BOARD OF DIRECTORS

Your Directors have pleasure in presenting the Thirty-First (31^st) Board's Report of your Company together with the Audited Standalone and Consolidated

Financial Statements for the Financial Year ended 31^st March, 2026.

The consolidated performance of the Company and its subsidiaries have been referred to wherever required.

FINANCIAL RESULTS

Your Company's financial performance (standalone and consolidated) for the Financial Year ended 31^st March, 2026 is summarized below:

STANDALONE FINANCIALS

Total income has increased by 37%. The Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) stood at 26% of Total Income and Net Profit at 17% of Total Income with Earnings Per Share at ' 10.05.

CONSOLIDATED FINANCIALS

Total Income has shown a growth of 6%. The EBITDA stood at 8% of Total Income and Net Profit at 4% of Total Income with Earnings Per Share at ' 16.74.

Analyzing your Company's consolidated results by the two spheres it operates in, International IT Services contributed 28% of total revenues and 63% (before exceptional items) of Profit After Tax (PAT) while Domestic products and services contributed to 72% of the total revenues and 37% of PAT.

International IT services total revenue is ' 294,803 lakhs, growth of 4.2% Y-o-Y and $ 328.4 million in US $ terms. Your Company has managed to declare good results consistently because of its focus on serving and growing its existing customers, addition of 23 new customers throughout the Financial Year, and maintaining resource utilization at 88.9% over the Financial Year under review. The Domestic IT Products business grew by 5.9% on Y-o-Y basis to ' 777,207 Lakhs.

Your Company during the Financial Year had a stronger consolidated Balance Sheet and has approximately ' 32,028 Lakhs of cash and cash equivalents, showing Return on Capital Employed (ROCE) of 27.68% (before exceptional items) and Earnings Per Share at ' 16.74.

The Audited Standalone and Consolidated Financial Statements of your Company, which form a part of this Annual Report, have been prepared in accordance with Indian Accounting Standards ("Ind AS") prescribed under Section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015, as amended.

BUSINESS PERFORMANCE

At Sonata, our ambition is clear: To be an AI-first Modernization Engineering firm, powered by our proprietary Platformation™ framework.

Sonata delivered a resilient performance in FY26 and we are excited with the progress we are making as we continue to execute our long-term vision.

From a growth point of view, we remain focussed on few critical bets:

1. Our Big Bet - Al-enabled Services is expected to contribute 20% of our revenue by the end of FY27. We are enabling our clients to leverage AI in 3 ways: i) driving efficiencies, ii) driving higher consumer experience/modern sales, and iii) driving innovative business models.

We made meaningful and measurable progress in scaling AI-led growth across the company. AI now contribute to 18% of our total order book -demonstrating both strong market demand and deeper integration of AI in our client solutions. Our client wins were spread across verticals, with TMT (Technology, Media, Telecom) and HLS (Healthcare & Life Sciences) clients showing the highest rate of AI adoption.

FY26 witnessed the launch of AgentBridge - our cloud-agnostic Agentic AI platform designed to help clients build and deploy next-generation Agentic AI solutions.

We also forged partnership with IISc (India) and Wharton School (US) to further research and innovation in Agentic AI.

We operationalized AI internally as well. Our HR and Finance teams now run production-grade Agents on AgentBridge, reinforcing our ambition to be a model AI-led technology services firm.

2. Large-deal pursuits remain a cornerstone of our growth strategy, with approximately 40% of our pipeline comprising large, strategic opportunities. In FY26, we continued to win Large Deals and added a few marque logos to our list of customers.

3. We remain confident that our investment verticals - Healthcare & Life Sciences (HLS) and Banking, Financial Services & Insurance (BFSI)

- are on track to scale to $250M in revenue over the next 3 to 5 years. Together, these two verticals now contribute 30% of our total revenue, a sharp rise from 13% just 3 years ago

- a clear reflection of our strategic focus and disciplined execution.

4. Cloud and data opportunities now account for ~57% of our total pipeline, reflecting strong client demand for modernization. We are seeing accelerating adoption around Microsoft Fabric, where Sonata is an Official Microsoft Fabric Featured Partner, enabling clients to build data analytics foundations for the AI era.

5. Our deep and diversified partnership with key industry Hyper-scalers like Microsoft, AWS, Salesforce, and Snowflake has been enabling us to deliver cutting-edge AI solutions for clients. While Sonata continued to remain a proud member of Microsoft Inner Circle and Partner AI Council, it is now among the first companies to be recognized as a Microsoft Frontier Partner and received Microsoft Fabric Featured Partner official badge as well.

With respect to AWS, Sonata Software is now an AWS Premier Tier Services Partner - the

highest level of recognition in the AWS Partner Network and having AWS Gen AI Competency Partner status is no less feat either.

Our North America business scaled significantly and now represents over 74% of total revenue, up from approximately 54% three years ago. This shift reflects our continued success in deepening client relationships and expanding share in this key market.

We once again achieved an impressive, aggregated Customer Satisfaction (CSAT) score of 4.3 out of 5.

Our India business (SITL) made strong progress across three strategic pillars: 1) Expanding our Microsoft channel with a sharper focus on SMC segment;

2) Broaden partnerships with other ISVs - expanding beyond the three hyperscaler CSP partnerships;

3) Win large System Integration (SI) deals that integrate Cisco, IBM, Dell, and other ISV infrastructures with leading cloud platforms. These strategic bets are core to building a more diversified, resilient, and future ready domestic business.

6200 Sonatians remain our biggest asset and our culture, built on AGILE (Action, Growth, Integrity,

Learning, and Empathy), remains our guiding force. The Company continued to reinforce its commitment to Diversity and Inclusion, maintaining healthy gender and cultural diversity of 31%, across the workforce.

