Directors Report of Tera Software Ltd.

Mar 31, 2025

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

1. FINANCIAL PERFORMANCE

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

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

(Rs. in Lakhs)

	Standalone		Consolidated
PARTICULARS	Financial Year 2024-25	Financial Year 2023-24	Financial Year 2024-25	Financial Year 2023-24
Total Income	11170.49	8841.13	11170.49	8841.13
EBITDA	1634.97	1053.53	1634.38	1053.03
Less: Interest	379.18	285.86	379.18	285.86
EBTDA	1255.79	767.67	1255.20	767.17
Less: Depreciation	13.59	14.98	13.59	14.98
EBT	1242.20	752.69	1241.61	752.19
Less: Exceptional Items	(4.26)	139.47	(4.26)	139.47
Less: Tax Expenses	295.86	221.27	295.86	221.27
EAT (Earnings After Tax)	942.08	391.95	941.49	391.45
Profit/Loss carried to B/S	995.89	462.26	995.30	461.76
EPS (Basic & Diluted)	7.53	3.13	7.52	3.13

12000 i nnm	¦	Financial Performance
XuUUU 8000 Anno
DUw 4000 2000 n
			1
		¦ a__		M_ _		Mm		-
Standalone FY2024-25 Standalone FY2023-24 Consolidated FY2024-2S Consolidated FY2023-24 ¦ Total Income • EBITDA EAT (Earnings After Tax)

• Achieved a growth of 27% in operation performance.

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

2. OPERATIONAL HIGHLIGHTS AND STATE OF COMPANY’S AFFAIRS

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

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

3. DIVIDEND

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

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

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

4. TRANSFER TO RESERVES

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

5. LISTING OF EQUITY SHARES

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

6. CHANGE IN NATURE OF BUSINESS

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

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

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

8. SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES

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

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

9. CONSOLIDATED FINANCIAL STATEMENTS

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

10. CORPORATE GOVERNANCE REPORT

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

11. DIRECTORS AND KEY MANAGEMENT PERSONNEL AND RELEVANT DISCLOSURES

• Composition of Board:

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

• Appointment and Superannuation of Directors during the year:

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

Name of the Director	DIN	Designation	Nature of Change	Effective date of change
Smt. Vemuri Usha Rani	03601565	Independent Director	Appointment	August 03, 2024
Dr. T. Hanuman Chowdary	00107006	Independent Director	Term Completed	September 30, 2024
Dr. T. V. Lakshmi	00003020	Independent Director	Term Completed	September 30, 2024

• Key Managerial Personnel (KMP)

Details of Key Managerial Personnel of the Company:

Sri. T. Gopichand	Chairman and Managing Director
Sri. T. Madhu Mitra	Whole-Time Director
Ms. D. Pravallika	Chief Financial Officer
Sri. Ch. Mallikarjuna	Company Secretary & Compliance Officer

• Declaration by Independent Directors:

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

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

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

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

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

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

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

12. BOARD AND COMMITTEE COMPOSITION AND THEIR MEETINGS

• Board Meeting and Composition:

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

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

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

Name of Director	Desig¬ nation	Category	No.of Board Meetings eligible to attend During the year	No.of Board Meetings attended during the year
Sri. T. Gopichand	CMD	Promoter	4	4
Sri. T. Madhu Mitra	WTD	Promoter Group	4	4
Sri. Divakar Atluri	NED	Independent	4	4
Prof. Dr. Braja Bandhu Nayak	NED	Independent	4	4
Smt. V. Usha Rani	NED	Independent	3	3
Sri. T. Bapaiah Chowdary	NED	Promoter Group	4	4
Dr. T. Hanuman Chowdary	NED	Independent Director	2	2
Dr. T.V. Lakshmi	NED	Independent Director	2	2

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

• Meeting of Independent Directors:

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

13. COMMITTEES OF BOARD

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

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

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

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

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

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

15. EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

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

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

16. MANAGEMENT DISCUSSION AND ANALYSIS

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

forms an integral part of this Annual Report.

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

17. CORPORATE SOCIAL RESPONSIBILITY

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

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

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

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

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

18. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

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

19. ANNUAL RETURN

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

20. DIRECTORS’ RESPONSIBILITY STATEMENT

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

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

b) The directors had selected such accounting policies and applied them consistently and made judgments and
estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company
as on March 31, 2025 and of the profit of the company for that period.

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

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

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

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

21. AUDITORS

(A) Statutory Auditors:

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

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

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

(B) Cost Auditor:

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

(C) Secretarial Auditor:

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

Board’s Comment on the Secretarial Audit Report:

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

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

(D) Internal Auditor:

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

22. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

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

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

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

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

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

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

25. COMPLIANCE WITH SECRETARIAL STANDARD

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

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

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

27. RISK MANAGEMENT

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

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

28. VIGIL MECHANISM

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

29. CODE FOR PREVENTION OF INSIDER TRADING

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

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

30. ACCEPTANCE OF DEPOSIT

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

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

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

32. DETAILS IN RESPECT OF FRAUD

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

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

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

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

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

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

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

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

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

37. INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

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

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

38. PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

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

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

39. MATERNITY BENEFIT

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

40. CERTIFICATE OF NON-DISQUALIFICATION OF DIRECTORS

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

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

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

42. COMPLIANCE CERTIFICATE SIGNED BY CEO & CFO

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

ACKNOWLEDGEMENT

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

For and on behalf of the Board

T. Madhu Mitra Tummala Gopichand

Place: Hyderabad Whole-Time Director Chairman and Managing Director

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

---

Mar 31, 2024

The Board of Directors are pleased to present the 30th Annual Report along with the Audited Financial Statements of Tera Software Limited (‘TSL’ or ‘the Company’) for the year ended 31st March, 2024.

ADEQUACY 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.

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 2023-24 is available on the website of the Company at https://terasoftware.com/annual-return/.

AUDIT COMMITTEE:

The Company has in place an Audit Committee in terms of the requirements of Section 177 of the Act read with the Rules made thereunder and Regulation 18 of the SEBI Listing Regulations.

The details pertaining to the same have been provided in Annexure ‘A’ - Report on Corporate Governance forming part of this Board’s Report.

AUDITORS REPORT:

The Auditors’ report to the shareholders does not contain any qualification, observation or comment or adverse remark(s). BOARD, COMMITTEE AND GENERAL MEETINGS:

During the financial year under review, 6 (Six) meetings of the Board of Directors were held.

1 (One) Annual General Meeting of the Company was held on 17th August, 2023.

Also, a separate meeting of Independent Directors as prescribed under Schedule IV of the Act was held on 10th February, 2024.

The details of the meetings are provided in “Annexure - A” Report on Corporate Governance forming part of this Board’s Report.

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.

CORPORATE GOVERNANCE REPORT:

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

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 as “Annexure - B”.

CHANGES IN DIRECTORS & KEY MANAGERIAL PERSONNEL (KMP):

Sri. O. Babu Reddy, Chief Financial Officer resigned w.e.f. 30-06-2023 from the Company.

Smt. T. Pavana Devi (DIN: 00107698), retired by rotation in the 29th Annual General Meeting held on 17th August, 2023 and not re-appointed as per her desire.

Sri. T. Madhu Mitra (DIN: 07124242) appointed as a Director (Marketing) in the capacity of Whole time Director in the 29th Annual General Meeting held on 17th August, 2023.

Kum. D. Pravallika appointed as the Chief Financial Officer w.e.f. 31st December, 2023.

The second term of five years tenure of Independent Directors Dr. T. Hanuman Chowdary and Smt. T. V. Lakshmi is to be completed on 30/09/2024 and not eligible for re-appointment as per Companies Act, 2013 and rules made thereunder,

but such independent director shall be eligible for appointment after the expiration of three years of ceasing to become an independent director.

Pursuant to the recommendation of the Nomination & Remuneration Committee (NRC), the Board at its meeting held on 3 August, 2024 appointed Smt. Vemuri Usha Rani as an Additional Director in the capacity of Non-Executive Independent Director and recommended the appointment of her as an Independent Director of the Company for a period of five years w.e.f. 3 August, 2024 to 2 August, 2029, for approval of the members at the ensuing Annual General Meeting.

Sri. T. Bapaiah Chowdary, Non-Executive Director, is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

The Notice convening the Annual General Meeting includes the proposal for appointment/re-appointment of Directors.

The Board opines that all the Independent Directors on the Board possess integrity, necessary expertise and experience for performing their functions diligently.

COMPANY POLICY ON DIRECTOR’S APPOINTMENT AND REMUNERATION:

The Company has formulated a Nomination and Remuneration Committee in accordance with the requirements of Section 178 of the Act read with Rules made thereunder and Regulation 19 of SEBI Listing Regulations.

The details of the same are given in “Annexure - A” - Report on Corporate Governance forming part of this Board’s Report.

The NRC has formulated a policy on Director’s appointment and remuneration including recommendation of remuneration of the key managerial personnel and senior management personnel and the criteria for determining qualifications, positive attributes and independence of a Director. The NRC Policy is also provided in Annexure ‘A’ - Report on Corporate Governance forming part of this Board’s Report.

COMPLIANCE WITH SECRETARIAL STANDARDS ON THE BOARD AND GENERAL MEETINGS:

The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings.

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, 2024, is annexed as “Annexure - C.”

COMPLIANCE CERTIFICATE SIGNED BY CEO & CFO:

Compliance Certificate signed by CEO & CFO for the financial year ended 31st March, 2024 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”.

CONSOLIDATED FINANCIAL STATEMENTS:

Your Directors have pleasure in attaching the Consolidated Financial Statements pursuant to Section 129(3) of the Act and Regulation 34 of the SEBI Listing Regulations prepared in accordance with the applicable Accounting Standards prescribed by the Institute of Chartered Accountants of India (ICAI), in this regard.

