Kirloskar Oil Engines Ltd Management Discussions

Global economy¹

The global economy has remained resilient, in spite of widespread uncertainty that prevailed during the year 2023 due to prolonged geopolitical conflicts. With Central Banks across the world implementing subsequent rate hikes, there has been a modest decline in inflation. This, coupled with lower commodity prices, has contributed to stronger-than-anticipated global economic growth.

The US, Europe and other emerging economies have witnessed gradual growth in economy in the year 2023. However, geopolitical conflicts continued to disrupt supply chains, adversely impacting global trade and commerce. The economy of China also continued to show signs of stress during the course of 2023, which may have negative ramifications for the global economy.

However, many emerging economies such as India, Vietnam and Mexico experienced robust growth, along with increased capital inflows from foreign institutional investors. For the Middle East and Africa, while economic growth is expected to pick up in 2024, there are still some foreign exchange concerns. However, these ongoing structural changes are expected to support long-term growth.

Figure 1.1. Global Inflation Falling as Output Grows

Outlook

The global economic outlook remains cautiously optimistic with the possibility of inflationary pressures further receding and the implementation of supportive monetary policies by Central Banks. In the years ahead, a strong labour force, a surge in manufacturing activity and increasing household incomes are expected to drive the growth of the global economy. The emerging market and developing economies (EMDEs) are projected to witness a growth rate of 4.1% in Current Year 2024. Global headline inflation is expected to remain anchored, declining from an estimated 6.8% in 2023 (the annual average) to 5.9% in 2024 and 4.5% in 2025.

Indian economy²

During the year under review, India sustained its position as one of the fastest-growing major economies. Robust fundamentals, such as increasing capex of both the stock exchanges, deleveraged balance sheets for most leading businesses, fiscal consolidation, manageable external balance and substantial foreign exchange reserves have contributed to this growth. Further, India, being a massive consumption-driven economy, was buoyed by growing domestic demand.

According to the National Statistical Office, India has registered a real GDP growth of over 8.2% during Financial Year 2024. Indias per capita disposable income has been increasing over the years and is expected to be H 2.14 lakh in 2023-24,³ driven by overall economic growth. Real GDP growth was at a six-quarter high in Q3 Financial Year 2024, roaring at 8.4%, powered by strong momentum witnessed from robust indirect tax collection and lower subsidies. Another fact that has contributed to economic growth is that inflation has remained within the RBIs target range of 2-6%. Besides, easing inflation, a robust banking sector and the effective calibration of monetary policies have acted as galvanising forces for improving near-term prospects.⁴ Further, the Government of India has helped establish a conducive investment environment in the country. FDI inflow during the year totalled USD 17.96 million, substantially benefitting various sectors of the economy. In Financial Year 2024, the gross GST collected stood at H 20.18 lakh Crore⁵. The construction and manufacturing sectors in India have witnessed expansion, with each of these sectors clocking growth rates of 9.5% and 11.6%, respectively, in the third quarter of Financial Year 2024.⁶

Outlook

In the years ahead, fortifying the financial system, driving responsible innovation and enabling inclusive growth will continue to be the governments key priorities. Additionally, the Government of India will remain focused on prioritising capital expenditure, infrastructure improvements, sustainable livelihood practices and the promotion of renewable energy. Further, with the China Plus One strategy gaining momentum, businesses from across the globe are considering India as a reliable manufacturing haven; this is expected to bode well for the growth of the Indian economy.

Additionally, the Governments vision of becoming a ‘Viksit Bharat will facilitate the development of the infrastructure sector in India. Factors such as sustained political stability, growing credit demand, low debt levels and increasing capacity utilisation across various sectors of the economy, are expected to augur well for economic growth.

The Indian Meteorological Department (IMD) forecasts above-normal rain during the June to September monsoon, which is expected to boost the prospects of a bountiful agricultural harvest. This, in turn, is likely to ease inflationary pressures and bolster economic growth.

Company Overview

Kirloskar Oil Engines Limited (‘KOEL/ ‘the Company) is the flagship Company of the Kirloskar Group, an esteemed conglomerate with a strong legacy in engineering and manufacturing. KOEL manufactures and markets a diverse range of products, including internal combustion engines, gensets, industrial solutions, pump sets, farm mechanisation equipment and more. The Companys products find a wide application across different sectors, spanning agriculture, construction, hotels and healthcare, infrastructure, IT, defence, oil and gas, marine, real estate and railways.

