Directors Report of Kirloskar Brothers Ltd.
Mar 31, 2023
Your Directors present the 103rd Board Report and the Audited Financial Statements of the Company for the Financial Year ended March 31, 2023 together with the reports of the Auditors thereon.
FINANCIAL RESULTS
The financial results of the Company for the Financial Year 2022-23 as compared with the previous Financial Year are as under:
|
(Rs. in Million) |
||
|
Particulars |
Year ended |
Year ended |
|
March 31,2023 |
March 31,2022 |
|
|
Revenue from operations |
25,399 |
21,659 |
|
Other income |
330 |
357 |
|
Total |
25,729 |
22,016 |
|
Profit before tax |
2,073 |
1,111 |
|
Tax expense |
547 |
329 |
|
Profit for the period |
1,526 |
782 |
|
Other comprehensive income |
(25) |
28 |
|
Surplus in Profit & Loss Account brought forward from previous year |
4,889 |
4,317 |
|
Dividend |
(238) |
(238) |
|
Available surplus |
6,152 |
4,889 |
DIVIDEND
The Board of Directors have recommended a Dividend of '' 4.50 per equity share i.e. @ 225% of face value of '' 2/- each, for the Financial Year 2022-23 ('' 3/- per equity share as Final Dividend for the Financial Year 2021-22) as per the Dividend Distribution Policy.
The total outflow towards dividend recommended for the Financial Year 2022-23 will be '' 357.30 million as against '' 238.30 million for the previous financial year.
Your Company has formulated a policy for Dividend Distribution which is disclosed on the website of the Company and can be accessed at https://www.kirloskarpumps.com/wp-content/ uploads/2021/09/Dividend-Distribution-Policy-2021.pdf
OPERATIONS OF THE COMPANY
The revenue from operations for the year under review is '' 25,399 million, which represents an increase of 17% compared to the previous financial year.
The Financial Year 2022-23 witnessed a significant revival of the economy, enabling the Company to operate all its plants without any restrictions, during the year. This, in turn, allowed the Company to provide its customers with the best possible products and services.
The Company experienced substantial growth in various industry sectors, including building & construction, chemical, pharma, steel, coal, sugar, oil & gas, and retail business. This growth was driven by a focus on value-added and sustainable products such as Lowest Life-cycle Cost (LLC) pumps, pressure boosting systems, dewatering pumps, micro-hydropower generator-PICO, process pumps, HVAC and autoprime pumps. The Company''s signature loT-based remote pump monitoring system - KirloSmart also continued to gain acceptance, further contributing to the Company''s success.
The Kirloskarvadi facility achieved remarkable results, setting a new record in annual performance with numerous accomplishments. The Kirloskarvadi facility recorded the highest sales ever and dispatched more than 55,000 pumps. The foundry also produced its highest-ever tonnage of 12,033 tons of cast iron.
During the Financial Year 2022-23, the Company executed 132 Vertical Turbine (VT) pumps (Small VT Medium VT Large VT) and successfully completed major irrigation projects in Uttar Pradesh, Madhya Pradesh, Gujarat and Odisha. The building and construction segment experienced a robust 26% growth during this financial year. Additionally, the Company secured significant orders from prestigious projects such as All MS Jammu, First Solar, Kanpur Metro, Oberoi Eternia and Enigma, and Reliance Model Economic Township Gurugram, further solidifying its market position.
To stay at the forefront of the fluid management business, Company''s research and engineering development introduced various new product series in Financial Year 2022-23. These include the DBxe and GK series with superior efficiency for utility applications, the KW-LC series of Inline pumps for HVAC applications, and an extended range of pumps in the FM/UL series for firefighting. The Company also launched a series of energy-efficient pumps in the monobloc and submersible pump category to consolidate its position in the agricultural and residential segments.
The Company also focused on addressing offshore applications by developing various types and sizes of Butterfly Valves (BFV) and other specialized products for specific markets such as Oman and Naval dockyards.
The Company''s international businesses delivered strong performances despite the challenges posed by increasing inflation pressure and global supply chain issues. In the UK, SPP Pumps experienced a 9% growth in industrial fire pumps order booking and its successful execution, while SPP Pumps Inc. in the USA witnessed a substantial increase in order booking. Kirloskar Brothers Thailand Limited (KBTL) successfully supplied FM/UL fire pumps for multiple metro stations in Bangkok and secured a contract for the supply of
concrete volute pumps for the Khlong Thawi Watthana storm water pumping station.
The Company remains committed to strengthening the capabilities of its channel partners for faster product delivery and service. To support this, the Company has opened Authorised Pumpset Original Equipment Manufacturer (APOEM) plants across the country.
The Company''s service engineers demonstrated their commitment and high-class service capabilities by successfully overhauling 7 units of the large vertical turbine (VT) pumps in Gardabani Thermal Power Plant, Georgia within a span of 22 days. The Company''s energy audit team also completed performance guarantee tests at various sites, resulting in successful project closures for numerous customers.
Furthermore, through its Vikas Charitable Trust (VCT), the Company actively engaged in various CSR initiatives, reflecting its commitment to giving back to the community.
AWARDS AND RECOGNITION
The Company received several awards and recognition, including the Gold Award from QCFI Coimbatore Chapter for the Kaniyur facility, a patent grant for Electrical Motor Assembly, and the âWinner-Excellence in Sustainability 2022â award for the Sanand plant. The Company was also recognized as one of Maharashtra''s Best Employer Brands and received the âPune Best Employer Brand Awards 2022â from the World Federation of HR Professionals. Additionally, the Company received an award at the Procurement Excellence Summit & Award 2023 organized by the Institute of Supply Chain Management, Mumbai (ISCM Forum).
There were no material changes or commitments to report that affected the Companyâs financial position that occurred between the end of the Financial Year and the date of this report.
TRANSFER TO RESERVE
The Board has decided to retain the entire amount of profit for the Financial Year 2022-23 and not to transfer any amount to general reserve.
STATUTORY DISCLOSURES
1. SHARE CAPITAL
The Paid-up Equity Share Capital of the Company as on March 31, 2023 was '' 158.82 million comprising of 79,408,926 equity shares of '' 2/- each. The Company does not have any shares with differential voting rights or stock options or sweat equity.
2. ANNUAL RETURN
As per provisions of Section 92(3) read with Section 134 of the Companies Act, 2013 (âthe Act''), the Annual Return of the Company is placed on the website of the Company at https://www.kirloskarpumps.com/investors/ shareholders-meetings/
3. NUMBER OF MEETINGS OF THE BOARD
During the Financial Year under review, 7 Board meetings were held, the details of which are appearing in the Report on Corporate Governance.
4. DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to Section 134(3) (c) of the Act, the Board of Directors to the best of its knowledge and ability confirm that:
(a) in preparation of the annual accounts, the applicable accounting standards have been followed.
(b) t hey have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the profit of the Company for that period.
(c) t hey have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
(d) they have prepared the annual accounts on a going concern basis.
(e) they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively.
(f) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
5. INDEPENDENT DIRECTORSâ DECLARATION
All Independent Directors of the Company have given declaration under Section 149 (7) of the Act, that they meet the criteria laid down in Section 149 (6) of the Act.
6. DISCLOSURE REQUIRED UNDER SECTION 134(3)(e)
The Board has adopted a Board Diversity Policy which sets the criterion for appointment as well as continuance of Directors, at the time of re-appointment of director in the Company. As per the policy, the Board has an optimum combination of members with appropriate balance of skill, experience, background, gender and other qualities of directors required by the directors for the effective functioning of the Board.
The Nomination and Remuneration Committee recommends remuneration of the Directors, subject to overall limits set under the Act, as outlined in the Remuneration Policy. As per the policy, the Executive Director is entitled to fixed salary, commission based on performance evaluation and other non-monetary benefits. In case of Non-Executive Directors, apart from receiving sitting fees, they are entitled to commission on the basis of criterion as per the policy.
The Remuneration Policy is available on the website of the Company at https://www.kirloskarpumps.com/ investors/policies/. The salient features of this policy are as follows:
⢠Philosophy: The Company strongly believes that the system of Corporate Governance protects the interest of all stakeholders by inculcating transparent business operations and accountability from management towards fulfilling the consistently high standard of Corporate Governance in all facets of the Company''s operations.
⢠Objective: Transparent process of determining remuneration at the Board and Senior Management level and appropriate balance between the elements comprising the remuneration.
⢠Coverage: The policy covers remuneration to Executive, Non-Executive Directors, Key Managerial Personnel and Senior Management Personnel.
7. REPORT OF AUDITORS
During the Financial Year under review, there are no qualifications, adverse remarks or disclaimers made by the Statutory Auditor on the financial statements of the Company and by the Secretarial Auditor in his Secretarial Audit Report, which is annexed herewith as an Annexure VI. There are no cases of fraud detected and reported by the Auditor under Section 143(12) during the Financial Year.
M/s. Sharp & Tannan Associates, Chartered Accountants (Firm Registration No. 109983W) have been appointed as Statutory Auditors for the second term of 5 consecutive years by the shareholders with effect from the conclusion of 102nd Annual General Meeting till the conclusion of 107th Annual General Meeting.
Mr. Shyamprasad Limaye (CP No. 572), Practicing Company Secretary was appointed as a Secretarial Auditor of the Company as per Section 204 of the Act, for the Financial Year 2022-23. Mr. Shyamprasad Limaye has been re-appointed as Secretarial Auditor of the Company for the Financial Year 2023-24.
M/s. Parkhi Limaye & Co. (Firm Registration No. 000191) have been appointed as Cost Auditor of the Company as per Section 148 of the Act, read with applicable rules made thereunder for the Financial Year 2023-24. Their remuneration is subject to the approval by the Members at the ensuing Annual General Meeting.
8. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
The details of loans, guarantees or investments under Section 186 of the Act, are available under Note no.
5, 7, 35E and 36 of notes to accounts, attached to the Standalone Financial Statements.
The full particulars are available in the Register maintained under Section 186 of the Act, which is available for inspection during business hours on all working days (except Saturday and Sunday).
9. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All contracts/arrangements/transactions entered by the Company during the Financial Year 2022-23 with the related parties were in the ordinary course of business and at arm''s length basis. There were no transactions required to be disclosed in Form AOC-2 (Annexure V). During the Financial Year, the Company has not entered into contracts/arrangements/transactions with the related parties which could be considered material in accordance with the Company''s âPolicy on Materiality of Related Party Transactions and Dealing with Related Party Transactions''. The said policy is available on the website of the Company.
Further, we draw your attention to Note no. 35 of the Standalone Financial Statements of the Company for details of related party transactions.
10. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Details of energy conservation, technology absorption, research and development and foreign exchange earnings and outgo as required under Section 134(3)(m) of the Act, read with the applicable rules, are given as an Annexure I to this Report.
11. RISK MANAGEMENT
The Risk Management Committee of the Company meets at regular intervals and identifies the top risks and prioritises those risks. Particulars of the Committee and on the Risk Management Policy of the Company are given in the Report on Corporate Governance.
12. CORPORATE SOCIAL RESPONSIBILITY (CSR) REPORT
The Company has a Corporate Social Responsibility Policy as per the requirements of the Act and the same is available on the website of the Company.
The salient features of this policy are as follows:
⢠The Company believes that serving society is a primary purpose.
⢠Perceivable improvement in attitude, culture and values amongst employees and community.
⢠Conservation of natural resources and commitment to Green Environment.
⢠Developing business processes which are environmentally and socially sustainable.
The Corporate Social Responsibility Report in the required format is given as an Annexure II to this report.
13. BOARD EVALUATION
The Board has formulated a Board Evaluation Policy for evaluation of individual Directors as well as the entire Board and Committees thereof. The evaluation framework is divided into parameters based on various performance criteria as given in the policy available on the website of the Company. The evaluation process for the Financial Year ended on March 31, 2023 has been carried out.
In compliance with the requirements under Schedule IV of the Act, read with Regulation 25(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âthe SEBI Listing Regulations, 2015''), a meeting of Independent Directors was held on March 22, 2023 primarily to discuss the matters mentioned under the said Schedule.
14. PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES, ASSOCIATE AND JOINT VENTURES
Following are the highlights of performance of subsidiaries, associate and joint venture companies and their contribution to the overall performance of the Company during the period under review.
i. Karad Projects and Motors Limited
The revenue for the year under review is '' 5,151 million which is 8% more as compared to the previous year. This constitutes 12% of gross consolidated revenue of your Company.
ii. The Kolhapur Steel Limited
The revenue for the year under review is '' 456 million which is 45% more as compared to the previous year. This constitutes 1% of gross consolidated revenue of your Company.
iii. Kirloskar Corrocoat Private Limited
The revenue for the year under review is '' 353 million which is 37% more as compared to the previous year. This constitutes 1% of gross consolidated revenue of your Company.
iv. Kirloskar Brothers International B.V. (consolidated with its overseas subsidiaries)
The revenue for the year under review is '' 11,777 million which is 34% more as compared to the previous year. This constitutes 27% of gross consolidated revenue of your Company.
v. Kirloskar Ebara Pumps Limited (Joint Venture)
The revenue for the year under review is '' 2,306 million which is 3% more as compared to the previous year.
The financial position of the subsidiaries and joint venture companies is given in AOC-1, in this Annual Report.
15. OTHER STATUTORY DISCLOSURES AS REQUIRED UNDER RULE 8(5) OF THE COMPANIES (ACCOUNTS) RULES, 2014
(i) Financial summary/highlights are included elsewhere in the Report.
(ii) There was no change in the nature of business during the year under review.
(iii) Details of the Directors are given in the Report of Corporate Governance, forming part of this Integrated Annual Report.
⢠Mr. Alok Kirloskar (DIN 05324745) is liable to retire by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.
⢠Mr. Pradyumna Vyas (DIN 02359563) and Ms. Shailaja Kher (DIN 08450568) ceased to be Directors with effect from May 15, 2022 on completion of their term as an Independent Director of the Company.
⢠Dr. Rakesh Mohan (DIN 02790744) ceased to be Director with effect from July 27, 2022 on completion of his term as an Independent Director of the Company.
⢠Mr. Pratap Shirke (DIN 00104902) ceased to be the Non-Executive, Non-Independent Director of the Company with effect from March 15, 2023 consequent upon resignation due to his personal commitments.
⢠Mr. Sanjay Kirloskar - Chairman and Managing Director, Mr. Chittaranjan Mate - Chief Financial Officer and Mr. Devang Trivedi - Company Secretary, are the Key Managerial Personnel (KMP) of the Company.
