Cadsys (India) Ltd Directors Report.

To,

The Members,

Cadsys(India) Limited

Dear Members,

Your Directors are pleased to present the 28th Annual Report of your Company on the business and operations of the Company together with the Audited Financial Statements for the financial year ended on 31st March 2020, the Boards Report and the Auditors Report thereon. The summary of financial performance of the Company and its 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 1,690.13 2,152.08 4,272.26 5,338.32
Total Expenses 1,539.93 1,748.17 4,383.61 3,826.13
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 1,512.19
Tax Expense 80.09 126.21 (22.22) 274.03
Profit after Tax 210.26 277.69 29.96 1,241.89
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 revenue due to the heightened restrictions on immigration and the lockdown caused due to Covid-19 pandemic, However, cadsys has implemented appropriate risk mitigation strategies to ensure business continuity. On a Consolidated basis, the revenue for the year under review was Rs. 4,272.26 Lakhs, decrease by 20% over the previous years revenue of Rs. 5,338.32 Lakhs. The PAT attributable to the members was Rs. 29.96 Lakhs registering a decline of 97.59% over the PAT of Rs. 1,241.89 Lakhs for the previous year.

On the Standalone basis, the revenue for the year under review was Rs. 1,690.13 Lakhs against the previous years revenue of Rs. 2,152.08 Lakhs. The PAT attributable to the members 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 of the 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 Business of the Company.

EXPORTS

The exports of the Company continue to be a major chunk of revenue accounting for a volume of Rs. 1,551.25 Lakhs, representing 94.37% of the total revenue of Rs. 1,643.71 Lakhs- 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 not transferred any amount to Reserves.

DIVIDEND

With a view to conserve the resources in long run, your Board of Directors have not recommended 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 along with underlying equity shares which remained unpaid or unclaimed for a period of seven years are supposed to be transferred to IEPF. Presently, there is no amount which is required to be transferred to IEPF by the Company. However, there is an unpaid and unclaimed dividend since last 2 financial years, the details of which can be accessed on Companys 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 the Company. 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. 85 Lakhs Equity Shares of Rs. 10/- each.

Further, the issued, subscribed and the Paid-up Share Capital of your Company as on 31st 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 Sections 92(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 is http://www.cadsystech.com/investor/.

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

The Board represents an optimum mix of professionalism, knowledge and experience. The Companys policy is to maintain optimum combination of Executive, Non-Executive Directors and Independent Directors.

Following were the Directors and Key Managerial Personnel of the Company as on 31st March, 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 of Directors. However, as the term of Appointment of Shri. Nallani Chakravarthi Venkata Rangacharya as Managing Director and Smt. Nallani Chakravarthi Padmaja as WholeTime Director are getting expired on 31st March 2020 the Board considered and recommended for re-appointment of Shri. Nallani Chakravarthi Venkata Rangacharya and Smt. Nallani Chakravarthi Padmaja as Managing Director and Whole-Time Director respectively for a period of further 5 years commencing from 1st April 2020 at the ensuing AGM for the approval of the members. The brief profile of the Directors is presented in this Annual Report.

II. Retire by Rotation:

In accordance with the provisions of the Companies Act, 2013, Shri. Sripadarajan Nagarajan, Director of the company retires by rotation at the ensuing AGM of the Company and being eligible, offers himself for re-appointment. The brief profile of the Director is 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 has been received from all the Independent Directors of the Company and the Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Actand the Code of Conduct for Directorsand senior management personnel.

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

COMPOSITION OF VARIOUS COMMITTEES OF BOARD OF DIRECTORS OF THE COMPANY& ITS MEETINGS

The Board had constituted various Committees as required under the provisions of Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The provisions of Companies Act, 2013 read with 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 supervision of the managements financial reporting process with a view to ensuring accurate, timely and proper disclosure and transparency, integrity and quality of financial reporting. The Committee adheres to the compliance with the applicable provisions under the Companies Act, 2013 and rules made thereunder. The committee policy is available on the website, at http://www.cadsystech.com/investor/.

During the year under review, there was no change in the Composition of the Audit Committee. 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 May 2019, 29th August 2019, 14 th November 2019, 6th December 2019 and 26th March 2020. The necessary quorum was present for all the meetings held during such year. The details of attendance of each Member at the Audit Committee 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 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 as executive directors, non-executive directors and independent directors, consistent with criteria approved by the Board, and to recommend, for approval by the Board, nominees for election at the General Meeting. The Committee also designs, benchmarks and continuously reviews the compensation program for the Board and senior management against the achievement of measurable performance goals. The Committee adheres to the compliance with the provisions of Section 178 of the Companies Act, 2013 and rules made thereunder. The committee also regularly reviews from time to time the policy for selection and appointment of Directors, Key Managerial Personnel and senior management employees and their remuneration.

During the year under review, there was no change in the Composition of the Nomination and Remuneration Committee. As such, the composition members of the Committee are shown below.

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 on 29th August 2019 and 26th March 2020. The necessary quorum was present for both the meetings. The details of attendance of each Member at the Nomination & Remuneration Committee 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) STAKEHOLDERS RELATIONSHIP COMMITTEE:

The Stakeholders Relationship Committee was constituted to review matters related to grievances of Shareholders and Investors. The committee primarily focuses on review of investor complaints, its redressal and queries received from investors i.e. transfer of Shares, issue of Duplicate Share Certificates, non-receipt of Annual Reports, Dematerialization/ Re-materialization etc. and also reviews the reports presented by the Share Transfer Agents of the Company. The Committee adheres to the compliance with the applicable provisions of Companies Act, 2013 and rules made thereunder.

Composition of the Stakeholders 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 under Section 135 of the Companies Act, 2013 and Rules made therein to formulate and recommend the Board, a CSR Policy indicating the activities to be undertaken by the Company as specified in Schedule VII of the Act. The Board recommend the amount of expenditure to be incurred on the activities mentioned in the CSR Policy and the Board will be monitoring the 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. The details of attendance of each Member at the CSR meetings held during the year are as under:

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 the Institute of Company Secretaries of India (ICSI) and SEBI (LODR) Regulations, 2015 were adhered while conducting Board Meetings. The details of the Board Meetings are covered hereunder:

Details of Board Meetings:

During the FY 2019-20, the Board of Directors met 5 times on 28th May 2019, 29th August 2019, 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 to the Company, i.e., Secretarial Standard -1 (SS-1) for Board and Committee Meetings and Secretarial Standards - 2 (SS-2) for General Meetings issued by the Institute of Company Secretaries 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 and remuneration to Directors and senior management personnel. The objective of the policy is to formulate the criteria for determining qualifications, competencies, positive attributes and recommend to the Board policies relating to the remuneration of Directors, Key Managerial Personnel and Senior Management personnel. The details of remuneration paid during the Financial Year ended 31st March 2020 are mentioned under the Form No. 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 performance, Board Committees and individual Directors pursuant to the provisions of the Companies Act, 2013 and rules made thereunder.

The performance of the Board and the committees was evaluated by the Board, after seeking inputs from all the Directors and the members of the Committees, on the basis of the criteria such as the composition and structure, effectiveness of Board and Committee processes, information and functioning, etc. The Board and the Nomination and Remuneration Committee reviewed the performance of the individual Directors on the basis of the criteria such as the contribution of the individual Director to the Board and Committee Meetings.

Separate meeting of Independent Directors was held to evaluate the performance of non-independent Directors, performance of the Board as a whole taking into account the views 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 31st March 2020, the applicable accounting standards have been adopted and followed;

(ii) The applicable accounting policies are applied consistently to make judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of 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 adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

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

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

(vi) Proper systems are devised by the Company to ensure compliance with the provisions of 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 equipments 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 1,551.25 2,033.76
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 statement containing salient features of financial statements of subsidiary companies in Form No. AOC-1 forms part of Boards Report as "Annexure - II".

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

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

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on an arms length basis and were in the ordinary course of business. The Particulars of contracts or arrangements with related parties referred to in sub-section (1) of section 188 in the prescribed Form AOC-2 pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014, forms part of this report as "Annexure III".

All related party transactions are placed before the Audit Committee and the Board for approval. The Board of Directors of the company, on the recommendation of the Audit Committee, adopted a policy to regulate transactions between the company and its related parties, in compliance with the applicable provisions of the Companies Act, 2013, the Rules framed thereunder. Policy for related party transactions has been uploaded on the website 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 from Directors/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. 302.80 Lakhs in Apex Advanced Technology LLC, USA, i.e., wholly owned subsidiary Company, making the total investment in the said Subsidiary to a sum of Rs. 2,495.63 Lakhs as at 31st March 2020. Further the Company has also invested additionally a sum of Rs. 0.27 Lakhs in Cadsys Technologies LLP, making the total contribution of a sum of Rs.1.15 Lakhs as at 31st March 2020. Apart from the said investment, the Company did not give any Loans or provided Guarantees or any security during the year under the provisions of Section 186 of the Companies Act, 2013.

DEPOSITS

The Company has not accepted any public deposits and as such no amount on account of principal 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 with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this report as "Annexure IV". Further, the Company has no employee drawing remuneration exceeding the limits prescribed under Section 197 (12) of Companies Act, 2013 read with SubRule 2 of Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

RISK MANAGEMENT

Risk management is the process of identification, assessment, and prioritization, of risk followed by coordinated efforts to minimize, monitor and mitigate/control the probability and/ or impact of unfortunate events or to maximize the realization of opportunities. The Company has laid a comprehensive risk assessments and minimization procedure 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 the SEBI (LODR) Regulations, 2015, the Company has formulated a vigil mechanism to address the instances of fraud and mismanagement, if any. The policy can also be accessed on the Companys at http://www.cadsystech.com/investor/.

MANAGEMENT DISCUSSION AND ANALYSIS

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

CORPORATE GOVERNANCE

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

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIALPOSITION OF THE COMPANY

There are no material changes and commitments affecting the financial position of the Company which has occurred between the end of the financial year and the date of the Boards report other than as disclosed in this Report except that the Company intended to purchase a land at Mangalgiri, Andhra Pradesh, India to establish a facility in the IT Park and expand the business outsourcing jobs in its network designing and documentation domain. However, the Company has received a letter from APIIC dated 11th November 2019 cancelling the allotment of land at Mangalgiri, Andhra Pradesh, India due to operational modifications in the onshore projects, resulting in the non fulfilment of the eligibility requirements to remain as an SEZ Company. Further, the Company has accepted the 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 on listed entities under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with SEBI Circular No. SEBI/HO/CFD/CMD1/CIR/P/2020/84 dated May 20, 2020. Your company has provided disclosure to the Exchange dated 18thjune 2020.

COMPLIANCE WITH PROVISIONS OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

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

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

CORPORATE SOCIAL RESPONSIBILITY

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

The Corporate Social Responsibility Committee has formulated a Corporate Social Responsibility Policy (CSR policy) indicating the activities to be undertakenby the Company. The CSR policy may be accessed on the Companys website http://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 the regulators or Courts or Tribunals which can adversely impact the going concern status of the Company and its operations in future.

INTERNAL FINANCIAL CONTROLS SYSTEMS AND THEIR ADEQUACY

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

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

The internal control is supplemented by an extensive programme of internal, external audits and periodic review by the Management. This system is designed to adequately ensure that financial andother records are reliable for preparing financial information and other data and for maintaining accountability of assets.

AUDITORS

STATUTORY AUDITORS:

Pursuant to the provisions of section 139 of the Companies Act, 2013 and the Rules framed thereunder, the Company in its 23rd Annual General Meeting (AGM) had appointed M/s Narven & Associates, Peer reviewed Chartered Accountants (Firm registration No. 005905S), as Statutory Auditors of the Company, from the conclusion of that Annual General Meeting till the conclusion of the ensuing AGM i.e., 28th Annual General Meeting. Since the term of the existing Auditor comes to an end, the Board has recommended the appointment of M/s Darapaneni & Co., Chartered Accountants (Firm registration No. 000685S), as the statutory auditors of the Company in their place, for a term

of five consecutive years, from the conclusion of the ensuing Annual General Meeting of the Company till the conclusion of the 33rd Annual General Meeting to be held in the year 2025, for approval of shareholders of the Company, based on the recommendation of the Audit Committee.

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

INTERNAL AUDITORS:

M/s A.V. Ratnam& Co. (M. No. 003028S), Chartered Accountants, were appointed during the year under review to perform the duties of Internal Auditors of the Company and their reports 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 has appointed M/s RANJ & Associates, Company Secretaries, to undertake the Secretarial Audit of the Company for the year ended on 31st March 2020. The Secretarial Auditors Report for the year ended 31st March 2020 forms part of this report as "ANNEXURE-VI".

Explanation to Secretarial Auditors Observations:

Auditors Observation:

The Company had unspent CSR Amount as at the end of financial year and the Company is in the process of identifying appropriate areas (as specified in Schedule VII of Companies Act, 2013) for which the Company can utilize the CSR funds through its Mashtishk Support Group, Companys Registered Trust.

Explanation: The Company has outlined and formulated eligible activities for its CSR. During the financial year the Company contributed towards rescue, relief and rebuild operations for the victims Caused due to "Fani" cyclone. Further, the management is pursuing to partner with the organizations to fund organizations working environmental sustainability, education, healthcare and sanitisation. Hence, the amount unspent will be funded in the FY 2020-21 after due assessment by the management for those eligible projects (as specified in Schedule VII of Companies Act, 2013).

COST AUDIT:

In terms of Cost (Records and Audit) Amendment Rules, 2014 issued by the Central Government, 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 confidence reposed by them and thank all the members, customers, Bankers, Registrar to the Company, dealers, suppliers and other business associates for their contribution to your Companys growth. Your Directors also wish to place on record their appreciation for the contribution made by the employees at all levels without whom the growth of the Company is unattainable. 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