Notes to Accounts of Ramco Systems Ltd.

Mar 31, 2025

j. Provisions, contingent liabilities and contingent
assets

Provisions involving substantial degree of estimation
in measurement are recognized when there is a
present obligation as a result of past events and it
is probable that there will be an outflow of resources
embodying economic benefits in respect of which a
reliable estimate can be made.

Provisions are discounted if the effect of the time
value of money is material, using pre-tax rates
that reflects the risks specific to the liability. When
discounting is used, an increase in the provisions due
to the passage of time is recognized as finance cost.
Insurance claims are accounted on the basis of
claims admitted or expected to be admitted and
to the extent that the amount recoverable can be
measured reliably and it is reasonable to expect
ultimate collection. Any subsequent change in the
recoverability is provided for.

A provision for onerous & other contractual
obligations are measured at the present value of the
lower of the expected cost of terminating the contract
and expected net cost of continuing with the contract
considering the incremental cost of fulfilling the
obligations.

Contingent liability is a possible obligation arising
from past events and whose existence will be
confirmed only by the occurrence or non-occurrence
of one or more uncertain future events not wholly
within the control of the Company or a present
obligation that arises from past events but is not
recognized because it is not probable that an outflow
of resources embodying economic benefits will be
required to settle the obligation or the amount of
the obligation cannot be measured with sufficient
reliability. The Company does not recognize such
liability and only discloses the same in the financial
statements.

Contingent asset is not recognized in the
financial statements as it may result in the
recognition of income that may never be realized.
Provisions, contingent liabilities and contingent
assets are reviewed at each Balance Sheet date.

The Company’s business operation comprises of
single operating segment viz., Software and related
solutions. The operating segment has been identified
on the basis of nature of products and reported in
a manner consistent with the internal reporting
provided to Chief Operating Decision Maker.

7. SIGNIFICANT ESTIMATES AND JUDGMENTS

The preparation of the financial statements requires
management to make judgments, estimates and
assumptions that affect the reported amounts of revenues,
expenses, assets and liabilities and the accompanying
disclosures, and the disclosure of contingent liabilities.
Actual results could vary from these estimates. The estimates
and underlying assumptions are reviewed on an on-going
basis. Revisions to estimates are recognized prospectively.

Information about judgments made in applying accounting
policies that have the material effects on the amounts
recognized in the financial statements is included in the
following notes:

Revenue recognition

The Company exercises judgments in determining
whether the performance obligation is satisfied at a point
in time or over a period of time.

The Company applies the percentage of completion
method using the input (cost expended) method to
measure progress towards completion in respect of fixed
price contracts, which are performed over a period of
time. The Company exercises judgment to estimate the
future cost-to-completion of the contracts which is used
to determine the degree of completion of the performance
obligation.

The Company’s contracts with customers could include
promises to transfer multiple products and services
to a customer. The Company assesses the products/
services promised in the contract and identifies distinct
performance obligations in the contract. Identification
of distinct performance obligation involves judgment to
determine the deliverables and the ability of the customer
to benefit independently from such deliverables. Judgment
is also required to determine the transaction price for the
contract.

The Company uses judgment to determine an appropriate
standalone selling price for a performance obligation.

The Company allocates the transaction price to each
performance obligation on the basis of the relative

standalone selling price of each distinct product or service
promised in the contract. Where standalone selling price is
not observable, the Company uses the expected cost-plus
margin approach to allocate the transaction price to each
distinct performance obligation. Provision for estimated
losses, if any, on uncompleted contracts are recorded in
the period in which such losses become probable based
on the expected contract estimates at the reporting date.

Defined benefit plans and other long term benefits

The cost of the defined benefit plan and other long¬
term benefits, and the present value of such obligation
are determined by the independent actuarial valuer. An
actuarial valuation involves making various assumptions
that may differ from actual developments in future.
Management believes that the assumptions used by the
actuary in determination of the discount rate, future salary
increases, mortality rates and attrition rates are reasonable.
Due to the complexities involved in the valuation and
its long-term nature, this obligation is highly sensitive
to changes in these assumptions. All assumptions are
reviewed at each reporting date.

Current taxes

Calculations of income taxes for the current period are
done based on applicable tax laws and management’s
judgment by evaluating positions taken in tax returns and
interpretations of relevant provisions of law and applicable
judicial precedents.

Deferred tax asset

Significant management judgment is exercised by
reviewing the deferred tax assets, including MAT credit
entitlement, at each reporting date to determine the
amount of deferred tax assets that can be retained/
recognized, based upon the likely timing and the level
of future taxable profits together with future tax planning
strategies.

Property, plant and equipment (PPE) and intangible
assets

The residual values and estimated useful life of PPEs and
intangible assets are assessed by the technical team at
each reporting date by taking into account the nature of
asset, the estimated usage of the asset, the operating
condition of the asset, past history. Upon review, the
management accepts the assigned useful life and residual
value for computation of depreciation/amortization/
impairment.

Determination of lease term of contracts as non¬
cancellable term

Significant management judgment is exercised in
determining the lease term as non-cancellable term of the
lease, together with any periods covered by an option to
extend the lease if it is reasonably certain to be exercised,
or any periods covered by an option to terminate the
lease, if it is reasonably certain not to be exercised, by
considering all relevant factors that create an economic
incentive for it to exercise either the renewal or termination.

Intangible asset

Significant management judgment is exercised in

identifying an intangible asset and estimating its useful
life, which is based on a number of factors including
the effects of obsolescence, demand, competition and
other economic factors and the level of maintenance
expenditures required to obtain the expected future cash
flows from such asset. Amortization methods and useful
lives are reviewed at each financial year end.

Impairment

Impairment of assets

Significant management judgment is exercised in

determining whether the investment in subsidiaries are
impaired or not is on the basis of its nature of long-term
strategic investments and business projections.

The impairment for trade receivables/unbilled licenses
/ unbilled services/loans and other receivables are done
based on assumptions about risk of default and expected
loss rates. The assumptions, selection of inputs for
calculation of impairment are based on management
judgment considering the past history, market conditions
and forward-looking estimates at the end of each reporting
date.

The impairment of non-financial assets is determined
based on estimation of recoverable amount of such assets.
The assumptions used in computing the recoverable
amount are based on management judgment considering
the timing of future cash flows, discount rates and the risks
specific to the asset.

Fair value measurement of financial instruments

When the fair values of financial assets and financial
liabilities could not be measured based on quoted prices
in active markets, management uses valuation techniques
including the Discounted Cash Flow (DCF) model, to

determine its fair value. The inputs to these models are
taken from observable markets where possible, but where
this is not feasible, a degree of judgment is exercised in
establishing fair values. Judgments include considerations
of inputs such as liquidity risk, credit risk and volatility.

Provisions

The timing of recognition requires application of judgment
to existing facts and circumstances that may be subject to
change. The litigations and claims to which the Company
is exposed are assessed by the management and in
certain cases with the support of external experts. The
amounts are determined by discounting the expected
future cash flows at a pre-tax rate that reflects the current
market assessments of the time value of money and the
risks specific to the liability.

Management judgment is exercised for estimating
the possible outflow of resources, if any, in respect of
contingencies/claims/litigations against the Company as it
is not possible to predict the outcome of pending matters
with accuracy.

Share based payments

The Company initially measures the stock options granted
to the employees, using a fair value model. This requires
determination of the most appropriate valuation model,
which is dependent on the terms and conditions of the
grant. This estimate also requires determination of the
most appropriate inputs to the valuation model including
volatility, dividend yield and making assumptions.

16. Other Equity (Contd.)

Nature and purpose of reserves
Securities premium

Represents excess of share application money received over par value of shares and includes employee stock compensation costs
accrued, to the extent they are exercised.

Employee stock options outstanding

Represents the fair value on grant date of the outstanding options issued to employees under various employees stock option
schemes of the Company.

Retained earnings

Represents that portion of the net income/(loss) of the Company.

Currency translation reserve

Exchange differences relating to the translation of the results and net assets of the Company’s foreign operations
from their functional currencies to the Company’s presentation currency (i.e., Currency Units) are recognized directly in other
comprehensive income and accumulated in the foreign currency translation reserve. Exchange differences previously accumulated
in the foreign currency translation reserve will be reclassified to profit or loss on the disposal of the foreign operation.

Fair value gain/(loss) on equity instruments through OCI

The Company has opted to recognize the changes in the fair value of certain investments in equity instruments and remeasurement
of defined benefit obligations in OCI. The Company transfers amounts from this reserve to retained earnings in case of actuarial loss/
gain and in case of fair value recognition of equity instrument, the same will be transferred when the respective equity instruments
are derecognized.

17. FINANCIAL LIABILITIES

17.1 BORROWINGS

The Company had availed borrowing facilities from Axis Bank Limited, Kotak Mahindra Bank Limited (previous year from Axis Bank
Limited, IDBI Bank Limited, Kotak Mahindra Bank Limited), which have been repaid during the year. The borrowings were in the
form of Term Loan, Packing Credit in Foreign Currency (PCFC), Working Capital Demand Loan (WCDL) and Cash Credit. The
interest rates on the borrowings during the year from Banks, ranged from 795% p.a. to 9.65% p.a. (PY 6.47% p.a. to 9.40% p.a.).

The borrowings as at the end of current and previous year were Nil.

Loans from Banks, secured

a. Borrowing facilities from Axis Bank Limited, ICICI Bank Limited and Kotak Mahindra Bank Limited are secured by pari-passu
first charge on the current assets, both present and future of the Company (Borrowing facilities for the previous year from Axis
Bank Limited are secured by pari-passu first charge on the current assets, both present and future of the Company. Borrowing
facilities for the previous year from IDBI Bank Limited are secured by pari-passu first charge on the receivables (i.e., trade
receivables, both current and non-current), both present and future of the Company).

b. With respect to the borrowings from banks on the basis of security, the periodical returns/statements filed by the Company with
banks are in agreement with the books of accounts.

17.2 LEASES

The Company has adopted Ind AS 116 “Leases” with the date of initial application being April 01, 2019, using the modified
retrospective approach. The Company has lease contracts for various items of Building, Land and Office equipments used in its
operations. There are several lease contracts that include extension and termination options and variable lease payments.

20.4 Ind AS 115 - revenue from contract with customers

The Company derives revenue from Software Solutions & Services. The accounting policies are mentioned in note no.6.a

1. Remaining performance obligations

The remaining performance obligation disclosure provides the aggregate amount of transaction price yet to be recognized as
at the end of the reporting period and an explanation as to when the Company expects to recognize these amounts in revenue.
Remaining performance obligation estimates are subject to change and are affected by various factors including termination,
changes in scope of contracts, adjustments for revenue that are not materialized and adjustments for currency.
Applying the practical expedient as given in Ind AS 115, the Company has not disclosed the following:

a) the remaining performance obligations for contracts where revenue recognized corresponds directly with the value to the
customer of the entity’s performance completed to date including time and material, support service and
subscription contracts and

b) the remaining performance obligations in respect of other contracts, since those performance obligations have an original
expected duration of one year or less in most of the cases.

2. During the year ended March 31, the Company recognized revenue of Rs. 19772 Mln. (PY Rs. 21758 Mln.) arising from
opening unearned revenue of Rs. 264.78 Mln. (PY Rs. 268.79 Mln.) as at April 01.

3. During the year ended March 31, the Company recognized revenue of Rs. 11.01 Mln. (PY Rs. 1.46 Mln.) arising from advance
from customers out of the opening advances of Rs. 21.52 Mln. (PY Rs. 11.97 Mln.) as at April 01.

4. Considering the form of engagement with customers and very strong inter despondencies between Parent and Subsidiaries,
it is more appropriate for us to disclose the revenue from software services from fixed-price and time-and-material contracts at
consolidated level. The percentage of revenue from software services from fixed-price contracts was 77% and 73% for each
of the year ended March 31,2025 and March 31,2024, respectively, at a consolidated basis.

‘Further to the appeal filed, CESTAT has adjudicated the case by

a) set aside the penalty imposed in the Order in Original

b) remanded the main issue to the Jurisdictional Assistant Commissioner as to the eligibility of CENVAT credit in the light of
documentary evidences produced by us and also in the light of final orders of the CESTAT for the previous period on similar
issues.

Note: The Company is engaged in development of software products, which are marketed by the Company and its
overseas subsidiaries. The intellectual property rights are held by the Company. There are in-built warranties for performance and
support. Claims which may arise out of these are not quantifiable and hence not provided for.

The Company has undertaken to provide continued financial support to its subsidiaries, Ramco Systems Pte. Ltd., Singapore,
Ramco Systems Australia Pty Ltd., Australia, Ramco Systems Sdn. Bhd., Malaysia, Ramco Systems FZ-LLC, Dubai and Ramco
System Vietnam Company Limited, Vietnam for their operations and have also undertaken to ensure the going concern status of
above subsidiaries and also that of Ramco Systems Sdn. Bhd., Malaysia and Ramco Systems Australia Pty Ltd., Australia with
respect to debt dues, if any, to Ramco Systems Ltd., Switzerland.

33. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Board of Directors has constituted a Risk Management committee, with responsibility including, formulation, monitoring
and review of risk management policy, identification of risk mitigation measures and establishment of business continuity plan.
The Company has already developed and implemented a risk management policy. The risk management systems are reviewed
periodically. The Internal Audit reviews the risk management controls & procedures and reports to the Audit Committee.

The Company’s financial risks comprise of market risk, credit risk and liquidity risk.

A. Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market
prices. Market risk comprises of two types of risk: interest rate risk and foreign currency risk.

