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R Systems International

BSE: 532735|NSE: RSYSTEMS|ISIN: INE411H01032|SECTOR: Computers - Software Medium & Small
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Directors Report Year End : Dec '15    Dec 14

The directors take great pleasure in presenting the Twenty Second Annual Report on the business and operations of R Systems
International Limited (“R Systems or the “Company) together with the audited statements of accounts for the year ended December
31, 2015.

1. Financial Results

a. Standalone financial results of R Systems

(Rs. in Millions)

Particulars Financial Year ended
31.12.2015 31.12.2014

Total income 2,988.83 3,045.65

Profit before depreciation, 625.70 685.01
exceptional items and tax

Less : Depreciation and 95.81 67.24
amortization *

Add : Exceptional items** 648.07 393.13

Profit before tax 1,177.96 1,010.90

Less : Current tax 262.82 247.53

Less : Deferred tax change/(credit) 8.70 13.08

Profit after tax 906.44 750.29

Surplus in the statement of
profit and loss Balance as per
last financial 494.41 633.83
statements

Add: Profit for the current year 906.44 750.29

Less: Appropriations
Proposed dividend $ - 121.76

Tax on proposed dividend - 24.33

Interim Dividend$ 501.10 624.33

Tax on Interim Dividend 102.27 119.29

Adjustment on account of 18.87 -

aligning the useful life of fixed
asset in accordance with Schedule
II of the Companies Act, 2013*
Tax impact of above (6.41) -
adjustment*

Proposed dividend written (0.65) -
back on buy back&

Tax on proposed dividend (0.13) -

written back on buy back & fist

Total Appropriation 615.05 889.71

Net Surplus in the 785.80 494.41
statement of profit and loss

* refer Note No. 34 of the standalone financial statements.

** refer Note No. 22 of the standalone financial statements.

$ refer Note No. 4 of the standalone financial statements.

& The Company has written back proposed dividend for the year ended December 31, 2014 and tax thereon towards shares bought back
under the buy back offer.

b. Consolidated financial results of R Systems and its subsidiaries

(Rs. in Millions)

Particulars Financial Year ended

31.12.2015 31.12.2014

Total income 6,148.45 6,575.68

Profit before depreciation, 812.06 986.55
exceptional items and tax

Less : Depreciation and 140.23 112.45
amortization expense*

Add : Exceptional items** 603.10 250.11

Profit before tax 1,274.93 1,124.21

Less : Current tax 290.08 325.29

Less : Deferred tax change 6.55 17.58

Profit after tax 978.30 781.34

Surplus in the statement
of profit and loss
Balance as per last financial 659.36 767.74
statements

Add: Profit for the
current year 978.30 781.34

Less: Appropriations

Proposed dividend$ - 121.76

Tax on proposed dividend - 24.33

Interim Dividend$ 501.10 624.33

Tax on Interim Dividend 102.27 119.29

Adjustment on account of 18.87 -

aligning the useful life of
fixed asset in accordance with
Schedule II of the Companies
Act, 2013*

Tax impact of above (6.41) -
adjustment*

Proposed dividend written (0.65) -
back on buy back&

Tax on proposed dividend (0.13) -
written back on buy back&

Total Appropriations 615.05 889.71

Net Surplus in the statement 1,022.61 659.36
of profit and loss

* refer Note No. 33 of the consolidated financial statements. ** refer Note No. 23 of the consolidated financial statements. $
refer Note No. 4 of the consolidated financial statements. & The Company has written back proposed dividend for the year

ended December 31, 2014 and tax thereon towards shares bought back under the buy back offer. Note: Previous Year figures have been
regrouped / reclassified, wherever necessary.

2. Results of Operations Standalone Accounts

- Total income during the year 2015 decreased to Rs. 2,988.83 mn. as against Rs. 3,045.65 mn. during the year 2014, a decline of
1.87%.

- Profit after tax including exceptional items was Rs. 906.44 mn. during the year 2015 as compared to Rs. 750.29 mn. during
2014, an increase of 20.81%.

- Basic earnings per share (of face value of Re. 1/- each) was Rs. 7.14 for the year 2015 as compared to Rs. 5.90 for the year
2014, an increase of 21.02%.

Consolidated Accounts

- Consolidated total income during the year 2015 decreased to Rs. 6,148.45 mn. as against Rs. 6,575.68 mn. during the year 2014,
a decline of 6.50%.

- Profit after tax including exceptional items was Rs. 978.30 mn. during the year 2015 as compared to Rs. 781.34 mn. during
2014, an increase of 25.21%.

- Basic earnings per share (of face value of Re. 1/-each) were Rs. 7.70 for the year 2015 as compared to Rs. 6.14 for the year
2014, an increase of 25.41%.

3. Appropriations and Reserves

Dividend

During the year 2015, the Board declared three interim dividends namely, first interim dividend of Re. 0.40 per equity share of
Re. 1/-each at its meeting held on April 23,2015, second interim (special) dividend of Rs. 3.30 per equity share of Re. 1/- each
at its meeting held on August 05, 2015 and third interim dividend of Re. 0.25 per equity share of Re. 1/- each at its meeting
held on October 29, 2015. Total interim dividends already paid for the year 2015 aggregates to Rs. 3.95 per equity share of Re.
1/- each i.e. 395%, as compared to total dividend including interim dividend paid for the year 2014 at Rs. 5.85 per equity share
of Re. 1/- each i.e. 585%. The Board of Directors (the Board) has not recommend any final dividend for the financial year ended
December 31, 2015.

The register of members and share transfer books shall remain closed from June 09, 2016 to June 13, 2016 both days inclusive.

Transfer to Reserves

It is proposed not to transfer any amount to general reserve in respect to dividend declared during the year ended December
31,2015 in pursuance of the provisions of Section 123 of the Companies Act, 2013 and Rules made there under.

4. Business

- Systems is a leading provider of outsourced product development services, business process outsource services and also offers
own product suite in BFSI, Manufacturing & Logistic verticals. R Systems diversified offering includes:

PLM Services Group

- Systems defines its outsourced product development business as Integrated Product Life Cycle Management (iPLM) services where R
Systems helps ISV and other companies to accelerate the speed to market for their products and services with a high degree of
time and cost predictability by using our proprietary pSuite framework and global delivery model.

Under iPLM Services, R Systems delivers solutions and services in the area of Information Technology and Information Technology
enabled services (ITES). The IT services cover application development, systems integration and support and maintenance of
applications. Under the ITES, we cover technical support and customer care for IT and Hi-Tech electronic manufacturers, high-end
quality process management and revenue and claims management using our global delivery model.

- Systems competitive advantage in iPLM Services is further enhanced by its industry specific domain expertise, global delivery
capabilities, multi-language support capabilities, industry best quality and security certification and agile development
methodologies supported by R Systems'' proprietary pSuite framework.

