Crane Infrastructure Ltd Management Discussions.


Macroeconomic Overview

Financial year 2020-21 was one of the most challenging years of our lifetime. Innumerable lives, jobs and growth prospects were lost due to the corona virus induced pandemic. The world has lost 4-5 per cent of its GDP output amounting to a US dollar value of4trillion approximately. The unprecedented health hazard continued to disrupt the lives and livelihoods of millions of people across the globe throughout the year. Demand-supply situation remained unstable for most part of the year, impacted further by the second wave of pandemic across the nation. Bringing the economy back from the brink of catastrophe and maintaining steady growth has been the greatest challenge of all time. However, it is refreshing to know that with great collaboration between all nations.the fiscal stimuli announced by the various governments and central banking systems, and rapid testing and vaccination the situation is being managed efficiently across die globe.

Indias GDP growth stands at -7.3 per cent for financial year 2020-21, and the Reserve Bank of Indias projections indicate a strong revival of the economy with GDP growth expected to beat 10.5 per cent for financial year 2021-22. This trend is already visible in quarterly GDP movement during 2020-21. with GDPmoving from a contraction of 24 per cent in Q1-21 to a growth of 1.6 percent during Q4-21 despite the disruptions caused by the ongoing second wave of the pandemic. However, we need to review and monitor with great caution, the short- to-medium term impact of thesecond and a probable third wave of the pandemic while continuing to work on more efficient ways of tackling its economic impact. This brings us to the efforts and role played by the research fraternity, pharma players, economists, central governments, various banking and administrative systems, and private players across the world who worked relentlessly for over a year and continue to focus on deriving more amicable solutions to the on going health crisis and the resultant impact on livelihoods. Throughoutthe pandemic, all core sector players showed robust resilience, which was further backed by a steady- upward performance of financial markets in India.

Indices are financial results driven and have responded positively with all sectors showing signs of a robust revival.

This is a healthy development, considering the fact that various parts of the country going under limited and sporadic lockdowns at regular intervals to contain the spread of the virus, which is generally a threat to day-today functioning of various industries and impacts the performance of various sectors. The challenging phase we are living through is unprecedented in nature. Its impact on business operations has thrown light on sectors and related businesses which are well positioned to adopt to ever changing needs of the market place. Businesses with ability to innovate, agility to adapt, efficient systems and processes in place, a customer centric approach and digital reach w ill be in a position to succeed and scale new heights in the coming years. In hindsight, readiness to manage and overcome a probable third w ave of the pandemic will determine the direction ofthe economy in the near-to-medium term range.

Sector Overview

Construction, a key contributor to the core sector, has always been a focus area for successive governments. Policy decisions taken in recent years have had a reflective impact on the real estate sector. Consolidation in the industiy is happening in an anticipated manner and Covid-19 related challenges are adding fuel and accelerating the pace of process. The sector which forms about 7 per cent of Indias GDP is expected to contribute about 13 per cent to the GDP with market size of USD 1 trillionby2030. While the ongoing pandemic has challenged the survival of some small businesses, it has also opened up avenues for listed and laige players with scale and agility as their advantage. Scalability is very crucial in times of sectoral consolidation as the laige players are marking substantial sales volume increases and geographical expansion plans. Smaller players continue to face operational challenges while large players like crane infra structure limited with brand recognition, known for quality- products. and in-house manufacturing facilities continue to gain a considerable market share. Despite the setbacks during first half of FY 2020-21, the realty sector witnessed a major revival in the second half of FY 202021.

The sector survived a challenging environment and showed robust signs of recover. This was backed by innovative sales and marketing efforts and continuous improvements in processes. Digital marketing and virtual tours of projects acted as a saviour forthe industry - otherwise dependent on in-person visits and meetings. Adapting and implementing innovations with regard to virtual reality and augmented reality too played a crucial role in increasing sale volumes in the sector. Following a digital approach increased the speed of the overall process and also the quality of the customer base with serious buyers at advanced stages of buying decisions approaching to enquire about projects. The real estate sector is anticipated to undergo further consolidation. With demand sentiment improving, execution of projects back at pre-Covid levels, and incentives for buyers like lowest interest rates and schemes for achieving housing for all by the Government of India, we trust that the coming years will be better operationally and will also give us an edge over the other sectors. Apart from the emotional value, housing has gained more prominence during this period due to human safety and security concerns and we believe this will augur well for the large players with quality products and vast project pipelines across regions. The focus of a viable and successful business remains in agility in seizing gainful opportunities, how quickly it can adapt to the changing behaviour of the customers and staying ahead of the curve always with the quality of processes, people and products that it has to offer.


The Board of Directors of the Company, during the year, have explored all the possibilities to develop its properties. Although there is acute shortage of quality warehousing facilities, due to prevailing subdued market conditions and increasing input costs, the Company has been adopting a conscious approach. Many of the projects are at different stages of planning as well as getting requisite statutory approvals, which will help to move forward, when the conditions improve. In the medium term, the Company also plans for development of transport infrastructure projects, such as Logistics Parks. Warehouses, truck terminals.

FTWZs etc in a phased manner. The revenue stream for these projects will primarily be lease based, on long tenu basis. In case of developing Logistics Parks & Warehouses, your Company shall be looking for strategic partners/investors having long term perspective with reasonable return expectation once the requisite permissions etc. are in place. Many of these projects are presently at various levels of planning as well as of getting requisite statutor\r approvals. Management will keep you informed on the development plans, from time to time

Companys performance

During the Year under review revenue from operations for the financial year 2020-21 is Rs.54.49 lakhs and it was decreased by 45.41 % over the previous financial year (Rs 99.85 lakhs in 2019-20) due to sever pandemic of covid-19. Profit after tax (PAT) for the financial year 2020-21 is Rs. 18.64 Lakhs and it was decreased by 61.65 %over last year (Rs.48.61 Lakhs in 2019-20)

Details of Significant changes (ie change of 25% or more as compared to immediately previous financial year) in the following key financial ratios along with explanations:

Debtors turnover Ratio was 4.56 times in the financial year 2020-21 and it was 7.47 times in the previous financialyear 2019-20.

Flence it w as decreased by 38.8% in the financial year 2020-21 compared to the previous financial year 201920.

Explanation : During the year due to the decrease of revenue with proportionate to decrease of accounts receivables causes the decrease of debtors turnover ratio.

Operating profit Ratio was 45.7 percentage of total revenue in the financial year 2020-21 and it was 61.07 percentage in the previous financialyear 2019-20.

Flence it was decreased by 25.16% in the financial year 2020-21 compared to the previous financial year 201920.

Due to severe pandemic of covid-19 causes the decrease of revenue drastically. Hence it causes decrease of operating profit.

Net profit Ratio was 34.2 percentage of total revenue in the financial year 2020-21 and itwas 48.67 percentage in the previous financialyear 2019-20.

Hence it was decreased by 29.73% in the financial year 2020-21 compared to the previous financial year 201920.

Due to severe pandemic ofcovid-19 causes the decrease of revenue drastically. Hence it causes decrease of net profit.

Details of Changes in return on net worth compared to the immediately previous financial year:

Return on net worth was 1.72 times in the financial year 2020-21 and it was 4.56 times in the financial year 201920. it was decreased by 62.2% in the financial year2020- 21 compared to the previous financial year 2019-20 due to decrease of revenue as the severe pandemic covid-19 w as effected.

Details of non Significant Changes (ie change is not more than 25 % as compared to immediately previous financial year) in the following key financial ratios: Current Ratio w as 4.61 times in the financial year 202021 and it was 4.5 times in the previous financialyear

2019- 20.

Hence it was increased by 2.44% in the financial year

2020- 21 compared to the previous financial year 201920.

Explanation: During the year due to the not significant change in current liabilities and decent decrease in the current liabilities cause the current ratio increase.

Debt equity Ratio was 6.96 times in the financial year 2020-21 and it was 7.2 times in the previous financialyear 2019-20.

Hence it was decreased by 3.30% in the financial year 2020-21 compared to the previous financial year 201920.

Explanation: During the year due to the part payment of principal loan amount and increase of profit causes the decrease of debt equity ratio.

Threats, Risks & Concerns

This sector faces various degrees of uncertainty, both at the macro and micro levels. The Company being in the same sector is not an exception. Right from the time of acquisition of land for construction, to the time of sale of finished properties, the Company faces various regulatory requirements. Some of these requirements such as land acquisition, permitted land use. approval from multiple government authorities, development of land and construction thereon, stringent environmental and safety standards etc. increases cost as well as affects timeliness of a project.

Material Developments In Human Resources/ industrial Relations

The timely availability of skilled and technical personnel is one of the key challenges. The Company maintains healthy and motivating work environment through various measures.

There were no material developments in human resources /Industrial relations during the financial year 2020-21.

As of 31st March 2021, your Company- had no permanent employees on its rolls.

Internal Control System And its Adequacy

The Company has an adequate internal control systems, commensurate with size and nature of its business. The system is supported by documented policies, guidelines and procedures to monitor business and operational performance which are aimed at ensuring business integrity and promoting operational efficiency. Internal controls are supplemented by an extensive programme of internal audit, review by management with reference to the documented policies, guidelines and procedures. These controls are designed to ensure that financial and other records are reliable for preparing financial information and other reports and for maintaining regular accountability of the Companys assets and operations.

Cautionary Statement

Certain Statements found in the Management Discussion and Analysis Report may constitute ‘Forward Looking Statements within the meaning of applicable securities laws and regulations. These forward looking statements involve known and unknown risks, uncertainties and other factors that are difficult to predict and which may cause our actual results, performance or achievements to be different from any future results, performance and achievements expressed or implied by these statements.