================================================================================
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                            ------------------------
                                   FORM 10-K/A
                                   (Mark One)

|X|  SECOND  AMENDMENT TO ANNUAL  REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 2003

                                       OR

|_|  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE  SECURITIES
     EXCHANGE ACT OF 1934

                         Commission File Number 0-19092
                            ------------------------
                               ROSS SYSTEMS, INC.

Incorporated in Delaware              IRS Employer Identification No. 94-2170198


                        Two Concourse Parkway, Suite 800
                             Atlanta, Georgia 30328
                                 (770) 351-9600
                            ------------------------
           Securities registered pursuant to Section 12(b) of the Act:
                                                       Name of each exchange
Title of each class                                    on which registered
---------------                                        ---------------------
None.................................................         None


           Securities registered pursuant to Section 12(g) of the Act:
        Common Stock, $0.001 par value; Preferred Shares Purchase Rights
                            ------------------------

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes |X| No |_|

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-K/A or any  amendment to
this Form 10-K/A. |_|

     Indicate by check mark whether the registrant is an  accelerated  filer (as
defined in Rule 12b-2 of the Act). Yes |_| No |X|

     The  aggregate  market  value  of the  registrant's  voting  stock  held by
non-affiliates  of the  Registrant,  based  upon the  closing  sale price of the
Common Stock on December 31, 2002 as reported by the NASDAQ National Market, was
approximately  $19,146,780.  Shares of voting  stock  held by each  officer  and
director and by each person who owns 5% or more of the outstanding  Common Stock
have been  excluded in that such  persons may be deemed to be  affiliates.  This
determination of affiliate status is not necessarily a conclusive  determination
for other purposes.

     As of September 2, 2003, the Registrant had outstanding 2,815,825 shares of
Common  Stock,  and  500,000  Series  A  7.5%  convertible   preference  shares,
("convertible preferred stock").

<PAGE>



                       ROSS SYSTEMS, INC AND SUBSIDIARIES
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                                EXPLANATORY NOTE

This amended  annual  report on Form 10-K/A  contains  modifications  to certain
disclosures  in the annual  report on Form 10-K filed on September  24, 2003. In
addition this document  contains  Items 10, 11, 12, 13, and 14 of Part III which
were absent from the annual  report on From 10-K filed on September 24, 2003 and
which were filed by amended annual report on form 10-K/A on October 30, 2003. No
restatements  have been made to the financial  results of the Company for any of
the periods reported in this document.

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                       ROSS SYSTEMS, INC AND SUBSIDIARIES

<TABLE>
<CAPTION>


                               ROSS SYSTEMS, INC.
                          ANNUAL REPORT ON FORM 10-K/A
                            YEAR ENDED JUNE 30, 2003
                                TABLE OF CONTENTS


                                                                                                                  Page No.
                                                                                                                  --------
<S>                                                                                                                   <C>
PART I
Item 1.       Business.......................................................................................         1
Item 2.       Properties.....................................................................................         4
Item 3.       Legal Proceedings..............................................................................         5
Item 4.       Submission of Matters to a Vote of Security Holders............................................         6
PART II
Item 5.       Market for Registrant's Common Equity and Related Stockholder Matters..........................         7
Item 6.       Selected Financial Data........................................................................         8
Item 7.       Management's Discussion and Analysis of Financial Condition and Results of Operations..........         9
Item 7.A.     Quantitative and Qualitative Disclosures about Market Risk.....................................        21
Item 8.       Financial Statements and Supplementary Data....................................................        21
Item 9.       Changes in and Disagreements with Accountants on Accounting and Financial Disclosure...........        21
Item 9A       Controls and Procedures                                                                                21
PART III
Item 10.      Directors and Executive Officers of the Registrant.............................................        22
Item 11.      Executive Compensation.........................................................................        25
Item 12.      Security Ownership of Certain Beneficial Owners and Management.................................        28
Item 13.      Certain Relationships and Related Transactions.................................................        30
Item 14.      Principal Account Fees and Services                                                                    31
PART IV
Item 15.      Exhibits, Financial Statement Schedules, and Reports on Form 8-K...............................        32
SIGNATURES...................................................................................................        33

</TABLE>



This Annual Report on Form 10-K/A including "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in Part I Item 2,
contains forward-looking statements that involve risks and uncertainties, as
well as assumptions that, if they never materialize or prove incorrect, could
cause the results of Ross Systems to differ materially from those expressed or
implied by such forward-looking statements. All statements other than statements
of historical fact are statements that could be deemed forward-looking
statements, including any projections of earnings, revenue, synergies,
accretion, margins or other financial items; any statements regarding the
anticipated completion of the proposed chinadotcom merger transaction described
under "Management's Discussion and Analysis of Financial Condition and Results
of Operations--Risk Factors;" any statements of the plans, strategies and
objectives of management for future operations, including the execution of
integration and restructuring plans; any statement concerning proposed new
products, services, developments or industry rankings; any statements regarding
future economic conditions or performance; any statements of belief; any
statements of anticipations; and any statements of assumptions underlying any of
the foregoing. The risks, uncertainties and assumptions referred to above
include quarterly fluctuations and unpredictability of revenues; various closing
conditions and other uncertainties that might delay or prevent the completion of
the proposed chinadotcom merger transaction; the general economic slowdown and
the risk of an extended slowdown or an increase in its intensity, the
competition that we face; the performance of contracts by customers and
partners; employee management issues; the challenge of managing asset levels;
the difficulty of aligning expense levels with revenue changes; and other risks
that are described herein under "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Risk Factors" beginning on page
19 and that are otherwise described from time to time in Ross Systems' reports
filed with the Securities and Exchange Commission . Ross Systems assumes no
obligation and does not intend to update these forward-looking statements.


<PAGE>


                       ROSS SYSTEMS, INC AND SUBSIDIARIES



                                     PART I


ITEM 1. BUSINESS


General

     The following  description of business is qualified in its entirety by, and
should be read in conjunction  with the more detailed  information and financial
data, including the financial statements and notes thereto,  appearing elsewhere
in this Report.  Unless  otherwise  stated in this  document,  references to (1)
"us," "our," "we" and similar terms,  (2) the "Company" or (3) "Ross" shall mean
Ross Systems, Inc., a Delaware corporation, and its subsidiaries.

     Ross Systems,  Inc. (NASDAQ:  ROSS) delivers  innovative software solutions
that help  manufacturers  worldwide  fulfill their  business  growth  objectives
through increased operational efficiencies, improved profitability, strengthened
customer  relationships and streamlined  regulatory  compliance.  Focused on the
food and  beverage,  life  sciences,  chemicals,  metals  and  natural  products
industries  and  implemented  by over 1,000 customer  companies  worldwide,  our
family of Internet-architected solutions is a comprehensive,  modular suite that
spans a customer's enterprise,  from manufacturing,  financials and supply chain
management  to customer  relationship  management,  performance  management  and
regulatory compliance.


     Publicly  traded on the NASDAQ since 1991,  Ross' global  headquarters  are
based in the U.S. in Atlanta,  Georgia, with sales and support operations around
the world.

     Our internet address is  www.rossinc.com.  We make available free of charge
on or through our  Internet  website our annual  report on Form 10-K,  quarterly
reports  on Form 10-Q,  current  reports on Form 8-K,  and  amendments  to those
reports  filed or furnished  pursuant to Section  13(a) or 15(d) of the Exchange
Act, in each case as soon as reasonably practicable after we electronically file
such material with, or furnish it to, the SEC.


     We license our products to customers  through a direct sales force in North
America  and Western  Europe as well as  independent  distributors  in dozens of
other markets worldwide.  We also provide  professional  consulting services for
implementation,  related custom application  development and education. We offer
ongoing  maintenance  and support  services  for our  products  via Internet and
telephone help desks.

Merger Proposal

     In early September 2003, we announced that we had entered into a definitive
agreement  whereby  chinadotcom  Software  (CDC) will  acquire Ross Systems in a
merger.  Both companies are listed on NASDAQ. We have not yet determined to what
extent the proposed merger will affect our financial  performance.  However,  we
believe  that  CDC's  Asian  operations  offer  greater  opportunities  of doing
business in that region,  while at the same time our operations in North America
and Europe offer many new  opportunities  to CDC in our markets.  Pursuant to an
agreement entered into in May 2003, chinadotcom is a licensed master distributor
of our products in Greater  China.  Both  chinadotcom  and Ross believe that the
merger represents a unique  opportunity to rapidly scale the introduction of our
manufacturing  products  into Greater  China and that the merger would assist in
the realization of this strategic vision by transforming a limited  distribution
partnership  into  an  integrated  group  with  common  objectives.  It is  also
anticipated  that  chinadotcom  will  work  with us in  selecting  and  pursuing
business  combinations  with strategic  software and services  companies and, in
connection with those opportunities,  provide necessary access to capital. We do
not have any  agreements in place with  chinadotcom  concerning the selection of
these strategic  software and services  companies or the terms and conditions of
any loans or grants from chinadotcom to us, and potential business  combinations
have only been  preliminarily  identified.  We anticipate  that  preparation  of
specific  plans for  capitalizing  on and creating  opportunities  as a combined
organization  will be  commenced  as soon as  practicable  after  the  merger is
completed.  The  proposed  merger  will be voted on by our  stockholders  at our
forthcoming Annual Meeting.

                                       1
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                       ROSS SYSTEMS, INC AND SUBSIDIARIES


Products

     Ross offers the award-winning iRenaissance(TM) family of software solutions
which  is  an  integrated  suite  of  enterprise  resource  planning  (ERP  II),
financials, materials management,  manufacturing and distribution,  supply chain
management  (SCM),  advanced  planning  and  scheduling,  customer  relationship
management  (CRM),  electronic  commerce,  business  intelligence  and analytics
applications.

     iRenaissance  applications are known for their deep and rich functional fit
to process industry  requirements,  as well as their short  implementation times
and cost-effective returns on investment.


Technology


     The  Company  leverages   contemporary   Internet  technologies  to  enable
significant benefits for its customers.  Many Ross customers have benefited from
technology  obsolescence  protection  as they have moved  from  older  computing
platforms to current  platforms by upgrading to new releases.  Built on a highly
flexible technology platform, iRenaissance applications cost-effectively support
not only  mid-size  companies but scale  effectively  to support  large,  global
organizations  in a  wide  range  of  languages  and  with  thousands  of  users
processing  hundreds of thousands of  transactions  daily.  Ross  customers also
benefit from the low cost of deployment and centralized  maintenance afforded by
browser-based  PC clients that provide  secure  access from any PC with Internet
access,  to the system  infrastructure  at central  locations where the software
resides and the data is  managed.  End-user  satisfaction  is enhanced by highly
configurable  and  easily  personalized   applications  that  provide  follow-me
profiles for each user, regardless of physical location.  Utilizing contemporary
standards   such  as  XML,  SOAP,   Microsoft  .NET  and  others,   iRenaissance
applications can be effectively  connected to any other  applications or devices
via the Internet.  Robust  security  features that leverage  Internet  standards
protect  applications  and data with both  user-based and  application  function
profiles.  The security  facilities  further enable companies in their effort to
achieve  regulatory  compliance  by  providing  detailed  audit trails for every
action taken by every user.

     Because the Company's  iRenaissance  applications  were  developed with the
GEMBASE  fourth  generation  language  , the  Company  believes  they are easily
modified and  expanded.  GEMBASE is a  programming  environment  that delivers a
central  data  dictionary,  complete  screen  painting,  editing  and  debugging
capabilities,  and links to most popular database  management  systems.  GEMBASE
itself is written in the C programming language to facilitate portability across
multiple  hardware  and  database  management  system  platforms.   Because  the
iRenaissance products were developed in GEMBASE, customers often find it easy to
customize their own applications.



Ongoing Development


     To meet the increasingly  sophisticated  needs of its customers and broaden
its product  offering for targeted  vertical  markets,  the Company  continually
strives to enhance its existing product  functionality.  The Company surveys the
needs of its customers through on-line,  industry-specific discussion forums and
polling  at  its  global  user  conferences,  and  incorporates  many  of  their
recommendations into its products.  The Company also conducts a variety of forms
of  market  research  with  industry   analyst  groups  and  targeted   industry
associations to determine  strategies for new features and entirely new products
for  targeted  vertical  industries.  As an  example,  iRenaissance  version 5.7
included new capabilities for streamlining the compliance and validation process
for   companies   regulated  by  the  US  FDA  (United   States  Food  and  Drug
Administration).  In fiscal 2002,  the Company  expanded  its product  suite for
targeted  industries and introduced  iRenaissance SCM (Supply Chain  Management)
and iRenaissance CRM (Customer Relationship Management).


     While  maintaining  focus on the requirements of targeted vertical markets,
the Company is expanding its  potential  geographic  markets by  developing  new
product  functionality to address the needs of additional  prospective customers
in key international  markets. These enhancements are related to local languages
and  dialects,  currency,  accounting  custom  and  procedures,  and  regulatory
requirements.  As an  example,  through  the  partnership  established  with CDC
Software  Corporation  during the fourth  quarter of fiscal 2003, the Company is
well advanced with its  preparations  for releasing  additional  local  language
versions of its software for the Chinese markets.  These enhancements enable the
Company to leverage its  iRenaissance  ERP products to capitalize on the growing
and largely untapped process manufacturing markets in China.

                                       2
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                       ROSS SYSTEMS, INC AND SUBSIDIARIES



     The  Company  is  also  committed  to  achieving   technology  advances  by
leveraging  new  Internet-based  capabilities  enabled by XML and Web  Services.
During  the 3rd  quarter of fiscal  2003,  the  Company  released  the  Internet
Application  Framework (TM) which enables the  iRenaissance  ERP foundation with
full  Internet  deployment   capabilities.   Through  the  Internet  Application
Framework,   application   users  have  full  access  to  the  iRenaissance  ERP
applications  from any computer  with an Internet  connection  and the Microsoft
Internet  Explorer  browser.  Because no iRenaissance  ERP application  software
needs to be deployed or maintained on user workstations, the Company's customers
have  reported  significant  savings  resulting  from  the  use of the  Internet
Application Framework.


Third-Party Products

     The Company resells software  products  licensed from third parties,  which
are complementary to its product including  applications for custom reporting of
information  maintained by the Company's  programs such as Business  Objects for
executive information, and FRx for financial reporting and budgeting, as well as
certain  middle-ware  products.  The Company  resells  other  privately  labeled
software  products  licensed  from third  parties  including  Prescient  Systems
(rebranded as iRenaissance SCM) and Selligent  (rebranded as iRenaissance  CRM).
Additionally,  the Company has entered into agreements which enable it to resell
database  products  and  other  products  that are  sublicensed  to end users in
conjunction  with  certain  of the  Company's  open  systems  products.  License
revenues from the products described in this paragraph constitute  approximately
26% of total software product license revenues in fiscal 2003.


Services

     Our worldwide  consulting  services  operation  complements  our enterprise
software  and  internet  application  offerings.  We  provide  a broad  range of
services to install and optimize each software product. These services fall into
two broad  categories:  Professional  Services and Client  Support.  Income from
these  activities  consist of services and  maintenance  revenues which comprise
approximately 28% and 41% of total revenues respectively.


Professional Services

     Our  Professional   Services  organization  provides  business  application
services with deep, rich, industry-specific experience,  technical expertise
and product  knowledge to  complement  our products and to provide  solutions to
meet  clients'  business  requirements.  The major  types of  services  provided
include the following:

     Application  Consulting involves in-depth analysis of the client's specific
needs and the preparation of detailed plans that list  step-by-step  actions and
procedures  necessary to achieve a timely and successful  implementation  of our
software  products.  These services are generally  offered on a time and expense
reimbursement basis.

     Technical Consulting involves evaluating and managing the client's needs by
supplying custom application systems, custom interfaces,  data conversions,  and
system  conversions.  Consultants  participate  in a wide  range of  activities,
including  requirements  definition,   and  software  design,   development  and
implementation.   We  also  provide  advanced  technology  services  focused  on
networking,  database  administration  and tuning.  These services are generally
offered  on a time and  expense  reimbursement  basis.  We also  provide  remote
systems management,  and remote applications  management,  either as transititon
support or in some cases as a permanent outsourced service.

     Education   Services  are  offered  to  clients  either  at  our  education
facilities  or at the  client's  location,  as  either  standard  or  customized
classes.

     Established relationships with third party consulting partners are utilized
around the world, to take advantage of local and specialized  industry expertise
and to support our implementation demands in certain markets.

Client Support

     Our Client Support functions include web-based support,  telephone support,
technical  publications  and product  support  guides,  which are provided under
maintenance  agreements.  The  annual  maintenance  fee for  these  services  is
generally 20% of the price for the licensed software.  The standard  maintenance
agreement  also  entitles  clients to certain new product  releases  and product
enhancements.

                                       3
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                       ROSS SYSTEMS, INC AND SUBSIDIARIES



Marketing and Sales

     We sell our products and  services in the US and Western  Europe  primarily
through our direct sales force.  At June 30, 2003, we had 44 sales and marketing
employees.  In other areas of the world, we sell our products through  servicing
distributors.  In  support  of our sales  force  and  distributors,  we  conduct
comprehensive  marketing programs which include telemarketing,  direct mailings,
advertising,  promotional material,  seminars, trade shows, public relations and
on-going customer communication.

     We are based in  Atlanta,  Georgia,  with a  regional  direct  sales  force
covering  all major US  business  locations.  We have  subsidiaries  in Antwerp,
Belgium; Ottawa, Canada; Berlin, Germany;  Utrecht, the Netherlands;  Barcelona,
Spain; Northampton, United Kingdom as well as Hong Kong and Singapore.

     We have business  arrangements  with  distributors  as well as language and
localized  support in the following  countries:  Argentina,  Australia,  Brazil,
Chile, China, Colombia, Czech Republic,  Denmark, Finland, Germany, Greece, Hong
Kong, Hungary,  Indonesia,  Ireland,  Italy, Japan, Jordan,  Lebanon,  Malaysia,
Mexico, Morocco, New Zealand, Norway, Pakistan, Peru, Poland, Portugal, Rumania,
Russia, Saudi Arabia,  Singapore,  Slovak Republic,  Sweden,  Taiwan,  Thailand,
Uruguay and Venezuela.  These  distributors pay us royalties on the sales of our
products and maintenance services.

     International   revenues   (from  foreign   operations  and  export  sales)
represented  approximately  40%,  45%,  and 33%, of our revenues in fiscal 2003,
2002, and 2001, respectively. International revenues include export sales to the
Asian region.  However,  Asian  revenues are included as part of North  American
revenues in the "Segment  Information"  in Notes to the  Consolidated  Financial
Statements.  We intend to  broaden  our  presence  in  international  markets by
entering into additional distribution agreements.


Product Development and Acquisitions

     To meet the increasingly  sophisticated  needs of our customers and address
potential new markets,  we  continually  strive to enhance our existing  product
functionality. We survey the needs of our customers annually through ballots and
direct  discussions at our annual user conferences,  and  incorporate  many of
their  recommendations into our products.  We also conduct a variety of forms of
market  research  with  industry  analyst  groups  and  targeted  industries  to
determine  strategies  for new  features  and  functions.  We are  committed  to
achieving  advances in the use of computer  systems  technology and to expanding
the breadth of our product line. Development activity during fiscal 2003 covered
a wide range of evolving  functionality  enhancements to present releases of our
products.  Projects in progress  being carried into fiscal 2004 include  several
functionality  enhancements  important  to a broad  base of our  customers,  and
ongoing improvements to the integration aspects of the third party applications,
which have been incorporated into our product suite.


Competition

     The business  applications  software  market is intensely  competitive.  We
compete with a broad range of applications  software companies.  Our competitors
include general business application  software providers,  such as peoplesoft,
Oracle  Corporation,  and SAP AG;  as well  as  business  applications  software
providers in specific vertical markets that offer products that compete with our
process manufacturing  products. The principal competitive factors in the market
for  business   application   software  include  product   reputation,   product
functionality, performance, quality of customer support, size of installed base,
financial  stability,  hardware and software  platforms  supported,  price,  and
timeliness of installation.  We believe that we compete effectively with respect
to these factors.


Proprietary Rights and Licenses

     We  provide  our  products  to  end  users  generally  under  nonexclusive,
nontransferable  licenses,  which  generally  have  perpetual  terms.  Under the
general terms and conditions of our standard  license  agreements,  the licensed
software may be used solely for internal  operations on designated  computers at
specific  sites.  We make source  code  available  for  certain  portions of our
products.

     We have registered  "iRENAISSANCE",  "RENAISSANCE",  "RENAISSANCE  CS", and
"ROSS  SYSTEMS"  as  trademarks  in the United  States.  We have  applied  for a
provisional   patent  with  respect  to  systems  and  associated   methods  for
determining  availability  and  pricing of goods  based on  attributes.  We have

                                       4

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                       ROSS SYSTEMS, INC AND SUBSIDIARIES


secured  registration of copyrights in the United States for 17 of our products.
Although we take steps to protect our  intellectual  property,  misappropriation
may  nevertheless  occur and  copyright and trade secret  protection  may not be
available in certain countries.

     Except as noted above, we rely on a combination of trade secret,  copyright
and trademark laws, and license  agreements to protect our proprietary rights in
our products.


Employees

     As of June 30,  2003,  we  employed  a total of 255  full  time  employees,
including  44  in  sales  and  marketing,  48 in  product  development,  132  in
professional services and client support, and 31 in finance,  administration and
operations.  Our employees are not represented by a labor union,  and we believe
that our employee relations are good.



ITEM 2. PROPERTIES

     Our corporate  headquarters,  research and development,  sales,  marketing,
consulting  and support  facilities  are located in Atlanta,  Georgia,  where we
occupy approximately 22,000 square feet. We also maintain a facility for product
development in San Marcos, California, which occupies 1,470 square feet.

     International   offices  are  maintained  in  Belgium  (Antwerp);   England
(Northampton); Germany (Berlin); Netherlands (Utrecht); and Spain (Barcelona).

     At June 30,  2003,  all  facilities  are leased with  periods  remaining to
renewal  varying from nine months to twelve years. We believe our facilities are
adequate for our current needs and that we can obtain suitable  additional space
as required.


ITEM 3. LEGAL PROCEEDINGS


     In the ordinary  course of business,  we may become  involved in litigation
and  administrative  proceedings.  Such  matters can be  time-consuming,  divert
management's  attention and resources and cause the  accumulation of significant
expenses.  Furthermore,  there can be no  assurance  that the  results of any of
these actions will not have a material  adverse effect on our business,  results
of operations or financial condition.


     a) On  June  30,  1998,  we  entered  into a  North  American  distribution
agreement  with  an  existing  Dutch  system  integrator  which  entitled  us to
distribute a certain  project  accounting  product the integrator had developed.
The agreement  contained  certain minimum annual payments which would become due
to the  distributor if we did not achieve  certain  minimum annual sales quotas.
The agreement also required that we use the distributor's  personnel for certain
implementation and maintenance activities.

     Over  the  next  few  years,  the  distributor,  in  our  view,  failed  to
consistently  successfully  implement the project accounting product at multiple
sites.  These  failures  cost us between  $300,000  and  $400,000 in legal fees,
uncollectible  accounts  receivable and settlement  costs.  In February 2001, we
cancelled the agreement with the distributor.

     The parties were not able to reach mutual agreement  regarding the terms of
a  settlement,  and  the  distributor  invoked  the  arbitration  clause  of the
agreement in late 2001. The arbitration was commenced  before the  International
Court of Arbitration in Paris,  France, with the distributor  ultimately seeking
multiple damages  aggregating  more than  $4,000,000.  On November 17, 2003, the
Arbitrator  announced  an award in favor  of the  distributor  of  approximately
$2,000,000. We paid the award during the quarter ended December 31, 2003, out of
operating cash flows in the ordinary course of business.

     b) Effective  February 28, 2001, the Company  completed the sale of certain
assets related to its Human Resource and Payroll  product line to Now Solutions,

                                       5

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                       ROSS SYSTEMS, INC AND SUBSIDIARIES


LLC,  (NOW),  a  majority  owned   subsidiary  of  Vertical   Computer   Systems
Inc.(Vertical).   Arglen  Acquisitions   (Arglen),  was  also  a  party  to  the
transaction and was a holding  company used by NOW to complete the  transaction.
The gross asset sale price was  $6,100,000.  The purchase price included cash of
$5,100,000 and a note payable by NOW to Ross of $1,000,000.

     The note was non-interest bearing and was due in two installments; $250,000
due on February 28, 2002 and $750,000 due on February 28, 2003. NOW defaulted on
the second  installment  of $750,000 which remains  outstanding  and is accruing
interest at the rate of 10%, the default interest rate as defined in the note.

     On February 27, 2003,  the day before the final note  installment  was due,
Vertical  filed a  derivative  suit on behalf  of NOW  against  Ross and  others
alleging breach of contract,  fraud, conspiracy and breach of fiduciary duty. In
summary the suit alleged that Ross failed to schedule  approximately  $3,600,000
of liabilities  related to maintenance  agreements assumed by NOW. The suit also
alleged  that Ross  failed to  disclose to NOW a  transaction  brokerage  fee of
$600,000 that Ross was to pay to Arglen,  whose CEO signed the fee agreement and
who was also the CEO of NOW.  The suit also  alleges that Ross should be jointly
and severally liable for certain alleged frauds committed by other defendants in
which Ross allegedly conspired. The suit further called for a setoff against the
remaining note payment based on the above alleged  damages,  and the recovery of
its attorneys'  fees and costs.  Ross denied and contested each and every one of
Vertical's claims, and filed a motion for the Court to dismiss.

     On November  18, 2003,  the Supreme  Court of the State of New York granted
Ross's motion to dismiss  Vertical's  action as against Ross based on Vertical's
failure to state claims,  thereby  dismissing  all of Vertical's  claims against
Ross.  Vertical has filed a Notice of Appeal.  Ross will continue to defend this
matter vigorously.

     In summary the suit  alleged  that Ross  failed to  schedule  approximately
$3,600,000 of liabilities related to maintenance  agreements assumed by NOW. The
suit also  alleged that Ross failed to disclose to NOW a  transaction  brokerage
fee of  $600,000  that  Ross was to pay to  Arglen,  whose  CEO  signed  the fee
agreement  and who was also the CEO of NOW.  The suit  also  alleges  that  Ross
should be jointly and severally  liable for certain alleged frauds  committed by
other defendants in which Ross allegedly conspired.  The suit further called for
a setoff against the remaining note payment based on the above alleged  damages,
and the recovery of its  attorneys'  fees and costs.  Ross denied and  contested
each and  every one of  Vertical's  claims  and filed a motion  for the Court to
dismiss.



ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     Not applicable

                                     PART II


ITEM 5.  MARKET  FOR THE  REGISTRANT'S  COMMON  EQUITY AND  RELATED  SHAREHOLDER
MATTERS

     The following table sets forth the range of high and low bid prices for our
Common  Stock on the NASDAQ  National  Market for each of the quarters of fiscal
2003 and 2002. Our Common Stock trades under the NASDAQ symbol "ROSS."

Fiscal 2003                                               High       Low
----------                                                ----       ----

First quarter (ended September 30, 2002)................ $ 8.35     $ 6.05
Second quarter (ended December 31, 2002) ............... $ 9.90     $ 4.51
Third quarter (ended March 31, 2003).................... $14.95     $ 8.00
Fourth quarter (ended June 30, 2003).................... $15.49     $11.10

Fiscal 2002                                               High       Low
----------                                                ----       ----

First quarter (ended September 30, 2001)................ $ 4.08     $2.94
Second quarter (ended December 31, 2001)................ $ 6.31     $2.38
Third quarter (ended March 31, 2002).................... $11.56     $5.82
Fourth quarter (ended June 30, 2002).................... $11.65     $7.80


     We have never  declared or paid cash  dividends on Common Stock,  and we do
not plan to declare or pay dividends in the future. We intend to use earnings to
finance the expansion of our business. In addition, our line of credit agreement
with Silicon Valley Bank dated September 24, 2002,  contains  certain  covenants
which  affect  our  ability  to pay cash  dividends.  This does not  affect  the
dividends payable on the Convertible Preferred Stock.

     As  of  September  2,  2003,  the  approximate   number  of  Common  Stock,
stockholders of record was 469.

     On January 13, 2003 we issued 120,000  unregistered  common shares to Oscar
Pierre Prats,  pursuant to the  acquisition  of Ross Systems  Iberica,  a former
distributor.  The shares  were issued at $9,  which was the market  price of the

                                       6
<PAGE>

                       ROSS SYSTEMS, INC AND SUBSIDIARIES


Company's  stock on that day. As of the same date,  the shares were  repurchased
into  treasury  stock.  The shares were issued in a private  placement  and were
therefore exempt from registration  under the Securities Act. See note 2 on page
F-14 in the Notes to Consolidated Financial Statements

     On June 29, 2001, we issued  mandatorily  convertible  preferred stock to a
qualified investor in a private placement transaction.  In summary, the investor
purchased  500,000  preferred shares at $4.00 per share yielding  $2,000,000 for
Ross. This price represented a premium to the market for our common stock at the
time of issuance.  The  preferred  shares  cannot be converted for two years but
must be  converted  within  five years  from the issue  date.  The  shares  earn
dividends  at the rate of 7.5%.  At September  3, 2003,  none of the  preference
shares had been converted to common stock. The shares are  convertible,  one for
one, at a price of $4.00 per share.

                                       7

<PAGE>

                       ROSS SYSTEMS, INC AND SUBSIDIARIES


ITEM 6. SELECTED FINANCIAL DATA


     The selected consolidated  financial data set forth below should be read in
conjunction with  "Management's  Discussion and Analysis of Financial  Condition
and  Results of  Operations,"  the  Consolidated  Financial  Statements  of Ross
Systems, and Notes thereto,  and other financial  information included elsewhere
in this Annual  Report on Form 10-K/A.  Historical  results are not  necessarily
indicative of results that may be expected in future periods.

<TABLE>
<CAPTION>

                                                        CONSOLIDATED FINANCIAL DATA
                                                 (In thousands, except earnings per share)

                                                        Fiscal Year Ended June 30,
                                              ------------------------------------------------------
                                               2003        2002       2001       2000        1999
                                              --------   --------   --------   ---------   ---------

<S>                                           <C>        <C>        <C>        <C>         <C>
Statements of Operations Data:
Total revenues (1)(2)......................   $ 48,100   $ 46,053   $ 50,805   $  83,399   $ 106,024
Operating earnings (loss) (3)(4)...........   $  4,791   $ (8,667)  $ (2,024)  $  (8,143)  $  (3,936)
Net earnings (loss)........................   $  4,206   $ (9,424)  $   (842)  $  (9,662)  $  (5,626)
Net earnings (loss) available to common
   stockholders                               $  4,056   $ (9,574)  $   (842)  $  (9,662)  $  (5,626)
Diluted net earnings (loss) per share......   $   1.28   $  (3.65)  $  (0.33)  $   (4.15)  $   (2.53)
Shares used in computing diluted net
   earnings (loss) per share...............      3,296      2,625      2,566       2,330       2,223
Balance Sheet Data:
Working capital (deficit)..................   $   (943)  $ (4,536)  $ (9,640)  $ (15,340)  $  (3,745)
Total assets...............................   $ 40,211   $ 37,618   $ 50,462   $  64,295   $  83,185
Long-term debt, less current portion.......         --         --         --   $   2,627       3,705
Preferred stock, no par value 5,000,000
   shares authorized;
500,000 shares issued and outstanding .....   $  2,000   $  2,000   $  2,000       -           -
Total shareholders' equity.................   $ 17,029   $ 13,943   $ 23,104    $ 20,890   $  29,257

</TABLE>

(1)  Revenues  and  operating  costs  have  been  increased  in all years by the
     reclassification  of Reimbursable  Expenses to comply with EITF 01-14.  See
     notes to the Consolidated Financial Statements on page F-10.

(2)  Results shown for fiscal years 2000 and 1999 include revenues and operating
     costs relating to activities derived from the HR/Payroll product line which
     was sold in  February  of 2000.  Results  for  these two  fiscal  years are
     therefore  not  directly  comparable  with the results of fiscal years 2001
     through 2003. See commentary on this in "Results of Operations" on page 10.


(3)  In  accordance  with the  adoption  on SFAS No.  142,  the  Company  ceased
     amortization  of  Goodwill  beginning  July  1,  2001.  See  notes  to  the
     Consolidated Financial Statements on page F-10.


(4)  In  accordance  with SFAS No. 86, the  Company  recorded an  impairment  of
     Capitalized  Software  Costs during the year ended June 30, 2002. See notes
     to the Consolidated Financial Statements on page F-13.

                                       8
<PAGE>


                       ROSS SYSTEMS, INC AND SUBSIDIARIES





     ITEM 7.  MANAGEMENT'S  DISCUSSION  AND ANALYSIS OF FINANCIAL  CONDITION AND
                              RESULTS OF OPERATIONS

Basis of Presentation

     Our consolidated  financial statements include the accounts of Ross and our
wholly  owned   subsidiaries.   All  significant   inter-company   balances  and
transactions have been eliminated in consolidation. Our fiscal year ends on June
30.  "Fiscal 2001," "fiscal 2002," and "fiscal 2003" mean our fiscal years ended
June 30 of each such year.



Critical Accounting Policies

     Revenue  Recognition.  We  recognize  revenues  from  licenses  of computer
software  "up-front"  provided that a non-cancelable  license agreement has been
signed, the software and related  documentation have been shipped,  there are no
material  uncertainties   regarding  customer  acceptance,   collection  of  the
resulting  receivable  is  deemed  probable,  and no  significant  other  vendor
obligations exist. The revenue associated with any license agreements containing
cancellation or refund provisions is deferred until such provisions lapse. Where
we have future obligations, if such obligations are insignificant, related costs
are accrued  immediately.  If the  obligations  are  significant,  the  software
product  license  revenues are  deferred.  Future  contractual  obligations  can
include software  customization,  requirements to provide additional products in
the future  and  porting  products  to new  platforms.  Contracts  that  require
significant    software    customization    are    accounted    for    on    the
percentage-of-completion  basis. Revenues related to significant  obligations to
provide future products or to port existing  products are deferred until the new
products or ports are completed.

     Our revenue  recognition  policies  are  designed  to comply with  American
Institute of Certified  Public  Accountants  Statement of Position ("SOP") 97-2,
"Software Revenue  Recognition," and with SEC Staff Accounting Bulletin No. 101,
"Revenue  Recognition  in  Financial   Statements."   Revenues  recognized  from
multiple-element software license contracts are allocated to each element of the
contracts  based  on the fair  values  of the  elements,  such as  licenses  for
software products,  maintenance,  or professional services. The determination of
fair value is based on objective  evidence which is specific to the Company.  We
limit our assessment of objective  evidence for each element to either the price
charged when the same element is sold  separately,  or the price  established by
management  having the relevant  authority to do so, for an element not yet sold
separately.  If evidence of fair value of all  undelivered  elements  exists but
evidence  does not exist for one or more  delivered  elements,  then  revenue is
recognized using the residual method.  Under the residual method, the fair value
of the  undelivered  elements  is  deferred  and the  remaining  portion  of the
arrangement fee is recognized as revenue.


     We utilize distributors primarily in those geographic areas where we do not
maintain a physical presence.  Our revenue recognition  policies with respect to
sales by  distributors  comply with SOP 97-2 and SAB 101 in that all the revenue
recognition criteria listed above are met. In addition, distributors do not have
rights of return,  price  protections,  rotation rights,  or other features that
would preclude  revenue  recognition.  Generally,  the value of software license
sales to  distributors  is based on list selling prices to their customer less a
discount  at  a  predetermined   rate.   Similarly,   we  receive  revenue  from
distributors based on a predetermined  percentage of the maintenance fees billed
by the distributor to the end customer.  The distributor  typically  retains any
fees earned by them for implementation services. Distributorships may or may not
be geographically exclusive, and are generally subject to annual renewals by the
Company.


     Service  revenues  generated  from  professional  consulting  and  training
services are  recognized as the services are  performed.  Maintenance  revenues,
including revenues bundled with original software product license revenues,  are
deferred and recognized over the related contract period, generally 12 months.

     Accounts receivable comprise trade receivables that are credit based and do
not  require  collateral.  Generally,  our credit  terms are 30 days but in some
instances  we offer  extended  payment  terms to customers  purchasing  software
licenses. We have a history of offering extended payment terms from time to time
for  competitive  reasons.  These terms are not offered in  connection  with any
contingencies  related  to  product  acceptance,  implementation,  or any  other
service or contingency post-transaction,  and we have not offered concessions as
a result of these terms. Payment  arrangements in these circumstances  typically
require payment of a significant  portion of the total contract amount within 30
days of the sale,  with 2 or 3  subsequent  installments  making up the  balance
payable within 6 months. We have not found collectibility to be compromised as a
result of these terms.  In no case have payment terms extended beyond 12 months.
Based on historical results, we believe that all components of SOP 97-2 are met,
including that the arrangement is fixed and determinable.




                                       9
<PAGE>



                       ROSS SYSTEMS, INC AND SUBSIDIARIES

     We maintain  an  allowance  for  doubtful  accounts  for  estimated  losses
resulting from the inability of our customers to make required  payments.  On an
ongoing basis, we evaluate the collectibility of accounts  receivable based upon
historical   collections  and  assessment  of  the  collectibility  of  specific
accounts. We specifically review the collectibility of accounts with outstanding
accounts receivable  balances in excess of 90 days outstanding.  We evaluate the
collectibility  of specific  accounts using a combination of factors,  including
the age of the  outstanding  balance(s),  evaluation of the account's  financial
condition,  recent payment history,  and discussions with our account  executive
responsible for the specific customer and with the customer directly. Based upon
this evaluation of the  collectibility  of accounts  receivable,  an increase or
decrease  required in the  allowance  for doubtful  accounts is reflected in the
period in which the evaluation  indicates that a change is necessary.  If actual
results differ, this could have an impact on our financial condition, results of
operation and cash flows.

     Computer   Software  Costs.  We  capitalize   computer   software   product
development   costs   incurred  in  developing  a  product  once   technological
feasibility has been  established and until the product is available for general
release to customers.  Technological  feasibility is established  when we either
(1) complete a detail program design that encompasses product function,  feature
and technical requirements and is ready for coding and confirms that the product
design is complete,  that the necessary skills, hardware and software technology
are  available  to produce  the  product,  that the  completeness  of the detail
program design is consistent  with the product design by documenting and tracing
the detail  program  design to the product  specifications,  and that the detail
program  design  has been  reviewed  for  high-risk  development  issues and any
related  uncertainties  have been  resolved  through  coding and  testing or (2)
complete a product  design and working  model of the software  product,  and the
completeness  of the working model and its  consistency  with the product design
have been confirmed by testing.

     Capitalized  software  development  costs  generally  relate to development
projects spanning several months. Resources are committed to these projects on a
consistent and long-term basis resulting in a generally consistent impact on the
financial results.  We evaluate the extent to which the capitalized  amounts are
realizable  based on  expected  revenues  from the  product  over the  remaining
product life.  Where future revenue  streams are not expected to cover remaining
amounts to be amortized,  we either accelerate amortization or expense remaining
capitalized amounts.

     Amortization  of such costs is  computed as the greater of (1) the ratio of
current  revenues to expected  revenues from the related  product sales or (2) a
straight-line  basis over the  expected  economic  life of the  product  (not to
exceed five years).  Software  costs related to the  development of new products
incurred  prior to  establishing  technological  feasibility  or  after  general
release are expensed as incurred.

     Reserves and Estimates.  In the ordinary  conduct of our business,  we must
often use judgment and estimates  regarding  the recording of certain  reserves.
For example,  we use  judgment in order to determine  the amount of our reserves
for  uncollectible  accounts  receivable.  Should  our  estimates  prove  to  be
incorrect, our reserves may be inadequate.


Foreign Currencies

     The  financial  position  and the  results  of  operations  of our  foreign
subsidiaries are measured using local  currencies as the functional  currencies.
Assets and liabilities of these  subsidiaries  are translated into US dollars at
the exchange rate in effect at year end. Income and expense items are translated
at average  exchange rates for the year. The resulting  translation  adjustments
are recorded in the foreign currency translation adjustment account. The effects
of changes in foreign  currency  exchange  rates have had minimal  effect on our
financial results reported herein.

Results of Operations

Fiscal Years Ended June 30, 2003, 2002, and 2001

     The following table sets forth certain items reflected in our  consolidated
statements  of  operations  as a  percentage  of total  revenues for the periods
indicated, and a comparison of such statements is shown as a percentage increase
or decrease from the prior year's results:

                                       10

<PAGE>

<TABLE>
<CAPTION>


                       ROSS SYSTEMS, INC AND SUBSIDIARIES




                                                          Percentage of Revenue
                                                            Fiscal Year Ended              Percentage
                                                                 June 30,              Increase(Decrease)
                                                         ------------------------      ----------------------
                                                          2003      2002      2001     2003/2002    2002/2001
                                                         ------    ------    ------    ---------    ---------

<S>                                                        <C>       <C>       <C>        <C>          <C>
Revenues:
Software product licenses.............................     30%       28%       19%        12%          35%
Consulting and other services.........................     28        28        32          4          (21)
Maintenance...........................................     42        44        49          0          (19)
                                                         ------    ------    ------    ---------    ---------
        Total revenues................................    100%      100%      100%         4%          (9)%
                                                          =====    ======    ======    =========    =========
Operating expenses:
Costs of software product licenses....................      5%        4%        2%        23%          91%
Costs of consulting, maintenance and other services...     36        37        35          1           (3)
Non-cash charge for impairment of capitalized
   software costs ....................................     --        24         -       (100)         100
Software product license sales and marketing..........     23        20        30         20          (37)
Product development...................................     15        22        23        (29)         (11)
General and administrative............................      9        10         9         --           (7)
Provision for uncollectible accounts..................      2         3         3        (42)          (5)
Amortization of goodwill..............................     --        --         1         --         (100)
Non-recurring (benefit) costs.........................     --        (1)        2       (100)        (182)

                                                         ------    ------    ------    ---------    ---------
        Total operating expenses......................     90       119       104        (21)           4
                                                         ------    ------    ------    ---------    ---------
        Operating profit (loss) ......................     10       (19)       (4)        --         (228)
Other expense, net....................................     --        (1)       (2)       (71)         (47)
Gain on sale of product line..........................     --         -         5         --           --
                                                         ------    ------    ------    ---------    ---------
        Profit (loss) before income taxes.............     10       (21)       (2)        --       (1,019)
Income tax benefit (expense)..........................     (1)        -         -        207        1,367
                                                         ------    ------    ------    ---------    ---------

        Net profit (loss).............................      9%      (21)%      (2)%       --        1,037%
                                                          =====    ======    ======    =========    =========
</TABLE>





     Revenues.  Revenues were affected by the sale of the Human Resource product
line in February 2001. Fiscal 2001 therefore  reflects a mix of full and partial
years of product line  activity.  For comparison  purposes,  revenues for fiscal
2001 have been  adjusted to exclude the Human  Resource  product line  activity.
This revenue is referred to as "adjusted  revenue".  We believe this is a useful
way to consider  the trend in our  reported  revenues  since the disposal of the
HR/Payroll product line did not qualify as a discontinued operation.


     Comparisons  of both adjusted  revenue and total  revenue  follow below (in
     thousands):

<TABLE>
<CAPTION>
                                                                                Adjustment to
                                                                                   Exclude
                                                                 Estimated        Estimated        Actual
                                                               Adjusted (non      HR/Payroll      Revenues
                                                               GAAP) Revenues      Revenues      Fiscal Year
                                         Actual Revenues        Fiscal Year      Fiscal Year        Ended
                                        Fiscal Year Ended      Ended June 30,     Ended June       June 30,
Revenue comparison                          June 30,               2001            30, 2001          2001
                                        2003        2002
                                     ---------------------     --------------   -------------   ------------

Revenues:
<S>                                  <C>         <C>           <C>              <C>             <C>
Software product licenses..........  $  14,589   $  13,026     $   9,130        $    477        $   9,607
Consulting and other services......     13,489      13,013        14,922           1,598           16,520
Maintenance........................     20,022      20,014        21,717           2,961           24,678
                                     ---------   ---------     ---------        -------------   ------------
        Total revenues.............  $  48,100   $  46,053     $  45,769        $   5,036       $  50,805
                                     ---------   ---------     ---------        ------=------   ------------
</TABLE>
                                       11



<PAGE>

                       ROSS SYSTEMS, INC AND SUBSIDIARIES

     Adjustments  for the sale of the HR/Payroll  product line were not required
for actual  revenues  in fiscal  years 2003,  and 2002.  Adjusted  revenues,  as
defined above, were slightly increased by $284,000 at $46,053,000 in fiscal 2002
from  $45,769,000 in fiscal 2001.  Adjusted  software  product license  revenues
increased by 43% from fiscal 2001 to fiscal 2002.  Adjusted  consulting revenues
decreased 12% from fiscal 2001 to fiscal 2002. Since consulting revenue activity
generally  occurs during the six to nine months  following the software  license
sales,  2002  consulting  revenues were  adversely  affected by the low software
license revenues reported in 2001. Adjusted maintenance revenues from first year
and renewed  maintenance  agreements,  both of which are recognized ratably over
the  maintenance  period,  decreased  8% from fiscal 2001 to fiscal  2002.  This
decrease  in  maintenance  revenues  was  due to  the  fact  that  the  rate  of
maintenance  contract  cancellations  in fiscal 2002  exceeded the rate at which
maintenance  contracts for new customers were added to the revenue  stream.  The
rate of cancellations in fiscal 2002 was not abnormally high but the addition of
new  maintenance  contracts  in fiscal  2002 was  adversely  affected by the low
software license sales in 2001.


     Total  actual  revenues  increased 4% from  $46,053,000  for fiscal 2002 to
$48,100,000 fiscal 2003. Actual revenues decreased 9% to $46,053,000,  in fiscal
2002  from  $50,805,000  in  fiscal  2001.  Software  product  license  revenues
increased 12 % from fiscal 2002 to fiscal 2003,  and  increased  36% from fiscal
2001 to fiscal 2002. Consulting revenues increased 4% from fiscal 2002 to fiscal
2003,  and decreased 20% from fiscal 2001 to fiscal 2002.  Maintenance  revenues
from first year  maintenance  contracts  sold with new license  agreements,  and
renewed  maintenance  agreements,  both of which are recognized ratably over the
maintenance  period, were flat for fiscal 2003 when compared to fiscal 2002, and
decreased 19% from fiscal 2001 to fiscal 2002.

     Software product license revenues in the North American market increased by
78% in fiscal  2003 when  compared  to fiscal  2002.  Software  product  license
revenues  in the North  American  market  decreased  by 18% in fiscal  2002 over
fiscal 2001.  We believe that the North  American  decrease in software  license
sales in fiscal 2002 was due to an  industry-wide  slowdown in North  America of
sales of enterprise  resource planning (ERP) software during that period. In the
aftermath of the  September 11, 2001  terrorist  attack,  prospective  customers
became more cautious in general about spending on new projects and capital items
as an  atmosphere  of economic  uncertainty  prevailed.  This  cautious  outlook
prevailed for some time until in fiscal 2003 when we experienced a turnaround in
the volume of software  sales in North America due to both a slight  improvement
in the economic  trading  conditions in the process  manufacturing  sector,  and
increasing  benefits arising from our  consistently  applied  marketing  efforts
during  fiscal  2002  and  2003.  While  not yet  significant,  total  sales  of
approximately  $427,000 of the recently  introduced  iRenaissance  CRM (Customer
Relationship  Management)  product also began to  contribute to revenues in both
Europe and North  America in fiscal 2003.  In the European  market during fiscal
2003,  our software  license  sales grew by 8%. This  increase  was  experienced
primarily in the United Kingdom and Northern  Europe.  In the United Kingdom,  a
new sales  director  was  appointed at the  beginning  of calendar  year 2003 to
replace  the  country  manager  and  he  led  his  sales  team  to an  immediate
improvement in software license sales. In Northern Europe software license sales
were  increased  mainly by  gaining  increased  visibility  of our  products  by
increased  attendance  at trade shows in the region.  In fiscal  2003,  sales in
Spain were down 10% on the prior year,  but this was after  increasing  software
license  revenues in fiscal 2002 by 164% over fiscal 2001. This increase was due
to our  Spanish  subsidiary  gaining  market  recognition  through  exposure  in
industry  publications  and  entering  into  strategic  partnerships  with other
software  vendors.  The  software  license  revenue  performance  of the Spanish
subsidiary in fiscal 2002 was the dominant  cause of the overall 74% increase in
software license revenues in Europe in fiscal 2002 when compared to fiscal 2001.
European revenues in fiscal 2003 were also enhanced by approximately  $2,100,000
due to more favorable  foreign  exchange rates on average during the year,  when
compared to fiscal 2002.  Software  license sales in the Asia/Pacific Rim region
decreased  by 71% to  $841,000  in  fiscal  2003  after  increasing  by  148% to
$2,853,000 in fiscal 2002, from $1,150,000 in fiscal 2001. The software  license
revenues in fiscal 2002, of approximately $2,853,000,  comprised mainly of sales
to our distributor in Japan and provided them with software product for sales to
new customers in their region.  Orders for new licenses from our  distributor in
Japan  did not  recur at  similar  levels in  fiscal  2003,  thus  sales to this
distributor  in fiscal 2003 were  confined to royalties on revenues  earned from
their existing  customer  base, and resulted in lower revenues of  approximately
$841,000 in that region.




