Cranes Software International Ltd. — Annual Report 2021

Aug 11, 2021

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Cranes Software International Limited

Ph: +91 80 6764 4800/4848 Fax: +91 80 6764 4888 Email: training@cranessoftware.com

Correspondence Address:

82, Presidency Building, 3[rd ] & 4[th ] Floor,

St. Marks Road, Bengaluru - 560 001, Karnataka

11[th] August, 2021

To, The Manager Department of Corporate Services BSE Limited, P J Towers, Dalal Street Mumbai – 400 001

Dear Sir,

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

Further to our letter dt. 2[nd] August, 2021 informing you of the Board of Directors Meeting, we wish to inform you that at the meeting of the Board of Directors held today (11[th] August, 2021), the Board has:

• Approved and taken on record the audited financial results for the year ended 31st March, 2021. 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.

• No dividend payout has been declared for the financial year 2020-2021.

• Approved the re-appointment of Mr. Asif Khader as Managing Director of the Company effective from 17th May 2021 for a period of 3 (three) years.

• Approved the appointment of Mr Supriya Kumar Guha, Fellow member of the Institute of Company Secretaries of India, as the Secretarial Auditor for the FY 2020-21.

• Cranes Management and Board members regret the delay in hosting this Board meeting. As experienced across the business world, the pandemic has caused disruptions across business operations, including availability and effectiveness of essential staff. Convening the Board meeting with required business data was also unavoidably delayed due to C19 difficulties faced by Board members and global external audit/accounting service providers. The Company shall continue to work on timely Board meetings backed by contemporary business data.

Thanking you,

Yours faithfully,

For Cranes Software International Ltd.

Mueed Digitally signed by Mueed Khader Khader Date: 2021.08.11 18:22:24 +05'30'

Authorised Signatory Name: Mueed Khader Designation: Director

Encl: as above

ISO 9001:2000 ISO 27001:2005 CM www.cranessoftware.com

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: L05190KA1984PLC031621

Statement of audited financial results for the quarter and year ended 31st March, 2021

PART-1

PART-1	PART-1
		(Rs.In Lakhs)
	Particulars	Standalone					Consolidated
		Quarter Ended			Year Ended		Quarter Ended			Year Ended
		31.03.2021	31.12.2020	31.03.2020	31.03.2021	31.03.2020	31.03.2021	31.12.2020	31.03.2020	31.03.2021	31.03.2020
		Audited	Unaudited	Audited	Audited	Audited	Audited	Unaudited	Audited	Audited	Audited
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15	Income from Operations (a)Net Sales/Income from Operations (b)Other Income Total Income Expenses (a) Cost of materials consumed (b) Purchase of Stock-in-Trade (c) Changes in inventories of finished goods and work-in-progress (d) Employee benefit expense (e) Finance costs (f) Depreciation and amortization expense (g) Other expenses Total Expenses Profit/(Loss) from Ordinary activities before exceptional items & taxes (1- 2) Exceptional Items Profit/(Loss) from ordinary activities before tax (3 - 4) Tax expense / (credit) (a) Current Tax (b) Deferred Tax Total tax expenses / (credit) Net Profit/(Loss) from ordinary activities after tax (5-6) Extraordinary Items Net Profit/(Loss) for the period (7-8) Minority Interest Net Profit/(Loss) after Taxes, minority interest and share of profit/Loss of associates(9+10) Total Comprehensive Income for the period [Net of tax] Paid-up equity share capital (Face Value of Rs.2/-) Reserve excluding Revaluation Reserves as per balance sheet of previous accounting year Earnings Per Share i) Basic ii)Diluted	141.87 4.82 146.69 - - - 69.73 0.12 2.61 6,534.80 6,607.25 (6,460.56) - (6,460.56) - (2,593.18) (2,593.18) (3,867.38) - (3,867.38) (3,867.38) - 2355.34 (3.28) (3.28)	78.91 73.71 152.62 - - - 66.75 0.30 2.21 674.78 744.04 (591.43) - (591.43) - 120.22 120.22 (711.65) - (711.65) (711.65) - 2355.34 (0.60) (0.60)	52.61 719.14 771.75 - - - 93.45 0.77 1.70 843.05 938.97 (167.22) - (167.22) (0.59) 2,971.37 2,970.79 (3,138.01) - (3,138.01) (3,138.01) - 2355.34 (2.66) (2.66)	276.16 98.47 374.63 - - - 231.05 0.51 9.23 7,525.63 7,766.41 (7,391.78) - (7,391.78) - (2,552.99) (2,552.99) (4,838.79) - (4,838.79) (4,838.79) - 2355.34 (69,380.13) (4.11) (4.11)	379.79 1,054.38 1,434.17 - - - 324.55 0.77 6.50 1,655.68 1,987.49 (553.32) - (553.32) (0.59) 3,097.65 3,097.06 (3,650.38) - (3,650.38) (3,650.38) - 2355.34 (64,541.33) (3.10) (3.10)	3,290.80 104.85 3,395.65 261.69 - 88.00 32.83 339.17 5,478.70 6,200.40 (2,804.75) - (2,804.75) 14.32 (1,588.52) (1,574.20) (1,230.54) - (1,230.54) - (1,230.54) 2355.34 (1.04) (1.04)	1,792.50 (0.00) 1,792.50 3.07 - 170.82 0.68 412.41 959.27 1,546.25 246.25 - 246.25 7.59 120.22 127.81 118.44 - 118.44 - 118.44 2355.34 0.10 0.10	562.68 713.21 1,275.89 2.08 - 550.65 32.63 337.26 260.12 1,182.74 93.15 - 93.15 9.94 2,829.94 2,839.89 (2,746.74) - (2,746.74) - (2,746.74) 2355.34 - (2.33) (2.33)	5,859.85 236.10 6,095.95 322.69 - 921.21 33.81 1,380.42 6,903.74 9,561.88 (3,465.93) - (3,465.93) 47.18 (1,548.33) (1,501.15) (1,964.78) - (1,964.78) - (1,964.78) 2355.34 (75,491.72) (1.67) (1.67)	2,500.23 1,058.44 3,558.67 126.69 - 1,806.65 32.63 1,315.80 784.77 4,066.53 (507.86) - (507.86) 62.58 2,968.39 3,030.97 (3,538.83) - (3,538.83) - (3,538.83) 2355.34 (73,489.96) (3.00) (3.00)

