Palsoft Infosystems Ltd Directors Report

To,

The Members,

Palsoft Infosystems Limited, Jaipur

Your directors present the 26th Annual Report together with the Audited statement of Accounts of the Company for the year ended March 31, 2019.

1. FINANCIAL HIGHLIGHTS:

Particulars	For the year ended on 31st March, 2019	For the year ended on 31st March, 2018
Net Sales	8.25	0.00
Total income inclusive of Comprehensive income	37.90	32.30
Total Expense other than Interest, Depreciation & Tax	38.20	35.47
Profit for the year (Before Interest., Tax, Depreciation) [PBIDT]	(0.30)	(3.17)
Financial Expenses	0.04	0.05
Cash Profit/(Loss)	(0.34)	(3.22)
Depreciation/Amortisation	0.00	0.63
Net Profit/Loss before TAX and Extra Ordinary Items	(0.34)	(3.85)
Provisions for TAX	0	0
Extra Ordinary Gains/(Expenses)	0	0
Net Profit/(Loss) After Extra Ordinary Items	(0.34)	(3.85)

2. STATE OF COMPANYSAFFAIRS:

During the year under review, your Company has started the business activity of sale of software once again in the financial year 2018-2019. Further, the Company has recovered an amount of Rs. 38.94 Lakhs during the year under review for which the Company had made provision for bad and doubtful debts in the earlier years. Total income other than comprehensive income represents sale of software as well as write back of provision for doubtful loans and advances.

The Board of directors are exploring the possibilities to increase the business operations of the Company.

3. RECOMMENDATION OF DIVIDEND:

In the absence of profits, your directors regret their inability to recommend any dividend for the year on equity shares of the company.

4. DIRECTORSAND KEY MANAGERIAL PERSONNEL:

There was no change in composition of Board of Directors during the year under review.

During the financial year 2018-19, the Board of Directors has appointed Mrs. Rashmi Malhotra as Company Secretary and Compliance Officer w.e.f. May 23, 2018.

5. DECLARATION GIVEN BY INDEPENDENT DIRECTORS:

In line with the provision of Section 149 (7) of the Companies Act, 2013, the Board has received the declarations from the Independent Directors of the Company that they meet the criteria of Independence as prescribed under Section149(6) of the CompaniesAct, 2013 read with the Rules made thereunder.

6. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 134(3) (C) of the CompaniesAct, 2013, the Directors confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures;

ii. the Directors 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 ended on March, 31, 2019 and of the profit/loss of the company for that period;

iii. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of theAct for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv. the Directors had prepared the annual accounts on a going concern basis.

v. the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

vi. the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

7. MANAGEMENT DISCUSSIONANDANALYSIS REPORT: detailed Report on Management Discussion and Analysis is annexed in [Annexure- 1] that forms part of this Board Report.

8. AUDITORSAND THEIR QUALIFICATION:

i. Statutory Auditors –

During the year under review, the Board has ratified the appointment of M/s H.S. Darda & Co. Chartered Accountants, Jaipur (Firm Registration No. 000889C) as Statutory Auditors of the Company at the 25th Annual General Meeting to hold office from the conclusion of 25th Annual General Meeting till the conclusion of 26thAnnual General Meeting (subject to ratification by shareholders at everyAnnual General Meeting).

M/s H.S Darda & Co. have submitted a certificate, confirming their re-appointment, if ratified, will be in accordance with Section 139 read with Section 141 of theAct.

Members are requested to ratify the appointment of M/s H.S Darda & Co, Chartered Accountants from the conclusion of 26th Annual General Meeting till the conclusion of 27th Annual General Meeting and to authorize the Board of Directors to fix their remuneration.

ii. Secretarial Auditor –

In terms of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company has appointed M/s JPS & Associates, Company Secretaries (C.P. No.13099) as the Secretarial Auditor of the Company to undertake the Secretarial Audit of the Company for the financial year 2018-19. The Secretarial Audit Report was submitted by the Secretarial Auditors and the same is annexed in [Annexure-2] forming part of the Board Report.

Reply to Secretarial Auditors Qualifications: Qualification No. 1 & 2

(i) There were instances of late deposit of statutory dues and late filing of various forms and returns

Management Reply to above Qualification

Due to financial difficulties, there were instances of late deposit of statutory dues and late filing of various forms and returns.

Qualification No. 3

(ii) Non compliance of Section 134(3)(h) of the CompaniesAct, 2013

Management Reply to above Qualification

The Company has received an order of developing software from related parties after 25th Annual General Meeting. The Board has duly approved the proposed transactions from related parties after vetting from the audit Committee. The financial performance of the company is not so good to get prior approval of shareholders under Section 188 of the CompaniesAct, 2013 in this regard.

Hence, in the best interest of the Company, the directors have decided that it will intimate related party transactions in forthcoming Annual Report 2018-19 and also to complete the software assignment without waiting for the shareholders approval.

Qualification No. 4

Non compliance of Secretarial Standards at various occasions

Management Reply to above Qualification

The Company has complied with Secretarial Standards on regular basis. However, on some occasions, there were instances of lapse which will be taken care of in future.

iii. Internal Auditor –

In terms of Section 138 of the CompaniesAct, 2013 read with Rule 13 of the Companies (Accounts) Rules, 2014, the Board of Directors has appointed M/s P.Dangayach & Associates, Chartered Accountants as internal auditors of the company for the period of one year. He had submitted his report to the board of directors of the Company.

iv. Cost Auditor

The provision of Cost audit is not applicable to the Company as there is no business activity carried out by the Company during the year under review.

9. EXTRACT OFANNUAL RETURN:

The details forming part of the extract of the Annual Return in Form MGT-9 as per provisions of Section 92 (3) Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is annexed in [Annexure-3] forming part of the Board Report.

10. BOARDAND COMMITTEE:

The Board of Directors met four (4) times, 25.05.2018, 13.08.2018, 12.11.2018, 05.02.2018 during the Financial Year 2018-19, the details of which is annexed in [Annexure-4] forming part of the Board Report. The intervening gap between the meetings was within the period prescribed under the CompaniesAct, 2013.

The Board of Directors have delegated their powers in compliance with the provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 to following committees of the Board.

i. Audit Committee

ii. Nomination & Remuneration Committee.

iii. Stakeholders Relationship Committee.

iv. Share Transfer Committee.

The details of the abovementioned committees are annexed in [Annexure-4] that forms part of this Board Report.

11. RESERVES & SURPLUS:

In view of losses, there is no requirement to transfer any surplus to General ReserveAccount.

12. LOAN, GUARANTEE OR INVESTMENT:

The particulars of Loans, Guarantees or investment made under the provision of Section 186 of the Companies Act, 2013 are given in the Financial Statements that forms part of thisAnnual Report.

13. RELATED PARTY TRANSACTIONS:

TheAudit Committee reviews the policy from time to time and also reviews all the Related Party Transactions, to ensure that the same are in line with the provisions of Law and Policy. The Committee approves the Related Party Transactions and wherever it is not possible to estimate the value, approves limit for financial year, based on best estimates. All Related Party Transactions are reviewed by an independent accounting firm to establish compliance with law and limits approved. None of the transactions approved in the financial year breached Arms length and ordinary course criteria and those are within materiality threshold.

All the Related Party Transactions entered during the year were in ordinary course of the Business and done on Arms Length basis. The disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act, 2013 in FormAOC-2 isAnnexed asAnnexure 6 of the Board Report.

In conformity with the requirements of the Companies Act, 2013 read with Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the policy to deal with Related Party

Transactions was formulated which is also available on Companys website at www.palsoft.info.

14. FRAUDS REPORTED BYAUDITORS:

No frauds are reported by Auditors which falls under the purview of sub section (12) of Section 143 other than those which are reported to Central Government during the year under review.

15. POLICY ONAPPOINTMENT OF DIRECTORSAND REMUNERATION:

In terms of sub section (3) of Section 178 of the Companies Act, 2013 read with Regulation 19 of the Stock Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015, the policy pertaining to Directors Appointment and Remuneration is enumerated by the Company is annexed in [Annexure-4] that forms part of this Board Report.

16. ANNUAL EVALUATION OF THE BOARDS PERFORMANCE:

In terms of clause (p) of sub section (3) of Section 134 of the Companies Act, 2013 and as per the policy framed and approved by the Board of Directors of the Company in line with the terms of Regulation 19 of the Stock Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015, the annual evaluation of the Independent Directors, Board of Directors is annexed in [Annexure- 4] that forms part of this Board Report.

17. CORPORATE SOCIAL RESPONSIBILITY:

In terms of clause (o) of sub section (3) of Section 134 of the CompaniesAct, 2013 every Company is required to detail the expenditure made as Corporate Social Responsibility of the Company is required to be furnished, but as per Section 135 of the CompaniesAct, 2013 the provisions mentioned thereto doesnt apply on the Company.

18. CHANGE IN THE NATURE OF BUSINESS;

The Company is engaged in providing engineering and designing services along with the software development consultancy services. Further there was no change in the nature of business during the year.

19. BUSINESS RISK MANAGEMENTANDADEQUACY OF INTERNAL FINANCIAL CONTROL:

The main identified risks at the Company are commercial risks, legal & regulatory risk. Your company has established a comprehensive risk management policy to ensure that risk to the Companys continued existence as a going concern and to its development are identified and addressed on timely basis. Risk management strategy as approved by the board of directors is implemented by the company management.

Your Company maintains an adequate and effective Internal Control System commensurate with its size and complexity. Internal control systems provide, among other things, a reasonable assurance that transactions are executed with Management authorisation and that they are recorded in all material respects to permit preparation of financial statements in conformity with established accounting principles and that the assets of your Company are adequately safe-guarded against significant misuse or loss. An independent Internal Audit function is an important element of your Companys internal control system. The internal control system is supplemented through an extensive internal audit programme and periodic review by Management and Audit Committee.

