Melstar Information Technologies Ltd Directors Report.

To the Members, Your Directors have pleasure in presenting the 31st Annual Report along with Audited Financial Statements for the year ended 31st March, 2018.

1. Financial RESuLTS:

(Rs. in Lakhs
2017-18 2016-17
Net Sales/ Income from Operations 335 2,102
Other Operating Income 364 12
Operating Profit/(Loss) before Interest and Depreciation (PBIDTA) (31) (157)
Finance Cost 194 165
Depreciation 28 63
Operating Profit/(Loss) before Tax (253) (386)
Other Income, net - -
Net Profit/(Loss) before tax and Exceptional Items (253) (386)
Exceptional Items - -
Net (Loss) before tax and after Exceptional Items (253) (386)
Provision for Taxation (19) (2)
Net (Loss) after Tax (272) (389)
Other comprehensive income (5) (4)
Deficit Brought Forward From Previous Year (1,033) (640)
Less: Adjustments relating to Fixed Assets on Application of Schedule- II of the Companies Act, 2013 - -
Balance Carried to Balance Sheet (1,309) (1,033)
Face Value of Equity Shares (in Rupees) 10 10
EPS - Basic and Diluted (Before Exceptional Item) (in Rupees) (1.90) (2.72)
EPS - Basic and Diluted (After Exceptional Item) (in Rupees) (1.90) (2.72)
Book Value per Share (in Rupees) 0.89 2.81

2. OPERATIONS:

The total sales of the Company for the financial year ended on 31st March, 2018 were Rs.335 Lakhs as against Rs. 2,101 Lakhs during the last financial year ended on 31st March, 2017. Similarly the net Profit/ Loss before tax during the year were Rs.253.18 Lakhs Loss as against Rs. 386.39 Lakhs Loss in the previous year.

3. DIVIDEND:

In view of the current year and carried forward losses, the Directors regret their inability to recommend any dividend to the Equity Shareholders of the Company for the year under review.

4. FINANCIAL STATEMENTS OF SUBSIDIARY:

The company doesnt have any subsidiary as on 31st March 2018.

5. EVENT SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS:

No major event has occurred subsequent to the date of Financial Statements.

6. CHANGE IN THE NATURE OF BUSINESS IF ANY:

There is no change in the nature of business during the year under the review.

7. 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.

8. 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 provisions 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.

9. 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 ANNEEXURE- I to this Report.

10. NUMBER OF BOARD MEETING:

The Board of Directors met 7 (Seven) times in the year, the details of which are provided in the Corporate Governance Report.

11. 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.

12. RELATED PARTY TRANSACTIONS:

No transactions were entered with related party during the year under review. 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 the transactions with Related Parties to be provided in FORM AOC-2 is annexed herewith as ANNEXURE-II.

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.

13. RISK MANAGEMENT:

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 properly defined framework.

14. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

There are no significant and material orders passed by the Regulators/Courts which would impact the going concern status of the Company and its future operations.

15. 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.

16. HUMAN RESOURCES:

Your Company treats its human resources as its important asset and believes in its contribution to the all round growth of your Company. Your Company takes steps, from time to time, to upgrade and enhance the quality of this asset and strives to maintain it in agile and responsive form. Your Company is an equivalent opportunity employer and practices fair employment policies. Your Company is confident that its Human Capital will effectively contribute to the long term value enhancement of the organization.

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.

17. 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 t he Companies Act, 2013 (the Act).

18. 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, 2018.

19. DIRECTORS AND KEY MANAGERIAL PERSONAL:

Mr. Durgesh Jadhav was appointed as Independent and Non Executive Director w.e.f. 13th November 2017.

Mr. Bhalchandra Shinde was appointed as Non Executive Director w.e.f. 13th November 2017.

Mrs Sadhana Patil was appointed as Independent and Non Executive Woman Director w.e.f. 09th February 2018.

Mrs. Kirti Tripathi resigned as Non Executive Director of the company w.e.f. 29th May, 2017 Mr Ashish Mahendrakar resigned as Whole time Director w.e.f. 14th September, 2017.

Mr Milind Prabhudesai resigned as Independent and Non Executive Director w.e.f. 14th September, 2017.

Mrs Minal Pote resigned as Independent and Non Executive Director w.e.f. 14th September, 2017.

Mr Pritam Dhanawade resigned as Non Executive Director w.e.f. 14th September, 2017.

Ms Rasika Kadam resigned as Independent and Non Executive Director w.e.f. 13th November, 2017.

Mr Suresh Mitbaokar resigned as Non Executive Director w.e.f. 13th November, 2017.

Ms Soni Kanojia resigned as Independent and Non Executive Director w.e.f. 09th February, 2018.

Mr. Ashish Mahendrakar was appointed as Chief Financial Officer and Chief Executive Officer w.e.f 29th May, 2017 and 13th November 2017 respectively.

Ms. Krina Metha resigned as Company Secretary & Compliance Officer of the Company w.e.f. 29th July, 2017.

Mrs. Farida Bhaita was appointed as Company Secretary & Compliance Officer of the Company w.e.f. 11th May 2018.

Present Directors and Key Managerial Personnel of the Company are:

(i) Directors:

SR. NO. NAME DIN DESIGNATION DATE OF APPOINTMENT
1 Mr. Durgesh Jadhav 08000007 Additional Director 13.11.2017
2 Mr. Bhalchandra Shinde 07978440 Additional Director 13.11.2017
3 Mrs. Sadhana Patil 06565115 Additional Director 09.02.2018

(ii) Key Managerial Personnels:

SR. NO. NAME DESIGNATION DATE OF APPOINTMENT
1 Mr. Ashish Mahendrakar Chief Financial Officer 29.05.2017
Chief Executive Officer 13.11.2017
2 Mrs. Farida Bhatia Company Secretary & Compliance Officer 11.05.2018

The Board records its appreciation of all Directors for their guidance advice during the meeting.

Declaration from independent Directors:

As per the provisions of Companies Act, 2013, the independent directors of the Company shall be appointed by the members for a term upto five years, and no independent director shall be liable to retire by rotation.

Further Mr. Durgesh Jadhav and Mrs. Sadhana Patil have given declaration to the Company under Section 149(6) of the Companies Act, 2013, that they qualifies the criteria of independence mentioned under that sub-section. Accordingly it is proposed to appoint said Mr. Durgesh Jadhav and Mrs. Sadhana Patil as an Independent Directors not liable to retire by rotation for a term of five (5) years from the ensuing Annual General Meeting.

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 and Senior Management Employees, details of the same are given in the Corporate Governance Report.

20. 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 2018, 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 loss 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.

21. 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, 2018.

22. 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.

The information required pursuant to Section 197(12) of the Companies Act, 2013, read with rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014- Nil.

23. 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.

24. AUDITORS:

i) Statutory Auditors:

Pursuant to the provision of Section 139 of the Companies Act, 2013 and the Companies (Audit & Auditors) Rule, 2014, M/s Sarda & Pareek (FRN 109262W), Chartered Accountants, the retiring Statutory Auditors of the Company, after receiving the approval from the shareholders be re-appointed as the auditors of the Company from the conclusion of this Annual General meeting till the conclusion of 34th Annual General Meeting. The Company has received a confirmation from the said Auditors that they are not disqualified to act as Auditors and are eligible to hold office as Auditors of the Company.

Necessary resolution for re-appointment of the said Auditors is included in the Notice of Annual General Meeting for seeking approval of members.

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 Company Secretary in Practice is enclosed in FORM MR-3 as a part of this report ANNEXURE-V.

iii) Compliance with Secretarial Standards:

The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings.

iv) Cost Auditors:

Cost Audit is not applicable to the Company.

25. PURCHASE OF SHARES OF THE COMPANY:

The Company does not give 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.

26. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE:

The provisions of Section 135 of the Companies Act, 2013 are not presently applicable to the Company.

27. 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.

28. 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.

29. EMPLOYEE STOCK OPTION

The Company does not have any Employee Stock Option Scheme for its employees.

30. APPRECIATION:

Your Company is grateful for the continued co-operation and support extended to it by the Government and Semi-Government Authorities, Shareholders, Financial Institutions and Banks. Your Directors also express their warm appreciation for the dedicated and sincere services rendered by the Employees of the Company.

For and on behalf of the Board of Directors

Place: Mumbai Durgesh Jadhav Bhalchandra Shinde
Date:10.08.2018 Director Director