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Cadsys (India) Ltd.

BSE: 535011 Sector: IT
NSE: CADSYS ISIN Code: INE090Y01013
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Cadsys (India) Ltd. (CADSYS) - Director Report

Company director report

To

The Members

Cadsys(India) Limited

Dear Members

Your Directors are pleased to present the 28th Annual Report of your Companyon the business and operations of the Company together with the Audited FinancialStatements for the financial year ended on 31st March 2020 the Board's Reportand the Auditor's Report thereon. The summary of financial performance of the Company andits Subsidiaries for the year under review is given hereunder:

DISCLOSURES AS PER RULE 8(5) OF COMPANIES (ACCOUNTS) RULES 2014:

FINANCIAL HIGHLIGHTS

(in Lakhs Rs)

Particulars

Standalone

Consolidated

For the financial year 2019-20 For the financial year 2018-19 For the financial year 2019-20 For the financial year 2018-19
Total Revenue 1690.13 2152.08 4272.26 5338.32
Total Expenses 1539.93 1748.17 4383.61 3826.13
Finance Cost 36.81 24.59 97.89 55.44
Depreciation 107.09 140.88 386.23 292.05
Exceptional Items (140.15) 0 (117.65) 0
Profit before Tax 290.34 403.90 6.29 1512.19
Tax Expense 80.09 126.21 (22.22) 274.03
Profit after Tax 210.26 277.69 29.96 1241.89
Earnings per share (Basic & Diluted) 2.80 3.70 0.40 16.55

FINANCIAL PERFORMANCE

Your Company has during the period under review showed a decline in terms of revenuedue to the heightened restrictions on immigration and the lockdown caused due to Covid-19pandemic However cadsys has implemented appropriate risk mitigation strategies to ensurebusiness continuity. On a Consolidated basis the revenue for the year under review wasRs. 4272.26 Lakhs decrease by 20% over the previous year's revenue of Rs. 5338.32Lakhs. The PAT attributable to the members was Rs. 29.96 Lakhs registering a decline of97.59% over the PAT of Rs. 1241.89 Lakhs for the previous year.

On the Standalone basis the revenue for the year under review was Rs. 1690.13 Lakhsagainst the previous year's revenue of Rs. 2152.08 Lakhs. The PAT attributable to themembers was Rs. 210.26 Lakhs against the PAT of Rs. 277.69 Lakhs for the previous year.

Your Directors are continuously making effort for the future growth and expansion ofthe Company by exploring all possible avenues in the market both in India and abroad.

Further during the year under review there were no changes in the Nature of Businessof the Company.

EXPORTS

The exports of the Company continue to be a major chunk of revenue accounting for avolume of Rs. 1551.25 Lakhs representing 94.37% of the total revenue of Rs. 1643.71Lakhs- during the year under review.

TRANSFER TO RESERVES IN TERMS OF SECTION 134(3)(J) OF THE COMPANIES ACT 2013

For the financial year ended on 31st March 2020 the Company has nottransferred any amount to Reserves.

DIVIDEND

With a view to conserve the resources in long run your Board of Directors have notrecommended any dividend for the Financial yearended 31st March 2020.

TRANSFER OF UNPAID & UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND(IEPF)

Pursuant to the provisions of the Companies Act 2013 read with IEPF Authority(Accounting Audit Transfer and Refund) Rules 2016 as amended declared dividends alongwith underlying equity shares which remained unpaid or unclaimed for a period of sevenyears are supposed to be transferred to IEPF. Presently there is no amount which isrequired to be transferred to IEPF by the Company. However there is an unpaid andunclaimed dividend since last 2 financial years the details of which can be accessed onCompany's website i.e. https://www.cadsystech.com/investor/.

SHARE CAPITAL

During the year under review there has been no change in the Share Capital of theCompany. Your Company has one Class of Shares i.e. Equity Shares of face value Rs. 10/-each. The Authorized Share Capital of your Company is Rs. 850 Lakhs comprising of Rs. 85Lakhs Equity Shares of Rs. 10/- each.