Sonata University made significant strides in training and development, because of which more than 92% of our workforce and 80% of managers are now trained in AI and ready to partner with our customers and internal stakeholders in their AI journey. We also rolled out Vibe Code training across the organization, with 78% of employees successfully completing it, reflecting high engagement and adoption.

Sonata Software had the honour to win ET Now Best Organizations to Work 2025 and Team Marksmen Most Preferred Workplace 2025-26. These awards are testament of our exceptional endeavor in creating employee-friendly workplaces.

Team Sonata remains committed to our longterm ambition of transforming Sonata Software into a differentiated Modernization Engineering firm powered by Platformation™, AI, and modern technologies, with an aim to judiciously accelerate the growth curve and build scale in terms of large clients, deals, markets, partnerships, and talent.

Industry recognition

Sonata Software continued to receive accolades in FY26. It was recognized among the Best Companies APAC 2026. Besides, it bagged two prestigious awards at CII AI Summit and Awards 2025 gala.

HUMAN RESOURCE MANAGEMENT

In line with Sonata's vision of Re-imagining growth with AI, Sonata's People and Talent function endeavours to be a growth multiplier and catalyst by nurturing a workplace where AI is powered by humans.

This human-centric approach to AI-led growth permeates our talent philosophy, people processes and the cultural ecosystem in which these are embedded.

The foundational fulcrum of our 'AI powered by humans' approach is to invest deeply in building people capability to facilitate better AI fluency, adoption and architecting.

Towards this end, during FY26, we continued to make significant strides in training and development, as a result of which, more than 90% of our workforce is AI-capable, ready to partner with our customers and internal stakeholders in their AI journey. All our

training curricula, across domains and technologies is now tailor-made to make our talent AI-proficient.

Complementing this, our Global AI Hackathon attracted ~500 participants who showcased both internal enterprise use cases and customer business challenges that leveraged Generative and Agentic AI. This compounds the existing innovation ecosystem of hackathons, tech-fests, and collaborative ideation platforms.

We also onboarded native AI talent throughout the year to complement the internal talent pool.

Around 50 campus graduates completed a 3-month intensive immersion program with AI as the driver as well as primary focus area. In addition, we also inducted close to 100 Interns who will be working exclusively on AI projects with a focus on Agentic AI.

At Sonata Software, our people philosophy is anchored in the belief that our people are our "Customer Zero" for AI-led transformation. As a result, our employee experience approach is pivoted on making AI work with and for our people so that they can be their best selves at work every day.

In line with the company's strategic emphasis on artificial intelligence, a niche talent initiative titled AI Mavericks was launched in FY26. This program has been designed to identify, engage and nurture emerging AI talent within the organization. It provides structured opportunities for participants to contribute to ongoing AI initiatives and be embedded within AI-led solutions, thereby strengthening the talent pipeline for future business opportunities.

Our Talent Acquisition team has implemented AI-orchestrated, multi-agent hiring platform designed to standardize job requirements and generating standardized screening and interview frameworks to support human decision making. This will lead to better outreach, enhanced candidate experience and faster onboarding of the right talent for the right roles.

Our HR team has also implemented AI-Driven HRMS Optimization by introducing automated and AI-enabled features such as auto-triggered onboarding workflows, OTP-based secure access, and end-to-end digitization of employee documentation laying the foundation for predictive analytics and data-driven decision-making across the employee lifecycle.

In addition, employee onboarding, background verification (BGV) and employee separation processes have been redefined to make it seamless and intelligent through a unified, system-driven data collection workflow.

Mavin, the organization's internal AI assistant, continued to mature as a core enabler of digital HR transformation during the year. Enhanced capabilities supported consistent and effective execution of key people frameworks, including Sonata Experience Management (SEM), Performance And Career Enablement (PACE), and Talent Connects, driving improved employee engagement and stronger talent retention outcomes. The rollout of standardized, plug-and-play survey and communication modules enabled faster and more scalable deployment across critical people initiatives such as the Buddy Program, Attrition Management, Predictive Retention, and enterprise feedback mechanisms, strengthening data-driven decision-making across the employee lifecycle.

As part of Program Edge, we have made significant progress with respect to automation of our workflows with the help of native systems and additional systems with AI capabilities. Immigration management and compensation and benefits administration are on the road to be fully automated with an AI layer on top of it thereby ensuring efficiencies and governance.

The Company continues to reinforce its commitment to Diversity and Inclusion, maintaining healthy gender and cultural diversity across the workforce. Investments in leadership and manager capability building, supported the nurturing of an inclusive workplace, while focused initiatives to strengthen the diverse talent pipeline led to the launch of the Women Mentoring Program. Inclusive behaviours were further encouraged through the introduction of the Allyship Award, and the expansion of SWAN (Sonata Women Advocacy Network) across regions helped strengthen belonging through mentoring and leadership dialogues. Policy enhancements, including extended medical insurance coverage for LGBTQ colleagues, reinforced the Company's commitment to equity and wellbeing.

Employee wellbeing remained a key priority, with augmented wellness initiatives during the year.

As an acknowledgement of the impact of the work as detailed above, your company was recognised as employer of choice in different forums viz. Jombay WOW Workplace 2025, in IT and ITES category; Team Marksmen Most Preferred Workplace 2025-26 and ET Now Best Organizations to Work 2025.

These awards recognise organizations that have demonstrated exceptional leadership in creating employee friendly workplaces.

CYBER SECURITY AND PRIVACY OVERVIEW

Protecting information and respecting privacy remain important priorities for the Company. As digital threats continue to evolve, the Company is taking steady steps to strengthen its approach to cybersecurity and data protection. This includes investing in security technologies, improving internal processes, and enhancing awareness across the organization.