Products Group

ECnet Supply Chain products provide solutions for holistic management of the complex interaction between an organization and its
trading partners. The integrated solution aims to reduce all supply chain costs through improved collaboration and optimization.
The solutions are robust and scalable and give measurable ROI to clients that meets the clients ‘strategic business goals.

Further, ECnet also operates as a Gold Channel Partner for one of the largest business software companies in the world to resell,
implement and support enterprise solutions of ERP, WMS, Service Management, Bl and Performance Management. It mainly serves small
to medium-sized businesses in the manufacturing and distribution industries. These products present an opportunity to cross and
up sell these solutions since these are adjunct to ECnet''sown product offerings.

- Systems'' recent acquisition, IBIZ, is a Microsoft Gold Channel Partner and is specialized in deploying Microsoft business
management solution suites, including enterprise resource planning, customer relationship management, point of sales, mobility,
business intelligence and portals.

- Systems focused on key verticals i.e. Telecom & Digital Media, Banking and Finance, Health Care, Manufacturing & Logistics and
Government Services. Telecom and Digital Media is the largest industry vertical which contributes 30 percent of the total
consolidated revenue for the year ended December 31,2015.

Further with the deep expertise in the key vertical like Telecom & Digital Media, BFSI and Healthcare, we have horizontally
embraced analytics solutions across these verticals to bring operational efficiency and also create a vital information pool
reflecting on the economical, statistical, social media, speech metrics of the customers.

- Systems rapidly growing customer list includes a variety of Fortune 1000, government and mid-sized organizations across a wide
range of industry verticals and has served twenty one million dollor plus customer during the year 2015.

Customers and Delivery Centre’s

- Systems rapidly growing customer list includes a variety of Fortune 1000, government and mid-sized organizations across a wide
range of industry verticals including Banking and Finance, Independent Software Vendors, Telecom and Digital Media, Government,
Healthcare, Manufacturing and Logistic Industries. R Systems maintains fourteen development and service centre’s and using our
global delivery model, we serve customers in the USA, Europe and the Far East.

There were no changes in the nature of the Company''s business and generally in the classes of business in which the Company has
an interest and in the business carried on by the subsidiaries during the year under review. For details of Company''s
subsidiaries please refer note number 14 relating to subsidiaries.

5. Quality

- Systems has continuously invested in processes, people, training, information systems, quality standards, frameworks, tools and
methodologies to mitigate the risks associated with execution of projects. Adoption of quality models and practices such as the
Capability Maturity Model Integrated (CMMi) and Six Sigma practices for processes have ensured that risks are identified and
mitigated at various levels in the planning and execution process. R Systems journey for various quality

During the year 2015, all ISMS artifacts of the Company have been migrated from ISO 27001:2005 to new ISO 27001:2013 standard and
Noida Unit has been certified for this new Information Security Standard. Further, Noida unit has been reappraised for PCMM Level
5 (Ver.2.0). In the year 2015, Noida BPO Center has been certified as PCI-DSS (ver. 3.1) compliant for the call Analytic Services
provided to one of the major client.

As of the date of this report, Noida IT centre is CMMi level 5, PCMM Level 5, ISO 9001 : 2008 and ISO 27001 : 2013 certified;
Noida BPO centre is PCI-DSS (ver.3.1), PCMM Level 5, ISO 9001 : 2008, ISO 27001 : 2013 and PCI-DSS (ver.3.1) certified. The
continuing compliance with these standards demonstrates the rigor of R Systems processes and differentiates us to keep our
competitive edge in service and product offerings.

certifications / standards for the development and service centre’s in India is provided below:

To maintain and strengthen competitive strengths, R Systems
continues to make investments in its unique and proprietary <™™»® with best practices, tools and methodologies for flawless
execution and consistent delivery of high quality software. The pSuite framework offers services along the entire software
lifecycle that includes technology consulting, architecture, design and development, professional services, testing, maintenance,
customer care and technical support. R Systems expects that its technology focus, investment in processes, talent and
methodologies will enable it to distinguish itself from competition as it seeks to provide services to technology / product
companies.

6. Directors

During the year under review, the following changes took place in the office of directors of the Company.

Mr. Raj Kumar Gogia, Mr. Gurbax Singh Bhasin, Mr. Suresh Paruthi and Mr. Amardeep Singh Ranghar, Non-Executive Independent
Directors of the Company were appointed as Independent Director of the Company, not liable to retire by rotation, as per the
provisions of Section 149 of the Companies Act, 2013 at twenty first Annual General Meeting for period commencing from March 29,
2015 till the ensuing Annual General Meeting.

Mrs. Ruchica Gupta who was appointed as an additional director at the meeting of the Board of Directors held on July 07, 2014 was
regularized at twenty first Annual General Meeting of the Company held on June 09, 2015.

Lt. Gen. Baldev Singh (Retd.) was re-appointed as President & Senior Executive Director for a period of three years commencing
from April 01, 2015 to April 01, 2018 at twenty first Annual General Meeting held on June 09, 2015.

Mr. Raj Swaminathan, Director & Chief Operating Officer of the Company ceased to be director of the Company consequent upon his
resignation w.e.f. June 27, 2015.

Details of the Director proposed to be appointed and re-appointed at the ensuing Annual General Meeting are as follows:

At the ensuing Annual General Meeting Lt. Gen. Baldev Singh (Retd.), President & Senior Executive Director of the Company is
liable to retire by rotation in accordance with the provisions of Section 152 of the Companies Act, 2013 read with the Articles
of Association of the Company and being eligible, offer himself for reappointment as director of the Company.

Further, on the recommendation of the Nomination & Remuneration Committee of the Company, Mr. Raj Kumar Gogia, Mr. Suresh
Paruthi, Mr. Gurbax Singh Bhasin and Mr. Amardeep Singh Ranghar, Non- Executive Independent

Directors of the Company are proposed to be re-appointed as Independent Director pursuant to the provision of Section 149 of the
Companies Act, 2013 and rules made there under at the ensuing Annual General Meeting for the second term of five years commencing
from the conclusion of twenty second Annual General Meeting.

As required under Section 149 of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015 (Hereinafter referred as Listing Regulations), all the Independent Directors of the
Company have given the declarations that they meet the criteria of independence as laid down therein. The brief profile of the
aforesaid Independent Directors forms part of the Corporate Governance Report.

None of the directors of the Company is disqualified as per the provisions of Section 164(2) of the Companies Act, 2013. The
directors of R Systems have made necessary disclosures, as required under various provisions of the Companies Act, 2013 and
Listing Regulations.