Further the issued subscribed and the Paid-up Share Capital of your Company as on31st March 2020 is Rs. 750.25 Lakhs.

EXTRACT OF ANNUAL RETURN

The Extracts of Annual Return in Form No. MGT-9 pursuant to provisions of Sections92(3) and 134(3)(a) of the Companies Act 2013 read with Rule 12 of the Companies(Management & Administration) Rules 2014 forms part of this report as "ANNEXURE-I"and also been placed on the website of the Company the web address for which ishttp://www.cadsystech.com/investor/.

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

The Board represents an optimum mix of professionalism knowledge and experience. TheCompany's policy is to maintain optimum combination of Executive Non-Executive Directorsand Independent Directors.

Following were the Directors and Key Managerial Personnel of the Company as on 31stMarch 2020:

S. No. Name of the Directors Designation DIN/PAN
1. Nallani Chakravarthi Venkata Rangacharya Managing Director 01067596
2. Nallani Chakravarthi Padmaja Whole-Time Director and Chief Finance Officer 01173673
3. Nallani Chakravarthi Madhavi Non-Executive Director 01067690
4. Sri Padarajan Nagarajan Non-Executive Director 05262644
5. Sai Sridhar Sangineni Independent & Non-Executive Director 03274134
6. Appalacharyulu Chilakamarri Independent & Non-Executive Director 01601712
7. Babladi Shailaja Company Secretary and Compliance Officer ARXPB4192L

Changes during the Financial Year ended 31st March 2020:

I. Cessation and Appointment of Director/KMP:

During the year under review there was no Change in the Composition of Board ofDirectors. However as the term of Appointment of Shri. Nallani Chakravarthi VenkataRangacharya as Managing Director and Smt. Nallani Chakravarthi Padmaja as WholeTimeDirector are getting expired on 31st March 2020 the Board considered andrecommended for re-appointment of Shri. Nallani Chakravarthi Venkata Rangacharya and Smt.Nallani Chakravarthi Padmaja as Managing Director and Whole-Time Director respectively fora period of further 5 years commencing from 1st April 2020 at the ensuing AGM for theapproval of the members. The brief profile of the Directors is presented in this AnnualReport.

II. Retire by Rotation:

In accordance with the provisions of the Companies Act 2013 Shri. SripadarajanNagarajan Director of the company retires by rotation at the ensuing AGM of the Companyand being eligible offers himself for re-appointment. The brief profile of the Directoris presented in this Annual Report.

DECLARATION BY INDEPENDENT DIRECTORS AND STATEMENT ON COMPLIANCEOF CODE OF CONDUCT

During the year under review necessary declarations with respect to independence hasbeen received from all the Independent Directors of the Company and the IndependentDirectors have complied with the Code for Independent Directors prescribed in Schedule IVto the Actand the Code of Conduct for Directorsand senior management personnel.

In the opinion of the Board the Independent Directors possess there quisite expertiseand experience and are persons of high integri- tyand repute. They fulfill the conditionsspecified in the Companies Act 2013 ('the Act') as well as the Rules made thereunder andare independent of the management.

COMPOSITION OF VARIOUS COMMITTEES OF BOARD OF DIRECTORS OF THE COMPANY& ITSMEETINGS

The Board had constituted various Committees as required under the provisions ofCompanies Act 2013 and Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015. The provisions of Companies Act 2013 readwith Secretarial Standard - 1 issued by the Institute of Company Secretaries of India(ICSI) and SEBI (LODR) Regulations 2015 were adhered while conducting Committee Meetings.The details of various committees constituted by the Board are covered hereunder:

I. AUDIT COMMITTEE:

Audit Committee was constituted to monitor oversee and provide effective supervisionof the management's financial reporting process with a view to ensuring accurate timelyand proper disclosure and transparency integrity and quality of financial reporting. TheCommittee adheres to the compliance with the applicable provisions under the CompaniesAct 2013 and rules made thereunder. The committee policy is available on the website athttp://www.cadsystech.com/investor/.

During the year under review there was no change in the Composition of the AuditCommittee. As such the Composition of the members of the Committee are shown below:

Composition of Audit Committee:

S. No. Name of the Director/KMP Designation in the Committee
1. Appalacharyulu Chilakamarri Chairman
2. Sai Sridhar Sangineni Member
3. Nallani Chakravarthi Venkata Rangacharya Member
4. Babladi Shailaja Secretary

Details of Audit Committee Meetings:

The Audit Committee met 5 times during the year under review on 28th May2019 29th August 2019 14 th November 2019 6th December2019 and 26th March 2020. The necessary quorum was present for all the meetings heldduring such year. The details of attendance of each Member at the Audit Committee meetingsheld during the year are as under:

Sr. No Name of the Directors/KMP

Number wise meetings attendance

No. of Meetings Attended

1 2 3 4 5
1. Nallani Chakravarthi Venkata Rangacharya ? ? ? ? ? 5
2. Appalacharyulu Chilakamarri ? ? ? ? ? 5
3. Sai Sridhar Sangineni ? x x x ? 2
4. Babladi Shailaja ? ? ? ? ? 5

II) NOMINATION AND REMUNERATION COMMITTEE:

The Committee was constituted to screen and review individuals qualified to serve asexecutive directors non-executive directors and independent directors consistent withcriteria approved by the Board and to recommend for approval by the Board nominees forelection at the General Meeting. The Committee also designs benchmarks and continuouslyreviews the compensation program for the Board and senior management against theachievement of measurable performance goals. The Committee adheres to the compliance withthe provisions of Section 178 of the Companies Act 2013 and rules made thereunder. Thecommittee also regularly reviews from time to time the policy for selection andappointment of Directors Key Managerial Personnel and senior management employees andtheir remuneration.

During the year under review there was no change in the Composition of the Nominationand Remuneration Committee. As such the composition members of the Committee are shownbelow.

Composition of Nomination and Remuneration Committee:

Sr. No. Name of the Directors Designation in the Committee
1. Sai Sridhar Sangineni Chairman
2. Sripadarajan Nagarajan Member
3. Appalacharyulu Chilakamarri Member
4. Babladi Shailaja Secretary

Details of Nomination and Remuneration Committee Meetings:

The Nomination and Remuneration Committee met 2 times during the year under review on29th August 2019 and 26th March 2020. The necessary quorum was present for both themeetings. The details of attendance of each Member at the Nomination & RemunerationCommittee meetings held during the year are as under:

Sr. No Name of the Directors/KMP

Number wise meetings attendance

No. of Meetings Attended

1 2
1. Nagarajan Sripadarajan ? ? 2
2. Appalacharyulu Chilakamarri ? ? 2
3. Sai Sridhar Sangineni x ? 1
4. Babladi Shailaja ? ? 2

III) STAKEHOLDER'S RELATIONSHIP COMMITTEE:

The Stakeholder's Relationship Committee was constituted to review matters related togrievances of Shareholders and Investors. The committee primarily focuses on review ofinvestor complaints its redressal and queries received from investors i.e. transfer ofShares issue of Duplicate Share Certificates non-receipt of Annual ReportsDematerialization/ Re-materialization etc. and also reviews the reports presented by theShare Transfer Agents of the Company. The Committee adheres to the compliance with theapplicable provisions of Companies Act 2013 and rules made thereunder.

Composition of the Stakeholder's Relationship Committee:

Sr. No. Name of the Directors Designation in the Committee
1. Nallani Chakravarthi Madhavi Chairperson
2. Nallani Chakravarthi Padmaja Member
3. Nallani Chakravarthi Venkata Rangacharya Member

IV. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE:

The Corporate Social Responsibility Committee (CSR) meets the criteria laid down underSection 135 of the Companies Act 2013 and Rules made therein to formulate and recommendthe Board a CSR Policy indicating the activities to be undertaken by the Company asspecified in Schedule VII of the Act. The Board recommend the amount of expenditure to beincurred on the activities mentioned in the CSR Policy and the Board will be monitoringthe CSR Policy from time to time.

Composition of the Corporate Social Responsibility Committee:

Sr. No. Name of the Directors Designation in the Committee
1. Nallani Chakravarthi Venkata Rangacharya Chairman
2. Nallani Chakravarthi Padmaja Member
3. Sai Sridhar Sangineni Member

Details of Corporate Social Responsibility Committee Meetings:

CSR Committee met once during the year under review on 26th March 2020. Thedetails of attendance of each Member at the CSR meetings held during the year are asunder:

Sr Name of the Directors No Number wise meetings attendance

No. of Meetings Attended

1
1. Nallani Chakravarthi Venkata Rangacharya ? 1
2. Nallani Chakravarthi Padmaja ? 1
3. Sai Sridhar Sangineni ? 1
4. Babladi Shailaja ? 1

BOARD MEETINGS

The provisions of Companies Act 2013 read with Secretarial Standards issued by theInstitute of Company Secretaries of India (ICSI) and SEBI (LODR) Regulations 2015 wereadhered while conducting Board Meetings. The details of the Board Meetings are coveredhereunder:

Details of Board Meetings:

During the FY 2019-20 the Board of Directors met 5 times on 28th May 2019 29th August2019 14th November 2019 6th December 2019 and 26th March 2020.

Sr Name of the Directors No

Number wise meetings attendance

No. of Meetings Attended

1 2 3 4 5
1. Nallani Chakravarthi Venkata Rangacharya ? ? ? ? ? 5
2. Appalacharyulu Chilakamarri ? ? ? ? ? 5
3. Sai Sridhar Sangineni ? x x x ? 2
4. Sripadarajan Nagarajan ? ? ? ? ? 5
5. Nallani Chakravarthi Padmaja ? ? ? ? ? 5
6. Nallani Chakravarthi Madhavi ? ? ? ? ? 5

COMPLIANCE WITH SECRETARIAL STANDARDS

During the year under review the provisions of the Secretarial Standards applicable tothe Company i.e. Secretarial Standard -1 (SS-1) for Board and Committee Meetings andSecretarial Standards - 2 (SS-2) for General Meetings issued by the Institute of CompanySecretaries of India (ICSI) were adhered to while conducting the respective Meetings.

POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION

The Board of Directors of the Company has framed a policy on the appointment andremuneration to Directors and senior management personnel. The objective of the policy isto formulate the criteria for determining qualifications competencies positiveattributes and recommend to the Board policies relating to the remuneration of DirectorsKey Managerial Personnel and Senior Management personnel. The details of remuneration paidduring the Financial Year ended 31st March 2020 are mentioned under the FormNo. MGT - 9 which is forming part of this Boards' Report.

PERFORMANCE EVALUATION OF THE BOARD

The Board of Directors has carried out an annual evaluation of its own performanceBoard Committees and individual Directors pursuant to the provisions of the Companies Act2013 and rules made thereunder.

The performance of the Board and the committees was evaluated by the Board afterseeking inputs from all the Directors and the members of the Committees on the basis ofthe criteria such as the composition and structure effectiveness of Board and Committeeprocesses information and functioning etc. The Board and the Nomination and RemunerationCommittee reviewed the performance of the individual Directors on the basis of thecriteria such as the contribution of the individual Director to the Board and CommitteeMeetings.

Separate meeting of Independent Directors was held to evaluate the performance ofnon-independent Directors performance of the Board as a whole taking into account theviews of Executive Directors and Non-Executive Directors.

DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors state that:

(i) For the preparation of the annual financial statements for the year ended 31stMarch 2020 the applicable accounting standards have been adopted and followed;

(ii) The applicable accounting policies are applied consistently to make judgements andestimates that are reasonable and prudent so as to give a true and fair view of the stateof affairs and profits of the company as at the end of the financial year under review;

(iii) Proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;

(iv) The Directors have prepared the annual accounts on a "going concernbasis";

(v) Proper internal financial controls were in place and followed by the Company andthat such internal financial controls are adequate for effective operations; and

(vi) Proper systems are devised by the Company to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS & OUTGO

A. Conservation of energy:

(i) the steps taken or impact () on conservation of energy

Efforts are made towards minimizing wastage in all areas of operations of the Company.

the steps taken by the com- (ii) pany for utilizing alternate sources of energy
the capital investment on (iii) energy conservation equipment's No additional investment was made for reduction in consumption of energy.

B. Technology absorption:

During the year under review there has been no transaction of technology absorption.

C. Foreign Exchange earnings and outgo (Rs. in Lakhs):

Particulars Financial Year 2019-20 Financial Year 2018-19
Foreign Exchange Earnings 1551.25 2033.76
Foreign Exchange Outgo 5.25 38.05

CONSOLIDATED FINANCIAL STATEMENTS OF SUBSIDIARIES

As on 3ist March 2020 your Company has following subsidiaries

Sr. No. Name of the Company Percentage of Holding
1. Apex Engineers (India) Private Limited 80%
2. Apex Advanced Technology LLC USA 100%
3. Cadsys Technologies LLC USA 97.56%

Pursuant to the provisions of Section 129(3) of the Companies Act 2013 a statementcontaining salient features of financial statements of subsidiary companies in Form No.AOC-1 forms part of Board's Report as "Annexure - II".

COMPANIES WHICH HAVE BECOME OR CEASED TO BE SUBSIDIARIES/JOINT VENTURES AND ASSOCIATECOMPANIES

There are no other companies which have become or ceased to be its subsidiaries/jointventure/associate companies during the year.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business. The Particulars ofcontracts or arrangements with related parties referred to in sub-section (1) of section188 in the prescribed Form AOC-2 pursuant to clause (h) of sub-section (3) of section 134of the Act and Rule 8(2) of the Companies (Accounts) Rules 2014 forms part of thisreport as "Annexure III".

All related party transactions are placed before the Audit Committee and the Board forapproval. The Board of Directors of the company on the recommendation of the AuditCommittee adopted a policy to regulate transactions between the company and its relatedparties in compliance with the applicable provisions of the Companies Act 2013 theRules framed thereunder. Policy for related party transactions has been uploaded on thewebsite of the company at http://www.cadsystech.com/investor/.

UNSECURED LOANS FROM DIRECTORS/ RELATIVES OF DIRECTORS

During the year under review the Company has not accepted any unsecured loans fromDirectors/Relatives of Directors pursuant to provisions of Companies Act 2013.

PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS

During the year under review the Company has invested additionally a sum of Rs. 302.80Lakhs in Apex Advanced Technology LLC USA i.e. wholly owned subsidiary Company makingthe total investment in the said Subsidiary to a sum of Rs. 2495.63 Lakhs as at 31stMarch 2020. Further the Company has also invested additionally a sum of Rs. 0.27 Lakhs inCadsys Technologies LLP making the total contribution of a sum of Rs.1.15 Lakhs as at31st March 2020. Apart from the said investment the Company did not give any Loans orprovided Guarantees or any security during the year under the provisions of Section 186 ofthe Companies Act 2013.

DEPOSITS

The Company has not accepted any public deposits and as such no amount on account ofprincipal or interest on public Deposits was outstanding as on 31st March 2020.

PARTICULARS OF EMPLOYEES AND REMUNERATION

The information required under section 197 (12) of the Companies Act 2013 read withRule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014forms part of this report as "Annexure IV". Further the Company has noemployee drawing remuneration exceeding the limits prescribed under Section 197 (12) ofCompanies Act 2013 read with SubRule 2 of Rule 5 of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014.