Mueed Digitally signed by Mueed Khader Khader Date: 2021.08.11 18:22:58 +05'30'

CRANES SOFTWARE INTERNATIONAL LIMITED

PART-2	PART-2
SL No	PARTICULARS	3 Months Ended			Year ended
		31.03.2021	31.12.2020	31.03.2020	31.03.2021	31.03.2020
A 1 2	- Number of shares - Percentage of shareholding - Number of shares - Percentage of shares (as a % of the total shareholding of promoter and promoter group) - Percentage of shares (as a % of the total share capital of the company) - Number of shares - Percentage of shares (as a % of the total shareholding of promoter and promoter group) - Percentage of shares (as a % of the total share capital of the company) PARTICULARS OF SHAREHOLDING Public Shareholding Promoters and Promoter Group Shareholding (a) Pledged / Encumbered (b) Non-encumbered	11,02,47,850 93.62% 10,00,000 13.30% 0.85% 65,19,000 86.70% 5.54%	11,02,47,850 93.62% 10,00,000 13.30% 0.85% 65,19,000 86.70% 5.54%	11,02,47,850 93.62% 10,00,000 13.30% 0.85% 65,19,000 86.70% 5.54%	11,02,47,850 93.62% 10,00,000 13.30% 0.85% 65,19,000 86.70% 5.54%	11,02,47,850 93.62% 10,00,000 13.30% 0.85% 65,19,000 86.70% 5.54%
B	INVESTOR COMPLAINTS FOR 3 MONTHS ENDED 31ST MARCH 2021
	Pending at the beginning of the Quarter	Received during the Quarter	Disposed of during the Quarter	Remaining unresolved at the end of the Quarter
	-	-	-	-

Mueed Digitally signed by Mueed Khader Khader Date: 2021.08.11 18:23:15 +05'30'

Cranes Software International Limited

Audited Balance Sheet as at 31st March, 2021

	(Rs in Lakhs)	(Rs in Lakhs)	(Rs in Lakhs)	(Rs in Lakhs)
Particulars	Standalone		Consolidated
	As At 31.03.2021	As At 31.03.2020	As At 31.03.2021	As At 31.03.2020
I. ASSETS 1 Non-current assets Property, plant and equipment Intangible assets Capital work in progress Deferred Tax Asset (Net) Financial Assets Investments Other non-current assets Non-current assets 2 Current assets Inventories Financial Assets Trade receivables Cash and cash equivalents Bank balances other than above Other current assets Current assets TOTAL ASSETS	27.91 0.39 - 24,585.77 8,010.18 2,984.95	32.20 0.98 5,042.44 22,032.78 8,010.18 3,660.79	63.90 3,939.67 - 27,894.92 17.87 554.54	70.06 4,894.68 5,042.44 25,945.36 17.87 223.66
	35,609.20 - 9,880.70 11.66 7.76 199.48	38,779.37 - 11,591.34 9.08 7.76 232.18	32,470.89 - 5,530.38 204.64 113.21 444.31	36,194.07 - 3,262.24 124.90 104.65 474.09
	10,099.60	11,840.37	6,292.55	3,965.88
	45,708.80	50,619.74	38,763.44	40,159.95
II. EQUITY AND LIABILITIES 1 Equity Equity share capital Other Equity 2 Non-Current Liabilities Financial Liabilities Provisions Non-Current Liabilities 3 Current liabilities Financial Liabilities Borrowings Trade payables Other current liabilities Provisions Current liabilities TOTAL EQUITY AND LIABILITIES	2,355.34 (69,380.13)	2,355.34 (64,541.33)	2,355.34 (75,491.72)	2,355.34 (73,489.96)
	(67,024.79) 29.94	(62,186.00) 33.91	(73,136.39) 46.62	(71,134.62) 52.73
	29.94 43.78 377.28 1,12,127.37 155.22	33.91 43.78 476.72 1,12,093.71 157.62	46.62 43.78 1,311.41 1,10,342.80 155.22	52.73 43.78 1,544.65 1,09,495.80 157.62
	1,12,703.65	1,12,771.82	1,11,853.21	1,11,241.85
	45,708.80	50,619.74	38,763.44	40,159.95

Digitally signed by Mueed Mueed Khader Date: Khader 2021.08.11 18:24:00 +05'30'

Notes

1. The above result is for the period ended March 31, 2021 as reviewed and recommended by the Audit committee of the Board, has been approved by the Board of Directors at its meeting held on August 11, 2021.

2. 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.