Key focus areas include securing systems and networks, managing access controls, monitoring for potential threats, and handling incidents in a timely manner. Your Company continues to build on its existing capabilities to better protect information that is entrusted to whether related to employees, clients, or business operations. Recognizing that people are an important part of the security chain, the Company runs regular awareness programs and training sessions for employees. New hires go through basic cybersecurity training, and additional communication campaigns help keep security top-of-mind across teams.

Your Company remains committed to improving its security posture. Ongoing investments and a focus on practical security measures reflect this commitment to safeguard the interests of all stakeholders.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report as required under Regulation 34 and Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, amended from time to time (the "Listing Regulations"), is disclosed separately in this Annual Report.

DIVIDEND / TRANSFER TO RESERVES

In line with the practice of rewarding members, based on your Company's performance and future outlook, the Directors are pleased to recommend a final dividend of ' 4.15/- per equity share at 415 % on par value of shares of ' 1/- each. This recommendation is subject to the approval of the shareholders at the ensuing Annual General Meeting ("AGM") and shall be subject to deduction of income tax at source.

The final dividend is in addition to the interim dividends. Your Board has already declared first interim dividend of ' 1.25/- per equity share (125%) which was paid on 26^th August, 2025, second interim dividend of ' 1.25/- per equity share (125%) which

was paid on 4^th December, 2025 and third interim dividend of ?1.25/- per equity share (125%) which was paid on 2^nd March, 2026. Thus, the total dividend for FY 2026 amounts to ' 7.90 per equity share and would involve a total cash outflow of ' 22,154 Lakhs. The total dividend for FY 2025 was ' 4.40/- per equity share and involved a total cash outflow of ' 12,339 lakhs.

If approved by the Members at the ensuing AGM, the final dividend will be paid on or after 10^th August, 2026 to all those equity shareholders whose names appear on the Register of Members of your Company on 17^th July, 2026 and to those whose names appear as beneficial owners in the records of the National Security Depository Limited and Central Depository Services (India) Limited on the said date.

Your Company has not transferred any amounts to reserve for the Financial Year ended 31^st March, 2026. The dividend paid and recommended is in accordance with the Company's Dividend Distribution Policy.

DIVIDEND DISTRIBUTION POLICY

As required under Regulation 43A of the Listing Regulations, your Company has Dividend Distribution Policy. The Policy is available on the website of the Company at Dividend Distribution Policy.

SHARE CAPITAL

During the Financial Year 2025-26, there was no change in the paid-up share capital of your Company compared to the previous financial year 2024-25.

The paid-up share capital remains at ' 280,424,816 (Rupees Two Hundred Eighty Million, Four Hundred Twenty-Four Thousand, Eight Hundred & Sixteen only), divided into 280,424,816 (Two Hundred Eighty Million, Four Hundred Twenty-Four Thousand, Eight Hundred & Sixteen) equity shares with a face value of ' 1/- (Rupee One only). Additionally, your Company did not issue any new shares (public, bonus, rights, or preferential) during the financial year under review.

BOARD MEETINGS

During the year under review, the Board of Directors met four (4) times. The meetings were held on 7^th May, 2025, 30^th July, 2025, 13^th November, 2025 and 6^th February, 2026. The maximum interval between any two meetings did not exceed one hundred twenty (120) days, as prescribed under the Companies Act, 2013 (the "Act").

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. Shyam Bhupatirai Ghia (DIN: 00005264), Director, retires by rotation and being eligible, offers himself

for re-appointment at the ensuing Annual General Meeting (AGM). Brief profile of Mr. S B Ghia is provided in the notes to the Notice of the AGM. The Board of Directors, pursuant to the recommendation of the Nomination and Remuneration Committee, has recommended his re-appointment by the members at the ensuing AGM.

Pursuant to the recommendation of the Nomination and Remuneration Committee, the Board of Directors at their meeting held on 6^th February, 2026, approved the re-appointment of Mr. P Srikar Reddy (DIN: 00001401) as Executive Vice Chairman and WholeTime Director of your Company w.e.f. 4^th April, 2026. The said re-appointment was approved by the members of your Company through postal ballot on 31^st March, 2026.

Upon the expiration of the term of Mr. Samir Dhir (DIN: 03021413) on 8^th May, 2026, he decided not to continue and will cease and vacate the office of Managing Director & Chief Executive Officer of the Company due to personal priorities. Further, he has also resigned from the position of the Executive Director of the Company with effect from the close of business hours on 8^th May, 2026. The Board places on record its sincere appreciation to Mr. Samir Dhir for his contribution and leadership during his tenure.

Mr. Rajsekhar Datta Roy was appointed as Chief Executive Officer of the Company with effect from 9^th May, 2026 for a period of 3 years.

POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION

The Company's policy on appointment and remuneration of Directors is available on the Company's website at Nomination and Remuneration Policy. The qualifications, positive attributes, independence and skills of the Directors are covered in the Corporate Governance Report which is a part of this Report.

INDEPENDENT DIRECTORS

Your Company has laid down and followed procedures for familiarizing the Independent Directors with your Company regarding their roles, rights, responsibilities and to impart the required information and training to enable them to contribute significantly to your Company.

As required under Section 149(7) of the Act, all the Independent Directors on the Board of your Company have given their respective declarations that they fulfil and meet the criteria of independence as laid down

in Section 149(6) of the Act, read with Regulation 16(1)(b) and Regulation 25(8) of Listing Regulations. There has been no change in the circumstances during the year under review affecting their status as Independent Directors of your Company. The list of key skills, expertise, and core competencies of the Board, including the Independent Directors, is provided elsewhere in this Annual Report.

The Independent Directors have confirmed that they have complied with the Company's Code of Conduct during the year under review. They have also further confirmed that they have registered their names in the Independent Directors' Databank.

