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Megri Soft Ltd.

BSE: 539012 Sector: IT
NSE: N.A. ISIN Code: INE756R01013
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NSE 05:30 | 01 Jan Megri Soft Ltd
OPEN 15.40
PREVIOUS CLOSE 15.40
VOLUME 51
52-Week high 17.70
52-Week low 12.00
P/E 13.63
Mkt Cap.(Rs cr) 5
Buy Price 15.40
Buy Qty 8.00
Sell Price 12.95
Sell Qty 361.00
OPEN 15.40
CLOSE 15.40
VOLUME 51
52-Week high 17.70
52-Week low 12.00
P/E 13.63
Mkt Cap.(Rs cr) 5
Buy Price 15.40
Buy Qty 8.00
Sell Price 12.95
Sell Qty 361.00

Megri Soft Ltd. (MEGRISOFT) - Director Report

Company director report

Dear Members

The Board of Directors hereby submits the report of the business and operations of yourCompany ('the Company' or 'Megrisoft') along with the Audited Financial Statements for thefinancial year ended March 31 2018.

- Results of operations

Particulars Year Ended 31.03.2018 Year Ended 31.03.2017
(Rs. In Lakhs) (Rs. In Lakhs)
Total Income 190.32 226.73
Depreciation 22.44 23.84
Profit/(Loss) Before Taxes 40.25 50.24
Provision for Taxation 9.65 13.39
Net Profit/(Loss) After Tax 30.60 36.85
Net Profit/(Loss) Carried To Balance Sheet 30.60 36.85
Paid Up Share Capital (Face Value Rs. 10/- each fully paid up) 314.07 314.07

Indian Accounting Standards (Ind AS): The Ministry of Corporate Affairs (MCA) vide itsnotification in the Official Gazette dated 16th February 2015 notified the Ind ASapplicable to certain classes of Companies. Ind AS has replaced the existing Indian GAAPprescribed under Section 133 of the Companies Act 2013 read with Rule 7 of the Companies(Accounts) Rules 2014. Ind AS is applicable on the Company from 1st April 2017 with atransition date of 1st April 2016.

- Financial Review

This year the Company registered income from operations around Rs. 190.32 Lakhs ascompared to lastyear of Rs. 226.73 Lakhs and also registered a net profit (after taxes) ofRs. 30.60 Lakhs which is lower than last year's profits of Rs. 36.85 Lakhs (after taxes).There has been decline in profit as well as sales as compared to previous year because ofdecline in major services relating to search engine optimization carried out by Company.However Company has already starting diversifying to new technologies of mobile and webapplication development. The Company has started further development of its web portal andvortal on various subjects.

- Consolidated Financial Statement:

In accordance with the Companies Act 2013 & Indian Accounting Standards (Ind AS)110 on 'Consolidated Financial Statements' the Audited Consolidated Financial Statementsis provided in the Annual Report.

- Dividend & Reserves

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. Therefore your Directors propose to transfer Rs. 3.06 Lakhs (10%of the standalone net profit of the year) to the general reserve. An amount of 27.54 Lakhsproposed to be retained in surplus.

- 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 shares of Rs. 10/- each and the issuedsubscribed and paid up share capital remained Rs. 31407000/- divided into 3140700equity shares of Rs. 10/- each fully paid.

- Listing of Shares

The Company's shares are listed on BSE Ltd. (BSE) & Metropolitan Stock Exchange ofIndia Limited (MSEI). The annual listing fees for the financial year 2018-19 to BSE andMSEI has been paid. The Securities and Exchange Board of India (SEBI) on September 22015 issued SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015(Listing Regulations) with the aim to consolidate and streamline the provisions of theListing Agreement for different segments of capital markets to ensure betterenforceability. The said regulations were applicable w.e.f. December 1 2015. Accordinglyall listed entities were required to enter into a Uniform Listing Agreement within sixmonths from the effective date. The Company has entered into the requisite ListingAgreement with both the above Stock Exchanges.

- Subsidiaries

The Company has incorporated a wholly owned subsidiary "Megrisoft Limited" inLondon United Kingdom under the Registrar of Companies for England and Wales on October18 2016. The Company has earned revenue from its operations of Rs 50.53 Lakhs during yearunder review. The Net Profit of the Company after its first year of operations worked outto Rs 4.62 Lakhs. Detail about the aforesaid wholly owned subsidiary is annexed asAnnexure I in Form AOC 1 to Board's report.

- Details of significant and material orders passed by the regulators/courts/tribunals

1. The Company has filed an appeal with CIT (Appeals) Chandigarh for a demand ofamount to Rs. 7347744/- raised by disallowing deduction u/s 80IC of Income Tax Act 1961for the Assessment Year 2013-14. Taxes are already paid with the Income Tax Department. SoCompany does not see any liability in future.

2. The Company has filed an appeal with CIT (Appeals) Chandigarh for a demand ofamount to Rs. 6515710/- raised by disallowing deduction u/s 80IC of Income Tax Act 1961for the Assessment Year 2014-15. Taxes are already paid with the Income Tax Department. SoCompany does not see any liability in future.

