You are here » Home » Companies » Company Overview » R Systems International Ltd

R Systems International Ltd.

BSE: 532735 Sector: IT
NSE: RSYSTEMS ISIN Code: INE411H01032
BSE 00:00 | 12 Aug 241.00 0.95
(0.40%)
OPEN

240.40

HIGH

243.20

LOW

238.70

NSE 00:00 | 12 Aug 241.00 1.00
(0.42%)
OPEN

241.15

HIGH

243.40

LOW

239.25

OPEN 240.40
PREVIOUS CLOSE 240.05
VOLUME 5193
52-Week high 354.55
52-Week low 185.00
P/E 22.67
Mkt Cap.(Rs cr) 2,851
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 240.40
CLOSE 240.05
VOLUME 5193
52-Week high 354.55
52-Week low 185.00
P/E 22.67
Mkt Cap.(Rs cr) 2,851
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

R Systems International Ltd. (RSYSTEMS) - Director Report

Company director report

Dear Shareholders

Your directors take great pleasure in presenting the Twenty Eighth Annual Report on thebusiness and operations of R Systems International Limited ("R Systems" or the"Company") together with the audited financial statements of accounts for theyear ended December 312021.

1. Financial Results

a. Standalone financial results of R Systems

(Rs. in million)

Particulars

Financial Year ended

31.12.2021 31.12.2020
Total Revenue 5775.01 4387.15
Profit before depreciation exceptional items and tax 1505.42 950.41
Less: Depreciation and amortisation expense 146.49 134.61
Profit before tax 1358.93 815.80
Less: Current tax 245.27 149.86
Less: Deferred tax (credit)/expense (43.81) (31.13)
Profit after tax 1157.47 697.07
Other comprehensive income/ (loss) 0.71 (11.01)
Total comprehensive income for the year 1158.18 686.06
Statement of change in Retained Earnings
Opening Balance 3116.03 2423.29
Adjustment pursuant to Merger of RightMatch Holdings Limited - 19.22
Adjustment for adoption of Ind AS 116 - (10.49)
Adjusted opening balance 3116.03 2432.02
Add: Profit for the current year 1157.47 697.07
Less: Buyback of Shares (including tax) 168.10 -
Less: Dividend paid 677.66 -
Less: Dividend paid by RightMatch Holdings Limited - 13.06
Closing Balance 3427.74 3116.03
EPS-Basic 9.70 5.83

b. Consolidated financial results of R Systems and its Subsidiaries

(Rs. in million)

Particulars

Financial Year ended

31.12.2021 31.12.2020
Total Revenue 11556.39 8805.91
Profit before depreciation exceptional items and tax 1977.65 1236.90
Less: Depreciation and amortisation expense 276.93 256.04
Less: Exceptional Items - 18.65
Profit before tax 1700.72 962.21
Less : Current tax 327.63 206.17
Less : Deferred tax (credit)/ expense (41.27) (61.95)
Profit after tax 1414.36 817.99
Other comprehensive income/ (loss) (32.19) 75.92
Total comprehensive income for the year 1382.17 893.91
Statement of change in Retained Earnings
Opening Balance 3606.67 2796.95
Adjustment pursuant to Merger of RightMatch Holdings Limited - 19.22
Adjustment on adoption of Ind-AS 116

-

(14.43)
Adjusted opening balance 3606.67 2801.74
Add: Profit for the current year 1414.36 817.99
Less : Buyback of Shares (including tax) 168.10

-

Less : Dividend paid 677.66 -
Less : Dividend paid by RightMatch Holdings Limited

-

13.06
Closing Balance 4175.27 3606.67
EPS-Basic 11.85 6.84

2. Results of Operations Standalone Accounts

• Total revenue during the year 2021 was

' 5775.01 mn. as compared to ' 4387.15 mn. during the year 2020 an increase of31.63%.

• Profit after tax was ' 1157.47 mn. during the year 2021 as compared to ' 697.07mn. during the year 2020 an increase of 66.05%.

• Basic earnings per share (of face value of ' 1/- each) was ' 9.70 for the year2021 as compared to ' 5.83 for the year 2020 an increase of 66.38%.

Consolidated Accounts

• Total revenue during the year 2021 was

'11556.39 mn. as compared to ' 8805.91 mn. during the year 2020 an increase of31.23%.

• Profit after tax was ' 1414.36 mn. during the year 2021 as compared to ' 817.99mn. during the year 2020 an increase of 72.91%.

• Basic earnings per share (of face value of ' 1/- each) was '11.85 for the year2021 as compared to ' 6.84 for the year 2020 an increase of 73.25%.

The state of affairs of the Company is presented as part of Management Discussion andAnalysis Report forming part of this report.