3. The business of the Company falls under a single primary segment i.e., IT/ ITES in accordance with Ind AS 108 'Operating Segments" and hence no segment reporting is applicable.

4. The Company has not provided interest in books of accounts on FCCB Liability, Loan from UPS Capital & Banks for quarter and year ended March 31, 2021.

5. The Company has not restated for FCCB liability, Loan from UPS Capital and interest thereon for the quarter and ended March 31, 2021.

6. On a standalone basis, the Company performed well in the months ahead of the pandemic, particularly as the Varsity division reinforced its market position in the training and education market. However, we have experienced serious business impact and disruptions from the pandemic downturn across the entire industrial, manufacturing and services spectrum. Revenues and operations have been drastically reduced because of shut-downs, travel restrictions, and highly curtailed customers' and users' demand. We are planning for a post-Covid rebound based on i) leveraging the scope and reach of legacy products, services and training strengths to address expected needs of customers, students, corporate and universities, ii) continuing to develop training programs in cutting-edge technologies such as Cloud Computing, Analytics and AI, iii) expanding our expertise, programs and collaborations in the rapidly evolving on-line training sector, and iv) productive licensing arrangements which leverage our products, services and extensive customer relationships and market reach.

7. Major constituents of the other expenses in the financial statements includes the following : a) Loss on account of foreign exchange fluctuations - INR 265.04 Lakhs. b) Bad and doubtful debts written off - INR 505.49 Lakhs.

8. c) Loss on account of Impairment of Intangible assets under development - INR. 5,042.44 Lakhs.

9. On approval from the appropriate authorities, the allowances for credit loss standing at Rs. 31,173.00 lakhs as on 31st March 2020 was squared off against the respective receivables during year.

Place : Bangalore Date: 11[th] August 2021

for Cranes Software International Limited Mueed Digitally signed by Mueed Khader Khader Date: 2021.08.11 18:24:20 +05'30' Mueed Khader Director DIN - 00106674

Cranes Software International Limited CIN : L05190KA1984PLC031621 Standalone Statement of cash flows for the year ended March 31, 2021 (All amounts are in lakhs of Indian Rupees, unless otherwise stated)	Cranes Software International Limited CIN : L05190KA1984PLC031621 Standalone Statement of cash flows for the year ended March 31, 2021 (All amounts are in lakhs of Indian Rupees, unless otherwise stated)
Particulars	For the year ended March 31, 2020 For the year ended March 31, 2021
Cash Flow From Operating Activities
Profit / (Loss) before income tax	(7,391.78) (553.33)
Adjustments for
Depreciation and amortisation expense Bad Debts Written off Allowances for Credit Loss	9.23 6.50 505.49 - 1,463.00 1,457.90
Deposit Written off	- 56.66
Foreign Exchange Loss/(Gain) (Net)	265.04 (1,008.15) (95.60) (44.09)
Balance no longer payable written Back
Interest received Finance costs Change in operating assets and liabilities	- 1.88 0.51 0.77
	(5,244.11) (81.85)
(Increase)/ decrease in trade receivables Increase/ (decrease) in Other non-current assets	925.65 145.00 (978.78) (1,221.72)
(Increase)/ decrease in Other assets Increase/ (decrease) in provisions and other liabilities Increase/ (decrease) in trade payables Cash generated from operations	35.19 (5.29) 296.41 1,197.15 (66.88) (27.90)
	(5,032.53) 5.39
Less : Income taxes paid (net of refunds)	(2.48) (4.54)
Net cash from operating activities (A) Cash Flows From Investing Activities
	(5,035.00) 0.85
Purchase of PPE (including changes in CWIP) Impairment of Assets	(4.35) (19.91) 5,042.44 -
Interest income Net cash used in investing activities (B) Cash Flows From Financing Activities Finance costs Net cash from/ (used in) financing activities (C) Net decrease in cash and cash equivalents (A+B+C) Cash and cash equivalents at the beginning of the financial year Cash and cash equivalents at end of theyear	- (1.88)
	5,038.09(21.79)
	(0.51) (0.77)
	(0.51) (0.77)
	2.58 (21.71) 16.84 38.55 19.42 16.84

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Muee Digitally
signed by
d Mueed Khader
Khade Date: 2021.08.11
18:24:37
r +05'30'
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Cranes Software International Limited CIN : L05190KA1984PLC031621 Consolidated Statement of cash flows for the year ended March 31, 2021 (All amounts are in lakhs of Indian Rupees,unless otherwise stated)
Particulars Cash Flow From Operating Activities Profit before income tax Adjustments for Depreciation and amortisation expense Bad Debts Writteroff Foreign Exchange (Loss)/Gain (Net) (Profit)/ Loss on sale of fixed assets Loan Principal Writeback Interest on Bank loans written back Balance no longer payable written Back Interest received Finance costs Change in operating assets and liabilities (Increase)/ decrease in inventories (Increase)/ decrease in trade receivables (Increase)/ decrease in Other assets Increase/ (decrease) in Current liabilities Increase/ (decrease) in trade payables Cash generated from operations	For the year ended March 31, 2021 (3,465.93) 1,380.42 505.49 (302.15) (133.66) (107.54) 33.81 (2,089.56) (2,773.65) (301.10) 710.94 (233.24) (4,686.61)	For the year ended March 31, 2020 (507.86) 1,315.80 81.30 (1,036.15) - - - (4.45) 17.04 32.63
		(101.69) 2,111.37 (3.02) (3,159.43) 122.75
		(1,030.02)
Less : Income taxes paid (net of refunds)		(63.17)
Net cash from operating activities (A) Cash Flows From Investing Activities Purchase of PPE (including changes in CWIP) Impairment of Intangible Asset under Development (Purchase)/ disposal proceeds of Investments Interest income (Purchase)/ disposal proceeds from fixed Asset Net cash used in investing activities (B) Cash Flows From Financing Activities	(4,686.61) (4.47) 5,042.44 107.54 (330.69)
		(1,093.19)
		(20.77) - 17.04 1,114.79
	4,814.82	1,111.06
Interest on borrowed funds Borrowings/repayments Long term Provisions	(33.81)	(32.63)
	- (6.11)
		14.83
Net cash from/ (used in) financing activities (C) Net decrease in cash and cash equivalents (A+B+C)	(39.92) 88.30
		(17.80)
		0.08
Cash and cash equivalents at the beginning of the financial year	229.55	229.47
Cash and cash equivalents at end of theyear	317.85	229.55