3. During the year MS Shoes East Limited (now known as Tomorrowland TechnologiesExports Limited) has instituted a suit against the company for execution of ex-partedecree for an amount of Rs 8576928/- along with interest @18 % p a till date. TheCompany has taken suitable legal action in this regard.

- Board of Directors & Key Managerial Personnel (KMP's)

Appointment

During the year under review one director Mr. Raman Seth have been appointed on theBoard of the Company as an additional director (independent) w.e.f. November 11 2017 onthe place of Mr. Anil Kumar Goyal Independent Director who has resigned from the saiddesignation w.e.f. August 26 2017.

However Mr. Raman Seth has resigned from the board w.e.f 17th April 2018 which waslater replaced by Ms. Diksha on 16th July 2018.

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 one director Mr. Anil Kumar Goyal has resigned from thedesignation of independent Director of the Board w.e.f. August 26 2017.

Retirement by Rotation (Ms. Aprajita Kohli)

In terms of Section 15 2 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 herappointment for consideration of the members at the forthcoming Annual General Meeting

Key Managerial Personnel

In compliance with provisions of Section 203 of the Companies Act 2013 following arethe KMPs of the Company as on 31st March 2018:

Name Designation
1. Mr. Rajnesh Sharma Whole Time Director & Chief Financial Officer
2. Ms. Pratima Yadav* Company Secretary

* Ms. Ankita Jain Company Secretary resigned from the Company w.e.f. 11th November2017 and Ms. Pratima Yadav has been appointed as Company Secretary in her place w.e.f.20th November 2017.

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.

In accordance with the aforesaid provisions the Board has carried out the annualperformance evaluation of its own performance the Directors individually as well as theevaluation of the working of its Committees.

Annual Evaluation of the Board Performance:

Pursuant to Schedule IV to the Companies Act 2013 and Listing Regulations one meetingof Independent Directors were held during the year i.e. on February 10 2018 without theattendance of Executive directors and members of Management to evaluate the performance of

Non-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/Ddfs/fD-id.Ddf. Further atthe time of the appointment of an Independent Director the company issues 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:

The Nomination & Remuneration Committee of the Company has formulated theNomination & Remuneration Policy on Director's appointment and remuneration includingthe criteria for determining qualifications positive attributes independence of adirector and other matters as provided under Section 178(3) of the Companies Act 2013.The Nomination & Remuneration Policy is annexed hereto and forms part of this reportas Annexure II and it may also be accessed on the Company's website at https://www.megrisoft.com/pdfs/NMR-Poilcv.pdf

- Meetings of the Board

During the Financial Year 2017-18 the Board met Eight (08) times i.e. on29.05.201712.08.2017 26.08.2017 26.08.2017 28.10.201711.11.2017 20.11.2017 and10.02.2018. The intervening gap between any two meetings was within the period prescribedby the Companies Act 2013. Detailed information on the meetings of the Board are includedin the report on Corporate Governance which forms part of this Annual Report.

Committees of the Board

The Company has several Committees which have been established as a part of the bestcorporate governance practices and are in compliance with the requirements of the relevantprovisions of applicable laws and statutes.

The Company has following Committees of the Board:

• Audit Committee

• Nomination and Remuneration Committee

• Stakeholders Relationship Committee

• Committee of Independent Directors

The details with respect to the compositions powers roles terms of reference etc.of relevant committees are given in the report on Corporate Governance of the Companywhich forms part of this Annual Report.

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

Since the Company (Megri Soft Limited) is a Service Sector Company and does not own anymanufacturing facility the other particulars in the Companies (Disclosure of Particularsin the Report of the Board of Directors) Rules 1998 are not applicable.

The particulars regarding foreign exchange earnings during the year of Rs. 160.42 Lakhsonly (Previous Year Rs. 156.70 Lakhs) and expenditure in foreign currency is Rs. 10.09Lakhs only (Previous year Rs. 3.80 Lakhs).

We operate in the internet/ information technology industry where new developmentshappen on a continuous basis. We regularly evaluate these developments & factor theirsuitability to us. Accordingly research and development of new services designsframeworks processes and methodologies continue to be of importance to us. This allows usto enhance quality productivity and customer satisfaction through continuousimprovements/inn ovation.

Your Company continues to use state-of-the-art technology for improving theproductivity and quality of its products and services. To create adequate infrastructureyour Company continues to invest in the latest hardware and software.

Audit Reports & Auditors

Audit Reports

• The Auditors' Report for financial year ended March 31 2018 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 financial year ended March 31 2018 doesnot contain any qualification reservation or adverse remark. The Secretarial Auditor'sReport is enclosed as Annexure III to the Board's report in this Annual report.

• As required by the Listing Regulations the Auditor's Certificate on corporategovernance is enclosed to the Board's report. The Auditor's Certificate for Financial Year2017-18 does not contain any qualification reservation or adverse remark.

