The Board of Directors of SecureKloud Technologies Limited have pleasure in presenting the Thirty Ninth (39th) Annual Report on the business and operations for the year ended March 31, 2024 along with the Audited Financial Statements (standalone and consolidated).
Financial Performance
The financial performance of the Company for the year ended March 31, 2024 and March 31, 2023 is summarized below:
(Rs in Lakhs)
Review of Operations & Performance
The Company has reported consolidated revenue from operations of INR 34,032 lakhs for the financial year 2024, a decrease of 25.77% compared to financial year 2023. This was primarily due to healthcare projects coming to an end in Financial Year 2024. Additionally, there was a drop in revenue due to loss of a major customer. The loss before taxes had marginally come down during the financial year 2024 to INR 9,511 lakhs as compared to INR 9,927 lakhs during the financial year 2023.
Management Discussion and Analysis
Management Discussion and Analysis as required under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is provided separately as Annexure VI to this report.
Share Capital
The Company has only one class of equity shares of par value INR 5 each. The authorised share capital as on March 31, 2024 was INR 3,000 lakhs divided into 600 lakhs equity shares of INR 5 each. The paid-up share capital as on March 31, 2024 was INR 16,70,53,025 divided into 3,34,10,605 equity shares of INR 5 each.
Transfer to Reserve
The Company has not made any transfer of amounts to General Reserve during the year.
Material Changes affecting the Financial Position of the Company
The Management identified a significant change in circumstances arising from the loss of a major customer within our step-down subsidiary, Devcool Inc. Historically, this customer accounted for approximately 33% of the Company's consolidated revenues. Based on the Impairment assessment, Management provided a one-time write-off of INR 22.66 Crores from the value of the customer relationship and INR 9.73 Crores from Goodwill as of March 31, 2024.
Dividend
Due to inadequacy of profits, the Board has not recommended any dividend for the financial year 2023-24.
Public Deposits
The Company has neither accepted any deposits from the public nor accepted any amounts which are deemed to be deposits within the meaning of Sections 73 to 76 of the Companies Act, 2013 (as amended) and the Rules made thereunder, to the extent applicable.
Pursuant to the Ministry of Corporate Affairs (MCA) notification amending the Companies (Acceptance of Deposits) Rules, 2014, the Company has filed with the Registrar of Companies (ROC) the requisite forms for outstanding receipt of money/loan by the Company, which is not considered as deposits.
Transfer of Unclaimed Dividend to Investor Education and Protection Fund
There was no amount required to be transferred to Investor Education and Protection Fund during the year. Particulars of Loans, Guarantees or Investments
The Company has given Corporate guarantee on behalf of its subsidiary, SecureKloud Technologies Inc and step- down subsidiary, Healthcare Triangle Inc for facilitating business needs. The outstanding amount as on March 31, 2024 is as below:
Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 and Regulation 34(3) and Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 form part of the notes to the financial statements provided in this Annual Report.
Disclosure under Rule 8(5)(xii) of the Companies (Accounts) Rules,2014
There was no instance of one-time settlement with any bank or financial institution.
Compliance Culture
The Company promotes a culture in which compliance with laws, the internal Regulations and market standards is seen as an integral part of doing business. At its core, compliance culture of the Company is guided and supported by many people to create an environment in which everyone can say and do the right thing. The Company believes that a successful compliance culture does not view training as a once and done exercise, but as a continual process aimed at closing knowledge gaps and upskilling employees.
Board and Committee Meetings
The Board met Nine (9) times during the financial year 2023-24. The details regarding the Board meetings and Committee meetings are given separately in the report on Corporate Governance as Annexure III to this report. The gap intervening between two meetings of the Board is within the stipulated time frame prescribed in the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Committees of the Board
The details of the powers, functions, composition, and meetings of the Committees of the Board held during the year are given in the Report in the Corporate Governance Section forming part of the Annual Report.