During the year under review, there were no changes in the KMPs of the Company.
(iv) No company has become or ceased to be a subsidiary, joint venture or associate company of the Company, during the year.
Material Subsidiaries
Regulation 16 of the SEBI Listing Regulations 2015, defines a âmaterial subsidiary'' to mean a subsidiary, whose income or net worth exceeds ten percent of the consolidated income or net worth respectively, of the listed entity and its subsidiaries in the immediately preceding accounting year.
Under this definition, Karad Projects & Motors Limited Karad, Maharashtra (âKPML''), incorporated
on 2nd April 2001, an Unlisted Indian Subsidiary, SPP Pumps Limited, UK (âSPP''), incorporated on February 15, 2010 and Kirloskar Brothers International B.V, The Netherlands (âKBI BV''), incorporated on August 30, 2007, Unlisted Foreign Subsidiaries, are material subsidiaries of the Company.
The subsidiaries of the Company function independently, under the supervision and control of the Board of Directors of respective companies. For more effective governance, the minutes of Board Meetings of subsidiaries of the Company are placed before the Board of Directors of the Company for their review at every quarterly Meeting.
In addition to the above, Regulation 24 of the SEBI Listing Regulations, 2015 requires that at least one Independent Director on the Board of Directors of the listed entity shall be a Director on the Board of Directors of an unlisted material subsidiary, whether incorporated in India or not. For this provision, material subsidiary means a subsidiary, whose income or net worth exceeds twenty percent of the consolidated income or net worth respectively, of the listed entity and its subsidiaries in the immediately preceding accounting year. However, there is no Subsidiary which falls under this definition of unlisted material subsidiary for the Financial Year ended March 31,2023.
PG. Bhagwat LLP Chartered Accountants, Pune, are the statutory auditors of KPML. Saffery Champness, Chartered Accountants, UK, are the statutory auditors of SPP
The other requirements as prescribed under Regulation 24 of the SEBI Listing Regulations, 2015 for Subsidiary Companies have been complied with.
Secretarial Audit of Material Unlisted Indian Subsidiary
KPML, a material subsidiary of the Company carried out Secretarial Audit for the Financial Year 2022-23 pursuant to Section 204 of the Companies Act, 2013 and Regulation 24A of the SEBI Listing Regulations, 2015. The Secretarial Audit Report of KPML submitted by M/s. Dakhawe Apte & Associates, Company Secretaries is attached as Annexure VII to this Report and it does not contain any qualification, reservation or adverse remark or disclaimer.
(v) Details relating to Deposits
The Company has neither accepted nor renewed matured deposits since January 2003 and there were no deposits accepted by the Company as covered under Chapter V of the Act read with Rules made thereunder.
(vi) The details of Deposit which are not in compliance with the requirement of the Chapter V of the Act - NA.
(vii) No significant and material orders were passed by the regulators or court or tribunals impacting the going concern status and Company''s operations in future.
(viii) Details in respect of adequacy of internal financial controls with reference to the financial statements:
The Company has adequate internal financial control systems in place. The control systems are regularly reviewed by the external auditors and their reports are presented to the Audit Committee.
The Company has an Internal Audit Charter specifying mission, scope of work, independence, accountability, responsibility and authority of Internal Audit Department. The internal audit reports are reported to Audit Committee along with management response.
(ix) Your Company is required to maintain the Cost records as required under Section 148(1) of the Act and accordingly, such accounts and records are maintained by the Company for the Financial Year ended on March 31,2023.
(x) The details of application made or any proceedings pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the Financial Year - Nil.
(xi) The details of the difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reason thereof - Nil.
(xii) Other disclosures required under the Companies Act, 2013 as may be applicable
⢠Composition of the Audit Committee has been disclosed in Corporate Governance Report.
⢠Establishment of Vigil Mechanism:
The Company has already in place a âWhistle Blower Policy'' as a Vigil Mechanism since 2008. The details of the same are reported in Corporate Governance Report.
⢠Disclosures as required under Section 197(12)
of the Act read with the applicable rules and details as per Rule 5(2) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 are given as Annexure III & Annexure IV, respectively to this report.
(xiii) Other Disclosure
⢠The Company has filed a suit against Kirloskar Proprietary Limited (KPL) relating to the use, assignment and ownership of the trademark âKirloskarâ. The Company has made appropriate pleadings in the said suit as advised by the Legal Advisors of the Company and has inter-alia, challenged the unlawful termination and sought declaration, injunction and other appropriate relief/s. KPL subsequently has withdrawn the termination letters with effect from March 3, 2020.
⢠I n compliance with the order of the Hon''ble Pune Commercial Court, the Company has been depositing the claimed Royalty amount by way of cheque in the safe custody of Ld. Nazir District Court, Pune Civil Court from the quarter ended October, 2018 until 3rd quarter of the Financial Year 2022-23, without prejudice to its rights and contentions. The cheques upon their expiry have been replaced by fresh cheques in terms of the order of the Hon''ble Court, Pune.
⢠Kirloskar Industries Limited along with Mr. Atul Kirloskar and Mr. Rahul Kirloskar (âthe requisionists''), collectively holding more than one-tenth of the paid-up share capital of the Company had requisitioned for an Extra-ordinary General Meeting (âEGM'') of the shareholders of the Company for appointment of an independent and reputed external entity as an independent forensic auditor for conducting a forensic audit to investigate and i) verify the expenses incurred by the Company on legal, professional and consultancy charges over the past 6 (six) years, and the affairs of the Company; ii) verify all records, books of accounts, minute books, other documents of company; and iii) examine the conduct of Board of Directors of the Company including independent directors. Accordingly, Notice dated November 16, 2022 for convening EGM along with statement setting out material facts was sent to the shareholders of the Company and the EGM was conducted on December 8, 2022 by the Company. As per the voting results of the said EGM, the resolution as proposed by the requisitionists was defeated since it was not passed by a majority of the votes of the shareholders, present/ participating and voting.
16. CASH FLOW
Cash flow statement for the Financial Year ended on
March 31,2023 is attached to the Balance Sheet.
17. SECRETARIAL STANDARDS
The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating efficiently.
SAFETY, HEALTH AND ENVIRONMENT Safety and Health
⢠Hazard identification is one the important element in Safety. A good safety culture is also said to be developed when all level employees identify the hazards. An Incident tracking system is being used by Staff employees whereas Safety yellow tag (SaY) system is developed for workmen. Corrective and preventive actions are assigned to rectify the hazards. There is significant improvement in the compliance of corrective and preventive actions compared to last year. It''s more than 90% in almost all manufacturing plants.
⢠Safety audit is one of the important tool to identify the gaps in safety. All manufacturing plants are audited for safety by internal trained Safety officers using quantitative methodology.
⢠Safety training is one another method to improve the skill and knowledge of safety, which also improves the safety culture. We kept the target of 3 man-hours/ employee/year, which is achieved and surpassed in manufacturing plants.
⢠State of art Safety training centre is created in Kirloskarvadi plant.
⢠Special initiatives taken to high consequences area to improve safety like Grinding safety, Road safety, forklift safety etc.
⢠To improve the wastewater quality, in Kirloskarvadi plant, industrial waste streams like coolant waste, paint booth wastewater and acid pickling waste water are segregated from sewage stream. A new effluent treatment plant is installed to treat this segregated industrial waste.
Environment and Energy
Through sustainability policy, the Company is committed to achieve excellence in overall sustainable performance through integration of economic, environmental and social dimensions. As a part of its sustainability initiative, the Company focuses on various aspects to reduce adverse impact on the environment, which include conservation of natural resources, optimising the use of resources, reducing carbon emissions, developing products with low ecological footprint, promoting energy efficient products, promoting use of renewable sources of energy, conserving biodiversity, and engaging with stakeholders and communities for sustainability practices.
For the purpose of optimum utilization of resources and continual improvement, the Company monitors and reviews the important parameters impacting environment such as
carbon footprint, energy consumption, water consumption, material consumption and waste generation.
As a step towards enhancing the use of renewable energy sources and curtailing the scope 2 emissions, the Company has installed and made operational roof-top solar power panels at its manufacturing locations and Corporate Office with capacity of 4.6 MW, which is yielding green power with good efficiency. This is in addition to the generation of 4 MW wind power by Kirloskarvadi plant. Thus, the Company is able to satisfy around 23% of its energy requirement from renewable energy.
At its Dewas plant, the Company has developed âKirloskar Centenary Forestâ by taking input from Miyawaki afforestation concept (Special Process for Thick Forest). It has helped the Company in reducing carbon footprint and developing biodiversity to enrich the environment and society.
Rain-water harvesting system is encouraged to recharge groundwater for all manufacturing plants of the Company. Thus, the Company is able to save up to 30% of water by effective utilisation of water management practices. All plants of the Company are âzero waste water dischargeâ units.
Through Confederation of Indian Industry (CII), the Company has completed âLife Cycle Assessment (LCA)â study on a sample product to evaluate the impact of manufacturing on environment. Implementation of âHigh Pressure Moulding Lineâ (HPML)Technology for Company''s foundry in Dewas plant will help it to reduce carbon emission by around 3-5%.
Similarly, the Company has also taken up product specific Carbon Mapping Project for a few of its pump models being regularly exported to the EU market. Actions have been suggested to reduce the impact of carbon emissions from the identified products. Similar exercise has been completed at Dewas Plant to establish measurement of carbon emission by Plant. Thus, the Company shall continue taking efforts to improve and contribute to help India achieve its commitment to be Carbon Net Zero by 2070.
Corporate office of the Company in Pune, Maharashtra is a Green building with LEED Platinum certification. Commitment towards environment is one of the Values of the Company. At corporate office and manufacturing locations, the Company has extensive daylight harvesting to save energy. 80% of Company''s work stations are illuminated by natural light. Most pumps manufactured by the Company are BEE star labelled for efficiency.
Green initiatives like plantation of trees to minimize heat load on buildings, use of furnace slag for constructing internal roads and use of ply-boards and metallic frames instead of wood for packing are few other environmental practices adopted by the Company.
In order to encourage our manufacturing plants to implement more and more energy saving projects, the Company organizes energy conservation competition (ENCON) at the Company group level through independent energy auditors. The Company shares best practices and achievements with all plants and also awards teams for innovative ideas and energy saving performances.
All manufacturing plants of the Company are certified with Environment Management System (ISO 14001:2015), Energy Management System (ISO 50001:2018), Quality Management System (ISO 9001:2015) and Occupational Health and Safety Management System (ISO 45001:2018) under Integrated Management System certifications.
The Company is committed to the integration of environment performance considerations in the value chain process of products and services including planning, use and disposal, environmental aspects, potential impacts and costs associated with the life cycle assessment in order to have a minimal negative impact on the environment.
The Company seeks to reduce the environmental impacts of its procurement process and also encourages suppliers to adopt sustainable supply chain practices through establishing and adopting Sustainable Policy.
REPORTS ON MANAGEMENT DISCUSSION AND ANALYSIS, CORPORATE GOVERNANCE
Pursuant to the SEBI Listing Regulations 2015, Management Discussion and Analysis Report, Report on Corporate Governance, Auditor''s Certificate on Corporate Governance, Certificate pursuant to Schedule V read with Regulation 34 (3) and the declaration by the Chairman and Managing Director regarding affirmations for compliance with the Company''s Code of Conduct are annexed to this report.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
Your Company has been reporting its sustainability performance for the past 13 years. Further, the Company started presenting Integrated Annual Report since 2018-19. The Annual Report for the Financial Year 2022-23 is 5th Integrated Annual Report of the Company. Pursuant to the provisions of Regulation 34(2) (f) of the SEBI Listing Regulations, 2015, the Business Responsibility and Sustainability Report for the Financial Year 2022-23 is annexed to this report.
DISCLOSURE UNDER THE âSEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
Your Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and in terms of Section 22 of this Act, read with Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Rules, 2013, we report that for the Financial Year ended on March 31,2023:
|
1 |
No. of complaints received in the year |
Nil |
|
2 |
No. of complaints disposed-off in the year |
NA |
|
3 |
Cases pending for more than 90 days |
NA |
|
4 |
No. of workshops and awareness programmes conducted in the year |
2 |
|
5 |
Nature of action by employer or District Officer, if any |
NA |
ACKNOWLEDGEMENTS
Your Directors wish to place on record their appreciation of the unstinted support and co-operation given by the banks and financial institutions. Your Directors would further like to record their appreciation of the efforts by the employees of the Company and wish to express their gratitude to the Members for their continued trust and support.
For and on behalf of the Board of Directors,
Sanjay C. Kirloskar
Chairman & Managing Director Pune: May 11,2023 DIN 00007885
Mar 31, 2022
Your Directors present the 102nd Board Report and the Audited Financial Statements of the Company for the Financial Year ended March 31,2022 together with the reports of the Auditors thereon.
FINANCIAL RESULTS
The financial results of the Company for the Financial Year 2021-22 as compared with the previous Financial Year are as under:
|
Year ended March 31,2022 (Amt. in Million '' |
Year ended March 31,2021 (Amt. in Million '' |
|
|
Revenue from operations |
21,659 |
17,999 |
|
Other income |
357 |
189 |
|
Total |
22,016 |
18,188 |
|
Profit before tax |
1,111 |
1,249 |
|
Tax expense |
329 |
317 |
|
Profit for the period |
782 |
932 |
|
Other comprehensive income |
28 |
23 |
|
Surplus in Profit & Loss Account brought forward from previous year |
4,317 |
3,402 |
|
Dividend |
(238) |
(40) |
|
Available surplus |
4,889 |
4,317 |
DIVIDEND
The Board of Directors have recommended a Dividend @ 150%, amounting to '' 3.00 per equity share for the Financial Year 2021-22 ('' 3.00 per equity share as Final Dividend for 2020-21).
Your Company has formulated a policy for Dividend Distribution which is disclosed on the website of the Company and can be accessed at https:// www.kirloskarpumps.com/wp-content/uploades/2021/09/Dividend-Distribution-Policy-2021.pdf
OPERATIONS OF THE COMPANY
The revenue from operations for the year under review is '' 21,659 Million, which is more by 20% compared to the previous Financial Year.
The Financial Year 2021-22 witnessed the revival of the economy post relief from the covid pandemic. The opening of businesses and markets helped your Company to return to a full operation based on robust demand from across the sectors. Operations across all plants scaled to full potential while strictly following covid guidelines. This helped to serve customers of the Company with the best products and services in the best possible ways.
Overall demand from industry sectors including building & construction, chemical, pharma, steel, coal, sugar, power and textile helped the Company register good growth in these segments.
