Megasoft : 2022-23 ANNUAL REPORT

Corporate Information:

Board of Directors

Sunil Kumar Kalidindi, ED & CEO

Anish Mathew

Leona Ambuja (Ms.)

Kalyan Vijay Sivalenka

Suryanarayana Raju Nandyala

Krishna Yeachuri

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

8th Floor, Unit No. 801B,

Jain Sadguru Image's Capital Park, 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	18
Management's discussion and analysis	31
Auditor's Certificate on Corporate Governance	39
Financial Statements - Consolidated
Auditor's Report	42
Balance Sheet	49
Statement of Profit and Loss	50
Cash Flow Statement	53
Notes to the consolidated financial statements	54
Financial statements - Standalone
Auditors' Report	76
Balance Sheet	86
Statement of Profit and Loss	87
Cash Flow Statement	90
Notes to the financial statements	91
Notice of the AGM	114

MEGASOFT LIMITED

CIN: L24100TN1999PLC042730

23rd 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 2023.

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
	2023	2022	2023	March 2022
Revenues from operations	197.10	1410.80	197.10	5239.61
Expenditure	1966.72	3257.32	1967.25	7071.56
Finance cost	1089.62	205.81	1089.63	294.49
Depreciation	284.05	339.37	284.05	361.42
Operating profit/ (loss)	(3143.30)	(2391.70)	(3143.83)	(2487.86)
Profit before Exceptional items and	1042.83	278.50	1042.38	182.34
Tax
Exceptional Items	105.01	341.87	94.91	341.87
Profit before tax	1147.84	620.37	1137.29	524.21
Less: Taxes	0.00	62.14	0.00	62.08
Profit after tax	1147.84	558.23	1137.29	462.13
Share of Profit /(Loss) of Associate	0.00	0.00	(254.36)	0.00
Profit/(Loss) for the period	1147.84	558.23	882.93	462.13
Other Comprehensive Income/	(2.67)	(12.64)	(2.67)	(12.64)
(Loss)
Total Comprehensive Income	1145.17	545.59	880.26	449.49
Earnings per share
(equity shares, par value Rs. 10
each)
Basic (Rs.)	1.56	0.89	1.20	0.74
Diluted (Rs.)	1.56	0.89	1.20	0.74

Overview

During the financial year ended 31 March 2023, your company recorded consolidated revenues of ₹ 197.10 lakhs as compared to ₹ 5239.61 lakhs for the financial year ended 31 March 2022. The consolidated profit was ₹ 880.26 lakhs during the current year as compared to ₹ 449.49. lakhs in the previous year.

Further, during the year under review there were changes in the nature of business of the company. The Company has altered its main objects from IT business to pharmaceuticals pursuant to resolution passed by the members of the Company on June 04,2022. Your Company has plans to diversify in other industries as well as per the latest MOA of the Company and work towards its success and growth in the coming years.

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

For the financial year ended on 31st March 2023, the Company transferred ₹ 1147.84/- lakhs to Reserves & Surplus.

Dividend

As the Company is intending to ploughing back of profit, Board of Directors of the Company does not recommended the 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 2022-23

2

Share Capital

The paid-up equity share capital as on 31 March 2023 was ₹ 7377.00 lakhs comprising 7,37,70,041 equity shares of ₹ 10 each. During the year under review, the company has not issued shares with differential voting rights nor 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.

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. Sunil Kumar Kalidindi has been regularized as a Whole-time Director (Executive & CEO) of the Company by members of the Company through postal ballot dated 04th June,2022 with effect from 10th December,2021
• Mr. Krishna Yeachuri, has been appointed as an Additional Director of the Company with effect from 31st December,2022 and his appointment was regularised by the members of the Company as a Director (Professional, Non-Executive & Non- Independent) by way of postal ballot results dated 27th March,2023 with effect from even date.
• Mr. Anil Kumar Sood, Director of the Company tendered his resignation with effect from 07th October,2022.
• Mr. Suryanarayana Raju Nandyala has been regularized as a Director (Independent) of the Company by members of the Company in AGM held on 23rd September,2022 with effect from 23rd September,2022.

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. Also, a separate meeting of Independent Directors as prescribed under Schedule IV of the Act, was held during the year under review. For details of the meetings of the Board and its Committees, please refer to the Corporate Governance Report forming part of this Report. The 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.

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.

Annual Report 2022-23

3

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 2023, 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

1. Divestment of 100% Equity stake/investment held in its wholly owned subsidiary company and divestment of Company's Software Product Division

The Board of Directors in its meeting held on 4th May,2022 had approved the Divestment of 100% Equity stake / investment held in its ultimately wholly owned subsidiary viz., Nelatop Systems Private Limited ("NSPL") for an aggregate consideration of INR 5.50 Cr and also approved Sale of its Indian software product division housed within the Company by way of slump sale for an aggregate consideration of INR 1 Cr subject to approval of members of the company. Accordingly members of the Company approved through postal ballot dated 04th June, 2022 and based on members approval Company divested its 100% Equity stake / investment held in its ultimately wholly owned subsidiary viz., Nelatop Systems Private Limited ("NSPL") and sold its Indian software product division housed within the Company by way of slump sale.

B. Investment in Extrovis AG

The Board of Directors in its meeting held on 04th May,2022 has also approved the acquisition of a 40% stake in Extrovis AG in one or more tranches. Accordingly, the Company has acquired 40% stake in four tranches for a consideration of USD 16,780,000.

C. Change in Promoter Company

Company had received a letter dated April 04, 2023 from Ramanagaram Enterprises Private Limited (REPL), informing that the Hon'ble National Company Law Tribunal, Hyderabad Bench (NCLT) vide its order dated January 30, 2023 has approved the Scheme of Amalgamation between Sri Power Generation (India) Private Limited (SPGIPL) (Promoter of the Company prior to above Amalgamation), Solar Integration Systems India Private Limited and Nimbha Biotech Private Limited, (Transferor Companies) with Ramanagaram

Annual Report 2022-23

4