Directors’ Report Dear Members, Your Directors are delighted to present the 24th Annual Report on our business and operations together with the Audited Financial Statements for the year ended March 31, 2015. Finances This year the Company registered income from operation around Rs. 405.86 Lacs as compared to last year of Rs. 500.77 Lacs and also registered a net profit (after taxes) of Rs. 170.03 Lacs which is lower than last year’s profits of Rs. 200.59 Lacs (after taxes). T here has been decline in profit as well as sale as compare to previous year because of decline in major services relating to search engine optimization carried out by Company. However Company has already starting diversifying to new technologies of mobile and web application development. The Company has started further development of its web portal and votral on various subjects. Transfer to General Reserve We propose to transfer 17.00 Lacs (10% of the standalone net profit of the year) to the general reserve. An amount of 153.03 Lacs proposed to be retained in surplus. Share Capital There have been no changes in the Authorized Share Capital, issued subscribed and paid-up share capital during the year under review. The authorized share capital was Rs. 3,30,00,000/- divided into 33,00,000 equity shares of Rs. 10/- each and the issued, subscribed and paid up share capital remained Rs. 3,14,07,000/- divided into 31,40,700 equity shares of Rs. 10/- each fully paid. Corporate Governance Your Company always places a major thrust on managing its affairs with diligence, transparency, responsibility and accountability thereby upholding the important dictum that an Organization's corporate governance philosophy is directly linked to high performance. The Company is committed to adopting and adhering to established world-class corporate governance practices. The Company understands and respects its fiduciary role and responsibility towards its stakeholders and society at large and strives to serve their interests, resulting in creation of value and wealth for all its stakeholders. The report on corporate governance and requisite certificate from Auditors of the Company confirming compliance with the conditions of Corporate Governance, as stipulated under Clause 49 of the listing agreement with the Stock Exchanges, is attached herewith. Your Company will continue to implement and adhere in letter and spirit to the policies of good corporate governance. Contracts & Arrangements with Related Parties During the year, the Company had not entered into any contract/arrangement/transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions except rent paid to Mr. Mohnesh Kohli & relatives. The particulars of contracts or arrangements with related parties referred to in sub-section (1) of Section 188 in the prescribed Form AOC-2 are given in Annexure I . Your Directors draw attention of the members to Note 34 to the financial statements which sets out related party disclosures. Directors & Key Managerial Personnel ? Previous Year at a Glance ? In the previous Financial Year 2013-14, the Company had appointed two Independent Directors (Mr. Anil Kumar Goyal & Mr. Ajay Jagga) for a term of up to two consecutive years on the Board of the Company. ? Further stated that Mr. Rajnesh Sharma, Director of the Company, had been appointed as a Whole-Time Director of the Company pursuant to Section 196, 197, Schedule V and other applicable provisions of Companies Act, 2013, read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. ? As per sub-section (13) of Section 149 and sub-section (2) of Section 196 of the Companies Act, 2013, the provisions of retirement by rotation do not apply to Independent Directors and to Whole Time Directors respectively. ? Current Year Details ? The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Act and Clause 49 of the Listing Agreement with the Stock Exchange. ? The Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual directors which includes criteria for performance evaluation of the non-executive and executive directors. ? Pursuant to sub-section (6) of Section 152 of the Companies Act, 2013, not less than 2/3rd (Two-third) of the total number of Directors (other than Independent & Whole Time Directors) shall be liable to retire by rotation. In accordance with the provisions of the Act and the Articles of Association of the Company, Ms. Aprajita Kohli, Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible have offered herself for re-appointment. ? The details of programmes for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are put up on the website of the Company at the following link: http://www.megrisoft.com/pdfs/fpid. pdf ? The following policies of the Company are attached herewith marked as Annexure IIA and Annexure IIB: a) Policy for selection of Directors and determining Directors independence; and b) Remuneration Policy for Directors, Key Managerial Personnel and other employees. ? Woman Director In terms of the provisions of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, a Company shall have at least one Woman Director on