secmark consultancy ltd share price Management discussions


Your Company was incorporated as a Private Limited Company under the Companies Act, 1956 on August 3, 2011 and got listed on BSE SME platform on October 1, 2020. Over these years your Company has expanded its client base and offerings consistently and now offers Consulting, Technology and Outsourcing services to a large number of leading financial market participants. Your Company offers services in the areas of compliance, operations, risk management, software development, etc. The major clients include stock and commodity brokers, depository participants, stock exchanges, wealth managers, research analysts, insurance corporate agents, portfolio managers, alternative investment funds, investment advisors, NBFCs etc. As can be observed from the financial results, your Company has been able to post a fairly reasonable growth in its topline from Rs. 1,517.14 Lakh in the previous year to Rs. 1,827.08 Lakh in the current year effectively resulting in a growth of over 20%. Though the bottom line is in red, the Company has incurred heavy expenses to the tune of Rs. 812 Lakhs (PY - Nil) for consultancy service for handover and knowledge transfer of the software applications that your Company had purchased. Further the depreciation on these applications was Rs. 195.98 Lakhs (PY – 108.23 Lakh). The Loss of your Company is Rs. 526.23 Lakhs.

The team of Company comprises of competent, qualified and experienced professionals and employees having working experience with exchanges and financial market participants in India. Company has two wholly owned subsidiary viz. Markets on Cloud Private Limited and Sutra Software Services Private Limited and one associate viz. Trakiot Solutions Private Limited.

Financial Results and Growth:

(Amount in Rs. Lakh)

Year Ending on:

31.03.2021 31.03.2022 31.03.2023
Total Operating Income 758.90 1454.17 1743.72
Employee Costs 285.01 386.35 504.61
Other Expenses 295.87 658.73 1744.86
Profit/(Loss) Before Interest Depreciation and
178.02 409.09 (505.75)
Taxation
Depreciation 22.04 112.64 239.63
Profit/(Loss) Before Interest and Taxation 155.97 296.46 (745.38)
Finance Cost 8.38 3.96 37.25
Operating Profit/(Loss) Before Tax 147.60 292.50 (782.63)
Operating Profit/(Loss) After Tax 89.17 274.90 (782.63)
Non-Operating Income /(Expense) 52.23 62.91 45.97
Profit/ (Loss) Before Tax 199.82 355.41 (699.41)
Current Tax 58.42 17.6 0
Provision for Deferred Tax 15.89 71.88 (173.18)
Profit/ (Loss) After Tax 157.29 265.93 (526.23)

Your Company provides consulting, technology and outsourcing services to financial market participants. In the last Annual Report, your Company had sensitised you about the possible impact of global events and the possibility of reduced spending by your clients due to reduction in investment by Private Equity Investors (PE) investors.

Though some of the aforesaid came true in the current year, your Company managed to grow its topline by rationalising the price of the software and services offered to its clients. This year seems to be a little better than the previous year and the results are expected to show up in the financials of your Company.

Further your Company has also acquired iBeats back office product suit from Comtek Bizsoft Pvt. Ltd. in the current year and the revenues from there from will add to the business of your Company. This acquisition has added more than 70 financial market participants as clients of these products. Further your Company has also taken up a few capital intensive projects like revamping its PMLA products it acquired from Analyze N Control, which will help enhance the business and reduce the cost of support in the years to come. Your Company has substantial cash outflows for software purchase and consultancy services with regards to software purchase from TradePlus Technologies LLP and Comtek Bizsoft as under in the coming year:

(Amt. in Rs.)

fSoftware

Apr 1, 2023 to Mar 31, 2024 Apr 1, 2024 to Mar 31, 2025 Apr 1, 2025 to Mar 31, 2026 Apr 1, 2026 to Mar 31, 2027

TradePlus Back Office product suit (Paid in FY 2023-24)

5,36,00,000 Nil Nil Nil

Comtek Bizsoft Pvt. Ltd. for software purchase (Paid in FY 2023-24)

6,21,00,000 Nil Nil Nil

Comtek Bizsoft Pvt. Ltd. (For Consultancy)

