Dear Members,
The Board of Directors hereby pleased to submit the report of the business and
operation of your Company ("The Company" or "MELSTAR INFORMATION
TECHNOLOGIES LIMITED") along with the Audited financial Statements, for the
financial year ended March 31, 2020.
1. FINANCIAL RESULTS:
|
|
(Rs.in Lakhs) |
| PARTICULAR |
2019-2020 |
2018-19 |
| Net Sales/ Income from Operations |
1,113.35 |
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 |
(1,319.91) |
(1,309) |
| Less: Adjustments relating to Fixed Assets on Application of Schedule- II of the
Companies Act, 2013 |
- |
- |
| Balance Carried to Balance Sheet |
(1,784.91) |
(1,320) |
| 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 |
2. OPERATIONS:
The total sales of the Company for the financial year ended on 31st March, 2020 were
Rs.1113 Lakhs as against Rs. 343 Lakhs during the last financial year ended on 31st March,
2019. Similarly the net Profit/ Loss before tax during the year were Rs. 465.10 Lakhs as
against Rs. 9.76 Lakhs Loss in the previous year.
The Company is going through Corporate Insolvency Resolution Process (CIRP) by the
order dated 1st October 2019 by Honble NCLT, Mumbai bench.
3. DIVIDEND:
No Dividend is declared for the financial year ended 31st March 2020 due to the
financial position of the Company.
4. TRANSFER TO RESERVE
No Transfer has been made to General Reserve as the Company has suffered losses.
5. SUBSIDIARY(S)
The Company doesnt have any subsidiary as on 31st March 2020.
6. BUSINESS DESCRIPTION
Our Strategic objective is to build sustainable organization that remains relevant to
the agenda of our Clients, while creating growth Opportunities for our employees and
generating 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 Company
called Shivasons Solution Private Limited which has been approved by the Committee of
Creditors.
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, 2016
has been admitted on 1st October, 2019 except that there was no such major
change in the nature of business during the year under the review. The Adjudicating
Authority, the NCLT, Mumbai, has also appointed Mr. Neehal Mahamulal Pathan, a registered
insolvency resolution professional having Registration Number
[IBBI/IPA-001/IP-P01561/2019-20/12406] and the same was confirmed by the Committee of
Creditors (CoC).
9. VIGIL MECHANISM / WHISTLE BLOWER POLICY:
The Company has framed a Whistle Blower Policy to deal with instances of fraud and
mismanagement, if any. The details of the Policy are given in the Corporate Governance
Report and the Policy is posted on the Companys website.
10. CORPORATE GOVERNANCE:
The Company adheres to corporate culture of integrity and consciousness. Corporate
Governance is a journey for constantly improving sustainable value creation. As required
under the provision of Regulation 34 read with Schedule V of the SEBI
Listing Regulations, a separate report on Corporate Governance forms part of this Annual
Report, together with a Certificate from the Auditors of the Company regarding compliance
of conditions of Corporate Governance.
11. EXTRACT OF ANNUAL RETURN:
Extract of the Annual Return as provided under Section 92(3) of the Companies
Act, 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 29.05.2019,
14.06.2019, 12.08.2019, 24.09.2019, 19.11.2019, 15.01.2020, 23.01.2020 and 13.02.2020
the details of which are provided in the Corporate Governance Report. There was also one
Committee of Creditors (CoC) meeting held on 30th October, 2019, 3rd January
2020, 7th February, 2020 and 18th March, 2020 pursuant to the directions issued by the
Adjudicating Authority, NCLT, Mumbai Bench.
13. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
Details of Loans, Guarantees and Investments covered under the provisions of Section
186 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 and
Disclosure Requirements) Regulations 2015, the Managements discussion and analysis is set
out in this Annual Report.
15. RELATED PARTY TRANSACTIONS
The Company has entered into related party transactions in the ordinary course of
business during the year under review. However, there are no materially significant
related party transactions made by the Company with Promoters, Directors, Key Managerial
Personnel or other related parties which may have a potential conflict with the interest
of the Company at large. The detail of such related party transactions is provided in Note
27(g) of Financial Statements for the year ended 31st March, 2020. The policy
on Related Party Transactions as approved by the Audit Committee and Board is uploaded on
the Companys 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 Management
Policy to identify and access the key business risk areas and a risk mitigation process. A
detailed exercise is being carried out at regular intervals to identify, evaluate, manage
and monitor all business risks. The Board periodically reviews the risks and suggests
steps 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, 2016
has been admitted on 1st October, 2019 except that there was no such major
change in the nature of business during the year under the review. The Adjudicating
Authority, the NCLT, Mumbai, has appointed Mr. Neehal Mahamulal Pathan, a registered
insolvency 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 Honble NCLT may impact the going concern status
and the Companys operation in future.
18. INTERNAL CONTROL SYSTEM
Your Company has adequate system of internal controls to ensure that all the assets are
safeguarded and are productive. Necessary checks and controls are in place to ensure that
transactions are properly verified, adequately authorized, correctly recorded and properly
reported. The Internal Auditors of the Company conducts Audit of various departments to
ensure that internal controls are in place and submits for each quarter reports to the
Audit Committee. The Audit Committee regularly reviews these Reports and when needed takes
corrective actions.