Established in 1946, the Company offers power solutions, including designing, engineering and commissioning. With an extensive network of OEMs, distributors and service dealers, it provides timely and effective services to its global clientele. As a customer-centric organisation, the Company consistently prioritises providing innovative, customised solutions to meet diverse client needs. The Company leverages its robust R&D capabilities to indigenously develop advanced products that enhance operational efficiency and productivity.

As a responsible corporate entity, the Company has undertaken a suite of programmes promote energy efficiency, reduce emissions, safeguard environment and empower communities.

Further, the Company focuses on enabling sustainable development and has established advanced manufacturing units in Kolhapur,

Pune, Nashik and Rajkot, which adhere to applicable environmental regulations. The Company is continuing on its 2X3Y journey, aiming to double its revenue (Financial Year 22 base year) in three years.

The Company also intends to substantially expand its international is presence. Kirloskar Americas Corporation, a subsidiary of KOEL, . has acquired 51% stake in Engines LPG LLC dba Wildcat Power Gen. Besides this, the Company has appointed a GOEM, to enhance its business prospects in the Middle East.

B2B

Business Overview a KOEL operates in the B2B business vertical, which includes businesses related to power and energy solutions including its fuel- agnostic internal combustion engine platforms. The B2B business comprises of the Powergen, Industrial, Distribution and Aftermarket businesses which operate both domestically and globally. The Company has cutting-edge research and engineering facilities that are equipped with advanced software tools to improve efficiency and drive productivity. Further, it has in place an efficient emission testing facility to verify that its products are both environment- friendly and emission-compliant.

- KOEL is the largest genset manufacturer in India and one of the leading manufacturers globally. The Company has expertise in building high-quality fuel-agnostic engines as well as power generation sets to meet power requirements. These fuel-agnostic gensets can run on Petrol, Diesel, Natural Gas, Ethanol, Methanol and Dual Fuel (diesel and gas) catering to various industry segments. The Company has the largest CPCBIV+ certified genset a portfolio in the Indian Industry. It was the first company to get the entire range of CPCBIV+ certified. It has also the highest market share in the country.

The industrial business of KOEL has a leading market position, with its products being widely used in various industries including construction, defence, marine, railways, agri, mining and fluid handling. The industrial business provides products for engines ranging from 10hp to 11,000hp. The Companys industrial engines are specialised, either water-cooled or air-cooled. Its focus extends beyond manufacturing innovative products to conserving the environment. All engines manufactured by the Company are emission-compliant and meet Bharat Stage IV and Bharat Stage V emission norms.

The Distribution and Aftermarket business of KOEL emphasises improving customer services, serving clients from varied sectors and expanding its market share. The Distribution and Aftermarket business is further divided into two channels, namely, the Service Channel and Retail Channel. The Service Channel intends to offer high-quality assistance to clients in terms of technical support as well as the requirement of Spare Parts and Products throughout the life cycle of the Customer Asset and the Retail Channel specialises in the distribution of spare parts, oil and allied products including electric motors.

KOELs Service Delivery Process for its customers is digitally enabled with features like enhanced Electronic Field Service Reports, Customer Self Support application along with digital monitoring and action oriented IoT solution known as Kirloskar Remote Monitoring (KRM). In line with our commitment to quick service response, we have deployed a multi-layered Rapid Response Team which focuses on quick and first-time-right solution deployment for all its products including the recently launched CPCB IV+ Gensets and CEV BS IV Industrial Electronic engines along with its advanced emission and after treatment systems. Proactive service through remote monitoring and customer support packages are at the core of our Service Delivery.

