The Board of Directors hereby pleased to submit the report of the business andoperation of your Company ("The Company" or "MELSTAR INFORMATIONTECHNOLOGIES LIMITED") along with the Audited financial Statements for thefinancial year ended March 31 2020.
1. FINANCIAL RESULTS:
| || ||(Rs.in Lakhs) |
|PARTICULAR ||2019-2020 ||2018-19 |
|Net Sales/ Income from Operations ||1113.35 ||343 |
|Other Operating Income ||8.05 ||904 |
|Operating Profit / (Loss) before Interest and Depreciation (PBIDTA) ||(437) ||77 |
|Finance Cost ||27.61 ||86 |
|Depreciation ||0.55 ||1 |
|Operating Profit / (Loss) before Tax ||(465.16) ||(10) |
|Other Income net ||- ||- |
|Net Profit / (Loss) before tax and Exceptional Items ||(456.16) ||(10) |
|Exceptional Items ||- ||- |
|Net (Loss) before tax and after Exceptional Items ||(465.16) ||(10) |
|Provision for Taxation ||0 ||0 |
|Net (Loss) after Tax ||(465.16) ||(10) |
|Other comprehensive income ||0.16 ||(1) |
|Deficit Brought Forward From Previous Year ||(1319.91) ||(1309) |
|Less: Adjustments relating to Fixed Assets on Application of Schedule- II of the Companies Act 2013 ||- ||- |
|Balance Carried to Balance Sheet ||(1784.91) ||(1320) |
|Face Value of Equity Shares (in Rupees) ||10 ||10 |
|EPS - Basic and Diluted (Before Exceptional Item) (in Rupees) ||(3.26) ||(0.07) |
|EPS - Basic and Diluted (After Exceptional Item) (in Rupees) ||(3.26) ||(0.07) |
|Book Value per Share (in Rupees) ||(2.45) ||0.81 |
The total sales of the Company for the financial year ended on 31st March 2020 wereRs.1113 Lakhs as against Rs. 343 Lakhs during the last financial year ended on 31st March2019. Similarly the net Profit/ Loss before tax during the year were Rs. 465.10 Lakhs asagainst Rs. 9.76 Lakhs Loss in the previous year.
The Company is going through Corporate Insolvency Resolution Process (CIRP) by theorder dated 1st October 2019 by Hon'ble NCLT Mumbai bench.
No Dividend is declared for the financial year ended 31st March 2020 due to thefinancial position of the Company.
4. TRANSFER TO RESERVE
No Transfer has been made to General Reserve as the Company has suffered losses.
The Company doesn't have any subsidiary as on 31st March 2020.
6. BUSINESS DESCRIPTION
Our Strategic objective is to build sustainable organization that remains relevant tothe agenda of our Clients while creating growth Opportunities for our employees andgenerating profitable growth for our Investors.
7. EVENT SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS:
Since the date of financial year we have received a Resolution Plan from one Companycalled Shivasons Solution Private Limited which has been approved by the Committee ofCreditors.
8. CHANGE IN THE NATURE OF BUSINESS IF ANY:
A petition filed by M/s Nityo Infotech Services Private Limited u/s 9 of the IBC 2016has been admitted on 1st October 2019 except that there was no such majorchange in the nature of business during the year under the review. The AdjudicatingAuthority the NCLT Mumbai has also appointed Mr. Neehal Mahamulal Pathan a registeredinsolvency resolution professional having Registration Number[IBBI/IPA-001/IP-P01561/2019-20/12406] and the same was confirmed by the Committee ofCreditors (CoC).
9. VIGIL MECHANISM / WHISTLE BLOWER POLICY:
The Company has framed a Whistle Blower Policy to deal with instances of fraud andmismanagement if any. The details of the Policy are given in the Corporate GovernanceReport and the Policy is posted on the Company's website.
10. CORPORATE GOVERNANCE:
The Company adheres to corporate culture of integrity and consciousness. CorporateGovernance is a journey for constantly improving sustainable value creation. As requiredunder the provision of Regulation 34 read with Schedule V of the SEBIListing Regulations a separate report on Corporate Governance forms part of this AnnualReport together with a Certificate from the Auditors of the Company regarding complianceof conditions of Corporate Governance.
11. EXTRACT OF ANNUAL RETURN:
Extract of the Annual Return as provided under Section 92(3) of the CompaniesAct 2013 in Form MGT-9 is annexed herewith as ANNEXURE-I to this Report.
