The Board of Directors of SecureKloud Technologies Limited have pleasure in presenting
the thirty eighth (38th) Annual Report on the business and operations for the
year ended March 31, 2023 along with the audited financial statements (standalone and
consolidated).
Financial Performance
The financial performance of the Company for the year ended March 31, 2023 and March
31, 2022 is summarized below:
(' In lakhs)
|
Consolidated |
Standalone |
Particulars |
FY 23 |
FY 22 |
FY 23 |
FY 22 |
Revenue from operations |
45,844 |
37940 |
5,931 |
4,423 |
Earnings Before Interest, Depreciation and Amortization |
(7,097) |
(8,189) |
531 |
421 |
Interest |
1,032 |
1,196 |
527 |
806 |
Depreciation and Amortization |
1,798 |
1,141 |
276 |
117 |
Profit Before Tax (PBT) before Exceptional Item |
(9,927) |
(10,526) |
(272) |
(503) |
Exceptional Item |
- |
- |
- |
- |
Profit Before Tax (PBT) After Exceptional Item |
(9,927) |
(10,526) |
(272) |
(503) |
Profit After Tax (PAT) before Non Controlling Interest |
(9,876) |
(9,818) |
(268) |
(585) |
Profit After Tax (PAT) after Non Controlling Interest |
(4,859) |
(6,653) |
(268) |
(585) |
Results of our operations
The Company has reported consolidated revenue from operations of INR 45,844 lakhs for
the financial year 2023, an increase of 20.8% compared to financial year 2022. This was
primarily due to the growth in healthcare and life sciences business by 28.8% compared to
the previous year, due to acquisition of Devcool Inc in November 2021 as well as new
business from our existing customers' reflecting continued adoption and acceleration in
the demand for cloud technology. The loss before taxes had marginally come down during the
financial year 2023 to INR 9,926 lakhs as compared to INR 10,525 lakhs during the
financial year 2022. The loss was primarily due to our continued investment in maintaining
our existing platforms, investment towards development of blockedge web3 and neutral zone
as well increase in operational expenses related to delivery of software services.
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, 2023 was INR 3,000 lakhs divided into 600 lakhs equity
shares of INR 5 each. The paid-up share capital as on March 31, 2023 was INR 16,70,53,025
divided into 3,34,10,605 equity shares of INR 5 each.
Issue of Convertible Warrants and Allotment of Shares
The Company had previously allotted 45,00,000 convertible share warrants of INR 100
each to Mr. Suresh Venkatachari, promoter of the Company on March 17, 2021 on receipt of
an upfront payment of INR 11,25,00,000 (rupees eleven crores and twenty five lakhs only),
equal to 25% of the total consideration as per the terms of preferential issue in
compliance with chapter V of SEBI (Issue of Capital and Disclosure Requirements)
Regulations, 2018, section 42 and 62 of the Companies Act, 2013 and rules made thereunder
as amended from time to time.
During the financial year 2022-23, 12,25,000 convertible share warrants were exercised
by Mr. Suresh Venkatachari and the Company had duly obtained the approval from the stock
exchanges for the listing and trading pursuant to the allotment of
12.25.000 equity shares and these shares are subject to the lock-in provisions as per
the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. Further,
16,07,000 convertible share warrants were forfeited due to non-exercise on account of
lapse of time.
Transfer to Reserve
16.07.000 convertible share warrants were forfeited due to non-exercise on account of
lapse of time and consequently, INR
4.01.75.000 amounting to 25% of the value which was paid upfront was transferred to
capital reserve.
Material Changes affecting the Financial Position of the Company
There are no material changes and commitments affecting the financial position of the
Company since the date of the financial statements i.e., March 31, 2023 till the date of
this report.
Dividend
Due to inadequacy of profits, the Board has not recommended any dividend for the
financial year 2022-23.
Public Deposits
The Company has not accepted any deposits within the meaning of provisions of chapter V
of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014
for the year ended March 31, 2023.
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, 2023 is as below:
('Rs in lakhs)
Name of the subsidiary |
Outstanding value as on March 31, 2023 |
Value of Guarantee |
SecureKloud Technologies Inc |
2,679 |
4,250 |
Healthcare Triangle Inc |
2,420 |
4,250 |
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.
Compliance Culture
The Company is essentially compliance centric and has a huge focus in this direction.
The compliance function is manned by a dedicated and experienced team of professionals.
The compliance team regularly conducts various educative training programs for various
segments within the organization. The Company thrives towards a culture of 'Total
Compliance' and it has a 'Zero Tolerance' policy for non-compliances. There exists a
comprehensive compliance manual, which is reviewed by the Board of Directors from time to
time and it facilitates Company's compliance team to monitor various compliance
requirements effectively and comprehensively.
