Kirloskar Oil Engines Ltd Management Discussions.


The world as we knew it was thrown into bedlam in the year 2020 because of the spread of the novel COVID-19 virus, threatening all that was taken for granted- mobility, safety, and a normal life itself. This, in turn, posed the most formidable economic challenge to India and to the world in a century. The inherent trade-off due to the restrictions in economic activities from the lockdown required to contain the pandemic, led to the policy dilemma of "lives versus livelihoods".

Governments and central banks across the world deployed a range of policy tools to support their economies such as lowering key policy rates, quantitative easing measures, loan guarantees, cash transfers and fiscal stimulus measures. India recognized the disruptive impact of the pandemic and charted its own unique path amidst dismal projections by several international institutions of the spread in the country given its huge population, high population density and an overburdened health infrastructure.

Sector-wise, agriculture has remained the silver lining while contact-based services, manufacturing, construction were hit hardest, and have been recovering steadily. Government consumption and net exports have cushioned the growth from diving further down.

The V-shaped economic recovery is supported by the initiation of a mega vaccination drive with hopes of a robust recovery in the services sector. Together, prospects for robust growth in consumption and investment have been rekindled with the estimated real GDP growth for Financial Year 2021-22 at double-digit.

This report will provide insights and an update on the Company performance through the Financial Year 2020-21 with a brief outlook for the Financial Year 2021-22.


Kirloskar Oil Engines Limited (KOEL), being one of the pioneers of the ‘Made in India concept since independence, continues to work towards bringing robust and innovative product offerings to the customer at competitive prices. The Companys drive towards excellence continued unabated.

After the outbreak of COVID-19 pandemic situation, the Company has moved swiftly to implement business continuity plans to mitigate its impact on our businesses and to ensure the health and safety of our workers and their families. Adopting guidelines provided by the Indian Government and the World Health Organisation (WHO), our management teams developed policies, protocols and procedures to ensure that our operations could continue safely and securely. With the decisive pandemic measures implemented by the Company and the co-operation and the common spirit manifested by the management and employees working together as one family has enabled us to navigate the pandemic with minimal disruptions to operations.

The COVID-19 pandemic disrupted the world order during Financial Year 2021 causing large-scale humanitarian, social and economic impact across nations. Your Company stayed resilient and relevant through it all. We moved to ‘work from home proactively and enhanced employee support, safety and information security measures. The Companys digital and connected products and channel strategies implemented in the last 5 years came very handy. Almost on the next day of lockdown announcement, the organization was fully prepared to work remotely except factories. Investments in technology, strong risk management and business continuity discipline cultured over the years ensured we remained fully operational, serving and meeting the needs of our stakeholders. Even in this time of significantly increased global uncertainty, KOELs business model has demonstrated its resilience.

The Financial Year 2020-21 has been a tumultuous year in many respects. The financial results of the Company reflected the impact of the COVID-19 pandemic which surfaced in early 2020. Business conditions will continue to be challenging amid the ongoing uncertainties associated with the COVID-19 pandemic. The COVID-19 pandemic and resultant lockdown had led to an unprecedented disruption in demand and supply and general business activity in the Financial Year 2020-21.

KOEL retained focus around people and communication throughout this journey. The Company established strong upwards and downwards links of weekly communication covering all employees. This retained positive team sentiments irrespective of daily operational challenges.

KOEL will strive to create value for its stakeholders by being agile and prudent in its approach and strategy, improve cost efficiency, and will continue to set itself apart by providing cost-effective, quality care and outstanding service to its customers. Our long-standing reputation as a respected and trusted provider of quality products and services at competitive prices will continue to benefit us as the situation gradually improves.



Your company is actively dominating the Power Generating sets product market for over 3 decades offering the widest range of Petrol and Diesel Power Generating sets (2-1010 kVA) used for power back-up in industrial, residential & commercial establishments and also in special applications such as Telecom. Products are marketed under KOEL i-Green and KOEL Chhota Chilli brands. Your company is rapidly transitioning from being a source of reliable products to a complete Power back-up solution provider offering turn-key solutions for diverse customer applications.

