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Directors Report of Kellton Tech Solutions Ltd.

Mar 31, 2023

The 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 as against ^8,42,67,12,473 in the previous financial year. Profit before tax (PBT) and Exceptional Items at ^69,79,71,868 as against ^83,44,11,133 in the previous financial year. Profit after tax (PAT) at ^(1,26,80,88,401)* 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 to ^13,38,38,284 as against ^14,52,09,688 in the previous financial year. Similarly, Profit after tax (PAT) decreased to ^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 amortization. This strategic move resulted 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 year. The summarized financial results of 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) before Exceptional Items and taxes

13,30,59,072

14,50,88,740

69,79,71,868

83,44,11,133

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 equity shares in Rs.

0.96

1.16

(13.56)

7.39

Total Comprehensive 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 COMPANY''S AFFAIRS:

Your directors are pleased to report that in spite of severe impact on Country''s 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 FY''23.

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 Company''s 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 COMPANY''S OPERATIONS IN FUTURE:

There are no significant and material order has been passed by Regulators or Courts, Tribunals impacting the going concern status and Company''s 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 holder''s approval

ESOP Scheme, 2013 as approved on 27/12/2013 and amendment made on 27/09/2017 at the 23rd Annual General Meeting 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 website www.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 Company''s 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 Board''s actions and decisions are aligned with the Company''s 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 and the Board, which is necessary to effectively and reasonably perform and 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 (including the proficiency) and competency in the business & industry knowledge, financial expertise, digital & information technology, corporate governance, legal and compliance, marketing & sales, risk management, leadership & human resource development and general management as required to fulfill their 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 Board''s 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, NonIndependent 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 sufficient care towards the maintenance of adequate accounting records 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 Board''s 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 hold the office for the term of 5 (Five) years till the conclusion of 31st Annual 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. F63392997dated23-08-2023 with respect to Report on Annual General Meeting with Registrar of Companies with a delay of297 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 Company''s 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 arm''s 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 arm''s 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 arm''s 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 employee''s 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 Company''s Internal Audit Department is regularly carrying out the Audit in all areas. Normal foreseeable risks of the Company''s 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 operations, to effectively provide for safety of its assets, reliability of financial transactions with adequate 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 Directors reviews the adequacy of these systems. All significant audit 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.


Mar 31, 2018

Dear Members,

The Directors have pleasure in presenting their 24th Annual Report on the business and operations of your company for the financial year ended March 31st, 2018.

Financial Results

The standalone financial performance of the Company for the financial year ended March 31, 2018 is summarized below :

Standalone (Rs. in Lacs)

Particulars

2017-18

2016-17

Revenue from operations

1,22,54,38,764

76,49,69,400

Other Income

2,47,52,266

2,19,77,058

Total Revenue

1,25,01,91,030

78,69,46,458

Total Expenditure

1,10,95,21,753

66,61,81,371

Profit/(Loss) before taxes

14,06,69,277

12,07,65,087

Tax Expense/(Benefit)

(4,21,11,834)

(4,10,08,924)

Profit/(Loss) after Tax

9,85,57,443

7,97,56,163

Earnings per equity shares in Rs.

1.04

0.84

Consolidated

Particulars

2017-18

2016-17

Revenue from operations

7,83,47,99,953

6,14,76,98,590

Other Income

274,43,022

372,24,475

Total Revenue

7,86,22,42,975

6,18,49,23,065

Total Expenditure

6,86,75,97,318

5,47,30,95,281

Profit/(Loss) before taxes

99,46,45,657

71,18,27,784

Tax Expense/(Benefit)

(31,06,97,960)

(18,12,02,630)

Profit/(Loss) after Tax

68,39,47,697

53,06,25,154

Earnings per equity shares in Rs.

6.60

5.39

Review of Performance and state of the company’s affairs

During the year under review, the overall performance of the Company was reasonable considering to the Sector/market conditions.

During the year under review, Members will notice that the gross revenues have increased to Rs.1,25,01,91,030 from Rs. 78,69,46,458, while the Profit before Tax also increased from Rs. 12,07,65,087 to Rs.14,06,69,277.

The profit after tax also increased to Rs. 9,85,57,443 from Rs. 7,97,56,163 reported in the previous year.

The earnings per share is Rs. 1.04 as compared to Rs. 0.84 in the previous year.

The Consolidated revenue of your Company for the year ended 31st March 2018 is Rs. 7,86,22,42,975 as against previous year revenue of Rs.6,18,49,23,065. The consolidated Net Profit for the year stood at Rs. 68,39,47,697 as against previous year consolidated net profit of Rs. 53,06,25,154.

Change in the nature of business, if any:

There is no change in the nature of business of the Company or any of its subsidiaries or joint venture, during the year under review.

Dividend and Transfer to Reserves

Although your Company has earned profits during the year, the Board of Directors have decided to plough back the Profits into the Company. Therefore, your Directors have not recommended any dividend for the financial year 2017-18.

There were no transfers to Reserves during the financial year 2017-18.

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.

The Authorized Share Capital of the Company was increased from Rs. 31,00,00,000 (Rupees Thirty One Crore only)divided into 6,20,00,000 (Six Crore Twenty Lakh only) Equity Shares of Rs. 5/- (Rupees Five) each to 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 on 19/03/2018. The increase was made to facilitate the issue of Bonus shares to the members of the Company.

