Cranes Software International Ltd. — Annual Report 2019

May 30, 2019

«Cranes Software International Limited

momar’ eeES

et

Correspondence Address:

82, Presidency Building, 3 & 4" Floor,

St. Marks Road, Bengaluru - 560 001, Karnataka

Ph: +91 80 6764 4800/4848 Fax: +91 80 6764 4888 il: train

30" May, 2019

To,

The Manager

Department of Corporate Services Bombay Stock Exchange Ltd., P J Towers, Dalal Street Mumbai — 400 001

Dear Sir,

Sub: Meeting of the Board of Directors Ref: Company No. 512093

Further to our letter dt. 218' May, 2018 informing you of the Board of Directors Meeting, we wish to inform you that at the meeting of the Board of Directors held today (30"" May, 2019), the Board has:

• e Approved and taken on record the audited financial results for the year ended 31st March, 2019. The results are enclosed herewith for your information / records.

• The Auditor’s Report is also enclosed for your reference.

• The Statement on Impact of Audit Qualifications is enclosed for your reference.

• e No dividend payout has been declared for the financial year 2018-2019 in order to conserve cash reserves.

• e Mr. Asif Khader, Managing Director, continues to be the Chief Financial Officer (CFO) of the Company at this time.

Thanking you,

Yours faithfully,

For Cranes Software International Ltd.

Authorised Signatory Name: Mueed Khader Designation: Director

Encl: as above

www.cranesvarsity.com

ISO 9001:2000 ISO 27001:2005 CMMILS5 V1.2

CRANES SOFTWARE INTERNATIONAL LIMITED

Regd. Office: # 82, Presidency Building, 3rd & 4th Floor, St.Marks Road, Bangalore - 560 001 Ph.080 6764 4848 / 4800 Fax:080 6764 4888 Email:info@cranessoftware.com Website: www.cranessoftware.com CIN: LO5190KA1984PLC031621

Statement of audited financial results for the quarter and year ended March 31, 2019

PART-1

								(Rs.In Lakhs)	(Rs.In Lakhs)
				Standalone				Consolidated
	Particulars	Quarter Ended				Year Ended		Year Ended
		31.03.2019		31.12.2018			31.03.2018] 31.03.2019	31.03.2018	31.03.2019 31.03.2018
		Audited	Unaudited	Audited				Audited	Audited
1		Income from Operations
	(a)Net Sales/Income from Operations	195.34	241.99		164.18	887.80	785.85	2,557.42	17,050.14
	(b)Other Income	131.50	1,153.80		206.09		10,926.12	7,662.60	11,052.00
	Total income	326.84	1,395.79		370.27		11,813.92	8,448.44	13,609.42
2		Expenses
	(a) Cost of materials consumed	-	-		1.90	-	5:17	248.42	10,952.19
	(b) Purchase of Stock-in-Trade	-	-		-	-	-
	(c) Changes in inventories of finished goods and work-in-progress	-	-		40.01	-	40.01	-	219.03
	(d) Employee benefit expense	80.77	87.03		81.15	331.58	304.08	1,963.33	3,714.36
	(e) Finance costs	9.15	9.21		(13.18)	37.06	51.43	79.77	150.76
	(f) Depreciation and amortization expense	0.61	1.90		16.14	29.92	64.68	1,322.01	1,464.43
	(g) Other expenses	1,289.23	866.70		8,932.07		2,234.55		16,185.02
Total Expenses 1,379.75 964.84	9,058.10 2,633.11	16,650.39 5,061.01 35,161.64 a ao from Ordinary activities before exceptional items & taxes	(4 96591)	430.95	(8,687.83)	9,180.81] (8,201.95)	8,548.41	(8,823.31)
4		Exceptional Items	-	-		-	-	-	-
5		Profit/(Loss) from ordinary activities before tax (3 - 4)	(1,052.91)	430.95		(8,687.83) 9,180.81			(8,201.95)
6		Tax expense / (credit)
	(a) Current Tax	640.00	-		-	640.00	-	558.02	103.53
	(b) Deferred Tax	5,797.21	1,466.92		(666.63)	10,069.05		(682.01)	10,069.05
	Total tax expenses / (credit)	6,437.21	1,466.92		(666.63)	10,709.05		(682.01)	10,627.07
7		Net Profit/(Loss) from ordinary activities after tax (5-6)	(7,490.12)}(1,035.96)}			(8,021.21)	(1,528.24)}(7,519.94)
8		Extraordinary Items	-	-		-	-	-	-
9		Net Profit/(Loss) for the period (7-8)	(7,490.12)}(1,035.96)}			(8,02121)](1,528.24)			(7,519.94)
10	Minority Interest								S
11	Net Profit/(Loss) after Taxes, minority interest and share of profit/Loss
	of associates(9+10)	(7,490.12)}(1,035.96)] (8,02121)}(1,528.24)]					(7,519.94)	(2,078.66)
12	Total Comprehensive Income for the period [Net of tax]		=	-		-	-	=
13	Paid-up equity share capital (Face Value of Rs.2/-)		2355.34	2355.34	2355 34		2355.34	2355.34	2355.34
14 Reserve excluding Revaluation Reserves as per balance sheet of						(60,890.95) (59,362.71)			(69,962.49)
	previous accounting year
15	Earnings Per Share
		) Basic	(6.36)	(0.88)		(6 81)	(1.30)	(6.39)	(1.77)
	!)Diluted	(6.36)	(0.88)		(681)	(1.30)	(6.39)	(1.77)