Nil 1,50,00,000 1,50,00,000 1,50,00,000

Comtek Bizsoft Pvt. Ltd. (For Sales Commission)*

Nil 3,00,00,000 3,00,00,000 4,00,00,000

* Sales Commission is payable at a rate of 50% of sales in the next year for sales in previous year. If the total sales for the period April 1, 2023 to March 31, 2026 is less than Rs. 20 Crores then the minimum Commission payable will be Rs. 10 Crores across the span of 3 years and if the sales are more than Rs. 20 Crores, then the sales commission will be paid at 50% of sales value subject to a maximum of Rs. 15 Crores over a span of 3 years. Therefore the numbers may vary accordingly.

Our Competitive Strength

We believe that the following strengths contribute to our success and position us well for future growth:

1. Qualified and Experienced Team

2. Company is managed by professionals having a varied experience in financial services. The team of the Company exhibits a synergy of both, qualified professionals (Chartered Accountants, Cost and Management Accountants, Company Secretaries, Advocates, CISAs, DISAs, Engineers, Technology Experts, Management Professionals etc.) as well as experienced personnel having diversified experience in the fields of Software Development, Operations, Outsourcing, Corporate Consultancy and Compliance, and the like. Since management has been actively involved in the

Financial Services Industry and has gained requisite domain knowledge, experience and industry networks, going forward they would be able to take benefits of opportunities in the Financial Services Industry thereby improving our operational performance and brand value.

3. Diversified Portfolio of Services offered

4. The Tech Initiatives:

Companys major clientele are brokers and depository participants and they require the following 5 major type of software / services: i. E-KYC Software – for client on-Boarding. ii. Trading and Risk Management Software – for enabling clients to transact on stock exchanges. iii. Back Office Software – for handling back-office operations of Broking and DP businesses. iv. PMLA Software – for client screening and transaction monitoring. v. Compliance Software – for managing compliance activities. Your Company had shared in the previous annual report that it has all Software Applications in its fold except Trading and Risk Management Software. Your Company has already commenced the development of online RMS software of its own and the same shall hit the markets before March 31, 2024.

5. Long-term relationships

Long term client relationships provide the foundation for our business. Client list includes stock brokers, depository participants, stock exchanges, wealth managers, research analysts, insurance companies, insurance brokers, corporate agents, portfolio managers, investment advisors, merchant bankers, NBFCs, banks etc. Companys track record of delivering solutions to complex business problems backed by demonstrable industry and technology expertise has helped to forge strong relationships with clients.

The relationship with clients has grown with a good interest in the latest products of Compliance Management and E-KYC. Both these products are seeing good traction.

Opportunities and Threats Opportunities

• Your company has increased its offerings by acquisition of Software and added several clients. There is further scope of increasing the business and adding more clients.

• Favourable market conditions on the back of overall growth in the sector.

• Government push to increase securities market out reach across India and increase in products offering for different types of investors

• Acceptance of outsourcing as a suitable business model.

• Technology driven services.

• Regulatory stringent approach requiring specialized teams to handle tasks and situation.

• Using technology to reduce transactions cost, improve compliance.

Knowing above opportunities, threats shall be as:

• Global uncertainties, high inflation in various countries and possibilities of wars can pose a significant risk to business as it will reduce the spending capacity of the clients of your Company.

• Changing regulatory landscape.

• Large scale influx of competitors (Requires several capabilities which cannot be acquired overnight)

• Cyber Attacks (Controls to be placed for prevention, detection and correction).

• Technological advancements.

Segment–wise or product-wise performance

As the Company is dealing in only in one industry and offers products and services that are interlinked to each other segment reporting is not applicable to the Company. There is no identical geographical segment of the Company as there are no major differences in factors affecting the segment of market.

Outlook

As aforesaid, with the increase in products on offer there is higher possibility of business with each client. Also, addition of clients can result in substantial growth in business. The overall outlook of the business looks positive.

Risks and Concerns

Your Company has substantial foreseeable cash outflows for the consultancy services for software applications it acquired and this will have an impact on the profitability in the near term.