The Paid up Share Capital has increased to from Rs. 23,57,22,865/- (Rupees Twenty Three Crore Fifty Seven Lakh Twenty Two Thousand Eight Hundred and Sixty Five Only) divided into 4,71,44,573 (Four Crore Seventy One Lakh Forty Four Thousand Five Hundred and Seventy Three Only) equity shares of Rs. 5/- each to Rs. 48,19,12,340 (Rupees Forty Eight Crore Nineteen Lakh Twelve Thousand Three Hundred and Forty only) divided into 9,63,82,468 (Nine Crore Sixty Three Lakh Eighty Two Thousand Four Hundred and Sixty Eight only) equity shares of Rs. 5/- each.

The change in the Share Capital of the Company has occurred due to allotment under ESOP Scheme, 2013 and Bonus issue of shares.

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.

I) The shareholders of the company has 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 31st March, 2018 is as follows:

S.NO

Particulars

Description

1.

Date of Share holder’s approval

ESOP Scheme, 2013 as approved on 27/12/2013 and amendment made on 27/09/2017 at the 23rd Annual General Meeting of the Company

Total number of options granted

25,27,500

Vesting requirements

12-60 months

The pricing formula

Closing price of equity shares on the stock exchange where the shares are listed from vesting date

Maximum term of options granted

Employees to exercise options within 3 years

Source of shares

Primary

Method used to account for ESOS

Fair Value

Option movement during the year (For each ESOS):

Particulars

Details

Number of options outstanding at the beginning of the period

18,11,359

Number of options granted during the year

0

Number of options forfeited / lapsed during the year

2,73,336

Number of options vested during the year

6,46,495

Number of options exercised during the year

10,46,661

Number of shares arising as a result of exercise of options

10,46,661

Money realized by exercise of options (INR), if scheme is implemented directly by the company

Rs. 3,18,06,005

Loan repaid by the Trust during the year from exercise price received

NIL

Number of options outstanding at the end of the year

4,91,362

Number of options exercisable at the end of the year

60,668

The Note: Details of disclosures pursuant to ESOP required under SEBI (Share Based Employee Benefits) Regulations, 2009 are available at the website www.kelltontech.com

Listing

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

The Company confirms that it has paid the Annual Listing Fees for the year 2017-18 to NSE and BSE where the Company’s Shares are listed.

Directors & its board meetings:

The Board of directors of your company is duly constituted.

There was no resignation of Directors this year.

Proposed Appointments/re-appointments:

The following appointments to the Board are proposed:

In accordance with the Companies Act, 2013 read with the Articles of Association of the Company, Mr. Ni-ranjan Chintam, Directors, retires by rotation at the ensuing Annual General Meeting of the Company and being eligible offered himself for re-appointment.

Appropriate resolutions for the appointment/ re-appointment of Directors are being placed before you for your approval at the ensuing Annual General Meeting. The brief resume of the aforesaid Directors and other information have been detailed in the Notice. Your Directors recommend their appointment/reappointment as Director of your Company.

Number of meetings of the board:

Twenty Board Meetings were held on 24.04.2017, 30.05.2017, 01.06.2017, 12.06.2017, 06.07.2017, 12.07.2017, 01.08.2017, 01.09.2017, 12.09.2017, 26.09.2017, 13.10.2017, 08.12.2017, 20.12.2017, 26.12.2017, 29.12.2017, 17.01.2018, 06.02.2018, 07.03.2018, 20.03.2018 and 31.03.2018 during the year ended on 31st March 2018. The gap between any two Board Meetings is within the period prescribed by the Companies Act, 2013 and Listing Agreement.

Declarations by Independent Directors:

The Company has received declarations from the Independent Director under Section 149(6) of the Companies Act, 2013 confirming their independence vis-a-vis the Company.

Board evaluation and assessment:

The company believes formal evaluation of the board and of the individual directors, on an annual basis, is a potentially effective way to respond to the demand for greater board accountability and effectiveness. For the company, evaluation provides an ongoing means for directors to assess their individual and collective performance and effectiveness. In addition to greater board accountability, evaluation of board members helps in ;

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.

Familiarisation Programme for Independent Directors

The Company shall through its Senior Managerial personnel familiarise the Independent Directors with the strategy, operations and functions of the Company. The Independent Directors will also be familiarised with their roles, rights and responsibilities and orientation on Statutory Compliances as a Board Member.

On appointment of the Independent Directors, they will be asked to get familiarised about the Company’s operations and businesses. An Interaction with the key executives of the Company is also facilitated to make them more familiar with the operations carried by the company. Detailed presentations on the business of the company are also made to the Directors. Direct meetings with the Chairman and the Managing Director are further facilitated for the new appointee to familiarize him/her about the Company/its businesses and the group practices as the case may be and link is available at the website www.kelltontech.com.

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, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b. such accounting policies have been selected and applied consistently and the Directors 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 as at 31st March, 2018 and of the profit/loss of the Company for that year;

c. proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the annual accounts of the Company have been prepared on a going concern basis;

e. internal financial controls have been laid down to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

f. proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively;

Constitution and Composition of Audit Committee

The Audit Committee of the company is duly constituted as per section 177 of the Companies Act, 2013 and Regulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 Composition and Scope of Audit Committee is provided under the Corporate Governance report annexed herewith.

Nomination and Remuneration cum Compensation Committee:

Nomination and Remuneration cum Compensation Committee meets the requirements of section 178 of the Companies Act, 2013 and Regulation 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. The details of the composition of the Nomination and Remuneration cum Compensation Committee as required under the provisions of Section 178 of the Companies Act, 2013 is given in the Corporate Governance Report furnished as part of the Annual Report.

