Tera Software Ltd. — Annual Report 2021

Jun 10, 2021

8-2-293t82tN1107, Plot No. 1107, Road No. 55, Jubilee Hills, Hyderabad-S00 033, Telangand, lNDlA.

Date: 10.06.2021

BSE Limited	National Stock Exchange of India Limited
P.J. Towers	Exchange Plaza, Bandar Kurla Complex
Dalal Street, Mumbai - 400001	Bandra (E ), Mumbai - 400051
Scrip:533982	Symbol: TERASOFT

Dear Sir/IMadam,

sub: outcome of Board Meeting of the company held on l0th June,2021 - Reg. Ref: Regulation 30, 33 and other applicable regulations of SfBI (Listing Obligations and Disclosure Requirements) Regulations, Z0lS (tisting Regulations) and Companies Act, 2013

J$ it to inform you that, the Board of Directors of the Company at their meeting held today i.e. Thursday, l}th June,202l through AudioA/ideo conference facilit! inter alia, has approved the following:

• ' 1. Audited Financial Statements (Standalone) and the Audited Financial Results (Standalone) for the Quarter and the Year ended 3lst March ,2021along with Independent Auditors' Report thereon.
  • 1. Regularisation of appointment of Mr Divakar Atluri as an Independent Director in the ensuing Annual General Meeting.
  • 1. Re-appointment of Mr Tummala Gopichand as Managing Director of the Company in the ensuing Annual General Meeting.
  • 1. Appointment of Mr Tammana Sivarama Prasad as an Independent Director in the enSuing Annual General Meeting as recommended by th" Nomination and Remuneration committee.
  • 1. Directors' Report for the year ended 31st March,2O2l alongwith required Statements, Reports and disclosures.
  • 1. Notice of 27th Annual General Meeting (AGM) of the shareholders of the Company scheduled to be held on 30th July,202l.

GIN : L72200TG1994PLC018391

Regd. Office : # 8-2-293/821N1107, Road Number 55, Jubilee Hills, Hyderabad,Telangana 500033. Tel : +91-40-2354 7447 , E-mail : info@terasoftware.in, www.terasoftware.com

#8-2-293/82/A/1107. Plot No. 1107, Road No. 55, Jubilee Hills, Hyderabad-500 033, Telangana, INDIA.

• 1. Closure of the Register of Members and Share Transfer Books of the Company, Pursuant to Regulation 42 of Listing Regulations, from 23rd July, 2021 to 29th July, 2021 (both days inclusive) for the purpose of 27th Annual General Meeting.
• 1. Re-appointment of M/s. C.V. Reddy K. & Associates, Company Secretaries. Hyderabad as the Secretarial Auditors of the Company for the Financial Year 2021-22 to conduct the Secretarial Audit of the Company.
• 1. Re-appointment of M/s. Darapaneni & Company, Chartered Accountants, Hyderabad as the Internal Auditors of the Company for the Financial Year 2021-22 to conduct the Internal Audit of the Company.

In terms of Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a copy of the said Results and Auditors' Report issued by M/s. Mullapudi & Co., Chartered Accountants, is enclosed herewith.

Kindly take the above information on your record.

Yours faithfully, For Tera Software Limited

Tummala Gopichand Vice Chairman & Managing Director DIN: 00107886

TERA

CIN: L72200TG1994PLC018391

8-2-2931821N1107, Plot No. 1107, Road No. 55, Jubilee Hills, Hyderabad-500 033, Telangana, lNDlA.

Date: 10.06.2021

BSE Limited	National Stock Exchange oTI"Aa fimitea
P.J. Towers	Exchange Plazq Bandar Kurla Complex
Dalal Street, Mumbai - 400001	Bandra (E ), Mumbai - 400051

Dear Sir/lVladam,

sub: Declaration for 11. Audit Report with un-modified opinion on Annuar Audited IND AS Financial Statements for the x'inancials year ended 3lst March,202l.

It is hereby declared and confirmed that the_Statutory Auditors of the Company, IWs Mullapudi & Co, Chartered Accountants, Hyderabua, nu, issued the Audit Report with unmoa]fi9a opinion on the Annual Audited nio As Financial statements for the year ended 31't March,2O2l

This declaration is turnished pursuant tg_I.egylation 33(3)(d) of the sEBI (Listing obligations and Discrosure Requirements) Regirations, zoiJ.

