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Updated:23 Sep, 2021, 09:54 AM IST

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Updated:23 Sep, 2021, 10:03 AM IST

REPORT OF THE BOARD OF DIRECTORS

Your Board has pleasure in presenting the Nineteenth Annual Report together with the Audited Accounts of the Company for the year ended 31 st March 2016

3. INFORMATION ON SUBSIDIARIES AND ASSOCIATES

As on 31st March 2016, the Company has the following nine subsidiaries (including a step–down subsidiary) viz., Ramco Systems Corporation, USA; Ramco Systems Limited, Switzerland; Ramco Systems Pte. Ltd, Singapore; Ramco Systems Sdn. Bhd., Malaysia; RSL Enterprise Solutions (Pty) Ltd, South Africa; Ramco Systems Canada Inc., Canada (step down subsidiary of Ramco Systems Corporation, USA); Ramco Systems FZ–LLC., Dubai; RSL Software Company Limited, Sudan and Ramco Systems Australia Pty Ltd, Australia and an associate viz., Citiworks (Pty) Limited, South Africa (Associate of RSL Enterprise Solutions (Pty) Ltd, South Africa).

The Company has incorporated a subsidiary in Philippines viz., Ramco System Inc. on 5th April 2016.

There has been no material change in the nature of the business of subsidiaries during the year. A statement containing the brief financial details of the subsidiaries is included in the Annual Report.

A new branch was opened in New Zealand for Ramco Systems Australia Pty Ltd., Australia on 18th November 2015 and steps are being taken for closing the already existing branch in New Zealand of Ramco Systems Pte. Ltd., Singapore.

In accordance with Rule 5 of Companies (Accounts) Rules, 2014, a statement containing the salient features of the financial statements of the Company's Subsidiaries' and Associates' (in Form AOC–1) is attached to the financial statements.

4. CONSOLIDATED FINANCIAL STATEMENTS

As per provisions of Section 129(3) of the Companies Act, 2013 and Regulation 34 of SEBI (LODR) Regulations, 2015, Companies are required to prepare consolidated financial statements to be laid before the Annual General Meeting of the Company.

The Audited/Reviewed f nancial statements of the Subsidiary Companies are available at the Company's website at the following link at <http://www.ramco.com/investor–relations/investor–information/subsidiary–fnancials>.

The consolidated net prof t of the company amounted to Rs.391.70 million for the year ended 31st March 2016 as compared to Rs.126.72 million of the previous year.

5. CHANGES IN CAPITAL STRUCTURE

During the Financial Year 2015–16, the Share Capital and the Securities Premium of the Company have undergone changes to the extent of allotment shares to eligible employees under the Employee Stock Option Scheme of the Company and allotment of shares to Qualified Institutional Buyers (QIBs) under Qualified Institutional Placement (QIP).

(i) Allotment of shares under Employee Stock Option Schemes

During the year, 2015–16, the Company has allotted a total of 4,68,980 equity shares to the employees of the Company and its Subsidiaries during the year, pursuant to exercise of the vested options under ESOS 2008, ESOS 2009 – Plan A, ESOS 2009 – Plan B and ESOS 2013.

ii) Allotment of shares under QIP

During the year, 51,18,100 equity shares at a price of Rs.635.00 (Rupees six hundred and thirty f i ve only) per Equity Share (including a premium of Rs.625.00 per Equity Share), at a discount of 4.9444% to the floor price of Rs.668.03 per Equity Share, aggregating to Rs.3,249.99 million were issued and allotted to the QIBs under the QIP by the Fund Raising Committee of the Board. The allotment was made on 29th April 2015. The shares have since been listed and trading approvals were received on 7th May 2015.

The fresh infusion of funds is aimed to meet the needs of our growing business, marketing and brand building initiatives, long term working capital requirements, repayment of existing debts, investment in subsidiary companies and other corporate purposes. The funds raised were utilized towards the stated objectives as given below:

6. PUBLIC DEPOSITS

Your Company has not accepted any deposits within the meaning of Chapter V – Acceptance of Deposits by Companies under the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 from the public during the year and no deposits are outstanding as at the end of financial year.

