Crayons Advertising Ltd Management Discussions

(a) Business Overview & Discussion On Financial Performance With Respect To Operational Performance

The company treats marketing and advertising fundamentals to business strategy and revenue management. It provides outdoor, print, ground events/activations and digital marketing.

The offering of outdoor media includes advertising on hoardings, billboards on roads, highways, streets, lamp post boards, mobile sign trucks, kiosks, traffic booths, etc. The company helps its clients run focused campaign in consumer-populated areas. The company is focused on cost-effective and impactful solutions tailor- made as per their client needs so that their clients get the necessary reach and frequency to further propel their business.

The company is also engaged in events management which includes planning, organizing, and managing events. Crayons Advertising Limited manages commercial events, corporate events, cultural events, and also small brand promotion events for their clients.

They are also engaged in branding and designing through print and online & digital media and also design various publicity materials for their clients. The company has in-house Creative and design capabilities for the same.

The company has always believed in the best quality in its services. The company is dedicated to the quality of its services and adheres to quality standards as prescribed by its clients. The company strives for complete transparency and satisfaction of its clients with an unwavering thrust and focus on professional excellence and integrity.

It is focused on increasing the number of client relationships and having more relationship managers to service these relationships. Its strategy is to increase the number of client relationships and then leverage those client relationships into offering a whole suite of financial products.

The financial statements have been prepared in accordance with the requirement of the Companies Act, 2013 and applicable Accounting Standards issued by the Institute of Chartered Accountant of India.

Particulars	FY 2023-24	FY 2022-23	Change %
Revenue from contracts with customers	20,154.90	27,568.45	-26.89%
Cost of Services	15,145.63	23,017.56	-34.20%
Employee benefits expenses	1,404.96	1,149.46	22.23%
Other expenses	1,547.25	1,506.88	2.68%
EBITDA	2,057.06	1,894.55	8.58%
% EBITDA Margin	10.21	6.87	48.52%
Depreciation and amortisation expenses	138.82	110.49	25.64%
Finance costs	91.86	79.06	16.19%
Other income (Excl. Liabilities written back, if any)	450.07	546.46	-17.64%
Profit Before Tax and Share of loss of an associate	2,276.45	2,251.46	1.11%
Share of loss of an associate	-	-	-
Profit Before Tax (PBT)	2,276.45	2,251.46	1.11%
(Less): Total tax	586.16	592.19	-1.02%
(Less): Non-controlling interest	-	-	-
Profit After Tax (PAT) net of non-controlling interest	1,690.29	1,659.27	1.87%
% Profit Margin	8.39	6.02	39.34%
Normalized PAT (net of non-controlling interest)	1,690.29	1,659.27	1.87%
% Normalized PAT Margin	8.39	6.02	39.34%

(b) Opportunities and Threats:

In todays dynamic business environment which is filled with rapid change of technology, government policies, mounting competitive threats and constant new entrants into market, makes it challenging to sustain and handle the intricacies and provide competitive solutions to its clients. We face competition from domestic and international Companies. We foresee this competition to continue to grow as the demand for advertising and monetizing solutions increases. Further we believe that our competition also depends on several factors which include currency fluctuations, changing business framework, information technology policies, difficult to retain skilled staff etc. We currently operate globally from our offices in four countries. We believe we can extend our marketplace platform through international expansion to help automate and improve advertising for buyers and sellers globally. We intend to grow our market share in our existing international markets. We also plan to expand our business operations into

(c) Outlook:

Our technology is a key factor affecting our performance. We plan to continue to make substantial investments in our technology and research and development to enhance the effectiveness of our solution. We sell our solution to advertisers and publishers through our global direct sales team, which operates from our locations in India, US, UK and UAE. This team leverages its market knowledge and expertise to demonstrate the benefits to advertisers and publishers of advertising automation and our solution. We are focused on managing our brand and increasing market awareness to do so, we often present at global industry conferences/exhibitions, create custom events and invest in public relations.

