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Megri Soft Ltd.

BSE: 539012 Sector: IT
NSE: N.A. ISIN Code: INE756R01013
BSE 12:17 | 27 Jan 119.00 -0.95
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NSE 05:30 | 01 Jan Megri Soft Ltd
OPEN 119.95
PREVIOUS CLOSE 119.95
VOLUME 119
52-Week high 186.50
52-Week low 78.05
P/E 73.01
Mkt Cap.(Rs cr) 37
Buy Price 114.00
Buy Qty 21.00
Sell Price 117.00
Sell Qty 363.00
OPEN 119.95
CLOSE 119.95
VOLUME 119
52-Week high 186.50
52-Week low 78.05
P/E 73.01
Mkt Cap.(Rs cr) 37
Buy Price 114.00
Buy Qty 21.00
Sell Price 117.00
Sell Qty 363.00

Megri Soft Ltd. (MEGRISOFT) - Director Report

Company director report

Dear Members

The Board of Directors of your Company take pleasure in presenting the 31st AnnualReport on the business and operations of the Company together with the audited Standalone& Consolidated Financial Statements and the Auditor's Report thereon for the financialyear ended March 31 2022.

The results of operations for the year under review are given below:

>• Results of operations

Particulars

Standalone

Consolidated

FY 2021-22 FY 2020-21 FY 2021-22 FY 2020-21
1. Revenue 174.28 136.41 255.56 216.75
2. Other Income 26.37 26.44 26.37 26.44
3. Total Income (1+2) 200.65 162.85 281.93 243.19
Expenditure:
a) Employees Benefits Expenses 23.25 30.26 62.82 70.25
b) Depreciation and Amortization expenses 7.56 3.40 8.11 3.81
c) Finance Cost 0 0 0 0
d) Other Expenses 109.26 78.99 140.19 109.70
4. Total Expenditure 140.07 112.65 211.12 183.76
5. Earnings Before Interest and Tax (EBIT) (3-4) 60.58 50.20 70.81 59.43
6. Exceptional Item 0 0 0 0
7. Net Profit before tax (5-6) 60.58 50.20 70.81 59.43
8. Tax Expenses 14.17 12.72 16.24 14.53
9. Net Profit After Tax (7-8) 46.41 37.48 54.57 44.90
10. Other Comprehensive Income (Net of Tax) 0.62 4.27 0.62 4.27
11. Total Comprehensive Income (9+10) 47.03 41.75 55.19 49.17

>- Financial Review

Standalone Financial Statements

The annual audited Standalone Financial Statements for the year have been prepared inaccordance with the Companies (Indian Accounting Standards) Rules 2015 (Ind-AS)prescribed under Section 133 of the Companies Act 2013 and other recognized accountingpractices and policies to the extent applicable. Necessary disclosures as regards to thekey impact areas & other adjustments upon transition to Ind-AS reporting have beenmade under the Notes to Financial Statements. Your Company's revenue from operations isRs. 174.28 Lakh during the year under review as against Rs.136.41 Lakh during the previousfinancial year. Operating EBIT for the year is Rs. 60.58 Lakh in comparison with Rs.50.20 Lakh in FY 2020-21.

Profit before tax (PBT) from ordinary activities (before exceptional items) is Rs.60.58 Lakh in FY 2022 as against Rs. 50.20 Lakh in FY 2020-21

Consolidated Financial Statements

The Consolidated Financial Statements have been prepared in accordance with theCompanies (Indian Accounting Standards) Rules 2015 (Ind AS) prescribed under Section 133of the Companies Act 2013 and other recognized accounting practices and policies to theextent applicable. The Consolidated Financial Statements have been prepared on the basisof the audited financial statements of the wholly owned subsidiary (Megrisoft Limited)which is incorporated in the United Kingdom as approved by their respective Board ofDirectors. Your Company on a consolidated basis achieved net revenue of Rs.255.56 Lakhduring the year under review as against Rs. 216.75 Lakh during the previous financialyear. The total consolidated income for the year is Rs. 281.93 Lakh as compared to Rs.243.19 Lakh in FY 2020-21.

- Covid-19

The previous financial year 2021-22 has been very tough due to the outbreak of COVID 19pandemic which has thrown up many challenges in terms of complete shutting down for a fewmonths limited operations for most part of the year. The outbreak of COVID-19 virus aglobal pandemic has affected the world economy including India. Performance of the companyis mainly improved consequent to significant opening up of the economic activity in thecountry the unprecedented rise in the capital market is seen recently improved comparedto that during the initial phases of Covid-19 including the lock down period. The extentto which the Covid-19 pandemic including the current second and third wave witnessed inthe country will continue to impact the Company's operations and financials will dependon the future developments which are uncertain and will depend on how fast thebusinesses other commercial and economical activities come back on track.

- Dividend

In order to strengthen the financial position of the Company your directors proposedto retain the profits for future growth & expansions therefore do not recommend anydividend for the year.

> Transfer to Reserves

During the year under review the balance in Other Equity stands at Rs. 1726.23 Lakhs.The Board of Directors of your company has decided not to transfer any amount to theReserves for the year under review.

> Share Capital

There have been no changes in the authorized share capital issued subscribed andpaid-up share capital during the year under review.

The authorized share capital was Rs. 33000000/- divided into 3300000 equity sharesof Rs.10/- each and the issued subscribed and paid up share capital remained Rs.31407000/- divided into 3140700 equity shares of Rs. 10/- each fully paid.

> Listing of Shares

The Company's shares are listed on Bombay Stock Exchange Ltd. (BSE) & MetropolitanStock Exchange of India Limited (MSEI). The Securities and Exchange Board of India (SEBI)on September 2 2015 issued SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 (Listing Regulations) with the aim to consolidate and streamline theprovisions of the Listing Agreement for different segments of capital markets to ensurebetter enforceability. The said regulations were applicable w.e.f. December 1 2015.Accordingly all listed entities were required to enter into a Uniform Listing Agreementwithin six months from the effective date. The Company has entered into the requisiteListing Agreement with both the above Stock Exchanges.