                                       12

<PAGE>
                       ROSS SYSTEMS, INC AND SUBSIDIARIES


     Revenues  from  consulting  and other  services  (which are  recognized  as
performed)   correlate  with  software   product  license  revenues  (which  are
recognized  upon  delivery),  so that when  software  product  license  revenues
increase or decrease,  future period  services  revenues  generally  increase or
decrease respectively as a result. In fiscal 2003, consulting and other services
revenues  increased by 4% over fiscal 2002  revenues.  This increase was the net
result of a 37% increase in North  America and an 18% decrease  internationally.
The North American services revenues benefited from the steady increase in North
American software license revenues over the fiscal year, while the international
services  revenues  were  adversely  affected  by the timing of the  increase in
software license revenues being  predominantly in the last quarter of the fiscal
year. This meant that most of the services revenues associated with these fourth
quarter  license  revenues  will be  earned  in fiscal  2004.  In  fiscal  2002,
consulting and other services revenues  decreased 20%, from fiscal 2001 results.
Fiscal 2002  consulting  revenues  were  adversely  affected by the low software
license revenues reported in 2001.

     Revenues from first year  maintenance  contracts and renewable  maintenance
were  unchanged in fiscal 2003 as compared to fiscal 2002.  During  fiscal years
2002 and 2001,  declines in  maintenance  revenues  were  experienced  due to an
excess of the value of maintenance revenue contracts cancelled over the value of
new renewable maintenance revenue contracts being added to the maintenance base.
During fiscal 2003, the retention of existing  renewable  maintenance  contracts
improved.  At the same time,  maintenance  revenue  accruing  from new customers
acquired  during the prior year  increased in proportion to the  improvement  in
software  license  revenues in the prior  fiscal year.  In addition,  first year
maintenance  revenues  benefited from the increase in software  license sales in
the current  fiscal  year.  The effect of these  trends was to keep  maintenance
revenues constant in fiscal 2003 as compared to fiscal 2002.

     Our international  operations, as a percentage of total revenues for fiscal
2003, 2002 and 2001 was 40%, 45% and 33% respectively.

     No single  customer  accounted for more than 10% of revenues  during fiscal
2003, 2002 or 2001. Our customers are evenly spread among the industry verticals
within the process manufacturing market.


     Costs of software  product  licenses.  Costs of software  product  licenses
include  expenses  related  to  royalties  paid to  third  parties  and  product
documentation and packaging. Third party royalty expenses will vary from quarter
to  quarter  based  on the mix of  third-party  products  being  sold.  Costs of
software  product  licenses for fiscal 2003 increased by 23% to $2,295,000  over
fiscal 2002, and in fiscal 2002 increased by 91% to $1,870,000 from fiscal 2001.
The increase in fiscal 2003 reflects the continued growth of third party content
in software license sales. This is an outcome of our strategy to provide a fully
rounded  suite of  products  that meet all our  customers'  needs.  The  largest
contributor  to this  was  sales  of  iRenaissance  CRM  (Customer  Relationship
Management) which is a privately labeled product licensed from a third party. As
a percent of software  revenue,  third party  royalties  comprised 16% in fiscal
2003, 14% in fiscal 2002, and 10% for fiscal 2001.

     Costs of consulting,  maintenance and other services.  Costs of consulting,
maintenance  and other  services  include  expenses  related to  consulting  and
training personnel, personnel providing customer support pursuant to maintenance
agreements,  and  other  costs of sales.  From time to time we also use  outside
consultants to supplement Company personnel in meeting peak customer  consulting
demands.   Costs  of  consulting,   maintenance  and  other  services,   net  of
reimbursable  expenses,  increased  by 1% to  $17,193,000  in  fiscal  2003 from
$17,023,000 in fiscal 2002, and had decreased 3% in fiscal 2002 from $17,595,000
in fiscal 2001.  Fiscal 2003  consulting  revenues were  relatively  constant as
compared to fiscal 2002, and this resulted in the similar  pattern  exhibited in
the  consulting,  maintenance  and other  services  costs.  The lower  levels of
expenditure  in  fiscal  2002  compared  to fiscal  2001,  reflects  savings  of
approximately  $572,000  in  employee  related  costs as a result of a headcount
reduction of approximately 127 consulting personnel early in fiscal 2001, net of
additions during fiscal 2002 of approximately 10 service personnel.

     Software  Product License Sales and Marketing  Expenses.  Software  product
license sales and marketing  expenses  increased by 20% to $11,384,000 in fiscal
2003,  from  $9,461,000  in fiscal 2002,  and  decreased by 37% to $9,461,000 in
fiscal 2002 from $15,026,000 in fiscal 2001. The increase in fiscal 2003 was due
to higher  expenditures  on sales and marketing of $531,000 in North America and
$434,000  in  Europe,  combined  with an  escalating  effect  attributable  to a
stronger Euro Dollar and British Pound accounting for approximately  $958,000 of
the increase in European expenditures.  These increases were caused primarily by
increases in commissions and incentive  compensation  expenses.  The decrease of
$5,565,000 for fiscal 2002 over fiscal 2001, was a result of lower  expenditures
due primarily to  reductions of sales and marketing  personnel and related costs
totaling  approximately 74 employees from fiscal year 2002 as compared to fiscal
2001. Specifically,  the decrease comprises approximately $3,600,000 relating to
employee base  compensation  and benefits  costs,  and other expense  reductions
including  approximately  $514,000  in travel  and  entertainment,  $300,000  in
incentives and commissions, $720,000 in facilities and communications,  $190,000
in marketing expenses, and $241,000 in other costs.


                                       13

<PAGE>



                       ROSS SYSTEMS, INC AND SUBSIDIARIES


     Product  Development  Expenses.   Product  development  expenditures  is  a
commonly  used measure in the software  industry to describe the quantum of cost
relating to software development  excluding the effects of any capitalization of
these costs and  amortization  of capitalized  costs.  This amount is derived by
adjusting  the figures  shown in the  Consolidated  Statements  of Operations as
follows: (in thousands):
<TABLE>
<CAPTION>


                                                                              Fiscal Year Ended June 30,
                                                                          -------------------------------
                                                                             2003      2002        2001
                                                                          --------   --------   ---------
<S>                                                                       <C>        <C>        <C>
Product development, net of capitalized computer software costs and
   amortized computer software costs....................................  $  7,230   $ 10,241   $  11,496
        Amortization of previously capitalized software development
       costs............................................................    (4,702)    (7,184)     (7,369)
                                                                          --------   --------   ---------
        Expenses, excluding  amortization...............................     2,528      3,057       4,127
         Software development costs capitalized  during the year........     4,239      4,181       6,878
                                                                          --------   --------   ---------
Total  expenditures.....................................................  $  6,767   $  7,238   $  11,005
                                                                          --------   --------   ---------
Total expenditures as a percent of total revenues.......................        14%        16%         22%
                                                                          ========   ========   =========
</TABLE>


     Product  development  expense declined by 29% to $7,230,000 in fiscal 2003,
from $10,241,000 in fiscal 2002.  After a substantial  reduction in the value of
capitalized  software   development  costs  in  fiscal  2002,   amortization  of
previously  capitalized  software  development  costs decreased by $2,482,000 in
fiscal 2003 as compared to fiscal 2002. This decrease  accounted for most of the
product  development expense decline in fiscal 2003. Product development expense
was  slightly  down in fiscal  2002,  as  compared to fiscal  2001.  Capitalized
development  costs incurred  during fiscal 2003 were at a level  consistent with
the prior year. In fiscal 2002,  capitalized  development costs had decreased by
39% to $4,181,000  from  $6,878,000  due mainly to the absence in fiscal 2002 of
development  costs  relating to the  HR/Payroll  product  line which was sold in
fiscal 2001.  As a  percentage  of total  revenues,  total  development  expense
decreased  slightly  to 14% in fiscal  2003  from 16% in fiscal  2002 and 22% in
fiscal  2001.  Development  expense is  expected to continue in fiscal 2004 at a
level consistent with fiscal 2003.

     During  fiscal  2003,  product  development  expenditures  were  focused on
expanding  integrated  Internet/ERP  functionality and accelerating the complete
integration with the iRenaissance  product suite, of the privately labeled third
party  products,  now part of our  offering.  Product  development  expenditures
during  fiscal  2002 and 2001 were  primarily  focused  on new  Internet-enabled
modules and  continued  enhancements  to the  underlying  technology of released
products and developing new web enabled products.

     General and Administrative  Expenses.  General and administrative  expenses
were  relatively  constant in the three fiscal years ending June 30, 2003,  2002
and  2001,  at  $4,376,000,  $4,393,000  and  $4,737,000  respectively.  Various
cost-saving  measures and controls,  coupled with improved  productivity through
the  implementation  of streamlined  systems,  have  contributed to stability in
costs relating to our administrative infrastructure and personnel. Costs in this
area have been contained by avoiding  increases in headcount,  by strict control
of capital  expenditures,  and an overall  cost  consciousness  promoted  mainly
through  management's  focus on budgetary  control over spending.  During fiscal
2003, a decrease in property insurance of approximately  $100,000, was offset by
a net increase after departmental  allocations,  of $121,000 in employee related
costs, in comparison to expenditures  for the same expense items in fiscal 2002.
During fiscal 2002, savings of approximately  $150,000 in legal costs,  $114,000
in travel  costs,  $97,000  due to the  closure  of the  French  operation,  and
$273,000  in other  headcount  related  reductions  in Europe  were offset by an
increase in North American  salaries and wages of approximately  $208,000,  when
compared to  expenditures  incurred for the same items in fiscal  2001.  Capital
expenditures were reduced by strictly enforcing our authorization  process,  and
purchasing  only  essential  items,  and this helped to reduce  depreciation  by
approximately  $70,000,  and $47,000 for fiscal years 2002 and 2003 respectively
when compared to fiscal years 2001 and 2002 respectively.



                                       14

<PAGE>
                       ROSS SYSTEMS, INC AND SUBSIDIARIES


     Provision for Doubtful  Accounts.  In fiscal years 2003, 2002, and 2001, we
recorded  provisions  for  doubtful  accounts  of  $831,000,   $1,444,000,   and
$1,514,000,  respectively. These provisions represent management's best estimate
of the doubtful  accounts for each period.  The improving trend in the provision
for doubtful  accounts  over the three fiscal years  represented,  has been made
possible  in  part,  by  tighter  and more  effective  processes  over  accounts
receivable  collections.  In general,  a customer's ability to access certain of
our  maintenance  services is  contingent on  maintaining  their account in good
standing,  and this has encouraged customers to be current on their accounts and
resolve  any  outstanding  issues  promptly.   In  Europe,  where  the  accounts
receivable  collections  performance has been  somewhat  weaker than that in
North  America,  we made  changes to  managers'  compensation  terms,  providing
incentives on improvements in receivables collections performance.  In addition,
a  distributor  policy change in Europe is slowly  taking  effect,  whereby upon
renewal of a distributor's  contract, we assume the billing of the distributor's
customers, and thereby are able to better control the receivable balances due by
the distributor and its customers.

     Amortization  of Other  Assets.  Amortization  of other  assets was zero in
fiscal years 2003 and 2002  compared to $691,000 in fiscal 2001.  This  reflects
the change in accounting  treatment due to  compliance  with the new  accounting
pronouncement,  SFAS No. 142, on Goodwill and Other Intangible  Assets. See Note
(1) in the Notes to the Consolidated Financial Statements on page F-10.

     Intangible  assets are reviewed for impairment in value in accordance  with
Statement  of Financial  Accounting  Standards  No. 142.  Our recorded  goodwill
relates  to the  acquisition  of  HiPoint  Systems  Inc.  in  fiscal  1999,  the
acquisition of Bizware,  Inc. in fiscal 1998, and the acquisition of our Spanish
distributor in fiscal 1997. After  application of the principles of SFAS142,  we
believe  that the  assets  are not  impaired  and are  properly  stated at their
current carrying value.

     Non-Recurring Items. The non-recurring gain reflected in fiscal 2002, was a
result  of the gain of  $650,000  arising  from  the  reduction  of the  reserve
previously created in fiscal year 2001 for the closure of the French office.

     At the end of the first  quarter of fiscal 2001,  we recorded an expense of
$790,000 being severance payments associated with 125 employees. Staffing levels
were  scrutinized  with a view  towards  eliminating  overhead  positions  where
possible,  and reducing the number of billable consultants in geographic regions
or areas of  expertise  where  acceptable  productivity  levels  were not  being
regularly  achieved.   In  North  America,   position   eliminations   comprised
approximately 21in marketing and sales, 47 services consultants,  23 development
personnel,  and 8  employees  in  administration  and  finance.  In Europe,  the
positions of  approximately  26 employees  from  various  functional  areas were
eliminated.

     Non-cash Capitalized Software Impairment Charge. In the year ended June 30,
2002, an impairment charge of $10,938,000 was incurred.  This was as a result of
certain events  occurring  during fiscal 2002,  including a change in technology
direction,  and developments  affecting the potential  realizability of revenues
relating to certain  capitalized  software assets.  This action had no effect on
our cash position or cash flows.

     The change in technology  direction  occurred  during the fourth quarter of
fiscal 2002, when the internet related functionality of the iRenaissance product
was  re-directed  from the "java" based initial  development  used in the Resynt
product line to the  Microsoft  ".net"  technology.  A new,  formal  development
relationship  with Microsoft was launched to support the requirements of the new
technology direction.  This strategic  re-direction was based on our belief that
the .net technology will serve us and our customers better in the future, due to
fuller  market  penetration,  better  standards of  compatibility,  and superior
technical adaptability.  The result of this change was that prior development in
the former java environment became obsolete. Effective April 1, 2002, the amount
of $5,488,000,  representing all unamortized  software-project balances relating
to this, was expensed.


     On April 23, 2002, we announced the General Availability of Gembase Version
6.0. This version of Gembase,  the 4GL language used for the  development of the
iRenaissance  products,  contained  major  functionality  differences  to  prior
versions,  rendering all prior versions obsolete.  As a result,  development and
maintenance of all versions prior to 6.0 were  discontinued and no further sales
using these versions would be contemplated.  In addition,  customers using these
versions  would be strongly  encouraged  to upgrade to version 6.0 because we no
longer  supported  development  of any Gembase  release  lower than version 6.0.
Upgrades  to the 6.0  version  were  strongly  supported  and to  encourage  and
facilitate customers' upgrading, the product was designed to make the transition
straight-forward. Since Gembase versions lower than 6.0 would not contribute any
further revenue to the Company, even in the short-term,  the related unamortized
software-project balances amounting to $943,000 were expensed.

                                       15

<PAGE>



                       ROSS SYSTEMS, INC AND SUBSIDIARIES

     On May 22, 2002 we announced the release of iRenaissance  version 5.7. This
version was  significantly  changed  from the prior  versions.  Previous to this
release,  upgrades  from any version  less than 4.4 to the latest  version  were
technically  challenging  resulting in an environment  not conducive to customer
upgrades. Version 5.7 offered a straight-forward upgrade capability to customers
on previous versions.  In addition,  version 5.7 contained a new "engine" at its
core, which  significantly  changed the way the software operated internally and
resulted in improved operating  efficiencies.  Since customers on versions lower
than 4.4 could now upgrade without  difficulty,  we were able to discontinue the
development  and support of all  versions  prior to 4.4. No further  sales using
these  versions  would be  contemplated.  This had the effect of  rendering  all
releases of iRenaissance which were lower than 4.4 obsolete.  Since iRenaissance
versions lower than 4.4 would not contribute any further  license  revenue,  the
related  unamortized  software-project  balances  amounting to  $3,333,000  were
expensed.

     During May 2002, we terminated further work on general  enhancements of the
COBOL technology based  Renaissance  Classic product line and a twofold decision
was made;  to  continue  working  with  specific  customers  on  custom  product
development,  and to introduce a general sales program of free software  license
upgrade  from the  Classic  product  to the latest  release of the  iRenaissance
product line for  customers  who remain on  maintenance.  We continue to support
those  customers  who remain  active  users until they  schedule  their  upgrade
conversion  to  iRenaissance.  Since no future  revenues are  expected  from the
general   enhancements   capitalized  to  date,   the   aggregate,   unamortized
software-project balances amounting to $1,174,000 were expensed.

     Other Income and Expense.  Interest  income has diminished  over the fiscal
years 2001 through 2003 due to lower interest rates.  Interest expense decreased
in fiscal 2003 as compared to fiscal 2002,  and 2002 as compared to fiscal 2001,
due to improved cash flows from operations and the resultant  lower  utilization
of our revolving credit facilities.  Foreign exchange benefit and expense arises
on converting  foreign  currency  transactions  or short-term  balances to local
currency  throughout  the year.  Foreign  exchange  losses  in fiscal  2003 were
insignificant  in  comparison  to  $181,000  in fiscal 2002 which was due to net
adverse movements in currency exchange rates during that year.


     Income Taxes.  Income tax expense consists primarily of alternative minimum
tax for federal  purposes,  state taxes for which state operating  losses do not
apply,  and various  foreign  taxes which we  incurred  from time to time.  As a
result we recorded  net income tax  expense of  $405,000,  $132,000,  and $9,000
during 2003, 2002, and 2001 respectively.  Note 11 to the Consolidated Financial
Statements details the differences between our effective income tax rate and the
statutory rate.

     At June 30, 2003, we had net operating loss  carryforwards of approximately
$34,370,000  $25,354,000  and  $7,187,000  for  federal,  state and  foreign tax
purposes, respectively, which expire between 2005 and 2020.

     In all the years  presented,  we have  reserved  in full the  deferred  tax
assets which comprise  primarily of net operating loss  carryforwards.  At which
time  it is  determined  that it is more  likely  than  not  that  they  will be
utilized, the valuation reserve will be removed.


Liquidity and Capital Resources

     Historically we have funded the operations of our business out of operating
activities.  Changes in net cash  provided  by  operating  activities  generally
reflect the changes in earnings  plus the effect of changes in working  capital.
Changes in working capital, especially trade accounts receivable, trade accounts
payable and accrued  expenses,  are generally  the result of timing  differences
between  collection  of fees billed and payment of  operating  expenses.  During
fiscal 2003, net cash provided by operating  activities  increased by $5,033,000
to $10,108,000 in fiscal 2003,  from  $5,075,000 in fiscal 2002. In fiscal 2002,
net  cash  provided  by  operating   activities  decreased  by  $8,983,000  from
$14,058,000  in 2001 to  $5,075,000  in 2002.  After  adjusting  net  income for
non-cash expense items only, cash provided by operating  activities decreased by
$446,000 to $10,460,000 in fiscal 2003,  from  $11,126,000 in fiscal 2002.  Cash
used due to charges in working capital only, decreased $5,479,000 in fiscal 2003
as compared  with fiscal 2002 to $572,000,  as compared to cash used for working
capital purposes of $6,051,000 in fiscal 2002.

     Accounts  receivable  increased from 2002 to 2003 but to a lesser magnitude
than from 2001 to 2002.  This was due to less cash being used by the increase in
accounts  receivable in fiscal 2003,  and resulted in a comparative  increase in
cash provided by operating  activities of $2,400,000 from receivables.  This was
caused by continual  improvements  in cash  collections in fiscal 2003 described
more fully above.

                                       16
<PAGE>
                       ROSS SYSTEMS, INC AND SUBSIDIARIES


     Increased cash flow from  operations can also be attributed to the increase
in accounts  payable from 2002 to 2003,  which  resulted in cash  provided  from
operations  compared  to cash used in  operations  in the  previous  year.  This
resulted in an increase in cash provided by operating  activities of $2,499,000.
The increase in accounts payable is mainly due to increased third party software
sales in the fourth  quarter.  During  fiscal 2002, an aggregate net increase in
non-cash  charges for  depreciation,  amortization,  capitalized  software  cost
impairment,  and provisions for uncollectible  accounts of $9,384,000 was offset
by an increase in our net operating loss of $8,582,000. This reflected primarily
the non-cash  charge in fiscal 2002, of $10,938,000 for software assets impaired
which  decreased  our earnings but did not affect our cash  position.  In fiscal
2002, an aggregate  decrease in the changes in operating  assets and liabilities
of  $9,725,000  was due primarily to the decrease in cash provided from accounts
receivable and deferred revenues of $10,632,000, from $6,920,000 in fiscal 2001,
to ($3,712,000) in fiscal 2002.


     The net cash  used for  investing  purposes  decreased  in  fiscal  2003 by
$792,000 to $4,111,000 from $4,903,000 in fiscal 2002, and decreased by $256,000
in fiscal 2002,  from  $5,159,000  in the prior year.  This  represents a stable
pattern of investment in capitalized  software in fiscal years 2003 and 2002. In
fiscal  2001,  investment  in  capitalized  software was higher due to continued
investment in the HR/Payroll product line for eight months of the year until the
product  line was sold in February  2001.  In fiscal 2003 cash used in investing
was  partially  offset by cash of $850,000  arising from the repayment of a note
receivable from a former  distributor who from whom we had acquired Ross Systems
Iberica, our Spanish subsidiary.

     Cash flows  used in  financing  activities  increased  $1,875,000  from net
repayments  in the prior year of  $604,000  to net  repayment  in fiscal 2003 of
$2,479,000.  Of this increase,  $1,345,000  represented purchases of Ross shares
into treasury stock. The repurchase of treasury stock comprised principally of a
one time purchase of $1,260,000  from a former  distributor who had acquired the
shares  pursuant to our purchase from him of Ross Systems  Iberica,  our Spanish
subsidiary. The balance of the increase in cash used in financing activities was
an increase in repayments under our credit lines of $612,000 in 2003 as compared
to  $555,000 in fiscal  2002.  We have  reduced  our use of our credit  lines as
liquidity  has  improved.  In fiscal  2002  there  were no  significant  capital
receipts or  repayments.  In fiscal 2001,  net  repayments of capital leases and
long term debt were $1,723,000,  and we received $2,000,000 in a preferred stock
issuance.  We financed our continuing operations during fiscal 2003 through cash
generated from operations and available credit facilities. We expect to fund our
activities through fiscal 2004 with positive cashflows generated from continuing
operations.

     At June 30, 2003, we had  $8,628,000 of cash and cash  equivalents.  During
the first  quarter of fiscal 2003, we secured a new  revolving  credit  facility
from Silicon  Valley  Bank,  which  replaced the facility  expiring in September
2002. This facility,  with a maturity date of September 23, 2004, incorporates a
maximum  credit  line of  $5,000,000,  and an  interest  rate of  prime  plus 2%
(approximately 6.75% at September 2, 2003.  Borrowings under the credit facility
are collateralized by substantially all assets of the Company. At June 30, 2003,
we had approximately  $2,131,000  outstanding  against the $5,000,000  revolving
credit facility, and based on the eligible accounts receivable at June 30, 2003,
our cash  plus our  remaining  borrowing  capacity  under the  revolving  credit
facility totaled approximately $9,091,000.  This represents an increase in total
availability of cash at June 30, 2003 of $3,558,000 from June 30, 2002.

     On June 29,  2001,  we issued  convertible  preferred  stock to a qualified
investor in a private placement transaction.  In summary, the investor purchased
500,000  preferred  shares at $4.00 per share yielding  $2,000,000 for Ross. The
shares are  convertible,  one for one at a price of $4.00  each,  after June 29,
2002,  and must be converted by June 29, 2006.  The shares pay  dividends at the
rate of 7.5%.

     We have no off balance sheet financial arrangements.

     We have certain fixed,  monthly,  payment commitments for leased facilities
and  equipment.  The facility  leases and equipment  operating  leases expire at
various dates through fiscal 2016.  Certain leases include  renewal  options and
rental  escalation  clauses to reflect  changes in price  indices,  real  estate
taxes, and maintenance costs.



                                       17

<PAGE>
                       ROSS SYSTEMS, INC AND SUBSIDIARIES


Funding Obligations


     As of June 30, 2003,  our  contractual  commitments  and  obligations  that
require  funding from  operations  in fiscal 2004 and  subsequent  years were as
follows (in thousands):

<TABLE>
<CAPTION>


                                       Total Payments                 Less than               More than 5
                                       --------------                 ---------               -----------
                                           Due            1 year      1-3 years   3-5 years     years
                                           ---            ------      ---------   ---------     -----

<S>                                       <C>             <C>         <C>         <C>         <C>
 Operating leases..................       $ 5,256         $ 1,384     $  1,450    $   592     $   1,830
Unconditional purchase obligations             --              --           --         --           --

Debt repayment obligations ........            --              --           --         --           --

                                           ------          ------       ------      ------       ------
Total future minimum cash payment         $ 5,256         $ 1,384     $ 1,450     $   592     $  1,830
   obligations ....................        ======          ======       ======      ======       ======
</TABLE>



     Operating lease payments included in the above table decline  significantly
in fiscal 2005 since our real estate  lease for our  Atlanta  office  expires in
April 2004. We expect to reduce our rent, either by negotiation with our current
landlord,  or by relocation  within the Atlanta area. We anticipate that our new
lease will  involve  base rentals of $325,000 to $440,000 per year which are not
reflected  in the table above  since we have yet not entered  into the new lease
agreement.