A.1 Interest rate risk

The Company has borrowed debt at variable rates to finance its operations, which exposes it to interest rate risk. The
Company''s interest rate risk management planning includes achieving the lowest possible cost of debt financing, while
managing volatility of interest rates, applying a prudent mix of fixed and floating debt. Interest rate risk exposure on the average
borrowing for the year:

The Company has the following strategy to mitigate the risk of changes in exchange rates on foreign currency exposures:

a. Availment of packing credit in foreign currency (PCFC), including entering into cross currency forward contracts in equivalent
USD where the exposures are in other currencies. The exposure is Nil for both March 31,2025 and March 31,2024.

b. Entering into forward contracts which are not covered by PCFC, for such quantum as considered appropriate.

A. 3 Other price risk

The Company is exposed to equity price risks arising from equity investments. Company''s equity investments are primarily in its
subsidiaries which are held for strategic rather than trading purposes.

B. Credit risk

Credit risk is the risk of financial loss to the Company, if the customer or counter party to the financial instruments or supplier
fail to meet its contractual obligations and arises principally from the Company’s receivables and treasury operations.
Customer credit risk is managed by Company’s established policy, procedures and control relating to customer credit risk
management. Outstanding customer receivables and unbilled revenues are regularly monitored and the Company creates
a provision based on expected credit loss model.

B.1 Trade receivables, unbilled revenues and advance to suppliers and service providers

(i) Trade receivables

Trade receivables of the Company include a) dues from its overseas subsidiaries amounting to 52% as at March 31,
2025 (64% as at March 31, 2024), of total trade receivables which are risk free and b) dues from others which are
exposed to credit risk. The number of external customers (excluding subsidiaries) and the percentage they owed exceeding Rs.
5.00 Mln. individually, out of the outstanding as at March 31,2025, were 10 and 62% respectively (12 and 60% as at March 31,
2024). External customers who accounted for more than 10% of the trade receivable from them, are two as at March 31,2025 (Nil
as at March 31,2024).

The Company evaluates credit worthiness of each customer.

The Company tracks changes in credit risk of trade receivable using simplified approach as per Ind AS 109. The Company calculates
the expected credit losses on trade receivables using a provision matrix on the basis of its historical credit loss experience.

Trade receivables are written off when there is no reasonable expectation of recovery, such as a debtor declaring bankruptcy or
failing to engage in a repayment plan with the Company.

Where trade receivables have been written off, the Company continues to engage in enforcement activity to attempt to recover the
receivable due. Where recoveries are made, these are recognized in profit and loss account.

(ii) Unbilled revenues

Unbilled revenues (Unbilled licenses revenue grouped under financial asset and unbilled services revenue grouped under non¬
financial assets i.e., other assets) of the Company are also exposed to risk in the event of the inability to bill the customer.

Number of external customers constituting more than 10% of the unbilled revenues in respect of them, is eight as at March 31,2025
(four as at March 31,2024).

The Company calculates the expected credit losses using simplified approach as per Ind AS 109, on the basis of its historical credit
loss experience.

(iii) Advance to suppliers and service providers

Advance to suppliers and service providers are also exposed to risk in the event of inability to adjust such advances from their
billing or otherwise recover the same.

B.2 Financial instruments and cash deposits

Investments of surplus funds are made only with approved counterparties. The Company is exposed to counter party risk relating
to deposits with banks and investments in mutual funds. The Company places its cash equivalents based on the creditworthiness
of the financial institutions.

There are fixed deposits and investment in mutual fund as at the end of current year (PY Nil).

C. Liquidity risk

Liquidity risks are those risks that the Company will not be able to settle or meet its obligations on time or at reasonable price. In
the management of liquidity risk, the Company monitors and maintains a level of cash and cash equivalents deemed adequate by
the management to finance the Company’s operations and to mitigate the effects of fluctuations in cash flows. Due to the dynamic
nature of the underlying business, the Company aims at maintaining flexibility in funding by keeping the credit lines available.

The entire proceeds of Preferential Issue 2022 were utilized towards objects of the issue and unutilized balance is Nil.

36. OTHER NOTES

a. The Company’s shares are listed on BSE Limited and The National Stock Exchange of India Limited. In line with the provisions
of the listing agreement with the stock exchanges, the listing fee for the FY 2024-25 have been paid to the BSE Limited and
The National Stock Exchange of India Limited.

b. Figures for the previous year have been regrouped/restated wherever necessary to make them comparable with the figures
for the current year.

As per our report annexed

For M S JAGANNATHAN & N KRISHNASWAMI P R VENKETRAMA RAJA R RAVI KULA CHANDRAN

Chartered Accountants Chairman Chief Financial Officer

Firm Registration No.: 001208S (DIN:00331406)

S SRIVATSAN P V ABINAV RAMASUBRAMANIAM RAJA MITHUN V

Partner Managing Director Company Secretary

Membership No.: 021880 (DIN:07273249)

Place: Bengaluru JUSTICE P P S JANARTHANA RAJA (RETD.) Place: Chennai

Date: May 21, 2025 Director Date: May 21,2025

(DIN:06702871)

---

Mar 31, 2024

j. Provisions, contingent liabilities and contingent assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources embodying economic benefits in respect of which a reliable estimate can be made.

Provisions are discounted if the effect of the time value of money is material, using pre-tax rates that reflects the risks specific to the liability. When discounting is used, an increase in the provisions due to the passage of time is recognized as finance cost.

Insurance claims are accounted on the basis of claims admitted or expected to be admitted and to the extent that the amount recoverable can be measured reliably and it is reasonable to expect ultimate collection. Any subsequent change in the recoverability is provided for.

A provision for onerous & other contractual obligations are measured at the present value of the lower of the expected cost of terminating the contract and expected net cost of continuing with the contract considering the incremental cost of fulfilling the obligations.

Contingent liability is a possible obligation arising from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present

obligation that arises from past events but is not recognized because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or the amount of the obligation cannot be measured with sufficient reliability. The Company does not recognize such liability and only discloses the same in the financial statements.

Contingent asset is not recognized in the financial statements as it may result in the recognition of income that may never be realized.

Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date.

k. Segment reporting

The Company’s business operation comprises of single operating segment viz., Software and related solutions. The operating segment has been identified on the basis of nature of products and reported in a manner consistent with the internal reporting provided to Chief Operating Decision Maker.

7 SIGNIFICANT ESTIMATES AND JUDGMENTS

The preparation of the financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the accompanying disclosures, and the disclosure of contingent liabilities. Actual results could vary from these estimates. The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to estimates are recognized prospectively.

Information about judgments made in applying accounting policies that have the material effects on the amounts recognized in the financial statements is included in the following notes:

Revenue recognition

The Company exercises judgments in determining whether the performance obligation is satisfied at a point in time or over a period of time.

The Company applies the percentage of completion method using the input (cost expended) method to measure progress towards completion in respect of fixed price contracts, which are performed over a period of time. The Company exercises judgment to estimate the future cost-to-completion of the contracts which is used to determine the degree of completion of the performance obligation.

The Company’s contracts with customers could include promises to transfer multiple products and services to a customer. The Company assesses the products / services promised in the contract and identifies distinct performance obligations in the contract. Identification of distinct performance obligation involves judgment to determine the deliverables and the ability of the customer to benefit independently from such deliverables. Judgment is also required to determine the transaction price for the contract.

The Company uses judgment to determine an appropriate standalone selling price for a performance obligation. The Company allocates the transaction price to each performance obligation on the basis of the relative standalone selling price of each distinct product or service promised in the contract. Where standalone selling price is not observable, the Company uses the expected cost-plus margin approach to allocate the transaction price to each distinct performance obligation. Provision for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the expected contract estimates at the reporting date.

Defined benefit plans and other long term benefits

The cost of the defined benefit plan and other longterm benefits, and the present value of such obligation are determined by the independent actuarial valuer. An actuarial valuation involves making various assumptions that may differ from actual developments in future. Management believes that the assumptions used by the actuary in determination of the discount rate, future salary increases, mortality rates and attrition rates are reasonable. Due to the complexities involved in the valuation and its long-term nature, this obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

Current taxes

Calculations of income taxes for the current period are done based on applicable tax laws and management’s judgment by evaluating positions taken in tax returns and interpretations of relevant provisions of law and applicable judicial precedents.

Deferred tax asset

Significant management judgment is exercised by reviewing the deferred tax assets, including MAT credit entitlement, at each reporting date to determine the amount of deferred tax assets that can be retained / recognized, based upon the likely timing and the level

of future taxable profits together with future tax planning strategies.

Property, plant and equipment (PPE) and intangible assets

The residual values and estimated useful life of PPEs and intangible assets are assessed by the technical team at each reporting date by taking into account the nature of asset, the estimated usage of the asset, the operating condition of the asset, past history. Upon review, the management accepts the assigned useful life and residual value for computation of depreciation / amortization / impairment.

Determination of lease term of contracts as noncancellable term

Significant management judgment is exercised in determining the lease term as non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised, by considering all relevant factors that create an economic incentive for it to exercise either the renewal or termination. Intangible asset

Significant management judgment is exercised in

identifying an intangible asset and estimating its useful life, which is based on a number of factors including the effects of obsolescence, demand, competition and other economic factors and the level of maintenance expenditures required to obtain the expected future cash flows from such asset. Amortization methods and useful lives are reviewed at each financial year end.

Impairment

Impairment of assets

Significant management judgment is exercised in

determining whether the investment in subsidiaries are impaired or not is on the basis of its nature of long-term strategic investments and business projections.

The impairment for trade receivables / unbilled licenses / unbilled services / loans and other receivables are done based on assumptions about risk of default and expected loss rates. The assumptions, selection of inputs for calculation of impairment are based on management

judgment considering the past history, market conditions and forward-looking estimates at the end of each reporting date.

The impairment of non-financial assets is determined based on estimation of recoverable amount of such assets. The assumptions used in computing the recoverable amount are based on management judgment considering the timing of future cash flows, discount rates and the risks specific to the asset.

Fair value measurement of financial instruments When the fair values of financial assets and financial liabilities could not be measured based on quoted prices in active markets, management uses valuation techniques including the Discounted Cash Flow (DCF) model, to determine its fair value. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is exercised in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Provisions

The timing of recognition requires application of judgment to existing facts and circumstances that may be subject to change. The litigations and claims to which the Company is exposed are assessed by the management and in certain cases with the support of external experts. The amounts are determined by discounting the expected future cash flows at a pre-tax rate that reflects the current market assessments of the time value of money and the risks specific to the liability.

Contingent liabilities

Management judgment is exercised for estimating the possible outflow of resources, if any, in respect of contingencies / claims / litigations against the Company as it is not possible to predict the outcome of pending matters with accuracy.

Share based payments

The Company initially measures the stock options granted to the employees, using a fair value model. This requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including volatility, dividend yield and making assumptions.

17.1 Borrowings (Contd.)

The Company had availed borrowing facilities from Axis Bank Limited, IDBI Bank Limited, Kotak Mahindra Bank Limited (previous year from Axis Bank Limited, IDBI Bank Limited, Kotak Mahindra Bank Limited, ICICI Bank Limited and HDFC Bank Limited) and also had repayments during the current year. The borrowings were in the form of Term Loan, Packing Credit in Foreign Currency (PCFC), Working Capital Demand Loan (WCDL) and Cash Credit. The interest rates on the borrowings during the year from Banks, ranged from 6.47% p.a. to 9.40% p.a. (PY 1.28% p.a. to 9.10% p.a.).

1. Loans from Banks, secured

a. Borrowing facilities from Axis Bank Limited, IDBI Bank Limited and Kotak Mahindra Bank Limited are secured by pari-passu first charge on the current assets, both present and future of the Company (Borrowing facilities for the previous year from Axis Bank Limited are secured by pari-passu first charge on the current assets, both present and future of the Company. Borrowing facilities for the previous year from IDBI Bank Limited are secured by pari-passu first charge on the receivables (i.e., trade receivables, both current and non-current), both present and future of the Company).

b. With respect to the borrowings from banks on the basis of security, the periodical returns / statements filed by the Company with banks are in agreement with the books of accounts.

17.2 LEASES

The Company has adopted Ind AS 116 “Leases” with the date of initial application being April 01, 2019, using the modified retrospective approach. The Company has lease contracts for various items of Building, Land and Office equipments used in its operations. There are several lease contracts that include extension and termination options and variable lease payments.

Disclosures in respect of leases are given below:

20.4 Ind AS 115 - revenue from contract with customers

The Company derives revenue from Software Solutions & Services. The accounting policies are mentioned in note no.6.a

1. Remaining performance obligations

The remaining performance obligation disclosure provides the aggregate amount of transaction price yet to be recognized as at the end of the reporting period and an explanation as to when the Company expects to recognize these amounts in revenue. Remaining performance obligation estimates are subject to change and are affected by various factors including termination, changes in scope of contracts, adjustments for revenue that are not materialized and adjustments for currency. Applying the practical expedient as given in Ind AS 115, the Company has not disclosed the following:

a) t he remaining performance obligations for contracts where revenue recognized corresponds directly with the value to the customer of the entity’s performance completed to date including time and material, support service and subscription contracts and

b) the remaining performance obligations in respect of other contracts, since those performance obligations have an original expected duration of one year or less in most of the cases.

2. During the year ended March 31, the Company recognized revenue of Rs. 21758 Mln. (PY Rs.152.70 Mln.) arising from opening unearned revenue of Rs.268.79 Mln. (PY Rs.174.90 Mln.) as at April 01.