3. Appropriations and Reserves Dividend

During the year 2021 the Board of Directors declared two interim dividends namelyInterim Dividend 2021 of ' 2.50/- per equity share i.e. 250% of face value of ' 1/- eachat its meeting held on June 18 2021 and Second Interim Dividend 2021 of ' 3.20/- perequity share i.e. 320% of face value of ' 1/- each at its meeting held on November 022021. The said interim dividends have been paid to shareholders on July 14 2021 andNovember 26 2021 respectively. The Board of Directors has not recommended any finaldividend for the financial year ended on December 312021.

Transfer to Reserves

In order to augment resources your Directors do not propose to transfer any amount toreserves.

4. Business

R Systems is a leading provider of technology artificial intelligence analytics andknowledge services. We partner with customers to enable or elevate their digitaltransformation with our diversified digital offerings. Our technology offerings includeproduct engineering cloud enablement QA testing Internet of Things (IoT) and digitalplatforms and solutions. This includes solution offerings i.e. Microsoft Infor BlueYonder and QlikView through our subsidiaries in South East Asia.

AI/ Analytics services include advanced analytics data monetization and modernizationmachine learning/ artificial intelligence business analytics intelligent automation andmodern data management. R Systems' design services include UX engineering visual designmobile user experience and experience re-engineering. Our knowledge service offeringscover revenue cycle management back office service technical support and customer careusing multi-lingual capabilities and global delivery platform.

R Systems services and solutions span over five major business verticals i.e.Technology Telecom Healthcare & Life Science Finance & Insurance and Retail& e-commerce. R Systems maintains eighteen development and service centres to servecustomers in North America Europe and APAC. There were no changes in the nature of theCompany business and generally in the classes of business in which the Company has aninterest and in the business carried on by the subsidiaries during the year under review.

For details of Company subsidiaries please refer note number 12 relating tosubsidiaries.

The outbreak of COVID-19 raised widespread concern and economic hardship for consumersbusinesses and communities across the globe. However the Indian IT Sector was largelysuccessful in containing the impact of Covid -19 as the businesses have accelerated thedigitization of their customer supply-chain interactions and of their internal operationsto function and transact. This acceleration in digital transformation has led to increasein demand for technology products and services.Therefore the business outlook continuesto be positive with strong demand environment and we continue to invest in newertechnologies sales and marketing initiatives to fuel our growth engine.

We are still conscious of risk of COVID. Safety and wellbeing of our employees isparamount to us in evaluating our options for work-from-office or hybrid working in aphased manner while ensuring the smooth services to our custome'

Subsequent to year ended December 31 2021 the Company has received approval fromDepartment of Commerce Ministry of Commerce & Industry Government of India forexpansion of its existing Special Economic Zone units located at Greater Noida West (NCR)for additional space of approximate 48320 sq. ft.

5. Quality

R Systems has continuously invested in processes people training informationsystems quality standards frameworks tools and methodologies to mitigate the risksassociated with execution of projects. Adoption of quality models and practices such asthe Capability Maturity Model Integration (CMMI) and People Capability Maturity Model(PCMM) practices for processes have ensured that risks are identified and mitigated atvarious levels in the planning and execution process. R Systems journey on various qualitystandards/ models is as follows:

During the year 2021 Noida IT as well as Knowledge Services (KS) Division became SOC2compliant and got reappraised for PCMM Level 5.

As of the date of this report Noida IT division is CMMI level 5 (Ver.1.3) PCMM Level5 ISO 9001:2015 ISO 27001:2013 certified and SOC2 Type 2 compliant. Noida KnowledgeServices (KS) Division is PCMM Level 5 ISO 27001:2013 ISO 9001:2015 certified and SOC2Type 2 compliant. Apart from this KS division is also HIPAA compliant for specificclients and PCI-DSS (ver.3.2.1) certified (for IT Infrastructure along with the projects/process/ applications in scope).

To maintain and strengthen competitive strengths R Systems continues to makeinvestments for enhancing its competencies around latest technologies for flawlessexecution and consistent delivery of state of art Product and solutions for our custome'The product engineering offerings include services along the entire software lifecyclethat includes technology consulting architecture design and development professionalservices testing maintenance customer care and technical support. R Systems expectsthat its technology focus investment in processes talent and methodologies will enableit to distinguish itself from competition as it seeks to provide services to technology/product companies.

6. Directors & Key Managerial Personnel's (KMP)

During the year under review the following changes took place in the office ofdirectors of the Company:

• Mr. Avirag Jain was re-appointed as director liable to retire by rotation atthe Annual General Meeting held on May 19 2021.

• Lt. Gen. Baldev Singh (Retd.) was re-appointed as Whole-time Directordesignated as President and Senior Executive Director of the Company for a period of twoyears commencing from April 012021 to March 31 2023 at the Annual General Meeting heldon May 19 2021.