7. BOARD OF DIRECTORS AND COMMITTEES

As per the provisions of Companies Act, 2013, Shri P R Ramasubrahmaneya Rajha ( DIN: 00331357), Director retires by rotation at the ensuing Annual General Meeting of the Company and being eligible offers himself for re–appointment. The Board of Directors recommends the above re–appointment for approval of the Members. The brief resume and other details relating to the Director, as stipulated under Regulation 36(3)(a) of the SEBI (LODR) Regulations, 2015 are furnished in the Notice of Annual General Meeting forming part of this Annual Report.

Shri P R Venketrama Raja, was reappointed as Managing Director of the Company for a period of three years starting from 22nd May 2014 at the Annual General Meeting (AGM) held on 28th July 2014 under Section 196, 197 read with Section 203 of the Companies Act, 2013 and at a remuneration as per Schedule V of the said Act. Based on the recommendation of the Nomination and Remuneration Committee made at its meeting held on 19th May 2016, the Board of Directors at its meeting held on 20th May 2016 had pre–closed his existing tenure as Managing Director by 31st March 2017 so as to align his appointment with the fi nancial year being followed by the Company i.e., 1st April to 31st March and have approved his appointment for a further period of three years starting from 1st April 2017. Approval of the Members has been sought for his re–appointment in the Notice convening the AGM.

The Independent Directors hold office for a fixed term of 5 years and are not liable to retire by rotation. No Independent Director has retired during the year. Pursuant to Rule 8(5)(iii) of Companies (Accounts) Rules, 2014, it is reported that, there have been no changes in the Directors or Key Managerial Personnel during the year.

The Company has received necessary declarations from all the Independent Directors under Section 149(7) of the Companies Act, 2013, that they meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013.

The Audit Committee has three members, out of which two are Independent Directors. Pursuant to Section 177(8) of the Companies Act, 2013, it is reported that there has not been an occasion, where the Board had not accepted any recommendation of the Audit Committee.

In accordance with Section 178(3) of the Companies Act, 2013 and based upon the recommendation of the Nomination and Remuneration Committee, the Board of Directors have approved a policy relating to appointment and remuneration of Directors, Key Managerial Personnel and Other Employees. The objective of the Nomination and Remuneration Policy is to ensure 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.

As required under Regulation 25(7) of SEBI (LODR) Regulations, 2015, the Company has programmes for familiarisation for the Independent Directors about the nature of the industry, business model, roles, rights and responsibilities of Independent Directors and other relevant information. As required under Regulation 46(2) of SEBI (LODR) Regulations, 2015, the details of the Familiarisation Programme for Independent Directors are available at the Company's website, at the following link at <http://www.ramco.com/investor–relations/Independent–Directors–Familiarisation–Programme.pdf>

The details of the familiarization programme are explained in the Corporate Governance Report also.

8. BOARD EVALUATION

Pursuant to Section 134(3)(p) of the Companies Act, 2013 and Regulation 25(4) of the SEBI (LODR) Regulations, 2015, Independent Directors have evaluated the quality, quantity and timeliness of the f i ow of information between the Management and the Board, Performance of the Board as a whole and its Members and other required matters. Pursuant to Schedule II, Part D of SEBI (LODR) Regulations, 2015, the Nomination and Remuneration Committee has laid down evaluation criteria for performance evaluation of Independent Directors, which will be based on attendance, expertise and contribution brought in by the Independent Director at the Board Meeting, which shall be taken into account at the time of re–appointment of Independent Director.

During the year five Board Meetings were held. The details of the Meetings of the Board and its various Committees are given in the Corporate Governance Report.

9. SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNALS

Pursuant to Rule 8(5)(vii) of Companies (Accounts) Rules, 2014, it is reported that, no significant and material orders have been passed by the Regulators or Courts or Tribunals, impacting the going concern status and Company's operations in future.

10. INTERNAL FINANCIAL CONTROLS

In accordance with Section 134(5)(e) of the Companies Act, 2013, the Company has Internal Financial Controls Policy by means of Policies and Procedures commensurate with the size and nature of its operations and pertaining to fi nancial reporting. 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 fi nancial statements.

11. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The particulars of the loan / guarantees / investments under Section 186(4) of the Companies Act, 2013 are provided under Note Nos.12,18 & 26.1 forming part of standalone fi nancial statements.

12. AUDITORS

(I) STATUTORY AUDIT

At the Annual General Meeting held on 28th July 2014 M/s. CNGSN & Associates (Now known as M/s. CNGSN & Associates LLP), Chartered Accountants, Chennai, (Firm Regn. No. 004915S) were appointed as Statutory Auditors of the Company for three consecutive years being their remaining eligible period in terms of Rule 6 of Companies (Audit and Auditors) Rules, 2014. The matter relating to their appointment for the third year of their term is being placed before the Members for ratification at the ensuing Annual General Meeting, in accordance with the requirements of Section 139(1) of the Companies Act, 2013.

The Auditors have conf i rmed their eligibility for their reappointment, under Section 141 of the Companies Act, 2013. As required under Regulation 33(1)(d) of SEBI (LODR) Regulations, 2015, the Auditors have also conf rmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

The reports of the Statutory Auditors for the year ended 31st March 2016 on both Standalone and Consolidated fi nancial statements do not contain any qualification, reservation or adverse remark.

(II) SECRETARIAL AUDIT

M/s. S.Krishnamurthy & Co., Company Secretaries, have been appointed to conduct the Secretarial Audit of the Company. Pursuant to Section 204(1) of the Companies Act, 2013, the Secretarial Audit Report submitted by the Secretarial Auditors for the year ended 31st March 2016 is attached herewith as Annexure A. The report does not contain any qualif cation, reservation or adverse remark.

13. EXTRACT OF ANNUAL RETURN

In Accordance with Section 92(3) of the Companies Act, 2013, read with Rule 12(1) of Companies (Management and Administration) Rules, 2014, an extract of the Annual Return in Form MGT–9 is attached herewith as Annexure B.

14. CORPORATE SOCIAL RESPONSIBILITY

The Company does not fall under the purview of the criteria specif ed in Section 135(1) of the Companies Act, 2013 relating to Corporate Social Responsibility (CSR) for the fi nancial year 2015–16. However considering the networth and net profit of the Company for the year ended 31st March 2016, CSR is applicable to the Company from the fi nancial year 2016–17 onwards. The Board of Directors at its meeting held on 20th May 2016 had constituted CSR Committee comprising of Shri P R Venketrama Raja, Vice Chairman & Managing Director, Shri M M Venkatachalam, Non–Executive & Independent Director and Shri A V Dharmakrishnan, Non–Executive Director as members pursuant to the provisions section 135 read with Schedule VII to the Companies Act, 2013 and the rules notified thereunder.

15. VIGIL MECHANISM / WHISTLE BLOWER POLICY

In accordance with Section 177(9) and (10) of the Companies Act, 2013 and Regulation 22 of the SEBI (LODR) Regulations, 2015, the Company has established a Vigil Mechanism and has a Whistle Blower Policy. The policy is available at the Company's website.

16. RISK MANAGEMENT POLICY

Pursuant to Section 134(3)(n) of the Companies Act, 2013 and Regulation 17(9) of SEBI (LODR) Regulations, 2015, the Company has developed and implemented a Risk Management Policy. The Policy envisages identif cation of risk and procedures for assessment and minimisation of risk thereof.

17. RELATED PARTY TRANSACTIONS

Prior approval / omnibus approval is obtained from Audit Comiittee for all Related Party Transaction and the transactions with related parties entered into by the Company are periodically placed before the Audit Committee for its approval. All related party transactions that were entered into during the fi nancial year were on an arm's length basis and were in the ordinary course of business and not attracting Section 188(1) of the Companies Act, 2013. No transaction with the related party is material in nature, in accordance with Company's "Related Party Transaction Policy" and Regulation 23 of SEBI (LODR) Regulations, 2015. In accordance with AS 18, the details of the transactions with the related parties are set out in in the Disclosures forming part of Financial Statements.

As required under Regulation 46(2)(g) of SEBI (LODR) Regulations, 2015, the Company's Related Party Transaction Policy is disclosed in the Company's website and its weblink is: <http://www.ramco.com/investor–relations/ramco–related–>party– transaction–policy.pdf.

As required under Regulation 46(2)(h) of SEBI (LODR) Regulations, 2015, the Company's Material Subsidiary Policy is disclosed in the Company's website and its weblink is: <http://www.ramco.com/investor–relations/Ramco–Material–>Subsidiary–policy.pdf.

18. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Pursuant to Section 134(3)(m) of the Companies Act, 2013 and Rule 8(3) of Companies (Accounts) Rules, 2014, the information relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo are annexed to, and forms part of, this report as Annexure C.

