Kabra Extrusion Technik Ltd Management Discussions.
1. INDUSTRY STRUCTURE AND DEVELOPMENTS:
Kabra Extrustiontechnik Ltd. (KET) is the flagship company of Kolsite group and one of the largest players in the plastic extrusion machinery known for its innovative offerings. KET specializes in delivering high performance extrusion solutions for manufacturing pipes and films. It has two manufacturing locations in Daman.
There is a rising trend in the plastics industry for cost savings and process simplification, which is being met by automation and industry 4.0. The Biodegradable plastics industry is gaining popularity and is one of the most evolving businesses in recent times.
2. BUSINESS OVERVIEW AND OUTLOOK:
The Company continued its focus on marketing activities and strengthening its agent network by participating in various trade fairs and exhibitions. It has made significant inroads in new markets. During the Financial Year 2018-19, the Company has participated in several national and international exhibitions, viz. Plast-print-pack-Ethiopia, Expo PLAST-Peru, Argenplast-Argentina, Kenya Plast, IPLEX-Hyderabad, Indplast-Kolkata, Propack, West Africa, Iran Plas, Plastic & Rubber-Indonesia, Plast Eurasia-Turkey, ARAB Plast-Dubai to show-case its product portfolio and technology to strengthen its geographical base as well as clientele.
The business will continue expanding its global footprint with high focus on market penetration, enhance customer delight, and sustain investments in technology to support growth and further strengthen engagement programmes across platforms. The Company is in the process of identifying new avenues of growth and effective utilization of its existing resources. The Company continues to focus on innovations and is also exploring in new opportunities in e-commerce for its spares business.
3. KETs COMPETITIVE POSITIONING:
KETs competitive positioning lies in its understanding of the indigenous markets with strong client relationship, coupled with continuous efforts towards enhancing its technological expertise. Being a market leader in the extrusion market over five decades of promoter experience in the industry, it has a strong brand loyalty and customer base.
The Company received the prestigious The Economic Times Best Plastics and Polymers Brand 2019 Award for 2nd consecutive year for providing a fantastic combination of economics, excellence, engineering and environment friendly solutions. The Economic Times recognises, honours and celebrates the Best Plastics & Polymers Brands, which are not only setting benchmarks in the domestic markets but are also shining in the global arena.
The Technological collaborations forged by Company over a period of time have helped it to capture the market in India and expand its geographical base to more than 91 countries globally.
Your Company continues to derive sustainable benefit from the strong foundation and long tradition of R&D. Our R&D function actively searches for ways to translate the trends in consumer preference into new technologies for incorporation into future products.
4. SEGMENT-WISE PERFORMANCE:
Your Company is operating only in one segment i.e. Plastic Extrusion Machinery and Allied Equipment.
5. RISKS AND CONCERNS:
Our business operations may fluctuate due to a variety of factors such as Technology obsolescence, market conditions, growing competition, including imports and unorganized sector that may have adverse effect on Companys business and its margin in future. A risk identification and mitigation framework has been adopted by the Company. Major risks have been identified by the businesses and functions and the company will adopt various measures at different points in time to counter these risks successfully on a continuing basis. The Company is geared up to provide a technological solution to face the upcoming challenges to process reusable, recyclable or compostable Plastic as well as Lead-Free stabilizers by upgrading the existing set up of its customers.
As a mitigation measure, the Company proposes to diversify its business into a new segment of Energy Storage Systems (ESS). To reduce the dependency on single segment business, the Company will leverage its ability to adapt new technologies to manufacture advance Lithium-ion Battery Packs equipped with Battery Management Systems (BMS) under the brand name "BATTRIXX" to power the growth of Indias transition to green energy storage and electric transportation. Battrixx is positioned to provide higher range and longer battery life to the electrical vehicles segment and safe and reliable energy storage system with its customized wide range of advanced battery modules, packs and BMS. Battrixx technology is commited to offer light weight, high efficiency, long life, maintenance free, high power density with low charging time, low energy cost, smaller carbon footprint and wide temperature range of lithium-ion battery packs with BMS compared to conventional lead acid batteries.
The Company has acquired land at MIDC at Chakan, Pune to set up complete state of the art manufacturing facility for Module and battery packs and has applied for regulatory clearances and eligible incentives announced by the State and Central Government.
6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Companys internal audit system is geared towards ensuring adequate internal controls commensurate with the size complexity and needs of the business, with the objective of efficient conduct of operations through adherence to the Companys policies, identifying areas of improvement, evaluating the reliability of financial statements, ensuring compliance with applicable laws and regulations and safeguarding of assets from unauthorized use.
The Company has appointed a firm of Chartered Accountants as Internal Auditors in compliance of Section 138 of the Companies Act, 2013 to conduct internal audit of functions and activities of the Company. They report on quarterly basis to the Company on their findings. Their Report is reviewed by the Audit Committee Members and Statutory Auditors.
7. FINANCIAL & OPERATIONAL PERFORMANCE:
|Sr. No.||Particulars||FY 2018-19||FY 2017-18|
|(र in Lakhs)||(र in Lakhs)|
|1.||Income from Operations (Net of Excise)||24,514.19||27,172.31|
|2.||Other Income||1,993.59 *||257.01|
|3.||Net Profit after Finance Cost, Depreciation, Tax and Deferred Tax||2,447.21||2,011.77|
* mainly includes gain on dis-investments of stake held in BWPTI Holdings Inc., USA (erstwhile Gloucester Engineering Co. Inc. and interest on outstanding insurance claim)
No financial defaults of whatsoever nature were reported during the year under review.
8. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES /INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED:
Industrial relations during the year were cordial and peaceful without any disruption of manufacturing activities. Programmes aiming at leadership development and upgradation with advancing technology on all fronts were conducted during the year. Manpower as on March 31, 2019 including Workers, Staff and Executives was 476.
9. SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS COMPARED TO PREVIOUS YEAR:
|Sr. No.||Particulars||Change in %||Explanation(s)|
|3.||Interest Coverage Ratio||(60.88%)||Higher utilization of working capital on account of higher inventory|
|5.||Debt Equity Ratio||-||No long term Debt|
|6.||Operating Profit Margin (%)||(31.30)%||Lower turnover|
|7.||Net Profit Margin (%)||59.95%||Higher non-operating income on account of sale of investment|
10. Change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof: Increase by 5.54% on account of gain on dis-investments of stake held in BWPTI Holdings Inc., USA
11. CAUTIONARY STATEMENT:
Actual performance may differ from projections made, as the Companys operations are subject to various economic conditions, government regulations and other incidental factors.
|For and on behalf of the Board|
|Place : Mumbai|
|Date : May 28, 2019||S.V. Kabra|
|Chairman & Managing Director|