You are here » Home » Companies » Company Overview » Ramco Systems Ltd

Ramco Systems Ltd.

BSE: 532370 Sector: IT
NSE: RAMCOSYS ISIN Code: INE246B01019
BSE 14:09 | 12 Aug 270.95 -2.90
(-1.06%)
OPEN

273.05

HIGH

274.95

LOW

269.40

NSE 13:59 | 12 Aug 270.50 -2.65
(-0.97%)
OPEN

275.60

HIGH

275.60

LOW

268.80

OPEN 273.05
PREVIOUS CLOSE 273.85
VOLUME 5601
52-Week high 526.50
52-Week low 221.55
P/E
Mkt Cap.(Rs cr) 835
Buy Price 270.30
Buy Qty 21.00
Sell Price 270.95
Sell Qty 40.00
OPEN 273.05
CLOSE 273.85
VOLUME 5601
52-Week high 526.50
52-Week low 221.55
P/E
Mkt Cap.(Rs cr) 835
Buy Price 270.30
Buy Qty 21.00
Sell Price 270.95
Sell Qty 40.00

Ramco Systems Ltd. (RAMCOSYS) - Auditors Report

Company auditors report

To the Members of RAMCO SYSTEMS LIMITED

REPORT ON THE AUDIT OF STANDALONE FINANCIAL STATEMENTS

Opinion

We have audited the accompanying Separate ("Standalone") Financial Statementsdrawn in accordance with the Indian Accounting Standards ("Standalone FinancialStatements") of Ramco Systems Limited ("Company") which comprise theBalance Sheet as at 31 March 2022 the Statement of Profit and Loss (including OtherComprehensive Income) the Cash Flow Statement and Statement of Changes in Equity for theyear ended on 31 March 2022 and a summary of significant accounting policies and otherexplanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Financial Statements give the information requiredby the Companies Act 2013 ("Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards of the State of Affairs ("FinancialPosition") of the Company as at 31 March 2022 its Loss ("Financial Performanceincluding Other Comprehensive Income") Cash Flows and Changes in Equity for the yearended on 31 March 2022.

Basis for Opinion

We conducted our audit of the Standalone Financial Statements in accordance with theStandards on Auditing ("SAs") specified under section 143(10) of the Act. Ourresponsibilities under those SAs are further described in the Auditor's Responsibilitiesfor the Audit of the Standalone Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India ("ICAI") together with the ethicalrequirements that are relevant to our audit of the Standalone Financial Statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the Standalone Financial Statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in the audit of the Standalone Financial Statements of the current period.These matters were addressed in the context of our audit of the Standalone FinancialStatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Trade Receivables Unbilled License Revenue and Unbilled Service Revenue

Trade Receivables

Trade receivables are amounts billed but not yet received. As on 31 March 2022 amountoutstanding on this account is Rs. 692.95 Mn (PY: 1175.38 Mn). Of this Rs. 217.44 Mn isreceivable from eight wholly owned subsidiaries and Rs. 82.17 Mn is receivable from asubsidiary (that includes a step-down subsidiary) where the Company holds 98% of theEquity. Unbilled License Revenue Revenue recognition in the case of Licenses is ondelivery of the software and when the customer obtains a right to use such license. Theexcess revenue over billing is classified as Unbilled License Revenue and grouped underFinancial Assets. The amount outstanding as on 31 March 2022 is Rs. 316.86 Mn (PY: 394.66Mn).

Unbilled Service Revenue

Revenue recognition in the case of services is based on percentage of completionmethod. The excess revenue over billing is classified as Unbilled Service Revenue andgrouped under Other Assets. The amount outstanding as on 31 March 2022 is Rs. 317.77 Mn(PY: 342.81 Mn).

Auditor's Response

We have audited the Revenue recognition to ensure that it follows the stated policy.The outstanding amount has certain element of credit risk.

In the case of Trade Receivables and Unbilled License Revenue the credit risk isdefault on its payment obligation by the customer resulting in a financial loss.

In the case of Unbilled Service Revenue the risk consists of the satisfaction of thecustomers in respect of completion of service milestones and the default on its paymentobligation by the customer resulting in a financial loss.