the Board of the Company. Your Company has Ms. Aprajita Kohli as Director on the Board of the Company since September 2009. ? Company Secretary/Chief Financial Officer Pursuant to the provisions of Section 203 of the Companies Act, 2013 and other applicable provisions, the Company has appointed Ms. Ankita Jain as the Company Secretary/Compliance Officer of the Company with effect from December 04, 2014 and Mr. Rajnesh Sharma as the Chief Financial Officer of the Company with effect from January 24, 2015. Auditors & Auditors’ Report ? Statutory Auditor At the 23rd Annual General Meeting of the Company held on September 30, 2014, M/s K.K. Bassi & Associates, Chartered Accountants (FRN 005539N), were appointed as Statutory Auditors of the Company to hold office from the conclusion of this Annual General Meeting till the conclusion of its 4th Annual General Meeting. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of the Auditors shall be placed for ratification at every Annual general Meeting. Accordingly, the appointment of M/s K.K. Bassi & Associates, Chartered Accountants, as Statutory Auditors of the Company, will be placed for ratification by the shareholders. In this regard, the Company has received a certificate from the Auditors to the effect that if they are appointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013. The Notes on financial statement referred to in the Auditor's Report are self-explanatory and do not call for any further comments. The Auditors’Report does not contain any qualification, reservation or adverse remark. ? Internal Auditor Pursuant to the provisions of Section 138 of the Companies Act, 2013 and all other applicable provisions, the Board has appointed M/s Shweta Jindal & Co., Chartered Accountants, Chandigarh (FRN 026490N), as the Internal Auditor of the Company to conduct the Internal Audit functions. Further stated that the Audit Committee shall in consultation with the Internal Auditor, formulate the scope, functioning, periodicity and methodology for conducting the Internal Audit from time to time. The Internal Auditor reports directly to the Audit Committee. ? Secretarial Auditor Pursuant to the provisions of Section 204 of the Companies Act, 2013 and all other applicable provisions, the Board has appointed M/s A.M. & Associates., Company Secretaries (CP No. 9951), to undertake the Secretarial Audit of the Company for F.Y. 2014-15. The Report on Secretarial Audit forms a part of this Annual Report as A nnexure III. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. Director’s Responsibility Statement In terms of provisions of Section 134(5) of the Companies Act, 2013, (“Act”), your Directors state that: 1. In the preparation of annual accounts, the applicable accounting standards have been followed, along with proper explanation relating to material departures, wherever applicable; 2. They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period; 3. They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; 4. The annual accounts have been prepared on a going concern basis; 5. The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and 6. The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. Dividend In order to strengthen the financial position of the Company, your directors proposed to retain the profits for future growth & expansions therefore do not recommend any dividend for the year. Segment Reporting Segment Reporting is not applicable for the Company. Disclosures ? Audit Committee The Audit Committee comprises Independent Directors namely Mr. Anil Kumar Goyal (Chairman), Mr. Ajay Jagga and Mr. Mohnesh Kohli as other members. All the recommendations made by the Audit Committee were accepted by the Board. The Company Secretary acts as a Secretary to the Committee also. ? Vigil Mechanism The Vigil Mechanism of the Company, which also incorporates a whistle blower policy in terms of the Listing Agreement, includes an Ethics & Compliance Task Force comprising senior executives of the Company. Protected disclosures can be made by a Whistleblower through an e-mail, or dedicated telephone line or a letter to the Task Force or to the Chairman of the Audit Committee. The Vigil Mechanism/ Whistle Blower policy is available for view on the Company’ website at the following link: http://www.megrisoft.com/pdfs/wbp.pdf ? Meetings of the Board Nine meetings of the Board of Directors were held during the year. For further details, please refer report on Corporate Governance Report of this Annual Report. ? Particulars of Loans given, Investments made, Guarantees given and Securities provided The Company has not given any loans or made any investments or given any guarantees or provided any securities to any person or body corporate mentioned under Section 186 of the Companies Act, 2013. ? Public Deposits and Liquidity We continue to be debt-free, and believe we maintain sufficient cash to meet our strategic objectives. During FY 2014-15, your Company has not accepted any deposits or raised any fresh equity from the public. ? Energy Conservation, Technology Adoption And Foreign Exchange