3. During the year ended March 31, the Company recognized revenue of Rs. 1.46 Mln. (PY Rs. 20.63 Mln.) arising from advance from customers out of the opening advances of Rs. 11.97 Mln. (PY Rs. 30.34 Mln.) as at April 01.

4. Considering the form of engagement with customers and very strong inter despondencies between Parent and Subsidiaries, it is more appropriate for us to disclose the revenue from software services from fixed-price and time-and-material contracts at consolidated level. The percentage of revenue from software services from fixed-price contracts was 73% and 73% for each of the year ended March 31,2024 and March 31,2023, respectively, at a consolidated basis.

30. DISCLOSURE OF FAIR VALUE MEASUREMENTS

The fair values of financial assets and liabilities are determined at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Fair value of cash & cash equivalents, trade and other short term receivables, trade payables, borrowings and other financial instruments approximate their carrying amounts largely due to the short term maturities of these instruments.

31. CAPITAL MANAGEMENT

For the purpose of the Company’s capital management, capital means the Total Equity as per the Balance Sheet. The primary objective of the Company’s capital management is to maximize the Shareholder’s wealth.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The Company monitors capital using a gearing ratio, which is net debt divided by the total equity.

* Further to the appeal filed, CESTAT has adjudicated the case by a) set aside the penalty imposed in the Order in Original b) remanded the main issue to the Jurisdictional Assistant Commissioner as to the eligibility of CENVAT credit in the light of documentary evidences produced by us and also in the light of final orders of the CESTAT for the previous period on similar issues.

Note: The Company is engaged in development of software products, which are marketed by the Company and its overseas subsidiaries. The intellectual property rights are held by the Company. There are in-built warranties for performance and support. Claims which may arise out of these are not quantifiable and hence not provided for.

The Company has undertaken to provide continued financial support to its subsidiaries, Ramco Systems Pte. Ltd., Singapore, Ramco Systems Australia Pty Ltd., Australia, Ramco Systems Sdn. Bhd., Malaysia, Ramco Systems FZ-LLC, Dubai and Ramco System Vietnam Company Limited, Vietnam for their operations and have also undertaken to ensure the going concern status of above subsidiaries and also that of Ramco Systems Sdn. Bhd., Malaysia and Ramco Systems Australia Pty Ltd., Australia with respect to debt dues, if any, to Ramco Systems Ltd., Switzerland.

33. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Board of Directors has constituted a Risk Management committee, with responsibility including, formulation, monitoring and review of risk management policy, identification of risk mitigation measures and establishment of business continuity plan. The Company has already developed and implemented a risk management policy. The risk management systems are reviewed periodically. The Internal Audit reviews the risk management controls & procedures and reports to the Audit Committee.

The Company’s financial risks comprise of market risk, credit risk and liquidity risk.

A. Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of two types of risk: interest rate risk and foreign currency risk.

A.1 Interest rate risk

The Company has borrowed debt at variable rates to finance its operations including capital expenditure, which exposes it to interest rate risk. The Company’s interest rate risk management planning includes achieving the lowest possible cost of debt financing, while managing volatility of interest rates, applying a prudent mix of fixed and floating debt, either directly or through the use of derivative financial instruments affecting a shift in interest rate exposures between fixed and floating.

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s transactions denominated in a foreign currency including trade receivables and unbilled revenues, loans given to overseas subsidiaries, trade payables and bank balances.

33. Financial Risk Management Objectives and Policies (Contd.)

A. 3 Other price risk

The Company is exposed to equity price risks arising from equity investments. Company''s equity investments are primarily in its subsidiaries which are held for strategic rather than trading purposes.

B. Credit risk

Credit risk is the risk of financial loss to the Company, if the customer or counter party to the financial instruments or supplier fail to meet its contractual obligations and arises principally from the Company’s receivables and treasury operations.

Customer credit risk is managed by Company’s established policy, procedures and control relating to customer credit risk management. Outstanding customer receivables and unbilled revenues are regularly monitored and the Company creates a provision based on expected credit loss model.

B.1 Trade receivables, unbilled revenues and advance to suppliers and service providers

(i) Trade receivables

Trade receivables of the Company include a) dues from its overseas subsidiaries amounting to 64% as at March 31, 2024 (61% as at March 31, 2023), of total trade receivables which are risk free and b) dues from others which are exposed to credit risk. The number of external customers (excluding subsidiaries) and the percentage they owed exceeding Rs.5.00 Mln. individually, out of the outstanding as at March 31, 2024, were 12 and 60% respectively (20 and 79% as at March 31, 2023). External customers who accounted for more than 10% of the trade receivable from them, is Nil as at March 31,2024 (one as at March 31,2023).

The Company evaluates credit worthiness of each customer.

The Company tracks changes in credit risk of trade receivable using simplified approach as per Ind AS 109. The Company calculates the expected credit losses on trade receivables using a provision matrix on the basis of its historical credit loss experience.

Trade receivables are written off when there is no reasonable expectation of recovery, such as a debtor declaring bankruptcy or failing to engage in a repayment plan with the Company.

Where trade receivables have been written off, the Company continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognized in profit or loss.

(ii) Unbilled revenues

Unbilled revenues (Unbilled licenses revenue grouped under financial asset and unbilled services revenue grouped under nonfinancial assets i.e., other assets) of the Company are also exposed to risk in the event of the inability to bill the customer. Unbilled royalty revenue is in respect of overseas subsidiaries, which are risk free.

Number of external customers constituting more than 10% of the unbilled revenues in respect of them, is four as at March 31,2024 (two as at March 31,2023).

(iii) Advance to suppliers and service providers

Advance to suppliers and service providers are also exposed to risk in the event of inability to adjust such advances from their billing or otherwise recover the same.

B.2 Financial instruments and cash deposits

Investments of surplus funds are made only with approved counterparties. The Company is exposed to counter party risk relating to deposits with banks and investments in mutual funds. The Company places its cash equivalents based on the creditworthiness of the financial institutions.

There are no fixed deposits and investment in mutual fund as at the end of current year. (In the previous year, Fixed deposits of Rs. 46739 Mln. have been placed with 2 Banks having high credit rating. Investment in mutual funds of Rs.100.31 Mln. have been placed in bond, ultra short duration and liquid funds with 3 mutual fund institutions).

Liquidity risks are those risks that the Company will not be able to settle or meet its obligations on time or at reasonable price. In the management of liquidity risk, the Company monitors and maintains a level of cash and cash equivalents deemed adequate by the management to finance the Company’s operations and to mitigate the effects of fluctuations in cash flows. Due to the dynamic nature of the underlying business, the Company aims at maintaining flexibility in funding by keeping the credit lines available.

36. OTHER NOTES

a. The Company’s shares are listed on BSE Limited and The National Stock Exchange of India Limited

In line with the provisions of the listing agreement with the stock exchanges, the listing fee for the FY 2023-24 have been paid to the BSE Limited and The National Stock Exchange of India Limited.

b. Figures for the previous year have been regrouped / restated wherever necessary to make them comparable with the figures for the current year.

As per our report annexed

For M S JAGANNATHAN & N KRISHNASWAMI P R VENKETRAMA RAJA SOUNDARA KUMAR

Chartered Accountants Chairman Director

Firm Registration No.: 001208S Rajapalayam Coimbatore

P V ABINAV RAMASUBRAMANIAM RAJA SUBRAMANIAN SUNDARESAN

Whole Time Director Chief Executive Officer

K SRINIVASAN R RAVI KULA CHANDRAN N E VIJAYARAGHAVAN

Partner Chief Financial Officer Company Secretary

Membership No.: 021510

Place: Chennai Date: May 21,2024

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Mar 31, 2023

k. Provisions, contingent liabilities and contingent assets

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Company expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognized as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.

If the effect of the time value of money is material, provisions are discounted using a current pretax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

Contingent liability is a possible obligation that may arise from past events and its existence will be confirmed only by occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the same are not recognized but disclosed in the financial statements.

Insurance claims are accounted on the basis of claims admitted or expected to be admitted and to the extent that the amount recoverable can be measured reliably and it is reasonable to expect ultimate collection. Any subsequent change in the recoverability is provided for. Contingent Assets are neither recognized nor disclosed.

l. Employee benefits expense Short term employee benefits

Short term employee benefits viz., salaries, wages and other benefits are recognized as expenses at the undiscounted amount as per contractual terms in the statement of profit and loss for the year in which the related service is rendered.

Defined contribution plans Superannuation

The senior officers of the Company have been given an option to participate in Defined Contribution Plan (“The Superannuation Plan”) maintained by the Life Insurance Corporation of India. For those who opt to participate, the Company makes contributions not exceeding Rupees one lakh fifty thousand per annum, based on specified percentage of basic salary of each covered employee. For those who do not opt to participate, an amount equivalent to the contribution determined at the time of exercise of option is paid along with salary. The Company has no further obligation beyond its contribution / payments.

National pension system

The employees of the Company have been given an option to participate in a defined contribution plan (’’National Pension System”), maintained by the fund managers approved by the Pension Fund Regulatory and Development Authority. For those who opt to participate, the Company makes contributions equal to 10% of the covered employee’s basic salary. For those who do not opt to participate, an amount equivalent to the contribution determined at the

time of exercise of option is paid along with salary. The Company has no further obligation beyond its contribution / payments.

Provident fund

In addition to the above benefits, all employees receive benefits from a provident fund, which is defined contribution plan. Both the employee and employer each make monthly contributions to the plan equal to 12% of the covered employee’s basic salary. These contributions are made to the employees’ provident fund maintained by the Government of India. The Company has no further obligations under the plan beyond its monthly contributions.

Defined benefit plans Gratuity

I n accordance with the Indian Law, the Company provides for gratuity, a defined benefit plan (“The Gratuity Plan”), covering all employees. The employees are covered under the Company Gratuity Scheme of the Life Insurance Corporation of India. The liability for Gratuity is ascertained as at the end of the financial year, based on the actuarial valuation by an independent external actuary as at the Balance Sheet date using the “projected unit credit method”

Remeasurement of net defined benefit asset / liability comprising of actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged / credited to other comprehensive income in the period in which they arise and immediately transferred to retained earnings. Other costs are accounted in the standalone statement of profit and loss.

Leave encashment

The Company has a policy of providing encashment of unavailed leave for its employees. The obligation for the leave encashment is recognized based on an independent external actuarial valuation at the Balance Sheet date. The expense is recognized in the statement of profit and loss at the present value of the amount payable determined based on actuarial valuation using “projected unit credit method”

m. Financial instruments

1. A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

2. Financial assets and liabilities are offset and the net amount is presented in the Balance Sheet when and only when the Company has a legal right to offset the recognized amounts and intends either to settle on a net basis or to realize the assets and settle the liabilities simultaneously.

those financial assets whose contractual terms give rise to cash flows on specified dates that represents solely payments of principal and interest thereon, are measured as detailed below depending on the business model:

3. The Company initially determines the classification of financial assets and liabilities. After initial recognition, no re-classification is made for financial assets which are categorized as equity instruments at FVTOCI and financial assets / liabilities that are specifically designated as FVTPL. However, other financial assets are re-classifiable when there is a change in the business model of the Company. When the Company reclassifies the financial assets, such reclassifications are done prospectively from the first day of the immediately next reporting period. The Company does not restate any previously recognized gains, losses including impairment gains or losses or interest.

Financial assets

4. Financial assets comprise of investments in equity and mutual funds, trade receivables, cash and cash equivalents and other financial assets.

5. Depending on the business model (i.e.,) nature of transactions for managing those financial assets and its contractual cash flow characteristics, the financial assets are initially measured at fair value and subsequently measured and classified at:

a) Amortized cost; or

b) Fair value through other comprehensive income (FVTOCI); or

7 Financial assets are de-recognized (i.e.,) removed from the financial statements, when its contractual rights to the cash flows expire or upon transfer of the said assets. The Company also de-recognizes when it has an obligation to adjust the cash flows arising from the financial asset with third party and either upon transfer of: a) significant risk and rewards of the financial asset, or

c) Fair value through profit or loss (FVTPL).

Amortized cost represents carrying amount on initial

recognition at fair value plus or minus transaction

cost.

6. The Company has evaluated the facts and circumstances on date of transition to Ind AS for the purpose of classification and measurement of financial assets. Accordingly, financial assets are measured at FVTPL except for

b) control of the financial asset.

However, the Company continue to recognize the transferred financial asset and its associated liability to the extent of its continuing involvement, which are measured on the basis of retainment of its rights and obligations of financial asset. The Company has applied the derecognition requirements prospectively.

8. Upon de-recognition of its financial asset or part thereof, the difference between the carrying

amount measured at the date of recognition and the consideration received including any new asset obtained less any new liability assumed shall be recognized in the Statement of Profit and Loss.

9. For impairment purposes, significant financial assets are tested on individual basis at each reporting date. Other financial assets are assessed collectively in groups that share similar credit risk characteristics.

o. Cash dividend

The Company recognizes a liability to make cash dividend, when the distribution is authorized and the distribution is no longer at the discretion of the Company. A corresponding amount is recognized directly in equity including applicable taxes.

p. Cash flow statement

Cash flows are presented using indirect method, whereby profit / loss before extraordinary items and tax is adjusted for the effects of transactions of noncash nature and any deferrals or accruals of past or future cash receipts or payments.

For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short term deposits net of outstanding bank overdrafts as they are considered an integral part of the Company’s cash management.

q. Share based payments

Stock options granted to the option grantees in the Company / subsidiaries are measured at the fair value of the equity instruments granted. For each stock option, the measurement of fair value is performed on the grant date. The grant date is the date on which the options are granted. The fair value so determined is revised only if the stock option scheme is modified in a manner that is beneficial to the employees. The ex-modification fair value is recognized as an employee expense equally over the vesting period and the incremental fair value resulting from modification of the scheme, is recognized over the vesting period remaining after the modification date.

Graded vesting options

If the options vest in installments (i.e., the options vest pro rata over the vesting period), then each installment is treated as a separate share option grant because each installment has a different vesting period.

r. Earnings per share (EPS)

Net profit after tax is divided by the weighted average number of equity shares outstanding.

When an item of income or expense which is otherwise required to be recognized in the statement of profit and loss is debited or credited to Equity, the amount in respect thereof is suitably adjusted in Net Profit for the purpose of computing Earnings Per Share.

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted average number of Equity Shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of Equity Shares outstanding during the year plus the weighted average number of Equity Shares that would be issued on conversion of all the dilutive potential Equity Shares into Equity Shares.

s. Operating segments

The Company’s business operation comprises of single operating segment viz., Software and related solutions. Operating segment has been identified on the basis of nature of products and reported in a manner consistent with the internal reporting provided to Chief Operating Decision Maker.

t. Assets held for sale

Assets held for sale are measured at the lower of carrying amount or fair value less costs to sell.

3.2 Recent pronouncements

Ministry of Corporate Affairs (“MCA’) notifies new standards or amendments to the existing standards under Companies Ind AS Rules as issued from time to time. On March 31, 2023, MCA amended the Companies Ind AS Amendment Rules, 2023 as detailed below:

Ind AS 1 - Presentation of Financial Statements

This amendment requires the entities to disclose their material accounting policies rather than their significant accounting policies.

Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors

This amendment has introduced a definition of ‘accounting estimates’ and included amendments to Ind AS 8 to help entities distinguish changes in accounting policies from changes in accounting estimates.

Ind AS 12 - Income Taxes

This amendment has narrowed the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and offsetting temporary differences. The effective date for adoption of these amendments is from April 01,2023. The Company does not expect

that, these amendments will have any significant impact in its financial statements.

The Government of India had enacted The Code on Wages 2019, The Industrial Relations Code 2020, The Occupational Safety, Health & Working Conditions Code 2020 and The Social Security Code 2020, subsuming various existing labour and industrial laws, but the effective date is yet to be notified. The impact of the legislative changes If any will be assessed and recognized post notification of relevant provisions.

4. SIGNIFICANT ESTIMATES AND JUDGMENTS

The preparation of the financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the accompanying disclosures, and the disclosure of contingent liabilities. Actual results could vary from these estimates. The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision effects only that period or in the period of the revision or future periods, if the revision affects both current and future years.

The Company has considered the possible effects that may result from the continuance of pandemic relating to COVID-19 on the carrying amounts of receivables, inventories, other financial / other non-financial assets. In developing the assumptions relating to the possible future uncertainties in the economic conditions because of this pandemic, the Company, as at the date of approval of these financial statements, has used internal and external sources of information from market sources on the expected future performance of the Company. The impact of COVID-19 on the Company’s financial statements may differ from that estimated as at the date of approval of these financial statements due to prevailing uncertainties.

The management has applied the following estimates / assumptions / judgment in preparation and presentation of financial statements:

Property, plant and equipment (PPE) and intangible assets

The residual values and estimated useful life of PPEs and Intangible assets are assessed by technical team duly reviewed by the management at each reporting date. Wherever the management believes that the assigned useful life and residual value are appropriate,

such recommendations are accepted and adopted for computation of depreciation / amortization / impairment.

Current taxes

Calculations of income taxes for the current period are done based on applicable tax laws and management’s judgment by evaluating positions taken in tax returns and interpretations of relevant provisions of law.

Deferred tax asset (including MAT credit entitlement) Significant management judgment is exercised by reviewing the deferred tax assets at each reporting date to determine the amount of deferred tax assets that can be retained / recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

Contingent liabilities

Management judgment is exercised for estimating the possible outflow of resources, if any, in respect of contingencies / claims / litigations against the Company as it is not possible to predict the outcome of pending matters with accuracy.

Impairment of financial assets

The impairment of financial assets are done based on assumptions about risk of default and expected loss rates. The assumptions, selection of inputs for calculation of impairment are based on management judgment considering the past history, market conditions and forward-looking estimates at the end of each reporting date.

Impairment of non-financial assets (PPE / Intangible assets)

The impairment of non-financial assets is determined based on estimation of recoverable amount of such assets. The assumptions used in computing the recoverable amount are based on management judgment considering the timing of future cash flows, discount rates and the risks specific to the asset.

Impairment of Investments in Subsidiaries / Associate

Significant management judgment is exercised in determining whether the investment in subsidiaries / associate are impaired or not, is on the basis of its nature of long term strategic investments and other business considerations.

Defined benefit plans and other long term benefits

The cost of the defined benefit plan and other long term benefits, and the present value of such obligation

are determined by the independent actuarial valuer. Management believes that the assumptions used by the actuary in determination of the discount rate, future salary increases, mortality rates and attrition rate are reasonable. Due to the complexities involved in the valuation and its long term nature, this obligation is highly sensitive to changes in these assumptions.

Fair value measurement of financial instruments When the fair values of financial assets and financial liabilities could not be measured based on quoted prices in active markets, management uses valuation techniques including the Discounted Cash Flow (DCF) model, to determine its fair value. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is exercised in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility.

Share based payments

The Company initially measures the equity settled transactions with employees using fair value model. This requires determination of most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including volatility and dividend yield and making assumptions about them.

Revenue recognition

The Company exercises judgment in determining whether the performance obligation is satisfied at a point in time or over a period of time.

The Company applies the percentage of completion method using the input (cost expended) method to measure progress towards completion in respect of fixed price contracts, which are performed over a period of time. The Company exercises judgment to estimate the future cost-to-completion of the contracts which is used to determine the degree of completion of the performance obligation.

The Company’s contracts with customers could include promises to transfer multiple products and services to a customer. The Company assesses the products / services promised in a contract and identifies distinct performance obligations in the contract. Identification of distinct performance obligation involves judgment to determine the deliverables and the ability of the customer to benefit

independently from such deliverables. Judgment is also required to determine the transaction price for the contract.

The Company uses judgment to determine an appropriate standalone selling price for a performance obligation. The Company allocates the transaction price to each performance obligation on the basis of the relative standalone selling price of each distinct product or service promised in the contract. Where standalone selling price is not observable, the Company uses the expected cost- plus margin approach to allocate the transaction price to each distinct performance obligation. Provision for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the expected contract estimates at the reporting date.

Leases

The Company determines the lease term as the noncancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised.

The Company has several lease contracts that include extension and termination options. The Company applies judgment in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination. After the commencement date, the Company reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate (e.g., construction of significant leasehold improvements or significant customization to the leased asset).

The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment or which requires estimation when no observable rates are available. The Company estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates.

34. Other Notes

a. The Company has only one operating segment, viz., Software Solutions & Services and hence the segment reporting required under Ind AS 108 does not apply.

b. The Company’s shares are listed on BSE Limited and The National Stock Exchange of India Limited

In line with the provisions of the listing agreement with the stock exchanges, the listing fee for the FY 2022-23 have been paid to the BSE Limited and The National Stock Exchange of India Limited.

c. Figures for the previous year have been regrouped / restated wherever necessary to make them comparable with the figures for the current year.

d. The figures in Rupees have been rounded off to the million with two decimals in current and previous year.

As per our report annexed

For M S JAGANNATHAN & N KRISHNASWAMI P R VENKETRAMA RAJA SOUNDARA KUMAR

Chartered Accountants Chairman Director

Firm Registration No.: 001208S Vancouver, Canada

K SRINIVASAN P V ABINAV RAMASUBRAMANIAM RAJA

Partner Whole Time Director

Membership No.: 021510

Place: Chennai R RAVI KULA CHANDRAN N E VIJAYA RAGHAVAN

Date: May 17 2023 Chief Financial Officer Company Secretary

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Mar 31, 2018

1. Corporate information

Ramco Systems Limited (the “Company”) is a public limited company domiciled and headquartered in India and incorporated under the provisions of Companies Act,1956. Its shares are listed in BSE Limited and National Stock Exchange of India Limited. The registered offi ce of the Company is located at No. 47, P.S.K Nagar, Rajapalayam 626108 and corporate office and R&D center is located at 64, Sardar Patel Road, Taramani, Chennai 600113.

The Company develops Enterprise Resource Planning (ERP) Software solutions for various verticals in various domains like Human Capital Management, Aviation Maintenance Repair & Overhaul, Logistics and provides these with related solutions and services, including managed services. The Software is either delivered on-premise or offered as a service hosted on cloud.

The financial statements of the Company for the year were approved and adopted by Board of Directors of the Company in its meeting held on 23 May 2018.

2. Basis of preparation of separate financial statements

The financial statements have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under section 133 of the Companies Act, 2013 (‘the Act’) read together with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 as amended and the provisions of the Act to the extent notified.

Accounting policies have been consistently applied except where a newly-issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

Figures for the year ended March 31, 2017 and as at March 31, 2017 were audited by previous auditors M/s. CNGSN & Associates LLP.

2.1 The financial statements have been prepared under the historical cost convention on accrual basis except certain financial instruments and defined benefit plan assets, share based payments that are measured at fair values.

2.2 Foreign currency transactions

The functional currency of the Company is Indian Rupee. Transactions denominated in foreign currency are recorded at the exchange rate prevailing on the date of transaction. The monetary items denominated in the foreign currency at the year-end are translated at the exchange rates prevailing on the date of the balance sheet and the loss or gain arising out of such transactions is adjusted in the Statement of Profit and Loss.

2.3 Translation of financial statements of foreign branches

Functional currency of foreign branches is the respective local currency of domicile. All income and expenditure transactions during the year are reported at a monthly moving average exchange rate for the respective periods. All assets and liabilities are translated at the rate prevailing on the Balance Sheet date. Net gain / loss on foreign currency translation is recognized in Other Comprehensive Income.

2.4 An asset is treated as current when it is:

- Expected to be realized or intended to be sold or consumed in normal operating cycle

- Held primarily for the purpose of trading

- Expected to be realized within twelve months after the reporting period, or

- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

2.5 A liability is current when:

- It is expected to be settled in normal operating cycle

- It is held primarily for the purpose of trading

- It is due to be settled within twelve months after the reporting period, or

- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

All other liabilities are classified as non-current.

2.6 Deferred tax assets and liabilities are classified as non-current assets and liabilities.

2.7 The operating cycle is the time between the acquisition of assets for processing and their realization in cash and cash equivalents. The Company has identified twelve months as its operating cycle.

2.8 The financial statements are presented in Indian Rupees rounded to the nearest million with two decimals. Figures less than ten thousands are shown as nil.

3.1. Recent Accounting pronouncements - Standards issued but not effective

Ind AS 115 - Revenue from contracts with customers:

In March 2018, the Ministry of Corporate Affairs (‘MCA’) issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2018, notifying deletion of existing standard Ind AS 18 and insertion of new standard Ind AS 115 on Revenue from contracts with customers. The amendments are applicable to the company from April 1, 2018. This Standard establishes a five-step model to account for revenue arising from contracts with customers. Revenue is recognized at an amount that refi ects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The Company’s existing policy of eliminating the imputed interest attributable to arrangements having extended credit period from the revenue and accounting the same as interest over the credit period is in line with the requirements of Ind AS 115. The Company is also evaluating the further requirements of the amendment and the effect on the financial statements.

Ind AS 21 - Foreign currency translations and advance consideration:

In March 2018, MCA further notif i ed the Companies (Indian Accounting Standards) (Amendments) Rules, 2018, containing Appendix B to Ind AS 21, Foreign currency translations and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. The amendments are applicable to the company from April 1, 2018. The Company is evaluating the requirements and its effect on the financial statements.

4. Significant estimates and judgements

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the accompanying disclosures, and the disclosure of contingent liabilities. Actual results could vary from these estimates. The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision effects only that period or in the period of the revision or future periods, if the revision affects both current and future years.

Accordingly, the management has applied the following estimates / assumptions / judgements in preparation and presentation of financial statements:

Property, plant and equipment (PPE) and intangible assets

The residual values and estimated useful life of PPEs, Intangible assets are assessed by technical team duly reviewed by the management at each reporting date. Wherever the management believes that the assigned useful life and residual value are appropriate, such recommendations are accepted and adopted for computation of depreciation / amortization / impairment.

Current taxes

Calculations of income taxes for the current period are done based on applicable tax laws and management’s judgement by evaluating positions taken in tax returns and interpretations of relevant provisions of law.

Deferred tax asset (including MAT credit entitlement)

Significant management judgement is exercised by reviewing the deferred tax assets at each reporting date to determine the amount of deferred tax assets that can be retained / recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

Contingent liabilities

Management judgement is exercised for estimating the possible outflow of resources, if any, in respect of contingencies/ claims / litigations against the Company as it is not possible to predict the outcome of pending matters with accuracy.

Impairment of financial assets

The impairment of financial assets are done based on assumptions about risk of default and expected loss rates. Theassumptions, selection of inputs for calculation of impairment are based on management judgement considering the past history, market conditions and forward looking estimates at the end of each reporting date.

