Kellton Tech Solutions Ltd Management Discussions

Jul 23, 2024|03:32:38 PM

Kellton Tech Solutions Ltd Share Price Management Discussions

Letter to Shareholders

Dear Shareholders

I am pleased to present our annual report for the financial year 2022-23. In this financial year,

Kellton explored new frontiers of growth and technology by making significant in building its capability in its core areas and service lines. Although the global economic conditions, geopolitical tension, and banking crisis in some advanced economies led to rising uncertainties and sluggish economic growth, our company successfully navigated the challengesandachievedsignificant . outcomes

In fiscal FY 2022-23, Kellton further increased its pace toward building a seamlessly integrated organization and leveraging synergies to drive client value and growth. To keep pace with the changing business demands and ever-evolving technology landscape, we continued making significant state-of-the-art Centers of Excellence (CoEs) as well as in fortifying our peoples capabilities.

The global realignment exercise helped foster new possibilities for Kellton and its valued customers. On the one hand, our practice leadership is expeditiously establishing new Centers of Excellence (COEs) and imbibing new practices to inspire our people to take complete ownership and build future-proof solutions for our clients. On the other hand, our delivery teams are focused on cultivating agile methodologies that revolve around our clients needs. Whether it pertains to sculpting pathways for an unbroken synergy between sales and delivery or reshaping the intricate trajectory of client feedback, our concepts are deeply entrenched in the commitment to deliver paramount customer value.

In todays dynamic businessinvestments landscape,in settingour innovative solutions, encompassing Generative AI, the Metaverse, Data Engineering, and Cloud, are increasingly empowering our clients for a resounding success. Secure Gen AI applications drive innovation and efficiency, while the Metaverse expertise reshapes engagement. Through expert Data Engineering, raw data becomes strategic foresight, all supported by our state-of-the-art Cloud infrastructure.

With this extensive range of tech and digital transformation solutions, were not just embracing innovation but propelling businesses across industries forward and leading clients into the future.

In this fiscal, we continued our progress toward elevating our approach to sales by adopting a consultative paradigm that transcends the traditional vendor-client relationship. To succeed in the new role, we shifted our focus to cultivating long-term partnerships with our customers. We are achieving this new balance in our client relationships by immersing ourselves in our clients unique challenges and helping them forge ahead and outpace the competition. With a team of dedicated experts, we craft bespoke, innovative solutions designed not only to address immediate needs but also to set the stage for enduring growth and prosperity.

AtKellton,ourpeopleareattheheartofeverything we do. We recognize that our team members are the driving force behind our success, and thats why weve established robust HR policies and a multitude of Learning and Development (L&D) programs. Our HR policies are designed to create a supportive, inclusive, and growth-oriented work environment. We prioritize the well-being of our employees, offering flexible work arrangements, comprehensive healthcare benefits, and a strong emphasis on work-life balance. As we adapt to the changing landscape of work, were also carefully planning our return-to-office strategy. Our approach is thoughtful and considers the safety and preferences of our team members. Were committed to providing a seamless transition back to the office while respecting individual needs. In tandem with our HR policies, our Learning and Development initiatives are geared toward nurturing talent and fostering continuous growth. We believe that investing in our peoples skills and knowledge is pivotal to our collective success.

In fiscal year 2022-2023, Kelltons relentless dedication to hard work and innovation has garnered notable recognition. In our debut appearance, we proudly emerged as a Leader in the Zinnov Zones ER&D 2022 report. This achievement stands as a resounding validation of Kelltons enduring commitment to delivering top-tier technology services. We are confident that this remarkable feat will further solidify Kelltons stature as a leader in the dynamic technology market. We are also pleased to share our recent recognition as a Webby Honoree, which underscores our commitment to excellence and innovation in the realm of Apps, dApps, and Software - Data Management, further enhancing our reputation in the tech industry.

In FY 2022-23, we continued to deepen our engagement with our clients and expand our partner ecosystem, resulting in more repeat business and sustained growth throughout the year. During the year, we also won several lucrative deals across our focused verticals and breadth of capabilities.


In FY 2022-23, Kellton successfully fortified its financial performance as the revenue for the financial year grew 8.96% over last year to Rs. 919.55 crores, with an EBITDA of Rs. 95.69 crores. Our EBITDA margins stand at 10.4%. The increase in revenue shows our commitment to delivering customer-centric solutions and winning regular large deals to ensure sustainable growth.


Generative Artificial Intelligence (GenAI) Is undeniably the future, and at Kellton, we are fully embracing this technology to transform the way we engage with people, partners, and customers and drive client value. In the next fiscal, we aim to integrate GenAI into our arsenal of core offerings so as to build secure and responsible AI solutions to enable our clients to become more agile, resilient, and responsive. By harnessing the power of AI, we are poised to revolutionize industries, enhance customer experiences, and drive unparalleled growth.

With remarkable progress on the OneKellton front resulting in closely integrated global operations, we are now primed to accelerate and deliver unparalleled customer value. Our seamless alignment across the organization ensures that we provide holistic solutions that exceed client expectations, setting us apart as a leader in our industry. Furthermore, our commitment to Environmental, Social, and Governance (ESG) principles underscores our responsibility as a business to preserve our planet and nurture growth in our communities and society at large. As a responsible entity, we are dedicated to making a positive impact through environmental and health initiatives. Our intrinsic desire to safeguard the environment drives us to take proactive measures, contributing to a sustainable and thriving future for all.

I extend my deepest thanks to everyone for their continued trust, confidence, and support.

