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Item 9A. Controls and Procedures

2025-05-30 compared with 2024-05-30 · 24 added, 34 removed, 127 unchanged (31% of the section changed)

2 unchanged sentences

The Company’s management evaluated, with the participation of the Chief Executive Officer and Chief Financial Officer, the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of March 31, 2025, the end of the period covered by this report.

Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were not considered to be effective as of March 31, 2024 due to a material weakness in internal control over financial reporting (as such term is defined in Rule 12b-2 of the Exchange Act) in the area of our information technology general controls (“ITGCs”).

The deficiencies in ITGCs were related to access and program development and change management controls associated with the Company’s large-scale migration in a compressed timeframe of its internal operating systems to a new enterprise resource planning system (“ERP”), which was required to replace the systems temporarily being made available to the Company by our former parent following our Spin-off.

These control deficiencies did not result in a misstatement to the annual or interim consolidated financial statements previously filed or included in this Annual Report on Form 10-K.

Subsequent to the identification of the ITGC deficiencies and prior to the issuance of this Annual Report on Form 10-K, the Company performed a lookback review of the users making changes to relevant systems and conducted other supplemental procedures.

As a result of these procedures we did not identify any material misstatements in our consolidated financial statements or disclosures in the fiscal year ended March 31, 2024.

Our management has concluded that the consolidated financial statements for the periods covered by and included in this Annual Report on Form 10-K fairly present, in all material respects, our financial position, results of operations and cash flows in conformity with GAAP.

Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act).

Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Our internal control over financial reporting is a process designed to

provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Internal control over financial reporting includes those policies and procedures that:

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Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate due to changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management, with the participation of the Chief Executive Officer and Chief Financial Officer, conducted an assessment of the effectiveness of our internal control over financial reporting as of March 31, 2024 based on the criteria set forth in Internal Control – Integrated Framework (“2013 Framework”) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

In connection with our assessment of the effectiveness of internal control over financial reporting, management identified certain control deficiencies associated with the Company’s new ERP environment in the area of ITGCs related to (i) user access and segregation of duty controls that restrict user and privileged access to appropriate personnel;

(ii) program development and change management controls;

and (iii) certain computer operations controls that, when aggregated, are considered to be a material weakness which is defined in Rule 12b-2 of the Exchange Act as a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis.

Because of this, management has determined our internal control over financial reporting was not effective as of March 31, 2024.

These control deficiencies did not result in a misstatement to the annual or interim consolidated financial statements previously filed or included in this Annual Report on Form 10-K.

Our consolidated financial statements included in this Annual Report on Form 10-K and the effectiveness of our internal control over financial reporting as of March 31, 2024 have been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report included in this Annual Report on Form 10-K.

Management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our internal control over financial reporting as of March 31, 2025 .

In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework (2013) .

Based on this evaluation, management concluded that, as of March 31, 2025 , our internal control over financial reporting was effective.

The effectiveness of our internal control over financial reporting as of March 31, 2025 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report included in this Annual Report on Form 10-K.

See “Report of Independent Registered Public Accounting Firm” on page 47 .

Remediation Plan

Management has evaluated the deficiencies described above and has developed and is implementing a remediation plan designed to strengthen our ITGC processes and controls associated with our new ERP environment.

This plan includes but is not limited to (i) implementing and/or formalizing additional controls across our information technology environment, including user access and segregation of duty controls, program development and change management controls, and certain computer operations controls, and (ii) training of relevant personnel on the design and operation of any new or modified ITGCs.

The remediation plan is subject to ongoing management review, as well as oversight by the Audit Committee of our Board of Directors.

The Company expects to complete the implementation of its remediation plan during fiscal year 2025.

We believe our remediation plan will address the deficiencies described above;

however, deficiencies will not be considered fully remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

We will continue to monitor the design and effectiveness of these and other processes, procedures and controls and make further changes as appropriate.

Changes in Internal Control over Financial Reporting

Other than the deficiencies and remediation activities described above, there has been no change in the Company’s internal control over financial reporting (as such term is defined in Rule 13a-15(f) of the Exchange Act) that occurred during the Company’s last fiscal quarter ended March 31, 2024 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

There have been no changes in the Company’s internal control over financial reporting (as such term is defined in Rule 13a-15(f) of the Exchange Act) that occurred during the quarter ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting other than the remediation of our information technology general controls as part of our previously disclosed remediation activities.

Other Information .

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Directors, Executive Officers and Corporate Governance .

Information about our executive officers may be found under the caption “Information about our Executive Officers” in Part I of this Form 10-K and is incorporated by reference in this Item 10.

Other information called for by this Item 10 will be included in the subsections titled “Proposal 1 - Election of Directors,” “Kyndryl Code of Conduct,” “Securities Trading Policy,” and “Committees of the Board” under the section entitled “Corporate Governance and Board Matters” in our Proxy Statement for our 2024 Annual Meeting of Stockholders (our “2024 Proxy Statement”) and is incorporated herein by reference.

