Ramco Systems Ltd
Directors Reports
Dear Members,
Your Directors are pleased to present the Twenty Sixth Report of the Board of Directors
("Board") on the business and operations of the Company ("Ramco
Systems" or "Ramco" or "RSL" or "Company"), together
with the audited standalone and consolidated financial statements for the year ended March
31, 2023.
SUMMARY OF PERFORMANCE
In the financial year (FY) 2022-23, your Company saw a decline in the growth momentum,
with a consolidated turnover of Rs.4,922.23 Mln., as against previous year's turnover of
Rs. 5,311.02 Mln. The consolidated Profit/(Loss) after tax for the FY 2022-23 was
Rs.(2,068.40) Mln. as against Rs. (733.59) Mln. for the previous year. Consequently, the
consolidated earnings per share reduced to Rs.(65.60) for the year, as against Rs. (23.87)
for the previous year.
The standalone turnover stood at Rs.2,478.15 Mln. in the FY 2022-23, as against
previous year's turnover of Rs. 2,795.92 Mln. The standalone Profit/(Loss) after tax for
the FY 2022-23 was at Rs.(1,130.05) Mln. as against Rs. (499.71) Mln. for the previous
year. Consequently, the standalone earnings per share reduced to Rs.(35.84) for the year,
as against Rs. (16.26) for the previous year.
The global order booking during the year has improved and witnessed an increase of 39%
over the previous year. However, the drop in revenue by 14% was attributable mainly to
product revenue being lower by about 11% and services revenue being lower by about 17%,
owing to lower order booking in the previous year.
FINANCIAL HIGHLIGHTS
Your Company's financial highlights for the year ended March 31,2023 and March 31,2022
are as follows:
(Rs. Mln.)
Particulars |
For the year ended March 31 |
|
Standalone |
Consolidated |
|
2023 |
2022 |
Inc./(dec.) |
2023 |
2022 |
Inc./(dec.) |
Revenue from Operations |
2,478.15 |
2,795.92 |
(11.37%) |
4,922.23 |
5,311.02 |
(732%) |
Total Income |
2,538.57 |
2,900.08 |
(12.47%) |
4,977.32 |
5,403.77 |
(7.89%) |
Finance Cost |
8734 |
46.81 |
86.58% |
99.61 |
54.19 |
83.82% |
Depreciation & Amortization |
739.19 |
698.63 |
5.81% |
808.24 |
753.18 |
731% |
Total Expense |
3,800.07 |
3,483.70 |
9.08% |
7,184.23 |
6,137.88 |
1705% |
Profit before Interest, Tax & Depreciation (EBITDA) |
(434.97) |
161.82 |
(368.80%) |
(1,298.90) |
74.30 |
(1,848.18%) |
Profit/(Loss) before Tax |
(1,261.50) |
(583.62) |
116.15% |
(2,206.75) |
(733.07) |
201.03% |
Provision for Tax |
(131.45) |
(83.91) |
56.66% |
(138.16) |
(3.77) |
3,564.72% |
Profit after Tax Attributable to Owners of the Parent |
(1,130.05) |
(499.71) |
126.14% |
(2,068.40) |
(733.59) |
181.96% |
BUSINESS HIGHLIGHTS
Technology has been playing a more significant role in our lives since the pandemic.
With organizations realizing the importance of digital readiness, there's been a rising
demand for digital technology solutions, which can help them grow and adapt to the
emerging trends. Over the past year, we at Ramco have prioritized innovation, technology
and our people, to improve our offerings and keep up with the ever-changing needs of our
customers. This focus on our fundamentals has helped us bring in transformation for the
future.
From Artificial Intelligence and Machine Learning(‘AI&ML') to loT, we are
amidst a powerfully transformative technology that is bringing in a revolution. By
leveraging this transformative technology through automation and various other development
tools, we have successfully been solving critical business problems, thereby creating a
sustainable future. With reformed business processes and emphasis on a ‘Customer
First' approach, we at Ramco have been inching towards offering a world class enterprise
solution.
Detailed review of operations of the various Business Units has already been covered
under business review portion of this Annual Report.
DIVIDEND AND APPROPRIATIONS
In accordance with Regulation 43A of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, (hereinafter referred to as "SEBI LODR") the
Board approved and adopted the Dividend Distribution Policy and the same is available at
the Company's website, at the following weblink:
https://www.ramco.com/hubfs/494075/PDF%20Download%20URL/Dividend%20Distribution%20Policy/DIVIDEND-
DISTRIBUTION-POLICY.pdf
Your Directors have not recommend any dividend for the FY 2022-23. Hence no
appropriations have been made to general reserves.
FUND RAISING / UTILIZATION OF FUNDS
During the year, the Board in its Meeting held on December 22, 2022 had approved
Preferential Issue of Equity Shares and Warrants Fully Convertible into Equity Shares each
at a price of Rs.274/-, aggregating to Rs.160 cr. The Members approved the same through
Postal Ballot on January 21,2023. The required consideration as below was received from
the respective allotees and allotments of Equity Shares / Warrants Fully Convertible into
Equity Shares ("Warrants") were made by the Board on February 01,2023.
Sl.
No. |
Name of the Allottees |
Category |
Issue Size Rs. cr. |
Consideration received (Rs. cr.) |
Consideration received on |
No. of. Securities Allotted |
1. |
Ramco Industries Limited |
Promoter Group |
45.00 |
45.00 |
January 27, 2023 |
1,642,335 equity shares |
2. |
Atyant Capital India Fund-I |
Non-Promoter |
3750 |
3750 |
January 25, 2023 |
1,368,613 equity shares |
3. |
Vanderbilt University |
Non-Promoter |
3750 |
3750 |
January 30, 2023 |
1,368,613 equity shares |
4. |
P R Venketrama Raja, Chairman |
Promoter |
40.00 |
10.00* |
January 25, 2023 |
1,459,854 warrants |
|
|
|
160.00 |
130.00 |
|
|
‘Represents 25% of the total consideration received as upfront payment in respect
of Warrants. Each Warrant, so allotted, is convertible into one fully paid-up equity share
of the Company having face value of Rs.10 (Rupee Ten only) each in accordance with the
provisions of Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2018, on payment of the balance consideration by the Allottee
pursuant to exercise of conversion option against each such Warrant, within 18 months from
the date of allotment of Warrants, failing which the upfront payment made will be
forfeited.
Required approvals from Stock Exchanges and Depositories were obtained and required
compliances including those relating to lock in were made within the prescribed time
limits.
The objects of the preferential issue and status of funds utilized are as given below:
Sl. No. |
Objects of the Issue |
Amount to be utilized |
Amount Utilized in Q4/22-23 |
1. |
Repayment, of all or a portion of certain outstanding borrowings
including interest thereon |
92-100 |
6750 |
2. |
Sales & Marketing expenses |
10 |
1.38 |
3. |
Capex expenditure towards tangible & intangible assets |
20 |
4.62 |
4. |
General Corporate Purposes |
32-38 |
- |
|
Total |
160 |
73.50 |
ICRA Limited has been appointed as the Monitoring Agency for monitoring the utilization
of the proceeds. Your Company is utilizing the proceeds for the objects for which it is
raised and there are no deviations.
CAPITAL STRUCTURE
During the year, the issued and paid up capital of the Company has increased upon
exercise of stock options by various option grantees and allotment of shares pursuant to
the same and allotment of shares under Preferential Issue. The issued and subscribed
capital of the Company stood at Rs.355.77 Mln. and paid up capital stood at Rs.352.63 Mln.
as on March 31,2023
as against Rs.311.63 Mln. and Rs.308.49 Mln. respectively as at the end of the previous
year. The Securities Premium has also increased to Rs.7,842.33 Mln. from Rs.6,675.74 Mln.
and other than this, the Company has not made any fresh issue of shares. More details on
the preferential issue of shares and Warrants during the year are provided in this report
under the heading of fund raising / utilization of funds.
The number of shares and date on which such allotments were made by the Company under
various Employee Stock Option Schemes ("ESOS") and Preferential Issue are given
below:
Particulars |
No. of equity shares (face value of Rs.10 per share) |
Paid up Opening as at April 01,2022 |
30,813,921 |
June 03, 2022 * |
1,799 |
November 02, 2022 * |
2,762 |
January 20, 2023 * |
29,713 |
February 01,2023 # |
4,379,561 |
Paid up Closing as at March 31,2023 |
35,227,756 |
* Allotment of shares pursuant to exercise of stock options.
# Allotment of shares pursuant to Preferential Issue. DEPOSITORY SYSTEM
Your Company's shares are in compulsorily tradable securities in electronic form. As on
March 31, 2023, 99.70% of the Company's total paid up shares are in dematerialized form.
To avoid fraud/delicacy of shares, the Members holding shares in physical mode are advised
to demat the shares.
CREDIT RATING
During the year, there has been no change in the rating provided by ICRA Limited and
the annual surveillance by ICRA Limited for the renewal of the ratings in respect of the
banking facilities is in progress. Pending this, the ratings vide ICRAs letter dated March
17 2022 are live and are given as below:
(Rs. Mln.)
Facilities |
Existing |
Revised |
Existing Rating |
Revised Rating |
Long term Fund based/CC (Reaffirmed) |
350 |
350 |
A (Stable) |
A (Negative) |
Short term fund based facilities (Reaffirmed) |
1,375 |
1,375 |
A2+ |
A2+ |
Short term non-fund based facilities (Reaffirmed) |
305 |
305 |
A2+ |
A2+ |
Unallocated (Reaffirmed) |
115 |
115 |
A (Stable) / A2+ |
A (Negative) / A2+ |
Total |
2,145 |
2,145 |
|
|
The details of said rating is available at the Company's website, at the following
weblink: https://www.ramco.com/hubfs/investor-
relations/Intimation-Of-CreditRating-30-06-2023.pdf .
MANAGEMENT DISCUSSION AND ANALYSIS
In accordance with Regulation 34 of SEBI LODR, the Management Discussion and Analysis
(MDNA) Report is set out in this Annual Report.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
In terms of amendment to Regulation 34 (2) (f) of SEBI LODR vide Gazette notification
no. SEBI/LAD-NRO/GN/2021/22 dated May 05, 2021, SEBI has introduced new reporting
requirements on ESG (Environment, Social and Governance) parameters, called the Business
Responsibility and Sustainability Report (BRSR). In terms of the aforesaid amendment, with
effect from the FY 2022-23, filing of BRSR shall be mandatory for the top 1000 listed
companies (by market capitalization) and shall replace the existing Business
Responsibility Report.
As per the Market capitalization list issued by BSE and NSE as on March 31, 2023, the
Company falls in 1126th position in BSE and 1067th Position in NSE. Though the Company is
not falling under top 1000 companies, BRSR is being published as per Regulation 3(2) of
SEBI LODR which states that "the provisions of SEBI LODR Regulations which become
applicable to listed entities on the basis of market capitalization criteria, shall
continue to apply to such entities even if they fall below such thresholds" and also
a matter of good governance. Accordingly, the BRSR is set out in this Annual Report.