Looking forward, we remain committed to harnessing the potential of new and emerging technologies to assist our clients to succeed in their industries and better prepare for impending disruptions. Our focus will also be on crafting strategies that place our people at the forefront, ensuring the safety, motivation, and resilience of our employees in the face of challenges. And, of utmost importance, we will continue refining our shareholder approach, making sustainability its cornerstone, and striving to create lasting value for the prosperity we all share.




Dear Members,

Your Directors take pleasure in presenting the 29th Annual Report covering the highlights of the finances, business, and operations of your Company. Also included herein are the Audited Financial Statements of the Company (standalone and consolidated) prepared in compliance with Ind AS accounting standards, for the financial year ended March 31, 2023.



During the period under review the Company recorded a total revenue from operations of 9,17,32,58,067 before asagainst 8,42,67,12,473intheprevious financial year. Profit tax (PBT) and Exceptional Items at 69,79,71,868asagainst 83,44,11,133inthepreviousfinancial Profitafter tax (PAT) at (1,26,80,88,401)* year. as against 70,44,51,151 in the previous financial year.

* In the FY_2022-23 the write off good will Rs.184 crores - non operational balance sheet item


During the period under review the Company recorded a total revenue from operations of 1,70,85,40,306 as against 1,23,18,15,618 in the previous financial year. Profit before tax (PBT) decreased as against 14,52,09,688 in the previous financial year. Similarly, Profit after tax 9,48,93,316 as against 10,88,98,508 in the previous financial year.

In recent years, our Company has undertaken several acquisitions, leading to the establishment of subsidiaries abroad. Additionally, we introduced the unified brand "OneKellton," which has prompted us to reevaluate the value of our previous brand assets which has no value anymore as we solely focus on projecting the Kellton brand. Based on the recommendations from our auditors, we made the decision to completely write off these as opposed to the previous method of in a complete write-off of Rs. 184 crores as an exceptional item in our financial records. Consequently, this action has led to a negative financial outcome for the entire fiscal the Company for the period ended March 31, 2023 are as follows:

(Amt in Rs.)




2022-23 2021-22 2022-23 2021-22

Revenue from operations

1,70,85,40,306 1,23,18,15,618 9,17,32,58,067 8,42,67,12,473
Other Income 2,22,48,451 1,03,49,638 2,22,48,451 1,19,70,741

Total Revenue

1,73,07,88,757 1,24,21,65,256 9,19,55,06,518 8,43,86,83,214

Total Expenditure

1,59,77,29,685 1,09,70,76,516 8,49,75,34,650 7,60,42,72,081

Profit/(Loss) be - fore Exceptional

13,30,59,072 14,50,88,740 69,79,71,868 83,44,11,133

Items and taxes

Exceptional Items* 7,79,212 1.20.948 (1,84,07,11,681)* 120,948

Profit/(Loss) before taxes

13,38,38,284 14,52,09,688 (1,14,27,39,813) 83,45,32,081
Tax Expense 3,89,449,68 3,63,11,180 12,53,48,588 13,00,80,930

Profit/(Loss) after Tax

9,48,93,316 10,88,98,508 (1,26,80,88,401) 70,44,51,151

Earnings per eq- uity shares in Rs.

0.96 1.16 (13.56) 7.39

Total Comprehen- sive Income for the period

9,23,49,512 11,18,17,765 (1,30,88,54,323) 71,28,22,798

* In the FY_2022-23 the write off good will - non operational balance sheet item


Your directors are pleased to report that in spite of severe impact on Countrys economy and almost all the industries with de-growth to a great extent, your Company has been able to with stand the impact and registered performance at the same level of FY23.


During the year, there was no change in the nature of business of the Company. Further, there was no significant change in the nature of business carried on by its subsidiaries.


The Company has not declared any dividend for the financial year March 31, 2023 and no amount is proposed to be transferred to the reserve. Instead, the Directors have recommended retaining the entire profits for the financial year ended March 31, 2023 in the profit and loss account.

Your Company did not have any amounts due or outstanding as at Balance Sheet date to be credited to the Investor Education and Protection Fund.

Pursuant to Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated a Policy on Dividend Distribution which is disseminated on the Companys website at .


Pursuant to Section 92(3) of the Companies Act, 2013 read with read with Rule 12 of the Companies (Management and Administration) Rules, 2014, copy of the Annual Return of the Company for financial year 2022-23 prepared in accordance with Section 92(1) of the Act has been placed on the website and is available at


There are no material changes and commitments affecting the financial position of the company which occurred between the end of the financial year to which the financial statements relate and the date of this report.


There are no significant and material order has been passed by Regulators or the going concern status and Companys operations in future.


The Authorized Share Capital of the Company stands at Rs. 60,00,00,000 (Rupees Sixty Crore only) divided into 12,00,00,000 (Twelve Crore only) Equity Shares of Rs. 5/- (Rupees Five) each and the Paid up Share Capital stand at Rs. 48,26,53,995 (Fourty Eight Crore Twenty Six Lakh Fifty Three Thousand Nine Hundred Ninety Five) divided into 9,65,30,799 (Nine Crore Sixty Five Lakh Thirty Thousand Seven Hundred Ninety Nine) Equity Shares of Rs. 5/- (Rupees Five) each.

I) The shareholders of the company have vide resolution passed at the 19th Annual General Meeting approved ESOP 2013 and has granted options to the employees.

Disclosure regarding Employees Stock Option Plan and forming part of the Directors Report for the year ended March 31, 2023 is as follows: Particulars


1. Date of Share holders approval ESOP Scheme, 2013 as approved on 27/12/2013 and amend- ment made on 27/09/2017 at the 23rd Annual General Meet- ing of the Company
2. Total number of options granted 37,85,000
3. Vesting requirements 12-60 months
4. The pricing formula Closing price of equity shares on the stock exchange where the shares are listed from vesting date
5. Maximum term of options granted Employees to exercise options within 3 years
6. Source of shares Primary
7. Method used to account for ESOS Fair Value

During the year under the review the Company has allotted 34,999 (Thirty Four thousand Nine hundred and Ninety Nine) equity shares of Rs. 5/- each upon exercising of ESOP by the employee of the Company.

The Company has not issued any shares with differential rights and hence no information as per provisions of Section 43(a)(ii) of the Act read with Rule 4(4) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

Option movement during the year (For each ESOS):


Number of options outstanding at the beginning of the period 13,01,839
Number of options granted during the year 0
Number of options forfeited / lapsed during the year 84,337
Number of options vested during the year 3,19,162
Number of options exercised during the year 34,999
Number of shares arising as a result of exercise of options 34,999
Money realized by exercise of options (INR), if scheme is implemented directly by the company 0
Loan repaid by the Trust during the year from exercise price received 0
Number of options outstanding at the end of the year 11,82,503
Number of options exercisable at the end of the year 6,29,993

Note: Details of disclosures pursuant to ESOP required under Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 are available at the


Details of loans, guarantees and investments covered under Section 186 of the Act, along with the purpose for which such loan or guarantee was proposed to be utilized by the recipient, form part of the notes to the financial statements provided in this Integrated Annual Report


The Company has not accepted/renewed any fixed deposits during the year under review.



Information on Conservation of energy as required under Section 134(3)(m) of the Act read with the Rules made thereunder is not applicable to the Company and hence, no annexure forms part of this report.


There is no information to be furnished regarding Technology Absorption as your Company has not undertaken any research and development activity in any manufacturing activity nor any specific technology is obtained from any external sources which needs to be absorbed or adapted.


In accordance with the provisions of Section 134 of the Companies Act, 2013, read with the

Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, the information relating to foreign exchange earnings and outgo is provided under Notes 35 (ii-a) to the Financial Statement for the year.


The Equity Shares of your Company are listed on BSE Limited and National Stock Exchange of India Limited.

The Company confirms that it has paid the Annual Listing Fees for the year 2022-23 to NSE and BSE where the Companys Shares are listed.



The composition of the Board of the Company is in accordance with the provisions of Section 149 of the Companies Act 2013 and Regulation 17 of the Listing Regulations, with an optimum combination of Executive, Non-Executive and Independent Directors.

The Board of Directors of your company is duly constituted. The Board consists of Total of 8 Directors, comprising of 3 Executive Directors, and 5 Non-Executive Directors including 4 Independent Directors. The Chairman of the Board is Executive Director. The complete list of Directors of the Company has been provided in the Report on Corporate Governance forming part of the Annual Report.

The Directors on the Board of the Company are persons with proven competency, integrity, experience, leadership qualities, financial and strategic insight. They have a strong commitment to the Company and devote sufficient time to the Meetings.

Your Directors believe that the Board must consciously create a culture of leadership to provide a long-term vision and policy approach to improve the quality of governance. The Boards actions and decisions are aligned with the Companys best interests.

The company has maintained an optimum combination of Executive and Non-Executive Directors.

Following Changes took place in the Directors and KMP of the Company during the Financial year 2022-23

• Ms. Surabi Jain, resigned from the position of Company Secretary and Compliance Officer of the Company w.e.f. close of business hours on July 06, 2022. The Board placed on record its sincere appreciation for the contribution made by her during her tenure.

• Mrs. Kunda Kalpana (DIN: 07328517), resigned from her office of the Independent Director of the Company w.e.f. close of business hours on May 30, 2022. The Board placed on record its sincere appreciation for the contribution made by her during her tenure

• The Board of Directors at their meeting held on July 27, 2022, approved the appointment of as Mr. Rahul Jain as Company Secretary and Compliance Officer of the Company with immediate effect.

• The Board of Directors at their meeting held on September 06, 2022 has appointed Ms. Geeta Goti (DIN- 06866598) as Independent Director, which was further confirmed by the Shareholders at the AGM held on September 30, 2022.

• Except the above, there were no changes in the Key Managerial Personnel of the Company.


i. In accordance with the provisions of Section 152(6) of the Companies Act, 2013 Mr. Srinivas Potluri (DIN: 03412700) Director of the Company retires by rotation at the ensuing Annual General Meeting (AGM) of the Company and being eligible, offers himself for re-appointment at the ensuing AGM. The Board on the recommendation of the Nomination & Remuneration Committee (NRC) has recommended his re-appointment ii. Re-appointment of Directors the Board, based on the performance evaluation and on recommendation of the NRC, has considered below re-appointments at its Meeting held on September 05 2023 subject to approval of the Members of the Company and on terms and conditions including remuneration as mentioned in the Notice of the AGM.

S. No. Name of the Director

DIN Designation Term Effective from
1 Krishna Chintam 01658145 Managing Director 05 year April 09, 2024
2 Karanjit Singh 06898258 Whole-Time Director 05 year Mar 29, 2024
3 Satya Prasad 08082530 Independent Director 05 year Sep 30, 2023

The Resolutions seeking approval of Members for the re-appointment of all the Directors are detailed in the Notice of the ensuing AGM along with their brief profile


The Board has set up various Committees in compliance with the requirements of the business & relevant provisions of applicable laws and layered down well documented terms of references of all the Committees. Details with respect to the Composition, terms of reference and number of meetings held, etc. are included in the Report on Corporate Governance forming part of the Annual Report.

During the year under review, all the recommendations/submissions made by the Audit Committee and other Committees of the Board were accepted by the Board.