     Certain  executive  employees have employment  contracts  containing  terms
which upon termination  would oblige us to make severance  payments varying from
three months to three years of annual salary.


     In  addition  to the  amounts  shown in the above  table,  we have  various
agreements to purchase services, none of which are material.


Related Party Transactions


     In July 2002, we transferred  the assets and  liabilities of our subsidiary
Ross Systems  Auckland  Limited to Kauri Business  Systems  Limited  (Kauri),  a
startup  company  in  which we  retained  a 20%  interest.  The  balance  of the
ownership  of Kauri  consists  of  former  employees  of Ross  Systems  Auckland
Limited.  We wrote off all  remaining net book value as well as the residual 20%
interest as we deemed its value to be minimal at the  translation  date. The new
company,  based in New Zealand,  provided product  development and subcontracted
consulting  services to us, while also managing and supporting Ross customers as
our Distributor for the Australian  region.  During the 11 months ended June 30,
2003, Kauri provided services to us to the value of approximately  $405,000. For
the same period,  we billed Kauri  approximately  $82,000 for royalties  owed on
services and maintenance revenues earned.



Recent Accounting Pronouncements

     In  November  2002,  the FASB issued  FASB  Interpretation  ("FIN") No. 45,
"Guarantor's  Accounting and Disclosure  Requirements for Guarantees,  Including
Indirect Guarantees of Indebtedness of Others",  which clarifies  disclosure and
recognition/measurement   requirements   related  to  certain  guarantees.   The
disclosure  requirements  are effective for  financial  statements  issued after
December 15, 2002 and the recognition/measurement  requirements are effective on
a prospective  basis for guarantees  issued or modified after December 31, 2002.
The application of the  requirements of FIN 45 did not have a material impact on
our financial position or result of operations.

     In  December  2002,  the FASB  issued  Statement  of  Financial  Accounting
Standards  No. 148,  Accounting  for  Stock-Based  Compensation--Transition  and
Disclosure--an  amendment of FASB  Statement  No. 123  ("Statement  148").  This
amendment  provides two additional  methods of transition for a voluntary change
to  the  fair  value  based  method  of  accounting  for  stock-based   employee
compensation.  Additionally,  more  prominent  disclosures  in both  annual  and
interim financial statements are required for stock-based employee compensation.
The transition  guidance and annual  disclosure  provisions of Statement 148 are
effective for fiscal years ending after  December 15, 2002.  This Interim Report
complies  with  the  requirements  of  Statement  148.  The  interim  disclosure
provisions are effective for financial reports containing  financial  statements
for interim periods beginning after December 15, 2002. The adoption of Statement
148 did not have a material impact on our consolidated financial statements.








                                       18

<PAGE>
                       ROSS SYSTEMS, INC AND SUBSIDIARIES


     In  January  2003,  the FASB  issued  FASB  Interpretation  No.  (FIN)  46,
"Consolidation of Variable Interest Entities." This interpretation of Accounting
Research  Bulletin  No.  51,  "Consolidated   Financial  Statements,"  addresses
consolidation  by business  enterprises  of  variable  interest  entities  which
possess certain characteristics.  The Interpretation requires that if a business
enterprise has a controlling  financial  interest in a variable interest entity,
the assets, liabilities,  and results of the activities of the variable interest
entity must be included in the consolidated  financial  statements with those of
the business  enterprise.  This  Interpretation  applies immediately to variable
interest  entities  created  after  January 31, 2003,  and to variable  interest
entities in which an enterprise  obtains an interest  after that date. We do not
have any  ownership in any variable  interest  entities as of June 30, 2003.  We
will  apply the  consolidation  requirement  of FIN 46 in future  periods  if we
should own any interest in any variable interest entity.

     In April 2003, the FASB issued Statement of Financial  Accounting Standards
No. 149,  Amendment  of  Statement  133 on  Derivative  Instruments  and Hedging
Activities  ("Statement 149"). This Statement amends Statement 133 for decisions
made  (1)  as  part  of  the  Derivatives   Implementation  Group  process  that
effectively  required  amendments to Statement 133, (2) in connection with other
Board projects  dealing with financial  instruments,  and (3) in connection with
implementation issues raised in relation to the application of the definition of
a derivative,  in particular,  the meaning of an initial net investment  that is
smaller  than  would be  required  for other  types of  contracts  that would be
expected to have a similar response to changes in market factors, the meaning of
underlying,  and the  characteristics  of a derivative  that contains  financing
components. We do not have any derivative instruments or hedging activities. The
application  of Statement  149 did not have a material  impact on our  financial
statements.

     In May 2003, the FASB issued  Statement of Financial  Accounting  Standards
No. 150,  Accounting for Certain Financial  Instruments with  Characteristics of
both  Liabilities  and Equity  ("Statement  150").  This  Statement  establishes
standards  for  how  an  issuer   classifies  and  measures  certain   financial
instruments with  characteristics  of both  liabilities and equity.  It requires
that an issuer  classify a  financial  instrument  that is within its scope as a
liability (or an asset in some  circumstances).  Many of those  instruments were
previously classified as equity. Statement 150 requires that certain mandatorily
redeemable  financial  instruments  issued  in  the  form  of  shares  are to be
classified as liabilities  rather than equity. We have no outstanding  financial
instruments  that fall  into the  definitions  covered  by this  Statement.  The
application  of Statement  150 did not have a material  impact on our  financial
statements.

     Risk Factors

          Our proposed merger with chinadotcom Corporation could have an adverse
          effect on our business  because  preparations for closing will consume
          our management's time and will result in material costs and expenses.

          On  September  4,  2003,  we  entered  into a  merger  agreement  with
     chinadotcom  Corporation.  Preparations  for the merger  will be a material
     expense, will consume much of executive management's time and may result in
     potential  customers deferring  purchasing  decisions until they understand
     the form of and reasons for the merger,  any of which could have an adverse
     effect on our  business  model and results of financial  operations.  These
     adverse effects will be intensified if the merger is not completed.

          Our  software  license  revenues can be almost  immediately  adversely
          affected by decreases  in customer  demand and even  relatively  minor
          delays in customer purchasing decisions.


          Our software  product  license  revenues can fluctuate  depending upon
     such  factors as  overall  trends in the  United  States and  International
     economies, new product introductions,  as well as customer buying patterns.
     Because we typically  ship  software  products  within a short period after
     orders are received, and therefore maintain a relatively small backlog, any
     weakening in customer demand could have an almost immediate  adverse impact
     on revenues and operating results.  Moreover,  a substantial portion of the
     revenues for each quarter is  attributable to a limited number of sales and
     tends to be realized in the latter part of the  quarter.  Thus,  even short
     delays  or  deferrals  of  sales  near  the  end  of a  quarter  can  cause
     substantial fluctuations in quarterly revenues and operating results.



                                       19

<PAGE>


                       ROSS SYSTEMS, INC AND SUBSIDIARIES


          Because our operating  expenses are based in large part on anticipated
          revenues,  even  small  variations  in the time at which we  recognize
          revenues can cause significant variation in our operating results from
          quarter to quarter.


          Our operating expenses are based in large part on anticipated  revenue
     levels,  including revenue from software sales agreements that we expect to
     sign. We sometimes  defer our  recognition  of revenue from software  sales
     agreements  that we sign during a quarter to future  periods,  based on our
     revenue recognition criteria. Because a high percentage of our expenses are
     relatively  fixed,  a small  variation in the timing of the  recognition of
     specific revenues can cause significant variation in operating results from
     quarter to quarter.


          The recent  economic  slow-down may cause customer  demand to decrease
          and price  competition  among our competitors to intensify,  either of
          which would adversely affect our operating results.


          Our  business  may be  adversely  impacted by the  worldwide  economic
     slowdown and related uncertainties. Weak economic conditions worldwide have
     contributed to the current technology industry  slow-down.  This may impact
     our business  resulting in reduced demand and increased price  competition,
     which may result in higher  overhead  costs,  as a percentage  of revenues.
     Additionally,  this  uncertainty may make it difficult for our customers to
     forecast future business  activities.  This could create  challenges to our
     ability  to  profitably  grow  our  business.  If the  economic  or  market
     conditions further  deteriorate,  this could have a material adverse impact
     on the results of operations and cash flow.

          The rapid development and maturation of technology in our industry and
          the strengthening  our competitors in light of industry  consolidation
          may make it difficult for us to compete effectively,  which would harm
          our operating results and financial condition.

          We may face increased  competition  and our financial  performance and
     future growth depend upon  sustaining a leadership  position in our product
     functionality.  Competitive  challenges  faced by Ross are  likely to arise
     from a number of factors,  including:  industry  volatility  resulting from
     rapid  development and maturation of technologies;  industry  consolidation
     and  increasing  price  competition  in  the  face  of  worsening  economic
     conditions. Although there are fewer competitors in our target markets than
     previously,  failure to compete  successfully against those remaining could
     harm our business operating results and financial condition.

              Our stock price is subject to significant volatility due to
              changes in economic conditions and announcements of new products
              or significant fluctuations in quarterly results of our company or
              our competitors.

          Our stock price, like that of other technology  companies,  is subject
     to  volatility  because of factors such as  announcement  of new  products,
     services  or  technological  innovations  by  us  or  by  our  competitors,
     quarterly variations in our operating results, and speculation in the press
     or investment community. In addition our stock price is affected by general
     economic  and  market   conditions  and  may  be  negatively   affected  by
     unfavorable global economic conditions.

              We may not be able to adequately protect our intellectual property
              against unauthorized third party copying or use, in part because
              the laws of other countries do not offer the same protection as
              the laws of the U.S., and any such inability could significantly
              reduce our revenues and profitability.


          Our  business  may  suffer  if  we  cannot  protect  our  intellectual
     property. We generally rely upon copyright, trademark and trade secret laws
     and  contract  rights  in the  United  States  and in  other  countries  to
     establish and maintain  proprietary  rights in our technology and products.
     However,  there can be no assurance that any of our proprietary rights will
     not be challenged,  invalidated or circumvented.  In addition,  the laws of
     certain countries do not protect  proprietary  rights to the same extent as
     do the laws of the United States. Therefore, there can be no assurance that
     we will be able to adequately  protect our proprietary  technology  against
     unauthorized  third-party  copying or use, which could adversely affect our
     competitive  position  and could  significantly  reduce  our  revenues  and
     profitability.  Further,  there can be no assurance that we will be able to
     obtain  licenses  to any  technology  that may be  required  to conduct our
     business or that, if  obtainable,  such  technology  could be licensed at a
     reasonable cost.






                                       20
<PAGE>

                       ROSS SYSTEMS, INC AND SUBSIDIARIES


     ITEM 7.A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Foreign Exchange: We have a worldwide presence and as such maintain offices
and derive  revenues  from  sources  overseas.  For fiscal  2003,  international
revenue  as  a  percentage   of  total  revenue  was   approximately   40%.  Our
international business is subject to typical risks of an international business,
including,  but not  limited  to:  differing  economic  conditions,  changes  in
political   climates,   differing  tax   structures,   other   regulations   and
restrictions,  and foreign  exchange rate  volatility.  Accordingly,  our future
results  could be  materially  adversely  impacted  by changes in these or other
factors. The effect of foreign exchange rate fluctuations on Ross in fiscal 2003
was not material.


     Interest  Rates:  Our exposure to interest  rates relates  primarily to our
cash equivalents and certain debt obligations.  The Company invests in financial
instruments  with  original  maturities  of three  months or less.  Any interest
earned on these  investments is recorded as interest  income on our statement of
operations. Because of the short maturity of our investments, a near-term change
in interest rates would not materially affect our financial position, results of
operations,  or cash flows.  Certain of our debt obligations  include a variable
rate of interest.  We did not engage in any  derivative/hedging  transactions in
fiscal 2003.


     ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The information  required by this Item is incorporated by reference  herein
from Part IV Item 14(a) (1) and (2) of this Form 10-K/A Report.

     ITEM 9. CHANGES IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON ACCOUNTING AND
FINANCIAL DISCLOSURE

     As  previously  reported,  in  July  2002,  the  Company  dismissed  Arthur
Andersen, LLP and engaged BDO Seidman LLP as its independent public accountants.


     ITEM 9A. CONTROLS AND PROCEDURES


     As required by Securities and Exchange  Commission rules, we have evaluated
the  effectiveness  of the design and operation of our  disclosure  controls and
procedures  as of the end of the period  covered  by this  annual  report.  This
evaluation was carried out under the supervision and with the  participation  of
our  management,   including  our  principal  executive  officer  and  principal
financial officer. Based on this evaluation,  these officers have concluded that
the  design  and  operation  of  our  disclosure  controls  and  procedures  are
effective. There were no significant changes to our internal controls during the
period covered by this annual report that materially affected, or are reasonably
likely to materially affect, our internal controls over financial reporting.


     Disclosure  controls and  procedures  are controls and other  procedures of
Ross designed to ensure that  information  required to be disclosed by us in the
reports that we file or submit  under the  Exchange Act is recorded,  processed,
summarized and reported, within the time periods specified in the Securities and
Exchange  Commission's  rules and  forms.  Disclosure  controls  and  procedures
include,  without  limitation,  controls and procedures  designed to ensure that
information required to be disclosed by us in the reports that we file under the
Exchange Act are  accumulated  and  communicated  to  management,  including the
principal executive officer and principal financial officer, as appropriate,  to
allow timely decisions regarding required disclosure.

                                       21
<PAGE>

                       ROSS SYSTEMS, INC AND SUBSIDIARIES


                                    PART III


     ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The  following  additional  information  pertains to executive  officers of
     Ross. There are no family  relationships  between any director or executive
     officer and any other  director or executive  officer.  Executive  officers
     serve at the discretion of the Board of Directors.

<TABLE>
<CAPTION>

         Executive Officers of Ross Systems
         ----------------------------------


                      Name                       Age                        Position
                      ----                       ---                        --------

<S>                                              <C>     <C>
     J. Patrick Tinley......................     55      Chairman  and CEO, and Director

     Robert B. Webster......................     56      Executive Vice President Operations and
                                                         Secretary

     Verome M. Johnston.....................     38      Vice President and Chief Financial Officer

     Eric W. Musser.........................     38      Vice President and Chief Technology Officer

     Rick Marquardt.........................     50      Senior Vice President Marketing and Sales

</TABLE>





     Mr. Tinley was promoted to Chairman and CEO in December  2000. He served as
President and Chief  Operating  Officer from 1995 to June 2000 and President and
CEO from July through  December 2000. He has been a director of Ross since 1993.
Mr. Tinley joined Ross in November 1988 as Executive  Vice  President,  Business
Development and has served as Executive Vice President,  Product Development and
Executive Vice  President,  Product  Development and Client  Services.  Prior to
1988, Mr. Tinley held management  positions with Management  Science of America,
Inc. and Royal Crown Companies.  Mr. Tinley received a Bachelors in Science from
Columbus University.

     Mr. Goodhew  joined  Intelligent  Systems  Corporation,  a publicly  traded
technology  product and services  company,  as Vice  President in January  1997.
Prior to that,  Mr.  Goodhew  was  President  of  Peachtree  Software,  Inc.,  a
privately held software company,  from 1984 to 1994. In 1994, Peachtree Software
was purchased by Automatic  Data  Processing,  Inc., a publicly  traded  company
providing  computerized  services.  Mr. Goodhew remained at Peachtree  Software,
Inc. in a managerial capacity until joining Intelligent Systems Corporation.

     Mr.   Dickerson   is  the  Chief   Operating   Officer   of  MWH  Energy  &
Infrastructure,  Inc., a division of MWH Global, Inc., and a member of the Board
of MWH Global,  Inc. The MWH group was formed out of a merger between Montgomery
Watson and Harza  Engineering,  a power  engineering  group.  Mr.  Dickerson was
Chairman of the Board of Harza Engineering  International and has also served as
Chief Financial Officer and General Counsel of the Group. Prior to joining Harza
in 1992, Mr.  Dickerson had been  Executive  Vice President and Chief  Financial
Officer of Long Lake Energy  Company,  and Vice  President  and Chief  Financial
Officer of Texas International  Company.  Mr. Dickerson received his Bachelor of
Arts in Economics from Washington Square College of New York University in 1970,
his Master of Arts in Economics  from the  University of Chicago in 1972 and his
Juris Doctor from the University of Georgia in 1975.

     Mr. Ryan has served as Executive Vice President, Finance and Administration
of  Global  Knowledge  Network,  Inc.,  an  independent  information  technology
education  company,  since  February 1998. Mr. Ryan was Executive Vice President
and Chief Financial Officer of Amdahl Corporation, a computer solutions company.

                                       22


<PAGE>

                       ROSS SYSTEMS, INC AND SUBSIDIARIES

Mr.  Ryan holds a  Bachelors  of Arts in  Business  Administration  from  Boston
College and an Masters of Business Administration from Suffolk University.

     Mr.  Webster,  Executive Vice President  Operations is also Secretary and a
director  of  Ross.  Mr.  Webster  joined  Ross in June  1998 as its CFO and was
promoted to his  current  role in December  2000 and later  elected  director in
August 2001. Mr. Webster is responsible for the consulting  services function as
well as the  administrative,  legal, human resource and financial  operations of
Ross  worldwide.  Mr.  Webster holds a Bachelors of Science degree in Accounting
and  Computer  Science,  as  well  as  a  Masters  of  Business   Administration
specialized in Information  Systems from St. Peter's  College.  Mr. Webster is a
Certified  Public  Accountant in the State of Georgia and a member of the AICPA.
Mr.  Webster,  prior to joining  Ross  served in a  progression  of more  senior
financial and general management positions with both Unisys Corporation and Wang
Laboratories, Inc. over a twenty year period.

     Mr.  Johnston,  Vice  President  and Chief  Financial  Officer,  joined the
Company in July 1998 as Corporate Controller.  He was promoted to Vice President
in August 1999, and to Chief  Financial  Officer in December  2000.  Immediately
prior to joining the Company,  Mr.  Johnston  served as Vice President and Chief
Financial  Officer of Market Area North America for Sunds  Defibrator,  where he
had been employed since June of 1991.  Prior to that, Mr.  Johnston was employed
with Deloitte & Touche.  Mr. Johnston maintains a CPA certificate in Georgia and
earned  Bachelor of Business  Administration  degrees in Accounting  and Finance
from Valdosta State University.

     Mr.  Musser  joined the  Company in 1993 and was  promoted to CTO in May of
2000. He has served in development for over 5 years and has held the position of
Vice  President,  Development  for the past 2 years.  Mr.  Musser  has also held
senior positions in Marketing and has been a critical  influence in changing the
Company from client/server  solutions to Internet based solutions.  From 1989 to
1993 Mr. Musser held IT management positions in the steel industry.

     Mr.  Marquardt  joined the company in October 2001 as Senior Vice President
of  Worldwide  Sales and  Marketing.  Prior to joining  Ross Systems he was Vice
President and General  Manager - Products at Eftia OSS Solutions,  a provider of
operational  support system (OSS)  solutions.  In 2000, Mr. Marquardt was a Vice
President at NSE Inc., an  international  distribution and investment firm. From
1997 to 2000 Mr. Marquardt  served as COO of Distinction  Software a provider of
enterprise-wide supply chain-planning  solutions.  From 1994 to 1997 he was Vice
President  of  Corporate  Marketing  and  Business   Development  for  Datalogix
International.  From 1989 to 1994, Mr. Marquardt held various  positions at Ross
Systems  in Sales  and  Marketing  including  Vice  President  of  Manufacturing
Systems.  Prior to 1989, Mr.  Marquardt held various  management  positions with
Management Science America,  Inc. Mr. Marquardt has a Bachelor of Science Degree
from the University of Wisconsin - Stevens Point.

     BOARD MEETINGS AND COMMITTEES

     The board of directors of Ross held a total of fifteen  meetings  including
four  regularly  scheduled  quarterly  meetings and eleven special and committee
meetings  during the fiscal year ended June 30, 2003.  During fiscal 2003,  each
director  attended  at least 93% of the  aggregate  of (1) the  total  number of
meetings of the board of directors  and (2) the total number of meetings held by
all committees of the board of directors on which such person served.  The board
of directors has an Audit Committee, a Compensation Committee,  and a Nominating
Committee, each of which is composed of external directors.

     During the year  ended  June 30,  2003,  the Audit  Committee  of the board
consisted of three  directors  Ryan,  Dickerson  and  Goodhew,  none of whom are
employees of Ross. The Audit Committee held four meetings during the fiscal year
ended  June 30,  2003.  Following  the  annual  meeting,  the board  intends  to
re-appoint  directors  Dickerson,  Ryan  and  Goodhew,  with  director  Ryan  as
Committee Chairman.  The primary purpose of the Audit Committee is to assist the
board of directors in fulfilling  its  responsibility  to oversee Ross' internal
and external  financial  reporting  processes so as to ensure the objectivity of
Ross' financial statements and its system of internal accounting  controls.  The
Audit  Committee  recommends  engagement  of Ross'  independent  auditors and is
primarily  responsible for approving the services performed by Ross' independent
auditors.

     The  Nominating  Committee  consisted of  directors  Dickerson,  Ryan,  and
Goodhew.   Following  the  annual  meeting,  the  board  intends  to  re-appoint
directors,  Dickerson,  Goodhew,  and, Ryan with director Dickerson as Committee
Chairman. The Nominating Committee is responsible for making recommendations for

                                       23

<PAGE>

                       ROSS SYSTEMS, INC AND SUBSIDIARIES

the  nomination of directors  for  replacement  of resigning  members and annual
nominations for re-election where  appropriate.  The committee also monitors the
composition  of Ross'  board of  directors  to  ensure  that it meets  generally
acceptable  standards  of  competence,  skills and  experience.  The  Nominating
Committee met once during the year ended June 30, 2003.  The  recommendation  of
the committee was to nominate  existing  directors,  Ryan,  Goodhew,  Dickerson,
Tinley and Webster for re-election.

     The  Compensation  Committee of the board  consisted of directors  Goodhew,
Ryan and Dickerson and held seven meetings during the fiscal year ended June 30,
2003. Following the annual meeting,  the board intends to re-appoint  directors,
Goodhew,  Ryan and, Dickerson with director Goodhew as Committee  Chairman.  The
Compensation  Committee  makes  recommendations  to the  board  regarding  Ross'
executive  compensation policy and grants stock options and administers the 1998
Stock Option Plan.

     COMPENSATION OF DIRECTORS

     For the fiscal  year  ended  June 30,  2003,  non-employee  directors  were
compensated  $2,000 for each board of directors  meeting attended and $1,000 for
participating  in any  telephonic  board of  directors  meetings  which were not
regularly scheduled.  In addition,  directors are reimbursed for travel expenses
incurred in connection  with attending  board of directors  meetings.  Annually,
each  non-employee  director is  automatically  granted  4,000 stock  options to
purchase  shares of Ross' common  stock  pursuant to the terms of the 1998 Stock
Option Plan, or the Option Plan. Options granted to non-employee directors under
the Option Plan are not intended by Ross to qualify as incentive  stock  options
within the  meaning of Section  422 of the  Internal  Revenue  Code of 1986,  as
amended,  or the Code.  Pursuant to the Option Plan, on the annual meeting date,
each  non-employee  director  who is elected  or  re-elected  at the  meeting is
granted  options in  accordance  with the  automatic  grant.  In  addition,  any
non-employee director newly elected to the Board of Directors receives an option
for 10,000 shares of Ross' common  stock.  The  10,000-share  option vests 25% a
year over four years and the 4,000 share  options are fully  vested on the dates
of grant.  The price of all  options  granted is equal to the  closing  price of
Ross' common  stock,  as quoted on the NASDAQ  National  Market,  on the date of
grant.  During  fiscal 2003,  outside  directors  were granted a total of 12,000
stock options at an exercise price of $13.16.

     COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT

     Section  16(a) of the Exchange Act requires  Ross'  executive  officers and
directors to file initial reports of share ownership and report changes in share
ownership  with  the  Commission.   Such  persons  are  required  by  Commission
regulations  to furnish Ross with copies of all Section 16(a) forms,  which they
file.  Based solely on Ross' review of such forms  furnished to Ross and written
representations  from certain  reporting  persons,  Ross  believes  that for the
period July 1, 2002 to June 30, 2003,  all Section  16(a) filings were made on a
timely  basis,  except that Mr.  Oscar Pierre was late to file a Form 4 with the
Commission.