> Fixed Deposits

During the year under review your Company has not invited or accepted any Depositsfrom the public/members pursuant to the provisions of Sections 73 and 76 of the CompaniesAct 2013 read together with the Companies (Acceptance of Deposits) Rules 2014.

> Operations Review

The Company has primarily one business segment of IT/ITES services and therefore hasonly one reportable with IND AS 108 "Operating Segment".

> Details of Subsidiaries

The Company incorporated a wholly owned subsidiary "Megrisoft Limited" inLondon United Kingdom under the Registrar of Companies for England and Wales on October18 2016. During the year the Board of Directors of your Company reviewed the affairs ofthe subsidiaries. A statement containing the salient features of the financial statementsof our wholly owned subsidiary company in the prescribed format AOC-I is given asAnnexure-I to this report. The statement also provides the details of performance andfinancial positions of the wholly owned subsidiary and their contribution to the overallperformance of the Company.

> Particulars of Loans Guarantees or Investments in Securities

The particulars of investments madeare given in the notes to the standalone financialstatements. (Please refer to Note No. 4 to the standalone financial statements). Thecompany has not given any loans nor provided any securities or guarantee.

> Particulars of Contracts & Arrangements made with Related Parties

As per the provisions of the Act and the Listing Regulations your Company hasformulated a Policy on Related Party Transactions which is also available on Company'swebsite at http://www.megrisoft.com/pdfs/rptp.pdf. The Policy intends to ensure thatproper reporting approval and disclosure processes are in place for all transactionsbetween the Company and Related Parties. This Policy specifically deals with the reviewand approval of Material Related Party transactions keeping in mind the potential oractual conflicts of interest that may arise because of entering into these transactions.All Related Party Transactions are placed before the Audit Committee for review andapproval. Prior omnibus approval is also obtained for related party transactions on anannual basis for transactions which are of repetitive nature and/ or entered in theordinary course of business and at arm's length basis. The Company has entered intomaterial related party transactions i.e. transactions exceeding 10% of the annualconsolidated turnover as per the last audited financial statements. The particulars ofcontracts or arrangements with related parties referred to in sub-section (1) of section188 in the prescribed Form AOC-2 are given in Annexure II.

> Material changes and commitments if any affecting the financial position of theCompany occurred between the end of the Financial Year to which this financial statementsrelate and the date of the report:

There have been no material changes affecting the financial position of the Companywhich have occurred between the end of the financial year of the Company and the date ofthe Report.

As required under section 134(3) of the Act the Board of Directors informs the membersthat during the financial year there have been no material changes except as disclosedelsewhere in report:

• In the nature of Company's business

• In the nature of subsidiary business carried out by them and

• In the classes of business in which the Company has an interest

>- Future Outlook

The Company is increasing the Search Engine Optimization and IT related services in theUnited Kingdom (UK) since the past few years. Considering the fact the Company hasincorporated a wholly owned subsidiary in London United Kingdom in order to expand itsbusiness in coming years.

> Corporate Governance

In view of the provisions of Regulation 15(2) of the Securities and Exchange Board ofIndia (Listing Obligation and Disclosure Requirements) Regulations 2015 the provisionsrelated to Corporate Governance as specified in Regulations 17 to 27 and clauses (b) to(i) of sub regulation (2) of Regulation 46 and para C D and E of Schedule V are notapplicable to the Company

> Management Discussion And Analysis

The Management Discussion and Analysis Report for the year under review as stipulatedby SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is presentedin a separate section forming part of this Annual Report.

Risk Management

Risks are inherent to our business as our operating environment is complex highlyregulated and dynamic. To attain our strategic growth objectives protect the interestsof all our stakeholders and meet legal requirements we have an established process ofidentifying analyzing and responding appropriately to all business risks. We have awell-embedded Risk Management Framework to ensure that we are well-placed to manage anyadverse effect posed by financial operational strategic or regulatory related risks. Ourframework adopts appropriate risk mitigation measures for identified risks acrossfunctions. The process ensures that new risks which might arise or the impact ofexisting risks which might have increased are identified and a strategy is put in placefor mitigating such risks. The major risks identified by the management are regulatorycompetition supply chain disruption cyber and data security along with economic andpolitical risks. A review of the risk management policy is carried out annually by theRisk Management Committee and the Board of Directors. Our performance in the year istestimony of the strength of our risk management system.

Internal Controls and Adequacy

Your Company has a robust and reliable system of internal controls commensurate withthe nature of the business and the scale and complexity of operations. The Company hasadopted policies and procedures covering all financial operating and compliancefunctions. These controls have been designed to provide a reasonable assurance over:

1. Effectiveness and efficiency of operations

2. Safeguarding of assets from unauthorised use or losses

3. Compliance with applicable laws and regulations

4. Prevention and detection of frauds and errors

5. Accuracy and completeness of the accounting records

6. Timely preparation of reliable financial information

The current system of Internal Financial Controls (IFC) is aligned with therequirements of the Companies Act 2013 and is in line with the globally acceptedrisk-based framework. The Internal Audit (IA) function of the Company functionally reportsto the Chairperson of the Audit Committee thereby maintaining its objectivity. The IAfunction is supported by a dedicated internal audit team and resources from external auditfirms across the locations. The annual internal audit plan is carved out from acomprehensively defined Audit Universe that encompasses all businesses functions riskscompliance requirements and maturity of controls. The internal audit plan is approved bythe Audit Committee at the beginning of every year. Each quarter the Audit Committee ofthe Board is presented with key control issues and the actions taken on issues highlightedin the previous reports. The Audit Committee deliberates with the management considersthe systems as laid down and meets the internal auditors and statutory auditor toascertain their views on the internal control framework. The Company recognises the factthat any internal control framework would have some inherent limitations and hence hasinculcated a process of periodic audits and reviews to ensure that such systems andcontrols are updated at regular intervals.