As stipulated in the Code of Conduct for Independent Directors under the Act and the Listing Regulations, a separate Meeting of the Independent Directors of the Company was held on February 14, 2023 to review the performance of Non-Independent Directors (including the Chairman) and the Board as a whole.

The Independent Directors also assessed the quality, quantity and timeliness of flow of information between the Company Management effectivelyand reasonably perform and theBoard,whichisnecessaryto discharge their duties.


All the Independent Directors of your Company have submitted their declaration of independence, as required, pursuant to the provisions of Section 149(7) of the Act and Regulation 25(8) of the Listing Regulations, stating that they meet the criteria of independence, as provided in Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations and are not disqualified from continuing as Independent

Directors of your Company. Further, veracity of the above declarations has been assessed by the Board, in accordance with Regulation 25(9) of the Listing Regulations.

The Board is of the opinion that the Independent Directors of the Company hold highest standards of integrity and possess requisite qualifications, expertise & experience competency in the business & industry knowledge, financial expertise, digital & information technology, corporate governance, legal and compliance, marketing & sales, risk management, leadership & human resource developmentandgeneralmanagementasrequiredtofulfilltheir duties as Independent Directors.


The Board of Directors of the Company met 8 (Eight) times during the year under review. The details of these Board Meetings are provided in the Report on Corporate Governance section forming part of the Annual Report. The necessary quorum was present for all the meetings. The maximum interval between any two meetings did not exceed 120 days.


Pursuant to the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015, the Board has carried out an Annual Performance Evaluation of its own performance, the Directors individually as well as the evaluation of the working of its various Committees. Structured questionnaires were prepared after taking into consideration inputs received from the Directors, covering various aspects of the Boards functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance. A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of participation in the meetings and contribution, independence of judgment, safeguarding the interest of the Company and other stakeholders etc. The Board of Directors expressed their satisfaction with the evaluation process.

In a separate meeting held on February 14, 2023, the performance evaluation of the Chairman, Non-Independent Directors and the Board as a whole was carried out by the Independent Directors. The Independent Directors expressed their satisfaction with the evaluation process. The performance evaluation of all the Directors, Committees and the Board was carried out by the Nomination & Remuneration

Committee, Independent Directors and Board at their respective meetings.

a. More effective board process b. Better collaboration and communication c. Greater clarity with regard to members roles and responsibilities d. Improved chairman managing directors and board relations

The evaluation process covers the following aspects - Self evaluation of directors.

• Evaluation of the performance and effectiveness of the board.

• Evaluation of the performance and effectiveness of the committees

• Feedback from the non executive directors to the chairman. - Feedback on management support to the board.


The Board of Directors has satisfied itself that plans are in place for orderly succession for appointment to the Board of Directors and Senior Management


The Company has complied with the applicable Secretarial Standards. The Directors state that applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to ‘Meetings of the Board of Directors and ‘General Meetings, respectively have been duly followed by the Company


Pursuant to the requirement under section 134 (3) and (5) of the Companies Act 2013, with respect to Directors Responsibility Statement, your board of directors to the best of their knowledge and ability confirm that: a. In the preparation of the annual accounts for the financial year ended March 31, 2023, the applicable accounting standards have been followed and there are no material departures. b. 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 of the Company for that period. c. They have taken proper and sufficientcare 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. d. They have prepared the annual accounts of the Company on a going concern basis. e. They have laid down internal financial controls, which are adequate and are operating effectively. f. They have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.


The Management Discussion and Analysis Report highlighting the industry structure and developments, opportunities and threats, future outlook, risks and concerns etc. is furnished separately and forms part of this report. Annexure- V


Following are the Subsidiary and Step-down subsidiaries of the Company:

Name of the Entity


Kellton Dbydx Software Private Limited Wholly Owned Subsidiary
Kellton Tech Inc Wholly Owned Subsidiary
Kellton Tech Solutions Inc Wholly Owned Subsidiary
Kellton Tech Limited (Ireland) Wholly Owned Subsidiary
Evantage Solutions Inc Step Down Subsidiary
(Wholly owned subsidiary of Kellton Tech Inc)
Vivos Professionals Services LLC Step Down Subsidiary
(Wholly owned subsidiary of Kellton Tech Inc)
Prosoft Technology Group Inc Step Down Subsidiary
(Wholly owned subsidiary of Kellton Tech Solutions Inc)
Intellipeople Inc Step Down Subsidiary
(Wholly owned subsidiary of Kellton Tech Solutions Inc)
Kellton Tech (UK) Limited Step Down Subsidiary
(Wholly owned subsidiary of Kellton Tech Limited)
Lenmar Consulting Inc Step Down Subsidiary
(Wholly owned subsidiary of Kellton Tech Solutions Inc)
SID Computer Group Inc Step Down Subsidiary
(Wholly owned subsidiary of Kellton Tech Solutions Inc)
Talent Partners Inc Step Down Subsidiary
(Wholly owned subsidiary of Kellton Tech Solutions Inc)
Planet Pro Inc Step Down Subsidiary
(wholly owned subsidiary of Kellton Tech Inc)
Tivix Europe S P Z.O.O (Poland) Step Down Subsidiary
(Wholly owned subsidiary of Kellton Tech Limited)
PlanetPro Canada Inc. Step Down Subsidiary
(Wholly owned subsidiary of Kellton Tech Limited)
PlanetPro Asia Pte. (Singapore) Step Down Subsidiary
(Wholly owned subsidiary of Kellton Tech Limited)


The Consolidated Financial Statements of the Company and its Subsidiaries ("the Group") for the year ended March 31, 2023 are prepared in accordance with generally accepted accounting principles applicable in India, and the Indian Accounting Standard 110 (Ind AS 110) on ‘Consolidated Financial Statements, notified by Companies (Accounting Standards) Rules, 2015, ("Indian Accounting Standards") by and to the extent possible in the same format as that adopted by the Company for its separate financial statements

A statement containing brief financial details of the subsidiaries for the financial year ended March 31,

2023 in the prescribed format AOC-1 is appended as Annexure - II to the Boards Report. The annual accounts of these subsidiaries and the related detailed information will be made available to any member of the Company/its subsidiaries seeking such information at any point of time and are also available for inspection by any member of the Company/its subsidiaries at the registered office of the Company. The annual accounts of the subsidiaries will also be available for inspection, as above, at registered office of the respective subsidiary companies.