Statutory Auditor

M/s Kapil Sandeep & Associates Chartered Accountants (Firm Registration No.0016244N) were appointed as the statutory auditors of the Company by the Members at their26th Annual General Meeting held on 30th September 2017 to hold office for a period offive consecutive years from the conclusion of the 26th Annual General Meeting of theCompany till the conclusion of the 31st Annual General Meeting to be held in the year2022 subject to the annual ratification by members at every Annual General Meeting

However the Ministry of Corporate Affairs has vide notification dated May 7 2018omitted the requirement of annual ratification of the appointment of statutory auditors byth members of the company at every Annual General Meeting Hence annual ratification shallnot be required with effect from this Annual General Meeting to be held in the year 2018.

Secretarial Auditor

As required under Section 204 of the Companies Act 2013 and rules thereunder theBoard has appointed Ankur Mahindru proprietor of M/s A.M. & Associates PracticingCompany Secretaries as its Secretarial Auditors of the Company for Financial year 2018-19.

- Management Discussion And Analysis

The Management Discussion and Analysis Report for the year under review as stipulatedSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is presented in aseparate section forming part of this Annual Report.

- 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 review of critical risks impacting the achievement of Company'sobjectives or threaten its existence. To further strengthen & streamline theprocedures about risk assessment and minimization procedures the Board of Directors hasformulated a Risk Management Policy which is available for view on the Company's websiteat the following link: http: //www.megrisoft.com/pdfs/rmp.pdf

- Corporate Governance

Corporate governance is an ethically driven business organization's brand andreputation. This is ensured by taking ethical business decisions and conducting businesswith a firm commitment to values while meeting stakeholders' expectations. Your Companyis committed to achieve the highest standards of Corporate Governance and also adheres tothe Corporate Governance requirements set by the Regulators/ applicable laws. Accordinglythe Company understands and respects its fiduciary role and responsibility towards itsstakeholders and society at large and strives to serve their interests resulting increation of value and wealth for all its stakeholders.

A Certificate from M/s Kapil Sandeep & Associates Statutory Auditors of theCompany confirming compliance to the conditions of Corporate Governance as stipulatedunder SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is annexedto this Report.

- Director's Responsibility Statement

Pursuant to the requirement under Section Section 134(3)(c) and 134(5) of the CompaniesAct 2013 the directors confirm that:

1. In the preparation of annual accounts for the financial year ended March 31 2018the applicable accounting standards have been followed.

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 profitor loss of 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 Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

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

5. They have laid down internal financial controls which are adequate and are operatingeffectively; and

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

- Human Resources

Human resources play a key role in the performance of every organization. Your Companystrongly believes that it is the employees who will make significant contribution to thesuccess and growth of a business. The employee relations remained steady and harmoniousthroughout the year under review resulting in high level of performance.

Employees are our vital and most valuable assets. We have created a favorable workenvironment that encourages innovation and meritocracy. We have also set up a scalablerecruitment and human resources management process which enables us to attract and retainhigh caliber employees. During the year the Company employed around 13 employees onpermanent rolls.

- Loans Guarantees or Investments in Securities

The Company has not given any loans or given any guarantees or provided any securitiesto any person or body corporate mentioned under Section 186 of the Companies Act 2013.

- Particulars of Contracts & Arrangements made with Related Parties

All contracts/arrangements/transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an arm's lengthbasis. During the year the Company had not entered into any contract/arrangement/transaction with related parties which could be considered material inaccordance with the provisions of Regulation 23 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. The particulars of Contracts or Arrangementsmade with related parties as required under Section 134(3)(h) of the Companies Act 2013are covered under Note No. 32 to the Financial statement which is set out for relatedparty transactions.

The Policy on dealing with related party transactions as approved by the Board may beaccessed on the Company's website at the link: hhttn: //www.megrisoft.com/ndfs/rntn.ndf

- Annual Return

The extracts of Annual Return pursuant to the provisions of Section 92 134 and Rule 12of the Companies (Management and Administration) Rules 2014 for the financial year2017-18 in Form MGT-9 is annexed hereto and form part of this report as Annexure IV.

The Annual return of the Company for Financial Year 2017-18 can also be accessed on theCompany's website at the link: httn://www.megrisoft.com/ndfs/annualreturn.ndf

Internal Financial Control and its Adequacy

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.

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 V and forms part of this report. None ofthe employees has received salary of' 1.02 crores per annum or ' 8.50 lakh per month ormore during the Financial Year 2017-18. Accordingly no particulars of employees arerequired to be given as per Rule 5 (2) and 5 (3) Companies (Appointment & Remunerationof Managerial Personnel) Rules 2014. Since the Company has no Holding Company noparticulars are required to be given pursuant to the provisions of section 197 (14) of theCompanies Act 2013.

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

No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which this financial statements relateon the date of this report.

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 this 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.

Green Initiatives

Electronic copies of the Annual Report 2017-18 and the Notice of the 27th AnnualGeneral Meeting are sent to all members whose email addresses are registered with theCompany/depository participant(s). For members who have not registered their emailaddresses physical copies are sent in permitted mode.

Acknowledgment

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

Mohnesh Kohli Director DIN:01784617

Rajnesh Sharma Whole-Time Director DIN:02528435

Place: Chandigarh

Date: May 29 2018