Key highlights of the domestic industry

f As of Financial Year 2024, the power generation capacity of the domestic business stands at approximately 4,26,132 MW, with rural areas currently having 20.6 hours and urban areas 23.8 hours of electricity availability. The increase in power consumption has resulted in a greater demand for gensets, as indicated by the power generation markets expansion from H 1,655 Crore in Financial Year 2023 to H 1,905 Crore in Financial Year 2024, representing a growth rate of 15%. This expansion can be attributed to an increasing power deficit and increased commercial and industrial activity.

f Both the manufacturing and construction sectors registered strong growth in Financial Year 2024, with construction increasing by 9.5% and manufacturing by 11.6% . The growth in these factors helped drive the demand for industrial engines along with the industrial engines sector in India which registered a growth of 18% in Financial Year 2024. The Company also won new customers in the Industrial segment during the year.

Key highlights of the International industry

f In Current Year 2023, advanced economies recorded a decline in electricity consumption, reducing the global power demand. Meanwhile, countries in Southeast Asia, including India, China and others, exhibited strong growth in electricity demand. Looking ahead to Current Year 2024 and beyond, global electricity demand is projected to grow over the next three years; also, the power generation market is expected to expand by 7.4% through Current Year 2026⁹.

f The Middle East, North Africa and Asia Pacific regions are the primary growth markets for industrial engines globally. Increasing applications of industrial engines in sectors such as agriculture, construction, power production, mining, railways and transportation, are driving the growth of the global market for industrial engines. Further, the global industrial engine market is predicted to expand at a CAGR of 6.7% by Current Year 2028¹⁰.

Power Generation Business

The power generation market in India is witnessing a surge in demand, fuelled by the expansion of manufacturing, real estate and infrastructure sectors. Additionally, the advent of 5G telecom with its high-power demands, the growth of data centres and expanding healthcare facilities are all contributing to the need for reliable backup power solutions. Recognising this increasing demand, in Financial Year 2024, KOEL introduced CPCB IV+ compliant gensets that promise high performance, fuel efficiency and environmental sustainability while also adhering to the Central Pollution Control Board (CPCB) Regulations. For the coming year, the Company will continue to focus on manufacturing these products while expanding its services to become an end-to-end turnkey solution provider for backup power, especially in the high horse power range. The launch of the Optiprime series gensets, leveraging patented hybrid technology, aims to decrease customer cost of ownership, enhance efficiency and minimise emissions.

The Company has also appointed its first international GOEM for the Middle East and North Africa Region. In the USA, it has acquired Engines LPG LLC through a wholly-owned subsidiary, Kirloskar Americas Corporation. These developments demonstrate the Companys dedication to expanding its global footprint.

E 1,905

Revenue generated from power generation in Financial Year 2024

Industrial business

The industrial business of KOEL reported a sale of H 1008 Crore in Financial Year 2024. The industrial segment consists of construction, agriculture, fluid handling and firefighting, defence and nuclear, marine, mining and railways. The strong growth in the industrial business has been due to factors such as growth in the construction and railways sectors in India. In the years ahead, the growth of manufacturing, infrastructure and housing sectors are expected to add impetus to the industrial business. The firefighting and dewatering products are expected to continue to drive growth in the international markets.

18%

Growth Y-o-Y

Make in India

The Make in India initiative, launched by the Government of India, aims to transform the country into a global manufacturing powerhouse. This initiative not only boosts manufacturing activities but also drives demand for gensets and industrial engines, presenting significant growth opportunities for companies like KOEL. Although ‘Make in India has been a deliberate move by the Government of India to strengthen indigenous manufacturing, there has been a notable rise in the investments made by global companies in Indian Manufacturing facilities. Taking advantage of this opportunity, KOEL has plans for expansion to capitalise on the prospects of this sector, ultimately boosting revenue and profitability in its B2B segment.

Kirloskar Oil Engines Limited (KOEL) secured an order on January 17th, 2024, from the Nuclear Power Corporation of India Limited (NPCIL). This order entails supplying, installing, commissioning and handing over 10 emergency diesel generators, each with a capacity of 6.3 MWe, for the fifth and sixth units of the Kudankulam project. The total value of the order stands at H 768 Crore, and the timeframe for the project execution is 68 months.

