R S Software (India) Ltd
Chairman Speech
Fiscal 2022 has set the foundation to win, and it feels almost like
'lull before the storm'. What is driving us is the patience and the commitment to do all
we can for our stakeholders, the belief in ourselves that continues to be reinforced by
our existing and potential customers, the validation of our strategy to focus on the
payments modernization opportunity, and the conviction in what we are here for, which is
to transform humanity with the power of payments. Our corporate journey for 30+ years is
enriched, while working with global leaders and start-ups alike.
Keep going, the best is yet to come!
What keeps us going
At RS Software, innovation, creativity, and entrepreneurship come
together in delivering payment systems that impact people, country, businesses and
government, making it possible for us to address the demand for new type of financial
infrastructure globally, which enables shared digital capabilities. The four major payment
platforms that we have helped to build globally process 350+ billion transactions
annually. India's success story with digital payments is unfolding every minute to achieve
the next level of success, and what enables this unprecedented set of achievements are the
three major payment platforms exclusively built by RS Software. The RS Payments Innovation
Lab pursues with passion that 5G enabled connectivity, coupled with advances in AI
algorithms, quantum computing, and blockchain will radically alter the payments, leading
to continuous demand for payments modernization - a multi-decade opportunity. The
company's leadership is committed to execute a fine balance that helps to achieve optimal
cashflow based financial strategy, while reaching out in the market with its strategic
partnering model to go after the continuing growth opportunities in payments
modernization.
Transforming India - dream coming true
During the fiscal 22, transactions volume on the UPI platform scaled
from ~0.09 billion since launch in 2016, to a staggering 5+ billion transactions, and most
recently the month of June recorded 5.8 billion transactions, valued at Rs 10 trillion.
There are today 330 banks live on the UPI platform. What started as a small step when RS
Software exclusively built the UPI platform, has become a 'giant leap' for India. With the
launch of UPI123Pay in March 2022, making UPI transactions possible for feature phone
users and available in the offline mode as well, rural India particularly has got
empowered, bringing with it true financial inclusion. This level of adoption bear
testimony to UPI architecture and design strengths, executed by RS Software. Most
importantly, it demonstrates scale and innovation at a pace not achieved anywhere else in
the world.
Major payment networks Visa and Mastercard are committed to the
principle of payments anytime, anywhere, and recognize that UPI like systems will shape
the digital financial services landscape globally. UPI is the first faster payment system
that truly has demonstrated the success of going international, UPI is on a roll to be
accepted in many countries. The technology stack of UPI, built exclusively by RS Software
is such that it enables easy integration with other payment infrastructure. Indian
government has been fostering relationships with several nations including UAE and France
in the recent past. Prime Minister of India, Mr Modi said at the recent Digital India week
that "Everyone including the World bank has appreciated it as the best
platform".
Making this world a better place to be
The bedrock of India's digital payment infrastructure, the three major
platforms have built a solid foundation for India, making it amongst the first few
countries globally to announce the launch of central bank digital currency (CBDC). How
money moves has undergone and is undergoing huge, unprecedented change - increasingly,
cards, digital and mobile payments dominate, and cash is fast on the way out. Advances in
technology, the COVID-19 pandemic, crypto currency, and more have shaped the movement of
money and have redefined roles for banks and cash systems. The COVID-19 pandemic has
accelerated the move away from cash. Lots of youngsters don't carry cash anymore. There
will come a moment, and it's approaching fast, when merchants and shopkeepers will say,
"Why keep accepting cash, we're going to stop accepting cash."
India is leading the world in terms of digital payments innovations.
Its payment systems are available 24X7, available to both retail and wholesale customers,
they are largely real-time, the cost of transaction is perhaps the lowest in the world,
users have an impressive menu of options for doing transactions and digital payments have
grown at an impressive rate. While presenting Budget 2022, the Indian Finance Minister
Nirmala Sitharaman stated Digital Rupee, the name of the Central Bank Digital Currency in
India, will give a big boost to the digital economy. Digital currency will also lead to a
more efficient and cheaper currency management system, she said. In order to counter the
cryptocurrency craze, the central banks across the globe are taking a keener look at
introducing central bank digital currencies. Central Bank Digital Currencies is the
digital form of a country's fiat currency. This will be issued by the federal bank of that
particular country. Although it is in digital form, CBCD can be exchanged with the fiat
currency of the country.
[As per a PhonePe-Boston Consulting Group report ("Digital
payments in India: A $10 trillion opportunity"), India's digital payments market is
expected to increase more than threefold from the current $3 trillion to $10 trillion by
2026. This would translate to digital payments constituting 2 out of 3 payment
transactions by 2026.]
All that can be digital comes together - Metaverse
The massive decrease in the cost of computing power and the widespread
availability of devices able to process information has led to an unprecedented level of
connectivity. For the first time, algorithms can be created to read and analyze bank
account information and combine this data with other information from disparate sources.
Moreover, realtime payments allow for the movement of money in a matter of seconds
regardless of the time or date of application. Consumer and business expectations have
evolved and when end user demands change, existing players must innovate in order to meet
these demands. The maintenance and reporting of real-time balances is essential to allow
customers to benefit from realtime payments and open banking. The technology to meet these
needs is available today. By using a flexible payments hub, combined with a modern
orchestration layer, messaging standards, and API-based interfaces, banks will improve
their positions for the future. Customers want banks to provide these services and banks
will add value and increase their share of the value chain if they can meet them.
The new payments ecosystem views open banking and real-time payments as
two sides of the same coin: they are part of a larger transformation of how banking is
conducted today. While banks have a checklist of to-dos, the list of opportunities is even
longer.
With digital payments must come digital authentication and security, of
course. Biometric measures are tipped to bridge the gap here. According to Juniper
research, roughly 90 percent of smartphones worldwide will have a form of biometric
capability by 2024, to enable authenticated mobile payments. Juniper's research also
forecasts $2.5 trillion in mobile payments, facilitated by biometric data, by 2024,
compared with $228 million in 2019.
We are closer to a fully digital payment landscape than we've ever been
before, online payments have been scaling steadily over the past 5 - 10 years and the
natural evolution of online payments to augmented payments is already happening before our
very eyes. Everyday things such as ingame or in-app purchases from places like Fortnite's
VBuck System, the NFT market in places like Opensea, communities, and tokens are replacing
traditional systems we all relied upon where the direct consumer can pay the producer of
the digital asset directly with no financial intermediary in their decentralised way. The
instant element of blockchain and crypto payments means instant processing and settlement
of digital assets like NFTs, cryptocurrency and other future discovered digital assets.
These assets could be traded, sold, and marketed through the metaverse marketplace tied to
an individual's blockchain based payment wallet or equivalent, meaning a secure, instant,
scalable way of accepting a payment for commerce. I encourage you to read in this annual
report about Metaverse, the emerging future for humanity and also about CBDC, likely to
become the way the world pays as it goes through its everyday life.
The digitization of B2B payments
While the use of paper checks continues to decrease by the year, it
still accounts for more than 50% of the overall transaction value for B2B payments. When
it comes to vendor relationships, businesses are still preparing and sending paper
invoices, or emailed invoices that get printed out and annotated by someone in an office
who inputs it into an ERP system. The payment experience is even more manual. For example,
someone writes paper checks, puts them in envelopes, or inputs payments into a spreadsheet
for uploading to the bank for ACH or EFT. Or it's someone with a corporate purchasing card
calling the provider and giving the payment details over the phone.
With the recent move to a more remote workforce, businesses see that
their employees need to manage their accounts receivable and payable functionality outside
of a physical office. Digitizing B2B payments, including accounts payable, accounts
receivable, expense reimbursement, and employee-initiated spending, is the solution with
significant benefits.
With digital B2B payments, a business has more visibility into what
funds are going where and why. In turn, they gain the transparency and control needed to
optimize cash flow, reduce errors, and mitigate payment-related fraud. Another benefit in
reducing your manual payment processes gets down to the bottom line: saving money.
Reducing checks by 1050% equates to $1.3-$58.3 billion savings each year. The hard costs
of B2B check payments disappear when migrating to digital processes including paper,
postage, and the time it takes to stuff envelopes. For all of these reasons, global B2B
non-cash transactions will increase to nearly 200 billion transactions by 2025, from 121.5
billion in 2020, according to Capgemini estimates.
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R S Software (India) Ltd
Directors Reports
Dear Members,
Your Directors have immense pleasure in presenting the Thirty Fifth Annual Report
together with the Audited Statement of Accounts, highlighting the business operations and
financial results for the Financial Year ended March 31,2023.
1. FINANCIAL SUMMARY OR HIGHLIGHTS/PERFORMANCE OF THE COMPANY (STANDALONE AND
CONSOLIDATED)
The summarized standalone and consolidated results of your Company and its subsidiaries
are given in the table below:
On the basis of standalone financial statements, the performance of the Company is as
follows:
(Rupees in Lacs)
| Particulars |
2022-23 |
2021-22 |
| Total Revenue |
3,084.26 |
3206.81 |
| Profit before Finance Charges, Tax, Depreciation/Amortization (PBITDA) |
(79.53) |
(442.73) |
| Less: Finance Charges |
22.27 |
0.05 |
| Profit before Depreciation/Amortization (PBTDA) |
(101.80) |
(442.68) |
| Less: Depreciation |
304.99 |
318.67 |
| Profit before Taxation (PBT) |
(406.79) |
(761.35) |
| Profit/(Loss) after Taxation (PAT) |
(413.38) |
(1246.69) |
On the basis of Consolidated Financial Statements, the performance of the Company is as
follows:
(Rupees in Lacs)
| Particulars |
2022-23 |
2021-22 |
| Total Revenue |
3,077.13 |
3231.43 |
| Profit before Finance charges, Tax, Depreciation/Amortization (PBITDA) |
(441.09) |
(787.78) |
| Less: Finance Charges |
22.27 |
0.05 |
| Profit before Depreciation/Amortization (PBTDA) |
(463.36) |
(787.83) |
| Less: Depreciation |
405.88 |
420.12 |
| Profit before Taxation (PBT) |
(868.36) |
(1207.95) |
| Profit/(Loss) after Taxation (PAT) |
(821.21) |
(1645.16) |
2. STATE OF COMPANY'S AFFAIRS
FY 23 has been a year of significant sales efforts with existing clients and
prospecting with new prospects, in all of our focused geographies, and opening new markets
with our partners. Our partnership strategy is being reinforced and will continue to be an
important part of our growth in the coming years. India has become a global leader in the
adoption of digital payments, and we continue to play an important role for India to
achieve such phenomenal success. No wonder that the largest revenue contributor for us in
FY 23 is India, while the largest pipeline value built is in geographies outside of India.