7. Employees Stock Option Plans / Schemes

The industry in which R Systems operates is people intensive and R Systems believes that human resources play a pivotal role in
the sustainability and growth of the Company. R Systems has always believed in rewarding its employees with competitive
compensation packages for their dedication, hard work, loyalty and contribution towards better performance of the Company. To
enable more and more employees to be a part of the financial success of the Company, retain them for future growth and attract
new employees to pursue growth, R Systems has set up employees stock option plans / schemes from time to time for its employees
and for the employees of its subsidiaries. As on the date of this report, the stock option plans of R Systems are as follows:

(a) R Systems International Ltd.- Year 2004 Employee Stock Option Plan : For the employees of R Systems and its subsidiaries
other than ECnet Limited.

(b) R Systems International Ltd. - Year 2004 Employee Stock Option Plan - Ecnet: For the employees of ECnet Limited, a subsidiary
of R Systems. The term of the said plan has been expired on August 31, 2014.

(c) R Systems International Ltd. Employees Stock Option Plan- Year 2001 (Formerly known as Indus Software Employees Stock Option
Plan -Year 2001): Initially formulated for the employees of Indus Software Private Limited which got amalgamated with R Systems
and the plan continues as per the scheme of amalgamation approved by the Hon''ble High Courts of Delhi and Mumbai. As on the date
of this report, no stock options are in force under this plan.

(d) R Systems International Limited Employee Stock Option Scheme 2007 : For the employees of R Systems and its subsidiaries.

As required under the Companies Act, 2013 and Securities and Exchange Board of India (Employee Stock Option Scheme and Employee
Stock Purchase Scheme), Guidelines, 1999 as amended, details relating to options approved, granted, vested, exercised, lapsed, in
force etc. under the prevailing employees stock option plans/schemes during the year ended December 31, 2015 are as follows:

sl Particular R systems R systems
No International International ltd
year 2004 year 2004
employee employee
option plan stock option plan


a. Total number
of shares 1,995,000 2,000,000
covered under
the plan

b. Pricing Formula Prevailing Price Prevailing Price
once the Company''s once the Company''s
shares are listed and shares are listed
at the Fair Market at the Fair Market
Value as per the Value as per the
terms of R Systems terms of R Systems
International Ltd. - International Ltd.
Year2004Employees Year 2004 Employees
Stock Option Plan on Stock Option Plan
the date such option - ECnet on the
is granted when the date such option is
Company''s shares granted when the
are not listed. Company''s shares
are not listed.

c. Options granted
during the year Nil Nil

d. Options vested
during the year Nil Nil

e. Options
exercised during
the year Nil Nil

f. The total
number of shares Nil Nil
arising as a result
of exercise of
options during
the year

g. Options lapsed
during the year 102,150 Nil_

h. Variation of
terms of options Nil Nil

during the year

i. Money realized
by exercise of Nil Nil

options during
the year (Rs.)

j. Total number
of options in force Nil Nil
at the end of
the year

k. Employee wise
details of options
granted to (during
the year)

(i) Senior
managerial
personnel Nil Nil

(ii) Any other
employee who Nil Nil
receives a grant
in any one
year of options
amounting to
5% or more of
options granted
during that year

(iii) Identified
employees who were Nil Nil
granted options,
during anyone year,
equal to or exceeding
1% of the issued
capital (excluding
outstanding warrants
and conversions) of
the Company at the
time of gran

I. Diluted Earnings
Per Share N.A. N.A.
(EPS) pursuant to
issue of shares
on exercise of
options

particular R System R System International
Limited

a. Total number 738,980 6,500,000

of shares
covered under
the plan

b. Pricing Formula As approved
under Exercise Price means
the market
the Scheme of price which is payable
for
exercising
Amalgamation
the options and Market Price
of Indus
Software means the latest
available closing
Private
Limited price, prior to the
daft’s of the
with the
Company meeting of the Board
of Directors /
by the Hon''ble Compensation Committee,
in which
High Courts of options are granted,
on the stock
Delhi and
Mumbai. exchange on which
the shares of

the Company are listed.
If the shares
are listed on more
than one stock
exchange, then the
stock exchange
where there is highest
trading
volume on the said
date shall Be considered.

c. Options granted Nil Nil
during the year

d. Options vested Nil NIL
during the year

e. Options
exercised during Nil 90,000
the year

f. The total
number of shares Nil 90,000
arising as a result
of exercise of
options during
the year

g. Options lapsed Nil 75,000
during the year

h. Variation of
terms of options Nil Nil

during the year

i. Money realized Nil 1086300
by exercise of
options during
the year (Rs.)

j. Total number
of options in force Nil 80,280
at the end of
the year

k. Employee wise
details of options
granted to (during Nil Nil
the year)

(i) Senior
managerial Nil Nil
personnel

(ii) Any other
employee who
receives a grant
in any one
year of options
amounting to
5% or more of
options granted
during that year NIl Nil

(iii) Identified
employees who were
granted options,
equal to or exceeding
1% of the issued
capital (excluding
outstanding warrants Nil Nil
and conversions) of
the Company at the
time of grant

I. Diluted Earnings
Per Share N.A 7.14
(EPS) pursuant to
issue of shares
on exercise of
options

# Please note that the details given above for plan (a), (b) and (c) are after making the required adjustments in relation to
consolidation of each of the 5 equity shares of Rs. 2 each into 1 equity share of Rs. 10 each as approved by the shareholders in
the year 2006 and after Sub-division of each of the equity shares of Rs. 10 each into 10 equity shares of Re. 1/-each as per
record date of February 28, 2014.

* EPS is Rupees per equity shares of Re. 1/-each i.e. after giving into effect Sub-division of equity shares of Rs. 10 each into
equity shares of Re. 1 /- each as per record date of February 28, 2014.

**During the year ended December 31, 2015 R Systems International Ltd. Year- 2004 Employee Stock Option Plan has been completely
expired on December 27, 2015 due to expiry of the term of the plan. Further, R Systems International Ltd. -Year 2004 Employee
Stock Option Plan - ECnet was expired on August 31, 2014 due to expiry of the term of the plan.

During the year ended December 31,2015, R Systems had not granted any options under any of the aforementioned plans. Subsequent
to year ended December 31,2015, on the recommendation of Compensation Committee 150,000 stock options were granted under existing
R Systems International Limited Employee Stock Option Scheme 2007 at the price of Rs. 12.07 per option (i.e. the price at which
the options were granted earlier on July 11, 2007).

All options granted under R Systems International Ltd. Employees Stock Option Plan -Year 2001 has already been vested and
exercised or lapsed and no options were in force as on December 31, 2015.

For options granted during the earlier years under plan (a), (b)and (c), R Systems used the fair value of the stock options for
calculating the employees compensation cost.

