The world economy faced a series of severe and mutually reinforcing shocks in
2022. While the COVID–19 pandemic receded in many regions, the war in Ukraine
unleashed a new crisis, disrupting food and energy markets, and escalating food insecurity
and malnutrition in many developing countries. Surging inflation across the world reduced
real income, triggering a global cost-of-living crisis, particularly for the most
vulnerable groups. At the same time, the climate crisis continued to impose a heavy toll,
with heat waves, wildfires, floods and hurricanes inflicting massive economic damages and
generating humanitarian crises in many countries. These shocks and the monetary policy
responses to inflation have put the world economy on a slippery slope. High inflation has
prompted aggressive monetary tightening in many developed and developing countries.
The Indian economy appears to have moved on after its encounter with the
pandemic, staging a full recovery in FY 2022 ahead of many nations and positioning itself
to ascend to the pre-pandemic growth path in FY 2023. Indias recovery from the pandemic
was relatively quick, and growth in the upcoming year will be supported by solid domestic
demand and a pickup in capital investment. Strong economic growth in the first quarter of
FY 2022-23 helped India overcome the United Kingdom to become the fifth-largest economy.
Yet in the current year, India has also faced the challenge of reining in inflation that
the European strife accentuated. Measures taken by the government and RBI, along with the
easing of global commodity prices, have finally managed to bring retail inflation below
the RBI upper tolerance target in November 2022.
However, the challenge of the depreciating rupee, although better performing than most
other currencies, persists with the likelihood of further increases in policy rates by the
US Fed. The widening of the CAD may also continue as global commodity prices remain
elevated and the growth momentum of the Indian economy remains strong. The loss of export
stimulus is further possible as the slowing world growth and trade shrinks the global
market size in the second half of the current year.
Despite these, agencies worldwide continue to project India as the fastest-growing
major economy at 6.5-7.0 per cent in FY 2023. These optimistic growth forecasts stem in
part from the resilience of the Indian economy seen in the rebound of private consumption
seamlessly replacing the export stimuli as the leading driver of growth. The rebound in
consumption was engineered by the near-universal vaccination coverage overseen by the
government that brought people back to the streets to spend on contact-based services,
such as restaurants, hotels, shopping malls, and cinemas, among others. The worlds
second-largest vaccination drive involving more than 2 billion doses also served to lift
consumer sentiments that may prolong the rebound in consumption.
Indias economic growth in FY23 has been principally led by private consumption and
capital formation. It has helped generate employment as seen in the declining urban
unemployment rate and in the faster net registration in Employee Provident Fund. Still,
private capex soon needs to take up the leadership role to put job creation on a fast
track. Recovery of MSMEs is proceeding apace, as is evident in the amounts of Goods and
Services Tax (GST) they pay, while the Emergency Credit Linked Guarantee Scheme (ECGLS) is
easing their debt servicing concerns.
The growing population in India requires improved transport infrastructure,
including aviation, railways, and road funding. The rising infrastructural development in
the country increases the demand for the India construction equipment market. The Indian
government is taking several initiatives and programs to boost the construction industry
while increasing the construction equipment market. Government programs and projects such
as Ujwal Discoms Assurance Yojana (UDAY), Smart City Mission, Pradhan Mantri Awas Yojana,
Gati Shakti Master Plan, and Bharatmala project drive the markets growth. These programs
and projects increase the demand and usage for construction equipment in the region.
Growing technological advancements in the construction industry may increase the demand
for India construction equipment market. Under Budget 2023-24, capital investment outlay
for infrastructure is being increased by 33% to Rs.10 lakh crore (US$ 122 billion), which
would be 3.3 per cent of GDP and almost three times the outlay in 2019-20.
- THREATS:
- Economic uncertainty: Based on the current and future market environment estimates, the
base cost of material are expected to continue to be volatile. GDP witnessed contraction
pushing the economy in a recession.
- Dependency on other Sectors: Construction types of equipment are heavily dependent on
the success and growth of other industries. This might lead to revenue loss in one of its
biggest markets.