Yours faithfully, f,'or TerTSo frwa;.e Lim ited

@/e/

TummYlh Gopichand Vice Chairnian & Managing Di DIN:00107886

GIN : L72200TG1 994PLC01 8391

TERA SOFTWARE LIMITED crN 172200TG1994P1C018391

#8-2-2931821A11107, Plot no 1107, Road no 55, Jubilee Hills, Hyderabad-33.

STATEMENT OF STANDALONE UNAUDITED RESUTTS FOR THE qUARTER AND YEAR ENDED 31St MARCH, 2021

				in Lakhs
PARTICULARS	3 monthsended	Preceding 3monthsended	CorrespondinB 3Months ended inthe previous year	Figures for thecurrent yearended	Figures for theprevious yearended
	31.03.2021	3,-.t2.2020	31.03.2020	31.03.2021	31.03.2020
	Audited	Unaudited	Audited	Audited	Audited
1. lncome from Operations
(a) Net Sales /lncome from operations (net of excise
duty)	4,968.89	4,002.74	9,225.06	16,072.23	26,897.37
(b) Other lncome	71,.67	74.89	79.93	32t.31	301,57
total lncome from Operations (net)	5,040.50	4,077,63	9,304.99	15,393.54	27,L98.94
Expenses
Pu rchases	5s.00	0.40		55.40	2s2.55
Changes in inventories of finislred goods, work-in
progress and stock in trade	1,8.25	72.33	143.88	132.90	656.55
Technical & Operation expense	4,029.69	3,377.L0	7,137.93	!2,389.16	19,391.87
Employee benefit expense	331.40	312.05	842.68	2,178.54	3,417.44
Finance costs	t96.76	201.s5	242.04	849.28	927.38
Depreciation & amortisation expense	14.18	14.49	16.s5	50.46	80.50
Other Expenses	127.66	77.70	598.91	575.08	1,485.05
Total Expenses	4,772.94	4,049.53	8,981.99	t6,24O.82	26,2L2.44
3. Profit/(Loss) from operations after other income,
finance costs but before Exceptional ltems (1-2)
	267.56	28.00	323.00	Lsz.72	986.s0
4. Exceotional ltems
5. Profit/(Loss) from ordinary activities before tax
(3.-4)	267.56	28.00	323.00	ts2.72	986.50
6. Tax expense
1) Current Tax	107.60	0.37	109.91	116.83	352.91
2) Tax Expenses relating to Earlier years
3) Deferred Tax	(72.49\	3.94	(4.30)	{48.41)	(18.88
7. Profit/(Loss) from ordinary activities after tax
(s -5)	772.45	23.69	2L7.39	84.30	652.47
8. Extraordinary iteJns (net of tax Rs expense
Lakhsl
-9. Net Profit/(Loss) before Other comprehensive
income (7*-8)	172.45	23.69	2L7.39	84.30	652.47
10. Other Comprehensive lncome
Add: (i) ltems that will be reclassified to profit or
loss	(s7.3s)		(23.021	(97.3s,	123.02)
tess: (ii) lncome Tax relating to items that will be
reclassified to profit or lbss	(24.s1)		(s.79	(24.57	{s.7sl
u. Net Profit/lloss) for the period (9*-10)	99.57	23.69	200.15	Lt.42	633.24
Earning Per equity share (for continuing
operations):
(L) Basic	1.38	0.19	L.74	0.67	5.21
(2)Diluted	1.38	0.19	1.74	0.67	5.27

For Tera S

VC and l|anuging Director

CIN L72200TG1994PLC018391

#8-2-293/82/A/1107, Plot no 1107, Road no 55, Jubilee Hills, Hyderabad-33.