For the purpose of valuation of the options granted during earlier years, the management obtained fair value of the options at
the date of grant under respective schemes from a firm of Chartered Accountants, to determine accounting impact, if any, of
options granted over the periods. In the considered opinion of the valuer, the fair value of option determined using ‘Black
Schools Valuation Model ‘under each of above schemes isNiland thus no accounting thereof is required.

The assumptions used for the purpose of determination of fair value are state
d below:

Assumption Unit schme Schme Schme

Strike price Rs. 42 154 26

Current share price Rs. 16 140 16

Expected option life No.
of
Years 5 2.5 5

Volatility % 1 0.5 1

Risk free return % 7 11.3 7

Expected dividend % - 15 -
Yield


Assumption Comments by the valuer

Strke price Taken on the basis of NAV and
PECV method of valuation.

Current share Price Being half of the maximum option life.

Expected option life In case of unlisted shares,
the volatility may be taken
as zero. Verma committee also
recommends this.
Volatility
Zero coupon rate estimated from
trading government securities
for a maturity corresponding to
expected life of option - taken
from sites of NSE and / or BSE.

Expected dividend Company has no set policy so
Yield dividend taken as zero.

In case of R Systems Employees
Stock Option Plan - Year 2001, as
the dividend had been paid by the
erstwhile company, it has been
assumed at 15%.

* R Systems International Ltd.-Year 2004 Employee Stock Option Plan under which the price was based on Rs. 2 per share.

** R Systems International Ltd. Employees Stock Option Plan -Year 2001 under which originally the price was based on Rs. 10 per
share for 21,967 shares. Asa result of amalgamation of Indus Software Private Limited into R Systems, R Systems had issued
206,822 equity shares of Rs. 2 each pursuant to the swap ratio approved by Hon''ble High Courts of Delhi and Mumbai.

*** R Systems International Ltd.-Year 2004 Employee Stock Option Plan - ECnet under which the price was based on Rs. 2 per share.

Please note that the details given above for plan (a), (b) and (c) are after making the required adjustments in relation to
consolidation of each of the 5 equity shares of Rs. 2 each into 1 equity share of Rs. 10 each as approved by the shareholders in
the year 2006 and before Sub-division of each of the equity shares of Rs. 10 each into 10 equity shares of Re. 1/-each as per
record date of February 28, 2014.

Further, for the purpose of valuation of the options granted during the year 2005 under R Systems International Ltd.-Year 2004
Employee Stock Option Plan, the management obtained fair value of the options at the date of grant from a firm of Chartered
Accountants, to determine accounting impact, if any, of options granted. In the considered opinion of the valuer, the fair value
of these options determined using ‘Black Scholes Valuation Model''isNiland thus no accounting thereof is required.

The assumptions used by the valuer for the purpose of determination of fair value are stated below:

Assumption Unit Schme Comments by the Valuer

Strike price Rs. 42

Current share
price Rs. 13.58 Taken on the basis of NAV and
PECV method of valuation.

Expected
option life No.of
Years 5 Being half of the maximum
option life.

Volatility % 1 In case of unlisted shares,
the volatility may be taken
as zero. Verma committee also
recommends this.

Risk free
return % 7.42 Zero coupon rate estimated from
trading government securities
for a maturity
corresponding to expected
life of option - taken from
sites of NSE.

Expected
dividend % - Company has no set policy so
dividend taken as zero.

Yield

The above information is based on Rs. 2 per share prior to consolidation of 5 equity shares of Rs. 2 each into one equity share
of Rs. 10 and subsequent allotment of bonus shares in the ratio of 1 :1.

For the purpose of valuation of the options granted during the year ended December 31, 2007 under R Systems International Limited
Employee Stock Option Scheme 2007, the compensation cost relating to Employee Stock Options, calculated as per the intrinsic
value method is nil.

The management obtained fair value of the options at the date of grant from a firm of Chartered Accountants. In the considered
opinion of the valuer, the fair value of these options determined using''Black Scholes Valuation Model''isRs. 50.73 per option.

The assumptions used by the valuer for the purpose of determination of fair value are stated below:

Assumption Unit Scheme Comments by the Valuer

Strike price Rs. 120.70

Current share
price Rs. 118.50 Price on the date of grant by
Board of Directors i.e.
closing price on July 11, 2007.

Expected option No.
of
Years 4 Being the vesting period,

life

Volatility % 44 On the basis of industry average.

Risk free
return % 7 Zero coupon rate estimated from
trading government securities
for a maturity
corresponding to expected
life of option -taken from
sites of NSE.

Expected
dividend % 0.86 Company has declared Dividends
off 2% in the past. Assuming
that it will continue
Yield declaring similar dividends
in future.

The stock based compensation cost calculated as per the intrinsic value method for the financial year 2014 and 2015 was nil. If the
stock based compensation cost was calculated as per fair value method prescribed by SEBI, the total cost to be recognized in the
financial statements for the year 2015 would be nil (Previous year nil). The effect of adopting the fair value method on the net
income and earnings per share is presented below:

Pro Forma adjusted Net Income and Earnings Per Share

(Amount in Rs.)
Particular year ended year ended
December 31 December 31
2015 2015

Net Income as reported 906,439,976 750,289,488

Add : Intrinsic Value
Compensation Cost

Less: Fair Value
Compensation Cost*

Adjusted Pro-forma Net Income 906,439,976 750,289,488

Earnings ‘Per Share
(Face Value of Re. 1/-)

Basic (Face Value of Re. 1/-)

-As reported 7.14 5.90

-Pro-forma 7.14 5.90

Diluted (Face Value
of Re. 1/-)

-As reported 7.14 5.90

-Pro-forma 7.14 5.90

*all granted options have been vested during earlier years.

Weighted average exercise price of options granted during the year

Sl. Particulars Scheme Scheme scheme scheme
No


1. Exercise price
equals market price NA NA NA NA.

2. Exercise price is
greater than N.A. N.A. N.A. N.A.
market price

3. Exercise price is
less than market N.A. N.A. N.A. N.A.
price

Weighted average fair value of the options granted during the year

Sl Particular Scheme Scheme Scheme Scheme

1. Exercise price
equals market
price NA NA NA NA

2. Exercise price
is greater than N.A. N.A. N.A. N.A.
market price

3. Exercise price
is less than
market N.A. N.A. N.A. N.A.
price

Scheme (a): R Systems International Ltd.-Year 2004 Employee Stock Option Plan.

Scheme (b): R Systems International Ltd. Employees Stock Option Plan-Year 2001.

Scheme (c): R Systems International Ltd.-Year 2004 Employee Stock Option Plan -ECnet.

Scheme (d): R Systems International Limited Employee Stock Option Scheme 2007.

As no options are granted during the year under Scheme (a), Scheme (b), Scheme (c) and Scheme (d), hence the required information
is not applicable.