Board and Committee Meetings
The Board met thirteen(13) times during the financial year 2022-23. 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.
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 directors 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).
Separate Meeting of Independent Directors
During the year, a separate meeting of independent directors was held on February 13,
2023. The independent directors actively participated and provided guidance to the Company
in all its spheres.
Nomination and Remuneration Policy
The nomination and remuneration committee of the company reviews the composition of
Board to ensure that there is an appropriate mix of talent, qualification, experience and
diversity to serve the interests of the shareholders of the Company. Pursuant to section
178 of the Companies Act, 2013, the remuneration policy has been formulated to govern the
terms of appointment and remuneration of Directors of the Company. The policy ensures that
the remuneration paid is sufficient to retain and motivate the directors of the company.
The remuneration policy is available on the website of the Company at https://www.securekloud.com/investor/policies/8
Nomination-and-Remuneration-Policv.pdf.
Subsidiary Companies
S. No Name of the Company |
Relationship |
% of shares held |
1 SecureKloud Technologies Inc (USA) |
Subsidiary |
60.70% |
(a) Healthcare Triangle Inc |
Step-down subsidiary |
SecureKloud Technologies Inc holds 59.82% |
(i) Devcool Inc |
Step-down subsidiary |
Healthcare Triangle Inc holds 100% |
(b) SecureKloud Technologies Inc (Canada) |
Step-down subsidiary |
SecureKloud Technologies Inc holds 100% |
(c) Nexage Technologies Inc |
Step-down subsidiary |
SecureKloud Technologies Inc holds 100% |
2 Blockedge Technologies Inc |
Subsidiary |
100% |
3 Mentor Minds Solutions and Services Inc |
Subsidiary |
100% |
4 Healthcare Triangle Private Limited |
Subsidiary |
99.99% |
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 the 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 continuously explores new technology to optimize energy consumption in its
office premises to achieve maximum saving of energy. The work from home policy adopted by
the Company has resulted in reduced attendance in the office, thereby, energy consumption
has been significantly scaled down. Further, conservation measures undertaken include,
quarterly maintenance of AHU ducts, fitting of motion sensors to turn off lights in places
where there are no employees, installation of water-cooled chillers which consume power
from wind energy.
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, we have strived to strengthen our collaboration with healthcare and life
sciences enterprises. We have institutionalized programs that encourage employees to
contribute ideas. We have invested in some of these ideas with the objective of building
product/service offerings for our customers, as well as for use in executing
internal/customer projects.
Foreign Exchange (' in lakhs)
Particulars |
2022-23 |
Earnings in foreign exchange |
5,090.01 |
Foreign exchange outflow |
0.48 |
Internal Financial 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 disclosure under Sexual Harassment of Women at Workplace (Prevention, Prohibition
and Redressal) Act, 2013 has been dealt with in detail under the corporate governance
report.
Directors, Key Managerial Personnel and Promoters
As on date of this report, the Board comprises of seven directors, out of which four
are independent directors and the chairman of the Board is a non-executive director. The
details of each member of the Board as on the date of this report forms part of corporate
governance report. During the year under review, multiple changes in the Board of
Directors took place; which are captured separately in the corporate governance report.
Further, during the financial year 2022-23; Mr. Suresh Venkatachari was the chief
executive officer and the chairman of the Company. SEBI interim order cum show cause
notice dated August 04, 2022 passed an order that Mr. Suresh Venkatachari should step down
from the position of chief executive officer and chairman of the Company. Later, he
appealed to the Hon'ble Securities Appellate Tribunal and an interim order dated September
07, 2022 was passed allowing him to continue as the chief executive officer of the
Company. Subsequently, the Board re-appointed him as the chief executive officer of the
Company with effect from September 16, 2022. The SEBI's interim order culminated into a
final order dated December 16, 2022; wherein the orders was passed stating that he cannot
be associated with the Company as a key managerial personnel; thereby, he ceased to hold
the position of the chief executive officer (KMP) of the Company with effect from January
19, 2023.
The following are the Key Managerial Personnel (KMP's) of the Company as on March 31,
2023
Thyagarajan R, Whole-time Director and Chief Financial Officer
Srinivas Mahankali, Whole-time Director and Chief Business Officer
Roshini Selvakumar, Company Secretary and Compliance Officer
Changes after March 31, 2023, until the date of this Report
Mr. Balasubramanian V, independent director was designated as the chairman of
the Company with effect from May 29, 2023.