In the Financial Year 2020-21, the overall genset industry witnessed a slowdown owing to the ongoing pandemic. Liquidity crunch, lower industrial growth, hospitality sector majorly affected due to travel restrictions, decline in Telecom majorly in the first half of Financial Year impacted industries growth. The market revival observed from Q4, has set a momentum and industry is expected to have growth in Financial Year 2021-22 over Financial Year 2020-21 assuming subsequent waves of the virus are contained.

Business Overview

The Companys revenue in Financial Year 2020-21 from Power Generation Business stood at Rs. 883 Crores as compared to Rs. 1,148 Crores in Financial Year 2019-20. The overall Genset retail market (excluding Telecom) witnessed 25% decline, while telecom segment shrunk by 50%.

Even with unfavorable economic circumstances your Company withheld its dominant market share position in the Low and Medium kVA segments with iGreen and gained 3% market share in the Ultra High Horse Power kVA segment.

Major gains in HHP segment due to gain in mind share with key influencers and execution of Turnkey solutions through channel partners

Digital connect sessions conducted by your Company with key influencers during the lockdown period has delivered mind share gain with key influencers and growth in ultra-high horse power segment in Financial year 2020-21. The sessions were tailor made in line with customers area of interest, giving major focus to design optimization and improving solution efficiency. The drive towards providing turnkey solutions continued in this financial year by providing innovative solutions in the space of changeover, power distribution and exhaust management through our channel partners for major health care projects, Mobility segment, institutions and realtors.

Telecom business

The telecom business witnessed a major decline due to a massive drop by almost 50% in demand. However, 5G expansion may reopen the window in this segment.

Future outlook

With the introduction of iGreen range value package and HHP solutions foray the power generation business is poised to grow profitably.

In addition to this, the new emission norms for power generating sets are likely to be implemented in the next Financial Year 2022-23 and your Company is fully geared up for this transition and will fully support Government of Indias drive for the green cause.


Your Company continued to strengthen its longstanding partnerships with key stakeholders including key Original Equipment Manufacturers (OEMs), end-users across operating segments, suppliers, employees and communities.

In the Industrial business, your Company was able to strengthen its market presence across operating segments by providing the right ‘Fit for Market product with assured deliveries at competitive price, backed by strong after sale support network of KOEL CARE across India.

KOEL is a leading independent engine manufacturer in India and is a preferred choice of all the Construction Equipment OEMs in India - both domestic as well as global players.

Business Overview

In Q1 of Financial Year 2020-21, due to impact of COVID, market demand slowed down initially, however it picked up from Q2. In 2nd half of the Financial Year 2020-21, it further increased because of BS III emission certified pre-buy stock build up by OEMs. There was all time high demand for Off Highway machines. Tractor market also peaked to all time high volumes in this financial year due to the buoyant rural economy.

The Companys revenue in Financial Year 2020-21 from Industrial Engine Business stood at Rs. 502 Crores, as compared to Rs. 435 Crores in Financial Year 2019-20.

New Product Developments

To address the upcoming Construction Equipment Vehicle - Bharat Stage IV (CEV-BSIV) emission changes, your Company had initiated a program to launch superior electronic engines with key customers since the last two years. Due to COVID, the introduction of BS-VI emission norms got postponed by six months, and are now effective from 1st April 2021.

This program progressed well and your Company has developed multiple power nodes of the BS IV engine models to cater to a vast range of equipment across Construction Equipment Vehicles. These include power nodes in the range from 74 hp to 130 hp. Your Company is working with all the leading OEMs across India for several applications such as Backhoe Loader, Compactor, Self-Loading Mixer, Cranes, Wheel Loader, Paver, Tele-handler etc.

The proto / pilot machines clocked more than @ 25,000 hours in the field prior to going for SOP from 1st April 2021. The same engine platform is capable of meeting BS V emission norms which are expected to be effective from 1st April 2024.

Future Outlook

Your Company has strong partnerships with all major equipment manufacturers and will continue to leverage technology leadership to continue growth in this sector.

