Hypersoft Technologies Ltd

Dear Shareholders,

Your directors are happy to present 41^st Annual Report and the Financial Results for the financial year ended on 31^st March 2024.

1. Financial Results

2. Management Discussion & Analysis (M D &A): Review of Business & Outlook

Your company remains a preferred supplier for several software requirements. Stockbrokers are showing a renewed interest in our software which is of the highest quality. Additionally, ERP system for manufacturing, processing and stock control has been the focus of the company.

In the stock markets, SEBI has increased compliance regulations exponentially and the result is that several brokers are preferring to shut down the business rather than comply with all the regulations. Keeping this in mind, the focus of the Company has shifted to other products especially Online opening of Accounts for Stockbrokers.

The mobile market in India is the second largest in the world after China, and Mobile applications developed by your company have shown great acceptance and will continue to be the prime mover. The Global Mobile Applications market is poised to grow at a sustained rate and the number of users of smart phones will soon cross more than half the population of the country. The Online KYC package - and it's Mobile versions - developed by your Company has been accepted by Extremely large Broking houses.

Opportunities and Threats

The Online KYC model so far has been targeted at very large broking houses. To cater to smaller brokers, the software is being modified to be offered in a SAAS (Software As A Service) configuration.

Absence of skilled manpower, high cost of development, high cost of user acquisition, competition driven by independent and freelance developers and the high cost of marketing are major impediments to growth.

Outlook

With the release of our KYC package, we envisage many brokers accepting the system. Since this is virtually independent of SEBI regulations, we see a bright future for the product.

The pandemic has mostly affected the business and the possibility of meeting potential new customers has reduced to a great extent. Also, with the new compliances being brought in for Stockbrokers by SEBI the number of brokers giving up their membership is increasing.

Risk and Concerns

1. The first major problem developed in recent times subject to added different legal laws and norms.

2. Another major problem the need to develop the optimum mix of employees. A big dilemma is to get the balance correct in terms of recruitment.

Internal control systems and their adequacy

The Company has a proper and adequate system of internal controls. This ensures that all transactions are authorized, recorded and reported correctly, and assets are safeguarded and protected against loss from unauthorized use or disposition. In addition, there are operational controls and fraud risk controls, covering the entire spectrum of internal financial controls. The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations.

Discussion on financial performance with respect to operational performance

During the year under review, your Company made a Turnover of Rs. 93.06 Lakhs as against Rs. 96.00 Lakhs for the previous year and had a loss of Rs. 101.33 Lakhs as against a loss of Rs. 9.66 Lakhs for the previous year.

Material development in Human Resource & Industrial Relations

There are no significant developments in human resources and number of people employed. However, all our efforts were made to retain the talent and improve the productivity.

3. Change in the nature of business

There were no changes in the nature of business of the Company during the financial year 20232024.

4. Deposits

The Company has not accepted any deposits from the public during the year in pursuant to Section 73 of the Companies Act, 2013.

5. Material Changes and Commitments

During the financial year the Company has issued a notice of postal ballot on November 6, 2023 pursuant to Sections 108 and 110 of the Companies Act, 2013, and the relevant rules, considering the following transaction:

1. Approval for Sale of Company premises situated at Mumbai and Hyderabad.

Thomas Joesph Lloyd are appointed as the Scrutinizer to conduct the aforesaid postal ballot, scrutinize the e-voting process and issue the report.

Additionally, after the financial year ended 31^st March 2024, an Open Offer was announced for the acquisition of up to 11,05,442 (Eleven Lakhs Five Thousand Four Hundred and Forty-Two) fully paid-up equity shares, representing 26% of the total paid-up/voting share capital of Hypersoft Technologies Limited ("Target Company"). The offer was made by Mr. Narra Puma Babu ("Acquirer-1") and Mr. Sudhakara Varma Yarramraju ("Acquirer-2"), collectively referred to as the "Acquirers," at a cash consideration of INR 11 per share.

This Open Offer was made pursuant to and in compliance with the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (SEBI (SAST) Regulations), specifically under Regulations 3(1) and 4, along with Regulations 13, 14, and 15(1), and other applicable provisions. The offer was managed by CIL Securities Limited, acting as the Manager to the Offer, for and on behalf of the Acquirers.

The Open Offer was triggered following the execution of the Share Purchase Agreement (“SPA”) on 7th June 2024, between the Acquirers and the Sellers, wherein the Sellers agreed to sell an aggregate of up to 20,34,440 Equity Shares, representing 47.85% of the fully paid-up equity share capital of and control over the Target Company. The aggregate consideration for this transaction was INR 2,23,78,840 (Two Crore Twenty Three Lakhs Seventy Eight Thousand Eight Hundred and Forty Only) at a price of INR 11 per Equity Share, with the payment of the said amount being treated as an Earnest Money Deposit.

This Open Offer represents a significant transaction for the Company, reflecting a material change in the ownership and control of Hypersoft Technologies Limited.

6. Number of meetings of the Board

The Board of Directors met Seven (7) times during this financial year on 27^th May 2023, 29^th May

2023, 11^th August 2023, 21^st August 2023, 27^th October 2023, 09^th December 2023, 02^nd February

2024.