The Company recognizes the importance of well-structured system to identify and manage the different elements of risk. The management of the Company regularly identifies reviews and assesses risks involved in its various business activities and work out guidelines for mitigating the same. The Risk factors have been determined on the basis of their materiality. The following factors have been considered for determining the materiality.

1. Some events may have material impact qualitatively instead of quantitatively;

2. Some events may not be material individually but may be found material collectively;

3. Some events may not be material at present but may be having material impact in future.

Our systems are potentially vulnerable to data security breaches, whether by our employees, or our service providers or others that may expose sensitive data to unauthorized persons. We process and transfer data, including personal information, financial information and other confidential data provided to us by our clients. Although we maintain systems and procedures to prevent unauthorized access and other security breaches, it is possible that unauthorized individuals could improperly access our systems, or improperly obtain or disclose sensitive data that we process or handle. Data security breaches could lead to the loss of intellectual property or could lead to the public exposure of personal information (including sensitive financial and personal information) of our clients investors or our employees. Any such security breaches or compromises of technology systems could result in institution of legal proceedings against us and potential imposition of penalties, which may have an adverse effect on our business and reputation.

Internal control systems and their adequacy.

The Company has proper and adequate systems of internal controls. These have been designed to provide reasonable assurance that all assets are safeguarded and protected against loss from unauthorized use or disposition and that all transactions are authorized, recorded and reported correctly and the business operations are conducted as per the prescribed policies and procedures of the Company.

Discussion on financial performance with respect to operational performance.

The Key highlights pertaining to the business of the Company for the financial the year ended have been given hereunder. In the Consolidated Financial Statements, total income was Rs. 1743.72 lakhs, Rs. 1454.17 lakhs and Rs. 758.90 lakhs for the Financial Year 2023, 2022 and 2021. Profit/(Loss) after Tax for the similar fiscal years mentioned above were Rs. (526.21)* lakhs, Rs. 265.93 lakhs and Rs. 157.29 lakhs respectively. For the Standalone Financial Statements, total income was Rs. 1743.72 lakhs, Rs. 1454.17 lakhs and Rs. 758.90 lakhs for the Financial Year 2023, 2022 and 2021 respectively. Profit/(Loss) after Tax for the similar fiscal years mentioned above were Rs. (526.23)* lakhs, Rs. 265.93 lakhs and Rs. 157.29 lakhs respectively.

*Note - The Company has paid Rs. 5.12 Crore to TradePlus Technologies LLP and Rs. 3 Crores to Rekha Shah (Analyze N Control Private Ltd.) for consultancy service regarding transfer of knowledge and capabilities for the software applications acquired from them.

The performance of the Company in the opinion of the Directors is satisfactory. Your Directors are hopeful to further improve the growth rate in turnover and profitability in current year.

Material developments in Human Resources / Industrial Relations front, including number of people employed.

The Directors want to place on record their appreciation for the contribution made by employees at all levels, who through their steadfastness, solidarity and with their co-operation and support have made it possible for the Company to achieve its current status. Human resource is the key element for our Companys growth strategy and handling the day to day activities within the organization. We focus on attracting and retaining the best possible talent. Our team is a blend of experienced, professional with expertise in capital markets. Our Company strongly believes that its human resources are the key enablers for the growth of the Company and important asset. Hence, the success of the Company is closely aligned with the goals of the human resources of the Company. Currently our company has employed 88 employees. Taking into this account, our Company continued to invest in developing its human capital and establishing its brand on the market to attract and retain the best talent. The employee relations continue to be cordial and harmonious.

Details of significant changes (i.e., change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefore:

Ratios

2022-23

2021-22

Growth

Reasons

Trade Receivable Turnover ratio

13.25

8.19

61.72%

The Company has been able to grow its sales while recovering the sales proceeds faster, resulting in lesser average receivables.

Net Capital Turnover Ratio

4.29

1.46

194.10%

Sales has increased on account of better performance and working capital requirement has reduced on account of efficiency in recovery of debtors.

Debt Equity Ratio

0.56

0.05

948.42%

The Company has availed Overdraft (OD) against its FDs for payment of Rs. 8.12 Crores towards consultancy charges for the services related to the software applications purchased by the company, thus increasing the outstanding liability. Further Shareholders equity has reduced on account of loss suffered by the company because of this large payment.