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

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.

There is no requirement to spend on CSR activities in the financial year 2023-24 as the average net profit of the preceding three financial years are in negative.

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 - E” to this report.

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 is annexed as

“Annexure - F.”

DECLARATION OF INDEPENDENCE OF INDEPENDENT DIRECTORS:

The Company has received Declarations of Independence from Independent Directors as stipulated under Section 149(7) of the Act and Regulation 25(8) of the SEBI Listing Regulations, confirming that he/she is not disqualified from appointing/continuing as Independent Director as per the criteria laid down in Section 149(6) of the Act and Regulation 16(1)(b) of SEBI Listing Regulations. The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Companies Act, 2013.

DEPOSITS:

During the year under review, the Company has not accepted any deposits from the public falling within the ambit of Section 73 of the Act and the Rules framed thereunder. Hence, the Company does not have any unclaimed deposits as on the date of the Balance Sheet. The Company complies with the requirement of filing the requisite return with respect to amount(s) not considered as deposits.

DEPOSITORY SYSTEM:

As the members are aware, the Company’s shares are compulsorily tradable in electronic form only. As on 31 March, 2024, 99.62% of the Company’s total paid-up capital representing 1,24,64,427 shares are in dematerialized form. In terms of Regulation 40(1) of SEBI Listing Regulations, requests for effecting transfer of securities shall be processed only if the securities are held in the dematerialized form.

Pursuant to SEBI circular dated January 25, 2022, all requests for transmission, transposition, issue of duplicate share certificate, claim from unclaimed suspense account, renewal/exchange of securities certificate, endorsement, sub-division/splitting of securities certificate and consolidation of securities certificates/folios will be processed only in demat form. A letter of confirmation will be issued, which needs to be submitted by the shareholder to Depository Participant to get credit of these securities in dematerialized form. Shareholders desirous of using these services are requested to contact the RTA of the company, the contact details of RTA are available on the website of the Company at www.terasoftware.com.

Further in adherence to SEBI’s circular to enhance the due diligence for dematerialization of the physical shares, the Company has provided the static database of the shareholders holding shares in physical form to the depositories which would augment the integrity of its existing systems and enable the depositories to validate any dematerialization request.

In view of the numerous advantages offered by the Depository System as well as to avoid frauds, members holding shares in physical mode are advised to avail of the facility of dematerialization from either of the depositories.

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, 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.

DISCLOSURE OF REMUNERATION:

The details of remuneration as required to be disclosed under the Section 197(12) of the Act and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are given in Annexure ‘G’ forming part of this Board’s Report.

The information in respect of employees of the Company required pursuant to Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is not applicable during the year under review, as no employee is drawing the aggregate limits as specified in the above said Rules.

DIVIDEND:

Your directors have not recommended the payment of dividend for the F.Y. 2023-24 to manage the cash flows of the Company Business operations.

FINANCIAL RESULTS: (Rs. in Lakhs)

PARTICULARS	Standalone
	Year Ended 31.03.2024	Year Ended 31.03.2023
Gross Income	8841.13	15595.96
Expenditure	7787.60	14070.71
Profit before Finance Cost, Depreciation & Tax	1053.53	1525.25
Less: Finance Cost	285.86	636.20
Depreciation	14.98	23.49
Profit/Loss Before Tax (PBT)	752.69	865.56
Less: Provision for Current tax	205.72	190.37
Tax Expense relating to earlier years	(31.76)	276.53
Deferred tax	94.61	52.08
Exceptional Items	139.47	--
Profit/Loss After Tax (PAT)	344.65	346.58

LISTING OF SHARES ON STOCK EXCHANGES:

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

MATERIAL CHANGES & COMMITMENTS:

There are no material changes and commitments affecting the financial position of the Company between the end of the current financial year and the date of this report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

The Management’s Discussion and Analysis Report as required 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 Board’s Report.

PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN OR SECURITY PROVIDED BY THE COMPANY:

The Company has disclosed the full particulars of the loans given, investments made or guarantees given or security provided as required under Section 186 of the Act and Regulation 34(3) read with Schedule V of the SEBI Listing Regulations and forms part of the financial statements.

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 and is appended as “Annexure - I” 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 may have a potential conflict with the interest of the Company at large.

The Audit Committee has approved all the Related Party Transactions for the FY 2023-24. Omnibus approval of the Audit Committee is obtained before the commencement of financial year for all the transactions for FY 2024-25 as required under the provisions of Section 177 of the Act.

The revised policy on Related Party Transactions as approved by the Board is uploaded on the Company’s website. PERFORMANCE OF THE COMPANY:

The gross income for the financial year under review were Rs. 8,841.13 lakhs as against Rs.15,595.96 lakhs for the previous year. The Company has registered a net profit of Rs. 344.65 lakhs as compare to previous year’s net profit of Rs. 346.58 lakhs.

PERFORMANCE EVALUATION OF BOARD, ITS COMMITTEES AND DIRECTORS:

Pursuant to applicable provisions of Schedule IV of Companies Act, 2013, read with Securities Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015, 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.

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 Committee’s 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.

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:

The Company always believes and endeavours to provide safe and healthy environment, which is free from discrimination and harassment including sexual harassment. 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.

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

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

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.

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.

SECRETARIAL AUDITORS AND SECRETARIAL AUDIT REPORT:

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 Auditors. The Secretarial Audit report for the financial year 2023-24 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.

SHARE CAPITAL:

The Company’s total paid-up equity share capital is Rs.12,51,18,750/- consisting of 1,25,11,875 equity shares of Rs.10/- each, fully paid up as on 31st March, 2024. During the year under review, there was no change in share capital of the Company.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS:

During the year under review, there were no material and significant orders passed by the regulators or courts or tribunals impacting the going concern status and the Company’s operations in future.

STAKEHOLDERS’ RELATIONSHIP COMMITTEE:

The Company has in place a Stakeholders’ Relationship Committee in terms of the requirements of Section 178 of the Act read with the Rules made thereunder and Regulation 20 of the SEBI Listing Regulations.

The details of the same are given in “Annexure - A” Report on Corporate Governance forming part of this Board’s Report. STATUTORY AUDITORS:

Pursuant to the 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 confirmed that they have subjected themselves to the peer review process of Institute of Chartered Accountants of India (ICAI) and hold valid certificate issued by the Peer Review Board of the ICAI.

Further, in compliance with Section 146 of the Act, the notices of the general meeting of the Company are also forwarded to the Statutory Auditors of the Company to ensure their attendance at the AGM of the Company.

The details of the total fees paid by the Company and its subsidiaries and other relevant details are provided in “Annexure - A” Report on Corporate Governance forming part of this Board’s Report.

SUBSIDIARY / ASSOCIATE / JOINT VENTURE COMPANIES:

The Company entered into a Joint Venture Agreement with Sitra Infotech Private Limited in the ordinary course of business and incorporated a subsidiary company under the name of ‘TS Innovations Private Limited’ (TSIPL) w.e.f. 18/07/2023 and participated in e-tender invited by ONGC for award of contract for “Survey, Engineering, Supply, Installation & Commissioning of CCTV System during the year under review. But the contract has not awarded for TSIPL.

The Company has formulated a policy on the identification of material subsidiaries in line with Regulation 16(c) of the Securities & Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015 (“SEBI

Listing Regulations”), as amended, and the same is placed on the website at https://www.terasoftware.com/investors. The Company has not having any material subsidiary. Pursuant to the provisions of Section 129(3) of the Act, a statement containing the salient features of financial statements of the Company’s subsidiaries in Form AOC-1 is annexed as “Annexure - K” to the Board’s Report.

TRANSFER TO RESERVES:

The Company has not transferred any amount to the reserves during the current financial year.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF):

Pursuant to the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (“IEPF Rules”), the Company has appointed the Company Secretary as the Nodal Officer for carrying out the necessary functions under the applicable provisions of the Act and the rules made thereunder.

Pursuant to the provisions of Section 124 of the Act read with IEPF Rules and relevant circulars and amendments thereto, the amount of dividend remaining unpaid or unclaimed for a period of seven years from the due date is required to be transferred to IEPF, constituted by the Central Government. Further, pursuant to the provisions of IEPF Rules, all equity shares in respect of which dividend has not been paid or claimed for last seven consecutive years are required to be transferred by the Company to the designated demat account of the IEPF authority within a period of thirty days of such shares becoming due to be transferred.

The Company sends advance communication to the concerned shareholders at their address registered with the Company and also publishes notices in the newspapers for taking appropriate action to claim unclaimed dividend and the shares due for transfer to IEPF.

Despite these efforts, an amount of Rs. 2,43,264/- which remained unclaimed for a period of seven years from the financial year 2015-16, was transferred to the IEPF in accordance with the provisions of the Act.

Subsequent to the transfer, the concerned shareholders can claim the said shares along with the dividend(s) by making an application to IEPF Authority in accordance with the procedure available on www.iepf.gov.in and on submission of such documents as prescribed under the IEPF Rules.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY:

As per the provisions of Section 177(9) of the Act, the Company is required to establish an effective Vigil Mechanism for Directors and Employees to report genuine concerns. The Whistle Blower Policy of the Company meets the requirement of the Vigil Mechanism framework under the Act and Regulation 22 of SEBI Listing Regulations.

Employees are encouraged to report any wrongdoings having an adverse effect on the Company’s financials/image and instances

of leak of unpublished price sensitive information. An employee can report any wrongdoing in oral or written form. Whistle blowers are assured by the management of full protection from any kind of harassment, retaliation, victimization, or unfair treatment.

The whistle Blower Policy is available on the Company’s website at the link: http://terasoftware.com/investors/. There were no complaints received during the year under review.

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 Board’s Report.