                                       24
<PAGE>

                       ROSS SYSTEMS, INC AND SUBSIDIARIES


     ITEM 11. EXECUTIVE COMPENSATION

     ROSS EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE

     The following table sets forth certain information  regarding  compensation
earned  during each of Ross' last three  fiscal  years by Ross' Chief  Executive
Officer,  and  each of  Ross'  four  other  most  highly  compensated  executive
officers,  based on salary  and bonus  earned  during  fiscal  2003 (the  "Named
Executive Officers").

<TABLE>
<CAPTION>




                                                                                                 Long Term
                                                                Annual Compensation          Compensation Awards
                                                                -------------------          -------------------
                                                                              Other         Securities
                                                                             Annual         Underlying       All Other
                                      Fiscal                              Compensation       Options/      Compensation
     Name and Principal Position       Year    Salary(4)     Bonus(4)          (1)          SARs (#)(2)         (3)
     ---------------------------       ----    ---------     --------          ---          -----------         ---

<S>                                     <C>    <C>           <C>             <C>            <C>               <C>
     J. Patrick Tinley.............     2003   $315,000      $165,600(4)     $12,000        100,000           $2,000
        Chairman and Chief Executive    2002    307,500       114,000         10,400         15,000            2,000
              Officer                   2001    292,500        41,400         10,400         12,000            1,000

     Robert B. Webster.............     2003   $210,000      $110,400(4)     $12,000         70,000           $2,000
        Executive Vice President,       2002    205,000       100,000         12,000         10,000            2,000
           and
              Secretary                 2001    195,000        43,000         12,000          9,000            1,000

     Gary Nowacki..................     2003   $179,800      $120,006(5)     $10,000          5,000           $2,000
        VP, North American Sales        2002    179,800        56,481         10,000         10,000            2,000
                                        2001    142,000        67,500         10,000          6,500            1,000

     Rick Marquardt................     2003   $200,000       $62,540(6)     $10,000         10,000           $2,000
        Senior VP, World Wide Sales     2002    141,160        14,123          7,500         10,000           $2,000
           and Marketing


     Eric W. Musser................     2003   $175,000       $44,275(4)     $10,000         10,000           $2,000
         VP, Development                2002   $178,875        50,000         10,000         10,000           $2,000
                                        2001    151,125        19,000         10,000          9,000            1,000

</TABLE>


(1)  The amounts included in Other Annual Compensation include auto allowance.
(2)  Ross has not granted any stock appreciation rights (SARs).
(3)  Represents  amounts  contributed  to Ross'  401(k)  plan,  on behalf of the
     officer by Ross and premiums paid by Ross on behalf of the officer for term
     life insurance.
(4)  Represents a bonus earned in fiscal 2002 and paid in fiscal 2003.
(5)  Includes a bonus in the amount of $22,997 earned in fiscal 2002 and paid in
     fiscal 2003.
(6)  Includes a bonus in the amount of $6,490  earned in fiscal 2002 and paid in
     fiscal 2003.

                                       25
<PAGE>


                       ROSS SYSTEMS, INC AND SUBSIDIARIES


     OPTION/SAR GRANTS IN FISCAL YEAR ENDED JUNE 30, 2003

     The following  table  describes the grant of options to the Named Executive
Officers during fiscal 2003.

<TABLE>
<CAPTION>



                                                                                          Potential Realizable Value at
                                                                                              Assumed Annual Rates
                                                                                                 of Stock Price
                                                                                             Appreciation for Option
                                                  Individual Grants in Fiscal 2003                  Term (4)
                                                  --------------------------------                  --------
                                 Number of
                                Securities
                                Underlying    Percent of Total
                                 Options/       Options/SARs
                                   SARs          Granted to      Exercise
                                  Granted       Employees in       Price     Expiration
     Name                         (#)(1)      Fiscal Year (2)   ($/Sh) (3)    Date (2)          5%              10%
     ----                         ------      ---------------   ----------    --------        --------    -----------

<S>                                <C>             <C>             <C>      <C>                <C>           <C>
     J. Patrick Tinley........     50,000          19.8%           7.26     9/24/2012          591,289       941,529

     J. Patrick Tinley........     50,000          19.8%           7.95     12/5/2012          647,486     1,031,013

     Robert B. Webster........     50,000          19.8%           7.26     9/24/2012          591,289       941,529

     Robert B. Webster........     20,000           7.9%           7.95     12/5/2012          258,994       412,405

     Rick Marquardt...........     10,000           4.0%           7.26     9/24/2012          118,258       188,306

     Eric W. Musser...........     10,000           4.0%           7.26     9/24/2012          118,258       188,306

     Gary Nowacki.............      5,000           2.0%           7.25     11/4/2012           59,047        94,023

</TABLE>


(1)  Ross has not granted any SARs.
(2)  Based on an aggregate of 252,828  options  granted to all employees  during
     the fiscal year. Options granted in fiscal year 2003 expire in 2012 or 2013
     and typically vest annually over four years from the date of grant.
(3)  All  options  were  granted at an  exercise  price equal to the fair market
     value based on the closing market value of Ross' common stock on the Nasdaq
     National Market on the date of grant.
(4)  Amounts  reported in these columns  represent  amounts that may be realized
     upon exercise of the options  immediately  prior to the expiration of their
     terms  assuming the specified  compounded  rates of  appreciation  on Ross'
     common stock over the terms of the options.  These  numbers are  calculated
     based on the Commission's rules and do not reflect Ross' estimate of future
     stock price appreciation. Actual gains, if any, are dependent on the timing
     of option exercises and the future performance of Ross' common stock. There
     can be no assurances that the rates of  appreciation  assumed in this table
     can be achieved or that the individuals will realize the amounts reflected.

                                       26
<PAGE>

                       ROSS SYSTEMS, INC AND SUBSIDIARIES


AGGREGATED  OPTION/SAR  EXERCISES  IN  LAST  FISCAL  YEAR  AND  FISCAL  YEAR-END
OPTION/SAR VALUES

     The following table provides  information  related to options  exercised by
the Named  Executive  Officers  during  fiscal  2002 and the number and value of
options held at June 30, 2003. Ross has not granted any SARs.

<TABLE>
<CAPTION>



                                                              Number of Securities            Value of Unexercised
                                                             Underlying Unexercised               In-the-Money
                                                                Options/SARs at                 Options/SARs at
                                                                 June 30, 2003                  June 30, 2003(2)
                                                                 -------------                  ----------------
                                Shares
                               Acquired       Value
                                  on         Realized
     Name                     Exercise(#)      (1)        Exercisable    Unexercisable    Exercisable    Unexercisable
     ----                     -----------      ---        -----------    -------------    -----------    -------------
<S>                              <C>          <C>              <C>            <C>             <C>            <C>
     J. Patrick
        Tinley.........            --       $    --           36,870         119,350         $58,005        $809,345
     Robert B. Webster.....      3,750        18,900           5,300          83,200          1,760          580,490
     Rick Marquardt........        --            --            2,500          17,500          23,650         139,150
     Eric W.
        Musser..........           --            --           11,300          23,700          51,797         164,352
     Gary Nowacki..........      1,250        14,725           5,125          16,375          26,697         144,247

</TABLE>


(1)  Based upon the fair market  value of one share of Ross' common stock on the
     date the option was exercised, less the exercise price per share multiplied
     by the number of shares received upon exercise of the option.

(2)  Value is based on the difference  between the option exercise price and the
     fair market  value at June 30, 2003  ($14.08 per share)  multiplied  by the
     number of shares underlying the option.

                                       27
<PAGE>


                       ROSS SYSTEMS, INC AND SUBSIDIARIES


     ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The  following  table sets forth the  beneficial  ownership  of Ross common
stock as of September 24, 2003 by (a) each  director,  (b) each of the executive
officers  identified in the Summary  Compensation  Table,  (c) all directors and
executive  officers as a group and (d) each person known by Ross to beneficially
own more than 5% of any class of Ross' voting securities. Under the rules of the
Securities and Exchange Commission, or Commission, beneficial ownership includes
any  shares  as to which  the  individual  has sole or  shared  voting  power or
investment  power  and also any  shares  which the  individual  has the right to
acquire  within 60 days of September  24, 2003 through the exercise of any stock
option.

<TABLE>
<CAPTION>



       -----------------------------------------------------------------------------------------------------------------
       Name                                                     Common Stock               Series A Preferred Stock
       -----------------------------------------------------------------------------------------------------------------
                                                    Number of    Number of    Percentage      Number of     Percentage
                                                    Shares(1)   Options(2)     of Class        Shares        of Class
       ------------------------------------------- ------------ ------------ ------------- ---------------- ------------
<S>                                                 <C>                        <C>             <C>               <C>
       Alvin Johns                                   51,754        6,476         1.9%             --             --
       ------------------------------------------- ------------ ------------ ------------- ---------------- ------------
       Robert B. Webster **                          52,401      133,500         6.0%             --             --
       ------------------------------------------- ------------ ------------ ------------- ---------------- ------------
       J. Patrick Tinley **                          31,041      210,215         7.7%             --             --
       ------------------------------------------- ------------ ------------ ------------- ---------------- ------------
       Oscar Pierre Prats                             3,625        5,175          *               --             --
       ------------------------------------------- ------------ ------------ ------------- ---------------- ------------
       Gary Nowacki                                  14,684        9,875          *               --             --
       ------------------------------------------- ------------ ------------ ------------- ---------------- ------------
       Eric W. Musser                                 6,346       15,950          *               --             --
       ------------------------------------------- ------------ ------------ ------------- ---------------- ------------
       Verome M. Johnston                             3,986       10,500          *               --             --
       ------------------------------------------- ------------ ------------ ------------- ---------------- ------------
       Bruce J. Ryan                                    --         9,200          *               --             --
       ------------------------------------------- ------------ ------------ ------------- ---------------- ------------
       Frank M. Dickerson                               --        13,000          *               --             --
       ------------------------------------------- ------------ ------------ ------------- ---------------- ------------
       J. William Goodhew, III                          --         9,200          *               --             --
       ------------------------------------------- ------------ ------------ ------------- ---------------- ------------
       Rick Marquardt                                   123        7,500          *               --             --
       ------------------------------------------- ------------ ------------ ------------- ---------------- ------------
       Richard Thomas                                 1,448        2,375          *               --             --
       ------------------------------------------- ------------ ------------ ------------- ---------------- ------------
       All officers and directors as a group (12    165,408      432,966       19.2%              --             --
       persons)
       ------------------------------------------- ------------ ------------ ------------- ---------------- ------------
       Benjamin W. Griffith III                     152,500         --         20.5% (3)       500,000 (4)       100%

       ------------------------------------------- ------------ ------------ ------------- ---------------- ------------
</TABLE>

*Less than 1%.
**   Number of options  exercisable within 60 days includes  accelerated vesting
     of certain  options  due to a change of control  pursuant  to the  proposed
     merger.

(1)  The  table  is based  upon  information  supplied  by  executive  officers,
     directors and principal stockholders.  Unless otherwise indicated,  each of
     the  stockholders  named in the table  has sole  voting  investment  and/or
     dispositive  power  with  respect to all  shares of common  stock  shown as
     beneficially owned, subject to community property laws where applicable and
     to the information contained in the footnotes to this table
(2)  These are options which are  exercisable for common stock within 60 days of
     September 24, 2003.
(3)  Mr. Griffith owns 4.9% of the total number of shares of outstanding  common
     stock.
(4)  The 7.5% Series A  Convertible  Preferred  Stock has one vote per share and
     votes with the common stock on most matters.  These shares may be converted
     at the rate of one preferred share for one common stock share. These shares
     must be converted by June 29, 2006.

     EQUITY COMPENSATION PLAN INFORMATION

     The  following  table  provides  information  as of June 30, 2003 about the
common stock of Ross that may be issued upon the  exercise of options,  warrants
and rights under all of Ross' existing equity compensation plans,  including the
Ross Systems Inc. 1988 Incentive  Stock Plan, the 1998 Stock Option Plan and the
1991 Employee Stock Purchase Plan, each as amended.


                                       28
<PAGE>


                       ROSS SYSTEMS, INC AND SUBSIDIARIES
<TABLE>
<CAPTION>




                                                                                            Number of Securities
                                                                                          Remaining Available for
                                                                                           Future Issuance Under
                               Number of Securities to        Weighted-Average (1)       Equity Compensation Plans
                               be Issued upon Exercise         Exercise Price of           (Excluding Securities
                               of Outstanding Options,        Outstanding Options,         Reflected in the First
                                 Warrants and Rights           Warrant and Rights                 Column)
        Plan Category                    (#)                         ($)(1)                         (#)
    -----------------------    -------------------------     -----------------------    -----------------------------
<S>                                   <C>                          <C>                            <C>
    Equity compensation
    plans approved by
    security holders                  576,063                       $9.62                        266,960



    Equity compensation
    plans not approved by
    security holders                       --                          --                             --

            Total                      576,063                       $9.62                        266,960


</TABLE>


(1)  Pursuant to a resolution  passed by Ross stockholders at the annual meeting
     held November 15, 2001,  the number of shares  available for issuance under
     the 1991 Employee Stock Purchase Plan is automatically  increased  annually
     by the lesser of 35,000  shares or 1.5% of the  outstanding  shares of Ross
     common stock.

                                       29
<PAGE>

                       ROSS SYSTEMS, INC AND SUBSIDIARIES


     ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     CERTAIN TRANSACTIONS

     Under the terms of  indemnification  agreements with each of Ross' officers
and directors,  Ross is obligated to indemnify each officer and director against
certain  claims and  expenses  for which the  director  might be held  liable in
connection  with past or future  service on behalf of Ross.  In addition,  Ross'
Certificate of  Incorporation  provide that, to the extent permitted by Delaware
law,  the officers and  directors  shall not be liable for monetary  damages for
breach of fiduciary duty as an officer or director. In fiscal 2003, Ross renewed
and modified employment agreements with J. Patrick Tinley and Robert B. Webster.
The employment  agreements  provide the executives  with severance  payments and
accelerated  vesting  of  stock  options  and  other  incentive  awards  if  the
executive's  employment is terminated without "cause" at any time. If Mr. Tinley
is terminated  without "cause," he would be entitled to (1) a severance  payment
of 300% of his base  compensation  plus 300% of his targeted bonus, (2) employee
benefit  coverage  applicable  to the executive at the time of  termination  for
three years following the termination and (3) ninety days to exercise all vested
and  unvested  stock  options  and other  incentive  awards.  If Mr.  Webster is
terminated  without "cause," he would be entitled to (A) a severance  payment of
200% of his base  compensation  plus 200% of his  targeted  bonus,  (B) employee
benefit coverage  applicable to the executive at the time of termination for two
years  following the  termination and (C) ninety days to exercise all vested and
unvested stock options and other  incentive  awards.  The employment  agreements
also provide the executives with severance  payments and accelerated  vesting of
stock  options  and other  incentive  awards  if the  executive  terminates  his
employment  with Ross for "good  reason" or is  terminated  for any reason other
than "cause" or "disability" within nine months immediately  following a "change
of control" of Ross. In such a case, Mr. Tinley would be entitled to a severance
payment of 300% of his base  compensation  plus 300% of his targeted bonus, each
at the time of termination,  and ninety days to exercise all vested and unvested
stock options and other incentive awards, and Mr. Webster would be entitled to a
severance  payment of 200% of his base  compensation  plus 200% of his  targeted
bonus,  each at the time of termination,  and ninety days to exercise all vested
and unvested stock options and other incentive awards. The employment agreements
define "cause" to include a willful act by the executive which constitutes fraud
and which is  injurious  to Ross,  conviction  of, or a plea of  "guilty" or "no
contest" to, a felony or the executive's  continuing repeated willful failure or
refusal to perform his  material  duties  required by the  employment  agreement
which is injurious to Ross.  The employment  agreements  define "good reason" to
include a material  reduction in the executive's  powers or duties,  one or more
reductions in the executive's base compensation in the cumulative amount of five
percent (5%) or more or notifying the executive that his principal place of work
will be relocated by a distance of 50 miles or more. The  employment  agreements
define  "disability"  as  the  executive's   eligibility  to  receive  immediate
long-term  disability benefits under Ross' long-term  disability  insurance plan
or, if there is no such plan,  under the federal Social  Security  program.  The
employment  agreements  define "change of control" to mean the occurrence of any
of the  following  events:  (a) any  "person"  (as such term in used in sections
13(d)  and 14(d) of the  Exchange  Act) by the  acquisition  or  aggregation  of
securities is or becomes the beneficial  owner (within the meaning of Rule 13d-3
of the Exchange Act), directly or indirectly, of securities of Ross representing
fifty  percent  (50%)  or  more of the  combined  voting  power  of  Ross'  then
outstanding  securities ordinarily (and apart from rights accruing under special
circumstances)  having the right to vote at elections of directors,  referred to
as "Base  Capital  Stock";  except  that any change in the  relative  beneficial
ownership of Ross' securities by any person resulting solely from a reduction in
the  aggregate  number of  outstanding  shares of Base  Capital  Stock,  and any
decrease  thereafter  in  such  person's  ownership  of  securities,   shall  be
disregarded  until such person increases in any manner,  directly or indirectly,
such  person's  beneficial  ownership  of any  securities  of  Ross,  or (b) the
stockholders of Ross approve a definitive  agreement:  - to merge or consolidate
Ross with or into another  corporation in which the holders of the securities of
Ross before such merger or reorganization will not,  immediately  following such
merger or  reorganization,  hold as a group on a fully  diluted  basis  both the
ability  to  elect  at  least  a  majority  of the  directors  of the  surviving
corporation  and at least a  majority  in value of the  surviving  corporation's
outstanding  equity  securities;  or - to sell or  otherwise  dispose  of all or
substantially all of the assets of Ross or dissolve or liquidate Ross.

                                       30
<PAGE>
                       ROSS SYSTEMS, INC AND SUBSIDIARIES


      ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

     AUDIT AND RELATED FEES BILLED TO ROSS DURING FISCAL 2003 AUDIT FEES

     BDO  Seidman  billed  Ross  an  aggregate  of  $186,000  for  expenses  and
professional  services  rendered  for the (1) audit of the  annual  consolidated
financial  statements  for fiscal year 2003  included in Ross' Annual  Report on
Form 10-K/A and (2) the review of the consolidated financial statements included
in Ross' quarterly reports on Form 10-Q.  FINANCIAL  INFORMATION  SYSTEMS DESIGN
AND IMPLEMENTATION  FEES Ross did not engage BDO Seidman to provide advice to it
regarding  financial  information  systems design and implementation  during the
fiscal  year ended June 30,  2002.  ALL OTHER FEES BDO  Seidman  billed  Ross an
aggregate  of $92,000  for all other  non-audit  services  rendered to it during
fiscal 2003. The following table summarizes the approximate aggregate accounting
fees billed to Ross for its 2003 fiscal year:

<TABLE>
<CAPTION>

<S>                                                                                    <C>
         Audit fees                                                                    $  186,000
         Financial information systems design and implementation fees                  $      --
         All other fees:(1)                                                            $   92,000
                                                                                       ----------
         Total fees                                                                    $  278,000
</TABLE>

(1)  Includes fees for assistance with Commission filings and various accounting
     consultation  ($11,000);  various advisory services related  principally to
     tax preparation services and tax consultation  services associated with the
     development and  implementation  of international  tax strategies and sales
     taxes  ($67,000);  and  executive  compensation  analysis  prepared  at the
     request of independent board members ($14,000).

                                       31
<PAGE>

                       ROSS SYSTEMS, INC AND SUBSIDIARIES


                                     PART IV


     ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

     (a)  The following documents are filed as a part of this Report:

     1.   Consolidated   Financial   Statements.   The  following   Consolidated
          Financial  Statements of Ross Systems,  Inc. are filed as part of this
          report:
<TABLE>
<CAPTION>

                                                                                                          Page
                                                                                                          -----
<S>                                                                                                        <C>
Report of BDO Seidman , LLP, Independent Certified Public Accountants...................................   F-1
Fiscal 2001, and 2000 Report of Arthur Andersen LLP, Independent Public Accountants.....................   F-2
Consolidated Balance Sheets at June 30, 2003 and 2002...................................................   F-3
Consolidated Statements of Operations--Years Ended June 30, 2003, 2002, and 2001........................   F-4
Consolidated Statements of Cash Flows--Years Ended June 30, 2003, 2002, and 2001........................   F-5
Consolidated Statements of Shareholders' Equity--Years Ended June 30, 2003, 2002, and 2001..............   F-6
Notes to Consolidated Financial Statements..............................................................   F-7

</TABLE>


     2.   Financial  Statement  Schedule.   The  following  financial  statement
          schedule of Ross  Systems,  Inc.  for the Years  Ended June 30,  2003,
          2002,  and 2001 is filed as part of this  Report and should be read in
          conjunction  with  the  Consolidated   Financial  Statements  of  Ross
          Systems, Inc.
<TABLE>
<CAPTION>

Schedule                                                                                                  Page
--------                                                                                                  ----
<S>                                                                                                          <C>
II     Valuation and Qualifying Accounts................................................................   S-1
</TABLE>

     Schedules  not  listed  above  have  been  omitted  because  they  are  not
applicable  or are not  required,  or the  information  required to be set forth
therein is included in the Consolidated Financial Statements or Notes thereto.

     3.   Exhibits.  The Exhibits listed on the  accompanying  Index to Exhibits
          immediately  following the financial  statement schedules are filed as
          part of, or incorporated by reference into, this Report.

     (b)  Reports on Form 8-K.

     None

                                       32
<PAGE>
                       ROSS SYSTEMS, INC AND SUBSIDIARIES



     SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its  behalf  by the  undersigned,  thereunto  duly  authorized,  in the  City of
Atlanta, State of Georgia, on the 22nd day of September, 2003.

                                ROSS SYSTEMS, INC.


                                By:     /s/ J. Patrick Tinley
                                    --------------------------------------------
                                          J. Patrick Tinley
                                             Chairman and
                                       Chief Executive Officer


                                POWER OF ATTORNEY

     KNOW ALL MEN BY THESE PRESENTS,  that each person whose  signature  appears
below constitutes and appoints J. Patrick Tinley his attorney-in-fact,  with the
power of substitution, for him in any and all capacities, to sign any amendments
to this Report on Form 10-K/A,  and to file the same, with exhibits  thereto and
other  documents  in  connection  therewith,  with the  Securities  and Exchange
Commission,  hereby ratifying and confirming all that the said attorney-in-fact,
or his substitute or substitutes, may do or cause to be done by virtue hereof.

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>


                Signature                                        Title                                     Date
                --------                                          ----                                     ----

<S>                                           <C>                                                   <C>
          /s/ J. Patrick Tinley               Chairman and Chief Executive Officer                  September 22, 2003
            ----------------------------       (Principal Executive Officer)
              J. Patrick Tinley

          /s/ Robert B. Webster               Executive Vice President Operations, Company          September 22, 2003
            ----------------------------       Secretary and Director
              Robert B. Webster

          /s/ Verome M. Johnston              Vice President and Chief Financial Officer            September 22, 2003
            ----------------------------       (Principal Financial and Accounting
              Verome M. Johnston                   Officer)

          /s/ J. William Goodhew III            Director                                            September 22, 2003
             ---------------------------
              J. William Goodhew III

          /s/ Frank M. Dickerson                Director                                            September 22, 2003
             ---------------------------
              Frank M. Dickerson

          /s/ Bruce J. Ryan                      Director                                           September 22, 2003
             ---------------------------
              Bruce J. Ryan
</TABLE>

                                       33
<PAGE>


                       ROSS SYSTEMS, INC AND SUBSIDIARIES

                               ROSS SYSTEMS, INC.
                          ANNUAL REPORT ON FORM 10-K/A
                            YEAR ENDED JUNE 30, 2003
                               ROSS SYSTEMS, INC.
                                INDEX TO EXHIBITS



Exhibit No.                        Description
----------                         -----------

     2.1  Asset Sale  Agreement  between  Registrant and Now Solutions LLC dated
          March 5, 2001 (1)
     3.1  Certificate of Incorporation of the Registrant, as amended (2)
     3.2  Bylaws of the Registrant, as amended (2)
     3.3  Amendment to the Certificate of Incorporation of the Registrant, dated
          April 26, 2001, for the 1 for 10 Reverse Stock Split.(3)
     4.1  Certificate of Designation  of Rights,  Preferences  and Privileges of
          Series B Preferred Stock of the Registrant (4)
     4.2  Form of the  subordinated  debenture  agreement  due  February 6, 2003
          issued by the Registrant to each investor (6)
     4.3  Registration Rights Agreement between the Registrant and each Investor
          (6)
     10.1 Preferred Share Rights Agreement,  dated September 4, 1999 between the
          Registrant and Registrar and Transfer Company (5)
     10.2 Employment  Agreement dated January 7, 1999,  modified March 24, 2003,
          between Mr. Patrick Tinley and the Registrant (8)
     10.3 Employment  Agreement  dated  September 13, 1999,  modified  March 24,
          2003, between Mr. Robert B. Webster and the Registrant (8)
     10.4 Convertible  Preferred  Stock Purchase  Agreement  dated June 29, 2001
          between Registrant and Benjamin W. Griffith, III (7)
     10.5 Loan  and  Security   Agreement   dated  September  24,  2002  between
          Registrant and Silicon Valley Bank (3)
     21.1 Listing of Subsidiaries of Registrant
     23.1 Consent of BDO Seidman, LLP
     24.1 Power of Attorney (included on signature page)
     31.1 Certification  of Chief Executive  Officer  pursuant to Section 302 of
          the Sarbanes-Oxley Act of 2002
     31.2 Certification  of Chief Financial  Officer  pursuant to Section 302 of
          the Sarbanes-Oxley Act of 2002
     32.1 Certification of Chief Executive  Officer pursuant to 18 U.S.C.  1350,
          as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
     32.2 Certification of Chief Financial  Officer pursuant to 18 U.S.C.  1350,
          as adopted pursuant to Section 906 of the  Sarbanes-Oxley  Act of 2002
                                   ------------


     (1)  Incorporated  by reference to the exhibit filed with the  Registrant's
          current Report on Form 8-K/A filed May 15, 2001.

