees for
their continued support extended to your Companies activities during the year under review. Your Directors also acknowledges
gratefully the shareholders for their support and confidence reposed on your Company.

For and on behalf of the Board

T. Madhu Mitra Tummala Gopichand

Place: Hyderabad Whole-Time Director Chairman and Managing Director

Date : 12th August, 2025 DIN: 07124242 DIN: 00107886