Flows Since the Company (Megri Soft Limited) is a Service Sector Company and does not own any manufacturing facility, the other particulars in the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1998 are not applicable. The particulars regarding foreign exchange earnings during the year of Rs. 334.88 Lacs only (Previous Year Rs. 423.48 Lacs) and expenditure in foreign currency is Rs. 49.28 Lacs only (Previous year 44.85 Lacs). We operate in the internet/ information technology industry where new developments happen on a continuous basis. We regularly evaluate these developments & factor their suitability to us. Accordingly, research and development of new services, designs, frameworks, processes and methodologies continue to be of importance to us. This allows us to enhance quality, productivity and customer satisfaction through continuous improvements/innovation. Your Company continues to use state-of-the-art technology for improving the productivity and quality of its products and services. To create adequate infrastructure, your Company continues to invest in the latest hardware and software. ? Extract of Annual Return Extract of Annual Return of the Company is annexed herewith as Annexure IV to this Report. ? Particulars of the Employees No employee of the Company is in receipt of remuneration in excess of the limits prescribed under the provisions of Section 197(12) of the Act read with Rules 5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. ? General Your Directors state that no disclosure or reporting is required in respect of the following 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 significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company’s operations in future. Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Human Resources Human resources play a key role in the performance of every organization. Your Company strongly believes that it is the employees who will make significant contribution to the success and growth of a business. The employee relations remained steady and harmonious throughout the year under review resulting in high level of performance. Employees are our vital and most valuable assets. We have created a favorable work environment that encourages innovation and meritocracy. We have also set up a scalable recruitment and human resources management process, which enables us to attract and retain high caliber employees. Green Initiatives The Company has implemented the “Green Initiative” to enable electronic delivery of notices/documents and annual reports to shareholders. Electronic copies of the Annual Report 2014-15 and Notice of the 24th Annual General Meeting shall be sent to members whose email addresses are registered with the Company. For members, who have not registered their email addresses, physical copies of the Annual Report 2015 and the Notice of the 24th Annual General Meeting shall be sent in permitted mode. Members requiring a physical copy may request the Company for the same. The Company is providing e-voting facility to all members to enable them to cast their votes electronically on all resolutions set forth in the Notice. This is pursuant to Section 108 of the Companies Act, 2013 read with relevant rules thereon. The instructions for e-voting are provided in the Notice of the meeting. Risk Management During the year, your Directors have constituted a Risk Management Committee which has been entrusted with the responsibility to assist the Board in (a) Overseeing and approving the Company’s enterprise wide risk management framework; and (b) Overseeing that all the risks that the organization faces such as strategic, financial, credit, market, liquidity, security, property, IT, legal, regulatory, reputational and other risks have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks. The Policy on Risk Management is available for view on the Company’s website at the following link: http://www.megrisoft.com/pdfs/rmp.pdf Management Discussion And Analysis Report The Management Discussion and Analysis Report for the year under review as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges is presented in a separate section forming part of this Annual Report. Acknowledgment We thank our customers, vendors, investors and bankers for their continued support during the year. We place on record our appreciation of the contribution made by our employees at all levels. Our consistent growth was made possible by their hard work, solidarity, cooperation and support. We also thank the Government of India, particularly the Ministry of Communication and Information Technology, the Customs and Excise Departments, the Income Tax Department, the Ministry of Commerce, the Ministry of Finance, the Reserve Bank of India, the state governments, the Software Technology Parks (STPs)–Mohali and other government agencies for their support, and look forward to their continued support in the future. For and on behalf of the Board Mohnesh Kohli Director DIN:01784617 Rajnesh Sharma WholeTime Director & Chief Financial Officer DIN:02528435 Place: Chandigarh Date: May 29, 2015 |