DIRECTORS' RESPONSIBILITY STATEMENT

As stipulated under the provisions contained in Section 134(3)(c) read with 134(5) of the Companies Act 2013 (the "Act"), the Directors, based upon the information and explanations obtained by them and also documents made available to them and to the best of their knowledge and belief, hereby confirm that:

a) in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

b) the Directors have 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 your Company at the end of the Financial Year and of the profit and loss of your Company for that period;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the Annual Accounts on a going concern basis;

e) the Directors have laid down Internal Financial Controls to be followed by your Company and that such Internal Financial Controls are adequate and were operating effectively; and

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

Stakeholders Relationship Committee of the Board as on 31^st March, 2026, comprised of Mr. Shyam Bhupatirai Ghia, Chairperson, Mr. P Srikar Reddy,

Ms. Mona Ninad Desai and Mr. Samir Dhir as its members. Mr. Samir Dhir ceased to be a Member of Stakeholders Relationship Committee w.e.f. close of 8^th May, 2026. The Committee met four (4) times during the year under review.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

Pursuant to the provisions of Section 135 of the Act, the Corporate Social Responsibility Committee of the Board as on 31^st March, 2026, comprised of Ms. Mona Ninad Desai, Chairperson, Mr. P Srikar Reddy,

Mr. Shyam Bhupatirai Ghia and Mr. Samir Dhir as its members. Mr. Samir Dhir ceased to be a Member of Corporate Social Responsibility Committee w.e.f. close of 8^th May, 2026. The Committee met four (4) times during the year under review. The brief outline of the Corporate Social Responsibility (CSR) Policy of your Company and the initiatives undertaken by your Company on CSR activities during the year are set out in Annexure III of this Report as prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended.

RISK MANAGEMENT COMMITTEE

Pursuant to the provisions of Regulation 21 of Listing Regulations, the Risk Management Committee of the Board as on 31^st March, 2026, comprised of Mr. Surin Shailesh Kapadia, Chairperson, Mr. Viren Raheja, Mr.

P Srikar Reddy and Mr. Samir Dhir as its members.

Mr. Samir Dhir ceased to be a Member of Risk Management Committee w.e.f. close of 8^th May, 2026. The Committee met two (2) times during the year under review.

The terms of reference of all Committees of the Board and the details of attendance in their respective meetings are set out in the Corporate Governance Report forming part of the Annual Report.

RISK MANAGEMENT

Your Company's Risk Management framework, strategies & practice seeks to sustain the long-term vision and mission of your Company. Your Company continuously evaluates the various risks surrounding the business and seeks to review and upgrade its risk management strategies and process to mitigate the risks. To further endeavour, your Board constantly formulates strategies directed at mitigating these risks which get implemented at the Executive Management level and a regular update is provided to the Board. Further, the detailed discussions on risks and concerns

perceived by the Management and the strategies thereof are enumerated in Management Discussion and Analysis Report, which forms part of the Annual Report.

VIGIL MECHANISM

Your Company has established a Vigil Mechanism and Whistle Blower Mechanism for receiving and redressing complaints from employees and Directors, as per the provisions of Section 177(9) and (10) of the Act. Regulation 22 of the Listing Regulations and Regulation 9A of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations,

2015.

The said Mechanism which, 'inter alia', also provides for direct access to the Chairperson of the Audit Committee in cases that require reporting about the unethical behaviour, actual or suspected fraud or violation of code of conduct laid down by your Company. This mechanism is governed by Vigil Mechanism Policy which covers unethical behaviour, actual or suspected fraud, theft, bribery, misappropriation of Company's funds, financial reporting violations, misuse of intellectual property, mismanagement, significant environmental, safety or product quality issues, discrimination or harassment including sexual harassment, Insider Trading, actual or potential conflicts of interest, violation of Company's rules, Company's Policies or violation of Code of Conduct of your Company.

Further, your Company has prohibited discrimination, retaliation, or harassment of any kind against any employee who reports under the Vigil Mechanism or participates in the investigation. There were no complaints received during the year under review under this Policy. The Audit Committee periodically reviews the functioning of this mechanism. No personnel of your Company were denied access to the Audit Committee.

The Vigil Mechanism Policy can be accessed through Vigil Mechanism Policy.

SUBSIDIARY COMPANIES, ASSOCIATES AND JOINT VENTURES

As on 31^st March, 2026, your Company had 22 subsidiaries. The statement pursuant to the Section 129(3) of the Companies Act, 2013, containing salient features of the Financial Statements of your Company's Subsidiaries in Form AOC-1 is given in Annexure I of the report. Audited Financial Statements together with related information and other reports of each of the subsidiary companies

have also been placed on the website of your Company at Investor Relations

The Consolidated Financial Statements of your Company and its Subsidiaries viz., Sonata Information Technology Limited, Sonata Software North America Inc. (SSNA), Sonata Software GmbH, Sonata Europe Limited (SEL), Sonata Software (Qatar) LLC (in the process of being closed), Sonata Australia Pty Ltd, Sonata Software Solutions Limited, Sonata Software (Shanghai) Co., Ltd, GAPbuster Inc., Sonata Software Worldwide Malaysia SDN. BHD., GAPbuster Worldwide Pty Limited, Sonata Software Japan KK, Encore I.T. Services Solutions Private Limited, Sonata Software Intercontinental Limited, Sonata Software Canada Limited, Sonata Latin America S. DE R.L. DE C.V.,

Sonata Software Solutions North America Inc. (formerly known as Quant Systems Inc.), Sonata Software Technology Private Limited (formerly known as Quant Cloud Solutions Private Limited), Quant Systems CRC Inc Sociedad de Responsabilidad Limitada, Woodshed LLC, Sonata Software Malaysia SDN. BHD and Sonata Software Solutions, Egypt duly audited/ unaudited/reviewed are presented as part of this Report in accordance with the Act, Ind-AS 110 and the Listing Regulations, wherever applicable.