SEGMENT WISE REVENUE AND RESULTS

Preceding 3Corresponding 3Figures for theFigures for the3 monthsmonthsMonths ended incurrent yearprevious yearSI.endedPARTICULARSendedthe previous yearendedended$\mathcal{F}_{\mathcal{A}}^{\mathcal{A}}$No.31.03.202131.12.202031.03.202031.03.202131.03.2020AuditedUnauditedAuditedAuditedAudited$\mathbf{1}$Segment Revenuea) Integrated Solutions Division57.750.4558.20361.09b) Technical Division279.67270.76615.321,699.092,422.45c) Projects Division4,631.473,731.538,609.7414,314.9424,113.83Net sales/Income from operations4,968.894,002.749,225.0616,072.2326,897.37Segment Results [Profit / (Loss) before Tax andInterest from each Segment]$\overline{2}$a) Integrated Solutions Division(62.43)(71.47)(146.25)(129.81)b) Technical Division30.8529.7375.30195.61291.27c) Projects Division649.27315.31899.181,368.202,408.23Total617.69273.57828.231,434.002,625.73Less: i) Interest Expenses196.76201.56242.04849.28927.38ii) Un-allocable expenditure (Net)224.98118.90343.12753.311,013.42Add: Interest and Other Income71.6174.8979.93321.31301.57Total Profit/(Loss) Before Tax267.5628.00323.00152.72986.50Segment AssetsIntegrated Solutions Division553.72572.37657.13553.72657.13Technical Division732.031,045.241,347.49732.031,347.49Projects Division22,834.9321,518.4822,935.1322,834.9322,935.13Unallocable5,706.925,888.066,559.265,706.926,559.26Total29,827.6029,024.1531,499.0129,827.6031,499.01Segment LiabilitiesIntegrated Solutions Division862.77792.60858.91862.77858.91Technical Division808.991,036.671,125.69808.991,125.69Projects Division9,821.7410,058.5613,775.989,821.7413,775.98Unallocable18,334.1017,136.3215,738.4318,334.1015,738.43Total29,827.6029,024.1531,499.0129,827.6031,499.01(Segment Assets - Liabilities)Integrated Solutions Division(309.05)(220.23)(201.78)(309.05)(201.78)Technical Division(76.96)8.57221.80(76.96)221.80Projects Division13,013.1911,459.929,159.1513,013.199,159.15Unallocable(12, 627.18)(11, 248.26)(9, 179.17)(12, 627.18)(9, 179.17)Total$\blacksquare$		Rupees in Lakhs
						(73.77)

For Tera Softmare Limited VC and Managing Director

STATEMENT OF ASSETS AND TIABITITIES

			in Lakhs
ParticularsAudited			Audited
		31-03-2021 Audited	1-03-2020 Audited
t. AssETs
1. Non-current assets
(i) Property, Plant & Equipment	3,0s2.45		3,117.L0
(ii) Financial Assets
(a)'Other financial assets	251.61		223.73
(iii) diher non current assets	L6L.02		306.72
(iv) Deferred tax Asset (net)	332.62	3,797.7O	2s9.7L	3,907.26
2. Current assets
(i) lnventories	273.99		406.89
(ii) Financial Assets
(a) Trade receivables	19,716.89		t6,832.42
(b) Cash and Cash Equivalents	t,377.36		1,586.03
(c) Other financial assets	2,723.34		7,O07.O9
(iii) Other current assets	1,954.93		L,714.14
		26,046.51
Total Assets		29,8/,4.21		27,546.s731,453,83
EqUlTYAND TIABITITIES1, Equity(a) Equity Share Capital(b) Other Equity2. liabilitiesa) Non-current liabilities(i) Financial liabilities(a) Longterm borrowings(iii) Long-term provisionsb) Current liabilities(i) Financial liabilities(a) Short-term borrowings(b) Trade payablesTotal Outstanding dues to Micro enterprises and smallToial Outstanding dues to creditors other than Micro enterprises	L,251.L99,613.73348.88161.535,112.58353.77	10,864.92	1,25L.t99,631.11151.81177.21,2,79s.95492.20	10,882.30329.02
(c) Other financial Iiabilities	to,279.91		L5,076.52
(ii) Other current liabilities	1,402.40		954.07
(iii) Short-term provisions	L,20r.31		76L,L5
	118.91	18,468.88	t62.62	20,242.51
Total liabilities
		29,844.21		31,453.83

Notes:

1 The above financial results for the quarter and Year ended 31st March 2021 have been reviewed by the Audit committee and were approved by the Board of Directors of the Company at the meeting held on 10th June 2021

2This statement is as per regulation 33 of the sEBl (Listing obligationsand disclosure Requirements) Regulations, 2015. These financials results of the company wdre prepared in accordance with the lndian Accounting standards prescribed under section 133 of the companies'Act' 2013 ("the act") read with relevant rules issued there under ("lnd AS,') and other accounting principles generally acceprted in lndia and guidelines issued bythe Securities and Exchange Boardof lndia (,,SEBl,,).