In Financial Year 2021-22, focus will be to add further new OEMs / applications by working closely with OEMs and meeting their requirements for machines under development

The Government has a clear focus in the long term on road construction and infrastructure projects to bring the economy back on track, therefore your Company believes that in the long term, Indias growth story remains intact.


KOELs after sales service support, provided through its widespread digitally connected 425 service outlets pan India with robust digitized processes and 3000+ trained service teams makes it a dominant service brand and industry benchmark.

Acknowledging all market demands and needs like increased utilization of Industrial Engines and changing of DG sets utilization patterns, your Company continuously strives for increasing service reach and long term retention of customers through preventive maintenance which is vital for maintaining revenue growth.

Preference to engage engine OEMs for after sales service has seen a positive trend in Corporate, Institutional & Government sector & customers are also assertive in direct connect and transaction with the brand.

Innovative Service Products & New Initiatives

With the introduction of innovative service products viz. Bandhan & Anubandh and putting a strong measurement process of Customer Retention "CRI" into place, gives us an opportunity to get directly engaged with numerous retail customers for the long term and delivers an assurance of best in class after-sales service for their Gensets.

Four regional training centers across India are supporting KOEL in continuous improvement of competencies of our field service and are actually proving to be the backbone for any new service products and initiatives.

Many digital initiatives taken by your Company to enhance customer experience are the benchmark in the service industry and set your Company apart from its competition. The Company continues to implement the following initiatives this year also:

• System based tracking of the following KPIs to improve customer confidence and service satisfaction viz

o FTR ( First Time Right )

o FVR ( First Visit Resolution)

• Customer Delight Index (CDI) score consistently above 90+ (externally measured)

• 24 hours Maximum Time To Restore (MaxTTR) monitoring for improved response time and restoration

With all the above mentioned initiatives, despite a challenging market due to pandemic situation, our speedy service response to our all essential category customers continued without interruption. Many customers appreciated service support provided during the lockdown situation. Despite unfavorable market situation, the proactive services helped the customer support business to maintain its revenue at Rs. 388 Crores in Financial Year 2020-21 as against Rs. 405 Crores of Financial Year 2019-20.

Future outlook

Your company has put robust processes and measurement system with the support of a strong CRM for ensuring long term customer engagement with KOEL CARE.

Your Company has also taken initiatives for capability building to handle new emission norm viz. BSIV and CPCB IV technology through structured service trainings throughout the year.


The electric pump industry is estimated to have declined by 6% while the diesel engine & pumpset segment is estimated to have declined by 20%. The Q1 of Financial Year 2020-21 which is generally the peak season for sale of pumps was under lockdown situation. Even in the later part of the Financial Year, buying decision of customers was affected due to surge in the prices of pump sets and allied products especially column pipes.

This business continues to focus on further increasing its reach into rural India and building efficient supply chain, to increase its business in engines, pump sets, oil & allied products.

Business Overview

The contribution to revenue in Financial Year 2020-21 from the Crop Irrigation Business stood at Rs. 342 Crores, as compared to Rs. 330 Crores in Financial Year 2019-20.

The sales of diesel engines and pump-sets declined by 10% over last year. Despite this decrease in sales numbers, our market share is expected to remain at a robust 32%.

The sales of electric pumps grew by 44% over last year and crossed many milestones on the way. Electric motor based MMB segment did very well.

For Diesel segment, renewed focus on OEM applications such as concrete mixers, agro applications has helped the business enhance its share of wallet and revenues.

New Product introduced

During the year under review, several new Stock Keeping Units were introduced for electric pumps business to fill product gaps and to establish product superiority in its focused states. These have contributed significantly towards the strong growth in the electric pumps. In case of diesel pumps business the Company had worked out cost effective packaging which resulted in savings for offering the products to customers.

Further, the Company has successfully developed several additional products (viz. urban focused version) which will be introduced to the market in early Financial Year 2021-22. The Company is in the process of developing the lightweight pump sets in the petrol category.

