Your Directors are pleased to present the Twenty Fourth Report of the Board ofDirectors ("Board") on the business and operations of the Company ("RamcoSystems" or "Ramco" or "RSL" or "Company") togetherwith the Audited Standalone and Consolidated Financial Statements for the year ended March31 2021.
SUMMARY OF PERFORMANCE
In the FY 2020-21 your Company continued its growth momentum with a consolidatedturnover of Rs.6263.06 Mln. as against previous year's turnover of Rs.5689.16Mln. recording a growth of 10% over the previous year. The consolidated Profitafter tax for the FY 2020-21 was
Rs.557.77 Mln. as against Rs.101.74 Mln. for the previous year. Consequentlythe consolidated earnings per share improved to Rs.18.20 for the year as against Rs.3.32for the previous year.
The standalone turnover registered a growth of 12.8% and stood at Rs.3450.05 Mln. inthe FY 2020-21 as against previous year's turnover of Rs.3058.48 Mln. The standaloneProfit after tax for the FY 2020-21 was at Rs.442.25 Mln. as against Rs.248.91 Mln. forthe previous year.
Amongst the business units Aviation registered a growth of 43% in terms ofconsolidated revenue. Amongst the geographies Europe recorded a growth of 99%. Costoptimization measures and improvement in the operating efficiencies had enabled repaymentof loans of Rs.962.50 Mln. during the FY 2020-21 resulting in making the borrowings zeroat the end of the year.
Your Company's financial highlights for the year ended March 31 2021 and March 312020 are as follows:
|Particulars ||For the year ended March 31 |
| ||Standalone ||Consolidated |
| ||2021 ||2020 ||Inc./(Dec.) ||2021 ||2020 ||Inc./(Dec.) |
|Revenue from Operations ||3450.05 ||3058.48 ||12.80% ||6263.06 ||5689.16 ||10.09% |
|Total Income ||3543.58 ||3197.56 ||10.82% ||6408.71 ||5780.87 ||10.86% |
|Finance Cost ||75.91 ||107.56 ||(29.43%) ||88.25 ||122.05 ||(27.69%) |
|Depreciation & Amortization ||629.52 ||606.08 ||3.87% ||691.46 ||664.65 ||4.03% |
|Total Expense ||2731.21 ||2584.70 ||5.67% ||5329.84 ||5445.78 ||(2.13%) |
|Profit before Interest Tax & Depreciation (EBITDA) ||1517.80 ||1326.50 ||14.42% ||1858.58 ||1121.79 ||65.68% |
|Profit before Tax ||812.37 ||612.86 ||32.55% ||1079.22 ||337.15 ||220.10% |
|Provision for Tax ||370.12 ||363.95 ||1.70% ||512.24 ||227.97 ||124.70% |
|Profit after Tax Attributable to Owners of the Parent ||442.25 ||248.91 ||77.67% ||557.77 ||101.74 ||448.23% |
Over a period of time we have built a legacy of expertise and executional excellence.We have simplified the digital transformational journey of our clients across the worldand made them more agile. Today we are fast-growing enterprise software player disruptingthe market with our multi-tenant cloud and mobile-based enterprise software and solutions.We have built the next generation end-to-end enterprise solutions that render completetransformation of the business in real time. Our solutions are further simplified throughan extensive deployment of AI/ML and delivering measurable outcomes.
Companies' world over are adapting digitization in their processes and are lookingforward to having a platform/solution with latest technologies driven by AI/MLmulti-geographical coverage cloud hosting capability with real time connected system andcomplete virtual or remote implementation. Post pandemic the digital implementation hasaccelerated across the world. Our solutions are enabling clients to embrace thisremarkable change by helping them in reducing cost saving manhours transforming theircore business operations and realigning their goals with the renewed focus.
Detailed review of operations of the various Business Units has already been coveredunder business review portion of this Annual Report.
DIVIDEND AND APPROPRIATIONS
In accordance with Regulation 43A of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 (hereinafter referred to as "SEBI LODR") theBoard approved and adopted the Dividend Distribution Policy and the same is available atthe Company's website at the followinghttps://www.ramco.com/hubfs/investor-relations/DIVIDEND-DISTRIBUTION-POLICY.pdf .
Your Directors have decided to conserve the funds for future growth opportunities andhad not recommended any dividend for the FY 2020-21. Hence no appropriations have beenmade to General Reserves.
During the year the issued and paid up capital of the Company has increased uponexercise of stock options by various option grantees and allotment of shares pursuant tothe same. The issued and subscribed capital of the Company stood at Rs.310.63 Mln.and paid up capital stood at Rs.307.49 Mln. as on March 31 2021 as againstRs.309.52 Mln. and Rs.306.39 Mln. respectively as at the end of the previous year. TheSecurities Premium has also increased to Rs.6633.66 Mln. from Rs.6585.58 Mln. andother than this the Company has not made any fresh issue of shares or convertiblesecurities during the year.