3ln view of non-realisation of bills from AP Fiber Grid project for operation and maintenance work being executed by the company, the company is recognising the revenue only to the extent of cost incurred for the project till the termination notice received from client dt 06.08.2020 and 30.07.2020

4Bankguarantee invoked by "Andhra Pradesh state Fibernet limited" of Rs.4.2g crores. The said action was challenged by,the company before the division bench of Andhra Pradesh High court, Amaravathi, which is pending. Based on the legal opinion given by the counsel, the company has not made any provision in its books of accounts.

5Bank Balance Attachement from Government of AP: The commercial taxes Department of Andhra pradesh notice has given an attachment to the Bank of Maharashtra to hold and remit an amount of Rs.73,36,942/- Company due to to the Govt. from the cash credit account of the commercial tax depad@&rtthe period March _ Mav ?n?n hrca.l ^^ ^crDl r^__^ r!,, , . - Mav 2020 based on ut'*hlirl'tLfrf

ffiPeriod

ii t/ ^.. l(il11 \a ffi )fl) (w'3fit,frpbw,rnsil'.

• 6Orders lssued by GST Department: Best Judgment assessment orders under section G2 have been passed by the GST Department Andhra Pradesh for the period March 2020 to February 2O2ttor non filing of GSTR-3B returns and raised a demand of Rs 4.33 Crores including interest of Rs 11.25 lakhs' A reply has been filed with the department by the company requesting for extension of time for filing the returns and payment of taxes till the huge arrears due from APSFL are realized.
• 7orders lssued by Appellate Deputy Commissioner (CT), Tirupathi: The order restricts the input availed by the company to 75% of the input claimed treating the service being executed as a works contract instead of the supply and services contracts separately (ApSFL Project)- A demand of Rs.21,45,089/- has been raised by the department including a penalty of Rs.4,29,01g. The company decided to challenge the proceedings before the Appellate Tribunal.
• 8Orders lssued by Deputy commissioner (cT) Guntur Division: The orders restricts the input availed by the compan ylo 75%of the input claimed treating the work being executed as a works contract instead of the supply and services contracts separately (Ap civil supplies Project). A demand of Rs.6,96,746/- has been raised by the department. The company decided to challenge the above order before the Appellate Tribunal.
• 9 The Company has considered possible effects that may result from Covid-19 in preparation of these financial results including recoverability of its assets. ln developing the assumptions relating to future uncertainities in the economic conditions due to Covid-19 it has, at the date of approval of these results considered releveant internal and external sources of information and expects that the carrying amount of these assets are recoverable. The impact of covid -19 may be different from that estimated as at the date of approval of these financial results.
• 10Corresponding quarter/year to date/Year figures heve been re-grouped /re-classified classification of the current period. necessary to confirm to the

