Notes to Accounts of Cranes Software International Ltd.

Mar 31, 2024

q) Provisions, contingent liabilities and contingent asset Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Provisions are discounted, if the effect of the time value of money is material, using pre-tax rates that reflects the risks specific to the liability. When discounting is used, an increase in the provisions due to the passage of time is recognised as finance cost. These provisions are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.

Necessary provision for doubtful debts, claims, etc., are made if realisation of money is doubtful in the judgement of the management.

Contingent liability

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. Contingent liabilities are disclosed separately.

Show cause notices issued by various Government authorities are considered for evaluation of contingent liabilities only when converted into demand.

Contingent assets

Where an inflow of economic benefits is probable, the Company discloses a brief description of the nature of the contingent assets at the end of the reporting period, and, where practicable, an estimate of their financial effect. Contingent assets are disclosed but not recognised in the financial statements.

r) Cash and cash equivalents

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances with original maturity of less than 3 months, highly liquid investments that are readily convertible into cash, which are subject to insignificant risk of changes in value.

s) Cash Flow Statement

Cash flows are presented using indirect method, whereby profit / (loss) before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments.

Bank borrowings are generally considered to be financing activities. However, where bank overdrafts which are repayable on demand form an integral part of an entity''s cash management, bank overdrafts are included as a component of cash and cash equivalents for the purpose of Cash flow statement.

t) Earnings per share

"The basic earnings per share are computed by dividing the net profit for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Diluted EPS is computed by dividing the net profit after tax by the weighted average number of equity shares considered for deriving basic EPS and also weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for bonus shares, as appropriate"

28 Operating Segments

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 reporting on various segments do not arise.

29 Impairment of Assets

The company assessed its fixed Assets for impairment as at 31st March 2024 and concluded that there has been no significant impaired fixed asset that needs to be recognized in the books of account.

30 Operating lease arrangements (as lessor)

The Company has given certain properties on operating lease arrangements. The leases are cancellable at the option of either party to lease and may be renewed based on mutual agreement of the parties. The total lease income recognised on such contracts for the year is Nil (Previous year Rs. Nil).

31 Confirmation of balances in respect of Trade Receivables and Trade Payables has not been obtained.

32 Foreign Currency Convertible Bonds

The Foreign Currency Convertible Bonds carry coupon rate of 2.50 %, payable half yearly. In case of default of payment of interest the coupon rate stands increased to 4.80 %.

During March 2011, the convertible foreign currency bonds had become due for conversion to Equity Shares and none of the bond holders have exercised their option for conversion. Correspondingly, the amounts had become due for payment as on the closure of such exercise and is yet to be redeemed as on the date of the balance sheet. These funds fall within the meaning of ''deposit'' as defined under section 73 of the Companies Act 2013. The Company has not complied with the directives issued by the Reserve Bank of India and the provisions of section 73 to 76 of the Companies Act, 2013 and the rules framed thereunder

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. The Company had received an intimation from the “Ministry of Corporate affairs” during August 2019, stating that a winding up order is issued against the Company by the Hon’ble High Court of Karnataka had granted a stay during June 2022 directing the official liquidator not to precipitate the process of the winding up order and the matter was extended till the next date of hearing as the petitioner and the company were exploring the possibility of amicable settlement. Now, the Hon’ble High Court of Karnataka has withdrawn the winding up order on behalf of the Foreign Currency Bond Holders.

Financial risk management objectives

The treasury function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

The Company seeks to minimise the effects of these risks by using natural hedging financial instruments and forward contracts to hedge risk exposures. The use of financial derivatives is governed by the Company’s policies approved by the board of directors, which provide written principles on foreign exchange risk, the use of financial derivatives, and the investment of excess liquidity. The Company does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

Market risk

Market risk is the risk of any loss in future earnings, in realizable fair values or in future cash flows that may result from a change in the price of a financial instrument. The Company’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. The Company actively manages its currency and interest rate exposures through its finance division and uses derivative instruments such as forward contracts and currency swaps, wherever required, to mitigate the risks from such exposures. The use of derivative instruments is subject to limits and regular monitoring by appropriate levels of management.

Foreign currency risk management

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. The Company actively manages its currency rate exposures through a centralised treasury division and uses natural hedging principles to mitigate the risks from such exposures. The use of derivative instruments, if any, is subject to limits and regular monitoring by appropriate levels of management.

Foreign currency sensitivity analysis

Movement in the functional currencies of the various operations of the Company against major foreign currencies may impact the Company’s revenues from its operations. Any weakening of the functional currency may impact the Company’s cost of borrowings. The foreign exchange rate sensitivity is calculated for each currency by aggregation of the net foreign exchange rate exposure of a currency and a simultaneous parallel foreign exchange rates shift in the foreign exchange rates of each currency by 2%, which represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 2% change in foreign currency rates.