INFORMATION ON SUBSIDIARIES AND ASSOCIATE
Your Company has Eighteen (18) subsidiaries and One (1) associate entity as on March
31, 2023. In accordance with Section 129(3) of the Companies Act, 2013 (hereinafter
referred to as "the Act"), read with Rule 5 of Companies (Accounts) Rules, 2014,
a statement containing the salient features of the financial statements of our
subsidiaries and associate and their contribution to the overall performance of the
Company are available in Form AOC-1 and the same is enclosed as Annexure I to the Board's
Report. Statutory group information is provided under Note no. 30 to the consolidated
financial statements. In accordance with Regulation 46(2)(s) of SEBI LODR, separate
audited/ reviewed financial statements of the above subsidiary companies are placed on the
website of the Company.
The Audit Committee reviews the financial statements of subsidiaries, including the
investments made in the subsidiaries, on a quarterly basis and minutes of the Meetings of
the subsidiary are placed in the Board Meetings.
During the FY 2022-23,
a. The Company had incorporated a wholly owned subsidiary in the Kingdom of Saudi
Arabia in the name "Ramco Middle East for Information Technology" on April
01,2022. The share capital is yet to be infused.
b. The Company had incorporated a wholly owned subsidiary in Qatar in the name
"Ramco System LLC" on December 27, 2022. The share capital is yet to be infused.
As on March 31, 2023, the Company has 5 overseas branch offices - in UK, Germany, UAE,
Australia and Spain.
Material Subsidiaries
Based on the financials of FY 2021-22, Ramco Systems Corporation, USA, Ramco Systems
FZ-LLC, Dubai and Ramco Systems Australia Pty Ltd were identified as material subsidiaries
for the FY 2022-23 in accordance with Regulation 16(1) of SEBI LODR.
Based on the financials of FY 2022-23, Ramco Systems Corporation, USA, and Ramco
Systems Australia Pty Ltd., Australia were identified as material subsidiaries for the FY
2023-24 in accordance with Regulation 16(1) of SEBI LODR.
Of these material subsidiaries, for both FY 2022-23 and FY 2023-24, Ramco Systems
Corporation, USA was considered as a material subsidiary in accordance with Regulation 24
of SEBI LODR, warranting the appointment of an Independent Director of the Company in that
subsidiary, since the income/net worth of Ramco Systems Corporation, USA, is more than 20%
of the Consolidated income/ net worth. Since the Company had already appointed Mr. M M
Venkatachalam, Independent Director of the Company as a Director of that subsidiary on May
22, 2019, he continues to be a Director of that subsidiary, thus fulfilling the
requirements.
In accordance with Regulation 46(2) of SEBI LODR, the policy for determining material
subsidiaries formulated by the Board is available at the Company's website, at the
following weblink: https://www.ramco.com/hubfs/494075/PDF%20Download%20
URL/Material%20Subsidiary%20Policy/ramco-material- subsidiarv-policv.pdf .
Consolidated Financial Statements
In accordance with Section 129(3) of the Act and Regulation 33 and 34 of SEBI LODR, the
consolidated financial statements incorporating the accounts of subsidiary companies and
associate company along with the Auditors' Report thereon are set out in this Annual
Report and are available at the Company's website, at the following weblink:
https://www.ramco.com/investor-relations/annual-reports .
In accordance with Section 136(1) of the Act, separate audited / reviewed accounts in
respect of the subsidiary companies are also made available at the Company's website, at
the following weblink: https://www.ramco.com/investor-relations/annual-reports .
The Company shall provide a copy of the same to any Member of the Company who asks for
it.
BOARD OF DIRECTORS
As on March 31, 2023, 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. Mr. P R
Venketrama Raja, (DIN:00331406), Chairman of the Board is a Non-Executive &
Non-Independent Director and Promoter and Mr. P V Abinav Ramasubramaniam Raja
(DIN:07273249), Manager designated as Whole Time Director, belongs to Promoter Group.
During the year, no appointment / re-appointment / resignation of Directors took place
except the following:
a. Retirement by rotation and re-appointment of Mr. P R Venketrama Raja, Non-Executive
& NonIndependent Director (DIN: 00331406).
b. Appointment of Mr. P V Abinav Ramasubramaniam Raja (DIN:07273249) as a whole time
key managerial personnel in the position of Manager, with the designation as Whole Time
Director of the Company for a period of 2 years commencing from June 04, 2022 to June 03,
2024, by the Members at the 25th Annual General Meeting ("AGM") held on August
10, 2022.
The Company had formulated a Code of Conduct for the Directors and Senior Management
Personnel and the same has been complied with. The Board at its Meeting held on May 17
2023 had reviewed, amended the said Code and the same is available at the Company's
website, at the following weblink: https://www.ramco.com/hubfs/494075/PDF%20Download%20
URL/Code%20of%20Conduct%20and%20Business%20 Ethics/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 Company,
Mr. A V Dharmakrishnan, Director (DIN: 00693181) retires by rotation and being eligible,
offers himself for re-appointment at the ensuing AGM of the Company.
A brief resume of the Director being re-appointed, the nature of expertise in specific
functional areas, names of companies in which he holds Directorships, Committee
Memberships/ Chairpersonships, his shareholding in the Company etc., have been furnished
in the explanatory statement to the notice of the ensuing AGM.
Independent Directors
Independent Directors of the Company provide declarations, both at the time of
appointment and annually.
The Company has received necessary declaration as laid down in Section 149(7) of the
Act from all the Independent Directors confirming that they meet the criteria of
independence as provided in Section 149(6) of the Act and SEBI LODR. Independent Directors
have also complied with the Code for Independent Directors prescribed in Schedule IV to
the Act.
In accordance with Companies (Appointment and Qualification of Directors) Rules, 2014,
the Company has received declarations from Independent Directors confirming that they have
registered with the Independent Directors Data Bank through Indian Institute of Corporate
Affairs. Amongst them, Mr. M M Venkatachalam, Mr. R S Agarwal and Justice Mr. P P S
Janarthana Raja (Retd.) have been exempted from passing the online proficiency
self-assessment test conducted by IICA. Mrs. Soundara Kumar has passed the proficiency
selfassessment test.