Place: Hyderabad Date : 10th June,2021

For Ter timited

T. Gopichand Vice Chairman & Managing Director DIN :00107886

$\mathbf{r}^{(1)}$

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH-2021

		(Rupees in Lakhs)
Particulars	2020-21	2019-20
A. Cash flow from operating activities
Net Profit / (Loss) before tax as per Profit & Loss Statement	152.72	986.51
Adjustments for:
Depreciation and amortisation	60.46	80.60
Sundry Credit Balances Written Back	482.98	394.27
Interest Income	(112.34)	(107.63)
Bad Debts Written Off	172.41	863.26
Finance Cost	(849.28)	(927.38)
Sundry Balances Written back	(3.71)
Interest on MSME	(23.44)
Changes in Assets and Liabilities
Trade receivables	(3,056.88)	(4, 131.15)
Other Financial Assets and Other Assets	4,254.20	(6,907.73)
Other Non Current Assts	145.70	(12.34)
Other Current Assets	(240.79)	(773.67)
Inventories	132.90	656.55
Trade Payables	(5,418.02)	11,213.12
Long Term Provisions	(15.68)	51.05
Other Current Liabilities	440.16	408.16
Short Term Provisions	(43.71)	10.96
Other Financial Liabilities	448.33	(48.21)
Cash generated from operations	(3,473.99)	1,756.37
Income tax paid	(214.21)	(375.95)
Net cash flow from operating activities (A)	(3,688.20)	1,380.42
B. Cash flow from investing activities
Property, Plant & Equipment	4.19	(27.27)
Interest Income	112.34	107.63
Net cash flow from Investing activities (B)	116.53	80.36
C. Cash flow from financing activities
Short Term Barrowings(Net)	2,316.63	(2, 158.28)
Long Term Borrowings	197.07	49.44
Interest Paid	849.28	927.38
Net cash flow from Financing activities (C)	3,362.98	(1, 181.46)
Net increase in Cash and cash equivalents (A+B+C)	(208.69)	279.32
Opening balance of Cash and cash equivalents	1,586.05	1,306.73
Closing balance of Cash and cash equivalents	1,377.36	1,586.05
Components of Cash and Cash Equivalentsà.
Cash and cheques on Hand	15.36
Balances with Banks		12.57
-On Current Accounts	76.22
-On Deposit Accounts	1,285.78	56.54
Cash and cash Equivalents as per Note 7	1.377.36	1,516.94158605

For Tera Software Limited 'S/a

J'C and Managing Director

MULLAPUDI & Co., CHARTERED ACCOUNTANTS

Flat No 1A, Rama Apartments, Plot No 84, Srinagar Colony, Hyderabad - 500073

Tel: 040-2373 5095, 94920 63246 E-mail: ca.mullapudi@gmail.com

Independent Auditor's Report

To the Members of TERA SOFTWARE LIMITED

Report on the Audit of Ind AS Financial Statements

Opinion

We have audited the financial statements of Tera Software Limited ("the Company"), which comprise the Balance Sheet, as at March 31, 2021, the statement of profit and loss (Including Other Comprehensive Income), the Statement of Changes in Equity, the statement of Cash Flows for the year then ended, and notes to financial statements, including a summary of the significant accounting policies and other explanatory information ("the financial statements").

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Ind AS financial statements give the information required by the Companies Act, 2013 ("the Act') in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS') and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2021, its profit, its total comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI's Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the Key Audit Matters to be communicated in our report.

S.No	Key Audit Matter	Auditor's Response
$\mathbf{1}$	Provision for impairment loss in accountsreceivables.The credit loss provision in respect ofAccount receivables represent management'sbest estimate of the credit losses incurred onthe receivables at the balance sheet date.We have identified provisioning for creditloss as a key audit matter as the calculationof credit loss provision is a complex area andrequires management to make significantassumptions on customer payment behaviourand estimating the level and timing ofexpected future cash flows,	Our audit procedure in respect of this areaincluded:Understand and assess the management'sestimate and related policies used in thecredit loss analysis.Performed test of key controls to analyseoperating effectiveness relating tocalculation of impairment provisions.Reviewed the data flows from sourcesystems to spreadsheet-based models totest their completeness and accuracy.For Expected Credit Loss (ECL) of tradereceivables assessed on individual levelby the management, examined on a testcheck impairment of trade receivables andthe key assumptions used in the estimateof the cash shortfalls and reviewedwhether amounts have been recoveredafter the end of reporting period.Reviewed the management's ageinganalysis based on days past due byexamining the original documents (suchas invoices and bank deposit advices).Verified the calculation of ECL of eachtype of trade receivables according to theprovision matrix.

Other Information

The Company's Board of Directors is responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis, Board's Report including annexures thereto, Business Responsibility Report, Corporate Governance and Shareholder's Information, but does not include the financial statements and our Auditor's report thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated. It based on the work we have performed, we conclude that there is a material $\sqrt{P^{UD}/f}$

misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the accounting standards specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Board of Directors is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors are responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SA's will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with the SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve control, collusion, forgery, intentional omissions, misrepresentations, or the override of internal.
• Obtain an understanding of internal controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section $143(3)(i)$ of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting APUDI estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basis of accounting $\bullet$ and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.