Future Outlook

Considering the government initiatives for Agricultural, Irrigation and Rural development, it is expected that the market for electric pump segment will witness a boost in the coming years especially the demand in the rural and construction segment. The Companys focus will be to create better brand visibility to capture a significant market share in electric pump segment. The Diesel pump set segment will continue to see de-growth, however with higher focus on the engines segment the plan to introduce new products to cater to new application, will help maintain market share.


Despite the challenges in the Financial Year 2020-21, like COVID-19, subsequent lockdowns, unprecedented deceleration of economy, volatile increase in raw material prices across the spectrum, it empowered & motivated the Company to sail with renewed Vigor and the Company continued its journey to offer new farm mechanization solutions for enriching the lives of the farming community.

The Companys revenue from Farm Mechanization Business for Financial Year 2020-21 stood at Rs. 180 Crores as compared to Rs. 130 Crores in Financial Year 2019-20.

The Farm Mechanization business recorded a growth of 44% in revenue from all of the product segments.

The demand for Power Tiller which is the leading product of Farm Mechanization Business is highly seasonal and government subsidy driven. In the Financial Year 20-21, the Government subsidy remained the dominant factor in Power Tiller sales all across India. The Direct Benefit Transfer (DBT) to end beneficiaries was extended to almost all states across India. In the state of Tamilnadu, a Farmer Producer Group subsidy was introduced. Other States like Assam, Orissa, Jammu & Kashmir, Himachal Pradesh introduced regular subsidy programs. This has played a vital role in the growth of this business.

Though the seasonality patterns for various markets are known, monsoon patterns of the year also decide regional demand. In Financial Year 20-21, overall Power tiller market witnessed 13% growth as compared to Financial Year 19-20.

New Products Launched

In Financial Year 2020-21, Farm Mechanization continued its innovation journey and introduced a new product range to address the market requirements in 12HP & 15 HP segment powered by New Generation "K cool" Engine Technology and Power Weeder segment with reaper attachment.

The Company developed a sprayer attachment to cater to the need of sanitization during the COVID situation. Now a full range of products of MinT 5 (Petrol, diesel) & MinT 8 (Petrol, diesel & DLX) , MinT reaper, Mega T 12 LV and Mega T 15 LV along with rotary tiller & brush cutter range are available.

Future Outlook

Agriculture & related industries are expected to be on priority for government & formulations of policies post the COVID-19 pandemic and will most likely benefit the overall Farm Mechanization sector. Return to normalcy, preferably before Kharif season peak in June-July would be critical for Farm Mechanization business.

Subsidy from Government will be a key driver for power tiller sales in Financial Year 2021-22.

The Company will continue its efforts on establishing new product range in the market and this will be a key driver for growth in Financial Year 2021-22.


The Companys International Business has a vast product range consisting of diesel engines, generating sets, power tillers, pumpsets and spare parts required for these products. These products have a variety of applications in Agriculture, Power, Construction, Marine, and Mining sectors.

The Financial Year 2020-21 started in the shadows of COVID-19 pandemic. The business still confronts an environment of extreme uncertainty. Even as economies started opening in the second half of Financial Year 2020-21, the market conditions remained volatile which has drastically affected new investments.

The global economy is growing again after a contraction of 4.3% in 2020. The path of recovery is increasingly visible. Fiscal support by many countries has been an economy booster. This has especially helped the Agriculture segment.

KOELs major markets are in Africa, Middle East Asia, South East Asia, and Latin America. Some of the key markets are facing political or economic challenges. International business will be adversely affected if volatility continues in these economies.

The outlook for 2021-22 highlights major challenges such as commodity price increase, labor shortage, and increase in inflation and interest rates. Even though uncertainty prevails in the business environment, the industry has started responding progressively, thinking through the contours of the ‘Next Normal. The global economy is expected to expand 4% in 2021. Improved commodity prices would boost business in Industrial segment. Agriculture segment is expected to continue to get support which offers opportunities in traditional markets. However, the recovery in power generation segment may take more time.