Declaration by Independent Directors
The Company has received declaration of independence from the Independent Directors under Section 149(7) of the Companies Act, 2013 and Regulation 16 (1) (b) and Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 confirming that they meet the criteria of independence which has been duly evaluated by the Board. Further, all the Independent Directors have confirmed that they have registered themselves on the Independent Director's data bank maintained by the Indian Institute of Corporate Affairs as mandated by Companies (Appointment and Qualification of Directors) Rules, 2014. The Independent Directors have complied with the code for Independent Directors prescribed in Schedule IV to the Companies Act, 2013 and in the opinion of the Board, the Independent Director(s) appointed during the year are persons of integrity, expertise and experience (including the proficiency).
Familiarization Program for Independent Directors
The Company has in place a familiarization program for its Independent Directors. The objective of the program is to familiarize Independent Directors on our Board with the business of the Company, industry in which the Company operates, business model, challenges etc.
The familiarization program and other disclosures as specified under the Listing Regulations is available on the Company's website at https://www.securekloud.com/investor/policies/3 Familiarisation-Program-for-Independent- Directors.pdf.
Separate Meeting of Independent Directors
During the year, a separate meeting of Independent Directors was held on January 31, 2024. The Independent Directors actively participated and provided guidance to the Company in all its spheres.
Nomination and Remuneration Policy
The Nomination and Remuneration Policy of the Company provides for the roles and responsibilities of the Nomination and Remuneration Committee and the criteria for evaluation of the Board and compensation of the Directors and senior management. Further, as per the policy, the said Committee identify potential candidates with integrity, possessing relevant skill set, expertise and experience for becoming members of the Board and determining the composition of the Board based on the need and requirements of the Company from time to time to bring out diversity in the Board and also identify persons to be recruited in the senior management of the Company and ensure the compensation packages and other human resource practices are effective in maintaining a competent workforce and make recommendations relating thereto. The remuneration policy is available on the website of the Company at https://www.securekloud.com/investor/policies/8 Nomination-and-Remuneration-Policy.pdf
Subsidiary Companies
A statement under Section 129 (3) of the Companies Act, 2013 in form AOC-1 is attached as Annexure IV to this report. Consolidated Accounts
The consolidated financial statements of the Company is prepared in accordance with the provisions of Section 129 of Companies Act, 2013 read with Companies (Accounts) Rules, 2014 and Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The audited consolidated financial statements together with auditor's report forms part of the Annual Report.
Conservation of Energy
The Company is a Software Company and hence the operations of the Company are not energy intensive. The Company employs energy efficient computers and office equipment. The Company is conscious about environment protection and energy conservation and strives to evolve new technologies to see to that, the infrastructure is more energy efficient.
Various practices have been implemented, such as adjusting AC temperature settings, monitoring AC systems based on occupancy, seasonal adjustments to AC temperatures, and shutting down unused lights and equipment on respective floors, all of which are rigorously monitored and enforced. Also implementing regular checks to power down monitors and machinery during non-operational hours and weekends to reduce IT equipment power consumption.
Technology Absorption
The Company has always adopted the latest trends and best practices to build capability in new and emerging technologies. To encourage a culture of innovation in solving industry challenges, the Company strived to strengthen our collaboration with healthcare and life sciences enterprises and have institutionalized programs that encourage employees to contribute ideas. The Company has used technology to improve the work experience of the resources and ensure efficient delivery to the customers by migrating critical applications to the cloud and ensuring adequate business continuity. The Company's operations do not require significant import of technology.
Internal Finacial Controls
The Company has formulated a framework on internal financial controls and laid down policies and procedures commensurate with the size and nature of its operations pertaining to financial reporting. In accordance with Rule 8 (5) (viii) of Companies (Accounts) Rules, 2014, the Company has adequate internal control systems to monitor business processes, financial reporting and compliance with applicable Regulations and they are operating effectively. The systems are periodically reviewed by the Audit Committee of the Board, for identification of deficiencies and necessary time bound actions are taken to improve efficiency at all the levels. The Committee also reviews the observations forming part of internal auditors' report, key issues and areas of improvement, significant processes and accounting policies.
Disclosure as required under Section 22 of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company has formulated a policy on prevention of sexual harassment at workplace and has put in place a redressal mechanism for resolving complaints received with respect to sexual harassment and discriminatory employment practices for all genders. The Company has constituted Internal Complaints Committee which is responsible for redressal of complaints related to sexual harassment.
