8K Miles Software Services Ltd Directors Report.

The Board of Directors of 8K Miles Software Services Limited have pleasure in presenting the Thirty Fourth Annual Report on the business & operations for the year ended March 31, 2019 along with the Audited Financial Statements for the year.

Financial Performance

The Financial performance of the Company for the year ended 31st March 2019 & 31st March 2018 is summarized below.

(Amount Rs. in Lakhs)

Particulars

Consolidated

Standalone

FY 19 FY 18 FY 19 FY 18
Revenue 84,219.15 84,923.87 5,694.44 5,056.52
Earnings Before Interest & Depreciation 17,765.20 30,087.02 2,366.76 1,560.76
Interest 1,162.49 971.49 969.66 755.42
Depreciation and Amortization 6,959.83 2,518.68 34.05 83.87
Profit Before Tax (PBT) 9,642.88 26,596.85 1,363.05 721.47
Profit After Tax (PAT) before Minority Interest 7,982.49 20,541.31 980.16 498.67
Profit After Tax (PAT) after Minority Interest 6,871.77 17,161.62 980.16 498.67

Financial Perspective (Consolidated)

On consolidated basis, revenue for the year is Rs 84219.15 lakhs signifying a decrease by 0.83% in Rupee terms. EBITDA margin for the current year is 20.89 % as compared to 35.08 % in previous year. Profit After Tax (PAT) after Minority Interest has decreased by 59.96 % to Rs.6871.77 Lakhs as compared to Rs.17161.62 Lakhs in the previous year. Total employee benefit expenses have increased by 23.33%. However, Employee benefits expenses as a percentage to revenue, has decreased by only 6.76% on Revenue.

Highlights of performance are discussed in detail in the Management Discussion and Analysis Report attached as Annexure D to this Report.

Share Capital

We have only one class of shares - equity shares of par value Rs.5 each. The authorized share capital as at March 31, 2019 was Rs.3,000 Lakhs divided into 600 Lakhs Equity shares of Rs.5 each. The paid-up share capital as at March 31, 2019 was Rs. 1,525.88 lakhs divided into 3,05,17,605 equity shares of Rs.5 each.

Dividend

Your company is exploring new business opportunities therefore it is necessary to conserve the funds to meet these investment opportunities. Thus, your Board has not recommended any dividend for the financial year 2018-19.

Transfer to Reserves

Your Company does not propose to transfer amounts to the general reserve out of the amounts available for appropriation and an amount of Rs.6871.77 Lakhs is proposed to be retained in the profit and loss account.

Public Deposits

Your Company has not accepted any deposits within the meaning of provisions of Chapter V of the Act read with the Companies (Acceptance of Deposits) Rules, 2014 for the year ended March 31, 2019.

Transfer of Unclaimed Dividend to Investor Education and Protection Fund

There was no amount required to be transferred to Investor Education and Protection Fund during the year.

Material changes and commitment if any affecting the financial position of the company

There are no material changes and commitments affecting the financial position of the Company between the end of financial year and the date of this Report.

Particulars of Loans, Guarantees or Investments

Loans, guarantees and investments covered under Section 186 of the Act form part of the notes to the financial statements provided in this Annual Report.

Board and Committee Meetings

The Board met seven times during the Financial Year 201819. The details regarding the board meetings and committee meetings are given separately in the Corporate Governance Report as Annexure B to this report. The gap intervening between two meetings of the board is within the stipulated time frame prescribed in the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.

Independent Directors

All Independent Directors hold office for a period of five years and are not liable to retire by rotation. The company has received declarations from all the Independent Directors of the company confirming that they meet the criteria of independence as prescribed under Section 149 (6) of the Companies Act, 2013 and Regulation 16 (1) (b) of the SEBI (LODR) Regulations, 2015. The terms of appointment of Independent Directors are available in the website of the company.

https://8kmiles.com/Investor/Policies/FamilirizationprogramforIndependentDirectors.pdf

During the year, Mrs. Padmini Ravichandran, an Independent Director considering the rich experience in the field of promotion and strategy planning, the Board of Directors requested to take part in active role and advise in the area of Marketing and promotional activities and to strategize business planning for the growth of the Company as and when required. Considering this, Board requested her for change in category from Independent Director to Non-Executive, NonIndependent Director w.e.f 13th February 2019.