- There is no consistency in the demand owing to the fluctuations in the market thereby
making capacity planning challenging for the equipment manufacturer.
- Many new construction equipment players have emerged in the country and many more will
hit the ground in the coming years. Thus, the construction equipment and agri equipment in
India will have to face stiff competition.
- Any change in the government policy or its budgetary allocation to the infrastructure
sector will have a major impact on Companys business.
- Weak currency resulting in pressure on margins.
- Concern for the environment has skyrocketed regulations to protect and improve air
quality. Reducing emissions and the development of green vehicles have become a priority.
This is a challenge to the heavy equipment industry because manufacturers must stay
competitive and ensure that their equipment meets these regulations to help them stay in
business.
- The increasing demand for rental construction equipment decreases the demand for
the new construction equipment market.
- Unforeseen business losses.
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 value creation for its
stakeholders. The impact of the key risks, which are potentially significant are listed
below has been identified through a formal process by the management. Your company
recognizes that every business has its inherent risks and the company has been taking
proactive approach to identify and mitigate them on a continuous basis.
- INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
Your Company has in place adequate internal control system and procedures
commensurate with its size and nature of operations. Internal control systems comprising
of policies and procedures are designed to ensure sound management of your Companys
operations, provide a reasonable assurance over reliability in financial reporting, ensure
appropriate authorization of transactions, safeguarding the assets of the Company and
prevent misuse/ losses and legal compliances.
The internal control system includes a well-defined delegation of authority and a
comprehensive Management Information System coupled with quarterly reviews of operational
and financial performance, a well-structured budgeting process with regular monitoring of
expenses and Internal audit.
The Company has a proper and adequate system of internal controls, commensurate with
its size and business operations to ensure the following:
- Timely and accurate financial reporting in accordance with applicable accounting
standards;
- Optimum utilization and safety of assets;
- Compliance with applicable laws, regulations, listing applications and management
policies; and
- An effective management information system and reviews of other systems. Systems and
procedures are periodically reviewed to keep pace with the growing size and complexity of
your Companys operations.
- BUSINESS HIGHLIGHTS :
Turnover:
Crown Lifters Limited has turnover of Rs. 19,27,76,431 in 2022-23 as against Rs.
19,92,40,713 of the previous year.
Employee Benefit Expenses:
Employees emolument (other than managerial remuneration) is Rs. 2,70,88,317 during
the F.Y 2022-23 as against Rs. 2,29,56,209 during the previous year.
Managerial Remuneration:
The Managerial Remuneration for the F.Y. 2022-23 is Rs. 78,00,000 as against Rs.
42,30,000 during the previous year
Administrative, Selling and Other Expenses:
Major components of administrative and other expenses includes Bank Charges &
Commission, Sales Promotion & Presentation, Brokerage & Commission, Site Exp.,
Legal and Professional Tax, Rent, listing fees, insurance premium, Sundry Exp., Bad Debts
written off, etc. Administrative and Selling expenses for the year amounted to Rs.
1,05,80,095 during the F.Y 2022-23 as against Rs. 1,06,25,128 during the previous year.
Finance Costs:
Finance Costs/bank charges during the year come to Rs. 18,57,411 during the F.Y
2022- 23 as against Rs. 1,05,80,187 during the previous year.
Depreciation:
Depreciation charge for the current year came to Rs. 2,64,16,769 during the F.Y
2022- 23 as against Rs. 26,958,239 of the previous year.
Provision for Tax:
The Company has made provision towards current tax for the financial year 2022-23
amounting to 28,22,000 as against Rs. 16,90,081 of the previous year. There are no prior
period tax adjustments.
Profit/Loss after Tax:
The company has made profit after tax of Rs. 3,89,66,586 as against the loss
after tax during previous year of Rs. 1,60,27,626. The Directors are hopeful for the
better performance in the future.
Earnings per Share:
Basic and diluted earnings per share for the current year worked out to Rs. 3.74 as
against Rs. (1.54) during the previous year.
