Cranex Ltd Management Discussions.

• UPDATE ON COVID-19 PANDEMIC Towards the end of financial year 2019-20, the crane industry and the entire global economy has been faced with an unprecedented disruption, owing to the COVID-19 pandemic. The COVID-19 has resulted in interrupted supply chains, halted production and lock-down, leading to no or minimum business across all economic sector. With COVID-19 situation escalating, the Company had proactively rolled-out a slew of measures to ensure health and safety of its employees and business partners, including suspending production at its manufacturing facilities on March 22, 2020. The Company the Company reopened, in a gradual manner, its manufacturing facilities during the first week of May 2020. While the COVID-19 pandemic has pushed several timelines, the Company has successfully navigated through the unprecedented times. The Company is largely dependent on the sales to Govt. of India and PSUs and is confident about gradual resumption of the pre-lockdown sales figure. The Company is proactively adapting to the changing business needs and will stay prepared dynamically to do course correction if and when required.

• INDUSTRY STRUCTURES AND DEVELOPMENTS

The growth of equipment manufacturers (cranes, construction and material handling equipments) is concerned; it is linked with growth of infrastructure, real estate, agricultural and indirectly with the growth of Indian economy. It requires expertise, in terms of technology, design and providing customer satisfaction. Its potential and market is huge; however only companies who would be able to provide good quality products at most competitive price will survive. The Companys CRANEX brand has emerged as brand for reliability and has been able to win the customer loyalty in all these years. CRANEX LIMITED will continue its successful stint in the industry, through providing good quality products at most reasonable prices and complete customer satisfaction by its strong distribution and service network.

• OPPORTUNITIES

Recent changes in the consumer spending behaviour along with fall in disposable income have posed serious challenges for sustained future growth. To maintain such growth, your Company is taking necessary steps such as expanding its production capacity. Your Company is also working on various cost-optimisation measures including efficient production process, digitalisation drive across the organization, etc., to eliminate redundancies. Your Company continues to focus on reliable and sustainable quality products so as to be ahead of competition.

Cranex continues to focus on various strategies and initiatives to overcome challenges. These include consolidation of new generation cranes in the targeted market segments. Cranex maintained its market position and is well positioned to achieve growth in terms of volumes and market share through better service levels and by providing the best of technology at an affordable price. We

believe that our proactive steps in providing best solutions to our customers and implementation of our strategies have prepared us for growth

• THREATS

> Economic downturn or slowdown can lead to decreased volumes and capacity utilization.

> Continued threat of material price volatility due to slowdown in supply and demand chain translating into pressure on margins during a rapid increase in raw material prices.

> Week currency resulting in pressure on margins.

> Any change in the government policy or its budgetary allocation to the infrastructure sector will have a major impact on Companys business.

> Change in the tax structure of, GST, Income tax, FEMA, RBI and their tax rates etc.

> Increasing competition from National and International players.

> Unforeseen business losses

• RISK & CONCERNS

The Companys ability to foresee and manage business risks is crucial in achieving favourable results. The Company operates in an environment which is affected by various risks some of which are identifiable and Controllable some others are unexpected and cannot be controlled. Under these conditions, proper identification and management of risks is very important in determining the ability of the organization to sustain and create value for its stakeholders. The impact of the key risks which are listed below has been identified through a formal process by the management. However, the Company has been taking appropriate measures to mitigate these risks on a continuous basis. Some of the risks that are potentially significant in nature and need careful monitoring are listed hereunder:

• The New Normal- COVID Aftermath

Under the "New Normal" as India Inc. shifts to "work from home" and with socialising becoming a rare occasion, The silver lining, however, is the increasing awareness about health, thereby driving the demand for sustainable and eco friendly products. The infrastructure business is expected to improve gradually the current government initiatives on Industry 4.0 will surely pace up in coming months.

• Raw material prices volatility

As COVID Pandemic hit the country economic activity the liquidity slowdown and raw material market is Steel and other commodities are subject to price volatility and our profitability and cost effectiveness may be affected due to any increase in $ decrease in the prices of raw materials and other inputs.

• Continued economic growth -

Demand of our equipment / machines is dependent on economic growth and / or infrastructure development. Any slowdown in the economic growth affects our growth.

• Market risk-

Even as the Indian economy slowly recovers from the Nation-wide lockdown, infrastructure spends will take time to kick in. Consequently, demand for construction equipment remains muted. There ever there is demand, one find stiff competition from other players trying to secure these orders at such prices as may put unsustainable pressure on margins.

• Foreign Currency Risk-

Due to Govt. continuous assertion on import of Chinese goods the Exchange rate fluctuations have an adverse impact on the Company. Further the Escalator business need to reinvent its resources to supplement the Self dependence Economy.

• Cyclical nature of the Industry-

The Companys growth is linked to those of the crane Industry, which is cyclical in nature. The demand for crane has a significant impact on the demand and prices of the products manufactured by the Company. A fall in the demand and / or prices would adversely impact the financial performance of the Company.

• CAUTIONARY STATEMENT

Statements made in this report describing the Companys objectives, projections, estimates and expectations may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include economic conditions affecting demand/supply and price conditions in the domestic and overseas markets in which the Company operates; changes in the Government regulations; tax laws and other statutes and incidental factors.