The number of shares and date on which such allotments were made by the Company undervarious Employee Stock Option Schemes ("ESOS") are given below:
|Particulars ||No. of equity shares (face value of Rs.10 per share) |
|Paid up Opening as at April 01 2020 ||30603181 |
|May 25 2020 ||1752 |
|August 08 2020 ||1312 |
|September 24 2020 ||40202 |
|November 16 2020 ||10024 |
|December 18 2020 ||17462 |
|February 03 2021 ||30873 |
|March 19 2021 ||9276 |
|Paid up Closing as at March 31 2021 ||30714082 |
Your Company's shares are in compulsorily tradable securities in electronic form. As onMarch 31 2021 99.59% of the Company's total paid up capital representing 307494710shares are in dematerialized form. To avoid fraud/delicacy of shares the Members holdingshares in physical mode are advised to avail the facility of dematerialization from thedepositories.
During the year there has been no change in the rating provided by ICRA Limited. Videits credit rating letter dated April 29 2021 ICRA has revised the ratings for the BankFacilities of the Company. The Outlook on the long-term rating is upgraded from A (Positive) to A (Stable). The details of said revision in the rating is available at theCompany's website at the following https://www.ramco.com/hubfs/investor-relations/CreditRatingIntimation-30-04-2021.pdf .
|Facilities ||Amount (Rs.Mln.) ||Existing Rating ||Revised Rating |
| ||Existing ||Revised || || |
|Long term Fund based/CC (Upgraded) ||350 ||350 ||A- (Positive) ||A(Stable) |
|Long term Fund based/Term Loan ||100 ||NIL ||A- (Positive) ||Not Applicable |
|Short term fund based facilities (Reaffirmed) ||1375 ||1375 ||A2+ ||A2+ |
|Short term Non-Fund based facilities (Reaffirmed) ||305 ||305 ||A2+ ||A2+ |
|Unallocated (Reaffirmed) ||15 ||115 ||A- (Positive) / A2+ ||A(Stable)/ A2+ |
|Total ||2145 ||2145 || || |
MANAGEMENT DISCUSSION AND ANALYSIS
In accordance with Regulation 34 of SEBI LODR the Management Discussion and Analysisis set out in this Annual Report.
BUSINESS RESPONSIBILITY REPORT
Your Company is one of the Top 1000 listed entities as per Market Capitalization dataissued by Stock Exchanges as on March 31 2021. In accordance with Regulation 34 of SEBILODR the Business Responsibility Report ("BRR") has been prepared and is setout in this Annual Report.
INFORMATION ON SUBSIDIARIES AND ASSOCIATE
Your Company has fourteen (14) subsidiaries and one (1) associate entity as on March31 2021. In accordance with Section 129(3) of the of the Companies Act 2013 (hereinafterreferred to as "the Act") read with Rule 5 of Companies (Accounts) Rules 2014a statement containing the salient features of the Financial Statements of oursubsidiaries and associate and their contribution to the overall performance of theCompany are available in FORM AOC-1 (is enclosed as Annexure I to the Board's Report) andStatutory group information (under note no. 30 to the Consolidated Financial Statements).In accordance with Regulation 46(2)(s) of SEBI LODR Separate Audited/ Reviewed FinancialStatements of the above subsidiary companies are placed on the website of the Company.
The Audit Committee reviews the Financial Statements of subsidiaries including theinvestments made in the subsidiaries on a quarterly basis and minutes of the Meetings ofthe subsidiary are placed before the Board Meetings. Subsequent to the close of FY2020-21 the Company has incorporated a wholly owned subsidiary in Japan RamcoSoftware Japan Kabushiki Kaisha (Ramco Software Japan Limited In English) on April01 2021. However as per the local regulations in Japan the share capital of JPY 9.50Min. (Rs.6.42 Mln.) was remitted on March 25 2021 in advance before incorporation.
As on March 31 2021 the Company has 5 overseas branch offices at UK Germany UAEAustralia and Spain.
Based on the financials of FY 2019-20 following subsidiaries were identified asmaterial subsidiaries for the FY 2020-21 in accordance with Regulation 16(1) of SEBI LODR:
1. Ramco Systems Corporation USA
2. Ramco Systems Pte. Ltd. Singapore
3. Ramco Systems FZ-LLC. Dubai
4. Ramco System Inc. Philippines
Based on the financials of FY 2020-21 following will be the material subsidiary forthe FY 2021-22 in accordance with Regulation 16(1) of SEBI LODR:
Ramco Systems Corporation USA
Since the income of this material subsidiary is more than 20% of the consolidatedincome it warrants the appointment of an Independent Director of the Company in thatsubsidiary in accordance with Regulation 24 of SEBI LODR. Since the Company had alreadyappointed Mr. M M Venkatachalam Independent Director of the Company as a Director of thatsubsidiary on May 22 2019 he continues to be a Director of that subsidiary thusfulfilling the requirements.
In accordance with Regulation 46(2) of SEBI LODR the policy for determiningmaterial subsidiaries formulated by the Board is available at the Company's website atthe followinghttps://www.ramco.com/hubfs/investor-relations/ramco-material-subsidiary-policy.pdf .
Consolidated Financial Statements
In accordance with Section 129(3) of the Act and Regulation 33 and 34 of SEBILODR the Consolidated Financial Statements incorporating the accounts of subsidiaryCompanies and associate Company along with the Auditors' Report thereon is set outin this Annual Report and are available at the Company's website at the following https://www.ramco.com/investor-relations/annual-reports. In accordance with Section 136(1) of the Act Separate Audited/ Reviewed Accounts inrespect of the subsidiary companies are also made available at the Company's website atthe following weblink: https://www.ramco.com/investor-relations/annual-reports . TheCompany shall provide a copy of the same to any Member of the Company who asks for it.
BOARD OF DIRECTORS
As on March 31 2021 your Board comprises of eight (8) Directors out of which four(4) are Independent Directors including an Independent Woman Director three (3)Non-Executive & Non-Independent Directors and an Executive Director. Chairman of theBoard is a Non-Executive & Non-Independent Director.
Mr. P R Venketrama Raja (DIN:00331406) Chairman is a Promoter Director and Mr. P VAbinav Ramasubramaniam Raja (DIN:07273249) Manager designated as Whole Time Directorbelongs to Promoter Group.
During the year no appointment / re-appointment (except the retirement by rotation andre-appointment of Mr. A V Dharmakrishnan (DIN:00693181) Non-Executive &Non-Independent Director) / resignation of Directors took place.
The Company had formulated a Code of Conduct for the Directors and Senior ManagementPersonnel and the same has been complied with. The said Code is available at the Company'swebsite at the following weblink: https://www.ramco.com/hubfs/investor-relations/code-of-conduct-business-ethics.pdf.
Retirement by Rotation and Re-Appointment
In accordance with Section 152 of the Act and Articles of Association of the CompanyMr. Sankar Krishnan (DIN:01597033) Director retires by rotation and being eligible offershimself for re-appointment at the ensuing Annual General Meeting ("AGM") of theCompany.
A brief resume of the Director being re-appointed the nature of expertise in specificfunctional areas names of companies in which he holds Directorships CommitteeMemberships/ Chairpersonships his shareholding in the Company etc. have been furnishedin the explanatory statement to the notice of the ensuing AGM.
Independent Directors of the Company provide declarations both at the time ofappointment and annually.
The Company has received necessary declaration as laid down in Section 149(7) of theAct from all the Independent Directors confirming that they meet the criteria ofindependence as provided in Section 149(6) of the Act and SEBI LODR. Independent Directorshave also complied with the Code for Independent Directors prescribed in Schedule IV tothe Act. In accordance with Companies (Appointment and Qualification of Directors) Rules2014 the Company has received declarations from Independent Directors confirming thatthey have registered with the Independent Directors Data Bank through Indian Institute ofCorporate Affairs. Amongst them Mr. M M Venkatachalam and Mr. R S Agarwal have beenexempted from passing the online proficiency self-assessment test conducted by IICA. Mrs.Soundara Kumar has passed the proficiency self-assessment test for Justice Mr. P P SJanarthana Raja (Retd.) time is available upto February 26 2022 for passing theself-assessment test. The Company had issued letter of appointment in accordance withRegulation 46 of the SEBI LODR and the terms and conditions of appointment of IndependentDirectors are available at the Company's website at the following weblink:https://www.ramco.com/hubfs/investor-relations/Independent-Directors-Terms-of-Appointment.pdf.
Information on familiarization program to Independent Directors is provided in theCorporate Governance Report Section of this Annual Report.
Details of Remuneration to Directors
Details as required under the Act in respect of remuneration paid to Directors aregiven in Corporate Governance Section of this Annual Report and in the Extract of AnnualReturn uploaded in the website under the following link: https://www.ramco.com/investor-relations/investor-information/annual-return/ .
Number of Meetings of the Board
Your Board met four (4) times during the FY 2020-21 on June 19 2020 August 08 2020November 03 2020 and February 03 2021 and further details on this aspect are given inthe Corporate Governance Section of this Annual Report. The maximum time gap between anyof the two consecutive Meetings was not more than one hundred and twenty (120) days orsuch other period as stipulated under the Act and SEBI LODR. Accordingly the BoardMeeting amongst others to consider Q4 financial results of FY 2019-20 was held on June19 2020 before the extended timeline of June 30 2020 prescribed by SEBI.
