Today's Top Gainer
Note:Top Gainer - Nifty 50 More
(Annexure to Directors Report)
(Note: This discussion covers the consolidated financial performance of Cranes Software International Limited and its subsidiaries)
Cranes Software International Limited (NSE: CRANESSOFT; BSE 512093), is a global scientific & engineering products and solutions provider. The Companys business interests continues to be software products (proprietary products and product alliances), Solutions (Business Data Analytics & Engineering Services) and Services (training in niche domain areas). The company is dedicated to excellence and recognized leadership in technical software products and training services and will remain focused on product development, consulting, distribution and training.
Global Business Environment
Gartner Report for IT Services Worldwide, 2013-2019 forecasts shows the market reaching nearly $914 billion in 2015, growing 3.8%. With outsourcing contributing more than half of market growth in constant currency, the market will reach $1.1 trillion in 2019.
In the IT sector, fundamental aspects of the business landscape continue to favour offshore outsourcing through the growing trend of global delivery, despite the recent political challenges caused by BREXIT and the upcoming US elections this year. It will be a wait and watch game for most IT outsourcing companies this year despite early trends.
Cranes Software: Business Initiatives
The Company has consolidated its position in the global software products and services segment by undertaking essential business transformation to leverage its product development capability and worldwide presence. In the year under review, the Company has enhanced its position in the areas of Business Intelligence, Engineering Services and Vocational Training. The Company continues to improve operational effectiveness, optimize costs and increase market reach across all businesses. These initiatives have positively impacted the current year business revenues and improved operating margins.
In the year gone by, Cranes furthered its engagement with its clientele by increasing product portfolio with new releases and launches and solution offerings by introducing new alliances and partnerships. This includes expanding our product range, partnering with partners to penetrate into new business areas, launching new products upgrades in the Engineering & Business Intelligence products and services area. The Company also forged its presence in the training services space by penetrating further into Engineering Universities and Colleges. In the Business Intelligence space the Company launched Cubeware Solutions Platform C8. This release superseded all previous Cubeware portfolio components, bundling and synchronizing them in a complete BI architecture. This provides companies an integrated, scalable, easy-to-use BI platform that addresses the complete spectrum of modern BI requirements across all industries. The Company operates in the Business Intelligence area through of its subsidiaries; Dunn Solutions Group (DSG), a full service IT consulting firm with Business Intelligence and Application Development practices, and Cubeware, a company offering a complete, innovative, industry-independent Business Intelligence Product portfolio. A detailed update of new product launches and business initiatives is included below.
On a standalone basis, the Companys Cranes Varsity division has reinforced its position in the training and education market. Some of the highlights this year are as follows:
1. Won NPOL orders through tender process and delivered training in multiple batches for various teams on different technologies
2. Breakthrough with major DRDOs BEL, ADE, CDOT followed by continuous business
3. Delivered multiple high-end training in the market like Android, USB, DSP Architecture, SDLC etc with support of consultants
1. Launched first time ever M.Tech Internship paid program which was a great success and getting good response
2. Successfully executed academic project for 80+ participants which was well received by students and colleges.
3. Launched placement oriented program (POP) and Delivered the same successfully to 4 major colleges.
4. Technically trained 1400+ UG & PG students for their domain skill up-gradation.
1. Launched Software Application based training on java & Android
2. Trained 600 students for the year.
3. Conducted customized batch for TataExlsi and Hyundai
1. Major clients for Placements Cyient, Tata Elxsi, Verifone, Autoliv, L&T Technology Services, American Technology Services, Robert Bosch Technology Services
2. New Clients Delphi Automotive, Continental Automotive, Mindtree, Sharp Software
3. Placement statistics 75%
During the year, your Company, on a standalone basis, achieved a Sales and Operating Revenue of Rs. 293 million, increase from Rs. 133.8 million. The after tax position was a loss of Rs. 725 million, on Standalone basis, as compared to loss of Rs. 791 million in the previous year. Decrease in loss was primarily due to exchange gain of Rs. 207.20 million, Deferred Tax of Rs, Rs. 351.6 million as compared to Rs. 403.51 million previous year and other minor variances in expenditure.
On a consolidated basis, during the year, your Company together with its subsidiaries achieved a Sales and Operating Revenue of Rs. 3478.4 million, up from Rs. 3949.9 million of the previous year.
The Company is also focused on improving its balance sheet position. Active discussions with secured and unsecured lenders for restructuring / closure of debts have yielded debt closure agreements with many banks. We also continue to pursue various approaches to sustained operational profitability and reduced debt exposure.
Opportunities & Threats
Opportunities are in plenty in an aggressively growing and high-demand environment. The industry today is experiencing a definite shift from fundamental IT enabled business automation to flexible, sustainable real-time solutions in heterogeneous IT environments such as Cloud, tablets, mobile phones etc. The Company is constantly working on higher-end easy-to-operate but yet powerful and flexible business applications for its core areas such as business intelligence and vocational training.
Although the organization witnessed financial downside, in the year under review, it has managed to maintain organization sustainability and operational efficiencies. The Company today continues to leverage its expertise, experience and domain knowledge in the fields of Vocational Training, Engineering Services and Business Analytics to grow and achieve new grounds. The Companys balance sheet has been strongly leveraged through secured and unsecured debts. The Company has already secured favorable settlement options with a large set of secured lenders. The Company is confident that a significant part of these loans will be settled/ restructured by the end of the current financial year.
The Company has developed and adopted a Risk Management Policy. This policy identifies all perceived risks which might impact the operations and on a more serious level also 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 would be subjected to internal audit and reviewed on a regular basis.
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 manning the global offices.
Internal Control Systems
Having grown to a sizeable operation, the management has focused on augmenting its internal control systems and processes to support further growth opportunities. To this effect, the Company is certified under ISO 9001 standards in FY2002 and later the company was assessed at SEICMM Level 5 during FY 2005. The Company has also obtained certification under ISO 27001 Information Security Management System in FY 2006 and was also awarded SEI-CMMi Level 5 assessment for its processes.
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 Companys 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.