Impairment of non-fnancial assets (PPE / Intangible assets)

The impairment of non-fnancial assets is determined based on estimation of recoverable amount of such assets. The assumptions used in computing the recoverable amount are based on management judgement considering the timing of future cash flows, discount rates and the risks specific to the asset.

Def ned benefit plans and other long term benefits

The cost of the def ned benef t plan and other long term benef ts, and the present value of such obligation are determined by the independent actuarial valuer. Management believes that the assumptions used by the actuary in determination of the discount rate, future salary increases, mortality rates and attrition rate are reasonable. Due to the complexities involved in the valuation and its long term nature, this obligation is highly sensitive to changes in these assumptions.

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities could not be measured based on quoted prices in active markets, management uses valuation techniques including the Discounted Cash Flow (DCF) model, to determine its fair value. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is exercised in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility.

Share based payments

The Company initially measures the equity settled transactions with employees using fair value model. This requires determination of most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including volatility and dividend yield and making assumptions about them.

Note:

a. Movement in investment in Ramco Systems Pte. Ltd., Singapore represents conversion of loan of Rs.418.34 Mln. (SGD 8.53 Mln.) to equity and additional equity contribution of Rs.187.60 Mln. (SGD 3.77 Mln.) (Previous year movement represents conversion of loan of Rs.346.65 Mln. (SGD 7.45 Mln.) to equity).

b. Movement in investment in RSL Enterprise Solutions (Pty) Ltd., South Africa represents conversion of loan of Rs.99.02 Mln. (ZAR 19.35 Mln.) to equity.

c. Movement in investment in Ramco Systems Australia Pty Ltd., Australia represents conversion of loan of Rs.473.68 Mln. (AUD 9.38 Mln.) to equity.

Note:

1 During the previous year, the Company had, based on the estimates, determined that future taxable profit will be available against which the deductible temporary differences and unused tax losses / unused tax credits can be utilised and hence has recognised net deferred tax asset as above including the credit pertaining to earlier years.

2 During the previous year, the Company had, based on the estimates, determined that future economic benefits in the form of adjustment against the discharge of the normal tax liability within the specified period in which the MAT is allowed to be utilised, will be available and hence has recognised MAT credit entitlement as above including the credit pertaining to earlier years.

Loans are non-derivative financial assets and are carried at amortised cost. Loans - others carry an interest at the rate of 10% p.a. and are repayable in equated monthly instalments at quarterly rests. Loans - subsidiaries carry an interest ranging between 10% p.a. to 12.50% p.a. (previous year 10.50% p.a. to 12.50% p.a.) and are repayable on demand.

5.1 Terms / rights attached to class of shares

The Company has only one class of share referred to as Equity Shares having a par value of Rs.10 each. The holders of Equity Shares are entitled to one vote per share. In the event of liquidation of the Company, the equity shareholders will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Nature and purpose of reserves Securities Premium

Represents excess of share application money received over par value of shares and includes employee stock compensation costs accrued.

Currency translation reserve

Exchange differences relating to the translation of the results and net assets of the Company’s foreign operations from their functional currencies to the Company’s presentation currency (i.e. Currency Units) are recognised directly in other comprehensive income and accumulated in the foreign currency translation reserve. Exchange differences previously accumulated in the foreign currency translation reserve will be reclassif ed to profit or loss on the disposal of the foreign operation.

Employee stock options outstanding

The share options outstanding account is used to recognise the grant date fair value of options issued to employees under various employees stock option schemes of the Company.

Retained earnings

Represents the portion of the net income / (loss) of the Company.

Note: The share application money pending allotment as at 31 March 2018 represents receipt pursuant to the exercise of options under the Employee Stock Option Schemes ESOS 2009 Plan B, ESOS 2013 and ESOS 2014 of the Company. Under the said scheme, one share of Rs.10 each, at a premium of Rs.Nil for 6,014 shares & Rs.145 for 5,625 shares Rs.335 for 282 shares & Rs.346 for 375 shares needs to be issued for each option exercised. The shares need to be allotted within 6 weeks of receipt of exercise application along with remittance of exercise money. No such application money has been pending beyond the stipulated time for allotment.

6.1 The Company provides for expenses towards compensated absences (leave encashment) provided to its employees. The expenses are recognised in the statement of profi t and loss account and the liabilities are recognised at the present value of the amount payable determined based on an independent external actuarial valuation made as at each Balance Sheet date, using Projected Unit Credit method.

As at 31 March 2018 - Security details

Axis Bank Ltd. - Cash credit - This loan is secured by pari passu fi rst charge on the current assets, both present and future and unencumbered fixed assets (Property, plant and equipment excluding building) of the Company.

IDBI Bank Ltd. - WCDL - This loan is secured by pari passu first charge on the receivables, both present and future, of the Company.

Kotak Mahindra Bank Limited - WCDL - This loan is unsecured

Short Term Borrowings carry interest ranging from 8.60% p.a. to 9.85% p.a.

As at 31 March 2017 - Security details

Axis Bank Ltd. - Cash credit - This loan is secured by pari passu fi rst charge on the current assets, both present and future and unencumbered fixed assets (Property, plant and equipment excluding building) of the Company. Short Term Borrowings carry an interest of 11.25% p.a.

There are no Micro and Small Enterprises, to whom the Company owes dues as at 31 March 2018 and 31 March 2017. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identif ed on the basis of information available with the Company.

7.1 Net debt reconciliation for the year

Effective April 01, 2017, the Company adopted the amendments to Ind AS 7, which require the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from f nancing activities, including both changes arising from cash fi ows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the Balance Sheet for liabilities arising from fi nancing activities, to meet the disclosure requirement. Accordingly the following statement is produced for:

8. Corporate social responsibility (CSR)

As per Section 135 of the Companies Act, 2013, a company meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on CSR activities. Accordingly, the gross amount required to be spent by the Company during the year ended 31 March 2018 is Rs.4.14 Mln. Details of amount spent during the year on CSR activities are given below:

9. Related party transactions

Information on names of related parties and nature of relationship as required by Ind AS 24 on related party disclosures are given below:

a. Subsidiary companies

1. Ramco Systems Corporation, USA

2. Ramco Systems Ltd., Switzerland

3. Ramco Systems Pte Ltd., Singapore

4. Ramco Systems Sdn. Bhd., Malaysia

5. RSL Enterprise Solutions (Pty) Ltd., South Africa

6. Ramco Systems Canada Inc., Canada (wholly owned subsidiary of Ramco Systems Corporation, USA)

7. Ramco Systems FZ-LLC, Dubai

8. RSL Software Company Limited, Sudan

9. Ramco Systems Australia Pty Ltd., Australia

10. Ramco System Inc., Philippines

11. Ramco Systems (Shanghai) Co. Ltd., China

12. Ramco System Vietnam Company Limited, Vietnam

13. PT Ramco Systems Indonesia, Indonesia

b. Key managerial personnel (KMP), including KMP under Companies Act, 2013

1. P R Ramasubrahmaneya Rajha, Chairman upto 11^th May 2017

2. P R Venketrama Raja, Vice Chairman & Managing Director upto 3^rd June 2017, Chairman from 4^th June 2017

3. P V Abinav Ramasubramaniam Raja , Whole Time Director w.e.f. 4^th June 2017

4. Virender Aggarwal, Chief Executive Officer

5. R Ravi Kula Chandran, Chief Financial Officer

6. G Kathikeyan, Company Secretary upto 5^th December 2016

7. P R Karthic, Company Secretary w.e.f. 3^rd July 2017

8. M M Venkatachalam, Independent Director

9. V Jagadisan, Independent Director upto 16^th March 2018

10. A V Dharmakrishnan, Non-Executive, Non-Independent Director

11. R S Agarwal, Independent Director

12. Soundara Kumar, Independent Director

c. Relatives of KMP

1. P R Venketrama Raja, Son of P R Ramasubrahmaneya Rajha

2. R Sudarsanam, Spouse of P R Ramasubrahmaneya Rajha

3. S Saradha Deepa, Daughter of P R Ramasubrahmaneya Rajha

4. R Nalina Ramalakshmi, Daughter of P R Ramasubrahmaneya Rajha

5. P V Nirmala, Spouse of P R Venketrama Raja

6. B Srisandhya Raju, Daughter of P R Venketrama Raja

7. P V Abinav Ramasubramaniam Raja, Son of P R Venketrama Raja

d. Enterprises over which the above persons exercise significant inf uence

1. Rajapalayam Mills Limited

2. The Ramco Cements Limited

3. Ramco Industries Limited

4. The Ramaraju Surgical Cotton Mills Limited

5. Sri Vishnu Shankar Mills Limited

6. Sandhya Spinning Mill Limited

7. Thanjavur Spinning Mill Limited

8. Rajapalayam Spintex

(A division of Rajapalayam Mills Ltd)

9. Sri Harini Textiles Limited

10. Swarna Boomi Estate

11. Thanga Vilas Estate

12. Rajapalayam Textile Limited

13. Shri Harini Media Limited

14. Sudarsanam Estate

15. Shri Abhinava Vidya Theertha Seva Trust

16. Smt. Lingammal Ramaraju Shastra Prathista Trust

17. The Ramco Cements Limited Educational and Charitable Trust

18. Gowrihouse Metal Works

19. JKR Enterprises Limited

20. Gowrishankar Screws

21. P A C R Sethuramammal Charity Trust

22. P A C R Sethuramammal Charities

23. Rajapalayam Spinners Limited

24. Ontime Industrial Services Limited

25. Madurai Trans Carrier Limited

26. Ramco Welfare Trust

27. Lynks Logistics Limited

28. Ramco Management Private Limited

e. Employee benefi t funds where control exists

1. Ramco Systems Limited employees group gratuity scheme

2. Ramco Systems Limited employees superannuation scheme

Notes:

a) Details of corporate guarantee / Undertaking given by the Company are given in the note no.35.

b) The above figures include Service Tax / VAT / CST / GST as applicable.

c) The transactions with related parties are at arm’s length basis. The outstanding balances are unsecured and interest free, except loan transactions. The Company has not recorded any impairment of receivables owed by related parties. Payment terms for related party transactions are 30 to 60 days, except in the case of overseas subsidiaries, from whom the receivables are realised within the prescribed period.

d) 2,500 options granted during the previous year under the employee stock option to G Karthikeyan, Company Secretary.

e) Disclosure of Key Management Personnel compensation in total and for each of the following categories:

10. The fair values of financial assets and liabilities are determined at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Fair value of cash and short-term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial instruments approximate their carrying amounts largely due to the short term maturities of these instruments.

11. Capital management

For the purpose of the Company’s capital management, capital means the Total Equity as per the Balance Sheet. The primary objective of the Company’s capital management is to maximise the Shareholder’s wealth.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The Company monitors capital using a gearing ratio, which is Net Debt divided by the Total Equity.

In order to achieve the overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets financial covenants if any, attached to the interest-bearing loans and borrowings that defi ne capital structure requirements. There have been no breaches in the financial covenants of any interest bearing loans/ borrowings. There are no signifi cant changes in the objectives, policies or processes for managing capital during the years ended 31 March 2018 and 31 March 2017.

The Company has undertaken to provide continued financial support to its subsidiaries, Ramco Systems Pte. Ltd., Singapore and Ramco Systems Australia Pty. Ltd., Australia, for their operations and have also undertaken to ensure their going concern status with respect to debt dues to Ramco Systems Limited, Switzerland.

Note: The Company is engaged in development of software products, which are marketed by the Company and its overseas subsidiaries. The intellectual property rights are held by the Company. There are in-built warranties for performance and support. Claims which may arise out of these are not quantifiable and hence not provided for.

12. Financial risk management objectives and policies

The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework and thus established a risk management policy to identify and analyse the risks faced by the Company. The risk management systems are reviewed periodically. The Audit Committee of the Board overseas the compliance with the policy. The Internal Audit reviews the risk management controls and procedures and reports to the Audit Committee.

The Company’s financial risks comprise of market risk, credit risk and liquidity risk.

A. Market risk

Market risk is the risk that the fair value of future cash fiows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: interest rate risk and currency risk.

A.1 Interest rate risk

The Company has borrowed debt at variable rates to fi nance its operations, which exposes it to interest rate risk. The Company’s interest rate risk management planning includes achieving the lowest possible cost of debt fi nancing, while managing volatility of interest rates, applying a prudent mix of fixed and fi oating debt, either directly or through the use of derivative financial instruments affecting a shift in interest rate exposures between fixed and floating.

1% change in interest rate on variable rate borrowing would impact the interest cost for 2017-18 by Rs.0.05 Mln. (2016-17 by Rs.0.12 Mln.).

A.2 Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s transactions denominated in a foreign currency including trade receivables, unbilled revenues, loans given to overseas subsidiaries, trade payables and bank balances.

B. Credit risk

Credit risk is the risk of financial loss to the Company, if the customer or counter party to the financial instruments fail to meet its contractual obligations and arises principally from the Company’s receivables, treasury operations and other operations that are in the nature of lease.

Customer credit risk is managed by Company’s established policy, procedures and control relating to customer credit risk management. Outstanding customer receivables and unbilled revenues are regularly monitored.

B.1 Trade receivables

Trade receivables of the Company include a) dues from its overseas subsidiaries amounting to 76 % as at 31 March 2018 (74% as at 31 March 2017), of total trade receivables which are risk free and b) dues from others which are exposed to credit risk. The number of other customers and percentage out of total other customers who owed more than Rs.5.00 Mln. were 8 customers and 34% as at 31 March 2018 (13 customers and 43% as at 31 March 2017).