Business Overview

KOELs International Business Revenue for the Financial Year 2020-21 amounted to Rs. 239 Crores, as compared to Rs. 233 Crores in the last Financial Year 2019-20. The main contributors to growth were market coverage in focus countries, new product development, and addition of new OEMs in our portfolio. Firefighting and Agriculture product verticals were the major growth contributors along with Customer Services. New products accounted for 21% of the exports revenue.

Business was adversely affected due to closure of mines in Southern Africa. However, growth in Industrial segment helped us to avoid revenue drop. We could not surpass last years business levels in West Africa and South East Asia.

We made an encouraging progress in firefighting segment in USA through innovative business processes. However, Power generation market conditions remained sluggish which affected the business. Product range expansion planned in the Financial Year 2021-22 is expected to put us on the growth path.

Competition continued to be strong from global players in power generation business. Price pressures were often witnessed in most of the markets. We improved our competitiveness through offering power solutions and value engineering projects.

Product performance, and pre and after sales support have been our strengths in Industrial segment. We further strengthened on these parameters thereby scoring over competition. In the Agriculture segment, we continued to face severe price competition from domestic as well as Chinese players.

Some of the highlights in the International Business for the Financial Year 2020-21 include:

• Firefighting engines and Agriculture verticals registered robust growth of 61% and 40% respectively.

• Firefighting engines business contributed to 22% of overall exports business as we expanded business in the USA and UAE. We have started new product development to expand our product range.

• UAE, which is a focus market, registered 40% growth over last year.

• Various new digital initiatives were conceptualized and institutionalized during the year with the objectives of improving process efficiency and effectiveness, and enhancing customer experience. This will form the new way of conducting business in the ‘New Normal era.

Future outlook

The focus in Financial Year 2021-22 will be to continue to achieve significant market share in the focus markets identified.

KOEL Americas Corporation, USA (a wholly owned subsidiary company) is exploring the market for firefighting engines as an offer of a complete solution to OEMs. KOEL Americas is also working closely with OEMs for gas engines. This will boost business growth during Financial Year 2021-22.


The Companys revenue in Financial Year 2020-21 from the Institutional Project Solutions (IPS) Business Unit stood at Rs. 129 Crores, as compared to Rs. 160 Crores in Financial Year 2019-20.

IPS Business Unit operates in niche segments like Defence and Marine for supply energy systems for radars, vehicle repowering, propulsion engines and gensets for Marine. This Business Unit has started working as a Systems integrator and complete Solution provider to key customers.

Business Overview

Being a Systems integrator, design, development, delivery, erection & commissioning of customized products meeting stringent qualification requirements of customer remained the focused area for growth.

The Company has developed various nodes for Defence requirements with successful completion of qualification test.

Responding to the requirements of the fishing boat industry, your Company has developed specific horse power fishery engines (various nodes of SL90 - 180 HP to 350 BHP). Addressing the need of the Commercial Marine segment as a complete solution provider, your Company has developed product nodes for propulsion package with 4R, 3R and 4RT engine having tie-ups with Gear box, Shafting & Propeller Manufacturers.

New Product Development

Successful performance validation and supply of 490 kWe DG set of Project ‘Whale and this boosted our confidence in developing special application engines and DG sets.

Future outlook

The IPS businesss unit will be focusing on various projects as a System Integrator and Complete solutions provider by increasing products offering which will ensure growth in Defence and Marine power and propulsion segments and the fishing engine segment. IPS Business Unit is emerging as the preferred choice of Customer and in pursuit of demand from the Defence segment, this business unit will continue to focus on development of compact and lightweight sets.

Your Company is the only Indian company offering a complete range of engines for the Fishery segment with in-house development of durable and efficient engines that meet stringent product performance requirements, and is gearing up to get sizable market in Fishing boat engines.


Research is a key enabler that helps KOEL remain relevant and competitive in the global markets and drives growth through innovative solutions and enhanced product offerings. In pursuit of excellence in product performance and enhancing value to customers R&D is focused on expanding product range, as well as emission upgrades and solutions for sustainable future growth. R&D supported the launch of several innovative products that enabled your Company to fortify its market leadership position.

K4300 engine platform of HHP segment is under development. Engine validation for R550 engine platform of LHP segment was achieved in Financial Year 2020-21.