> Board of Directors

The Board of Directors ("Board") determines the purpose and values of theCompany. The primary role of the Board is that of trusteeship so as to protect and enhancestakeholders' value through the strategic supervision of the Company and its subsidiaries.The Company is headed by a Board that exercises leadership integrity and judgment indirecting so as to achieve continuing. prosperity and to act in the best interest of theCompany. The Board plays a critical role in overseeing how the management serves theshort-term and long-term interests of shareholders and other stakeholders. This isreflected in the Company's governance practices through which it strives to maintain anactive informed and an independent Board.

The Board ensures that the Company complies with all relevant laws regulationsgovernance practices secretarial accounting and auditing standards. It identifies keyrisk areas and key performance indicators of the Company's business and constantlymonitors these factors. The Board is entrusted with the ultimate responsibility of themanagement general affairs direction and performance of the Company and has been vestedwith the requisite powers authorities and duties.

> BOARD SIZE AND COMPOSITION

The Board is at the core of the Company's corporate governance practices and overseeshow the management serves and protects the long-term interests of all the stakeholders.The Company believes that an active well informed and independent Board is necessary toachieve highest standards of corporate governance. The Board of the Company has an optimumcombination of Executive Director Non-Executive Non-Independent Directors and IndependentDirectors who have an in-depth knowledge of business in addition to the expertise intheir areas of specialization.

>- Meetings of the Board

• Scheduling and selection of agenda items for Board meetings

• The meetings of the Board are convened by giving appropriate advance notice tothe members of the Board. The Company Secretary circulates internal notice to all theBoard members asking for the suggestions/details of any matter which requires discussionor approval of the Board so that the same could be incorporated in the agenda of the Boardmeeting. The date of the Board meeting is fixed taking into account the convenience andavailability of the Board members.

• The agenda papers are circulated to the Directors in advance along with suitableexplanatory notes. At each meeting detailed presentations and important documents areplaced at the table of the meeting for discussion of individual agenda items. The minutesof the Committees of the Board are taken as read at the meeting of the Board forinformation of the members. The follow up actions of important agenda items of previousBoard meetings are placed at the Board meeting for review of the Board.

• The Company Secretary conducts the Board meetings and prepares all documentsincluding minutes of the meeting in compliance with the provisions of the Companies Actand other statutory enactments. The Company Secretary records minutes of proceedings ofeach Board and Committee meeting. Draft minutes are circulated to Board/Board Committeemembers for their comments. The minutes are entered in the Minutes Book within 30 daysfrom the conclusion of the meeting.

• Pursuant to Schedule IV to the Companies Act 2013 and Listing Regulations onemeeting of Independent Directors was held during the year i.e. on February 7 2022without the attendance of Executive directors and members of Management. In addition theCompany encourages regular separate meetings of its independent directors to update themon all business-related issues and new initiatives.

• During the Financial Year 2021-22 the Board met 11 (eleven) times i.e. on02.04.2021 21.05.2021 02.08.2021 10.08.2021 25.08.2021 1.10.2021 10.11.202129.01.2022 05.02.2022 15.02.2022 and 30.03.2022. The intervening gap between any twomeetings was within the period prescribed by the Companies Act 2013.

Quarter -1 Quarter - II Quarter - III Quarter - IV
[April'21-June'21] [July'21-Sept'21] [Oct'21-Dec21] [Jan'22-Mar'22]
1) 02.04.2021 1.) 02.08.2021 1) 01.10.2021 1) 29.01.2022
2) 21.05.2021 2.) 10.08.2021 2) 10.11.2021 2) 05.02.2022
3.) 25.08.2021 3) 15.02.2022
4) 30.03.2022

? No. of Meetings Attended by the Board of Directors

S.No Name of the Directors Number of Meeting Attended
1. Mohnesh Kohli 11
2. Aprajita Kohli 3
3. Rajnesh Sharma 11
4. Diksha 5
5. Mahesh Kumar 11
6. Ishwar Partap Singh 11

General Meetings

During the Financial Year 2021-22 There was 1 (one) Meeting held by the Shareholdersof the Company. The details of Meetings are as Follows:

S.No. Meeting Date of Meeting
1. Annual General Meeting 30.09.2021

Committees of the Board

During the year the Board had the following Committees -

1) Audit Committee

2) Nomination & Remuneration Committee

3) Stakeholders' Relationship Committee

4) Committee of Independent Directors

Each Committee has its own Charter and has been assigned with scope ofresponsibilities duties and authorities which is reviewed by the Board from time totime in order to determine the appropriateness of the purpose for which the Committee wasformed. Committee composition confirms applicable laws and regulations. Minutes of all theCommittee meetings are placed for information/noting in the subsequent Board meeting.

All decisions pertaining to the constitution of committees and its Charter includingfixing of terms of service for committee members is taken by the Board of Directors.Details on the role and composition of these committees including the number of meetingsheld during the financial year and the related attendance are provided below:

BOARD COMMITTEES

The Committees of the Board at present their constitution and terms of reference areset out below:

• Audit Committee

The Audit Committee which acts as a link between the management external and internalauditors and the Board of Directors of the Company is responsible for overseeing theCompany's financial reporting process by providing direction to audit function andmonitoring the scope and quality of Internal and Statutory Audits. The Audit Committee ofthe Company has been constituted in compliance with the provisions of Section 177 of theAct read with Regulation 18 of SEBI LODR. The Audit Committee of the Company is entrustedwith the responsibility to supervise the Company's financial reporting process and termsof reference of the Committee are as per the guidelines set out in SEBI LODR and Section177 of the Act and inter alia includes the following:

• Oversee the Company's financial reporting process and disclosure of itsfinancial information to ensure that the financial statements are correct sufficient andcredible;

• Recommend the appointment / removal of Statutory Auditor(s)& InternalAuditor(s) fixing the audit fee and also approve the payment for any other services;

• Recommending the terms of appointment of auditors of the Company;

• Review with the Management the quarterly/annual financial statements and theauditors' report thereon before submission to the Board with particular reference to:

a) Matters required to be included in the Directors' Responsibility Statement to beincluded in the Board's report in terms of Section 134(3)(c) of the Companies Act 2013;

b) Changes if any in accounting policies and practices and reasons for the same;

c) c) Major accounting entries involving estimates based on exercise of judgment bymanagement;

d) Significant adjustments made in the financial statements arising out of auditfindings;

e) Compliance with listing and other legal requirements relating to financialstatements;

f) Any related party transactions i.e. transactions of the Company of material naturewith promoters or the management their subsidiaries or relatives etc. that may havepotential conflict with the interests of the Company at large and

g) Qualifications in draft audit report;

• Review with the management performance of external and internal auditors and theadequacy of internal control systems;

• Review the adequacy of internal audit function reporting structure coverageand frequency of internal audit;

• Discussion with internal Auditors any significant findings and follow up thereon;

• Review the findings of any internal investigations by the internal Auditors intomatters where there was suspected fraud or irregularity or a failure of internal controlsystems of a material nature and reporting the matter to the Board; 25

• Discussion with Statutory Auditors before the audit commences nature and scopeof audit as well as have post-audit discussion to ascertain any area of concern;

• Review the Company's financial and risk management policies;

• Evaluation of internal financial controls and risk management systems;

• Look into the reasons for substantial defaults if any in the payment to thedepositors debenture holders shareholders (in case of non-payment of declared dividends)and creditors;

• Reviewing the functioning of the Whistle Blower mechanism;

• Approving the appointment of Chief Financial Officer (CFO) before finalizationof the same by the management. While approving the appointment the Audit Committee shallassess the qualifications experience and background etc. of the candidate;

• Reviewing and monitoring the auditor's independence and performance andeffectiveness of audit process;

• Approving any subsequent modification of transactions of the Company withrelated parties;

• Monitoring the end use of funds raised through public offer and review with theManagement the statement of uses/ application of funds raised through an issue (publicissue right issue preferential issue etc) the statement of funds utilized for purposesother than those stated in the offer/document /prospectus /notice and the report submittedby the monitoring agency monitoring the utilization of proceeds of a public or rightsissue and making appropriate recommendations to the Board to take up steps in this manner;

• Reviewing the adequacy of internal audit function if any including thestructure of the internal audit department staffing and seniority of the official headingthe department reporting structure coverage and frequency of internal audit;

• Scrutinize inter-corporate loans and investments;

• Valuation of undertakings or assets of the Company wherever it is necessary;

• Reviewing the utilization of loans and/ or advances from/investment by theholding company in the subsidiary exceeding rupees 100 crore or 10% of the asset size ofthe subsidiary whichever is lower including existing loans / advances / investments and

• To carry out any other function as may be required to be carried out by theAudit Committee under the Act the listing agreement and all other applicable laws(including any statutory modification(s) or re-enactment thereof for the time being inforce).

• Audit Committee Composition

Our Audit Committee comprised three directors as on March 31 2022 out of which two areindependent directors and one is non-executive director. The Company Secretary acts as thesecretary to the audit committee.

• Mr. Mahesh Kumar Chairman (Non- Executive & Independent Director)
• Ms. Diksha Member (Non- Executive & Independent Director)(Retired on 30/09/2021)
• Mr. Mohnesh Kohli Member (Non- Executive Director)
• Mr. Ishwar Pratap Singh Member (Non- Executive & Independent Director)

Audit Committee Meetings

During the Financial Year 2021-22 there were 5 (Five) meetings held by the Members ofthe Audit committee. The details pertaining to the number of Audit Committee Meetings heldduring the financial year under review.

S.No Date of Board Meeting
1. 21.05.2021
2. 02.08.2021
3. 10.08.2021
4. 10.11.2021
5. 29.01.2022

Number of Meetings attended by the Members of the Audit Committee

S.No Name of the Directors Numbers of Meeting Attended
1. Mahesh Kumar 5
2. Diksha (till 30-09-2021) 3
3. Mohnesh Kohli 5
4. Ishwar Pratap Singh 5

• Nomination & Remuneration Committee

Nomination and Remuneration Committee has been constituted in compliance with theprovisions of Section 178 of the Act read with Regulation 19 of SEBI LODR and acts as aBoard Governance cum Compensation Committee. The terms of reference of this Committeeinter alia include:

• Assist the Board in identifying the prospective directors and select orrecommend to the Board in filling up vacancies in the offices of directors and appointmentof additional directors of the Company and its subsidiaries;

• Evaluate the current composition organization and governance of Board and itscommittees Board of its subsidiaries determine future requirements and makerecommendations to the Board for approval;

• Ensure that the Board and the Board of its subsidiaries is properly constitutedto meet its fiduciary obligations the corporate governance principles and best practices;

• Determine the Directors who shall be liable to retire by rotation;

• Appointment of whole-time directors;

• Oversee the evaluation of the Board and management;

• Formulate the code of ethics and governance;

• Conduct succession planning and work with the Board for evaluating the potentialsuccessors to executive management positions;

• Co-ordinate and approve Board and Committee meeting schedules;

• Review of the terms of reference and annually review its own performance andsubject it to the assessment by the Board;

• Identify persons who may be appointed in senior management in accordance withcriteria laid down recommend to the Board their appointment and removal;

• Formulate the criteria for determining qualifications positive attributes andindependence of a director;

• Formulate criteria for evaluation of Independent Director and the Board;

• Devise a policy on Board diversity;

• Evaluate and recommend to the Board the compensation plan policies andprograms for executive directors and senior management;

• Review performance of whole-time directors and whole-time directors of thesubsidiaries nominated by the Company on its Board and to recommend the remunerationpayable to them from time to time by way of salary perquisites commission allowancesperformance bonus stock options etc;

• Approve the policy for and quantum of bonus payable to the members of the staff;

• Frame/modify the Employees Stock Options Scheme and recommend granting of stockoptions to the staff and whole-time directors of the

Company and the group companies;

• Make recommendations to the Board in respect of the incentive compensationplans;

• Recommend to the Board a policy relating to remuneration for the directors keymanagerial personnel and other employees and

• Recommend to the Board all remuneration in whatever form payable to seniormanagement.

The primary objective of the Committee is to recommend suggestions to the Board ofDirectors pertaining to the Remuneration Policy for Directors KMP and all other employeesof the Company.