The Board has following Committees during the FY 2020-21: a. Audit Committee b.Stakeholders Relationship Committee c. Nomination and Remuneration Committee d. CorporateSocial Responsibility Committee e. Allotment Committee f. Fund Raising Committee Inaccordance with the disclosure requirement of Section 177(8) of the Act the compositionof the Audit Committee comprises of Mrs. Soundara Kumar Chairperson of the Committee Mr.M M Venkatachalam Mr. A V Dharmakrishnan Mr. Sankar Krishnan Mr. R S Agarwal andJustice Mr. P P S Janarthana Raja (Retd.).
A detailed note on the attendance composition of the Board and Committees along withother disclosures are provided in the Corporate Governance Report Section of this AnnualReport.
Meetings of Board and Committees held during the year are in compliance with thecirculars and notifications issued by Ministry of Corporate Affairs ("MCA") andSEBI in this regard.
Your Company recognizes the importance of a diverse Board for its success and believesthat a diverse Board will leverage inter alia differences in thought skills and industryexperience which in the long run will enhance shareholder value.
In accordance with the provisions of the Act and SEBI LODR Board has carried out aseparate exercise to evaluate the performance of the Board as a Whole its Committees andindividual Directors by taking into account the criteria laid down in this regard by theNomination and Remuneration Committee like attendance expertise contribution etc.brought in by the Directors at the Board and Committee Meetings which shall be taken intoaccount at the time of re-appointment of Independent Director.
A structured questionnaire was prepared covering various aspects including thefollowing but not limited to adequacy of the composition of the Board and its Committeesflow of information Board culture/Diversity execution and performance of specificduties obligations and Governance.
In accordance with Regulation 25(4) of the SEBI LODR Independent Directors haveevaluated the performance of Chairman Non-Independent Directors and Board as a Whole andassessed the quality quantity and timeliness of the flow of information between theManagement and the Board and other required matters.
In accordance with Regulation 17(10) of SEBI LODR the Board of Directors has evaluatedthe performance of Independent Directors and observed the same to be satisfactory andtheir deliberations beneficial in Board / Committee Meetings. In accordance withRegulation 4(2) of SEBI LODR the Board of Directors have reviewed and observed that theevaluation framework of the Board of Directors was adequate and effective. The Board'sobservations on the evaluations for the year under review carried on May 21 2021 weresimilar to their observations of the previous years. No specific actions have beenwarranted based on current year observations. The Company would continue to familiarizeits Directors on the industry technological and statutory developments which have abearing on the Company and the industry so that Directors would be effective indischarging their expected duties.
Policy on Directors' Appointment and Policy on Remuneration
In accordance with Section 134 and 178 of the Act the Policy on appointment of BoardMembers including criteria for determining qualifications positive attributesindependence of a Director and the Policy on remuneration of Directors KMP and otheremployees are outlined as part of Nomination and Remuneration Policy of the Company andsalient features of the same are disclosed in this report.
Nomination and Remuneration Committee' (NRC Committee) of your Board had fixed thecriteria for nominating a person on the Board which inter alia include desired size andcomposition of the Board age limit qualification/experience areas of expertise andindependence of the individual.
Your Company's current policy is to have an appropriate mix of Independent andNon-Independent Directors to maintain the independence of the Board and separate itsfunctions of Governance and management.
In accordance with Section 178 of the Act the NRC Committee of your Board hasformulated the Nomination and Remuneration Policy for the appointment and determination ofremuneration of the Directors Key Managerial Personnel and other employees of yourCompany. The said Policy ensures that the level and composition of remuneration isreasonable the relationship of remuneration to performance is clear and appropriate tothe long term goals of the Company.
The NRC Committee has also developed the criteria for determining the qualificationspositive attributes and independence of Directors and for making payments to Executive andIndependent Directors of the Company. It recommends to the Board the compensation payableto Directors. Director's compensation are within the limits prescribed under the Act andapproved by the Members of the Company where required.
Your Company follows a compensation mix of fixed pay benefits and performance basedvariable pay for its employees which is based on the performance of the business and theindividual performance of the individuals is measured through annual appraisal process.
The Whole Time Director is paid remuneration by way of salary benefits and allowancesin addition to entitlement of sitting fee for attending the Meetings. Non-ExecutiveDirectors are paid remuneration by way of sitting fees based on their participation in theMeetings. Remuneration paid to Directors is within the scale approved by the Board andMembers subject to overall ceilings stipulated under Section 197 of the Act. Sitting feesare being paid to Directors for attending the Board Meeting Audit Committee andIndependent Directors Meetings.
