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Notes to Accounts of Cranes Software International Ltd.

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.


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.


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.


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.


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.


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

 
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