7. Extract of Annual Return

As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, Company shall place a copy of the annual return on the website of the company, and the weblink of the same is mentioned below:

http://hypersoftindia.com/investor-relations.html

8. Policy on directors' appointment and remuneration

The current policy is to have an appropriate mix of executive and independent directors to maintain the independence of the Board and they demark their functions of governance and management. As on March 31, 2024, the Board consists of 4 (four) members. The Board periodically evaluates the need for a change in its composition and size. The policy of the Company on directors' appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Sub-Section (3) of Section 178 of the Companies Act, 2013, adopted by the Board, is appended as Annexure-I to the Board's report. We affirm that the remuneration paid to the directors is as per the terms laid out in the nomination and remuneration policy of the Company.

9. Directors and Key Managerial Personnel

Mr. Feroz Russi Bhote was re- appointed as a Managing Director of the Company with effect from 15 ^th February 2023.

Ms. Geeta Bhote, is designated as the Director of the Company.

Mr. Feroz Russi Bhote (DIN: 00156590), the Managing Director, who retires by rotation, was reappointed as the Director of Company.

Mr. Shaik Khudaventh is designated as the Chief Financial Officer of the Company with effect from 10th November 2021

Mrs. Shilpa Agarwal is appointed as the Whole-time Company Secretary and Compliance Officer of the Company with effect from 21^st August, 2023.

Mr. Vinay Vir (DIN: 02378210) is no longer associated with the company as an Independent Director, effective April 27, 2024, due to his passing.

Mr. Umesh Chandra Lunker was appointed as an Additional Director (categorized as Independent Director) of the Company with effect from 21st May 2024. The Board proposes his regularization at the upcoming Annual General Meeting (AGM).

10. Declaration given by Independent Directors

The Company has received necessary declaration from each independent director under Section 149(7) of the Companies Act, 2013, that they meet the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirement), Regulations 2015.

11. Contracts and arrangements with Related Parties under Section 188

The Company has not entered into any contracts or arrangements with related parties during the financial year. Therefore, AOC-2 is not required to be enclosed in this report.

12. Particulars of loans, guarantees or investments under Section 186

The Company has not made any investments and has not given any loans or guarantees under section 186 of the Companies Act, 2013.

13. Risk Management

The Company has developed and implemented a risk management framework that includes identification of elements of risk, if any, which in the opinion of the Board may threaten the existence of the Company.

The following broad categories of risks to the business objectives have been considered in our risk management framework:

Strategy: Risks to the successful execution of the Company's articulated strategies. These originate from the choices we make on markets, business mix, resources and delivery models that can potentially impact our competitive advantage in the medium and long term. Risks related to scalability and sustainability of our business might also have an impact on our business.

Industry: Risks relating to the inherent characteristics of our industry such as competitive structure, emergence of new business models, technological landscape, extent of linkage to economic environment and regulatory structure.

Counterparty: Risks arising from our association with entities for conducting business. The counterparties include clients, vendors, alliance partners and their respective industries. Counterparty risks include those relating to litigation and loss of reputation.

Resources: Risks arising from inappropriate sourcing or sub-optimal utilization of key organizational resources such as financial capital, talent and infrastructure.

Operations: Risks inherent to business operations including those relating to client acquisition, service delivery to clients, business support activities, information security, intellectual property physical security, and business activity disruptions. Operational risks are assessed primarily on three dimensions - business process effectiveness, compliance to policies and procedures, and strength of underlying controls.

Regulatory environment: Risks due to adverse developments in the regulatory environment that could potentially impact our business objectives and lead to loss of reputation.

Societal: Risks and opportunities relating to our focus on the environment and society at large. Environmental focus includes conservation of essential resources such as water and energy, disposal of waste, minimizing emissions, etc. Social focus includes projects to impact the communities in the regions where we operate.

14. Subsidiaries, Associate Companies and Joint Ventures

The Company does not have any subsidiaries, Associate Companies or Joint Ventures.

15. Annual Evaluation of Board's Performance

The Nomination and Remuneration Committee of the Company approved an Evaluation Policy during the year 2014-2015, which was adopted by the Board of Directors. The policy provides for evaluation of the Board, the Committees of the Board and individual Directors, including the Chairman of the Board. The Policy provides that evaluation of the performance of the Board and Committees of Board shall be carried out on an annual basis.

The Evaluation process of performance focused on various aspects of the Board and Committees functioning such as composition of the Board and Committees, experience and competencies, performance of specific duties and obligations, governance issues etc., A separate exercise was carried out to evaluate the performance of individual Directors on parameters such as attendance, contribution and independent judgement.

The performance evaluation of the Independent Directors was carried out by the entire Board, excluding the Director being evaluated. The performance evaluation of Managing Director and Non-Executive Director was carried out by the Independent Directors, who also reviewed the performance of the Board as a whole. The Nomination and Remuneration Committee (NRC) also reviewed the performance of the Board, its committees and of the Directors.

