REPORT OF THE BOARD OF DIRECTORS To, The Members of Crane s Software International Limited, 1. Your Directors have pleasure in presenting their 30TH Annual Report on the business and operations of the Company and the accounts for the Financial Year ended March 31, 2015. 2. BRIEF DESCRIPTION OF THE COMPANY’S WORKING DURING THE YEAR/STATE OF COMPANY’S AFFAIR The Company’s financial performance for the year under review along with previous ye ar’s figures is given hereunder: During the year, your Company, on a standalone basis, achieved a Sales and Operating Revenue of Rs. 137 million, down from Rs. 197.3 million. The after tax position was a loss of Rs. 233.8 million, on Standalone basis, as compared to loss of Rs 999.7 million in the previous year. This reduction in loss was primarily due to items classified as ’Other Income’ - Rs.723.2 million, Deferred Tax of Rs. 382.3 million as compared to Rs 931 million previous year and other minor variances in expenditure. On a consolidated basis, during the year, your Company together with its subsidiaries achieved a Sales and Operating Revenue of Rs. 3676.4 million, up from Rs. 3,392.3 million of the previous year. Given below is the excerpt of profitability performance Operations The Company has consolidated its position in the global software products and services segment by undertaking essential business transformation to leverage its product development capability and worldwide presence. In the year under review, the Company has enhanced its position in the are as of Business Intelligence, Engineering Services and Vocational Training. The Company continues to improve operational effectiveness, optimize costs and increase market reach across all businesses. These initiatives have positively impacted the current year business revenues and improved operating margins. In the year gone by, Cranes furthered its engagement with its clientele by increasing product portfolio with new releases and launches and solution offerings by introducing new alliances and partnerships. This includes expanding our product range, partnering with partners to penetrate into new business are as, launching new products upgrades in the Engineering & Business Intelligence products and services are a. The Company also forged its presence in the training services space by penetrating further into Engineering Universities and Colleges. In the Business Intelligence space the Company launched Cubeware Solutions Platform C8. This release superseded all previous Cubeware portfolio components, bundling and synchronizing them in a complete BI architecture. This provides companies an integrated, scalable, easy-to-use BI platform that addresses the complete spectrum of modern BI requirements across all industries. The Company operates in the Business Intelligence area through one of its subsidiaries; Dunn Solutions Group (DSG), a full service IT consulting firm with Business Intelligence and Application Development practices, and Cubeware, a company offering a complete, innovative, industry-independent Business Intelligence Product portfolio. 3. CHANGE IN THE NATURE OF BUSINESS, IF ANY No Change in the nature of Business. 4. DIVIDEND In the absence of distributable profits in the year, the Directors have not recommended any dividend for the year 2014-15, in order to conserve cash 5. DIRECTORS AND KEY MANAGERIAL PERSONNEL Mr. Asif Khader, Managing Director whose term ends at the conclusion of this AGM and being eligible, offer himself for re appointment. 6. PARTICULARS OF EMPLOYEES Pursuant to the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, statement of particulars of employees is annexed as Annexure I. 7. MEETINGS A calendar of Meetings is prepared and circulated in advance to the Directors. During the year four Board Meetings and four Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. 8. BOARD EVALUATION Pursuant to the provisions of the Companies Act, 2013, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Compliance Committees. 9. DECLARATION BY INDEPENDENT DIRECTORS AND RE- APPOINTMENT, IF ANY The independent directors have affirmed that they satisfy the criteria laid down under section 149(6) of the Companies Act, 2013 and clause 49 of the Listing Agreement. An independent director shall hold office for a term up to five consecutive years on the Board of a Company, but shall be eligible for re appointment for next five years on passing of a special resolution by the Company and disclosure of such appointment in the Board’s report. 10. REMUNERATION POLICY The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. Managerial Remuneration: The Company’s Policy relating to appointment of Directors, payment of Managerial remuneration, Directors’ qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 is furnished in the Corporate Governance Report and is provided in this report 11. DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES Pursuant to sub-section (3) of section 129 of the Act, the statement containing the salient feature of the financial statement of a company Directors’ Reports, Profit and Loss Accounts and Balance Sheets of each of the noted Subsidiary Companies are incorporated in the Consolidated Financial Statements which are presented herein. In accordance with the Accounting Standard AS-21 on consolidated financial statements, the Consolidated Financial Statements are attached as part of the Annual Report and Accounts. This along with the Company’s results, we believe, presents a full view of the state of affairs of the Company. Pursuant to sub-section (3) of section 129 of the Act, the statement containing the salient feature of the financial statement of a company’s subsidiary or subsidiaries, associate company or companies and joint venture or ventures is given as Annexure-II Further, the Annual Accounts and related documents of the subsidiary company shall be kept open for inspection at the Registered & Corporate Office of the Company. The Company will also make available copy thereof upon specific request by any Member of the Company interested in obtaining the same. Further, pursuant to Accounting Standard AS-21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company in this Annual Report include the financial information of its subsidiary. 12. AUDITORS: The Auditors, M/s S Janardhan & Associates, Chartered Accountants, Bangalore have be en appointed for the transitionary period of 3 years at the last Annual General Meeting and, being eligible, ratification is hereby recommended for continuance from the forth coming AGM to the next AGM. 13. AUDITORS’ REPORT The Auditors’ Report is reproduced here with and the management analysis and discussions are also attached Remarks of Auditors In the course of auditing the Company Accounts, the Statutory auditors have raised comments, observations and qualifications. Their comments in respect of the Company’s assumption of "Going Concern" along with the responses of the Board to each are given below : 14. DISCLOSURE ABOUT COST AUDIT As per the Cost Audit Orders, Cost Audit is not applicable to this Company and its products/ business of the Company for F Y 2014-15 15. SECRETARIAL AUDIT REPORT In terms of Section 204 of the Act and Rules made there under, M/s. The Perfect Professionals, have be en appointed as Secretarial Auditors of the Company. The report of the Secretarial Auditors is enclosed as Annexure III to this report. The report is self-explanatory. Internal Audit & Controls The Company as per section 138 of Companies act, 2013 and the rules thereon has engaged M/s. G. Raghavendra and Co. as its Internal Auditor. During the year, the Company continued to implement their suggestions and recommendations to improve the control environment. Their scope of work includes review of processes for safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes, and assessing the internal control strengths in all are as. Internal Auditors findings are discussed with the process owners and suitable corrective actions taken as per the directions of Audit Committee on an ongoing basis to improve efficiency in operations. 16. VIGIL MECHANISM : In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report genuine concerns has be en established. The Audit Committee consists of the following members a Mr. Richard Gall b. Dr. Peter Ryser c. Mr. Asif Khader The above composition of the Audit Committee consists of independent Directors viz., Mr Richard Gall and Dr. Peter Ryser who form the majority. The Company has established a vigil mechanism and overseas through the committee, the genuine concerns expressed by the employees and other Directors. The Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns. The Company has also provided direct access to the chairman of the Audit Committee on reporting issues concerning the interests of co employees and the Company. 17. RISK MANAGEMENT POLICY The Company has developed and adopted a Risk Management Policy. This policy identifies all perceived risks which might impact the operations and on a more serious level also threaten the existence of the Company. The Company’s Management Committee assists the Board in taking appropriate measures to achieve prudent balance between risk and reward in both ongoing and new business activities. 18. EXTRACT OF ANNUAL RETURN: As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 as a part of this Annual Report as ANNEXURE IV. 19. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR O F THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statements relate on the date of this report 20. 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 No significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company’s operations, between the end of the financial year to which this financial statements relate on the date of this report 21. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS. The internal control systems and adequacy are discussed in the Management Discussion and Analysis annexed to the Director’s Report 22. DEPOSITS The details relating to deposits, covered under Chapter V of the Act,- The Company has not accepted deposits from the public during the current year. 23. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 Details of Loans, Guarantees or Investments covered under section 186 of the Companies Act 2013, are given in the notes to the Financial Statements. 24. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES: The particulars of every contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arm’s length transactions under third proviso thereto shall be disclosed in Form No. AO C-2. As Annexure V 25. STATUTORY DISCLOSURES In terms of the provisions of Section 217 (2A) of the Companies Act, 1956, re ad with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are set out in the annexure to the Directors’ Report. However, as per the provisions of Section 219 (b) (iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company at the registered office of the Company. 26. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION AND REDRESSA L) ACT, 2013 In order to prevent sexual harassment of women at work place a new act The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has be en notified on 9th December, 2013. Under the said Act every company is required to set up an Internal Complaints Committee to look into complaints relating to sexual harassment at work place of any women employee. Company has adopted a policy for prevention of Sexual Harassment of Women at workplace and has set up Committe e for implementation of said policy. During the year Company has not received any complaint of harassment. 27. CONSERVATION OF ENERGY, 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. (a) 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. The statement giving information as required under Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules 1988 is enclosed to this report (b) Foreign exchange earnings and Outgo During the year, the total foreign exchange used was Rs. 1611.26 lakh and the total foreign exchange earned was Rs. 714.20 lakh. 28. CORPORATE SOCIAL RESPONSIBILITY (CSR) The C SR activities of the Company are focused in the are as of Education, He althcare, Environment and Community Development. The CSR Activities undertaken by the Company are in line with the CSR Policy and recommendation of the C SR Committee . Since there has be en no profit declared by the Company, the said provisions are not applicable in Financial Year 2014-15. 29. HUMAN RESOURC ES Your Company treats its "human resources" as one of its most important assets. Your Company continuously invest in attraction, retention and development of talent on an ongoing basis. A number of programs that provide focused people attention are currently underway. Your Company thrust is on the promotion of talent internally through job rotation and job enlargement. 30. DIRE CTORS’ RESPONSIBILITY STAT EMENT The Directors’ Responsibility Statement referred to in clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, shall state that- (a) in the preparation of the annual accounts, the applicable accounting standards had be en followed along with proper explanation relating to material departures; (b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period; (c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; (d) the directors had prepared the annual accounts on a going concern basis; and (e) the directors, in the case of a listed company, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. (f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. 31. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND Due to the relationship of the bank and the Company having soured the amount has be en blocked by the bank. The Company is in the process of settling the matters with the bank concerned and will transfer the amount to Investor Education and Protection Fund (IEPF) in due course. 32. ACKNOWLEDGEMENTS An acknowledgement to all with whose help, cooperation and hard work the Company is able to achieve the results. For and on behalf of the Board Asif Khader Managing Director Mueed Khader Director Bengaluru September 4th, 2015 |