Distribution and Aftermarket

In Financial Year 2024 the revenue generated by Distribution and Aftermarket business of KOEL has beenH 749 Crore. The Distribution and Aftermarket business of the Company can be sub-divided into-

f Service Channel - Supporting the Gensets and Engines supplied by the Product Business Units

f Retail Channel - Traded products such as spare parts, oil and allied products such as Electric Motors

Customer support and service channel

The Service Channel, under the Kirloskar CARE brand of KOEL, has generated a revenue of H 596 Crore in Financial Year 2024, representing a growth of 19%. Kirloskar CARE has a network of (450+) service touchpoints across the country. The brand focuses on providing efficient after-sales services for the Powergen and Industrial business segments of KOEL. The Company stays abreast of emerging market trends and structures its service channels to attain long-term customer retention.

Outlook

With the introduction of electronic products across the Powergen and Industrial portfolio, Kirloskar Care will be focusing on upskilling the service capabilities of the channel partners while improving response & repair times.

Retail channel

KOEL has a retail distribution channel, which was originally named Tractor Parts and Oil (TPO). This Channel generated a revenue of H 153 Crore in Financial Year 2024, registering a growth of 24%. As of Financial Year 2024, the Company has a network in both rural and urban regions. During the reporting year, it has also undertaken initiatives to bolster its retail channel with new products.

Outlook

The Companys retail distribution channel is poised for expansion, focusing on a wider product portfolio catering to both urban and rural needs. This will be achieved by introducing complementary products through this channel as well as by establishing structured channels for each product line, ensuring efficient distribution and improved reach across all customer segments. It also plans to improve engagement with the retail channel through loyalty programmes.

International Business

As part of the 2X3Y strategy, international business is a significant priority. To achieve this, the Company is actively optimising operations in international markets, leveraging our extensive experience as the dominant power generation manufacturer in the Indian market. As a crucial aspect of our global power generation strategy, we have been diligently working to establish exclusive Kirloskar Genset Original Equipment Manufacturers (GOEMs) in key markets worldwide. These GOEMs will play a pivotal role in manufacturing, marketing, and servicing our gensets within their respective regions. During the year, the Company successfully identified and appointed GOEMs in two key regions: the Americas and the Middle East. In a significant move, our subsidiary, Kirloskar Americas Corporation (KAC), made a strategic investment by acquiring a 51% stake in Engines LPG LLC, dba Wildcat Power Gen, in the US market. Engines LPG LLC, dba Wildcat Power Gen specialises in the design, manufacturing, sale, and service of generators powered by gas, diesel, and other environmentally friendly fuel/power solutions under the brand name Wildcat Power Gen, catering to various applications.

Additionally, we have appointed Myspan Power Solutions as an exclusive GOEM for the GCC countries. This strategic move allows us to manufacture gensets closer to the customer, facilitating better customisations and delivering superior products to our customers. The Companys revenue in Financial Year 2024 from International Business was around H 520 Crore as against H 393 Crore registering a growth of over 32%.

Key opportunities

f India is undergoing rapid industrialisation, which has led to an increase in the demand for gensets providing uninterrupted, high-quality power, and this is expected to continue to increase due to their extensive use in infrastructure and construction.

f The need for gensets is also expected to grow with the rise in per capita income in India which creates a bigger demand for power.

Key strengths

f KOELs power solutions, gensets, and industrial engines are renowned for their engineering excellence. The Company has an enduring legacy of providing high-quality standards following sustainable practices to ensure compliance with environmental regulations. This provides the Company with a distinct competitive edge among its peers.

f KOELs extensive R&D capabilities help bring technological leadership in engine research, design and development. With state-of-the-art facilities and equipment, KOEL provides customised product solutions to its customer base and sustains its position as an industry leader.

f The Company benefits from digitally connected state-of-the-art manufacturing facilities with a highly localised supply chain (over 90%). This allows for greater efficiency, flexibility, and responsiveness to customer needs.

Threats

f With a diverse range of products across multiple sectors, KOEL faces stiff competition from other established players in their respective markets, both domestic and global. Intense competition could lead to pricing pressures, market share erosion and reduced profitability. f The Company is exposed to the risks of technological disruptions or the emergence of new, more efficient technologies that could render its existing products obsolete or less competitive.

f KOEL operates in various sectors, including agriculture, infrastructure and energy, which may be subject to frequent regulatory changes. Changes in environmental regulations, emission norms, or industry-specific regulations could impact the Companys operations and require significant investments to ensure compliance.

f With rapid digitalisation and increasing reliance on technology, KOEL may be vulnerable to cybersecurity threats, such as data breaches, hacking attempts, or system failures, which could compromise sensitive information or disrupt operations.