In management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year.

Interest rate risk management

The Company is exposed to interest rate risk because it borrow funds at both fixed and floating interest rates. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings and by the use of interest rate swap contracts. Hedging activities are evaluated regularly to align with interest rate views and defined risk appetite, ensuring the most cost-effective hedging strategies are applied. Further, in appropriate cases, the Company also effects changes in the borrowing arrangements to convert floating interest rates to fixed interest rates.

Interest rate sensitivity analysis

The sensitivity analyses below have been determined based on the exposure to interest rates for both derivatives and non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 25 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

Credit risk management

Credit risk arises when a customer or counterparty does not meet its obligations under a customer contract or financial instrument, leading to a financial loss. The Company is exposed to credit risk from its operating activities primarily trade receivables and from its financing/ investing activities, including deposits with banks, mutual fund investments, investments in debt securities and foreign exchange transactions. The Company has no significant concentration of credit risk with any counterparty.

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure is the total of the carrying amount of balances with banks, short term deposits with banks, trade receivables, margin money and other financial assets excluding equity investments.

(a) Trade Receivables

Trade receivables are consisting of a large number of customers. The Company has credit evaluation policy for each customer and, based on the evaluation, credit limit of each customer is defined. Wherever the Company assesses the credit risk as high, the exposure is backed by either bank, guarantee/letter of credit or security deposits.

The Company does not have higher concentration of credit risks to a single customer. As per simplified approach, the Company makes provision of expected credit losses on trade receivables using a provision matrix to mitigate the risk of default in payments and makes appropriate provision at each reporting date wherever outstanding is for longer period and involves higher risk.

(b) Investments, Derivative Instruments, Cash and Cash Equivalents and Bank deposits

Credit Risk on cash and cash equivalents, deposits with the banks/financial institutions is generally low as the said deposits have been made with the banks/financial institutions, who have been assigned high credit rating by international and domestic rating agencies.

Credit Risk on Derivative Instruments is generally low as the Company enters into the Derivative Contracts with the reputed Banks.

Investments of surplus funds are made only with approved Financial Institutions/ Counterparty. The Company has standard operating procedures and investment policy for deployment of surplus liquidity, which allows investment in debt securities and mutual fund schemes of debt and arbitrage categories and restricts the exposure in equity markets.

Offsetting related disclosures

Offsetting of cash and cash equivalents to borrowings as per the consortium agreement is available only to the bank in the event of a default. Company does not have the right to offset in case of the counter party’s bankruptcy, therefore, these disclosures are not required.

36 Retirement benefit plans Defined contribution plans

In accordance with Indian law, eligible employees of the Company are entitled to receive benefits in respect of provident fund and super annuation fund, a defined contribution plan, in which both employees and the Company make monthly contributions at a specified percentage of the covered employees’ salary. The contributions, as specified under the law, are made to the Provident Fund.

Defined benefit plans

(a) Gratuity

Gratuity is payable as per Payment of Gratuity Act, 1972. In terms of the same, gratuity is computed by multiplying last drawn salary (basic salary including dearness Allowance if any) by completed years of continuous service with part thereof in excess of six months and again by 15/26. The Act provides for a vesting period of 5 years for withdrawal and retirement and a monetary ceiling on gratuity payable to an employee on separation, as may be prescribed under the Payment of Gratuity Act, 1972, from time to time. However, in cases where an enterprise has more favourable terms in this regard the same has been adopted.

Sensitivity analysis

In view of the fact that the Company for preparing the sensitivity analysis considers the present value of the defined benefit obligation which has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.

(b) Compensated absences

The leave scheme is a final salary defined benefit plan, that provides for a lumpsum payment at the time of separation; based on scheme rules the benefits are calculated on the basis of last drawn salary and the leave count at the time of separation and paid as lumpsum.

The expected cost of accumulating compensated absences is determined by actuarial valuation performed by an independent actuary at each balance sheet date using projected unit credit method on the additional amount expected to be paid / availed as a result of the unused entitlement that has accumulated at the balance sheet date.

Notes:

EBITDA - Earnings before interest, taxes, depreciation and amortisation.

PAT - Profit after taxes.

EBIT - Earnings before interest and taxes.

Debt includes current and non-current lease liabilities.

Adjusted expenses derived from total expenses excluding depreciation and finance cost. working capital derived from current assets in excess of current liabilities excluding borrowings.