Trade receivables are written off / provided for, when there is no reasonable expectation of realisation, such as debtor declaring bankruptcy or failing to engage in a repayment plan with the Company and where there is a probability of default. Apart from this, the Company maintains a provision based on Expected Credit Loss for trade receivables at the rate of 3% on outstanding more than 365 days.

B.2 Unbilled revenues

Unbilled revenues of the Company are also exposed to risk in the event of the inability to bill the customer. Unbilled revenues are written off / provided for, when there is no reasonable expectation of billing. Apart from this, the Company maintains a provision based on Expected Credit Loss at the rate of 3% on the outstanding more than 365 days.

B.3 Financial instruments and cash deposits

Investments of surplus funds are made only with approved counterparties. The Company is presently exposed to counter party risk relating to deposits with banks and investments made in mutual funds. The Company places its cash equivalents based on the creditworthiness of the financial institutions.

C. Liquidity risk

Liquidity risks are those risks that the Company will not be able to settle or meet its obligations on time or at reasonable price. In the management of liquidity risk, the Company monitors and maintains a level of cash and cash equivalents deemed adequate by the management to finance the Company’s operations and to mitigate the effects of fluctuations in cash flows. Due to the dynamic nature of the underlying business, the Company aims at maintaining flexibility in funding by keeping both committed and uncommitted credit lines available.

13. The Company has only one operating segment, viz., Software Solutions & Services and hence the segment reporting required under Ind AS 108 does not apply.

14. The Company’s shares are listed on BSE Limited and The National Stock Exchange of India Limited. In line with the provisions of the listing agreement with the stock exchanges, the listing fee for the financial year 2018-19 have been paid to the BSE Limited and The National Stock Exchange of India Limited.

15. Figures for the previous year(s) have been regrouped / restated wherever necessary to make them comparable with the figures for the current year.

16. The figures in Rupees have been rounded off to the million in current and previous years.

---

Mar 31, 2017

1 During the year, the Company had, based on the estimates, determined that future taxable profit will be available against which the deductible temporary differences and unused tax losses / unused tax credits can be utilized and hence has recognized net deferred tax asset as above including the credit pertaining to earlier years.

2 During the year, the Company had, based on the estimates, determined that future economic benefits in the form of adjustment against the discharge of the normal tax liability within the specified period in which the MAT is allowed to be utilized, will be available and hence has recognized MAT credit entitlement as above including the credit pertaining to earlier years.

3. First time adoption of Ind AS

These are the Company’s f rst financial statements prepared in accordance with Ind AS.

The accounting policies set out in these financial statements have been applied in preparing the financial statements for the year ended 31 March 2017, the comparative information presented in these financial statements for the year ended 31 March 2016 and in the preparation of an opening Ind AS Balance Sheet at 01 April 2015 (The Company’s date of transition). In preparing its opening Ind AS Balance Sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP). The Balance Sheet as on the date of transition has been prepared in accordance with Ind AS 101 - First time adoption of Indian Accounting Standards. All applicable Ind AS were applied consistently and retrospectively in preparation of the first Ind AS Financial Statements with certain mandatory exceptions and voluntary exemptions for the specific cases as provided under Ind AS 101. An explanation / reconciliation of how the transition from previous GAAP to Ind AS has affected the Company’s financial position, financial performance is set out in note no. 32.1.

Set out below are the applicable Ind AS 101 mandatory exceptions and optional exemptions applied in the transition from previous GAAP to Ind aS.

4. Ind AS mandatory exceptions

5 Estimates

The estimates at 01 April 2015 and at 31 March 2016 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to refect any differences in accounting policies) apart from the following items where application of Indian GAAP did not require estimation:

- Fair valuation of derivative instruments

- Impairment of financial assets based on expected credit loss model

The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions at 01 April 2015, the date of transition to Ind AS and as of 31 March 2016.

6 De-recognition of financial assets and liabilities

The Company has elected to apply the de-recognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.

7 Hedge accounting

The Company has measured derivatives at fair value eliminating all gains and losses arising on derivatives and does not have any hedging relationship as on the transition date.

8 Classification and measurement of financial assets

The Company has evaluated the facts and circumstances existing on the date of transition to Ind AS for the purpose of classification and measurement of financial assets and classified accordingly.

9 Impairment of financial assets

The Company has applied the impairment requirement under Ind AS 109 retrospectively based on the reasonable and supportable information that is available on transition date without undue cost or effort.

10. Ind AS optional exemptions

11 Share based payments

The Company has elected to apply Ind AS 102 share based payment to equity instruments in respect of the unvested options as on the transition date.

12 Deemed cost

The Company has elected to continue with the carrying value for all of its property, plant and equipment and intangible assets as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and used that as its deemed cost as at the date of transition.

13 Investment in subsidiaries

The Company has opted to measure its investments in subsidiaries as per the previous GAAP carrying amount as at the date of transition.

14 Reconciliations

The following reconciliations provide the effect of transition to Ind AS from Indian GAAP in accordance with Ind AS 101.

15. Equity as at 01 April 2015 and 31 March 2016

16. Net profit for the year ended 31 March 2016

Sub notes

17. Imputed interest in respect of customer contracts having extended credit periods

Imputed interest in respect of customer contracts having extended credit period was not earlier segregated as interest income, but was shown as part of the revenue from operations. The same has been worked out and dealt with as below:

18.a. Imputed net interest of Rs.6.74 Mln. in respect of revenues accrued till 01 April 2015 has been reduced from the opening retained earnings on transition date. The net interest of Rs.2.27 Mln. for the year 2015-16 has been reduced from the revenue from operations which resulted in cumulative reduction of Rs.9.01 Mln. from retained earnings as at 31 March 2016.

19.b. Imputed interest of Rs.5.62 Mln. in respect of revenues accrued in the financial year 2015-16 has been reduced from revenue from operations. The imputed interest amounting to Rs.3.34 Mln., attributable to the financial year 2015-16 has been accrued and shown under finance income.

20. Share based payments

The Company has issued various stock option schemes to the option grantees. As required under Ind AS the unvested stock options have now been fair valued, instead of intrinsic value accounting made under the previous Indian GaAp. The difference has been dealt with as below:

The differential cost of fair value amounting to Rs.96.70 Mln. has been reduced from the opening retained earnings on transition date. The differential cost of fair value for the financial year 2015-16 amounting to Rs.100.77 Mln. has been added to employee benefits expense which resulted in cumulative reduction of Rs.197.47 Mln. from retained earnings as at 31 March 2016. During the financial year 2015-16 Rs.14.73 Mln., has been transferred to securities premium account from stock options outstanding account relating to the stock options exercised by the option grantees.

21. Other comprehensive income

Under Indian GAAP, the Company has not presented other comprehensive income (OCI) separately. The following reclassifications have been now made:

22.a. Foreign exchange fluctuation expense of Rs.1.28 Mln. for the financial year 2015-16 pertaining to foreign branches, earlier considered understatement of profit and loss has now been grouped under OCI, on account of change in functional currency of foreign operation and shown as currency translations reserve in the Balance Sheet.

23.b. Under Indian GAAP including actuarial gains and losses relating to defined benefit obligations were charged to statement of profit and loss. Under Ind AS, remeasurement gains and losses are recognized under OCI. Thus the employee benefits expense cost has been reduced by Rs.4.80 Mln. and recognized in the OCI during the financial year 2015-16.

24. Recovery of expenses from customers

Under Indian GAAP, the recovery of expenses from customers were presented under other income. Under Ind AS, the same is required to be netted off with the relevant expenditure. Thus Rs.20.57 Mln. has been reduced from other income and netted off with other expenses during the financial year 2015-16.

For the purposes of this clause, the term “Specified Bank Notes” shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 08 November 2016.

35. Related party transactions

2nformation on names of related parties and nature of relationship as required by Ind AS 24 on related party disclosures are given below:

a. Subsidiary companies

1. Ramco Systems Corporation, USA 7. Ramco Systems FZ-LLC, Dubai

2. Ramco Systems Ltd., Switzerland 8. RSL Software Company Limited, Sudan

3. Ramco Systems Pte Ltd., Singapore 9. Ramco Systems Australia Pty Ltd., Australia

4. Ramco Systems Sdn Bhd., Malaysia 10. Ramco System Inc., Philippines

5. RSL Enterprise Solutions (Pty) Ltd., South Africa

6. Ramco Systems Canada Inc., Canada (wholly owned subsidiary of Ramco Systems Corporation, USA)

b. Key managerial personnel (KMP), including KMP under Companies Act, 2013

1. P R Ramasubrahmaneya Rajha, Chairman

2. P R Venketrama Raja, Vice Chairman & Managing Director

3. Virender Aggarwal, Chief Executive Officer

4. R Ravi Kula Chandran, Chief Financial Offer

5. G Karthikeyan, Company Secretary (was on employment till 05 December 2016)

6. M M Venkatachalam, Independent Director

7. V Jagadisan, Independent Director

8. A V Dharmakrishnan, Non-Executive, Non Independent Director

9. R S Agarwal, Independent Director

10. Soundara Kumar, Independent Director

c. Relatives of KMP

1. P R Venketrama Raja, Son of P R Ramasubrahmaneya Rajha

2. R Sudarsanam, Spouse of P R Ramasubrahmaneya Rajha

3. S Saradha Deepa, Daughter of P R Ramasubrahmaneya Rajha

4. R Nalina Ramalakshmi, Daughter of P R Ramasubrahmaneya Rajha

5. P V Nirmala, Spouse of P R Venketrama Raja

6. B Srisandhya Raju, Daughter of P R Venketrama Raja

7. P V Abinav Ramasubramaniam Raja, Son of P R Venketrama Raja

d. Enterprises over which the above persons exercise significant influence and with which the Company has transactions during the year

1. Rajapalayam Mills Limited 14. Sudarsanam Estate

2. The Ramco Cements Limited 15. Shri Abhinava Vidya Theertha Seva Trust

3. Ramco Industries Limited 16. Smt. Lingammal Ramaraju Shastra Prathista Trust

4. The Ramaraju Surgical Cotton Mills Limited 17. The Ramco Cements L imited Educational and

5. Sri Vishnu Shankar Mills Limited ^{Charitable Trust}

6. Sandhya Spinning Mill Limited ¹⁸. ^{Gowrihouse Metal Works}

7. Thanjavur Spinning Mill Limited ¹⁹. ^{JKR Enterprises Limited}

8. Rajapalayam Spintex (A division of ^{20 Gowrishankar Screws} Rajapalayam Mills Ltd) 2 1 i P.A . C.R Sethuramammal Charity Trust

9. Sri Harini Textiles Limited 22. P.A.C.R. Sethuramammal Charities

10. Swarna Boomi Estate 23. Rajapalayam Spinners Limited

11. Thanga Vilas Estate 24. Ontime Industrial Services Limited

12. Rajapalayam Textile Limited 25. Madurai Trans Carrier Limited

13. Shri Harini Media Limited 26. Ramco Welfare Trust

Notes:

a) Details of corporate guarantee / Undertaking given by the Company are given in the note no.38.

b) The above figures include Service Tax / Vat / CST as applicable.

c) Represents conversion of loan of Rs.346.65 Mln.SGD 7.45 Mln. to equity.

d) The transactions with related parties are at arm’s length basis. The outstanding balances are unsecured and interest free, except loan transactions. The Company has not recorded any impairment of receivables owed by related parties. Payment terms for related party transactions are 30 to 60 days, except in the case of overseas subsidiaries, from whom the receivables are realized within the prescribed period.

e) Remuneration to P R Venketrama Raja represents Basic pay and other allowances / perquisites amounting to Rs.1.08 Mln. and retrial contribution Rs.0.09 Mln. during the current and previous year.

f) Details of corporate guarantees availed from related parties are given in note nos.16 and 19.

g) 2,500 options granted during the year under employees stock option scheme to G Karthikeyan.

36. The fair values of financial assets and liabilities are determined at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Fair value of cash and short-term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial instruments approximate their carrying amounts largely due to their short term maturities of these instruments.

27. Capital management

For the purpose of the Company''s capital management, capital means the Total Equity as per the Balance Sheet. The primary objective of the Company''s capital management is to maximize the Shareholder’s wealth.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The Company monitors capital using a gearing ratio, which is Net Debt divided the Total Equity.

Rs. Mln.

28. Financial risk management objectives and policies

The Board of Directors has overall responsibility for the establishment and oversight of the Company''s risk management framework and thus established a risk management policy to identify and analyze the risks faced by the Company. The risk management systems are reviewed periodically. The Audit Committee of the Board overseas the compliance with the policy. The Internal Audit reviews the risk management controls and procedures and reports to the Audit Committee.

The Company''s financial risks comprise of market risk, credit risk and liquidity risk.

A. Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: interest rate risk and currency risk.

A.1 Interest rate risk

The Company has borrowed debt at variable rates to finance its operations, which exposes it to interest rate risk. The Company''s interest rate risk management planning includes achieving the lowest possible cost of debt financing, while managing volatility of interest rates, applying a prudent mix of fixed and floating debt, either directly or through the use of derivative financial instruments affecting a shift in interest rate exposures between fixed and floating.

B. Credit risk

Credit risk is the risk of financial loss to the Company, if the customer or counter party to the financial instruments fail to meet its contractual obligations and arises principally from the Company''s receivables, treasury operations and other operations that are in the nature of lease.

Customer credit risk is managed by Company’s established policy, procedures and control relating to customer credit risk management. Outstanding customer receivables and unbilled revenues are regularly monitored.