Risks

f As a manufacturing Company, KOEL relies on a stable supply chain for the procurement of its raw materials, components and more. Supply chain disruptions due to factors like geopolitical tensions, natural disasters, or supplier issues could impact its operations and productivity.

f Failure to effectively manage its environmental impact or to comply with environmental regulations could lead the Company to face legal implications, and reputational damage and incur additional costs.

B2C

Business Overview

KOEL operates in businesses of water management solutions under its B2C segment. The Companys portfolio of water management solutions includes pumps, pump sets, induction motors, small engines, column pipes and cable segments.

KOEL also caters to the Farm Mechanisation market under its B2C segment. Products such as tillers, weeders, etc. are designed to cater to the specific needs of the unorganised agricultural segment in India.

Domestic Business- Key highlights

Pump Industry

The pump industry in India is fragmented with around 300 organised players & over 600 unorganised players.

The organised pump market has a handful of large domestic and multinational companies, alongside several mid-sized companies.

The main manufacturing hubs for pumps are Coimbatore, Rajkot and Ahmedabad. These clusters contribute significantly to the production and development of pumps and pump technology.

Submersible pump sets are among the leading pump categories followed by open well submersible pump sets and electric Monoblock Pumps. Increased application of these pumps across various end-user sectors is driving industry growth.

Industrial applications account for approximately 37% of the total demand for pumps. Agriculture follows closely at around 31%. Domestic pumps, used in residential and commercial buildings, constitute 21% of the market.

Farm Mechanisation

Favourable government policies, raising farm incomes & private sector innovation contribute to driving the Farm mechanization sector in India.

The Farm Mechanisation sector is heavily dependent upon the adoption rate of mechanized farming in India. Currently, the rate of mechanization is less than in countries such as China & Brazil but is expected to be in long term 70-80% adoption in the long term.

Farm mechanisation in India holds the key to unlocking efficiency and ensuring sustainable agricultural growth. As KOEL continues to innovate and address the unique needs of Indian farmers, farm mechanization is expected to gain momentum in the long term.

International Business- Key highlights

Indias pump industry has a robust global presence, exporting pumps to nearly 70 countries. Key destinations include Saudi Arabia, Yemen, South Africa, Kenya, Uganda, Tanzania, Egypt, USA, Germany and Russia.

Adapting to varying regulations, customer preferences and customisations based on local requirements is crucial for sustained growth in these International markets.

Collaborating with local distributors & establishing strong networks with them is crucial for deeper international market penetration in these markets.

The current geo-political situation in the Middle East has impacted the shipment time and business model in a few countries.

Water management solutions (WMS)

The Company develops and manufactures pumps and diesel engines that are widely used across diverse industries such as industrial, domestic & agriculture sectors. Along with offering superior quality products, the Company has established a wide sales and service network to serve its growing customer base. The domestic and agricultural pump segments have witnessed strong growth in the Diesel and Electric pump segments.

In the electric pump segment, the Company is striving to establish organised distribution across all the states with a key focus on southern and northern markets. Deepening & Widening are the major initiatives that have given good results, as we continue to grow and capture market share.

In the small engine segment, we have identified OEM as one of the segments with a key opportunity. A focused approach to product, partner and service models has helped us improve our sales and increase market share in Financial Year 2024.

Our international business is doing well with the introduction of new products, the right order mix, and deepening & widening initiatives. We have also changed our business model to SKDs in a few selected countries to improve local content.

During the year under review, Optiqua Pipes and Electricals Private Limited amalgamated with La-Gajjar Machineries Private Limited.

Farm mechanisation solutions (FMS)

KOELs FMS segment focuses on providing cutting-edge solutions to enhance agricultural productivity. From advanced tillers and weeders to precision planting equipment, KOELs offerings empower farmers with efficient tools. By addressing the unique needs of Indian agriculture, KOEL contributes significantly to the mechanization drive, reducing labour-intensive tasks and promoting sustainable farming practices.

