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Cranes Software International Ltd.

BSE: 512093 | NSE: CRANESSOFT | Series: NA | ISIN: INE234B01023 | SECTOR: Computers - Software Medium & Small

BSE Live

May 29, 16:00
0.58 0.02 (3.57%)
Volume
AVERAGE VOLUME
5-Day
2,183
10-Day
1,609
30-Day
8,132
2,650
  • Prev. Close

    0.56

  • Open Price

    0.58

  • Bid Price (Qty.)

    0.58 (2000)

  • Offer Price (Qty.)

    0.00 (0)

NSE Live

Dec 27, 11:22
6.95 -0.45 (-6.08%)
Volume
No Data Available
57,966,590
  • Prev. Close

    7.40

  • Open Price

    -

  • Bid Price (Qty.)

    - (0)

  • Offer Price (Qty.)

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Cranes Software International is not listed on NSE

Annual Report

For Year :
2015 2014 2013 2012 2011 2010 2009 2008 2007

Auditor's Report

1. We have audited the accompanying standalone financial statements of Cranes Software International Limited (the Company), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information. 2. The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (the Act) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Ac- counting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. 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 irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and main- tenance 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. 3. Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. 4. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncement require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. 5. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditor''s judg- ment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the company has in place adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropri- ateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements. 6. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements. Basis for Qualified Opinion 7. The attached Balance Sheet as at 31st March, 2015 is drawn on the basis of the Principle of ''Going Concern''. We opine as follows in this connection : 7.1 An advance of Rs. 23,958.53 lakhs is due from a party for an inordinate period and in our opinion recovery of the same is doubtful. However, the company continues to classify such amounts as ''Good''. However, no evidence has been given to us to consider those amounts as recoverable as on the date of Balance Sheet. 7.2 Attention of the members is invited to note 3.11 of the Notes regarding recognition of deferred tax credit on account of unabsorbed losses and allowances aggregating to Rs.26,965.82 lakhs (year ended March 31, 2014 Rs. 22,559.89 lakhs). This does not satisfy the virtual certainty test for recognition of deferred tax credit as laid down in Accounting Standard 22. 7.3 Reference is drawn to note no. 3.33 of the Notes regarding the amounts classified under Fixed As- sets including Intangible Assets Under Development amounting to Rs. 32,252.28 lakhs. No evi- dence has been produced before us for testing its impairment and in the absence of the same, we are unable to express any opinion on the impairment to such asset. In our opinion, such test of impairment as on the date of Balance Sheet is mandatory, especially in view of the higher degree of the obsoles- cence of software which is stated to be under various stages of development, though no further devel- opments have been carried out during the recent years. 7.4 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. 8 We further report that, except for the effect, if any, of the matters stated in paragraphs 7.3 above, whose effect are not ascertainable, had the observations made in paragraphs 7.1 and 7.2 above been considered, the loss after tax for the year ended March 31, 2015 would have been higher by Rs. 50,924.36 lakhs. Qualified Opinion In our opinion and to the best of our information and according to the explanations given to us, except for the matters expressed in Basis for Qualified opinion and Emphasis of matter paragraph the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015, its loss and its cash flows for the year ended on that date. Emphasis of Matter 1. Redemption of Foreign currency convertible bond amounting to Rs. 28,354.20 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. A winding up petition has been filed by the trustees of the Foreign Currency Convertible Bond holders against the Company, before the Hon''ble High Court of Karnataka for non-payment of principal and the accrued interest thereon. 2. Term loans and working capital loans availed by the company from various banks amounting to Rs. 58,550.95 lakhs, which includes an amount of Rs. 4,425.04 lakhs taken over by an Asset Reconstruction Company, 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 respective Hon''ble Courts. Winding up petitions have been filed by Canara Bank and Bank of India against the company, before the Hon''ble High Court of Karnataka for non-payment of principal and the accrued interest thereon. 3. SBI Capital, a Creditor, has initiated a winding up petition against the company, before the Hon''ble High Court of Karnataka for non-payment of its dues. 4. 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. 5. We would like to draw the attention of the members to note no. 3.27 of the financial statements regarding default of payments to various statutory authorities. 6. We further draw attention on the following non compliances under the Companies Act, 2013 and rules thereon a. Non-appointment of Woman Director as required under the second proviso to Section 149(1) of the said Act. b. Non-appointment of Chief Financial Officer as required under section 203 of the said Act. c. The Company has drawn and utilised an amount Rs. 43.77 lakhs from the ''CSIL Employees Comprehensive Gratuity Trust'' fund for the purpose not intended in terms of ''The Payment of Gratuity Act, 1972''.(See note No. 3.05 of the Financial Statements) Our Report is not qualified in respect of the above matter. Report on Other Legal and Regulatory Requirements 1. As required by the Companies (Auditor''s Report) Order 2015 (the order), issued by the Central Govern- ment of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the order to the extent applicable. 2. As required by Section 143 (3) of the Act, we report that: (a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. (b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books; (c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account. (d) In our opinion, except for the matters expressed in paras 7.2 and 7.3 of the Basis for Qualified opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. (e) In our opinion, the qualifications and matters specified in the Emphasis of Matter paragraph, may have an adverse effect on the functioning of the Company. (f) On the basis of the written representations received from the directors as on 31 st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164 (2) of the Act. (g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us: i. The Company has disclosed the impact of pending litigations on its financial position in its finan- cial statements - Refer Note No. 3.27 to the financial statements; ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses; iii. The Company has not transferred an amount of Rs. 3.93 Lakhs, which is required to be trans- ferred to the Investor Education and Protection Fund. ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT The Annexure referred to in our Independent Auditor''s re port to the members of Cranes Software International Limited (''the Company'') on the standalone financial statements for the year ended on 31st March 2015. We report that: i) (a) The company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. (b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. ii) (a) In our opinion and according to the information and explanations given to us, the management has conducted the physical verification of inventory at reasonable intervals during the year under review. (b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business. (c) According to the information and explanations given to us, we are of the opinion that the Company is maintaining proper records of inventory and no material discrepancies were noticed on their physical verification. iii) (a) The Company has in the past granted interest free loans to its subsidiary companies covered in the register maintained under section 189 of the Companies Act, 2013. However, the Company has not granted any loan, secured or unsecured, to firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013. (b) In the case of the loans granted to the bodies corporate listed in the register maintained under section 189 of the Act, the terms of arrangements do not stipulate any repayment schedule and the loans are repayable on demand. Accordingly, paragraph 3(iii)(b) of the Order is not applicable to the Company in respect of repayment of the principal amount. (c) There are no overdue amounts of more than rupees one lakh in respect of the loans granted to the bodies corporate listed in the register maintained under section 189 of the Act. iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business, with regard to the purchase of inventory and fixed assets and for the sale of goods and services. We have not observed any major weakness in the internal control system during the course of the audit. v) The company has not raised any deposits from public as covered by provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed thereunder. vi) The Central Government has not prescribed the maintenance of cost records under section 148(1) of the Act, for any of the services rendered by the Company. vii) (a) On Examination of the books of accounts and other records of the Company we report that the company has defaulted in depositing its undisputed statutory dues including Provident Fund, Investors Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Service Tax, Wealth Tax, Customs duty, and Cess with the appropriate authorities. The following statutory liabilities are pending for payment for a period of more than six months from the date they became payable: (Rs. In Lakhs) Name of the Statute Nature of dues Amount to be paid Employee''s Provident Fund & Miscellaneous Provision Act Provident Fund 12.19 Employees State Insurance Act ESI 3.85 Income Tax Act Withholding Taxes 271.27 Finance Act Service Tax 184.49 Commercial Taxes Act Sales Tax/Value Added Tax 71.26 Income Tax Act Self Assessment Tax 89.02 Wealth Tax Act Wealth Tax 0.88 Income Tax Act Dividend Distribution Tax 273.88 Income Tax Act Fringe Benefit Tax 0.41 Investor Education Protection Fund Unclaimed Dividend 0.97 (b) According to the information and explanations given to us, there are no disputed amounts as at 31st March 2015 in respect of Provcident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Service Tax, Wealth Tax, Customs duty and Cess and other applicable statutory dues with the exception of the following: (Rs. In Lakhs) Period to Name of the statute Nature of dues Amount which amount relates Income Tax Act, 1961 Income Tax 6728.44 2009-10 Chapter V of the 2004-05 to Finance Act, 1994 Service Tax 756.02 2007-08 Chapter V of the 2008-09 to Finance Act, 1994 Service Tax 630.45 2012-13 The Employees Provident Employer and 51.87 1996-1997 to Fund and Miscellaneous Employee 2013-14 Provisions Act, 1972 Provident Fund The Foreign Exchange Penalty for 50.00 2006 Regulation Act, 1999 Contravention of Section 42(1) of the FEMA, 1999 Name of the Statute Forum where dispute is pending Income Tax Act, 1961 Income Tax Appellate Tribunal Chapter V of the Finance Act, 1994 Customs, Excise and Service Tax Appellate Tribunal Chapter V of the Finance Act, 1994 Commissioner, Service Tax, Bangalore The Employees Provident Fund Assistant / Regional Provident Fund Commissioner The Foreign Exchange Regulation Act, 1999 Director, Directorate of Enforcement. (c) According to the information and explanations given to us, an amount of Rs. 3.93 Lakhs required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder has not been transferred to such fund within time. viii) The Company has accumulated losses amounting to Rs. 12,600 lakhs as at March 31, 2015 which is more than 50% if its Net worth. The Company has also incurred cash losses of Rs. 3,733.89 lakhs in the current financial year ended on that date and incurred cash loss of Rs. 16,142.52 lakhs in the immediate preceeding financial year. ix) There are defaults in repayment of dues to various financial institutions and banks as at the balance sheet date. The amount of defaults and the period are tabulated below (Rs. In Lakhs) Name of the Banks & Amount of default Period of financial institutions (including accrued Default interest) Bank of India 25,555.83 From 2009 to Till Date Canara Bank 8,050.43 From 2009 to Till Date Industrial Development Bank of India 4,871.58 From 2009 to Till Date State Bank of Mysore 4,186.97 From 2009 to Till Date Bank of India 5,994.76 From 2009 to Till Date State Bank of Travancore 5,466.33 From 2009 to Till Date Jammu and Kashmir Bank Limited 1,951.06 From July 2013 to Till Date x) In our opinion and according to the information and the explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions. xi) Based on information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained. xii) During the course of our examination of the books of accounts carried on in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the company, noticed or reported during the year nor have been informed of such case by the management. For S.JANARDHAN & ASSOCIATES Chartered Accountants Firm Registration No. 005310S Bengaluru Vijay Bhatia May 29, 2015 Partner Membership No.201862