• M' Ruchica Gupta Mr. Kapil Dhameja and Mr. Aditya Wadhwa were re-appointed asNonExecutive Independent Director of the Company for a period of further five yearscommencing from June 29 2021 to June 28 2026 at the Annual General Meeting held on May19 2021.

There was no change in the KMP of the Company during the financial year ended onDecember 312021.

In terms of Section 152 of the Act Lt. Gen. Baldev Singh (Retd.) President &Senior Executive Director being liable to retire by rotation shall retire at the ensuingAGM and being eligible for re-appointment offers himself for reappointment.

The brief profile of Lt. Gen. Baldev Singh (Retd.) forms part of the CorporateGovernance Report and the notice of the ensuing Annual General Meeting of the Company.

No director of the Company is disqualified as per the provisions of Section 164(2) ofthe Companies Act 2013. The directors of R Systems have made necessary disclosures asrequired under various provisions of the Companies Act 2013 (Hereinafter referred as the"Act") and the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 (Hereinafter referred as "ListingRegulations").

On the basis of the declarations submitted by the Independent Directors of the Companythe Board of Directors have opined that all the Independent Directors of the Companyfulfil the required criteria as defined under Section 149(6) of the Act and the ListingRegulations.

Further the Board is of the opinion that the Independent Directors of the Companypossess requisite qualifications experience and expertise and they hold highest standardsof integrity.

7. Liquidity and Borrowings - Consolidated Financial Statement

The consolidated cash and cash equivalents as at December 31 2021 were ' 2043.68 mn.as against ' 2135.84 mn. as on December 31 2020. Net cash generated from operatingactivities was ' 873.15 mn. for the year ended on December 31 2021 compared to ' 1253.92mn. for the year ended December 31 2020. Cash inflow from investing activities was '211.89 mn. for the year ended on December 31 2021 and mainly comprised of proceeds fromlong term deposit with bank ' 421.93 mn. (net) interest income of ' 67.81 mn. as offsetby purchase of property plant and equipment of ' 278.94 mn.

Cash used in financing activities was ' 1159.17 mn. for the year ended December312021 and mainly comprised of payment of interim dividends of ' 677.76 mn. Buyback ofequity shares (including tax) of ' 369.80 mn. and payment of lease liabilities of ' 107.01mn.

R Systems' policy is to maintain sufficient liquidity to fund the anticipated capitalexpenditures operational expenses and investments for strategic initiatives.

R Systems has taken credit facility (fund based as well as non-fund based) from AxisBank Limited and ICICI Bank Limited. As of December 312021 the total credit balance wasnil under fund based line of credit. Further borrowings as on December 31 2021 representloan taken for motor vehicles amounting to ' 10.61 mn.

8. Changes in the Capital Structure

During the year under review the following changes took place in the capital structureof the Company:

At the beginning of the financial year 2021 the share capital structure of the Companywas as follows:

Particulars Equity Shares of ' 1/- each
Authorised Share Capital 206000000
Issued Subscribed and Paid up share Capital 119636445

During the year under review Hon'ble National Company Law Tribunal New Delhi videorder dated February 012021 approved the Scheme of Amalgamation of RightMatch HoldingsLimited ("RightMatch") and R Systems International Limited and their respectiveshareholders and credito' Pursuant to the said Order on March 09 2021 the Company hadcancelled and extinguished 8828489 fully paid up equity share held by RightMatch andallotted equivalent number of shares to the shareholders of RightMatch in the proportionof their shareholding in RightMatch.

Further during the period under review the Company had completed buyback of its1333000 equity shares of ' 1/- each. At the end of the financial year ended December 312021 the share capital structure of the Company was as follows:

Particulars Equity Shares of ' 1/- each
Authorised Share Capital 206000000
Issued Subscribed and Paid up share Capital 118303445

9. Buyback

During the year ended December 312021 in compliance with the provisions of theSecurities and Exchange Board of India (Buyback of Securities) Regulations 2018applicable SEBI Circulars and the Companies Act 2013 the Board of Directors of theCompany at its meeting held on August 06 2021 approved the Buyback of up to 1333000fully paid-up equity shares of face value of ' 1/- each from all the equity shareholdersof the Company as on the record date i.e. August 27 2021 on a proportionate basisthrough the "tender offer" route using the "Mechanism for acquisition ofshares through Stock Exchange" as notified by SEBI at a price of ' 225/- (Rupees TwoHundred Twenty Five Only) per equity share for an aggregate amount of up to '299925000/- (Rupees Twenty Nine Crore Ninety Nine Lakhs Twenty Five Thousand Only)(excluding buyback tax). The settlement of all valid bids was completed by the IndianClearing Corporation Limited on October 12 2021. The extinguishment of 1333000 equityshares (all in dematerialized form) accepted under the said Buyback was completed onOctober 14 2021.