During FY23, we maintained our focus on the execution of our business strategy for
products and key offerings, go-to-market and sales execution, delivery fulfilment and
efficiency in our execution. All of this translated into improvement of quality of revenue
and margins, and it has positioned us well for revenue growth and improved margins in FY24
and beyond.
We have achieved good success in walking the fine line between achieving financial
stability and building our capabilities to pursue growth opportunities. Major milestones
achieved are:
• Product based revenue at 50%+ in FY23
• Breakthrough in helping to build the foundation, that will help the largest
economy in the world, The United States of America, to accelerate its adoption of
Real-time Payments
• Support costs stabilizing now at about half of when pandemic started
• Gross margin/contribution for FY '23 at 2 times of when pandemic started
• Operating loss in FY23 down by 30% YoY
• Cash loss for the year on 31st March '23 down by 50% YOY, reduced to just about
20% of when pandemic started f Quarter-4 returned to profitability.
Financial Consolidation
The Company continues to be on a sound financial foundation, with the standalone
performance improving significantly, as evidenced by operating losses reduced almost by
50% during the fiscal year 22-23. A major contributor to consolidated loses is company's
investment in its subsidiary Paypermint, which infact is being used to build an asset that
has significant marketable value. The company is committed to pursue cash flow focus
strategy, and the company achieved profitability in quarter 4 of FY 23.
Margins Analysis
The standalone net revenue for the financial year 2022-23 stood at Rs 3,084.26 Lacs as
compared to the previous financial year, which was Rs. 3206.81 Lacs. On a standalone
basis, the Company's Standalone profit/(loss) before tax stood at Rs. (406.79) Lacs in the
financial year 2022-23, vis-a-vis Rs. (761.35) Lacs in the previous year. The Margins of
the company has improved with the emphasis on product lead revenue and Strategic cost
management initiatives, as reflect in the financial results of the company.
The company's progress is slow but steady on transitioning its business model to
enhance its offerings from total services to include its suite of products and platforms.
This is where the company has invested significantly over the past 5 years. The
investments made have been written off as expenses in respective fiscal years and the
valuation today of these products and platform does not appear in the balance sheet,
standalone or consolidated. The company is pursuing its growth strategy in payments
modernization, which is all about digital payments, and it's a multi-decade long
opportunity. The covid-19 pandemic has accelerated the need for digital.
On a consolidated basis, the Company's profit/ (loss) before tax stood at Rs. (868.36)
Lacs in the financial year 2022-23, vis-a- vis Rs. (1207.95) Lacs in the previous year,
operating loss reduced by almost 70% Reserves.
The total standalone capital employed decreased from Rs. 4,799.13 Lacs in 2021-22.to
Rs. 4,303.03 Lacs in 2022-23.
• Ratio Analysis
The improvement in the Key Financial ratios is indicative of the improved performance
and treasury management of the company. The Company has been able to improve it operations
by reducing its Net Loss and returns on Equity & Capital employed exponentially.
Efficient treasury management has led to improved treasury Management.
| Ratio |
MAR 31, 2023, |
MAR 31,2022 |
Variance |
| Current Ratio (in times) |
2.06 |
2.35 |
12% |
| Debt-Equity raio (in times) |
- |
0.00 |
0% |
| Return on equity ratio (in %) |
-7% |
-20% |
177% |
| Trade receivables turnover ratio (in times) |
12.75 |
3.89 |
-70% |
| Trade payables turnover ratio (in times) |
5.51 |
6.86 |
24% |
| Net profit ratio (in %) |
-13% |
-39% |
190% |
| Return on capital employed (in %) |
-13% |
-24% |
80% |
• Economic Scenario, Outlook, and Strategy
The industry scenario, industry outlook and the company strategy has been extensively
covered in the Management Discussion and Analysis presented in the earlier sections of
this Annual Report.
3. TRANSFER TO RESERVES
The Directors do not propose to transfer any amount to the General Reserves
4. CHANGES IN SHARE CAPITAL
The Company's paid-up equity share capital remained at Rs.12,85,41,590.00 (Rupees
Twelve Crore Eighty-Five Lacs Forty-One Thousand Five Hundred Ninety only) comprising of
2, 57,08,318 equity shares of Rs.5/- each.
There was no change in the Company's paid up share capital during the year under review
and there was no Issue of sweat equity shares and equity shares with differential rights
as to dividend, voting or otherwise.
5. CHANGE IN NATURE OF BUSINESS, IF ANY
During the year, there was no change in the nature of business of the Company and the
Company continues to concentrate on its own business.