Our Nomination and Remuneration Committee comprised the following directors as on March31 2022 :

• Ms. Diksha - Chairman (Non- Executive & Independent Director)(Retired on 30/09/2021)
• Mr Mohnesh Kohli - Member (Non- Executive Director)
• Mr Mahesh Kumar - Member (Non- Executive & Independent Director)
• Mr Ishwar Pratap Singh - Member (Non- Executive & Independent Director)

The Company Secretary acts as the secretary to the nomination and remunerationcommittee.

During the Financial Year 2021-22 there were 5 (five) meetings held by the Members ofthe Nomination & Remuneration committee and requisite quorum attended the saidmeeting. The details pertaining to the number of Nomination & Remuneration CommitteeMeetings held during the financial year under review

S.No Date of Board Meeting
1. 21.05.2021
2. 02.08.2021
3. 30.09.2021
4. 10.11.2021
5. 05.02.2022

Number of Meetings attended by the Members of the Nomination & RemunerationCommittee

S.No Name of the Directors Numbers of Meeting Attended
1. Mahesh Kumar 5
2. Diksha(till 30.09.2021) 3
3. Mohnesh Kohli 5
4. Ishwar Pratap Singh 5

• Shareholders'/Investors' Grievance Committee (Stakeholders Relationship)

The Stakeholders' Relationship Committee of the Company was constituted by the Board incompliance with the provisions of Section 178 of the Act read with Regulation 20 of SEBILODR to look into the redressal of shareholders'/investors' complaints such as transferof securities non-receipt of dividend notice Annual Reports and all other securitiesholder related matters. The terms of reference of this Committee inter alia include:

• Allot to the applicants shares and other securities issued by the Company fromtime to time including allotment under Employee Stock Option Scheme as amended from timeto time;

• Approve transfers duly lodged for registration of transfer of shares and othersecurities issued and that may be issued from time to time;

• Approve or reject application for transmission of shares and other securitieswith and without any legal representation (i.e. probate letter of administrationsuccession certificate etc.) in the name(s) of the legal heir(s) or such other person onsuch terms and conditions as the Committee might deem fit;

• Reject applications for transfer of shares and other securities based on thenormal technical grounds and as per any prevailing law or order;

• Lay down suitable procedure and approve issue of duplicate certificates ofshares and other securities;

• Approve printing of such number of certificates of shares and other securitiesas the Committee might deem fit and lay down procedure(s) for their issue(s) safe keepingand proper maintenance of records etc.;

• Decide account(s) to be opened/closed with any bank(s) in India for the purposeof payment of interest/dividend or for such other purpose relating to shares or othersecurities and to authorise such of the executive (s) or officer(s) of the Company or anyother person(s) as the Committee might deem fit to open / close and operate bankaccount(s) already opened for said purposes;

• Decide the stock exchange(s)/depository(ies) in India or abroad on which sharesor other securities issued by the Company to be listed or delisted includingoffering/issuing such shares/ securities through depositories;

• Fix record date and determine closure of Register of Members and Transfer booksfor the purpose of payment of dividend interest issue of rights/bonus shares or for suchother purpose as Committee might deem fit;

• Delegate the authority in respect of any or all of the above matters to anyperson(s) including but not restricted to the employees of its registrars to the issueand transfer agents as may be permissible in law and on such terms and conditions as theCommittee might deem fit and revoke and substitute such delegation;

• Authorize such of the officers of the Company or any other person for:

a) Revalidation of dividend and interest warrants issue of duplicate dividend andinterest warrants and endorsement for payment of the same to the mandatees and successors;

b) Signing and make endorsement on shares and all securities of the Company in respectof issues so far made and might be made hereinafter in connection with the transfer ortransmission of shares and other securities the application in respect of which isapproved by the Committee;

c) Signing certificates of shares/other securities of the Company along with any two ofthe directors or their attorneys as witness to the seal of the Company to be affixedthereto in their presence in terms of the Companies (Share Capital and Debentures) Rules2014 and;

d) Signing the fixed deposit receipts pass through certificates and any otherinstruments.

• Resolving the grievances of the security holders of the listed entity includingcomplaints related to transfer/transmission of shares non-receipt of annual report non-receipt of declared dividends issue of new/duplicate certificates general meetingsetc.;

• Ensure that the notices balance sheet annual and other reports and otherdocuments contain adequate disclosures to the shareholders;

• Report to the Board about the important developments in the area of servicing ofthe shareholders;

• Taking initiatives for better servicing of the shareholders;

• Consider and resolve grievances of shareholders debenture holders depositholders and other security holders of the Company;

• Redressal of shareholders' and investors' complaints such as non-payment ofinterest to debenture holders and deposit holders or any security holders etc;

• Review of measures taken for effective exercise of voting rights byshareholders.

• Review of adherence to the service standards adopted by the listed entity inrespect of various services being rendered by the Registrar & Share Transfer Agent and

• Review of the various measures and initiatives taken by the listed entity forreducing the quantum of unclaimed dividends and ensuring timely receipt of dividendwarrants/annual reports/ statutory notices by the shareholders of the Company and suchother activities as the Board may determine from time to time.

The stakeholders relationship committee has the mandate to review and redressstakeholder grievances.

