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Tera Software Ltd.

BSE: 533982 | NSE: TERASOFT |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE482B01010 | SECTOR: Computers - Software Medium & Small

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BSE Live

Jan 22, 16:00
26.25 -1.20 (-4.37%)
Volume
AVERAGE VOLUME
5-Day
2,458
10-Day
1,765
30-Day
1,911
2,874
  • Prev. Close

    27.45

  • Open Price

    25.55

  • Bid Price (Qty.)

    0.00 (0)

  • Offer Price (Qty.)

    0.00 (0)

NSE Live

Jan 22, 15:41
26.40 -0.40 (-1.49%)
Volume
AVERAGE VOLUME
5-Day
10,536
10-Day
10,840
30-Day
10,545
10,803
  • Prev. Close

    26.80

  • Open Price

    27.55

  • Bid Price (Qty.)

    0.00 (0)

  • Offer Price (Qty.)

    26.40 (292)

Annual Report

For Year :
2018 2016 2015 2014 2013 2012 2011 2010 2009

Director’s Report

Dear Members,

The Board of Directors present the 24th Annual Report and the Audited Financial Statements for the year ended 31st March, 2018.

FINANCIAL HIGHLIGHTS:

During the year, performance of your Company is as under: (Rs. in Lakhs)

PARTICULARS

Year Ended 31.03.2018

*Year Ended 31.03.2017

Gross Income

17,185.73

27,670.72

Expenditure

15,977.65

25,095.57

Profit before Finance Cost, depreciation & tax

1,208.07

2,575.15

Less : Finance Cost

723.57

658.21

Depreciation

254.19

23,6.13

Profit before tax

230.31

1,680.81

Less : Provision for Current tax

89.13

637.87

Tax Expense relating to earlier years

(12.00)

(4.87)

Deferred tax

(4.43)

(29.65)

Profit for the year

157.61

1,077.46

* The financial statements for the year ended March 31,2018 are prepared as per Ind AS (Indian Accounting Standards) and accordingly previous year numbers are re-grouped in accordance with the provisions of Ind AS for comparative information.

INDIAN ACCOUNTING STANDARDS (IND AS)

The Ministry of Corporate Affairs (‘MCA’) vide its notification in the Official Gazette dated February 16, 2015, notified the Indian Accounting Standards (‘Ind AS’) applicable to certain class of companies. Ind AS has replaced the existing Indian GAAP prescribed under Section 133 of the Companies Act, 2013 read with the rules made thereunder. For your Company the said new accounting standards are applicable from April 1,2017. The impact on account of the transition is disclosed as part of notes to financial statements

OPERATIONS & STATE OF COMPANYS AFFAIRS

During the year under review, your Company has reported a turnover of Rs. 17,185.73 lakhs and registered a net profit of Rs. 157.61 lakhs. The company’s turnover is decreased by 38% compared to the turnover of F/Y 2016-17 as there were no substantial value of work order awarded to your company.

Further, the Company has been effected with volatile market conditions, where the tenders/bids submitted are either being cancelled or the entire tender process is re-initiated due to various reasons like insufficient budget from the Government/ Organizations. Despite the uncertainties, the Company is determined and focusing to get new projects with an objective to achieve growth and profitability.

MATERIAL CHANGES & COMMITMENTS

There have been no material changes and commitments affecting the financial position of the Company during the financial year ended 31a March, 2018.

DIVIDEND

Your Directors have not recommended the payment of dividend for the F.Y. 2017-18 due to issues in cash flows consequent on slow realisations from customers. Therefore, the board thought it better to conserve funds to support the existing projects and to invest in upcoming and expected projects. The Company is persistently striving to improve the position both in terms of revenue, profitability and cashflows. Hence, the board requests the members to bear with the situation and seeks member’s support and cooperation.

DEPOSITS

Your company has not accepted any deposits and as such no amount of principal or interest is outstanding as on 31st March, 2018.

SHARE CAPITAL

There was no change in the share capital during the year and the company neither issued any shares with differential voting rights nor any employee stock options or sweat equity shares and does not have any scheme to fund its employees to purchase the shares of the Company.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A Report on Management Discussion and Analysis is appended as (Annexure-I) to this report as per the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

CORPORATE GOVERNANCE

The Company endeavors to maximize the wealth of the shareholders by managing the affairs of the Company with accountability, transparency and integrity. A report on Corporate Governance pursuant to the provisions of Corporate Governance Code stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed and forms part of the annual report. A Certificate from the Statutory Auditors of the Company M/s. Mullapudi & Co., Chartered Accountants regarding compliance of conditions on Corporate Governance is enclosed as (Annexure II).