Justice Mr. P P S Janarthana Raja (Retd.) (DIN:06702871) was appointed as an
Independent Director for a period of five (5) years from August 29, 2018 to August 28,
2023. He is eligible for reappointment for another term of five (5) consecutive years as
an Independent Director from August 29, 2023 to August 28, 2028. The Nomination and
Remuneration Committee in its Meeting held on May 17, 2023 and Board of Directors in its
Meeting held on May 17 2023 have evaluated the performance of the said Independent
Director based on the contribution of the Director and have recommended his reappointment
for another term of five (5) years from August 29, 2023 to August 28, 2028. In accordance
with Section 149(10) of the Act, approval of the Members through special resolution is
being sought for his reappointment at the ensuing AGM.
The Company had issued letter of appointment in accordance with Regulation 46 of the
SEBI LODR and the terms and conditions of appointment of Independent Directors are
available at the Company's website, at the following weblink:
https://f.hubspotusercontent20.net/hubfs/494075/independent-
directors-terms-of-appointment.pdf.
Information on familiarization program to Independent Directors are provided in the
Corporate 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, are
given in Corporate Governance Section of this Annual Report and in the Annual Return
uploaded in the Company's website, at the following weblink: https://www.
ramco.com/investor-relations/investor-information/annual-return/ .
Number of Meetings of the Board
Your Board met six times during the FY 2022-23 on May 19, 2022, June 03, 2022, July 26,
2022, November 07, 2022, December 22, 2022 and February 01,2023 and further details on
this aspect are given in the Corporate Governance Section of this Annual Report. The
maximum time gap between any of the two consecutive Meetings was not more than one hundred
and twenty (120) days.
Board Committees
The Board had following Committees during the FY 2022-23:
a. Audit Committee
b. Stakeholders Relationship Committee
c. Nomination and Remuneration Committee
d. Corporate Social Responsibility Committee
e. Allotment Committee
f. Risk Management Committee
g. Fund Raising Committee
In accordance with the disclosure requirement of Section 177(8) of the Act, the Audit
Committee comprises of Mrs. Soundara Kumar as Chairperson of the Committee, Mr. M M
Venkatachalam, Mr. A V Dharmakrishnan, Mr. Sankar Krishnan, Mr. R S Agarwal and Justice
Mr. P P S Janarthana Raja (Retd.).
A detailed note on the attendance, composition of the Board and Committees along with
other disclosures are provided in the Corporate Governance Report Section of this Annual
Report.
Meetings of Board and Committees held during the year are in compliance with the Act
& SEBI LODR read with circulars and notifications issued by Ministry of Corporate
Affairs and SEBI in this regard.
Diversity
Your Company recognizes the importance of a diverse Board for its success and believes
that a diverse Board will leverage inter alia differences in thought, skills and industry
experience, which in the long run will enhance shareholder value.
Board Evaluation
In accordance with the provisions of the Act and SEBI LODR, Board has carried out a
separate exercise to evaluate the performance of the Board as a whole, its Committees and
individual Directors by taking into account the criteria laid down in this regard by the
NRC like attendance, expertise, contribution etc., brought in by the Directors at the
Board and Committee Meetings and found it satisfactory, which shall be taken into account
at the time of reappointment of Independent Director.
A structured questionnaire was prepared covering various aspects including the
following but not limited to adequacy of the composition of the Board and its Committees,
flow of information, Board culture/Diversity, execution and performance of specific
duties, obligations and governance.
In accordance with Regulation 25(4) of the SEBI LODR, Independent Directors have
evaluated the performance of Chairman, Non-Independent Directors and Board as a whole and
assessed the quality, quantity and timeliness of the flow of information between the
Management and the Board and other required matters.
In accordance with Regulation 17(10) of SEBI LODR, the Board of Directors has evaluated
the performance of Independent Directors and observed the same to be satisfactory and
their deliberations are beneficial in Board / Committee Meetings.
In accordance with Regulation 4(2) of SEBI LODR, the Board of Directors have reviewed
and observed that the evaluation framework of the Board of Directors was adequate and
effective.
The Board's observations on the evaluations for the year under review carried on May
17, 2023 were similar to their observations of the previous years. No specific actions
have been warranted based on current year observations. The Company would continue to
familiarize its Directors on the industry, information security, technological and
statutory developments, which have a bearing on the Company and the industry, so that
Directors would be effective in discharging 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 Board
Members including criteria for determining qualifications, positive attributes,
independence of a Director and the Policy on remuneration of Directors, KMP and other
employees are outlined as part of Nomination and Remuneration Policy of the Company and
salient features of the same are disclosed in this report.
NRC of your Board had fixed the criteria for nominating a person on the Board which
inter alia include desired size and composition of the Board, age limit,
qualification/experience, areas of expertise and independence of the individual.
Your Company's current policy is to have an appropriate mix of Independent and
Non-Independent Directors to maintainthe independence of the Board and separate its
functions of governance and management.
Remuneration Policy
In accordance with Section 178 of the Act, the NRC of your Board has formulated the
Nomination and Remuneration Policy for the appointment and determination of remuneration
of the Directors, Key Managerial Personnel and other employees of your Company. The
Nomination and Remuneration Policy ensures that the level and composition of remuneration
is reasonable, the relationship of remuneration to performance is clear and appropriate to
the long-term goals of the Company.
The NRC has also developed the criteria for determining the qualifications, positive
attributes and independence of Directors and for making payments to Executive and
Independent Directors of the Company. It recommends to the Board the compensation payable
to Directors. Director's compensation are within the limits prescribed under the Act, and
approved by the Members of the Company where required.
Your Company follows a compensation mix of fixed pay, benefits and performance based
variable pay for its employees, which is based on the performance of the business and the
individual performance of the individuals is measured through annual appraisal process.
