REVIEW OF OPERATIONS:

Turnover for the year ended 31st March, 2025 was 1,00,809.57 (in hundreds) as against 82,970.65 (in hundreds) in the previous year. The Company registered a Loss of 91,112.40 (in hundreds) as against loss of 15,100.94 (in hundreds) in the previous year. The operations of the company are impacted by slowdown in the business from the existing customers during the year.

MATERIAL CHANGES:

The Board anticipates that the current market environment will continue and is of the view that the diversification of business operations will not adversely impact the financial position of the Company.

DETAILS OF REVISION OF FINANCIAL STATEMENT OR THE REPORT:

There is no revision of financial statement or the Report.

INDUSTRY STRUCTURE AND DEVELOPMENT:

The company is engaged in the business of software development, providing software development and consultancy services in the fields of software and allied services. The industry is expected to grow at the moderate rate compared to the earlier period; however, the company is facing challenges in maintaining its operations.

LISTING OF EQUITY SHARES:

The Company's Equity shares are presently listed on BSE Limited and the Company has paid the Annual Listing Fees to the said Stock Exchanges for the financial year 2024-2025.

SOP FINES BY BSE:

As per Regulations 33, 31, 27(2), 6(1), 29(2), 29(3) of SEBI, every listed entity shall submit the quarterly and year-to-date standalone financial results to the stock exchange within 45 days from the end of each quarter. The Company duly submitted the quarterly financial results within the prescribed time as stipulated in the SEBI regulations. However, due to a change in the format, the financial results submitted by the Company were not considered by the stock exchange, and it was treated as though the Company had not submitted any financial results. Consequently, a penalty of Rs. 34,618.80 (in hundreds) was levied by BSE, for the period from 2014-2022 which the Company has paid the entire fines by the end of July 2024.

DIVIDEND

Your directors did not recommend any dividend during the year.

TRANSFER TO RESERVES

There was no transfer to Reserves during the financial year under report as the company has incurred loss during the year the same is adjusted against the opening balance of reserves.

STATE OF THE COMPANY'S AFFAIRS:

During the financial year 2024-25, the Company has been engaged in the software business and actively operating its business.

SHARE CAPITAL

The Authorized Share Capital of the Company remains unchanged during the financial year 2024-25.

INVESTOR EDUCATION AND PROTECTION FUND:

During the period under review, no such case was raised to credit / to pay any amount to the Investor Education and Protection Fund. There is no outstanding amount lying in the Unpaid Dividend Account of the Company in respect of the last 07 years and which is due for transfer to the IEPF.

CHANGE IN NAUTURE OF BUSINESS, IF ANY:

During the financial year 2024-25, there has been no change in the business of the Company. However, after the end of financial year 2024-25, the Company diversified its operations by initiating a new line of business i.e. trading, supply, and distribution of both agricultural commodities.

PERFORMANCE AND FINANCIAL POSITION OF THE SUBSIDIARY COMPANY:

The Company does not have any subsidiaries or associate or joint venture companies. Hence the required information under this head is not being attached to the report.

CREDIT RATING:

During the year under review, the Company has not obtained any Credit Rating as the same was not applicable to the Company.

CORPORATE GOVERNANCE:

The provisions of corporate governance under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI LODR Regulations”) are not applicable to the Company.

STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS:

All the Independent Directors have given declarations of Independence, as required pursuant to Section 149 (7) of the Companies Act, 2013 stating that they meet the criteria of Independence as provided in subsection (6) of Section 149 of the Companies Act, 2013.

The Independent Directors also confirmed that they have complied with the Code for Independent Directors prescribed in Schedule IV to the Companies Act, 2013. There has been no change in the circumstances affecting their status as an Independent Director during the year.

Independent Directors' Meeting:

The Independent Directors met on 14.02.2025 without the attendance of Non-Independent Directors and members of the Management. The Independent Directors reviewed the performance of Non-Independent Directors and the Board as a whole; the performance of the Chairman of the Company, taking into account the views of Executive Directors and Non Executive Directors and assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

The Board of Directors duly met 8 times during the year viz 29.05.2024, 14.08.2024, 02.09.2024, 08.11.2024, 23.01.2025, 01.03.2025, 06.03.2025, 12.03.2025. The intervening gap between any two Board Meetings was within the period prescribed under the provisions of the Companies Act, 2013. All the recommendations given by the Audit Committee are accepted by the Board.

CHANGE OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

In terms of the provisions Section 152 of the Companies Act, 2013 read with the Articles of Association of the Company, Mr. Man Mohan Rao Suddhala, Director of the Company retire at the ensuing Annual General Meeting and are being eligible to offer himself for re-appointment at the ensuing Annual General Meeting.