Key opportunities f The trend of urbanisation and industrialisation is creating opportunities for both industrial and domestic pumps, as well as diesel engines and induction motors.

f Within the electrical pumps segment, KOELs presence is currently limited to specific states in the North and East. However, vast geographical opportunities exist across all states, which WMS is actively pursuing.

f KOELs service network plays a crucial role in supporting farmers. This strong reach could help the team to reach deeper and wider markets with their innovative solutions & increased business.

Key strengths

KOEL provides a diverse range of products in its B2C segment, catering to customers across various sectors. This affords the Company a competitive edge in risk management by reducing dependence on any single product. Additionally, the Company has focused on enhancing its service presence and delivery standards, aiming to establish itself as an industry leader. These efforts have bolstered WMSs channel and customer confidence, resulting in increased sales and market share.

Threats

f Agriculture sector is subject to climate change, most noticeably uneven rains, which affects the consumption of pumps.

f Supply-chain inefficiencies could lead to harvest losses, inadequate storage facilities, etc, impacting farmers income and food security.

f Soil degradation, loss of fertile land, and declining soil health are threats to long-term sustainability.

Risks

f The Companys B2C segment serves underprivileged farmers, requiring robust operational planning and a prudent management strategy to mitigate risks associated with product commoditisation.

f Government initiatives promoting solar pump sets may impact sales of grid-powered pumps.

f Indian agricultural sector is dominated by small and marginal landholdings, covering approximately 85% of operational holding. The limited land-size often hinders use of modern farming machinery.

Supply chain

To ensure a steady supply of raw materials and finished products, the Company strives diligently to create a resilient supply chain, which is capable of handling growing consumer demand without any disruptions. Also, the Company employs the Internet of Things (IoT) and Artificial Intelligence (AI) to maintain the efficiency of its supply chain.

During the reported year, the Company in collaboration with a premier Indian business school offered an inclusive supplier growth programme. It helped nurture a growth mindset and service orientation within the manufacturing sector, equipping the Companys suppliers with fresh perspectives for managing their businesses.

The Companys focus on continuous improvement is evident in the expansion of its ‘Zero Defect Journey programme which engages key suppliers. This programme, along with KOELs existing partnerships with ‘made-to-print suppliers, underscores the Companys efforts to ensure effective supplier engagement in achieving the highest quality standards. Additionally, KOEL implements Six Sigma clusters for its suppliers, promoting a data-driven culture to streamline processes and reduce errors.

To comply with the new CPCB IV+ regulations, KOEL has onboarded new technology partners, ensuring its products meet stringent emission standards. The Company continues to undertake digitalisation efforts throughout its supply chain. Its emphasis on ‘data democracy with suppliers has facilitated a two-way communication portal. This portal streamlines various supply chain activities, including supplier code of conduct compliance, policy updates, quality management system (QMS) certification status, MSME registration, project and change management, new product development (NPD) and overall quality management.

Human resource

KOEL aims to nurture positive relations with all its team members and leverages a Human Resource Management System (HRMS) to manage the entire employee lifecycle. The Company organises Leadership development sessions, like ‘Passport to Leadership and ‘Future Leaders Programme to equip managers with the necessary skills to excel in their respective roles. Recognising the advantages of early talent acquisition, KOEL has established the ‘Campus to Corporate programme, which is specifically designed to onboard college hires.

The Company aims to promote diversity and inclusion for attracting people from diverse backgrounds—all while offering them adequate resources and opportunities for their professional growth.

The Company cultivates a performance-driven culture and acknowledges employee contributions through its Recognition and Rewards (R&R) programme. This involves SPOT Awards, BU Awards and MD Awards that are presented quarterly. Additionally, to remain the employer of choice, KOEL continuously reviews its compensation and benefits package. This includes a recently introduced Flexi-basket Compensation structure and a Car Lease programme. Furthermore, a Retention Bonus Programme is in place to retain critical employees.

The Company understands that employee engagement is crucial for improved productivity. It organises various initiatives across its locations, including fun activities and awareness programs for Environment Day and National Safety Day. Moreover, KOEL promotes a sense of community by hosting annual Family Days where the families of its personnel are invited to participate.

2,496

Employees on payroll

For more details on learning and development, health, safety and well-being of employees, rewards and recognition, refer to the human capital section of the report on page 64.