The Whole Time Director was paid a fixed monthly remuneration partly during the year in
the form of Commission and for the rest of the period, in the form of fees for
professional services. This is in addition to entitlement of sitting fee for attending the
Meetings. Non-Executive Directors are paid remuneration by way of sitting fees based on
their participation in the Meetings. Remuneration paid to Directors is within the scale
approved by the Board and Members, subject to overall ceilings stipulated under Section
197 of the Act. Sitting fees are being paid to Directors for attending the Board Meeting,
Audit Committee and Independent Directors Meetings.
In accordance with Section 178(4), the salient features of the Nomination and
Remuneration Policy should be disclosed in the Board's Report. The objective of the Policy
is to ensure that:
• The level and composition of remuneration is reasonable and sufficient to
attract, retain and motivate Directors of the quality required to run the Company
successfully;
• Relationship of remuneration to performance is clear and meets appropriate
performance benchmarks;
• Remuneration to Directors, Key Managerial Personnel and Senior Management shall
be appropriate to the working of the Company and its goals; and
• Any other functions as mandated by the Board from time to time and / or enforced
by any statutory notification, amendment or modification, as may be applicable, are
carried out.
The said Policy and composition of the NRC are in compliance with the Act and SEBI
LODR. The responsibilities of Compensation Committee as defined in SEBI (Share Based
Employee Benefits and Sweat Equity) Regulations, 2021, have been assigned to NRC. During
the year, there has been no change in the Nomination and Remuneration policy and the said
policy is available at the Company's website, at the following weblink:
https://f.hubspotusercontent20.net/ hubfs/494075/PDF%20Download%20URL/Material%20
Subsidiary%20Policy/ramco-material-subsidiary-policy.pdf.
KEY MANAGERIAL PERSONNEL
Key Managerial Personnel (KMP) of your Company as on March 31,2023 are as follows:
Mr. P V Abinav Ramasubramaniam Raja, Whole Time Director Mr. R Ravi Kula Chandran,
Chief Financial Officer Mr. Vijayaraghavan N E, Company Secretary and Compliance 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) of
Section 134 of the Act, which is to the best of their knowledge and belief and according
to the information and explanations obtained by them:
a. t hat the financial statements for the year ended March 31, 2023 have been prepared
in conformity with Indian Accounting Standards (Ind AS) and requirements of the Act, and
that of guidelines issued by SEBI, to the extent applicable to the Company along with
proper explanation relating to material departures;
b. t hey had selected such accounting policies and applied them consistently and made
judgments and estimates that are reasonable and prudent so as to give a true and fair view
of the state of affairs of the Company as at March 31, 2023 and of the loss of the Company
for the year ended on that date;
c. they had taken proper and sufficient care for the maintenance of adequate accounting
records in accordance with the provisions of the Act, for safeguarding the assets of the
Company and for preventing and detecting fraud and other irregularities;
d. they had prepared the annual accounts on a going concern basis;
e. they had laid down internal financial controls to be followed by the Company and
that such internal financial controls are adequate and were operating effectively; and
f. t hey had devised proper systems to ensure compliance with the provisions of all
applicable laws and that such systems were adequate and operating effectively.
CORPORATE GOVERNANCE
Corporate Governance is a process that aims to allocate corporate resources in a manner
that 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 throughout
the business and in its disclosures. Your Director's always strive to follow good
Corporate Governance practices in the Company to enhance long term shareholder value.
Corporate Governance Report for the FY 2022-23 is set out in this Annual Report.
The requisite certificate from the Secretarial Auditors confirming compliance with the
conditions of Corporate Governance as stipulated under SEBI LODR is annexed to the
Corporate Governance Report.
Secretarial Compliance Report on applicable compliances of SEBI Circular, Notifications
and Regulations etc., issued by Secretarial Auditors being filed before the due date with
stock exchanges in the prescribed format.
EQUAL OPPORTUNITY
Your Company believes in transparency and providing equal opportunities in the
employment. Your Company's offices across the globe have multi-cultural and multi-national
employees. Your Company prevents harassment of any kind based on age, gender, race or any
other 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 of
Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the FY
2022-23, Committee composition was revised and Ms. Rampriya Sridharan was appointed as the
presiding officer with effect from October 20, 2022 and the required changes were made in
POSH policy of the Company. During the FY 2022-23, there was no complaint received and no
complaint was pending for disposal as on March 31,2023.
In accordance with Rule 8(5) of Companies (Accounts) Rules, 2014, the Company has
complied with the provisions relating to the constitution of Internal Complaints Committee
under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act,
2013.
EMPLOYEES STOCK OPTION SCHEME (ESOS)
The growth of the Company has, in large measure, been possible owing to the
wholehearted support, commitment and teamwork of its personnel. Accordingly, the Company
had instituted various Employee Stock Option Plans / Schemes (ESOP / ESOS) for the benefit
of employees:
(A) Employee Stock Option Plan, 2000 (ESOP 2000)
(B) Employee Stock Option Scheme, 2003 (ESOS 2003)
(C) Employee Stock Option Scheme, 2004 (ESOS 2004)
(D) Employee Stock 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)
(H) Employee Stock Option Scheme, 2014 (ESOS 2014) and
(I) Employee Stock Option Scheme, 2022 (ESOS 2022) During the year, 34,274 options were
exercised in 3 tranches by eligible employees/option grantees of the Company and its
subsidiaries under ESOS 2008, ESOS 2009 Plan A, ESOS 2009 Plan B, and ESOS 2014 schemes of
the Company.