Mueed Digitally signed by Mueed Khader Khader Date: 2021.08.11 18:25:01 +05'30'

Sethia Prabhad Hegde & Co Chartered Accountants

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Independent Auditor’s Report on Standalone Annual Financial Results of the Company Pursuant to the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Requirements, 2015

To the Board of Directors of Cranes Software International Limited

Opinion

1. We have audited the standalone financial results of Cranes Software International Limited for the year ended 31[st] March 2021, 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 amended)(“Listing Regulations”) including relevant circulars issued by SEBI from time to time.

2. In our opinion and to the best of the information and according to the explanation given to us, except to the matters expressed in the Basis of Qualified Opinion , and Emphasis of Matter Paragraph , the statement

3. i) Presents financial results in accordance with the requirements of Regulation 33 of the Listing Regulations, and,

4. ii) Gives a true and fair view in conformity with the applicable Indian accounting standards (IND AS) as prescribed under the section 133 of the Companies Act 2013 read with the relevant rules issued there under and other accounting principles generally accepted in India, of the standalone loss and other comprehensive Income and other financial information of the Company as at 31[st] March, 2021.

With respect to the standalone Financial Results for the quarter ended March 31, 2021, based on our review conducted as stated in paragraph (b) of Auditor’s Responsibilities section below, nothing has come to our attention that causes us to believe that the standalone Financial Results for the quarter ended March 31, 2021, prepared in accordance with the recognition and measurement principles laid down in the Indian Accounting Standards and other accounting principles generally accepted in India, has not disclosed the information required to be disclosed in terms of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, including the manner in which it is to be disclosed, or that it contains any material misstatement.

TIMMAYY Digitally signed by TIMMAYYA HEGDE A HEGDE Date: 2021.08.11 17:30:43 +05'30'

No-21,1[st] Floor, 14th A Main Road, E Block, Sahakarnagar, Bangalore-92

Basis for Qualified Opinion

We conducted our audit in accordance with the standards of auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under these standards are further described in the Auditor’s Responsibilities for the audit of the statement section of our report. We are independent of the company in accordance with the code of ethics issued by the institute of Chartered Accountants of India (The ICAI) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the rules there under and we have fulfilled our other ethical responsibilities in accordance with these requirements and the code of ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our opinion

1. The attached Balance Sheet as at 31[st] March, 2021 is drawn on the basis of the Principle of ‘Going Concern’. We opine as follows in this connection:

2. i. 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 INR 24,585.77 lakhs (year ended March 31, 2020 INR 22,032.78 lakhs). This does not satisfy the virtual certainty test for recognition of deferred tax credit as laid down in IND AS-12.

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

4. We further report that, except for the effect, if any, of the matters stated in paragraph 1(ii) above, whose effect are not ascertainable, had the observation made in paragraph 1(i) above been considered, the loss after tax for the year ended March 31, 2021 would have been higher by INR. 24,585.77 lakhs.

5. We draw attention to Note No. 34 of the standalone Ind AS Financial Statements regarding the Redemption of Foreign currency convertible bonds.

6. i. Redemption of Foreign currency convertible bond amounting to INR. 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.

7. ii. The Company had received an intimation from the “Ministry of Corporate affairs” during August 2019, stating that a wounding up order is issued against the Company by the

TIMMAYY Digitally signed by TIMMAYYA HEGDE A HEGDE Date: 2021.08.11 17:31:37 +05'30'

Hon’ble High Court of Karnataka vide order dated 28th November 2017. Further, based on the plea submitted by the Company, the Hon’ble High Court of Karnataka had granted a stay during December 2020 directing the official liquidator not to precipitate the process of the winding up order and the matter is extended till the next date of hearing as the petitioner and the company are exploring the possibility of amicable settlement.

Emphasis of Matter

• a. Term loans and working capital loans availed by the company from various banks amounting to INR 57,376.13 lakhs remain unpaid and are overdue since 2009, 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

• b. Legal proceedings u/s.138 of the Negotiable Instruments Act has been initiated by the following Banks against the company.

• i. Industrial Development Bank of India

• ii. State Bank of India (Formerly State of Mysore)

• iii. Bank of India

• c. 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.

• d. We would like to draw the attention of the members to note no. 9 of the financial statements regarding the squaring off of the allowance for credit loss against the respective receivables.

• e. We would like to draw the attention of the members to note no. 27 of the financial statements regarding default of payments to various statutory authorities.

• f. We draw attention to Note No. 35 of the standalone Ind AS Financial Statements regarding the investments (including 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 investments (including receivables) in subsidiaries are as under.