In accordance with Section 178(4) the salient features of the Nomination andRemuneration Policy should be disclosed in the Board's Report. The objective of the Policyis to ensure that:
The level and composition of remuneration is reasonable and sufficient to attractretain and motivate Directors of the quality required to run the Company successfully;
Relationship of remuneration to performance is clear and
Remuneration to Directors Key Managerial Personnel and Senior Management shall beappropriate to the working of the Company and its goals; and
To carry out any other function as is mandated by the Board from time to time and / orenforced by any statutory notification amendment or modification as may be applicable;The said Policy and composition of the NRC are in compliance with the Act and SEBI LODR.During the year there has been no change in the said policy and the said policy isavailable at the Company's website at the following weblink:https://www.ramco.com/hubfs/investor-relations/ramco-nomination-and-remuneration-policy.pdf.
KEY MANAGERIAL PERSONNEL
KMPs of your Company as on March 31 2021 are as follows: Mr. P V AbinavRamasubramaniam Raja Whole Time Director Mr. Virender Aggarwal Chief Executive Officer(Employee of Ramco Systems Pte. Ltd. Singapore a subsidiary of the Company) Mr. R RaviKula Chandran Chief Financial Officer Mr. Vijaya Raghavan N E Company Secretary andCompliance Officer During the year there is no change in the list of KMPs.
DIRECTORS' RESPONSIBILITY STATEMENT
Your Company's Directors make the following statement in terms of sub-section (5) ofSection 134 of the Act which is to the best of their knowledge and belief and accordingto the information and explanations obtained by them: a. that the Financial Statements forthe year ended March 31 2021 have been prepared in conformity with Indian AccountingStandards (Ind AS) and requirements of the Act and that of guidelines issued by SEBI tothe extent applicable to the Company along with proper explanation relating to materialdepartures; b. they 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 as at March 31 2021 and of the profit ofthe Company for the year ended on that date; c. they had taken proper and sufficient carefor the maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding the assets of the Company and for preventing and detecting fraudand other irregularities; d. they had prepared the annual accounts on a going concernbasis; e. they had laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and were operating effectively; and f.they had devised proper systems to ensure compliance with the provisions of all applicablelaws and that such systems were adequate and operating effectively.
Corporate Governance is a process that aims to allocate corporate resources in a mannerthat maximizes value for all Stakeholders.
Your Company is committed to maintain the highest standards of Corporate Governance.Your Company places high emphasis on business ethics and ensures best practices throughoutthe business and in its disclosures. Your Directors always strive to follow good CorporateGovernance practices in the Company to enhance long term shareholder value. CorporateGovernance Report for the FY 2020-21 is set out in this Annual Report. The requisitecertificate from the Secretarial Auditors confirming compliance of conditions of CorporateGovernance as stipulated under SEBI LODR is annexed to the Corporate Governance Report.
A Compliance Report on applicable compliances of SEBI Circular Notifications andRegulations etc. issued by Secretarial Auditors being filed with stock exchanges in theprescribed format.
Your Company believes in transparency and providing equal opportunities in theemployment. Your Company's offices across the globe have multi-cultural and multi-nationalemployees. Your Company prevents harassment of any kind based on age gender race or anyother basis protected by law.
The Company has a Policy on Prevention and Redressal of Sexual Harassment("POSH") in place in accordance with the requirements of Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013. During the FY2020-21 consequent to the exit of presiding officer Mrs. Shyamala Jayaraman Committeecomposition was revised and Mrs. Vinitha Ramani was appointed as the presiding officerwith effect from March 01 2021 and the required changes were made in POSH policy of theCompany.
During the FY 2020-21 there was no complaint received and no complaint pending fordisposal as on March 31 2021. Pursuant to Rule 8(5) of Companies (Accounts) Rules 2014the Company has complied with the provisions relating to the constitution of InternalComplaints Committee under Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.
EMPLOYEES STOCK OPTION SCHEME ("ESOS")
During the year 110901 options were exercised in 7 tranches by eligibleemployees/option grantees of the Company and its Subsidiaries under ESOS 2008 ESOS 2009Plan A ESOS 2009 Plan B ESOS 2013 and ESOS 2014 schemes of the Company. No employee wasgranted options/shares during the year equal to or exceeding 1% of the issued capital.