CRANES SOFTWARE INTERNATIONAL LIMITED

PART-2
SL		3		Months Ended			Year ended
No PARTICULARS	31.03.2019			31.12.2018		31.03.2018	31.03.2019	31.03.2018
A	PARTICULARS OF SHAREHOLDING
1	Public Shareholding					.
- Number of shares	110,247,850			110,247,850				110,247,850
- Percentage of shareholding		93.62%		93.62%		93.62%	93.62%		93.62%
2 {Promoters and Promoter Group Shareholding
(a) Pledged / Encumbered
- Number of shares		1,000,000		1,000,000		1,000,000	1,000,000	1,000,000
- Percentage of shares (as a % of the total		‘		"		P	.		5
shareholding of promoter and promoter group)		13.30%		13.30%		13.30%	13.30%		13.30%
- Percentage of shares (as a % of the total share
capital of the company)		0.85%		0.85%		0.85%	0.85%		0.85%
(b) Non-encumbered
- Number of shares		6,519,000		6,519,000		6,519,000	6,519,000	6,519,000
- Percentage of shares (as a % of the total
shareholding of promoter and promoter group)		86.70%		88.70%		86.70%	86.70%	86.70%
- Percentage of shares (as a % of the total share		2		“		-	és		ss
capital of the company)		5.54%		5.54%		5.54%	5.54%		5.54%
B_	INVESTOR COMPLAINTS FOR 3 MONTHS ENDED 31ST	MARCH 2019
: eee	Received		Disposed of
=o a Qbear	during the			during the	Remaining unresolved at the			end	of the Qua
		Quarter		Quarter

Cranes Software International Limited

Audited Balance Sheet as at 31st March, 2019

					(Rs in Lakhs)	(Rs in Lakhs)
is S25		es aes Ae	_ Standalone			Consolidated BA
oe			34.03.2019	31.03.2018	31.03.2019 —
1 Non-current assets
Property, plant and equipment			18.20	1,087.99	57.02	1,092.20
Capital work in progress			§,042.44	5,042.44	5,042.44	5,042.44
Intangible assets			1.57	-	5,986.59	6,622.99
Deferred Tax Asset (Net)			25,130.43	35,199.48	28,596.91	38,254.85
Financial Assets
Investments			8,010.18	8,010.18	17.87	17.86
Loans						-
Other non-current assets			4,507.75	6,040.01	243.90	894.41
Non-current assets			42,710.57	55,380.10	39,944.72	51,924.76
2 Current assets
Inventories			-
Financial Assets
Trade receivables			10,701.60	10,190.40	5,373.61	3,611.35
Cash and cash equivalents			12.11	5.48	108.36	118.14
Bank balances other	than (ili) above		26.44	24.82	121.11	102.76
Loans			222.35	226.40	.	-
Other current assets					450.83	435.96
Current assets			10,962.50	10,447.10	6,053.92	4,268.21
	TOTALASSETS			53,673.07	65,827.19	45,998.64
EQUITY AND LIABILITIES
Equity
Equity share capital			2,355.34	2,355.34	2,355.34	2,355.34
Other Equity		(60,890.95)}(59,362.71)	(69,962.49)
		(58,535.61)	(57,007.37)	(67,607.15)
Share application money pending allotment
1 Non-Current Liabilities
Financial Liabilities
Borrowings			-	-	-	-
Provisions			19.08	6.66	37.89	25.48
Non-Current Liabilities			19.08	6.66	37.89	25.48
2 Current liabilities
Financial Liabilities
Borrowings			43.78	43.78	43.78	43.78
Trade payables			570.79	497.44	1,421.90	1,243.58
Other current liabilities		141,411.27}122,112.68]111,938.47 120,270.90
Provisions			163.76	174.01	163.76	174.01
Current liabilities		112,189.60			122,827.90	113,567.90 121,732.27
TOTAL EQUITY AND LIABILITIES] 53,673.07				65,827.19	45,998.64	56,192.97