I. Statutory Auditor:

In terms of provisions of Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, at the 26th Annual General Meeting held on September 28, 2020, the Company has appointed M/s. Anant Rao & Malik, Chartered Accountants having FRN: 006266S), Hyderabad, as statutory auditors of the Company to holdtheoffice for the term of 5 (Five) years till the General Meeting of the Company. They have confirmed that they are not disqualified from continuing as auditors of the company.

The Notes on financial statement referred in the Auditors Report are self explanatory and do not call for any further comments. The Auditors Report does not contain any qualification, reservation or adverse remark.

The Audit Committee reviews the independence and objectivity of the Auditors and the effectiveness of the Audit process Mr. V. Anant Rao Partner, M/s. Anant Rao & Malik , Chartered Accountants, Statutory Auditors of the Company, has signed the Audited Financial Statements of the Company

II. Statutory Auditors Report

The Statutory Auditors Report issued by M/s. Anant Rao & Malik Chartered Accountants for the year under review does not contain any qualification, reservations, adverse remarks or disclaimer. The Notes to the Accounts referred to in the Auditors Report are self-explanatory and therefore do not call for any further clarifications under Section 134(3)(f) of the Act. Further, pursuant to Section 143(12) of the Act, the Statutory Auditors of the Company have not reported any instances of frauds committed in the Company by its officers or employees.

III. Secretarial Auditor and Secretarial Audit Report:

In terms of the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed Mr. NVSS Suryanarayana Rao, Practicing Company Secretary, as Secretarial Auditor of the Company for the financial year 2022-23 and secretarial audit report for the financial year ended March 31, 2023 is enclosed as Annexure-VII and Annexure-VII(A).


The Company is engaged in Information Technology & related activities and hence provisions related to maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Act are not applicable.


The Board at its Meeting held on May 30, 2022 had appointed Mr. Ravindhar Reddy, Chartered Accountants, as Internal Auditors for the FY 2022-23 to conduct the internal audit of the various areas of operations and records of the Company. Further, the Board at its Meeting held on May 30, 2023 has re-appointed M/s. Mr.

Ravindhar Reddy, Chartered Accountants as the Internal Auditors for a term of 5 (five) years commencing from FY 2023-24 to FY 2027-28. The periodic reports of the said internal auditors are regularly placed before the Audit Committee along with the comments of the management on the action taken to correct any observed deficiencies on the working of the various departments.

Management responses to observations in Secretarial Audit Report:

The following are the responses of the management against the observations made by the Secretarial Auditor:

S. No. Observation

Response by Management

1. The company has filed the Form MGT-15 vide SRN. F63392997 dated 23-08-2023 with respect to Report on Annual General Meeting with Registrar of Companies with a delay of 297 days. However, the same has been filed with additional fee and same has been taken on record by Registrar of Companies, Telangana.

There was a delay in filing certain due to the administrative approval process. The Company will ensure timely compliance in future

As required under the provisions of SEBI LODR Regulations, a certificate confirming that none of the Directors on the Board have been debarred or disqualified by the Board/Ministry of Corporate Affairs or any such statutory authority obtained from M/s. NVSS Suryanarayana Rao., Practicing Company Secretaries is a part of the Corporate Governance report under Annexure VI(A)


In terms of Regulation 34(2)(f) of the Listing Regulations, the initiatives taken by the Company from an

Environmental, Social, Governance & Sustainability perspective are provided in the Business Responsibility & Sustainability Report ("BRSR") which is presented in a separate section and forms part of the Annual

Report and is also uploaded on the website of the Company at

BRSR includes details on performance against the nine principles of the National Guidelines on Responsible Business Conduct and a report under each principle, which is divided into essential and leadership indicators is also part of it. The Business Responsibility & Sustainability Committee overviews the BRSR and policies as may be required from time to time.


Kellton Tech believes in balancing growth priorities with social responsibility. Indeed, even in its commercial undertakings, it attaches special weightage to those projects concerning the welfare of masses. With healthcare, child education and destitute care as its focus areas, Kellton Tech has contributed to its bit to society through various initiatives in these arenas. Kellton Tech is providing scholarship to needy, deserving students for further education.

A Report on Corporate Social Responsibility (CSR) Policy and Activities as per Rule 8 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is appended to this annual report as Annexure – IX and link to the CSR policy is available at the website


Pursuant to the provisions of section 177 of the Companies act, 2013 and the rules framed there under and pursuant to the applicable provision of Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has established a mechanism through which all stake holders can report the suspected frauds and genuine grievances to the appropriate authority. The Whistle blower policy which has been approved by the Board of Directors of the Company has been hosted on the website of the Company viz.


The Company has risk management policy in place which mitigates the risk at appropriate situations and there are no elements of risk, which in the opinion of Board of Directors may jeopardize the existence of the Company.