Our Stakeholders Relationship committee comprised the following directors as on March31 2022 :

• Mr Mohnesh Kohli Chairman (Non- Executive Director)
• Mr Mahesh Kumar Member (Non- Executive & Independent Director)
• Mr Ishwar Pratap Singh Member (Non- Executive & Independent Director)

During the Financial Year 2021-22 there were 3 (Three) meetings held by the Members ofthe stakeholder's relationship committee and requisite quorum attended the said meeting.The details pertaining to number of stakeholder's relationship Committee Meetings heldduring the financial year under review

S.No Date of Board Meeting
1. 06.12.2021
2. 09.03.2022
3. 25.03.2022

Number of Meetings attended by the Members of the stakeholder's relationship committee

S.No Name of the Directors Numbers of Meeting Attended
1. Mahesh Kumar 3
2 Mohnesh Kohli 3
3.. Ishwar Pratap Singh 3

Details of number of complaints received during the year are given below and Status ofInvestor Complaints as on March 31 2022 are as under :

Complaints as on April 1 2021 0
Received during the year 0
Resolved during the year 0
Pending as on 31st March 2022 0

During the Financial Year 2021-22 the Company has not received any complaints from anyshareholder • Board Evaluation

Pursuant to the provisions of the Companies Act 2013 and Rules made thereunderSchedule IV of the Act and SEBI (LODR) Regulations 2015 the Board of Directors hascarried out an annual evaluation of its own performance Board committees and individualdirectors pursuant to the provisions of the Act and the corporate governance requirementsas prescribed by Securities and Exchange Board of India (SEBI). The performance of theBoard was evaluated by the Board after seeking inputs from all the directors on the basisof the criteria such as the Board composition and structure effectiveness of boardprocesses information and functioning etc. The performance of the committees isevaluated by the board after seeking inputs from the committee members on the basis of thecriteria such as the composition of committees effectiveness of committee meetings etc.The Board and the Nomination and Remuneration Committee (NRC) reviewed the performance ofthe individual directors on the basis of the criteria such as the contribution of theindividual director to the Board and committee meetings like preparedness on the issues tobe discussed meaningful and constructive contribution and inputs in meetings etc.

• Committee of Independent Directors

The Independent directors of the company shall hold at least one meeting in a financialyear without the attendance of non-independent directors and members of management. Themeeting of Independent Directors of the Company for the Financial Year 2021-22 was held onFebruary 07 2022 to discuss:

1) Review & Evaluation of the performance of Non-Independent Directors and theBoard of Directors as a whole.

2) Review of the performance of the Executive and Non-Executive Directors.

3) Assessment of the quality quantity and timeliness of flow of information betweenthe Management and the Board.

> Familiarisation Programme for Independent Directors.

The Independent Directors are provided with necessary documents reports and internalpolicies to enable them to familiarize with the Company's procedures and practices.Further periodic presentations are made at the Board and Committee meetings on businessand performance updates of the Company global business environment business strategy andrisks involved. Quarterly updates on relevant statutory changes are provided to theDirectors in the Board meetings. Upon appointment the Independent Directors are issued aletter of appointment setting out in detail the terms of employment including their rolesfunction responsibilities and their fiduciary duties as a Director of the Company.

> Disclosure Under Section 164(2) of the Companies Act 2013

The Company has received the disclosure in Form DIR-8 from its Directors beingappointed or reappointed and has noted that none of the Directors are disqualified underSection 164(2) of the Companies Act 2013 read with Rule 14(1) of Companies (Appointmentand Qualification of Directors) Rules 2014.

> Vigil Mechanism/Whistle Blower Policy

Pursuant to Section 177(9-10) of the Companies Act 2013 and regulation 22 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Company hasformulated a whistle blower policy for vigil mechanism for directors and employeesreporting for unethical behavior fraud and mismanagement or violation of Company's codeof conduct. The said policy has been uploaded on the website of the Company at https://www.megrisoft.com/pdfs/wbp.pdf.

> Observance of the Secretarial Standards Issued by The Institute Of CompanySecretaries Of India.

The Company complies with all applicable Secretarial Standards issued by the Instituteof Company Secretaries of India.

> Risk Management Policy

The Company has an effective risk management procedure which is governed at thehighest level by the Board of Directors covering the process of identifying assessingmitigating reporting and reviewing critical risks impacting the achievement of theCompany's objectives or threatening its existence.

To further strengthen & streamline the procedures about risk assessment andminimization procedures the Board of Directors has formulated a Risk Management Policywhich is available for view on the Company's website at the following link: http://www.megrisoft.com/pdfs/rmp.pdf

> Internal Financial Control

Your Company has put in place adequate internal financial controls with reference tothe financial statements. During the year such controls were tested and no reportablematerial weakness in the design or operation were observed. The Company has also put inplace adequate systems of Internal Control to ensure compliance with policies andprocedures which is commensurate with size scale and complexity of its operations.

The Board has adopted policies and procedures for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies the safeguardingof its assets the prevention and detection of its fraud error reporting mechanisms theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial disclosures.

> Details of significant and material orders of regulators/courts/ tribunals

1) The Company has filed an appeal with CIT (Appeals) Chandigarh for a demand of Rs.7347744/- raised by disallowing deduction u/s 80IC of Income Tax Act 1961 for theAssessment Year 2013-14.

2) The Company has filed an appeal with CIT (Appeals) Chandigarh for a demand of Rs.6515710/- raised by disallowing deduction u/s 80IC of Income Tax Act 1961 for theAssessment Year 2014-15.

3) The Company has filed an appeal with CIT (Appeals) Chandigarh for a demand of Rs.1867998/- raised by disallowing deduction u/s 80IC of Income Tax Act 1961 for theAssessment Year 2016-17.

4) The Company has filed an appeal with CIT (Appeals) Chandigarh for a demand of Rs.5538940/- raised by disallowing deduction u/s 37(contingent liability) of Income TaxAct 1961 for the Assessment Year 2020-21.

>- Directors and Key Managerial Personnel (KMP's)

The composition of the Board of Directors is in accordance with the provisions ofSection 149 of the Act and Regulation 17 of the Listing Regulations with an optimumcombination of Executive Director Non-Executive Non-Independent Directors and IndependentDirectors.Details of the composition of the Board of Directors appointments /re-appointments during the financial year under review re-appointments after the close ofthe financial year director(s) retiring by rotation and details of declaration byIndependent Directors which forms part of this Annual Report

• Appointment

During the year under review Ms Khushboo Goyal was appointed as Company Secretary andCompliance officer on 02.08.2021 and resigned due to personal reasons on 10.11.2021. MsSunimrat Kaur was appointed as Company Secretary and Compliance officer on 05.02.2022.

• Change in Designation

During the year under review there is no change in designation of any director of theCompany.

• Cessation

During the year under review Ms. Diksha resigned with effect on 30.09.2021 from thepost of independent director of the company.