Revival of the residential building segment and continued focus on communicating the benefits of intelligent water management pumping system helped the Company achieve more delivery of its Hydro Pneumatic Pressure Boosting (HYPN) pumping system. During the period, for the first time, Kirloskar Brothers Limited (KBL) supplied 104 HYPN systems to HPCLâs residential township in Barmer, Rajasthan.
Your Company continues to maintain a leadership position in the firefighting pumping system, especially Multi-Stage Multi-Outlet (MSMO) firefighting pumps, winning many new customers in this segment.
In the Oil & Gas segment, KBL developed a new pump in horizontal execution for the IOCL 3G Ethanol project.
Revival of large water projects and good enquiry from large OEMs resulted in a significant number of orders for the supply of high head multi-stage pumps, split case pumps, and Large Vertical Turbine (VT) pumps. We were particularly pleased to be part of the Gujarat Water Supply and Sewage Board (GWSSB), Hafeshwar project, where VT pumps of the Company were installed with 35 mtrs suspension length. The project was inaugurated by Honourable Prime Minister Shri Narendra Modi Ji. Your Company has successfully executed Jaipur - Bisalpur Augmentation project by increasing the total capacity of the scheme without interrupting the existing Infrastructure where 18 large Pumps were supplied.
Your Company continues to focus on gaining more customer traction for product concepts like Pump as Turbine (PAT), which can generate green power continuously using the pressure available in the water supply pipeline, reducing carbon footprints and saving cost in the long run. Solar pumping is another potential segment where we registered significant growth in FY 21-22.
With many irrigation projects being executed, we supplied large and medium-range VT pumps for projects in Madhya Pradesh, Gujarat and Orissa. Also, during the period, we supplied pumps for Haryana Lift Irrigation Schemes and UP Irrigation Dept (CESPO).
Successful shifting of Valve manufacturing to Kirloskarvadi resulted in streamlining valve operations, adding a significant advantage to the business. The Valve business registered good growth mainly due to demand from the Middle East and Asia-Pacific region.
Your Company continues to play its part in making India Atmanirbhar in the defence sector by successfully completing an Indigenisation project of âMagazine Fire Fighting Systemâ in coordination with Mazagaon Dock Shipbuilders Ltd.
In the retail segment, a series of energy-efficient pumps both in the monobloc and submersible pump category have been launched to further consolidate the Companyâs position in the agricultural and domestic segments. The pumps, including AARNA, ANAYA, RIAN, Jaldaksh, Jalhasti, Jaltara and submersible pumps like KP4 Jalraaj UVA and NEO Series Pumps, are made with advanced technology and consume less energy for high performance. Further, introducing new energy-efficient pump series equivalent to IE4 and IE5 efficiencies helped the Company in gaining new market penetration. In this regard, KBL launched 53 variants of Monobloc pumps with IE4 Super Premium Efficiency motors and 16 variants of Monobloc pumps (up to 5 HP) sets with Ultra-Premium Efficiency IE5 motors.
Focus on value-added and sustainable products, including Lowest Life-cycle Cost (LLC) pumps, dewatering pumps, micro hydropower generator - PICO, process pumps, HVAC, sewage pumps and booster pumps, among others, helped gain growth in these product sales. Your Company also witnessed continued acceptance of its signature IoT based remote pump monitoring system - KirloSmart. With more advanced features, the Company is confident of winning more customers in future for this product.
During FY 21-22, rising electricity requirements lead to expansion projects in power industry resulting in the demand for pumps. This is mainly for pumps required in Flue Gas Desulfurization (FGD) project in Thermal Power plants. The opening of an Advanced Technology Product Division (ATPD) at Kirloskarvadi has further strengthened our capability in the nuclear power segment.
Your Company is committed to manufacturing high-quality products through its state-of-the-art plants using the latest technology like 3D printers. KBL continues to invest in improving manufacturing competitiveness. Recently, Sanand plant of the Company, a dedicated submersible pump manufacturing plant, was awarded Silver Medal and the Kaniyur plant, an all-women operated plant, was awarded a bronze medal by NAMC (National Award for Manufacturing Competitiveness 2021), which shows our commitment to manufacturing best quality pumps. Also, the material testing lab of the Kirloskarvadi plant is now NABL accredited in accordance with ISO/IEC 17025: 2017.
The focus on research and development continues to help maintain KBLâs leadership position on the technological forefront in the fluid management business. During the period, the Company received multiple patents, reiterating its commitment to continue to follow the path of adding value through innovation. The
Company developed a ballast pump for the special navy application and solids handling pump type SHL 250/40 M1 for handling 131 mm solid size. Your Company has designed, developed and completed model testing of the Francis Turbine Pump (FTP) for 30 MW. These projects speak volumes of the Companyâs R&D capability.
Your Company has also achieved product improvement in the Valve sector through the development of a NonRising Sluice Valve (NRSV) of 1200 mm size of PN 2.0, 1400 mm size of PN 2.0 and Butterfly Valve of 1200 mm size of rating AWWA #150, size 1400 of rating PN6, 2300 mm size of rating PN10.
Your Company remains committed to strengthening the capability of channel partners in faster product delivery and service. To take this forward, it has opened the Authorised Pump Original Equipment Manufacturer (APOEM) plants across the country. These plants have a stocking, servicing and testing facilities along with skilled manpower to support installation and commissioning. Strategically located, these plants will reaffirm KBLâs commitment in providing unmatched value for the customers.
Service remains the focus area both from a revenue and customer satisfaction point of view. Having industryleading skilled manpower helped the Company gain many customers. Successful commissioning of 104 VT Pumps in MRT Skytrain Project-Bangkok, Thailand and the execution of Annual Maintenance Contracts (AMC) with big clients speaks volume of the commitment and high-class service capabilities of the companyâs experienced service team.
Your Company was awarded âIndiaâs Most Ethical Companyâ, which reflects the honesty with which it conducts business and remains committed to adding value for the customers through innovative products and superior service. Also, through CSR activities, the Company has always walked an extra mile to give back to the community.
There were no material changes or commitments to report that affected the Companyâs financial position that occurred between the end of the Financial Year and the date of this report.
1. ANNUAL RETURN
As per provisions of Section 92(3) read with Section 134 of the Companies Act, 2013 (''the Act''), the Annual Return of the Company is placed on the website of the Company at https://www.kirloskarpumps. com/investors/shareholders-meetings/
2. NUMBER OF MEETINGS OF THE BOARD
During the Financial Year under review, 5 Board meetings were held, the details of which are appearing in the Report on Corporate Governance.
3. DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) of the Act, the Board of Directors to the best of its knowledge and ability confirm that:
(a) in preparation of the annual accounts, the applicable accounting standards have been followed.
(b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the profit of the Company for that period.
(c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
(d) they have prepared the annual accounts on a going concern basis; and
(e) they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively.
(f) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
4. INDEPENDENT DIRECTORSâ DECLARATION
All Independent Directors of the Company have given declaration under Section 149 (7) of the Act, that they meet the criteria laid down in Section 149 (6) of the Act.
5. DISCLOSURE REQUIRED UNDER SECTION 134(3)(e)
The Board has adopted a Board Diversity Policy which sets the criterion for appointment as well as continuance of Directors, at the time of re-appointment of director in the Company. As per the policy, the Board has an optimum combination of members with appropriate balance of skill, experience, background, gender and other qualities of directors required by the directors for the effective functioning of the Board.
The Nomination and Remuneration Committee recommends remuneration of the Directors, subject to overall limits set under the Act, as outlined in the Remuneration Policy. As per the policy, the Executive Director is entitled to fixed salary, commission based on performance evaluation and other nonmonetary benefits. In case of Non-Executive Directors, apart from receiving sitting fees, they are entitled to commission on the basis of criterion as per the policy.
The Remuneration Policy is available on the website of the Company at https://www.kirloskarpumps. com/wp-content/uploades/2020/01/Remuneration-Policy.pdf The salient features of this policy are as follows:
- Philosophy: The Company strongly believes that the system of Corporate Governance protects the interest of all stakeholders by inculcating transparent business operations and accountability from management towards fulfilling the consistently high standard of Corporate Governance in all facets of the Companyâs operations.
- Objective: Transparent process of determining remuneration at the Board and Senior Management level and appropriate balance between the elements comprising the remuneration.
- Coverage: The policy covers remuneration to Executive, Non-Executive Directors, Key Managerial Personnel and Senior Managerial Personnel.
6. REPORT OF AUDITORS
During the Financial Year under review, there are no qualifications, adverse remarks or disclaimers made by the Statutory Auditor on the financial statements of the Company and by the Secretarial Auditor in his Secretarial Audit Report, which is annexed herewith as an Annexure VI. There are no cases of fraud detected and reported by the Auditor under Section 143(12) during the Financial Year.
In terms of the provisions of Section 139 of the Companies Act, 2013, read with the applicable rules made thereunder, M/s. Sharp & Tannan Associates, Chartered Accountants (Firm Registration No.109983W) would complete their term of 5 years as the Statutory Auditors of the Company at the ensuing 102nd AGM.
They have been recommended by the Board of Directors to be appointed as Statutory Auditors for the second term of 5 consecutive years with effect from the conclusion of 102nd Annual General Meeting till the conclusion of 107th Annual General Meeting. The Statutory Auditor have confirmed its eligibility and necessary certificates as required under the Act have been received. Their appointment for the second term is subject to the approval of the shareholders of the Company at the ensuing 102nd AGM.
Mr. Shyamprasad Limaye (CP No. 572), Practicing Company Secretary was appointed as Secretarial Auditor of the Company as per Section 204 of the Act, for the Financial Year 2021-22. Mr. Shyamprasad Limaye has been re-appointed as Secretarial Auditor of the Company for the Financial Year 2022-23.
M/s. Parkhi Limaye & Co. (Firm Registration No. 000191) have been appointed as Cost Auditor of the Company as per Section 148 of the Act, read with applicable rules made thereunder for the Financial Year 2022-23. Their remuneration is subject to the approval by the Members at the ensuing 102nd AGM.
7. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
The details of loans, guarantees or investments under Section 186 of the Act, are available under Note no. 5, 7 and 35E of notes to accounts, attached to the Standalone Financial Statements.
The full particulars are available in the Register maintained under Section 186 of the Act, which is available for inspection during business hours on all working days (except Saturday and Sunday).
8. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All contracts/arrangements /transactions entered by the Company during the Financial Year 2021-22 with the related parties were in the ordinary course of business and at armâs length basis. There were no transactions required to be disclosed in Form AOC-2 (Annexure V). During the Financial Year, the Company has not entered into contract/arrangement/transactions with the related parties which could be considered material in accordance with the Companyâs âPolicy on Materiality of Related Party Transactions and Dealing with Related Party Transactionsâ. The said policy is available on the website of the Company.
Further, we draw your attention to Note no. 35 of the Standalone Financial Statements of the Company for details of related party transactions.
9. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Details of energy conservation, technology absorption, research and development and foreign exchange earnings and outgo as required under Section 134(3)(m) of the Act, read with the applicable rules are given as an Annexure I to this Report.
10. RISK MANAGEMENT
The Risk Management Committee of the Company meets at regular intervals and identifies the top risks and prioritises those risks. Particulars about this Committee are given in the Report on Corporate Governance.
11. CORPORATE SOCIAL RESPONSIBILITY REPORT
The Company has a Corporate Social Responsibility Policy as per the requirements of the Act and the same is available on the website of the Company.
The salient features of this policy are as follows:
- The Company believes that serving society is a primary purpose.
- Perceivable improvement in attitude, culture and values amongst employees and community.
- Conservation of natural resources and commitment to Green Environment.
- Developing business processes which are environmentally and socially sustainable.
The Corporate Social Responsibility Report in the required format is given as an Annexure II to this report.
12. BOARD EVALUATION
The Board has formulated a Board Evaluation Policy for evaluation of individual Directors as well as the entire Board and Committees thereof. The evaluation framework is divided into parameters based on various performance criteria. The evaluation process for the Financial Year ended on March 31,2022 has been carried out.
In compliance with the requirements under Schedule IV of the Act, read with Regulation 25(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a meeting of Independent Directors was held on November 10, 2021 primarily to discuss the matters mentioned under the said Schedule. All the Independent Directors of the Company attended the same.
13. PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES, ASSOCIATE AND JOINT VENTURES
Following are the highlights of performance of subsidiaries, associate and joint venture companies and their contribution to the overall performance of the Company during the period under review.
i. Karad Projects and Motors Limited
The revenue for the year under review is '' 4,775 million which is 55% more as compared to the previous year. This constitutes 13% of gross consolidated revenue.
ii. The Kolhapur Steel Limited
The revenue for the year under review is '' 314 million which is 50% more as compared to the previous year. This constitutes 1% of gross consolidated revenue.
iii. Kirloskar Corrocoat Private Limited
The revenue for the year under review is '' 258 million which is 28% more as compared to the previous year. This constitutes 1% of gross consolidated revenue.
iv. Kirloskar Brothers International B.V. (consolidated)
The revenue for the year under review is '' 8,775 million which is 6% less as compared to the previous year. This constitutes 25 % of gross consolidated revenue.
v. Kirloskar Ebara Pumps Limited (Joint Venture)
The revenue for the year under review is '' 2,234 million which is 22% more as compared to the previous year.
The financial position of the subsidiaries and joint venture companies is given in AOC-1, in this Annual Report.
14. OTHER STATUTORY DISCLOSURES AS REQUIRED UNDER RULE 8(5) OF THE COMPANIES
(ACCOUNTS) RULES, 2014
(i) Financial summary/highlights are included elsewhere in the Report.
(ii) There was no change in the nature of business during the year under review.
(iii) Changes in Directors and Key Managerial Personnel
- Mr. Pratap Shirke (DIN 00104902) is liable to retire by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.
- Mr. Rajeev Kher (DIN 01192524) ceased to be Director with effect from January 24, 2022 on completion of his term as an Independent Director of the Company.
- Mr. Pradyumna Vyas (DIN 02359563) and Ms. Shailaja Kher (DIN 08450568) ceased to be Directors with effect from May 15, 2022 on completion of their term as Independent Directors of the Company.
- At the 101st Annual General Meeting held on 9th September 2021, the Shareholders have approved the appointment of Ms. Rama Kirloskar (DIN 07474724) as the Joint Managing Director of the Company for a period of five years with effect from August 3, 2021.