ACKNOWLEDGMENTS:

Your Directors take this opportunity to thank the customers, vendors, Financial Institutions, Regulatory Authorities, Stock Exchanges and all the various stakeholders for their continued co-operation and support to the Company. Your Directors also acknowledge the support and co-operation from the Government of India, the concerned State Governments, other Government Departments and Governmental Agencies. The Directors appreciate the significant contributions made by the employees of the Company and its subsidiaries during the year under review and value the contributions made by every member of the Tera family.

For and on behalf of the Board

T. Madhu Mitra Tummala Gopichand

Place: Hyderabad Whole-Time Director Chairman and Managing Director

Date : 3rd August, 2024 DIN: 07124242 DIN: 00107886

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Mar 31, 2018

Dear Members,

The Board of Directors present the 24^th Annual Report and the Audited Financial Statements for the year ended 31^st 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 31^a 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 31^st 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 22^nd 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 7^th 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 28^th 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 31^st 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

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Mar 31, 2016

Dear Members,

The Directors are pleased to present the Twenty Second Annual Report for the financial year ended 31 March, 2016.

FINANCIAL RESULTS

(Rs. in Lakh)

PARTICULARS	Year Ended 31.03.2016	Year Ended 31.03.2015
Gross Income	17,515.69	9,325.99
Expenditure	15,372.19	7,434.66
Profit before Finance Cost, depreciation & tax	2,143.50	1,891.33
Less: Finance Cost	697.81	719.69
Depreciation	269.85	630.74
Profit before tax	1,175.84	540.90
Less: Provision for Current tax	303.78	127.96
Tax Expense relating to earlier years	9.75	0.51
Deferred tax	90.58	49.99
Profit for the year	771.73	362.44

OVERVIEW OF COMPANY''S FINANCIAL PERFORMANCE

Your Company posted a turnover of Rs.17,515.69 lakh for the year ended 31 March, 2016 as against Rs.9,325.99 lakhs in 2014-15. Your Company has registered a net profit of Rs.771.73 lakhs, as compared to previous year''s net profit of Rs.362.44 lakhs.

There have been no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of this report.

DIVIDEND:

The Board on its meeting held on 28 May 2016, has recommended a dividend of Re.1.20/- per equity share i.e. 12% on each equity share having face value of Rs.10/- each, subject to the approval by the shareholders at the ensuing Annual General Meeting. The total dividend payout will be Rs.180.71 lakhs (including dividend distribution tax).

SHARE CAPITAL

The paid up Equity Share Capital as on 31 March, 2016 was 12.51 crores. During the year under review, the Company has not issued any shares. The Company has not issued shares with differential voting rights. It has neither issued employee stock options nor sweat equity shares and does not have any scheme to fund its employees to purchase the shares of the Company.

ECONOMIC SCENARIO AND OUTLOOK

India is the world''s largest sourcing destination for the information technology (IT) industry, accounting for approximately 67 per cent of the US$ 124-130 billion market. The industry employs about 10 million workforces. More importantly, the industry has led the economic transformation of the country and altered the perception of India in the global economy.

The IT industry has also created significant demand in the Indian education sector.

MARKET SIZE

The Indian IT sector is expected to grow at a rate of 12-14 per cent for FY 2016 in constant currency terms. The sector is also expected triple its current annual revenue to reach US$ 350 billion by FY 2025, as per National Association of Software and Services Companies (NASSCOM).

GOVERNMENT INITIATIVES

Some of the major initiatives taken by the government to promote IT and ITeS sector in India are as follows:

- The Ministry of Communication and Information Technology, announced plan to increase the number of common service centres or e-Seva centres to 250,000 from 150,000 currently to enable village level entrepreneurs to interact with national experts for guidance, besides serving as a e-services distribution point.

- The e-Tourist Visa (e-TV) scheme has been extended to 37 more countries thereby taking the total count of countries under the scheme to 150 countries.

- Indian government is expected to increase its spending on information technology (IT) products and services by 5.2 per cent to US$ 6.88 billion in FY 2015-16.

- The Government of India has launched the Digital India program to provide several government services to the people using IT and to integrate the government departments and the people of India. The adoption of key technologies across sectors spurred by the ''Digital India Initiative'' could help boost India''s Gross Domestic Product (GDP) by US$ 550 billion to US$ 1 trillion by 2025.

The Company has a positive outlook for the coming years and endeavors to achieve a steady business performance in the coming years. Your Company anticipates higher percentage of profits from the new projects that will be undertaken during the coming years.

CORPORATE SOCIAL RESPONSIBILITY

During the year under review, our Company has not come under the purview of the Section 135 of the Companies Act, 2013 as the Company has not crossed limit of Net worth or Turnover or Net profit during the three preceding financial years as specified in the provisions of Section 135 of the Companies Act, 2013.

HUMAN RESOURCES

''Human Resources'' are recognized as a key pillar of any successful organization and so is for Tera Software. 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 personnel policies. The needs of the employees are addressed with high importance and efforts are made to provide a highly challenging and healthy environment. Besides all these, the company places high emphasis on professional etiquette required of every employee.

RISK MANAGEMENT

The provisions related to the Risk Management Committee of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are not applicable to the Company. However the Company has a Corporate Risk Management Committee. The Company has a Risk Management framework to identify, evaluate business risks and opportunities. This framework seeks to minimize adverse impact on the business objectives and enhance the Company''s competitive advantage. The risk framework defines the risk management approach across the enterprise at various levels. The Corporate Risk Management Committee reports to the Audit Committee and the Board.

INTERNAL CONTROLS SYSTEMS AND ADEQUACY

The Company has an Internal Control System commensurate with the size, scale and complexity of its operations. The scope of the Internal Audit is decided by the Audit Committee and the Board. To maintain its objectivity and 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, which reports to the Audit Committee of 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 of the Board.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Company has adopted a Whistle Blower Policy, to provide a formal mechanism to the Directors and employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Company''s Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee.

FIXED DEPOSITS:

The Company has not accepted any fixed deposits during the financial year 2015-2016. There are no outstanding deposits as on 31.03.2016

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 in prescribed form AOC-2, is appended as Annexure III 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 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 certain 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 Company''s website.

DIRECTORS

In pursuance of Section 152 of the Companies Act, 2013 and the rules framed there under, Sri T.Bapaiah Chowdary, Director is liable to retire by rotation, at the ensuing Annual General Meeting and being eligible has offered himself for reappointment.

Sri T.Gopichand, has been re-appointed as Managing Director for a period of 5 years with effect from 1 September, 2016 subject to approval of Members in the ensuing Annual General Meeting. Details of the proposal for appointment of Sri T.Gopichand are mentioned in the Explanatory Statement under Section 102 of the Companies Act, 2013 of the Notice of the 22^nd Annual General Meeting.

Sri K.Rama Rao, has been re-appointed as Whole Time Director with effect from 1 September, 2016 subject to approval of Members in the ensuing Annual General Meeting. Details of the proposal for appointment of Sri K. Rama Rao are mentioned in the Explanatory Statement under Section 102 of the Companies Act, 2013 of the Notice of the 22^nd Annual General Meeting.

All the Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149 (6) of the Act. In the opinion of the Board, they fulfill the conditions of independence as specified in the Act and the Rules made there under and are independent of the management.

KEY MANAGERIAL PERSONNEL

During the year, the following are the changes in the Key Managerial Personnel of the Company.

Name	Designation	Appointed Date	Resigned Date
B.D.Naidu	CFO	—	30/05/2015
V.Sri Lakshmi	Company Secretary	—	07/09/2015
Ch.Vijaya Bhaskar	CFO	01/36/2015	—
Pavan Pise	Company Secretary	12/11/2015	—

PERFORMANCE EVALUATION

The annual evaluation framework for assessing the performance of Directors comprises of the following key areas:

i) Attendance for the meetings, participation and independence during the meetings.

ii) Interaction with Management.

iii) Role and accountability of the Board.

iv) Knowledge and proficiency.

The evaluation involves assessment by the Nomination and Remuneration Committee and Board of Directors. A member of the Nomination and Remuneration Committee and Board does not participate in the discussion of his / her evaluation.

NOMINATION AND REMUNERATION POLICY

The Company has adopted the Nomination and Remuneration Policy for the Directors, Key Managerial Personnel and other employees, pursuant to the provisions of the Act and SEBI (LODR) Regulations, 2015.

The Nomination and Remuneration Committee has considered the following factors while formulating the Policy:

(i) The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;

(ii) Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

(iii) Remuneration to Directors, Key Managerial Personnel and Senior Management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.

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. Details of the Remuneration Policy are given in the Corporate Governance Report.

BOARD AND COMMITTEE MEETINGS

A calendar of Board and Committee Meetings to be held during the year was circulated in advance to the Directors. Five Board Meetings were convened and held during the year.

The Board has constituted an Audit Committee with all Independent Directors namely Sri R. S. Bakkannavar (Chairman), Dr. T. Hanuman Chowdary and Sri Koteswara Rao SSR as Members. There have not been any instances during the year when recommendations of the Audit Committee were not accepted by the Board.

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 period prescribed under the Act and the SEBI(L0DR)Regulation,2015.

DIRECTORS'' RESPONSIBILITY STATEMENT:

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

a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to 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 that period;

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

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

e) The Company had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

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

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

No significant material orders have been passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations.

AUDITORS

Statutory Auditors

M/s. Narven Associates, Chartered Accountants have been appointed as statutory auditors of the company at the Annual General Meeting held on 30.09.2014 for a period of three years subject to ratification by members at every consequent Annual General Meeting. Members are requested to consider the ratification of appointment of Statutory Auditors of the Company at the ensuing AGM and authorise the Board of Directors to fix their remuneration.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s C.V. Reddy K & Associates, Practicing Company Secretaries, to undertake the secretarial audit of the company. The Secretarial Audit Report is annexed herewith as ''Annexure I''.