We have reviewed the credit risk policy of the Company. The implementation of suchpolicy has been audited through audit / review of accounts through compliance andsubstantive testing of selected samples. The Company has created a provision for doubtfuldebts for Trade Receivables and Unbilled Revenue based on expected credit loss method. Wehave evaluated the empirical data of the previous years and we have ascertained that thecurrent provisioning for the expected credit loss is in line with the historical evidence.

We assessed the ageing of Trade Receivables and Unbilled Revenue the customer'shistorical billing and collection patterns and whether any payments post year-end havebeen received up to the date of this report. We have also ascertained the key judgmentsand assumptions used by the Management in the recoverability assessment of TradeReceivables Unbilled License Revenue and Unbilled Service Revenue.

Investment in Subsidiaries

The Company has various overseas subsidiaries. The carrying cost of the investment inthese subsidiaries under equity as on 31 March 2022 is Rs. 3678.59 Mn (PY: 3672.60 Mn).

Auditor's Response

We have evaluated the carrying cost of the investments in subsidiaries. The investmentsin these subsidiaries are considered as long term strategic essential in nature inachieving the commercial objectives of the Company. We have considered theinter-dependency between the Company and its subsidiaries the manner in which theoperations are carried out by the Company and its subsidiaries and assessed the keyjudgments and assumptions used by the Company in evaluating the stated value of theinvestments.

Intangible Assets

The Company's significant cash generating assets are Product Software and TechnologyPlatform. Costs incurred in the development of the product together with updates to theproduct functionality development of new business components upon completion of thedevelopment phase have been classified as "Product Software". Similarly costsincurred in the development of Technology Platform framework together with updates to thetechnology platform functionality which would enable the Company to provide solutions inboth standard and customized way have been classified as "Technology Platform".These are disclosed under Intangible Assets.

The carrying value of intangible assets is subjected to evaluation based on itsexisting functionality and its ability to generate revenue in future for the foreseeableperiod. The carrying cost of Product Software and Technology Platform as on 31 March 2022is Rs. 2812.05 Mn (PY: 2572.14 Mn). Auditor's Response We have reviewed and verified theprocess of capitalization of Product Software and Technology Platform. The Companyamortizes the cost incurred in development of these intangible assets over its estimateduseful life which is determined as ten years.

Our procedures focused on:

1. The functional classification of the product software and technology platform andtheir reasonableness; and

2. Evaluation of the appropriateness of the revenue forecasts and operating cash flowsthat could be generated based on the current functionality of the product software andtechnology platform included in the business forecast for the foreseeable future.

3. Reviewing the reasonableness of the key assumptions including those driving the cashflows underpinning the analysis by: a) Comparing historical budget forecasts againstactual results. b) Comparing forecast growth to business plans approved by the Board.

INFORMATION OTHER THAN STANDALONE FINANCIAL STATEMENTS AND AUDITOR'S REPORT THEREON

The Company's Management and Board of Directors are responsible for the preparation ofthe other information. The other information comprises the information included in theManagement Discussion and Analysis Board's Report including Annexures to Board's ReportBusiness Responsibility Report Corporate Governance and Shareholder's Information butdoes not include the Standalone Financial Statements Consolidated Financial Statementsand our audit report thereon.

Our opinion on the Standalone Financial Statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the Standalone Financial Statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the Standalone Financial Statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.If based on the work we have performed we conclude that there is a material misstatementof this other information; we are required to report that fact. We have nothing to reportin this regard.

MANAGEMENT'S RESPONSIBILITIES FOR THE STANDALONE FINANCIAL STATEMENTS

The Company's Management and Board of Directors are responsible for the matters statedin Section 134(5) of the Act with respect to the preparation and presentation of theStandalone Financial Statements that give a true and fair view of the Financial PositionFinancial Performance (including Other Comprehensive Income) Cash Flows and Changes inEquity of the Company in accordance with the accounting principles generally accepted inIndia including the Indian Accounting Standards specified under Section 133 of the Actread with Rule 7 of the Companies (Accounts) Rules 2014. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate Internal Financial Controls that wereoperating effectively for ensuring the accuracy and completeness of the accounting recordsrelevant to the preparation and presentation of the Standalone Financial Statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

InpreparingtheStandaloneFinancialStatementsManagement and Board of Directors areresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless Management and Board of Directors either intends to liquidatethe Company or to cease operations or has no realistic alternative but to do so. TheBoard of Directors is also responsible for overseeing the Company's financial reportingprocess.

AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an audit report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also: i. Identify and assessthe risks of material misstatement of the financial statements whether due to fraud orerror design and perform audit procedures responsive to those risks and obtain auditevidence that is sufficient and appropriate to provide a basis for our opinion. The riskof not detecting a material misstatement resulting from fraud is higher than for oneresulting from error as fraud may involve collusion forgery intentional omissionsmisrepresentations or the override of internal control. ii. Obtain an understanding ofInternal Financial Controls relevant to the audit in order to design audit procedures thatare appropriate in the circumstances. Under section 143(3)(i) of the Act we are alsoresponsible for expressing our opinion on whether the Company has adequate InternalFinancial Controls system in place and the operating effectiveness of such controls. iii.Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management. iv. Conclude on theappropriateness of management's use of the going concern basis of accounting and based onthe audit evidence obtained whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Company's ability to continue as a goingconcern. If we conclude that a material uncertainty exists we are required to drawattention in our audit report to the related disclosures in the financial statements orif such disclosures are inadequate to modify our opinion. Our conclusions are based onthe audit evidence obtained up to the date of our audit report. However future events orconditions may cause the Company to cease to continue as a going concern. v. Evaluate theoverall presentation structure and content of the financial statements including thedisclosures and whether the financial statements represent the underlying transactionsand events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in: i. Planning the scope of our auditwork and in evaluating the results of our work; and ii. To evaluate the effect of anyidentified misstatements in the financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant de_ciencies in internal control that we identify during our audit.

Wealsoprovidethosechargedwithgovernancewithastatement that we have complied withrelevant ethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the Standalone Financial Statementsof the current period and are therefore the key audit matters. We describe these mattersin our audit report unless law or regulation precludes public disclosure about the matteror when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor's Report) Order 2020 ("the Order")issued by the Central Government of India in terms of Sub-Section (11) of Section 143 ofthe Act we give in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act based on our audit we report to theextent applicable that: a. We have sought and obtained all the information andexplanations which to the best of our knowledge and belief were necessary for the purposesof our audit. b. In our opinion proper books of account as required by law have been keptby the Company so far as it appears from our examination of those books. c. The BalanceSheet the Statement of Profit and Loss (including Other Comprehensive Income) the CashFlow Statement and Statement of Changes in Equity dealt with by this report are inagreement with the books of account. d. In our opinion the aforesaid Standalone FinancialStatements comply with the Indian Accounting Standards specified under Section 133 of theAct read with Rule 7 of the Companies (Accounts) Rules 2014. e. On the basis ofthe written representations received from the Directors as on 31 March 2022 and taken onrecord by the Board of Directors none of the Directors is disqualified as on 31 March2022 from being appointed as a Director in terms of Section 164 (2) of the Act. f. We haveenclosed our report in "Annexure B" with respect to the adequacy of the InternalFinancial Controls over financial reporting of the Company and the operating effectivenessof such controls. Our report expresses an unmodified opinion on the adequacy and operatingeffectiveness of the Company's Internal Financial Controls over financial reporting. g.With respect to the other matters to be included in the Auditor's Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to thebest of our information and according to the explanations given to us: i. The Company hasdisclosed the impact of pending litigations as at 31 March 2022 on its financial positionin its Standalone Financial Statements – Refer Note No. 29 in the StandaloneFinancial Statements. ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses. iii. There wereno amounts that were required to be transferred by the Company to the Investor Educationand Protection Fund. iv. (a) The management has represented that to the best of itsknowledge and belief no funds have been advanced or loaned or invested (either fromborrowed funds or share premium or any other sources or kinds of funds) by the Company toor in any other person or entity including foreign entity ("Intermediaries")with the understanding whether recorded in writing or otherwise that the Intermediaryshall:

Whether directly or indirectly lend or invest in other persons or entities identifiedin any manner whatsoever by or on behalf of the Company ("UltimateBeneficiaries") or

Provide any guarantee security or the like on behalf of the Ultimate Beneficiaries.

(b) The management has represented that to the best of its knowledge and belief nofunds have been received by the Company from any person or entity including foreign entity("Funding Parties") with the understanding whether recorded in writing orotherwise that the Company shall:

Whether directly or indirectly lend or invest in other persons or entities identifiedin any manner whatsoever by or on behalf of the Funding Party ("UltimateBeneficiaries") or

Provide any guarantee security or the like on behalf of the Ultimate Beneficiaries;and

(c) Based on the audit procedures as considered reasonable and appropriate in thecircumstances nothing has come to our notice that has caused us to believe that therepresentations under sub-clause (iv)(a) and (iv)(b) contain any material misstatement. v.There is no dividend declared or paid during the year by the Company and hence therequirement of compliance with Section 123 of the Act does not arise. h. With respect tothe matter to be included in the Audit Report under Section 197(16) of the Act: In ouropinion and according to the information and explanations given to us the remunerationpaid by the Company to its Directors during the current year is in accordance with theprovisions of Section 197 of the Act. The remuneration paid to any Director is not inexcess of the limit laid down under Section 197 of the Act. The Ministry of CorporateAffairs has not prescribed other details under Section 197(16) of the Act which arerequired to be commented upon by us.

For M S JAGANNATHAN & N KRISHNASWAMI
Chartered Accountants
Firm Registration No.: 001208S
K SRINIVASAN
Partner
Membership No.: 021510
UDIN: 22021510AJFRJI5895
Place: Chennai
Date: May 19 2022

ANNEXURE A to the Independent Auditor's Report

(Referred to in paragraph 1 under the heading "Report on Other Legal andRegulatory Requirements" of our report of even date to the Standalone FinancialStatements of the Company for the year ended 31 March 2022) We state the following afterconsidering the information and explanations given to us by the Company and on the basisof examination of the records of the Company:

1. In respect of Company's Property Plant and Equipment and Intangible Assets 1.1. TheCompany has maintained proper records showing full particulars including quantitativedetails and situation of Property Plant and Equipments. The Company has also maintainedproper records showing full particulars of Intangible assets.

1.2. The Property Plant and Equipment were physically verified during the year by theCompany in accordance with the phased programme of verification which in our opinionprovides for physical verification at reasonable intervals. No material discrepancies werenoticed during such verification.

1.3. The title deeds of immovable properties disclosed in the financial statements areheld in the name of the Company (Other than the properties where the Company is a lesseeand the lease arrangements are duly executed in favour of the Company). 1.4. The Companyhas not revalued its Property Plant and Equipment (including Right of use Assets) and/orintangibles during the year and accordingly the provisions of clause 3(i)(d) of the Orderis not applicable to the Company.

1.5. The Company does not hold any benami property and no proceedings have beeninitiated or are pending against the Company for holding any Benami property under theBenami Transactions (Prohibition Act) 1988 (45 of 1988) and rules made thereunder andaccordingly the provisions of clause 3(i)(e) of the Order is not applicable to theCompany.

2. Inventory and Working Capital

2.1. The Company does not carry any inventory and accordingly the provisions of Clause3(ii)(a) of the Order is not applicable to the Company.

2.2 The Company has been sanctioned Working Capital limits in excess of five crorerupees in aggregate from banks or financial institutions on the basis of security ofcurrent assets. The quarterly returns or statements filed by the Company with such banksor financial institutions are in agreement with the books of accounts of the Company.

3. Investments made Loans given Advances in the nature of loans given and guaranteesprovided during the year 3.1 To Subsidiaries Joint Ventures Associates and Others

Particulars Aggregate amount provided during the year Balance Outstanding at the year end (Rs. In Mn)
(Rs. In Mn)
Loans given to Subsidiaries Unsecured Nil 773.01
Guarantees provided to/ on-behalf of Subsidiaries Nil 777.57
Guarantees provided to others 13.29 14.14

3.2. The investments made guarantees provided security given and terms and conditionsof grant of all loans and advances are not prejudicial to the Company's interest.

3.3 The loans given to subsidiaries and interest due thereon are repayable on demandand hence the schedule of repayment is not applicable. The repayments and receipts havebeen regular when demanded.

3.4. There has been no amount overdue for more than 90 days in respect of loans given.

3.5. No loan granted by the Company which has fallen due during the year has beenrenewed or extended or fresh loans granted to settle the existing loans given to the sameparties.

3.6 The Company has granted loans repayable on demand as below

Particulars Aggregate Amount provided during the year (Rs. in Mn) Percentage to the Loans granted Balance outstanding at the year end (Rs. in Mn)
Loans given to Subsidiaries Unsecured Nil Not Applicable 773.01

4. The Company has complied with the provisions of Section 185 and 186 of the Act inrespect of loans investments guarantees and security.

