Megasoft : 2021-22 ANNUAL REPORT

Corporate Information:

Board of Directors

Sunil Kumar Kalidindi, ED & CEO

Anil Kumar Sood

Anish Mathew

Leona Ambuja (Ms.)

Kalyan Vijay Sivalenka

Suryanarayana Raju Nandyala

Chief Financial Officer

Shridhar Thathachary

Company Secretary and Compliance Officer

Srivalli Susarla

Statutory Auditors

M/s. N. C. Rajagopal & Co., Chartered Accountants Office No.22, Krishnaswamy Avenue

Mylapore Road, Opposite Mylapore Club Chennai 600 004, Tamil Nadu, India

Secretarial Auditor

M Damodaran

M/s. M Damodaran & Associates LLP MDA Towers, New No.6,

Old No.12, Appavoo Gramani

1st Street, Mandaveli, Chennai-600028

Bankers

Kotak Mahindra Bank

Registered Office

85, Kutchery Road, Mylapore Chennai 600004, Tamil Nadu, India

Corporate Office

01st Floor, Block-3, My Home Hub,

Madhapur, Hyderabad - 500081,

Telangana, India

Registrars and Share Transfer Agents

Cameo Corporate Services Limited Subramanian Building 1, Club house Road Chennai 600004, Tamil Nadu, India

Contents	Page No.
Statutory Reports
Directors' Report	02
Corporate Governance Report	17
Management's discussion and analysis	28
Auditor's Certificate on Corporate Governance	36
Financial Statements - Consolidated
Auditor's Report	39
Balance Sheet	46
Statement of Profit and Loss	47
Cash Flow Statement	50
Notes to the consolidated financial statements	51
Financial statement - Standalone
Auditors' Report	73
Balance Sheet	83
Statement of Profit and Loss	84
Cash Flow Statement	87
Notes to the financial statements	88
Notice of the AGM	112

MEGASOFT LIMITED

CIN: L24100TN1999PLC042730

22nd ANNUAL REPORT

1

DIRECTORS' REPORT

To The Members

Your Directors have pleasure to present their Report of your Company on the business and operations for the year ended 31 March 2022.

Financial Highlights

				(₹ in Lakhs)
	Standalone	Consolidated
Particulars	For the year	For the year	For the year	For the year
ended 31 March	ended 31 March	ended 31 March	ended 31
	2022	2021	2022	March 2021
Revenues	1,410.80	1,646.60	5,239.61	5,940.22
Expenditure	3,257.32	1,577.99	7,071.56	5,530.07
Finance cost	205.81	273.69	294.49	548.96
Depreciation	339.37	343.30	361.42	363.04
Operating profit/ (loss)	(2,391.70)	(548.38)	(2,487.86)	(501.85)
Profit before Exceptional items and	278.50	138.03	182.34	184.55
Tax
Exceptional Items	341.87	0	341.87	0
Profit before tax	620.37	138.03	524.21	184.55
Less: Taxes	62.14	(0.85)	62.08	(0.26)
Profit after tax	558.23	138.88	462.13	184.81
Other Comprehensive Income/	(12.64)	(6.66)	(12.64)	(6.66)
(Loss)
Total Comprehensive Income	545.59	132.22	449.49	178.15
Earnings per share
(equity shares, par value Rs. 10
each)
Basic (Rs.)	0.89	0.31	0.74	0.42
Diluted (Rs.)	0.89	0.31	0.74	0.42

Overview

During the financial year ended 31 March 2022, your company recorded consolidated revenues of ₹ 5,239.61 lakhs as compared to

• 5,940.22 lakhs for the financial year ended 31 March 2021. The consolidated profit was ₹ 449.49 lakhs during the current year as compared to ₹ 178.15 lakhs in the previous year.

Further, during the year under review there were no changes in the nature of business of the company. However, during the year your company had undertaken a corporate restructuring exercise leading to changes in the Memorandum of Association defining the new areas of business that your Company intends to pursue, including Pharmaceuticals, Defense, Manufacturing etc.

Transfer to Reserves in terms of Section 134(3) (j) of the Companies Act, 2013

For the financial year ended on 31st March 2022, the Company transferred ₹ 5,58,23,239.62./- to Reserves & Surplus.

Dividend

On account of inadequacy of profits during the financial year ended 31 March 2022, the Board of Directors of the company have not recommended dividend.

Transfer of Unclaimed Dividend to Investor Education and Protection Fund

The provisions of Section 125(2) of the Companies Act, 2013 do not apply as there was no dividend declared and paid last year.