The Auditors'' Report and the Secretarial Audit Report for the financial year ended 31 March, 2016 do not contain any qualification, reservation, adverse remark or disclaimer.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND 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:

Your Company is constantly upgrading its technological excellence with emerging technologies. The 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

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:

The information required pursuant to Section 197 read with Rule, 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is as follows:

(i) & (ii) the ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year, the percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year;

Name	Designation	RATIO OF REMUNERATION OFEACH DIRECTORTO THE MEDIAN REMUNERATION OF EMPLOYEES	% INCREASE IN REMUNERATION DURING FY 2016
*Sri T. Gopichand,	Vice Chairman & Managing Director	44.00	NIL
Sri K. Rama Rao	Wholetime Director	21.36	9.92
Sri Vijaya Bhaskar	Chief Financial Officer	NA	NIL
Sri Pavan Pise	Company Secretary	NA	NIL

(iii) the percentage increase in the median remuneration of employees in the financial year- 4%.

(iv) the number of permanent employees on the rolls of company as on 31.03.2016 - 1215.

(v) The relationship between average increase in remuneration and company mainly governed by the market trend.

(vi) Comparison on the remuneration of the Key Managerial Personnel against the performance of the Company was in line with Business Results.

(vii) a) The market capitalization of the Company as at 31st March, 2016 is Rs.104.03 crores, as against Rs.40.038 crores as at 31^st March, 2015, an increase of 259.83% during the year under review.

b) The price earnings ratio of the Company as at 31^st March, 2016 is 13.3, as against 11.03 as at 31^st March, 2015.

c) Price at the time of initial public offer in the year 2000 was Rs.10. The market quotation of the Equity Shares of the Company as on 31st March, 2016 was Rs.83.1 for shares of face value of Rs.10/- each, representing an increase of 831% over the period.

(viii) Average percentile increase already made in the salaries of employees other than the managerial personnel in the financial year 2015-16 is 5 to 6 %.

(ix) Comparison of the remuneration of each Key Managerial Personnel (KMP) against the performance of the Company: KMP''s are eligible to commission/ incentive as a part of variable remuneration, which is linked to the performance of the Company. Such payment is effected only if the performance of the Company so permits and as recommended by the Nomination & Remuneration Committee and approved by the Board.

(x) The key parameters for any variable component of remuneration availed by the Directors - In case of Non-Executive Directors, Payment of sitting fees for Board / Committee Meetings are on the basis of their attendance. Commission to Directors is determined by the Nomination & Remuneration Committee with reference to a threshold of eligible profits within the statutory limits and performance evaluation.

(xi) the ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year;

None of the employees (who are not directors) receive remuneration in excess of the highest paid director

(xii) Affirmation that the remuneration is as per the Remuneration Policy of the Company:

It is affirmed that the remuneration paid to all the Key management Personnel was in accordance with remuneration policy adopted by the Company.

CORPORATE GOVERNANCE

The Company endeavors to maximize the wealth of the shareholders by managing the affairs of the Company with a pre-eminent level of accountability, transparency and integrity. A report on Corporate Governance including the relevant Auditors'' Certificate regarding compliance with the conditions of Corporate Governance as stipulated in Regulation 34 (3) read with Part E of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 along with Management Discussion and Analysis is annexed and forms part of the Annual Report.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as "Annexure - II".

SEXUAL HARASSMENT

During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under.

ACKNOWLEDGMENT:

The Directors wish to convey their appreciation to all your Company''s employees for their enormous personal efforts as well as their collective contribution to your Company''s performance. The Directors would also like to thank the shareholders, customers, dealers, suppliers, bankers and all other stakeholders for their continued support and their confidence in its management.

For and on behalf of the Board of Directors

Sd/- Sd/-

Place: Hyderabad (T. Gopichand) (K. Rama Rao)

Date : 28.05.2016 Vice Chairman and Managing Director Whole time Director

DIN:00107886 DIN:00108659

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Mar 31, 2015

Dear Members,

The Directors are pleased to present the Twenty First Annual Report for the financial year ended March 31, 2015. Summarized Financial Highlights:

(Rs. in Lakh)

PARTICULARS Year Ende Year Ended

31.03.2015 31.03.2014

Gross Income 9,325.99 10,278.83

Expenditure 7,434.66 7950.56

Profit before Finance Cost, depreciation 1,891.33 2328.27 & tax

Less:Finance Cost 719.69 899.36

Depreciation 630.74 1,002.47

Profit before tax 540.90 426.44

Less:Provision for Current tax 127.96 369.02

Tax Expense relating to earlier years 0.51 0

Deferred tax 49.99 (144.91)

Profit for the year 362.44 202.33

Company Performance

Your Company posted a turnover of Rs. 9,325.99 lakh for the year ended 31st March, 2015 as against Rs. 10,278.83 Lakh in 2013-14. Your Company has registered a net profit of Rs.362.44 Lakh, as compared to previous year's net profit of Rs. 202.33 Lakh representing an increase of 179% over the previous year.

No Material changes and commitments have occurred after the close of the year till the date of this Report, which affect the financial position of the Company.

Dividend:

Your Directors have recommended a dividend of Re.0.80/- per equity share i.e. 8% on each equity share having face value of Rs.10/- each, subject to the approval by the shareholders at the ensuing Annual General Meeting. The total dividend payout will be Rs. Rs.120.11 Lakh (including dividend tax).

Share Capital

The paid up Equity Share Capital as on 31st March, 2015 was 12.51 crores. During the year under review, the Company has not issued any shares. The Company has not issued shares with differential voting rights. It has neither issued employee stock options nor sweat equity shares and does not have any scheme to fund its employees to purchase the shares of the Company.

Economic Scenario and Outlook

India is set to become the world's fastest-growing major economy by 2016 ahead of China, the International Monetary Fund (IMF) said in its recent latest forecast. India is expected to grow at 6.3 per cent in 2015, and 6.5 per cent in 2016 when it is likely to cross China's projected growth rate, the IMF said in the latest update of its World Economic Outlook.

With the introduction of the concept of e-governance, both the Central and State Governments are keen in implementing different projects to keep the activities of the Governments transparent, timely and cost effective.

E-governance in India is steadily evolving from basic digitization of government data and processes to actually facilitating delivery of various citizen services on-line. A common vision and strategy is being deliberated and firmed up across all levels of government Central, State and local bodies. This approach has huge potential in garnering cost savings, increasing transparency, and presenting a seamless view of government to citizens. Digital Technologies which include Cloud Computing and Mobile Applications have emerged as catalysts for rapid economic growth and citizen empowerment across the globe. Digital technologies are being increasingly used by us in everyday lives from retail stores to government offices. They help us to connect with each other and also to share information on issues and concerns faced by us. In some cases they also enable resolution of those issues in near real time.

Hon'ble Prime Minister vision of a digital India is transforming our nation and creating opportunities for all citizens by harnessing digital technologies. His vision is to empower every citizen with access to digital services, knowledge and information.

Vision of Digital India Centered on 3 Key Areas

* Digital Infrastructure as a Utility to Every Citizen

* Governance & Services on Demand

* Digital Empowerment of Citizens

A well connected citizen to government eco system has huge potential for both the partners. Citizens will continue to enjoy speedy, transparent and convenient services, whilst the government gets increasingly integrated into the community welfare and more importantly is in a position to focus real time on reallocation of resources where they are needed the most. A social transformation happens when citizens are empowered to help themselves in dealing with various government segments, saving time and money for all concerned and elevating overall levels of satisfaction for common man.

Tera Software is positioned to entrench into the following schemes announced by the Government under Digital India initiatives.

* Infrastructure as a Utility to Every Citizen

* High speed internet as a core utility

* Mobile phone & Bank account enabling participation in digital & financial space

* Easy access to a Common Service Centre

* Services available in real time from online &mobile platform

* All citizen entitlements to be available on the cloud

* Making financial transactions electronic & cashless

* Universal Digital Literacy - Universally accessible digital resources - All documents/ certificates to be available on cloud

* Collaborative digital platforms for participative

* Process Re-engineering using IT to improve transactions

* Use of online repositories e.g. school certificates, voter ID cards, etc.

* Integration of services and platforms - UIDAI, Payment Gateway, Mobile Platform, EDI Workflow automation inside government

* Technology for Education - e-Education

* Technology for Health - e-Healthcare - Online medical consultation- Online medical -Pan-India exchange for patient information

* Common Service centers

* Aadhaar based Direct Cash (e-Cash) Transfers

* Aadhaar based Pension schemes.

* Aadhaar based Social Security Benefit Schemes towards Scholarships for Students and Teachers.

* Aadhaar based Public Distribution Systems ( PDS)

* Permanent enrollment centres for AADHAAR

* Automation of VAT and subsequently GST

* Power sector Field Management services including Pre-Paid Meters

* Online tax/Utility Bill Collection

* Healthcare and Education

* Smart Cities, Wi-Fi enabled services.

The Company has a positive outlook for the coming years and endeavors to achieve a steady business performance in the coming years. Your company anticipates higher percentage of gross profits from the new projects that will be undertaken during the coming years.

Corporate Social Responsibility

The Company has constituted a Corporate Social Responsibility (CSR) Committee as required under Section 135 of the Companies Act, 2013 at its Board meeting held on 30.05.2014. The Company's average Net profits of last 3 years works out to Rs.804.07 lakhs, and 2% thereof to be spent on CSR works out to Rs.16.08 lakhs. The Company could not spend any amount on CSR activity in view of substantial outstanding receivables from the Government Departments.