BOARD & COMMITTEES MEETING

During the year four meetings of Board of Directors of the Company were convened and held in accordance with the provisions of the Companies Act, 2013. The date(s) of the Board Meeting, attendance by the directors are given in the Corporate Governance Reportforming partofthis annual report.

The Audit Committee is constituted by all the Independent Directors; Shri. R.S.Bakkannavar (Chairman), Radma Shri Dr T. Hanuman Chowdary and Shri. Koteswara Rao SSR as Members. During the year under review the Board has accepted all the recommendations of the Audit Committee.

Details of the composition of the Board and its Committees and of the Meetings held and attendance of the directors at such meetings, are provided in the Corporate Governance Report. The intervening gap between the Meetings was within the limits prescribed under the companies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

DIRECTORS & KEY MANAGERIAL PERSONNEL:

A. Retirement By Rotation

Pursuant to Section 152 of Companies Act, 2013 Shri T. Bapaiah Chowdary (DIN: 00107795), Director will retire at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. The Board recommends his re-appointment.

B. Changes In Key Managerial Personnel

During the year Mr. Pavan Pise, ceased to be Company Secretary of the Company with effect from 20* April, 2017. Subsequently, the Company had appointed Mrs. B. Sowmya as Company Secretary of the Company with effect from 22nd May, 2017.

C. Declaration By Independent Directors

All the Independent Directors of the Company have given declarations stating that they meet the criteria of independence as provided under Section 149(6) of Companies Act, 2013.

D. Performance Evaluation

The Board evaluation process is designed to provide directors with an opportunity to examine Board effectiveness and to make suggestions for improvement The Nomination and Remuneration Committee has devised a criteria for evaluating the performance of Board, its Directors and its committees on the basis of definite parameters like attendance at the meetings of the Board, effective participation, decision making, and performance of specific duties and obligations.

The evaluation of the Independent Directors and that of the Chairman was carried out by the entire Board and the evaluation of Non-Independent Directors was carried out by the Independent Directors.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The Company has not made any loan, given guarantee or provided security or made investments as specified in Section 186 of Companies Act, 2013.

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 technology 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: Rs. 39,24,83,401

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

Ratio to Median Remuneration

Mr. T. Copichand

Vice-Chairman & Managing Director

83.07%

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

Name

Designation

% increase in Remuneration in the financial year

Mr. Vijaya Bhaskar

Chief Financial Officer

19.44%

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

d. The number of permanent employees on the rolls of the Company as on 3151 March, 2018:955

e. The relationship between average increase in remuneration and company performance is mainly governed by the market trend.

f. Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company was in line with business results.

g. Variations in the market capitalization of the Company, Price Earnings ratio as at the closing date of the current financial year and previous financial year:

Particulars

28th March, 2018

3151 March, 2017

% Change

Market Capitalization (Rs. Crores)

46.61

127.25

-63.37%

Price Earnings Ratio

29.48

11.81

17.67%

h. Percentage increase or decrease in the market quotations of the shares of the Company in comparison to the rate at which the company came out with the last public offer:

Particulars

28lh March,

IPO price

% Change

2018

Market Price (BSE)

37.25

10

272.5%

Market Price (NSE)

37.15

10

271.5%

i. Average percentile increase already made in the salaries of employees other than the managerial personnel in the financial year 2017-18: Nil

j. The Key parameters for any variable component of remuneration availed by the directors:

The payment of sitting fees to the non-executive d irectors of the Company is well within the applicable provisions of the Companies Act, 2013. The said sitting fees is determined by the board of directors, based on the recommendations made by the Nomination and Remuneration Committee and is paid amongst non-executive directors based on their attendance and contribution at the board and at certain committee meetings.

k. The ratio of the remuneration of the highest paid director to that of the employees who are not directors but received remuneration in excess of the highest paid director during the year: NIL

I. Affirmation thatthe remuneration is as per the remuneration policy of the Company:

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

CORPORATE SOCIAL RESPONSIBILITY

The Corporate Social Responsibility Committee formed pursuant to section 135 of Companies Act, 2013 approved and spent Rs. 23,16,210/- during the Financial Year 2017-18. The manner in which the amount spent during the financial year is detailed below:

SI. No

CSR project or activity Identified

Sector in which the project is covered

Projects or programs (1) Local area or other (2) Specify the State and district where the project or Programs was Undertaken

Amount outlay (budget) project or program wise,

Amount spent on the project or program Subheads: (1) Direct Expenditure on projects or program

(2) Overheads

Cumulative Expenditure upto the reporting period

Amount spent Direct or through implementation agency

1

Distribution of Set Top Boxes under concept of smart Village

Rural Development Projects

Mori Village, East Godavari district, Andhra Pradesh

Rs. 24,00,000

(1) Direct Expenditure on projects = Rs. 23,16,210

Rs. 23,16,210

Direct

HUMAN RESOURCES

Human Resources’ are recognized as a key pillar of any organization and so is for Tera Software Limited. The company puts constant efforts in recruiting and training the employees and ensures to bring out the best of them. The company adopts a HR policy and ensures that all the employees are aware of such policies. The needs of the employees are addressed with high importance and efforts are made to provide a healthy environment. Besides all these, the company places high emphasis on professional etiquette and integrity.