Explanation for variances exceeding 25%:

(a) Current Ratio reduced on account of increase in current liabilities which increased by increasing in Provision for doubtful debts.

(b) Debt Equity Ratio has Increased on account of decrease in PAT during the year ended March 31,2024

(c) Debt service coverage ratio decreased on account of decrease in EBIT during the year ended March 31,2024

(d) Return on Equity ratio reduced on account of decrease in PAT during the year ended March 31,2024

(e) Return on capital employed increased on account of decrease in Networth during the year ended March 31, 2024

The significant accounting policies and the accompanying notes form an integral part of the financial statements

For and on behalf of the Board As per our report of even date attached

For M/s. Chaturvedi Sohan & Co

Asif Khader Mueed Khader Chartered Accountants

Managing Director Director Firm Registration No.118424W

DIN : 00104893 DIN : 00106674

Vivekanand Chaturvedi

Apeksha Nagori Manjunath.H Partner

Company Secretary CFO Membership No.106403

Membership No. A21952 UDIN : 24106403BKBFHK2707

Date: July 6th, 2024 Place: Bengaluru

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Mar 31, 2023

Provisions, contingent liabilities and contingent asset Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of
a past event and it is probable that an outflow of resources embodying economic benefits will be required to
settle the obligation and a reliable estimate can be made of the amount of the obligation.

Provisions are discounted, if the effect of the time value of money is material, using pre-tax rates that
reflects the risks specific to the liability. When discounting is used, an increase in the provisions due to the
passage of time is recognised as finance cost. These provisions are reviewed at each Balance Sheet date
and adjusted to reflect the current best estimates.

Necessary provision for doubtful debts, claims, etc., are made if realisation of money is doubtful in the
judgement of the management.

Contingent liability

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed
by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the
company or a present obligation that is not recognized because it is not probable that an outflow of resources
will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there
is a liability that cannot be recognized because it cannot be measured reliably. Contingent liabilities are
disclosed separately.

Show cause notices issued by various Government authorities are considered for evaluation of contingent
liabilities only when converted into demand.

Contingent assets

Where an inflow of economic benefits is probable, the Company discloses a brief description of the nature
of the contingent assets at the end of the reporting period, and, where practicable, an estimate of their
financial effect. Contingent assets are disclosed but not recognised in the financial statements.

r) Cash and cash equivalents

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances
with original maturity of less than 3 months, highly liquid investments that are readily convertible into cash,
which are subject to insignificant risk of changes in value.

s) Cash Flow Statement

Cash flows are presented using indirect method, whereby profit / (loss) before tax is adjusted for the effects
of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments.

Bank borrowings are generally considered to be financing activities. However, where bank overdrafts which
are repayable on demand form an integral part of an entity''s cash management, bank overdrafts are included
as a component of cash and cash equivalents for the purpose of Cash flow statement.

t) Earnings per share

"The basic earnings per share are computed by dividing the net profit for the period attributable to equity
shareholders by the weighted average number of equity shares outstanding during the period. Diluted EPS
is computed by dividing the net profit after tax by the weighted average number of equity shares considered
for deriving basic EPS and also weighted average number of equity shares that could have been issued
upon conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted
as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined
independently for each period presented. The number of equity shares and potentially dilutive equity shares
are adjusted for bonus shares, as appropriate"

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Mar 31, 2015

1. BACKGROUND

Cranes Software International Limited (C SI L) was incorporated on 22nd December, 1984. C SI L is a Company that provides enterprise statistical analytics and engineering simulation software products and solutions across the globe. Presently, CSIL has developed IP's and products in data Integration & visualization, engineering simulations, graphing, plotting and designing modules. The Company is head quartered in Bangalore and has offices in India, United States of America, United Kingdom, Germany and Singapore.

2.1 In the opinion of Board of Directors, all assets, investments have atleast the value as stated in the Balance Sheet, if realised in the ordinary course of business

2.2 Provision for Bad debts recognised in the statement of profit and loss includes as amount of Rs. Nil (Previous year Rs. 15.62 Crores) written off by a subsidiary.

2.3 IMPAIRMENT OF ASSETS

Pursuant to Accounting Standard AS 28 : Impairment of Assets issued by the Companies Accounting Standard Rules, 2006, the company assessed its fixed assets for impairment as at 31st March 2015 and concluded that there has been no significant impaired fixed asset that needs to be recognized in the books of account.