During the year, the following options were granted to employees/option grantees:
Scheme Name |
No. of Options granted |
Date of Grant of Options |
Exercise Price in Rs. |
ESOS 2013 |
127,500 |
April 29, 2022 |
10 |
ESOS 2013 |
127500 |
April 29, 2022 |
160 |
ESOS 2014 |
313,500 |
April 29, 2022 |
10 |
ESOS 2014 |
313,500 |
April 29, 2022 |
160 |
ESOS 2014 |
11,250 |
June 03, 2022 |
10 |
ESOS 2014 |
22,500 |
June 03, 2022 |
129 |
ESOS 2014 |
11,250 |
June 03, 2022 |
258 |
ESOS 2022 |
437,000 |
September 21,2022 |
10 |
ESOS 2022 |
437,000 |
September 21,2022 |
160 |
ESOS 2022 |
25,000 |
February 01,2023 |
10 |
ESOS 2022 |
25,000 |
February 01,2023 |
160 |
No Option grantee was granted options/shares during the year, equal to or exceeding 1%
of the issued capital.
During the FY 2022-23, the Members at the 25th Annual General Meeting held on August
10, 2022 have approved the implementation of ESOS 2022, with an issue of 1,500,000 stock
options convertible into equity shares of Rs.10/- each with the number of stock options
that could be granted to the Non-Executive Directors, excluding Independent Directors of
the Company not exceeding 200,000 options per year and 400,000 options in aggregate. The
Nomination and Remuneration Committee (designated Compensation Committee) in accordance
with the SEBI (Employee Share Based Employee Benefit and Sweat Equity) Regulations, 2021,
framed detailed schemes in this regard.
It is confirmed that the Schemes of the Company are in compliance with SEBI (Share
Based Employee Benefits and Sweat Equity) Regulations, 2021. The relevant disclosures in
terms of the Act and in accordance with the said Regulations are enclosed as Annexure II
to the Board's Report. The
Company does not have any Scheme for issue of sweat equity to the employees or
Directors of the Company. During the year, no ESOS were granted to Non-Executive &
Non-Independent Directors.
A certificate from Secretarial Auditors, with respect to implementation of the above
Employee Stock Option Schemes in accordance with SEBI Regulations and the resolution
passed by the Members of the Company, will be available electronically for inspection by
the Members during the ensuing AGM and a copy of the same shall be available for
inspection at the Corporate Office of the Company during normal business hours on any
working day. The disclosure required to be made under SEBI (Share Based Employee Benefits
and Sweat Equity) Regulations, 2021 is available in the Company's website, at the
following weblink: https://www.ramco.com/periodic-compliances .
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Disclosures with respect to the remuneration of Directors, KMP and Employees in
accordance with Section 197 of the Act read with Rule 5 of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 are enclosed as Annexure III to the
Board's Report.
The statement containing names of the top ten employees in terms of remuneration drawn
and the particulars of employees as required under Section 197(12) of the Act, read with
Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014, is provided in a separate Annexure forming part of this report.
However, the annual report is being sent to the Members, excluding the aforesaid
Annexure. In terms of Section 136 of the Act, the said Annexure is open for inspection.
Any Member interested in obtaining a copy of the same may write to the Company Secretary.
INTERNAL FINANCIAL CONTROLS AND ITS ADEQUACY
In accordance with Section 134(5) of the Act, the Company has Internal Financial
Controls by means of policies and procedures commensurate with size and nature of
operations. The Company's policies, procedures and standards are developed to uphold
internal controls across the organization. These controls ensure transactions are
authorized, recorded and reported correctly and assets are safeguarded and protected
against loss from unauthorized use or disposition. In addition, there are operational
controls and fraud risk controls, covering the entire spectrum of Internal Financial
controls. The controls were tested during the year and no material weakness exists.
Audit Committee of the Board periodically reviews the internal audit plans and
observations/recommendations of Internal and Statutory Auditors. In accordance with Rule
8(5)(viii) of Companies (Accounts) Rules, 2014, it is hereby confirmed that the Internal
Financial Controls are adequate with reference to the financial statements.
RISK MANAGEMENT
In accordance with Regulation 21(5) of SEBI LODR read with SEBI notification dated May
05, 2021, Board has constituted the Risk Management Committee. A detailed note on the
attendance, composition of the Committee along with other details are provided in the
Corporate Governance Report Section of this Annual Report.
In accordance with Section 134(3)(n) of the Act and Regulation 17(9) of SEBI LODR, the
Company has developed and implemented a Risk Management Policy. The Policy envisages
identification of risk and procedures for assessment and minimization of risk thereof. The
said policy is available at the Company's website, at the following weblink: https://
www.ramco.com/hubfs/494075/PDF%20Download%20URL/
Risk%20Management%20Policy/Risk-Management-Policy. pdf . Details on the Company's risk
management framework/ strategy also further discussed in the Company's MDNA. In the
opinion of the Board, there is no element of risk which may threaten the existence of the
Company/its operations.
RELATED PARTY TRANSACTIONS (RPT)
The Company has formulated a policy on materiality of RPT and also on dealing with RPT.
The said policy is available at the Company's website, at the following weblink:
https://www.ramco.com/hubfs/494075/PDF%20Download%20URL/Related%20Party%20Transaction%20Policy/ramco-
related-partv-transaction-policv.pdf .
Prior approval / omnibus approval have been obtained from Audit Committee for all RPTs
and these transactions are periodically placed before the Audit Committee for its
review/approval. All RPTs that were entered into during the financial year were on arm's
length basis and were in the ordinary course of business. There were no materially
significant transactions with related parties during the year that may have potential
conflict with the interests of the Company at large or that requires approval of the
Members. In accordance with Ind AS 24, the details of the transactions with the related
parties are set out in the notes to financial statements.