19. HUMAN RESOURCES
At Melstar, human resource is treated as an important asset and believe in its
Contribution in overall growth of the Company. Here, we focus on the workplace of tomorrow
that promotes a collaborative, transparent and participative organization culture,
encourages innovation and rewards individual Contribution. The Focus of Human Resources
Management at Melstar is to ensure that we enable each and every employee to navigate the
next, not just for clients, but also for themselves. We have re-imagined our employee
value proposition, to make it more meaningful to our employee.
The Strategic Pillars under this are:
? Inspiring them to build whats next
? Making Sure their Career never Stand Still
? Navigating Further together
? Upgrade and Enhance the quality and strive to maintain it in agile and responsive
form
? 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 of
the Organization.
20. PARTICULARS OF JOINT VENTURES OR ASSOCIATE COMPANY:
The Company does not have any Joint Venture with any person or an associate Company as
defined 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 and
there 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 Stakeholders
Relationship Committee". The details of which are provided in the Corporate
Governance Report.
23. INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY
The Board has adopted policies and procedures for ensuring the Orderly and efficient
conduct of its business, including adherence to the Companys policies, Safeguarding of
its assets, prevention and deduction of Fraud, error reporting mechanisms, accuracy a nd
completeness of the Accounting records, and timely preparation of reliable financial
disclosures.
Criteria for appointment of Independent Directors
The Independent Director shall be of high integrity with relevant expertise and
experience with Director having expertise in the fields of manufacturing, marketing,
finance, law, governance and general management, so as to have a diverse Board.
Remuneration Policy
The Company follows a policy on remuneration of Directors, Senior Management and
Employees, details of which are given in the Corporate Governance Report.
24. SECRETARIAL STANDARDS
The Company complies with all the applicable Mandatory Secretarial Standards issued by
the Institute of Company Secretaries of India (ICSI).
25. LISTING ON STOCK EXCHANGES:
The Companys 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, your
Directors confirm as under:-
i) that in the preparation of the accounts for the financial year ended 31st March
2020, the applicable accounting standards have been followed along with proper
explanation relating to material departures;
ii) that the Directors have selected such accounting policies and applied them
consistently and made judgments and estimates that were 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 of the Company for the year under review;
iii) that the Directors have taken proper and sufficient care for 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;
iv) that the Directors have prepared the accounts for the financial year on going
concern basis.
v) the Directors have laid down internal financial controls, which are adequate and
were operating effectively.
vi) the Directors have devised proper systems to ensure compliance with the provisions
of 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 and
the Individual Directors has been evaluated during the Financial Year ended 31st March,
2020.
28. PARTICULARS OF EMPLOYEES:
Disclosures pertaining to remuneration and other details as required under Section
197(12) of the Act read with Rule 5(1) of the Companies (Appointment and
Remuneration of Managerial Personnel Rules, 2014 are provided as per ANNEXURE -III.
29. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND
OUTGO:
The Information pursuant to Section 134(3)(m) of the Companies Act, 2013 read
with Rule 8 of The Companies (Accounts) Rules, 2014, is given in ANNEXURE IV to
this report.
30. AUDITORS:
i) STATUTORY AUDITORS:
In view of the provision of Section 139, 142 and other applicable provisions if any, of
the 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 three
financial year from 01/04/2018 to 31/03/2021 in the 31st Annual General Meeting held on
27th September 2018. M/s Sarda & Pareek (FRN 109262W) continues to be the
Statutory 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 Rule
9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014,
the Secretarial Audit Report submitted by Mr. Anil Kumar Somani, Company Secretary in
Practice 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 assistance
to the employees of the Company for the purpose of purchase or subscription for any shares
of the Company or its holding Company pursuant to Section 67(2) of the Companies Act,
2013.
32. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE:
The provisions of Section 135 of the Companies Act, 2013 are not presently
applicable to the Company.
33. ISSUE OF SHARES WITH DIFFERENTIAL VOTING RIGHTS:
The Company has not issued any shares with differential Voting Rights pursuant to the
provisions 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 any
of its employees, pursuant to the provisions of Rule 8 of the Companies (Share
Capital 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 causing
significant economic disturbance and slowdown of economic activities. Businesses are being
forced to cease or limit their operations for long or indefinite period of time. Measures
taken to contain the spread of the virus, including the countrywide lockdown imposed by
the Government of India, travel bans, quara ntines, social distancing, and closure of
non-essential services have triggered significant disruptions to businesses worldwide,
resulting into adverse impact on the operations of the Company. Your Companys performance
for the March, 2020 was affected as the quarter end activities relating to sales and
revenues could not be accomplished. Further, the impact of the COVID-19 will continue in
the ensuing months as the entire field force was unable to perform in field and generate
the secondary demand to the desired levels. However, your directors took immediate step to
counter the adverse impact and have been able to salvage the situation. The businesses are
on a recovery path post the lockdown primarily led by domestic traffic. Third party
verification of debtors and creditors could not be carried out at the end of the year and
are based on management certification.
37. ACKNOWLEDGEMENT
We thank our Customer, investors, Government and Semi Government Authorities,
Shareholders, Bankers and Financial Institutions and for their continued co-operation and
support. The Director also expresses their warm appreciation for the dedicated and sincere
services rendered by the Employees of the Company.
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