Pursuant to SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations 2021, top 1000 listed companies based on market capitalization is mandatorily required to constitute the Risk Management Committee and adopt the Risk Management Policy of the Company. Meetings of the risk management committee were held on May 30, 2022, August 13, 2022, November 14, 2022 and February 14, 2023.


The Company has adopted policy on Prevention of Sexual Harassment of Women at Workplace in accordance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company also has in place duly constituted Internal Complaints Committee (ICC) to consider and resolve all sexual harassment complaints reported by women. The constitution of the ICC is as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the committee includes external members from NGOs or with relevant experience. Investigation is conducted and decisions made by the ICC at the respective location, and a senior women employee is the presiding officer over every case. Majority of the total members of the IC are women.

The policy on sexual Harassment policy which has been approved by the Board of Directors of the Company has been hosted on the website of the Company viz.

During the financial year ended March 31, 2023, the Company has not received any complaints pertaining to Sexual Harassment.


The Company has formulated a policy on materiality of related party transactions and manner of dealing with related party transactions which is available on the Companys website at the link: https://www.kellton. com/legal-policies

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in its ordinary course of business and on an arms length basis.

Particulars of every contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto shall be disclosed in Form No. AOC-2 as Annexure -III

All transactions with related parties were reviewed and approved by the Audit Committee. Omnibus approval is obtained for related party transactions which are of repetitive nature and entered in the ordinary course of business and on an arms length basis. A statement giving details of all related party transactions entered pursuant to omnibus approval so granted is placed before the Audit Committee on a quarterly basis for its review. Details of transactions, contracts and arrangements entered into with related parties by the Company, during FY 2022-23, is given under Notes to Accounts annexed to Financial Statements, which forms part of this Annual Report.


The Company has adopted a policy for determining material subsidiary, in line with the requirements of the Listing Agreement. The Policy on Material Subsidiary is available on the website of the Company at https://


A table containing the particulars in accordance with the provisions of Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended as Annexure - IV to this Report.

In terms of Section 136 of the Companies Act, 2013 the same is open for inspection at the Registered Office of the Company.

Copies of this statement may be obtained by the members by writing to the Company Secretary at the

Registered Office of the Company.

The ratio of the remuneration of each Director to the median employees remuneration and other details in terms of Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are enclosed in Annexure – IV and forms part of this Report


As required under the SEBI Guidelines, the Chairman and Managing Director and the Chief Financial Officer Certification is attached to this Report


The Company has a proper and adequate system of internal control to ensure all the assets are safeguarded and protected against loss from unauthorized use or disposition and the transactions are authorized, regarded and reported correctly. The internal control is supplemented by an extensive program of internal audits, review by management and procedures. It is designed to ensure that the financial and other records are reliable for preparing financial statements and other data, and for maintaining accountability of assets.

The Companys Internal Audit Department is regularly carrying out the Audit in all areas. Normal foreseeable risks of the Companys Assets are adequately covered by comprehensive insurances.


The Company has adequate Internal Financial Controls consistent with the nature of business and size of the reliability of financial transactions with adequate operations,toeffectively checks and balances, adherence to applicable statues, accounting policies, approval procedures and to ensure optimum use of available resources. These systems are reviewed and improved on a regular basis. These systems ascertain that transactions are authorised, recorded and reported correctly. The Company ensures adherence with all internal control policies and procedures as well as compliance with all regulatory guidelines in respect of the business, risk, branches and support functions. The Audit Committee of the

Board of Directorsreviewstheadequacyofthesesystems.Allsignificantaudit observations of the Internal Auditors and follow-up actions were duly reported upon and discussed at the Audit Committee. During the year under review, the ‘Internal Control Framework was evaluated on the design and effectiveness of controls by an Independent Risk Advisory Consultant and was found to be in accordance with the Internal Financial controls requirement of Companies Act, 2013. It has a comprehensive budgetary control system to monitor revenue and expenditure against approved budget on an ongoing basis.


The Company enjoyed cordial relations with its employees during the year under review and the Board appreciates the employees across the cadres for their dedicated service to the Company, and looks forward to their continued support and higher level of productivity for achieving the targets set for the future.


During the period under review, there was no application made nor any proceeding initiated or pending under the Insolvency and Bankruptcy code, 2016.


During the period under review, there was no one time settlement with any Bank.


Your Company treats its "human resources" as one of its most important assets. Your Company continuously invests in attraction, retention and development of talent on an ongoing basis. A number of programs that provide focused people attention are currently underway. Your Company thrust is on the promotion of talent internally through job rotation and job enlargement.


Your Directors wish to express their appreciation for the support and co-operation extended by the bankers, financial institutions, joint development partners, shareholders, government agencies and other business associates. Your Directors wish to place on record their deep sense of appreciation for the committed services by the employees of the Company.

For and on behalf of the Board of

Kellton Tech Solutions Limited

Sd/- Sd/-

Krishna Chintam Niranjan Chintam

Managing Director Whole-Time Director

DIN: 01658145

DIN: 01658591

Place : Hyderabad

Date : 05.09.2023



Management Discussion and Analysis




The world economy is entering a phase of low growth despite showing remarkable resilience in the face of heightened uncertainties, stubborn inflation, rising interest rates, and the Ukraine conflict. According to the International Monetary Fund (IMF), in its April 2023 "World Economic Outlook, "the economic growth is forecast to bottom out at 2.8% for 2023 against 3.4% in 2022 before rising modestly to 3% in 2024."

