KKalpana Industries (India) Ltd Management Discussions.


Global Economy was more or less stagnant in the year 2018. The economic growth was 3.6% in 2018 as against 3.8% in 2017.

Further, the tariff war between United States of America (USA) and China will have pernicious effect and global economy. If this continues, global trade will be definitely weakened.

The spin off of the above referred trade war may result in currency war also. Moreover, Britain coming out of European Union will also have adverse effect on growth trajectory.


The GDP for 2018-19 has been 6.8%. It is, however, surmised that the GDP for 2019-20 will be 7%. But if the Indian economy has to be a $5 trillion economy by 2024-25, this growth rate will not suffice. Moreover, there must be credit growth of 17-18% in the next 3 – 4 years for the Indian economy to achieve the targeted $5 trillion market.

Industry Overview

Kkalpana Industries (India) Limited mainly caters to cable and wires companies which are mainly in the unorganized sector. However, after introduction of Goods and Services Tax (GST), the organized sector will find it easy to market their products.

Industry Structure and Developments

India will need to generate 0.5KW of electricity per person to provide reasonable level of living opportunity to its population. Based on current population, projection for 2025 will be 710GW as against 280GW presently. Therefore, the capacity increase for generating power/electricity must be 2.5 approximately. The above scenario will benefit your company immensely. Since, it mainly operates in cable and wire industry.

Company’s Performance:

Critical financial figures for 2018-19 are as under:-

• Gross turnover for the year is Rs. 2,020.83 Crore against Rs. 1,773.52 Crore in 2017-18.

• PBIDT for the year Rs.114.33 Crore as against 107.03 Crore in 2017-18.

• Profit before Tax for the year Rs. 40.42 Crore against Rs.34.50 Crore in 2017-18.

• Capital Structure of the Company as at 31st March 2019 is Rs. 18.81 Cr comprising of 94072930 nos. of equity shares of Rs. 2/- each.

B. Product wise operational performance:-

Product wise, your company is engaged in manufacturing of the following products, the performance of which is discussed below-Poly Vinyl Chloride The turnover from Poly Vinyl Chloride is Rs 48,310.54 lacs as against Rs 43,326.23 lacs in the previous year. Polyethylene Turnover from Polyethylene is Rs. 122,807.20 lacs in the year under review year as against Rs. 88,372.83 lacs in the previous year.

Agglomerates, Reprocessed Granules, Scraps & Others

Turnover from these items is Rs. 29,785.45 lacs as against Rs. 44,322.01 lacs in the previous year.

Future Outlook

Since the overall picture of Indian economy in 2019-20 and also 2020-21 is not rosy, industries in general are bound to face slowdown in demand. However, the company has started taking effective steps to safeguard its topline and bottomline. In this regard, you should be happy to note that your company recognizes that continuous innovation across products, processes and systems will be the springboard to catapult your company to higher profits and growth. The directors of the company are confident that these steps will protect the company from the adverse impact of slowdown in Indian economy.

SWOT Analysis

Strength Weakness
Large scale of operation allows economies of scale of production The weakness will mainly flow from slow down in Indian economy
Geographical spread of operation in India allows access to a large and diversified customer base The global tariff was and probably currency war will affect both demand and supply
String financials credentials
Skilled and diversified work force with considerable experience
Threat Opportunities
It is expected that there will be liquidity crisi in Indian Financial market. Stiff terms and conditions may be imposed for borrowings. As it is, the cost of capital has increased thereby affecting the bottomlines of Industry, in general. The Central Government’s mission for electricity in all houses and particularly in rural areas will require demand of the Company’s product from cable and wire industry.
The Central Government can convert the tariff war and currency war into opportunity for demand growth of Indian Industry, if it lays down proper economic policies

Risks and Concerns:

The company has comprehensive risk management framework in place, which consists of a) Process to identity, prioritize and formulate mitigation plans for risks and b) A framework of rules and regulations for various officials/ employees and the Board, in discharging the risk management process, periodicity of reporting risk management.

As a part of this risk management framework, the company has identified for each conceivable risk and corresponding mitigation plan to ensure continuous risk monitoring and risk mitigation.

Internal Control System.

The Company always strives to strengthen Internal Control Systems and processes for smooth and efficient conduct of business and complies with applicable relevant laws and regulations. A comprehensive delegation of power exists for smooth decision making. Elaborate guidelines for preparation of accounts are followed for uniform compliance. Further, all the key functional areas are governed by respective operating manuals. In order to ensure that all checks and balances are in place and all Internal Control Systems are in work, regular and exhaustive internal audits are conducted by experienced firm of accountants in close co-ordination with the company’s concerned accredited officials.

The Internal Financial Control are reviewed periodically and in particular the Internal Auditors ensure that the company has in all material aspects, laid down Internal Financial Controls including operational controls and that such controls are adequate and operating efficiently.

Human Resources and Industrial Relations

The Company appreciates performance of the employees for the year and anticipates much more for the years to come. Your Company believes in employee empowerment across the entire organization in order to achieve organizational effectiveness. The Human Resource policies are soundly drafted for all levels of employees to serve them motivation, transfer & promotions and to retain the skills. Over a period of time, your company has built and nurtured a dedicated and excellent workforce who consists of engineers,

CAs, CSs, MBAs, and advance degree holders like PhDs having a big business portfolio. The Industrial relations of the Company was cordial and there were no instances of employee disputes arising during the year.

Your company has sufficient pool of talents in various operational fields. The Human Resource environment has been very smooth throughout the year.

The company takes special care about the safety, which is core value of the company and all necessary actions are taken in the company to keep safety as priority.

Cautionary Statement

Certain statements made in the Management Discussion and Analysis Report relating to the Company’s objectives, projections, estimates, and expectations and others may constitute ‘forward looking statements’ within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed or implied. Important factors that could make a difference to the Company’s operations include economic conditions affecting demand/supply and price conditions in the domestic and overseas markets in which the Company operates, changes in the Government regulations, tax laws, natural calamities and so on over which the company does not have any direct control.

For and on behalf of the Board of Directors
Place: Kolkata (DIN: 00060127)
Date: 28.05.2019 Chairman & Managing Director