8. Liquidity and Borrowings - Consolidated Financial Statement

The available Cash and bank balance as at December 31, 2015 was Rs. 921.95 mn. against Rs. 1,098.24 mn. as of December 31, 2014.
The decrease was mainly on account of purchase of fixed assets, acquisition of IBIZCS Group Pte Limited (IBIZ) and dividend
payouts as offset by cash generation from operations net of taxes and proceeds from the sale of Indus Business Division.

The consolidated cash and cash equivalent as at December 31, 2015 were Rs. 786.17 mn. as against Rs. 1,059.10 mn. as on December
31, 2014.

Net cash generated from operating activities were Rs. 448.53 mn. for the year ended December 31, 2015 compared to Rs. 724.57 mn.
for the year ended December 31, 2014.

Cash generated from investing activities were Rs. 397.95 mn. for the year ended December 31, 2015 comprised of proceeds from
sale of subsidiaries Rs. 274.01 mn., proceeds from long term fixed deposits with banks Rs. 239.44 mn. (net), proceeds from
redemption of mutual funds Rs. 19.77 mn., interest Income Rs. 42.57 mn., rental income from investment property Rs. 3.08 mn.,
sale of fixed assets Rs. 2.79 mn. as offset by purchase of fixed assets of Rs. 162.58 mn.and initial payout amounting to Rs.
21.13 mn.(net)on acquisition of IBIZ operations.

Cash used in financing activities were Rs 1,131.46 mn. for the year ended December 31, 2015 comprised of payment of dividend
(including CDT) of Rs. 1,072.22 mn., Rs. 59.57 mn. paid for buy back of Equity shares, Rs. 1.11 mn. paid for interest as offset
by cash received from issuance of equity shares of Rs. 1.09 mn. and net increase in long term borrowings by Rs. 0.36 mn. R
Systems'' policy is to maintain sufficient liquidity to fund the anticipated capital expenditures, operational expenses and
investments for strategic initiatives.

R Systems has a credit facility from the Axis Bank Limited amounting to Rs. 200 mn. (including non-fund based credit limit of Rs.
180 mn.for currency derivatives). As at December 31, 2015, the total credit balance was Rs. Nil under fund based line of credit.
Loan payable as at December 31, 2015 comprises of loan for motor vehicles purchased amounting to Rs. 11.58 mn. and against
general corporate purpose of Rs. 0.99 mn. R Systems primary bankers in India are Axis Bank Limited, ICICI Bank Limited,
KotakMahindra Bank Limited, State Bank of India, HDFC Bank Limited and Oriental Bank of Commerce. In U.S.A., U.K., Singapore and
New Zealand , the primary bankers are California Bank & Trust, NatWest Bank, Citibank N.A. and Bank of Baroda (NZ), respectively.

9. Changes in the Capital Structure

During the financial year ended the following changes took place in the capital structure of the Company.

At the beginning of the financial year ended December 31, 2015 the issued and paid up capital of the Company was Rupees
127,458,580/- divided into 127,458,580 equity shares of Re. 1/- each.

Subsequently, the Company completed the buyback of its 678,155 equity shares of Re. 1/- each on April 23, 2015. Consequent to
this buy back the issued and paid up capital of the Company was reduced to Rs. 126,780,425/- divided into 126,780,425 equity
shares of Re. 1/- each.

Futher, the Company allotted 90,000 equity shares of Re. 1/- each on June 09, 2015 pursuant to exercise of Stock Options under R
Systems International Limited Employee Stock Options Scheme 2007, at an exercise price of Rs. 12.07 per share therefore, the
issued and paid up share capital reached to Rs. 126,870,425/- divided into 126,870,425 equity shares of Re. 1/-each.

During the financial year ended December 31, 2015, the Company has not issued any shares with differential voting rights or any
sweat equity shares. Therefore, disclosure pursuant to Section 43(a) (ii) & Section 54(1 )(d) of the Companies Act, 2013 are not
applicable. Further, no disclosure is required under Section 67 (3) (c) of the Companies Act, 2013, in respect of voting rights
not exercised directly by employees of the Company as the provisions of the said section are not applicable.

10. Buy Back

The Board of Directors of the Company at its meeting held on December 20, 2014 approved the buy back of the Company''s fully
paid-up equity shares of face value of Re. 1/- each from its existing shareholders, other than those who are promoters, members
of the promoter group and persons acting in concert, from the open market through stock exchange(s) for a total consideration not
exceeding Rs. 60 mn. and at a price not exceeding Rs. 100/- per share, payable in cash.

During the year ended December 31, 2015, this offer for buy back remained opened from January 06, 2015 to April 23, 2015. During
this period, the Company bought back 678,155 equity shares for Rs. 59.57 mn. All the shares bought back from January 06, 2015 to
April 23, 2015 had been extinguished within the statutory time limits and the said buy back was completed on April 23,2015.

11. Corporate Restructuring

During the year ended December 31, 2015, pursuant to shareholder approval accorded by special resolution through postal ballot on
September 23,2014, the Company concluded the divestment of Indus Product Business, in line with its strategy to focus on core
services business by executing a ‘Business Transfer Agreement''(BTA) with R Systems Product &Technologies Private Limited
(RSPTPL), a wholly owned subsidiary of the Company on June 27,2015 for the transfer of Indus Business Unit operated out of Pune
and Chennai to RSPTPL on a going concern basis by way of slump sale, for consideration of Rs. 783.9 mn. on the terms and
conditions agreed in BTA.

The Company completed the acquisition of 100% shares of IBIZCS Group Pte Limited (IBIZ), a Singapore based Company engaged in
Microsoft Dynamics ERP Practice, w.e.f. April 30, 2015 through its wholly owned subsidiary namely R Systems (Singapore) Pte
Limited. IBIZCS Group Pte. Limited is having operations mainly in South East Asia as a reseller of Microsoft Dynamics Navision
ERP along with Bl and mobility solutions competencies.

- Systems Solutions, Inc. (RSSI) has been merged with R Systems, Inc. (RSI), both being wholly owned subsidiaries of the Company
based in USA, as per the applicable laws of USA on December 10, 2015. Pursuant to aforesaid merger, the Company has received
incremental 150 common stock of RSI against outstanding common and preferred (series A) stocks held in RSSI.

12. Material changes affecting the financial position of the Company

There are no significant events, changes occurred between the end of the financial year and till the date of this report which
would materially affect the financial position of the Company.

13. Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars as prescribed under Section 134 (1) (m) of the Companies Act, 2013, read with rule 8 of Companies (Accounts)
Rules, 2014 for the year ended December 31,2015 are as follows:

A. Conservation of Energy

Since the Company does not own any manufacturing facility, the other particulars relating to conservation of energy stipulated in
the Companies (Accounts) Rules, 2014 are not applicable.