5. The Company has not accepted any deposits from the public and hence the directivesissued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any otherrelevant provisions of the Act and the Companies (Acceptance of Deposit) Rules 2015 withregard to the deposits accepted from the public are not applicable.

6. The Company is not required to maintain accounts and records which have beenspecified by the Central Government under Section 148(1) of the Act.

7. Undisputed and Disputed Taxes and Duties

7.1. The Company is regular in depositing undisputed statutory dues including ProvidentFund Employees State Insurance Income-Tax Sales Tax Service Tax Goods and ServicesTax Duty of Customs Duty of Excise Value Added Tax Cess and any other statutory dueswith the appropriate authorities. No undisputed amounts payable in respect of the abovewere in arrears as at 31 March 2022 for a period of more than six months from the datethey became payable.

7.2. The disputed statutory dues aggregating to Rs. 82.30 Mn. that have not beendeposited on account of matters pending before appropriate authorities are as under:

Name of the Statute Nature of Dues Forum where Dispute is pending Amount in Mn
Tamil Nadu Value Added Tax Act 2006 Value Added Tax Honorable High Court of Madras 75.86
The Maharashtra Value Added Tax Act 2002 Value Added Tax Deputy Commissioner of Sales Tax Mumbai 0.09
Finance Act 1994 Service Tax The Commissioner of Service Tax Appeals Chennai 1.21
Goods and Services Tax 2017 Goods and Services Tax The Additional / Joint Commissioner of GST & Central Excise Adjudication Chennai 5.14

8. There have been no transactions which were not previously recorded in the books ofaccount but have been surrendered or disclosed as income during the year in the taxassessments by the Company under the Income Tax Act 1961.

9. Default in respect of repayment of loans and interest during the year 9.1. TheCompany has not defaulted in repayment of dues to financial institutions BanksGovernment Debenture holders or any other lender.

9.2. The Company has not been declared as a willful defaulter by any bank or financialinstitution or any other lender.

9.3. The Company has not obtained any term Loans during the year and accordingly theprovisions of the clause 3(ix)(c) of the Order is not applicable to the Company.

9.4. Funds raised on short term basis by the Company were not utilised for long termpurposes.

9.5. The Company has not taken any funds from any entity or person on account of or tomeet the obligations of the subsidiaries joint ventures or associates and accordingly theprovisions of clause 3(ix)(e) of the Order is not applicable to the Company.

9.6. The Company has not raised any loans during the year on the pledge of securitiesheld in subsidiaries joint ventures or associate companies and accordingly theprovisions of clause 3(ix)(f) of the Order is not applicable to the Company.

10. Funds Raised

10.1 The Company has not raised any money by way of initial public offer or furtherpublic offer during the year. The Company has not raised term loans from Banks orFinancial Institutions during the year. The Company has not issued any debentures duringthe year. Accordingly clause 3(x)(a) of the Order is not applicable to the Company.

10.2. The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review.Accordingly the provisions of clause 3(x)(b) of the Order is not applicable to theCompany. 11. Fraud and Whistle Blower System 11.1. We report that no fraud by the Companyor on the Company by its officers or employees has been noticed or reported during theyear.

11.2. No report under sub-section (12) of Section 143 of the Act has been filed by theauditors in respect of the Company in Form ADT-4 as prescribed under Rule 13 of Companies(Audit and Auditors) Rules 2014 with the Central Government.

11.3 .The Company's management has not received any whistle blower complaints duringthe year.

12. The Company is not a Nidhi Company. Therefore the provisions of clause 3(xii) ofthe Order is not applicable to the Company.

13. All the transactions with the related parties by the Company are in compliance withSection 177 and 188 of the Act and the details have been disclosed in the StandaloneFinancial Statements as required by the applicable Accounting Standards.

14. The Company has an Internal Audit system commensurate with the size and nature ofits business. The reports of the internal auditor have been taken into consideration. 15.The Company has not entered into any non-cash transactions with its Directors or personsconnected with them and accordingly the provisions of clause 3(xv) of the Order is notapplicable to the Company.

16. Registration

16.1. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934 and accordingly the provisions of clause 3(xvi)(a) of the Orderis not applicable to the Company.

16.2 The Company has not conducted any Non-Banking Financial or Housing Financeactivities and accordingly the provisions of clause 3(xvi)(b) of the Order is notapplicable to the Company.