Your Company has a "Policy for determining Material Subsidiaries" as required under Listing Regulations so that your Company could identify such subsidiaries and set out a governance framework for them.

The Policy is put up on the website at Policy for Determining Material Subsidiary

In terms of the said Policy as per financial statement for the year ended 31^st March, 2026, Sonata Information Technology Limited, India and Sonata Software North America Inc., USA, are considered as material subsidiaries whose income exceeds 10% of the consolidated turnover of your Company in the financial year 2025-26. Further details on the subsidiary monitoring framework have been provided as part of the Corporate Governance Report.

EMPLOYEE STOCK OPTION PLAN ("ESOP")

Your Company has an Employee Stock Option Plan, 2013 in accordance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("ESOP Regulations"), as amended. The principal objectives of this Plan are to:

• Attract, retain and motivate talented and critical Employees;

• Encourage Employees to align individual performance with the Group's objectives;

• Reward Employee performance with ownership in proportion to their contribution; and

• Align Employee interest with those of the Group.

Pursuant to the requirements of the ESOP Regulations, a Certificate has been issued by the Secretarial Auditor of your Company confirming that the Plan has been implemented in accordance with the said Regulations and in accordance with the resolution of your Company in the General Meeting.

As required under the ESOP Regulations, the applicable disclosures regarding the details of options granted, number of shares arising as a result of exercise of options, etc., as on 31^st March, 2026 are uploaded on the website of your Company Corporate Governance

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, read with Regulation 24A of Listing Regulations, M/s GDR & Partners LLP, Company Secretaries holding ICSI Firm Registration Number: L2024KR016500 were appointed as Secretarial Auditors of your Company from the conclusion of Thirtieth (30^th) Annual General Meeting (AGM) held on 31^st July, 2025, till conclusion of Thirty-Fifth (35^th) AGM to be held in the calendar year 2030. The Secretarial Audit Report in Form MR-3 for the Financial Year ended 31^st March, 2026 is annexed to this Report as Annexure II. The Report does not contain any qualifications, reservations, adverse remarks or disclaimer.

MAINTENANCE OF COST RECORDS AND APPOINTMENT OF COST AUDITOR

For the year under review, the provisions of Companies (Cost Records and Audit) Rules, 2014 were not applicable to your Company.

STATUTORY AUDITORS

M/s. B S R & Co. LLP, Chartered Accountants, Bengaluru, (Firm Registration No. 101248W/W-100022) were appointed as Statutory Auditors of your Company from the conclusion of Twenty Seventh (27^th) Annual General Meeting (AGM) held on 24^th June, 2022, till conclusion of Thirty Second (32^nd)

AGM to be held in the calendar year 2027, as required under Section 139 of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014.

For the year under review, the Statutory Auditors have confirmed that they satisfy the independence criteria

required under the Companies Act, 2013.

The Auditors' Report contains 'Unmodified Opinion' on the financial statements (standalone and consolidated) of your Company, for the year ended 31^st March, 2026 and there are no qualifications, reservations, adverse remarks or disclaimer in their report.

REPORTING OF FRAUDS BY AUDITORS

During the year under review, neither the Statutory Auditors nor the Secretarial Auditor have reported to the Audit Committee under Section 143 (12) of the Companies Act, 2013, any instances of fraud committed against your Company by its officers or employees.

SECRETARIAL STANDARDS

During the year under review, your Company has complied with all the applicable provisions of the Secretarial Standard 1 on Meetings of the Board of Directors & Secretarial Standard 2 on General Meetings issued by the Institute of Company Secretaries of India.

ANNUAL RETURN

Annual Return pursuant to Section 92(3) and Section 134(3)(a) of the Companies Act, 2013, your Company has placed a copy of the Annual Return as at 31^st March, 2026 on its website at Corporate Governance.

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to the provisions of Section 124 (5) of the Act and IEPF rules, during the year under review, your Company has transferred the unclaimed and un-encashed dividends of ' 52,85,811/-. Pursuant to the provisions of Section 124 (6) of the Companies Act, 2013 and IEPF rules, 54,125 corresponding equity shares of ' 1/- each on which dividends were unclaimed for seven consecutive years were transferred as per the requirements of the IEPF Rules. The details of the resultant benefits arising out of said shares already transferred to the IEPF, year-wise amounts of unclaimed / un-encashed dividends lying in the unpaid dividend account up to the year, and the corresponding equity shares, which are liable to be transferred, are provided in the Shareholder information section of the Corporate Governance report and are also available on our website, at Corporate Governance.

The Company has appointed a Nodal Officer under the provisions of IEPF, the details of which are available on the website of your Company at Investor Relations.

KEY AWARDS AND RECOGNITIONS

During the year under review, your Company

was felicitated with the following key awards and

recognitions:

Industry Recognitions:

• Sonata Software has been recognized as one of Dun & Bradstreet India's Leading ESG Entities for FY25, reflecting our commitment to responsible and sustainable business practices.

• Sonata Software has been declared among the Best Companies APAC 2026. Companies were identified on three dimensions: Employee Satisfaction, Financial Performance, and Sustainability Transparency.

• Sonata Software has bagged two prestigious awards at the recently held CII AI Summit and Awards 2025 gala - for Best AI Solution Showcase and Best Industry AI Application -under the Most Innovative Category for our AgentBridge Solution. These honors recognize organizations that harness AI to transform businesses, deliver exceptional value, and champion responsible innovation that benefits society at large.