Fresh headwinds, such as the turbulence in the US banking sector, disruptions in local supply chains, and a sharp devaluation of major start-ups across economies, are further deteriorating the possibilities of robust economic growth. In order to successfully navigate these challenges, businesses are likely to spend cautiously and keep a strict watch on cash flows, at least in the first three quarters of 2023. To further secure and strengthen supply chains from local and global disruptions, businesses can also plan to move production to their home countries or stable economies.


In the aftermath of the pandemic, the US economy grappled with the impact of inflation and financial uncertainties, resulting in a notable deceleration. With the GDP growth rate hovering at 2.1% and unemployment surpassing 5%, challenges were evident. Nonetheless, a positive outlook emerges for the years 2023 and 2024 as the economy anticipates a resurgence. As inflation is moving in the right direction and can gradually drop down to the Feds targeted 2% by late 2024, hopes are high for a revitalized economic trajectory.


The Eurozone economy is facing a notable shift in growth dynamics. The advanced economies of Europe are expected to experience a considerable deceleration in growth, dropping from 3.6 percent last year to a mere 0.7 percent this year. Similarly, emerging economies, with the exception of T?rkiye, Belarus, Russia, and Ukraine, are also poised to witness a sharp decline in growth, plummeting from 4.4 percent to 1.1 percent. However, the outlook shows a glimmer of hope as a mild recovery is anticipated for the next year, with growth rates projected to rebound to 1.4 percent and 3 percent for advanced and emerging economies, respectively.


In FY 23, the Indian economy witnessed an impressive 6.9 percent real GDP growth, driven by robust domestic demand, government-backed infrastructure investment, and strong private consumption.

However, global headwinds, such as tightening financial conditions, inflationary pressures, and geopolitical tensions, are likely to modern the growth rate to 6.3 percent in the next fiscal from the estimated 6.9 percent in FY 23.


The last few years have witnessed remarkable growth for the IT industry as businesses are increasingly investing in next-generation technologies to become disruptors in their industries rather than being disrupted. According to Gartner, worldwide IT spending is expected to reach USD 4.6 trillion in 2023, marking a 5.5% increase from the previous year. While consumer purchasing power is being eroded by inflation, resulting in a decrease in device spending, enterprise IT spending is anticipated to stay robust.

Businesses increasingly rely on technology to scale automated services, streamline supply chains, enhance cyber resilience, and achieve sustainability goals.

In the fiscal year 2023, the industry continued with its robust performance in terms of revenue generation.

Driven by the increasing pressure for digital transformation and cyber resilience and a multitude of factors, such as a hybrid work model and reduced overhead costs, the industry will continue to perform in the next fiscal year. Digitalization is also gaining momentum, with the technology industry seeing a 32-34% share of digital revenues in their total revenue mix and an estimated 2 million digitally competent professionals.

Indian IT industry Indian IT industry is on an impressive growth trajectory. According to NASSCOM, India remains a global talent hub, with the technology sector employing over 5.4 million workforce and creating 290,000 new jobs in FY23. With a 36% digitally skilled workforce, the industry remains on the top in terms of AI skills penetration, the 2nd largest in terms of AI/ML BDA talent pool globally, and the 3rd globally in terms of installed supply of Cloud professionals.

Despite several global headwinds and moderation in demand seen in the last quarter of the financial year

2023, the Indian IT industrys value proposition of resilience, agility, and a transformation partner for global enterprises has enabled the industry to strengthen its leadership in core and emerging areas. It expects spending on digital to continue with evolving priorities as per the changing macroeconomic environment.

inIn further fiscalyear2023,Kelltonmadesignificant unifying our diverse capabilities and global talent to generate better outcomes for our customers. As we set our sights on our next revenue milestone of US$ 300 million, the entirety of FY23 was dedicated to meticulously laying down the foundational elements required to achieve this ambitious target and propel us even further in the new fiscal. Despite the challenges posed by persistent global headwinds and impending recessions in a few of our markets, our unwavering commitment to excellence helped us emerge as a leader in the realm of digital transformation and win record-high large deals. As we transition into the fiscal year are hopeful for a more inclusive and sustainable growth for all our stakeholders, including our employees, partners, and customers.


In the financial year 2022-23, we made significant progress under OneKellton - a that has been designed to combine our global competencies seamlessly to create liquid ways to serve our customers across geographies. Our entire ecosystem, consisting of our people, partners, and processes, now reflects the inherent values of OneKellton, i.e., collaboration, innovation, and generating sustainable value for clients. We aim to achieve more tangible results in the new fiscalyear, driving our ability to innovate and generate new revenue streams.

During the year, Kellton successfully stepped into a new era of possibilities. The new pillars that now support the growth and vision of Kellton include the following:

Harnessing the power of AI:

Generative AI (GenAI) has helped us lay the groundwork for the future of work at Kellton. In the year under review, we have proactively invested our resources in leveraging artificial intelligence to positively impact our employee productivity and experience and craft meaningful solutions for our customers, who range from start-ups to Fortune 1000 companies. Our deep association with global AI partners and our leadership in the innovative technology landscape uniquely position us as a trusted strategic partner in developing and deploying secure GenAI solutions. Global delivery support:

In FY23, Kellton further perfected its global delivery model as was envisioned under the OneKellton program. Through our optimized global delivery model (GDM), we aim to build more robust service pipelines for our customers across industries and geographies. The Centers of Excellence (CoE), the Kverse Experience

Center, and a hybrid model of on-shore, off-shore, and near-shore capabilities have helped us forge a new path to build more disruptive solutions for our clients that can help them reshape the future in their respective industries.

Strategic transformation partner of existing clients:

Businesses today need transformative solutions to drive change and gain a competitive advantage. Kellton draws on its globally distributed team of 1800+ people and years of experience staying at the bleeding edge of technological revolution to craft robust and future-ready solutions for its clients. The unrelenting focus on engineering success for the businesses we serve makes us a ‘strategic transformation partner of choice for organizations that see technology as a strategic differentiator and help us win repeat business.