- Mr. Shobinder Duggal (DIN 00039580), Ms. Ramni Nirula (DIN 00015330) and Mr. Shrinivas Dempo (DIN 00043413) were appointed as Additional Directors of the Company with effect from May 25, 2021. The Shareholders at the 101st Annual General Meeting held on 9th September, 2021 have approved their appointment as Independent Directors of the Company with effect from May 25, 2021 for a term upto May 24, 2026.
- Mr. Vivek Pendharkar (DIN 02791043), Mr. Amitava Mukherjee (DIN 00003285) and Ms. Rekha Sethi (DIN 06809515) were appointed as Additional Directors of the Company with effect from October 29, 2021. The Shareholders vide resolution passed through Postal Ballot on December 14, 2021 have approved their appointment as Independent Directors of the Company with effect from October 29, 2021 for a term upto October 28, 2026.
- Mr. Raghunath Apte ceased to be the Company Secretary & Compliance Officer with effect from November 26, 2021.
- Mr. Devang Trivedi was appointed as the Company Secretary & Compliance Officer with effect from March 18, 2022.
(iiia) The Board is of the opinion that Mr. Shobinder Duggal, Ms. Ramni Nirula, Mr. Shrinivas Dempo, Mr. Vivek Pendharkar, Mr. Amitava Mukherjee and Ms. Rekha Sethi - Independent Directors of the Company who were appointed during the year, possess the requisite qualifications, experience, expertise including proficiency.
(iv) No company has become or ceased to be a subsidiary, joint venture or associate company of the Company, during the year.
Material Subsidiaries
Regulation 16 of the Listing Regulations 2015, defines a âmaterial subsidiaryâ to mean a subsidiary, whose income or net worth exceeds ten percent of the consolidated income or net worth respectively, of the listed entity and its subsidiaries in the immediately preceding accounting year.
Under this definition, Karad Projects & Motors Limited (âKPMLâ), an Unlisted Indian Subsidiary, SPP Pumps Limited (UK) and Kirloskar Brothers International B.V., Unlisted Foreign Subsidiaries, are material subsidiaries of the Company.
The subsidiaries of the Company function independently, with an adequately empowered Board of Directors and adequate resources. For more effective governance, the minutes of Board Meetings of subsidiaries of the Company are placed before the Board of Directors of the Company for their review at every quarterly Meeting.
In addition to the above, Regulation 24 of the Listing Regulations requires that at least one IndependentDirector on the Board of Directors of the listed entity shall be a Director on the Board of Directors of an unlisted material subsidiary, whether incorporated in India or not. For this provision, material subsidiary means a subsidiary, whose income or net worth exceeds twenty percent of the consolidated income or net worth respectively, of the listed entity and its subsidiaries in the immediately preceding accounting year. However, there is no Subsidiary which falls under this definition of unlisted material subsidiary for the financial year ended March 31,2022.
The other requirements as prescribed under Regulation 24 of the Listing Regulations for Subsidiary Companies have been complied with.
Secretarial Audit of Material Unlisted Indian Subsidiary
Karad Projects & Motors Limited (âKPMLâ), a material subsidiary of the Company carried out Secretarial Audit for the Financial Year 2021-22 pursuant to Section 204 of the Companies Act, 2013 and Regulation 24A of the Listing Regulations. The Secretarial Audit Report of KPML submitted by Mr. Abhijit Dakhawe, Practicing Company Secretary is attached as Annexure VII to this Report and it does not contain any qualification, reservation or adverse remark or disclaimer.
(v) Details relating to Deposits
The Company neither accepts nor renews matured deposits since January 2003 and there were no deposits accepted by the Company as covered under Chapter V of the Act read with Rules made thereunder.
(vi) The details of Deposit which are not in compliance with the requirement of the Chapter V of the Act - NA.
(vii) No significant and material orders were passed by the regulators or court or tribunals impacting the going concern status and Companyâs operations in future.
(viii) Details in respect of adequacy of internal financial controls with reference to the financial statements
The Company has adequate internal financial control systems in place. The control systems are regularly reviewed by the external auditors and their reports are presented to the Audit and Finance Committee.
The Company has an Internal Audit Charter specifying mission, scope of work, independence, accountability, responsibility and authority of Internal Audit Department. The internal audit reports are reported to Audit and Finance Committee along with management response.
(ix) Your Company is required to maintain the Cost records as required under Section 148(1) of the Act and accordingly, such accounts and records are maintained by the Company for the Financial year ended on March 31,2022.
(x) The details of application made or any proceedings pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the Financial Year
- Nil.
(xi) The details of the difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reason thereof - Nil
(xii) Other disclosures required under the Companies Act, 2013 as may be applicable
- Composition of the Audit and Finance Committee has been disclosed in Corporate Governance Report.
- Establishment of Vigil Mechanism: The Company has already in place a âWhistle Blower Policyâ as a Vigil Mechanism since 2008. The details of the same are reported in Corporate Governance Report.
- Disclosures as required under Section 197(12) of the Act read with the applicable rules and details as per Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given as Annexure III & Annexure IV.
(xiii) Other Disclosure
The Company has filed a suit against Kirloskar Proprietary Limited (KPL) relating to the use, assignment and ownership of the trademark âKirloskarâ. The Company has made appropriate pleadings in the Suit and has inter-alia, challenged the unlawful termination and sought declaration, injunction and other appropriate relief/s. KPL subsequently has withdrawn the termination letters with effect from March 3, 2020.
In compliance with the order of the Honâble Pune Commercial Court, the Company has deposited the claimed Royalty amount by way of cheque in safe custody of Ld. Nazir District Court, Pune Civil Court from the period October 2018 until 3rd quarter 2021-22, without prejudice to its rights and contentions. The cheques upon their expiry have been replaced by fresh cheques in terms of the order of the Honâble Court.
15. CASH FLOW
Cash flow statement for the Financial Year ended on March 31,2022 is attached to the Balance Sheet. SAFETY, HEALTH AND ENVIRONMENT
Safety and Health
⢠All KBL manufacturing plants have achieved âZero reportable accidentsâ.
⢠Behavioral change from Unsafe practice to safe practice was more focused. Behavior Based Safety checks are improved from 4500 per year to 5500 per year.
⢠Identifying, reporting and taking corrective / preventive actions (CAPA) by the employees is one of the major indicators of Good Safety Culture. It also indicates the involvement of all employees in the safety. Compliance of Corrective Action and Preventive action is around 85%.
⢠Apart from ISO system audits, our plants have been audited for Internal safety audits. Safety checks are carried out at project sites by project site employees.
⢠Safety Mitra (Safety Stewards) concept is introduced in the manufacturing Plants.
⢠Material Handling Safety is a big concern especially in our type of industry. A special drive was undertaken to ensure Safe lifting tools, tackles are used.
⢠Safety Training is an important element to increase Safety awareness and improve Safe Culture,
training provided 4.2 Man-hours/employee/year against the target 3 Man-hours/employee/year.
⢠Utmost care and steps have been taken to control COVID-19 spread and to work safely across the organisation. These include checking of body temperature at entry gate, use of hand sanitizer and maintenance of social distancing to the extent possible at workplace.
⢠Initiatives were undertaken to increase COVID-19 awareness among employees and community, including displaying boards and hoardings, distribution of pamphlets and awareness programmes.
Environment and Energy
Through sustainability policy, the Company is committed to achieve excellence in overall sustainable performance through integration of economic, environmental and social dimensions. As a part of its sustainability initiative, the focus is on various aspects to reduce adverse impact on the environment, which include conservation of natural resources, reduce use of resources and emission of carbon, develop products with low ecological footprint, promoting energy efficient products, promoting use of renewable sources of energy, conserving biodiversity and engaging with stakeholders and communities for sustainability practices.
As a part of commitment towards conserving fossil fuels and depending more on renewable energy sources, the Company has installed and made operational roof top solar power panels at manufacturing locations and Corporate Office for a capacity of 4.6 MW, which is yielding green power with good efficiency. This is in addition to the generation of 4 MW wind power by Kirloskarvadi plant.
For the purpose of optimum utilization of resources and continual improvement, the Company monitors and reviews the important parameters impacting environment such as Carbon footprint, Energy consumption, Water consumption, Material consumption and Waste generation. The Company has also initiated few green initiatives like plantation of trees to minimize heat load on buildings, use of ply boards and recyclable metallic cage instead of wood, use of furnace slag for constructing roads and floorings and modifying shopfloor layouts to minimize material flow and multitasking using value stream mapping.
Through Confederation of Indian Industry (CII), the Company has completed âLife Cycle Assessment (LCA)â study on a sample product to evaluate impact of manufacturing on environment so that it can initiate actions to improve the same. In continuation of this initiative, it has now selected different range of products to assess GHG emission impact on environment due to manufacturing of those products. Thus, the Company shall continue with its efforts to improve and contribute to help India achieve its commitment to be Carbon Neutral by 2070.
âCommitment towards the Environmentâ is one of our Values. Our corporate office is a green building with LEED Platinum Certification. At corporate office and manufacturing locations, we have extensive daylight harvesting to save energy and rain water harvesting system to conserve water. All our plants are âzero waste water dischargeâ units.
The Company has a patented low cost, permanent solution to depleting groundwater & unreliable monsoon known as âKedia Farm Patternâ - KFP (Patented) RWH. KFP can solve drinking water problem of a village and âMake Rural India Water Secureâ for all times to come.
In order to encourage manufacturing plants to implement more and more energy saving projects, the Company organizes energy conservation competition (ENCON) at KBL group level through independent energy auditors. The Company shares best practices and achievements with all plants and also award teams for innovative ideas and energy saving performances.
Your Company is committed to the integration of environment performance considerations in the procurement process to have a minimal impact on the environment. It also encourages its suppliers to adopt green sustainable supply chain practices.
All manufacturing plants of the Company are certified to Environment Management System (ISO 14001:2015), Energy Management System (ISO 50001:2018), Quality Management System (ISO 9001:2015) and Occupational Health and Safety Management System (ISO 45001:2018) under Integrated Management System Certification.
CORPORATE GOVERNANCE
Pursuant to Securities and Exchange Board of India (SEBI) (Listing Obligations and Disclosure Requirements), Regulations 2015, Management Discussion and Analysis Report, Report on Corporate Governance, Auditorâs Certificate on Corporate Governance, Certificate pursuant to Schedule V read with Regulation 34 (3) and the declaration by the Chairman and Managing Director regarding affirmations for compliance with the Companyâs Code of Conduct are annexed to this report.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION. PROHIBITION AND REDRESSAL) ACT. 2013â
Your Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and in terms of Section 22 of this Act, read with Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Rules, 2013, we report that for the Financial Year ended on March 31,2022:
|
1 |
No. of complaints received in the year |
Nil |
|
2 |
No. of complaints disposed off in the year |
Nil |
|
3 |
Cases pending for more than 90 days |
NA |
|
4 |
No. of workshops and awareness programmes conducted in the year |
2 |
|
5 |
Nature of action by employer or District Officer, if any |
NA |
ACKNOWLEDGEMENTS
Your Directors wish to place on record their appreciation of the unstinted support and co-operation given by the banks and financial institutions. Your Directors would further like to record their appreciation of the efforts by the employees of the Company and wish to express their gratitude to the Members for their continued trust and support.
Mar 31, 2018
The Directors present the 98th Annual Report and the Audited financial statements of the Company for the year ended on March 31, 2018 together with the reports of the Auditors and Board, thereon.
FINANCIAL RESULTS
The financial results of the Company for the year 2017-18 as compared with the previous Financial Year are as under:
|
Year ended March 31, 2018 (Amt. in Million Rs.) |
Year ended March 31, 2017 (Amt. in Million Rs.) |
||
|
Revenue from Operations |
19,345.63 |
18,230.39 |
|
|
Other income |
188.65 |
182.38 |
|
|
Total |
19,534.28 |
18,412.77 |
|
|
Profit before tax |
923.32 |
532.89 |
|
|
Tax expense |
267.46 |
202.92 |
|
|
Profit for the period |
655.86 |
329.97 |
|
|
Other Comprehensive Income |
9.47 |
(11.45) |
|
|
Surplus in Profit & Loss Account brought forward from previous year |
2,015.13 |
1,696.61 |
|
|
Available surplus |
2,590.00 |
2,015.13 |
|
DIVIDEND
The Board of Directors have recommended Dividend of 125%, Rs.2.50 per equity share for the year 2017-18 (Rs.1/- per equity share for 2016-17).
OPERATIONS OF THE COMPANY
The revenue from the operations for the year under review is Rs.19,345.63 million, which is more than 6.12% compared to the previous year.
The Company is focusing on the Oil & Gas market as we see upgradation of existing reaeneryplants to BS IV has taken up speed. As a result, we have received prestigious orders from Oil India Ltd. for FM/UL pumps and second order from BPCL Mumbai for LLC pumpset.
As the Goods and Service Tax (GST) roll out took place on July 1, 2017, the transition to the new tax regime had its expected initial impact on business and with majority of small customers like the Dealers and Retailers from Small Pump Business, the service centres and the customers from Building & Construction and Industry initially struggled to align their business processes with the new discipline. Dealers and Retailers took long to settle with the GST regulatory requirements. Business with contractors and Public Sector undertakings were also impacted.
During the year, the Company has commissioned largest bottom suction pump as a replacement to existing 80 (Eighty) years old make pump & motor at Kolkata Municipal Corporation.
The prestigious project of ERP Optimization and migration to the SAP S4 HANA platform, along with the required changes in 7 (Seven) major allied systems was driven by the core team along with the consultants and delivered on the agreed timelines. The Company went live on the new platform on October 9, 2017. With this, Kirloskar Brothers Limited (KBL) the restengineering equipment Company in India to go-live on the SAP HANA 1610 platform.
During the year, on international front, our representatives attended ATOMEXPO02017, business forum for global nuclear industry held recently at Moscow, Russia.
As a strategy to focus on the process segment, Industry Sector team has put up complete focus on networking with Global Process consultants for seeking approvals for chemical and process applications.
Irrigation sector successfully commissioned the Company® largest suspension length (30.3 Meters) vertical turbine pump at HNSS Pump Station in Andhra Pradesh.
In Small Pump Business, the sales team continued its focus on the market reach campaign through Retailer / Plumber / Mechanic meets, Industrial customer visits and seminars. There is significant growth in such focused marketing efforts as compared to previous year.
Our Company® Sanand plant completed 5 (Five) years on June 17, 2017.
During the year, Kondhapuri plant was awarded Certificate of Excellence for the URunner Up Performance in Energy Conservation under Small Manufacturing Unit Category for year 2015-16. AECOM Indiais visit was successful and resulted in approval of the entire range of Company® valves for all their projects. A product conformity audit by Bureau Veritas was successfully completed for small and medium Buttergy valves at Kondhapuri. Kondhapuri plant completed development of larger size valves such as 2400 mm BFV, 1400 and 1800 mm turbine inlet valves, 1800 mm MDNRV etc. during the year.