During the year ended December 31, 2015 R Systems continued its'' action plans to curtail the energy bills by adopting various
energy conservation options / technologies as identified by Federation of Indian Chambers of Commerce & Industry (FICCI)
through a detailed Energy Audit carried out by FICCI for R Systems Noida operations in the year 2007.

Significant measures were taken to reduce energy consumption by using energy efficient equipment and devices. R Systems
constantly evaluates new technologies and makes appropriate investments to be energy efficient. Currently, the Company uses
LED/CFL fittings and electronic ballasts to reduce power consumption of fluorescent tubes. The air is conditioned with energy
efficient compressors for central air conditioning and with split air conditioning for localized areas.

R Systems is always in search of innovative and efficient energy conservation technologies and applies them prudently. However, R
Systems being in the software industry, its operations are not energy intensive and energy costs constitute a very small portion
of the total cost, therefore, the financial impact of these measures is not material.

B. Technology absorption

1. Efforts made towards technology absorption

The Company has established practice streams in specific technologies to analyze their implications and the benefits they can
provide to the Company''s customers. These steps enable the Company to find and execute the most appropriate solutions for its
clients.

2. Benefits derived as a result of the above efforts The benefits derived from the above mentioned efforts are fulfilling
customer needs, efficiency in operations, improvement in quality and growth in revenues.

3. Technology imported during the last 3 years Not applicable, as no technology has been imported by the Company.

4. Expenditure incurred on Research and development.

Driven by our core value of innovation, we believe that innovation is not just a practice but an essential component embedded
within R Systems organizational DNA. Innovation is one of our core areas which keeps us competitive and successful in today''s
highly competitive business environment. Over the year ended December 31, 2015, your Company has invested in research and
development in the area of Analytics and Mobility solutions in addition to strengthening and up-grading proprietary products and
frameworks. The key R&D initiates undertaken by the Company for the year 2015 are as follows:

(1) R Systems’ Analytics practice plays a key role in leveraging advanced technologies to develop sophisticated & disruptive
analytics solutions that drive the business transformation for the existing and prospective customers. With the deep expertise in
the vertical like Telecom & Digital Media, BFSI and Healthcare, we have horizontally embraced Analytics solutions across these
verticals to bring operational efficiency and also create a vital information pool reflecting on the economical, statistical,
social media, speech metrics of the customers. Our technology innovation agenda focuses on solutions around advanced Analytics
themes i.e. Customer Analytics, Speech &Text Analytics and Risk & Financial Portfolio Analytics, Autonomics, Social Media
Analytics, Healthcare Analytics and Operational Analytics. We have also initiated our investment in next generation data
analytics framework and multiple focused solutions across key verticals. This framework will provide end-to-end functions for
conceptualizing and implementing any big data analytics initiative.

(2) Your Company has developed a customer interaction analytics platform by leveraging the speech text mining capabilities that
empowers organizations to measure and analyze 100% of recorded customer interactions. This platform is built to deliver actionable
business insights by analyzing unstructured & semi- structured data extracted from various data sources such as: CRM, IVR, CDR,
ACD and customer interactions etc. with integrated capabilities for speech, text, social media, big data & predictive analytics.

(3) The Company has invested in building reusable components library and testing frameworks for mobile platforms (Android and
iOS). These reusable components and frameworks provide an edge to your Company in term of cost efficiency and reduced time to
market while servicing existing as well as prospective customers.

(4) Additionally, your Company has continued its investment building frameworks and proof of concepts in key verticals like
Telecom & Digital Media and Healthcare domains.

C. Foreign Exchange Earnings and Outgo (Accrual Basis)

A significant percentage of R Systems revenues are generated from exports. The development and service centre in Noida is
registered with the Software Technology Park of India as 100% Export Oriented Undertaking. All efforts of the Company are geared
to increase the business of software exports in different products and markets. We have made investments in sales and marketing
activities in various growing markets.

The total foreign exchange used and earned by R Systems during the year as compared with the previous year is as follows:

Sl particular Financial year ended (Rs. in Millions)
no 31.12.2015 31.12.2015

(a) Earnings 2,638.34 3,087.10
(Accrual Basis)

(b) Expenditure 423.67 412.68
(Accrual Basis)

(c) CIF value of 39.73 19.74
imports


14. Subsidiaries

As on December 31,2015, R Systems has twenty four subsidiaries. The name and country of incorporation of those subsidiaries are
as follows:

Sl Name of the Subsidiaries Country of incorporation

1. R Systems (Singapore) Pte Ltd. Singapore

2. R Systems, Inc. U.S.A.

3. R Systems Technologies Ltd. U.S.A.
(Formerly known as Indus
Software, Inc.)

4. ECnet Limited Singapore

5. Systemes R. International Ltee,5 Canada

6. ECnet (M) SDN. BHD# Malaysia

7. ECnet, Inc. * U.S.A.

8. ECnet (Hong Kong) Limited* Hong Kong

9. ECnet Systems (Thailand) Thailand
Company Limited*

10. ECnet Kabushiki Kaisha* Japan

11. ECnet (Shanghai) Co. Ltd. * People''s Republic of
China

12. Computer’s International Limited U.K.

13. ICS Computer’s International Sri® Moldova

14. Computer’s Malaysia Sdn. Bhd. ® Malaysia

15. Computer’s Polska sp zo.o. ® Poland

16. Computer’s Romania SRL® Romania

17. Computer’s USA, Inc.® U.S.A.

18. IBIZCS Group Pte Ltd.* Singapore

19. IBIZ Consulting Services Pte Ltd. Singapore

20. IBIZ Consulting Services Sdn. Malaysia
Bhd.

21. PT. IBIZCS Indonesia Indonesia

22. IBIZ Consultancy Services
India India Private Limited

23. IBIZ Consulting Services Limited Hong Kong

24. IBIZ Consulting Services
People''s Republic of
(Shanghai) Co., Ltd. China

* wholly owned subsidiaries of ECnet Limited, Singapore being 99.75% subsidiary of R Systems (The shareholding by the Company and
R Systems (Singapore) Pte. Ltd. is 69.37% and 30.38% respectively).

® wholly owned subsidiaries of Computer’s International Limited being 100% subsidiary of R Systems.

* Wholly owned subsidiary of R Systems (Singapore) Pte Ltd. being 100% subsidiary of R Systems.

Wholly owned subsidiaries of IBIZCS Group Pte Ltd. being 100% Subsidiary of R Systems (Singapore) Pte Ltd. being 100%
subsidiary of R Systems.

5 Subsequent to the year ended December 31, 2015, name of Systems R. International Ltee, Canada has been changed to
RSYSTECHNOLOGIESLTD.

During the year ended December 31, 2015, the Company has acquired though R Systems (Singapore) Pte Ltd., wholly owned subsidiary
of the Company, 100% share of IBIZCS Group Pte Ltd., Singapore (IBIZ) on April 30,2015.