TIMMAYY Digitally signed by TIMMAYYA HEGDE A HEGDE Date: 2021.08.11 17:32:15 +05'30'

(INR in Lakhs)

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Sl No. Name of the Subsidiary Amount
1 Esqube Communication Solutions 190.92
2 Cranes Software International Pte Limited 1,715.05
3 Systat Software UK Ltd 433.95
4 Proland Software Private Limited 463.34
5 Systat Software Inc.(Net of Provision) 9,604.48
6 Tilak Auto Tech Private Ltd. 163.81
7 Cranes Varsity Private Ltd. 49.52
8 Systat Software Gmbh 187.67
Total 12,808.24
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• g. The company had invested in the below mentioned wholly owned subsidiaries. Due to the cumulative losses in the subsidiaries, the value of investment is eroded.

(INR in Lakhs)

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Sl No. Name of the Subsidiary Investment Shareholder Funds
1 Esqube Communication Solutions Pvt Ltd 179.78 (24.39)
2 Proland Software Pvt Ltd 318.89 (645.49)
3 Tilak Auto Tech Private Limited 51.62 (144.56)
4 Systat Software Inc. USA 1,851.18 (4,242.24)
5 Cranes Software International Pte Limited 44.31 (575.23)
6 Caravel Info System Private Limited 362.33 (546.56)
TOTAL 2,808.11 (6,178.47)
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• h. 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.

• i. The Company has drawn and utilized an amount INR 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’. (Refer note No. 15 of the Financial Statements)

• j. The company has provided for doubtful debts of INR 1,463.00 lakhs during the year, towards due from a subsidiary.

• k. Loan availed by the company from ‘UPS Capital Business Credit’ remains unpaid and is overdue since April 2014. The management is of the view that the liability of INR 696.37 lakhs (including interest) reflected in the financial statements will adequately cover its liability on settlement of dues and therefore no provision for interest is

TIMMAYY Digitally signed by TIMMAYYA HEGDE A HEGDE Date: 2021.08.11 17:32:54 +05'30'

provided for the year ended 31[st] March 2021. Had such interest been provided in the books in the normal course, the present loss for the year ended 31st March 2021 would have been higher by INR 178.91 lakhs.

• l. In continuation to the point ‘l’ above, the company has also discontinued the restatement of the Exchange fluctuation gain / loss on account of the outstanding due towards ‘UPS Capital Business Credit’ 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 loss for the year ended 31[st] March 2021 would have been lower by INR 19.63 lakhs.

• m. 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 INR 11,286.71 lakhs on such outstanding amounts for the year ended 31st March, 2021 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 loss for the year ended 31st March 2021 would have been higher by INR 11,286.71 lakhs.

• n. 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 INR 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 2021. Had such interest been provided in the books in the normal course, the present loss for the year ended 31st March 2021 would have been higher by INR 1,738.04 lakhs.

• o. In continuation to the point ‘o’ 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 loss for the year ended 31st March 2021 would have been higher by INR 1,243.20 lakhs.

• p. There are undisputed statutory dues including dues on current year’s transactions, on account of Provident Fund Contribution, Employee State Insurance, Income Tax, Service tax, Sales Tax, Goods and Service tax, Dividend Distribution Tax and the like, not deposited by the Company in favor of the respective statutory authorities.

TIMMAYY Digitally signed by TIMMAYYA HEGDE A HEGDE Date: 2021.08.11 17:34:08 +05'30'

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

• r. Due to pandemic COVID-19, we have not been able to visit the business areas for performing verification of documents and other records relevant for the audit. However, we have sought documents and records via electronic mode and the same was made available, though not in complete, for our verification.

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

Responsibilities of the Management and Those Charged with Governance for the statement

This statement has been prepared on the basis of the standalone annual audited financial statements and has been approved by the company’s Board of Directors. The Company’s Board of Directors are responsible for the preparation and presentation of the statement that gives a true and fair view of the net profit/loss and other comprehensive income and other financial information of the company in accordance with the accounting principles generally accepted in India including Ind AS prescribed under section 133 of the Act, read with relevant rules issued there under and other accounting principles generally accepted in India and in compliance with regulation 33 of the listing regulations. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the act for safeguarding of the assets of the company and for preventing and detecting frauds and other regularities; selection and application of appropriate Accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records relevant to the preparation and presentation of the statement that gives a true and fair view and is free from material mis statements whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless Management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibility for the audit of statement

Our objective is to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs, specified under section of 143(10) of the Act will always detect a material mis-statement when it exists. Mis-statements can arise from fraud or error

TIMMAYY Digitally signed by TIMMAYYA HEGDE A HEGDE Date: 2021.08.11 17:35:28 +05'30'

and are considered material if individually or in aggregate they could reasonably be expected to influence the economic decisions of users taken on the basis of this statement

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

TIMMAYY Digitally signed by TIMMAYYA HEGDE A HEGDE Date: 2021.08.11 17:36:39 +05'30'

Other Matter

The statement includes the financial results of the quarter ended 31[st] March 2021, being the balancing figures between the audited figures between the audited figures in respect of the full financial year and the published unaudited year-to-date figures up to the third quarter of the current financial year, which were subject to limited review by us.

