DIRECTORS REPORT
Dear Member,
The Directors of the Company have the pleasure to present this Integrated Annual Report of Cranes Software
International Limited ("the Company") along with the audited financial statements for the financial year ended
March 31,2023.
The consolidated performance of the Company and its subsidiaries has been referred to wherever required.
1. Consolidated/ Standalone Financial Performance:
|
Particulars
|
Standalone
|
Consolidated
|
|
Financial
Year
2022-23
(FY 2023)
|
Financial
Year
2021-22
(FY 2022)
|
Financial
Year
2022-23
(FY 2023)
|
Financial
Year
2021-22
(FY 2022)
|
|
Total Income
|
18,962.99
|
6,513.29
|
20,859.56
|
7,087.86
|
|
Total Expense
|
7,487.06
|
3,695.98
|
6,650.69
|
3,994.61
|
|
Profit/ (loss) before extraordinary items & tax
|
11,475.93
|
2,817.32
|
14,208.87
|
3,093.24
|
|
Exceptional Items
|
-
|
-
|
(1,140.00)
|
-
|
|
Profit / (loss) before tax
|
11,475.93
|
2,817.32
|
13,068.87
|
3,093.24
|
|
Deferred Tax
|
(20,234.69)
|
(4,351.08)
|
(22,817.35)
|
(4,581.30)
|
|
Profit / (loss) for the period
|
(8,758.75)
|
(1,533.76)
|
(9,754.39)
|
(1,499.83)
|
2. Consolidated/ Standalone Financial Performance:
The consolidated annual revenue from operations has registered an increaseof about 194% compared
with the previous year and the Company has posted a consolidated profit from operations before tax of
Rs. 142.09 crores as compared to profit of Rs. 30.93 crores in the previous year.
The standalone annual revenue from operations has registered an increase by about 191 % compared
with the previous year. The profit for the period before tax stands at Rs. 114.76 crores as compared with
profit of Rs. 28.17 crores in the previous year. The increase in the income and profits for this year is
majorly due to the one time settlement(s) with Bank(s) due to write back required.
In the year under review, the Company has made efforts to enhance its position by building products in
the areas of engineering services in the Engineering segment and in the educational segment and the
same is reflected in the revenue from operations. The Company continues to improve operational
effectiveness, optimize costs and increase market reach across all businesses. Barring unforeseen
circumstances, these initiatives will have positive impact in future.
Your Directors are continuously working on different avenues for future growth of the company.
3. Change in the nature of business, if any:
There was no change in nature of business activity during the year.
4. Dividend:
The Board did not declare any dividend for the present financial year in the absence of distributable
surplus.
5. Transfer to reserves:
There was no transfer to reserves during the year.
6. Share Capital:
During the financial year under review your there were no changes in the Capital Structure of your
Company.
7. Listing/Delisting:
The equity shares of the Company are listed at BSE Limited ("BSE").The Equity Shares of the Company
will continue to remain listed on BSE having nationwide terminals and the shareholders of the Company
shall continue to avail the benefits of listing and trading on BSE.
8. Events Subsequent to the date of the Financial Statements:
The Board of Directors at its meeting held on 30th November 2023:
a. to increase the authorized capital of the Company from Rs. 35 crores to Rs. 39 crores.
b. approved the partial conversion of loan taken from Techuni Ventures Private Limited for settlement of
loans to the various banks to Equity shares of the Company. The Board decided, subject to approval of
the shareholders by a special resolution, to offer, issue and allot 34,190,375 Equity Shares of Rs. 2
each @ premium of Rs. 2.57 per Equity Shares aggregating to Rs. 4.57 per Equity Shares upon partial
conversion of interest-bearing unsecured loan,
c. approved, subject to approval of the shareholders by a special resolution to offer/ issue/ allot 40,000,000
Equity convertible warrants of Rs. 4.57 each to be converted in accordance with SEBI (ICDR) Regulations
to Mr. Asif Khader, one of the Promoter and the Managing Director of the Company.
The above will have a bearing on the capital of the Company.
Other than the above, there have been no material changes and commitments which have affected the
financial position of the Company from the Financial Year ended 31st March, 2023 and the date of this
Board Report.
9. Public Deposits:
The Company has not accepted or invited any deposits falling within the meaning of Section 73 of the
Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 during the year under
review.
10. Details of Directors / Key Managerial Personnel:
During the period the Board was duly constituted as per the provisions of the Companies Act, 2013 and
the following directors were on the board:
|
Sl. No.
|
DIN
|
Name of Director
|
Designation
|
Date of Appointment
|
|
1.
|
00104893
|
Asif Khader
|
Managing Director
|
30/04/2002
|
|
2.
|
00106674
|
Mueed Khader
|
Director
|
30/04/2002
|
|
3.
|
00906340
|
Richard Holden Gall
|
Independent Director
|
16/05/2002
|
|
4.
|
07624256
|
Akthar Begum
|
Independent Director
|
12/08/2016
|
Pursuant to Section 203 of the Companies Act 2013 the Key Managerial Personnel for the period were as
follows:
|
Sl. No.
|
DIN/ PAN
|
Name of Key
Managerial
Personnel
|
Designation
|
Date of Appointment
|
|
1.
|
00104893
|
Asif Khader
|
Managing Director
|
30/04/2002
|
|
2.
|
ANBPM6724F
|
Honnappa Manjunath
|
Chief Financial Officer
|
08/09/2021
|
|
3.
|
GEDPS6725H
|
Joydeep Sarkar*
|
Company Secretary
|
01/09/2022
|
Mr. Joydeep Sarkar was relieved from the services with effect from 30th November 2022 consequent
to his resignation from the services of the Company.
Further, Mr. Mueed Khader (DIN: 00106674), Director of the Company retires by rotation and being
eligible, offers himself for re-appointment. A resolution seeking shareholders' approval for his re¬
appointment along with other required details forms part of the Notice of the Annual General Meeting.
The board considered his re-appointment and accordingly at the meeting held on 7th December 2023
upon the recommendation of the Nomination and Remuneration Committee approved the re-appointment
of Mr. Mueed Khader as the director of the Company to continue on the Board of directors of the
Company subject to approval of the shareholders in the ensuing Annual general meeting to be held on
30th December 2023.
Pursuant to the provisions of Section 149 of the Act, the independent directors have submitted
declarations that each of them meet the criteria of independence as provided in Section 149(6) of the
Act along with Rules framed thereunder and Regulation 16(1)(b) of the SEBI Listing Regulations. There
has been no change in the circumstances affecting their status as independent directors of the Company.
Ms. Apeksha Nagori (PAN: AJQA6750Q) took over as the Company Secretary, with effect from 30th
May 2023.
Ms. Apeksha Nagori is a member of the Institute of Company Secretaries of India, having membership
number: ACS 21952and has vast experience in the field of Company law, SEBI regulations and other
corporate legal matters.
11. Number of Meetings of the Board:
The Board met 6 (six) times during the financial year. The meeting details are provided in the Corporate
Governance report that forms part of this Annual report. The maximum interval between any two meetings
did not exceed 120 days, as prescribed in the Companies Act, 2013. The Board met on 30.05.2022,
13.08.2022, 08.09.2022, 01.10.2022, 14.11.2022 & 21.03.2023. Further all the Directors of the Company
were present on the Board Meetings.
12. Committees of the Board:
As on March 31,2023, the Board had four committees: the Audit Committee, the Nomination and
Remuneration committee, Corporate Social Responsibility Committee, Stakeholder's Relationship
Committee.
A detailed note on the composition of the Board and its committees is provided in the Corporate
Governance report.
13. Policy on directors' appointment and remuneration and other details:
The Company is in process of revamping the policy on directors appointment and remuneration.
14. Formal Annual Evaluation of the Board:
The guidelines for evaluating and assessing the performance of the directors are being modified due to
the expansion of the board. Generally, such assessment would include the decision-making abilities of
individual directors, strategic and value addition contributions at the meetings, charting your company's
policy and growth and introducing risk management policies.
As per listing regulations, the directors need to carry out an annual performance evaluation of the
Board, independent directors, whole-time and non-whole-time directors, committees of the Board and
chairman of the Board, which was done during the year.
15. Details of significant and material orders passed by the regulators or courts or tribunals
impacting the going concern status and Company's operations in future:
a. The members were informed in the last year's report of the Board of Directors that the Company had
filed jointly with the Foreign Currency Convertible Bond Holders for withdrawal of the winding up
petition. The Honorable Hight Court of Karnataka was pleased to withdraw the winding up order on
the Company. Necessary intimation was also filed with the Registrar of Companies, Karnataka.
b. The Honorable High Court of Karnataka had passed an order in favour of the Company in the matter
of petition filed by Securities Exchange Board of India (SEBI) in the matter of delay in payment of
dividend by the Company which was due to late approval from the Bank(s) pursuant to the loan
agreement with the Bank(s), however the same was paid three years before any complaint was
initiated by SEBI. SEBI had thereafter filed an appeal against the order in the Honorable Supreme
Court of India. The matter is yet to be adjudicated by the Honorable Supreme Court of India.
16. Details of Non-Compliance by the Company, Penalties, and Strictures imposed on the Company
by Stock Exchanges or SEBI or any Statutory Authority, on any matter related to Capital
Markets, during the last three years:
The Company has complied with the requirements of the Stock Exchanges or SEBI on matters related
to Capital Markets, as applicable, during the last three years. Following penalties or strictures have
been imposed on the Company:
|
Sr.
No.
|
Financial Year
|
Action taken by the
Authority
|
Details of violation
|
Details of action taken E.g.
fines, warning letter,
debarment, etc.
|
|
1.
|
2022-23
|
Bombay Stock
Exchange
|
Regulation 23(9)- Delay
in filing disclosures relat¬
ing to RPTs - INR 75000
GST of 18% aggregat¬
ing to INR 88,500 - fine
levied
|
BSE levied fine for delay in fil¬
ing disclosures relating to
RPTs.
|
| |
|
|
Regulation 6(1)- Delay in
appointing a Company
Secretary of the Com¬
pany- INR 51,000 GST
of 18% aggregating to
INR 60,180/- fine levied
|
BSE levied fine for delay in
appointing a Company Secre¬
tary of the Company
|
| |
|
|
Regulation 34 - delay in
filing Annual Report - INR
16000 GST aggregat¬
ing to INR 18,880 - fine
levied
|
BSE levied fine for delay in fil¬
ing Annual Report
|
| |
|
|
Regulation 33 - Delay in
filing un-audited financial
results for the quarter
ended 31st December
2022- INR1,40,000
GST fine of 18% aggre¬
gating to INR 1,65,200/-
fines levied.
|
BSE levied fine for delay in fil¬
ing un-audited financial results
for the quarter ended 31st
December 2022
|
| |
|
|
Regulation 31 - Delay in
filing shareholding pat¬
tern of the Company for
the quarter ended June
2022- INR 64,000 plus
18% GST aggregating to
INR 75,520/-
|
BSE levied fine for delay in
submission of shareholding
pattern for the quarter ended
30th June 2022
|
| |
|
|
Regulation 31A- delay in
filing the reclassification
of any person as pro-
moter/public- INR 84,000
plus 18% GST aggregat¬
ing to INR 99,120/-
|
BSE levied fine for delay in
submission of reclassification
of any person as promoter/
public
|
|
2.
|
2021-22
|
Bombay Stock
Exchange
|
Regulation 34 - delay in
filing Annual Report - INR
10000 GST aggregat¬
ing to INR 11,800 - fine
levied
|
BSE levied fine for delay in fil¬
ing Annual Report
|
| |
|
|
Reg-23 (9) - Delay in fil¬
ing disclosures relating
to RPTs - INR 85000
GST of 18% aggregating
to INR 100,300 - fine lev¬
ied
|
BSE levied fine for delay in fil¬
ing disclosures relating to
RPTs.
|
|
3.
|
2020-21
|
Bombay Stock
Exchange
|
Regulation 33 - Annual
audited Financial Re¬
sults - Late submission.
INR1,20,000 GST fine
levied - promoters
shareholdings frozen.
|
Delay in reporting of Financial
results for last year was due
to Covid-19 lockdown- the re¬
sults were announced after a
delay of 24 days. The Com¬
pany paid the fine to BSE.
Subsequent to the payment of
fine, the promoters
shareholding was released.
|
| |
|
|
Reg-19(1)/19(2) - recon¬
stitution of Board Com¬
mittees quarter ended
March 2020 - INR
1,82,000 GST fine lev¬
ied, promoters
shareholdings frozen
|
Constitution of Board Com¬
mittees - The Board had re¬
constituted the Board
Committee's but the Com¬
pany did not inform BSE. The
Company paid the fine and
after representation this fine
was waived off / reversed by
BSE.
|
| |
|
|
Reg-23(9) - Disclosure of
related party - Late sub¬
mission - INR 2,10,000
( GST) - fine levied and
promoters shareholdings
frozen. . The Company
was warned to exercise
caution in filing its docu¬
ments with BSE and
strictly comply with the
various circulars of SEBI
and the Exchange no¬
tices on timely basis.
|
Disclosure of Related Party
transaction - The Company
paid the fine. After represen¬
tation by the Company this
fine was waived off / reversed
by BSE. The Company was
warned to exercise caution in
filing its documents with BSE
and strictly comply with the
various circulars of SEBI and
the Exchange notices on
timely basis.
|
| |
|
|
Reg-19(1)/19(2) - recon¬
stitution of Board Com¬
mittees quarter ended
June 2020 - INR
1,82,000 GST fine lev¬
ied, promoters
shareholdings frozen.
|
Constitution of Board Com¬
mittees - The Board had re¬
constituted the Board
Committee's but the Com¬
pany did not inform BSE. The
Company paid the fine and
after representation this fine
was waived off / reversed by
BSE.
|
17. Vigil Mechanism and Whistle Blower:
Pursuant to provisions of section 177 (9) of the Companies Act, 2013, the Company has established a
"Vigil mechanism" incorporating Whistle Blower Policy in terms of the Listing Obligations and Disclosure
Requirements, 2015 for employees and Directors of the Company, for expressing the genuine concerns
of unethical behaviour, frauds or violation of the codes of conduct by way of direct access to the
Chairman of the Audit Committee in exceptional cases. The Company has also provided adequate
safeguards against victimization of employees and Directors who express their concerns.
18. Internal Financial Control & Adequacy:
Your Company has in place adequate internal control systems commensurate with the size of its
operations to ensure sound management of operations, safe keeping of its assets including in tangible
assets and utilization of resources. However, further steps as may be advised will be implemented, if
found, necessary.
19. Corporate Social Responsibility (CSR):
The provisions of Section 135 of the Act read with Companies (Corporate Social Responsibility Policy)
Rules, 2014 are not applicable to the Company and therefore no report is attached under this head.
20. Disclosure under Sexual Harassment of Women at Work Place - Prevention Prohibition and
Redressal Act, 2013:
The Company has zero tolerance towards sexual harassment at workplace and during the year under
review, your Board had constituted an Internal Complaints Committee to consider and redress complaints
of sexual harassment & also adopted a policy on prevention, prohibition and redressal of sexual
harassmentat workplace in line with the provisions of Sexual Harassment of Women at Workplace
(Prevention, Prohibitionand Redressal) Act, 2013 and the rules framed thereunder.
21. Corporate Governance:
Our corporate governance practices are a reflection of our value system encompassing our culture,
policies and relationships with our stakeholders. Integrity and Transparency are key to our corporate
governance practices to ensure that we gain and retain the trust of our stakeholders at all times.
Corporate governance is about maximizing shareholder value legally, ethically and sustainably. We
also endeavor to enhance long term shareholder value and respect minority rights in all our business
decisions.
Our Corporate governance report for financial year 2023 forms part of this Annual Report as Annexure
I and the Independent Chartered Accountant Certificate of Compliance is attached to this report as per
Annexure II.
22. Management Discussion & Analysis Report:
In terms of the provisions of regulation 34(2) of the SEBI (Listing Obligation and Disclosure Requirements)
Regulations, 2015 the Management Discussion and Analysis report is set out separately and forms an
integral part of this report as per Annexure - III.
23. Extract of annual return:
In accordance with Section 134(3)(a) read with Section 92(3) of the Act, the Annual Return in Form
MGT-7 is placed on the website of the Company and same can be downloaded by clicking on the
following link:http://www.cranessoftware.com/ Investors.
24. Particulars of Employees:
No remuneration was paid to Managing Director, hence the ratio of the median remuneration of the
employees to the remuneration of the each of the Whole-Time Directors is Zero.
The Company had 6 employees as on March 31,2023. The percentage increase in remuneration, ratio
of remuneration of each director and Key Managerial Personnel (KMP)(as required under Companies
Act, 2013) to the median of employees remuneration and the list of top 10 employees in terms of
remuneration drawn as required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of
the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms a part of
this Board's Report.
Disclosures pertaining to remuneration and other details as required under section 197(12) of the act
read with companies (appointment and remuneration of managerial personnel) Rules, 2014 are attached
to this report as per Annexure - IV.
25. Health, Safety and Environment:
Your Board is committed to highest standards of providing healthy environment for safety of its employees
and your Board reviews the same from time to time.
26. Particulars of Loans, Guarantee & Investment:
Details of loans, guarantees and investments under the provisions of section 186 are given in notes to
financial statements.
27. Directors' responsibility statement:
The financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) under
the historical cost convention on accrual basis except for certain financial instruments, which are
measured at fair values, the provisions of the Companies Act, 2013 (to the extent notified) and guidelines
issued by SEBI. The IND AS are prescribed under Section 133 of the Companies Act, 2013 read with
Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting
Standards) Amendment Rules, 2016. Accounting policies have been consistently applied except where
a newly-issued accounting standard is initially adopted or a revision to an existing accounting standard
requires a change in the accounting policy hitherto in use.
The directors confirm that:
• In preparation of the annual accounts, the applicable accounting standards have been followed along
with proper explanation relating to material departures.
• They have selected such accounting policies and applied them consistently and made judgements
and estimates that are reasonable and are prudent, so as to give a true and fair view of the state of
affairs of the company at the end of the financial year and of the profit of the company for that period.
• They have taken proper and sufficient care towards the maintenance of adequate accounting records in
accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the company
and preventing and detecting fraud and other irregularities.
• They have prepared the annual accounts on a going concern basis.
• They have laid down the internal financial controls to be followed by the Company and that they are
adequate and were operating effectively.
• They have devised proper systems to ensure compliance with the provisions of all applicable laws and
that such systems were adequate and operating effectively.
28. Statutory Auditors:
During the 37th Annual General Meeting of the Company M/s Reddy Goud & Janardhan sought
appointment from the shareholders. The said resolution was not passed by the members. M/s Chaturvedi
Sohan & Co, Chartered Accountants were appointed as auditors in casual vacancy at the Board
Meeting held on 1st October 2022, to continue till the date of the current Annual General Meeting. The
Board based on the recommendation of the Audit Committee, has proposed the appointment of M/s
Chaturvedi Sohan & Co, Chartered Accountants (FRN 118424W) for a term of 4 years from the conclusion
of 38th Annual General Meeting till conclusion of the 42nd Annual General Meeting subject to the
approval of the shareholders in the ensuing Annual General Meeting at such remuneration, as mutually
agreed between the Board of Directors of the Company and the Statutory Auditors. A resolution seeking
shareholders' approval for the appointment of the Statutory Auditors along with other required details
forms part of the Notice of the Annual General Meeting.
The requirement for annual ratification of auditor's appointment at the Annual General Meeting has
been omitted pursuant to Companies (Amendment) Act, 2017 notified on May 7, 2018.
During the year, the Statutory Auditors have confirmed that they satisfy the Independence criteria
required under Companies Act, 2013 and Code of ethics issued by Institute of Chartered Accountants
of India.
29. Secretarial Auditor:
As required under Section 204 of the Companies Act, 2013 and Rules there under, the Board appointed
Mr. Supriya Kumar Guha., Practicing Company Secretary, as Secretarial Auditor of the Company for
financial year 2023.
30. Cost Records and Cost Audit:
Maintenance of cost records and requirement of cost audit as prescribed under the provisions of
Section 148(1) of the Companies Act, 2013 are not applicable for the business activities carried out by
the Company.
31. Auditors Qualifications and Board's Reply:
The Statutory auditors have qualified their report on various matters pertaining to the Company and the
Board has replied to these qualifications. A detailed list containing the audit qualifications and the
Board's replies thereto have been provided as an annexure to this report, marked Annexure - V.
32. Secretarial Auditor and Board's Reply to Secretarial Audit Qualifications:
The Secretarial audit report in prescribed Form MR-3 attached to this report marked Annexure - VI.
The Secretarial auditors have qualified their report on various matters pertaining to the Company and
the Board has replied to these qualifications. A detailed list containing the audit qualifications and the
Board's replies thereto have been provided as an annexure to this report, marked Annexure - VIA.
33. Related Party Transactions:
During the year under report, your Company has entered into related party transactions, which were on
arm's length basis and in the ordinary course of business. Certain material transactions as defined
under section 188 of the Companies Act, 2013 read with the companies (Meetings of Board and its
powers) Rules, 2014 are reported. All these transactions were previously approved by the audit committee
and are being reviewed on a regular basis. Further, details of contracts and arrangements with related
parties for the financial year ended March 31,2023 are provided under note no. 35 to the audited
financial statements and details pertaining to related party transactions are provided in Annexure - VII.
34. Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo:
Even though the operations of your Company are not energy-intensive, adequate measures have been
taken to reduce energy consumption by using efficient equipment. Since it is a software Company,
primarily dealing with scientific and engineering software products and product related projects, energy
cost forms a very small part of total cost and its impact on total cost is not material.
35. Research & Development Activities:
The Management of your Company has been committed to building a strong R&D culture from day one
and has set clear R&D goals. In order to achieve these goals, the Company has focused on furthering
the efficacies of R&D activities as well as building synergies among multiple-impact technologies.
36. Secretarial Standards:
The Directors state that applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to 'Meetings of
the Board of Directors' and 'General Meetings', respectively, have been duly followed by the Company.
37. Subsidiaries, Joint Ventures & Associates:
Current Subsidiaries, Joint venture & Associates have been listed in Annexure-VIII. Any substantial or
material business related changes that have taken place in the subsidiary companies during the year
is reflected in the Balance Sheet reported by your company and discussed in a Management Discussion
and Analysis report in Annexure-III.
38. Reporting of Fraud by Auditors:
During the year under review, the Statutory Auditors have not reported under Section 143 (12) of the
Companies Act, 2013, any instances of fraud committed against the Company by its officers or
employees, the details of which would need to be mentioned in the Board's Report.
39. Risk Management:
Your directors have entrusted the risk management functions to the audit and remuneration committee
as the number of directors on the Board is four only. Your Company will take steps to expand its
Board, if advised and found warranted, in the future.
40. The details of application made or any proceeding pending under the Insolvency and
Bankruptcy Code, 2016 during the year along with their status as at the end of the financial
year:
There are no application made or any proceeding pending under the Insolvency and Bankruptcy Code,
2016 during the year.
41. The details of difference between amount of the valuation done at the time of one-time
settlement and the valuation done while taking loan from the Banks or Financial Institutions
along with the reasons thereof.
The loan from SBI Bank was repaid during the year.
42. Green Initiative:
Electronic copies of the Annual Report 2022-23 and the Notice of the AGM are sent to all the members
whose email addresses are registered with the Company.
43. Acknowledgements:
Your Directors would like to express their sincere appreciation for the assistance and co-operation
received from Financial Institutions, Government Authorities, customers, vendors, members and all
stakeholders of the Company during the year under review.
Further, your Directors wish to place on record their deep sense of appreciation for the committed
services by the Company's executives, staff and workers.
for and on behalf of the Board of Directors
Sd/- Sd/-Date: 08-12-2023
Asif Khader
Mueed Khader
Place: Bengaluru Managing Director Director
DIN:00104893 DIN:00106674
|