Human Resources

'Human Resources' are recognized as a key pillar of any successful organization and so is for Tera Software. 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 personnel policies. The needs of the employees are addressed with high importance and efforts are made to provide a highly challenging and healthy environment. Besides all these, the company places high emphasis on professional etiquette required of every employee.

Business Risk Management

The Company has adopted a Risk Management Policy in accordance with the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement. It establishes various levels of accountability and overview within the Company, while vesting identified managers with responsibility for each significant risk.

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

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

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

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

Internal Controls Systems and Adequacy

Tera Software has an adequate system of internal control to ensure that the resources of the Company are used efficiently and effectively, all assets are safeguarded and protected against loss from unauthorized use or disposition and the transactions are authorised, recorded and reported correctly, financial and other data are reliable for preparing financial information and other data and for maintaining accountability of assets. The internal control is supplemented by extensive programme of internal audits, review by management, documented policies, guidelines and procedures.

Vigil Mechanism/ Whistle Blower Policy

The Company has adopted a Whistle Blower Policy, to provide a formal mechanism to the Directors and employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Company's Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee.

Particulars of Loans, Guarantees or Investments

The Company has not made any investment or given any loans or guarantees or provided any security during the year.

Fixed Deposits:

The Company has not accepted any fixed deposits during the financial year 2014-2015. The Company has repaid the public fixed deposits of Rs.11 Lakh accepted during the year 2013-14. There are no outstanding deposits as on 31.03.2015.

Related Party Transactions

The Company has not entered into any new Related Party Transactions during the financial year. There were no materially significant Related Party Transactions made by the Company during the year that would have required Shareholder approval under Clause 49 of the Listing Agreement.

All the Related Party Transactions of the Company were entered before the commencement of Companies Act, 2013 at arm's length price and requisite approvals were also obtained. Details of the transactions with Related Parties are provided in the accompanying financial statements.

The Company has adopted a Policy for Related Party Transactions. The Policy, as approved by the Board, is uploaded on the Company's website.

Directors

In pursuance of Section 152 of the Companies Act, 2013 and the rules framed there under, Sri K. Rama Rao, Wholetime Director is liable to retire by rotation, at the ensuing Annual General Meeting and being eligible has offered himself for reappointment.

During the year under review Sri Koteswara Rao SSR was appointed as the Additional Director (Independent) w.e.f. 07th August, 2014 by the Board and Sri D. Seetharamaiah, an independent Director and Chairman ceased to be the Director of the Company from 30.09.2014. The Board of Directors records its sincere appreciation and recognition of the valuable contribution and services rendered by Sri D. Seetharamaiah during his association with the Company.

At the 20th Annual General Meeting of the company held on 30th September, 2014 the Company had appointed Sri Koteswara Rao SSR and the other independent directors, Dr. T .Hanuman Chowdary, Sri R. S. Bakkannavar and Dr.T. V. Lakshmi as independent directors under the Companies Act, 2013 for 5 years term which ends at conclusion of the 25th Annual General Meeting.

All the Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149 (6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement entered into with the Stock Exchanges. In the opinion of the Board, they fulfill the conditions of independence as specified in the Act and the Rules made there under and are independent of the management.

No Key Managerial Person has been appointed or has retired or resigned during the year.

Performance Evaluation

Pursuant to the provisions of Section 134 (3) (p), 149(8) and Schedule IV of the Companies Act, 2013 and Clause 49 of the Listing Agreement, annual Performance Evaluation of the Directors as well as of the Audit Committee, Nomination and Remuneration has been carried out.

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

The manner in which the evaluation has been carried out has been explained in Corporate Governance Report.

Nomination and Remuneration Policy

The Company has adopted the Nomination and Remuneration Policy for the Directors, Key Managerial Personnel and other employees, pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

The Nomination and Remuneration Committee has considered the following factors while formulating the Policy:

(i) The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;

(ii) Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

(iii) Remuneration to Directors, Key Managerial Personnel and Senior Management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.

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. Details of the Remuneration Policy are given in the Corporate Governance Report.

Board and Committee Meetings

A calendar of Board and Committee Meetings to be held during the year was circulated in advance to the Directors. Five Board Meetings were convened and held during the year.

The Board has constituted an Audit Committee with all Independent Directors namely Sri R.S.Bakkannavar (Chairman), Dr.T.Hanuman Chowdary and Sri Koteswara Rao SSR as Members. There have not been any instances during the year when recommendations of the Audit Committee were not accepted by the Board.

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 period prescribed under the Act and the Listing Agreement.

Directors' Responsibility Statement:

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

a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to 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 that period;

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

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

e) The Company had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

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

Significant and Material orders passed by the Regulators or Courts

No significant material orders have been passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations.

Auditors

Statutory Auditors

M/s. Narven Associates, Chartered Accountants have been appointed as statutory auditors of the company at the last Annual General Meeting held on 30.09.2014 for a period of three years subject to ratification by members at every consequent Annual General Meeting. Members are requested to consider the ratification of appointment of Statutory Auditors of the Company at the ensuing AGM and authorize the Board of Directors to fix their remuneration.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s C.V Reddy K & Associates, Practicing Company Secretaries, to undertake the secretarial audit of the company. The Secretarial Audit Report is annexed herewith as Annexure I'.

The Auditors' Report and the Secretarial Audit Report for the financial year ended 31st March, 2015 do not contain any qualification, reservation, adverse remark or disclaimer.

Conservation of Energy, Technology Absorption and 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:

Your Company is constantly upgrading its technological excellence with emerging technologies. The 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:

* Value of Imports on CIF Basis In Respect of

(Rs. in Lakh)

Particulars Current Year Previous Year

Trading goods 15.76 Nil

Capital Contracts 3.56 Nil

Total 19.32 Nil

* Expenditure in Foreign Currency (CIF):

(Rs. in Lakh)

Particulars Current Year 3Previous Year

Trading Goods 13.40 Nil

Capital Contracts 2.52 Nil

TOTAL 15.92 Nil

Particulars of Employees and related disclosures:

The information required pursuant to Section 197 of the Companies Act, 2013 read with Rule, 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is as follows:

(i) & (ii) the ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year, the percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year;

Ratio of remuneration Name Designation of each Director to the Median remuneration of Employees

*Mr. T. Gopichand Vice Chairman & Managing 77.62 Director

Mr. K. Rama Rao Wholetime Director 16.77

Mr. B. D. Naidu Chief Financial Officer N.A

Mrs. V. Sri Lakshmi Company Secretary N.A

Name % Increase in remuneration during F.Y. 2014-15

*Mr. T. Gopichand 300%

Mr. K. Rama Rao 11%

Mr. B. D. Naidu 3.50%

Mrs. V. Sri Lakshmi 5.75%

*Due to inadequate profits previous year Sri T. Gopichand, Vice Chairman & Managing Director was paid minimum remuneration of Rs.21 lakhs only as per the applicable provisions of Companies Act, 1956 read with Schedule XIII of the said Act.

Due to inadequate profits during the year review Sri T. Gopichand, Vice Chairman & Managing Director was paid minimum remuneration of Rs.84 lakhs only as per the applicable provisions of Companies Act, 2013 read with Schedule V of the said Act as approved by the Members of the Company at the AGM held on 30.09.2014 by special resolution for doubling limits of remuneration payable to managerial personnel specified in Para-A, Section II, Part-II of Schedule V of the Companies Act, 2013 in case of Company having no profit or inadequate profit in any financial year to Sri T. Gopichand, Vice Chairman and Managing Director during the tenure of his appointment with effect from 1st April, 2014, for the remainder of his term up to 31.08.2016.

(iii) the percentage increase in the median remuneration of employees in the financial year- 3% to 6%.

(iv) the number of permanent employees on the rolls of company as on 31.03.2015 - 864.

(v) the explanation on the relationship between average increase in remuneration and company performance;

There was no increase in remuneration during the previous year 2013-14 due to average company performance. The average increase of 3% to 6% in remuneration given in the Company was to prevent any significant employee attrition at lower levels.

(vi) Comparison of the remuneration of the Key Managerial Personnel against the performance of the company;

The increase in remuneration of the Chief Financial Officer and Company Secretary are below the increase in employees' median remuneration. The increase in the remuneration of Mr. T. Gopichand and Mr. K. Rama Rao is as approved by the Board of Directors and the Members.

(vii) Variations in the market capitalisation of the company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over 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 in case of listed companies.

The market capitalization of the Company as at 31st March, 2015 is Rs.40.038 crores, as against Rs.19.581 crores as at 31st March, 2014, an increase of 104% during the year under review. The price earnings ratio of the Company as at 31st March, 2015 is 11.03, as against 9.66 as at 31st March, 2014.

Price at the time of initial public offer in the year 2000 was Rs. 10. The market quotation of the Equity Shares of the Company as on 31st March, 2015 was Rs.32 for shares of face value of Rs. 10/- each, representing an increase of 220% over the period.

(viii) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration;

The percentage increase in the salaries of employees other than the managerial personnel in the last financial year is 3% to 6%. The increment given to each individual employee is based on the employees' potential, experience as also their performance and contribution to the Company's progress over a period of time.

The Percentage increase in the salaries of employees its comparison with the percentile increase in the managerial remuneration - for justification please refer point no. (ii) (v) & (vi) above.

There are no exceptional circumstances of increase in KMP remuneration.

(ix) Comparison of the each remuneration of the Key Managerial Personnel against the performance of the company Same response as in point (v) & (vi) above.

(x) The key parameters for any variable component of remuneration availed by the directors;

No Director has received any variable component of remuneration.

(xi) The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year;

None of the employees (who are not directors) receive remuneration in excess of the highest paid director.

(xii) Affirmation that the remuneration is as per the Remuneration Policy of the Company:

It is affirmed that the remuneration paid to all the Key management Personnel was in accordance with remuneration policy adopted by the Company.