There has been a change in category of Directorship of Mr. Gurumurthi Jayaraman from Independent Director to Nonexecutive, Non- Independent Director of the Company and w.e.f 6th September 2019.

Separate Meeting of Independent Directors

During the year, a separate meeting of Independent Directors was held on 13th February, 2019. The Independent Directors actively participated and provided guidance to the Company in all its spheres.

Nomination and Remuneration Policy

The Nomination and Remuneration Committee of the Company reviews the composition of board to ensure that there is appropriate mix of talent, qualification, experience and diversity to serve the interests of the shareholders of the Company.

Pursuant to Section 178 of the Companies Act, 2013, the Remuneration policy has been formulated to govern the terms of appointment and remuneration of Directors of the Company. The policy ensures that the remuneration paid is sufficient to retain and motivate the Directors of the company. The Remuneration policy is available in the website of the Company.

https://8kmiles.com/Investor/Policies/Remunerationpolicy.pdf

Subsidiary Companies

1) 8K Miles Software Services Inc. USA

(i) Nexage Technologies USA Inc

(ii) Cornerstone Advisors Inc. USA

2) 8K Miles Software Services FZE. UAE

3) 8K Miles Health Cloud Inc. USA (i) Serj Solutions Inc. USA

4) Mentor Minds Solutions and Services Inc. USA

A statement under Section 129 (3) of the Companies Act, 2013 in Form AOC-1 is attached as Annexure F to the Directors Report.

Consolidated Accounts

The Consolidated financial statements of the Company are prepared in accordance with the provisions of Section 129 of Companies Act, 2013 read with Companies (Accounts) Rules, 2014 and Regulation 33 of SEBI (LODR) Regulations, 2015.

The audited consolidated financial statements together with Auditors report forms part of the Annual report.

Conservation of Energy

a) Company ensures that the operations are conducted in the manner whereby optimum utilisation and maximum possible savings of energy is achieved.

b) No specific investment has been made in reduction in energy consumption.

c) As the impact of measures taken for conservation and optimum utilisation of energy are not quantitative, its impact on cost cannot be stated accurately.

d) Since the Company does not fall under the list of industries, which should furnish this information in Form A annexed to the aforesaid Rules, the question of furnishing the same does not arise.

Technology Absorption:

The Company continues to innovate, develop, adopt and use the latest technologies to improve the productivity and quality of its services. The Companys core business demands innovation & adoption of emerging technologies to stay ahead of competition. The Company has made significant investments in area of Platforms/Tools/Framework to reduce the Cloud transformation time for our customers while staying ahead of Competition.

The Company has taken following initiatives during the year to improve the productivity and quality of its services:

• Developed Patient-centric Health Exchange platform targeting to have Patient as the central and primary focus on the Blockchain technology. This will enable the platform to represent Patients medical history effectively, which is the foundation for Healthcare and Health Information Exchange. Such Exchange can be integrated with any EHR/ EMR solutions such as EPIC, Cerner and Meditech thus not impacting the way hospitals run today, while enabled Patients to have direct access to his/her own medical records on their mobile phones and tables. This not only ensures transparency but also enable the patients share the necessary medical records information with other Providers for effective continuation or validation of care.

• Integrating with Payers (Insurance companies) would extend Digital Experience of the Patients so the Exchange becomes a primary point of interaction as it would be able to address Insurance related capabilities such as Viewing EOBs (Explanation of Benefits), Managing Claims, Paying Copays/Deductibles and so on. Having those capabilities on top of Public Cloud means not only an effective PaaS (Platform as a Service) solution but also makes it possible to provide Big Data Analytics and Artificial Intelligence, which will be very valuable for Pharma and Medical research.