10. Scheme of Amalgamations and Arrangements

Hon'ble National Company Law Tribunal New Delhi vide its order dated February 01 2021approved the Scheme of Amalgamation of RightMatch Holdings Limited("RightMatch") and R Systems International Limited and their respectiveshareholders and creditors ("Scheme"). The said scheme was also approved by theStatutory Authorities of Mauritius. The Scheme was effective w.e.f. March 09 2021.

Pursuant to the said Scheme RightMatch (part of Promoter and Promoter Group of RSystems) was amalgamated into R Systems International Limited and 8828489 fully paid upequity shares of R Systems International Limited as held by RightMatch were extinguishedand equivalent number of shares were allotted to the shareholders of RightMatch (who werealso part of Promoter and Promoter Group of R Systems) in the proportion of theirshareholding in RightMatch.

Therefore there was no change in the Promoter and Promoter Group shareholding of RSystems as a result of amalgamation of RightMatch into R Systems.

The said amalgamation not only led to simplification of the shareholding structure andreduction of shareholding tiers but also demonstrated the Promoter's direct commitment toand engagement with R Systems.

11. Particulars of Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo

The particulars as prescribed under Section 134 (1) (m) of the Companies Act 2013 readwith Rule 8 of the Companies (Accounts) Rules 2014 for the year ended December 312021are as follows:

A. Conservation of Energy

Though your Company does not have energy intensive operation every endeavor has beenmade to ensure the optimal usage of energy avoid wastage and conserve energy.

R Systems constantly evaluates new technologies and makes appropriate investments to beenergy efficient.

During the year ended December 31 2021 R Systems adopted various energy conservationoptions/ technologies and took measures to reduce energy consumption by using energyefficient equipment and devices replacing existing CFL fittings with LEDs fittings toreduce power consumption timely preventive maintenance of all major and minor equipment.The air is conditioned with energy efficient compressors for central air conditioning andwith split air conditioning for localized areas. The Company is endeavoring to convert itsDiesel generators to GAS based generato'

R Systems is always in search of innovative and efficient energy conservationtechnologies and applies them prudently. Being in the software industry R Systems'soperations are not energy intensive and energy costs constitute a very small portion ofthe total cost therefore the financial impact of these measures is not material.

B. Technology absorption

1. Efforts made towards technology absorption

The Company has established centre of excellence in specific digital technologies likeCloud Mobility IOT Analytics RPA/ IPA etc. to strengthen competencies and enhanceofferings across focused verticals i.e. Technology Telecom Healthcare & LifeScience Banking & Insurance and Retail & e-Commerce.

2. Benefits derived as a result of the above efforts

Our investment in digital technologies is helping us to enhance market reach andsupport our revenue growth.

3. Technology imported during the last 3 years

Not applicable as no technology has been imported by the Company.

4. Expenditure incurred on Research and development

Driven by our core value of innovation we believe that innovation is not just apractice but an essential component embedded within R Systems organizational DNA. We arenow operating in a digital world. Digital transformation is one of our core areas where RSystems partner with businesses to make them competitive and successful in today'shyper-changing environment. Over the year ended December 312021 your Company hasinvested in research and development around all leading digital technologies. Further RSystems has also strengthened its proprietary solutions and frameworks optimizing theintegration with digital technologies.

C. Foreign Exchange Earnings and Outgo (Accrual Basis)

A significant percentage of R Systems revenues are generated from exports. Thedevelopment and service centre in Noida is registered with the Software Technology Park ofIndia as 100% Export Oriented Undertaking. All efforts of the Company are geared toincrease the business of software exports in different products and markets. We have madeinvestments in sales and marketing activities in various growing markets.

The total foreign exchange used and earned by R Systems during the year as comparedwith the previous year is as follows:

(Rs. in million)

Particulars Financial Year ended
31.12.2021 31.12.2020
(a) Earnings (Accrual Basis) 5770.20 4272.28
(b) Expenditure (Accrual Basis) 695.83 519.17
(c) CIF value of imports 64.27 61.78

12. Subsidiaries

As on December 31 2021 R Systems has twenty five subsidiaries. The name and countryof incorporation of those subsidiaries are as follows:

S. Name of the Subsidiaries No. Country of Incorporation
1. R Systems Inc. U.S.A.
2. R Systems Technologies Ltd. U.S.A.
3. RSYS Technologies Limited Canada
4. R Systems Consulting Services Limited (Formerly known as ECnet Limited) Singapore
5. R Systems Consulting Services (M) Sdn. Bhd. (Formerly known as ECnet (M) Sdn. Bhd.)# Malaysia
6. R Systems Consulting Services (Hong Kong) Limited (Formerly known as ECnet (Hong Kong) Limited)# Hong Kong
7. R Systems Consulting Services (Thailand) Co. Ltd. (Formerly known as ECnet Systems (Thailand) Co. Ltd.)# Thailand
8. R Systems Consulting Services Kabushiki Kaisha (Formerly known as ECnet Kabushiki Kaisha)# Japan
9. R Systems Consulting Services (Shanghai) Co. Ltd. (Formerly known as ECnet (Shanghai) Co. Ltd.)# People's Republic of China
10. R Systems Computaris International Limited (Formerly known as Computaris International Limited) U.K.
11. R Systems Computaris S.R.L. (Formerly known as ICS Computaris International Srl)@ Moldova
12. R Systems Computaris Malaysia Sdn. Bhd. (formerly known as Computaris Malaysia Sdn. Bhd.)@ Malaysia
13. R Systems Computaris Poland Sp. Z o.o. (Formerly known as Computaris Polska Sp Z.o.o.)@ Poland
14. R Systems Computaris Europe S.R.L (Formerly known as Computaris Romania SRL)@ Romania
15. R Systems Computaris Philippines Pte. Ltd. Inc. (Formerly known as Computaris Philippines Pte. Ltd. Inc.)@ Philippines
16. R Systems Computaris Suisse Sarl (Formerly known as Computaris Suisse Sarl)@ Switzerland
17. R Systems (Singapore) Pte. Ltd. Singapore
18. R Systems IBIZCS Pte. Ltd. (Formerly known as IBIZ Consulting Pte. Ltd.)* Singapore
19. IBIZ Consulting Services Pte Ltd.A Singapore
20. R Systems IBIZCS Sdn. Bhd. (Formerly kown as IBIZ Consulting Services Sdn. Bhd.)A Malaysia
21. PT. RSystems IBIZCS International (Formerly known as PT. IBIZCS Indonesia)A Indonesia
22. IBIZ Consulting Services LimitedA Hong Kong
23. IBIZ Consulting Services (Shanghai) Co. Ltd.% People's Republic of China
24. IBIZ Consulting ( Thailand) Co. Ltd.A Thailand
25. IBIZ Consultancy Services India Private Limited India

# wholly owned subsidiaries of ECnet Limited Singapore being 99.75% subsidiary of RSystems (The shareholding held by R Systems International Limited and R Systems(Singapore) Pte. Limited is 69.37% and 30.38% respectively).

 

@ wholly owned subsidiaries of R Systems Computaris International Limited being100% subsidiary of R Systems.

* wholly owned subsidiary of R Systems (Singapore) Pte Limited being 100% subsidiary ofR Systems.

 

A wholly owned subsidiaries of R Systems IBIZCS Pte. Ltd. being 100% Subsidiaryof R Systems (Singapore) Pte. Limited.

% wholly owned subsidiary of IBIZ Consulting Services Limited - Hong Kong being 100%Subsidiary of R Systems IBIZCS Pte. Ltd.

As on date of this report all the subsidiaries of the Company except IBIZ ConsultancyServices India Private Limited were incorporated and based outside India. In addition toprovide services to various international clients these subsidiaries also help to generaterevenues for R Systems.

During the year under review Innovizant LLC wholly- owned step-down subsidiary of theCompany has been merged with R Systems Inc. wholly owned subsidiary of the Companyw.e.f. August 312021.

During the year under review the name of some of the subsidiaries as mentioned abovehas been changed to operationalize various synergies across the group Companies.

During the year no other corporate restructuring activity was done by the Companyexcept as stated in this report.

The Board of Directors of the Company regularly reviews the affairs of thesesubsidiaries. Policy for determining material subsidiaries of the Company is available onthe website of the Company at https://www.rsystems.com/investors-info/corporate-governance/.

During the year 2021 the Company had three material Subsidiaries namely R SystemsInc. R Systems (Singapore) Pte. Ltd. R Systems Computaris Europe

S.R.L. all incorporated and based outside India.

A statement containing the salient features of the financial statements of oursubsidiaries in the prescribed Form AOC-1 is attached at the end of consolidated financialstatements of the Company. The statement also provides the details of performancefinancial position of each of the subsidiaries.

Further the audited annual accounts and related detailed information of oursubsidiaries wherever applicable will be made available to shareholders seeking suchinformation at any point of time. The annual accounts of the subsidiary companies willalso be available for inspection by the shareholders at Registered Office of R Systemsi.e. GF-1-A 6 Devika Tower Nehru Place New Delhi-110019 and Corporate Office of RSystems i.e. C-40 Sector 59 Noida (U.P)-201307 and Registered Offices of the subsidiarycompanies concerned during business hou' The same will also be hosted on R Systems'website i.e. www.rsystems.com.