Remuneration Policy

The remuneration paid to the Directors is as per the terms laid out in the Nomination & Remuneration policy of the Company. The Nomination & Remuneration policy is adopted by the Board is placed on the Company’s website at www.kelltontech.com

Corporate Governance

In pursuance of Regulation 17 to 27 read with Schedule V of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, entered into with the Stock Exchanges, a separate Report on Corporate Governance along with a certificate from a Practicing Company Secretary regarding its compliance is annexed and forms part of this Report. Your company will continue to adhere in letter and spirit to good corporate governance policies.

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.

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

Kellton Tech Solutions Pte. Ltd.

Wholly Owned Subsidiary

Evantage Solutions Inc

Step Down Subsidiary (Wholly owned subsidiary of Kellton Tech Inc)

Supremesoft Global Inc

Step Down Subsidiary (Wholly owned subsidiary of Kellton Tech Inc)

Vivos Professionals 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)

Cyberworld Solutions Inc

Step Down Subsidiary (Wholly owned subsidiary of Prosoft Technology Group)

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)

Planet Pro Inc

Step Down Subsidiary (wholly owned subsidiary of Kellton Tech 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)

Consolidation of Accounts

The consolidated financial statements of the Company and its subsidiaries (“the Group”) for the year ended March 31, 2018 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, 2018 is annexed. 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.

Statutory Auditors

M/s. Sastri& Shah, Chartered Accountants, Hyderabad, the auditors of the Company have resigned from the position of Statutory Auditors of the Company due to their professional pre-occuption and therefore Directors have recommended the appointment of M/s PARY & Co , Chartered Accountants, Hyderabad, as Statutory Auditors of the Company to fill the vacancy.

M/s PARY & Co confirmed their eligibility under Section 139(1) of the Companies Act, 2013

The Audit Committee and the Board recommends the appointment of M/s PARY & Co, Chartered Accountants as statutory Auditors of the company.

Management Replies To Auditors Report - Standalone And Consolidated Financial Reports:

There are no qualifications mentioned by the Auditors in the Auditors Report. Thus, company have no replies.

Reporting of Fraud

The Auditors of the Company have not reported any frauds specified under Section 143(12) of the Companies Act, 2013.

Business Responsibility Report (BRR)

Securities Exchange Board of India (SEBI) vide circular CIR/CFD/DIL/8/2012 dated August 13, 2012 has mandated the inclusion of BRR as part of the Annual Report for the top 100 listed entities based on their market capitalization on Bombay Stock Exchange Ltd and National Stock Exchange of India Ltd as at 31 March 2012. In view of the requirements specified, the company is not mandated for the providing the BRR and hence do not form part of this Report.

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 the society through various initiatives in these arenas. Kellton Tech is providing scholarship to the needy, deserving students for further education.

In collaboration with Aashritha Samaj, it has sponsored the education of many children with single parent. In healthcare, it has worked closely with NGO’s and donated a generous amount towards disease-eradica-tion by educating people on prevention.

Through REACH OUT initiative, the employees of Hyderabad and Gurugram Office helped the patients of local hospitals by providing essentials for infants and babies and nourishing edibles to other patients. This has been an ongoing commitment of the Company and by dint their efforts they have been able to make some lives happier and filled with warmth. 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 - VII and link to the CSR policy is available at the websitewww.kelltontech.com.

Particulars of Loans, Guarantees and Investments

Details of loans and guarantees given and investments made under Section 186 of the Act are provided in the Notes to the Financial Statements.

Cost Audit Report

The provisions of Section 148 of the Companies Act, 2013 does not apply to the Company and hence, no cost auditors are appointed.

Secretarial Audit Report

Pursuant to the provisions of Section 204 read with Section 134(3) of the Companies Act, 2013, the company is required to obtain Secretarial Audit Report from Practicing Company Secretary. Mr. NVSS Suryana-rayanaRao, Practising company secretary was appointed to issue Secretarial Audit Report for the financial year 2017-18.

Secretarial Audit Report issued by Mr. NVSS SuryanarayanaRao, Practising company secretary in Form MR-3 for the financial year 2017-18 forms part to this report as ‘Annexure - V’.

The observation given in the said report is as follows:

I further observed that the company has delayed in filing resolutions with respect to appointment of Internal Auditor as per section 179(3) read with rule 8 of the Act

Management’s Reply to the observation:

The management will strengthen the procedures for adequate and timely compliance of all statutory requirements of the regulatory authorities.

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. www.kelltontech.com.

Risk Management Policy

The board of directors has formed a risk management committee to identify, evaluate, mitigate and monitor the risks associated with the business carried by the company. The committee reviews the risk management plan and ensures its effectiveness. A mechanism has been put in place which will be reviewed on regular intervals.

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. During the financial year ended 31st March, 2018, the Company has not received any complaints pertaining to Sexual Harassment.

Particulars of Contracts or arrangements with related parties

All the related party transactions that were entered during the financial years were in the ordinary course of business of the company and were on arm length basis. There were no materially significant related party transactions entered by the company during the year with the promoters, directors, key managerial personnel or other persons which may have a potential conflict with the interest of the company.

The policy on related party transactions as approved by the board of directors is hosted on the website of the company viz. www.kelltontech.com.

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 arm’s length transactions under third proviso thereto shall be disclosed in Form No. AOC-2 as ‘Annexure II’ to this report.

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 the report.

Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company’s operations in future

No significant and material order has been passed by the regulators, courts, tribunals impacting the going concern status and Company’s operations in future

Public Deposits

Your Company has not accepted any deposits from the public. As such, there was no principal or interest outstanding on the date of the Balance Sheet.