The growth of the Company has in large measure been possible owing to thewholehearted support commitment and teamwork of its personnel. Accordingly the Companyhad instituted various Employee Stock Option Plans / Schemes (ESOP / ESOS) for the benefitof employees: (A) Employee Stock Option Plan 2000 (ESOP 2000) (B) Employee Stock OptionScheme 2003 (ESOS 2003) (C) Employee Stock Option Scheme 2004 (ESOS 2004) (D) EmployeeStock Option Scheme 2008 (ESOS 2008) (E) Employee Stock Option Scheme 2009 - Plan A(ESOS 2009 - Plan A) (F) Employee Stock Option Scheme 2009 - Plan B (ESOS 2009 - Plan B)(G) Employee Stock Option Scheme 2013 (ESOS 2013) and (H) Employee Stock Option Scheme2014 (ESOS 2014) During the FY 2020-21 there has been no change in the Schemes of theCompany. It is confirmed that the Schemes of the Company are in compliance with SEBI(Share Based Employee Benefits) Regulations 2014. The relevant disclosures in terms ofthe Act and in accordance with the said Regulations are enclosed as Annexure II to theBoard's Report. The Company does not have any Scheme for issue of sweat equity to theemployees or Directors of the Company. Details of Stock Options granted during the year toMr. A V Dharmakrishnan Non-Executive & Non-Independent Director is disclosed inAnnexure II to the Board's Report. A certificate from Statutory Auditors with respect toimplementation of the above Employee Stock Option Schemes in accordance with SEBIRegulations and the resolution passed by the Members of the Company will be availableelectronically for inspection by the Members during the ensuing AGM and a copy of the sameshall be available for inspection at the Corporate Office of the Company during normalbusiness hours on any working day. The disclosure required to be made under SEBI (ShareBased Employee Benefits) Regulations 2014 is available in the Company's website at thefollowing weblink: https://www.ramco.com/periodic-compliances .
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Disclosures with respect to the remuneration of Directors KMP and Employees inaccordance with Section 197(12) of the Act read with Rule 5(1) (2) and 5(3) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are enclosedas Annexure III to the Board's Report.
INTERNAL FINANCIAL CONTROLS AND ITS ADEQUACY
In accordance with Section 134(5) of the Act the Company has Internal FinancialControls by means of policies and procedures commensurate with size and nature ofoperations. The Company's policies procedures and standards are developed to upholdinternal controls across the organization. These controls ensure transactions areauthorized recorded and reported correctly and assets are safeguarded and protectedagainst loss from unauthorized use or disposition. In addition there are operationalcontrols and fraud risk controls covering the entire spectrum of Internal FinancialControls. The controls were tested during the year and no material weakness exists.
Audit Committee of the Board periodically reviews the internal audit plans andobservations/recommendations of Internal and Statutory Auditors. In accordance with Rule8(5)(viii) of Companies (Accounts) Rules 2014 it is hereby confirmed that the InternalFinancial Controls are adequate with reference to the Financial Statements.
RISK MANAGEMENT POLICY
In accordance with Section 134(3)(n) of the Act and Regulation 17(9) of SEBILODR the Company has developed and implemented a Risk Management Policy. The Policyenvisages identification of risk and procedures for assessment and minimization of riskthereof. The policy is available at the Company's website at the followingweblink: https://www.ramco.com/hubfs/investor-relations/Risk-Management-Policy.pdfDetails on the Company's Risk Management framework/strategy also further discussed in theCompany's MDNA. In the opinion of the Board there is no element of risk which maythreaten the existence of the Company/its operations.
RELATED PARTY TRANSACTIONS ("RPT")
The Company has formulated a policy on materiality of RPT and also on dealingwith RPT. The said policy is available at the Company's website at the followingweblink:https://www.ramco.com/hubfs/investor-relations/ramco-related-party-transaction-policy.pdf.
Prior approval / omnibus approval have been obtained from Audit Committee for all RPTsand these transactions are periodically placed before the Audit Committee for itsreview/approval. All RPTs that were entered into during the financial year were on arm'slength basis and were in the ordinary course of business. There were no materiallysignificant transactions with related parties during the year that may have potentialconflict with the interests of the Company at large or that requires approval of theMembers. In accordance with Ind AS 24 the details of the transactions with the relatedparties are set out in the notes Financial Statements.
AUDITORS Statutory Auditor
Your Company at its 20th AGM held on August 04 2017 had appointed M/s. M.S.Jagannathan & N. Krishnaswami Chartered Accountants (FRN:001208S) as the StatutoryAuditors of the Company to hold office from the conclusion of 20th AGM till the conclusionof the 25th AGM of the Company to be held in the calendar year 2022.
In accordance with Sections 139 and 141 of the Act and relevant Rules prescribed thereunder the Company has received certificate from the Statutory Auditors to the effect thatthey are eligible to continue as Auditors. The Auditors have also confirmed that they havesubjected themselves to the peer review process of Institute of Chartered Accountants ofIndia (ICAI) and holds a valid certificate issued by the Peer Review Board of the ICAI.
Board on the recommendation of Audit Committee at its Meeting held on June 19 2020 hadapproved a Statutory Audit fee of Rs.1800000/- (exclusive of applicable taxes and out ofpocket expenses) for the FY 2020-21. Details of fees paid to Statutory Auditor isdisclosed in Corporate Governance Section of this report.
