ramco systems ltd share price Auditors report

To the members of

RAMCO SYSTEMS LIMITED

REPORT ON THE AUDIT OF STANDALONE FINANCIAL STATEMENTS

OPINION

We have audited the accompanying Separate ("Standalone") Financial Statements drawn in accordance with the Indian Accounting Standards ("Standalone Financial Statements") of Ramco Systems Limited ("Company"), which comprise the Balance Sheet as at 31 March 2023, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and Statement of Changes in Equity for the year ended on 31 March 2023 and a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 ("Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Indian Accounting Standards, of the State of Affairs ("Financial Position") of the Company as at 31 March 2023, its Loss ("Financial Performance including Other Comprehensive Income"), Cash Flows and Changes in Equity for the year ended on 31 March 2023.

BASIS FOR OPINION

We conducted our audit of the Standalone Financial Statements in accordance with the Standards on Auditing ("SAs") specified under section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditors Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India ("ICAI") together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIs Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Financial Statements.

KEY AUDIT MATTERS

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

Trade Receivables, Unbilled License Revenue and Unbilled Service Revenue

Trade Receivables

Trade receivables are amounts billed but not yet received. As on 31 March 2023, amount outstanding on this account is Rs. 844.21 Mn (PY: 692.95 Mn). Of this Rs. 519.57 Mn is receivable from twelve subsidiaries.

Unbilled License Revenue

Revenue recognition in the case of Licenses is on delivery of the software and when the customer obtains a right to use such license. The revenue recognized over billing is classified as Unbilled License Revenue and grouped under Financial Assets (both Current and Non-Current). The amount outstanding as on 31 March 2023 is Rs. 266.61 Mn (PY: 316.86 Mn).

Unbilled Service Revenue

Revenue recognition in the case of services is based on percentage of completion method. The revenue recognized over billing is classified as Unbilled Service Revenue and grouped under Other Assets (both Current and Non-Current). The amount outstanding as on 31 March 2023 is Rs. 283.02 Mn (PY: 317.77 Mn).

Auditors Response

We have audited the Revenue recognition to ensure that it follows the stated policy. The outstanding amount has certain element of risk. i. In the case of Trade Receivable, there could arise a credit risk on account of default of the payment obligation by the customer, resulting in a financial loss. ii. In the case of Unbilled License Revenue, the risk could arise on account of inability of the Company to raise invoices on the stated timelines. iii. In the case of Unbilled Service Revenue, the risk could arise on account of, (a) non- acceptance of the milestones delivered to the customer and, (b) the consequential inability of the company to invoice those milestones. iv. In respect of (ii) and (iii) above, once invoiced, there could arise credit risk as stated in (i) above.

The Company creates a provision for Trade Receivables and Unbilled License Revenue by using a 12-month ECL method along with ECL over lifetime of the assets by using a provision matrix which is based on the historical loss experience reflecting current conditions.

In the case of Unbilled Service Revenue, the Company creates a provision using a 12-month ECL where credit risk has not increased significantly. In other cases, the impairment is measured based on probability of default over lifetime.

While arriving at our conclusion that the stated amounts are realizable, we have applied the following audit procedures:

1. We have reviewed the credit risk policy of the Company. The implementation of such policy has been audited through audit / review of accounts through compliance and substantive testing of selected samples. The substantive audit procedures include ascertaining the contractual obligation of the customers, execution status of the selected projects and consequent recoverability, historical evidence of the ability of the Company in reviving certain stagnant projects.

2. We assessed the ageing of Trade Receivables and Unbilled Revenue, the customers historical billing and collection patterns along with the technical status of the projects and whether any payments post year-end have been received up to the date of this report. We have also ascertained the key judgments and assumptions used by the Management in the recoverability assessment of Trade Receivables, Unbilled License Revenue and Unbilled Service Revenue.

3. We have also evaluated the empirical data of the previous years, and we have ascertained that the current provisioning for the expected credit loss is in line with the historical evidence.

Investment in Subsidiaries

The Company has various overseas subsidiaries. The carrying cost of the investment in these subsidiaries under equity as on 31 March 2023 is Rs. 3,925.93 Mn (PY: 3,678.59 Mn). The investments in these subsidiaries are considered by the Company as long-term, strategic, and essential in nature in achieving the commercial objectives of the Company.

Auditors Response

We have evaluated the carrying cost of the investments in subsidiaries. In the process of evaluation, we have considered the Companys view that these are long-term, strategic and essential in nature. While evaluating the statement by the Company, we have considered the inter-dependency between the Company and its subsidiaries, the manner in which the operations are carried out by the Company and its subsidiaries. We have taken note of the fact that these subsidiaries have been established by the Company to meet the requirement of the customers to enter into contracts with the Companys local entities, and also the need to have local entities to comply with the work permit related requirements while deploying the Companys resources in such local entities.

Intangible Assets

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

The carrying value of Intangible Assets is subjected to evaluation based on its existing verticals and functionality and its ability to generate revenue in future for the foreseeable period. The carrying cost of Product Software and Technology Platform as on 31 March 2023 is Rs. 3,333.60 Mn (PY: 2,812.05 Mn). Auditors Response We have reviewed and verified the process of capitalization of Product Software and Technology Platform. The Company amortizes the cost incurred in development of these intangible assets over its estimated useful life, which is determined as ten years.

Our procedures focused on validating the current carrying value by:

1. Ascertainingthefunctionalstructureoftheproductsoftware and technology platform and their reasonableness; and

2. (a) Evaluating the appropriateness of the revenue forecasts and operating cash flows that could be generated based on the current functionality of the product software and technology platform, included in the business forecast for the foreseeable future.

(b) Reviewing the reasonableness of the key assumptions including those driving the cash flows underpinning the analysis, by: i) Comparing historical budget forecasts against actual results. ii) Comparing forecast growth to business plans approved by the Board.

INFORMATION OTHER THAN STANDALONE FINANCIAL STATEMENTS AND AUDITORS REPORT THEREON

The Companys Management and Board of Directors are responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Boards Report including Annexures to Boards Report, Business Responsibility and Sustainability Report, Corporate Governance and Shareholders Information, but does not include the Standalone Financial Statements, Consolidated Financial Statements and our audit report thereon.

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

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

MANAGEMENTS RESPONSIBILITIES FOR THE STANDALONE FINANCIAL STATEMENTS

The Companys Management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation and presentation of the Standalone Financial Statements that give a true and fair view of the Financial Position, Financial Performance (including Other Comprehensive Income), Cash Flows and Changes in Equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate Internal Financial Controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records relevant to the preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the Standalone Financial Statements, Management and Board of Directors are responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless Management and Board of Directors, either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. The Board of Directors is also responsible for overseeing the Companys financial reporting process.

AUDITORS RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

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

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We, also:

i. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

ii. Obtain an understanding of Internal Financial Controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate Internal Financial Controls system in place and the operating effectiveness of such controls.

iii. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

iv. Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our audit report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our audit report. However, future events or conditions may cause the Company to cease to continue as a going concern.

v. Evaluate the overall presentation, structure, and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in:

i. Planning the scope of our audit work and in evaluating the results of our work; and

ii. To evaluate the effect of any identified misstatements in the financial statements.

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

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

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

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

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

2. As required by Section 143(3) of the Act, based on our audit, we report, to the extent applicable, that:

a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

c. The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and Statement of Changes in Equity dealt with by this report are in agreement with the books of account.

d. In our opinion, the aforesaid Standalone Financial Statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e. On the basis of the written representations received from the Directors as on 31 March 2023 and taken on record by the Board of Directors, none of the Directors is disqualified as on 31 March 2023 from being appointed as a Director in terms of Section 164 (2) of the Act.

f. We have enclosed our report in "Annexure B" with respect to the adequacy of the Internal Financial Controls over financial reporting of the Company and the operating effectiveness of such controls. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companys Internal Financial Controls over financial reporting.

g. With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations / claims against the Company as at 31 March 2023 on its financial position in its Standalone Financial Statements – Refer Note No. 29 in the Standalone Financial Statements.

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There were no amounts that were required to be transferred by the Company to the Investor Education and Protection Fund.

iv. (a) The management has represented that, to the best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kinds of funds) by the Company to or in any other person or entity, including foreign entity ("Intermediaries"), with the understanding whether recorded in writing or otherwise, that the Intermediary shall:

Whether directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries"), or

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

(b) The management has represented that, to the best of its knowledge and belief, no funds have been received by the Company from any person or entity including foreign entity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall:

Whether directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries"), or

Provide any guarantee, security, or the like on behalf of the Ultimate Beneficiaries; and (c) Based on the audit procedures as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (iv)(a) and (iv)(b) contain any material misstatement.

v There .is no dividend declared or paid during the year by the Company and hence the requirement of compliance with Section 123 of the Act does not arise

. h. With respect to the matter to be included in the Audit Report under Section 197(16) of the Act: In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its Directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any Director is not in excess of the limit laid down under Section 197 of the Act.

The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) of the Act which are required to be commented upon by us. i. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from April 1, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31, 2023.

For M.S. Jagannathan & N. Krishnaswami

Chartered Accountants

Firm Registration No.: 001208S

K. Srinivasan

Partner

Membership No.: 021510

UDIN: 23021510BGTPFG3231

Chennai

17 May 2023

Annexure A to the Independent Auditors Report

(Referred to in paragraph 1 under the heading "Report on Other Legal and Regulatory Requirements" of our report of even date to the Standalone Financial Statements of the Company for the year ended 31 March 2023) We state the following after considering the information and explanations given to us by the Company and on the basis of examination of the records of the Company:

1. In respect of Companys Property, Plant and Equipment, Right-Of-Use Assets and Intangible Assets 1.1. The Company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment and relevant details of Right-Of-Use Assets. The Company has also maintained proper records showing full particulars of Intangible Assets.

1.2. The Property, Plant and Equipment and Right-Of-Use Assets were physically verified during the year by the Company in accordance with the phased programme of verification which, in our opinion, provides for physical verification at reasonable intervals. No material discrepancies were noticed during such verification.

1.3. The title deeds of immovable properties disclosed in the financial statements are held in the name of the Company (Other than the properties where the Company is a lessee, and the lease arrangements are duly executed in favour of the Company). 1.4. The Company has not revalued its Property, Plant and Equipment (including Right-Of-Use Assets) and/or intangibles during the year and accordingly the provisions of clause 3(i)(d) of the Order is not applicable to the Company.

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

2. Inventory and Working Capital

2.1. The Company does not carry any inventory and accordingly the reporting under Clause 3(ii)(a) of the Order is not applicable to the Company.

2.2. The Company has been sanctioned Working Capital limits in excess of five crore rupees, in aggregate, from banks on the basis of security of current assets. The quarterly returns or statements filed by the Company with such banks are in agreement with the books of accounts of the Company.

3. Investments made, Loans given, Advances in the nature of loans given and guarantees/securities provided during the year 3.1. To Subsidiaries, Joint Ventures, Associates and Others

Particulars	Aggregate amount provided during the year (Rs. in Mn)	Balance outstanding at the year- end (Rs. in Mn)
Loans given to Subsidiaries, Unsecured	Nil	128.87
Guarantees provided to/on- behalf of Subsidiaries	83.22	846.50
Guarantees provided to others	Nil	0.53

3.2. The investments made, guarantees provided, security given and the terms and conditions of grant of all loans and advances are not prejudicial to the Companys interest.

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

3.4. There has been no amount overdue for more than 90 days in respect of loans given and accordingly the reporting under clause 3(iii)(d) of the Order is not applicable to the Company.

3.5. No loan granted by the Company, which has fallen due during the year, has been renewed or extended or fresh loans granted to settle the existing loans given to the same parties and accordingly the reporting under clause 3(iii)(e) of the Order is not applicable to the Company.

3.6. The Company has granted loans repayable on demand as below

Particulars	Aggregate amount provided during the year	Percentage to the loans granted (Rs. in Mn)	Balance outstanding at the year end (Rs. in Mn)
Loans given to Subsidiaries, Unsecured	Nil	Not Applicable	128.87

4. The Company has complied with the provisions of Section 185 and 186 of the Act, in respect of loans, investments, guarantees and security and accordingly the reporting under clause 3(iv) of the Order is not applicable to the Company.

5. The Company has not accepted any deposit or amounts which are deemed to be deposits from the public and hence the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the rules made thereunder with regard to the deposits accepted from the public are not applicable and accordingly the reporting under clause 3(v) of the Order is not applicable to the Company.

6. The Company is not required to maintain accounts and records which have been specified by the Central Government under Section 148(1) of the Act and accordingly the reporting under clause 3(vi) of the Order is not applicable to the Company.

7. Undisputed and Disputed Taxes and Duties

7.1. The Company is regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Goods and Services Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and any other statutory dues with the appropriate authorities. No undisputed amounts payable in respect of the above were in arrears as at 31 March 2023 for a period of more than six months from the date they became payable.

7.2. The disputed statutory dues aggregating to Rs. 103.80 Mn that have not been deposited on account of matters pending before appropriate authorities are as under:

Name of the statute	Nature of dues	Financial year	Forum where dispute is pending	Amount in Mn
Tamil Nadu Value Added Tax Act, 2006	Value Added Tax	FY 2009- 10 & FY 2013- 14	Honorable High Court of Madras	75.86
The Maharashtra Value Added	Value Added Tax	FY 2012- 13	Deputy Commissioner of Sales Tax,	0.09
Tax Act, 2002 Goods and Services Tax Act, 2017	Goods and Services Tax	FY 2020- 21 & FY 2021- 22	Mumbai The Additional / Joint Commissioner of GST & Central Excise, Adjudication, Chennai	27.85

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

9. Default in respect of repayment of loans and interest during the year 9.1. The Company has not defaulted in repayment of dues to financial institutions, Banks, Government, Debenture holders or any other lender and accordingly the reporting under clause 3(ix)(a) of the Order is not applicable to the Company.

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

9.3. The Company has obtained term loans from Banks during the year and the same were applied for the purposes for which they were obtained.

9.4. Funds raised on short term basis by the Company were not utilized for long term purposes.

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

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

10. Funds Raised

10.1. The Company has not raised any money by way of initial public offer or further public offer (including debt instruments) during the year and accordingly the reporting under clause 3(x)(a) of the Order is not applicable.

10.2. The Company has made a preferential allotment of shares and warrants convertible into equity shares, during the year and the requirements of section 42 and section 62 of the Companies Act, 2013 have been complied. The funds utilized until the end of the financial year have been in accordance with the purposes for which they were raised.

11. Fraud and Whistle Blower System

11.1. We report that no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.

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

11.3. The Companys management has not received any whistleblower complaints during the year.

12. The Company is not a Nidhi Company and accordingly the reporting under clause 3(xii) of the Order is not applicable to the Company.

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

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

16. Registration

16.1. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934 and accordingly the reporting under clause 3(xvi)(a) of the Order is not applicable to the Company. 16.2. The Company has not conducted any Non-Banking Financial or Housing Finance activities and accordingly the reporting under clause 3(xvi)(b) of the Order is not applicable to the Company.

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

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

17. The Company has incurred cash losses in the current year amounting to Rs.525.52 Mn and has not incurred any cash losses in the immediately preceding financial year.

18. There has been no resignation of statutory auditors of the Company during the year and accordingly the reporting under clause 3(xviii) of the Order is not applicable to the Company.

19. On the basis of the financial ratios, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the financial statements, the auditors knowledge of the Board of Directors and management plans, we are of the opinion that no material uncertainty exists as on the date of the audit report indicating that the Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. Variations in ratios over 25% on comparison with previous year has also been disclosed in the notes accompanying financial statements.

20. CSR Compliance

20.1. There is no unspent amount towards Corporate Social Responsibility (CSR) on other than ongoing projects requiring a transfer to a Fund specified in Schedule VII to the Act and accordingly the reporting under clause 3(xx)(a) of the Order is not applicable to the Company.

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

21. None of the companies (other than Ramco Systems Limited, India) included in the Consolidated financial statements are incorporated in India, and hence the Companies (Auditors Report) Order, 2020 issued by the Central Government of India in terms of Section 143(11) of the Act, is not applicable to them. Accordingly the reporting under clause 3(xxi) of the Order is not applicable to the Company.

For M.S. Jagannathan & N. Krishnaswami

Chartered Accountants

Firm Registration No.: 001208S

K. Srinivasan

Partner

Membership No.: 021510

UDIN: 23021510BGTPFG3231

Chennai

17 May 2023

Annexure B to the Independent Auditors Report

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

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

OPINION

We have audited the Internal Financial Controls over financial reporting of Ramco Systems Limited ("Company") as of 31 March 2023, in conjunction with our audit of the Standalone Financial Statements of the Company for the year ended on 31 March 2023.

In our opinion, and to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate Internal Financial Controls system over financial reporting and such Internal Financial Controls over financial reporting were operating effectively as at 31 March 2023, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting ("the Guidance Note") issued by the Institute of Chartered Accountants of India ("ICAI").

MANAGEMENTS RESPONSIBILITIES FOR INTERNAL FINANCIAL CONTROLS

The Companys Management and Board of Directors are responsible for establishing and maintaining Internal Financial Controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note ICAI. These responsibilities include the design, implementation and maintenance of adequate Internal Financial Controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

AUDITORS RESPONSIBILITIES

Our responsibility is to express an opinion on the Companys Internal Financial Controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing ("SAs"), issued by ICAI and deemed to be prescribed under Section

143(10) of the Act, to the extent applicable to an audit of internal financial controls and, both applicable to an audit of Internal Financial Controls and, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate Internal Financial Controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the Internal Financial Controls system over financial reporting and their operating effectiveness. Our audit of Internal Financial Controls over financial reporting included obtaining an understanding of Internal Financial Controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys Internal Financial Controls system over financial reporting.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial control over financial reporting includes those policies and procedures that: (1) Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company.

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

(3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

Because of the inherent limitations of Internal Financial Controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the Internal Financial Controls over financial reporting to future periods are subject to the risk that the Internal Financial Control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

For M.S. Jagannathan & N. Krishnaswami

Chartered Accountants

Firm Registration No.: 001208S

K. Srinivasan

Partner

Membership No.: 021510

UDIN: 23021510BGTPFG3231

Chennai

17 May 2023