B.1 Trade receivables

Trade receivable of the Company include dues from its overseas subsidiaries which are risk free and other customer receivables are exposed to credit risk. The number of other customers and percentage out of total other customers who owed more than Rs.5.00 Mln. as at 31 March 2017: 13 customers accounted for 43%, as at 31 March 2016: 24 customers accounted for 63% and as at 01 April 2015: 23 customers accounted for 63% accordingly.

Trade receivables are written off when there is no reasonable expectation of recovery, such as a debtor declaring bankruptcy or failing to engage in a repayment plan with the Company and where there is a probability of default. The Company creates a provision based on Expected Credit Loss for trade receivables at the rate of 3% on out standings more than 365 days.

B.2 Unbilled Revenue

Unbilled Revenue of the Company are also exposed to risk in the event of the inability to bill the customer. The Company creates a provision based on Expected Credit Loss at the rate of 3% on the outstanding more than 365 days.

B.3 Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed in accordance with the Company’s policy. Investments of surplus funds are made only with approved counterparties. The Company is presently exposed to counter party risk relating to deposits and investments made in mutual funds. The Company places its cash equivalents based on the creditworthiness of the financial institutions.

C. Liquidity risk

Liquidity Risks are those risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. In the management of liquidity risk, the Company monitors and maintains a level of cash and cash equivalents deemed adequate by the management to finance the company''s operations and to mitigate the effects of fluctuations in cash flows. Due to the dynamic nature of the underlying business, the Company aims at maintaining flexibility in funding by keeping both committed and uncommitted credit lines available.

29. The Company has only one operating segment, viz., Software Solutions & Services and hence the segment reporting required under Ind AS 108 does not apply.

30. The Company’s shares are listed on BSE Limited and The National Stock Exchange of India Limited. In line with the provisions of the listing agreement with the stock exchanges, the listing fee for the financial year 2016-17 have been paid to the BSE Limited and The National Exchange of India Limited.

31. Figures for the previous year(s) have been regrouped / restated wherever necessary to make them comparable with the figures for the current year.

32. The figures in Rupees have been rounded off to the million in current and previous years.

---

Mar 31, 2016

note:1. The Share Application Money Pending Allotment as at the year end, represents receipt pursuant to the exercise of Options
under the Employee Stock Option Scheme, 2008, 2009 Plan A and 2009 Plan B of the Company. Under the said scheme, 1 share of
Rs.10 each, at a premium of Rs.41 for 5,561 shares & Rs.80 for 4,617 shares (previous year at a premium of Rs.41 for 914 shares &
Rs.73 for 301 shares), needs to be issued for each option exercised. The shares need to be allotted within 60 days from the
receipt of exercise application money. No such application money has been pending beyond the stipulated time for allotment.

* Nil (Rs.2,075.00 Mln. supported by Corporate Guarantee from The Ramco Cements Limited.) ** Nil (Rs.100.00 Mln. supported by
Corporate Guarantee from The Ramco Cements Limited.)

1. Terms of Repayment and Security details

1) Loans repayable on Demand, from Banks, secured consists of

(a) Nil (previous year Rs.10.00 Mln. secured by a pari-passu first charge on the current assets including stocks and book debts
and supported by a Corporate Guarantee from Ramco Industries Limited.)

2) Loans from Banks, Unsecured, consists of

(a) Nil (previous year Rs.250.00 Mln. supported by Corporate Guarantee from The Ramco Cements Limited.)

3) Loans from Others, Unsecured, consists of

(a) Nil (previous year Rs.280.00 Mln. supported by Corporate Guarantee from The Ramco Cements Limited.)

* Supported by Corporate Guarantee from The Ramco Cements Limited

** Includes advance collected from customers and payable to vendors for capital payables

2. Tax on book profits (MAT) has been provided for. No provision for regular tax for the Company (including its Branch- es at
United Kingdom and Germany) has been made in view of absence of taxable profits during the current and previous year. The company
has net deferred tax assets as on March 31, 2016 and as on March 31, 2015, which arise mainly on account of carry forward losses.
However the company has not taken credit for such net deferred tax assets.

3.There are no Micro and Small Enterprises, to whom the Company owes dues as at 31st March 2016 and on 31st March 2015. This
information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined
to the extent such parties have been identified on the basis of information available with the Company.

Notes:

4. Gross block under Vehicles includes assets purchased under Hire Purchase Rs.26.41 Mln. (previous year Rs.27.61 Mln.), Net block
as on March 31, 2016 Rs.15.83 Mln. (previous year Rs.21.73 Mln.).

5. Gross block under Servers and Networks includes assets purchased under Finance Lease Rs.25.29 Mln. (previous year Rs.25.29
Mln.), Net block as on March 31, 2016 Nil (previous year Nil).

6. Additions to the gross block in respect of Technology Platform include capitalization of interest amounting to Nil (previous
year Rs.61.12 Mln.) and Product Software include Nil (previous year Rs.166.30 Mln.).

7. The depreciation on tangible assets is provided on the straight-line method as prescribed under Schedule II to the Companies
Act, 2013, over the useful life of those assets. As prescribed in said Schedule II, during the previous year an amount of Rs.9.02
Mln. towards depreciation has been charged in the opening balance of retained earnings for the assets in respect of which the
remaining useful life was Nil as on April 01, 2014 and in respect of other assets on that date, depreciation has been worked out
based on remaining useful life of those assets.

Note: The Company is engaged in development of software products, which are marketed by the Company and its overseas
subsidiaries. The intellectual property rights are held by the company. There are in-built warranties for performance and
support. Claims which may arise out of these are not quantifiable and hence not provided for.

8. Research and Development

Statement of Profit and Loss, Balance Sheet and Schedules, based on separate books maintained in respect of the Research &
Development Activities, are enclosed.

9. Segment Revenue

The company currently operates only in one segment, viz., Software solutions & Services and hence the segment reporting as
required by AS-17, issued by The Institute of Chartered Accountants of India does not apply.

10. Related Party Transactions

As per Accounting Standard (AS-18) issued by The Institute of Chartered Accountants of India, the Company''s related parties are
given below:

a. Subsidiary Companies

1. Ramco Systems Corporation, USA 6. Ramco Systems Canada Inc., Canada

2. Ramco Systems Ltd., Switzerland (wholly owned subsidiary of Ramco Systems

3. Ramco Systems Pte. Ltd., Singapore Corporation, USA)

4. Ramco Systems Sdn. Bhd., Malaysia 7. Ramco Systems FZ-LLC, Dubai

5. RSL Enterprise Solutions (Pty) Ltd., South Africa 8. RSL Software Co. Ltd., Sudan

9. Ramco Systems Australia Pty Ltd., Australia

b. Key Managerial Personnel

1. Shri P R Ramasubrahmaneya Rajha, Chairman

2. Shri P R Venketrama Raja, Vice Chairman & Managing Director

3. Shri Virender Aggarwal, Chief Executive Officer

Relatives of KMP

1. Shri P R Venketrama Raja, Son of Shri P R Ramasubrahmaneya Rajha

2. Smt. R Sudarsanam, Spouse of Shri P R Ramasubrahmaneya Rajha

3. Smt. S Saradha Deepa, Daugher of Shri P R Ramasubrahmaneya Rajha

4. Smt. R Nalina Ramalakshmi, Daughter of Shri P R Ramasubrahmaneya Rajha

5. Smt. P V Nirmala, Spouse of Shri P R Venketrama Raja

6. Smt. B Srisandhya Raju, Daughter of Shri P R Venketrama Raja

7. Shri P V Abinav Ramasubramaniam Raja, Son of Shri P R Venketrama Raja

c. Enterprises over which the above persons exercise significant influence and with which the company has transactions during
the year ("Group")

1. Rajapalayam Mills Limited 13. Sudarsanam Estate

2. The Ramco Cements Limited 14. Ramco Welfare Trust

3. Ramco Industries Limited 15. Smt. Lingammal Ramaraju Shastra Prathista Trust

4. The Ramaraju Surgical Cotton Mills Limited 16. The Ramco Cements Limited Educational and

5. Sri Vishnu Shankar Mills Limited Charitable Trust

6. Sandhya Spinning Mill Limited 17. Gowrihouse Metal Works

7. Thanjavur Spinning Mill Limited 18. JKR Enterprises Limited

8. Sri Harini Textiles Limited 19. Gowrishankar Screws

9. Swarna Boomi Estate 20. P.A.C.R. Sethuramammal Charity Trust

10. Thanga Vilas Estate 21. P.A.C.R. Sethuramammal Charities

11. Rajapalayam Textile Limited 22. Rajapalayam Spinners Limited

12. Shri Harini Media Limited

11 Amounts recovered from Subsidiaries towards expenses incurred on account of on-site employees to the extent of Rs.155.64 Mln.
(previous year Rs.107.69 Mln.) have been netted off from expenses.

12 The Company''s shares are listed on BSE Limited and The National Stock Exchange of India Limited. In line with the provisions
of the listing agreement with the stock exchanges, the listing fee for the financial year 2015-16 have been paid to the BSE
Limited and The National Stock Exchange of India Limited.

13 Figures for the previous year have been regrouped / restated wherever necessary to make them comparable with the figures for
the current year.

14. The figures in Rupees have been rounded off to the million in both current and previous year.

---

Mar 31, 2013

1.1 The hire purchase loans are secured by hypothecation of assets (Vehicles) procured under the hire purchase scheme.

1.2 Terms of repayment: These loans are repayble in 48/60 equal monthly instalments from the date of disbursement. The interest and maturity profile are as under:

2.1 Short Term Borrowings Terms of Repayment and Security details

Loans repayable on demand, from Banks, secured, consists of:

(a) Rs.10.00 Mln. (previous year Rs.10.00 Mln.) secured by a pari-passu first charge on current assets including stocks and book debts and fixed assets of the Company except assets given as exclusive charge and assets acquired on hire purchase or lease and supported by Corporate Guarantee from Ramco Industries Limited and

(b) Rs.75.00 Mln. (previous year Rs.100.00 Mln.) secured by a pari-passu first charge on the current assets including stocks and book debts and supported by Corporate Guarantee from Ramco Industries Limited.

Loans repayable on demand, from Banks, unsecured, consists of:

(a) Rs. 100.00 Mln. (previous year Nil), supported by Corporate Guarantee from Madras Cements Limited.

Loans from Banks, unsecured, consists of :

(a) Rs. 2,230.00 Mln. (previous year Rs. 1,450.00 Mln.), supported by Corporate Guarantee from Madras Cements Limited and

(b) Rs.300.00 Mln. (previous year Rs.295.00 Mln.), supported by Corporate Guarantee from Ramco Industries Limited.

Loan repayable on demand from related parties, unsecured, consists of:

(a) Rs.137.50 Mln. (previous year Rs.130.00 Mln.) from Madras Cements Limited.

3.1 No provision for tax for the Company (including its Branches at United Kingdom and Germany) has been made in view of absence of taxable profits during current and previous year. Profits of the Dubai Branch are tax free. The company has net deferred tax assets as on 31st March, 2013 and as on 31st March, 2012, which arise mainly on account of carry forward losses. However the company has not taken credit for such net deferred tax assets.

As at As at 31.03.2013 31.03.2012 (Rs. Mln.) (Rs. Mln.)

4 Contingent Liabilities and Commitments

4.1 Contingent Liabilities:

(a) Bank Guarantees 33.52 38.38

(b) Disputed Income tax / Wealth tax demand - pending before the first appellate 12.34 9.84 authority

(c) In respect of disputed Sales tax demand amounting to Rs. 1.91 Mln. (previous year Nil), appeal is pending with the first Appellate Authority. Agains this, Rs. 0.95 Mln. has been deposited and for the balance, Bank Guarantee has been furnished.

Note: The Company is engaged in development of software products, which are marketed by the Company and its overseas subsidiaries. The intellectual property rights are held by the company. There are in-built warranties for performance and support. Claims which may arise out of these are not quantifiable and hence not provided for.

5 Research and Development

Statement of Profit and Loss, Balance Sheet and Schedules, based on separate books maintained in respect of the Research & Development Activities, are enclosed.

6 Segment Revenue

The company currently operates only in one segment, viz., Software Solutions & Services and hence the segment reporting as required by AS-17, issued by The Institute of Chartered Accountant of India does not apply.

Notes: (a) Details of corporate guarantees given by the Group are given in Note No.8.1 above.

(b) Details of transactions with Key Management Personnel and Relatives

(i) Remuneration paid to Shri P R Venketrama Raja for the year is Rs.1.17 Mln. (Previous year Rs.1.17 Mln.). (ii) Sitting fee paid to Shri P R Ramasubrahmaneya Rajha Rs.0.02 Mln. (Previous year Rs. 0.04 Mln.).

(c) The above figures include taxes as applicable.

7 Amounts recovered from Subsidiaries towards expenses incurred on account of on-site employees to the extent of Rs. 74.28 Mln. (previous year Rs.48.60 Mln.) have been netted of from expenses.

8 Figures for the previous year has been regrouped/restated wherever necessary to make them comparable with the figures for current year.

9 The Company''s shares are listed on Madras Stock Exchange Limited, Bombay Stock Exchange Limited and The National Stock Exchange of India Limited. The Listing Fees payable to these stock exchanges have been paid.

10 The figures in Rupees have been rounded off to the million in both current and previous year.

---

Mar 31, 2012

Note: The Share Application Money Pending Allotment represents receipt pursuant to the exercise of Options under the Employee Stock Option Scheme, 2008 of the Company. Under the said scheme, 1 share of Rs. 10 each, at a premium of Rs. 43 per share needs to be issued for each option exercised. The shares need to be allotted within 6 weeks of receipt of exercise application along with remittance of exercise money. No such application money has been pending beyond the stipulated time for allotment.