AUDITORS Statutory Auditor
Your Company at its 25th AGM held on August 10, 2022 had re-appointed M S Jagannathan
& N Krishnaswami, Chartered Accountants, (FRN:001208S) as the Statutory Auditors of
the Company for a second term of 5 consecutive financial years commencing from 2022-23 to
2026-27 to hold office from the conclusion of 25th AGM till the conclusion of the 30th AGM
of the Company to be held in the year 2027
In accordance with Sections 139 and 141 of the Act and relevant Rules prescribed there
under, the Company has received certificate from the Statutory Auditors to the effect that
they are eligible to continue as Auditors. The Auditors have also confirmed that they have
subjected themselves to the peer review process of Institute of Chartered Accountants of
India (ICAI) and holds a valid certificate issued by the Peer Review Board of the ICAI.
Details of fees paid to Statutory Auditor is disclosed in Corporate Governance Report
set out in this report.
Internal Auditor
Your Board on the recommendation of Audit Committee at its Meeting held on May 19, 2022
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 to conduct
Internal Audit for the FY 2022-23. The Internal Auditors reports directly to the Audit
Committee and make presentations at the Audit Committee Meeting(s) on the Internal Audit
Report.
In accordance with Sections 138 and 141 of the Act and relevant Rules prescribed
thereunder the Company has received certificate from the Internal Auditors to the effect
that they are eligible to continue as Internal Auditors.
Your Board on the recommendation of Audit Committee at its Meeting held on May 17, 2023
has re-appointed M/s. SRSV & Associates, Chartered Accountants (FRN:015041S), Chennai
as the Internal Auditors of the Company for the FY 2023-24.
Secretarial Auditor
Your Board at its Meeting held on May 19, 2022 had re-appointed M/s. S.Krishnamurthy
& Co., Company Secretaries, to conduct the Secretarial Audit of the Company for the FY
2022-23.
The Company had received required declarations/consents from the Secretarial Auditors
confirming that they have been Peer Reviewed and are eligible to continue as Secretarial
Auditors.
Your Board at its Meeting held on May 17 2023 had re-appointed M/s. S.Krishnamurthy
& Co., Company Secretaries, to conduct the Secretarial Audit of the Company for the FY
2023-24.
Cost Auditor
In accordance with Section 148 of the Act, maintenance of cost records and requirement
of cost audit are not applicable to the business activity carried out by the Company.
Opinion/Reports
The Statutory Auditors, Secretarial Auditors and Internal Auditors of the Company have
not reported any frauds to the Audit Committee or to the Board of Directors under Section
143(12) of the Act, including Rules made thereunder.
The Statutory Audit Report in the prescribed format issued by Statutory Auditors is
provided in this Annual Report.
The Secretarial Auditor's Report in the prescribed format issued by the Secretarial
Auditors is enclosed as Annexure IV to the Board's Report.
The Reports issued by them for the FY 2022-23, do not contain any qualification,
reservation or adverse remark or disclaimer.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
In Compliance with Section 135 of the Act, the Board of Directors had constituted a CSR
Committee and adopted a CSR Policy, in accordance with Schedule VII of the Act.
Your Company was required to spend Rs.14.43 Mln. towards CSR activities during FY
2021-22. Upon recommendation of CSR Committee, Board had approved to contribute the CSR
spend for the FY 2021-22 to ‘Aurovile Foundation" for its Botanical Gardens Unit
for "Conservation of the Tropical Dry Evergreen Forest of South India" (TDEF) -
an ongoing project. Rs.2.00 Mln. were spent for the above said activity in March 2022 and
then balance Rs.12.43 Mln. was transferred to a special bank account "Ramco Systems
Limited - Unspent CSR Account FY 2021-22" in April 2022 and from the said bank
account, Rs.5.05 Mln. was spent during FY 2022-23 and Rs.2.00 Mln. was spent in April
2023. As on date, the balance available in the said unspent account is Rs.5.38 Mln. The
intent is to make the contribution, depending upon the project progress, submission of
progress reports by the agency and review thereof by the Company.
Your Company was required to spend Rs.6.03 Mln. towards CSR activities during the FY
2022-23. Upon recommendation of CSR Committee, Board had approved to contribute Rs.1.00
Mln. to ‘Aurovile Foundation" for its Botanical Gardens Unit to run the entire
energy needs of the gardens from alternative energy using solar and wind power and the
balance to Ramasubrahmaneya Rajha Ramco Foundation (RRRF) towards Rajapalayam Town forming
part of masterplan development under AMRUT scheme Guidelines of Tamil Nadu Government - an
ongoing project. During the year, accordingly Rs.1.00 Mln. was contributed to Aurovile
Foundation and Rs.0.50 Mln. was contributed to RRRF. The unspent amount of Rs.4.53 Mln.
has been transferred to a special bank account "Ramco Systems Limited - Unspent CSR
Account FY 2022-23" in April 2023. The intent is to make the contribution, depending
upon the project progress, submission of progress reports by the agency and review thereof
by the Company.
Annual Report on CSR activities as prescribed under Companies (Corporate Social
Responsibility Policy) Rules, 2014 is enclosed as Annexure V to the Board's Report.
Your Company's CSR Committee comprises of Mr. 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 of the Company. In accordance with Section 135(4) of the Act,
the major contents of CSR policy are as follows:
Concept: The Company's philosophy on CSR is that "as the organization grows,
the society and community around it should also grow"
Vision: The Company's vision is to contribute to the social and economic
development of the communities in which it operates, resulting in building a better and
sustainable way of life for the society at large.
Objectives: The objective of the CSR Policy is to:
a. Ensure an increased commitment at all levels in the organization, to operate its
business in an economically, socially & environmentally sustainable manner, while
recognizing the interests of all its Stakeholders.
b. To generate, through its CSR initiatives, a community goodwill for RSL and help
reinforce a positive & socially responsible image of RSL as a corporate entity.
Implementation Process:
The CSR initiatives shall be undertaken by the Company as per its stated CSR Policy as
Projects or Programs or Activities (either new or ongoing).