Notes:

• i, The above quarter & year ended results for the period ended March 31, 2019 as reviewed and recommended by the Audit committee of the Board, has been approved by the Board at its meeting held on May 30. 2019.

• The statement has been prepared in accordance with the Companies (indian Accounting Standards) Rules, 2015 (ind As) prescribed under section 133 of the companies Act, 2013 and other recognized accounting practices and policies to the extent applicable.

• Ind AS 108 'Operating Segments" and hence no segment reporting is applicable.

• The Company has not provided interest in books of accounts on FCCB liability and Bank loans for year ended March 31, 2019.

• The Company has not restated for FCCB loans and interest thereon for the year ended March 31, 2019.

• Other income includes write back of Principal and Interest amounts of Rs. 8523.46 Lakhs on

• account of full and final settlements of OTS scheme with Canara Bank.

• Other expense includes an amount of Rs. 1510.89 lakhs written off which includes Impairment of assets and provision for bad debts.

Place : Bangalore Date: 30th May 2019

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for Crane Software International Limited
Mueed-Khader
Direttor<
DIN - 00106674
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Sethia Prabhad [egde & Co. (_hartered A\ccountants

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Auditor’s Report on Quarterly and year to Date Standalone Financial Results of the Company Pursuant to the Regulation of the SEBI (Listing Obligations and Disclosure Requirements) Requirements 2015

To

Board of Directors of Cranes Software International Limited

1. We have audited the quarterly financial results of Cranes Software International Limited for the year ended 31° March 2019 and the year to date results for the period 1° April 2018 to 31* March 2019 attached herewith, being submitted by the company pursuant to the requirement of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as modified by Circular No. CIR/CFD/FAC/62/2016 dated July 5, 2016, Attention is drawn to the fact that the figures for the quarter ended 31st March 2019 and the corresponding quarter ended in the previous year as reported in these financial results are the balancing figures between audited figures in respect of the full financial year and published year to date figures up to the end of the third quarter of the relevant financial year. Also, the figures up to the end of the third quarter had only been reviewed and not subjected to audit. These quarterly financial results as well as the year to date financial results have been prepared on the basis of the interim financial statements, which are the responsibility of the company’s management. Our responsibility is to express an opinion on these financial results based on our review of the standalone Ind AS financial results for the nine-month period ended 31° December, 2018, which has been prepared in accordance with the recognition and measurement principles laid down in Ind AS 34 Interim Financial Reporting, specified under section 133 of the Companies Act, 2013, read with relevant rules issued thereunder and other accounting principles, generally accepted in India; our audit of the annual standalone Ind AS financial statements as at and for the year ended 31% March, 2019; and the relevant requirements of the Regulation and the Circular.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial results are free of material misstatement(s). An audit includes examining, on a test basis, evidence supporting the amounts disclosed as financial results. An audit also includes assessing the accounting principles used and significant

3. estimates made by management. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

4. The attached Balance Sheet as at 31 March, 2019 is drawn on the basis of the Principle of ‘Going Concern’. We opine as follows in this connection :

5. 3.1 Redemption of Foreign currency convertible bond amounting to Rs. 29,085 lakhs (42 million Euros) to the holders of the bonds have fallen due during April 2011 and is yet to be redeemed as on the date of Balance Sheet. On a petition filed by the Foreign currency convertible bond holders, The Hon’ble High Court of Karnataka issued a winding up order against the company, which indicates the existence of material uncertainty that may cast significant doubt on the company’s ability to continue as a going concern. The company has obtained a stay against the operation of the winding up order issued by the Hon’ble High Court of Karnataka. However, the accounts have been prepared on a going concern basis.