• Sonata Software has been recognized among the ET Now Best Organizations to Work for 2025. This prestigious recognition highlights workforce management practices, emphasizing on employee engagement, career development, workplace safety, and inclusivity.

• India Legal Awards 2025 recognized Sonata Legal Team as the "Legal Team of the Year" in the IT Segment.

Partner Recognitions:

• Sonata Software is now among the first companies to be recognized as a Microsoft Frontier Partner.

• Sonata Software is now an AWS Premier Tier Services Partner - the highest level of recognition in the AWS Partner Network.

• Sonata Software has been honored with the 2025-2026 Microsoft AI Business Solutions Inner Circle Award — placing us among the top global AI Business Solutions partners of Microsoft.

• Sonata Software received the Fabric Featured Partner official badge.

Analyst Recognitions

• Disruptor in HFS Horizons : Best Service

Providers for Mortgage Reinvention, 2025 report.

• Major Contender in Everest Group's Cloud Services for Mid-market Enterprises PEAK Matrix® Assessment 2025.

• Major Contender in the Everest Group's Microsoft Business Applications Services PEAK Matrix® Assessment - Focus on CRM.

• Major Contender in the Everest Group's Microsoft Business Applications Services PEAK Matrix® Assessment - Focus on ERP Services.

• Major Contender in Everest Group's Application Transformation Services for AI enablement PEAK Matrix® Assessment 2025.

• Major Contender in Everest Group's Application Development Services for AI Applications PEAK Matrix® Assessment 2025.

• Star Performer and a Major Contender in Everest Group's Enterprise Quality Engineering (QE) Services PEAK Matrix® Assessment 2025.

• Star Performer and an Aspirant in Everest Group's Data & Analytics (D&A) Services PEAK Matrix® Assessment 2025.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO

A. Conservation of energy

The Company is committed to conserving energy in line with its Sustainability Policy and continually works to improve energy efficiency across all its operations. It proactively adopts innovative approaches and advanced technologies to enhance operational performance while reducing energy consumption. These continuous efforts are focused on increasing efficiency, minimizing waste, and promoting responsible energy use.

In support of its sustainability objectives, the Company has implemented a range of energy saving initiatives.

o Optimizing the operation of engineering and technical equipment during nonworking hours to reduce energy usage.

o Ensuring all office equipment such as computers, monitors, printers, plotters, shredders, and task lighting are switched off during nights and weekends.

o Powering down computer lab equipment and activating energy saving modes on laser

printers or switching them off when not in use.

o Enabling low power or sleepmode settings for computer monitors and hard drives during periods of inactivity.

o Prioritizing the procurement of Energy

Star-rated office equipment with automatic power down features.

o Adjusting thermostats to lower settings or switching them off when not required and effectively using programmable thermostat energy-saving modes.

o Minimizing heat gain during summer by closing blinds, curtains, and drapes on windows exposed to direct sunlight.

o Maximizing natural warmth in winter by opening window coverings during daylight hours and closing them at night to retain heat.

o Keeping windows and external doors closed in air-conditioned or heated spaces to prevent energy loss.

o Leveraging natural daylight through

windows or skylights to reduce dependence on artificial lighting.

o Replacing traditional incandescent bulbs with energy efficient LED lighting wherever feasible.

o Switching off unnecessary lighting in

unoccupied areas and limiting decorative or non-essential lighting while maintaining safety and security standards.

o Turning off office and pantry appliances, including copiers, microwaves, and coffee machines, after working hours and on weekends.

o Ensuring specialty equipment not required during weekends or holidays is powered down.

o Promoting responsible water usage by

limiting hot water consumption and turning off taps when not in use.

o Encouraging double-sided printing to reduce paper consumption.

o Reusing paper by setting aside scrap sheets for internal use.

B. Technology absorption

Leading the Shift to Agentic, AI-Driven Enterprise

During the year under review, Sonata strengthened its enterprise transformation strategy by positioning Artificial Intelligence at the core of its modernization agenda. AI now serves as the unifying layer across our key competencies—Dynamics, Cloud, Data, and Managed Services—enabling intelligent operations, agentic workflows, and measurable business outcomes. Rather than being a standalone capability, AI underpins a connected ecosystem that powers modernized business processes and scalable innovation.

Our Core AI capabilities have been significantly expanded through the development of a comprehensive Agentic AI Suite spanning enterprise functions and industry use cases. Across corporate functions, we have built domain-specific agents for Finance and HR. In parallel, we are investing in high-value industry agents across Healthcare & Life Sciences,

BFSI, and Retail, Manufacturing & Distribution, enabling automation, improved decision-making, and scalable enterprise value. These agentic solutions are designed to drive automation, improve decision-making, and unlock scalable enterprise value.

Our Dynamics Modernization portfolio has been further strengthened through targeted investments in migration toolkits, AI-led initiatives, and industry-specific IPs. We have expanded our Migration Toolkit to support transitions from SAP and other ERP systems to Dynamics 365 Finance & Operations, alongside proprietary accelerators such as IntelliMigrate and an enhanced Upgrade Toolkit covering legacy platforms like NAV and GP.

In Data Modernization, we have adopted an account-centric growth approach complemented by an alliance-scaled motion with Microsoft, with a strong emphasis on Fabric-led migrations and data modernization, including transitions from platforms such as Alteryx and Informatica. To strengthen execution, we have deployed dedicated Data & AI sellers responsible for pipeline creation, deal progression, and conversion.

Our Cloud Modernization practice has transitioned to an AI-first, agentic engineering model, with GTMs focused on platform engineering, coding agents, and AIOps. We expanded migration capabilities across .NET,

Java, open-source stacks, and mainframe-to-cloud (AWS Transform), supported by accelerators and platform-led governance.