16.3 The Company is not a Core Investment Company (CIC) as defined in the regulationsmade by the Reserve Bank of India and accordingly the provisions of clause 3(xvi)(c) ofthe Order is not applicable to the Company.

16.4 The Group does not have any CIC as part of it and accordingly the provisions ofclause 3(xvi)(d) of the Order is not applicable to the Company.

17. The Company has not incurred cash losses in the current year and in the immediatelypreceding financial year. 18. There has been no resignation of statutory auditors of theCompany during the year and accordingly the provisions of clause 3(xviii) of the Order isnot applicable to the Company.

19. On the basis of the financial ratios ageing and expected dates of realization offinancial assets and payment of financial liabilities other information accompanying thefinancial statements we are of the opinion that no material uncertainty exists as on thedate of the audit report that the Company is capable of meeting its liabilities existingat the date of balance sheet as and when they fall due within a period of one year fromthe balance sheet date. Variations in ratios over 25% on comparison with previous year hasalso been disclosed in the notes accompanying financial statements.

20. CSR Compliance

20.1. There is no unspent amount towards Corporate Social Responsibility (CSR) on otherthan ongoing projects requiring a transfer to a Fund specified in Schedule VII to the Actand accordingly the provisions of clause 3(xx)(a) of the order is not applicable to theCompany.

20.2. In respect of Ongoing projects the Company has transferred CSR amount to aspecial account under section 135(6) of the Act within the time prescribed under the Act.

21. None of the companies (other than Ramco Systems Limited India) included in theConsolidated financial statements are incorporated in India and hence the Companies(Auditor's Report) Order 2020 issued by the Central Government of India in terms ofSection 143(11) of the Act is not applicable to them. Accordingly the provisions ofclause 3(xxi) of the Order is not applicable to the Company.

For M S JAGANNATHAN & N KRISHNASWAMI
Chartered Accountants
Firm Registration No.: 001208S
K SRINIVASAN
Partner
Membership No.: 021510
UDIN: 22021510AJFRJI5895
Place: Chennai
Date: May 19 2022

ANNEXURE B to the Independent Auditor's Report

(Referred in paragraph 2(f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

Report on the Internal Financial Controls over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 (‘Act‘)

OPINION

We have audited the Internal Financial Controls over financial reporting of RamcoSystems Limited ("Company") as of March 31 2022 in conjunction with our auditof the Standalone Financial Statements of the Company for the year ended on 31 March 2022.

In our opinion and to the best of our information and according to the explanationsgiven to us the Company has in all material respects an adequate Internal FinancialControls system over financial reporting and such Internal Financial Controls overfinancial reporting were operating effectively as at 31 March 2022 based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls over Financial Reporting issued by the Institute of CharteredAccountants of India.

MANAGEMENT'S RESPONSIBILITIES FOR INTERNAL FINANCIAL CONTROLS

The Company's Management and Board of Director's are responsible for establishing andmaintaining Internal Financial Controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India("ICAI"). These responsibilities include the design implementation andmaintenance of adequate Internal Financial Controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence toCompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

AUDITOR'S RESPONSIBILITIES

Our responsibility is to express an opinion on the Company's Internal FinancialControls over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting("Guidance Note") and the Standards on

Auditing issued by ICAI and deemed to be prescribed under Section 143(10) of the Actto the extent applicable to an audit of internal financial controls and both applicableto an audit of Internal Financial Controls and both issued by the ICAI. Those Standardsand the Guidance Note require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether adequate Internal FinancialControls over financial reporting was established and maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe Internal Financial Controls system over financial reporting and their operatingeffectiveness. Our audit of Internal Financial Controls over financial reporting includedobtaining an understanding of Internal Financial Controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's Internal Financial Controls systemover financial reporting.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that: (1) Pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company.

(2) Provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of Management and Directors of the company; and

(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.

over financial reporting may become inadequate because of changes in conditions orthat the degree of compliance with the policies or procedures may deteriorate.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

Because of the inherent limitations of Internal Financial Controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the Internal Financial Controls over financialreporting to future periods are subject to the risk that the Internal Financial Control

For M S JAGANNATHAN & N KRISHNASWAMI
Chartered Accountants
Firm Registration No.: 001208S
K SRINIVASAN
Partner
Membership No.: 021510
UDIN: 22021510AJFRJI5895
Place: Chennai
Date: May 19 2022

.