The launch of new products includes engines developed for applications such as BSIV CEV, Power tiller, 490 kWe submarine genset. In the Fire Fighting domain, FM/UL listed fire pump engines upto 3000 rpm and HHP fire pump engines are now part of regular production. With regards to certifications, 4 models of genset used in emergency standby application received an Environment Protection Authority certification.

The R&D team developed power nodes and upgrades for the following during last year:

• Bharat Stage IV (BSIV) emission compliant engines for wheeled construction equipment

• Bharat Stage III ( BS III) emission compliant engines for tracked construction equipment

• Bharat (TREM) Stage III A emission norm compliant engines for tractor application, Power Tiller and Power Weeder

Innovating for a sustainable future

The major focus areas of R&D wherein the team is putting efforts for sustainable future are as below -

• Cost effective emission solution for Tier 4 Final / BS IV CEV norms

• Commercial availability of new engine platforms namely K4300 and R550

• Development of special marine, railways and defense applications

• Product portfolio and emission strategy for CPCB IV+ norms

• Alternate fuels and alternate technologies QUALITY ASSURANCE

KOEL embraces shared value of Collaboration and Value Creation while focusing on Quality. The significant reduction in defects levels and complaints across various segments is achieved through various quality initiatives.

The sustained high levels of customer perception index through AC Neilson‘s Customer Satisfaction Survey, Net Promoter Score and Customer Delight Index confirm KOELs leadership on Quality of Products and Services.

In pursuit of Quality culture, following initiatives are taken across value chain:

• Journey Towards Zero Defect for suppliers

• Making pool of VDA 6.3 (Verband der Automobilindustrie - German Quality Management Standard) certified auditors available for audits and assessments

• Application Solutions for customers

• Quality Circles

• Competency Enhancements through various trainings in line with Best Practices

• Going Digitized way to automate the process for better performance and future readiness SUPPLY CHAIN

In the Financial Year 2020-21 the Companys Supply Chain Management team played a vital role in sustaining the supplies in the wake of constant uncertainties. The Companys strong allegiance to the Demand Driven Production System has been a great advantage, as it has helped us in coping with the demands of the market under many challenges from the ecosystem. Digitally connected Supply chain was a great advantage during this period. KOEL engagement with the supplier base and long fruitful association in many cases has come handy in tiding over these challenging times.

Industrial engines business could meet the upsurge in Tractor Industry and also the demand in the Industrial segments propelled by the phase out of BS-III emission norms Engines and the Phase-in of BS-IV emission norms engines. Your Company has successfully provided prototype engines with robust solutions for the BS-IV emission norms for the Industrial segment.

Your Company has formulated the Suppliers Code of Conduct and also a detailed engagement program. Your Company also conducts vendor satisfaction survey periodically and the outcome of the same including suggestions were reviewed by the Management of the Company.

Base material inflation has been a major concern during the last two quarters of the Financial Year 2020-21. Cost reduction drive has helped to mitigate some impact due to unprecedented inflation. The Company continues to work aggressively on this initiative in the Financial Year 2021-22.

The Company conducted the virtual Supplier Quality Improvement Contest.

Your Company is well equipped to meet the challenges in the coming days by building a future ready Supply chain by getting aligned to the modern concepts of Internet of Things (IoT).


EHS is one significant area which needs constant focus and attention. During the year, numerous initiatives were undertaken in your Companys plants and offices in the areas of Environment, Occupational Health and Safety (EHS).

To ensure efficient control of all processes in quality management, environmental protection, occupational health and safety, KOEL has implemented IMS, which integrates ISO 9001, ISO 14001 and OHSAS 18001 management systems. KOEL is now IMS certified by ABS QE.

The Company continued to undertake across all plants environmental initiatives viz., celebration of World Environment Day for awareness creation amongst employees & nearby villages, society environmental awareness and plantation of trees. As a part of Occupational Health, organization your Company organized Blood donation camps, Eye checkup camps, health awareness sessions and periodical medical checkup for employees. With regards to safety your Company conducted programs like Behavioral Based Safety awareness, road safety awareness, mock drills for safety awareness, Firefighting Training for employees etc. as a drive under safety initiatives.