Your Board on the recommendation of Audit Committee at its Meeting held on June 192020 had re-appointed M/s. SRSV & Associates Chartered Accountants (FRN:015041S)Chennai as the Internal Auditors of the Company and approved the internal audit fees toconduct Internal Audit for the FY 2020-21. The Internal Auditors reports directly to theAudit Committee and make presentations at the Audit Committee Meeting(s) on the InternalAudit Report. In accordance with Sections 138 and 141 of the Act and relevant Rulesprescribed there under the Company has received certificate from the Internal Auditors tothe effect that they are eligible to continue as Internal Auditors.
Your Board on the recommendation of Audit Committee at its Meeting held on May 25 2021has re-appointed M/s. SRSV & Associates Chartered Accountants (FRN:015041S) Chennaias the Internal Auditors of the Company for the FY 2021-22.
Your Board at its Meeting held on June 19 2020 had re-appointed M/s.S.Krishnamurthy & Co. Company Secretaries to conduct the Secretarial Audit of theCompany for the FY 2020-21.
Your Board at its Meeting held on May 25 2021 had re-appointed M/s.S.Krishnamurthy & Co. Company Secretaries to conduct the Secretarial Audit of theCompany for the FY 2021-22.
The Company had received required declarations/consents from the Secretarial Auditorsconfirming that they are not disqualified and eligible to continue as SecretarialAuditors.
In accordance with Section 148 of the Act Maintenance of cost records and requirementof cost audit are not applicable to the business activity carried out by the Company.
The Statutory Auditors Secretarial Auditors and Internal Auditors of the Company havenot reported any frauds to the Audit Committee or to the Board of Directors under Section143(12) of the Act including Rules made thereunder.
The Statutory Audit Report in the prescribed format issued by Statutory Auditors isprovided in this Annual Report.
The Secretarial Auditor's Report in the prescribed format issued by the SecretarialAuditors is enclosed as Annexure IV to the Board's Report.
The Reports issued by them for the FY 2020-21 do not contain any qualificationreservation or adverse remark or disclaimer.
CORPORATE SOCIAL RESPONSIBILITY ("CSR")
In Compliance with Section 135 of the Act the Board of Directors have constituted aCSR Committee and adopted a CSR Policy in accordance with Schedule VII of the Act. YourCompany was required to spend Rs.14.45 Mln. towards CSR activities during the FY 2020-21and the same was spent in full during the year. Annual Report on CSR activities asprescribed under Companies (Corporate Social Responsibility Policy) Rules 2014 isenclosed as Annexure V to the Board's Report. Your Company's CSR Committee comprises ofMr. P R Venketrama Raja (DIN:00331406) Chairman Mr. M M Venkatachalam(DIN:00152619) Director and Mr. A V Dharmakrishnan (DIN:00693181) Director. The
Committee is responsible for formulating monitoring and implementing the CSR policy ofthe Company. In accordance with Section 135(4) of the Act the major contents of CSRpolicy are as follows: Concept: The Company's philosophy on CSR is that "asthe organization grows the society and community around it should also grow".
Vision: The Company's vision is to contribute to the social and economicdevelopment of the communities in which it operates resulting in building a better andsustainable way of life for the society at large.
Objectives: The objective of the CSR Policy is to: a. Ensure an increasedcommitment at all levels in the organization to operate its business in an economicallysocially & environmentally sustainable manner while recognising the interests of allits Stakeholders. b. To generate through its CSR initiatives a community goodwill forRSL and help reinforce a positive & socially responsible image of RSL as a corporateentity.
The CSR initiatives shall be undertaken by the Company as per its stated CSR Policy asProjects or Programmes or Activities (either new or ongoing).
The CSR activities may be undertaken through a registered trust or a registered societyor a Company established by the Company or its subsidiary or associate Company or throughany other trust society or Company which shall have an established track record of 3years in undertaking similar programmes or projects.
Your Company's social initiatives are carried out by Shri Abhinava Vidyatheertha SevaTrust.
In addition to the above CSR Policy also includes Applicability Objectives Areas ofInitiatives Budget CSR Reporting etc. and the said policy is available at the Company'swebsite at the following weblink:https://www.ramco.com/hubfs/investor-relations/Corporate-Social-Responsibility-Policy.pdf.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
In accordance with Section 177(9) and (10) of the Act and Regulation 22 of the SEBILODR the Company has established a Vigil Mechanism and has a Whistle Blower Policy andthe same is available at the Company's website at the following weblink:https://www.ramco.com/hubfs/investor-relations/Ramco-Whistle-Blower-Policy.pdf .
Further disclosure/information about the Vigil Mechanism and Whistle Blower Policy arediscussed in Corporate Governance Report Section of this Annual Report.
