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Megri Soft Ltd.

BSE: 539012 Sector: IT
NSE: N.A. ISIN Code: INE756R01013
BSE 12:05 | 24 Sep 175.40 -9.20
(-4.98%)
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NSE 05:30 | 01 Jan Megri Soft Ltd
OPEN 175.40
PREVIOUS CLOSE 184.60
VOLUME 83
52-Week high 282.55
52-Week low 12.20
P/E 139.21
Mkt Cap.(Rs cr) 55
Buy Price 0.00
Buy Qty 0.00
Sell Price 175.40
Sell Qty 2486.00
OPEN 175.40
CLOSE 184.60
VOLUME 83
52-Week high 282.55
52-Week low 12.20
P/E 139.21
Mkt Cap.(Rs cr) 55
Buy Price 0.00
Buy Qty 0.00
Sell Price 175.40
Sell Qty 2486.00

Megri Soft Ltd. (MEGRISOFT) - Director Report

Company director report

Dear Members

The Board of Directors of your Company take pleasure in presenting the Twenty-NinthAnnual Report on the business and operations of the Company together with the auditedStandalone & Consolidated Financial Statements and the Auditor's Report thereon forthe financial year ended March 31 2020.

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

Results of operations

Particulars

Standalone

Consolidated

FY 2019-20 FY 2018-19 FY 2019-20 FY 2018-19
1. Revenue 160.83 180.32 221.41 246.03
2. Other Income 34.36 42.29 34.36 42.31
3. Total Income (1+2) 195.19 222.61 255.77 288.34
Expenditure:
a) Employees Benefits Expenses 41.21 39.73 78.24 75.77
b) Depreciation and Amortization expenses 6.45 11.94 6.96 12.22
c) Finance Cost 0.02 0.52 0.02 0.52
d) Other Expenses 101.37 120.32 121.41 144.04
4. Total Expenditure 149.05 172.51 206.63 232.55
5. Earnings Before Interest and Tax (EBIT) (3-4) 46.14 50.10 49.14 55.79
6. Exceptional Item 0.00 0.00 0.00 2.30
7. Net Profit before tax (5-6) 46.14 50.10 49.14 53.49
8. Tax Expenses 11.91 12.13 12.52 13.26
9. Net Profit After Tax (7-8) 34.23 37.97 36.62 40.23

• 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 is RS 160.83 Lakh during the year under reviewas against K180.32 Lakh during the previous financial year.'

Operating EBIT for the year is RS 46.14 Lakh in comparison with RS 50.10 Lakh in FY2018-19. Profit before tax (PBT) from ordinary activities (before exceptional items) is RS46.14. Lakh in FY 2019-20 as against RS 50.10 Lakh in FY 2018-19.

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 basis of the auditedfinancial statements of the wholly owned subsidiary (Megrisoft Limited) which isincorporated in the United Kingdom as approved by their respective Board of Directors.

Your Company on a consolidated basis achieved net revenue of RS 221.41 Lakh duringthe year under review as against RS 246.03 Lakh during the previous financial year. Thetotal consolidated income for the year is RS 255.77. Lakh as compared to RS 288.34 Lakh inFY 2018-19.

Covid-19

In the last month of FY 2020 the COVID-19 pandemic developed rapidly into a globalcrisis forcing governments to enforce lock-downs of all economic activity. For theCompany the focus immediately shifted to ensuring the health and well-being of allemployees and on minimizing disruption to services for all our clients globally. From ahighly centralized model consisting of work spaces set in large delivery campuses capableof accommodating employees the switch to work from home for employees all over extendingall the elements of the Company's Open Agile Delivery model concept into a next-generationSecure Borderless Workspaces (SBWS) model was carried out seamlessly.

As of March 31 2020 work from home was enabled to close to 90 percent of theemployees to work remotely and securely. This response has reinforced clients' confidencein Megrisoft and many of them have expressed their appreciation and gratitude for keepingtheir businesses running under most challenging conditions.

• 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 ^ 1637.45 Lakhs. TheBoard of Directors of your company has decided not to transfer any amount to the Reservesfor 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 ^ 33000000/- divided into 3300000 equity sharesof ^10/- each and the issued subscribed and paid up share capital remained ^31407000/- divided into 3140700 equity shares of ^ 10/- each fully paid.

• Listing of Shares

The Company's shares are listed on BSE Ltd. (BSE) & Metropolitan Stock Exchange ofIndia Limited (MSEI). 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.

• 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 has 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 that proper reporting approval and disclosure processesare in place for all transactions between the Company and Related Parties.