6. 3.2 Term loans and working capital loans availed by the company from various banks amounting to Rs. 57,768.91 lakhs, remain unpaid and are overdue since 2009. The lenders have filed cases before the Debt Recovery Tribunal (DRT) / Hon’ble Courts, etc for recovery of dues. These proceedings are in various stages of disposal before the “DRT” and the respective Hon’ble Courts. Winding up petition has been filed by Bank of India against the company, before the Hon’ble High Court of Karnataka for non-payment of principal and the accrued interest thereon.

7. 3.3 In our opinion the securities provided to Banks are not adequate to cover the amounts outstanding to them as on the date of Balance Sheet.

8. 3.4 Attention of the members is invited to note 6 of the Financial Statements regarding recognition of deferred tax credit on account of unabsorbed losses and allowances aggregating to Rs.25,130.43 lakhs (year ended March 31, 2018 Rs. 35,199.48 lakhs). This does not satisfy the virtual certainty test for recognition of deferred tax credit as laid down in IND AS-12.

9. aD Reference is drawn to note no. 5 of the Financial Statements regarding the amounts classified under “Fixed Assets” including “Intangible Assets Under Development” amounting to Rs. 5,042.44 lakhs. (year ended March 31, 2018 Rs. 5,042.44 lakhs) No evidence has been produced before us for testing its impairment and in the absence of the same, we are unable to express any opinion on the impairment to such asset. In our opinion, such test of impairment as on the date of Balance Sheet is mandatory, especially in view of the higher degree of the obsolescence of software which is stated to be under various stages of development, though no further developments have been carried out during the recent years.

In the light of the above, the appropriateness of the ‘Going Concern’ concept based on which the accounts have been prepared is inter alia dependent on the Company's ability to infuse requisite funds for meeting its obligations, rescheduling of debt and resuming normal operations.

We further report that, except for the effect, if any, of the matters stated in paragraphs 3.5 above, whose financial effect is not ascertainable, had the observations made in paragraph 3.4 above been considered, the profit after tax for the year ended March 31, 2019 would have been lower by Rs. 25,130.43 Lakhs.

5. Emphasis of Matter

5.1 We draw attention to Note No. 8 and Note No. 9 of the financial statements regarding the investments in the form of Equity Investments, Advances and trade receivables made in wholly owned subsidiaries. As explained by the management, it being a long term and strategic investment, there is a reasonable certainty that there will be no diminution in the value of the investment and is confident of recovery of receivables and therefore no provisioning has been considered necessary. The details of Equity Investments, Advances and trade receivables in subsidiaries are as under.

a. Investment in Equity

(Rs in Lakhs)

Sl	Investment	Shareholder
No. Name of the Subsidiary	in Equity	Funds
1	Esqube Communication Solutions Pvt Ltd	179.78
2	Proland Software Pvt Ltd	318.89
3	Tilak Auto Tech Private Limited	51.62
4	Systat Software Inc. USA	1,851.18
5	Cranes Software International Pte Limited	44.31
6	Caravel Info System Private Limited	362.33
TOTAL	2,445.78	(8,645.73)

Due to the cumulative losses in the subsidiaries, the value of investment is eroded.

b. Outstanding Advances made and Trade Receivables

		(Rs in Lakhs)
No.	Name of the Subsidiary	Amount
1	Esqube Communication Solutions	190.92
2	Cranes Software International Pte Limited	1,613.92
3	Systat Software UK Ltd	389.25
4	Proland Software Private Limited	463.34
5	Systat Software Gmbh	229.44
5	Systat Software Inc.(Net of Provision)	11,565.03
7	Tilak Auto Tech Private Ltd.	163.81
8	Cranes Varsity Private Itd	13.54
	Total	14,629.24

• 5.2 The company has not provided for diminution / impairment in the value of its investments in the above wholly owned subsidiaries, as required by the IND AS-36.