The CSR activities may be undertaken through a registered trust or a registered society
or a Company established by the Company or its subsidiary or associate Company or through
any other trust, society or Company which shall have an established track record of 3
years in undertaking similar Programs or projects.
In addition to the above, CSR Policy also includes Applicability, Objectives, Areas of
Initiatives, Budget, CSR Reporting etc., and the said policy is available at the Company's
website, at the following weblink:
https://www.ramco.com/hubfs/494075/PDF%20Download%20URL/Corporate%20Social%20Responsibilitv%20Policv/Corporate-Social-Responsibilitv-
Policv.pdf .
VIGIL MECHANISM / WHISTLE BLOWER POLICY
In accordance with Section 177(9) and (10) of the Act and Regulation 22 of the SEBI
LODR, the Company has established a Vigil Mechanism and has a Whistle Blower Policy and
the same is available at the Company's website, at the following weblink:
https://www.ramco.com/hubfs/494075/ PDF%20Download%20URL/Whistle%20Blower%20Policy/
ramco-whistle-blower-policy.pdf .
Further disclosure/information about the Vigil Mechanism and Whistle Blower Policy are
discussed 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, your Board has
framed a Policy on Preservation of documents and Archival of documents. This is intended
to provide guidelines for the retention of records and preservation of relevant documents
for a duration after which the documents shall be archived. This said policy is available
at the Company's website, at the following weblink: https://www.ramco.com/
hubfs/494075/PDF%20Download%20URL/Policy%20on%20
Preservation%20of%20Documents%20and%20Archival%20
of%20Documents/Policy-on-Preservation-of-Documents-and- Archival-of-Documents.pdf .
SUSTAINABILITY INITIATIVES
Your Company is in the space of providing technological solutions. Your Company's
contribution towards sustainability is continuous in nature as is reflected
throughout/forms an integral part of our business. The Company aims to reduce its carbon
footprint by using energy conservation equipments / other control measures. Further
details on this aspect are given in the Conservation of Energy and Technology Absorption
Annexure VII in the page no.63.
Your Company is future-ready by proactively encouraging Innovative thinking across the
organization and going digital.
OTHER DISCLOSURES
Deposits: During the year, your Company has not accepted any deposit within the
meaning of Sections 73 and 74 of the Act and no deposits are outstanding as at the end of
financial year;
Secretarial Standards: Your Company has complied with Secretarial Standards issued
by the Institute of Company Secretaries of India on Board / Committee and General
Meetings;
Nature of Business: During the year, there was no change in nature of business of
the Company or any of its subsidiaries;
Significant and Material Orders: During the year, there are no such orders passed
by Regulators/Courts/Tribunals, impacting the going concern status and the Company's
operations in future;
Loans, Guarantees or Investments: Disclosures on the same in accordance with
Section 186(4) of the Act and SEBI LODR are provided under Note nos. 8.1, 9.1,26 and 29
forming part of separate (standalone) financial statements;
Contracts or Arrangements with Related Parties: Particulars of the same as referred
in Section 188(1) of the Act, in the prescribed Form AOC-2 is enclosed as Annexure VI to
the Board's Report.
Annual Return:
In accordance with Section 92(3) of the Act, read with Section 134(3) (a) of the Act,
the Annual Return as on March 31,2023 is available on the Company's website, at the
following weblink: https://www.ramco.com/hubfs/investor-relations/Annual- Return-2022-23.
The annual return uploaded on the website is a draft in nature and the final annual
return shall be uploaded at the same link on the Company's website once the same is filed
with Ministry of Corporate Affairs after the AGM.
Conservation of Energy: The information on conservation of energy, technology
absorption and foreign exchange earnings and outgo as stipulated under Section 134(3) of
the Act, read with the Companies (Accounts) Rules, 2014, is enclosed as Annexure VII to
the Board's Report;
Material Changes and Commitments: No material changes and commitments affecting the
financial position of the Company occurred between April 01, 2023 and the date of signing
this report. Further deliberations on COVID-19 are provided under MDNA and Note nos. 33
& 31 of separate (standalone) & consolidated financial statements respectively;
Investor Education and Protection Fund (IEPF): In accordance with Section 124 of
the Act, scenario for transfer of amount of unclaimed/unpaid dividend or corresponding
shares to IEPF does not arise;
Committee Recommendations: During the year, recommendations of all the Committee
constituted by the Board in accordance with the Act were accepted by the Board;
Differential Rights: The Company has not issued equity shares with differential
rights as to dividend, voting or otherwise;
Health, Safety and Environmental Protection: Your Company is committed to provide a
safe, healthy and conducive environment to all of its employees and associates.
GREEN INITIATIVES
Your Company being in the industry of Information Technology, Green Initiative is
embedded in the Company's culture and throughout its business operations.
Keeping next step towards a Greener Planet for future generations and in furtherance of
digitization Commitment to Go-Green initiative of the Government, the Company has
digitalized internal communications with virtual Meetings through tele/audio/video
conferencing and also using digital mechanism to conduct Board/Committee Meeting(s) as per
the provisions of law, thereby it brings down the Meeting-related travel, usage of paper
etc., to a limited purpose.
AWARDS AND RECOGNITIONS
Your Company continued its excellence in its chosen area of business to set a tone at
the top.
APPRECIATIONS
Your Directors place on record their appreciation for the contributions made by
employees towards the success of your Company. Your Directors gratefully acknowledge the
co-operation and support received from the Members, Customers, Vendors, Bankers,
Regulatory/Governmental Authorities in India and abroad.
|
For and on Behalf of the Board |
|
For RAMCO SYSTEMS LIMITED |
Place : Chennai |
P R VENKETRAMA RAJA |
Date : May 17, 2023 |
Chairman |