This Policy specifically deals with the review and approval of Material Related Partytransactions keeping in mind the potential or actual conflicts of interest that may arisebecause of entering into these transactions. All Related Party Transactions are placedbefore the Audit Committee for review and approval. Prior omnibus approval is alsoobtained for related party transactions on an annual basis for transactions which are ofrepetitive nature and/ or entered in the ordinary course of business and at arm's lengthbasis. The Company has entered into material related party transactions i.e. transactionsexceeding 10% of the annual consolidated turnover as per the last audited financialstatements. The particulars of contracts or arrangements with related parties referred toin sub-section (1) of section 188 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

Pursuant to the provision of Regulation 27(2) of SEBI (Listing Obligation &Disclosure Requirements) Regulations 2015 regarding Corporate Governance Report is notapplicable on our Company due to applicability of exemption provided under Regulation15(2) of SEBI(LODR) Regulations 2015. Accordingly the paid-up Share Capital of ourCompany is ^ 314.07 Lakh (Rupees Three Crore Fourteen Lakhs & Seven Thousand Only)i.e. below Rs. 10 Crore and Net Worth of the Company is ^ 1951.52 Lakh as on March 312020 which is not exceeding Rs. 25 Crore. Hence Corporate Governance provisions 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.

• 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 08 2020without 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 2019-20 the Board met 7 (seven) times i.e. on22.05.2019 07.08.2019 30.08.2019 01.10.2019 14.11.2019 08.02.2020 and 18.02.2020. Theintervening gap between any two meetings was within the period prescribed by the CompaniesAct 2013.

Quarter - I Quarter - II Quarter - III Quarter - IV
[April'19-June'19] [July'19-Sept'19] [Oct'19-Dec19] [Jan'20-Mar'20]
1) 22.05.2019 1) 07.08.2019 1) 14.11.2019 1) 08.02.2020
2) 30.08.2019 2) 01.10.2019 2) 18.02.2020

• No. of Meetings Attended by the Board of Directors

S.No Name of the Directors Number of Meeting Attended
1. Mohnesh Kohli 7
2. Aprajita Kohli 2
3. Rajnesh Sharma 7
4. Diksha 7
5. Mahesh Kumar 7

>- General Meetings

During the Financial Year 2019-20 There were 2 (Two) Meetings held by the Shareholdersof the Company. The details of Meetings are as Follows:

S.No. Meeting Date of Meeting
1. Annual General Meeting 30.09.2019
2. Extra ordinary General Meeting 18.03.2020

>- 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 have 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:

? Audit Committee

Our Audit Committee comprised three directors as on March 31 2020 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)
? Mr. Mohnesh Kohli - Member (Non- Executive Director)

Audit Committee Meetings

During the Financial Year 2019-20 there were 7 (Seven) 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. 22.05.2019
2. 07.08.2019
3. 01.10.2019
4. 14.11.2019
5. 08.02.2020
6. 10.02.2020
7. 11.02.2020

Number of Meetings attended by the Members of the Audit Committee

S.No Name of the Directors Numbers of Meeting Attended
1. Mahesh Kumar 7
2. Diksha 7
3. Mohnesh Kohli 7

? Nomination & Remuneration Committee

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 2020 :

? Ms. Diksha

Chairman (Non- Executive & Independent Director)

? Mr. Mohnesh Kohli Member (Non- Executive Director)
? Mr. Mahesh Kumar Member (Non- Executive & Independent Director)

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

During the Financial Year 2019-20 there were 3 (Three) 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. 22.05.2019
2. 01.10.2019
3. 18.02.2020

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

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

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

The stakeholders relationship committee has the mandate to review and redressstakeholder grievances. Our Stakeholders Relationship committee comprised the followingdirectors as on March 31 2020 :

? Mr. Mohnesh Kohli

Chairman (Non- Executive Director)

? Ms. Diksha Member (Non- Executive & Independent Director)
? Mr. Mahesh Kumar Member (Non- Executive & Independent Director)

During the Financial Year 2019-20 there were 2 (Two) 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. 19.06.2019
2. 14.02.2020

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 2
2. Diksha 2
3. Mohnesh Kohli 2

During the Financial Year 2019-20 the Company has not received any complaints from anyshareholder.

? Committee of Independent Directors

The meeting of Independent Directors of the Company for the Financial Year 2019-20 washeld on February 08 2020 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.

• 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 athttps://www.megrisoft.com/pdfs/wbp.pdf.