2.4 DERIVATIVE INSTRUMENTS AND UNHEDGED FOREIGN CURRENCY INSTRUMENTS

Foreign currency exposure that are not hedged by derivative or forward contracts as on 31st March 2015 amounts to Rs.6,459,348,885/- ( Previous Year : Rs. 7,29,21,81,042/- )

2.5 Confirmation of balances in respect of Trade Receivables and Trade Payables has not been obtained in a few cases.

2.6 FOREIGN CURRENCY CONVERTIBLE BONDS

The Foreign Currency Convertible Bonds carry coupon rate of 2.50%, payable half yearly. In case of default of payment of interest the coupon rate stands increased to 4.80%.

During March 2011, the convertible foreign currency bonds had become due for conversion to Equity Shares and none of the bond holders have exercised their option for conversion. Correspondingly, the amounts had become due for payment as on the closure of such exercise and is yet to be redeemed as on the date of the balance sheet.

2.7 OBLIGATIONS TO WARDS LONG TERM, NON-CANCELLABLE OPERATING LEASES

The Company has taken various offices, vehicles, computers, furniture and equipment under cancellable operating leases. These lease agreements are normally renewed on expiry.

The rental expenses in respect of operating leases recognized in the statement of profit and loss are Rs. 4,22,544/- for the year ended March 31, 2015. (Previous year Rs. 12,27,850/-)

Lease rentals due for the period not exceeding period of 1 year Rs. 1,06,908/-

Lease rentals due for the period 1 to 5 years Nil

Lease rentals due for the period exceeding 5 years Nil

2.8 RESEARCH & DEVELOPMENT

Research & Development expenditure recognized as expenses during the year amounted to Rs. NIL (Previous year Rs. NIL)

2.9 SEGMENT REPORTING

The Company has identified geographic segments as its primary segment and business segments as its secondary segments.

Primary Segments- a) Exports b) Domestic

Secondary Segments- a) Proprietary Products and Services b) Product Alliances

2.10 A Sum of Rs. 98.73 Crore has been provided in the books of accounts as provision for bad and doubtful debts for the financial year 2013-14. Application is made to the concerned statutory authority to writeoff these debts and their approval awaited.

2.11 Previous year's figures have been regrouped and reclassified wherever necessary to make them comparable.

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Mar 31, 2014

1.1 CONTINGENT LIABILITIES AND COMMITMENTS

(to the extent not provided for) (Amount in Rupees)

PARTICULARS Current Year Previous Year

Claims against the Company not acknowledged as debts

(a) Income tax matters 1,000,667,009 245,972,000

(b) Service tax matters 138,647,868 75,602,762

(c) Guarantees and counter guarantee 10,603,533 10,014,960

(d) Others 5,515,000 5,515,000

TOTAL 1,155,433,410 337,104,722

The above information is prepared based on the information available with the Management.

1.2 In the opinion of Board of Directors, all assets, investments have atleast the value as stated in the Balance Sheet, if realised in the ordinary course of business

1.3 IMPAIRMENT OF ASSETS

Pursuant to Accounting Standard AS 28 : Impairment of Assets issued by the Companies Accounting Standard Rules, 2006, the company assessed its fixed assets for impairment as at 31st March 2014 and concluded that there has been no significant impaired fixed asset that needs to be recognized in the books of account.

1.4 Provision for bad debts recognised in the statement of profit and loss includes an amount of Rs. 15.62 crores written off by a subsidiary.

1.5 DERIVATIVE INSTRUMENTS AND UNHEDGED FOREIGN CURRENCY INSTRUMENTS

Foreign currency exposure that are not hedged by derivative or forward contracts as on 31 st March 2014 amounts to Rs.7,29,21,81,042/- ( Previous Year : Rs. 6,94,46,67,707/- )

1.6 Confirmation of balances in respect of Trade Receivables and Trade Payables has not been obtained in a few cases.

1.7 FOREIGN CURRENCY CONVERTIBLE BONDS

The Foreign Currency Convertible Bonds carry coupon rate of 2.50%, payable half yearly. In case of default of payment of interest the coupon rate stands increased to 4.80%.

During March 2011, the convertible foreign currency bonds had become due for conversion to Equity Shares and none of the bond holders have exercised their option for conversion. Correspondingly, the amounts had become due for payment as on the closure of such exercise and is yet to be redeemed as on the date of the balance sheet.

1.8 OBLIGATIONS TOWARDS LONG TERM, NON-CANCELLABLE OPERATING LEASES

The Company has taken various offices, vehicles, computers, furniture and equipment under cancellable operating leases. These lease agreements are normally renewed on expiry.

The rental expenses in respect of operating leases recognized in the statement of profit and loss are Rs. 12,27,850/- for the year ended March 31,2014. (Previous year Rs. 64,26,888/-)

1.9 RESEARCH & DEVELOPMENT

Research & Development expenditure recognized as expenses during the year amounted to Rs. NIL (Previous year Rs. NIL)

1.10 SEGMENT REPORTING

The Company has identified geographic segments as its primary segment and business segments as its secondary segments.

