tera software ltd Directors report

Dear Shareholders,

Your Directors have pleasure in presenting the Twenty-nineth (29th) Annual Report and Audited Accounts for the year ended 31st March, 2023.

1. FINANCIAL SUMMARY AND HIGHLIGHTS

		(Rs. in Lakhs)
PARTICULARS	Year Ended 31.03.2023	Year Ended 31.03.2022
Gross Income	15595.96	13032.72
Expenditure	14070.71	11962.65
Profit before Finance Cost, Depreciation & Tax	1525.25	1070.07
Less : Finance Cost	636.20	1104.52
Depreciation	23.49	47.86
Profit/Loss Before Tax (PBT)	865.56	(82.31)
Less : Provision for Current tax	190.37	51.54
Tax Expense relating to earlier years	276.53	-
Deferred tax	52.08	(3.70)
Profit/Loss After Tax (PAT)	346.58	(130.15)

2. COMPANYS PERFORMANCE

The Company has achieved a turnover of Rs.15595.96 lakhs for the year ended 31st March, 2023 as against Rs.13032.72 lakhs for the year ended 31st March, 2022. The Company has registered a profit of Rs. 346.58 lakhs as compares to previous years net loss of Rs.130.15 lakhs.

3. BOARD MEETINGS AND ANNUAL GENERAL MEETING

During the year under review Five meetings of the Board of Directors were held. 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 intervening gap between the Board meetings was within the period prescribed under Act.

One General Meeting i.e. 28th Annual General Meeting (AGM) of the Company was held on 24th September, 2022 during the year under review.

The Board of Directors affirms that the Company has complied with the applicable Secretarial Standards (SS) issued by the Institute of Companies Secretaries of India (SS1 and SS2) respectively relating to Meetings of the Board and its Committees and the Shareholders, which have mandatory applicable during the year under review.

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

The details of conservation of energy, technology absorption, foreign exchange earnings and outgo are as follows:

A) Conservation of energy

The operations of the Company are not energy intensive and every effort has been made to ensure the optimal use of energy, avoid waste and conserve energy by using energy efficient computers and equipment with latest technologies.

(B) Technology absorption

The Company is constantly upgrading its technological excellence with emerging technologies. It has not incurred any expenditure on Research and Development.

(C) Foreign exchange earnings and Outgo

Foreign Exchange Earnings during the year: NIL Foreign Exchange outgo: NIL

5. CORPORATE GOVERNANCE

As required under Regulation 34 (3) read with Schedule V (C) of the Listing Regulations, a report on Corporate Governance is annexed as "Annexure - A" and forms part of the annual report.

6. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Corporate Social Responsibility (CSR) Policy and CSR Committee formed pursuant to section 135 of Companies Act, 2013 and Rules made there under. The CSR Committee details are mentioned in the Corporate Governance Report. A budget of Rs. 7,12,376/- (Rupees Seven Lakhs Twelve thousand three hundred and Seventy-six only) approved for the Financial Year 2021-22.

The approved CSR activity for the budget of FY 2021-22 is installation of Gas based "Incinerator System for Human Body Cremation" under the project of Moderation/Renovation of Funeral Cremation Ground at Panduranga Pet, Tenali, Guntur District, Andhra Pradesh, India.

The total CSR Budget allocated is Rs.14,77,137/- (FY 2020-21 & 2021-22) for the above said project. The total Price of installation of the above said system is Rs.15,93,000/- including GST@18% and administrative expenses.

Tera Software Limited is mutually agreed to pay 90% of the total cost (i.e. Rs.14,33,700/-) of the Equipment against supply and remaining 10% shall be payable by the "Mahaprasthana Seva Samithi" on successful installation and commission, who are the maintainers of Funeral Ground at Tenali. The Mahaprasthana Seva Samithi will look after the maintenance of the equipment and overseas cremation ground after installation.

Advance was given to Supplier "Global Enviro Care" ofRs.6,75,000/- on 13-03-2023 and the project is under process as on 31-03-2023. The balance of Rs.37,376/- transferred to CSR unspent account on 2104-2023.

Rs.7,58,700/- (Rupees Seven Lakhs Fifty-eight thousand Seven hundred Only) paid to the above said supplier on 25-04-2023 after installation of the above said system. Rs.43,437/- (Rupees Forty three thousand four hundred and thirty seven Only) spent towards administrative expenses (3% on the project cost of Rs.14,33,700/-) in accordance with applicable CSR Rules, 2014 and amendment(s) thereof, if any for the above said project which was approved by CSR Committee and Board.