Kondhapuri plant participated and got shortlisted in the 12th State Level Awards for Excellence in Energy Conservation and Management under SME category for Financial Year 2016-17 held on February 8, 2018 at MEDA (Maharashtra Energy Development Agency GPune).
The Kirloskarvadi plant continued its growth and registered new highs on almost all parameters. Kirloskarvadi crossed INR 5,000 million dispatch till December 2017, the highest in last 5 (Five) years.
As a part of the drive of National Polio Eradication Programme, a Pulse Polio Campaign was organized for children under the age group of 5 (Five) years on January 28, 2018 at Kirloskarvadi.
The Company along with other reputed organizations having innovative and progressive HR practices in the area of Employee Benefits and Health, was invited to take part in the panel discussion on the subject. The Company was highly appreciated by industry forum leaders and it also emphasized Company®s commitment to its employees® overall health & wellbeing.
KBL received the prestigious (Golden Peacock HR Excellence AwardOor the year 2017 in Industrial Manufacturing sector from former Chief Justice of India, Mr. M. N. Venkatachaliah at the 12th International CSR Conference on February 9, 2018 in Bengaluru.
KBL received the prestigious India Design Mark award for its Romak Pump, AT Pump, i-CM Pump, i-NS Pump and HYPN System.
Recommendation was received from Bureau Veritas for inclusion of Corporate Secretarial function for the firsttime in the scope of ISO 9001:2015 certification on the basis of recent surveillance audit. This was a voluntary initiative by Corporate Secretarial function to get itself certified for its few identified processes under ISO Certification.
The Company® R&D - Engineered Pumps (CRED) team participated & presented paper in 44th National Conference on UFluidMechanics and Fluid Power-2017i held at Amrita University, Kollam, Kerala from December 14 to 16, 2017. The conference provided a platform for researchers, academicians, industrialist from around the globe to explore the vast potential of research and advancements in the fieldbf Fluid Mechanics and Fluid Power.
During the year, KBL was associated as co-sponsor for Pune team, (Puneri PaltanQn this yearâ Pro Kabaddi League. The Company was also co-sponsors for one of the eight teams participating in the Maharashtra Kusti Premier League (MKPL), an intra-state wrestling tournament organized by the Ahmednagar District Wrestling Association. This was a strategic decision taken in pursuit of nurturing local wrestling talent and providing them an ideal platform to compete with the worldâ best. More importantly, Companyâ association with a traditional sport like wrestling, which enjoys immense popularity among the masses, could help us expand Companyâ brand visibility and reach across the rural sector, i.e. the target audience for its Agriculture and Domestic pumps.
There were no material changes and commitments which affect the financial position of the Company that has occurred between the end of the Financial Year of the Company to which the financial statements relate and the date of this report.
STATUTORY DISCLOSURES
1. EXTRACT OF ANNUAL RETURN
Extract of Annual Return in Form MGT-9 as per provisions of Section 134 read with Section 92(3) of the Companies Act, 2013 (the Act) is given in Annexure I to this Report.
2. NUMBER OF MEETINGS OF THE BOARD
During the Financial Year under review, 4 (Four) Board meetings were held, the details are appearing in the Corporate Governance Report.
3. DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) of the Act, the Board of Directors report that:
(a) in preparation of the annual accounts, the applicable accounting standards have been followed;
(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the profitof the Company for that period;
(c) the directors had taken proper and sufecientcare for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) the directors had prepared the annual accounts on a going concern basis; and
(e) the directors, had laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectivdy;
(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
4. INDEPENDENT DIRECTORSâ DECLARATION
All Independent Directors of the Company have given declaration under Section 149 (7) of the Act, that he / she meets the criteria laid down in Section 149 (6) of the Act.
5. DISCLOSURE REQUIRED UNDER SECTION 134(3)(e)
The Board has adopted a Board Diversity Policy which sets the criterion for appointment as well as continuance of Directors, including Independent Directors, at the time of re-appointment as director in the Company. As per the policy, the Board has an optimum combination of Members with appropriate balance of skill, experience, background, gender and other qualities of directors required for the effective functioning of the Board.
The Nomination and Remuneration Committee recommends remuneration of the Directors, subject to the overall limits set under the Act, as outlined in the Remuneration Policy as approved by the Board. As per the policy, the Executive Director is entitled for a fixedsalary, other non-monetary benefitsetc. and commission based on performance evaluation. In case of Non-Executive Directors, apart from receiving sitting fees, they are entitled for commission on the basis of criterion as per the policy.
The Remuneration Policy is given in Annexure II is available on the website of the Company at http://www.kirloskarpumps.com/investors-investor-information-policies.aspx.
6. REPORT OF AUDITORS
During the Financial Year under review there are no qualificatins, reservations or adverse remarks or disclaimers made by the Statutory Auditors on the financial statements of the Company and by the Secretarial Auditor in his Secretarial Audit Report, which is annexed herewith as Annexure VIII.
M/s. Sharp & Tannan Associates, Chartered Accountants (Firm Registration No.109983W) have been appointed as Statutory Auditors of the Company for a period of 5 (Five) years, from the conclusion of 97th Annual General Meeting till the conclusion of 102nd Annual General Meeting by the shareholders of the Company. The Statutory Auditors have confirmed their eligibility and necessary certificates as required under the Act have been received from them.
Mr. Shyamprasad Limaye, Practicing Company Secretary, (CP No. 572) has been appointed as Secretarial Auditor of the Company as per Section 204 of the Act for the Financial Year 2017-18. Mr. Shyamprasad Limaye has been re-appointed as Secretarial Auditor for the Financial Year 2018-19.
M/s. Parkhi Limaye & Co. (Firm Registration No. 000191) have been appointed as Cost Accountant as per Section 148 of the Act, read with applicable rules made thereunder for the Financial Year 2018-19. Their remuneration is subject to approval by the Members.
7. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
The details of loans, guarantees or investments under Section 186 of the Act, are available under Note No. 5 and 35 (D) of notes to accounts, attached to the Standalone Financial Statements.
The full particulars are available in the Register maintained under Section 186 of the Act, which is available for inspection during business hours on all working days (except Saturday and Sunday).
8. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All contracts/arrangements/transactions entered by the Company during the Financial Year 2017-18 with the related parties were in the ordinary course of business and at armâ length basis except few transactions which are disclosed in Form No. AOC 2 as Annexure VII. During the year, the Company has not entered into contract/arrangement/transactions with related parties which could be considered material in accordance with the Companyâ (Policy on Materiality of Related Party Transactions and Dealing with Related Party Transactions The said policy is uploaded on the website of the Company.
Further, we draw your attention to Note No 35 of the Standalone Financial Statements of the Company for details of Related Party transactions.
9. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Details of energy conservation, technology absorption, research and development and foreign exchange earnings and outgo as required under Section 134(3) (m) of the Act read with applicable rules are given in Annexure III to this Report.
10. RISK MANAGEMENT
The Company has in place an (Enterprise Risk Management PolicyOThe Risk Management Committee identifies he top risks and prioritises those risks. The progress and review status of those identified risks are presented to the Audit and Finance Committee and Board. In the opinion of the Board there are no risks identified that may threaten the existence of the Company
11. CORPORATE SOCIAL RESPONSIBILITY REPORT
The Company has developed a Corporate Social Responsibility Policy as per the requirements of the Act and the same is available on the website of the Company.
The Corporate Social Responsibility Report in the required format is given in Annexure IV.
12. BOARD EVALUATION
The Board has formulated a Board Evaluation Policy for evaluation of individual directors as well as the entire Board and individual Committees thereof. The evaluation framework is divided into parameters based on the various performance criteria. The evaluation for the year ended on March 31, 2018 has been completed.
In compliance with the requirements under Regulation 25(3) of Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations, 2015, (SEBI Listing Regulations, 2015) a meeting of Independent Directors was held on November 11, 2017 primarily to discuss the matters mentioned under Schedule IV of the Act. All Independent Directors of the Company attended the same.
13. PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES
Following are the highlights of performance of subsidiaries, associates and joint venture companies and their contribution to the overall performance of the Company during the period under report.
i. Karad Projects and Motors Limited
The revenue for the year under review is Rs.3,270.10 million which is 8.95% more as compared to the previous year. Revenue constitutes 10.40% of gross consolidated revenue.
ii. The Kolhapur Steel Limited
The revenue for the year under review is Rs.448.06 million which is 39.44% more as compared to the previous year. Revenue constitutes 1.42% of gross consolidated revenue.
iii. Kirloskar Corrocoat Private Limited
The revenue for the year under review is Rs.343.30 million which is 19.97% more as compared to the previous year. Revenue constitutes 1.09% of gross consolidated revenue.
iv. Kirloskar Brothers International B.V. (consolidated)
The revenue for the year under review is Rs.8,468.16 million which is 7.76% more as compared to the previous year. Revenue constitutes 26.92% of gross consolidated revenue.
v. Kirloskar Ebara Pumps Limited (Joint Venture)
The revenue for the year under review is Rs.1,663.10 million which is 2.45% more as compared to the previous year. Revenue constitutes 5.66% of gross consolidated revenue.
The financial position of the subsidiaries, associate and joint venture companies is given in AOC-1, elsewhere in the Annual Report.
14. OTHER STATUTORY DISCLOSURES AS REQUIRED UNDER RULE 8(5) OF THE COMPANIES (ACCOUNTS) RULES, 2014
(i) Financial summary/highlights are included elsewhere in the report;
(ii) There was no change in the nature of the business during the year under review;
(iii) Details of Directors or Key Managerial Personnel who were appointed or have resigned during the year ;
- Dr. Rakesh Mohan (DIN 02790744) 0Additional Director, was appointed by the Board with effect from July 28, 2017. The Board recommends his appointment as an Independent Director at the ensuing Annual General Meeting.
- Ms. Rama S. Kirloskar (DIN 07474724) GAdditional Director, was appointed by the Board with effect from July 28, 2017. The Board recommends her appointment as a Non-Executive Director at the ensuing Annual General Meeting.
- Mr. Alok Kirloskar (DIN 05324745) GNon G Executive Director of the Company is liable to retire by rotation and being eligible offers himself for re-appointment.
(iv) Companies which have become or ceased to be subsidiaries, joint ventures or associate companies during the year:
During the year (Kirloskar Brothers International Zambia LimitedOwhich was a subsidiary company of Kirloskar Brothers International (Pty) Limited, was wound up on December 20, 2017. Kirloskar Brothers International (Pty) Limited acquired the shares in Rotaserve Mozambique and entered into joint venture with Viwe Mlenzana to form SPP Neziv Pumps Solutions.
(v) Details relating to Deposits:
The Company neither accepts nor renews matured deposits since January 2003 and there were no deposits accepted by the Company as covered under Chapter V of the Act read with Rules made thereunder.
(vi) No Signiaeant and material orders were passed by the Regulators or court or tribunals impacting the going concern status and Company® operations in future.
(vii) Details in respect of adequacy of internal financial controls with reference to the financial statements:
The Company has adequate internal financial control systems in place. The control systems are regularly reviewed by the external auditors and their reports are presented to the Audit and Finance Committee.
The Company has an Internal Audit Charter specifying mission, scope of work, independence, accountability, responsibility and authority of Internal Audit Department. The internal audit reports are reported to Audit and Finance Committee along with management response.
(viii) Other disclosures required under the Act as may be applicable:
- Composition of the Audit and Finance Committee has been disclosed in Corporate Governance Report.
- Establishment of vigil mechanism: The Company has already in place a (Whistle Blower PolicyCas a vigil mechanism since 2008. The details of the same are reported in Corporate Governance Report.
- Disclosures as required under Section 197(12) of the Act read with applicable rules and details as per Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure V & Annexure VI.
15. DISCLOSURE AS PER SECRETARIAL STANDARD:
The Board confirmst he compliance with the applicable Secretarial Standards (SS-1) for the year under review.
16. CASH FLOW
Cash flow statement for the year ended on March 31, 2018 is attached to the Balance Sheet.
SAFETY, HEALTH AND ENVIRONMENT Safety and Health
- All manufacturing plants are certified for Occupational Health and Safety Assessment Series (OHSAS) standards ISO 18001 and Environment Management System (ISO 14001) and SA8000. Periodic internal audits of all our manufacturing units are being conducted to ensure legal compliance, OHSAS 18001, ISO 14001 requirements.
- Apart from compliance external or internal audits, all the manufacturing units are internally audited by cross-plant Safety team for verification of EHS compliances and standard industrial safe practices.
- New initiative has been introduced to implement BBS system at manufacturing plant level phase wise. As a part of first phase, BBS check list portal is introduced and staff employees are checking the safety compliance and report in the system. Implementation of phase II is under consideration for some plants.
- Almost 800 incidents have been logged in the system last year in Incident tracking system against 500 incidents logged previous year, that is 60% more compared to last year. It indicates there is increase in safety awareness. 357 tasks have been implemented and 329 task are under implementation. Its helping to reduce unsafe acts and conditions at the workplace.
- Measuring Plant safety performance system is introduced, considering leading indicators and lagging indicators. Plant heads have been requested to add one slide on plant safety performance in Plant MIS.
- Safety Assessment from third party is initiated for manufacturing plants and subsidiaries.
- System Monthly safety checking by project site personnel, which is also declaration of safety compliance from the project site for Companyâ employee is initiated. Monthly MIS from live projects is sent from project In-charges to corporate safety is established.
Environment and Energy
Use of green strategies and optimal use of resources in manufacturing to ensure minimal environmental impact, is ingrained in our culture. All our manufacturing plants follow the principles of conservation. The Company has upgraded Environment Management System to latest version (ISO 14001: 2015) at Kirloskarvadi, Dewas, Sanand, Kaniyur and certified under matrix certification The Company is Corporate Environment, Health & Safety policy, details our approach towards the management of energy, water, preservation of natural resources and environment.
The Company makes conscious and serious attempts to conserve fossil fuels, by increasing our share of renewable energy. A dedicated ENCON team, helps us manage energy at manufacturing facilities. The Company monitors our direct and indirect energy consumption which is reported in the Companyâ annual sustainability report. Every year, Group Level Energy Conservation (ENCON) competition amongst manufacturing plants to encourage them to implement energy conservation projects.