Strengthening partnership ecosystems:

Our vast partnership ecosystem is one of the key strengths that help us build on our digital and business transformation capabilities and deliver next-generation solutions. Some of the industry-leading forces that help us redefine digital for our clients include names like AWS, SoftwareAG, SAP, Snowflake, Alteryx, Cloudera, and Big Commerce. In the next fiscal year, we will continue to strengthen our partnerships network so as to build more secure and dependable solutions for our clients.

Expanding the growth horizons of our people:

Our employees are the force behind our ability to dream, design, and deliver human-centered experiences. Through these people, we successfully take on the uncertainties of the future and convert challenges into opportunities. To help them unleash their full potential and bring their whole selves to work every single day, we constantly expose them to new learning experiences and programs that can help them learn, unlearn, and relearn. In 2022-23, we conducted a series of employee learning and development programs to augment the skills of our workforce.


Unmanaged risks and uncertainties can have a detrimental impact on business operations and profitability.

At Kellton, we manage the complex web of risk types by anchoring risk management in our day-to-day decision-making and embedding security and compliance in our products and services early on. Our robust enterprise risk management framework (ERM) enables us to proactively and effectively identify, assess, treat risks across the organization.

In addition to continually optimizing our risk management framework, we have been investing in building an effective risk-aware culture where our people are well-versed with all the risk types that Kellton is exposed to. The most significant risks and concerns that we confront as a global organization include, but are not limited to, the following:

Risk Types



Regulatory risks

Non-compliance with changing regulations across multiple jurisdic- tions could result in penalties, business loss, debarment, reputational damage, and criminal prosecution

Measures being implemented to ensure seamless compliance:

• Implementation of a compliance monitoring system to effectively monitor the compliances across various jurisdictions globally

• Constitution of Internal Compliance Committee for governance on compliances globally

• Engagement with external consultancy firms for timely updation of the Compliance Obligation Registers in line with changing laws

Macroeconomic and geopolitical risks

Geopolitical disruptions such as the Russia-Ukraine conflict and resultant vola - tility in the global econo- my may adversely affect the outlook and cause

• Geopolitical developments like trade wars, sanctions, export controls, and border conflicts, which may impact supply chains, lead to the loss of new opportunities, and harm the IT sec- tors global business environment, are moni- tored closely

inflation. This, in turn, can result in reduced revenue growth opportunities that can impact client spending and business costs

• Macro-economic parameters, such as GDP growth, interest rate, and inflation, are tracked to identify uncertainties in economic condi- tions that may impact the countries in which we operate

• A diversified revenue mix across different geographies and domains helps to mitigate this risk

Human capital risks

Human capital risks are as- sociated with high attrition levels, involuntary churn, and employee productivity due to Work From Home (WFH) High attrition levels adversely impact resource deployment on new and existing projects. Partial work from home carries the risk of loss of produc- tivity and associated cyber security and data protec- tion risks

• Proactive projections of resource demand • Strengthening HRBP functions to address em- ployee concerns proactively to control attrition

Cyber security risks

Cyber security and privacy risks can lead to a series of disasters for an organiza- tion. Unauthorized use or

• Data protection controls (encryption, data leakage prevention, etc.) and Cyber security tools (firewalls, antivirus, etc.) are deployed to prevent cyber-attacks and data exfiltration

unlawful disclosure of sen- sitive data/information can attract hefty fines/penal - ties from regulators and/ or damage the companys reputation

• User awareness and supplier risk management is rigorously implemented to ensure the effec - tive deployment of data security controls

• Security controls are continuously monitored and rigorously assessed through Annual Privacy Audit, IT Audits, External Health Check Audits, and Customer Audits

Future pandemic risks

The Companys opera- tions could be adversely affected due to the impact of the pandemic on em- ployee health and safety

• Various programs have been implemented in the organization to maintain employee health and safety, which helped to combat the situa- tion, especially in the earlier part of this year.

• Vaccination drives for employee safety 24x7 emergency medical helpline Establishment of COVID-19 emergency response cell

Foreign exchange risks

With the majority of the business being export- driven, the company is ex- posed to foreign exchange risk

• The organization has an approved Financial Risk Management Policy, which provides a framework for managing the foreign exchange risk emanating out of the business. The policy enables the implementation of a layered hedg- ing program at the Company level.


Kellton believes in empoweringitspeople.Overtheyears,wehaveputinsignificantefforts and investments in building a people-centric culture that helps us attract, retain, and engage top talent in the industry.

Offering a holistic and fulfilling experience builds the core of our people strategy at Kellton and helps us cater to the diverse needs of our employees.

In line with our vision laid down under the OneKellton initiative, our various employed learning and development programs have helped us bring our globally distributed teams together on one common platform to improve collaboration and customer service. In order to create a more unified and connected organization driven by employee-friendly policies and a strong belief in diversity, equity, and inclusion in the workforce, we further strengthened our HR leadership by onboarding key people in strategic HR roles. They will be primarily responsible for spearheading new initiatives and building a more integrated and collaborative ecosystem of people, processes, and partners that can help our clients outperform their competitors.

As of March 31, 2023, the total workforce at Kellton was 1671. We are growing as a family and taking pride in our cultural and ethnic diversity. Gender parity and womens participation across departments are at the forefront of our growth approach. Equal growth and role opportunities for all while letting go of the prejudices of age, gender, or favoritism is the principle we work on. We are pleased to inform you that approximately 22% of our total current workforce are women.

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