The Board of Directors hereby submits the report of the business and operations of yourCompany along with the audited financial statements for the financial year ended March312021. The consolidated performance of the Company and its subsidiaries has beenreferred to wherever required.
1. CONSOLIDATED / STANDALONE FINANCIAL PERFORMANCE:
The consolidated annual revenue from operations has registered an increase of about134% compared with the previous year and the Company has posted loss from operationsbefore tax of Rs. 34.65 crores as compared to loss of Rs. 5.07crores in the previous year.
The standalone annual revenue from operations has registered a decrease by about 27%compared with the previous year. The loss for the period before tax stands at Rs.73.91crores as compared with loss of Rs. 5.53crores in the previous year. The decrease inrevenue was due to lower sales which was effected due to covid-19 and the loss increasedsince the Board decided to write off certain Capital WIP which was sitting in the booksand the Company did not find opportunity to commercialize it.
2. Financial highlights (Consolidated & Standalone)
(Rs. in Crore)
|Particulars ||Consolidated ||Standalone |
| ||2020-21 ||2019-20 ||2020-21 ||2019-20 |
|Total Income ||60.96 ||35.59 ||3.75 ||14.34 |
|Total expenses ||95.62 ||40.67 ||77.66 ||19.87 |
|Profit / (Loss) before extraordinary items & tax ||(34.65) ||(5.08) ||(73.91) ||(5.53) |
|Exceptional Items ||- ||- ||- ||- |
|Profit / (Loss) before tax ||(34.66) ||(5.07) ||(73.91) ||(5.53) |
|Tax expense/(income) ||(15.01) ||30.31 ||(25.52) ||30.98 |
|Profit / (Loss) for the period ||(19.65) ||(35.39) ||(48.39) ||(36.50) |
3. NEW INITIATIVES AND CORPORATE ACTION:
In the year under review the Company has made efforts to enhance its position in theareas of Business Intelligence Engineering Services and Vocational Training. The Companycontinues to improve operational effectiveness optimize costs and increase market reachacross all businesses. Barring unforeseen circumstances these initiatives have positivelyimpacted the current year business revenues and improved operating margins.
The Company has entered into exclusive licensing arrangement with US-based Inpixon todistribute and enhance and optionally purchase its Systat and Sigmaplot softwareproducts. This wil have positive impact on the revenues of the Company in coming year(s).
4. IMPACT OF GLOBAL CRISIS: COVID-19:
In the last month of FY 2020 the COVID-19 pandemic developed rapidly into a globalcrisis forcing Governments to enforce lock-downs of all economic activity. For theCompany the focus immediately shifted to ensuring the health and well-being of allemployees and trainees and on minimizing disruption to services for all our customersglobally. The Company has taken necessary action to shift its focus on providing trainingsessions through an online platform and has made required arrangements in this regard.
Further for the period under review there were certain impact on business financialsfrom the COVID-19 pandemic which is reflected on lower revenue numbers in the standalonerevenue. The Company at present encouraging employees to Work from Home as far aspossible.
Your directors do not recommend any dividend in the absence of distributable surplus.
During the financial year under review your Company has not transferred any fund to theGeneral Reserve.
7. SHARE CAPITAL:
During the financial year under review your there were no changes in the CapitalStructure of your Company.
The equity shares of the Company are listed at BSE Limited ("BSE").
The Equity Shares of the Company will continue to remain listed on BSE havingnationwide terminals and the shareholders of the Company shall continue to avail thebenefits of listing and trading on BSE.
9. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING FINANCIAL POSITION OF THECOMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THEREPORT:
CHANGE IN THE NATURE OF BUSINESS IF ANY:
There were no changes in the nature of business of the Company during the financialyear ended March 31 2021.
Redemption of Foreign currency convertible bond amounting to INR 29085 Lakhs(42million Euros) to the holders of the bonds have fallen due during April 2011 and is yetto be redeemed. On a petition filed by the Foreign Currency Convertible Bond holder TheHon'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 duringAugust 2019 stating that a wounding up order is issued against the Company by the Hon'bleHigh Court of Karnataka vide over dated 28th November 2017. Also the company status onthe MCA portal reflects as Under Liquidation. Based on the plea submitted by the Companythe Hon'ble High Court of Karnataka had granted a stay of 8 weeks from the date of orderviz 29th November 2019 for the Newspaper publication of winding up order. If no settlementis arrived between the parties within the said period the petitioner i.e. "The Bankof New York" was at liberty to proceed with the newspaper publication. The staygranted ended on 30th January 2020. The said order was further extended by the Hon'bleHigh Court of Karnataka from time to time and last extended on 22nd January 2021 tillfurther orders.
The Board would also like to inform that The Honourable High Court of Bengaluru haspreviously favorably considered the Company's on-going productive settlement initiativeswith the parties so that an amicable resolution is reached. Management has diligentlyprogressed on settlement exchanges and expects to resolve this issue with the partiesbefore the High Court as soon as possible.
10. PUBLIC DEPOSITS:
The Company has not accepted or invited any deposits falling within the meaning ofSection 73 of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules2014 during the year under review.
11. DETAILS OF DIRECTORS / KEY MANAGERIAL PERSONNEL:
The Board of Directors of the Company is duly constituted and details of the same aregiven below:
11.1. PROMOTER GROUP (EXECUTIVE DIRECTORS) :
Mr. Asif Khader
11.2. NON- EXECUTIVE DIRECTORS :
Mr. Richard Holden Gall (Independent director)
Ms. Akthar Begum (Independent director)
Mr. Mueed Khader (Non-Independent director)
In terms of the provisions of section 203 of the Companies Act 2013 Mr. Asif KhaderManaging Director Manjunath. H Chief Financial Officer and Mr. P. Phaneendra CompanySecretary are the Key Managerial Personnel of your Company.
11.3. RETIRE BY ROTATION:
Mr. Asif Khader (DIN: 00104893) Managing Director of the Company retired by rotation on16-May- 2021 and Mrs. Akthar Begum Independent Director of the Company retired byrotation on 11- August 2021. The board considered their re-appointment and accordingly atthe meeting held on August 112021 on the recommendation of the Nomination andRemuneration Committee approved the re-appointment of Mr. Asif Khader as Managing directorand Ms Akhtar Begum as Independent director to continue of the Board of directors of theCompany subject to approval of the shareholders in the ensuing Annual general meeting tobe held on in September 2021. Both Mr. Asif Khader and Ms Akhtar Begum being eligibleofferthemselves for re-appointment. The Board of Directors recommended their appointmentfor consideration of the members at the forthcoming Annual General Meeting.
In accordance to the meeting held on 08-September-2021 Mr. Manjunath H was appointed asCFO of the company.
11.5. RESIGNATIONS AND RETIREMENTS:
There has been no resignation or retirements during the year under review.
11.6. REAPPOINTMENT OF INDEPENDENT DIRECTOR:
Mrs. Akthar Begum (DIN: 07624256) Pursuant to the provisions of Section 149 of theCompanies Act 2013 the tenure of Mrs. Akthar Begum (DIN: 07624256) as Independent Directorfor 5 years is completed as on 12 August 2021. She being eligible for re-appointment hasgiven her consent to be reappointed as the Independent Director of the Company for anotherterm of 5 years effective from 11 August 2021 and ending 10 August 2026 her appointmentshall be considered in the ensuing Annual General Meeting.
Keeping in view the vast experience expertise and knowledge it would be in theinterest of the Company that Mrs. Akthar Begum (DIN: 07624256) be re-appointed as anIndependent Director of the Company subject to the approval of the shareholders at theforthcoming Annual General Meeting.
11.7. KEY MANAGERIAL PERSONNEL:
In terms of the provisions of section 203 of the Companies Act 2013 Mr. Asif KhaderManaging Director Mr. Manjunath H Chief Financial Officer and Mr. P. Phaneendra CompanySecretary are the Key Managerial Personnel of your Company.
Further Mr. Manjuanth H was appointed as the Chief Financial Officer of the Companywith effect from 08-September-2021.
12. DECLARATION BY INDEPENDENT DIRECTORS:
The Company has received necessary declaration from each Independent Director underSection 149(7) of the Companies Act 2013 that he/she meets the criteria of Independencelaid down in Section 149(6) of the Companies Act 2013 and Regulation 25 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
13. NUMBER OF MEETINGS OF THE BOARD:
The Board met 7 times during the financial year. The meeting details are provided inthe Corporate Governance report that forms part of this Annual report. The maximuminterval between any two meetings did not exceed 120 days as prescribed in the CompaniesAct 2013.
14. COMMITTEES OF THE BOARD:
As on March 312021 the Board had four committees: the audit committee the nominationand remuneration committee corporate social responsibility committee stakeholder'srelationship committee.
A detailed note on the composition of the Board and its committees is provided in theCorporate Governance report.
15. FORMAL ANNUAL EVALUATION OF THE BOARD:
The guidelines for evaluating and assessing the performance of the directors are beingmodified due to the expansion of the board. Generally such assessment would include thedecision making abilities of individual directors strategic and value additioncontributions at the meetings charting your company's policy and growth and introducingrisk management policies.
As per listing regulations the directors have to carry out an annual performanceevaluation of the Board independent directors whole-time and non-whole-time directorscommittees of the Board and chairman of the Board. Necessary guidelines are beingre-framed in this regard.
16. DETAILS OF NON-COMPLIANCE BY THE COMPANY PENALTIES AND STRICTURES IMPOSED ON THECOMPANY BY STOCK EXCHANGES OR SEBI OR ANY STATUTORY AUTHORITY ON ANY MATTER RELATED TOCAPITAL MARKETS DURING THE LAST THREE YEARS:
The Company has complied with the requirements of the Stock Exchanges or SEBI onmatters related to Capital Markets as applicable during the last three years. Followingpenalties or strictures have been imposed on the Company:
|Financial Year ||Action taken by the Authority ||Details of violation ||Details of action taken E.g. fines warning letter debarment etc. |
|1. 2019-20 ||Bombay Stock Exchange - Levy of Fine || Regulation 33 - Annual audited Financial Results - Late submission. INR120000 + GST fine levied - promoters shareholdings frozen. || Delay in reporting of Financial results for last year was due to Covid-19 lockdown- the results were announced after a delay of 24 days. The Company paid the fine to BSE. Subsequent to the payment of fine the promoters shareholding was released. |
| || || Reg-19(1 )/19(2) - reconstitution of Board Committees quarter ended March 2020.INR 182000 + GST fine levied promoters shareholdings frozen || Constitution of Board Committees - The Board had reconstituted the Board Committee's but the Company did not inform BSE. The Company paid the fine and after representation this fine was waived off / reversed by BSE. |
|2. 2018-19 ||Bombay Stock Exchange - Levy of Fine ||Regulation 13(3) of the SEBI (LODR) 2015 ||Fine imposed by BSE for non-compliance of Regulation 13(3) of SEBI (LODR) 2015 for non-submission of Statement on Shareholder complaints for the quarter ended December 2018 |
|3. 2017-18 ||Not Applicable ||Not Applicable ||Not Applicable |
17. VIGIL MECHANISM AND WHISTLE BLOWER:
Pursuant to provisions of section 177 (9) of the Companies Act 2013 the Company hasestablished a "Vigil mechanism" incorporating Whistle Blower Policy in terms ofthe Listing Obligations and Disclosure Requirements 2015 for employees and Directors ofthe Company for expressing the genuine concerns of unethical behaviour frauds orviolation of the codes of conduct by way of direct access to the Chairman of the AuditCommittee in exceptional cases. The Company has also provided adequate safeguards againstvictimization of employees and Directors who express their concerns.
18. INTERNAL FINANCIAL CONTROL & ADEQUACY:
Your Company has in place adequate internal control systems commensurate with the sizeof its operations to ensure sound management of operations safe keeping of its assetsincluding in tangible assets and utilization of resources. However further steps as maybe advised will be implemented if found necessary.
19. CORPORATE SOCIAL RESPONSIBILITY (CSR):
The provisions of Section 135 of the Act read with Companies (Corporate SocialResponsibility Policy) Rules 2014 are not applicable to the Company and therefore noreport is attached under this head.
20. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORK PLACE - PREVENTION PROHIBITIONAND REDRESSAL ACT 2013:
The Company has zero tolerance towards sexual harassment at workplace and during theyear under review your Board had constituted an Internal Complaints Committee to considerand redress complaints of sexual harassment & also adopted a policy on preventionprohibition and redressal of sexual harassment at workplace in line with the provisions ofSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013and the rules framed thereunder.
21. CORPORATE GOVERNANCE
Our corporate governance practices are a reflection of our value system encompassingour culture policies and relationships with our stakeholders. Integrity and Transparencyare key to our corporate governance practices to ensure that we gain and retain the trustof our stakeholders at all times. Corporate governance is about maximizing shareholdervalue legally ethically and sustainably. We also endeavour to enhance long termshareholder value and respect minority rights in all our business decisions.
Our Corporate governance report for fiscal year 2021 forms part of this Annual Reportand the Independent Chartered Accountant Certificate of Compliance is attached to thisreport as per Annexure - I & II.
22. MANAGEMENT DISCUSSION & ANALYSIS REPORT:
In terms of the provisions of regulation 34(2) of the SEBI (Listing Obligation andDisclosure Requirements) Regulations 2015 the Management Discussion and Analysis reportis set out separately and forms an integral part of this report as per Annexure - III.
23. EXTRACT OF ANNUAL RETURN:
In accordance with Section 134(3)(a) read with Section 92(3) of the Act the AnnualReturn in Form MGT-7 is placed on the website of the Company and same can be downloaded byclicking on the following link:http:/ /www.cranessoftware.com / Investor.
24. PARTICULARS OF EMPLOYEES:
No remuneration was paid to whole time directors hence the ratio of the medianremuneration of the employees to the remuneration of the each of the whole-time directorsis Zero.
The Company had 47 employees as on March 312021. The percentage increase inremuneration ratio of remuneration of each director and key managerial personnel (KMP)(as required under Companies Act 2013) to the median of employees remuneration and thelist of top 10 employees in terms of remuneration drawn as required under Section 197(12)of the Companies Act 2013 read with Rule 5 of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 forms a part of this Board's Report. Disclosurespertaining to remuneration and other details as required under section 197(12) of the actread with companies (appointment and remuneration of managerial personnel) Rules 2014 areattached to this report as per Annexure - IV.
25. HEALTH SAFETY AND ENVIRONMENT:
Your Board is committed to highest standards of providing healthy environment forsafety of its employees and your Board reviews the same from time to time.
26. PARTICULARS OF LOANS GUARANTEE & INVESTMENT:
Details of loans guarantees and investments under the provisions of section 186 aregiven in notes to financial statements.
27. DIRECTORS' RESPONSIBILITY STATEMENT:
The financial statements are prepared in accordance with Indian Accounting Standards(Ind AS) under the historical cost convention on accrual basis except for certainfinancial instruments which are measured at fair values the provisions of the CompaniesAct 2013 (to the extent notified) and guidelines issued by SEBI. The IND AS areprescribed under Section 133 of the Companies Act 2013 read with Rule 3 of the Companies(Indian Accounting Standards) Rules 2015 and Companies (Indian Accounting Standards)Amendment Rules 2016. Accounting policies have been consistently applied except where anewly-issued accounting standard is initially adopted or a revision to an existingaccounting standard requires a change in the accounting policy hitherto in use.
The directors confirm that:
In preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures.
They have selected such accounting policies and applied them consistently andmade judgements and estimates that are reasonable and are prudent so as to give a trueand fair view of the state of affairs of the company at the end of the financial year andof the profit of the company for that period.
They have taken proper and sufficient care towards the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and preventing and detecting fraud and otherirregularities.
They have prepared the annual accounts on a going concern basis.
They have laid down the internal financial controls to be followed by theCompany and that they are adequate and were operating effectively.
They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
The present auditors M/s. Sethia Prabhad Hegde &Co were appointed at the 32ndAnnual General Meeting of your company to hold office for a period of 5 years i.e. tillthe conclusion of the 37th Annual General Meeting. The requirement for annualratification of auditor's appointment at the AGM has been omitted pursuant to Companies(Amendment) Act 2017 notified on May 7 2018
During the year the Statutory Auditors have confirmed that they satisfy theIndependence criteria required under Companies Act 2013 and Code of ethics issued byInstitute of Chartered Accountants of India.
As required under Section 204 of the Companies Act 2013 and Rules there under theBoard appointed Mr. Supriya Kumar Guha. Practicing Company Secretary as SecretarialAuditor of the Company for fiscal year 2021.
30. COST RECORDS AND COST AUDIT:
Maintenance of cost records and requirement of cost audit as prescribed under theprovisions of Section 148(1) of the Companies Act 2013 are not applicable for thebusiness activities carried out by the Company.
31. AUDITORS QUALIFICATIONS AND BOARD'S REPLY:
The Statutory auditors have qualified their report on various matters pertaining to theCompany and the Board has replied to these qualifications. A detailed list containing theaudit qualifications and the Board's replies thereto have been provided as an annexure tothis report marked Annexure - V.
32. SECRETARIAL AUDITOR AND BOARD'S REPLY TO SECRETARIAL AUDIT QUALIFICATIONS:
Secretarial audit report in prescribed Form MR-3 attached to this report markedAnnexure - VI.
The Secretarial auditors have qualified their report on various matters pertaining tothe Company and the Board has replied to these qualifications. A detailed list containingthe audit qualifications and the Board's replies thereto have been provided as an annexureto this report marked Annexure - VIA.
33. RELATED PARTY TRANSACTIONS:
During the year under report your Company has entered into related party transactionswhich were on arm's length basis and in the ordinary course of business. Certain materialtransactions as defined under section 188 of the Companies Act 2013 read with thecompanies (Meetings of Board and its powers) Rules 2014 are reported. All thesetransactions were previously approved by the audit committee and are being reviewed on aregular basis. Further details of contracts and arrangements with related parties for thefiscal year ended March 312021 are provided under note no. 37 to the audited financialstatements and details pertaining to related party transactions are provided in Annexure -VII.
34. ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
Even though the operations of your Company are not energy-intensive adequate measureshave been taken to reduce energy consumption by using efficient equipment. Since it is asoftware Company primarily dealing with scientific and engineering software products andproduct related projects energy cost forms a very small part of total cost and its impacton total cost is not material.
35. RESEARCH & DEVELOPMENT ACTIVITIES:
The Management of your Company has been committed to building a strong R&D culturefrom day one and has set clear R&D goals. In order to achieve these goals the Companyhas focused on furthering the efficacies of R&D activities as well as buildingsynergies among multiple-impact technologies.
36. SECRETARIAL STANDARDS:
The Directors state that applicable Secretarial Standards i.e. SS-1 and SS-2 relatingto Meetings of the Board of Directors' and General Meetings' respectivelyhave been duly followed by the Company.
37. SUBSIDIARIES JOINT VENTURES & ASSOCIATES:
Current Subsidiaries Joint venture & Associates have been listed in Annexure-VIII.Any substantial or material business related changes that have taken place in thesubsidiary companies during the year is reflected in the Balance Sheet reported by yourcompany and discussed in a Management Discussion and Analysis report in Annexure-III.
38. REPORTING OF FRAUD BY AUDITORS:
During the year under review the statutory auditors have not reported under Section143 (12) of the Companies Act 2013 any instances of fraud committed against the Companyby its officers or employees the details of which would need to be mentioned in theBoard's report.
39. RISK MANAGEMENT:
Your directors have entrusted the risk management functions to the audit andremuneration committee as the number of directors on the Board is four only. Your Companywill take steps to expand its Board if advised and found warranted in the future.
40. GREEN INITIATIVE:
Electronic copies of the Annual Report 2020-21 and the Notice of the AGM are sent toall the members whose email addresses are registered with the Company.
Your Directors would like to express their sincere appreciation for the assistance andco-operation received from Financial Institutions Government Authorities customersvendors and members during the year under review.
Your Directors wish to place on record their deep sense of appreciation for thecommitted services by the Company's executives staff and workers.
| ||for and on behalf of the Board of Directors || |
| ||Sd/- ||Sd/- |
|Date: September 08 2021 ||Asif Khader ||Mueed Khader |
|Place: Bengaluru ||Managing Director ||Director |
| ||DIN:00104893 ||DIN:00106674 |