KBL has initiated many actions to reduce energy consumption and conserve energy which includes installation of Roof Top Solar Plants at Dewas and Sanand manufacturing facilities, installation of LED/ Induction lamps, installing Solar water heating system for process application.
CORPORATE GOVERNANCE
Pursuant to SEBI Listing Regulations, 2015, Management Discussion and Analysis Report, Report on Corporate Governance, Auditorâs Certificate on Corporate Governance, Disclosure of unclaimed shares and the declaration by the Chairman and Managing Director regarding afermations for compliance with the Companyâ Code of Conduct are annexed to this report.
EMPLOYEE STOCK OPTION SCHEME (ESOS)
As you are aware, during the year 2007-08, the Company launched the Employeesi USharea VisionU Stock Option Scheme, 2007 (ES0S-2007).
The Management has formulated under ESOS G2007, a proposal of providing stock options at Rs.2/- per option to award employees for their outstanding, exemplary performance in getting sustainable results.
During the year, no allotment was made under ESOS -2007 scheme.
DISCLOSURE UNDER THE âSEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013.â
In terms of Section 22 of the above mentioned Act, read with Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Rules, 2013, we report as follows for the year ended on March 31, 2018:
|
1 |
No. of complaints received in the year |
Nil |
|
2 |
No. of complaints disposed off in the year |
Nil |
|
3 |
Cases pending for more than 90 days |
Nil |
|
4 |
No. of workshops and awareness programmes conducted in the year |
16 |
|
5 |
Nature of action by employer or District Ofecerif any |
NA |
ACKNOWLEDGEMENTS
Your Directors wish to place on record their appreciation of the unstinted support and co-operation given by banks and financiali nstitutions. Your Directors would further like to record their appreciation of the efforts by the employees of the Company.
For and on behalf of the Board of Directors,
Sanjay C. Kirloskar
Chairman & Managing Director
DIN 00007885
Pune: May 11, 2018
Mar 31, 2017
The Directors present the 97th Annual Report and the Audited financial statements of the Company for the year ended March 31, 2017 together with the reports of the Auditors and Board thereon.
FINANCIAL RESULTS
The financial results of the Company for the year 2016-17 as compared with the previous Financial Year are as under:
|
Year ended March 31,2017 (Amounts in Millions Rs.) |
Year ended March 31,2016 (Amounts in Millions Rs.) |
|
|
Revenue from Operations |
18,230.39 |
17,212.23 |
|
Other income |
182.38 |
207.86 |
|
Total |
18,412.77 |
17,420.10 |
|
Profit before tax |
532.89 |
74.44 |
|
Tax Expense |
202.92 |
(33.34) |
|
Profit for the period |
329.97 |
107.77 |
|
Other Comprehensive Income |
(11.45) |
14.72 |
|
Surplus in Profit & Loss Account brought forward from previous year |
1,696.61 |
1,663.88 |
|
Interim Dividend for the year 2015-16 |
- |
89.76 |
|
Available surplus |
2015.13 |
1,696.61 |
DIVIDEND
The Board of Directors have recommended a Dividend of 50%, i.e. Rs. 1/- per equity share for the year 2016-17.
OPERATIONS OF THE COMPANY
The revenue from operations for the year under review is Rs. 1823.04 crores, which is more than 6% compared to the previous year.
Your Company continues to be the only Indian company manufacturing metallic volute pumps in the country. We have become the world''s largest concrete volute pump manufacturer. Our focused efforts on HYPN systems [Pressure Boosting (Hydro Pneumatic) System], has crossed a landmark of 200 systems for the year under review.
Small Pump Business has registered an approximate growth of about 13% over the last year. The sales for the small pump business were affected in the month of November 2016 due to demonetization but registered an increase in the month of December 2016.
Valves sector dispatched 2000 mm size Multi Door Non Returnable Valve (MDNRV), one of the largest valve installed in India. BHIMA LIS Telangana project was successfully commissioned.
During the year, Company has received a ''Completion of Facilities Certificate1 for DVC, Koderma Project. A final ''Completion Certificate'' for Jaypee Bina 2 x 250 MW Thermal Power Project (M.P) was also received. The preliminary handing over of ''El Tagen'' pumping stations in Egypt, was completed this year.
Main focus of the Power sector during the year was on International projects along with the development of business in the subcontinent.
Kirloskarvadi factory has designed, developed and supplied Vertical Turbine Pumps (BHR34C(S)). These pumps complywith UL (Underwriters Laboratories) standards. It has also developed a trolley mounted Autoprime Pumpset (APM200/24), with 19HP engine. During the year, it has manufactured largest split case pump and also developed Closed Coupled Magnetic Drive pump Type RMKC. This series of pumps are useful in handling aggressive chemicals. In addition, Kondhapuri and Kirloskarvadi plants received Bronze and Silver awards respectively, at GreenCo Summit: 2016 held byCII at Hyderabad.
Dewas plant implemented Green Projects (Bio-gas plant, Solar LED street lighting, LED shopfloor lighting, Solar water heating system etc.) to reduce carbon foot-print and cost. Five new improved series of pumps were launched at Sanand Plant.
During the year, Sanand and Kaniyur plants received ISO 50001 certification for energy management.
Aggressive marketing activities were conducted across the country by organizing plumber meets, mechanics meets, campaigning by wall painting and reach activity, with special focus on Maharashtra. In addition, an intensive marketing campaign has been launched, which includes radio and outdoor media, covering public transport shelter. A mobile and Web application, ''Storm 11''was launched for Small Pump Business.
Kondhapuri plant was awarded a âCertificate of Excellenceâ, under small & medium enterprise sector at the 11th state level awards for excellence in Energy Conservation and Management Competition organized by Maharashtra Energy Development Agency, Government of Maharashtra. It has also received SA 8000 Certificate from Social Accountability Accreditation Services (SAAS).
The World Environment day was celebrated at corporate office, ''Yamuna'', Pune and at all manufacturing units on June 5, 2016. International Yoga Day was celebrated at Kirloskarvadi on June 21, 2016, over 500 employees participated in this event. Also, 200 trees were planted at Kirloskarvadi and 350 saplings were handed over to the students at Kirloskarvadi School in support to Government of Maharashtra''s plantation drive.
There were no material changes or commitments to report which affect the financial position of the Company that has occurred between the end of the Financial Year and the date of this report.
STATUTORY DISCLOSURES 1. EXTRACT OF ANNUAL RETURN
Extract of Annual Return in Form MGT-9 as per provisions of Section 134 read with Section 92(3) of the Companies Act, 2013 (the Act) is given in Annexure I to this Report.
2. NUMBER OF MEETINGS OFTHE BOARD
During the Financial Year under review, 6 (Six) Board meetings were held, the details are appearing in the Corporate Governance report.
3. DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) of the Act, the Board of Directors report that:
(a) in preparation of the annual accounts, the applicable accounting standards have been followed;
(b) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the profit and loss of the Company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) the directors have prepared the annual accounts on a going concern basis; and
(e) the directors have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively;
(f) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
4. INDEPENDENT DIRECTORSâ DECLARATION
All Independent Directors of the Company have given declaration under Section 149 (7) of the Act, that he /she meets the criteria laid down in Section 149 (6) of the Act.
5. DISCLOSURE REQUIRED UNDER SECTION 134(3)(e)
The Board has adopted a Board Diversity Policy which sets the criterion for appointment as well as continuance of Directors, including Independent Directors, at the time of re-appointment as director in the Company. As per the policy, the Board has an optimum combination of members with appropriate balance of skill, experience, background, gender and other qualities of directors required for the effective functioning of the Board.
The Nomination and Remuneration Committee recommends remuneration to the Directors, subject to the overall limits set under the Act, as outlined in the Remuneration Policy approved by the Board. As per the policy, the Executive Director is entitled for a fixed salary, other non-monetary benefits etc., and commission based on performance evaluation. In case of Non-Executive Directors, apart from receiving sitting fees, they are entitled for commission on the basis of criterion as per the policy.
The Remuneration policy is given in Annexure II.
6. REPORT OF AUDITORS
During the Financial Year under review there are no qualifications or adverse remarks or disclaimers made by the Statutory Auditors on the financial statements of the Company and by the Secretarial Auditor in his Secretarial Audit Report, which is annexed herewith as Annexure VII.
Pursuant to provisions of Section 139 of the Act read with applicable rules framed there under, M/s. P G. Bhagwat, Chartered Accountants (Firm Registration no. 101118W) the present Auditors would complete their term as Statutory Auditors of the Company at the ensuing Annual General Meeting (AGM). The Board would like to place on record its appreciation for the long association of M/s P G. Bhagwat with the Company and their continued support.
M/s Sharp & Tannan Associates, Chartered Accountants (Firm Registration No. 109983W) have been recommended by the Board of Directors to be appointed as Statutory Auditors of the Company for a period of 5 (Five) years from the conclusion of 97th Annual General Meeting till the conclusion of 102nd Annual General Meeting. The proposed Statutory Auditors have confirmed their eligibility and necessary certificates as required under the Act have been received from them.
Mr. M. J. Risbud, Practicing Company Secretary (CP No. 185) who was appointed as a Secretarial Auditor as per Section 204 of the Companies Act, 2013 for the Financial Year2016-17, tendered his resignation during the year.
Mr. Shyamprasad Limaye, Practicing Company Secretary (CP No. 572), has been appointed as a Secretarial Auditor of the Company as per Section 204 of the Companies Act, 2013 for the Financial Year 2016-17. Mr. Shyamprasad Limaye has been re-appointed as Secretarial Auditor for the Financial Year 2017-18.
M/s Parkhi Limaye & Co. (Firm Registration No. 000191) have been appointed as Cost Accountant as per Section 148 of the Act, read with applicable rules made thereunder for the Financial Year 2017-18. Their remuneration is subject to ratification by the Members.
7. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
The details of loans, guarantees or investments under Section 186 of the Act, are available under note no. 31(D) and 32 of notes to accounts, attached to the Standalone Financial Statements.
The full particulars are available in the Register maintained under Section 186 of the Act, which is available for inspection during business hours on all working days (except Saturday and Sunday).
8. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All contracts/arrangements /transactions entered by the Company during the Financial Year 2016-17 with the related parties were in the ordinary course of business and at arm''s length basis. Hence, no particulars are being provided in Form AOC-2. During the year, the Company has not entered into contract/arrangement/transactions with related parties which could be considered material in accordance with the Company''s ''Policy on Materiality of Related Party Transactions and Dealing with Related Party Transactions''. The said policy is uploaded on the website of the Company.
Further, we draw your attention to Note no. C-31 of the Standalone Financial Statements of the Company.
9. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Details of energy conservation, technology absorption, research and development and foreign exchange earnings as required under Section 134(3)(m) of the Act read with applicable rules are given in Annexure III to this Report.
10. RISK MANAGEMENT
The Risk Management Committee identifies and prioritizes the risks for the Company. The progress and review status of those identified risks are presented to the Audit and Finance Committee and Board. In the opinion of the Board there are no risks identified, that may threaten the existence of the Company.
11. CORPORATE SOCIAL RESPONSIBILITY REPORT
The Company has formulated a Corporate Social Responsibility Policy as per the requirements of the Act and the same is available on the website of the Company.
The Corporate Social Responsibility Report in the required format is given in Annexure IV.
12. BOARD EVALUATION
The Board has formulated a Board Evaluation Policy for evaluation of individual directors as well as the entire Board and individual Committees thereof. The evaluation framework is divided into parameters based on the various performance criteria. The evaluation for the year ended March 31,2017 has been completed.
In compliance with the requirements under Regulation 25(3) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations, 2015) a meeting of Independent Directors was held on October 26, 2016 primarily to discuss the matters mentioned under Schedule IV of the Companies Act, 2013. All the Independent Directors of the Company attended the same.
13. PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES AND JOINT VENTURES
Subsidiaries:
During the year, Hon''ble High Court of Judicature at Bombay, vide its order dated September 29,2016 approved the Scheme of Amalgamation of Kirloskar Systech Limited with Kirloskar Brothers Limited.
I. Karad Projects and Motors Limited
The revenue for the year under review is Rs. 3373.97 Min which is 14% more as compared to the previous year.
ii. The Kolhapur Steel Limited
The revenue for the year under review is Rs. 363.19 Min which is 19% less as compared to the previous year.
Hi. Kirloskar Corrocoat Private Limited
The revenue for the year under review is Rs. 300.85 Min which is 38% less as compared to the previous year.
iv. Kirloskar Brothers International B.V. (consolidated)
The revenue for the year under review is Rs. 7858.59 Min which is 10% less as compared to the previous year.
v. Kirloskar Ebara Pumps Limited (Joint Venture)
The revenue for the year under review is Rs. 1768.16 which is 8% more as compared to the previous year.
The financial position of the subsidiaries and joint venture companies is given in AOC-1, elsewhere in the Annual Report.
14. OTHER STATUTORY DISCLOSURES AS REQUIRED UNDER RULE 8(5) OF THE COMPANIES (ACCOUNTS) RULES, 2014
(i) Financial summary/highlights are included elsewhere in this report;
(ii) Change in the nature of the business during the year under review:
During the year Kirloskar Systech Limited (KSL), a wholly owned subsidiary of the Company merged with the Company pursuant to the Scheme of Amalgamation which was approved by the Honâble High Court of Judicature of Bombay on September 29, 2016. All the activities carried on by erstwhile KSL are now undertaken by the Company.
(iii) Directors and Key Managerial Personnel:
At the 96th AGM of the Company, Members confirmed re-appointment of Mr. Sanjay C. Kirloskar as Managing Director with effect from November 19, 2015 for a period of 5 (Five) years. In terms of the provisions of Section 152(6) of the Act, read with the Articles of Association of the Company, the Managing Director of the Company shall be considered for retirement by rotation in case the number of directors liable to retire by rotation is less than 2/3rd of total directors liable to retire by rotation.
Mr. Sanjay C. Kirloskar, Chairman and Managing Director, being longest in the office, is liable to retire by rotation and being eligible offers himself for re-appointment as a Director at the ensuing Annual General Meeting.
(iv) Companies which have become or ceased to be subsidiaries, joint ventures or associate companies during the year:
The Company in association with Synerge Overseas Pte. Limited incorporated KBL Synerge LLP with effect from September 1, 2016. KBL Synerge LLP is in the business of manufacture, supply and installation of solar power plants and distribution and transitions of electricity generated from solar power plants, dealing in solar pumps and pumping systems, LED lighting and ESCO projects.
During the year, SPP Pumps (Asia) Limited, SPP Pumps (Singapore) Pte. Limited and Kirloskar Brothers International Zambia Limited have been incorporated as step down subsidiaries of the Company with the objective to engage in pumps business.