For Sethia Prabhad Hegde & Co

Chartered Accountants Registration No.013367S

TIMMAYYA Digitally signed by TIMMAYYA HEGDE HEGDE Date: 2021.08.11 17:37:57 +05'30' SD/-

Date : 11[th] August 2021 Place : Bangalore

Timmayya Hegde Partner

Membership No.226267 (UDIN : 21226267AAAABF2867)

Sethia Prabhad Hegde & Co Chartered Accountants

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Independent Auditor’s Report on Consolidated Annual Financial Results of the Company Pursuant to the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Requirements, 2015

To The Board of Directors of Cranes Software International Limited

Opinion

1. We have audited the accompanying consolidated annual financial results of Cranes Software International Limited(“the Holding Company”) and its subsidiaries (the Holding company and its subsidiaries together referred to as the Group) for the year ended 31[st] March 2021 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 amended)(“Listing Regulations”) including relevant circulars issued by SEBI from time to time.

2. In our opinion and to the best of our information and according to the explanations given to us these consolidated year-end financial results:

   • (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

     • (h) Systat Software Inc (USA)

   • (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)

3. In our opinion and to the best of the information and according to the explanation given to us, except to the matters expressed in the Basis of Qualified Opinion , and Emphasis of Matter Paragraph , the statement

4. i) presents financial results in accordance with the requirements of Regulation 33 of the Listing Regulations, and, Digitally signed by TIMMAYYA HEGDE

TIMMAYY Digitally signed by TIMMAYYA HEGDE A HEGDE Date: 2021.08.11 17:43:44 +05'30'

No-21,1[st] Floor, 14th A Main Road, E Block, Sahakarnagar, Bangalore-92

• ii) gives a true and fair view in conformity with the applicable Indian accounting standards (IND AS) as prescribed under the section 133 of the Companies Act 2013 read with the relevant rules issued thereunder and other accounting principles generally accepted in India, of the consolidated loss and other comprehensive Income and other financial information of the Company as at 31[st] March, 2021.

• With respect to the Consolidated Financial Results for the year ended March 31, 2021, based on our review conducted as stated in paragraph (b) of Auditor’s Responsibilities section below, nothing has come to our attention that causes us to believe that the Consolidated Financial Results for the year ended March 31, 2021, prepared in accordance with the recognition and measurement principles laid down in the Indian Accounting Standards and other accounting principles generally accepted in India, has not disclosed the information required to be disclosed in terms of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, including the manner in which it is to be disclosed, or that it contains any material misstatement.

Basis for Qualified Opinion

We conducted our audit in accordance with the standards of auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under these standards are further described in the Auditor’s Responsibilities for the audit of the statement section of our report. We are independent of the company in accordance with the code of ethics issued by the institute of Chartered Accountants of India (The ICAI) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the rules there under and we have fulfilled our other ethical responsibilities in accordance with these requirements and the code of ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter

• i. Consolidated accounts of the company include compiled financials of

• a. Cranes Software International Pte Limited, Singapore

• b. Systat Software Gmbh

• c. Cranes Software Inc

The same are not audited by their respective auditors as on 31st March 2021.

• ii. ii. Our audit report has to be read along with the ‘Emphasis of Matter’ para as appearing in our Independent Auditor’s Report of even date in respect of the Consolidated financials of Cranes Software International Limited.

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

TIMMAYY Digitally signed by TIMMAYYA HEGDE A HEGDE Date: 2021.08.11 17:44:21 +05'30'

Responsibilities of the Management and Those Charged with Governance for the statement

The Holding Company’s Board of Directors is responsible for the preparation of these consolidated financial statements in terms with the requirement of the Companies Act, 2013 (“the Act”) that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Group in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. The respective Board of Directors of the companies included in the Group are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group and for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated financial statements by the Directors of the Holding Company, as aforesaid.

In preparing the consolidated financial statements, the respective Board of Directors of the companies included in the Group are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless Management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those respective Board of Directors of the companies including in the group are also responsible for overseeing the financial reporting process of the group.

Auditor’s Responsibility for the audit of statement

Our objective is to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs, specified under section of 143(10) of the Act will always detect a material mis-statement when it exists. Mis-statements can arise from fraud or error and are considered material if individually or in aggregate they could reasonably be expected to influence the economic decisions of users taken on the basis of this statement

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from

TIMMAYY Digitally signed by TIMMAYYA HEGDE A HEGDE Date: 2021.08.11 17:45:01 +05'30'

error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance of the Holding Company and such other entities included in the consolidated Ind AS financial statements of which we are the independent auditors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

Other Matters

1. We did not audit the financial statements of four (4) subsidiaries included in the consolidated year end results, whose consolidated financial statements reflect total assets of INR. 17,062.66 lakhs as at 31st March 2021 and the total revenue of INR 6,813.70 lakhs for the year ended 31st March 2021.

TIMMAYY Digitally signed by TIMMAYYA HEGDE A HEGDE Date: 2021.08.11 17:45:39 +05'30'

1. The statement includes the financial results of the year ended 31[st] March 2021, being the balancing figures between the audited figures in respect of the full financial year and the published unaudited year-to-date figures up to the third quarter of the current financial year, which were subject to limited review by us.