KOEL has undertaken a number of initiatives to reduce the adverse effect on environment & society such as innovative energy conservation projects, Environment-friendly disposal of hazardous material etc.

Some of the key initiatives are listed below:

Environment initiatives

A. Kagal Plant

• Installation of Piezometer to check impact on ground water level

• Installation of Sewage Treatment Plant (STP) for new warehouse facility

• Installation of Soil Immobilized Bio Filtration (SIBF) system treating sewage at Drivers rest room facility

• Installation of digital flow meter with telemetry to monitor ground water consumption

• Provided digital display on main gate to display MPCB consented parameters

• Use of filtered rainwater and treated effluent for Toilet flushing and industrial processes

• Publication of Carbon sequestration and Biodiversity report

• Carried out external water audit

B. Khadki Plant

• Celebrated World Environment Day by plantation of trees in the Companys premises

• Treated water is being used for toilet flush & gardening

• Hazardous waste is regularly disposed of through MPCB authorized agency

• Ambient air monitoring is carried out half yearly

• Carried out external water audit

Other than these special initiatives celebration of "World Environment Day" and Tree plantation on various occasions are horizontally deployed at all KOEL manufacturing locations. Also online monitoring of all air monitoring, effluent quality parameters were checked at all locations.

Safety Initiatives

• Installation of Sprinklers for new solar shed at Kagal plant

• Capacity enhancement of firefighting pumping system at Kagal plant.

Celebration of Safety week, Mock drills as a part of Emergency Preparedness program, External safety Audit and Training on Fire Fighting was organized at all locations under the safety initiatives.

At KOEL, Sustainability management is a journey and not a destination. In this journey, the Company strives for balance amongst various stakeholder expectation, Sustainable Development Goals (UN SDGs) and the business growth. In tracking KOELs contribution to the three pillars of the Sustainability - Economic, Environment and Social Development, the 9th Annual Corporate Sustainability Report as per the Global Reporting Initiative (GRI), Netherlands, for the year 2019-20 was released in April 2021.


The Human Resources function has been enabling business transformation by striking a balance between business needs and individual aspirations. The Financial Year 2020-21 started with unprecedented challenges which called for a collective mindset change and positively pushed us to break our boundaries to adopt newer ways of collaborating with our employees. The Company has a dedicated human capital of over 2,122 employees spread across locations in the organization.

The Company continues to maintain healthy and harmonious industrial relations across all its manufacturing plants and offices.

The Company recognizes that its human capital as critical to the Companys success and initiated numerous initiatives related to safety, health and engagement to ensure that the Company can continuously cater to the changing business opportunities and challenges are as below:

• At plant level many new COVID-19 related safety procedures were introduced to ensure safety of employees so that the plant could operate smoothly.

• 24x7 guidance / medical assistance was provided to employees at all locations during the pandemic.

• New Values were rolled out seamlessly on virtual platform and several sessions were conducted online to communicate the new values and to make employees aware about the behavioral attributes required to demonstrate the values.

• Several health sessions by experts were offered to employees on maintaining healthy lifestyle specially in work from home scenario and safety living habits during the time of pandemic.

• Introduced e-learning module system to ensure learning and skill updation of employees in the remote working scenario.


The Financial Year 2020-21 began with full of challenges on account of lockdown conditions due to outbreak of COVID-19. The Finance, Legal and Secretarial functions have played the role of business partner and have led several digital initiatives that ensure improved efficiency and profitability in the organization. The Company has robust ERP and other IT systems in place and all its locations are well networked. Even during the lockdown with critical staffs working from home, all reporting systems worked seamlessly without any major disruption. Adherence to statutory and regulatory compliance has always been given the highest importance. The Company has built a strong compliance management system and has automated the compliance management process.

With practically zero debt, a strong cash position and excellent working capital management the Companys Balance Sheet remains strong and poised for accelerated growth despite such critical conditions of business operations of the Company.