• 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 Company'sobjectives 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 ofamount to Rs. 7347744/- raised by disallowing deduction u/s 80IC of Income Tax Act 1961for the Assessment Year 2013-14.

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.

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

4) During the F.Y 2018-19 MS Shoes East Limited (now known as TomorrowlandTechnologies Exports Limited) had instituted a suit against the company for execution ofex-parte decree for an amount of Rs 8516928/- along with interest @18 % p a till date.The case also has been disposed off as settled by the Delhi High Court on 02.08.2019 bypayment of a lump sum amount of 15.00 lacs. The amount paid and execution proceeding hasbeen withdrawn MS Shoes East Limited (now known as Tomorrowland Technologies ExportsLimited). Therefore no Contingent Liability as on date.

• Directors and Key Managerial Personnel (KMP's)

? Appointment

During the year under review Mr. Rajnesh Sharma whose term as whole Time Director hasexpired on 30.09.2019 has been reappointed as Whole Time Director of the Company on01.10.2019 by the Board subject to the approval of terms and conditions of reappointmentby the Shareholders in the ensuing Annual General Meeting.

? 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 none of the directors have resigned from the designationof Director of the Board.

? 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 2020:

S.No. Name Designation
1. Mr. Rajnesh Sharma Whole Time Director
2. Mr. Rajnesh Sharma Chief Financial Officer
3. Ms. Aman Priya* Company Secretary

*Ms. Aman Priya has been appointed as Company Secretary of the Company w.e.f. 22ndMay2019 in the place of Ms. Pratima Yadav Company Secretary who has resigned from thesaid designation w.e.f. 29th March2019.

? 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 was held during the year i.e. on February 08 2020 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 athttps: / /www.megrisoft.com /pdfs /NMR-Poilcy.pdf

>- Auditors & Auditor's Report

? Statutory Auditor

During the year M/s Kapil Sandeep & Associates Chartered Accountants (FirmRegistration No. 0016244N) resigned as the statutory auditors of the Company due to theirpreoccupations in other assignments and M/s. Sanjay Arora & Associates CharteredAccountants Chandigarh [FRN: 008445N] were appointed as Statutory Auditors of theCompany by the Members at Extraordinary General Meeting held on 18th March 2020 till theconclusion of the ensuing Annual General Meeting to conduct the Statutory Audit for thethe period ending 31st March 2020.

Further M/s. Sanjay Arora & Associates Chartered Accountants Chandigarh [FRN:008445N] being eligible for re-appointment the Board on recommendation of Audit Committeehereby recommends their re-appointment as the statutory auditors of the Company for aperiod of 4 (four ) year on such remuneration as may be fixed by the board.

The Board received a certificate form M/s. Sanjay Arora & Associates CharteredAccountants Chandigarh [FRN: 008445N] intimating that if that firm will be appointed atensuing Annual General Meeting it shall be in accordance with the limits specified underSection 139(1) read with qualification as prescribed under Section 141 of the CompaniesAct 2013.

? 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 FY2019-20.

The Secretarial Audit Report does not contain any qualification reservation or adverseremark or disclaimer.

? Audit Reports

• The Auditors' Report for the financial year ended March 31 2020 does notcontain any qualification reservation or adverse remark. The Auditor's Report is enclosedwith the financial statements in this Annual Report.

• The Secretarial Auditor's Report for the financial year ended March 31 2020does 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.

• 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 year2019-20 in Form MGT-9 is annexed hereto and form part of this report as Annexure V.

The Annual return of the Company for Financial Year 2019-20 can also be accessed on theCompany's website i.e https: //www.megrisoft.com/

• 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 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.

? Foreign Exchange Earnings and Outgo

The particulars regarding foreign exchange earnings during the year of Rs. 160.83 Lakhsonly (Previous Year Rs. 180.32 Lakhs) and expenditure in foreign currency is Rs. 10.81Lakhs only (Previous year Rs. 7.33 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 Notice ofe-AGM and e-voting instructions only in electronic form to the registered E-mail addressesof the shareholders. whose e-mail addresses are registered with the Company/DepositoryParticipant(s). those members who have not registered their e-mail addresses and mobilenos. and in consequence could not be served the Annual Report and Notice of e-AGM maytemporarily get themselves registered by writing to the Company or RTA quoting their folionumber(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.

• Human Resources 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 company's values and principles are understood by alland 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 2019-20 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 '1.02 crores per annum or '8.50 lakh permonth or more during the Financial Year 2019-20. Accordingly no particulars of employeesare 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 FY 2020.

>- 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: May 252020 Director Whole-Time Director
DIN:01784617 DIN:02528435

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