Primary Segments- a) Exports b) Domestic

Secondary Segments- a) Proprietary Products and Services b) Product Alliances

1.11 A Sum of Rs. 98.73 Crore has been provided in the books of accounts as provision for bad and doubtful debts. Application is made to the concerned statutory authority to writeoff these debts and their approval awaited.

1.12 Previous year''s figures have been regrouped and reclassified wherever necessary to make them comparable.

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Mar 31, 2013

1. BACKGROUND

Cranes Software International Limited (CSIL) was incorporated on 22nd December, 1984. CSIL is a Company that provides Enterprise Statistical Analytics and Engineering Simulation Software Products and Solutions across the globe. Presently, CSIL has developed IP''s and products in data Integration & visualization, engineering simulations, Graphing, plotting and designing modules. The Company is head quartered in Bangalore and has offices in India, United States of America, United Kingdom, Germany, UAE and Singapore.

2.1 In the opinion of Board of Directors, all assets , investments have atleast the value as stated in the Balance Sheet, if realised in the ordinary course of business

2.2 IMPAIRMENT OF ASSETS

Pursuant to Accounting Standard AS 28 : Impairment of Assets issued by the Companies Accounting Standard Rules, 2006, the company assessed its fixed assets for impairment as at 31st March 2013 and concluded that there has been no significant impaired fixed asset that needs to be recognized in the books of account.

2.3 DERIVATIVE INTRUMENTS AND UNHEDGED FOREIGN CURRENCY INSTRUMENTS

Foreign currency exposure that are not hedged by derivative or forward contracts as on 31st March 2013 amounts to Rs. 6,94,46,67,707/- ( Previous Year : Rs. 9,11,44,75,587/- )

2.4 Confirmation of balances in respect of Trade Receivables and Trade Payables has not been obtained in a few cases.

2.5 FOREIGN CURRENCY CONVERTIBLE BONDS

The Foreign Currency Convertible Bonds carry coupon rate 2.50%, payable half yearly. In case of default of payment of interest the coupon rate stands increased to 4.80%.

During March 2011, the convertible foreign currency bonds had become due for conversion to Equity Shares and none of the bond holders have exercised their option for conversion. Correspondingly, the amounts had become due for payment as on the closure of such exercise and is yet to be redeemed as on the date of the balance sheet.

2.6 OBLIGATIONS TOWARDS LONG TERM, NON-CANCELLABLE OPERATING LEASES

The Company has taken various offices, vehicles, computers, furniture and equipment under cancellable operating leases. These lease agreements are normally renewed on expiry.

The rental expenses in respect of operating leases recognized in the statement of profit and loss are Rs. 64,26,888/- for the year ended March 31, 2013. (Previous year Rs. 1,02,42,684/-)

2.7 RESEARCH & DEVELOPMENT

Research & development expenditure recognized as expenses during the year amounted to Rs. Nil. (Previous year Rs. Nil)

2.8 SEGMENT REPORTING

The Company has identified geographic segments as its primary segment and business segments as its secondary segments.

Primary Segments- a) Exports

b) Domestic

Secondary Segments- a) Proprietary Products and Services b) Product Alliances

2.9 PAYMENT OF DIVIDEND DECLARED IN MEMBERS'' MEETING HELD ON 29TH SEPTEMBER, 2009

At the meeting of the Members of the Company held on 29th September, 2009, it was resolved that Dividend on Ordinary Shares at the rate of Rs 0.20 per share will be distributed to Members in the rolls as on the Record Date, 23rd September, 2009. Owing to the liquidity position of the Company, it has not been possible to make this payment. Liability of this amount continues to exist as on 31st March, 2013.

2.10 A Sum of Rs. 148 Crore has been provided in the books of accounts as provision for bad and doubtful debts. Application is made to the concern statutory authority to write off these debts and their approval awaited.

2.11 Previous year''s figures have been regrouped and reclassified wherever necessary to make them comparable.

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Mar 31, 2012

1. BACKGROUND

Cranes Software International Limited (CSIL) was incorporated on 22nd December, 1984. CSIL is a Company that provides Enterprise Statistical Analytics and Engineering Simulation Software Products and Solutions across the globe. Presently, CSIL has developed IP's and products in data Integration & visualization, engineering simulations, Graphing, plotting and designing modules. The Company is head quartered in Bangalore and has offices in India, United States of America, United Kingdom, Germany, UAE and Singapore.