We communicate with those charged with governance regarding, among other mailers, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have Complied with relevant ethical requirements regarding independence, and to Communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

• 1. As required by the Companies (Auditor's Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure A statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.
• 1. As required by section 143(3) of the Act, we report that:
  • a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;
  • b) In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books:
  • c) The Balance Sheet, the statement of Profit and loss (including Other Comprehensive Income), the Statement of changes in Equity and the Cash Flow Statement dealt with by APUDIC this Report are in agreement with the books of account:

• d) In our opinion, the aforesaid Financial statements comply with the Accounting Standards specified under Section 133 of the Companies Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
• e) On the basis of written representations received from the directors as on March 31, 2021, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2021, from being appointed as a director in terms of Section 164(2) of the Act.
• f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure B". Our Report expresses an Unmodified opinion on the adequacy and operating effectiveness of the company internal financial controls over financial Reporting.
• g) With respect to the other matters to be included in the Auditor's Report in accordance with the requirements of section 197(16) of the Act, as amended.

In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.

• h) with respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
  • i. The Company has pending litigations on its financial position in its financial statements.
  • ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
  • iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

For Mullapudi & Co., Chartered Accountants Firm Regn. No: 006707S

APUDI Hyderabad

B. Krishna Sivaram Apparao Partner Membership No: 226476

UDIN: 21226476AAAADE2700

Date: 10.06.2021 Place: Hyderabad

Annexure -A to the Independent Auditor's Report issued to the members of Tera Software Ltd

Statement on the matters specified in paragraphs 3 and 4 of the (Auditor's Report) Order, 2016

(a) The Company has maintained proper records showing full particulars including quantitative i. details and situation of fixed assets.

(b) As per the information and explanations given to us the fixed assets of the company have been physically verified by the management during the year in regular intervals. In our opinion the frequency of verification of the fixed assets by the management is reasonable having regard to the size of the company and the nature of its assets.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the company, the title deeds of the immovable properties are held in the name of the company.

• According to the information and explanations given to us the inventory has been physically ii. verified by the management at reasonable intervals and in our opinion, the frequency of verification is reasonable. No material discrepancies were noticed on physical verification between the physical stocks and the book stocks.
• During the year the Company has not granted any loans, secured or unsecured to Companies, firms. iii. Limited Liability Partnerships or other parties listed in the register maintained Under Section 189 of the Companies Act. Consequently clauses (iii) (a), (iii) (b) and (iii) (c) of the companies (Auditor's Report) order, 2016 are not applicable to the company.
• In our opinion and according to the information and explanations given to us, no loans, investment iv. and guarantees have been provided to the parities covered under section 185 and 186 of the Act.
• The company has not accepted any deposits from the public during the year and does not have V. unclaimed deposits deposits at the year end. Hence the provisions of clause $3(v)$ of the CARO are not applicable to the company.
• In respect of the company, the Central Government of India has not prescribed for the maintenance vi. of cost records under sub-section (1) of Section 148 of the Companies Act. Accordingly clause vi of the order is not applicable.
• (a) According to the information and explanations given to us, and on the basis of our examination vii. of the books of accounts, the Company has been generally regular in depositing with appropriate authorities undisputed statutory dues including Employees State Insurance, Provident Fund, Income-tax, Customs duty, GST and any other material statutory dues as applicable to it except in case of GST of Rs. Crores.

		S.no Nature of Dues Amount Period to which the
		amount relates
GST	Crores	2019-20
GST	Crores	2020-21

(b)There were no undisputed amounts payable in respect of Employees State Insurance, Provident Fund, Income-tax, Sales-tax, Service-tax, Customs duty, Excise duty, GST and any other material statutory dues in arrears as at 31/03/2021 for a period more than 6 months from the day they became payable.

(c) According to the information and explanations given to us, there are no material dues payable in respect of income tax, service tax, customs duty, excise duty which have not been deposited on account of any dispute other than the following:

S.no.	Name of theStatute	Nature of thedues	Amount(Rs)	Period to whichthe amount relates	Forum where dispute ispending
1	The Kerala VATRules , 2005	Value AddedTax	84,16,222	2005-06	Kerala VAT AT
$\overline{2}$	The Kerala VATRules , 2005	Value AddedTax	61,50,240	2006-07	Kerala VAT AT
3	The Kerala VATRules , 2005	Value AddedTax	7,42,446	2007-08	Kerala VAT AT
$\overline{4}$	The Kerala VATRules , 2005	Value AddedTax	8,52,280	2008-09	Kerala VAT AT
5	The Kerala VATRules , 2005	Value AddedTax	4,66,474	2009-10	Kerala VAT AT
6	The AP VAT	Value AddedTax	50,70,072	2015-16	Vat Appellate Tribunal,Andhra Pradesh
$\overline{7}$	The AP VAT	Value AddedTax	87,81,759	2016-17(April to Sep)	Vat Appellate Tribunal,Andhra Pradesh
8	The AP VAT	Penalty onVAT	12,67,518	2015-16	Vat Appellate Tribunal,Andhra Pradesh
9	The AP VAT	Penalty onVAT	21,95,440	2016-17	Vat Appellate Tribunal,Andhra Pradesh
10	The AP VAT	Value AddedTax & Penalty	21,45,089	2016-17 & 2017-18(Till June-18)	Refer Note 1
11	The Finance Act1994	Service Tax	3,99,98,766	$2011 - 12$	CESTSAT-Hyderabad
12	The Finance Act1994	Penalty OnService Tax	4,00,08,766	2011-12	CESTSAT-Hyderabad
13	The Finance Act1994	Service Tax	15,40,170	2008-09 to 2012-13	CESTSAT-Hyderabad
14	The Finance Act1994	Penalty OnService Tax	15,50,170	2008-09 to 2012-13	CESTSAT-HyderabadAPUDT

NEW derabad ed Accour

15	The AP VAT	Value AddedTax & Penalty	6,97,000	2014-15	Refer Note 1
16	GST	GST&Interest	73,36,942	March, April &May-2020	Writ petition filed withHigh Court of AndhraPradesh.
17	GST	GST &Interest	359,94,258	June-20 toFebruary-2021	Refer Note 2

Note 1: The appeal corresponding to this disputed demand is yet to be filed before VAT Appellate Tribunal, Andhra Pradesh. The time limit to file the said appeal is extended in lieu of COVID-19 Pandemic.

Note 2: The appeal corresponding to this disputed demand is yet to be filed before the Honorable High Court of Andhra Pradesh / Appellate Deputy Commissioner, Tirupathi. The time limit to file the said appeal is extended in lieu of COVID-19 Pandemic.

• viii. In our opinion and according to the information and explanation and given to us, the company has not defaulted in repayment of loans or borrowings availed from financial institution, banks and government. During the year the company has not issued debentures.
• The company did not raise the money by way of any initial public offer or further public offer ix. (including debt instruments) and term loans during the year. Accordingly, paragraph 3(ix) of the order is not applicable.
• According to the information and explanations given to us, no material fraud by the company or on X. the company by its officers or employees has been noticed or reported during the course of our audit.
• According to the information and explanations given to us, the company has paid / provided for xi. managerial remuneration in accordance with the requisite approvals mandated by the provisions of sections 197 read with Schedule V to the Act.
• In our opinion and according to the information and explanations given to us, the company is not a xii. Nidhi Company. Accordingly, paragraph 3(xii) of the order is not applicable.
• xiii. According to the information and explanations given to us, and based on our examination of the records of the company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
• xiv. According to the information and explanations given to us and based on our examination of the records of the company, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

• According to the information and explanations given to us and based on our examination of the XV. records of the company, the company has not entered into non cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the order is not applicable.
• The company is not required to be registered under section 45-IA of the Reserve Bank of India Act xvi. 1934.

For Mullapudi & Co., Chartered Accountants Firm Regn. No: 006707S

APUDI & Hyderabac $\star$ Colo ered Accou

CA B Krishna Sivaram Apparao

Partner Membership No: 226476 UDIN: 21226476AAAADE2700

Date: 10.06.2021 Place: Hyderabad

Annexure -B to the Independent Auditor's Report issued to the members of Tera Software Ltd

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of Tera Software Limited ("the Company") as of 31 March 2021 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India ('ICAI'). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act. 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company's internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that:

(1) Pertain to the maintenance of records that, in reasonable detail, accurately and that reflect the transactions and dispositions of the assets of the company;

(2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

(3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2021, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For Mullapudi & Co., Chartered Accountants Firm Regn. No: 006707S

PUD Hyderaba CA B Krishna Sivaram Apparad ed Acco

Date: 10.06.2021 Place: Hyderabad

Partner Membership No: 226476 UDIN: $21226476AAABE2700$