(d) Risks and concerns:

The digital advertising market is relatively new, and our solution may not achieve or sustain high levels of demand and market acceptance. While display advertising has been used successfully for many years, marketing via new digital advertising channels, such as mobile and social media and digital video advertising, is not as well established. The future growth of our business could be constrained by the level of acceptance and expansion of emerging digital advertising channels, as well as the continued use and growth of existing channels, such as digital display advertising, in which our capabilities are more established. It is difficult to predict the future growth rate and size of the digital advertising solutions market or the entry of competitive solutions. Any expansion of the market for digital advertising solutions depends on a number of factors, including the growth of the digital advertising market, the growth of social, mobile and video as advertising channels and the cost, performance and perceived value associated with digital advertising solutions. If demand for digital display advertising and adoption of automation does not continue to grow, or if digital advertising solutions or advertising automation do not achieve widespread adoption, or there is a reduction in demand for digital advertising caused by weakening economic conditions, decreases in corporate spending or otherwise, our competitive position will be weakened, and our revenue and results of operations could be harmed.

(e) Internal control systems and their adequacy:

Crayons has well-established Internal Control Systems, commensurate with the size, scale and nature of its operations. Stringent controls and processes are in place to monitor and control our operations across the markets we operate in. These controls have been designed to provide a reasonable assurance with regard to maintaining of proper accounting controls for ensuring reliability of financial reporting, monitoring of operations, protecting assets from unauthorised use or losses, and compliances with applicable regulations. For FY 2025, the Board has also appointed M/s Mahadev Bhansali & Co., the Chartered Accountants as Internal Auditors to maintain its independence, the Internal Auditor reports to the Audit Committee chaired by an Independent Director of the Board. Internal Audit team conducts half yearly audits, which include review of operating effectiveness of internal controls. Based on the report of Internal Auditor, reviewed quarterly by the Audit Committee, process owners undertake corrective action in their respective areas and thereby strengthen the controls.

The Risk Management Committee oversees the overall process of risk management throughout the organisation. Business Heads and Support Function Heads are also responsible for establishing effective internal controls within their respective functions. The Companys business units and corporate functions address risks through an institutionalized approach aligned to the Companys objectives.

(f) Human Resources Review:

Crayons is committed to nurturing an environment that promotes inclusive growth and drives thought leadership. With this objective in place, we have drawn a comprehensive human resource strategy which

addresses all key aspects of human resource development including

(i) adoption of fair business practices;

(ii) promoting workforce diversity, evolution of performance-based compensation packages to attract and retain the talent;

(iii) rewards & recognition and several best-in-class employee initiatives; and

(iv) delivery of training programs to improve technical, functional and managerial competence.

As at March 31,2024, our total employee count on a consolidated basis was 184, of the total, 72.83% were men and 27.17% were women employees.

Crayons strives to provide a workplace environment that is safe, hygienic, humane and upholds the dignity of the employees. The Company imparted training to all the employees on Prevention of Sexual Harassment at workplace. Psychological trainings were conducted to help employees develop mental fitness through Mind Fitness and Stress Management, particularly during the pandemic times.

(g) Compliance:

Crayons observes compliance practices of the highest standard. The Compliance team closely monitors all the compliances with special attention to those relevant to the Company. The Company follows all prudential norms laid down and submits all mandatory returns and statements in time. The Company has put in place a robust framework of internal controls that include precise delegation of authority and Standard Operating Processes which are available in all business segments and functions. The Company follows a practice of monitoring various internal control functions in-house as well as through external auditors whenever required or mandated. The Company also reviews risk management processes on a regular basis and documents the results.

(h) Details of significant changes in key financial ratios:

Key Ratios	As of March 31, 2024	As of March 31, 2023
Return on Net Worth (%)*	0.16	0.31
Return on Capital Employed (%)*	0.69	0.92
Total Debt/Equity	0.14	0.18
Interest Coverage Ratio	11.33	29.48
Current Ratio	2.15	1.46
Diluted Earnings per Share (Rs.)	7.21	9.22

Detail of Net-Worth of the company

Particulars	As on 31.03.2024	As on 31.03.2023
Net Worth	10,396.23	5,383.22

(i) Disclosure of Accounting Treatment:

Company has adhered all Accounting Policies applicable to it as per the Securities Laws and applicable provisions of Companies Act, 2013 and Rule made thereunder.

(j) Cautionary Statement:

Statements in the Management Discussion & Analysis Report describing the Companys expectations, opinion, and predictions may please be considered as "forward looking statements" only. Actual results could differ from those expressed or implied. Companys operations should be viewed in light of changes in market conditions, prices of raw materials, economic developments in the Country and such other factors.

	For and on behalf of the Board of Directors
	Crayons Advertising Limited
	Sd/-
	(Kunal Lalani)
	Managing Director and Chairman
	DIN:00002756
Place: New Delhi
Date: 05.09.2024