2.1 CONTINGENT LIABILITIES AND COMMITMENTS

(to the extent not provided for) (Amount in Rupees)

PARTICULARS Current Year Previous Year

Claims against the Company not acknowledged as debts

(a) Income tax matters 123,579,740 440,670,000

(b) Service Tax matters 75,798,122 -

(c) Guarantees and Counter Guarantee 10,126,529 3,377,366

(d) Others 5,515,000 -

TOTAL 215,019,391 444,047,366

2.2 In the opinion of Board of Directors, all assets , investments have atleast the value as stated in the Balance Sheet, if realised in the ordinary course of business

2.3 IMPAIRMENT OF ASSETS

Pursuant to Accounting Standard AS 28 : Impairment of Assets issued by the Companies Accounting Standard Rules, 2006, the company assessed its fixed assets for impairment as at 31st March 2012 and concluded that there has been no significant impaired fixed asset that needs to be recognized in the books of account.

2.4 DERIVATIVE INTRUMENTS AND UNHEDGED FOREIGN CURRENCY INSTRUMENTS

Foreign currency exposure that are not hedged by derivative or forward contracts as on 31st March 2012 amounts to Rs.9,11,44,75,587/- ( Previous Year : Rs. 8,72,20,44,578/- )

2.5 Confirmation of balances in respect of Trade Receivables and Trade Payables has not been obtained in a few cases.

2.6 FOREIGN CURRENCY CONVERTIBLE BONDS

The Foreign Currency Convertible Bonds carry coupon rate 2.50%, payable half yearly. In case of default of payment of interest the coupon rate stands increased to 4.50%.

During March 2011, the convertible foreign currency bonds had become due for conversion to Equity Shares and none of the bond holders have exercised their option for conversion. Correspondingly, the amounts had become due for payment as on the closure of such exercise and is yet to be redeemed as on the date of the balance sheet.

2.7 OBLIGATIONS TOWARDS LONG TERM, NON-CANCELLABLE OPERATING LEASES

The Company has taken various offices, vehicles, computers, furniture and equipment under cancellable operating leases. These lease agreements are normally renewed on expiry.

The rental expenses in respect of operating leases recognized in the statement of profit and loss are Rs. 1,02,42,684/- for the year ended March 31, 2012. (Previous year Rs. 93,20,000/-)

2.8 RESEARCH & DEVELOPMENT

Research & development expenditure recognized as expenses during the year amounted to Rs. Nil. (Previous year Rs. Nil)

2.9 PAYMENT OF DIVIDEND DECLARED IN MEMBERS' MEETING HELD ON 29TH SEPTEMBER, 2009

At the meeting of the Members of the Company held on 29th September, 2009, it was resolved that Dividend on Ordinary Shares at the rate of Rs 0.20 per share will be distributed to Members in the rolls as on the Record Date, 23rd September, 2009. Owing to the liquidity position of the Company, it has not been possible to make this payment. Liability of this amount continues to exist as on 31st March, 2012.

2.10 Previous year's figures have been regrouped and reclassified wherever necessary.

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Mar 31, 2011

21.1.1 Contingent liabilities not provided for and Capital commitments -

(Rupees in Million)

Particulars Current Year Previous Year

a. Contingent liabilities not provided for

Outstanding guarantees and counter guarantees 3.38 105.73

b. Claims against the Company not acknowledged as debts on Tax matters in dispute under appeal 440.67 447.66

21.1.2. Security for borrowings

i) Working Capital and Term Loans: Bank finances are secured by hypothecation of stocks of software, book debts, document of title to goods and collaterally secured by properties; personally guaranteed by Whole time Directors and also have additional collateral security by way of pledge of promoters share for part amount.

ii) Vehicle Loans: Finance for purchase of vehicles are secured by hypothecation of respective vehicles.

iii) There are other borrowings, some of which are personally guaranteed by whole time Directors.

21.1.3. Debtors and Creditors; Loans and Advances

Periodically, the Company evaluates all Debtors and Creditors balances. However, some of these are subject to confirmation. All Current Assets, Loans and advances, have at least the value as stated in the Balance Sheet if realized in the ordinary course of the Business.

21.1.4. Dues to Small-scale industrial undertakings

i. As at March 31, 2010 and March 31, 2011, the Company has no outstanding dues exceeding Rs.1 Lakh for more than 30 days to Small Scale Industrial undertaking as ascertained and certified by the Management.

ii. There are no micro and small enterprises, to whom the Company owes dues, for more than 45 days as at 31st March, 2011. This information as required to be disclosed under the Micro, Small & Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

The Company is in the business of software development and trading hence information on Licensed and installed capacity is not applicable.

21.1.5. Obligations towards long term, non-cancelable operating leases

The Company has taken various offices, vehicles, computers, furniture and equipment under cancel- lable operating leases. These lease agreements are normally renewed on expiry.

The rental expenses in respect of operating leases recognized in the profit and loss account are Rs.9.32 Million for the year ended March 31, 2011. (Previous year Rs.23.36 Million).

21.1.6.Research & Development

Research & Development expenditure recognized as expenses during the year amounted to Rs.Nil. (Previous year Rs.NIL)

Note:

Names of related parties and description of relationship

Holding Company Nil

Subsidiaries:

1. Systat Software Inc., USA

2. Systat Software Asia Pacific Limited

3. Cranes Software International Pte. Ltd, Singapore

4. Systat Software GmbH, Germany

5. Cranes Software Inc (Earlier known as NISA Software Inc., USA)

6. Analytix Systems Private Ltd

7. Tilak Autotech Private Ltd

8. Caravel Info Systems Pvt. Ltd.,

9. Proland Software Pvt. Ltd.,

10. Esqube Communication Solutions Pvt. Ltd.,

Step Down Subsidiaries:

1. Dunn Solutions Group Inc.

2. Engineering Technology Associates Inc with its Subsidiary, Engineering Technology Associates (Shanghai) Inc., China

3. Cubeware GmbH and its Subsidiaries in Austria and Switzerland

Key Management Personnel Mr.Asif Khader

Mr.Mukkaram Jan Mr.Mueed Khader

Relatives of Key Management Personnel Nil

Other Related Parties

Orca Infotech Private Limited

K&J Holdings Private Limited

K &J Telecom Private Limited

Jansons Land & Property Development Pvt Ltd

SPSS South Asia Private Limited

Keysoft Solutions Private Limited

Spice Capital Fund Private Limited

Sea Equity Private Limited

In respect of the above parties, there is no provision for doubtful debts as at the financial year and no amount has been written off/written back during the year in respect of debts due from/to them.

21.1.7. Segment Reporting

The Company has identified geographic segments as its primary segment and Business segments as its secondary segment.

Primary Segments- a) Exports and b) Domestic

Secondary Segments- a) Proprietary Products and Services and b) Product Alliances

21.1.8 Payment of Dividend declared in Members' meeting held on 29th September, 2009

At the meeting of the Members of the Company held on 29th September, 2009, it was resolved that Dividend on Ordinary Shares at the rate of Rs 0.20 per share will be distributed to Members in the rolls as on the Record Date, 23rd September, 2009. Owing to the liquidity position of the Company, it has not been possible to make this payment. Liability of this amount continues to exist as on 31st March, 2011.

21.1.9. Previous year's figures have been regrouped and reclassified wherever necessary.

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Mar 31, 2010

21.1.1 Contingent liabilities not provided for and Capital commitments -

(Rupees in Million)

Particulars Current Year Previous Year

a. Contingent liabilities not provided for

I. Outstanding guarantees and counter guarantees 105.73 2,449.91

II. Bill discounting - 535.71

b. Claims against the Company not acknowledged as debts on Tax matters in dispute under appeal 447.66 490.82

c. Estimated amount of contracts remaining to be executed on capital account not provided for. - 13.29

Counter Guarantee to the extent of Rs 2,344.43 mn given on behalf of a party for their borrowings from a Scheduled Bank to meet requirements of business that were in exploratory stage to be ultimately integrated with the Company were encashed by the lender during the year. Concomittant amount is regarded as Recoverable from the Party and included under the Head Advances Recoverable in Cash or Kind or for Value to be Received. Action to recover the sums from the Party have been initiated.

21.1.6. Security for borrowings

i) Working Capital and Term Loans: Bank finances are secured by hypothecation of stocks of software, book debts, document of title to goods and collaterally secured by properties; personally guaranteed by Whole time Directors and also have additional collateral security by way of pledge of promoters share for part amount.

ii) Vehicle Loans: Finance for purchase of vehicles are secured by hypothecation of respective vehicles.

iii) There are other borrowings, some of which are personally guaranteed by whole time Directors.

21.1.7. Debtors and Creditors; Loans and Advances

Periodically, the Company evaluates all Debtors and Creditors balances. However, some of these are subject to confirmation. All Current Assets, Loans and advances, have at least the value as stated in the Balance Sheet if realized in the ordinary course of the Business.