Based on the confirmations received from Directors, none of the Directors are disqualified from appointment under Section 164 of the Companies Act, 2013.

PROVISIONS OF INDEPENDENT DIRECTRS

The performance of the Individual Directors on the Board and the Committees thereof is done by the Board and the Independent Directors in their exclusive meeting done as per the policy formulated by the Board in this regard.

The Board of Directors is of the opinion that the Independent Directors possess requisite qualifications, experience and expertise in industry knowledge and corporate governance and they hold highest standards of integrity. The Company proactively keeps its directors informed of the activities of the Company, its management and operations and regularly update and refresh their skills, knowledge and familiarity with the company.

BOARD EVALUATION:

Pursuant to Section 134(3)(p) of the Companies Act, 2013, Independent Directors have evaluated the quality, quantity and timeliness of the flow of information between the management and the board, performance of the Board as a whole and its Members and other required matters. The Board of Directors have evaluated the performance of Independent Directors and observed the same to be satisfactory and their deliberations beneficial in Board/Committee Meetings.

The Company had formulated a code of conduct for the Directors and Senior Management personnel and the same has been complied.

COMMITTEES OF THE BOARD:

During the financial year 2024-25, the Company's Board has the following Committees:

(a) Audit Committee;

(b) Nomination and Remuneration Committee; and (c) Stakeholders Relationship Committee.

(a) Audit Committee

The Company has constituted the Audit Committee with power and role that are in accordance with Section 177 of the Companies Act, 2013. The Audit Committee oversees the accounting, auditing and overall financial reporting process of the Company. The Audit Committee acts as a link between the Management, the Statutory Auditors and the Board of Directors to oversee the financial reporting process of the Company.

Composition of Audit Committee

1. Mr. Kollu Venkata Srinivasa Rao -Chairman (Independent Director) 2. Ms. Gurram Lakshmi - Member (Independent Director) 3. Ms. Triveni Vuddaraju - Member (Independent Director)

The Audit Committee met five (5) times on (i) 29.05.2024, (ii) 14.08.2024, (iii) 08.11.2024, (iv) 23.01.2025 and (v) 12.03.2025.

The Board has accepted all the recommendations made by the Audit Committee.

(b) Nomination and Remuneration Committee

The Nomination and Remuneration Committee has been entrusted with role of formulating criteria for determining the qualifications, positive attributes and independence of the Directors as well as for identifying persons who may be appointed at senior management levels and also for devising a policy on remuneration of Directors and other senior employees. The Committee has the power and role that are in accordance with Section 178 of the Companies Act, 2013.

Under Section 178(3) of the Companies Act, 2013, the Nomination and Remuneration Committee of the Board has adopted a policy for nomination, remuneration and other related matters for directors and senior management personnel. Details of the policy are available on the company's website www.capricornsys-global.com.

Composition of Nomination and Remuneration Committee

1. Mr. Kollu Venkata Srinivasa Rao -Chairman (Independent Director) 2. Ms. Gurram Lakshmi - Member (Independent Director) 3. Ms. Triveni Vuddaraju - Member (Independent Director)

The Nomination and Remuneration Committee met two (2) times on (i) 29.05.2024 and (ii) 12.03.2025

(c) Stakeholders Relationship Committee

The Stakeholders Relationship Committee has been entrusted with role to consider and resolve the grievances of shareholders of the Company.

Composition of Stakeholders Relationship Committee

No meeting of the Stakeholders Relationship Committee was held during the financial year 2024-25.

INTERNAL FINANCIAL CONTROL

The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the requirement of Section 134(5) of the Act, and based on the representations received from the management, the directors hereby confirm that: i. In the preparation of the annual accounts for the financial year 2024-25, the applicable accounting standards have been followed and there are no material departures; ii. s elected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the financial year; iii. and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act. They confirm that there are adequate systems and controls for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv. prepared the annual accounts on a going concern basis; v. laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating properly; and vi. devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively

RISK AND RISK MITIGATION POLICY:

The operations of the company are dependent on the export to overseas markets the international economic environment directly influences the spending patterns of the industry on the Information Technology. Also, with the growing demand for the skilled manpower and ever-growing business environment poses risk of availability of skilled man power. With the employee friendly policies the company pursued the employee retention rate has been very high in the company.

CORPORATE SOCIAL RESPONSIBILITY:

Your Company does not fall under any of the criteria specified under the provisions of Companies Act, 2013. Hence the Company has not constituted any committee and is not required to furnish information required under the provisions of the said Act.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:

There have been no loans, guarantees and investments under Section 186 of the Act during the financial year 2024-2025.

TRANSACTIONS WITH RELATED PARTIES:

There are no related party transactions during the year except that are entered in the ordinary course of business and on arm's length basis. There were no materially significant related party transactions between your Company and the Directors, promoters, Key Managerial Personnel and other designated persons which may have a potential conflict with the interest of company at large.