13. Particulars of employees

The details required under Section 197(12) of the Act read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are annexedas Annexure A and forms part of this report. Further as required under the provisions ofRule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 the name and other particulars of employees are set out in Annexure B and forms partof this report.

14. Directors' responsibility statement

Pursuant to the requirement of Section 134 (3) (c) read with Section 134(5) of theCompanies Act 2013 with respect to directors' responsibility statement your directorshereby confirm that:

1) in the preparation of the annual accounts for the financial year ended December 312021 the applicable accounting standards had been followed along with proper explanationrelating to material departures;

2) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the Company for that period;

3) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

4) the directors had prepared the annual accounts for the financial year ended December31 2021 on a going concern basis;

5) the directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively;

6) the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

15. Auditors and Audit Report

M/s. Deloitte Haskins & Sells LLP Chartered Accountants [Firm's Registration No.117366W/W-100018] were appointed as the Statutory Auditors of your Company in the AnnualGeneral Meeting held on May 15 2017 for a term of five years until the conclusion of the28th Annual General Meeting of the Company.

In terms of provisions of Sections 139 and 141 of the Act M/s. Deloitte Haskins &Sells LLP Chartered Accountants are eligible to be re-appointed for a further term of 5(five) yea'

The Board of Directors in their meeting held on February 18 2022 on therecommendation of the Audit Committee and subject to approval of the Shareholders of theCompany at the ensuing AGM have approved the re-appointment of M/s. Deloitte Haskins& Sells LLP Chartered Accountants having Firm Registration No. 117366W/W-100018 asthe Statutory Auditors of the Company from the conclusion of 28th AnnualGeneral Meeting till the conclusion of 33rd Annual General Meeting of theCompany.

The Company has received written consent and certificate of eligibility in accordancewith Sections 139 141 and other applicable provisions of the Act and Rules issuedthereunder from M/s. Deloitte Haskins & Sells LLP They have confirmed to hold a validcertificate issued by the Peer Review Board of the Institute of Chartered Accountants ofIndia (ICAI) as required under the Listing Regulations.

The Auditors have issued an unmodified opinion on the Financial Statements bothstandalone and consolidated for the financial year ended December 312021. During theyear 2021 the statutory auditors has not reported any matter under Section 143(12) of theAct. The said Auditors' Report(s) for the financial year ended December 31 2021 on thefinancial statements of the Company forms part of the Annual Report.

16. Audit committee

R Systems has a qualified and independent Audit Committee. During the year underreview there was no change in the composition of the Audit Committee.

The constitution of the Committee is in compliance with the provisions of the Act andthe Listing Regulations.

Detailed description of the Audit Committee has been given in Corporate GovernanceReport. The terms of reference and role of the Committee are as per the guidelines set outin the Listing Regulations and Section 177 of the Act and rules made thereunder andincludes such other functions as may be assigned to it by the Board from time to time.

The Committee has adequate powers to play an effective role as required under theprovisions of the Act and Listing Regulations. During the year under review the Board ofDirectors of the Company had accepted all the recommendations of the Audit Committee.

17. Prevention and prohibition of sexual harassment of women at work place

At R Systems it is our desire to promote a healthy and congenial working environmentirrespective of gender caste creed or social class of the employees. We value everyindividual and are committed to protect the dignity and respect of every individual. TheCompany has always endeavored for providing a better and safe environment free of sexualharassment at all its work places. Consequent to the enactment of Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013 and Rules madethereunder the Management of R Systems International Limited has constituted an InternalComplaints Committee ("ICC") to deal with any complaints or issues that mayarise in the nature of sexual harassment of women employees. The Company has alsoprepared and implemented Policy for Prevention Prohibition and Redressal of SexualHarassment of Women at Workplace. During the year ended December 312021 there was onecase reported to ICC which was dully investigated and resolved by the ICC.

18. Corporate Governance

As required under the Listing Regulations the detailed report on corporate governanceis given as Annexure C to this report and the certificate obtained from M/s. DeloitteHaskins & Sells LLP Chartered Accountants [Firm's Registration No.117366W/W-100018] Statutory Auditors of the Company regarding compliance of theconditions of corporate governance as stipulated in the Listing Regulations is annexed asAnnexure D to this report.

19. Customer relations

R Systems recognizes that the customers have a choice of service providers and thedirectors would like to place on record their gratitude on behalf of the Company for thebusiness provided by them. The Company quality policy mandates that the voice of thecustomer is obtained on a regular basis. We constantly review the feedback and incorporateits impact into our delivery systems and communications.