Ms. Babita Singaram, independent director resigned from her position with effect
from May 29, 2023.
The Enforcement Directorate (ED) had arrested Mr. Suresh Venkatachari and Mr. R S
Ramani (Promoters) along with the stock brokers on an investigation under the Prevention
of Money Laundering Act (PMLA); this investigation was initiated by the Enforcement
Directorate based on the FIR filed by Mr. Suresh alleging that Quantum Global Securities
Ltd (QGSL), its directors, Mr. Atul Malik, Mr. Bhavesh Singh and loan broker Mr. Rohit
Arora, cheated him to the tune of INR 144 crores by selling shares of the Company, which
were pledged with QSBL to secure a loan of INR 37 crores.
The Hon'ble High Court of Judicature at Madras granted conditional bail to Mr. Suresh
Venkatachari and Mr. R S Ramani. In the bail order, the Honorable Judge, mentioned that
"in view of the above discussion and the peculiar circumstances of the case, this
court is of the firm view that on mere suspicion of serious offences and surmises alone,
the personal liberty, guaranteed by the statute as time and again reiterated by the Apex
Court and other High Courts, cannot be denied to the petitioners and thereby this court
feels that the continuation of incarceration of the petitioners does not only amount to
putting the cart in front of the horse, but, also, keeping a cart ready for an unborn,
rather, stillborn foal".
The predicate offence based on which the present Enforcement Case Information Report
(ECIR) came on record, viz., FIR in crime no 39 of 2019, has been quashed by the Hon'ble
High Court of Judicature at Madras based on order dated May 10, 2023.
Further, in parallel proceedings, the ECIR has been stayed by the Division Bench of the
Hon'ble High Court of Judicature at Madras; and the proceedings have come to a standstill.
Subsequently, Mr. Suresh Venkatachari and Mr. R S Ramani have filed a writ petition
before the Hon'ble High Court of Judicature at Madras seeking to quash the ECIR and the
same is pending to be heard.
Particulars of Employees
The percentage increase in remuneration, ratio of remuneration of each director and key
managerial personnel to the median of employees' remuneration, and the list of top 10
employees at a consolidated level in terms of remuneration drawn, 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 to this
report. The statement containing particulars of employees at a consolidated level employed
throughout the year and in receipt of remuneration of INR 1.02 crore or more per annum and
employees employed for part of the year and in receipt of remuneration of INR 8.5 lakhs or
more per month, 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, shall be provided upon request.
Report on Corporate Governance
Pursuant to regulation 34 (3) and Schedule V of the 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.
Statutory Auditors
M/s. K. Gopal Rao & Co., Chartered Accountants (Firm Registration No.000956S) were
appointed as the statutory auditors of the Company at the 35th annual general
meeting for a period of five years. In accordance with sections 139 and 141 of the
Companies Act, 2013 and relevant rules prescribed thereunder, the Company has received
certificate from the statutory auditors to the effect that have confirmed they are
eligible to continue as auditor. 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.
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, 2023.
The secretarial audit report is enclosed as Annexure I to this report.
Observation |
Management's Response |
The Company has not obtained the prior approval of the audit committee
and its shareholders, in connection with the material related party transaction entered
between its subsidiaries Securekloud Technologies Inc and Healthcare Triangle Inc, as per
regulation 23 (2) and (4) of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015. The same has been subsequently ratified by obtaining approval from
shareholders via postal ballot. |
The prior approval of the audit committee was inadvertently missed
out. However, it was later obtained during the year and subsequently ratified by the
shareholders through postal ballot notice dated November 21, 2022. |
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/2022-2023/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
Policv-on-Related-Partv-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, 2023. The annual report contains a
declaration to this effect signed by the whole-time director.
Details of Significant and Material orders passed by the Regulators or Courts or
Tribunals
The list of orders passed by the regulatory authorities have been captured under a
separate section in the corporate governance report.
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.
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
Since the Company does not have adequate profits, corporate social responsibility is
not applicable for the year under review. Software Technology Park
During the year under review, our 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.
Reporting of Fraud
During the year under review, neither the statutory auditors nor the secretarial
auditor has reported to the audit committee, under section 143 (12) of the Companies Act,
2013, any instances of fraud committed against the Company by its officers or employees,
the details of which would need to be mentioned in the Board's report.
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, 2023, 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, 2023, 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 also 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.
For and on behalf of the Board, SecureKloud Technologies Limited
|
Thyagarajan R |
Biju Chandran |
Place: Chennai |
DIN:00942326 |
DIN: 06540000 |
Date: May 29, 2023 |
Whole-time Director |
Independent Director |
|