Further disclosure under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been provided in detail under the Corporate Governance report.
Directors and Key Managerial Personnel
As on date of this report, the Board comprises of Six Directors, out of which Three are Independent Directors and the Chairman of the Board is an Executive Director. The details of each member of the Board as on the date of this report forms part of Corporate Governance report.
Mr. Suresh Venkatachari has been appointed as the Chairman and Chief Executive Officer of the Company with effect from February 07, 2024.
During the Financial Year, Mr. Thyagarajan R resigned from the position of Whole-time Director and Chief Financial Officer as a part of internal restructuring and Mr. Ramachandran S took charge as the Chief Financial Officer of the Company with effect from February 07, 2024.
Further during the Financial Year, Mr. V. Balasubramanian stepped down from the position of Chairperson with effect from February 07, 2024 and resigned from the position of Independent Director with effect from March 31, 2024.
The following are the Key Managerial Personnel (KMP's) of the Company as on March 31, 2024
• Mr.Suresh Venkatachari1 , Chairman and Chief Executive Officer
• Mr.Ramachandran S2, and Chief Financial Officer
• Mr.Srinivas Mahankali, Whole-time Director & Chief Business Officer
• Ms.Roshini Selvakumar, Company Secretary & Compliance Officer
Changes after March 31, 2024, until the date of this Report
• Ms. Roshini Selvakumar, Company Secretary and Compliance Officer resigned from her position with effect from May 09, 2024.
• Ms. Jayashree Vasudevan has been appointed as the Company Secretary and Compliance Officer of the Company with effect from May 13, 2024.
ECIR against Promoters unequivocally quashed by the Madras High Court
Madras High Court has unequivocally quashed the money laundering case filed by the Enforcement Directorate (ED) against Mr. Suresh Venkatachari and Mr. R S Ramani, promoters of the Company. The same was upheld by the Supreme Court of India. The Supreme Court rejected the appeal filed by the Enforcement Directorate, affirming the Madras High Court's judgment and conclusively endorsing the quashing of the predicate offence of the ECIR. The order underscores the fact that SecureKloud is in no way connected to the money laundering charges levelled against the promoters.
Particulars of Employees
The percentage increase in remuneration, ratio of remuneration of each Director and key managerial personnel to the median of employees' remuneration as required under Section 197 (12) of the Companies Act, 2013, read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, form part of Annexure II (a) to this report.
A statement as required under Rule 5 (2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed to this Report as Annexure II (b).
Report on Corporate Governance
Pursuant to Regulation 34 (3) and Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Corporate Governance report forms an integral part and has been enclosed as Annexure III to this report.
A Certificate from M/s. SPNP & Associates, a firm of Company Secretaries in practice, confirming the compliance with the conditions of Corporate Governance as stipulated under the said Regulations is attached as Annexure III to this the Corporate Governance Report.
Auditors Statutory Audit
M/s. K. Gopal Rao & Co., Chartered Accountants (Firm Registration No.000956S) was appointed as the Statutory Auditors of the Company for a period of five years from the conclusion of the 35th AGM of the Company held on September 30, 2020 till the conclusion of the 40th AGM to be held in 2025. In accordance with Sections 139 and 141 of the Companies Act, 2013 and relevant Rules prescribed there under, the Company has received certificate from the statutory auditors to the effect that have confirmed they are eligible to continue as auditor and they have not incurred any disqualification after their appointment. The auditors have also confirmed that they have subjected themselves to the peer review process of Institute of Chartered Accountants of India (ICAI) and holds a valid certificate issued by the peer review Board of the ICAI.
The Auditors' Report for Financial Year ended March 31, 2024 does not contain any qualification, reservation, or adverse remark, other than the following for which the management's response is also incorporated:
The report is enclosed with the financial statements in this Annual Report.
Secretarial Audit
Pursuant to provisions of Section 204 of Companies Act, 2013 read with rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company engaged the services of M/s. SPNP & Associates, Practicing Company Secretaries to undertake the secretarial audit of the Company for the year ended March 31, 2024.
The secretarial audit report is enclosed as Annexure I to this report.
