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Tera Software Ltd.

BSE: 533982 Sector: IT
NSE: TERASOFT ISIN Code: INE482B01010
BSE 00:00 | 26 Apr 55.00 2.60
(4.96%)
OPEN

55.00

HIGH

55.00

LOW

55.00

NSE 00:00 | 26 Apr 55.30 2.60
(4.93%)
OPEN

55.30

HIGH

55.30

LOW

55.30

OPEN 55.00
PREVIOUS CLOSE 52.40
VOLUME 3574
52-Week high 104.70
52-Week low 36.00
P/E 125.00
Mkt Cap.(Rs cr) 69
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 55.00
CLOSE 52.40
VOLUME 3574
52-Week high 104.70
52-Week low 36.00
P/E 125.00
Mkt Cap.(Rs cr) 69
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Tera Software Ltd. (TERASOFT) - Auditors Report

Company auditors report

To the Members of TERA SOFTWARE LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of Tera Software Limited("the Company") which comprise the Balance Sheet as at March 312017statement of profit and loss statement of Cash Flow for the year then ended and notes tofinancial statements including a summary of significant accounting policies and otherexplanatory information.

Management's Responsibility for the Financial Statements

The Company 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 thesefinancial statements that give a true and fair view of the financial position financialperformance and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Accounting Standards specified under Section133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit.

We have taken in to account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2017 its profit and its cash flows for the year ended on that date;

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 ofthe Act we give in the Annexure A statement on the matters specified in the paragraph 3and 4 of the Order to the extent applicable.

2. 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 bestof our knowledge and belief were necessary for the purpose of ou r audit;

b) In our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books;

c) The Balance Sheet the statement of Profit and loss and Cash Flow Statement dealtwith by this Report are in agreement with the books of account;

d) In our opinion the aforesaid Balance Sheet the statement of Profit and loss andCash Flow Statement comply with the Accounting Standards specified under Section 133 ofthe 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 312017 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2017 from being appointed as a director in terms of Section 164(2) of theAct.

f) with respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B"; and

g) with respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has pending tax litigations disclosed as Note no.25C of the Notes toaccounts. We are of the opinion that the pending litigations would not impact thefinancial position of the company.

ii. The Company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

iv. The Company has provided requisite disclosures in the financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8thNovember 2016 to 30'h December 2016. Based on the audit procedures andrelying on the management representation we report that the disclosures are in accordancewith books of account maintained by the Company and as produced to us by the Management(Refer to Note No-28 to the audited Financial Statements).

For NARVEN ASSOCIATES
Chartered Accountants
Firm Regn. No: 005905S
Sd/-
G.V.Ramana
Date : 22.05.2017 Partner
Place: Flyderabad Membership No: 025995

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

Statement on the matters specified in paragraphs 3 and 4 of the (Auditor's Report)Order 2017

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

(b) As per the information and explanations given to us the fixed assets of the companyhave been physically verified by the management during the year in regular intervals. Inour opinion the frequency of verification of the fixed assets by the management isreasonable 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 ourexamination of the records of the company the title deeds of the immovable properties areheld in the name of the company.

ii The inventory has been physically verified by the management at reasonable intervalsand in our opinion the frequency of verification is reasonable. No material discrepancieswere noticed on physical verification between the physical stocks and the book stocks.

iii During the year the Company has not granted any loans secured or unsecured toCompanies firms. Limited Liability Partnerships or other parties listed in the registermaintained 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 thecompany.

iv In our opinion and according to the information and explanations given to us noloans investment and guarantees have been provided to the parties covered under section185and 186ofthe Act.

v The company has not accepted any deposits from the public and consequently thedirectives issued by the Reserve Bank of India the provisions of sections 73 to 76 or anyother relevant provisions of the Companies Act and the rules framed there under are notapplicable to the company. Consequently no order has been passed by Company Law Board orNational Company LawTribunal or Reserve Bank

Of India or any court or any other tribunal on compliance or non compliance of thesame. Accordingly clause (v) of the Order is not applicable

vi In respect of the company the Central Government of India has not prescribed forthe maintenance of cost records under sub-section (1) of Section 148 of the Companies Act.Accordingly clause vi of the order is not applicable.

vii (a) According to the information and explanations given to us and on the basis ofour examination of the books of accounts the Company has been generally regular indepositing with appropriate authorities undisputed statutory dues including EmployeesState Insurance Provident Fund Income-tax Sales-tax Service-tax Customs duty Exciseduty and any other material statutory dues as applicable to it except in case of ServiceTax of Rs. 11999545 and VAT of Rs.2890080

(b) There were no undisputed amounts payable in respect of Employees State InsuranceProvident Fund Income-tax Sales-tax Service-tax Customs duty Excise duty and anyother material statutory in arrears as at 31/03/2017 for a period more than 6 months fromthe day they became payable except the following:

S.No Nature of Dues Amount Period to which the amount relates
1 Value Added Tax 963360 2014-15
2 Value Added Tax 963360 2015-16
3 Value Added tax 240840 2016-17

(c) According to the information and explanations given to us there are no materialdues payable in respect of income tax service tax customs duty excise duty which havenot been deposited on account of any dispute other than the following:

s. No. Name of the Statute Nature of the dues Amount (Rs) Period to which the amount relates Forum where dispute is pending
1 The Kerala VAT Rules 2005 Value Added Tax 8416222 2005-06 Deputy Commissioner (Appeals) Kerala
2 The Kerala VAT Rules 2005 Value Added Tax 6150240 2006-07 Deputy Commissioner (Appeals) Kerala
3 The Kerala VAT Rules 2005 Value Added Tax 742446 2007-08 Deputy Commissioner (Appeals) Kerala
4 The Kerala VAT Rules 2005 Value Added Tax 852280 2008-09 Deputy Commissioner (Appeals) Kerala
5 The Kerala VAT Rules 2005 Value Added Tax 466474 2009-10 Deputy Commissioner (Appeals) Kerala
6 The AP VAT Value Added Tax 5070072 2015-16 Deputy Commissioner (Appeals) Andhra Pradesh
7 The AP VAT Value Added Tax 8781759 2016-17 Deputy Commissioner (Appeals) Andhra Pradesh
8 The AP VAT Penalty on VAT 1267518 2015-16 Deputy Commissioner (Appeals) Andhra Pradesh
9 The AP VAT Penalty on VAT 2195440 2016-17 Deputy Commissioner (Appeals) Andhra Pradesh
10 The Finance Act 1994 Service Tax 39998766 2011-12 CESTAT-Hyderabad
11 The Finance Act 1994 Penalty On Service Tax 40008766 2011-12 CESTAT-Hyderabad
12 The Finance Act 1994 Service Tax 1540170 2008-09 to 2012-13 CESTAT-Hyderabad
13 The Finance Act 1994 Penalty On Service Tax 1550170 2008-09 to 2012-13 CESTAT-Hyderabad

viii In our opinion and according to the information and explanation given to us thecompany has not defaulted in repayment of loans or borrowings availed from financialinstitution banks and government. During the year the company has not issued debentures.

ix The company did not raise the money by way of any initial public offer or furtherpublic offer (including debt instruments) and term loans duringthe year. Accordinglyparagraph 3(ix) of the order is not applicable.

X According to the information and explanations given to us no material fraud by thecompany or on the company by its officers or employees has been noticed or reported duringthe course of our audit.

xi According to the information and explanations given to us the company has paid /provided for managerial remuneration in accordance with the requisite approvals mandatedby the provisions of sections 197 read with Schedule V to the Act.

xii In our opinion and according to the information and explanations given to us thecompany is not a Nidhi Company. Accordingly paragraph 3{xii) of the order is notapplicable.

xiii According to the information and explanations given to us and based on ourexamination of the records of the company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

xiv According to the information and explanations given to us and based on ourexamination of the records of the company the company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.

xv According to the information and explanations given to us and based on ourexamination of the records of the company the company has not entered into non cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe order is not applicable.

xvi The company is not required to be registered under section 45-IAof the Reserve Bankof India Act 1934.

For NARVEN ASSOCIATES
Chartered Accountants
FRN:005905S
Sd/-
G.V.Ramana
Place: Hyderabad (PARTNER)
Date : 22-05-2017 Membership No.025995

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

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 {"the Act")

We have audited the internal financial controls over financial reporting of TeraSoftware Limited ("the Company") as of 31st March 2017 in conjunctionwith 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 internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ('ICAI'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditor's Responsibility

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

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

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

Meaning of Internal Financial Controls over Financial Reporting

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

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

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

(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect onthe financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

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

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31s1 March 2017based on the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For NARVEN ASSOCIATES
Chartered Accountants
Firm Regn. No: 005905S
Sd/-
G.V.Ramana
Date : 22.05.2017 (Partner)
Place: Hyderabad Membership No: 025995