Ratios

2022-23

2021-22

Growth

Reasons

Return on Capital Employed

-35.18

23.45

-250.02%

The Company has paid consultancy charges of Rs. 8.12 Crores for the services related to the software applications purchased by the Company and a depreciation of Rs. 1.95 Crores on these software applications resulting into losses. Further the capital employed has increased on account of increased in OD of Rs. 8.91 Crore as reduced by the losses for the current year increased in OD.

Current Ratio

1.33

4.31

-69.19%

The Company has availed OD against its FDs for payment of Rs. 8.12 Crores towards consultancy charges for the services related to the software applications purchased by the company.

Operating Profit Margin (%)

-0.45

0.19

-337.42%

As aforesaid the Company has paid consultancy charges of Rs. 8.12 Crores for the services related to the software applications purchased by the company and a depreciation of Rs. 1.95 Crores on these two software applications resulting into losses.

Net Profit Margin (%)

-0.30

0.18

-265.02%

As aforesaid the Company has paid consultancy charges of Rs. 8.12 crores for the services related to the software applications purchased by the company and a depreciation of Rs. 1.95 crores on these two software applications resulting into losses.

Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof

Particulars

2022-23 2021-22 Growth Reasons

Return on Networth

-0.29 0.11 -354.92% The Company has paid consultancy charges of Rs. 8.12 crores for the services related to the software applications purchased by the company and a depreciation of Rs. 1.95 crores on these software applications resulting in decrease in return on networth.

Form AOC-1

(Pursuant to first proviso to sub-section (3) of section 129 of Companies Act, 2013 read with rule 5 of Companies (Accounts) Rules,2014) Statement containing salient features of the financial statement of subsidiaries/associate companies/ joint ventures

Part "A": Subsidiaries

(Amount. in Rs)

Name of Subsidiary

Markets On Cloud Private Limited Sutra Software Services Private Limited

Reporting period for the subsidiary concerned, if different from the holding Companys reporting period holding Companys reporting period

April 1, 2022 to March 31, 2023 October 7, 2022 to March 31, 2023

Reporting currency and Exchange rate as on the last date of the relevant financial year in the case of foreign subsidiaries.

Not Applicable Not Applicable
Share capital (Rs.) 1,00,000 1,00,000
Reserves & surplus 1,338 1,369
Total assets 1,11,418 1,01,775
Total Liabilities 10,080 406
Investments - -
Turnover 6,000 7,109
Profit before taxation 351 1,775
Provision for taxation 80 406
Profit/(Loss) after taxation 271 1,369
Proposed Dividend - -
% of shareholding 100% 100%

The following information shall be furnished:

1. Names of subsidiaries which are yet to commence operations – Markets On Cloud Private Limited and Sutra Software Services Private Limited

2. Names of subsidiaries which have been liquidated or sold during the year- None

Part "B": Associates & Joint Ventures

(Amount. in Rs. Lakh)

Name of Associate

Trakiot Solutions Private Limited

Reporting period for the subsidiary concerned, if different from the holding Companys reporting period

April 1, 2022 to March 31, 2023

Reporting currency and Exchange rate as on the last date of the relevant financial year in the case of foreign subsidiaries.

Not Applicable
Share capital (Rs.) 1.25d>
Reserves & surplus 60.52
Total assets 134.83
Total Liabilities 73.06
Investments -
Turnover 543.81
Profit before taxation 23.09
Provision for taxation 0.08
Profit/(Loss) after taxation 23.01
Proposed Dividend -
% of shareholding 20%

For and on behalf of the Board

SECMARK CONSULTANCY LIMITED

Ravi Vijay Ramaiya Sagar Thanki

Date: August 19, 2023 Managing Director & CEO Executive Director & CFO Place: Mumbai (DIN:03510258) (DIN: 08281489)

DISCLOSURE RELATED TO EMPLOYEE

Particulars Pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014

1. The ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the Financial Year 2022-23 are as under:

Name of Director

Designation Ratio
Ravi Vijay Ramaiya Non-Executive Director Not applicable
Shardul Shah Non-Executive Director Not applicable
Jignesh Mehta Managing Director and CEO 4.00
Sagar Thanki Executive Director 2.31

2. Percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager if any, in the financial year:

Name of Director

Designation Ratio
Ravi Vijay Ramaiya Non-Executive Director Not applicable
Shardul Shah Non-Executive Director Not applicable
Jignesh Mehta Managing Director & CEO -22.02%
Sagar Thanki Executive Director & CFO -6.25%
Sunil Bang Company Secretary 47.96%

Note:

Note: Mr. Ravi Vijay Ramaiya and Mr. Shardul Shah has not drawn any remuneration during the year.

3. During the year, the median remuneration of employees increased by 34.34%.

4. There were 77 permanent employees on the rolls of Company as on March 31,2023.

Average percentile increase made in the salaries of employee than the managerial personnel in the last Financial Year i.e.,2022-23 was 21.96% whereas the percentile decrease in the managerial remuneration for the same Financial Year was 16.90%. The change in the remuneration of the managerial personnel is in accordance with the remuneration policy of the Company. During the year change in managerial remuneration was less as compared to salaries of employees.

5. It is affirmed that the remuneration is as per the remuneration policy of the Company.

For and on behalf of the Board

SECMARK CONSULTANCY LIMITED

Ravi Vijay Ramaiya Sagar Thanki
Date: August 19, 2023 Managing Director & CEO Executive Director & CFO
Place: Mumbai (DIN:03510258) (DIN: 08281489)

COMMITTEES OF THE BOARD:

1. NOMINATION AND REMUNERATION COMMITTEE (NRC)

Your Company has constituted a Nomination and Remuneration Committee in accordance Section 178 of Companies Act 2013. The constitution of the Nomination and Remuneration Committee was approved at a meeting of Board held on November 01, 2019. The Nomination and Remuneration Committee comprises the following Directors as on March 31, 2023:

Name of Director

Status in Committee Nature of Directorship
Ms. Priti Gandhi Chairperson Independent Director
Mr. Binod Maharana Member Independent Director
Mr. Ravi Vijay Ramaiya Member Non-Executive Director

Dates of meetings held during the year are: August 23,2022 and March6,2023

Attendance at Nomination and Remuneration Committee Meetings

Name of Director

Number of Committee Meetings held Number of Committee Meetings attended
Ms. Priti Gandhi 2 2
Mr. Binod Maharana 2 2
Mr. Ravi Vijay Ramaiya 2 2

The Nomination and Remuneration Committee comprises the following Directors as on date of Directors Report:

Name of Director

Status in Committee Nature of Directorship
Ms. Priti Gandhi Chairperson Independent Director
Mr. Binod Maharana Member Independent Director
Mr. Shardul Shah Member Non-Executive Director

2. AUDIT COMMITTEE

Your Company has constituted an Audit Committee, as per section 177 of the Companies Act, 2013 vide resolution passed at the meeting of our Board held on December 20, 2019. The Audit Committee comprises the following Directors:

Name of Director

Status in Committee Nature of Directorship
Ms. Priti Gandhi Chairperson Independent Director
Mr. Binod Maharana Member Independent Director
Mr. Ravi Vijay Ramaiya Member *Non-Executive Director

* Designation of Mr. Ravi Vijay Ramaiya changed to Managing Director and CEO w.e.f. June 15, 2023.

Dates of meetings held during the year are:

May 25, 2022, August 23, 2022, November 11, 2022 and March 06, 2023

Attendance at Audit Committee Meetings

Name of Director

Number of Committee Meetings held Number of Committee Meetings attended
Ms. Priti Gandhi 4 4
Mr. Binod Maharana 4 4
Mr. Ravi Vijay Ramaiya 4 4

3. STAKEHOLDERS RELATIONSHIP COMMITTEE

Your Company has constituted a Stakeholders Relationship Committee to redress complaints of the shareholders. The Stakeholders Relationship Committee was constituted vide resolution passed at the meeting of our Board held on December 20, 2019.