     (2)  Incorporated  by reference to the exhibit filed with the  Registrant's
          current Report on Form 8-K filed July 24, 1998.

     (3)  Incorporated  by reference to the exhibit filed with the  Registrant's
          current Report on Form 10K/A filed October 2, 2002

     (4)  Incorporated  by reference to the exhibit filed with the  Registrant's
          Quarterly Report on Form 10-Q filed May 6, 1996.

     (5)  Incorporated  by reference to the exhibit filed with the  Registrant's
          Registration Statement on Form 8-A filed September 4, 1998.

     (6)  Incorporated  by reference to the exhibit filed with the  Registrant's
          current report on Form 8-K filed February 12, 1998.

                                       34
<PAGE>
                       ROSS SYSTEMS, INC AND SUBSIDIARIES


     (7)  Incorporated  by reference to the exhibit filed with the  Registrant's
          Quarterly Report on Form 10K filed September 27, 2001.

     (8)  Incorporated  by reference to the exhibit filed with the  Registrant's
          Quarterly  Report on Form 10-Q for the  quarter  ended  March 31, 2003
          filed May 14, 2003.

                                       35
<PAGE>

                       ROSS SYSTEMS, INC AND SUBSIDIARIES


REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and Shareholders
of Ross Systems, Inc.

We have audited the  accompanying  consolidated  balance sheets of Ross Systems,
Inc. and subsidiaries as of June 30, 2003 and 2002, and the related consolidated
statements of operations, shareholders' equity and cash flows for the years then
ended. We have also audited the financial statement schedule for the years ended
June  30,  2003 and 2002  listed  in the  accompanying  index.  These  financial
statements and schedule are the responsibility of the Company's management.  Our
responsibility  is to  express  an opinion  on these  financial  statements  and
schedule based on our audits. The Company's  consolidated  financial  statements
and  financial  statement  schedule as of and for the year ended June 30,  2001,
prior to the  adjustments  discussed  in the summary of  significant  accounting
policies,  were audited by auditors who have ceased  operations.  Those auditors
expressed an unqualified opinion on those consolidated  financial statements and
schedule in their report dated August 17, 2001.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audits to obtain  reasonable  assurance  about whether the financial
statements  and schedule are free of material  misstatement.  An audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements  and schedule.  An audit also includes  assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.  We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects,  the financial position of Ross Systems,  Inc.
and  subsidiaries  as of June  30,  2003  and  2002,  and the  results  of their
operations  and their cash flows for the years  then  ended in  conformity  with
accounting principles generally accepted in the United States of America.

Also,  in our  opinion,  the 2003  and 2002  schedules  present  fairly,  in all
material respects, the information set forth therein.

As discussed in Note 1, during the year ended June 30, 2002 the company  changed
the manner in which it records reimbursement of out-of- pocket expenses upon the
adoption of the  accounting  standards  in of  Emerging  Issues Task Force Issue
01-14.

As discussed in Note 1, the Company  changed the manner in which it accounts for
goodwill and other intangible  assets upon adoption of the accounting  standards
in Statement of Financial Accounting Standards No. 142 on July 1, 2001,

As  discussed  above,  the  financial   statements  of  Ross  Systems  Inc.  and
subsidiaries  as of June 30,  2001,  and for each of the two years in the period
ended June 30, 2001, were audited by other auditors who have ceased  operations.
As described in Note 1, these financial statements have been restated to reflect
the  adoption of  Emerging  Issues Task Force Issue 01-14 and revised to include
the  transitional   disclosures  required  by  SFAS  No.  142.  We  audited  the
adjustments  described in Note 1 that were applied to restate the 2001 financial
statements to reflect the adoption of Emerging Issues Task Force Issue 01-14. We
also audited the adjustments reflected in the transitional  disclosures required
by SFAS No. 142. In our opinion,  such adjustments are appropriate and have been
properly  applied.  However,  we were not engaged to audit,  review or apply any
procedures  to the 2001  financial  statements  of the company,  other than with
respect to such  adjustments and,  accordingly,  we do not express an opinion or
any other form of assurance on the 2001 financial statements taken as a whole.



                              /s/ BDO Seidman, LLP

Atlanta, Georgia
August 20, 2003 (Except for Note 9 as to which the date is September 4, 2003)

                                      F-1
<PAGE>

                       ROSS SYSTEMS, INC AND SUBSIDIARIES


THE FOLLOWING REPORT IS A COPY OF A PREVIOUSLY  ISSUED REPORT BY ARTHUR ANDERSEN
LLP AND IT HAS NOT BEEN REISSUED BY ARTHUR ANDERSEN LLP. ARTHUR ANDERSEN LLP HAS
NOT  CONSENTED  TO ITS  INCORPORATION  BY  REFERENCE  INTO ROSS  SYSTEMS  INC.'S
PREVIOUSLY  FILED  REGISTRATION  STATEMENTS  FILE  NOS:  333-65660,   333-39348,
33-42036,  33-48226,  33-56584,   33-72168,  33-89128,   333-36745,   333-44665,
333-71005, 33-89504, 333-19619,  333-06053, 333-44363, 333-47877, 333-58639, AND
333-65065.  THEREFORE, AN INVESTOR'S ABILITY TO RECOVER ANY POTENTIAL DAMAGE MAY
BE LIMITED.

                REPORT OF PREVIOUS INDEPENDENT PUBLIC ACCOUNTANTS


     To Ross Systems, Inc.:


We have audited the  accompanying  consolidated  balance sheets of Ross Systems,
Inc. (a Delaware corporation) AND SUBSIDIARIES as of June 30, 2001 and 2000* and
the related  consolidated  statements of operations,  shareholders'  equity, and
cash flows for each of the three  years  ended June 30,  2001.  These  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position  of Ross  Systems,  Inc.  and
subsidiaries as of June 30, 2001 and 2000*,  and the results of their operations
and  their  cash  flows  for each of the  three  years  ended  June 30,  2001 in
conformity with accounting principles generally accepted in the United States.

Our  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial  statements  taken as a whole.  The  schedule  listed  in the index of
financial  statements included in Item 14 is presented for purposes of complying
with the Securities and Exchange Commission's rules and is not part of the basic
financial  statements.   This  schedule  has  been  subjected  to  the  auditing
procedures  applied in the audits of the basic financial  statements and, in our
opinion,  fairly states in all material  respects the financial data required to
be set forth therein in relation to the basic  financial  statements  taken as a
whole.


ARTHUR ANDERSEN LLP



Atlanta, Georgia
August 17, 2001

*  The  2000  and  2001  Consolidated  Balance  Sheet  and  the  1999  and  2000
Consolidated  Statement of Operations,  Shareholders  Equity, and Cash Flows are
not required to be present in the 2003 Annual Report.

                                      F-2
<PAGE>

                       ROSS SYSTEMS, INC AND SUBSIDIARIES


                           CONSOLIDATED BALANCE SHEETS
                        (In thousands, except share data)
<TABLE>
<CAPTION>


                                                                                                       June 30,
                                                                                               ------------------------
                                                                                                  2003          2002
                                                                                               ---------      ---------
              ASSETS
Current assets:
<S>                                                                                            <C>            <C>
   Cash and cash equivalents................................................................   $   8,628      $   5,438
   Accounts receivable, less allowance for doubtful accounts
      of  $1,532 and $3,379, at 2003, and 2002 respectively.................................      12,880         12,319
   Prepaid and other current assets.........................................................         731            532
   Note receivable from related party.......................................................           -            850
                                                                                               ---------      ---------
      Total current assets..................................................................      22,239         19,139
Property and equipment, net.................................................................       1,406          1,450
Computer software costs, net ...............................................................      13,573         14,036
Other assets................................................................................       2,993          2,993
                                                                                               ---------      ---------
      Total assets..........................................................................   $  40,211      $  37,618
                                                                                               =========      =========
  LIABILITIES AND SHAREHOLDERS'
              EQUITY
Current liabilities:
   Short term debt..........................................................................   $   2,800      $   3,967
   Accounts payable.........................................................................       2,978          2,682
   Accrued expenses.........................................................................       4,940          4,476
   Income taxes payable.....................................................................         261             15
   Deferred revenues........................................................................      12,203         12,535
                                                                                               ---------      ---------
      Total liabilities.....................................................................      23,182         23,675
                                                                                               ---------      ---------

Commitments and Contingencies

Shareholders' equity:
    Convertible Preferred stock, no par value 5,000,000 shares authorized; 500,000 shares
   issued and outstanding...................................................................       2,000          2,000
   Common stock, $0.001 par value; 15,000,000 shares authorized; 2,815,603 and
      2,625,378 shares issued and outstanding...............................................          28             26
   Additional paid-in capital...............................................................      87,189         86,983
   Accumulated deficit......................................................................     (69,094)       (73,300)
   Accumulated other comprehensive deficit..................................................      (1,749)        (1,766)
   Treasury stock at cost, 158,977 shares...................................................      (1,345)             -
                                                                                               ---------      ---------
     Total shareholders' equity............................................................       17,029         13,943
                                                                                               ---------      ---------
Total liabilities and shareholders' equity..................................................   $  40,211      $  37,618
                                                                                               =========      =========
</TABLE>

           See accompanying Notes to Consolidated Financial Statements



                                      F-3
<PAGE>
<TABLE>
<CAPTION>

                       ROSS SYSTEMS, INC AND SUBSIDIARIES


                      CONSOLIDATED STATEMENTS OF OPERATIONS
                        (In thousands, except share data)

                                                                                                     Years ended June 30,
                                                                                               -----------------------------------
                                                                                                  2003       2002          2001
                                                                                               ---------    ---------    ---------
Revenues:
<S>                                                                                            <C>          <C>          <C>
   Software product licenses.................................................................. $  14,589    $  13,026    $   9,607
   Consulting and other services..............................................................    13,489       13,013       16,520
   Maintenance................................................................................    20,022       20,014       24,678
                                                                                               ---------    ---------    ---------
      Total revenues..........................................................................    48,100       46,053       50,805
                                                                                               ---------    ---------    ---------
Operating expenses:
   Costs of software product licenses.........................................................     2,295        1,870          980
   Costs of consulting, maintenance and other services (inclusive of reimbursable expenses of
      $1,180, $834, and $1,307 for 2003, 2002, and 2001, respectively, and exclusive of non
      recurring expense of $353 for 2001) ....................................................    17,193       17,023       17,595
   Non-cash charge for impairment of capitalized software costs...............................         -       10,938            -
   Software product license sales and marketing (exclusive of non recurring expense of  $136
      for 2001)...............................................................................    11,384        9,461       15,026
   Product development, net of capitalized computer software costs and amortized computer
      software costs (exclusive of non recurring expense of $301 for 2001) ...................     7,230       10,241       11,496
   General and administrative.................................................................     4,376        4,393        4,737
   Provision for uncollectible accounts.......................................................       831        1,444        1,514

   Amortization of goodwill...................................................................         -            -          691
   Non-recurring costs (benefit)..............................................................         -         (650)         790
                                                                                               ---------    ---------    ---------
      Total operating expenses................................................................    43,309       54,720       52,829
                                                                                               ---------    ---------    ---------
      Operating profit (loss).................................................................     4,791       (8,667)      (2,024)
Other income (expense):
   Gain on sale of product line...............................................................         -            -        2,372
   Other financial, net.......................................................................      (180)        (625)      (1,181)
                                                                                               ---------    ---------    ---------
      Net income (loss) before income taxes...................................................     4,611       (9,292)        (833)
    Income tax expense........................................................................       405          132            9
                                                                                               ---------    ---------    ---------
Net income (loss).............................................................................     4,206       (9,424)        (842)
     Preferred stock dividends                                                                      (150)        (150)           -
                                                                                               ---------    ---------    ---------
      Net income (loss) available to common shareholders...................................... $   4,056    $  (9,574)   $    (842)
                                                                                               =========    =========    =========
Net income (loss) per common share--basic ..................................................... $   1.54    $   (3.65) $     (0.33)
                                                                                               =========    =========    =========
Net income (loss) per common share--diluted.................................................... $   1.28    $   (3.65) $     (0.33)
                                                                                               =========    =========    =========
Shares used in per share computation--basic ...................................................    2,641        2,625        2,566
                                                                                               =========    =========    =========
Shares used in per share computation--diluted .................................................    3,296        2,625        2,566
                                                                                               =========    =========    =========
</TABLE>


           See accompanying Notes to Consolidated Financial Statements

                                      F-4

<PAGE>

                       ROSS SYSTEMS, INC AND SUBSIDIARIES
<TABLE>
<CAPTION>


                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)

                                                                                                       Years ended June 30,
                                                                                               -----------------------------------
                                                                                                 2003         2002         2001
                                                                                               ---------    ---------    ---------
Cash flows from operating activities:
<S>                                                                                            <C>          <C>          <C>
   Net income (loss).............................................................              $   4,206    $  (9,424)   $    (842)
   Adjustments to reconcile net loss to cash provided by operating activities:
      Non cash financing costs...................................................                     --           --           60
      Non-cash stock compensation costs..........................................                    175           --           --
      Impairment of  capitalized  software costs.................................                     --       10,938           --
      Depreciation and amortization of property and equipment....................                    766          984        1,592
      Amortization of computer software costs....................................                  4,702        7,184        7,369
      Amortization of goodwill...................................................                     --           --          691
      Provision for uncollectible accounts.......................................                    831        1,444        1,514
      Changes in operating assets and liabilities, net of sale of product line:
        Accounts receivable......................................................                 (1,246)      (3,646)       9,911
        Prepaid and other current assets.........................................                   (121)         575         (149)
        Income taxes recoverable/payable.........................................                    271          185           92
        Accounts payable.........................................................                    281       (2,218)      (2,178)
        Accrued expenses.........................................................                    489         (881)      (1,011)
        Deferred revenues........................................................                   (246)         (66)      (2,991)
                                                                                               ---------    ---------    ---------
            Cash provided by operating activities................................                 10,108        5,075       14,058
                                                                                               ---------    ---------    ---------
Cash flows from investing activities:
   Purchases of property and equipment, net......................................                   (722)        (740)        (277)
   Computer software costs capitalized...........................................                 (4,239)      (4,307)      (6,878)
   Note receivable from related party repaid                                                         850           --           --
   Sale of product line, net of assets disposed..................................                     --           --        1,567
   Other.........................................................................                     --          144          429
                                                                                               ---------    ---------    ---------
           Cash used in investing activities.....................................                 (4,111)      (4,903)      (5,159)
                                                                                               ---------    ---------    ---------
Cash flows from financing activities:
   Net cash paid on line of credit activity......................................                 (1,167)        (555)      (5,353)
   Debt and capital lease payments...............................................                     --           --       (1,723)
   Repurchase of treasury stock                                                                   (1,345)
   Proceeds from issuance of preferred stock ....................................                     --           --        2,000
   Proceeds from issuance of common stock........................................                    183          101           17
   Preference dividend paid......................................................                   (150)        (150)          --
                                                                                               ---------    ---------    ---------
           Cash used in  financing activities....................................                 (2,479)        (604)      (5,059)
                                                                                               ---------    ---------    ---------
Effect of exchange rate changes on cash..........................................                   (328)         154         (134)
                                                                                               ---------    ---------    ---------
Net increase (decrease) in cash and cash equivalents.............................                  3,190         (278)       3,706
                                                                                               ---------    ---------    ---------
Cash and cash equivalents at beginning of fiscal year............................                  5,438        5,716        2,010
                                                                                               ---------    ---------    ---------
Cash and cash equivalents at end of fiscal year..................................              $   8,628    $   5,438    $   5,716
                                                                                               =========    =========    =========
</TABLE>



           See accompanying Notes to Consolidated Financial Statements

                                       F-5
<PAGE>

                         ROSS SYSTEMS, INC AND SUBSIDIARIES

<TABLE>
<CAPTION>


                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                 (In thousands)

                                                                                                        Accum-
                                                                                                        ulated
                                                                                                        Other     Total
                                                                                                        Compre    Share-    Compre
                              Preferred Stock     Common Stock    Treasury Stock  Paid in  Accumulated  hensive   holders'  hensive
                             Shares   Amount     Shares   Amount  Shares  Amount  Capital    Deficit    Deficit   Equity     Loss
                             ------  --------    ------  -------  ------  ------  --------   --------   -------   -------   -------


<S>                            <C>   <C>          <C>    <C>        <C>   <C>     <C>        <C>        <C>       <C>
Balances as of June 30, 2000    --   $    --      2,380  $    24     --   $  --   $ 85,780   $(63,034)  $(1,880)  $20,890
                             ------  --------    ------  -------  ------  ------  --------   --------   -------   -------
Conversion of debentures ...                        173        2                     1,175                          1,177
Issuance of stock pursuant
   to employee stock
   purchase plan............                         13                                 17                             17
Effect of foreign currency
   translation..............                                                                               (198)     (198)  $  (198)
Issuance of preference
   shares                      500     2,000                                                                        2,000
Issuance of warrants
   pursuant to cost of
   financing                                                                            60                             60
Net loss....................                                                                     (842)               (842)     (842)
                                                                                                                            -------
Comprehensive Loss..........                                                                                                 (1,040)
                                                                                                                            =======

                             ------  --------    ------  -------  ------  ------  --------   --------   -------   -------
Balances as of June 30, 2001   500     2,000      2,566       26     --      --     87,032    (63,876)   (2,078)   23,104
                             ======  ========    ======  =======  ======  ======  ========   ========   =======   =======   =======
Issuance of stock pursuant
   to employee stock
   purchase
   and option plans.........                         59                                101                            101
Effect of foreign currency
   translation..............                                                                                312       312       312
Net loss....................                                                                   (9,424)             (9,424)   (9,424)
Dividends on preferred stock                                                          (150)                          (150)
                                                                                                                            -------
Comprehensive Loss..........                                                                                                 (9,112)
                                                                                                                            =======
                             ------  --------    ------  -------  ------  ------  --------   --------   -------   -------
Balances as of June 30, 2002   500     2,000      2,625      26      --      --     86,983    (73,300)   (1,766)   13,943
                             ======  ========    ======  =======  ======  ======  ========   ========   =======   =======
Issuance of stock pursuant
   to employee stock
   purchase
   and option plans.........                         71       1                        357                            358
Issuance of stock in
   fulfillment of 1996
   acquisition of Spanish
   subsidiary                                       120       1                         (1)
Repurchase of treasury stock                                       (159)   (1,345)                                 (1,345)
Effect of foreign currency
   translation..............                                                                                 17        17        17
Net profit (loss)...........                                                                    4,206               4,206     4,206

Dividends on preferred stock                                                          (150)                          (150)
                                                                                                                            -------
Comprehensive Income........                                                                                                $ 4,223
                                                                                                                            =======
                             ------  --------    ------  -------  ------  ------  --------   --------   -------   -------
Balances as of June 30, 2003   500   $ 2,000      2,816  $    28    (159) $1,345) $ 87,189   $(69,094)  $(1,749)  $17,029
                             ======  ========    ======  =======  ======  ======  ========   ========   =======   =======

</TABLE>

           See accompanying Notes to Consolidated Financial Statements

                                       F-6

<PAGE>
                       ROSS SYSTEMS, INC AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)  Description of Business and Summary of Significant Accounting Policies


     Business of the Company

     Ross Systems,  Inc. (NASDAQ:  ROSS) delivers  innovative software solutions
that help  manufacturers  worldwide  fulfill their  business  growth  objectives
through increased operational efficiencies, improved profitability, strengthened
customer  relationships and streamlined  regulatory  compliance.  Focused on the
food and  beverage,  life  sciences,  chemicals,  metals  and  natural  products
industries  and  implemented  by over 1,000 customer  companies  worldwide,  the
company's family of Internet-architected  solutions is a comprehensive,  modular
suite that spans the enterprise, from manufacturing, financials and supply chain
management  to customer  relationship  management,  performance  management  and
regulatory compliance.

     Publicly  traded on the NASDAQ since 1991,  Ross' global  headquarters  are
based in the U.S. in Atlanta,  Georgia, with sales and support operations around
the world.

     The Company  operates in one business  segment and no  individual  customer
accounts  for more  than  10% of total  revenues.  The  Company  does not have a
concentration  of  credit  risk in any one  industry.  Approximately  60% of the
Company's revenues are derived from the North American market.

Basis of Presentation

     The accompanying  consolidated financial statements include the accounts of
the Company and its wholly owned  subsidiaries.  All  significant  inter-company
balances and transactions have been eliminated in consolidation.

Stock Based Compensation.

     The company measures  compensation  cost for its stock incentive and option
plans using the intrinsic value-based method of accounting.

     Had the company used the fair  value-based  method of accounting to measure
compensation  expense  for its stock  incentive  and  option  plans and  charged
compensation  cost against  income over the vesting  periods,  based on the fair
value of options at the date of grant,  net  income  and the  related  basic and
diluted per common  share  amounts for the twelve  months  ended June 30,  2003,
2002, and 2001, would have been reduced to the following pro forma amounts:

<TABLE>
<CAPTION>


      (In thousands, except per share data)
                                                                    Fiscal year ended June 30,
                                                                  -----------------------------
                                                                    2003      2002       2001
                                                                  -------   --------   --------

<S>                                                               <C>       <C>        <C>
  Net income (loss) available to common shareholders:
    As reported.............................................      $ 4,056   $ (9,574)  $   (842)
      Add: Stock-based compensation expense included in
      reported net income  , net of tax                               175        --         --

      Deduct: Total stock-based employee compensation
     expense under fair value-based method, net of tax              (699)       (406)      (460)
                                                                  -------   --------   --------
    Pro forma net income (loss) available to common
     shareholders...........................................      $ 3,532   $ (9,980)  $ (1,302)
                                                                  -------   --------   --------
  Basic net earnings per share:
    As reported ............................................      $  1.54   $  (3.65)  $  (0.33)
    Pro forma ..............................................         1.34      (3.80)     (0.51)
  Diluted net earnings per share:
    As reported ............................................         1.28      (3.65)     (0.33)
    Pro forma ..............................................         1.07      (3.80)     (0.51)
</TABLE>


                                      F-7

<PAGE>


                       ROSS SYSTEMS, INC AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     The following  weighted average  assumptions for the Company's Stock Option
Plan were used to determine the pro forma amounts noted above:

<TABLE>
<CAPTION>


                                                         Year ended June 30,
                                                    --------------------------------
                                                       2003       2002        2001
                                                    ---------   ---------   --------

<S>                                                      <C>         <C>         <C>
Expected life...................................         5           5           5
Expected volatility.............................      48.6%       80.4%      121.6%
Risk-free interest rate.........................       3.9%        5.0%        5.3%
Expected dividend yield.........................      None        None        None

</TABLE>

     Revenue Recognition.

     In accordance  with  Securities and Exchange  Commission  Staff  Accounting
Bulletin No. 101 "Revenue  Recognition  in  Financial  Statements,"  the Company
recognizes  revenues from licenses of computer software "up-front" provided that
a  non-cancelable  license  agreement has been signed,  the software and related
documentation have been shipped, there are no material  uncertainties  regarding
customer acceptance,  collection of the resulting receivable is deemed probable,
and no significant other vendor  obligations  exist. The revenue associated with
any license agreements containing  cancellation or refund provisions is deferred
until such provisions lapse. Where the Company has future  obligations,  if such
obligations are insignificant,  related costs are accrued immediately.  When the
obligations are significant, the software product license revenues are deferred.
Future contractual obligations can include software customization,  requirements
to  provide  additional  products  in the  future and  porting  products  to new
platforms.  Contracts  which  require  significant  software  customization  are
accounted  for  on  the  percentage-of-completion  basis.  Revenues  related  to
significant  obligations to provide future products or to port existing products
are deferred until the new products or ports are completed.