The particulars of the employees who are covered by the provisions contained in Rule 5(2) and rule 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are:

a) Employed throughout the year Nil

b) Employed for part of the year Nil

Extract of Annual Return

The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as "Annexure - II".

Sexual Harassment

During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under.

Corporate Governance

The Report on Corporate Governance, as required under Clause 49 of the Listing Agreement, forms part of the Annual Report.

Acknowledgment:

Your Directors place on record their sincere appreciation and thanks for the valuable cooperation and support received from the employees of the Company at all levels, Company's Bankers, Financial Institutions, Central and State Government Authorities, Electronic Corporation of India Limited and Other Government Agencies, clients, consultants, suppliers, and Members of the Company and look forward for the same in greater measure in the coming years.

For and on behalf of the Board of Directors

Sd/- Sd/- Place : Hyderabad (T. Gopichand) (K. Rama Rao) Date : 30.05.2015 Vice Chairman and Managing Wholetime Director Director

---

Mar 31, 2014

Dear Members,

The Directors are pleased to present the 20th Annual Report and the Audited Accounts of the Company for the financial year ended 31st March, 2014 together with the Auditors'' Report thereon.

Financial Results: (Rs. in Lakh)

PARTICULARS Year Ended Year Ended 31.03.2014 31.03.2013

Gross Income 10,278.83 14,543.58

Expenditure 7891.99 11,623.06

Profit before interest, depreciation & tax 2386.84 2,920.52

Less: Interest (Financial Cost) 957.93 1,184.39

Profit before depreciation & tax 1428.91 1,736.13

Less: Depreciation 1,002.47 1,099.31

Profit before extraordinary items & tax 426.44 636.82

Less: Extraordinary items 0 20.00

Profit before Tax 426.44 616.82

Less: Provision for tax Current year 369.02 123.41

MAT credit - F.Y.2012-13 0 (78.48)

Current Tax Expense relating to earlier years 0 169.39

Deferred tax (144.91) 46.06

Profit for the year 202.33 356.44

Dividend:

Your Directors have recommended a dividend of Re.0.80/- per equity share i.e. 8% on each equity share having face value of Rs.10/- each, subject to the approval by the shareholders at the ensuing Annual General Meeting. The total dividend payout will be Rs.117.105 Lakh including corporate dividend tax.

Performance of the Company:

You will note that your Company posted a turnover of Rs. 10,278.83 Lakh for the year ended 31st March, 2014 as against Rs. 14,543.58 Lakh in 2012-13. Your Company has registered a net profit of Rs.202.33 Lakh, as compared to previous year''s net profit of Rs. 356.44 Lakh. Due to the huge capital employed for future business, increases in financial costs, depreciation and coverage of service tax to the projects, slowdown in the production of AADHAAR and NPR Projects and few other Projects executed by the Company has resulted into low production levels and reduced revenue for the year ended 31.03.2014.

Management Discussion and Analysis Report:

Management''s Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges forms part of this Annual Report.

Corporate Governance:

The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report. A certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated under the said Clause 49 also forms part of this Annual Report.

Secretarial Audit Report

As a measure of good corporate governance practice, the Company has appointed M/s C.V. Reddy K & Associates, Practicing Company Secretaries to conduct Secretarial Audit of the records and documents of the Company. The Secretarial Audit Report for the Financial Year ended 31st March, 2014 forms part of this Annual Report.

Listing of Shares on Stock Exchanges:

The Equity Shares of your Company are listed on the Bombay Stock Exchange Limited and Bangalore Stock Exchange Limited. The Annual listing fee has been paid up to date.

Fixed Deposits:

In terms of the provisions of Section 58A of the Companies Act, 1956 and the rules made there under, the Company has accepted public fixed deposits of Rs.11 Lakh during the year 2013-14. There are no outstanding deposits or interest as at the end of the financial year 2013-2014.

Directors:

Smt.T.Pavana Devi, non executive Director, retires by rotation at the ensuing Annual General Meeting under the erstwhile applicable provisions of Companies Act, 1956 and being eligible, offers herself for reappointment.

Pursuant to the provisions of the section 161 of the Companies Act, 2013 read with the Articles of Association of the company, Sri.Koteswara Rao SSR is appointed as the Additional Director (Independent) w.e.f. 07th August, 2014 and he shall hold office only up to the date of this Annual General Meeting. Being eligible, the Board recommends his appointment as an Independent Director of the Company in terms of section 149(10) of the Companies Act, 2013 for a continuous period of 5 (five) years for a term up to the conclusion of the 25th Annual General Meeting of the Company in the calendar year 2019.

Dr.T.Hanuman Chowdary, Sri R.S.Bakkannavar and Dr.T.V.Lakshmi are the present Independent Directors appointed earlier as Directors, liable to retire by rotation and their present term did not end at the ensuing AGM under the applicable provisions of the erstwhile Companies Act, 1956. Pursuant to the provisions of Section 149 of the Companies Act, 2013, the Independent Directors may be appointed for a term upto 5 consecutive years and they are not liable to retire by rotation. The present tenure of the Independent Directors on the date of commencement of the Act shall not be counted as a term under Section 149 of the Act. It is therefore proposed to appoint Dr.T.Hanuman Chowdary, Sri R.S.Bakkannavar and Dr.T.V.Lakshmi as Independent Directors for a term of 5 consecutive years and not liable to retire by rotation.

As per the provisions of Section 152 of the Companies Act, 2013, Sri.D.Seetharamaiah, Independent Director of the Company retires by rotation at the ensuing Annual General Meeting. Sri.D. Seetharamaiah has expressed his intention not to seek re- election as a Director of the Company. He will cease to be the Director of the Company from the conclusion of the 20th Annual General Meeting of the Company on 30.09.2014.

The Board would like to thank Sri.D.Seetharamaiah for his guidance and support extended to the Company and placed on record its appreciation for his valuable services rendered during his tenure on the Board.

Board Committees

The Board of Directors at its meeting held on 30th May, 2014 has rechristened the existing Remuneration Committee as Nomination and Remuneration Committee and Shareholders''/ Investors'' Grievance Committee as Stakeholders Relationship Committee apart from constituting a Corporate Social Responsibility Committee so as to be in line with what is prescribed under the Companies Act, 2013 and Clause 49 of the amended Listing Agreement with the Stock Exchanges.

Auditors:

M/s. Narven Associates, Chartered Accountants, Hyderabad, the Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment in the transitional period of 3 years from the ensuring AGM as provided in Section 139 (2) (a) (ii) of the Companies Act, 2013. The Company has received a letter from them to the effect that their appointment, if made, would be within the prescribed limits including transitional period under Section 139 (1) of the Companies Act, 2013 and that they are not disqualified for re-appointment within the meaning of Section 139 (9) of the Companies Act, 2013.

Conservation of energy, technology absorption and foreign exchange earnings and outgo:

The Particulars with respect to Conservation of energy, Technology observation and Foreign Exchange earnings and outgo as per Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars) Rules, 1988 are given below:

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.

Technology absorption: Your Company is constantly upgrading its technological excellence with emerging technologies. Foreign Exchange Earnings and outgo:

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

* Value of Imports on CIF Basis In Respect of

(Rs. in Lakh)

Particulars Current Year Previous Year

Trading goods Nil Nil

Capital Contracts Nil Nil

Total Nil Nil

* Expenditure in Foreign Currency (CIF):

(Rs. in Lakh)

Particulars Current Year Previous Year

Trading Goods Nil Nil

Capital Contracts Nil Nil

Traveling Nil 0.63

TOTAL Nil 0.63

Directors'' Responsibility Statement:

Pursuant to the provisions of Section 217 (2AA) of the Companies Act, 1956, your Directors confirm as under:

* in the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departure

* we have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2014 and of the profit of the Company for the year ended on that date;

* we have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities and;

* the accounts for the year ended 31st March, 2014 have been prepared on a going concern basis.

Acknowledgment:

Your Directors place on record their sincere appreciation and thanks for the valuable cooperation and support received from the employees of the Company at all levels, Company''s Bankers, Financial Institutions, Central and State Government Authorities, Electronic Corporation of India Limited and Other Government Agencies, clients, consultants, suppliers, and Members of the Company and look forward for the same in greater measure in the coming years.

For and on behalf of the Board of Directors

Sd/- Sd/- Place: Hyderabad (T. Gopichand) (K Rama Rao) Date: 07.08.2014 Vice Chairman and Wholetime Director Managing Director

---

Mar 31, 2013

Dear Shareholders,

The Directors are pleased to present the 19th Annual Report and the Audited Accounts of the Company for the financial year ended 31st March, 2013 together with the Auditors'' Report thereon.

Financial Results:

(Rs. in Lakh)

Particulars Year Ended Year Ended 31.03.2013 31.03.2012

Gross Income 14,543.58 20,163.47

Expenditure 11,623.06 15,646.46

Profit before interest, depredation & tax 2,920.52 4,517.01

Less: Interest (Financial Cost) 1,184.39 938.36

Profit before depredation & tax 1,736.13 3,578.65

Less: Depredation 1,099.31 834.36

Profit before extraordinary items & tax 636.82 2,744.29

Less: Extraordinary items 20.00 -

Profit before Tax 616.82 2,744.29

Less: Provision for tax Current year 123.41 435.97

MAT credit -F.Y.2012-13 (78.48) (6.91)

Current Tax Expense relating to earlier years 169.39 -

Deferred tax 46.06 458.78

Profit for the year 356.44 1,856.45

Dividend:

Your Directors recommended a dividend of Re.1/- per equity share i.e. 10% on each equity share having face value of Rs.10/- each, subject to the approval by the shareholders at the ensuing Annual General Meeting. The total dividend payout will be Rs.145.42 Lakh including the tax on distributable profits.