• Retirement by Rotation (Ms Aprajita Kohli)

In terms of Section 152 of the Companies Act 2013 Ms. Aprajita Kohli being directorliable to retire by rotation shall retire at the ensuing AGM and being eligible forreappointment offers herself for re-appointment. The Board of Directors recommended hisappointment for consideration of the members at the forthcoming Annual General Meeting.

• Key Managerial Personnel

In compliance with the provisions of Section 203 of the Companies Act 2013 followingare the KMPs of the Company as on 31st March 2022:

S.No. Name Designation
1. Mr. Rajnesh Sharma Whole Time Director & CFO
2. Mr. Rajnesh Sharma Chief Financial Officer
3. Ms .Sunimrat Kaur* Company Secretary

*Ms. Khushboo has been appointed as Company Secretary of the Company w.e.f. 02ndAugust 2021 in the place of Ms. Kajal Rawat Company Secretary who has resigned from thesaid designation w.e.f. 21st May 2021.

*Ms. Sunimrat Kaur has been appointed as Company Secretary of the Company w.e.f. 5thFebruary 2022 in place of Khushboo Goyal who has resigned from the said designation w.e.f.10th November 2021.

Declaration by Independent Directors

The Independent Directors have submitted their disclosures to the Board that theyfulfill all the requirements as stipulated in Section 149(6) of the Companies Act 2013 soas to qualify themselves to be appointed as Independent Directors under the provisions ofthe Companies Act 2013 and the relevant rules thereof.

• Performance Evaluation of the Board

Listing Regulations laying down the key functions of the Board mandates that the Boardshall monitor and review the Board Evaluation Process and also stipulates that theNomination and Remuneration Committee of the Company shall lay down the evaluationcriteria for performance evaluation of Independent Directors. Section 134 of the CompaniesAct 2013 states that a formal evaluation needs to be made by the Board of its ownperformance and that of its committees and individual directors. Further schedule IV tothe Companies Act 2013 states that performance evaluation of Independent Directors shallbe done by the entire Board of Directors excluding the director being evaluated.Inaccordance with the aforesaid provisions the Board has carried out the annual performanceevaluation of its own performance the Directors individually as well as the evaluation ofthe working of its Committees.

• Annual Evaluation of the Board Performance:

Pursuant to Schedule IV of the Companies Act 2013 and Listing Regulations one meetingof Independent Directors was held during the year i.e. on February 7 2022 without theattendance of Executive directors and members of Management to evaluate the performance ofNon-Independent Directors Chairperson of the Company and the Board as a whole. Inaddition the Company encourages regular separate meetings of its independent directors toupdate them on all business-related issues and new initiatives.

• Familiarization Program for Independent Directors

Pursuant to provisions of Regulation 25 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 and Schedule IV of the Companies Act 2013 the company hasformulated 'Familiarisation Programmes' for the Independent Directors and it may beaccessed on the Company's website at http://www.megrisoft.com/pdfs/fp-id.pdf. Further atthe time of the appointment of an Independent Director the company issued a formal letterof appointment outlining his/her role function duties & responsibilities.

• Company's Policy relating to Directors appointment payment of remuneration anddischarge of their duties:

Pursuant to the provisions of Section 178 (1) of the Companies Act 2013 the Boardhas on their recommendation of the Nomination & Remuneration Committee framed apolicy for selection nomination appointment and remuneration of Directors suitablycontaining the criteria determining qualifications positive attributes and independenceof a Director. The Nomination & Remuneration Policy is annexed hereto and forms partof this report as Annexure III and it may also be accessed on the Company's website https://www.megrisoft.com/pdfs/NMR-Poilcy.pdf

>- Auditors & Auditor's Report

• Statutory Auditor

During the year M/s. Sanjay Arora & Associates Chartered Accountants Chandigarh[FRN: 008445N] were appointed as the statutory auditors of the Company by the Members attheir 29th Annual General Meeting held on 30th September 2020 to hold office for a periodof four consecutive years from the conclusion of the 29th Annual General Meeting of theCompany till the conclusion of the 33rd Annual General Meeting to be held in the year2024.

• Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act 2013 read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhad appointed M/s. A.M. & Associates Practicing Company Secretaries as theSecretarial Auditors of the Company to undertake Secretarial Audit of the Company for FY2021-2022.The Secretarial Audit Report does not contain any qualification reservation oradverse remark or disclaimer.

• Internal Auditors

The Board of Directors based on the recommendation of the Audit Committee has appointedM/s. N S Mann & Associates. Chartered Accountants Chandigarh as the InternalAuditors of your Company. The Internal Auditors are submitting their reports on aquarterly basis.

• Audit Reports

• The Auditors' Report for the financial year ended March 312022 does not containany qualification reservation or adverse remark. The Auditor's Report is enclosed withthe financial statements in this Annual Report.

• The Secretarial Auditor's Report for the financial year ended March 31 2022does not contain any qualification reservation or adverse remark. The SecretarialAuditor's Report is enclosed as Annexure IV to the Board's report in this Annual report.

? REPORTING OF FRAUD BY AUDITORS

During the year under review neither the statutory auditor nor the secretarial auditorhas reported to the Audit Committee any instances of fraud committed against the Companyby its officers or employees under Section 143 (12) of the Act the details of which wouldneed to be reported in the Board's Report.

? SECRETARIAL STANDARDS

The Company complies with all the mandatory secretarial standards issued by theInstitute of Company Secretaries of India as may be applicable.

? LISTING ON STOCK EXCHANGES

The Company's equity shares are listed on BSE Limited (BSE) and Metropolitan StockExchange of India Limited (MSEI) .

>- Conservation of Energy Research and Development Technology Absorption ForeignExchange Earnings & Outgo

• Conservation of Energy and Technology Absorption

The particulars as required under the provisions of Section 134(3) (m) of the CompaniesAct 2013 in respect of conservation of energy and technology absorption have not beenfurnished considering the nature of activities undertaken by the company during the yearunder review. The Company is a Service Sector Company and does not own any manufacturingfacility hence the clause is not applicable. Your Company continues to usestate-of-the-art technology for improving the productivity and quality of its products andservices. To create adequate infrastructure your Company continues to invest in thelatest hardware and software.