The Companys internal control system is commensurate with the nature of the business, size and complexity of operations covering all businesses and functions of the organization. The internal control system maintains a repository of internal controls which is tested and updated through its internal audits to ensure that adequacy and effectiveness of all major internal controls. In addition to this, control selfassessment framework complements the internal audits and helps the employees to monitor the internal controls they are responsible for. This system aids in building robust control environment across the organization. Both, the internal audit and control self-assessments processes are automated to promote efficient tracking of open audit issues without manual intervention.

A risk based audit plan on a yearly basis is approved by the Audit Committee. The audit plan covers all businesses and functions across all locations. Significant observations and progress of implementation of action plan are reported to and reviewed by the Audit Committee.

The enterprise risks and their mitigation plans are presented by the risk owners to the Risk Management Committee. The Enterprise Risk Management (‘ERM) framework is aimed at effectively mitigating the business and enterprise risks through strategic actions. The mitigation plans for enterprise and business risks are reviewed and updated on a periodic basis to the Risk Management, Audit Committee and the Board of Directors of the Company.


Some of the other recognitions received for our relentless efforts of quality delivery and operational excellence included for Kagal Plant:

• Consecutively second year "Golden Peacock Award" - 2020 for Energy Efficiency by Institute of Directors (IOD). This award is regarded as a benchmark of Corporate Excellence worldwide and recognition of a world-class organization promoting and implementing energy efficiency and energy conservation measures

• "First Rank" in the Envirocare Green Awards 2020

• "Par Excellence Award" and "Sliver Award" at National, State and Chapter level on Quality Control Circles in categories viz. Quality Assurance, 3M and Kaizen



• As per earlier estimate, Indias real GDP is projected to record a double digit growth in 2021-22. The Companys business is dependent on a favourable macroeconomic environment. Considering the potential impact of COVID-19 on Indias economic growth in 2021-22, there might be impact on achieving targeted business opportunities

• The countrys climate change related objectives of adaptation, mitigation and preparedness on climate risks

• Rising Commodity Price and its impact on the business

• Attracting and retaining required talent for business continuity


• The COVID-19 pandemic is a crisis like no other. Yet, it offers opportunities like no other. Businesses and Ecosystems should assess their measures to enhance resilience to counter pandemic challenges and to strengthen business positions

• Collaboration with global market players to establish cost-effective manufacturing base

• The need to ‘Go Digital will be an opportunity to drive efficiencies through digital initiatives

• Emergence of new technologies, fuel systems and upgradation of emission norms

• Allied Business in Water Management Segment Threats

• The 2nd wave of COVID-19 has impacted the country in a massive way and has created situation of national emergency again. There are also indication of severe third wave hitting India by second quarter of the Financial Year 2021-22. The identification of appropriate remedies or cures or correct strategies of avoidance whether it be lockdowns, social distancing, masks, testing, tracing or treatments, the policy makers have been forced to experiment and unable to solve the determinants

• Short term demand / supply imbalances may result in loss of business opportunities COVID-19 - IMPACT KOEL continues to closely monitor developments related to the pandemic and follow recommendations from various authorities, including the state and central government and local bodies. KOEL established a COVID-19 response team, which the Managing Director leads, that closely monitors the evolving situation, develops and implements precautionary measures to help limit the impact of COVID-19 at our workplace and on our communities and ensures business continuity. KOEL is actively monitoring the potential impact on our key priorities and assessing the situation on an ongoing basis to evaluate the impact and challenges posed by the COVID-19 situation and manage them accordingly.

The Company has analysed the impact that COVID-19 had on our financial reporting. The Companys operations and financial performance remains satisfactory despite the COVID-19 pandemic, and identified no significant impact on the financial reporting in Financial Year 2020-21. Further KOEL has not received any specific governmental financial support in relation to COVID-19.

A steep increase in virtual collaboration during COVID-19 has fast-tracked the need for digitalization both at our customers and at KOEL. Looking ahead, your Company will continue to make investments in digitalization and technology, which will also be crucial in a post-COVID-19 environment, in order to keep ensuring the well-being of our employees and to better serve our customers.