Environment, Health and Safety (EHS)

Kirloskar Oil Engines Limited (KOEL) is an organisation that places a strong emphasis on environmental sustainability, occupational health and safety. The Company has undertaken various initiatives across its facilities to curb carbon emissions and optimise energy usage across its manufacturing operations to minimise its environmental footprint, reflecting its dedication to creating a sustainable and safe work environment for its personnel, while also contributing to the overall well-being of the planet.

Environment Kagal Plant

At the Kagal plant, KOEL has taken significant strides towards reducing its environmental impact and embracing renewable energy sources. A Captive Solar Power Plant with a capacity of 8.2 MWp has been installed at the facility. It has generated over 92 lakh units of electricity in the reporting year. This initiative has not only reduced the plants reliance on traditional energy sources but has also resulted in substantial cost savings to the tune of approximately H 6.86 Crore.

In addition to the solar power plant, the Kagal facility has implemented various innovative solutions to promote sustainability. These include the refurbishment of a 300kg/day solar parabola steam generator, the installation of 30kWp micro wind turbines to harness wind energy and the establishment of a dedicated Biogas plant with a Biogas generator to process pre- and post-kitchen waste, powering streetlights with the generated gas.

To ensure sustainable development, the Kagal Plant uses recycled water from the Effluent Treatment Plant (ETP) for all Genset section toilets. An Organic Waste Composter (OWC) has also been installed to convert garden and kitchen waste into organic compost. Further, a rain gauge has been installed to monitor rainfall.

Khadki Plant

At the Khadki plant, KOEL has implemented measures to promote water conservation and sustainable practices. The facility utilises treated water for toilet flushing and gardening purposes, reducing its reliance on freshwater resources. Additionally, the Company has replaced the roof sheets of the stores shed with GI sheets, demonstrating its commitment to environment-friendly construction practices.

Nashik Plant

The Companys plant in Nashik has contributed towards sustainable environmental practices through conducting various activities. Some of these activities include installing solar rooftop plants, recycling water, residue-free farming, and installing vermiculture plants. Additionally, the Company conducted tree plantation activity within its premises to promote environmental conservation.

Rajkot Plant

The Rajkot plant of the Company adopted numerous actions to reduce its negative impact on society. Some of these initiatives include shutting down heavy-duty blowers in the testing environment, a significant step undertaken by the Company towards energy consumption. Along with this, other initiatives undertaken by the Companys Rajkot plant include installing motion sensors in the plant and reducing the consumption of diesel.

Bhare Plant

The Bhare plant adopted energy efficiency measures by switching over to LED lights from conventional lights. The LED lights are energy efficient and thus contribute towards the reduction of emission of greenhouse gases. Additionally, the Company reduced its electricity usage by installing transparent roof sheets. This further helped the Company towards the wise use of electricity.

Safety

The Companys stringent safety measures are implemented across all its facilities to ensure a safe working environment for all its personnel across all locations. KOEL prioritises employee safety. KOELs comprehensive safety initiatives demonstrate its commitment to creating a secure work environment, prioritising employee well-being and instilling a culture of safety awareness across all operations. The Companys initiatives have been recognised through various awards and accolades, including the ‘Safe Workplace Platinum Award from the Apex India Foundation, the ‘Appreciation Certificate from Informa Markets India and the ‘OSH India Award 2023 from the National Safety Council of India.

Kagal Plant

In the induction process, workplace hazards and countermeasures are instructed to ensure that all the workers including the new joiners are aware of health and safety in the workplace. Along with this, the Company conducts various safety training programs, which include safety measures against fire, using first aid kits during emergencies, the importance of using personal protective equipment, and safe handling machines and tools.

Khadki Plant

To ensure the health and safety of its employees in the workplace, the Company has implemented various safety measures, encompassing the installation of flameproof lights and a gas leak detector system, thereby, demonstrating its commitment towards prioritising health and safety in its workplace.

Rajkot Plant

The Company organised blood donation camps, health awareness sessions and mock drills to contribute to maintaining health and safety within its working environment.