The Stakeholders Relationship Committee comprises of following Directors:

Name of Director

Status in Committee Nature of Directorship
Ms. Priti Gandhi Chairperson Independent Director
Mr. Binod Maharana Member Independent Director
Mr. Shardul Jashwantlal Shah Member Non-Executive Director

Dates of meetings held during the year are: August 23,2022 and March6,2023

Attendance at Stakeholders Relationship Committee Meetings:

Name of Director

Number of Committee Meetings held Number of Committee Meetings attended
Ms. Priti Gandhi 2 2
Mr. Binod Maharana 2 2
Mr. Shardul Jashwantlal Shah 2 2

For and on behalf of the Board

SECMARK CONSULTANCY LIMITED

Ravi Vijay Ramaiya Sagar Thanki
Date: August 19, 2023 Managing Director & CEO Executive Director & CFO
Place: Mumbai (DIN:03510258) (DIN: 08281489)

The Members,

SECMARK CONSULTANCY LIMITED

CIN: L67190MH2011PLC220404

PLOT NO 36/227, RDP-10, CTS-1C/1/640, SECTOR-6, CHARKOP, NR.AMBAMATA MANDIR, KANDIVALI-WEST, MUMBAI – 400067, MAHARASHTRA, INDIA

I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by M/s SECMARK CONSULTANCY LIMITED (hereinafter called the company). Secretarial Audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon. Based on my verification of the Companys books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, I hereby report that in my opinion, the Company has, during the audit period covering the Financial Year ended on 31st March, 2023 ("Audit Period") complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter: I have examined the books, papers, minute books, forms and returns filed and other records maintained by the company for the Financial Year ended on 31st March, 2023 according to the provisions of: (i) The Companies Act, 2013 (the Act) and the rules made there under; (ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA) and the rules made there under; (iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed there under; (iv) Foreign Exchange Management Act, 1999 and the rules and regulations made there under to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings; (v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act):-(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; (b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015; (c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018; (d) The Securities and Exchange Board of India (Share based Employee Benefits) Regulations, 2014;

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations, 2008 – Not Applicable to the Company during the Audit Period; (f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client – Not Applicable to the Company during the Audit Period; (g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 – Not Applicable to the Company during the Audit Period; (h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018 – Not Applicable to the Company during the Audit Period. (i) Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

(vi) Other laws applicable specifically to the Company namely: Information Technology Act, 2000 and the rules made thereunder

(vii) Based on the representation made by the Company and its officers, the Company has proper system and process in place for compliance under the other applicable Labour Laws and other incidental laws, Acts, Rules, Regulations and Guidelines.

I have also examined compliance with the applicable clauses of the following: (i) Secretarial Standards issued by The Institute of Company Secretaries of India.

(ii) The Listing Agreements entered into by the Company with Bombay Stock Exchange (SME Platform).

During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above.

I further report that the compliance by the Company of applicable financial laws, like direct and indirect tax laws, has not been reviewed in this Audit since the same has been subject to review by statutory financial auditor and other designated professionals.

I further report that:

The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors, Independent Directors and Women Director. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting. Majority decision is carried through while the dissenting members views, if any, are captured and recorded as part of the minutes. I further report that there are adequate systems and processes in the Company commensurate with the size and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines. I further report that during the audit period, there were no specific events / actions having a major bearing on companys affair in pursuance of the above – referred laws, rules, regulations, guidelines, standards, etc, except below: We further report that during the audit period, the Company has increase the Authorized Share Capital of the Company from Rs.5,00,00,000/- (Rupees Five Crore Only) divided into 50,00,000 (Fifty Lakhs) Equity shares of Rs.10/- (Rupees Ten Only) each to Rs.15,00,00,000/-(Rupees

Fifteen Crores Only) divided into 1,50,00,000 (One Crores and Fifty Lakh) Equity shares of Rs.10/- (Rupees Ten Only) each, subsequently there was an alteration in Clause V (Capital clause) of Memorandum of Association of the Company by vide resolution passed in the Annual General Meeting of the Company held on September 28, 2022.