19. EMPLOYEE STOCK OPTION PLAN/ SCHEME AND EMPLOYEE STOCK PURCHASE SCHEME

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 Schemes / Plans (ESOS/ESOP) for the beneft of employees. The following schemes have been established by the Company:

(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)

The Company has implemented Employee Share Purchase Plan, 1999 (ESPP 1999) and Employee Stock Purchase Scheme, 2004 (ESPS 2004).

The above schemes/plans are in compliance with the SEBI Regulations. During the year under review, no changes were made in the above said schemes. Details regarding the above mentioned schemes along with their status are annexed to, and forms part of, this report as Annexure D. In addition, the following details are disclosed in the said Annexure.

a. Relevant disclosures in terms of the 'Guidance note on accounting for employee share–based payments' issued by ICAI and

b. Diluted EPS on issue of shares pursuant to all the schemes covered under the regulations shall be disclosed in accordance with 'Accounting Standard 20 – Earnings Per Share' issued by ICAI.

The above information forms part of the Annual report. The weblink to access the Annual report is <http://www.ramco.com/> investor–relations/ramco_annual_report_2016.pdf.

Further, a certificate from Statutory Auditors, with respect to implementation of the above Employee's Stock Option Schemes in accordance with SEBI Guidelines and the resolution passed by the Members of the Company, would be placed before the Members at the ensuing AGM, and a copy of the same shall be available for inspection at the Corporate Offce of the Company during normal business hours on any working day.

20. CORPORATE GOVERNANCE REPORT & AUDITOR'S CERTIFICATE

The Company has complied with the requirements regarding Corporate Governance as stipulated in SEBI (LODR) Regulations, 2015.

A detailed Corporate Governance Report of the Company as required under Schedule V(C) of SEBI (LODR) Regulations, 2015 along with the declaration on Code of Conduct and Statutory Auditor's Certif i cate conf i rming Compliance with the conditions on Corporate Governance as stipulated Schedule V (E) of SEBI (LODR) Regulations, 2015, is annexed to and forms part of, this report as Annexure E, F & G.

21. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In terms of requirement of Regulation 34(2)(e) read with Part B of SEBI (LODR) Regulations, 2015, a Management Discussion and Analysis Report elaborating upon the operations of the Company is annexed to and forms part of, this report as Annexure H.

22. PARTICULARS OF REMUNERATION TO DIRECTORS, KEY MANAGERIAL PERSONNEL AND EMPLOYEES

The disclosures in terms of provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5(1), (2) & (3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, relating to remuneration, are provided in the Report as Annexure I.

Having regard to the f rst proviso to Section 136(1) of the Companies Act, 2013, the physical copy of the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the Registered Offi ce of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request. The full Annual Report including the aforesaid information is being sent electronically to all those members who have registered their email addresses and is also available on the Company's website.

23. INDIAN ACCOUNTING STANDARDS (IND AS) – IFRS CONVERGED STANDARDS

The Ministry of Corporate Affairs vide its notif i cation dated 16th February 2015 has notif i ed the Companies (Indian Accounting Standard) Rules, 2015. In pursuance of this notif i cation, the Company has adopted IND AS with effect from 1st April 2016. For Company's f nancial results for periods commencing on or after 1st April 2016, the corresponding previous periods' figures will also be recast in accordance with IND AS.

24. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134 (5) of the Companies Act, 2013, the Directors conf rm that:

(a) in the preparation of the annual accounts for the year ended 31st March 2016, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) they 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 31st March 2016 and of the profit 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 this 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 fi nancial controls to be followed by the Company and that such internal fi nancial controls are adequate and were operating effectively; and

(f) they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

25. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY AFTER 31ST MARCH 2016

There are no material changes and commitments affecting the fi nancial position of the Company which have occurred between the 31st March 2016 and the date of this report, except as otherwise disclosed in this Report.

ACKNOWLEDGEMENT

Your Directors take this opportunity to convey their appreciation for the support and co–operation received during the year under review, from all the Government Authorities, Shareholders, Clients, Vendors, Partners, Bankers and other Business Associates. Your Directors wish to place on record their deep sense of appreciation for the dedicated and sincere services rendered by the Employees at all levels.

For and on Behalf of the Board

P R RAMASUBRAHMANEYA RAJHA

CHAIRMAN

Date : May 20, 2016

Place : Chennai

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