Nashik Plant

The Company conducts activities to spread awareness about how to overcome workplace hazards. These activities include safety talks, providing training against fire, health awareness sessions, mock drills to build a safe workplace for its workers.

Health Initiatives

KOEL recognises the necessity of promoting employee well-being and has implemented various health initiatives across its facilities. Some of its efforts include first aid training, annual medical checkups, awareness sessions on health topics like Gastroesophageal reflux disease (GERD), spinal health and diabetes management, as well as health camps for cardiac screening and eye check-ups.

The Company also celebrates International Yoga Day to encourage physical and mental wellness through yoga.

Finance, Legal and Secretarial

The finance, legal and secretarial departments of the Company remain focused on ensuring regulatory compliance and providing planning and analysis support to the business.

Along with the development of a robust compliance management system, the legal and secretarial department has formulated digital projects for improving productivity. It has helped improve functions related to business partnering, digitisation and governance.

The Finance department, helps to drive data-based decision-making by analysing financial and operational data to guide strategic choices. The department also supports to manage capital allocation, ensuring resources are used effectively to support company goals. It also oversees business performance management through financial reporting, variance analysis, and cost management, continuously enhancing companys profitability and strategic planning.

KOELs legal and secretarial department spearheaded ‘Governance Week 2024 in February. This week-long programme featured keynotes by the Managing Director and CEOs of B2B and B2C businesses, emphasising the importance of corporate governance and core organisational values. Additionally, knowledge-sharing and awareness sessions aimed to strengthen KOELs devotion to good governance practices. The initiative also included engaging in employee activities like online and offline governance quiz competitions, which also resulted in the Company being recognised as ‘Compliance Champions.

Awards, recognitions, and certifications

KOELs commitment to environmental sustainability, energy management and water conservation has been widely recognised through numerous prestigious awards and certifications.

Environmental Excellence and Sustainability Awards

f Apex Green Leaf Award – 2023- KOEL received this coveted award in recognition of its environmental initiatives.

f Paryavaran Gaurav Award- The Company was honoured with this award for its significant contributions to environmental protection.

f Envirocare Green Award 2023- KOELs efforts towards sustainability and environmental care were acknowledged through this award.

Energy Management Awards

f CIINationalAward2023forExcellenceinEnergyManagement-KOELs energy management practices were recognised with this award from the Confederation of Indian Industry (CII).

Horticultural Excellence f First Prize ‘Garden Club Award for Best Garden in Mega Industries Category- KOEL has been receiving this award for six consecutive years now. This award honours the Companys efforts in maintaining and nurturing beautiful gardens within its premises.

Water Management Award

f CII National ‘Noteworthy Water Efficient Unit Award for Water Management- The Companys innovative water management strategies and water conservation initiatives were honoured with this award from CII.

Certifications

f Green Building Platinum Certification from IGBC (Indian Green Building Council)- KOELs commitment to sustainable construction practices and eco-friendly buildings was recognised through this prestigious certification.

f IGMC (Indian Green Manufacturing Certification) Gold Certification- This certification acknowledges KOELs adoption of green manufacturing practices and its efforts towards environmental sustainability in its production processes.

f Water Monitoring System Certification (In Process)- KOEL is in the process of obtaining certification for its advanced water monitoring system, further demonstrating its dedication to water management and conservation.

f EMS (Energy Management System) Hardware Upgradation Certification (In Process)- The Company is upgrading its EMS hardware and seeking certification, highlighting its continuous efforts to enhance energy management.

f ElectricalTransformerHealthMonitoringSystemCertification-KOEL has implemented a robust system to monitor the health of its electrical transformers, ensuring optimal performance and energy efficiency.

f SCADA (Supervisory Control and Data Acquisition) for Air Compressors Certification- This certification recognises KOELs implementation of advanced SCADA technology for monitoring and controlling its air.

Disclaimer

Some forward-looking statements about potential business and economic developments might be found in this report. Although the Companys assessments and expectations for the future are reflected in these forward-looking statements, several variables could cause actual events and results to materially diverge from expectations. The Company does not commit to updating any forward-looking statements in the public domain to reflect new information or events. Investors are also urged to use their discretion when evaluating the Companys various risks and the success of the Companys mitigation efforts, as the risks listed in this report are just those that the Management believes exist.