We further report that during the audit period, company has issued Bonus of 62,22,300 Equity shares of Rs.10/- (Rupees Ten Only) each in the proportion of 3 (Three) fully paid-up equity shares for every 2 (Two) existing fully paid-up equity share held by the Members by vide resolution passed in the Annual General Meeting of the Company held on September 28, 2022.

We further report that, wholly owned subsidiary (‘WOS) of the Company in the name of Sutra Software Services Private Limited has been incorporated on October 07, 2022 under the Corporate Identification Number (‘CIN) U72900MH2022PTC391704.

We further report that, Company has passed resolution through postal ballot on December 02, 2022 for Migration of Companys equity shares from SME platform of BSE Limited (BSE) to Main Board of BSE and listing on Main Board of National Stock Exchange of India Limited ("NSE" or "NSEIL").

We further report that, Company has entered into Software Purchase Agreement for purchase of software applications and others along with all right, title and interest therein with Comtek Bizsoft Private Limited (Comtek) on March 31, 2023. The consideration for purchase of software is RS. 6,20,00,000 (Rupees Six Crore Twenty Lakh only).

For VRG & ASSOCIATES

Company Secretaries

CS Vijay Ramesh Gupta
Date: August 19, 2023 Proprietor
Place: Mumbai Mem No. 33236
CoP: 22478

Note: This report is to be read with our letter of even date that is annexed as Annexure I and forms an integral part of this report.

The Members,

SECMARK CONSULTANCY LIMITED

CIN: L67190MH2011PLC220404

PLOT NO 36/227, RDP-10, CTS-1C/1/640, SECTOR-6, CHARKOP, NR.AMBAMATA MANDIR, KANDIVALI-WEST, MUMBAI – 400067, MAHARASHTRA, INDIA

My report of even date is to be read along with this letter.

1. Maintenance of secretarial records is the responsibility of management of the Company. My responsibility is to express an opinion on these secretarial records based on my audit.

2. I have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. I believe that the processes and practices, I followed provide a reasonable basis for my opinion.

3. I have not verified the correctness and appropriateness of financial records and books of accounts of the company.

4. Wherever required, I have obtained the Management Representation about the compliance of laws, rules and regulations and happening of events, etc.

5. The compliance of the provisions of corporate and other applicable laws, rules and regulations, standards is the responsibility of the management. My examination was limited to the verification of procedures on test basis.

6. The Secretarial Audit Report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company.

For VRG & ASSOCIATES

Company Secretaries

CS Vijay Ramesh Gupta
Date: August 19, 2023 Proprietor
Place: Mumbai Mem No. 33236
CoP: 22478

Form for disclosure of particulars of contracts/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

1. Details of contracts or arrangements or transactions not at Arms length basis.: Nil

SL. No. Particulars

Details
a. Name (s) of the related party & nature of relationship NA
b. Nature of contracts/arrangements/transaction NA
c. Duration of the contracts/arrangements/transaction NA

d. Salient terms of the contracts or arrangements or transaction including the value, if any

NA

e. Justification for entering into such contracts or arrangements or transactions

NA
f. Date of approval by the Board NA
g. Amount paid as advances, if any NA
h. Date on which the special resolution was passed in General meeting as NA
required under first proviso to section 188

2. Details of material contracts or arrangement or transactions at arms length basis:

SL. No. Particulars

Details

a. Name (s) of the related party & nature of relationship

Trakiot Solutions Private Limited (Trakiot)

b. Nature of contracts/arrangements/ transaction

Software and related services

c. Duration of the contracts/ arrangements/transaction

Valid till termination

d. Salient terms of the contracts or arrangements or transaction including the value, if any

Fees:

• An amount equivalent to the costs and expenses actually incurred by Trakiot

• 10% (ten percent) of the Costs;
• Revenue sharing based on sales
e. Date of approval by the Board NA
f. Amount paid as advances, if any NIL

For and on behalf of the Board

SECMARK CONSULTANCY LIMITED

Ravi Vijay Ramaiya Sagar Thanki
Date: August 19, 2023 Managing Director & CEO Executive Director & CFO
Place: Mumbai (DIN:03510258) (DIN: 08281489)
60 : SECMARK CONSULTANCY LIMITED