Kisan Mouldings Ltd Management Discussions

ANNEXURE- C

ECONOMIC OVERVIEW:

The IMF World Economic Outlook (April 2025), the Global growth is projected to drop to 2.8 percent in 2025 and 3 percent in 2026, much below the historical (2000-19) average of 3.7 percent. The initial estimates are quite susceptible to intensifying downside risks and unanticipated shocks, especially in Advanced Economies. Global headline inflation, mirroring the embedded fault lines, is expected to decline reaching 4.3 percent in 2025 and 3.6 percent in 2026, with notable upward revisions for Advanced Economies and slight downward revisions for Emerging Markets and Developing Economies (EMDEs) in 2025. Restrictive trade policies and fragmentation could lead to a longterm shift in Global trade patterns rather than just a short-term disruption.

Notwithstanding myriad Global challenges and spillovers of exogenous shocks, Indian economy continued to display unparalleled maturity and resilience, clocking growth rates well above 6%. Further, domestic growth engines, viz., consumption and investment, remain relatively less susceptible to external headwinds. The unflinching navigation of brighter prospects reinforces the belief in Indias emergence as a knowledge economy where globally competitive manufacturing should thrive sans barriers.

Indias GDP grew by 6.2 percent in Q3 FY2025 after a 7-quarter low growth of 5.6 percent in Q2FY2025. The economic growth of India is expected to recover, supported by prudent fiscal and monetary policy measures. GDP growth is forecasted at 6.5 percent in FY2025 though some moderation can be seen due to the adverse impacts of tariff and other related barriers on trade front. The robust GDP growth projection remains largely anchored by GOIs thrust on capital expenditure, as also a resilient and rapidly unfolding domestic consumption and investments landscape. The strategy has been pivotal towards crowding in private investments, many states have been collaborating towards creating world class infrastructure across Physical, Social and Digital spheres.

COMPANY OVERVIEW:

Kisan Mouldings Limited has carved a niche in the field of pipes and fittings for water management, irrigation, water distribution and sewage disposal systems over the last three decades. Your company has emerged as one of Indias leading manufacturers of Plastic piping Company including Chlorinated Poly Vinyl Chloride

(CPVC) and Poly Vinyl Chloride (PVC) Pipes and also leading in irrigation system and plumbing systems for residential, commercial and industrial consumption and processes around 20,000 - 40,000 MT of polymer every year. The Companys plumbing range consists of KML Classic CPVC Plumbing system, Free Flow uPVC Plumbing system (ASTM). It provides One-stop piping solutions with its wide range of PVC and CPVC pipes, fittings and solvents.

During the year under review, your Company has its pipe manufacturing facilities in India at Mahagav in the state of Maharashtra, Dewas in the state of Madhya Pradesh and Khadoli at Selvas for manufacturing of Pipes, Fittings and Solvents manufacturing of plumbing systems, drainage systems, irrigation systems.

STRENGTHS:

The management has taken several corrective steps, as below, to stage a turnaround in business performance.

• Piping Brand Recognition:

Since past few years, the Company has successfully achieved object of recognising Kisan and KML Classic as most popular brand plumbing systems and irrigation systems in various location of India.

• Focus on high margin products:

The Company is operating from various manufacturing sites including parent plant at Mahagaon, Maharashtra. We have increased number of SKUs in the fittings segments and are now offering wider variety of solvents. These are high margin products and help to improve overall margin profile.

• Distribution channel:

The Company is continuously working on strengthening its distribution network by strategically locating its warehouses and manufacturing facilities with extensive distribution channel. The Company has also been participating in several exhibitions and large meets of plumbers, dealers with smaller groups in order to maintain appropriate discipline in COVID-19 atmosphere and strengthen and widen its distribution network. The Company is serving its customers through opening and maintaining Depot in order to reach its prospective buyers for creating customer base for the Company in a cost efficient manner.

OPPORTUNITIES AND THREATS:

In FY 2024-25, on a consolidated basis, the pipes and fittings segment contributed the revenue from operations of 27,335.35 Lakhs. Your companys new and renewed focus makes it well poised to seize opportunities arising in the sectors where we operate.

CONSTRUCTION PIPING:

India is in the midst of a major construction drive that is mainly supported by the Government of India. Multiple schemes and projects launched in last couple of years are leading to higher demand for pipes.

• Real Estate Regulation Act (RERA):

RERA has created a major transformation the way housing construction for sale was in vogue in the country. Many prominent business houses have made ambitious plans in this sector to grow geometrically with launch of their projects at multiple locations. It is expected to get good demands from Plastic Piping sector on continual basis.

• Jal Jeevan Mission:

Jal Jeevan Mission (JJM), which was introduced in the Union Budget 2019, is envisioned to provide safe and adequate drinking water through individual household tap connections “Har Ghar Jal” (piped water supply) to all households in rural India. The Government of India in the Union Budget 2021-22 had announced that the Jal Jeevan Mission (Urban), which aims at universal water supply in all 4,378 Urban Local Bodies with 2.86 crores household tap connections, as well as liquid waste management in 500 AMRUT cities. It will be implemented over 5 years, with an outlay of 2,87,000 crores.

• AMRUT:

The Atal Mission for Rejuvenation and Urban Transformation (AMRUT) was launched with the focus to establish infrastructure that could ensure adequate robust sewage networks and water supply for urban transformation by implementing urban revival projects. Some of the broad targets of AMRUT scheme are ascertaining that everyone has access to tap water and sewerage facilities, greenery like parks and open spaces are well maintained, digital and smart facilities like weather prediction, internet and WiFi facilities, pollution reduction by encouraging the public for using cheaper but secure public transport etc.

• Swachh Bharat Abhiyan:

It is a country-wide campaign initiated by the Government of India to eliminate open defecation and improve solid waste management The GOI in Union Budget 2021 has focused on swachhta of urban India, and has intended to focus on complete faecal sludge management and waste water treatment, source segregation of garbage, reduction in single-use plastic, reduction in air pollution by effectively managing waste from construction-and-demolition activities and bio-remediation of all legacy dump sites. The GoI has announced that the Urban Swachh Bharat Mission 2.0 will be implemented with a total financial allocation of 1,41,678 crores over a period of 5 years from 2021-2026.

Agriculture piping and micro irrigation:

Agriculture being an important sector of Indian economy and due to dependency of around 50% of agricultural lands on monsoon, the Government of India (GOI) has increased its focus on improving irrigation coverage area, which is expected to drive demand for PVC plastic pipes over the medium-to- long term. The GOI has laid down several initiatives, schemes and reforms that would directly and indirectly trigger higher demand for plastic piping as well as micro irrigation products.

The Government has given a clarion call to double farmers income. This is to be achieved by helping farmers to produce more from the same land parcel at lesser cost and at the same time fetch higher prices for their produce. More agricultural land is expected to be brought under irrigation resulting in efficient modes of water transportation. Government is hopeful to form 10,000 new Farmer Producer Organizations, to ensure economies of scale for farmers over the next five years.

Pradhan Mantri Krishi Sinchayee Yojna (PMKSY) has been formulated with the vision of extending the coverage of irrigation Har Khet Ko Pani and improving water use efficiency More crop per drop in a focused manner with end to end solution to increase area under irrigation, flood control, interconnectivity of canals which is expected to augment the demand of PVC pipes.

OUTLOOK:

Favourable factors like consistent agricultural performance, massive initiatives taken by the GOI in the areas of agriculture, construction of affordable

houses, water supply and sanitation, leads to upsurge in the demand for plastic piping products and irrigation system. Similarly, reforms such as GST and RERA would result in favourable playing field for organized players. These favourable macro-economic variables point towards an encouraging outlook for the year 2025-26. We intend to leverage on these opportunities.

The Companys efforts towards improving processes and operational efficiencies through automation are expected to deliver desired benefits. The Companys attempts for the improved quality of its distribution network will help the Company to control costs and

maintain its competitive advantage. There is focused effort towards increasing revenue contribution from high margin products to aid overall margins of the Company.