Deep expertise across Microsoft Copilot, Azure Foundry, AWS Bedrock, and related ecosystems underpins this shift.

Our Managed Services transitioned to a people first and AI first delivery approach, leveraging AI tools to transform shared services and enterprise operations. Through Support.ai, Command Centre.ai, and ProcessAutomation.AI, we helped clients achieve 40-50% cost optimization over 3-5 years, while ensuring agility and innovation.

We have evolved our Unified Engineering initiative into the Sonata Modernization Engineer program, aligning it with our broader workforce transformation efforts. Our talent base has been elevated through GenAI-enabled roles and embedded architects, strengthening our core capabilities.

We have invested in talent through Architect Guild, agentic AI certifications, and structured enablement, with 6,200 professionals trained across GenAI, cloud, and data domains. In addition, our talent has achieved multiple certifications across Microsoft, AWS, and other platforms, reinforcing our expertise and credibility across diverse technologies.

C. Foreign exchange earnings and Outgo

During the year under review, 87% of the Company's revenue came from exports of developed software and related services to clients mainly in USA, UK, Europe, Australia, Germany, UAE and Japan. Foreign Exchange outgo on account of travelling, professional and legal charges, subsistence/living costs, overseas salaries, capital goods, etc. was ' 11,698 Lakhs and Foreign Exchange inflow on account of export of software services (net), goods and other operating revenues was ' 118,814 Lakhs.

PUBLIC DEPOSITS

During the year under review, your Company has not

accepted any deposits from the public under Chapter

V of the Companies Act, 2013.

DISCLOSURES AS REQUIRED UNDER SECTION 22 OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company is committed to provide a healthy environment to all employees that enables them to work without the fear of prejudice and gender bias. The Company has in place a gender neutral Prevention of Sexual Harassment (POSH) Policy and framework in line with the requirements of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("POSH Act"). Your Company through this Policy has constituted an Internal Committee (IC) for Redressal of complaints and mechanisms to prevent victimisation. Following are some of the programs and initiatives in place to train Employees and the IC for POSH during the year.

1. Each Employee is required to undergo a mandatory e-learning module on 'Prevention of Sexual Harassment at Workplace'.

2. All new joiners are trained in person on Prevention of Sexual Harassment during their induction program.

3. The IC Members are provided relevant training by an external expert.

4. The IC conducts quarterly meetings to monitor preventive measures and review complaints, if any.

5. The POSH Policy is available on the intranet portal for the employees to access as and when required.

6. Information about the Penal consequences of sexual harassment and information about the IC members and their contact details are available on the intranet portal and at conspicuous places in the office.

Annual Report has been filed with the relevant authorities as required under the POSH Act.

2 (two) complaints were received and disposed off within the prescribed ninety day period during the Financial Year 2025-26.

MATERNITY BENEFIT ACT, 1961

The Company has complied with the provisions of the Maternity Benefit Act, 1961 for the year ended 31^st March, 2026.

INTERNAL FINANCIAL CONTROLS

Internal Financial Controls are an integrated part of the risk management process, addressing

financial and financial reporting risks. The controls commensurate with the size and nature of Company's operations. The internal financial controls have been embedded in the respective business processes.

Assurance on the effectiveness of internal financial controls is done through management reviews and review by internal auditors and statutory auditors during the course of their audits. The internal financial controls provide reasonable assurance that they are designed effectively with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use, executing transactions with proper authorization and ensuring compliance with Company's policies. The Audit Committee reviews the reports submitted by Internal Auditors, consider suggestions for improvement and thereafter take corrective actions.

Sonata's Management assessed the effectiveness of the Company's internal control over financial reporting as on 31^st March, 2026, B S R & Co. LLP, the Statutory Auditors have audited the financial statements included in this Annual Report and have issued an attestation report on the Company's Internal Control over financial reporting.

The Audit Committee also meets Statutory and Internal Auditors to ascertain, inter alia, their views on the adequacy of internal control systems and keeps the Board of Directors informed of its observations periodically. Based on its evaluation, the Audit Committee has concluded that, as of 31^st March,

2026, the Company's internal financial controls were adequate and operating effectively.

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNAL

During the year under review, there were no significant and material orders passed by any Regulators or Courts or Tribunals impacting the going concern status of your Company and its future operations.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

During the financial year under review, your Company had given Inter Corporate Deposits to its wholly-owned subsidiary, Sonata Software North America Inc. with yearly interest payment as per the agreement for meeting its working capital requirements. The balance outstanding as on 31^st March, 2026 is ' 9,481.13 Lakhs. The maximum amount outstanding at any point of time during the Financial Year has been ' 9,481.13 Lakhs.

Also, your Company has given Corporate Guarantees on behalf of Subsidiaries for facilitating their business needs. The outstanding amount as on 31^st March, 2026 is as below:

CORPORATE SOCIAL RESPONSIBILTY (CSR)

The CSR policy is formulated by the Corporate Social Responsibility Committee and approved by the Board of Directors of the Company. The policy can be accessed at CSR Policy.

During the Financial Year, your Company has spent ' 208.97 Lakhs towards CSR activities. Your Company has a CSR Policy in place and as part of its implementation program(s), it has identified and participated in the following initiatives:

Your Company has partnered with Arvind Eye Hospital (Govel Trust) to develop AEH Vikas, an Android-based assistive technology application designed for children with Cerebral Visual Impairment (CVI). The application supports early diagnosis and provides structured therapeutic interventions through interactive exercises and games tailored to the unique visual needs of children. The initiative aims to improve visual awareness, cognitive development, and overall learning outcomes for children with special visual needs.

Your Company has also supported Arvind Eye Hospital through the development of the AEH Simulation portal, a workflow simulation platform designed to enhance user understanding of software solutions and system upgrades. The portal enables quicker adoption, reduces training effort, and improves overall user experience by providing interactive simulations, thereby supporting efficient and effective hospital operations.

The Report on CSR in the prescribed format is enclosed in this Report as Annexure III.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

Pursuant to Regulation 34(2)(f) of the Listing Regulations, your Company's Business Responsibility and Sustainability Report ("BRSR") forms an integral part of this Annual Report. The BRSR outlines the Company's performance across the nine principles of the National Guidelines on Responsible

Business Conduct and presents disclosures under each principle through essential and leadership indicators. The report comprehensively articulates the Company's core philosophy and highlights the initiatives undertaken during the year 2025-26 across environmental, social, and governance dimensions.

It details the Company's approach to corporate social responsibility, sustainability initiatives focused on environmental conservation, green awareness programmes, its commitment to social development, strengthening of primary education, and other initiatives aligned with its responsible business practices.

Environmental, Social and Governance (ESG): Your Company has implemented various ESG initiatives across the organisation. The CSR Committee is responsible for providing oversight and guidance on ESG-related matters, including setting priorities and promoting leading ESG practices. The quarterly review and progress made on ESG are reported to the Board of Directors every quarter, the details on ESG are given elsewhere in the Annual Report.

RELATED PARTY TRANSACTIONS

The policy on Related Party Transactions is available on your Company's website at Related-party-transactions.

All Related Party Transactions are placed on a quarterly basis before the Audit Committee and/ or the Board for taking note /approval. Prior omnibus approval of the Audit Committee and the Board is obtained for the transactions which are foreseeable and of a repetitive nature. None of the transactions entered into with related parties during the financial year were covered under Section 188(1) of the Companies Act, 2013, as they were in the ordinary course of business and conducted on an arm's length basis. Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Act in Form AOC-2 is not applicable to the Company for FY 2025-26 and hence does not form part of this report.

Pursuant to Regulation 23(9) of the Listing Regulations, your Company has filed the disclosures on Related Party Transactions in prescribed format with the Stock Exchanges.

JUSTIFICATION FOR ENTERING INTO RELATED PARTY TRANSACTIONS

All the Related Party Transactions entered into by your Company with the Related Parties including rendering of services, sharing of expenses, providing of intercorporate loans and guarantees to its subsidiaries are in the ordinary course of business and are carried out at arm's length basis.

BOARD EVALUATION

During the year under review, as mandated by the Companies Act, 2013 and Listing Regulations, Annual Evaluation was conducted by the Board of its own performance and that of its committees, Chairperson, individual Directors and the Independent Directors.

As part of the evaluation process, individual criteria for each of the exercise was formulated. The said criteria specified certain parameters like attendance, acquaintance with business, communication inter se between board members, effective participation, domain knowledge, compliance with code of conduct, vision and strategy, benchmarks established by global peers etc., which is in compliance with applicable laws, regulations and guidelines. From these, formal questionnaire listing various parameters on which each of the categories were required to be evaluated was shared with each member of the Board / Committee / Director. They were then required to rate individually on each of the parameters and also provide feedback based on ratings.

In a separate meeting of Independent Directors, performance of Non-Independent Directors, the Board as a whole and Chairperson of the Company was evaluated, taking into account the views of Executive Directors and Non-Executive Directors. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.

The outcome of the Board Evaluation for the financial year 2025-26 was discussed by the Independent Directors/ Board/ Committee. The Board of Directors of the Company noted the actions taken in improving Board effectiveness based on feedback given in the previous year.

REMUNERATION TO DIRECTORS AND EMPLOYEES

The policy on remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the Corporate Governance Report, which is a part of this report and is also available on the Company's website at Nomination and Remuneration Policy.

Details / Disclosures of ratio of Remuneration of each Director to the median employee's remuneration and

I details of remuneration paid to Employees is given as Annexure - IV.

A statement comprising the names of top 10 employees in terms of remuneration drawn and every person employed throughout the year, who were in receipt of remuneration in terms of Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms an integral part of this Report. However, the same is not being sent along with this Annual Report to the Members of your Company in line with the provision of Section 136 of the Companies Act, 2013. Members who are interested in obtaining these particulars may write to investor@sonata-software.com and these documents will be made available for inspection electronically from the date of circulation of this Annual Report up to the date of AGM i.e. 31^st July, 2026.

CORPORATE GOVERNANCE

Your Company is committed to ensure the highest standards of Corporate Governance and adheres to the Corporate Governance requirements set out by the Securities and Exchange Board of India ("SEBI"). Your Company has also implemented best governance practices. The report on Corporate Governance as stipulated under the Listing Regulations forms part of the Annual Report.

A Certificate from M/s GDR & Partners, LLP, Company Secretaries, confirming the compliance with the conditions of Corporate Governance as stipulated under the Listing Regulations is attached to this report.

OTHER DISCLOSURES

1. Your Company confirms that it has paid the Annual Listing Fees for the year 2025-26 to National Stock Exchange of India Limited (NSE) and BSE Limited where its shares are listed.

2. Your Company has not issued shares with differential voting rights and sweat equity shares during the year under review.

3. There are no proceedings initiated/pending against your Company under the Insolvency and Bankruptcy Code, 2016 which materially impact the business of the Company.

4. There were no instances where your Company required the valuation for one time settlement or while taking the loan from any Banks or Financial institution.

ACKNOWLEDGEMENTS

Your Directors take this opportunity and place on record their gratitude for all the guidance and co-

in the future and all the Sonatians for their valuable contribution and dedicated service. The consistent growth was made possible by their hard work, solidarity, co-operation and support.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORSSanjay K Asher

Place: Mumbai Chairperson

Date: 7^th May, 2026 DIN: 00008221