• 5:3 The Company has drawn and utilized an amount Rs. 43.78 lakhs from the ‘CSIL Employees Comprehensive Gratuity Trust’ fund for the purpose not intended in terms of ‘The Payment of Gratuity Act, 1972’.(See note No. 16 of the Financial Statements)

• 5.4 The company has provided for doubtful debts of Rs 1,387.30 lakhs during the year, towards due from a subsidiary.

• 5.5 Loan availed by the company from ‘UPS Capital Business Credit’ amounting to Rs 696.37 lakhs remains unpaid and is overdue since April 2014.

• 5.6 The banks which had extended financial facilities to the company have treated the outstanding from the company as "Non-Performing Assets" since 2009. In order to achieve the desired congruency on this issue, the Company has also not provided for interest amounting to Rs. 9,274.35 lakhs on such outstanding amounts for the year ended 31st March, 2019 due to various banks, though the confirmation of such dues were not made available to us from the respective banks/financial institutions. Had the said interest been provided in the books in the normal course, the present profit for the year ended 31st March 2019 would have been lower by Rs. 9,274.35 lakhs.

• S./ The management is in negotiation with the Foreign currency convertible bond holders for settling its dues. The management is of the view that the liability of Rs 38,695 lakhs (including interest amounting to Rs. 9,610 lakhs) reflected in the financial statements will adequately cover its liability on settlement of dues with the Foreign currency convertible bond holders and therefore no provision for interest is provided for the year ended 31st March 2019. Had such interest been provided in the books in the normal course, the present profit for the year ended 31st March 2019 would have been lower by Rs 1,566.43 lakhs.

• 5.8 In continuation to the point no. 5.7 above, the company has also discontinued the restatement of the Exchange fluctuation gain / loss on account of the outstanding due towards Foreign currency convertible bond and the interest due thereon, in line with the IND AS-21 “The Effects of Changes in Foreign Exchange Rates”. Had such restatement of liability been made in the books in the normal course, the present profits for the year ended 31st March 2019 would have been higher by Rs 1266.79 lakhs.

• 5:9 The balances which were available in the dividend accounts of banks were utilized by the company for expenses.

• 5.10 The management is of the opinion that the all assets, investments have at least the value as stated in the Balance Sheet, if realised in the ordinary course of business.

Our Report is not qualified in respect of the above matter.

1. In our opinion and to the best of our information and according to the explanations given to us, except for matters stated in paragraphs 3 and 4 above, the Statement:

2. (i) is presented in accordance with the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,2015, as modified by Circular No. CIR/CFD/FAC/62/2016 dated July 5, 2016, in this regard; and

3. (ii) | gives a true and fair view of the net loss and other financial information for the quarter ended 31st March 2019 as well as the year to date results for the period from 1st April 2018 to 31st March 2019.

For Sethia Prabhad Hegde & Co Chartered Accountants Registration No.913367S 2 Timmyya gde Partner Membership No.226267

Bangalore 30th May, 2019

Sethia Prabhad [Hegde & Co.

(_hartered Accountants

Auditor’s Report on rterly and year to Date Consolidated Financial Results of the Compan Pursuant _to the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements Regulations ,2015

To

Board of Directors of Cranes Software International Limited,

• 1) We have audited the quarterly consolidated financial results of Cranes Software International Limited, for the quarter ended 31° March 2019 and the consolidated year to date results for the period 1° April 2018 to 31° March 2019 attached herewith, submitted by the company pursuant to the requirement of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as modified by Circular No. CIR/CFD/FAC/62/2016 dated July 5, 2016. Attention is drawn to the fact that the figures for the quarter ended 31st March 2019 and the corresponding quarter ended in the previous year as reported in these financial results are the balancing figures between audited figures in respect of the full financial year and the published year to date figures up to the end of the third quarter of the relevant financial year. Also, the figures up to the end of the third quarter had only been reviewed and not subjected to audit. These consolidated quarterly financial results as well as the consolidated year to date financial results have been prepared from consolidated interim financial statements, which are the responsibility of the company’s management. Our responsibility is to express an opinion on these quarterly consolidated financial results and consolidated year to date financial results based on our review of such consolidated interim financial statements, which have been prepared in accordance with the recognition and measurement principles laid down in the International Accounting Standard (IAS) 34, Interim Financial Reporting, specified under section 133 of the Companies Act, 2013, read with relevant rules issued thereunder and other accounting principles, generally accepted in India; our audit of the annual consolidated Ind AS financial statements as at and for the year ended 31* March, 2019; and the relevant requirements of the Regulation and the Circular.

• 2) We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial results are free of material misstatement(s). An audit includes examining, on a test basis, evidence supporting the amounts disclosed as financial results. An audit also includes assessing the accounting principles used and significant estimates made by management. We believe that our audit provides a reasonable basis for our opinion.

• 3) In our opinion and to the best of our information and according to the explanations given to us these consolidated quarterly financial results as well as the consolidated year to date results: <

a

• (i) Includes the Audited financial results and year to date of the following entities:

  • (a) Analytix Systems Pvt Ltd

  • (b) Caravel Info Systems Pvt Ltd

  • (c) Cranes Varsity Private limited

  • (d) Esqube Communication Solutions Pvt Ltd

  • (e) Proland Software Pvt Ltd

  • (f) Systat Software Asia Pacific Ltd

  • (g) Tilak Auto Tech Private Limited

• (ii) Includes the Compiled financial results and year to date of the following entities a) Cranes Software Intl. Pte Ltd (Singapore)

  • b) Systat Software Gmbh (Germany)

  • c) Cranes Software Inc (USA)

  • d) Systat Software Inc (USA)

• (iii) Have been presented in accordance with the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as modified by Circular No. CIR/CFD/FAC/62/2016 dated July 5, 2016; and

• (iv) Give a true and fair view of the consolidated net loss and other financial information for the quarter ended 31 March 2019 as well as the consolidated year to date results for the period from 1 April 2018 to 31* March 2019.

• 4) We did not audit the financial statements of four (4) subsidiaries included in the consolidated Quarterly financial results and consolidated year to date results, whose consolidated financial statements reflect total assets of Rs. 15,443.78 lakhs as at 31st March 2019 and the total revenue of Rs 3,522.56 lakhs for the year ended 31st March 2019.

• 5) These financial statements and other financial information have been audited by other auditors (except for those stated in para 6 below) whose reports have been furnished to us by the management, and our opinion on the quarterly financial results and the year to date results, to the extent they have been derived from such financial statements is based solely on the report of such other auditors.

• 6) We would like to opine as follows

• Consolidated accounts of the company include compiled financials of

  • a Cranes Software International Pte Limited, Singapore b. Systat Software Gmbh c Cranes Software Inc d Systat Software Inc

The same are not audited by the respective auditors as on 31% March 2019.

Il. Our audit report has to be read along with the observations and qualifications as appearing in para-3 of our audit report of even date in respect of the standalone financials of Cranes Software International Limited.

For Sethia Prabhad Hegde & Co Chartered Accountants Registration Ne.013367S

Membership No.226267

Bangalore 30th May, 2019

CRANES SOFTWARE INTERNATIONAL[LIMITED] Ph.080 Regd. Office: # 67644848Fax:080 82, Presidency 67644800Emailiinfo@c[Building, 3rd & 4th] [Fleor,] e.com[St.Marks] AotW[Road,] WWW.C[Bangalore][-] .[560] ware.com[001] CIN: LOS1S0KA1984PLLO31621

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ANNEXURE-1
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Statement of Impact of Audit Qualifications for the Financial Year ended March 31, 2019
{See Regulation 33/35 of SEB! {LODR) Amendment) Regulations, 2016
1
Audited Figures | Audited Figures {as
(as reported reported after
Lho. Periiculars before adjusting adjusting for
for qualification)qualification)
Standalone
1 |Turnover/Total Income 11,813.92 11,813.92
2 |Total Expenditure 13,342.16 48,046.58
3 |Net Profit/{Loss} (1,528.24)
4 |Earning per share {1.30)
5 {Total Assets 53,673.07
6 |Total Liabilities 53.673.07
7 |Net Worth {58.535.61) : ;
8 |Any other financial item (s) (as felt appropriately by the management- v
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- Audit Qualification {esch audit qualification separately):
a. Details of Audit Qualification: Refer Annexure
b. Type of Audit Qualification: Qualified opinion
¢ Frquency of qualification Refer Annexure
For Audit Qualification (s) where the impact is quantified by [auditors,]
Management's Views Refer Annexure
e For Audit Qualification{s) where the impact is not quantified by the auditorRefer Anfexiire
{1} Management's estimation on the impact of audit qualification:
(11} If management is unable to estimate the impact, reasons [for] [the] [same;]
(1) Auditor's Comments on (1} or (I} above:
m Signatories
CEO/Managing Director
Statutory Auditor
Place: Bangalore
Date:30/05/2019
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Anpexure -Audit Quslification {Each Audit quatification seperately)

St . e Type of Audit Frequency of Duantified Audit - Auditors Comments on No Detallof “”‘;S}Q“”’mfl"" Quafification | Qualification | Report [YES/NO] Ma“ag‘";;‘f’s Miews Management’s Views 1 Redemption of Foreign currency convertible bond amounting to Rs.Qualified29,085(C]lakhs (42HepetitiveT 1]No | The Company is actively engaged with the FCCB holderspara3and{Referof the mitlion Euros) to the halders of the bonds have fallen due during AprilOpinion2011 snd & yat i hopeful of reaching a settfement in the nearTh future.i Report on| to be redeemed as on the date of Balance Sheet. On a petition filed by the Foreign company is confident that on settiement with the FCCB|StandaloneFinancial | currency convertible bond holders, The Hon'ble High Court of Kamataka issued al holders, the winding-up petition fifed by the Bond Holders{statements winding up order against the company, which indicates the existence of materiall will be withdrawn in due course uncertainty that may cast significant doubt on the company's ability to continue as & going concern. The company has obtained a stay sgainst the operation of the winding up order issued by the Hon'ble High Court of Karnataka. However, the accounts have been prepared on a going concern basis. 2 3.2 Term foans and working capital loans availed by the company fromQualifiedvarious banksRapetitive No Referpara3 of the amounting to Rs. 57,768.91 lakhs, remain unpaid and are overdue sinceOpinion2009. The Audit Report on lenders have filed cases before the Debt Recovery Tribunal (DRT} / Hon'ble Courts)| Standalone - Financial etc the “DRT” and the respective Hon'ble Courts. for recovery of dues. These proceedings Winding up are in various petition has been filed by stages of disposal before] e C cn‘\uany% “S Aiely , defnaclig. e s pgs;.t;on = m} gy statements Hank of fndia again the company,before the Hon'ble High Court of Karnataka for cates: s Slon In aeivanced suftimant negouat.?ns i non-paytenitof principsl and the ac'c Fdio intarest thatesn settlementwithsecuredand unsecuredlendersandsome,expectsto reachfavourablewhilereaching 3 lin our opinion the securities provided to Banks are net adequate toQualifiedcover thel Repetitive No S ohen i dus rouss Referpara3 of the amounts outstanding to them as on the date of Balance Sheet. Opinion Audit Repert onj StandaloneFinancisl 4 jAttention of the members is invited to note 6 of the Financial StatementsQualifiedregarding|Repetitive Yes The Company has made significant changes tojstatementsits business{Referpara3 of the {recognition of deferred tax credit on account of unabsorbed losses Opinicnand allowances strategy and improvementsits solutionsin and productiAudit | Reportn apgregating to Rs.25,13043 lakhs (year ended March 31, 2018 Rs, 35,199 48 lakhs). offerings.Hence, the Corpany is canfident that we will have{StandaloneFinancisl This does not satishy the virtual certainty test for recognition of deferred tax credit as| future taxable income to take advantage of the deferred tax|statements faick downs in IND AS-12 credit as & 'recognized’ asset

• S {Reference is drawn to note ne. 5 of the Financial Statements regarding the amounts|Qualified Repetitive No As detsiledin the annexedManagementDiscussionandiReferpara 3 of the [classified under “fixed Assets”including “Intangible AssetsUnderDevelopment” Opinicn Analysis, the Comspany has made substantial progress to tts]AuditRepert on amounting to Rs. 5,042.44 takhs. {year ended March 31, 2018 Rs, 5,042.44 fakhs) No Froducts and across all The impact of{S Financial: evidence has been produced before us for testing its impairment and in the absence| this change is reflective in cur consolidated revenus growth. {statements of the same, we are unable to express any opinion on the impainnent 16 such assat. The Company has engaged an external consultantto rein our opinion, such test of impairment as on the date of Balance Sheet is mandatory, evaluatedthe WPassetsand the effect, if any, will be especially in view of the higher degree of the obsolescence of software which is refiected in the financial statement stated to be under varions stages of development, though no further developments| have been carried out during the recent years in the light of the sbove, the appropriateness of the ‘Going Concern’ concept bQu a lifiedsed| Repetitive Yes During the year under review, the management has put its{Referpara 3 of the on which the accounts have been prepared is inter alia dependent on the Company'sOpinian efforts toward resumption of normal operations. Hence, welAuditRepart oni ability to infuse requisite funds for meeting its obligations, rescheduling of debt and are highly confident that the concept of 'Going Concern’ 1 Financial resuming normal aperations £ continues to apply withaut doubt statements

• 6 |We draw attention to Note No, 8 and Note No. 9 of the financial statements regarding]Emphasis of Repetitive Ne The Management is of the view, that there is no diminution|Referpara 5 of the the investments[including receivables) madein wholly ownedsubsidiaries,As: Matter in the value of the investment provided to its subsidiaries, as|Audit ~onReport by the 1ent, it being 2 fong term and strategic investment, there is, there are valuable IPs in these subsidiaries and their value|StandaloFina n eciaf

• a reasonable certainty that there will be no diminution in the value of the investment| will be unlocked as and when the company is able to resume fstatements consideredand is confident of recoverynecessary. of receivables and therefore no provisioning has been its normal business operations,nature of long term, are strategic to the future growth oftheThe investments, being the company and the Management is canfident to recover the| receivablesas and when Businessstabilizesin these subsidiaries.

CRANES SOFTWARE INTERNATIONAL LIMITED Regd. Office: # 82, Presidency Building, 3rd & 4th Floor, St.Marks Road, Bangalore - 560 001 Ph.0B0 67644848Fax:080 67644800Emailinf fi e.com Website:www.c ware.com CIN: L05190KA1984PLC031621

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ANNEXURE-It
Statement of impact of Audit [Qualifications] [for] [the Financial] [Year] [ended] [March 31, 2019]
{See Reguiation 33/35 of [SEBI (LODR) Amendment)] [Regulations,] [2016]
i
Audited Figures Audited
{as reported Figures (as
5L.No. Particulars before adjusting| reported [after]
for adjusting for
qualification) | qualification)
e e
1 {Turnover/Total Income 13,609.42 13,609.42
2 [Total Expenditure 15,688.08
3 [Net Profit/{Loss) (2,078.66)
4 |Earning per share {1771
5 [Total Assets 45,998.64
6 {Totai Liabilities 45,998.64
e Net Worth (67,643.43)
8 |Any other financial item [(s) {as] [felt appropriately by the management] -
it Audit Qualification {each [audit qualification separatelyj:]
a, Details of Audit Qualification: Refer Annexure
b, Type of Audit Qualification: Quaiified opinion
¢ Frguency of qualification Refer Annexure
d For Audit Qualification (s} [where] [the impact] [is] [quantified] [by] [auditors,]
" Management's Views Refer Annexure
e For Audit Qualification(s} where the impact is not quantified by the auditorRefer Annexure
{1} Management's estimation on the impact of audit qualification:
{1} If management is unable to estimate the impact, reasons for the same:
{11} Auditor's Comments on {1} or {il} above:
H Signateriec
CEO/Managing Director
CFo
Audit Committee Chairman
Statutory Auditor
Place: Bangalore
Date:30/05/2019
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Annexure- Audit Qualification {Each Audit qualification seperately)

Sl	Details of Audit Qualification	Type of Audit	Frequency of	Quantified Audit	Management's Views	Auditors Comments on	Auditors Comments on
No	[a]	Qualification	Qualification	Report [YES/NO]	[e]	Management's Views
		[b]	[c]	[d]
1		Consolidated accounts of the companyinclude compiled	Qualified Opinion		Repetitive /	No	The compiled financial statements received are
	financials of		First time		Ireviewedby the auditors of respective subsidiary	Audit Report
					companies. In the absence of signed financials, we	have	Consolidated Financial
	a. Cranes Software International Pte Limited, Singapore				adopted the compiled financials in our report with an	statements
	b. Systat Software Gmbh				intention not to delay the SEB] compliance. We are in
	c. Cranes Software Inc				the process of receiving the signed financial from
	d. Systat Software inc				respective subsidiary company auditors.
	The same are not audited by the respective auditors as	on
	31st March 2019.