Internal A udit
M/s. K V Sudhakar, Chartered Accountants, are the Internal Auditors of the Company. The Audit Committee determines the scope of internal Audit in line with regulatory and business requirements.
Cost Records and Cost Audit
Maintenance of cost records and requirements of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable for the business activities carried out by the Company.
Reporting of Fraud
No instance of fraud committed against the Company by its officers or employees has been reported by either Statutory Auditor or by Secretarial Auditor during the year under review.
Secretarial Standards
The Company has complied with the applicable secretarial standards (SS 1) on meetings of Board of Directors and (SS 2) on general meeting issued by the Institute of Company Secretaries of India as per Section 118(10) of the Companies Act, 2013.
Extract of Annual Return
In accordance with Sections 134(3)(a) and 92(3) of the Companies Act, 2013 the draft annual return in form MGT- 7 is placed on the website at https://www.securekloud.com/investor/annual-report/2023-2024/Draft-MGT7.pdf
Related Party Transactions
The Board of Directors has adopted a policy on Related Party Transactions. The objective is to ensure proper approval, disclosure and reporting of transactions as applicable, between the Company and any of its related parties. All contracts or arrangements with related parties, entered into or modified during the financial year were at arm's length basis and in the ordinary course of the Company's business. Transactions with related parties, as per requirements of Indian Accounting Standard 24 are disclosed in the note no. 36 and 34 of the notes forming part of the standalone and consolidated financial statements respectively in the Annual Report. The Company's policy on related party transactions, as adopted by your Board, can be accessed on the Company's website at https://www.securekloud.com/investor/policies/7 Policy-on-Related-Party-Transactions.pdf
Particulars of contracts or arrangements with related parties referred to in Section 188(1) along with the justification for entering into such contracts or arrangements in Form AOC-2 is enclosed herewith as Annexure -V, forming part of this report.
Code of Business Conduct and Ethics
The Board of Directors has approved a code of conduct and ethics in terms of Schedule V of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015. All the Board members and the Senior Management Personnel have confirmed compliance with the code for the year ended March 31, 2024. The Annual Report contains a declaration to this effect signed by the Chairman & CEO.
Details of Significant and Material orders passed by the Regulators or Courts or Tribunals
The list of orders passed by the regulatory authorities has been captured under a separate Section in the Corporate Governance report.
Risk Management
The Company implemented a risk management framework and has in place a mechanism to inform the Board members about risk management and minimization procedures and periodical review to ensure that risks are controlled by the framework.
Evaluation of Board's Performance
The performance of the Board was evaluated after seeking inputs from all the Directors. The Board has carried out an evaluation of its own performance, Committees as a whole, Independent and Non-Independent Directors and that of its Directors individually. The manner in which the evaluation has been carried out is explained in the Corporate Governance report. Detailed note on the composition of the Board and its Committees are provided in the Corporate Governance report.
Insolvency and Bankruptcy Code
During the year, there was no application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016, hence the requirement to disclose the details of application made or proceeding pending at the end of financial year is not applicable.
Corporate Social Responsibility
In the absence of adequate profits for the year an obligation towards CSR as mandated by Section 135 of the Companies Act, 2013 does not arise.
Software Technology Park
During the year under review, the Company has been registered under the Software Technology Parks of India (STPI) Scheme. The STP Scheme is a 100% export-oriented scheme for the development and export of computer software, including export of professional services using communication links or physical media. As a unique scheme, it focuses on one sector, i.e. computer software.
Director's Responsibility Statement
In terms of Section 134 (5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm:
i. That in the preparation of the annual accounts for the financial year ended March 31, 2024, the applicable accounting standards had been followed along with proper explanation relating to material departures.
ii. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 March 31, 2024, and of the profit or loss of the Company for the year under review.
iii. The Directors have 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. The Directors have prepared the annual accounts on a going concern basis.
v. The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
vi. The Directors have devised proper system to ensure compliance with the provisions of all applicable laws and that such system is adequate and operating effectively.
Acknowledgement and Appreciation
The Directors wish to thank all the employees for their contribution, support and continued commitment throughout the year.
The Directors take this opportunity to thank the shareholders, financial institutions, vendors, banks, customers, suppliers and regulatory and governmental authorities for their continued support to the Company.