(v) Details relating to Deposits:
The Company neither accepts nor renews matured deposits since January 2003 and there were no deposits accepted by the Company as covered under Chapter V of the Act read with Rules made there under.
(vi) No Significant and material orders were passed by the Regulators or court or tribunals impacting the going concern status and Company''s operations in future.
(vii) Details in respect of adequacy of internal financial controls with reference to the financial statements:
The Company has adequate internal financial control systems in place. The control systems are regularly reviewed by the external auditors and their reports are presented to the Audit and Finance Committee.
The Company has an Internal Audit Charter specifying mission, scope of work, independence, accountability, responsibility and authority of Internal Audit Department. The internal audit reports are reported to Audit and Finance Committee along with management response.
(viii) Other disclosures required under Companies Act, 2013 as may be applicable:
Composition of the Audit and Finance Committee has been disclosed in Corporate Governance Report;
- Establishment of vigil mechanism: The Company has already in place a ''Whistle Blower Policy'' as a vigil mechanism since 2008. The details of the same are reported in Corporate Governance Report;
- Disclosures as required under Section 197(12) of the Act read with applicable rules and details as per Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure V & Annexure VI.
15. CASHFLOW
Statement of Cash flow for the period ended March 31,2017 is attached to the Balance Sheet.
safety; health and environment
Safety and Health
All our manufacturing plants are certified for Occupational Health and Safety Assessment Series (OHSAS) standards ISO 18001 and Environment Management System (ISO 14001) and SA8000. Periodic internal audits of all our manufacturing units are being conducted to ensure legal compliances, OHSAS 18001, ISO 14001 requirements and standard industrial practices.
Incident tracking system is fully utilizing for capturing unsafe acts / conditions and accidents, Corrective Action and Preventive Action (CAPAs) are tracked through this system. Almost 500 incidents were logged, which is more than 150% compare to last year. It helped to control the accident rate.
All manufacturing units and subsidiaries are brought under one Umbrella of corporate safety which helps to implement common safety programs and strategy.
Company strives for 100% compliance with Environment, Health and Safety (EHS) requirements. To verify that our facilities are meeting regulatory compliance requirements, all the project sites and manufacturing plants are inspected frequently.
Safety week and Environment day are celebrated at manufacturing plants, offices and project sites with number of activities, competitions and awareness programs. As a part of it, online Safety quiz organized along with other safety activities to increase the safety awareness. More than 700 employees participated in this quiz from KBL and subsidiaries.
BBS on line and classroom training provided to staff employees in Sanand, Dewas and Coimbatore plants. A2 (Two) day Safety meet of all persons looking after safety was organized at Kirloskarwadi, plant.
Safety internal audit team formed and training provided for carrying out safety audits. All manufacturing plants and subsidiaries.
Environment and Energy
Manufacturing plants of the Company at Kirloskarvadi, Dewas, Sanand, Kaniyurand Kondhapuri are certified for the Environment Management System (IS014001). We continuously monitor our environmental impact through measurement of important parameters related to the use of resources such as energy, water and materials. We ensure compliance with environmental norms and established systems to initiate timely actions to improve the environmental performance.
Our plants at Kirloskarvadi, Kondhapuri, Dewas, Sanand and Kaniyur have also received certification for implementing Energy Management System (ISO 50001).
We monitor our direct and indirect energy consumption which is reported in our annual sustainability report. A Company level Energy Conservation (ENCON) competition encourages all our manufacturing plants to implement energy conservation projects.
The Company has initiated many actions to reduce energy consumption and conserve energy which includes installation of Roof Top Solar Plants at the Corporate Office and manufacturing plants, replacing streetlights with LED lights, installing screw compressors at Foundry.
CORPORATE GOVERNANCE
Pursuant to SEBI Listing Regulations 2015, Management Discussion and Analysis Report, Report on Corporate Governance, Auditors'' Certificate on Corporate Governance, Disclosure of unclaimed shares and the declaration by the Chairman and Managing Director regarding affirmations for compliance with the Company''s Code of Conduct are annexed to this report.
EMPLOYEE STOCK OPTION SCHEME (ESOS)
As you are aware, during the year 2007-08, the Company launched the Employees'' âShare a Visionâ Stock Option Scheme, 2007 (ESOS-2007).
The Management has formulated under ESOS - 2007, a proposal of providing stock options at Rs. 2/- per option to award employees for their outstanding, exemplary performance in getting sustainable results.
During the year, no allotments were made under ESOS -2007 scheme.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
In terms of Section 22 of the above mentioned Act, read with Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Rule, 2013, we report as follows for the year ended on March 31,2017:
|
1 |
No. of Complaints received in the year |
Nil |
|
2 |
No. of Complaints disposed off in the year |
Nil |
|
3 |
Cases pending for more than 90 days |
Nil |
|
4 |
No. of workshops and awareness programmes conduced in the year |
23 |
|
5 |
Nature of action by employer or District Officer, if any |
NA |
ACKNOWLEDGEMENTS
Your Directors wish to place on record their appreciation of the unstinted support and co-operation given by banks and financial institutions. Your Directors would further like to record their appreciation of the efforts by the employees of the Company.
For and on behalf of the Board of Directors,
Sanjay C. Kirloskar
Chairman & Managing Director
DIN 00007885
Pune: May 17,2017
Mar 31, 2016
The Directors present the 96th Annual Report and the Audited Financial I Statements of the Company
for the year ended March 31,2016 together with the I reports of the Auditors and Board thereon.
FINANCIAL RESULTS
The financial results of the Company for the year 2015-16 as compared with the I previous year are
as under:
Year ended Year ended
March 31,2016 March 31,2015
Revenue from Operations 16,562,374,973 16,257,051,488
Other income 241,098,609 112,714,764
Total 16,803,473,582 16,369,766,252
Profit before tax 64,154,146 55,289,084
Tax Expense (53,916,131) (29,579,796)
Profit for the period 118,070,277 84,868,880
Surplus in Profit
& Loss Account
brought forward from
previous year 1,605,953,335 1,647,771,258
Depreciation and
amortization expense 389,427,899 496,764,630
Interim Dividend
for the year 2015-16 39,704,463
Available surplus 1,724,023,612 1,691,885,621
DIVIDEND
The Board of Directors declared and paid an Interim Dividend of 25% (Rs, 0.501 paise per equity
share) on March 29,2016 which is proposed to be considered as I final for the year 2015-16.
APPROPRIATIONS
Dividend of Rs, Nil (Rs,0.50)
@ - % (25%) on
79,408,926(79,388,176)
equity shares of Rs,2/- each - 39,694,088
Dividend distribution tax - 1,238,198
Corporate Social Responsibility - 45,000,000
Balance carried to
Balance Sheet 1,724,023,612 1,605,953,335
TOTAL 1,724,023,612 1,691,885,621
OPERATIONS OFTHE COMPANY
The revenue from the operations for the year under review is Rs, 1656 crores, which is more than
1.88% compared to the previous year. Drop in sales is mainly due to lower sales of project sectors,
partly attributable to liquidity issue in the market, non-receipt of dispatch clearances from the
customers and sluggish market and economic growth and subdued demand for fire fighting and HYPN
systems in the overall globe.
The performance of the Company was lower than planned due to shortfall in power sector and also a
lower rise in sales for small pumps in product sector.
The Company continued its focus of being selective in accepting orders depending on customers''
financial position. There was concentrated effort towards improvement of marketing initiatives and
brand presence. Overall efforts were made to improve the efficiencies at all plants.
For project business, the Company continues to focus on closure of old projects and recovery of
retention money. The main reason for major drop in sales of project sectors was unavailability of
funds from customers, delay in engineering and civil work by afewclients and non receipt of dues
from a few customers.
Our all women plant in Kaniyur won the Merit Award by the Confederation of Indian Industry (Cll)
under the 5S excellence category.
The Company scripted yet another success story in the global power market, having bagged another
repeat order from Calik Enerji of Turkey, for supply of pumps for its 230 MW CCPP project in
Georgia. The Company has successfully supplied 194 concrete volute pumps up to March 31, 2016. The
Company has also successfully commissioned Godavari Metropolitan Water Supply and Sewage Board
project valuingRs, 50 crores in November, 2015.
The Company has announced the launch of GK-P Pump at ACHEMA in Frankfurt, Germany. GK-P is a
process pump used for handling various types of chemical liquids from various process industries.
It is an End Suction centrifugal process pump having discharge capacity up to 500 m3/hr at 1450
rpm. The Company has also unveiled the technologically advanced ROMAK (RMK) Pump at ACHEMA in June
2015 which is used for handling various types of clear / clean chemical liquids without any
suspended particles by various process industries.
To its array of achievements for various innovative and indigenously developed products, the
Company has received national-level recognition for its Lowest Life Cycle (LLC) Pumps series. KBL''s
LLC Pumps series has been granted the prestigious "India Design Mark" by the India Design Council
which symbolizes product excellence in form, function, quality, safety, sustainability and
innovation and communicates that the product is usable, durable, aesthetically appealing while
being socially responsible.
Kirloskarvadi Plant has won ''Excellent Energy Efficient Unit'' Award in the national competition for
Excellence in Energy Management and Dewas & allied Plants received Safety award in regional level
"Manufacturing Today" competition.
There were no material changes or commitments to report which affect the financial position of the
Company that has occurred between the end of Financial Year and the date of this report.
STATUTORY DISCLOSURES
1. EXTRACT OF ANNUAL RETURN
Extract of Annual Return in Form MGT-9 as per provisions of Section 134 read with Section 92(3) of
the Companies Act, 2013 (the Act) is given in Annexure I to this report.
2. NUMBER OF MEETINGS OF THE BOARD
During the Financial Year under review, 5 (five) Board meetings were held, the details are
appearing elsewhere in this Annual Report.
3. DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 134(3) (c) of the Act, the Board of Directors report that
(a) in the preparation of the annual accounts, the applicable accounting standards had been
followed;
(b) the directors had selected such accounting policies and applied them consistently and made
judgments and estimates that are reasonable and prudent so as to give a true and fair view of the
state of affairs of the Company at the end of the Financial Year and of the profit and loss of the
Company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting
records in accordance with the provisions of this Act for safeguarding the assets of the Company
and for preventing and detecting fraud and other irregularities;
(d) the directors had prepared the annual accounts on a going concern basis; and
(e) the directors, had laid down internal financial controls to be followed by the Company and that
such internal financial controls are adequate and operating effectively;
(f) the directors had devised proper systems to ensure compliance with the provisions of all
applicable laws and that such systems are adequate and operating effectively.
4. INDEPENDENT DIRECTORS'' DECLARATION
All Independent Directors of the Company have given declaration under Section 149 (7) of the Act,
that he /she meets the criteria laid down in Section 149 (6) of the Act.
5. DISCLOSURE REQUIRED UNDERSECTION 134(3)(E)
The Board has adopted a Board Diversity Policy which sets the criterion for appointment as well as
continuance of Directors, including Independent Directors, at the time of re-appointment as
director in the Company. As per the policy the Board has an optimum combination of Members with
appropriate balance of skill, experience, background, gender and other qualities of directors
required for the effective functioning of the Board.
The Nomination and Remuneration Committee recommends remuneration of the Directors, subject to the
overall limits set under the Act, as outlined in the Remuneration Policy recommended by the
Committee and approved by the Board. As per the policy, the Executive Director(s) is/are entitled
for a fixed salary, other non-monetary benefits etc., and commission based on performance
evaluation of the Director. In case of Non Executive Directors, apart from receiving sitting fees,
they may be given commission on the basis of criterion as per the policy.
The Remuneration policy is given in Annexure II.
6. REPORTOFAUDITORS
During the Financial Year under review there are no qualifications or adverse remarks or
disclaimers made by the Statutory Auditors on the financial statements of the Company and by the
Company Secretary in practice in his Secretarial Audit Report, which is annexed herewith as
Annexure VIII.
M/s. R G. Bhagwat, Chartered Accountants (Firm Registration no. 101118W) the Auditors, retire at
the ensuing Annual General Meeting (AGM) and are eligible for re-appointment. The requisite
certificate as required under the Act has been received. The Audit and Finance Committee has
recommended their re-appointment and the annual audit fees.
Mr. M. J. Risbud, Practicing Company Secretary (CP No. 185) has been appointed as Secretarial
Auditor as per Section 204 of the Companies Act, 2013 for the Financial Year 2016-17.
Parkhi Limaye & Co. (Firm Registration No. 000191) have been appointed as Cost Accountant as per
Section 148 of the Act, read with applicable rules made there under for the Financial Year 2016-17.
Their remuneration is subject to approval by the Members.
7. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
The details of loans, guarantees or investments under Section 186 of the Act, are available under
note no. A-11 and A-17 of notes to accounts, attached to the Standalone Financial Statements.
The full particulars are available in the Register maintained under Section 186 of the Act, which
is available for inspection during business hours on all working days (except Saturday and Sunday).
8. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All contract/arrangement/transactions entered by the Company during the Financial Year 2015-16 with
the related parties were in the ordinary course of business and on arm''s length basis. Hence, no
particulars are being provided in Form AOC-2. During the year, the Company has not entered into
contract/arrangement/transactions with related parties which could be considered material in
accordance with the Company''s ''Policy on Materiality of Related Party Transactions and Dealing with
Related Party Transactions''. The said policy is uploaded on the website of the Company.
Further, we draw your attention to Note no C-17 of the Standalone Financial Statements of the
Company.
9. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Details of energy conservation, technology absorption, research and development and foreign
exchange earnings as required under Section 134(3) (m) of the Act read with applicable rules are
given in Annexure III to this Report.
10. RISK MANAGEMENT
The Risk Management Committee meets at regular intervals and identifies the top risks and
prioritizes those risks. The progress and review status of those identified risks are presented to
the Audit and Finance Committee.
11. CORPORATE SOCIAL RESPONSIBILITY REPORT
The Company has developed a Corporate Social Responsibility Policy as per the requirement of the
Act and the same is available on the website of the Company.
The Corporate Social Responsibility Report in the required format is given in Annexure IV.
12. BOARD EVALUATION
The Board has formulated a Board Evaluation Policy for evaluation of individual Directors as well
as the entire Board and individual Committees thereof. The evaluation framework is divided into
parameters based on the various performance criteria to be done annually. The evaluation for the
year ended March 31, 2016 has been completed.
In compliance with the requirements under Regulation 25(3) of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, a meeting of Independent Directors was held on March
14,2016 primarily to discuss the matters mentioned under Schedule IV of the Companies Act, 2013.