For Sethia Prabhad Hegde & Co Chartered Accountants Registration No.013367S

Date : 11[th] August 2021 Place : Bangalore

TIMMAYY Digitally signed by TIMMAYYA HEGDE A HEGDE Date: 2021.08.11 17:46:53 +05'30' SD/- Timmayya Hegde Partner Membership No.226267 (UDIN: 21226267AAAABE2893)

CRANES SOFTWARE INTERNATIONAL LIMITED Regd. Office: # 82, Presidency Building, 3rd & 4th Floor, St.Marks Road, Bangalore - 560 001 Ph.080 67644848 Fax:080 67644800 Email:info@cranessoftware.com Website: www.cranessoftware.com CIN: L05190KA1984PLC031621

ANNEXURE-I

Statement of Impact of Audit Qualifications for the Financial Year ended March 31, 2021

(See Regulation 33/35 of SEBI (LODR) Amendment) Regulations, 2016

	(See Regulation 33/35 of SEBI (LODR) Amendment) Regulations, 2016	(See Regulation 33/35 of SEBI (LODR) Amendment) Regulations, 2016	(See Regulation 33/35 of SEBI (LODR) Amendment) Regulations, 2016	(See Regulation 33/35 of SEBI (LODR) Amendment) Regulations, 2016	(See Regulation 33/35 of SEBI (LODR) Amendment) Regulations, 2016	(See Regulation 33/35 of SEBI (LODR) Amendment) Regulations, 2016
	(Rs. Lakhs)
I	SL.No.	Particulars	Audited Figures (as reported before adjusting for qualification)	Audited Figures (as reported after adjusting for qualification)	Audited Figures (as reported before adjusting for qualification)	Audited Figures (as reported after adjusting for qualification)
			Standalone		Consolidated
	1 2 3 4 5 6 7 8	Turnover/Total Income Total Expenditure Net Profit/(Loss) Earning per share Total Assets Total Liabilities Net Worth Anyother financial item(s) (as felt appropriatelybythe management	374.63 5,213.43 (4,838.79) (4.11) 45,708.81 1,12,733.59 (67,024.78) -	374.63 44,265.69 (43,891.05) (37.27) 21,123.04 1,27,200.08 (1,06,077.04) -	6,095.95 8,060.73 (1,964.78) (1.67) 38,763.44 1,11,899.82 (73,136.39) -	6,095.95 47,112.99 (41,017.04) (34.83) 14,177.67 1,26,366.31 (1,12,188.65) -

II Audit Qualification (each audit qualification separately):

a. Details of Audit Qualification: b. Type of Audit Qualification: c. Frquency of qualification

For Audit Qualification (s) where the impact is quantified by auditors, d. Management's Views

• e. For Audit Qualification(s) where the impact is not quantified by the auditor

Refer Annexure Qualified opinion Refer Annexure Refer Annexure Refer Annexure

(I) Management's estimation on the impact of audit qualification:

(II) If management is unable to estimate the impact, reasons for the same:

(III) Auditor's Comments on (I) or (II) above:

III Signatories

CEO/Managing Director

CFO

Audit Committee Chairman

Asif Digitally signed by Asif Khader Date: 2021.08.11 Khader 18:26:55 +05'30' Asif Digitally signed by Asif Khader Khader Date: 2021.08.11 18:27:58 +05'30' RICHARD Digitally signed by RICHARD HOLDEN HOLDEN GALL GALL Date: 2021.08.11 18:35:08 +05'30'

Statutory Auditor

TIMMAYY Digitally signed by TIMMAYYA HEGDE A HEGDE Date: 2021.08.11 17:50:22 +05'30'

Place: Bangalore Date: 09/08/2021

Annexure -Audit Qualification (Each Audit qualification seperately)

SL. No	Details of Audit Qualification [a]	Type of Audit Qualification [b]	Frequency of Qualification [c]	Quantified Audit Report [YES/NO] [d]	Management's Views [e]	Auditors Comments on Management's Views
1	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 INR 24,585.77 lakhs (year ended March 31, 2020 INR 22,032.78 lakhs). This does not satisfy the virtual certainty test for recognition of deferred tax credit as laid down in IND AS-12	Qualified Opinion	Repetitive	Yes	Responding to ongoing difficult business and financial conditions, the Company has made, and continues to make, significant adjustments to its business strategy and operations plans, as well as improvements in its solutions and product offerings. Based on these changes, the Company remains confident of future taxable income to take advantage of the deferred tax credit as a 'recognized' asset	Audit qualification is self explanatory.
2	The appropriateness of the ‘Going Concern’ concept based on which the accounts have been prepared is interalia dependent on the Company's ability to infuse requisite funds for meeting its obligations, rescheduling of debt and resuming normal operations	Qualified Opinion	Repetitive	Yes	Despite the business instability and disruptions faced across the country and world for the year under review, the management has diligently continued serious efforts toward resumption of normal operations. We are confident that the concept of 'Going Concern' continues to apply	Audit qualification is self explanatory.
3	Redemption of Foreign currency convertible bond amounting to INR. 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 goingconcern	Emphasis of Matter	Repetitive	No	The Company has remained actively engaged with the FCCB holders toward a mutually-favorable resolution - the parties expect a settlement soon which satisfies bond-holders' interests and also sustains the company business by withdrawal of the winding-up petition	Audit Note is self explanatory.
4	The Company had received an intimation from the “Ministry of Corporate affairs” during August 2019, stating that a wounding up order is issued against the Company by the Hon’ble High Court of Karnataka vide order dated 28th November 2017. Further, based on the plea submitted by the Company, the Hon’ble High Court of Karnataka had granted a stay during December 2020 directing the official liquidator not to precipitate the process of the winding up order and the matter is extended till the next date of hearing as the petitioner and the company are exploring the possibility of amicable settlement.	Emphasis of Matter	Repetitive	No
5	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 INR 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 2021. Had such interest been provided in the books in the normal course, the present loss for the year ended 31st March 2021 would have been higher by INR 1,738.04 lakhs	Emphasis of Matter	Repetitive	Yes
6	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 loss for the year ended 31st March 2021 would have been higher by INR 1,243.20 lakhs.	Emphasis of Matter	Repetitive	Yes

