Cadsys (India) Ltd Directors Report.

To,

The Members,

Cadsys (India) Limited

Dear Members,

Your Directors are pleased to present the 27th 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 31 st March, 2019, 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

(Rs in Lakhs)

Particulars Standalone Consolidated
For the financial year 2018-19 For the financial year 2017-18 For the financial year 2018-19 For the financial year 2017-18
Total Revenue 2,152.08 3,280.83 5,338.32 4,554.88
Total Expenses 1,748.17 2,805.21 3,826.13 3,667.77
Finance Cost 24.59 161.16 55.44 193.63
Depreciation 140.88 115.33 292.05 377.13
Profit before Tax 403.90 475.62 1,512.19 887.11
Tax Expense 126.21 122.47 274.03 142.38
Profit afterTax 277.69 353.15 1,241.89 739.76
Earnings per share (Basic & Diluted) 3.70 5.47 16.55 11.46

FINANCIAL PERFORMANCE

Your Company has performed excellently during the period under review showing a tremendous growth in terms of revenue that has been generated from its projects in India and abroad. On a Consolidated basis, the revenue for the year under review was Rs5,338.32 Lakhs, higher by 17.20% over the previous years revenue of Rs4,554.88 Lakhs. The PAT attributable to the members was Rs1,241.89 Lakhs registering a growth of 67.88% over the PAT of Rs739.76 Lakhs for the previous year.

On an Unconsolidated basis, the revenue for the year under review was Rs2,152.08 Lakhs against the previous years revenue of Rs3,280.83 Lakhs. The PAT attributable to the members was Rs277.69 Lakhs against the PAT of Rs353.15 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 2,033.76 Lakhs, representing 98.62% of the total revenue of Rs2,062.26 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, 2019, the Company has not transferred any amount to Reserves.

DIVIDEND

Your Board of Directors has recommended a Final Dividend for the Financial Year ended on 31st March, 2019, at the rate of 12.5% i.e., Rs1.25/- per Equity Share having Face Value of Rs 10/- each, subject to approval of the Members at the ensuing 27th Annual General Meeting (AGM) of the Company.

The Dividend will be paid to the Members whose names appear in the Register of Members of the Company as on the Record Date.

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, as there is no unpaid/unclaimed dividend pending.

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 Rs10/- each. The Authorized Share Capital of your Company is Rs850 Lakhs comprising of 85 Lakhs Equity Shares of Rs10/- each.

Further, the issued, subscribed and the Paid-up Share Capital of your Company as on 31st March, 2019 is Rs750.25 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, 2019:

Sr. 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, 2019:

I. Cessation:

During the year under review, Mr. Nandachary Mudumbi, who was Independent & Non-Executive Director of the Company, ceased to be so from the month of July, 2018 due to his sudden demise. The Board noted with profound regrets the tragic demise of Mr. Nandachary and his matchless energy, vision and business acumen that helped to build various aspects to build the Company. The Board expressed its condolences to his family and resolved to lend its support and expressed full confidence in the Companys Management team.

II. Appointment of Director/KMP

During the year under review, Mr. Appalacharyulu Chilakamarri was appointed as Independent & Non-Executive Director on the Board of the Company, to take over the position vacated by Mr. Nandachary due to his demise, pursuant to the applicable provisions of the Companies Act, 2013 and rules made thereunder. The Company has also received declaration from the Independent Director confirming that he meets the criteria of independence as laid down under the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.

III. Retire by Rotation:

In accordance with the provisions of the Companies Act, 2013, Mrs Nallani Chakravarthi Madhavi, Director of the company retires by rotation at the ensuing AGM of the Company and being eligible, offers herself for re-appointment. The brief profile of the Director is presented in this Annual Report.

DECLARATION BY INDEPENDENT DIRECTORS AND STATEMENT ON COMPLIANCE OF 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 Act and the Code of Conduct for Directors and senior management personnel.

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, the Composition of the Audit Committee was changed due to cessation of Mr. Nandachary Mudumbi and he was then replaced by new Independent Director, i.e., Mr. Charyulu Chilakamarri. As such, the post re-composition members of the Committee are as shown below.