Form AOC 2 for disclosure of particulars of contracts / arrangements, entered into by your company with related parties is attached herewith as Annexure - I.

TECHNOLOGY ABSORPTION, ENERGY CONSERVATION & FOREIGN EXCHANGE EARNINGS AND OUTGO:

Information in accordance with clause (m) of sub section (3) of Section 134 of the Companies Act, 2013 is annexed herewith as Annexure - II.

PARTICULARS OF EMPLOYEES:

Particulars of employees pursuant to Section 134(3)(q) and Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forming part of the Directors' Report for the year ended 31st March 2025 as Annexure - III.

There are no employees in the company whose names are required to be furnished as per the information and statement containing particulars of employees required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

The Nomination and remuneration committee of the Company has affirmed that the remuneration is as per the Remuneration policy of the Company.

Your directors take this opportunity to record their deep appreciation of the continuous support and contribution from all employees of the Company.

ANNUAL RETURN:

As required under Sub-Section (3) of Section 92 of the Companies Act, 2013 a copy of Annual Return in Form MGT-7 is available at the website of the Company, www.capricornsys-global.com.

FRAUDS REPORTED BY THE AUDITOR:

There were no frauds as reported by the Statutory Auditors under sub-section 12 of Section 143 of the Companies Act, 2013 along with Rules made there-under other than those which are reportable to the Central Government.

VIGIL MECHANISM:

The Company has formulated a Whistle Blower Policy to provide Vigil Mechanism for directors and employees of the Company to report genuine concerns. The provisions of this policy are in line with the provisions of the Section 177(9) of the Act and rules made thereunder.

REMUNERATION RECEIVED BY MANAGING/WHOLE TIME DIRECTOR FROM HOLDING OR SUBSIDIARY COMPANY:

The Company does not have any holding company or subsidiary company.

DEPOSITS:

During the year under review your Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date.

AUDITORS AND THEIR REPORT:

M/s. SNMR & Associates, Chartered Accountants, Hyderabad was appointed as Auditors of the Company for a term of 5 (Five) consecutive years at 37th Annual General Meeting held on 30th September, 2022. They have confirmed that they are not disqualified from continuing as auditors of the company. The Auditors Report does not contain any qualifications, reservations, adverse remark or disclaimer.

SECRETARIAL AUDITOR:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Company has appointed M/s Aakash Agarwal, Company Secretaries to undertake the Secretarial Audit of the Company for the financial year 2024-2025. The Secretarial Audit report is annexed herewith as Annexure IV. The Secretarial Audit Report is self-explanatory and does not require any specific explanation by the Board.

SECRETARIAL STANDARDS:

The Company complies with all applicable Secretarial Standards.

CORPORATE INSOLVENCY RESOLUTION PROCESS INITIATED UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (IBC):

During the year under review, Company has not made any application under the Insolvency and Bankruptcy Code, 2016.

DISCLOSURE AS PER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed there under. During the financial year 2024-2025, the Company has not received any complaints on sexual harassment. Your Company has complied with the provisions relating to the constitution of Internal Complaints Committee (ICC), ICC is responsible for redressal of complaints related to sexual harassment and follows the guidelines provided in the policy. ICC has its presence at corporate office as well as at site locations.

Status of Complaints during the financial year 2024-25: a. Number of complaints of sexual harassment received during the year: Nil b. Number of complaints disposed of during the year: Not Applicable c. number of complaints pending as on end of the financial year and cases pending for more than ninety days: Not Applicable

STATEMENT ON COMPLIANCE WITH THE MATERNITY BENEFIT ACT, 1961:

The Company is dedicated to safeguarding the rights and welfare of women employees in accordance with the provisions of the Maternity Benefit Act, 1961 and its subsequent amendments. During the financial year, the Company has maintained full compliance with all statutory provisions of the Maternity Benefit Act, 1961. The Company ensures that all eligible women employees are provided with statutory maternity benefits, including paid maternity leave, nursing breaks, and protection against dismissal during maternity leave, as mandated under the Act.

VALUATION OF ASSETS:

During the financial year under review, there was no instance of one-time settlement of loans / financial assistance taken from Banks or Financial Institutions, hence the Company was not required to carry out valuation of its assets for the said purpose.

FAILURE TO IMPLEMENT ANY CORPORATE ACTION:

During the year under review, the Company has not failed to implement any Corporate Action.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

ACKNOWLEDGEMENTS:

Your Directors place on record their appreciation for the assistance and co-operation extended by the Bankers and various State and Central Government Agencies. Your Directors also thank all the Customers for their continuous support, Employees for their continued dedicated services, Members for their valuable support and confidence in the Company.