Information about our executive officers may be found under the caption “Executive Officers of the Registrant” in Part I of this Form 10-K and is incorporated by reference in this Item 10.

in our Proxy Statement for our 2025 Annual Meeting of Stockholders (our “2025 Proxy Statement”) and is incorporated herein by reference.

Executive Compensation.

The information called for by this Item 11 will be included in the sections titled “Director Compensation” and “2024 Executive Compensation” in our 2024 Proxy Statement for our 2024 Annual Meeting of Stockholders and is incorporated herein by reference.

The information called for by this Item 11 will be included in the sections titled “Director Compensation” and “2025 Executive Compensation” in our 2025 Proxy Statement and is incorporated herein by reference.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters .

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Description of the registrant’s securities registered under Section 12 of the Exchange Act (filed herewith).

Term Loan Credit Agreement, dated as of October 18, 2021, by and among Kyndryl Holdings, Inc., the lenders party thereto and JPMorgan Chase Bank, N.A.

as administrative agent, and the other financial institutions party thereto, was filed as Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on October 22, 2021 and is hereby incorporated by reference.

Amendment No.

1 to Term Loan Credit Agreement dated as of June 21, 2023, among the Company, the Lenders party thereto and JPMorgan Chase Bank N.A., as Administrative Agent, was filed as Exhibit 10.2 to the registrant’s Current Report on Form 8-K filed on June 23, 2023, and is hereby incorporated by reference.

Five-Year Revolving Credit Agreement, dated as of October 18, 2021, by and among Kyndryl Holdings, Inc., the lenders party thereto and JPMorgan Chase Bank, N.A.

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was filed as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2022 filed on February 9, 2023 and is hereby incorporated by reference.

Fourth Amendment to Amended and Restated Receivable Purchase Agreement, dated July 26, 2024, by and among Banco Santander S.A., Kyndryl, Inc.

and Kyndryl Holdings, Inc.

was filed as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024 filed on November 7, 2024 and is hereby incorporated by reference.

Tax Matters Agreement, dated as of November 2, 2021, between International Business Machines Corporation and Kyndryl Holdings, Inc.

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Form of LTPP equity award agreement for performance share units (Fiscal 2023) was filed as Exhibit 10.3 to the registrant’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2022 filed on November 4, 2022 and is hereby incorporated by reference.†

Form of LTPP equity award agreements for restricted stock units was filed as Exhibit 10.5 to the registrants Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2023 filed on November 8, 2023, and is hereby incorporated by reference.†

Form of LTPP equity award agreement for performance share units was filed as Exhibit 10.6 to the registrants Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2023 filed on November 8, 2023, and is hereby incorporated by reference.†

Form of LTPP equity award agreement for restricted stock units was filed as Exhibit 10.5 to the registrant’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2023 filed on November 8, 2023 and is hereby incorporated by reference.†

Form of LTPP equity award agreement for performance share units was filed as Exhibit 10.6 to the registrant’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2023 filed on November 8, 2023 and is hereby incorporated by reference.†

Form of LTPP equity award agreement for performance share units was filed as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2024 filed on August 7, 2024 and is hereby incorporated by reference.†

Form of LTPP equity award agreement for performance share units (filed herewith).†

Form of LTPP equity award agreement for restricted stock units (filed herewith).†

Form of LTPP equity award agreement for retention restricted stock units (filed herewith).†

Kyndryl Excess Plan was filed as Exhibit 10.13 to the registrant’s Current Report on Form 8-K filed on November 4, 2021 and is hereby incorporated by reference.†

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Amendment to the Kyndryl Executive Severance Plan and Executive Retirement Policy was filed as Exhibit 10.7 to the registrant’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2023 filed on November 8, 2023 and is hereby incorporated by reference.†

Amendment to the Kyndryl Executive Severance Plan and Executive Retirement Policy was filed as Exhibit 10.3 to the registrant’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2024 filed on August 7, 2024 and is hereby incorporated by reference.†

Kyndryl Annual Incentive Plan for Executives was filed as Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on February 25, 2022 and is hereby incorporated by reference.†

Kyndryl Holdings, Inc.

Securities Trading Policy (filed herewith).

Securities Trading Policy was filed as Exhibit 19.1 to the registrant’s Annual Report on Form 10-K for the fiscal year ended March 31, 2024 filed on May 30, 2024 and is hereby incorporated by reference.

Subsidiaries of the registrant (filed herewith).

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Certification of principal financial officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).

Kyndryl Financial Statement Clawback Policy (filed herewith).

Kyndryl Financial Statement Clawback Policy was filed as Exhibit 97.1 to the registrant’s Annual Report on Form 10-K for the fiscal year ended March 31, 2024 filed on May 30, 2024 and is hereby incorporated by reference.

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32 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures