Cadsys (India) Ltd
Chairman Speech
Dear Shareholders,
It is my pleasure and honour for having this opportunity to present the 27th
Annual Report to the esteemed shareholders of Cadsys (India) Limited. We have successfully
completed another year with positive growth. I, on behalf of the Board, would like to
thank you all for being here and bestowing your trust yet again in the Company. I write
this letter with a sense of pride to express how well your Company performed this year,
not just in financial terms, but also in terms the revenue is atof what we accomplished
for customers, employees, shareholders and communities across the world. During the year,
Your Company has stood strong and formidable to all the challenges that came by and has
adapted openly to the constant changes. The management and employees of the Company
clasping strongly to the Vision and Mission goals have moved your Company a step closer to
the zenith of success.
This year your Company had to witness the sudden demise of the Independent Director
Late Shri. Nandachary Mudumbi.
I would like to acknowledge and remind everyone about his invaluable contributions to
the growth of this Company. Subsequently, Mr. Appalacharyulu Chilakamarri was appointed as
the Independent Director to discharge the duties and provide his expert knowledge to the
Company. Over the past couple of years, your Company focused on reducing the operational
costs by implementing proprietary software. In addition, your company focused to bestow
superior customer satisfaction to build a long term and sustainable business growth. This
strategy strengthened our customer – vendor relationship which laid path for inflow
of continuous business wherein your Company, in the year FY 2019 achieved long term MSAs
with two global Telecom giants. Apart from that, your company has also been awarded repeat
Work Orders from existing clients. I believe, this is true a manifestation for strong
Customer – Vendor relationship and the credibility your company has built. Overall
during FY 2018-19, your company added new customers. I believe this is a major milestone
for the Company, paving way to explore and expand the Company's presence in the Field
Services market.
I would like to now present to you all the financial highlights for FY 2018 – 19.
Your Company had a 17.20% of revenue growth as opposed to 4.38% in the preceding year. In
terms of revenue performance and business growth, under Consolidated financials your
Company in the current year achieved a revenue of 5,338 Lakhs as compared to 4,555 Lakhs
in FY 2017-18. Under Standalone financials, 2,152 Lakhs as compared to 3,280 Lakhs in the
previous Financial Year 2017-18.
The current year Profit After Tax (PAT) under Standalone is 277 Lakhs as compared to
353 Lakhs in the year 2017-18. This faint slump in the Standalone Profit After
Tax (PAT) is due to the company not taking up project from domestic market. However, in
the consolidated financials, the PAT for current year is 1,241 Lakhs to 739 Lakhs of
PAT in the previous financial year. As mentioned above, the automation of certain
operational functions have facilitated in reducing the overhead costs and aided the
overall profitability of the Company. Your Company is continuing to work extensively
towards building strong operational efficiencies and further expand its market in the USA.
The listing of equity shares on the Stock Exchange has laid down a path for strong
Company and shareholder relationship and we perceive as a huge motivation factor to strive
further to secure the interest of the stakeholders of the Company. During the year your
Company witnessed an increased momentum in strategies execution resulting in signing for a
key acquisition. During the firsthalf of the year, Your
Company entered into entered into Strategic Business Deal with First Call Services LLC,
USA to execute the projects in Field Services. However, utilising the operational
advantage and the opportunity to outsource the jobs off-shore, your company signed an LOI
to acquire the Business of First Call Services LLC.
Some of the highlights on the business front are as follows:
• Your company added 3 new customers one of them being the Global Telecom
giant AT&T.
• Your Company's subsidiary in USA has signed an LOI to acquire the business
First Call Services LLC, a Tennessee based Company which is into the business of Field
surveying.
• Your Company has signed a Sale Agreement with DSL
Infrastructure Pvt Ltd to purchase new office facility at DSL Abacus Arena, Hyderabad.
• Obtained building permissions for construction of new facility at the
Mangalgiri site in Andhra Pradesh state.
• Top 10 customers contribute 72% of the revenue compared to 85 % last
financial year.
• The current number of employees increased to 55 in the Apex Advanced
Technology LLC. The forecast in terms of business growth and outlook for the forthcoming
Financial year 2019-20 is expected to be as follows:
The analysts at Wall Street research firm- Cowen estimated that there will be 2,75,000
small cell nodes deployed by 2023, and if each generates $500 to $1,000 per month in
revenue, then the overall small cell opportunity creates $20 billion in "value
creation" for backhaul suppliers. Your Company understands the dearth for the
innovation in this segment and is looking forward to provide end to end solutions to the
customers by utilising the in-house technologies to the optimum levels and gain the market
edge. We believe that the adoption of these in-house technologies gives us a unique
opportunity to significantly increase our value proposition and create differentiated
positioning in the market
Going forward, the management is confident that your
Company through this acquisition will build traction with the customers and build the
right platform to tap onto other emerging technologies such as the 5G small cell business,
Internet of Things (IoT), Artificial Intelligence, Data Analytics, etc. With these
structural changes in the operations, your company will witness an accelerated, stable and
robust growth in the coming years. Finally, I would like to conclude my speech thanking
our Shareholders, Merchant Bankers, respected officials of National Stock Exchange EMERGE
platform, Share Transfer Agents, Senior Management, customers, vendors, auditors, company
secretaries, and all the employees of the Company for extending their continuous support
and encouragement towards your Company. We aim and hope to continue to invest more efforts
and hard work in building a strong family and generate.
Thank you once again.
With warm regards,
Nallani Chakravarthi Venkata Rangacharya
Founder and Managing Director
Cadsys (India) Ltd
Directors Reports
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 Board's
Report and the Auditor's 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 year's 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 year's 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
Company's 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 Company's 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 management's 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. STAKEHOLDER'S RELATIONSHIP COMMITTEE:
The Stakeholder's 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 Stakeholder's 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.