6. DIVIDEND
Due to absence of profit the Board of directors of the Company could not recommend any
dividend for the Financial Year ended 202223.
7. DETAILS OF BOARD MEETING
During the Financial Year Four Board Meetings were held, details of which are given
below:
| Date of the meeting |
No. of Directors attended the meeting |
| 22.04.2022 |
4 |
| 11.08.2022 |
4 |
| 14.11.2022 |
5 |
| 01.02.2023 |
4 |
The maximum time gap between any two consecutive meetings did not exceed 120 (One
Hundred Twenty) days.
8. COMMITTEES OF THE BOARD
The Audit Committee has been constituted in line with the provisions of Section 177 of
the Companies Act, 2013 read with Regulation 18 of SEBI Listing Regulations, 2015. The
details of composition of the Committees of the Board of Directors are as under:-
a. Audit Committee
| Sl. No. |
Name |
DIN |
Category |
| 1. |
Mr. Rajasekar Ramaraj (Chairman) |
00090279 |
Non- Executive & Independent Director |
| 2. |
Mr. Shital Kumar Jain* |
00047474 |
Non- Executive & Independent Director |
| 3. |
Mr. Rajnit Rai Jain |
00122942 |
Executive Director |
| 4. |
Mr. Richard Nicholas Launder |
03375772 |
Non- Executive & Independent Director |
* Mr. Shital Kumar Jain (DIN 00047474), Non-Executive Independent Director demised on
March 17th, 2023.
The Company Secretary of your Company acts as the Secretary to the Audit Committee. The
terms of reference of the Audit Committee have been provided in the Corporate Governance
Report forming part of this Report. During the Financial Year, the committee had met Four
times as on April 22nd 2022, August 11th 2022, November 14th
2022, and February 1st 2023.
Recommendation by audit committee:
There were no such instances where the recommendation of audit committee has not been
accepted by the Board during the financial year under review.
Vigil Mechanism/Whistle blower Mechanism
Your Company is serious about its adherence to the Codes of Conduct and to achieve at
par with the highest standards of ethical, moral, and legal conduct of business operations
and henceforth encourage its employees to bring ethical and legal violations they are
aware of to an internal authority without fear of punishment or unfair treatment so that
action can be taken immediately to resolve the problem. A Vigil (Whistle Blower) Mechanism
provides a channel to the employees and Directors to report to the management concerns
about unethical behaviour, actual or suspected fraud or violation of the Codes of Conduct
or policy. The mechanism also provides for adequate safeguards against victimization of
Directors or employees or any other person to avail of the mechanism and also provide for
direct access to the Chairman of the Audit Committee. Thus, minimization of organization's
exposure to the damage that can occur when employees circumvent internal mechanisms is the
main objective which neither release employees from their duty of confidentiality in the
course of their work, or can it be used as a route for raising any malicious allegations
against people in authority and / or colleagues in general. Your company has given
affirmation that no personnel have been denied access to the Audit Committee.
Your Company has formulated a codified Whistle Blower Policy incorporating the
provisions relating to Vigil Mechanism in terms of Section 177 of the Companies Act, 2013
and Regulation 22 of SEBI Listing Regulations, 2015. Further, no complaints were reported
under the Vigil Mechanism during the year.
The Company's Whistle Blower Policy is available on the company's website at
https://www.rssoftware.com/wp-content/
uploads/2022/04/vigil_mechanism_policy-rssoftware.pdf
b. Nomination & Remuneration Committee
| Sl. No. |
Members |
DIN |
Category |
| 1. |
Mr. Richard Nicholas Launder (Chairman) |
03375772 |
Non-Executive & Independent Director |
| 2. |
Mr. Rajasekar Ramaraj |
00090279 |
Non-Executive & Independent Director |
| 3. |
Mr. Rajnit Rai Jain |
00122942 |
Executive Director |
| 4. |
Mr. Shital Kumar Jain* |
00047474 |
Non- Executive & Independent Director |
* Mr. Shital Kumar Jain (DIN 00047474), Non-Executive Independent Director demised on
March 17th, 2023.
The Board of Directors of your Company has constituted a Nomination and Remuneration
Committee in accordance with the provisions of Section 178 of the Companies Act, 2013 read
with Regulation 19 of SEBI Listing Regulations, 2015. The terms of reference of the
Committee has provided in the Corporate Governance Report forming part of this Report.
During the financial year, the Committee met Four times as on April 21st 2022,
August 11th, 2022, November 13th, 2022, and January 31st
2023.
c. Stakeholders Relationship Committee
| Sl. No. |
Members |
DIN |
Category |
| 1. |
Mr. Shital Kumar Jain (Chairman)* |
00047474 |
Non-Executive & Independent Director |
| 2. |
Mr. Rajnit Rai Jain |
00122942 |
Executive Director |
| 3. |
Mr. Rajasekhar Ramaraj |
00090279 |
Non-Executive & Independent Director |
* Mr. Shital Kumar Jain (DIN 00047474), Non-Executive Independent Director demised on
March 17th, 2023.