• Foreign Exchange Earnings and Outgo

The particulars regarding foreign exchange earnings during the year of Rs. 174.28 Lakhsonly (Previous Year Rs. 136.41 Lakhs) and expenditure in foreign currency is Rs. 3.2 5Lakhs only (Previous year 1.21 Lakhs).

> Green Initiatives

On account of threat posed by COVID-19 and in terms of the MCA and SEBI Circulars TheCompany has implemented the "Green Initiative" to sent the Annual Report Noticeof e-AGM and e-voting instructions are sent only in electronic form to the registeredE-mail addresses of the shareholders whose email addresses are registered with theCompany/Depository Participant(s). Those members who have not registered their e-mailaddresses and mobile nos. and in consequence could not be served the Annual Report andNotice of e-AGM may temporarily get themselves registered by writing to the Company orRTA quoting their folio number(s).

The Company is providing e-voting facility to all members to enable them to cast theirvotes electronically on all resolutions set forth in the Notice. This is pursuant tosection 108 of the Companies Act 2013 read with relevant rules thereon. The instructionsfor e-voting are provided in the Notice of the AGM.

> Corporate Social Responsibility (CSR) Policy

The provisions regarding formation / constitution of CSR Committee prescribed underSection 135 of the Companies Act 2013 are presently not applicable to the CompanyHumanResources Management

> Human Resource Management

Human resources management at Megri Soft Ltd. goes beyond the set boundaries ofcompensation performance reviews and development. Your Company considers people as itsbiggest assets and 'Believing in People' is at the heart of its human resource strategy.Your Company has put concerted efforts in talent management and succession planningpractices strong performance management and learning and training initiatives to ensurethat your Company consistently develops inspiring strong and credible leadership.

During the year the focus of your Company was to ensure that young talent is nurturedand mentored consistently that rewards and recognition are commensurate with performanceand that employees have the opportunity to develop and grow. Your Company has establishedan organization structure that is agile and focused on delivering business results.

With regular communication and sustained efforts it is ensuring that employees arealigned on common objectives and have the right information on business evolution. YourCompany strongly believes in fostering a culture of trust and mutual respect in all itsemployees and seeks to ensure that the company's values and principles are understood byall and are the reference point in all people's matters.

> The Sexual Harassment of Women at the Workplace (Prevention Prohibition andRedressal) Act 2013

As per the requirement of The Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 ('Act') and rules made there under your Companyhas adopted a Sexual Harassment Policy for women to ensure healthy working environmentwithout fear of prejudice gender bias and sexual harassment.

During the FY 2021-22 the Company received no complaint on sexual harassment under TheSexual Harassment of Women at the Workplace (Prevention Prohibition and Redressal) Act2013.

> Particulars of the Employees

The disclosures in respect of managerial remuneration as required under section 197(12)read with Rule 5(1) of the Companies (Appointment & Remuneration of ManagerialPersonnel) Rules 2014 is attached in Annexure VI and forms part of this report.

None of the employees has received a salary of Rs.1.02 crores per annum or Rs.8.50 lakhper month or more during the Financial Year 2021-22. Accordingly no particulars ofemployees are required to be given as per Rule 5 (2) and 5 (3) Companies (Appointment& Remuneration of Managerial Personnel) Rules 2014. Since the Company has no HoldingCompany no particulars are required to be given pursuant to the provisions of section197(14) of the Companies Act 2013.

> Directors Responsibility Statement

Pursuant to Section 134(5) of the Act the Board of Directors to the best of itsknowledge and ability confirm that:

1. In the preparation of the annual accounts the applicable accounting standards havebeen followed and there are no material departures;

2. They have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the profitof the Company for that period;

3. They have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

4. They have prepared the annual accounts on a going concern basis;

5. They have laid down internal financial controls to be followed by the Company andsuch internal financial controls are adequate and operating effectively;

6. They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.

Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company the work performed by the internal statutoryand secretarial auditors including the audit of internal financial controls overfinancial reporting by the statutory auditors and the reviews performed by management andthe relevant board committees including the audit committee the Board is of the opinionthat the Company's internal financial controls were adequate and effective during FY2021-2022.

General Disclosures

Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:

1) Details relating to deposits covered under Chapter V of the Act.

2) Issue of equity shares with differential rights as to dividend voting or otherwise.

3) No material changes and commitments affecting the financial position of the Companyoccurred between the end of the Financial Year to which these financial statements relateand the date of this report.

4) No change in nature of Business of the Company.

Your Directors further state that during the year under review there were no casesfiled pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.

^ Code of Conduct

The Board of Directors has approved a Code of Conduct which is applicable to theMembers of the Board and all Senior Manager Personnel in the course of day to day businessoperations of the company. The Company believes in "Zero Tolerance" againstbribery corruption and unethical dealings / behaviors of any form and the Board has laiddown the directives to counter such acts. The Code has been posted on the Company'swebsite The Code lays down the standard procedure of business conduct which is expected tobe followed by the directors and all Senior Manager Personnel in their business dealingsand in particular on matters relating to integrity in the workplace in business practicesand in dealing with stakeholders.

>- Appreciation

We thank our customers vendors investors and bankers for their continued supportduring the year. We place on record our appreciation of the contribution made by ouremployees at all levels. Our consistent growth was made possible by their hard worksolidarity cooperation and support.

We also thank the Government of various countries where we have our operations. We alsothank the Government of India particularly the Ministry of Communication and InformationTechnology the Customs and Excise Departments the Income Tax Department the Ministry ofCommerce and industry the Ministry of Corporate Affairs the Ministry of Finance theReserve Bank of India the state governments the Software Technology Parks (STPs)-Mohali/Special Economic Zones (SEZs) and other government agencies for their support and lookforward to their continued support in the future

For and on behalf of the Board

Place: Chandigarh Mohnesh Kohli Rajnesh Sharma
Date: 20.05.2022 Director Whole-Time Director
DIN:01784617 DIN:02528435

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