Cranes Software International Ltd Management Discussions

(Annexure to Board?s 2024-25 Report)

(Note: This discussion covers the consolidated financial performance of Cranes Software International Limited)

Overview:

Cranes Software International Limited (NSE: CRANESSOFT, BSE: 512093), is a global scientific & engineering products, services and solutions provider. The Company?s business interests have focused on software products (proprietary products and product alliances), Solutions (Business Data Analytics & Engineering Services) and Services (training in niche domain areas). The company has been dedicated to excellence and recognized leadership in technical software products and training services, with a focus on product development, consulting, distribution and training.

Global Business Environment:

Global EdTech market projected to reach $300+ billion by 2030.Post-COVID, there is a slowdown in venture capital funding, shifting focus from growth to profitability. There has been strong demand for corporate training & upskilling in areas like AI, cloud computing, and cybersecurity.Internet penetration and mobile-first learning are driving massive demand, especially in emerging economies (India, Africa, Southeast Asia).

The global EdTech environment offers huge growth opportunities driven by technology, digital adoption, and demand for lifelong learning. But success requires navigating regulatory differences, affordability issues, cultural acceptance, and sustainability challenges while leveraging AI, AR/VR, and mobile-first platforms.

Business Strategy and Operational Performance Overview

The Company has continued to build on its core business strengths, drawing from its strong legacy, industry recognition, deep domain competencies, and long-standing customer relationships. Over the past year, the Management has effectively employed strategic planning and execution, with a clear focus on capital infusion and strategic collaborations. These initiatives have resulted in notable improvements in operational efficiency, profit margins, and market expansion.

Cranes has also demonstrated resilience in the face of pandemic-related challenges, achieving significant stability and growth. By leveraging its legacy in Ed-Tech and enhancing its Hybrid Training capabilities, the Company has successfully adapted to evolving business dynamics and emerging market demands.

Core Business highlights for FY 2024-25: -

• International Collaborations - Partnered with FPT Academy International, Vietnam, to launch international certification programs in Automotive Software Development and Data Science using Artificial Intelligence.

• Industry Engagements & Conferences - Participated in a prestigious AI Conference held in Dubai, showcasing Cranes Varsity?s capabilities in AI and advanced technology training

• Strategic Partnerships -Collaborated with NASSCOM to deliver advanced Embedded Systems training and certification programs.Over 400 students have been successfully trained under this initiative.

• Partnered with Future Skills (Powered by NASSCOM) to deliver industry-aligned online training programs aimed at bridging the skill gap.

• Academic Training - Conducted large-scale campus training programs across 7 noted engineering colleges spanning to around 2000 students achieving significant reach

• Faculty Development Programs- (FDPs) conducted at 4 colleges, all of them located in Andhra Pradesh.

• Student Training Programs -Trained a total of 658 students under our Business-to-Consumer (B2C) programs in core engineering domains.

• Corporate Training Programs - Trained over 1200 professionals across various corporate clients, notably among them are major GCC members , Fortune 500 Companies and IT giants.

• Cranes Varsity has trained over all 8000+ learners across all verticals – Colleges , Universities, Corporate, Defence & PSU?s and also individual learners and working professionals.

• The Focus domains remains to be in Embedded, Automotive , EV, IoT, VLSI , AI Engineering , Data Science, AIML, Cyber Security.

Opportunities & Threats:

Over the past year, our Company Management successfully kept the business stabilized and growing despite the wide-spread impact from the pandemic crisis. Management simultaneously continued the push for ‘debt-free & litigation-free? settlement of its financial burden from the 2007-08 global downturn. Cranes business IP and assets were creatively leveraged, and capital was strategically infused to stabilize core business operations, while also settling institutional debts, financial liabilities to employees, vendors and partners, and multiple legal, statutory and compliance cases.

Cranes Management actions have preserved the Cranes business, goodwill and legacy for the benefit of our valued stakeholders. Over the past year, OTS resolutions have been achieved for past debts with major banks; one final pending bank loan should be resolved within a few months. The resulting stability and growth of the core Cranes business have validated the strategic evolution of Cranes into an "Assets-Lite and IP-rich" business which strategically leverages its core competencies & legacy in Ed-Tech legacy for emerging Hybrid & Online Training demands.

On a standalone basis, the Company?s Cranes Varsity division has recovered well over the past year by reinforcing its market position in the training and education market. Your company has become stabilized and also achieved growth by expanding the scope and reach of its Ed-Tech training, and our placement strengths and portfolios to meet evolving demands of students and corporates; and consolidating our Hybrid Training expertise and programs, as well as collaborations with Knowledge Partners, for growth in the expanding Online training industry. We are also addressing the unique needs of working professionals via innovative evening/weekend courses, targeted placements and novel Train-Hire-Deploy programs.

The Company?s balance sheet is fundamentally strengthened by settling lingering corporate debts owed to several large, secured lenders. We have attempted hard to mitigate the large potential risk from pending winding-up and liquidation actions in litigation by CSIL?s FCCB holders and pending regulatory actions. Company Management is pleased that your company has strategically been moved to soon become a debt/litigation-free business.

With these strategic moves, your company is poised to actively participate with its sharpened core competencies in the globally expanding Ed-Tech market which, as noted above, is forecast at about $200 billion and growing 15% annually. We are optimistic that the stage is set for Cranes Software to build and grow upon its core Ed-Tech origins and expand this legacy!

Risk Management:

The Company has developed and adopted a Risk Management Policy. This policy identifies perceived risks which might reasonably be expected to impact the operations and possibly threaten the existence of the Company. The Company has laid down well-structured procedures for monitoring the risk management plan and implementing the risk mitigation measures. The strategic risks are taken into consideration in the annual planning process and these risks together with their mitigation plan are subject to review by the management on a regular basis. The business processes risks and the related controls are subject to internal audit and reviews.

Human Resources:

The Company continues to focus on business expansion while limiting the resources deployed to achieve such expansion. The mix of such members consists of Technology Experts, Sales and Marketing personnel.

Internal Control Systems:

Management recognizes the importance of strong internal control systems and processes to support further growth opportunities. We expect to benefit from and build upon the Company?s certification under ISO 9001 standards in FY2002 and the subsequent achievements of SEICMM Level 5 during FY 2005, and ISO 27001 Information Security Management System in FY 2006 as well as SEI-CMMi Level 5 assessment for its processes.

Safe Harbor:

Certain statements in this release concerning our growth prospects are forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties, including government actions; local political or economic developments; technological risks; risks inherent in the Company?s growth strategy; dependence on certain customers and business partners; dependence on availability of technical consultants and other factors that could cause our actual results to differ materially from those contemplated by the relevant forward-looking statements. The Company undertakes no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances.