DIRECTORS' REPORT To The Members Kellton Tech Solutions Limited Your Directors have pleasure in presenting the 21st Annual Report together with the audited statements of account for the year ended 30th June, 2015. 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. Material Changes and Commitments, if any, affecting the Financial Position of the Company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report. The members of the Company via Postal Ballot, passed necessary resolutions on 2nd July, 2015, with respect to the following: (I) Increase in Authorised Share Capital (ii) Alteration of capital clause of memorandum of association (iii) Alteration of the main objects (clause iii a) of the memorandum of association (iv) Alteration of incidental or ancillary objects (clause iii b) of the Memorandum ofAssociation (v) Deletion of the other objects (clause iii c) of the Memorandum ofAssociation (vi) Alteration of Articles ofAssociation (vii) Issue of 30,00,000 Share Warrants (viii) Increase in Power of Board to make investments, give loans, guarantees and provide securities beyond the prescribed limits. (ix) Increase in the Borrowing Powers of the Company (x) Power to create Charge / Mortgage on Assets of the Company 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. 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. 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. Kellton Tech Solutions Employees Stock Option Plan 2013 ("Plan"/ "Esop"/ "Esop 2013") I) The shareholders of the company has vide resolution passed at the 19 th 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 30th June, 2015. 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. Declaration by an Independent Director(s) A declaration has been received by all the Independent Directors of the Company that they meet the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013. Directors' Responsibility Statement 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 subsection (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 Managing Director DIN No:01658145 Niranjan Chintam Whole Time Director DIN: 01658591 Place: Hyderabad Date: 25-11-2015 CAUTIONARY STATEMENT Certain statements made in the management discussion and analysis report relating to the Company's objectives, projections, outlook, expectations, estimates and others may constitute 'forward looking statements' within the meaning of applicable laws and regulations. Actual results may differ from such expectations, projections and so on whether express or implied. Several factors could make significant difference to the Company's operations. These include climatic conditions and economic conditions affecting demand and supply, government regulations and taxation, natural calamities and so on over which the Company does not have any direct control. |