20. Stakeholder's relations

R Systems is inspired by its customers and its employees transform that inspiration andcustomers' needs into value for all stakeholde' We thank all R Systems employees worldwidefor their hard work commitment dedication and discipline that enables the Company toaccomplish its customer commitments and commitments to all its stakeholde' R Systemsconducts regular employee satisfaction surveys and open house meetings to get employeefeedback. R Systems is constantly validating key employee data with industry and peergroup business. These practices have helped the Company to achieve many of its businessgoals and have been recognised in many industry surveys over the last few yea' The opendoor policy of our senior management team ensures that the feedback loop is completedpromptly. We thank our shareholders for their continuous support and confidence in RSystems. We are aware of our responsibilities to our shareholders to provide fullvisibility of operations corporate governance and creating superior shareholder value andwe promise to fulfill the same.

21. Management discussion and analysis report

In terms of the Listing Regulations Management Discussion and Analysis Report is givenas Annexure E to this report.

22. Business Responsibility Report

The Business Responsibility Report of the Company for the financial year ended December312021 as required under Regulation 34(2)(f) of the Listing Regulations forms part ofthis Report as Annexure F.

23. Secretarial Auditor and Secretarial Audit Report

M/s. Sanjay Grover & Associates Company Secretaries was appointed by the Board ofDirectors of the Company to carry out the Secretarial Audit under the provision of Section204 of the Act for the financial year ended December 31 2021. The Secretarial Auditreport for financial year ended December 31 2021 is enclosed as Annexure G.

Further the Secretarial auditors' report being selfexplanatory does not call for anyfurther comments by the Board of Directors as there are no qualifications reservation oradverse remark or disclaimer made in the audit report for the financial year endedDecember 312021.

24. Vigil Mechanism/ Whistle Blower Policy

In order to provide a mechanism to employees of the company to disclose any unethicaland improper practices or any other alleged wrongful conduct in the Company and toprohibit managerial personnel from taking any adverse action against those employees theCompany has laid down a Vigil Mechanism also known as Whistle Blower Policy to deal withinstance of fraud and mismanagement if any. The details of the Vigil Mechanism or WhistleBlower Policy is explained in the Corporate Governance Report and also posted on thewebsite of the Company.

25. Criteria for selection of candidates for Membership on the Board of Directors andthe Remuneration Policy

As per the provisions of Section 178 of the Act and other relevant provisions and onthe recommendation of the Nomination and Remuneration Committee the Board has framed acriteria for selection of Directors a policy for remuneration of Directors KeyManagerial Personnel Senior Management Personnel and other employees. The Criteria forselection of candidates for Membership on the Board of Directors and the remunerationpolicy are stated in the Corporate Governance Report.

26. Meetings of the Board

The Board of the Company and its Committees meet at regular intervals to discussdecide and supervise the various business policies business strategy Company performanceand other statutory matte' During the year under review the Board has met seven times.The details of the meeting of the Board and its Committees are given in the CorporateGovernance Report. The intervening gap between two Board Meetings did not exceed 120 days.

27. Committees of the Board

The Board of Company has constituted the following Committees to focus on specificareas and take informed decisions in the best interests of the Company within authoritydelegated to each of the Committees:

(a) Audit Committee

(b) Nomination and Remuneration Committee

(c) Stakeholders Relationship Committee

(d) Corporate Social Responsibility Committee

(e) Risk Management Committee

(f) Compensation Committee

The details of composition of the said Committee(s) their terms of reference meetingsheld and attendance of the Committee members during the financial year 2021 are providedin the Corporate Governance Report.

28. Board Evaluation

Pursuant to the provisions of the Act and the Listing Regulations the Board hascarried out an annual performance evaluation of its own performance its committees andthe individual directo' The manner in which the evaluation has been carried out has beenexplained in the Corporate Governance Report.

29. Particulars of Loans Guarantees or investments

During the year under review the Company has made no investment under Section 186 ofthe Companies Act 2013. Further details of loan guarantees and investments covered underSection 186 of the Act are provided in the notes to accounts of the financial statements.

30. Related Party Disclosure

All the related party transactions entered during the year were in the ordinary courseof business and on arm's length basis and in compliance with the applicable provisions ofthe Act and Listing Regulations. There are no materially significant related partytransactions made by the Company with its Promoters Directors Key Managerial Personnelor other designated persons which may have a potential conflict of interest with theCompany at large. All the related party transactions are presented to the Audit Committeeand the Board as required. Omnibus approval is obtained for the transactions which arerepetitive in nature.

A statement of all related party transactions is presented before the Audit Committeeon quarterly basis specifying the terms & conditions of the transactions. The policyon Related Party Transactions as approved by the Board is uploaded on the Company websiteat the web link as mentioned in the Corporate Governance Report. Details of particulars ofcontracts or arrangements with related parties referred to in sub-section (1) of Section188 of the Act in form AOC-2 has been enclosed as Annexure H.

31. Risk Management

In view of growing level of operations of the Company and in terms of the ListingRegulations the Board of Directors of the Company constituted the Risk ManagementCommittee to identify elements of risk in different areas of operations comprising of themembers of the Board of Directors of the Company.