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. However, the Company has constituted a Risk Management Committee and Risk Management Framework to identify, evaluate, mitigate and monitor the risk management in the Company. The Committee is responsible for reviewing risk management plan and ensuring its effectiveness. The audit committee has additional oversight i n the area of financial risk and controls.

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.

VIGIL MECHANISM

The Company has a whistle blower policy as part of its Vigil Mechanism to deal with instance of fraud and mismanagement, if any. It provides for the directors and employees to report genuine concerns and provides adequate safeguards against victimization of persons who use such mechanism. The Policy on vigil mechanism may be accessed on the Company’s website at the link: http://terasoftware.com/investors/vigil-blower-policy/. There were no complaints received during the year 2017-18.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS ORCOURTS

During the year under review, no significant and material orders have been passed by the Regulators or Courts or Tribunals impacting the going concern status and operations of the Company.

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 listingfees of both the stock exchanges have been paid.

EXTRACT OF ANNUAL RETURN:

Pursuant to the provisions of Section 92 of the Companies Act, 2013 and rules framed thereunder, the extract of the Annual Return in form MGT-9 is annexed herewith as (Annexure III) and forms part of this report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

Particulars of contracts or arrangements with related parties as referred to in Section 188(1) of the Companies Act, 2013 is mentioned in form AOC-2 and is appended as (Annexure IV) to the Board’s report.

There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which have a potential conflict with the interest of the Company at large. Prior omnibus approval of the Audit Committee is obtained on a yearly basis. The transactions so entered pursuant to the omnibus approval 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 Company’s website.

AUDITORS & AUDITORS REPORT:

i. STATUTORY AUDITORS:

M/s. Mullapudi & Co., Chartered Accountants, (Firm Reg no: 006707S) Hyderabad, have been appointed as Statutory Auditors of the Company on 23”i September, 2017 for a period of five years

Further the amendment in the provisions of section 139 of companies Act, 2013 vide the Companies (Amendment) Act, 2017 notification dated 7th May, 2018 the requirement of ratifying the appointment of statutory auditor by members at every annual general meeting has been omitted. Hence, M/s. Mullapudi & Co., Chartered Accountants continue to hold office until the conclusion of 28th AGM to be held in the year 2022.

ii. SECRETARIAL AUDITORS:

During the year, the Company has appointed M/s. C.V. Reddy K & Associates, Practising Company Secretaries as Secretarial Auditor. The Secretarial Audit report for the Financial Year 2017-18 is annexed herewith as “Annexure-V” to this Report. The Secretarial Audit Report does not contain any reservation, qualification or adverse remark.

SEXUAL HARASSMENT

Your Company always believes and endeavors to provide safe and healthy environment, which is free from discrimination and harassment including sexual harassment. Du ring 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.

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

In terms of Section 123,124 and 125 of the Companies Act, 2013, the unclaimed dividend and shares wherein the dividends unclaimed for a period of seven consecutive years i.e (Final Dividend for the year 2009-10) have been transferred to the IEPF Fund/Suspense account respectively. The details of shares transferred to the I EPF suspense account is available on the website of the Company

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) In the preparation of the Annual Accounts for the year ended 319 March, 2018, the applicable accounting standards have been followed and there were no material departures.

b) We 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 the Company at the end of the financial year and of the profit of the Company for the financial year ended 31st March, 2018;

c) We have 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 Annual Accounts for the year ended 31 “March, 2018 have been prepared on a going concern basis

e) Proper internal financial controls were in place and that the financial controls were adequate and operating effectively.

f) The systems to ensure compliance with the provisions of all applicable laws were in place and were adequate & operating effectively.

ACKNOWLEDGMENT:

The Board of Directors take this opportunity to place on record their appreciation to all the stakeholders of the Company, viz., Customers, Investors, Employees, Banks, Regulators, Suppliers and other business associates for the su pport extended during the year.

For and on behalf of the Board of Directors

Sd/- sd/-

(Koteswara Rao SSR) (T. Gopichand)

Place : Hyderabad Chairman Vice Chairman and Managing Director

Date : 14.08.2018 DIN: 00964290 DIN: 00107886

Director’s Report