Performance of the Company:

You will note that your Company posted a turnover of Rs.14,543.58 Lakh for the year ended 31st March, 2013 as against Rs.20,163.47 Lakh in 2011-12. Your Company has registered a net profit of Rs.356.44 Lakh, as compared to previous year''s net profit of Rs.1,856.45 Lakh. Your company built IT infrastructure to a tune of Rs.5,271.44 Lakh in the Finandal year 2011-12 to deliver the services of enrolment under the national prestigious projects AADHAAR & NPR (National Population Register). These projects have an outlay of Rs.12,000 Crore from Government of India. Due to the huge capital employed for future business, there were increases in financial costs, depredation and coverage of service tax to the projects resulted in lesser net profit to a tune of 4.24% (previous year 13.61%) against PBIT 12.38%(previous year 18.26%). Further due to change in the processes adopted for enrollment and verification of dtizen by the Government, has resulted into low production levels and revenue.

Management Discussion and Analysis Report:

Management''s Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges forms part of this Annual Report.

Corporate Governance:

The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report. A certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated under the said Clause 49 also forms part of this Annual Report.

Secretarial Audit Report

As a measure of good corporate governance practice, the Company has appointed M/s C.V. Reddy K & Assodates, Practicing Company Secretaries to conduct Secretarial Audit of the records and documents of the Company. The Secretarial Audit Report for the Finandal Year ended 31st March, 2013 forms part of this Annual Report.

Listing of Shares on Stock Exchanges:

The Equity Shares of your Company are listed on the Bombay Stock Exchange Limited and Bangalore Stock Exchange Limited. The Annual listing fee has been paid up to date.

Fixed Deposits:

In terms of the provisions of Section 58A of the Companies Act, 1956 and the rules made there under, the Company has accepted public fixed deposits during the year 2011-12 and continued to hold the same during the year 2012-13. There are no outstanding deposits as at the end of the fin anal year 2012-2013.

Directors:

As per the provisions of the Companies Act, 1956 read with Articles of Assodation of the Company, Dr. T.V.Lakshmi and Sri T. Bapaiah Chowdary, Directors are liable to retire by rotation at the ensuing Annual General Meeting and being eligible offered themselves for reappointment. The brief particulars of respective persons are given in the Annexure to the Notice of this Annual General Meeting. The Board recommends their re-appointment as Directors of the Company.

Auditors:

The Statutory Auditors of the Company M/s. Narven Assodates, Chartered Accountants, retire at the conclusion of the 19th Annual General Meeting and have confirmed their eligibility and willingness to accept the office of Statutory Auditors, if reappointed. Your Board of Directors have recommended their reappointment, based on the recommendation of the Audit Committee to the members for their approval at the forthcoming Annual General Meeting of the Company, to hold office from the conclusion of the 19th Annual General Meeting up to the conclusion of the 20th Annual General Meeting.

Conservation of energy, technology absorption and foreign exchange earnings and outgo:

The Particulars with respect to Conservation of energy, Technology observation and Foreign Exchange earnings and outgo as per Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars) Rules, 1988 are given below:

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 effident computers and equipment with latest technologies.

Technology absorption: Your Company is constantly upgrading its technological excellence with emerging technologies.

Particulars of Employees:

Statement of particulars of employees pursuant to the provisions of section 217 (2A) (a) of the Companies Act, 1956.

(Rs. in lakhs)

Name Designa- Qualifi- Age Date of Experience Gross tion cation (Years) Joining (Years) Remune- ration Including Commission

T.Gopi chand V.C. & M.D. M. Tech 54 01.09.1995 31 87.96

C.S.Ravi ndran C.E.O. BE 56 01.07.2010 32 60.09



Name previous Employment

T.Gopichand Electronic corporation of India Limited

C.S.Ravindran Bartronics India Limited

Directors'' Responsibility Statement:

Pursuant to the provisions of Section 217 (2AA) of the Companies Act, 1956, your Directors confirm as under:

- in the preparation of the accounts for the finandal year ended 31st March, 2013 the applicable accounting standards have been followed along with proper explanation relating to material departures;

- we have selected such accounting polides and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2013 and of the profit of the Company for the year ended on that date;

- we have taken proper and suffident care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities and;

- the accounts for the year ended 31st March, 2013 have been prepared on a going concern basis.

Acknowledgment:

Your Directors place on record their sincere approbation and thanks for the valuable cooperation and support received from the employees of the Company at all levels, Company''s Bankers, Finandal Institutions, Central and State Government Authorities, Electronic Corporation of India Limited and other Government Agendes, clients, consultants, suppliers, and Members of the Company and look forward for the same in greater measure in the coming years.

For and on behalf of the Board of Directors

Sd/- Sd/-

Place: Hyderabad (T. Gopichand) (K Rama Rao)

Date: 02.08.2013 Vice Chairman and Managing Director Whole time Director

---

Mar 31, 2011

Dear Shareholders,

The Directors have pleasure in presenting the Seventeenth Annual Report and the audited accounts of the company for the year ended 31 st March 2011 together with Auditors' report thereon.

a) Financial Results:

(Rs. In Lakhs)

PARTICULARS Year Ended 31.03.2011 Year Ended 31.03.2010

Gross Income 12,637.65 10,575.96

Expenditure 10,692.25 8,703.81

Profit before interest, deprecation & tax 1,945.40 1,872.15

Less: Interest (Financial Cost) 200.05 156.06

Profit before depreciation & tax 1,745.35 1,716.09

Less: Depreciation 275.44 249.27

Profit before tax 1,469.91 1,466.82

Less: Provision for tax Current year 529.58 517.60

Deferred tax (68.17) 461.42 (16.73) 500.87

Profit after tax 1,008.49 965.95

Add: Balance brought forward from Previous Year 1380.38 1124.83

Add/(Less): Excess Tax Provision of

Earlier years (24.50) 1,355.88 9.17 1,134.00

Profit available for distribution 2,364.37 2,099.95

Less: Transferred to General Reserve 500.00 500.00

Proposed Dividend @ 20% 250.24 187.68 (Previous Year 15%)

Tax on distributable profits 40.59 790.83 31.89 719.57

Balance Carried to Balance Sheet 1,573.54 1,380.38

b) Dividend:

Your Directors are pleased to recommend a dividend of 20% absorbing a sum of Rs.290.83 Lakhs including the tax on distributable profits.

c) Performance of the Company:

The Company achieved a turnover of Rs.12, 637.65 Lakhs during the year and earned a net profit after tax of Rs.1,008.49 Lakhs. During the year the authorised capital of the Company is increesed from Rs.15 crores to Rs. 25 crores.

During the current year your company has added following three new business segments AADHAR, NPR (National Population Register) and SWAN (State Wide Area Network). Collectively they account for a healthy order book on hand of 870 crores to be executed over next three years. During the current year your company got empanelled with Unique Identification Authority of India, as T2 F4 agency. Under this award of order, your Company is entitled to enroll about 5 crore citizens per year. Central government has planned to cover the entire Indian population of 120 crores in about 4 years with coverage of 10 lakhs population per day.

During the year your Company became a preferred partner in India to integrate and sell the Biometric devices of L1 Identity Solutions Inc, USA. This gives an added advantage to integrated division of your company in addressing the Business opportunities in NPR and AADHAAR.

Your company firmly believes that in bringing new customers and adding value to the existing relationships (with our current customers) will only help in getting additional business opportunities for your company. During the year the client base of your Company has increased from 21 to 30.

During the current year your company has acquired the following certifications which brings in the required pre qualifications and delivery of quality services in managing and implementing UIDAI (AADHAAR), NPR and other e-governance projects.

- Information Security Management System - ISO 27001:2005 for Software development, IT Enabled Services and IT Infrastructure management.

- Information Technology Service Management System: ISO 20000:2005 for Software development, IT enabled Services and It Infrastructure Management.

- Enhanced the ISO 9001: 2008 quality management system with enrollment, data capturing, De-Duplication and supply 6? maintenance of Biometric devices.

- Provisional STQC certificate for the supply and delivery of L1 Identity Solutions Inc, USA Biometric devices for UIDAI projects.

Future Opportunities:

E-governance in India is steadily evolving from basic digitization of government data and processes to actually facilitating delivery of various citizen services on-line. A common vision and strategy is being deliberated and firmed up across all levels of government central, state and local bodies. This approach has huge potential in garnering cost savings, increased transparency, and presenting a seamless view of government to citizens.

A well connected citizen to government ecosystem has huge potential for both the partners. Citizens will continue to enjoy speedy, transparent and convenient services, whilst the government gets increasingly integrated into the community welfare and more importantly is in a position to focus real time on reallocation of resources where they are needed the most. A social transformation happens when citizens are empowered to help themselves in dealing with various government segments, saving time and money for all concerned and elevating overall levels of satisfaction for common man.

Your company has pioneered many a prestigious project in this domain of e-governance for various government agencies at the state and central level. The company today is standing on the threshold of contributing meaningfully to the National e-Governance mission. It has ambitions and plans in further designing creative solutions across a wide spectrum of industries for the dual benefit of citizens and the government, once the basic citizen identification biometric infrastructure is in place. Your company continues to invest in the core e-governance solution capabilities to address this potential market of Rs 60,000 Crore in the next 5 years.