BIZ is a Microsoft Gold-certified partner specialized in Microsoft
Business Management Solution suites, including Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), Point
of Sales (POS), Mobility, Business Intelligence (Bl) and Portals having subsidiaries in Singapore, Malaysia, Indonesia, India,
Hongkong and China.

The Company has transferred 93% of its equity share in R Systems Products & Technology Private Limited (RSPTPL) on July 07,
2015 by entering into ‘Share Purchase Agreement''(SPA) with BD Capital Partners Ltd. (BDC), a Mauritius based company on June 27,
2015 for a consideration of Rs. 443.17 mn.

On December 10, 2015, R Systems Solution Inc. (RSSI), has been merged with R Systems Inc. (RSI), both being wholly owned
subsidiaries of the Company, based in U.S.A.

As on date of this report, all the aforementioned twenty four subsidiaries except IBIZ Consultancy Services India Private Limited
- India were incorporated and based outside India. In addition to providing services to various international clients these
subsidiaries also help to generate revenues for R Systems. The Board of Directors of the Company regularly reviews the affairs
of these subsidiaries.

Policy for determining material subsidiaries of the Company is available on the website of the Company at http://www.rsystems.
com/investors/corporateqovernance.aspx.

Further, the audited annual accounts and related detailed information of our subsidiaries, where applicable, will be made
available to shareholders seeking such information at any point of time. The annual accounts of the subsidiary companies will
also be available for inspection by any shareholder at Registered Office of R Systems i.e. B-104 A, Greater Kailash-I, New
Delhi-110048 and Corporate Office of R Systems i.e. C-40, Sector 59, Noida (U.P.)-201307 and Registered Offices of the subsidiary
companies concerned during business hours. The same will also be hosted on R Systems ‘website i.e. www.rsystems.com.

15. Particulars of employees

The details required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, are annexed as Annexure A and forms part of this report.

Further, as required under the provisions of Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014, the name and other particulars of employees are set out in Annexure B and forms part of this report.

16. Directors'' responsibility statement

Pursuant to the requirement of Section 134 (3) (c) read with Section 134(5) of the Companies Act, 2013 with respect to
directors ‘responsibility statement, your directors hereby confirm that:

i) In the preparation of the annual accounts for the financial year ended December 31, 2015, the applicable accounting standards
had been followed along with proper explanation relating to material departures;

ii) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year
and of the profit and loss of the Company for that period;

iii) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other
irregularities;

iv) the directors had prepared the annual accounts for the financial year ended December 31, 2015 on a going concern basis;

v) the directors, had laid down internal financial controls to be followed by the Company and that such internal financial
controls are adequate and were operating effectively;

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

17. Auditors

M/s S. R. Batliboi & Associates LLP (Firm Registration No. 101049W/E300004), the statutory auditors of the Company will retire at
the ensuing Annual General Meeting and are eligible for reappointment.

The Board, based on the recommendation of the audit committee, recommends the re-appointment of M/s S. R. Batliboi & Associates
LLP (Firm Registration No. 101049W/E300004) as the statutory auditors of the Company. M/s S. R. Batliboi & Associates LLP have
confirmed their eligibility and willingness to act as the statutory auditors of the Company and have further confirmed that their
appointment, if made, shall be within the limits prescribed under Section 141 of the Companies Act, 2013 and that they are not
disqualified for such appointment within the meaning of the said section.

Further, the auditors ‘report being self-explanatory, does not call for any further comments by the Board of Directors.

18. Audit committee

R Systems has a qualified and independent Audit Committee. During the year under review there was no change in composition of
the Audit Committee except that Mr. Amardeep Singh Ranghar was appointed as a member of Audit Committee w.e.f. August 04, 2015.

The constitution of the Committee is in compliance with the provisions of the Companies Act, 2013, the Listing Regulations and
erstwhile Listing Agreement. Detailed description of the Audit Committee has been given in Corporate Governance report.

The terms of reference and role of the Committee are as per the guidelines set out in the Listing Regulations and erstwhile
Listing Agreement read with Section 177 of the Companies Act, 2013 and rules made there under and includes such other functions as
may be assigned to it by the Board from time to time. The Committee has adequate powers to play an effective role as required
under the provisions of the statute and Listing Regulations. During the year under review, the Board of Directors of the Company
had accepted all the recommendations of the Audit Committee.

19. Prevention and prohibition of sexual harassment of women at work place

At R Systems it is our desire to promote a healthy and congenial working environment irrespective of gender, caste, creed or
social class of the employees. We value every individual and are committed to protect the dignity and respect of every
individual. The Company has always endeavored for providing a better and safe environment free of sexual harassment at all its
work places.

Consequent to the enactment of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and
Rules made there under, the Management of R Systems International Limited has constituted an Internal Complaints Committee (ICC)
to deal with any complaints or issues that may arise, in the nature of sexual harassment of women employees. The Company has
also prepared and implemented Policy for Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace. During
the year ended December 31, 2015, no cases of sexual harassment against women employees at any of its work place were reported to
the ICC.

20. Corporate Governance

As required under Listing Regulations, the detailed report on corporate governance is given as Annexure C to this report and the
certificate obtained from a practicing company secretary regarding compliance of the conditions of corporate governance as
stipulated in the said clause is annexed as Annexure D to this report.

21. Deposits

The Company has neither invited nor accepted any deposits from the public within the purview of Section 2(31), 71 and 74 of
Companies Act, 2013 read with the Companies (Acceptance of Deposit) Rules, 2014, no amount of principal or interest was
outstanding on the date of the balance sheet.

22. Customer relations

- Systems recognizes that the customers have a choice of service providers and the directors would like to place on record their
gratitude on behalf of the Company for the business provided by them. The Company''s quality policy mandates that the voice of the
customer is obtained on a regular basis. We constantly review the feedback and incorporate its impact into our delivery systems
and communications.

23. Stakeholder''s relations

- Systems is inspired by its customers and its employees transform that inspiration and customers'' needs into value for all
stakeholders. We thank all R Systems employees worldwide for their hard work, commitment, dedication and discipline that enables
the Company to accomplish its customer commitments and commitments to all its stakeholders. R Systems conducts regular employee
satisfaction surveys and open house meetings to get employee feedback. R Systems is constantly validating key employee data with
industry and peer group business. These practices have helped the Company achieve many of its business goals and have been
recognized in many industry surveys over the last few years. The open door policy of our senior management team ensures that the
feedback loop is completed promptly.

We thank our shareholders for their continuous support and confidence in R Systems. We are aware of our responsibilities to our
shareholders to provide full visibility of operations, corporate governance and creating superior shareholder value and we
promise to fulfill the same.