RISK MANAGEMENT

Risk management is the process of identification assessment and prioritization ofrisk followed by coordinated efforts to minimize monitor and mitigate/control theprobability and/ or impact of unfortunate events or to maximize the realization ofopportunities. The Company has laid a comprehensive risk assessments and minimizationprocedure which is reviewed by the audit committee and approved by Board.

VIGIL MECHANISM

In accordance with the provisions of Section 177 of the Companies Act 2013 and theSEBI (LODR) Regulations 2015 the Company has formulated a vigil mechanism to address theinstances of fraud and mismanagement if any. The policy can also be accessed on theCompany's at http://www.cadsystech.com/investor/.

MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis Report for the year underreview as stipulated underRegulation 34(2)(e) of the SEBI (LODR) Regulations 2015 is presented in a separatesection forming part of this Annual Report.

CORPORATE GOVERNANCE

The Company is listed under Chapter XB of the SEBI (Issue of Capital and DisclosureRequirements) Regulations 2009 i.e.on SME Platform of National Stock Exchange of IndiaLimited - NSE EMERGE. As such according to Regulation 15(2)(b) of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the compliances with respectto Corporate Governance disclosures are not applicable to your Company. However yourCompany strives to incorporate the appropriate standards for Corporate Governance in theinterest of the stakeholders of the Company.

MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIALPOSITION OF THECOMPANY

There are no material changes and commitments affecting the financial position of theCompany which has occurred between the end of the financial year and the date of theBoards' report other than as disclosed in this Report except that the Company intended topurchase a land at Mangalgiri Andhra Pradesh India to establish a facility in the ITPark and expand the business outsourcing jobs in its network designing and documentationdomain. However the Company has received a letter from APIIC dated 11thNovember 2019 cancelling the allotment of land at Mangalgiri Andhra Pradesh India due tooperational modifications in the onshore projects resulting in the non fulfilment of theeligibility requirements to remain as an SEZ Company. Further the Company has acceptedthe Cancellation letter and requested APIIC for a refund of the purchase amount.

Impact of Covid-19 Pandemic:

With reference to Advisory on disclosure of material impact of COVID-19 pandemic onlisted entities under SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 read with SEBI Circular No. SEBI/HO/CFD/CMD1/CIR/P/2020/84 dated May 20 2020. Yourcompany has provided disclosure to the Exchange dated 18thjune 2020.

COMPLIANCE WITH PROVISIONS OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013

The Company is committed to uphold and maintain the dignity of woman employees andCompany has in place a POSH policy as required under Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013. A copy of the policy can alsobe accessed on the Company's website at http://www.cadsystech.com/investor/.

Your company has constituted Internal Complaints Committee as required under the saidAct to oversee the complaints received if any and to redress the same. Your Directorsfurther state that during the year under review there were no cases filed pursuant tosaid Act. Also Company frequently conducts workshop/ programmes for all theemployees/staffs briefing them about the Act and the rights of women employees at theworkplace.

CORPORATE SOCIAL RESPONSIBILITY

The Company has constituted Corporate Social Responsibility- Committee in compliancewith the provisions of Section 135 ofthe Act read with the Companies (Corporate SocialResponsibility Policy) Rules 2014.

The Corporate Social Responsibility Committee has formulated a Corporate SocialResponsibility Policy (CSR policy) indicating the activities to be undertakenby theCompany. The CSR policy may be accessed on the Company's websitehttp://www.cadsystech.com/investor/. The Annual Report on Corporate Social Responsibility(CSR) activities of the Company forms part of this Report as "ANNEXURE-V".

ORDERS IF ANY PASSED BY REGULATORS OR COURTS OR TRIBUNALS

During the year under review there are no significant material orders passed by theregulators or Courts or Tribunals which can adversely impact the going concern status ofthe Company and its operations in future.