As your Company enters a key strategic period in its evolution, the years ahead will be marked by growth in revenue and profits, whilst further strengthening our focus on customers and delivery.

d) Management Discussion and Analysis Report:

As per the requirements of Clause 49 of the Listing Agreement with the Stock Exchanges, a separate Management's discussion and Analysis Report is enclosed as Annexure - I to the Directors' Report.

e) Corporate Governance:

As per the requirements of Clause 49 of the Listing Agreement with the Stock Exchanges, a separate report on Corporate Governance along with the certificate issued by the Company's Statutory Auditors M/s Narven Associates, Chartered Accountants thereupon is given as Annexure - II to the Directors' Report.

f) Listing of Shares in Stock Exchanges:

At present the Equity Shares of your Company are traded under permitted Securities on the Bombay Stock Exchange Limited and listed on Bangalore Stock Exchange Limited. The listing fee was paid up to date.

g) Fixed Deposits:

The Company has accepted Rs.101.00 Lakhs as fixed deposits during the year to which the provisions of Section 58A of the Companies Act, 1956 apply. There are no overdue deposits as at the end of the financial year 2010-2011.

h) Directors:

In accordance with the provisions of the Companies Act, 1956, and the Articles of Association of the Company, Sri K.Rama Rao, Director and Sri.D.Seetharamaiah, Director will be retiring at this annual general meeting and being eligible offer themselves for reappointment. Sri M.V.S.R. Prasad is inducted as an Additional Director on 14.07.2011.

During the year on the recommendation of the Remunuration Committee, Board of Directors had recommended to the share holders for the re-appointent of Sri T. Gopichand, Sri N.V.V. Prasad and Sri K. Ramarao with Reumunaration.

i) Auditors:

M/s. NARVEN ASSOCIATES, Chartered Accountants retire at the ensuing Annual General Meeting, and are eligible for reappointment. They have furnished the requisite certificate to the effect that their reappointment, if made, would be in accordance with section 224 (1B) of the Companies Act 1956.

j) Particulars of Employees:

Statement of particulars of employees pursuant to the provisions of section 217 (2A) of the Companies Act, 1956.

Name Designation Qualifica- Age Date of tion (Years) Joining

T.Gopichand V.C&M.D. M.Tech 52 01.09.1995

NVVPrasad E.D. B.Tech 51 01.12.1999

C.S.Ravindran C.E.O. BE 55 01.07.2010

Name Experience Gross Remuneration Previous (Years) Including Commission Employment

T.Gopichand 29 6,675,102 Electronic Corporation of India Limited

N V V Prasad 28 3,793,221 Taraka Prabhu Publishers Pvt. Ltd.

C.S.Ravindran 30 4,505,460 Bartronics India Limited

k) Conservation of energy, technology absorption and foreign exchange earnings/out goings:

The particulars as required U/S 217(1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the report of the Board of Directors) Rules 1988 are:

1. Conservation of energy.- The Company does trading of various kinds of computer items and provides IT enabled services and does not use any energy. The electricity power consumption under LT is minimal hence the Company is not an energy intensive unit. However, the Company installed power efficient transformers and UPS systems to save the power cost.

2. Technology absorption, adaptation & innovation: The Company has not imported any technology.

3. Foreign Exchange Earnings and outgo:

i. Earnings in Foreign Currency (FOB): NIL

ii. Expenditure in Foreign Currency (OF):

Particulars Current Year (Rs.) Previous Year (Rs.)

Capital Contracts 19,806,300 Nil

Trading goods 3,133,200 Nil

Travelling 511,352 Nil

Total 23,450,852 NIL

iii. Value of Imports on OF Basis In Respect of

Particulars Current Year (Rs.) Previous Year (Rs.)

Traded goods 115,015,501 Nil

Capital goods 39,855,066 Nil

Total 154,870,567 NIL

iv. Foreign Currency outflow in respect of advance given for Professional Service of Rs.613,212/-.

l) Internal Control Systems:

Your Company has a well defined and documented Internal Control Systems which is adequately monitored.

m) Directors' Responsibility Statement:

Pursuant to the requirement under section 217(2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, it is hereby confirmed:

a. That in the preparation of the accounts for the financial year ended 31st March, 2011 the applicable accounting standards have been followed along with proper explanation relating to material departures;

b. That the directors have selected such accounting policies and applied them consistently and made adjustments and estimates that were 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 year under review;

c. That the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. That the directors have prepared the accounts for the financial year ended 31st March, 2011 on a going concern basis.

n) Acknowledgment:

Your directors thank the clients, vendors, investors and bankers for their continued support. Your directors place on record their appreciation of the contribution made by the employees at all levels. Your directors thank the Government of India, State Governments, Electronic Corporation of India Limited and Other Government Agencies for their support during the year and look forward to their patronized support.

For and on behalf of the Board of Directors

Sd/- Sd/- (T. Gopichand) (N.V.V. Prasad) Vice Chairman and Managing Director Executive Director

Place: Hyderabad Date : 14.07.2011

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Mar 31, 2010

The Directors have pleasure in presenting the Sixteenth Annual Report and the audited accounts of the company for the year ended 31st March, 2010-together with Auditorsreport thereon.

a) Financial Results:

(Rs. In Lakhs)

"PARTICULARS Year Ended 31.03.2010 Year Ended 31.03.2009

Gross Income . 10,575.96 8,214.43

Expenditure 8,703.81 6,054.81

Profit before interest,

deprecation & tax 1,872.15 2,159.62

Less: Interest

(Financial Cost) 156.06 216.21

Profit before

depreciation & tax 1,716.09 1,943.41

Less: Depreciation 249.27 266.44

Profit before tax 1,466.82 1,676.97

Less: Provision for tax Current year 517.60 612.87

Deferred tax (16.73) 6.89

Fringe Benefit tax - 500.87 8.41 628.17

Profit after tax 965.95 1,048.80

Add: Balance

brought

forward from

Previous Year 1124.83 868.78

Add/(Less): Excess

Tax Provision of

Earlier years 9.17 1,134.00 00.02 868.80

Profit available

for distribution . 2,099.95 1,917.60

Less: Transferred

to General Reserve 500.00 500.00

Proposed Dividend @15% 187.68 250.24

(Previous Year 20%)

Tax on distri- butable profits 31.89 719.57 42.53 792.77

Balance Carried

to Balance Sheet 1,380.38 1,124.83



b) Dividend:

Your Directors are pleased to. recommend a dividendof 15% absorbing a sum of Rs.219.57 Lakhs including the tax on distributable profits.

c) Performance of the Company:

The Company achieved a turnover of Rs.10575.96 Lakhs during the year and earned a net profit after tax of Rs.965.95 Lakhs.

d) Listing of Shares in Stock Exchanges:

At present the Equity Shares of your Company are traded under permitted Securities on the Bombay Stock Exchange Limited and listed on Bangalore Stock Exchange Limited. The listing fee was paid up to date.

e) Fixed Deposits:

The Company has not received any fixed deposits during the year to which the provisions of Section 58A of theCompanies Act, 1956 apply. There are no deposits outstanding as at the end of the financial year.

f) Directors:

In accordance with the provisions of the Companies Act, 1956, and the Articles of Association of the Company, Dr. Smt. T.V.Lakshmi, Director, Sri.T.Bapaiah Chowdary, Director and Smt. T.Pavana Devi, Director, will beretiring at this annual general meeting and being eligible offer themselves for reappointment.

g) Auditors:

M/s. NARVEN ASSOCIATES, Chartered Accountants retire at the ensuing Annual General Meeting, and are eligible for reappointment. They have furnished the requisite certificate to the effect that their reappointment, if made,iwould be in accordance with section 224 (1B) of the Companies Act 1956.

h) Particulars of Employees:

Statement of particulars of employees pursuant to the provisions of section 217 (2A) of the Companies Act, 1956.

Name Designation Qualification Age Date of

(Years) Joining



T.Gopichand Vice Chairman and M.Tech 51 01.09.1995

Managing Director

NVVPrasad Executive Director B.Tech 50 01.12.1999



Name Experience Gross Previous Employment

(Years) Remuneration

Including

Commission

T.Gopichand 28 8,257,294 Electronic Corporation of

India Limited

NVVPrasad 27 4,635,941 Taraka Prabhu Publishers Pvt.Ltd.

i) Conservation of energy, technology absorption and foreign exchange earnings/out goings:

The particulars as required U/S 217(1) (e) of the Companies Act, 1956, read with theCompanies (Disclosure of particulars in the report of the Board of Directors) Rules 1988 are:

1. Conservation of energy: The Company does trading of various kinds of computer items and provide IT enabled services and does not use any energy. The electricity power consumption under LT is minimal hence the Company is not an energy intensive unit. However, the Company installed power efficient transformers and UPS systems to save the power cost. »

2. Technology absorption, adaptation & innovation: The Company has not imported any technology. 3. Foreign Exchange Earnings and outgo:

1. Earnings in Foreign Currency (FOB):

Particulars Current Year (Rs.) Previous Year (Rs.)

Software Development/ Services NIL 903000

Total NIL 903000



2. Expenditure in Foreign Currency (CIF): Nil (Previous Year Nil).

j) Directors Responsibility Statement:

Pursuant to the requirement under section 217(2AA) of the Companies Act, 1956, with respect to Directors Responsibility Statement, it is hereby confirmed:

a. That in the preparation of the accounts for the financial year ended ,31st March, 2010 the applicable accounting standards have been followed along with proper explanation relating to material departures;

b. - That the directors have selected such accounting policies and applied them consistently and made adjustments

and estimates that were 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 ;
c. That the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. That the directors have prepared the accounts for the financial year ended 315 March, 20!0 on a going concern basis.

k) Acknowledgment:

Your directors thank the shareholders, clients, vendors, investors and bankers for their continued support. Your directors , place on record their appreciation of the contribution made by the employees at all levels. Your directors thank the Government of India, State Governments, Electronic Corporation of India Limited and Other Government Agencies for their support during the year and look forward to their patronized support.

For and on behalf of the Board of Directors

Sd/- Sd/-

Place: Hyderabad (T. Gopichand) (N.V.V.Prasad)

Date; 09.08.2010 Vice Chairman and Managing Director Executive Director