FINANCIAL CONDITION:
Non Current Liabilities:
The Companys Non Current Liabilities aggregating to Rs. 11,05,54,488 includes
Trade Payables of Rs. 2,81,27,848 and deferred tax liabilities of Rs. 2,36,41,900 as at 31st
March 2023 as against Non Current Liabilities of previous year of Rs. 3,49,27,961 which
includes Trade Payables of Rs. 84,70,977 and deferred tax liabilities 3,47,42,979 as at 31st
March 2022.
Current Liabilities:
Companys Current Liabilities includes Borrowings of Rs. 3,31,90,371 Trade payables
of Rs. 2,81,27,848 Other Current Liabilities of Rs. 59,53,263, Provisions of Rs. 48,61,502
and Current Tax liabilities of Rs. 20,98,729 aggregating to Rs. 7,42,31,713 as at 31st
March 2023 against Rs. 3,15,36,647 which includes Trade payables of Rs. 84,70,977,
Other Current Liabilities of Rs. 1,30,06,157, Provisions of Rs. 42,87,298 and Current
Tax liabilities of Rs. 57,72,215 of the previous year.
Fixed Assets:
Net block of the fixed assets at the end of the year is Rs. 20,39,17,130 as against
Rs. 13,45,27,399 in the previous year.
Non Current Assets:
During the year, the company has non-current assets (excluding fixed assets) of Rs.
38,94,481 including Rs. 35,92,431 as trade receivables and Rs. 3,02,050 as Loans and
Advances as against Rs. 70,66,943 of the previous year including Rs. 67,14,893 as trade
receivables and 3,52,050 as loans and advances.
Current Assets:
During the year, the company has current assets of Rs. 18,82,80,580 as against Rs.
9,92,91,670 of the previous year.
- SEGMENT WISE PERFORMANCE :
The company is operating as one of the largest and most preferred supplier of
construction equipments servicing all industrial sectors by offering competitive
technological edge. Your company has adopted various marketing strategies for sustained
growth including increase in number of clients / customers to reduce the dependency on any
single client / customer.
- AN INDUSTRY OVERVIEW :
The management is confident of improvement in the companys working in the near
future with fast growth.
The scenario of the infrastructure industry and economy in general is buoyant even
after the industry is exposed to competition with policy of the government. The process of
development, increasing thrust of the government on the infrastructure industry, the
future of the industry in which our company is working i.e. renting of cranes appears
quite bright.
- SWOT ANALYSIS OF THE COMPANY :
Strength:
- Management depth and ability to manage client/customer relationships.
- Enhanced presence in the market through clientele basis.
Opportunities and Threats:
The renting of Construction Equipments industry is subject to tough competition
amongst various segments within and outside the country. The threat of competition is
relatively less in the area in which your company is operating. The increase in demand
from business sector will provide opportunity to your company to increase more market
share. Moreover, suppliers of construction Equipments industry witnessing changes in
business dynamics.
- RISKS AND CONCERNS :
Your company is mainly focusing on manpower and the intelligence. Apart from
the risk on account of governmental policies and regulatory changes, business of the
company are exposed to certain operating business risks, which is mitigated by regular
monitoring and corrective actions. The company has taken necessary measures to safe guard
its assets and interest etc.
- HUMAN RESOURCE MANAGEMENT :
The Company believes that human resource is the most important assets of the
organization. It is not shown in the corporate balance sheet, but influences appreciably
the growth, progress, profits and the shareholders values. During the year your company
continued its efforts aimed at improving the HR policies and processes to enhance its
performance. The vision and mission of the company is to create culture and value system
and behavioral skills to insure achievement of its short and long term objectives.
CAUTIONARY STATEMENT:
Statement made in the Management Discussion and Analysis Report describing the
companys objectives, projections, estimates, expectations may be "Forward-looking
statements" within the meaning of applicable securities laws and regulations. Actual
results could differ 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 markets in which the company operates changes in the
government regulations, tax laws & other statutes and other incidental factors.
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