• Launched numerous Bots over our flagship CloudEz platform, started Devops-as-a-service to differentiate ourselves in the managed services marketplace; enhanced Multi-Domain Identity Services Platform (MISP) to help Cloud providers expand Software-as-a-Service offerings with Single Sign-on with hundreds of additional SaaS platforms. A new EzMFA (Multi Factor Authentication) offering on the cloud was also launched. DataEz, an 8K Miles Data Lake Platform-as-a-Service was launched along with AnalyticsEz which is our Data Analytics Plat- form-as-a-Service.

Foreign Exchange Earnings and Outgo (Rs.in Lakhs)

Particulars 2018-19
Earnings in Foreign Exchange 4556.38
Foreign Exchange Outflow 773.75

INTERNAL FINANCIAL CONTROLS

In accordance with Section 134(5)(e) of the Companies Act, 2013, the Company has Internal Financial Controls Policy by means of Policies and Procedures commensurate with the size and nature of its operations and pertaining to financial reporting. In accordance with Rule 8(5)(viii) of Companies (Accounts) Rules, 2014, it is hereby confirmed that the Internal Financials Controls are adequate with reference to the financial statements.

Other Laws:

Disclosure as required under Section 22 of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has in place a Policy on Prevention of Sexual Harassment (POSH) in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Frequent communication of this policy is done in assimilation programs and at regular intervals.

Pursuant to Rule 8(5) (x) of Companies Act (Accounts) Rules, 2014, the Company has complied with the provisions relating to the constitution of Internal Complaints Committee. During the year under review there were no complaints received by the Committee.

Appointment of Directors

Mrs. Padmini Ravichandran, Director retires by rotation at the forthcoming AGM and being eligible, offers herself for reappointment. The resolution seeking approval of the members for the re-appointment of Mrs. Padmini Ravichandran, has been incorporated in the Notice of the AGM of the company.

Mr. Raghunathan Aravamuthan was appointed as an Additional Director (Independent Category) with effect from 6th September 2019 for a period of 5 years subject to approval of members at the forthcoming AGM.

There has been a change in category of Directorship of Mr. Gurumurthi Jayaraman from Independent Director to Nonexecutive, Non- Independent Director of the Company and w.e.f 2nd November 2019, Mr. R.S. Ramani and Mr. Gurumurthi Jayaraman resigned from office of directorship of the Company.

Particulars of Employees

Disclosure pertaining to the remuneration and other details as required under Section 197(12) of the Act and the Rules framed thereunder is enclosed as Annexure A to the Boards Report.

Corporate Governance Report

Pursuant to Regulation 34 (3) and Schedule V of SEBI (LODR) Regulations, 2015 the Corporate Governance Report forms an integral part of this Report.

A detailed report on Corporate Governance is available as a separate section in this Annual Report as Annexure B to this report.

A Certificate from the Practising Company Secretary regarding compliance with the requirements of Corporate Governance attached as Annexure C to this report as stipulated in SEBI (LODR) Regulations, 2015.

The Chief Executive Officer & Managing Director/Chief Financial Officer (CEO/CFO) certification as required under the SEBI Listing Regulations is attached as Annexure E to this report.

Secretarial Audit

Pursuant to provisions of section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the company has appointed M/s. P Sriram & Associates, Practising Company Secretaries to undertake the Secretarial Audit of the Company for the year ended March 31, 2019.

The Secretarial Audit report forms part of the Annual Report attached as Annexure H to this report.

Explanation to Observations in the Secretarial Auditors Report:

S.NO Particulars Response
1. The company has entered into certain Related Party Transactions without taking prior approval of the Audit Committee and Board as required under SEBI (Listing Obligations and Disclosure) Requirements (LODR). Going forward the company will take suitable steps to obtain prior approval.
2. The Company had granted loans & has made investments to its subsidiary after taking approval of the board of directors as required u/s.179 of the Companies Act, 2013 but the filing of the resolution pursuant to sec.117 of the Companies Act, 2013 has not been complied with. The company is in the process of making an application for the condonation of delay and for filing the aforesaid form with Roc. The Company is in the process of making an application for the condonation of delay and for filing the aforesaid form with ROC and such delay was due to inadvertence.
3. The consolidated accounts for the year 2017-18 have been approved by the Board of Directors belatedly in the meeting held on 17th July 2018. Being the first year of IND AS adoption, the company declared Consolidated results belatedly and the delay was intimated to stock exchanges well in advance.
4. The company has not spent the CSR amount as required to be spent during the year under review as the committee was formed only on 13th February 2019. The CSR Committee was formed during the year and the company is looking for suitable and viable projects to spend the amount.
5. The company is yet to file IEPF-2 form relating unclaimed dividend declared in the Annual General Meeting held on 30th September 2017 The delay was due to inadvertence. The Company has taken sufficient precautions not to repeat such instances in the future.
6. Mr. Gurumurthy Jayraman and Ms. Padmini Ravichandran, who were the Independent Directors, redesignated as Non-Executive Non Independent Directors of the Company during the year under review, consequent to the observations made by the statutory auditors on appointment of their relatives in the company/overseas subsidiary post their appointment as employee/consultant. Since their appointment as an independent director presupposed the employment of such relatives, they shall not be disqualified to be an Independent Director U/s.149 of the Act.
7. The Boards report was signed by Managing Director of the Company as against the requirement of signing by the Managing Director and other director as contemplated U/s.134 of the Act. The Company missed out inadvertently.
8. There were certain lapses in compliance with Secretarial Standards. Inadvertently the Company missed to follow certain minor secretarial standards, and the Board assures that the same will be taken care in the forthcoming years.
9. During the year under review, it was observed that there were certain non-compliance in terms of disclosures to be made to the Committees & Board as contemplated under SEBI (LODR] Regulations, 2015. Inadvertently the Company missed to follow certain minor secretarial standards, and the Board assures that the same will be taken care in the forthcoming years.
10. The company had re-appointed the Managing Director who is a Non-resident Indian on 30th September 2017, which required the approval of the Central Government and during the year under review. The Company had filed the requisite form seeking the approval of the Central Government which was though not resubmitted with clarification within time frame, this has now been submitted afresh on 2nd November 2019.
11. The Company had made intimations to Stock Exchanges under SEBI (SAST) Regulation, 2011 and SEBI (PIT) Regulation,2015 on Pledge and sale of shares of the Promoter belatedly. The Company will comply & adhere to all regulations within the timelines in the forthcoming years.
12. The company has not filed form ODI with Reserve Bank of India thorough its Authorized dealers with respect to guarantees given on behalf of its subsidiary 8K Miles Software Services Inc., to Columbia Bank. The shareholders resolution passed during the AGM (under section 186 of Companies Act 2013) in the year 2015. The minutes of the Board of Directors meeting approving such corporate guarantee has been provided and the necessary intimation in the prescribed format to AD bank is in progress.

Secretarial Standards

The Company has complied with the applicable Secretarial Standards SS-1 on meetings of Directors and SS -2 on General Meetings issued by the Institute of Company Secretaries of India as per Section 118(10) of the Companies Act, 2013.

Extract of Annual Return

Pursuant to Section 92(3) of Companies Act, 2013 an extract of Annual Return in form MGT 9 as on 31st March 2019 is attached as Annexure I to this report.

Related Party Transactions

During the Financial Year ended 31st March 2019, all the contracts or arrangements or transactions entered into by the Company with the Related Parties were in the ordinary course of business and on an arms length basis and were in compliance with the applicable provisions of the Companies Act 2013 and the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

Further the Company has not entered into any contract or arrangement or transaction with the Related Parties which could be considered material in accordance with the Policy of the Company on materiality of Related Party Transactions.

The details of the transactions with related parties are provided in the financial statements. Policy on Related Party transactions are available in the website.

https://8kmiles.com/Investor/Policies/PolicyonRelatedpartytransactions.pdf

The details of the related party transactions as required under the Companies Act, 2013 and rules made thereunder are attached in Form AOC-2 as Annexure G.

Corporate Social Responsibility Initiatives

Corporate Social Responsibility (CSR) activities have been embedded in the value system of the Company. The Company continues to be actively engaged in CSR initiatives for development of the society through partnerships and continued to focus on to helping lesser privileged communities in areas like education, health & hygiene, culture & heritage and actively participated in other welfare projects.

The provisions of Section 135 of the Companies Act, 2013 became applicable to the Company with effect from 1st April 2018. Accordingly, the Board of Directors of the Company, at their meeting held on 13th February 2019 constituted the CSR Committee, the details of which are provided in the Corporate Governance report.

Based on the recommendation by the CSR Committee, the Board has approved the projects/programs to be undertaken as CSR activities for a sum of Rs. 8,38,189 during the financial year 2018-19. The Company is in the process of identifying the suitable and viable projects and ensure the objective of making a positive contribution to society through effective impact and sustainable development program.

Code of Business Conduct and Ethics

The Board of Directors has approved a Code of Conduct and Ethics in terms of Schedule IV of Companies Act, 2013 and Listing Agreement. All the Board Members and the Senior Management personnel have confirmed compliance with the Code for the year ended March 31, 2019. The annual report contains a declaration to this effect signed by the Managing Director.

Vigil Mechanism / Whistle Blower Policy

Pursuant to the provisions of Section 177(9) of the Act read with Rule 7 of the Companies (Meetings of Board and its powers) Rules, 2014 and Regulation 22 of the SEBI Listing Regulations, The Companys vigil mechanism allows Directors and employees to report their concerns anonymously about unethical behavior, actual/suspected fraud, violation of Code of Conduct/ business ethics. The vigil mechanism provides adequate safeguards against victimization of Directors and Employees, who avail this mechanism. The Company has established a Whistle Blower Policy and the same was hosted on the website of the Company.

Your Company hereby affirms that no Director/Employee has been denied access to the Chairman of the Audit Committee and that no complaints were received during the year.

https://8kmiles.com/Investor/Policies/WhistleBlowerPolicy.pdf

Details of Significant and Material orders passed by the Regulators or Courts or tribunals.

There are no significant material orders passed by the regulators or courts or tribunals which would impact the going concern status of the Company.

Evaluation of Boards Performance

The board has carried out an evaluation ofits own performance, and that of its directors individually. The manner in which the evaluation has been carried out is explained in the Corporate Governance Report. Detailed Note on the composition of the Board and its committees are provided in the Corporate Governance Report.

Reporting of Fraud

For the year under review, the statutory auditors have reported instances of suspected fraud committed against the Company by its officers or employees and reported the same to the Central Government as specified under Section 143(12) of Companies Act, 2013. The Board has taken cognizance of the suspected fraud and strengthening the internal control systems and appropriate response has been annexed to Auditors report

Directors Responsibility Statement

In terms of Section 134 (5) of the Companies Act, 2013, the Board of directors, to the best of their knowledge and ability, confirm:

i) That in the preparation of the annual accounts for the financial year ended 31st March 2019, the applicable accounting standards had been followed.

ii) 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 31st March 2019 and of the profit or loss of the Company for the year under review.

iii) The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) The directors have 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 system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively.

Acknowledgment and Appreciation

The Directors wish to place on record their appreciation for the committed service of all employees at all levels.

The Directors take this opportunity to thank the Shareholders, Financial Institutions, Banks, Customers, Suppliers and Regulatory & Governmental Authorities for their continued support to the Company.

Cautionary Statement

The Directors Report & Management Discussion and Analysis contains forward-looking statements, which may be identified by the use of words in that direction or connoting the same.

All statements that address expectations or projections about the future including but not limited to statements about your Companys strategy for growth, product development, market positions, expenditures and financial results are forward looking statements.

Your Companys actual results, performance & achievements could thus differ materially from those projected in such forward-looking statements. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements on the basis of any subsequent development, information or events.

For and on behalf of the Board of Directors

Sd/- Sd/-
Suresh Venkatachari Dinesh Raja Punniamurthy
Managing Director Director
DIN: 00365522 DIN: 03622140
Place : Chennai
Date : 2 November 2019