Kellton Tech Solutions Ltd Directors Report

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Kellton Tech Solutions Ltd Share Price directors Report

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.

1. HIGHLIGHTS OF FINANCIAL PERFORMANCE:

Consolidated:

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

Standalone:

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.)

PARTICULARS

STANDALONE

CONSOLIDATED

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

2. REVIEW OF PERFORMANCE AND STATE OF THE COMPANYS AFFAIRS:

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.

3. CHANGE IN THE NATURE OF BUSINESS, IF ANY:

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.

4. DIVIDEND AND TRANSFER TO RESERVES:

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 https://www.kellton.com/legal-policies .

5. ANNUAL RETURN

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 https://www.kellton.com/annual-general-meeting

6. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

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.

7. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE:

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

8. SHARE CAPITAL:

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:

S.no Particulars

Description

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):

Particulars

Details
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 websitewww.kellton.com

9. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:

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

10. PUBLIC DEPOSITS:

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

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

CONSERVATION OF ENERGY:

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.

TECHNOLOGY ABSORPTION:

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.

FOREIGN EXCHANGE EARNINGS AND OUTGO :

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.

12. LISTING WITH STOCK EXCHANGES:

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.

13. DIRECTORS, KEY MANAGERIAL PERSONNEL & BOARD MEETINGS :

COMPOSITION OF THE BOARD

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.

DIRECTOR(S) LIABLE TO RETIRE BY ROTATION

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

COMMITTEES OF THE BOARD

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.

SEPARATE MEETING OF INDEPENDENT DIRECTORS

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.

DECLARATION BY INDEPENDENT DIRECTORS

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.

14. NUMBER OF MEETINGS OF THE BOARD:

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.

15. BOARD AND PERFORMANCE EVALUATION:

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.

16. SUCCESSION PLAN

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

17. COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS:

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

18. DIRECTORS RESPONSIBILITY STATEMENT::

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.

19. MANAGEMENT DISCUSSION & ANALYSIS

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

20. SUBSIDIARY COMPANIES:

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

Name of the Entity

Status

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)

21. CONSOLIDATION OF ACCOUNTS:

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.

22. AUDITORS

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).

IV. MAINTENANCE OF COST RECORDS & COST AUDIT

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.

V. INTERNAL AUDITORS

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)

23. BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT (BRSR):

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 www.kellton.com.

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.

24. CORPORATE SOCIAL RESPONSIBILITY:

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 www.kellton.com

25. WHISTLE BLOWER POLICY/VIGIL MECHANISM:

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. https://www.kellton.com/legal-policies

26. RISK MANAGEMENT POLICY:

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.

27. POLICY ON SEXUAL HARASSMENT:

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. https://www.kellton.com/governance-new.

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

28. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

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.

29. MATERIAL SUBSIDIARY POLICY:

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:// www.kellton.com/legal-policies

30. PARTICULARS OF EMPLOYEES:

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

31. CHAIRMAN & MANAGING DIRECTOR AND CHIEF FINANCIAL OFFICER CERTIFICATION

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

32. INTERNAL AUDIT & CONTROLS:

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.

33. INTERNAL FINANCIAL CONTROL SYSTEMS:

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.

34. INDUSTRIAL RELATIONS:

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.

35. THE DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016)

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

36. THE DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF

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

37. HUMAN RESOURCES:

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.

38. ACKNOWLEDGEMENTS:

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

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