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 www. kelltontech.com.

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 III’ 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 employee’s 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 III and forms part of this Report

Extract of the Annual Return

In accordance with Section 134 (3) (a) of the Act, an extract of the Annual Return in the prescribed format is appended as ‘Annexure VI’ to this Report.

Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Conservation of Energy which is not furnished as the relative rule is not applicable to your company.

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 as under :

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

The Company has adequate Internal Financial Controls consistent with the nature of business and size of the operations, to effectively provide for safety of its assets, reliability of financial transactions with adequate 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. It has a comprehensive budgetary control system to monitor revenue and expenditure against approved budget on an ongoing basis.

Internal Financial Control Systems

The Company has adequate Internal Financial Controls consistent with the nature of business and size of the operations, to effectively provide for safety of its assets, reliability of financial transactions with adequate 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. It has a comprehensive budgetary control system to monitor revenue and expenditure against approved budget on an ongoing basis.

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.

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

Acknowledgements

Your Directors wish to express their appreciation of the support and co-operation of the Central and the State Government, bankers, financial institutions, business associates, employees, shareholders, customers, suppliers and alliance partners and seeks their continued patronage in future as well.

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 : 04/09/2018


Jun 30, 2015

The Directors have pleasure in presenting the 21st Annual Report together with the audited statements of account for the year ended 30th June, 2015.

Financial summary or highlights/Performance of the Company

Financial results (Standalone)

The performance during the period ended 30th June, 2015 has been as under:

(Rs. in Lakhs)

Particulars Current Year Previous Year 30.06.2015 30.06.2014

Revenue from Operations 3990.03 3383.67

Other Income 51.52 3.28

Total Revenue 4041.55 3386.94

Expenses 3236.28 2957.04

Depreciation and amortization 92.81 40.47

Profit / (loss) Before exceptional and extraordinary items and Tax 712.45 389.43

Less: exceptional and extraordinary items - -

Profit/ ( loss) Before Taxation 712.45 389.43

Less: - Current Tax 194.41 -

- Mat Credit -113.41 -

- Income Tax (Earlier years) - -

- Deferred Tax 15.20 -3.27

Profit / (loss) After Tax 616.24 392.70

Earning Per Share (Rs.) 1.47 1.11

Brief description of the Company's working during the year/State of Company's affair

During the year under review, the overall performance of the Company was reasonable considering to the sector/market conditions .

During the year under review, Members will notice that the gross revenues have increased to Rs. 3990.03 lakhs fromRs. 3383.67 lakhs, while the Profit before Tax also increased from 389.43 lakhs to Rs. 712.45

The profit after tax also increased to Rs. 616.24Lakhs from Rs. 392.70 Lakhs reported in the previous year. The earnings per share is Rs. 1.47 as compared to Rs. 1.11 in the previous year.

There are no other 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.

Subsidiary Companies

Following are the Subsidiary and Step down Subsidiaries of Kellton Tech

Name of the Entity Status

Kellton Dbydx Software Private Limited Wholly Owned Subsidiary

Kellton Tech Inc Wholly Owned Subsidiary

Kellton Tech Solution Inc Wholly Owned Subsidiary

Evantage Solution Inc Step Down Subsidiary (Wholly Owned Subsidiary of Kellton Tech Inc)

Supremesoft Global Inc Step Down Subsidiary (Wholly Owned Subsidiary of Kellton Tech Inc)

Vivos Professional LLS 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)

Cyberworld Solutions Inc Step Down Subsidiary (Wholly Owned Subsidiary of Prosoft Technology Group)

Intellipeople Inc Step Down Subsidiary (Wholly Owned Subsidiary of Kellton Tech Solutions Inc)

A statement showing the salient features of the financial statements of the subsidiaries, associates and joint ventures is enclosed as an Annexure to this Report.

Dividend

Although your Company has earned profits during the year, the Board of Directors have decided to plough back the profits into the Company. Therefore, your Directors have not recommended any dividend for the financial year 2014-15.

Transfer to reserve

There were no transfers to Reserves during the financial year 2014-2015.

Share Capital

The Authorised Share Capital of the Company was increased to 285,000,000 divided into 5,70,00,000 Equity Shares of Rs.10/- each on 02nd July,2015

The Paid up Share Capital has increased to Rs. 21,74,49,660 divided into 4,34,89,932 number of shares of Rs. 5/- each.

30,00,000 Warrants has been allotted vide Board Meeting dated 30-March -2015 which are yet to be converted into Equity Shares.

At the time of obtaining in-principle approval from BSE in respect of 30 Lacs warrants ,the minimum price calculation for issue of warrants was made on weighted average price method instead of volume weighted average price method, the price has been recomputed on volume weighted average price method and the minimum issue price is Rs 75.50.

Listing

The shares of the Company are listed on Bombay Stock Exchange.

Directors

In accordance with the Companies Act, 2013 read with Articles of Association of the company Mr. Niranjan Chintam is retiring by rotation at this Annual General Meeting and being eligible offer himself for reappointment.

Ms. Sreevidya Chintam and Mr. Karanjit Singh were appointed as Additional Directors of the Company with effect from 30th March, 2015 who being eligible for appointment and in respect of whom the Company has received a notice in writing under Section 160(1) of the Act, from members proposing their candidature for the office of Director.

Your Board recommends the appointment/ re-appointment of the Directors above.