The terms of reference of the Committee have been provided in the Governance Report
forming part of this Report. During the financial year, the Committee met Four times as on
April 21st 2022, August 11th, 2022, November 13th, 2022,
and January 31st, 2023.
b. Corporate Social Responsibility Committee
| Sl. No. |
Members |
DIN |
Category |
| 1. |
Mr. Rajnit Rai Jain (Chairman) |
00122942 |
Executive Director |
| 2. |
Mr. Shital Kumar Jain* |
00047474 |
Non-Executive& Independent Director |
| 3. |
Mr. Rajasekar Ramaraj |
00090279 |
Non- Executive & Independent Director |
* Mr. Shital Kumar Jain (DIN 00047474), Non-Executive Independent Director demised on
March 17th, 2023.
Keeping in view, the losses incurred during the year including previous year(s), the
provisions of spending money towards CSR expenditure under section 135 of the Companies
Act, 2013 is not applicable to the company during the period, therefore no meetings were
held during the financial year 2022-23.
d. Executive committee
| Sl. No. |
Members |
DIN |
Category |
| 1. |
Mr. Rajnit Rai Jain (Chairman) |
00122942 |
Executive Director |
| 2. |
Mr. Shital Kumar Jain* |
00047474 |
Non-Executive & Independent Director |
| 3. |
Mr. Rajasekar Ramaraj |
00090279 |
Non-Executive & Independent Director |
| 4. |
Mr. Richard Nicholas Launder |
03375772 |
Non-Executive & Independent Director |
| 5. |
Mr. Lakshmanan Narayan |
01582059 |
Non-Executive & Independent Director |
* Mr. Shital Kumar Jain (DIN 00047474), Non-Executive Independent Director demised on
March 17th, 2023.
During the financial year, the Committee met Four times as on April 21st
2022, August 11th 2022, November 13th 2022, and January 31st,
2023.
9. EMPLOYEE STOCK OPTION SCHEME ESOP Scheme
The Shareholders had approved in the Annual General Meeting dated 12th
August, 2022 the Company's new Employees Stock Option Scheme 2022 effective from 1st
April, 2022 for a further period of 3 years. The Nomination and Remuneration Committee
also designated as ESOP Compensation Committee, is empowered to formulate detailed terms
and conditions of the Company's new ESOP Scheme 2022, administer, and supervise the same.
Further, the Nomination and Remuneration Committee is empowered to determine the eligible
employees of the Subsidiary Companies as well whether existing or future, from time to
time within the validity period of the scheme for the entitlement ESOP Option grant.
Company's Employees Stock Option Scheme 2022 is in compliance with Securities and
Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations,
2021. The disclosure required to be made under Regulation 14 of the said Regulations is
available on the Company's website at
https://www.rssoftware.com/wp-content/uploads/2022/07/Directors-Disclosure ESOP
-Reg.-14-of-SEBI-SBEB-and-Sweat-Equity-Regulations.-2021.pdf
10. TRANSFER OF UNPAID AND UNCLAIMED DIVIDEND AMOUNTS TO IEPF
Pursuant to the provisions of Section 124 of the Act, the dividend amounts which have
remained unpaid or unclaimed for a period of seven years from the date of declaration have
been transferred by the Company to the Investor Education and Protection Fund
("IEPF") established by the Central Government pursuant to Section 125 of the
Act. The details of unpaid / unclaimed dividend that will be transferred to IEPF in
subsequent years are given in the Corporate Governance Report. Further, according to the
IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("the IEPF
Rules"), the shares in respect of which the dividend has not been claimed by the
shareholders for seven consecutive years or more shall also be transferred to the demat
account created by the IEPF Authority. Accordingly, the Company will transfer the
corresponding shares for which the unpaid and unclaimed dividend has been transferred, as
per the requirements of the IEPF Rules. The details of such shares are available on the
website of the Company at https://www.rssoftware.com/wp-content/uploads/2023/06/RSSOFTWARE
COMMON-UNPAID-FOLIOS 2015-16.pdf.
Further, in accordance with guidelines, the Company has appointed Nodal Officer for the
purposes of verification of claims and coordination with Investor Education and Protection
(IEPF) Authority.
11. DISCLOSURE RELATING TO MATERIAL VARIATIONS
As per Regulation 32(1) of SEBI (Listing Obligations and Disclosure Requirements)
Regulation, 2015, there are no such material variances in the Company.
12. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION BETWEEN
THE END OF THE FINANCIAL YEAR AND DATE OF THE REPORT
There are no material changes or commitments affecting the financial position of the
Company, which have occurred between the end of the financial year and the date of this
Report.
13. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS /COURTS /
TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND THE COMPANY'S OPERATIONS IN FUTURE
There are no significant and material orders passed by any Regulators / Courts
/Tribunals, which impacts the going concern status of the Company or will have any bearing
on Company's Operations in future.
14. RISK MANGEMENT POLICY
In terms of the requirement of the Companies Act, 2013 and SEBI (Listing Obligations
and Disclosure Requirements) Regulations 2015, the Company has taken adequate measures to
mitigate various risk encountered. In the opinion of the Board there is no such risk which
may threaten the present existence of the Company. Your Company see a positive impact to
our business as a result of COVID 19 impact. This is because the demand for digital and
contact less payment technologies is expected to be on the increase. However, since all
risks emerging from the impact of COVID 19 are not known, the company will continue to
monitor the same closely.