1.1 The hire purchase loans are secured by hypothecation of assets (Vehicles) procured under the hire purchase scheme.

2.1 Short Term Borrowings Terms of Repayment and Security details Loans repayable on demand, from Banks, secured, consists of:

(a) Rs. 10.00 Mln. (previous year Rs.10.00 Mln.) secured by a pari-passu first charge on current assets Including stocks and book debts and fixed assets of the Company except assets given as exclusive charge and assets acquired on hire purchase or lease and supported by Corporate Guarantee from Ramco Industries Limited and

(b) Rs.100.00 Mln. (previous year Rs.70.00 Mln.) secured by a pari-passu first charge on the current assets Including stocks and book debts and supported by Corporate Guarantee from Ramco Industries Limited.

Loans from Banks, unsecured, consists of:

(a) Rs. 1,450.00 Mln. (previous year Rs. 1,150.00 Mln.), supported by Corporate Guarantee from Madras Cements Limited and

(b) Rs.295.00 Mln.(previous year Rs.200.00 Mln.), supported by Corporate Guarantee from Ramco Industries Limited.

Loan repayable on demand from related parties, unsecured, consists of:

(a) Rs.130.00 Mln. (previous year Rs.120.00 Mln.) from Madras Cements Limited.

3.1 There are no Micro and Small Enterprises, to whom the Company owes dues as at March 31, 2012 and on March 31, 2011. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

4.1 No provision for tax for the Company (including its Branches at United Kingdom and Germany) has been made in view of absence of taxable profits during current and previous year. Profits of the Dubai Branch are tax free. The current taxation during the previous year represents the provision made for tax on the book profits, computed under Sec.115JB of the Income Tax Act, 1961. The company has net deferred tax assets as on March 31, 2012 and as on March 31, 2011, which arise mainly on account of carry forward losses. However the company has not taken credit for such net deferred tax assets.

The fee against Sl. No. (d) above for the previous year was not charged to the Statement of Profit and Loss in that year, in contemplation of adjustment of the same against Share Premium upon realisation of the proceeds of the Rights Issue 2010. However, in view of the withdrawal of the said Rights Issue during the year, the said fee has been charged to the Statement of Profit and Loss during the year.

5 Research and Development

Statement of Prof t and Loss, Balance Sheet and Schedules, based on separate books maintained in respect of the Research and Development Activities, are enclosed.

6 Segmental Revenue

The company currently operates only in one segment, viz., Software Solutions & Services and hence the segment reporting as required by AS-17, issued by The Institute of Chartered Accountants of India does not apply.

Notes: a) Details of corporate guarantees given by the Group are given in Note No.8.1 above.

b) Details of transactions with Key Management Personnel and Relatives

(i) Remuneration paid to Shri P.R. Venketrama Raja for the year is Rs.1.17 Mln. (Previous year Rs.1.17 Mln.).

(ii) Sitting fee paid to Shri P.R. Ramasubrahmaneya Rajha Rs.0.04 Mln. (Previous year Rs. 0.04 Mln.).

7 The Company has branches in United Kingdom, Germany and Dubai. The United Kingdom branch has made a turnover of Rs.13.18 Mln. for the year ended March 31, 2012 (previous year Rs. 5.03 Mln.), no turnover in Germany branch for the year and previous year and the Dubai branch has made a turnover of Rs.227.68 Mln. for the year ended March 31, 2012 (previous year Rs.258.96 Mln.).

8 Amounts recovered from Subsidiaries towards expenses incurred on account of on-site employees to the extent of Rs.48.60 Mln. (previous year Rs.25.01 Mln.) have been netted of from expenses.

9 The Company's shares are listed on Madras Stock Exchange Limited, Bombay Stock Exchange Limited and The National Stock Exchange of India Limited. The Listing Fees payable to these stock exchanges have been paid.

10 The financial statements for the year ended March 31, 2011 had been prepared as per the then applicable, pre-revised Schedule VI to the Companies Act, 1956. Consequent to the notification under the Companies Act, 1956, the financial statements for the year ended March 31, 2012 are prepared under revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year's classification.

11 The figures in Rupees have been rounded off to the million in both current and previous year.

---

Mar 31, 2011

(Rs. 000)

1. Contingent Liabilities as at 31.03.2011 As at 31.03.2010

a) Estimated amount of contracts remaining to be executed on capital account and not provided for 4,768 7,675

b) Bank Guarantees 77,154 18,738

c) Letters of Credit 2,797 Nil

Note: The Company is engaged in development of software products, which are marketed by the Company and its overseas subsidiaries. The intellectual property rights are held by the Company. There are in-built warranties for performance and support. Claims which may arise out of these are not quantifable and hence not provided for.

2. Secured & Unsecured Loans

Borrowings from the banks for working capital amounting to Rs.10,000 thousands (previous year Rs.10,000 thousands) are secured by a pari-passu frst charge on current assets including stocks and book debts and fxed assets of the Company except assets given as exclusive charge and assets acquired on hire purchase or lease and supported by a Corporate Guarantee from Ramco Industries Limited. Borrowings from the banks for working capital amounting to Rs.70,000 thousands (previous year Rs.70,000 thousands) are secured by a pari-passu frst charge on the current assets including stocks and book debts and supported by a Corporate Guarantee from Ramco Industries Limited.

Obligations under fnance lease are secured against fxed assets procured under fnance lease arrangement.

Assets acquired under Hire Purchase Finance are hypothecated to the Hire Purchase Financial Institutions as security.

Of the total unsecured loans of Rs.1,470,798 thousands (previous year Rs.1,235,000 thousands), Rs.1,150,000 thousands (Previous year Rs.950,000 thousands) are supported by a Corporate Guarantee from Madras Cements Limited and Rs.200,000 thousands (previous year Rs.200,000 thousands) are supported by a Corporate Guarantee from Ramco Industries Limited.

3. Current Liabilities

There are no Micro, Small and Medium Enterprises, to whom the Company owes dues as at 31st March, 2011 and on 31st March, 2010. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identifed on the basis of information available with the Company.

6. Managerial Remuneration

The Board of Directors of the Company in its meeting held on 28th January, 2010, after considering the recommendations of the Remuneration Committee, re-appointed Shri P R Venketrama Raja as the Managing Director (MD) of the Company for a further period of fve years effective 23rd February, 2010, on the same terms and conditions as were applicable before the re-appointment.

The Companys VCMD & CEO is also the Vice Chairman & Managing Director of Ramco Industries Limited. As per the provisions of the Companies Act, 1956 read with Schedule XIII, the total remuneration payable should not exceed the higher maximum limit admissible from any one of the Companies of which he is the Managing Director.

This remuneration has been adjusted in the overall maximum remuneration of Rs.35,173,049/- (Previous Year Rs.36,070,426/-) payable by Ramco Industries Limited at 5% of its net profts computed in accordance with the provisions of the said Act.

7. Taxation

Current taxation for the year represents the provision made for tax on the book profts, computed under Sec.115JB of the Income Tax Act, 1961. The Company has net deferred tax assets as on 31st March, 2011 which arise mainly on account of carry forward losses. However the Company has not taken credit for such net deferred tax assets.

12. The Companys shares are listed on Madras Stock Exchange Limited, Bombay Stock Exchange Limited and The National Stock Exchange of India Limited. The Listing Fees payable to these stock exchanges have been paid.

13. The Company has branches in United Kingdom, Germany and Dubai. The United Kingdom branch has made a turnover of Rs.5,029 thousands for the year ended 31st March, 2011 (previous year Rs.5,587 thousands), Germany branch has made a turnover of NIL for the year ended 31st March, 2011 (previous year Rs.18,429 thousands) and the Dubai branch has made a turnover of Rs.258,959 thousands for the year ended 31st March, 2011 (previous year Rs.1,08,335 thousands).

14. Amounts recovered from Subsidiaries towards expenses incurred on account of on-site employees to the extent of Rs.25,006 thousands (previous year Rs.30,975 thousands) have been netted of from expenses.

15. Cost of resale materials for the year includes Rs.48,722 thousands (previous year Rs.25,995 thousands), towards sub-contracting charges. Increase / (decrease) in resale material for the year is Rs.559 thousands (previous year Rs.333 thousands) and value of purchase of resale material for the year is Rs.11,886 thousands (previous year Rs.40,586 thousands).

notes:

a) Details of corporate guarantees given by the Group are given in Note No.2 above.

b) Details of transactions with Key Management Personnel and Relatives (i) Remuneration paid to Shri P R Venketrama Raja is furnished in Note No.6 above (ii) Sitting fee paid to Shri P R Ramasubrahmaneya Rajha Rs.40 thousands (Previous year Rs.25 thousands)

17. Segmental Revenue:

The Company currently operates only in one segment, viz., Software Solutions & Services and hence the segment reporting as required by AS-17, issued by the Institute of Chartered Accountants of India does not apply.

18. Exceptional Expense of Rs.10,515 thousands in the previous year represents overseas withholding tax written off. During the year, such overseas withholding tax, after adjusting against the liability for tax under Sec.115JB of the Income Tax Act, 1961, amounting to Rs.2,035 thousands has been grouped under “Administrative and Other Expenses".

19. The fgures have been rounded off to the nearest rupee / thousand and previous years fgures have been regrouped / recast wherever necessary to conform to the current year classifcations.

---

Mar 31, 2010

(Rs. 000)

1. Contingent Liabilities As at 31.03.2010 As at 31.03.2009

(a) Estimated amount of contracts remaining to be executed on capital account and not provided for 7,675 655

(b) Bank Guarantees 18,738 10,773

(c) Letters of Credit Nil 720

Note: The Company is engaged in development of software products, which are marketed by the Company and its overseas subsidiaries. The intellectual property rights are held by the Company. There are in-built warranties for performance and support. Claims which may arise out of these are not quantifiable and hence not provided for.

2. Secured & Unsecured Loans

Borrowings from the banks for working capital amounting to Rs.10,000 thousands are secured by a pari-passu first charge on current assets including stocks and book debts and fixed assets of the Company except assets given as exclusive charge and assets acquired on hire purchase or lease and supported by a Corporate Guarantee from Ramco Industries Limited. Borrowings from the banks for working capital amounting to Rs.70,000 thousands are secured by a pari-passu first charge on the current assets including stocks and book debts and supported by a Corporate Guarantee from Ramco Industries Limited.

Borrowings from the banks for working capital amounting to Rs.1,95,000 thousands during the previous year were secured by a first charge on the current assets including stocks and book debts and fixed assets of the Company except assets given as exclusive charge and assets acquired on hire purchase or lease and supported by a Corporate Guarantee from Madras Cements Limited and Ramco Industries Limited.

Obligations under finance lease are secured against fixed assets procured under finance lease arrangement.

Assets acquired under Hire Purchase Finance are hypothecated to the Hire Purchase Financial Institutions as security.

Of the total unsecured loans of Rs.1,235,000 thousands (Previous year Rs. 870,086 thousands), Rs. 950,000 thousands (Previous year Rs.470,086 thousands) are supported by a Corporate Guarantee from Madras Cements Limited and Rs.200,000 thousands (Previous year Rs.200,000 thousands) are supported by a Corporate Guarantee from Ramco Industries Limited.

3. Current Liabilities

There are no Micro and Small Enterprises, to whom the Company owes dues as at 31st March 2010 and as on 31st March 2009. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

4. Taxation

No provision for current Income Tax for the Company has been made in view of absence of taxable profits. The company has net deferred tax assets as on 31st March 2010 which arise mainly on account of carry forward losses. However the company has not taken credit for such net deferred tax assets.

5. The Companys shares are listed on Madras Stock Exchange Limited, Bombay Stock Exchange Limited and The National Stock Exchange of India Limited. The Listing Fees payable to these stock exchanges have been paid.

6. The Company has branches in United Kingdom, Germany and Dubai. The United Kingdom branch has made a turnover of Rs.5,587 thousands for the year ended 31st March 2010 (previous year Rs. 6,585 thousands), Germany branch has made a turnover of Rs.18,429 thousands for the year ended 31st March 2010 (previous year Rs.9,286 thousands) and the Dubai branch has made a turnover of Rs. 108,335 thousands for the year ended 31st March 2010 (previous year Nil).

7. Amounts recovered from Subsidiaries towards expenses incurred on account of on-site employees to the extent of Rs.30,975 thousands (Previous year Rs.49,949 thousands) have been netted off from expenses.

8. Related Party Transactions:

As per Accounting Standard (AS 18) issued by The Institute of Chartered Accountants of India, the Companys related parties are given below:

a. Subsidiary Companies:

1. Ramco Systems Corporation, USA

2. Ramco Systems Ltd., Switzerland

3. Ramco Systems Pte Ltd., Singapore

4. Ramco Systems Sdn Bhd., Malaysia

5. RSL Enterprise Solutions (Pty) Ltd., South Africa

b. Key Management Personnel and Relatives:

1. Shri P R Ramasubrahmaneya Rajha

2. Shri P R Venketrama Raja

9. Segmental Revenue:

The company currently operates only in one segment, viz., Software Solutions & Services and hence the segment reporting as required by AS-17, issued by The Institute of Chartered Accountants of India does not apply.

10.The figures have been rounded off to the nearest rupee /thousand and previous years figures have been regrouped /recast whereever necessary to conform to the current year classifications.