FINANCIAL PERFORMANCE:

An overview of the financial performance is given in the Directors Report. The Audit Committee constituted by the Board of Directors periodically reviews the financial performance and reporting systems. Summary of Standalone and Consolidated Profit and Loss for the Financial Year 2024-25 are as follows:

Summarised Profit and Loss Accounts

KEY FINANCIAL RATIO:

RISKS AND CONCERNS:

The Company is exposed to the financial market risks from changes in rate of interest and inflation, global recessionary trend, economic slowdown, increase in financial charges, non-availability (or undue increase in cost) of raw materials coupled with market fluctuations. The volatile movements in exchange rates are caused by major geopolitical developments besides mere economic and financial issues which are beyond the control of your Company. The Company is utilizing some bank facilities and consequently our over all would get impacted.

At times, we have seen some delays in customer orders, delays in execution of on-going orders, delays in payments by customers and logistics and supply chain challenges. Despite such adversity at some point of time, we have kept our operations running smoothly. Post take over of Management by Apollo Pipes Limited and due to all out effort by the Management, we resumed our operations to normal, though we will be exposed to adverse demand at macro level. We will continue to monitor the situation and business outlook, while closely watching our cash position and expenses and respond appropriately with corrective actions.

In the event of adverse demand senecio, the capacity utilization may not be remain at the desired level. This will affect our performance, turnover/profitability and consequently liquidity position in the short run. The Company has therefore devised a strategy to restrict the production based on the market demand and also reduce the overhead cost proportionately. The Companys focus shall remain on all critical areas of cost control and cost reduction and shall always be a focal point for constant optimization.

INTERNAL CONTROL SYSTEM:

The Company has adequate internal control procedure proportionate to the nature of its business and the size of its operations for the smooth conduct of its businesses. Internal auditors comprising of Independent professional firm of Chartered Accountants, M/s. Somani & Associates, Chartered Accountants, Mumbai, FRN: 145721W have been entrusted the job to conduct regular internal audits and report to the management the lapses, if any. The internal control is designed to provide reasonable assurance with regard to maintaining proper accounting controls, protecting assets from unauthorized losses and ensuring reliability of financial and operational information and proper compliance with regulations. The Audit Committee, in its periodic Meeting, review the adequacy of internal control system and procedures and suggest areas of improvements. The recommendations of Internal Auditors and the Audit Committee are placed before the Board for their consideration and followed up effectively for its implementation. The Companys statutory auditors have, in their report, confirmed the existence of effective internal control procedures.

TRANSPARENCY IN SHARING INFORMATION:

Your Company believes in total transparency in sharing information about its business operations with all its stakeholders. Your Company strives to provide maximum possible information in the Annual Report and also through other means like regularly posting of information on website of the Company, intimation to stock exchange and Publication in Newspaper wherever necessary to keep the stakeholders informed about the business performance.

HUMAN RESOURCE:

Human Capital Management has always been a key focus area for Kisan Mouldings Limited which is evident from the fact that employees are one of our key stakeholders. Your Company continues to maintain constructive relationship with its employees and deals with issues related to compensation, hiring, performance management, organization development, safety, wellness, benefits, employee motivation, communication, administration, and training; thereby striving hard to provide a positive environment to improve employee efficiency. Your Companys Human Resource Department aims to maximize the productivity by optimizing the effectiveness of its employees. Your Company commits to further align its HR Polices in order to meet the growing needs of the business. The total number of permanent employees as on 31^st March, 2025 was 415.

CAUTIONARY STATEMENT:

Certain statements in this Management Discussion and Analysis Report may be forward looking statements within the meaning of applicable laws and regulations. Actual results might differ substantially or materially from those expressed or implied in the statement. Such statements reflect the Companys current views with respect to the future events and are subject to risk and uncertainties. Important factors that could make a difference to your Companys operations include changes in industry structure, significant changes in political and economic environment in India and overseas, tax laws, litigation and industrial relations. It also includes economic conditions affecting demand / supply, price conditions in the domestic and international markets. The Company undertakes no obligation to publicly amend, modify or revise any forward- looking statements on the basis, of any subsequent developments, information or events. This report is prepared on the basis of public information available on website / report / articles etc. of various institutions. The above discussion and analysis should be read in conjunction with the Companys financial statements included herein and the notes thereto.