Annual Report 2021-2022

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Share Capital

The paid-up equity share capital as on 31 March 2022 was ₹ 7377.00 lakhs comprising 7,37,70,041 equity shares of ₹ 10 each. During the year under review, the company has issued and allotted 2,95,02,748 equity shares on rights basis. Apart from this Company has not granted stock options or sweat equity shares or bonus shares. The Company has not bought back any of its securities during the year under review.

Public Announcement to the shareholders on the Open Offer for Acquisition of Equity Shares by Sri Power Generation (India) Private Limited

During the year, Sri Power Generation (India) Private Limited made an open offer and made a detailed public statement to the public shareholders of Megasoft Limited for acquisition upto 2,95,08,017 Fully paid-up equity shares of ₹ 10/- each at an Offer Price of Rs. 16.70/- per share.

On 16th November, 2021 Sri Power Generation (India) Private Limited intimated to the Stock Exchanges regarding acquisition of 1,31,16,104 additional equity shares representing 17.78% of the then paid-up share capital of the Company through open offer. Further, on 18th November, 2021 Sri Power Generation (India) Private Limited intimated the Stock Exchanges that they are classified as promoters of the Company pursuant to open offer. As on date Sri Power Generation (India) Private Limited is holding 43.77% of equity shares of the Company.

Directors and Key Managerial Personnel

The company has received declarations from all the independent directors of the company confirming that they meet the criteria of independence as prescribed under section 149(6) of the Companies Act, 2013 and Schedule IV of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

During the year under review, the following changes were effected in the composition of the Board of Directors of the Company:

• Mr. G V Kumar, Managing Director & CEO of the Company tendered his resignation with effect from 10th December,2021.
• Mr. Sunil Kumar Kalidindi has been appointed as an Additional Director (Executive & CEO) of the Company with effect from 10th December,2021
• Mr. Upendar Mekala Reddy, Independent Director of the Company tendered his resignation with effect from 10th December,2021
• Mr. Suryanarayana Raju Nandyala, has been appointed as an Additional Director of the Company with effect from 24th December,2021
• the designation of Ms. Leona Ambuja, was changed from Independent Director to Non-Executive Director with effect from 01st April,2022

In accordance with the provisions of the Companies Act,2013 approval of members is being sought at the ensuing Annual General Meeting ('AGM') of your Company for appointment of Mr. Suryanarayana Raju Nandyala (DIN-01581731) as Independent Director(Non-Executive) of the Company.

In accordance with the provisions of the Companies Act, 2013 and in terms of the Memorandum of Association and Articles of Association of the Company, Mr. Sunil Kumar Kalidindi [DIN- 02344343] Director of your Company, retire by rotation at the ensuing AGM and eligible offers for reappointment.

Board Meetings

The Board of Directors met Nine (9) times during the financial year. The provisions of Companies Act, 2013 and Regulation 17(2) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, Secretarial Standard - 1 issued by The Institute of Company Secretaries of India were adhered to in respect of meeting of Board of Directors of the company.

Annual Report 2021-2022

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Compliance with Secretarial Standards

During the year under review, the provisions of Secretarial Standard - 1 (Board Meetings) and 2 (General Meetings) issued by the Institute of Company Secretaries of India (ICSI) were adhered to while conducting the respective Meetings.

Nomination & Remuneration Policy

The Board has, on the recommendation of the Nomination & Remuneration Committee, framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is available on the website of the company and the terms of reference are given separately in the Corporate Governance Report.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its committees. The manner in which the evaluation has been carried out has been detailed out in the Corporate Governance Report.

Performance Evaluation Criteria for Independent Directors

The performance evaluation criteria for independent directors are determined by the Nomination and Remuneration Committee. An indicative list of factors on which evaluation was carried out includes participation and contribution by a director, commitment, effective deployment of knowledge and expertise, integrity, experience (including the proficiency) and maintenance of confidentiality and Independence of behavior and judgment.

Directors' Responsibility Statement

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of section 134(3)(c) of the Companies Act, 2013:

1. in the preparation of the annual financial statements for the year ended 31 March 2022, the applicable accounting standards had been followed along with proper explanations relating to material departures;
2. 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 at the end of the financial year and of the profit of the company for the year;
3. the directors had 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;
4. the directors had prepared the annual accounts on a "going concern basis";
5. the directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
6. the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Significant Transactions

During the financial year 2021-2022 your company came up with and concluded a Rights Issue, the proceeds of which were used to pay the aggregate outstanding borrowings of the company on a consolidated basis. Also during the year the company concluded and signed a Lease Agreement for the third and the Final Block (Block 3) for its share for which the company started receiving rentals as declared by the company vide its disclosure to the Stock Exchange on 3rd January 2022. Apart from this during the previous financial

Annual Report 2021-2022

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