Asif Digitally signed by Asif Khader Asif Digitally signed by Asif Khader RICHARD Digitally signed by RICHARD HOLDEN Khader Date: 2021.08.11 18:28:51 +05'30' Khader Date: 2021.08.11 18:29:14 +05'30' HOLDEN GALL GALL Date: 2021.08.11 18:35:59 +05'30'

TIMMAYYA Digitally signed by TIMMAYYA HEGDE HEGDE Date: 2021.08.11 17:50:53 +05'30'

7	Term loans and working capital loans availed by the company from various banks amounting to INR 57,736.13 lakhs remain unpaid and are overdue since 2009, 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	Emphasis of Matter	Repetitive	No	The Company continues active defense of its position in these debt cases, and is in advanced settlement negotiations with both secured and unsecured lenders. Favorable settlements have been reached with some debtors and similar resolutions are expected with remaining debtors in due course	Audit Note is self explanatory.
8	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	Emphasis of Matter	Repetitive	No
9	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 INR 11,286.71 lakhs on such outstanding amounts for the year ended 31st March, 2021 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 loss for the year ended 31st March 2021 would have been higher by INR 11,286.71 lakhs.	Emphasis of Matter	Repetitive	Yes
10	Loan availed by the company from ‘UPS Capital Business Credit’ remains unpaid and is overdue since April 2014. The management is of the view that the liability of INR 696.37 lakhs (including interest) reflected in the financial statements will adequately cover its liability on settlement of dues and therefore no provision for interest is provided for the year ended 31st March 2021. Had such interest been provided in the books in the normal course, the present loss for the year ended 31st March 2021 would have been higher by INR 178.91 lakhs.	Emphasis of Matter	First Time	Yes	Under difficult business uncertainties and dire financial constraints, the company reasonably utilized available funds to cover critical liabilities and sustain essential business operations. With a range of favorable resolutions and settlements being actively pursued, and strong focus on business stability and revival, the company fully intends to take care of liabilities, statutory dues and interests of its valued employees, partners and other stakeholders.	Audit Note is self explanatory.
11	In continuation to the point above, the company has also discontinued the restatement of the Exchange fluctuation gain / loss on account of the outstanding due towards ‘UPS Capital Business Credit’ 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 loss for the year ended 31st March 2021 would have been lower by INR 19.63 lakhs.	Emphasis of Matter	First Time	Yes
12	We would like to draw the attention of the members to note no. 9 of the financial statements regarding the squaring off of the allowance for credit loss against the respective receivables	Emphasis of Matter	First Time	Yes
13	There are undisputed statutory dues including dues on current year’s transactions, on account of Provident Fund Contribution, Employee State Insurance, Income Tax, Service tax, Sales Tax, Goods and Service tax, Dividend Distribution Tax and the like, not deposited by the Company in favor of the respective statutory authorities.	Emphasis of Matter	Repetitive	Yes
14	We draw attention to Note No. 37 of the standalone Ind AS Financial Statements regarding the investments (including 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	Emphasis of Matter	Repetitive	No	The Management continues to believe there is no diminution in the value of strategic financial and executive support provided as investment into its subsidiaries. The company has nurtured valuable IP rights and assets in these subsidiaries whose long-term value will be unlocked as and when the company is able to resume its normal business plans and operations. These are long-term, investments strategically linked to future growth of the company and the Management expects to recover good gains (including past receivables) based on planned business stabilizing and growth in these subsidiaries.	Audit Note is self explanatory.

TIMMAYYA Digitally signed by TIMMAYYA HEGDE HEGDE Date: 2021.08.11 17:51:27 +05'30'

Asif Digitally signed by Asif Khader Khader Date: 2021.08.11 18:29:43 +05'30'

Asif Digitally signed by Asif Khader RICHARD Digitally signed by RICHARD HOLDEN Khader Date: 2021.08.11 18:30:52 +05'30' HOLDEN GALL GALL Date: 2021.08.11 18:36:56 +05'30'

Annexure- Audit Qualification (Each Audit qualification seperately)

SL. No	Details of Audit Qualification [a]	Type of Audit Qualification [b]	Frequency of Qualification [c]	Quantified Audit Report [YES/NO] [d]	Management's Views [e]	Auditors Comments on Management's Views
1	Consolidated accounts of the company include compiled financials of a. Cranes Software International Pte Limited, Singapore b. Systat Software Gmbh c. Cranes Software Inc The same are not audited by the respective auditors as on 31st March 2021.	Qualified Opinion	Repetitive	No	Financial statements compiled for these subsidiaries have been used where necessary as the basis for timely reporting of overall company's Financials to satisfy compliance with SEBI requirements. Formal audited statements are being pursued from respective subsidiary auditors	Audit qualification is self explanatory.
TIMMAYY A HEGDE Digitally signed by TIMMAYYA HEGDE Date: 2021.08.11 17:52:03 +05'30' Asif Khader Digitally signed by Asif Khader Date: 2021.08.11 18:31:34 +05'30' Asif Khader Digitally signed by Asif Khader Date: 2021.08.11 18:32:21 +05'30' RICHARD HOLDEN GALL Digitally signed by RICHARD HOLDEN GALL Date: 2021.08.11 18:37:54 +05'30'