Meetings

A calendar of Meetings is prepared and circulated in advance to the Directors. During the year, 15 (Fifteen) Board Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was not more than 120 days as prescribed under the Companies Act, 2013.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, 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 Audit, Nomination & Remuneration and Stakeholders Relationship Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

1. Directors' Responsibility Statement

Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors of your Company make the following statements, with the best of their knowledge and belief and according to the information and explanations obtained by them:

I. that in the preparation of the annual accounts for the financial year ended June 30, 2015, the applicable accounting standards have been followed and there have been no material departures from them;

ii. that the accounting policies mentioned in notes to Financial Statements have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at June 30, 2015 and of the profit of the company for the year ended on that date;

iii. that proper and sufficient care has been taken for the maintenance of adequate accounting records 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;

iv. that the annual financial statements have been prepared on a 'going concern' basis;

v. that proper internal financial controls have been laid down to be followed by the Company and such internal financial controls are adequate and operating effectively; and

vi. that proper systems are in place to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively Constitution and Composition of Audit Committee

The Audit Committee of the company is duly constituted as per section 177 of the Companies Act, 2013. Composition and Scope of Audit Committee is provided under the Corporate Governance report annexed herewith.

Remuneration Policy

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report.

Particulars of Employees

Details in respect of remuneration paid to employees as required under Section 197 (12) of the Companies Act, 2013 , read with Rule 5(2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended forms part of 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 employee's remuneration and other details in terms of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are enclosed in Annexure vi and forms part of this Report.

Statutory Auditors

M/s. Mahesh, Virender & Sriram, Chartered Accountants, Hyderabad, who retire at this Annual General Meeting, have signified their willingness for reappointment and accordingly Directors have recommended the reappointment of M/s Mahesh, Virender & Sriram, Chartered Accountants Hyderabad, who confirmed their eligibility under Section 139(1) of the Companies Act, 2013.

The Audit Committee and the Board recommends the appointment of M/s. Mahesh, Virender & Sriram, Chartered Accountants as statutory Auditors of the company.

Replies to Auditors' Report

The report is self-explanatory and do not call for any further comments.

Secretarial Audit Report

In terms of Section 204 of the Act and Rules made there under, Mr. Manoj Kumar Koyalkar, M/s. AGR Reddy & Co, Practicing Company Secretary has been appointed as Secretarial Auditor of the Company. The report of the Secretarial Auditors is enclosed as Annexure to this report.

Replies to Secretarial Auditors' Report

In order to constitute the Board as per the Listing agreement, Company is in process of appointment of an Independent Director during the current financial year.

Further, the report is self-explanatory and do not call for any further comments.

Cost Auditors

The provisions of Section 148 of the Companies Act, 2013 does not apply to the Company and hence, no cost auditors are appointed.

Internal Audit & Controls

The Company has adequate Internal Financial Controls consistent with the nature of business and size of the operations, to effectively provide for safety of its assets, reliability of financial transactions with adequate 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. It has a comprehensive budgetary control system to monitor revenue and expenditure against approved budget on an ongoing basis.

Whistle Blower Policy/Vigil Mechanism

Pursuant to Section 177 of the Companies Act, 2013 and the Rules framed there under and pursuant to the provisions of Clause 49 of the Listing Agreement entered into with the Stock Exchange, the Company has established a mechanism through which all the stakeholders 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 (www.kelltontech.com/Policies.html).

Risk Management Policy

The Risk Management Policy in place in the company enables the company to proactively take care of the internal and external risks of the company and ensures smooth business operations.

The company's risk management policy ensures that all its material risk exposures are properly covered, all compliance risks are covered and the company's business growth and financial stability are assured. Board of Directors decide the policies and ensure their implementation to ensure protection of company from any type of risks.

Extract of Annual Return

As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of Annual Return in Form MGT 9 is given as Annexure to this report.

Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future

No significant and material order has been passed by the regulators, courts, tribunals impacting the going concern status and Company's operations in future.

Deposits

The Company has not accepted any deposit from the public under Chapter V of the Act or under the corresponding provisions of Section 73 and 74 of the Companies Act, 2013, and no amount of principal or interest was outstanding as on the Balance Sheet date.

Particulars of loans, guarantees or investments under section 186

Details of loans and guarantees given and investments made under Section 186 of the Act are given in the Notes to the Financial Statements.

Particulars of contracts or arrangements with related parties:

The 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 arm's length transactions under third proviso thereto shall be disclosed in Form No. AOC-2 as Annexure to this report.

There were no material significant related party transactions made by the Company with the Promoters, Directors, Key Managerial Personnel or the Senior Management which may have a potential conflict with the interest of the Company at large. None of the Directors had any pecuniary relationship or transactions with the Company, except the payments made to them in the form of remuneration, sitting fee and commission.

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.

Corporate Governance

In pursuance of Clause 49 of the Listing Agreement entered into with the Stock Exchange, a separate section on Corporate Governance has been incorporated in the Annual Report for the information of the shareholders.

A certificate from the Auditors of the Company regarding the Compliance of the conditions of Corporate Governance as stipulated under the said Clause 49 also forms a part of this Annual Report.

Management's Discussion and Analysis

Management Discussion and Analysis Report, pursuant to Clause 49 of the Listing Agreement, forms part of this report and same is annexed.

Obligation Of Company Under The Sexual Harassment Of Women At Workplace (Prevention, Prohibition And Redressal) Act, 2013

The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed off during the year 2014-15:

No. of complaints received : - Nil -

No. of complaints disposed off : - Nil -

Personnel

Your Directors place on record their appreciation for the services rendered by the employees. The relation between the management and the employees has been cordial throughout the year.

ACKNOWLEDGEMENTS

The Directors wish to convey their appreciation to business associates for their support and Contribution during the year. The Directors would also like to thank the employees, shareholders, Customers, suppliers, alliance partners and bankers for the continued support given by them to the Company and their confidence reposed in the management.

By the order of the Board

for KELLTON TECH SOLUTIONS LIMITED

Krishna Chintam Niranjan Chintam Managing Director Whole Time Director DIN No:01658145 DIN: 01658591

Place: Hyderabad Date : 25-11-2015


Jun 30, 2014

Dear Members,

The Directors have pleasure in presenting the 20th Annual Report on the business and operations of your Company for the financial year ended 30th June, 2014.

FINANCIAL RESULTS (Standalone)

The performance during the period ended 30th June, 2014 has been as under:

(Rs. in Lakhs)

Particulars Current Year Previous year ended ended 30.06.2014 30.06.2013

Income from Operations 3383.67 1451.09 Other Operating Income - 0.52 Total Income 3383.67 1451.61 Total Expenditure 2817.75 1107.37

Profit / (Loss) from operations before other income, finance costs and exceptional items 565.92 344.24 Other Income 10.28 19.18 Finance Cost 186.75 60.00 Exceptional Items - - Profit / (Loss) Before Taxation 389.44 303.41 Provision for taxation -3.27 37.45 Net Profit / (Loss) for the period 392.71 265.97

REVIEW OF PERFORMANCE:

During the year under review, the overall performance of the Company was reasonable considering to the sector/market conditions.

During the year under review, Members will notice that the gross revenues have marginally improved by 133%, to 3383.67 lacs from 1451.61 lacs, while the Profit before Tax also increased by 28.35% to 389.45 lacs from 303.42 lacs.

The profit after tax also increased by 47.65% to Rs. 392.72 lacs from Rs. 265.97 lacs reported in the previous year. The earnings per share is Rs. 1.11 as compared to Rs. 0.75 in the previous year.

FINANCIAL RESULTS (Rs. in Lakhs) (Consolidated) Particulars Current Year ended Previous year ended 30.06.2014 30.06.2013

Income from Operations 13364.60 4854.97

Other Operating Income 2.53 6.36

Total Income 13367.13 4861.33

Total Expenditure 12289.18 4370.25 Profit / (Loss) from operations before other income, finance costs and exceptional items 1077.95 491.08

Other Income 17.24 53.63

Finance Cost 334.04 96.10

Exceptional Items - -

Profit / (Loss) Before Taxation 761.14 448.61

Provision for taxation 124.87 75.62

Extraordinary items (net of tax expenses) - -

Net Profit / (Loss) for the period 636.27 372.99

The Consolidated revenue of your Company for the year ended 30th June 2014 is 13367.13 lacs, as against previous year revenue of Rs. 4861.33 lacs. The consolidated Net Profit for the year stood at 636.27 lacs as against previous year consolidated net profit of 372.99 lacs.

DIVIDEND

Although your Company has earned profits during the year, the Board of Directors have decided to plough back the profits into the Company. Therefore, your Directors have not recommended any dividend for the FY 2013-14.

TRANSFER TO RESERVES

During the financial year under review, there were no transfers to Reserves.

SHARE CAPITAL:

During the year, there is no change in the Authorised Share Capital of the Company .The Authorised Share Capital is 23,50,00,000 divided into 4,70,00,000 number of shares of Rs. 5/- each.

The Paid up Share Capital has increased to Rs. 20,69,37,720 divided into 4,13,87,544 number of shares of Rs. 5/- each from Rs. 17,74,45,500 divided into 3,54,89,100 number of shares of Rs. 5/- each.

The Company in its Extraordinary General Meeting held on 22/04/2014 issued 78,00,000 warrants, out of which 58,98,444 warrants were covered into Equity shares and Paid-up Capital of the Company increased accordingly.

EMPLOYEE STOCK OPTION PLAN (ESOP)

In appreciation of the employees'' contribution for the growth of the Company and to share wealth with the employees, the Company has announced Employee Stock Option Plan (ESOP 2012) where in the Company has approved grant of 6,65,000 options to the eligible employees.

A brief report on ESOP 2012 scheme is given in the Annexure to the Directors Report.

SUBSIDIARIES

The Company has invested in Kellton Tech Inc, USA by which it has become its wholly owned subsidiary company and Supremesoft Global Inc, USA and Evantage Solutions Inc, USA was acquired by Kellton Tech Inc, which is a wholly owned subsidiary to M/s Kellton Tech Solutions Limited.

Pursuant to the provision of Section 212(8) of the Companies Act, 1956, the Ministry of Corporate Affairs vide its circular dated February 8, 2011 has granted general exemption from attaching the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies with the Annual Report of the parent Company. Accordingly the Company has availed the exemption from attaching the Balance Sheet, Profit and Loss Account and other documents of the subsidiary Companies.

The Company has acquired Vivos Professional Services, LLC, a New Jersey, USA corporation by way of purchasing 100% of shares by Kellton Tech, Inc. USA, its wholly owned subsidiary. This acquisition of VIVOS coincides with Kellton Tech''s disinvestment of 100% stake held by the Company in MCS Global, Inc. an existing subsidiary company.

A statement containing brief financial details of the subsidiaries for the financial year ended June 30, 2014 is given herein under. 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.