15. INTERNAL CONTROL SYSTEMS
Your Company has adequate system of internal controls procedures commensurate with its
size and the nature of its business. The company has documented its policies, controls and
procedures, covering all financial and operating functions, designed to provide a
reasonable assurance with regard to reliability of financial reporting, monitoring of
operations, protecting assets from unauthorized use or losses, compliances with
regulations, prevention and detection of fraudulent activities etc.
The internal control systems of the Company are monitored and evaluated by the Internal
Auditors. Your Company manages and monitors the various risks and uncertainties that can
have adverse impact on the Company's business. Your Company is giving major thrust in
developing and strengthening its internal audit so that risk threat can be mitigated.
The Audit Committee of the Board of Directors, comprising of Independent Directors,
regularly reviews the audit plans, significant audit findings, adequacy of internal
controls, compliance with accounting standards as well as reasons for changes in
accounting policies and practices, if any.
The CEO and CFO certification as provided in the Annual Report discusses the adequacy
of the Company's Internal Control System and Audit.
16. DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES
Pursuant to sub-section (3) of Section 129 of the Companies Act, 2013 read with Rule 5
of the Companies (Accounts) Rule, 2014, the statement containing the salient features of
the financial statement and performance of a company's subsidiaries, is given in AOC-I
which forms a part of this Annual Report.
The Consolidated Financial Statements are prepared in line with Section 129(3) of the
Act read with the aforesaid Rules, SEBI (Listing Obligations and Disclosure Requirements)
Regulations 2015 and in accordance with the Indian Accounting Standards ("IND
AS"). Consolidated Financial Statements and other applicable provisions include
financial information of its subsidiary companies.
Further, pursuant to the provisions of Section 136 of the Act, the financial statements
of the Company, consolidated financial statements along with relevant documents and
separate audited financial statements in respect of subsidiaries, are available on the
website of the Company www.rssoftware.com.
During the year, there were no changes in the subsidiary company. Currently the company
has two subsidiaries namely Responsive Solutions, Inc. and Paypermint Private Limited.
Further, the Company has no Joint Venture and Associate during the financial year ended 31st
March, 2023.
17. PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES, ASSOCIATES AND
JOINT VENTURE COMPANIES INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENT
A report on the performance and financial position of each of the Subsidiaries included
in the consolidated financial statements prepared by your company as per Rule 8(1) of the
Companies (Accounts) Rules, 2014, forms part of the audited annual accounts of each of the
subsidiary companies which have been placed on the website of your company
https://www.rssoftware.com/wp-content/ uploads/2022/03/annual report 2020-21 low
compressed compressed.pdf and also forms part of Form AOC-1 pursuant to Rule 5 of the
Companies (Accounts) Rules, 2014, which are set out as an Annexure- A to the Directors'
Report and forms a part of this Annual Report.
18. DEPOSITS
The Company has not accepted any kind of deposit from the public falling within the
ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits)
Rules, 2014.
19. AUDITORS Statutory Auditors
M/s. Chaturvedi & Company (Registration No. 302137E) was appointed as the Auditors
of the Company in place of the retiring Auditors to hold office from the conclusion of the
34th Annual General Meeting for a term of consecutive five years till conclusion of the
39th Annual General Meeting with the approval of shareholders on the Annual General
meeting dated 12th August, 2022.
There were no changes in the statutory auditor during the financial year 2022-23. The
Statutory Auditor M/s Chaturvedi & Company, Chartered Accountants (Registration No.
302137E) has submitted an un-qualified Audit Report for the financial year 2022-23 and no
frauds were detected by the Auditor during the financial year.
20. SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company
has appointed M/s. MR & Associates, a firm of Company Secretaries in Practice to
conduct the said Audit of the Company.
The Secretarial Auditors' Report, in the prescribed format, for the year ended March
31,2023 is annexed to this Directors' Report as Annexure B and forms part of the Annual
Report.
The remarks in the Secretarial Audit Report and clarification thereof for the financial
year ended March 31,2023 are as follows:
"The company did not have requisite number of minimum six directors on the Board
during the period as per Regulation 17(1)
(c) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 after
the demise of Mr. Shital Kumar Jain (DIN 00047474), Non-Executive Independent Director
w.e.f. 17.03.2023. "
The company is actively interviewing a few candidates who can potentially replace he
excellent credentials of late Mr Shital Kumar Jain, and keeping in mind the growth
strategy under execution.
The Report of the Secretarial Audit is annexed herewith as "Annexure B" to
the Directors Report.
The Secretarial Auditor's certificate on the implementation of share-based schemes in
accordance with SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021,
will be made available at the AGM, electronically.
21. COST RECORDS AND AUDIT
Maintenance of cost records and requirement of cost audit as prescribed under the
provisions of Section 148(1) of the Companies Act, 2013 are not applicable for the
business activities carried out by the Company.
22. EXTRACT OF THE ANNUAL RETURN
In accordance with the Companies Act, 2013, the annual return in the prescribed format
can be accessed at https://www. rssoftware. com/investors#.
23. MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report, in terms of Regulation 34 (3) of SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015, have been covered in
the earlier sections of the Annual Report.
24. PARTICULARS OF EMPLOYEES AND MANAGERIAL REMUNERATION
Disclosure pertaining to remuneration and other details as required under Section 197
of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annual Report as
"Annexure C".
The Statement containing particulars of employees as required under section 197(12) of
the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 is available for inspection in terms of
Section 136 of the Act, any member interested may write to the Company Secretary and the
same will be furnished on request.
25. CORPORATE SOCIAL RESPONSIBILITY
The concept of Corporate Social Responsibility has gained prominence from all avenues.
Organizations have realized that Government alone will not be able to get success in its
endeavour to uplift the downtrodden of Society. With the rapidly changing corporate
environment, more functional autonomy, operational freedom etc. our company has adopted
CSR as a strategic tool for sustainable growth. Pursuant to Section 135 of the Companies
Act, 2013 read with Schedule VII and Companies (Corporate Social Responsibility Policy)
Rules, 2014, the Board of Directors of the Company has in place a Corporate Social
Responsibility (CSR) Policy. The CSR policy is uploaded on Company's website i.e., on
https://www. rssoftware.com/investors. However, due to loss in the last three financial
years the company is not required to spend money for CSR activity. Therefore, the Report
on CSR Activities/ Initiatives along with other relevant disclosures is not applicable to
the company since no CSR activity took place during the financial year 2022-2023.
26. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars as prescribed under sub-section (3)(m) of the Section 134 of the
Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, are given which forms
a part of the Annual Report and attached as "Annexure D".
27. DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mrs. Sarita Jain, Director of the company who is liable to retire by rotation and
offers herself for re-appointment, based on the recommendation of Nomination and
Remuneration Committee, subject to the approval of the members at the ensuing Annual
General Meeting.
Your Company has received declaration from each of the Independent Directors under
Section 149(7) of the Companies Act, 2013 and Regulation 25(8) of SEBI Listing
Regulations, 2015 that they meets the criteria of independence laid down in Section 149(6)
of the Companies Act, 2013 and Regulation 16 of SEBI Listing Regulations, 2015 and that
they are not aware of any circumstance or situation, which exist or may be reasonably
anticipated, that could impair or impact his/ her ability to discharge their duties with
an objective independent judgment and without any external influence. All the declarations
were placed before the Board.
In terms of SEBI Listing Regulations, 2015, your Company identified the list of core
skills/expertise/competencies as is required in the context of your Company's Business(es)
and Sector(s) for it to function effectively and those which are available with the Board
and mapped such skills to the Individual Directors of your Company. Details of such
skills/expertise/competencies as identified were reviewed by the Nomination and
Remuneration Committee and the Board of Directors and are furnished in the Corporate
Governance Report and forms part of this Annual Report.
During the year, Mr. Lakshmanan Narayan (DIN:01582059) resigned as an Independent
Non-Executive Director w.e.f. 1st February,2023.
The Board of Directors had, on the recommendation of Nomination and Remuneration
Committee have appointed Mr. Cedarampattu Subramanian Mohan (DIN: 01308472) as an
Additional (Non-Executive Independent) Director w.e.f. 1st February 2023 and
got the approval of the Shareholders vide Postal Ballot dated 26.03.2023 through Special
resolution.
Further Mr. Shital Kumar Jain (DIN 00047474), Non-Executive Independent Director ceased
to be the director of the company w.e.f. 17th March, 2023 due to sudden and
unexpected passing away, will be an irreparable loss to the Company and all the Directors
and Employees of the Company convey heartiest condolences to his family. The Board pays
its tribute and gratitude for the contribution he has made to the Company.
The brief resume / details relating to Director who is proposed to be re-appointed are
furnished in the Notice of the ensuing AGM. The Board of Directors of your Company
recommends his reappointment in the Board.
The following directors/executives of your Company are whole-time Key Managerial
Personnel (KMPs) as on March 31, 2023, in accordance with the provisions of Section 203 of
the Companies Act, 2013
Mr. Rajnit Rai Jain - Chairman & Managing Director
Mr. Vijendra Surana - Chief Financial Officer and Company Secretary.
28. REMUNERATION POLICY
Remuneration policy of the RS Software (India) Ltd comprising members of the Board of
Directors ("Board"), Key Managerial Personnel ("KMP") and the Senior
Management Personnel (SMP or "LT") of the Company.
The objective of the remuneration policy is to enable the Company to attract, motivate,
and retain qualified industry professionals for the Board of Management and other
executive level in order to achieve the Company strategic goals. The remuneration policy
acknowledges the internal and external context as well as the business needs and long-term
strategy. The policy is designed to encourage behaviour that is focused on long-term value
creation, while adopting the highest standards of good corporate governance.
29. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
The particulars of loans, guarantees and investments have been disclosed in the notes
of the Financial Statements for the year ended 31st March 2023 and form a part of this
Annual Report.
30. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All contracts / arrangements / transactions entered by the Company during the financial
year with related parties were in the ordinary course of business and on an arm's length
basis and are in compliance with the applicable provisions of the Companies Act, 2013 and
SEBI Listing Regulations, 2015.