The Company has developed and implemented a comprehensive Risk Management Policyincluding Cyber security for identification assessment and monitoring of key risks thatcould negatively impact the Company goals and objectives. This policy is periodicallyreviewed and enhanced under the oversight of the Risk Management Committee of the Board.

32. Annual Return

The Annual Return of the Company as on December 31 2021 in Form MGT - 7 in accordancewith Section 92(3) of the Act read with the Companies (Management and Administration)Rules 2014 is available on the website of the Company athttps://www.rsystems.com/investors-info/annual-reports/.

33. Corporate Social Responsibility

In compliance with the provisions of Section 135 of the Act read with the Companies(Corporate Social Responsibility Policy) Rules 2014 the Company has constituted aCorporate Social Responsibility Committee (CSR Committee). During the year under reviewthere was no change in the composition of the CSR Committee.

The detailed terms of reference of the CSR Committee has been provided in the CorporateGovernance Report. In pursuit of the responsibilities entrusted to the CSR Committee apolicy on Corporate Social Responsibility has been prepared and adopted by the Board whichis available at the website of the Company at following link:https://www.rsystems.com/investors-info/corporate- governance/.

Annual Report on CSR activities of the Company in format prescribed in the Companies(Corporate Social Responsibility Policy) Rules 2014 is enclosed as Annexure I and formspart of this report.

34. Dividend Distribution Policy

The Board of Directors of the Company had approved the dividend distribution policy inline with Regulation 43A of the Listing Regulations. The Policy broadly specify theexternal and internal factors including financial parameters that shall be consideredwhile declaring dividend and the circumstances under which the shareholders of the Companymay or may not expect dividend and how the retained earnings shall be utilized etc. TheDividend Distribution policy is available on the Company website at https://www.rsystems.com/wp-content/uploads/2021/05/ Dividend-Distribution-Policv.pdf.

35. Internal Control System and Internal Financial Controls

The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The Internal Auditors and the management monitors andevaluates the efficacy and adequacy of the internal control system in the Company itscompliance with operating accounting procedures and policies at all locations of theCompany. Audit observations of Internal Auditors and corrective actions thereon arepresented to the Audit Committee. To maintain its objectivity and independence theInternal Auditor reports to the Audit Committee. The Board of your Company has laid downinternal financial controls to be followed by the Company and that such internal financialcontrols are adequate and operating effectively.

M/s. Deloitte Haskins & Sells LLP Chartered Accountants the statutory auditors ofthe Company has audited the financial statements for the financial year ended December31 2021 and has issued unmodified opinion on the adequacy and operating effectiveness ofthe Company internal financial controls over financial reporting.

36. Other Disclosures

During the financial year under review:

• the Company has complied with the applicable Secretarial Standards i.e. SS-1and SS-2 relating to Meetings of the Board of Directors and General Meetingsrespectively.

• the Company does not have any stock option plan in force.

• the Company has neither invited nor accepted any deposits from the public withinthe purview of the Act and the Rules made thereunder and accordingly no amount on accountof principal or interest on public deposits was outstanding as on December 312021.

• the Company has not issued shares with differential voting rights and sweatequity shares.

• no disclosure is required under Section 67 (3) (c) of the Act in respect ofvoting rights not exercised directly by employees of the Company as the provisions of thesaid section are not applicable.

• the Company is not required to maintain Cost records under Section 148(1) of theAct.

• no significant or material orders were passed by the regulators or courts ortribunals which could impact the going concern status of the Company and its futureoperations.

• no material changes and commitments have occurred after the close of the yeartill the date of this report which may affect the financial position of the Company.

• during the year under review there are no proceedings either filed by theCompany or filed against Company pending under the Insolvency and Bankruptcy Code 2016before Hon'ble National Company Law Tribunal or other Court.

• details of unclaimed dividends and equity shares transferred to the InvestorEducation and Protection Fund authority during the year 2021 have been provided as part ofthe Corporate Governance report.

37. Acknowledgments

Your directors once again take this opportunity to thank the employees investorsclients vendors banks business associates regulatory authorities including StockExchanges Software Technology Park of India the Central Government State Government ofDelhi Uttar Pradesh Tamil Nadu for the business support valuable assistance andco-operation continuously extended to R Systems. Your directors gratefully acknowledge thetrust and confidence and look forward for their continued support in the future.

On behalf of the Board
For R Systems International Limited
Sd/- Sd/-
Dr. Satinder Singh Rekhi Lt. Gen. Baldev Singh (Retd.)
(DIN: 00006955) (DIN: 00006966)
(Managing Director & Chief Executive Officer) (President & Senior Executive Director)
Place : Singapore Place : NOIDA
Date : February 18 2022 Date : February 18 2022

.