POLICY ON PRESERVATION OF DOCUMENTS AND ARCHIVAL OF DOCUMENTS
In accordance with Regulation 9 read with Regulation 30(8) of SEBI LODR yourBoard has framed a Policy on Preservation of documents and Archival of documents. Thisis intended to provide guidelines for the retention of records and preservation ofrelevant documents for a duration after which the documents shall be archived. This saidpolicy is available at the Company's website at the following weblink:https://www.ramco.com/hubfs/investor-relations/Policy-on-Preservation-of-Documents-and-Archival-of-Documents.pdf.
Your Company is in the space of providing technological solutions. Your Company'scontribution towards sustainability is continuous in nature as is reflectedthroughout/forms an integral part of our business. The Company aims to reduce its carbonfootprint by using energy conservation equipment's/ other control measures. Your Companyhas digitalized internal communications with virtual Meetings throughtele/audio-conferencing that bring down Meeting-related travel and other costsconsiderably.
Your Company is future-ready by proactively encouraging Innovative thinking across theorganization and going digital.
Deposits: During the year your Company has not accepted any deposit within themeaning of Sections 73 and 74 of the Act and no deposits are outstanding as at the end offinancial year; Secretarial Standards: Your Company has complied with SecretarialStandards issued by the Institute of Company Secretaries of India on Board / Committee andGeneral Meetings; Nature of Business: During the year there was no change innature of business of the Company or any of its subsidiaries;
Significant and Material Orders: During the year there are no such orders passedby Regulators/Courts/Tribunals impacting the going concern status and the Company'soperations in future;
Loans Guarantees or Investments: Disclosures on the same in accordance withSection 186(4) of the Act and SEBI LODR are provided under Note Nos. 8 9.1 26 and 29forming part of Separate (Standalone) Financial Statements.
Contracts or Arrangements with Related Parties: Particulars of the same as referredin Section 188(1) of the Act in the prescribed Form AOC-2 is enclosed as Annexure VI tothe Board's Report.
In accordance with Section 92(3) of the Act read with Rule 12(1) of Companies(Management and Administration) Rules 2014 an extract of the Annual Return in Form MGT-9for the year ended March 31 2021 is available in the Company's website at thefollowing weblink: https://www.ramco.com/investor-relations/investor-information/annual-return/ . and the Annual Return in Form MGT-7 for the said year will be filed withMCA after completion of AGM. MGT-7 for the year ended March 31 2020 had beenfiled with MCA and the same is available in the Company's website at the followingweblink: https://www.ramco.com/hubfs/PDF%20Download%20URL/Annual%20Return/Form_MGT-7_2019-20_Revised_Signed_. pdf .
Conservation of Energy: The information on conservation of energy technologyabsorption and foreign exchange earnings and outgo as stipulated under Section 134(3) ofthe Act read with the Companies (Accounts) Rules 2014 is enclosed as Annexure VII tothe Board's Report;
Material Changes and Commitments: No material changes and commitments affecting thefinancial position of the Company occurred between April 1 2021 and the date of signingthis report except the continuance of the Global pandemic COVID-19 and its impact on theoperations. Further deliberations on COVID-19 are provided under MDNA and Note Nos. 33 and31 of Separate (Standalone) and Consolidated Financial Statements respectively;
Investor Education and Protection Fund (IEPF): In accordance with Section 124 ofthe Act scenario for transfer of amount of unclaimed/unpaid dividend or correspondingshares to IEPF does not arise;
Committee Recommendations: During the year recommendations of all the Committeeconstituted by the Board in accordance with the Act were accepted by the Board;
Differential Rights: The Company has not issued equity shares with differentialrights as to dividend voting or otherwise;
Health Safety and Environmental Protection: Your Company is committed to provide asafe healthy and conducive environment to all of its employees and associates.
Your Company being in the industry of Information Technology Green Initiative isembedded in the Company's culture and throughout its business operations.
Keeping next step towards a Greener Planet for future generations and in furtherance ofdigitization Commitment to Go-Green initiative of the Government the Company startedusing digital mechanism to conduct Board/Committee Meeting(s) as per the provisions of lawand as part of this step circulating the agenda notes and other supporting documents ofthe Board/Committee Meetings through a secured electronic platform for ease of access toDirectors for their review and consideration thereby reducing usage of papers to alimited purpose.
AWARDS AND RECOGNITIONS
Your Company continued its excellence in its chosen area of business to set a tone atthe top. Rewards and recognition achieved by the Company globally during this year areprovided under page no.13 of this Annual Report.
Your Directors place on record their appreciation for the contributions made byemployees towards the success of your Company. Your Directors gratefully acknowledge thecooperation and support received from the Members Customers Vendors BankersRegulatory/Governmental Authorities in India and abroad.
| ||For and on Behalf of the Board of Directors |
| ||For RAMCO SYSTEMS LIMITED |
|Place : Rajapalayam ||P R VENKETRAMA RAJA |
|Date : May 25 2021 ||Chairman |