There are no materially significant related party transactions made by the Company with
Promoters, Directors or Key Managerial Personnel etc., which may have potential conflict
with the interest of the Company at large. Hence, no disclosure in Form AOC-2 is required.
All related party transactions are presented to the Audit Committee and the Board for
approval.
The Related Party Transaction Policy has been devised by your company for determining
the materiality of transactions with related parties and dealings with them and the same
is hosted on the website of the Company at https://www.rssoftware.com/wp-content/
uploads/2023/05/Related-Partv-Transaction-Policv.pdf
31. ANNUAL EVALUATION OF BOARD'S PERFORMANCE
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligation and
Disclosure Requirements) Regulations, 2015, an Annual Performance evaluation is to be made
by the Board of its own performance and that of the Committees and individual Directors.
The exercise was carried out covering various aspects of the Boards functioning such as
composition of the Board & committees, qualification, experience & competencies,
performance of specific duties & obligations, governance issues etc. Separate exercise
was carried out to evaluate the performance of Non-Independent Directors.
The performance of Independent Directors has been evaluated based on the guidelines as
provided under Schedule IV of the Act. In terms of SEBI Listing Regulations, 2015, the
company has identified the list of core skills/expertise/competencies as is required in
the context of company's business and sector for it to function effectively and those
which are actually available with the Board.
The evaluation of the Independent Directors was carried out by the entire Board except
by the Director being evaluated. The directors were satisfied with the evaluation results,
which reflected the overall engagement of the Board and its Committees with the Company.
32. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS (IDs)
In terms of Regulation 25(7) of SEBI Listing Regulations, 2015, your Company endeavours
to familiarize the Independent Directors (IDs) about your Company including nature of
industry in which your Company operates business model of your Company, roles, rights and
responsibilities of IDs and any other relevant information.
In addition to the above, the Board of Directors are continuously encouraged to
participate in various external training sessions to ensure that the Board members are
kept up to date. The details are uploaded on the website of the company at https://www.
rssoftware.com/wp-content/uploads/2022/09/Familiarization Programme Directors-21-22.pdf
33. PREVENTION OF INSIDER TRADING
The Company has adopted / re-framed the Code of Practices and Procedures for Fair
Disclosure of Unpublished Price Sensitive Information and Code of Conduct to Regulate,
Monitor and Report Trading by Designated Persons and Immediate Relatives of Designated
Persons In terms of Regulation 8 and 9 of SEBI (Prohibition of Insider Trading)
Regulations, 2015 as amended from time to time (the "Regulations").
The Board is responsible for implementation of the Code.
All Board of Directors and the designated employees have confirmed compliance with the
applicable Code during the financial year.
34. CORPORATE GOVERNANCE
The Corporate Governance which form an integral part of this Report as "Annexure
E", together with the Certificate from the auditors of the Company regarding
compliance with the requirements of Corporate Governance as stipulated in Regulation 34(3)
read with Schedule V of the SEBI Listing Regulations, 2015.
35. POLICY AGAINST SEXUAL AND WORKPLACE HARASSMENT
Your Company is committed to provide and promote safe, healthy, and congenial
atmosphere irrespective of gender, caste, creed or social class of the employees. Your
company has complied with provisions relating to the constitution of Internal Complaints
Committee and has put in place a "Policy on Prevention of Sexual Harassment" as
per The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal)
Act, 2013. There were no cases filed / disposed of under prevention of sexual harassment.
36. DIRECTORS' RESPONSIBILITY STATEMENT
In terms of provisions of Section 134(5) of the Companies Act, 2013, your Board of
Directors confirms that:
(i) In the preparation of the annual accounts for the financial year ended 31st
March 2023, the applicable accounting standards had been followed along with proper
explanation relating to material departures;
(ii) they have 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) They have 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) They have prepared the annual accounts for the financial year ended 31st
March, 2023 on a going concern basis;
(v) They have laid down internal financial controls to be followed by the company and
that such internal financial controls are adequate and were operating effectively;
(vi) They have devised proper systems to ensure compliance with the provisions of all
applicable laws and that such systems were adequate and operating effectively.
37. INSOLVENCY AND BANKRUPTCY CODE, 2016
There were no applications made or any proceeding pending under the Insolvency and
Bankruptcy Code, 2016 during the year.
38. ONE TIME SETTLEMENT
There was no one-time settlement made during the year, therefore the disclosures of the
details of difference between amount of the valuation done at the time of one -time
settlement and the valuation done while taking loan from the Banks or Financial
Institutions is not applicable.
39. COMPLIANCE WITH SECRETARIAL STANDARDS
Your Company has complied with all applicable provisions of the Secretarial Standards
issued by The Institute of Company Secretaries of India (ICSI) on Board Meetings and
General Meetings under section 118(10) of the act.
40. ACKNOWLEDGEMENTS
Your Directors' place on records their deep appreciation of the continued assistance
and co-operation extended to the Company by its customers, investors, bankers, Government
agencies and its dedicated group of employees. Above all, the Board expresses a deep sense
of gratitude to the Members of the Company who have reposed faith in their Board and the
Management.
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