INTERNAL FINANCIAL CONTROLS SYSTEMS AND THEIR ADEQUACY

Your Company is committed to constantly improve the effectiveness of internal financialcontrols and processesfor efficient conduct of its business operations and ensuringsecurity to its assets and timely preparation of reliable financial information. In theopinion of the Board the internal financial control system of the Company is commensuratewith the size scale and complexity of business operations of the Company. Further theinternal financial controls with reference to the Financial Statements are adequate in theopinion of the Board of Directors and were operating effectively.

The Company has a proper system of internal controls to ensure- that all assets aresafeguarded and protected against loss from unauthorized use or disposition and that thetransactions area uthorized recorded and reported correctly.

The internal control is supplemented by an extensive programme of internal externalaudits and periodic review by the Management. This system is designed to adequately ensurethat financial andother records are reliable for preparing financial information and otherdata and for maintaining accountability of assets.

AUDITORS

STATUTORY AUDITORS:

Pursuant to the provisions of section 139 of the Companies Act 2013 and the Rulesframed thereunder the Company in its 23rd Annual General Meeting (AGM) hadappointed M/s Narven & Associates Peer reviewed Chartered Accountants (Firmregistration No. 005905S) as Statutory Auditors of the Company from the conclusion ofthat Annual General Meeting till the conclusion of the ensuing AGM i.e. 28th AnnualGeneral Meeting. Since the term of the existing Auditor comes to an end the Board hasrecommended the appointment of M/s Darapaneni & Co. Chartered Accountants (Firmregistration No. 000685S) as the statutory auditors of the Company in their place for aterm

of five consecutive years from the conclusion of the ensuing Annual General Meeting ofthe Company till the conclusion of the 33rd Annual General Meeting to be heldin the year 2025 for approval of shareholders of the Company based on the recommendationof the Audit Committee.

Further the remuneration of the Auditors shall be fixed by the Board of Directors ofthe Company in consultation with the Auditors.

INTERNAL AUDITORS:

M/s A.V. Ratnam& Co. (M. No. 003028S) Chartered Accountants were appointed duringthe year under review to perform the duties of Internal Auditors of the Company and theirreports are reviewed by the Audit Committee from time to time.

SECRETARIAL AUDITORS:

Pursuant to the provisions of Sections 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the company hasappointed M/s RANJ & Associates Company Secretaries to undertake the SecretarialAudit of the Company for the year ended on 31st March 2020. The SecretarialAuditor's Report for the year ended 31st March 2020 forms part of this reportas "ANNEXURE-VI".

Explanation to Secretarial Auditor's Observations:

Auditor's Observation:

The Company had unspent CSR Amount as at the end of financial year and the Company isin the process of identifying appropriate areas (as specified in Schedule VII of CompaniesAct 2013) for which the Company can utilize the CSR funds through its Mashtishk SupportGroup Company's Registered Trust.

Explanation: The Company has outlined and formulated eligible activities for itsCSR. During the financial year the Company contributed towards rescue relief and rebuildoperations for the victims Caused due to "Fani" cyclone. Further the managementis pursuing to partner with the organizations to fund organizations working environmentalsustainability education healthcare and sanitisation. Hence the amount unspent will befunded in the FY 2020-21 after due assessment by the management for those eligibleprojects (as specified in Schedule VII of Companies Act 2013).

COST AUDIT:

In terms of Cost (Records and Audit) Amendment Rules 2014 issued by the CentralGovernment the requirement for Cost Audit is not applicable to the Company.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their gratitude to members for the confidencereposed by them and thank all the members customers Bankers Registrar to the Companydealers suppliers and other business associates for their contribution to your Company'sgrowth. Your Directors also wish to place on record their appreciation for thecontribution made by the employees at all levels without whom the growth of the Company isunattainable. Your Directors also thank the Central/StateGovernment for their support.Your Directors seek and look forward for the same support in future.

For and on behalf of Board of Directors

CADSYS (INDIA) LIMITED

sd/- sd/-
N.C Padmaja N.C.V. Rangacharya
Date: 25th June 2020 Whole Time Director Managing Director
Place: Hyderabad DIN:01173673 DIN:01067596

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