Full details of the above CSR Activities/expenditure mentioned in the disclosure as per Rule 8 of Companies (Corporate Social Responsibility Policy) Rules, 2014 which is enclosed as "Annexure - B" to this report.

7. CERTIFICATE OF NON-DISQUALIFICATION OF DIRECTORS

In accordance with the Listing Regulations, a certificate has been received from M/s C.V. Reddy K & Associates, Practicing Company Secretaries, that none of the Directors on the Board of the Company has been disqualified to act as Director. The same is annexed herewith as "Annexure - C".

8. COMPLIANCE CERTIFICATE SIGNED BY CEO & CFO

Compliance Certificate signed by CEO & CFO for the financial year ended 31st March, 2023 under Regulation 17(8) as specified in Part B of Schedule II of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is annexed as "Annexure - D".

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

Compliance Certificate by Auditors on Compliance of conditions of Corporate Governance as per Part E of Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015) for the year ended 31st March, 2023, is annexed as "Annexure - E."

10. DEPOSITS

Your Company has not accepted any public deposits during the year under review.

11. DIVIDEND

Your Directors have not recommended the payment of dividend for the F.Y. 2022-23 to manage the cash flows of the Company Business operations.

12. DIRECTORS & KEY MANAGERIAL PERSONNEL (KMP)

Name of the Director/KMP	Director Identification Number (DIN)/Mem.No.	Category
Mr. T. Gopichand (KMP)	00107886	Chairman & Managing Director (Promoter Executive Director)
Dr. T. Hanuman Chowdary	00107006	Non-Executive & Independent Director
Dr. T. V. Lakshmi	00003020	Non-Executive & Independent Director
Mr. A. Divakar	00033386	Non-Executive & Independent Director
*Mr. T. Sivarama Prasad	06405913	Non-Executive & Independent Director
**Dr. Braja Bandhu Nayak	09702361	Non-Executive & Independent Director
Mr. T. Bapaiah Chowdary	00107795	Promoter Non-Executive & Non-Independent Director
***Mrs. T. Pavana Devi	00107698	Promoter Non-Executive & Non-Independent Director
#Mr. O. Babu Reddy (KMP)	(Resigned w.e.f. 30-06-2023)	Chief Financial Officer
Mr. Ch. Mallikarjuna (KMP)	Mem. No. A47545	Company Secretary & Compliance Officer

*Mr. T. Sivarama Prasad (DIN: 06405913) resigned from the Board w.e.f.11-11-2022.

**Dr. Braja Bandhu Nayak (DIN: 09702361) has been appointed by the members at their 28th AGM held on 24-09-2022 as an Independent Director for a term of five years, on the recommendation of Nomination and Remuneration Committee (NRC) and the Board of Directors of the Company.

***Mrs. T. Pavana Devi (DIN: 00107698), retires in ensuing Annual General Meeting and she has expressed her desire not to offer her self for re-appointment and the Board as recommended by the Nomination and Remuneration Committee proposed to resolve not to fill the vacancy.

# Mr. O. Babu Reddy, Chief Financial Officer resigned w.e.f. 30-06-2023 due to his personal reasons.

The Board as recommended by the Nomination and Remuneration Committee Mr. Tummala Madhu Mitra, Vice President is proposed to appoint as a Whole time Director in the ensuing Annual General Meeting. Brief profile and details of Mr. Tummala Madhu Mitra, as required under the Listing Regulations are contained in the Notice convening the ensuing 29th Annual General Meeting of the Company.

Company has complied with the requirements of having Key Managerial Personnel as per the provisions of Section 203 of the Act, except the vacant position of CFO, who has resigned w.e.f.30-06- 2023 and will be filled with in the stipulated time as per Companies Act, 2013 and applicable rules.

13. DECLARATION BY CEO ON CODE OF CONDUCT OF DIRECTORS & SENIOR MANAGEMENT

Declaration by the Chairman and Managing Director in accordance with Part D of Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, confirm that all the Members of Board of Directors and Senior Management Personnel of the Company have affirmed compliance with the Code of Conduct, as applicable to them, for the year ended 31st March, 2023, is annexed herewith as "Annexure - F."

14. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(5) of the Companies Act, 2013 the Board of Directors to the best of their knowledge and ability confirm that:

a) that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; if any

b) Appropriate accounting policies have been selected and applied consistently and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

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

d) The annual accounts have been prepared on a going concern basis;

e) Appropriate internal financial controls have been laid down and that such internal financial controls are adequate and are operating effectively; and

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

15. EXTRACT OF ANNUAL RETURN

Pursuant to section 134(3)(a) and section 92(3) of the Act, read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the extract of the Annual Return, in form MGT 9 for the financial year 2022-23 is enclosed with this Report as "Annexure - G".

16. INTERNAL FINANCIAL CONTROLS

The Company has an Internal Financial Control System to commensurate with the size and scale of its operations. The scope of the internal audit is decided by the Audit Committee and the Board. To maintain its objectivity and independence, the Board has appointed an internal auditor, who reports to the Audit Committee and the Board on a periodic basis. The internal auditor monitors and evaluates the efficacy and adequacy of internal control systems in the company, its compliance with operating systems, accounting procedures and policies for various functions of the Company, Audit observations and actions taken thereof are presented to the Audit Committee.

17. INDEPENDENT DIRECTORS

The Companys Independent Directors have submitted requisite declarations under Section 149 (7) of the Companies Act, 2013, confirming that they continue to meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (LODR) Regulations, 2015. The Independent Directors have also confirmed that they have complied with Schedule IV of the Act and the Companys Code of Conduct.

18. INFORMATION REQUIRED UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company always believes and endeavors to provide safe and healthy environment, which is free from discrimination and harassment including sexual harassment. The Company has an Internal Complaints Committee which operate under a defined redressal system. During the year, there were no complaints filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder.

19. LISTING OF SHARES ON STOCK EXCHANGES

The Equity Shares of your Company are listed on the BSE Limited and National Stock Exchange of India Ltd. The Annual listing fees of both the stock exchanges have been paid.

20. MATERIAL CHANGES & COMMITMENTS

There has been no material change and commitment, affecting the financial performance of the Company that occurred between the end of the Financial Year of the Company to which the Financial Statements relate and the date of this Report.

21. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Managements Discussion and Analysis Report as stipulated under Regulation 34 read with Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed hereto as "Annexure - H" and forms part of Annual Report.

22. NOMINATION & REMUNERATION POLICY

The details of Nomination and Remuneration Policy of the Company for Directors, Key Managerial Personnel (KMP), Senior Management personnel (SMP) and other employees along with other related matters have been provided in the Corporate Governance Report. The Company has adopted a Nomination & Remuneration Policy for the Directors, Key Managerial Personnel and Senior Management, pursuant to the provisions of the Act and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

It is affirmed that the remuneration paid to Directors, Key Managerial Personnel and all other employees is as per the Remuneration Policy of the Company.

23. PERFORMANCE EVALUATION

Pursuant to applicable provisions of the Act, and the Listing Regulations, the Board has carried out annual evaluation of its own performance, performance of the Directors including Chairman assessment as well as the evaluation of the working of its committees.

The NRC has defined the evaluation criteria and procedure for the Performance Evaluation process for the Board, its Committees and Directors.

During the year, feedback was sought by way of structured questionnaires and evaluation was carried out based on various criteria and the responses received from the Directors.

The criteria for performance evaluation of the Board included aspects such as Board composition and quality, setting strategy, overall direction, effectiveness of Board processes, Board and management relations, contribution, board development, timeliness of information etc., The criteria for performance evaluation of the Committees included aspects such as structure and composition of Committees, effective participation of member of the Committees, deliberations and suggestions made by the Committee, effectiveness of the Committees recommendation for the decisions of the Board, etc., A separate peer review exercise was carried out to evaluate the performance of Individual Directors. The performance evaluation of the Chairman of the Board was also carried out, considering the views of all the remaining Directors.

Further, the Independent Directors, at their exclusive meeting held during the year, reviewed the performance of the Board, its Chairman and Non- executive Directors and other items as stipulated under the Listing Regulations.

24. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS UNDER SECTION 186

Particulars of the loans given, investment made or guarantee given or security provided and the purpose for which the loan or guarantee or security is proposed to be utilised by the recipient of the loan or guarantee or security if any are provided in notes to the Financial Statements.

25. PARTICULARS OF EMPLOYEES

The information required under Section 197 of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:

a. The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year:

Name	Designation	Remuneration FY 2022-23	Remuneration FY 2021-22	% of Increase / Decrease in	Ratio to Median
		Amount in Rs.	Amount in Rs.	Remuneration	Remuneration
Mr. T. Gopichand	Chairman & Managing Director	84,00,000	84,00,000	Nil	70.37
Mr. O. Babu Reddy	Chief Financial Officer	18,30,000	15,23,000	10.00 %	15.33
Mr. Ch. Mallikarjuna	Company Secretary	8,21,800	4,85,000	36.66%	6.89

b. The percentage increase in remuneration in each Director, Chief Financial Officer (CFO), Company Secretary (CS) in the financial year:

i) Increased in remuneration of CFO is 10% (from CTC of Rs.18,00,000/- p.a. to CTC of Rs.19,80,000/- p.a. w.e.f. 01-02-2023) and

ii) Increased in remuneration of CS is 36.36% (from CTC of Rs.6,60,000/- to CTC of Rs.9,00,000/- p.a. w.e.f. 01-08-2022)

c. The Median Remuneration of the employees of the Company during the financial year was Rs.1,19,375/-.

d. The percentage increase in the median remuneration of employees in the financial year: Nil

e. The number of permanent employees on the rolls of the Company as on 31st March, 2023: 1004

f. Average percentile increase made in the salaries of employees other than the managerial personnel in the last financial year:

Average percentile increase already made in the salaries of employees other than the managerial personnel in the last Financial Year i.e. 2022-23 was 6.49%. Justification: Increase in remuneration is decided based on the individual performance, inflation, prevailing industry trends and benchmarks. The remuneration of Non-Executive Directors consists of sitting fees only.

g. Affirmation that the remuneration is as per the remuneration policy of the Company:

The company affirms that the remuneration is as per its remuneration policy.

26. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013 is prescribed in form AOC-2 is appended as "Annexure - I" to the Boards report.

There are no materially significant related party transactions made by the Company with 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 have been placed before the Audit Committee for their approval and to the Board, as and when required. In all cases prior omnibus approval of the Audit Committee is obtained on a yearly basis. The transactions entered into pursuant to the omnibus approval so granted are reviewed by the audit committee on a quarterly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Companys website.

27. PROCEEDINGS UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016):

During the financial year, neither any application nor any proceeding is initiated against the Company under the Insolvency and Bankruptcy Code, 2016.

28. REPORTING OF FRAUD

During the year under review, the Statutory Auditors, Internal Auditors and Secretarial Auditors have not reported any instances of frauds committed in the Company by its Officers or Employees, to the Audit Committee under Section 143(12) of the Act, details of which need to be mentioned in this Report and rules made thereof. Therefore, no details are required to be disclosed under Section 134 (3) (ca) of the Act.

29. 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.

30. SHARE CAPITAL

The Companys paid-up equity share capital is Rs.1251.19 lakhs as on 31st March, 2023. During the year under review, there was no change in share capital of the Company.

31. STATUTORYAUDITORS

Pursuant to provisions of Section 139 of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014 M/s. Narven Associates, Chartered Accountants (Firm Registration No. 005905S), Hyderabad has been appointed as the Statutory Auditors, 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.

The Auditors have issued an unmodified opinion on the Financial Statements, for the financial year ended 31st March, 2023. The said Auditors Report(s) for the financial year ended 31st March, 2023 on the financial statements of the Company forms part of this Annual Report.

32. SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. C.V. Reddy K & Associates, Practising Company Secretaries as Secretarial Auditor. The Secretarial Audit report for the financial year 2022-23 in Form No.MR-3 and Annual Secretarial Compliance Report is annexed herewith as "Annexure-J" to this Report and the Secretarial Audit Report does not contain any reservation, qualification or adverse remarks.

33. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

During the Financial year under review, no regulator or court has passed any significant and/ or material orders impacting the going concern status of the Company and its future operations.

34. TRANSFER TO RESERVES

During the current financial year, there are no funds that are required to be transferred to Reserves.

35. VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Company has a Vigil Mechanism for Directors and Employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Companys Code of Conduct. The mechanism provides for adequate safeguards to employees and business associates reporting unethical practices and encourages employees to report genuine concerns or grievances such as unethical behaviour, actual or suspected fraud or violation of the Companys Code of Conduct. The whistle Blower Policy is available on the Companys website at the link: http://terasoftware.com/investors/ There were no complaints received during the year 2022-23.

36. OTHER DISCLOSURES

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions / events on these items during the year under review:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise.

2. Issue of Shares (including Sweat Equity Shares) to employees of the Company under any Scheme.

3. Voting rights which are not directly exercised by the employees in respect of shares for the subscription/purchase of which loan was given by the Company (as there is no scheme pursuant to which such persons can beneficially hold shares as envisaged under section 67(3)(c) of the Act).

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

5. The Company has not made any one-time settlement for loans taken from the Banks or Financial Institutions.

6. There was no revision of financial statements and Boards Report.

37. ACKNOWLEDGMENTS

Your Directors appreciate and value the co-operation and support of the Companys customers, members, suppliers, bankers, associates, Central and State Governments and employees at all levels and look forward to continuance of the supportive relations and assistance in the future.

		For and on behalf of the Board of Directors
	T. Pavana Devi	T. Gopichand
Place: Hyderabad	Director	Chairman & Managing Director
Date: 27th May, 2023	DIN: 00107698	DIN: 00107886