     The  Company's  revenue  recognition  policies  are designed to comply with
American Institute of Certified Public Accountants Statement of Position ("SOP")
97-2,  "Software Revenue  Recognition,"  and with SEC Staff Accounting  Bulletin
("SAB")  No.  101,  "Revenue  Recognition  in  Financial  Statements."  Revenues
recognized from  multiple-element  software  license  contracts are allocated to
each element of the contracts based on the fair values of the elements,  such as
licenses for software  products,  maintenance,  or  professional  services.  The
determination of fair value is based on objective  evidence which is specific to
the Company.  The Company limits its  assessment of objective  evidence for each
element to either the price charged when the same element is sold separately, or
the price established by management having the relevant  authority to do so, for
an element not yet sold separately. If evidence of fair value of all undelivered
elements exists but evidence does not exist for one or more delivered  elements,
then revenue is recognized using the residual method. Under the residual method,
the fair value of the undelivered elements is deferred and the remaining portion
of the arrangement fee is recognized as revenue.

     The Company utilizes distributors primarily in those geographic areas where
the  Company  does not  maintain  a physical  presence.  The  Company's  revenue
recognition  policies  with respect to sales by  distributors  complies with SOP
97-2 and SAB 101 in that all the revenue  recognition  criteria listed above are
met. In addition,  distributors do not have rights of return, price protections,
rotation  rights,  or other  features that would preclude  revenue  recognition.
Generally,  the value of software license sales to distributors is based on list
selling prices less a discount at a predetermined rate.  Similarly,  the Company
receives revenue from  distributors  based on a predetermined  percentage of the
maintenance  fees  billed  by  the  distributor  to  the  end  customer.   The
distributor  typically  retains  any  fees  earned  by them  for  implementation
services.  Distributorships may or may not be geographically  exclusive, and are
generally subject to annual renewals by the Company.


     Service  revenues  generated  from  professional  consulting  and  training
services are  recognized as the services are  performed.  Maintenance  revenues,
including revenues bundled with original software product license revenues,  are
deferred and recognized over the related contract period, generally 12 months.

Computer Software Costs.

     The  Company  capitalizes   computer  software  product  development  costs
incurred  in  developing  a  product  once  technological  feasibility  has been
established and until the product is available for general release to customers.
Technological feasibility is established when the Company either (1) completes a
detail program design that encompasses  product function,  feature and technical
requirements  and is ready for coding and  confirms  that the product  design is

                                      F-8

<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

complete,  that the  necessary  skills,  hardware  and software  technology  are
available to produce the product,  that the  completeness  of the detail program
design is  consistent  with the product  design by  documenting  and tracing the
detail program design to the product specifications, and that the detail program
design has been  reviewed  for  high-risk  development  issues  and any  related
uncertainties  have been resolved  through coding and testing or (2) completes a
product design and working model of the software  product,  and the completeness
of the  working  model and its  consistency  with the  product  design have been
confirmed by testing.  The Company  evaluates  realizability  of the capitalized
amounts based on expected  revenues from the product over the remaining  product
life.  Where future revenue streams are not expected to cover remaining  amounts
to be  amortized,  the  Company  either  accelerates  amortization  or  expenses
remaining  capitalized  amounts.  Amortization  of such costs is computed as the
greater of (1) the ratio of  current  revenues  to  expected  revenues  from the
related  product sales or (2) a straight-line  basis over the expected  economic
life of the product (not to exceed five years).  Software  costs  related to the
development  of  new  products  incurred  prior  to  establishing  technological
feasibility or after general release are expensed as incurred.

As of June 30, 2003 and 2002,  capitalized  computer software costs approximated
$63,945,000 and $61,587,000  respectively,  and related accumulated amortization
totaled $50,372,000 and $47,551,000 respectively.


Cash and Cash Equivalents

     The Company  considers  all highly  liquid  investments  purchased  with an
original maturity date of three months or less to be cash equivalents.

Accounts Receivable and Allowance for Doubtful Accounts

     Accounts receivable comprise trade receivables that are credit based and do
not require collateral. Generally, the Company's credit terms are 30 days but in
some instances the Company offers extended payment terms to customers purchasing
software licenses.  The Company has a history of offering extended payment terms
from  time to time for  competitive  reasons.  These  terms are not  offered  in
connection with any contingencies related to product acceptance, implementation,
or any other service or  contingency  post-transaction,  and the Company has not
offered  concessions as a result of these terms.  Payment  arrangements in these
circumstances  typically  require payment of a significant  portion of the total
contract amount within 30 days of the sale, with 2 or 3 subsequent  installments
making  up the  balance  payable  within 6  months.  The  Company  has not found
collectibility  to be  compromised  as a result of these terms.  In no case have
payment  terms  extended  beyond 12 months.  Based on  historical  results,  the
Company  believes that all  components of SOP 97-2 are met,  including  that the
arrangement is fixed and determinable.

     The Company  maintains an allowance  for  doubtful  accounts for  estimated
losses resulting from the inability of its customers to make required  payments.
On an ongoing  basis,  the  Company  evaluates  the  collectibility  of accounts
receivable   based  upon   historical   collections   and   assessment   of  the
collectibility   of   specific   accounts.   Ross   specifically   reviews   the
collectibility  of accounts with  outstanding  accounts  receivable  balances in
excess of 90 days  outstanding.  The Company  evaluates  the  collectibility  of
specific  accounts  using a  combination  of factors,  including  the age of the
outstanding balance(s),  evaluation of the account's financial condition, recent
payment history, and discussions with the account executive  responsible for the
specific customer and with the customer directly.  Based upon this evaluation of
the collectibility of accounts  receivable,  an increase or decrease required in
the  allowance  for  doubtful  accounts is  reflected in the period in which the
evaluation indicates that a change is necessary.  If actual results differ, this
could have an impact on the Company's financial condition,  results of operation
and cash flows.

Property and Equipment

     Property and  equipment  are stated at cost.  Depreciation  is  accumulated
using the straight-line method over the estimated useful lives of the respective
assets,  generally three to seven years.  Leasehold  improvements  and equipment
under  capital  leases are  amortized  using the  straight-line  method over the
shorter of the terms of the related leases or the respective useful lives of the
assets.

                                      F-9
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Long-lived Assets


     Long-lived assets are reviewed for impairment whenever events or changes in
circumstances  indicate  that  the  carrying  amount  of an  asset  may  not  be
recoverable.  If the sum of the expected future  undiscounted cash flows is less
than the carrying  amount of the asset,  a loss is recognized for the difference
between the fair value and the carrying value of the asset.


Fair Value of Financial Instruments


     The carrying amounts reported on the balance sheet for accounts receivable,
notes  receivable,  accounts payable and short term debt approximate  their fair
values.


Net Earnings (Loss) Per Common Share

     Basic earnings (loss) per common share is computed by dividing net earnings
or net loss by the weighted average number of common shares  outstanding  during
the period.  Shares  issued or  reacquired  during the year are weighted for the
portion  of the year that they were  outstanding.  Diluted  earnings  (loss) per
common  share is computed  in a manner  consistent  with that of basic  earnings
(loss) per share while giving effect to all  potentially  dilutive common shares
that were outstanding during the period. Potentially dilutive common shares used
in computing  diluted  earnings per share are shown in the following table. As a
result of the net losses  incurred in the years ended June 30,  2002,  and 2001,
the  potentially  dilutive  common  shares  for  these  fiscal  years  were  not
considered in the calculation as their impact would be antidilutive. Potentially
dilutive common shares excluded in 2003, 2002 and 2001 were as follows:

<TABLE>
<CAPTION>


                                                         Fiscal year ended June 30,
                                                         --------------------------
                                                      2003            2002          2001
                                                   ------------    ------------   ----------
<S>                                                    <C>             <C>          <C>
  Stock options .................................      347             41           39
  Warrants.......................................                      47
  Convertible Preferred shares...................                     500            1
                                                     ----------     ----------   ----------
   Total.........................................      347            588           40
                                                     ----------     ----------   ----------
</TABLE>


     The following is a reconciliation  from basic earnings per share to diluted
earnings per share for fiscal 2003 (in thousands) :

<TABLE>
<CAPTION>
                                                                 Earnings
                                                                available to
                                                                  common         Weighted average     Earnings
                                                                shareholders    shares outstanding    per share
                                                                ------------    ------------------    -----------
<S>                                                                <C>                 <C>              <C>
  Basic.......................................................     $4,056              2,641            $1.54
  Stock options...............................................                           108
  Warrants....................................................                            47
  Convertible Preferred shares................................        150                500
                                                                ------------    ------------------    -----------
  Diluted.....................................................      $4,206             3,296            $1.28
                                                                ------------    ------------------    -----------
</TABLE>



Goodwill

     In June 2001, the Financial Accounting Standards Board issued Statements of
Financial  Accounting  Standards No. 141,  Business  Combinations,  and No. 142,
Goodwill and Other Intangible Assets, effective for fiscal years beginning after
December 15, 2001. The Company elected early adoption and applied the provisions
of this statement,  effective in the first quarter of fiscal 2002. Under the new
rules,  goodwill  is no longer  amortized  but is subject  to annual  impairment
tests.  Other intangible  assets will continue to be amortized over their useful
lives. Goodwill attributable to each of the Company's reporting units was tested
in June 2003 for impairment by comparing the fair value of each of the reporting
units with its carrying  value.  The fair values of these  reporting  units were
determined  using a  combination  of  discounted  cash flow  analysis and market
multiples  based on  historical  and  projected  financial  information.  It was
determined that there was no impairment to goodwill in any period  subsequent to
the date the Company adopted SFAS 142.

     Net  loss  and loss  per  share  for  fiscal  2001,  adding  back  goodwill
amortization  of $691,000  ($0.27 per basic and diluted  share)  would have been
$(151,000), $(0.06) per basic and diluted share. Prior to July 1, 2001, goodwill
was being amortized over periods ranging from 7 to 10 years.

                                      F-10
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Reimbursable Expenses

     Prior to  January  1,  2002,  the  Company  recorded  reimbursement  by its
customers  for  out-of-pocket  expenses as a decrease to cost of  services.  The
Company's  results of operations  for the fiscal years June 30, 2001,  have been
reclassified for comparable purposes in accordance with the Emerging Issues Task
Force  release  01-14,  "Income  Statement  Characterization  of  Reimbursements
Received   for  Out  of  Pocket   Expenses   Incurred."   The   effect  of  this
reclassification was to increase both services revenues and cost of services by,
$1,307,000 for fiscal year 2001.


Income Taxes

     In accordance  with  Statement of Financial  Accounting  Standards No. 109,
"Accounting for Income Taxes"  ("Statement 109"), the Company utilizes the asset
and  liability  method  of  accounting  for  income  taxes.  Under the asset and
liability  method of  Statement  109,  deferred tax assets and  liabilities  are
established to recognize the future tax consequences attributable to differences
between  the  financial  statement  carrying  amounts  of  existing  assets  and
liabilities and their respective tax bases.


Foreign Operations and Currency Translation

     The  local  currencies  of  the  Company's  foreign  subsidiaries  are  the
functional  currencies.  Assets  and  liabilities  of foreign  subsidiaries  are
translated  into U.S.  dollars  at current  exchange  rates,  and the  resulting
translation  gains and losses are  included as an  adjustment  to  shareholders'
equity as a component of comprehensive income. Transaction gains and losses that
relate to U.S. dollar denominated  intercompany  short-term receivables recorded
in the  financial  statements  of the  Company's  foreign  subsidiaries  and are
reflected in income. Where related intercompany balances have been designated as
long-term,  gains and losses are  included  as an  adjustment  to  shareholders'
equity as a component of comprehensive income.


Reclassifications

     It is the Company's policy to reclassify prior year amounts to conform with
current year financial statement presentation when necessary.


Use of Estimates

     The  preparation  of financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of contingent  assets and  liabilities  at the dates of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting periods. Actual results could differ from these estimates.


Advertising Costs

     The  Company  generally   expenses   advertising  costs  at  the  time  the
advertisement  is  published,  or in the  case  of  direct  mail,  when  mailed.
Advertising  costs for the fiscal years ended June 30, 2003, 2002, and 2001 were
approximately $574,000, $437,000, and $607,000 respectively.


Segment Information

     SFAS No. 131  "Disclosures  about  Segments  of an  Enterprise  and Related
Information'' established standards for the way that public business enterprises
report information about operating segments in their financial  statements.  The
standard defines  operating  segments as components of an enterprise about which
separate financial  information is available that is evaluated  regularly by the
chief  operating  decision  maker in deciding how to allocate  resources  and in

                                      F-11
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




assessing performance.  Based on these standards the Company has determined that
it operates in four  geographical  segments:  Northern Europe,  Spain the United
Kingdom and North America.  During fiscal 2001, the Company  divested its French
subsidiary  and adopted an indirect  sales  approach in the French  market.  See
further discussion of this matter under "Acquisitions and Divestitures" below.

     The Company has no customers  that  represent ten percent or more of annual
revenues.

     For management  purposes,  the results of the Asian operations are included
in the North American results since the costs associated with managing the Asian
marketplace are born by the North American  entities within the Group.  Revenues
in the Asian markets  comprise less than 5% of total  revenues  reported for the
North American segment.  Selected balance sheet and income statement information
pertaining  to the various  significant  geographic  areas of  operation  are as
follows:

<TABLE>
<CAPTION>



              As of and for the year ended June 30, 2003 (in thousands) :

                                                     Net Income      Depreciation       Capital
                           Gross Assets    Revenue     (Loss)      and Amortization   Expenditures
                           ------------   --------   -----------   ----------------   ------------
<S>                        <C>            <C>        <C>           <C>                   <C>
Northern Europe........    $  2,987       $  5,000   $    475      $      60             $      68
Spain..................       6,220          6,902        615            306                   259
United Kingdom.........       2,569          5,545        387             54                    39
North America..........      28,435         30,653      2,729            346                   356
                           ------------   --------   -----------   ----------------   ------------
Total..................    $ 40,211       $ 48,100   $  4,206      $     766             $     722
                           ============   ========   ===========   ================   ============

              As of and for the year ended June 30, 2002 (in thousands) :

                                                     Net Income       Depreciation       Capital
                           Gross Assets    Revenue    (Loss)       and Amortization   Expenditures
                           ------------   --------   -----------   ----------------   ------------
Northern Europe..........  $  2,518       $  5,579   $    676      $      60            $  159
Spain....................     4,723          6,431      1,622            247                96
United Kingdom...........     2,969          5,127        134             62                21
North America............    27,408         28,916    (11,856)           615               464
                           ------------   --------   -----------   ----------------   ------------
Total....................  $ 37,618       $ 46,053   $ (9,424)     $     984            $  740
                           ============   ========   ===========   ================   ============


           As of and for the year ended June 30, 2001 (in thousands):

                                                     Net Income     Depreciation        Capital
                           Gross Assets   Revenue      (Loss)      and Amortization   Expenditures
                           ------------   --------   -----------   ----------------   ------------
Northern Europe........    $  1,583       $  4,947   $    (210)    $      80          $     35
Spain..................       2,248          4,218         (56)          182                38
United Kingdom.........       2,985          5,162      (1,014)          126                 4
North America..........      43,646         36,478         438         1,895               200
                           ------------   --------   -----------   ----------------   ------------
Total..................    $ 50,462       $ 50,805   $    (842)    $   2,283          $    277
                           ============   ========   ===========   ================   ============

</TABLE>



New Accounting Pronouncements

     In  November  2002,  the FASB issued  FASB  Interpretation  ("FIN") No. 45,
"Guarantor's  Accounting and Disclosure  Requirements for Guarantees,  Including
Indirect Guarantees of Indebtedness of Others",  which clarifies  disclosure and
recognition/measurement   requirements   related  to  certain  guarantees.   The
disclosure  requirements  are effective for  financial  statements  issued after
December 15, 2002 and the recognition/measurement  requirements are effective on
a prospective  basis for guarantees  issued or modified after December 31, 2002.
The application of the requirements of FIN 45 did not have a significant  impact
on our financial position or result of operations.



                                      F-12
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



     In  December  2002,  the FASB  issued  Statement  of  Financial  Accounting
Standards  No. 148,  Accounting  for  Stock-Based  Compensation--Transition  and
Disclosure--an  amendment of FASB  Statement  No. 123  ("Statement  148").  This
amendment  provides two additional  methods of transition for a voluntary change
to  the  fair  value  based  method  of  accounting  for  stock-based   employee
compensation.  Additionally,  more  prominent  disclosures  in both  annual  and
interim financial statements are required for stock-based employee compensation.
The transition  guidance and annual  disclosure  provisions of Statement 148 are
effective for fiscal years ending after December 15, 2002.  The Company  adopted
the disclosure provisions of SFAS 148 during fiscal 2003.


     In  January  2003,  the FASB  issued  FASB  Interpretation  No.  (FIN)  46,
"Consolidation of Variable Interest Entities." This Interpretation of Accounting
Research  Bulletin  No.  51,  "Consolidated   Financial  Statements,"  addresses
consolidation  by business  enterprises  of  variable  interest  entities  which
possess certain characteristics.  The Interpretation requires that if a business
enterprise has a controlling  financial  interest in a variable interest entity,
the assets, liabilities,  and results of the activities of the variable interest
entity must be included in the consolidated  financial  statements with those of
the business  enterprise.  This  Interpretation  applied immediately to variable
interest  entities  created  after  January 31,  2003 and to  variable  interest
entities in which an enterprise obtains an interest after that date. The Company
does not have any  ownership  in any variable  interest  entities as of June 30,
2003.

     In April 2003, the FASB issued Statement of Financial  Accounting Standards
No. 149,  Amendment  of  Statement  133 on  Derivative  Instruments  and Hedging
Activities  ("Statement 149"). This Statement amends Statement 133 for decisions
made  (1)  as  part  of  the  Derivatives   Implementation  Group  process  that
effectively  required  amendments to Statement 133, (2) in connection with other
Board projects  dealing with financial  instruments,  and (3) in connection with
implementation issues raised in relation to the application of the definition of
a derivative,  in particular,  the meaning of an initial net investment  that is
smaller  than  would be  required  for other  types of  contracts  that would be
expected to have a similar response to changes in market factors, the meaning of
underlying,  and the  characteristics  of a derivative  that contains  financing
components.  The Company  does not have any  derivative  instruments  or hedging
activities.  The  application  of  Statement  149 did not have an  impact on our
financial statements.

     In May 2003, the FASB issued  Statement of Financial  Accounting  Standards
No. 150,  Accounting for Certain Financial  Instruments with  Characteristics of
both  Liabilities  and Equity  ("Statement  150").  This  Statement  establishes
standards  for  how  an  issuer   classifies  and  measures  certain   financial
instruments with  characteristics  of both  liabilities and equity.  It requires
that an issuer  classify a  financial  instrument  that is within its scope as a
liability (or an asset in some  circumstances).  Many of those  instruments were
previously classified as equity. Statement 150 requires that certain mandatorily
redeemable  financial  instruments  issued  in  the  form  of  shares  are to be
classified as  liabilities  rather than equity.  The Company has no  outstanding
financial  instruments that fall into the definitions covered by this Statement.
The  application  of  Statement  150 did not have a  significant  impact  on our
financial statements.

     Non-recurring  items

     In October of 2000,  the Company  reorganized  its  European  presence  and
adopted an  indirect  sales model in France by  terminating  its  ownership  and
control of the French  subsidiary  due to the chronic and  sustained  losses and
negative cash flows suffered by the French subsidiary.  At that time, management
recorded what they deemed to be adequate reserves related to the possible future
costs for the change of presence in France by deferring the gain associated with
divesting net liabilities in this liquidating transaction. In the fourth quarter
of fiscal 2002,  the Company  experienced  a favorable  outcome  relating to the
French  subsidiary  liquidation  transaction  which rendered most of the reserve
unnecessary.  As a result the Company recorded a non-recurring  gain of $650,000
in fiscal year 2002, arising from the reduction of the reserve described above.

     On September 12, 2000, the Company announced restructuring efforts aimed at
reducing costs and improving efficiencies.  Under the restructuring, the Company
reduced  125  positions  across the  company as well as  accelerated  efforts to
eliminate  unneeded  office  space,  improve  productivity  through  the  use of
technology and focus on increased revenues through the use of distributors. As a
result of these  actions,  during  the first  quarter of fiscal  year 2001,  the
Company  recorded  a  $790,000  expense  to cover  the  liability  arising  from
associated  employee separation costs. The costs were accrued in accordance with
EITF Issue  94-3,  "Liability  Recognition  for Certain  Employee  Terminations,
Benefits and Other Costs to Exit an  Activity".  By March 31,  2001,  all of the
costs accrued in conjunction with both actions had been paid.



                                      F-13
<PAGE>




                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Non-cash Impairment of Capitalized Software Cost

     In the fourth  quarter of fiscal  2002,  the Company made a major change in
technology  direction.  The  Internet-related  functionality of the iRenaissance
product was re-directed  from the "java" based initial  development  used in the
Resynt  product  line  to  the  Microsoft  ".net"  technology.   A  new,  formal
development relationship with Microsoft was launched to support the requirements
of the new technology  direction.  This strategic  re-direction was based on the
Company's  belief  that the .net  technology  will  serve  the  Company  and its
customers  better  in the  future,  due to  fuller  market  penetration,  better
standards of compatibility,  and superior technical adaptability.  The result of
this change was that prior  development  in the former java  environment  became
obsolete.  Effective April 1, 2002, the amount of $5,488,000,  representing  all
unamortized software-project balances relating to this, was expensed.

     On April 23,  2002,  the  Company  announced  the General  Availability  of
Gembase  Version  6.0.  This version of Gembase,  the 4GL language  used for the
development  of  the  iRenaissance   products,   contained  major  functionality
differences  to prior  versions,  rendering all prior  versions  obsolete.  As a
result,   development  and  maintenance  of  all  versions  prior  to  6.0  were
discontinued and no further sales using these versions would be contemplated. In
addition, customers using these versions would be strongly encouraged to upgrade
to version 6.0 because the Company no longer supports development of any Gembase
release  lower than version 6.0.  Upgrades to the 6.0 version  would be strongly
supported and to encourage and facilitate customers' upgrading,  the product was
designed to make the transition  straight-forward.  Since Gembase versions lower
than 6.0 would not  contribute any further  revenue to the Company,  even in the
short-term,  the related  unamortized  software-project  balances  amounting  to
$943,000 were expensed.

     On May 22, 2002 the Company  announced the release of iRenaissance  version
5.7. This version was significantly changed from the prior versions. Previous to
this release, upgrades from any version less than 4.4 to the latest version were
technically  challenging  resulting in an environment  not conducive to customer
upgrades. Version 5.7 offered a straight-forward upgrade capability to customers
on previous versions.  In addition,  version 5.7 contained a new "engine" at its
core, which significantly changed the way the software operated internally,  and
resulted in improved operating  efficiencies.  Since customers on versions lower
than  4.4  could  now  upgrade  without  difficulty,  the  Company  was  able to
discontinue the development and support of all versions prior to 4.4. No further
sales  using  these  versions  would be  contemplated.  This had the  effect  of
rendering all releases of iRenaissance which were lower than 4.4 obsolete. Since
iRenaissance  versions lower than 4.4 would not  contribute any further  license
revenue to the  Company,  and  renewable  maintenance  revenue  would soon be in
respect  of the newly  released  version  of the  product  rather  than an older
version,  the  related  unamortized   software-project   balances  amounting  to
$3,333,000 were expensed.

     During  May  2002,   the  Company   terminated   further  work  on  general
enhancements of the COBOL  technology  based  Renaissance  Classic product line.
Following  prolonged,  unfruitful  attempts to garner  interest in the  proposed
enhancements  from the customer  base, a twofold  decision was made; to continue
working with specific customers on custom product development,  and to introduce
a general  sales  program of free  software  license  upgrade  from the  Classic
product to the latest release of the iRenaissance product line for customers who
remain on maintenance.  The company will continue to support those customers who
remain   active  users  until  they  schedule   their   upgrade   conversion  to
iRenaissance.  Since no future  revenue  benefits are expected  from the general
enhancements  capitalized to date, the aggregate,  unamortized  software-project
balances amounting to $1,174,000 were expensed.

     The aggregate value of unamortized impaired software expensed in the fourth
quarter of fiscal  2002 was  $10,938,000.  This  action  will have the effect of
reducing  software cost  amortization  in future  years.  If the Company had not
recorded  this  expense,   additional   amortization  expense  of  approximately
$2,734,000 would be recorded during 2003.