STATEMENT PURSUANT TO GENERAL EXEMPTION RECEIVED UNDER SECTION 212(8) OF THE COMPANIES ACT, 1956, RELATING TO SUBSIDIARY COMPANIES:

Particulars/Name of Kellton MCS Global Kellton Tech the Subsidiary Dbydx Inc Inc Company Software Private Limited

Reporting Currency INR USD USD

Exchange Rate NA 60.09 60.09

Capital 83.24 450.70 307.08

Reserve 204.80 637.66 379.34

Total Assets 590.76 1949.04 5229.38

Total Liabilities 302.72 860.68 4542.85 Investment Other Than investment in Subsidiary Nil Nil Nil

Turnover 659.39 3137.82 6186.25

Profit Before Tax 57.05 163.94 478.59

Provision for Taxation 5.61 31.86 90.66

Profit After Tax 51.44 227.77 387.92

Proposed Dividend Nil Nil Nil

DIRECTORS

Proposed Re-appointments

Approval of the shareholders is being sought for re-appointment of Mr. Krishna Chintam, who retires by rotation at the forthcoming Annual General Meeting of the Company and being eligible, offer himself for reappointment in accordance with the Articles of Association and Companies Act, 2013.

The Board recommends the above re-appointment.

The Company has, pursuant to the provisions of Clause 49 of the Listing Agreement entered into with Stock Exchange appointed Mr. Rajendra Vithal Naniwadekar, Mr. Brijmohan Venkata Mandala and Mr. Srinivas Potluri as Independent Directors of the Company. The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49. In accordance with the provisions of Section 149(4) and proviso to Section 152(5) of the Companies Act, 2013, these Directors are being appointed as Independent Directors to hold office as per their tenure of appointment mentioned in the Notice of the forthcoming AGM of the Company.

DIRECTORS RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 217(2AA) OF THE COMPANIES ACT, 1956:

In compliance of section 217 (2AA), as incorporated by the Companies (Amendment) Act, 2000, in the Companies Act, 1956, your directors confirm: -

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

(ii) The Directors have selected such accounting policies and applied them consistently and made judgment and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 30th June, 2014 and of the profit of the Company for the financial year ended on that date;

(iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, forsafeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) The annual accounts of the Company have been prepared on a ''going concern'' basis;

CORPORATE GOVERNANCE

Your Directors'' affirm their commitment to the Corporate Governance Standards prescribed by the Securities and Exchange Board of India (SEBI). A report on Corporate Governance with Management Discussion and Analysis as required under Clause 49 of the Listing Agreement is Annexed to this report.

MANAGEMENT DISCUSSION & ANALYSIS

A report on Management Discussion & Analysis forms part of this Annual Report.

CONSOLIDATION OF ACCOUNTS

In accordance with the Accounting Standard AS-21 on Consolidated Financial Statements read with Accounting Standard AS-27 on Financial Reporting of Interests in Joint Ventures your Directors have pleasure in attaching the Consolidated Financial Statements as part of the Annual Report.

STATUTORY AUDITORS

The Statutory Auditors of the Company M/s. Mahesh, Virender & Sriram, Chartered Accountants, Hyderabad, retire at this AGM, have signified their willingness for their re-appointment and have confirmed their eligibility under section 139(1) of the Companies Act, 2013. Members are requested to re-appoint them for a period of one year and to authorize the Board to fix their remuneration.

AUDITORS'' REPORT

The Board has duly examined the Statutory Auditors'' Report to the accounts, which is self-explanatory. Clarifications, wherever necessary, have been included in the Notes to Accounts section of the Annual Report.

BUSINESS RESPONSIBILITY REPORT (BRR)

Securities Exchange Board of India (SEBI) vide circular CIR/CFD/DIL/8/2012 dated August 13, 2012 has mandated the inclusion of BRR as part of the Annual Report for the top 100 listed entities based on their market capitalization on Bombay Stock Exchange Limited as at March 31, 2014. In view of the requirements specified, the company is not mandated for the providing the BRR and hence do not form part of this Report.

FIXED DEPOSITS

Your Company has not raised any Fixed Deposits as on 30th june , 2014 so as to attract the provisions of Section 58A of the Companies Act, 1956, read with the Companies (Acceptance of Deposits) Rules, 1975 as amended from time to time. There is no amount outstanding or due to any deposit holder.

COST AUDIT COMPLIANCE

As per the Companies (Cost Accounting Records) Rules, 2011 your company does not require to maintain Cost records and audit thereon

PARTICULARS OF EMPLOYEES

During the year under review, there were no employees drawing remuneration in excess of the limits laid down in section 217(2A) of the Companies Act, 1956 read with (Particulars of Employees) Rules,1975.

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

The information required under Section 217(1)(e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988, is not applicable as your company is not into manufacturing activity.

FOREIGN EXCHANGE EARNINGS AND OUTGO

Standalone Consolidated

Foreign Exchange Earnings: USD 1893899 USD 2393822

GBP 23515 GBP 50471

SGD 11004 SGD 136173

CAD 4516 CAD 4516

AED 25000

HKD 293679

Foreign Exchange Outgo : USD 135006 USD 142420

GBP 100 GBP 100

AED 1800 AED 1800

SGD 11004 SGD 11004

EURO 740 EURO 740

AUD 977 AUD 977

RAND 512 RAND 512

TWD 439061 TWD 439061

ZAR 8400 ZAR 8400

INDUSTRIAL RELATIONS

Employees are our vital and most valuable assets. We have created a favorable work environment that encourages innovation and meritocracy. With vibrant work atmosphere, your Company provides an opportunity to employees to work with new technologies. Your company has been fortunate in having a set of committed employees at all levels and looks forward to nurture them and retain their loyalty. The Company recognized the value of the committed workers and efforts are being made to enhance the bonding between the company and the committed employees.

STATEMENT PURSUANT TO LISTING AGREEMENT

The Equity Shares of the company are listed with the Bombay Stock Exchange Limited (BSE).

ACKNOWLEDGEMENTS:

Your Directors place on record their sincere appreciation for the services of the Bankers, BSE, NSDL, CDSL and other statutory authorities. Your Directors also place on record their sincere appreciation and gratitude for the valuable assistance, support and co-operation from the Company''s Customers, Employees and shareholders during the period under review.

By the order of the Board of Directors for KELLTON TECH SOLUTIONS LIMITED

Niranjan Chintam Executive Chairman DIN: 01658591 Date: 25/11/2014 Place: Hyderabad


Jun 30, 2010

The Directors have pleasure in presenting the 16th Annual Report together with the Audited Accounts of the Company for the period ended 30th June, 2010

FINANCIAL RESULTS (Rs. In Lakhs)

Current Year ended Previous year ended 30.06.2010 30.06.2009

Profit/(Loss) before taxes 19.59 (122.09)

Deferred Tax Asset 0.28 2.08

Provision for FBT Nil 0.18

Provision for MAT 0.28 0.18

Profit/(Loss) after taxes 19.02 (124.36)

REVIEW OF OPERATIONS

Your Company has registered revenue Rs. 94.22 Lakhs, activities during the year under review The performance of your Company is satisfactory as the Gross Revenue registered at Rs. 94.22 Lakhs and Net Profit of Rs. 19.02 Lakhs. Management of your Company is putting their best efforts to improve the operations.

DIVIDEND:

In view of the inadequate of profit, your Directors regret their inability to recommend any dividend for the year 2009-10.

FIXED DEPOSITS:

The company has not raised any fixed deposits as on 30th June 2010 so as to attract the provisions of section 58 A of the Companies Act 1956 read with the Companies (Acceptance of Deposits) Rules, 1975 as amended from time to time.

DIRECTORS

At the ensuing Annual GeneralMeeting of the Company Mr. Niranjan Reddy Chintam and Mr. Manthena Venkata Sivarama Raju retire by rotation at this Annual General Meeting and being eligible, offer themselves for re-appointment /appointment.

DIRECTORS* RESPONSIBILITY STATEMENT

Directors responsibility statement pursuant to section 217(2AA) is given here under.

I. in preparation of Annual accounts applicable accounting standards have been followed along with proper explanation relating to material departures

ii. that the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the company for that period;

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

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

AUDITORS

M/s Mahesh, Virender & Shram, Chartered Accountants - Hyderabad retire at the conclusion of this Annual General Meeting and are eligible for reappointment as statutory Auditors. They have signified their willingness for re-appointment and have confirmed their eligibility undersection 224(1 B) of the CompaniesAct, 1956.

REPLIES TO AUDITORS REPORT

Notes No.6 Regarding Non-confirmation of balances from various parties: The Company is in the process of obtaining the confirmation of balances on a going concern basis.

Note No.7 Regarding non-provision for proportionate liability on account of employees retirement benefits which have not been quantified; Since employees benefits yet completed statutory period for eligibility of retirement benefits the same has been not provided.

Notes No.8: Non provision of loss on investments suggestions of Auditors will be considered during the current year.

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

A Statement giving details of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956, read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988, are given in Annexure -1 to this report.

PARTICULARS OF EMPLOYEES

There were no employees drawing remuneration in excess of the limits mentioned under Sec.217(2A) of the Companies Act, 1956 read with the relevant rules made there under during the financial year 2009-10.

PERSONNEL:

Your Directors place (d) on record their appreciation for the services rendered by the employees. The relation between the management and the employees has been cordial throughout the year.

CORPORATE GOVERNANCE

In terms of Clause 49 of the Listing Agreement a separate Report on Corporate Governance is enclosed as Annexure-ll to this report.

ACKNOWLEDGMENTS

Your Directors wish to place on record their gratitude for the support received from Bankers, Government Departments, suppliers, clients and look forward for their continued support and co-operation. Your Directors record their special appreciation to the employees and officers for their sustained efforts and contribution to the company. Yours directors also thank the share holders and investors for the their support and confidence reposed in.

Pecuniary Relationship or transactions of Non-Executive Directors

Non-Executive directors dont have any other material pecuniary relationship or transactions with the company, its promoters or its management which in the judgement of the board may affect independence of judgment of the director.

Code of Conduct

The Board of Directors of the company has laid a code of conduct for Directors. .All Directors have affirmed compliance with the code for the year under review. A declaration to this effect duly signed by the Managing Director of the Company is annexed to this report.

Nomination facility

Shareholders holding shares in physical form and desirous of making a nomination in respect of their shareholding in the company, as permitted under Section 109A of the Companies Act, 1956 are requested to submit to the Company the prescribed Form 2B for this purpose.

Companys Policy on prevention of insider Trading

Pursuant to the requirements of SEBI (Prohibition of insider Trading) Regulations, 1992, as amended, the Company had framed a Code of conduct for prevention of insider trading. Sri Chintam Krishna Reddy - had been appointed as Compliance Officer for the purpose. The code is applicable to all such employees of the Company who are expected to have access to the unpublished price sensitive information relating to the Company and the same is being implemented as a self regulatory mechanish,

By order of the Board VMF SOFT TECH LIMITED

sd/- sd/- KRISHNA REDDY CHINTAM P KRISHNAM RAJU MANAGING DIRECTOR DIRECTOR

Registered Office:

22-240/5, Nanditha Complex Opp: KPHB Colony Kukatpally Hyderabad-500072.

Date; 30th August, 2010

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