The Chairman of the Board provided feedback to the Directors on an individual basis, as appropriate. Significant highlights, learning and action points with respect to the evaluation were presented to the Board.

16. Transfers to reserves

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

17. Dividend

In view of the accumulated losses, the Directors express their inability to recommend dividend during the year.

18. Auditors

Pursuant to the provisions of Section 139 of the Act read with Companies (Audit and Auditors) Rules, 2014, and other applicable provisions, if any, of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 as amended from time to time, M/s. Ramanatham & Rao, Chartered Accountants, bearing Firm Registration Number 002934S were appointed as Statutory Auditors from the conclusion of Thirty ninth Annual General meeting (AGM) till the conclusion of Forty fourth Annual General Meeting of the Company.

There are no observations, qualifications and remarks in the auditor's report for financial year ended 31^st March 2024.

19. Secretarial Auditor

SPP & Associates, Practicing Company Secretaries, was appointed to conduct the secretarial audit of the Company for the financial year 2023-2024, as required under Section 204 of the Companies Act, 2013 and Rules there under.

The secretarial audit report for the financial year 2023-2024 forms part of the Annual Report as Annexure-II to the Board's report.

20. Corporate Governance

A report on the Corporate Governance, which inter alia, includes the composition and construction of Audit Committee, is featuring as a part of Annual Report. Your Company will continue to adhere in letter and spirit to the good corporate governance policies. Pursuant to the relevant provisions of Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”), as referred to in Regulation 15(2) of the Listing Regulations for the period 1^st April, 2023 to 31^st March, 2024, a certificate from the auditors of the Company is enclosed.

21. Managing Director's Declaration

Pursuant to the provisions of Listing Regulations, a declaration by the Managing Director of the Company declaring that all the members of the Board and the Senior Management Personnel of the Company have affirmed compliance with the Code of Conduct of the Company is enclosed. The same can be viewed on the website of the Company at www.hypersoftindia.com

22. Directors' Responsibility Statement

In accordance with the provisions of the section 134(c) of the Companies Act, 2013 and based on the information provided by the management your directors state that:

a. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures.

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 at the end of the financial year and of the loss 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 annual accounts on a going concern basis.

e. 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.

f. 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.

23. Corporate Social Responsibility - Not Applicable

24. Significant and material orders

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future.

25. Secretarial Standards

The Company is in compliance of Secretarial Standards during the financial year 2023-2024.

26. Internal Financial Controls

The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the 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 disclosures.

27. Whistle Blower Policy/ Vigil Mechanism

To create enduring value for all stakeholders and ensure the highest level of honesty, integrity and ethical behavior in all its operations, the Company has formulated a Whistle Blower Policy/Vigil Mechanism that governs the actions of its employees. This Whistleblower Policy/Vigil Mechanism aspires to encourage all employees to report suspected or actual occurrence(s) of illegal, unethical or inappropriate events (behaviors or practices) that affect Company's interest / image.

A copy of the Policy is available on the website of the Company.

28. Disclosures Under Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules there under for prevention and redressal of complaints of sexual harassment at workplace. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment and the Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the financial year 2023-2024, the Company has not received any complaints on sexual harassment.

29. DISCLOSURE ON CORPORATE INSOLVENCY RESOLUTION PROCESS INITIATED UNDER THE INSOLVENCY AND BANKRUPTCY CODE (IBC)

The Company has not made any application, nor any proceeding are pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the financial year 2023-2024.

30. THE DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF - Not Applicable

31. Conservation of Energy & Technology Absorption, Foreign Exchange Earnings and Outgo:

A. Conservation of Energy:

(a) Energy Conservation measures taken: Your Company's operations are software oriented and not energy intensive. Adequate measures have been taken to conserve energy wherever possible by using energy-efficient computers and equipment.

(b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy: Exchanging legacy CRT monitors with

LCD power saving monitors.

(c) Impact of the measures (a) and (b) above for energy consumption and consequent impact on the cost of production of goods: As energy conservation is very meager and energy cost forms a small part of total costs, the impact of costs is not material.

B. Technology Absorption:

Research and Development (R & D):

(a) Specific areas in which R & D carried out by the Company:

The Company continues to focus and invest in R & D activities for developing and improving the quality and enhancing the benefits of its software products. The Company is a product-oriented Company and the continuous development of new products, and the existing products is an ongoing exercise.

(b) Benefits derived as a result of the R & D:

Research and development of new products & processes will continue to be of importance to your Company. Products although have a longer gestation, are of higher benefit to the Company and its profitability in the long run.

(c) Future plan of Action:

The Company continues to strive for development and innovation of new products and improving the existing ones in order to meet the changing requirements and to cater to customer needs.

(d) Expenditure on R & D: NIL Adaptation and Innovation:

As a result of new partnerships, the Company now has absorbed new technologies and will result in better adaptation to Indian customer needs.

C. Foreign Exchange Earnings & Outgo:

32. Appreciation:

Your directors place on record their appreciation of the continued assistance and co- operation extended by the shareholders, customers, bankers and the dedicated employees and the business associates.