The Company has in place adequate Internal Financial Controls with reference to Financial Statements. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.

20. MATERIAL CHANGESAND COMMITMENTAFFECTING COMPANYS BUSINESS:

Except as disclosed elsewhere in this report, no material changes and commitments which could affect the Companys financial position have occurred between the end of the financial year of the Company and date of this report.

21. COMPANIES CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURESANDASSOCIATE:

During the year under review, your Company doesnt have any Subsidiaries, Joint Ventures andAssociates.

22. SIGNIFICANT OR MATERIAL OREDRS PASSED BY REGULATORS, COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUSAND COMPANYS FUTURE OPERATIONS:

There is no significant or material order passed during the year by any regulators, courts or tribunals impacting the going concern status of the Company or its future operations.

23. SEXUAL HARRASMENT:

Your Company is committed to provide and promote a safe, healthy and congenial atmosphere irrespective of gender, caste, creed or social class of the employees. During the year under review, there was no case filed pursuant to the sexual harassment of Women at workplace (Prevention, Prohibition and Redressal)Act, 2013.

24. RATIO OF THE REMUNERATION OF EACH DIRECTOR TO THE MEDIAN EMPLOYEES REMUNERATION:

Disclosures with respect to the remuneration of Directors and employees as required under Section 197 of Companies Act, 2013 and Rule 5 (1) Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in [Annexure- 5] that forms part of this Board Report.

Details of employee remuneration as required under provisions of Section 197 of the Companies Act, 2013 and Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report. As per the provisions of Section 136 of the Act, the Report and Accounts are being sent to the shareholders of the Company and others entitled thereto.

25. DEPOSITS:

Your Company has not accepted any fixed deposits under Chapter V of Companies Act, 2013, during this financial year and as such, no amount on account of principal or interest on deposits from public was outstanding as on 31st March, 2019.

26. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

Information required under Section 134(3) (m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 for the financial year ended 31st March, 2019 in relation to the Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, there was insignificant business activity and no manufacturing activities and thus the expenses related to conservation of energy, technology absorption ad foreign earnings an outgo are nil.

27. VIGIL MECHANISM:

The Company has whistle blower policy. All employees of the Company have access to the Chairman of the Audit Committee in case they want to report any concern. The Policy on Vigil Mechanism and Whistle Blower Policy is annexed in [Annexure-4] that forms part of this Board Report.

28. DISCLOSURES PURSUANT TO SCHEDULE V OF THE STOCK EXCHANGE BOARD OF INDIA (LISTING OBLIGATIONSAND DISCLOSURE REQUIREMENTS), REGULATIONS 2015:

The disclosures applicable to the Company and specified under Schedule V of Stock Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations, 2015 are annexed in the Board Report at appropriate places.

29. GENERAL DISCLOSURES PRESCRIBED UNDER THE COMPANIESACT, 2013:

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. Issue of Equity Shares with differential rights as to dividend, voting or otherwise.

2. Issue of Shares (including Sweat Equity Shares) to employees of the Company under any scheme. The Company has not resorted to any Buy Back of its shares during the year under review.

3. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.

30. GENERAL DISCLOSURES PRESCRIBED UNDER SECURITIES EXCHANGE BOARD OF INDIA (LISTING OBLIGATIONSAND DISCLOSURE REQUIREMENTS) REGULATIONS 2015:

1. Affirmation of Compliance with the Code of Conduct of Board of Directors and Senior Management

In accordance with Listing Regulations executed with the BSE Limited, I, Anubha Gupta in my capacity as the Whole-time Director of the Company hereby confirm that all members of the Board of Directors and Senior Management Personnel of the Company have affirmed their compliance for the financial year 2018-19 with the Companys Code of Conduct.

2. Demat Suspense Account/ Unclaimed Suspense Account:

There is no requirement of opening a Demat Suspense Account/ Unclaimed Suspense Account; hence the Company hasnt opened any such account with any of the depositories.

31. ANNEXURES:

The list of Annexure forming part of the Board Report is as follows:

Name of the Annexure	Annexed
Management Discussion and Analysis Report	Annexure-1
Secretarial Auditor Report	Annexure-2
Extract of Annual Return (MGT-9)	Annexure-3
Composition of Board and Committee & Other disclosures of Companies Act, 2013	Annexure-4
Ratio of the remuneration of each director to the median employees remuneration	Annexure-5
Related Party Transactions AOC -2	Annexure - 6

32. APPRECIATION:

We thank our investors and bankers for their continued support during the year. We place on record our appreciation of the contribution made by our employees. The Directors thank to various statutory and administrative agencies and look forward to their continued support in the future.

		BY ORDER OF THE BOARD
	Sd/-	Sd/-
	(ANUBHA GUPTA)	(AMIT GUPTA)
DATE : AUGUST 23, 2019	WHOLE - TIME DIRECTOR	DIRECTOR
PLACE: JAIPUR	DIN: 02914072	DIN: 00058701