                                      F-14
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



(2) Acquisitions and Note Receivable from Related Party

     On December 30, 1996,  the Company  acquired a 100%  ownership  interest in
Ross Systems  Iberica,  its distributor in Spain and Portugal for the prior five
years,  in  exchange  for  shares  of  the  Company's  common  stock  valued  at
approximately  $1,400,000.  The  acquisition was a non-cash stock exchange which
was  accounted for under the purchase  method of  accounting.  Accordingly,  the
results  of  operations  of the  acquired  business  have been  included  in the
Company's  results of  operations  since the date of  acquisition.  The purchase
agreement  mandated  that the  purchase  price be  guaranteed  based on security
prices  as of a date  which  had  been  mutually  extended  by the  parties  and
coincided  with the extension of the maturity to July 8, 2003 of a  non-interest
bearing,  recourse note receivable,  owed by the former majority  shareholder of
Ross  Systems  Iberica  to the  Company.  The  former  majority  shareholder  is
currently an employee of the Company. The Company, in its sole discretion, could
make up any difference  between the value of the shares originally  tendered and
the  guaranteed  purchase  price of Ross  Iberica  either by issuing  additional
shares or by paying cash. The note receivable  described herein totaled $850,000
and was  satisfied in full during March 2003, in  conjunction  with the treasury
stock transaction discussed below.

     At the time of acquisition, the seller was issued 10% of the purchase price
in  unrestricted  shares  with the  remainder  of the shares  restricted.  As of
December 31, 2002, the former majority  shareholder still held 20,000 restricted
shares which were all the restricted  shares that were issued to him at the time
of acquisition. During January 2003, the Company sought and received a unanimous
written  consent from its Board of Directors to issue  additional  shares to the
former majority  shareholder to satisfy the guaranteed purchase price agreement.
On the date of the Board  consent,  the share  price  was $9.  Accordingly,  the
Company  issued  120,000   additional  shares  to  satisfy  the  purchase  price
agreement.  Since the guaranteed purchase price was based on security prices and
was not based on an earn out factor or any other performance measure, this share
issuance resulted only in a change in the number of common shares outstanding.

     On the same day as the  issuance of these  additional  shares,  the Company
entered into an agreement with the former majority  shareholder that allowed the
Company to repurchase the former majority  shareholder's shares at $9 per share.
During January,  2003, the Company purchased these shares into treasury stock at
the agreed upon $9 per share. The Company anticipated that these treasury shares
would  be  issued  to  satisfy   conversions  of  its  outstanding   mandatorily
convertible preferred shares which must occur prior to or on June 30, 2006.

<TABLE>
<CAPTION>


(3) Property and Equipment

     A summary of property and equipment follows (in thousands) :

                                                                         June 30,
                                                                   -----------------------
                                                                       (In thousands)
                                                                      2003         2002
                                                                   -----------  ----------
<S>                                                                <C>            <C>
Computer equipment.............................................    $  5,747       $  5,691
Furniture and fixtures.........................................       1,187          1,143
Leasehold improvements.........................................         838          1,508
                                                                   -----------  ----------
                                                                      7,772          8,342
Less accumulated depreciation and amortization                       (6,366)        (6,892)
                                                                   -----------  ----------
                                                                   $  1,406       $  1,450
                                                                   ===========  ==========
 (4) Other Assets

              A summary of other assets follows (in thousands):
                                                                          June 30,
                                                                   -----------------------
                                                                         (In thousands)
                                                                       2003        2002
                                                                   -----------  ----------
Goodwill.......................................................    $  4,414       $  4,414
Note receivable................................................         750            750
Other..........................................................          62             62
                                                                   -----------  ----------
                                                                      5,226          5,226
Less accumulated amortization..................................      (2,233)        (2,233)
                                                                   -----------  ----------
                                                                   $  2,993       $  2,993
                                                                   ===========  ==========

                                      F-15
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 (5) Accrued Expenses

              A summary of accrued expenses follows (in thousands):
                                                                          June 30,
                                                                   -----------------------
                                                                         (In thousands)
                                                                      2003         2002
                                                                   -----------  ----------
Accrued vacation, salary and related compensation costs........    $  1,583       $  1,502
Sales, Use, VAT and GST taxes payable..........................       1,334          1,159
Interest payable...............................................          38             63
Professional fees..............................................         244            281
Royalties......................................................         844            806
Other..........................................................         897            665
                                                                   -----------  ----------
                                                                   $  4,940       $  4,476
                                                                   ===========  ==========
</TABLE>


(6) Debt

     The Company has a revolving credit facility with an asset-based lender with
a maximum credit line for up to $5,000,000,  an expiration date of September 23,
2004,  and an  interest  rate equal to the Prime Rate plus 2% (6.25% at June 30,
2003).  Borrowings under the credit facility are collateralized by substantially
all the assets of the Company.  The revolving  credit  facility may be withdrawn
if,  amongst other things (a) the Company fails to pay any principal or interest
amount due or (b) there is a material impairment of the Company's business which
would prevent loan repayment and (c) any of these events are not remedied by the
Company within allowable  periods.  At June 30, 2003, the Company had $2,131,000
outstanding  against the $5,000,000  revolving  credit  facility and at June 30,
2002,  approximately  $3,370,000 was outstanding  under the Company's  revolving
credit facility.

     The  Company  maintains  other  credit  facilities  in Spain  with  various
expiration dates over a period of twelve months from June 30, 2003.  Interest on
these facilities  ranges from 6% to 8% and the facilities are  collateralized by
various  assets of the  Spanish  subsidiary.  Balances  outstanding  under these
agreements  were  approximately  $669,000 and $597,000 at June 30, 2003 and 2002
respectively.




(7) Commitments and Contingencies

Leases

     The Company leases  facilities and certain equipment under operating leases
which expire at various  dates  through  fiscal  2016.  Certain  leases  include
renewal  options  and rental  escalation  clauses  to  reflect  changes in price
indices,  real estate taxes, and maintenance  costs. As of June 30, 2003, future
minimum lease payments under non-cancelable operating leases were as follows (in
thousands):

Fiscal Year
----------
2004........................................................... 1,384
2005...........................................................   816
2006...........................................................   634
2007...........................................................   442
Thereafter..................................................... 1,980
                                                               -------
Total future minimum lease payments............................$5,256
                                                               =======

     Rent expense  approximated  $1,189,000,  $1,236,000,  and  $2,267,000,  for
fiscal 2003, 2002, and 2001, respectively.




                                      F-16
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Litigation

a) On June 30, 1998, the Company  entered into a distribution  agreement with an
existing  Dutch systems  integrator  which entitled Ross to distribute a certain
project accounting product the systems integrator was developing.  The agreement
contained certain minimum annual payments totaling  $1,500,000 which, unless the
agreement was properly  canceled (as defined in the  agreement)  by Ross,  would
become due to the systems  integrator  if the  Company  did not achieve  certain
minimum  annual sales quotas.  The agreement  also required that the Company use
the systems  integrator's  personnel for certain  implementation and maintenance
activities.

     Over the next few years, the systems  integrator,  in Ross' view, failed to
consistently  successfully  implement the project accounting product at multiple
North  American  sites.  These  failures cost the Company  between  $300,000 and
$400,000 in legal fees,  uncollectible accounts receivable and settlement costs.
In  February  2001,  the  Company  cancelled  the  agreement  with  the  systems
integrator.

     The parties were not able to reach mutual agreement  regarding the terms of
a settlement,  and the systems  integrator invoked the arbitration clause of the
agreement in late 2001. The arbitration was commenced  before the  International
Court of Arbitration in Paris,  France,  with the systems integrator  ultimately
seeking multiple damages aggregating more than $4,000,000.


     See note 14 for recent developments regarding the outcome of this matter.

     b) On February 28, 2001,  the Company  completed the sale of certain assets
related to its Human Resource and Payroll  product line to Now  Solutions,  LLC,
(NOW), a majority owned subsidiary of Vertical Computer Systems  Inc.(Vertical).
Arglen  Acquisitions  (Arglen),  was also a party to the  transaction  and was a
holding  company used by NOW to complete the  transaction.  The gross asset sale
price was  $6,100,000.  The purchase price consisted of cash of $5,100,000 and a
note payable by NOW to Ross of $1,000,000.

     The note was non-interest bearing and was due in two installments; $250,000
due on February 28, 2002 and $750,000 due on February 28, 2003. NOW defaulted on
the second  installment  of $750,000 which remains  outstanding  and is accruing
interest at the rate of 10%, the default interest rate as defined in the note.

     On February 27, 2003,  the day before the final note  installment  was due,
Vertical  filed a  derivative  suit on behalf  of NOW  against  Ross and  others
alleging breach of contract, fraud, conspiracy and breach of fiduciary duty. The
suit  alleges  that  Ross  failed  to  schedule   approximately   $3,600,000  of
liabilities  related to  maintenance  agreements  assumed by NOW.  The suit also
alleges  that Ross  failed to  disclose to NOW a  transaction  brokerage  fee of
$600,000 that Ross was to pay to Arglen,  whose CEO signed the fee agreement and
who was also the CEO of NOW.  The suit also  alleges that Ross should be jointly
and severally liable for certain alleged frauds committed by other defendants in
which Ross  allegedly  conspired.  The suit further  seeks a setoff  against the
remaining note payment based on the above alleged  damages,  and the recovery of
its attorneys' fees and costs.  Ross denies and has contested each and every one
of Vertical's  claims. The Company does not believe that the outcome of range of
outcomes is determinable currently,  nor does it believe that should the outcome
be  unfavorable  that  it  would  be  materially  detrimental  to the  Company's
liquidity.

See note 14 for recent developments regarding the outcome of this matter.


(8) Capital Stock


Mandatorily Convertible Preferred Stock and Private Placement

     In  fiscal  1991,  the  Company  authorized  a new  class  of no par  value
preferred  stock  consisting  of  5,000,000  shares.  The Board of  Directors is
authorized  to issue the  preferred  stock in one or more  series and to fix the
rights,  preferences,  privileges  and  restrictions  of such  stock,  including
dividend rights,  dividend rates,  conversion  rights,  voting rights,  terms of
redemption,  redemption prices, liquidation preferences and the number of shares
constituting any series or the designation of such series,  without further vote
or action by the  shareholders.  All preferred stock was issued with a mandatory
conversion feature.



                                      F-17


<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS





     On June 29, 2001,  the Company  issued  mandatorily  convertible  preferred
stock to a qualified  investor in a private placement  transaction.  In summary,
the  investor  purchased  500,000  preferred  shares  at $4 per  share  yielding
$2,000,000 for the Company.  This price  represented a premium to the market for
the Company's  common stock at the time of issuance.  The average  closing share
price of the Company's common stock for the 30 trading days prior to the private
placement was  approximately  $2.22.  The  preferred  shares can be converted at
$4.00 per share after June 29, 2002 but before June 29,  2006,  on a one for one
basis.  The shares earn dividends at the rate of 7.5%. In conjunction  with this
transaction,  the Company issued warrants to the broker who assisted in securing
the  investor.  These  warrants  were  fairly  valued at  $60,000 on the date of
issuance and the expense has been  recorded in the  statement of operations as a
component of other expense (net) in the quarter ended June 30, 2001.

     On April 27, 2001 the Company  executed a reverse  stock split on the basis
of 1 share for 10 shares.

(9) Subsequent Events

Announcement of Proposed Merger

     In early September 2003, the Company  announced that it signed a definitive
agreement  whereby  chinadotcom  Software  (CDC) will  acquire Ross Systems in a
merger.

     See note 14 for recent developments regarding the merger.

(10) Employee Stock Plans


(a) Stock Option Plan

     The Company has reserved  210,000 shares of common stock for issuance under
its 1988  Incentive  Stock Plan and 810,000  shares of common stock for issuance
under  its 1998  Incentive  Stock  Plan  (collectively  the  "Plans").  The 1988
Incentive  Stock  Plan is  closed  and may not be used  for  further  issues  of
options.  Under the Plans,  the Company may issue options to purchase  shares of
the  Company's  common  stock  to  eligible  employees,   officers,   directors,
independent  contractors and  consultants.  The term of the options issued under
the Plans  cannot  exceed ten years from the date of grant.  Options  granted to
date generally become exercisable over four to five years based on the grantees'
continued service with the Company.

     A summary of the status of the Company's Plan as of June 30, 2003, 2002 and
2001 and activity for the fiscal years then ended is presented below:

<TABLE>
<CAPTION>

                                                    Number of      Weighted Average
                                                     Shares         Exercise Price    Exercisable
                                                   ----------      ----------------   -----------
<S>                <C> <C>                           <C>              <C>               <C>
Balance as of June 30, 2000....................      203,600          $ 28.70           102,800
Granted (at market value)......................      165,219          $  4.90
Cancelled/forfeited............................      (77,148)         $ 21.80
                                                   ------------
Balance as of June 30, 2001....................      291,671          $ 16.91           112,255
Granted (at market value)......................      137,333          $  4.91
Exercised .....................................      (10,243)         $  2.32
Cancelled/forfeited............................      (91,966)         $ 20.34
                                                   ------------
Balance as of June 30, 2002....................      326,795          $ 10.78           113,494
Granted (at market value)......................      252,828          $  8.01
Exercised .....................................      (31,048)         $  3.23
Cancelled /forfeited...........................      (19,756)         $ 18.27
                                                   ------------
Balance as of June 30, 2003....................      528,819          $  9.62           154,615
                                                   ============
</TABLE>

                                      F-18
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     The weighted  average  estimated  grant date fair value of options  granted
during fiscal 2003, 2002, and 2001 was $4.44,  $3.73,  and $4.49,  respectively.
The following table summarizes  information about the stock options  outstanding
at June 30, 2003:

<TABLE>
<CAPTION>


                                     Options Outstanding                            Options Exercisable
                        --------------------------------------------------  -------------------------------

                                      Weighted Average
                                        Remaining
Range of Exercise          Shares       Contractual       Weighted Average     Shares      Weighted Average
      Prices            Outstanding      Life              Exercise Price    Exercisable    Exercise Price
-------------------     -----------   ----------------   -----------------   -----------   ----------------

<C>                       <C>           <C>              <C>                  <C>           <C>
$1.88-$1.88.......        50,613        7.5 years        $  1.88              16,041        $     1.88
$3.25-$3.25.......         5,738        8.1 years           3.25               5,738              3.25
$3.50-$3.50.......        63,441        7.4 years           3.50              12,750              3.50
$3.75-$5.40.......        34,514        6.5 years           4.71              26,639              4.74
$7.25-$11.88......       275,428        9.1 years           7.89               9,987              9.62
$12.99-$25.00.....        39,615        7.0 years          16.35              25,040             17.28
$25.94-$25.94.....        39,350        4.1 years          25.94              39,350             25.94
$26.56-$52.50.....        17,715        4.1 years          33.35              16,665             33.46
$65.00-$65.00.....         2,100        3.5 years          65.00               2,100             65.00
$67.50-$67.50.....           305        1.4 years          67.50                 305             67.50
                        -----------   ----------------   -----------------   -----------   ----------------
Totals............       528,819        7.8 years          $9.62             154,615       $     16.06
                        ===========   ================   =================   ===========   ================

</TABLE>

(b) Employee Stock Purchase Plan

     The Company  initially  reserved 80,000 shares of common stock for issuance
under its 1991  Employee  Stock  Purchase  Plan  ("ESPP").  In fiscal 1999,  the
stockholders  approved  an  amendment  to the plan  whereby the number of shares
reserved  for  issuance  was  increased  to 95,000.  An amendment in fiscal 2002
provided  that  beginning  in fiscal 2001 and each year  thereafter,  the amount
reserved for issuance is increased by the lesser of 20,000 shares or 1% of total
outstanding common stock.

     Under the ESPP,  the  Company's  employees may  purchase,  through  payroll
deductions of 1% to 10% of  compensation,  shares of common stock at a price per
share that is the lesser of 85% of its fair market value as of the  beginning or
end of the offering  period.  Under the ESPP,  the Company  sold 19,507  shares,
29,146 shares,  and 11,409 shares,  to employees in fiscal 2003,  2002, and 2001
respectively.  The weighted  average fair value of those purchase rights granted
in fiscal  2003,  and 2002,  was $2.85 and $0.83,  respectively.  As of June 30,
2003, 182,922 shares had been issued under the ESPP.


(11) Income Taxes

     Gains and losses before  income taxes  include  foreign gains before income
taxes of  $1,507,000,  and foreign  losses  before  income  taxes of $30,000 for
fiscal 2003.  Foreign gains before income taxes were  $2,425,000 for fiscal 2002
and foreign losses before income taxes were  $(1,280,000)  for fiscal year 2001.
Income tax expense for the years ended June 30, 2003,  2002 and 2001 consists of
the following (in thousands):

                                                2003       2002       2001
                                               -------   --------   -------
Current:
  Federal................................      $  142    $   --     $ (140)
  Foreign................................          --       112        123
  State..................................         263        20         26
                                               -------   --------   -------
                                                  405       132          9
                                               -------   --------   -------
Deferred:
  Federal................................          --        --        --
  Foreign................................          --        --        --
  State..................................          --        --        --
                                               -------   --------   -------
                                                   --        --        --
                                               $  405    $  132     $    9
                                               =======   ========   =======

                                      F-19
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



     For the years  ended June 30,  2003,  2002,  and 2001,  the  reconciliation
between the amounts computed by applying the United States federal statutory tax
rate of 34% to loss before  income taxes and the actual tax expense  follows (in
thousands):
<TABLE>
<CAPTION>


                                                                          2003        2002         2001
                                                                        ---------   --------    ---------

<S>                                                                     <C>         <C>         <C>
Income tax expense (benefit) at statutory rate.......................   $   1,568   $ (3,159)   $ (283)
State income tax expense (benefit), net of federal income tax benefit         170        (13)       (37)
Change in beginning of year valuation allowance......................      (1,195)     3,028      3,063
Losses for which no benefit is recognized (foreign loss and rate)....         --         --         435
Rate differential related to foreign income and foreign tax
   withholdings......................................................         --         843        485
Amortization of other assets and other permanent differences.........        (138)      (567)    (3,654)
                                                                        ---------   --------    ---------
                                                                        $     405   $    132    $     9
                                                                        =========   ========    =========

</TABLE>

     The tax  effects of  temporary  differences  that give rise to  significant
portions of deferred tax assets and deferred  tax  liabilities  at June 30, 2003
and 2002 were as follows (in thousands):

                                                        2003           2002
                                                      ----------    ----------

Accruals and reserves...............................  $      428    $      670
Net operating loss carryforward (federal)...........      11,686        11,502
Net operating loss carryforward (state).............       1,521         2,386
Net operating loss carryforward (foreign)...........       2,300         2,748
Tax  credit carryforwards...........................       3,802         3,802
Fixed assets depreciation differences...............         407           399
                                                      ----------    ----------
      Total gross deferred tax assets...............      20,144        21,507
      Less valuation allowance......................     (14,698)      (15,893)
                                                      ----------    ----------
      Net deferred tax assets.......................       5,446         5,614
                                                      ----------    ----------
Capitalized computer software costs.................      (5,446)       (5,614)
                                                      ----------    ----------
      Total gross deferred liabilities..............      (5,446)       (5,614)
                                                      ----------    ----------
Net deferred taxes..................................  $      --     $      --
                                                      ==========    ==========


     The net  change in total  valuation  allowance  for the year ended June 30,
2003, was a decrease of approximately  $1,195,000.  The valuation  allowance has
been  established  to recognize  the  uncertainty  of utilizing  loss and credit
carryovers and certain deferred assets.

     At June 30, 2003,  the Company had net  operating  loss  carry-forwards  of
approximately  $34,370,000,  $25,354,000  and $7,187,000 for federal,  state and
foreign tax  purposes,  respectively.  At June 30,  2003,  the Company  also had
unused research and other credit carry-forwards of approximately  $3,368,000 and
$208,000 for federal and  California  tax purposes,  respectively.  The loss and
research credit carry-forwards, if not utilized, will expire between fiscal 2005
and 2020.


(12) Supplemental Cash Flow Information

     Supplemental cash flow information for the years ended June 30, 2003, 2002,
and 2001 follows (in thousands):

<TABLE>
<CAPTION>


                                                                              2003       2002       2001
                                                                             --------   -------    -------

Cash payments:
<S>                                                                          <C>        <C>       <C>
  Interest................................................................   $    349   $  642    $  1,228
  Income taxes............................................................   $    121   $  319    $     75
Non-cash investing and financing activities:
  Conversion of convertible debentures into stock (non-cash transaction)..   $    --    $  --     $  1,177
</TABLE>


                                      F-20
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(13) Selected Unaudited Quarterly Information
(In thousands, except per share data)

<TABLE>
<CAPTION>


                                                                               Quarter Ended

                                                             June 30    March 31      Dec.31    Sept. 30
Fiscal year 2003                                              2003       2003          2003       2003
                                                            ---------   --------     --------   ----------

Total net revenues                                          $12,988     $11,513(a)   $12,173    $11,426
<S>                                                             <C>         <C>          <C>        <C>
Cost of software product licenses                               979         449          521        346
Net income                                                    1,306         719        1,430        601
Earnings per share - basic                                     0.49        0.27         0.54       0.23
Earnings per share - diluted                                   0.40        0.22         0.45       0.20
Number of shares used in per share computation - diluted      3,362       3,387        3,260      3,267
</TABLE>



(a)  As  originally  stated,  third  quarter  revenues of  $11,420,000  excluded
     $93,000 of revenue which was recorded originally as a reduction of Costs of
     consulting, maintenance and other services.


<TABLE>
<CAPTION>


                                                                        Quarter Ended

                                                            June 30      March 31     Dec.31    Sept. 30
Fiscal year 2002                                              2002       2002          2001       2001
                                                            ---------   --------     --------   ----------

<S>                                                               <C>       <C>          <C>         <C>
Total net revenues                                            $11,173   $11,456      $11,425     $11,165
Cost of software product licenses                                 761       403          311         396
Net income (loss)                                            (10,857)       381          488         414
Charge for impairment of capitalized software                (10,288)         -          --           -
Earnings (loss) per share - basic                              (4.14)      0.16         0.19        0.16
Earnings (loss) per share - diluted                            (4.14)      0.13         0.17        0.13
Number of shares used in per share computation - diluted        2,625     3,209        3,152       3,144

</TABLE>



(14) Recent Developments (unaudited)

     On November 17,  2003,  the  Arbitrator  in the systems  integrator  matter
described more fully in note 7, announced an award of  approximately  $2,000,000
in favor of the systems integrator. The Company paid the award before the end of
calendar 2003 by funding the payment out of operating cash flows in the ordinary
course  of  business.   As  a  result,   the  Company  recognized  a  charge  of
approximately $1,900,000 during the quarter ending December 31, 2003 as $104,000
was previously recorded in accordance with the contract in its normal course.

     On November 18, 2003,  the Supreme Court of the State of New York dismissed
all of Vertical  Computer Systems  (Vertical) claims against Ross described more
fully in note 7.  Vertical  has  filed a Notice  of  Appeal.  The  Company  will
continue to defend this matter vigorously.

     On January  8,  2004,  the  Company  filed a current  report on Form 8-K to
announce  changes  to  the  terms  of  the  previously   announced  merger  with
chinadotcom. Under the terms of the merger agreement, as amended, for each share
of Ross common  stock held,  stockholders  of Ross  Systems may elect to receive
either (i) $17.00 in cash or (ii) $19.00 in a combination of cash and CDC common
shares for each share of the Company's common stock (the "Common  Shares").  CDC
common shares will be valued at the average closing price of such shares for the
10 trading days preceding the second  trading day before the closing date.  Both
companies are listed on NASDAQ.



                                      F-21
<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                     SCHEDULE II
<TABLE>
<CAPTION>


                       ROSS SYSTEMS, INC. AND SUBSIDIARIES
                        VALUATION AND QUALIFYING ACCOUNTS
                                 (in thousands)


                                                                       Additions
                                                                     ------------------------
                                               Balance at      Charged to       Charged
                                                Beginning       costs and      to other                              Balance at
Description                                     of period       expenses       accounts        Deductions(1)        End of period
----------                                      ---------      ---------       --------        ------------          ------------

<S>                                               <C>               <C>           <C>              <C>                   <C>
Year ended June 30, 2003 allowance for
   doubtful accounts and returns..........        $3,379            $831          $ --             $2,676                $1,532
                                                  ------           ------          ---             ------                ------
Year ended June 30, 2002 allowance for
   doubtful accounts and returns..........        $2,930          $1,444          $ -               $995                $3,379
                                                  ------           ------          ---             ------                ------
Year ended June 30, 2001 allowance for
   doubtful accounts and returns..........        $3,571          $1,514          $ -             $2,155                $2,930
                                                  ------           ------          ---             ------                ------

</TABLE>
       --------------
     (1)  Represents net charge-off of specific receivables.


                                      S-1