24. Management discussion and analysis report

In terms of the Listing Regulations management discussion and analysis report is given as Annexure E to this report.

25. Secretarial Report

Mr. Jitender Singh, Company Secretary in Whole Time Practice, had been appointed by the Board to carry out the Secretarial

Audit under the provision of Section 204 of the Companies
Act, 2013 for the financial year ended December 31, 2015. The Secretarial Audit report for financial year ended 2015 is enclosed
as Annexure F.The report does not contain any qualification.

26. Vigil Mechanism /Whistle Blower Policy

In order to provide a mechanism to employees of the company to disclose any unethical and improper practices or any other alleged
wrongful conduct in the company and to prohibit managerial personnel from taking any adverse action against those employees, the
company has laid down a Vigil Mechanism also known as Whistle Blower Policy to deal with instance of fraud and mismanagement, if
any. The details of the Vigil Mechanism or Whistle Blower Policy is explained in the Corporate Governance Report and also posted
on the website of the Company.

27. Continuance of the Existing Financial Year

Pursuant to the provision of Section 2(41) of the Companies Act, 2013, an order from the Company Law Board has been awarded to
the Company to continue to follow calendar year (i.e. 1st January to 31st December) as its financial year.

28. Criteria for selection of candidates for Membership on the Board of Directors and the Remuneration Policy

As per the provisions of Section 178 of the Companies Act, 2013 and other relevant provisions and on the recommendation of
Nomination & Remuneration Committee, the Board has framed a criteria for selection of Directors, a policy for remuneration of
directors, key managerial personnel and other employees. The Criteria for selection of candidates for Membership on the Board of
Directors and the remuneration policy are stated in the Corporate Governance Report.

29. Meetings of the Board

The Board and its Committees of the Company meet at regular intervals to discuss, decide and supervise the various business
policies, business strategy, Company''s performance and other statutory matters. During the year under review, the Board has met
09 times. The details of the meeting of the Board and its Committees are given in Corporate Governance Report. The intervening
gap between two Board Meetings did not exceed 120 days.

30. Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and the Listing Regulations, the Board has carried out an annual
performance evaluation of its own performance, its committees and the individual directors .The manner in which the evaluation
has been carried out has been explained in the Corporate

Governance Report.

31. Particulars of Loans, Guarantees or investments under Section 186 of the Companies Act, 2013

During the year ended December 31, 2015, the Company has invested SGD 2,251,000 in R Systems (Singapore) Pte Ltd. by way of
acquisition of 1,052,125 shares in R Systems (Singapore) Pte Ltd.

Further, the Company has also made investment of Rs. 700,000 in R Systems Products &Technologies Private Limited (RSPTPL) by
way of acquisition of shares in right issue. Further, the Company also acquired 60,000,003 equity shares at Rs. 6.227333 per
equity share and 35,026 Non-Convertible Debentures (NCD) at Rs. 10,000/- per NCD as purchase consideration for transfer of its
business unit to RSPTPL.

The Company has transferred 93% of its equity share in RSPTPL on July 07, 2015 by entering into ''Share Purchase Agreement'' (SPA)
with BD Capital Partners Ltd. (BDC), a Mauritius based company on June 27, 2015.

32. Related Party Disclosure

All the Related Party Transactions entered during the year were in the ordinary course of business and on arm''s length basis.
There are no materially significant related party transactions made by the company with promoters, Directors, Key Managerial
personnel or other designated persons which may have a potential conflict of interest with the company at large.

All the related party transactions are presented to the Audit Committee and the Board. Omnibus approval is obtained for the
transactions which are foreseen and repetitive in nature. A statement of all related party transactions is presented before the
Audit Committee on quarterly basis, specifying the terms & conditions of the transactions.

The policy on Related Party Transactions as approved by the Board is uploaded on the company''s website at the we blink as
mentioned in the Corporate Governance Report.

Details of particulars of contracts or arrangements with related parties referred to in sub-section (1) of Section 188 of the
Companies Act, 2013 in form AOC-2 has been enclosed herewith as Annexure G.

33. Risk Management

The Company is not required to form a Risk Management Committee. The Company has developed and implemented a risk management
policy for identifying the risk associated with business of the Company and measures to be taken by including identification of
elements of risk and measures to control them.

34. Corporate Social Responsibility

In compliance with the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social
Responsibility Policy) Rules, 2014, the Company has constituted a Corporate Social Responsibility Committee (''CSR Committee'').

During the year under review, there is no change in the constitution of the Committee except that Mr. Raj Swaminathan, Director &
Chief Operating Officer of the Company ceased to be the member of the Committee consequent to his cessation as Director of the
Company w.e.f. June 27, 2015.

The detailed terms of reference of the Corporate Social Responsibility Committee has been provided in the Corporate Governance
Report. In pursuit of the responsibilities entrusted to the CSR Committee, a policy on Corporate Social Responsibility has been
prepared and adopted by the Board which is available at the website of the Company at following link:

http://www.rsvstems.com/investors/corporateqovernance.aspx

Annual Report on CSR activities of the Company in format prescribed in Companies (Corporate Social Responsibility Policy) Rules,
2014 in enclosed as Annexure H and forms part of this report.

35. Internal Control System and Internal Financial Controls

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The Internal
Auditors and the management monitors and evaluates the efficacy and adequacy of the internal control system in the Company, its
compliance with operating systems, accounting procedures and policies at all locations of the Company. Audit observations of
Internal Auditors and corrective actions thereon are presented to the Audit Committee of the Board. To maintain its objectivity
and independence, the Internal Auditor reports to the Audit Committee.

The Company has in place adequate internal financial controls commensurate with size, scale and complexity of its operations.
The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, the safeguarding of
its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and timely
preparation of reliable financial information.

36. Extract of Annual Return

The details forming part of the extract of the Annual Return in form MGT - 9 is enclosed as Annexure I to this Report.

37. Significant and Material Orders Passed By The Regulators Or Courts

There are no significant or material orders passed by the Regulators / Courts which would impact the going concern status of the
Company and its operations in future.

38. Acknowledgments

Your directors once again take this opportunity to thank the employees, investors, clients, vendors, banks, business associates,
regulatory authorities including stock exchanges, Software Technology Park of India, the Central Government, State Government of
Delhi, Uttar Pradesh, Maharashtra, Tamil Nadu for the business support, valuable assistance and co-operation continuously
extended to R Systems. Your directors gratefully acknowledge the trust and confidence and look forward for their continued
support in the future

On behalf of the Board

For R Systems International Limited


Sd/- Sd/-

Satinder Singh Rekhi Lt. Gen. Baldev Singh (Retd.)

(DIN:00006955) (DIN: 00006966)

(Managing Director) (President & Senior Executive
Director)

Place Singapore Place :Noida

Date: April 30,2016 Date: April 30,2016

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