12. NUMBER OF BOARD MEETING:
The Board of Directors met eight times in the year as on 29.05.201914.06.2019 12.08.2019 24.09.2019 19.11.2019 15.01.2020 23.01.2020 and 13.02.2020the details of which are provided in the Corporate Governance Report. There was also oneCommittee of Creditors (CoC) meeting held on 30th October 2019 3rd January2020 7th February 2020 and 18th March 2020 pursuant to the directions issued by theAdjudicating Authority NCLT Mumbai Bench.
13. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.
14. MANAGEMENT DISCUSSION AND ANALYSIS
In terms of the provision of Regulation 34 of the SEBI (Listing Obligation andDisclosure Requirements) Regulations 2015 the Management's discussion and analysis is setout in this Annual Report.
15. RELATED PARTY TRANSACTIONS
The Company has entered into related party transactions in the ordinary course ofbusiness during the year under review. However there are no materially significantrelated party transactions made by the Company with Promoters Directors Key ManagerialPersonnel or other related parties which may have a potential conflict with the interestof the Company at large. The detail of such related party transactions is provided in Note27(g) of Financial Statements for the year ended 31st March 2020. The policyon Related Party Transactions as approved by the Audit Committee and Board is uploaded onthe Company's website at the link http://www.melstar.com/policies.html.
16. RISK MANAGEMENT REPORT
In line with the regulatory requirements the Company has framed a Risk ManagementPolicy to identify and access the key business risk areas and a risk mitigation process. Adetailed exercise is being carried out at regular intervals to identify evaluate manageand monitor all business risks. The Board periodically reviews the risks and suggestssteps to be taken to control and mitigate the same through a proper defined framework.
17. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
A petition filed by M/s Nityo Infotech Services Private Limited u/s 9 of the IBC 2016has been admitted on 1st October 2019 except that there was no such majorchange in the nature of business during the year under the review. The AdjudicatingAuthority the NCLT Mumbai has appointed Mr. Neehal Mahamulal Pathan a registeredinsolvency resolution professional having Registration Number[IBBI/IPA-001/IP-P01561/2019-20/12406] which was confirmed by the Committee of Creditors(CoC). However the orders passed by the Hon'ble NCLT may impact the going concern statusand the Company's operation in future.
18. INTERNAL CONTROL SYSTEM
Your Company has adequate system of internal controls to ensure that all the assets aresafeguarded and are productive. Necessary checks and controls are in place to ensure thattransactions are properly verified adequately authorized correctly recorded and properlyreported. The Internal Auditors of the Company conducts Audit of various departments toensure that internal controls are in place and submits for each quarter reports to theAudit Committee. The Audit Committee regularly reviews these Reports and when needed takescorrective actions.
19. HUMAN RESOURCES
At Melstar human resource is treated as an important asset and believe in itsContribution in overall growth of the Company. Here we focus on the workplace of tomorrowthat promotes a collaborative transparent and participative organization cultureencourages innovation and rewards individual Contribution. The Focus of Human ResourcesManagement at Melstar is to ensure that we enable each and every employee to navigate thenext not just for clients but also for themselves. We have re-imagined our employeevalue proposition to make it more meaningful to our employee.
The Strategic Pillars under this are:
? Inspiring them to build what's next
? Making Sure their Career never Stand Still
? Navigating Further together
? Upgrade and Enhance the quality and strive to maintain it in agile and responsiveform
? Equal Opportunities for employer and practices fair employment policies
? Effective Contribution to the Long term Value Enhancement of the Organization.
? Building Confidence for effective Contribution to the Long term Value Enhancement ofthe Organization.
20. PARTICULARS OF JOINT VENTURES OR ASSOCIATE COMPANY:
The Company does not have any Joint Venture with any person or an associate Company asdefined under Section 2(6) of the Companies Act 2013 (the Act').
21. FIXED DEPOSITS:
During the year under review your Company has not accepted any fixed Deposits andthere were no unclaimed deposits or interest thereon as on 31st March 2020.
22. COMMITTEES OF THE BOARD
As on 31st March 2020 the Board has three Committee: "Audit Committee""The Nomination and Remuneration Committee" and "The StakeholdersRelationship Committee". The details of which are provided in the CorporateGovernance Report.
23. 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 Safeguarding ofits assets prevention and deduction of Fraud error reporting mechanisms accuracy a ndcompleteness of the Accounting records and timely preparation of reliable financialdisclosures.
Criteria for appointment of Independent Directors
The Independent Director shall be of high integrity with relevant expertise andexperience with Director having expertise in the fields of manufacturing marketingfinance law governance and general management so as to have a diverse Board.
The Company follows a policy on remuneration of Directors Senior Management andEmployees details of which are given in the Corporate Governance Report.
24. SECRETARIAL STANDARDS
The Company complies with all the applicable Mandatory Secretarial Standards issued bythe Institute of Company Secretaries of India (ICSI).
25. LISTING ON STOCK EXCHANGES:
The Company's shares are listed on BSE Limited and NSE Limited.
26. DIRECTORS' RESPONSIBILITY STATEMENT:
As stipulated under Section 134(3)(c) & (5) of the Companies Act 2013 yourDirectors confirm as under:-
i) that in the preparation of the accounts for the financial year ended 31st March2020 the applicable accounting standards have been followed along with properexplanation relating to material departures;
ii) that the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for the year under review;
iii) that the Directors have taken proper and sufficient care for maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
iv) that the Directors have prepared the accounts for the financial year on goingconcern basis.
v) the Directors have laid down internal financial controls which are adequate andwere operating effectively.
vi) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
27. ANNUAL EVALUATION:
The performance of Board of Directors and the Committees constituted by the Board andthe Individual Directors has been evaluated during the Financial Year ended 31st March2020.
28. PARTICULARS OF EMPLOYEES:
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel Rules 2014 are provided as per ANNEXURE -III.
29. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO:
The Information pursuant to Section 134(3)(m) of the Companies Act 2013 readwith Rule 8 of The Companies (Accounts) Rules 2014 is given in ANNEXURE IV tothis report.
i) STATUTORY AUDITORS:
In view of the provision of Section 139 142 and other applicable provisions if any ofthe Companies Act 2013 or any amendment thereof or modification thereof M/s Sarda& Pareek (FRN 109262W) was appointed as Statutory Auditor for the period of threefinancial year from 01/04/2018 to 31/03/2021 in the 31st Annual General Meeting held on27th September 2018. M/s Sarda & Pareek (FRN 109262W) continues to be theStatutory Auditor of the Company as per the provision of the Companies Act 2013.
ii) SECRETARIAL AUDITORS:
According to the provision of Section 204 of the Companies Act 2013 read with Rule9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014the Secretarial Audit Report submitted by Mr. Anil Kumar Somani Company Secretary inPractice is enclosed in FORM MR-3 as a part of this report ANNEXURE-V.
iii) COST AUDITORS: Cost Audit is not applicable to the Company.
31. PURCHASE OF SHARES OF THE COMPANY:
The Company has not given any loan guarantee or security or any financial assistanceto the employees of the Company for the purpose of purchase or subscription for any sharesof the Company or its holding Company pursuant to Section 67(2) of the Companies Act2013.
32. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE:
The provisions of Section 135 of the Companies Act 2013 are not presentlyapplicable to the Company.
33. ISSUE OF SHARES WITH DIFFERENTIAL VOTING RIGHTS:
The Company has not issued any shares with differential Voting Rights pursuant to theprovisions of Rule 4 of the Companies (Share Capital and Debenture) Rules 2014.
34. ISSUE OF SWEAT EQUITY SHARES:
During the year under review the Company has not issued any sweat equity shares to anyof its employees pursuant to the provisions of Rule 8 of the Companies (ShareCapital and Debenture) Rules 2014.
35. EMPLOYEE STOCK OPTION:
The Company does not have any Employee Stock Option Scheme for its employees.
36. COVID-19 Impact
The outbreak Coronavirus (COVID-19) pandemic globally and in India is causingsignificant economic disturbance and slowdown of economic activities. Businesses are beingforced to cease or limit their operations for long or indefinite period of time. Measurestaken to contain the spread of the virus including the countrywide lockdown imposed bythe Government of India travel bans quara ntines social distancing and closure ofnon-essential services have triggered significant disruptions to businesses worldwideresulting into adverse impact on the operations of the Company. Your Company's performancefor the March 2020 was affected as the quarter end activities relating to sales andrevenues could not be accomplished. Further the impact of the COVID-19 will continue inthe ensuing months as the entire field force was unable to perform in field and generatethe secondary demand to the desired levels. However your directors took immediate step tocounter the adverse impact and have been able to salvage the situation. The businesses areon a recovery path post the lockdown primarily led by domestic traffic. Third partyverification of debtors and creditors could not be carried out at the end of the year andare based on management certification.
We thank our Customer investors Government and Semi Government AuthoritiesShareholders Bankers and Financial Institutions and for their continued co-operation andsupport. The Director also expresses their warm appreciation for the dedicated and sincereservices rendered by the Employees of the Company.