Composition of Audit Committee:

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

Details of Audit Committee Meetings:

The Audit Committee met 4 times during the year under review on 9th May, 2018, 30th May, 2018, 9th November, 2018 and 15th February, 2019. 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:

Name of the Director

Number wise meetings attendance

No. of Meetings Attended
1 2 3 4
Nallani Chakravarthi Venkata Rangacharya ? ? ? ? 4
Sai Sridhar Sangineni ? ? ? ? 3
Appalacharyulu Chilakamarri NA NA NA ? 1
Nandachary Mudumbi* ? ? NA NA 1

* Associated until 30th June, 2018

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. The committee policy is available on our website, at http://www.cadsystech.com/investor/.

During the year under review, the Composition of the Nomination and Remuneration Committee was also changed due to cessation of Mr. Nandachary and he was then replaced by new Independent Director, i.e., Mr. Appalacharyulu Chilakamarri. As such, the post re-composition members of the Committee are as shown below.

Composition of Nomination and Remuneration Committee:

Name of the Directors Designation in the Committee
Sai Sridhar Sangineni Chairman
Sripadarajan Nagarajan Member
Appalacharyulu Chilakamarri Member

Details of Nomination and Remuneration Committee Meetings:

The Nomination and Remuneration Committee met 3 times during the year under review on 9th May, 2018, 30th August, 2018 and 9th November, 2018. 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:

Name of the Director Number wise meetings attendance No. of Meetings Attended
1 2 3
Sai Sridhar Sangineni ? ? ? 3
Sripadarajan Nagarajan ? ? ? 3
Appalacharyulu Chilakamarri NA NA NA 0
Nandachary Mudumbi* ? NA NA 1

* Associated until 30th June, 2018

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:

Name of the Directors Designation in the Committee
Nallani Chakravarthi Madhavi Chairperson
Nallani Chakravarthi Padmaja Member
Nallani Chakravarthi Venkata Rangacharya Member

IV. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE:

The Corporate Social Responsibility Committee (CSR) of the Board of Directors meets the criteria laid down under Section 135 of the Companies Act, 2013 and Rules made therein. Formulate and recommend to the Board, a CSR Policy indicating the activities to be undertaken by the Company as specified in Schedule VII of the Act. Recommend the amount of expenditure to be incurred on the activities mentioned in the CSR Policy. Monitor the CSR Policy.

Composition of the Corporate Social Responsibility Committee:

Name of the Directors Designation in the Committee
Nallani Chakravarthi Venkata Rangacharya Chairman
Nallani Chakravarthi Padmaja Member
Sai Sridhar Sangineni Member

Details of Corporate Social Responsibility Committee Meetings:

CSR Committee met once during the year under review on 30th March, 2019. The details of attendance of each Member at the CSR meetings held during the year are as under:

Name of the Directors Number wise meetings attendance No. of Meetings Attended
1
Nallani Chakravarthi Venkata Rangacharya ? 1
Nallani Chakravarthi Padmaja ? 1
Sai Sridhar Sangineni ? 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 2018-19, the Board of Directors met 5 times on 10th May, 2018, 30th May, 2018, 1st September, 2018, 9th November, 2018 and 15th February, 2019.

Name of the Directors Number wise meetings attendance No. of Board Meetings Attended
1 2 3 4 5
Nallani Chakravarthi Venkata Rangacharya ? ? ? ? ? 4
Nallani Chakravarthi Padmaja ? ? ? ? ? 5
Nallani Chakravarthi Madhavi ? ? ? ? ? 4
Sripadarajan Nagarajan ? ? ? ? ? 5
Sai Sridhar Sangineni ? ? ? ? ? 4
Appalacharyulu Chilakamarri NA NA NA NA ? 1
Nandachary Mudumbi* ? ? NA NA NA 1

* Associated until 30th June, 2018

POSTAL BALLOT

During the year under review, the Company had sought the approval of the members through notice of postal ballot dated 9th November, 2018 pursuant to the provisions of Sections 108 and 110 and other applicable provisions of the Companies Act, 2013 read with the Rules framed thereunder. Resolutions passed under Postal Ballot are as follows:

Appointment of Mr. Appalacharyulu Chilakamarri as an Independent Director of the Company and

Increasing the limits of Loans, Investments and Guarantee.

Both the aforementioned resolutions were duly passed and the results of which were announced and submitted on 21st December, 2018 with the NSE Emerge.

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, 2019 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, 2019, 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 affairsandprofitsof 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.