21.1.9. Dues to Small-scale industrial undertakings

i. As at March 31, 2009 and March 31, 2010, the Company has no outstanding dues exceeding Rs. 1 Lakh for more than 30 days to Small Scale Industrial undertaking as ascertained and certified by the Management.

ii. There are no micro and small enterprises, to whom the Company owes dues, for more than 45 days as at 31st march, 2010. This information as required to be disclosed under the Micro Small & Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

21.1.17. Obligations towards long term, non-cancellable operating leases

The Company has taken various offices, vehicles, computers, furniture and equipment under cancel- lable operating leases. These lease agreements are normally renewed on expiry.

The Company has also taken on non-cancellable operating leases certain offices, the future minimum lease payments in respect of which, as at the close of the year are as follows -

These lease agreements provide for an option to the Company to renew the lease period at the end of the non-cancellable period.

The rental expenses in respect of operating leases recognized in the profit and loss account are Rs.23.36 Million for the year ended March 31, 2010. (Previous year Rs.90.47 Million)

21.1.18Foreign currency convertible Bonds

The Company issued and allotted on March 17, 2006 Foreign Currency Convertible Bonds (Considered as non-Monetary liability) for Euro 42 Million (Equivalent for Rs. 2,270.10 Million) bearing an interest at 2.5% per annum payable half yearly. The bonds are convertible at any time on and after April 27, 2006 and till close of business on March 11, 2011 and were convertible into shares or GDRs at an initial conversion price of Rs. 143.293 per share with a fixed rate of exchange on conversion of Euro 1.00 = Rs. 52.6828. The outstanding bonds are redeemable at a premium of 12.833% on 18th March 2011. Further, based on the relevant clause of the issue document, conversion price has now been refixed at Rs.115. During the year ended 31 March 2009 there has been no conversion of the Bonds into Shares. If the outstanding bonds as on March 31, 2009 are converted into equity shares or GDRs, then the share capital of the Company will increase by 19,240,675 shares.

Proportionate Premium payable on redemption of FCCB Rs. 60 Million (Previous Year Rs.60 Million) has been transferred to FCCB Redemption Reserve during the year out of share premium account. In the event that the conversion option is exercised by the holders of FCCB in the future, the amount of premium charged to the share premium account will be suitably adjusted in the respective years.

Owing to liquidity related challenges, it was not possible to make payment of interest on these FCCBs due in September, 2009 and March, 2010, amounting to a total of Rs. 50 mn. Provision for these amounts are made in the Balance Sheet as on 31st March, 2010.

21.1.19.Research & Development

Research & Development expenditure recognized as expenses during the year amounted to Rs. Nil. (Previous year Rs.3.71 Million)

Names of related parties and description of relationship

Holding Company Nil

Subsidiaries:

1. Systat Software Inc., USA

2. Systat Software Asia Pacific Limited

3. Cranes Software International Pte. Ltd, Singapore

4. Systat Software GmbH, Germany

5. Cranes Software Inc (Earlier known as NISA Software Inc., USA)

6. Analytix Systems Private Ltd

7. Tilak Autotech Private Ltd

8. Caravel Info Systems Pvt. Ltd.,

9. Proland Software Pvt. Ltd.,

10. Esqube Communication Solutions Pvt. Ltd.,

Step Down Subsidiaries:

1. Cranes Software UK Ltd.( Earleir known as Systat Software UK Ltd )

2. Dunn Solutions Group Inc.

3. Engineering Technology Associates Inc with its Subsidiary, Engineering Technology Associates (Shanghai) Inc., China

4. Cubeware GmbH and its Subsidiaries in Austria and Switzerland

Key Management Personnel

Mr.Asif Khader Mr.Mukkaram Jan Mr.Mueed Khader

Relatives of Key Management

Nil

Other Related Parties

Orca Infotech Private Limited K&J Holdings Private Limited K &J Telecom Private Limited

Jansons Land & Property Development Pvt Ltd SPSS South Asia Private Limited Keysoft Solutions Private Limited Spice Capital Fund Private Limited Sea Equity Private Limited

In respect of the above parties, there is no provision for doubtful debts as at the financial year and no amount has been written off/written back during the year in respect of debts due from/to them.

21.1.21. Segment Reporting

The Company has identified geographic segments as its primary segment and Business segments as its secondary segment.

Primary Segments- a) Exports and b) Domestic

Secondary Segments- a) Proprietary Products and Services and b) Product Alliances

21.1. 22 Payment of Dividend declared in Members meeting held on 29th September, 2009

At the meeting of the Members of the Company held on 29th September, 2009, it was resolved that Dividend on Ordinary Shares at the rate of Rs 0.20 per share will be distributed to Members in the rolls as on the Record Date, 23rd September, 2009. Owing to the liquidity position of the Company, it has not been possible to make this payment. Liability of this amount continues to exist as on 31st March, 2010.

21.1.23. Previous years figures have been regrouped and reclassified wherever necessary