All the Independent Directors of the Company attended the same.
13. PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES AND JOINT VENTURES
Subsidiaries:
i. Karad Projects and Motors Limited
The revenue under review is Rs,2,634,407,105/-which is 7% more as compared to the previous year.
ii. Kirloskar Systech Limited (KSL)
The revenue under review isRs,219,169,880/-which is 8% more as compared to the previous year. iii.
The Kolhapur Steel Limited
The revenue under review isRs,393,971,829/-which is 25% more as compared to the previous year. iv.
Kirloskar Corroborate Private Limited
The revenue under review isRs,455,988,050/-which is 36% less as compared to the previous year. v.
Kirloskar Brothers International B.V (consolidated)
The revenue under review is Rs, 8,725,365,002/- which is 10% less as compared to the previous year.
vi Kirloskar Ebara Pumps Limited (Joint Venture)
The revenue under review isRs,1,590,581,939/-which is 7% less as compared to the previous year.
The financial position of the subsidiaries and joint venture companies is given in AOC-1, elsewhere
in the Annual Report.
14. OTHER STATUTORY DISCLOSURES AS REQUIRED UNDER RULE 8(5) OF THE COMPANIES (ACCOUNTS) RULES,
2014
(i) Financial summary/highlights are already included elsewhere in the Report;
(ii) Change in the nature of the business during the year under review;
During the year under review, the process of amalgamation of the Kirloskar Systech Limited (KSL)
wholly owned subsidiary, with the Company was initiated and in order to enable the Company to carry
on the existing business of KSL i.e. System Engineering and Information Technology Solutions, the
Company has amended its Memorandum of Association by insertion of a new Objects Clause 43 (A) after
existing Clause No. 43.
The Members of the Company have accorded their approval vide Postal Ballot, the results of which
were declared on February 24,2016.
(iii) Directors and Key Managerial Personnel:
Mr. Vikram S. Kirloskar resigned as a Non-Executive Director of the Company with effect from May
26,2015.
Mr. J. R. Sapre ceased to be a Whole Time Director of the Company with effect from May 31, 2015.
Consequently he also resigned as a Director of the Company from the same date.
Mr. Umesh R. Shastry resigned from the post of Chief Financial Officer (CFO) with effect from June
01,2015 and Mr. C. M. Mate was appointed as CFO of the Company with effect from July 27,2015.
Mr. Kishor A. Chaukar was appointed as an Independent Director by the Members in the previous
Annual General Meeting
Subject to Member''s approval the Board has re-appointed Mr. Sanjay C. Kirloskar as a Managing
Director of the Company at its Board Meeting held on October 28, 2015; the Members are requested to
confirm his re-appointment with effect from November 19,2015 for a period of 5 (five) years, at the
ensuing AGM of the Company.
Mr. Alok Kirloskar, Non-Executive Director is liable to retire by rotation and being eligible
offers himself for re-appointment.
(iv) Companies which have become or ceased to be subsidiaries, joint ventures or associate
companies during the year:
Kirloskar Pompen B.V., Netherlands, (KPBV) Company''s step down subsidiary company in Netherlands,
has acquired a Dutch pump manufacturer "Rodelta Pumps International B.Y, Netherlands" (Rodelta) on
July 17,2015, who is into API and non API pumps for Oil and Gas, Pulp and papers, fluid, marine and
chemical applications etc. KPBV also incorporated "Rotaserve Overhaul B.Y" as its wholly owned
subsidiary as on January 04, 2016, who is into overhauling and will handle sales of spares and
service activities of KPBV.
SPP Pumps LP USA has now become SPP Pumps Inc. during the year.
SPP Pumps Holding LLC and SPP Pumps Management LLC, USA, who were the wholly owned subsidiaries of
SPP Pumps Limited UK, have ceased to operate during the year.
SPP Pumps France EURL who was subsidiary of SPP Pumps Limited has ceased to operate during the
year.
(v) Details relating to Deposits:
The Company neither accepts nor renews matured deposits since January 2003 and there were no
deposits accepted by the Company as covered under Chapter V of the Act read with Rules made there
under.
(vi) No significant and material orders were passed by the regulators or court or tribunals
impacting the going concern status and Company''s operations in future.
(vii) Details in respect of adequacy of internal financial controls with reference to the financial
statements:
The Company has an Internal Audit Charter specifying mission, scope of work, independence,
accountability, responsibility and authority of Internal Audit Department. The internal audit
reports are initially presented to the Chairman and Managing Director and significant observations
and follow up actions thereon are reported to Audit and Finance Committee.
The Auditors of the Company in Annexure B to their reports on financial statements have expressed a
qualified opinion on the operative effectiveness of two sub processes of the Internal Control
System over financial reporting of the Company and one of its jointly controlled entities. In this
regards, your directors wish to state that the respective companies have already initiated
necessary steps to strengthen their Internal Financial Control Systems with regard to these two
processes.
(viii) Other disclosures required under Companies Act, 2013 as may be applicable:
Composition of the Audit and Finance Committee has been disclosed under Corporate Governance
Report;
Establishment of vigil mechanism: The Company has already in place a Whistle Blower Policy1 as a
vigil mechanism since 2008. The details of the same are reported under Corporate Governance Report;
Disclosure as required under Section 197(12) of the Act read with applicable rules and details as
per Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
are given in Annexure V& Annexure VI.
15. CASHFLOW
Cash flow statement for the year ended March 31,2016 is attached to the Balance Sheet.
SAFETY HEALTH AND ENVIRONMENT
Safety and Health
Our manufacturing plants at Kirloskarvadi, Dewas, Sanand (Ahmedabad), Kaniyur (Coimbatore) and
Kondhapuri are certified for Occupational Health and Safety Assessment Series standards (OHSAS
18001) and Environment Management System (IS014001).
The Company''s corporate office and four plants at Sanand (Ahmedabad), Kaniyur (Coimbatore),
Kirloskarvadi, Dewas are certified for SA8000 , implementation of SA 8000 is in progress at
Kondhapuri Plant and certification planned in 2016-17.
Achievements-
KBL Kirloskarvadi has been awarded "First Prize" by The Sangli District Industrial Safety Committee
for best Safety Performance in an Engineering Industry.
Dewas plant bagged ''Gold Safety Award 2015'', which was organized by Greentech Foundation New Delhi.
Dewas plant also secured winner (First) position in ''MT Award 2015 Excellence in Safety'', organized
by Manufacturing Today Magazine, Mumbai.
KBL Dewas won the 1st price in ENCON competition.
Safety Inspection/Audits -
Periodic internal audits of all our manufacturing units are being conducted to ensure legal
compliance, OHSAS 18001, IS014001 requirements and standard industrial practices.
More emphasis was given to ''Leading indicators'' rather than only concentrating on ''Lagging
indicators''. Nearly 300 incidents logged in the incident tracking system, Corrective Actions and
Preventive Actions (CAPA) are being tracked through the system, which helped to reduce the accident
rate. Safety Committees -
Safety committees in the manufacturing plants meet regularly to discuss various environment, health
and safety related issues. Workmen have equal number of participation in the safety committees. It
is encouraged to have departmental safety committees for bigger plants. Minutes of safety
committee meetings are made available to all for review. Issues raised in the meetings help to
Environment Health Safety improvement and reduce accidental situations.
New Initiative-
New initiatives were started to enhance the safety and increase safety awareness, which are as
under:
Online training course for machine guarding is conducted for shop floor staff and more than 98.5%
of staff has completed the training.
Behavioural Based Safety system is initiated at three locations namely Sanand, Kaniyurand Dewas.
Safety round by senior persons started on monthly basis at all manufacturing locations.
Departmental safety committees are established in Kirloskarvadi and Dewas plant.
Since, Kirloskarvadi plant is more than 100 years old, there are many Directorate of Industrial
Safety & Health (DISH) approved drawings, initiatives taken to prepare consolidated plan of factory
building and machinery layout, which got approved from DISH.
Environment Health Safety (EHS) Compliance -
Company strives for 100% compliance with EHS requirements. In order to verify that our facilities
are meeting regulatory compliances, all the project sites and manufacturing plants are audited
frequently.
Others-
Safety week and environment day are celebrated at all locations of manufacturing plants, offices
and project sites with number of activities, competitions and awareness programs.
Bi-monthly contractor''s safety meeting initiated.
Visit of safety committee members was organized in Kirloskarvadi and Kondhapuri plant.
A Safety meet of all persons looking after safety was organized in Sanand, which included the
safety visit to one Of the MNC plants.
Kirloskarvadi plant observed Safety Kaizen Month in September, 2015.
Environment and Energy
We monitor our direct and indirect energy consumption which is reported in our annual
sustainability report. A group wise Energy Conservation (ENCON) competition encourages all our
manufacturing plants to reduce the overall energy consumption.
Company has taken many steps to reduce energy consumption and water conservation which includes
maintaining power factor, use of alternative energy, installing VFD based equipments, replacing
streetlights by LED, installation of Bio-plant to recycle the canteen food waste at Dewas. Waste
heat recovery for Cupola furnace at Kirloskarvadi plant, installing close loop hydro testing at
Kirloskarvadi plant.
CORPORATE GOVERNANCE
Pursuant to Securities Exchange Board of India (SEBI) (Listing Obligations and Disclosure
Requirements), Regulations 2015, Management Discussion and Analysis Report, Report on Corporate
Governance, Auditors'' Certificate on Corporate Governance, Disclosure of unclaimed shares and the
declaration by the Chairman and Managing Director regarding affirmations for compliance with the
Company''s Code of Conduct are annexed to this report.
EMPLOYEE STOCK OPTION SCHEME (ESOS)
As you are aware, during the year 2007-08, the Company launched the Employees'' "Share a Vision"
Stock Option Scheme, 2007 (ESOS-2007).
The Management has formulated under ESOS - 2007, a proposal of providing stock options at Rs, 2/-
per option to award employees for their outstanding, exemplary performance in getting sustainable
results.
During the year, Mr. J. R. Sapre, ex-Whole Time Director of the Company and an employee of one of
the subsidiary companies have exercised their options and they were allotted 20,000 and 750 number
of shares respectively.
Auditors'' Certificate to that effect is provided as Annexure VII to this report.
DISCLOSURE UNDER THE "SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND
REDRESSAL) ACT, 2013.
In terms of Section 22 of the above mentioned Act, read with Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Rule, 2013, we report as follows for the year
ended on March 31,2016:
1 No. of Complaints received in the year Nil
2 No. of Complaints disposed off in the year Nil
3 Cases pending for more than 90 days Nil
4 No. of workshops and awareness
programmes conduced in the year 8
5 Nature of action by employer or
District Officer, if any NA
ACKNOWLEDGMENTS
Your Directors wish to place on record their appreciation of the unstinted support and co-operation
given by banks and financial institutions. Your Directors would further like to record their
appreciation of the efforts by the employees of the Company.
For and on behalf of the Board of Directors,
Sanjay C. Kirloskar
Chairman & Managing Director
DIN 00007885
Pune:May10,2016
Mar 31, 2015
TO THE MEMBERS
The Directors present the 95th Annual Report and the Audited Financial
Statements of the Company for the year ended March 31,2015 together
with the reports of the Auditors and Board thereon.
FINANCIAL RESULTS
The financial results of the Company for the year 2014-15 as compared
with the previous year are as under: -
Year ended Year ended
March 31,2015 March 31,2014
(Rs) (Rs)
Revenue from Operations 16,257,051,488 17,598,053,185
Other income 112,714,764 53,149,058
Total 16,369,766,252 17,651,202,243
Profit before tax 55,289,084 697,546,094
Tax Expense (29,579,796) 220,671,149
Profit for the period 84,868,880 476,874,945
Surplus in Profit &
Loss Account
brought forward from
previous year 1,647,771,258 1,449,112,037
Depreciation impact due to
Companies Act, 2013 40,754,517 -
Available surplus 1,691,885,621 1,925,986,982
DIVIDEND
Your Directors recommend a dividend of 25% (Rs. 0.50 paise per equity
share) for the year.
APPROPRIATIONS
Your Directors propose to appropriate the available surplus as under:-
Dividend of Rs 0.50 @25% (125%) on
79,388,176 (79,358,451) equity
shares of Rs. 2/- each 39,694,088 1,98,396,128
Dividend distribution tax 1,238,198 32,132,101
Transfer to General Reserve - 47,687,495
Corporate Social Responsibility 45,000,000 -
Balance carried to
Balance Sheet 1,605,953,335 1,647,771,258
TOTAL 1,691,885,621 1,925,986,982
STATE OF AFFAIRS OF THE COMPANY
The revenue from operations for the year under review is Rs. 1626 crores,
which is less than 7.61% compared to the previous year. Drop in sales
is mainly due to lower sales of project sectors, partly attributable to
liquidity issue in the market and non-receipt of dispatch clearances
from the customers.
The economic condition of the country continued to be sluggish
throughout the year. The Company continued its focus of being selective
in accepting orders depending on customers'' financial position. There
was concentrated effort towards improvement of marketing initiatives
and brand presence. Overall efforts were made to improve the
efficiencies at all plants.
For project business, the Company continues to focus on closure of old
projects and recovery of retention money. The main reasons for major
drop in sales of project sectors was due to non receipt of advances /
L/C from customers, delay in engineering and civil work by few clients
and non receipt of dues from few customers.
The Company has launched towards the year end, highly-advanced
"i-CAN" series of pumps, designed to reduce maintenance time and
total cost of ownership (TCO) for the small scale industries.
Endorsing the Prime Minister''s "Make in India" call, the Company
has also launched another product "i-NS" pump, which has been
developed entirely with domestic technology. The new innovative
features make the "i-NS" series pump ideal for dewatering function
in the Water & Wastewater Treatment industries, Sewage, Building &
Construction and other allied segments.
Kirloskarvadi plant received the National Energy Management Award.
Kondhapuri plant developed and dispatched 1800 mm Sluice Valves
(Largest size so far) & 2400 mm Turbine Inlet valves were manufactured
and completed testing and inspection and received orders from State
Water Supply & Sewerage Boards for various types of valves. Dewas plant
was recognized by CII for "Significant achievement on the journey
towards Business Excellence", was awarded TCM Level 4 by CII and
produced all time highest DB pumps in the month of December 2014.
Kaniyur plant received "Merit Award" for 5S by CII. Sanand plant
received "Energy efficient unit" award in 15th CII national award
for excellence in energy management 2014 and was recognized by CII for
Greenco "Silver" certification.
There were no material changes or commitments to report which affect
the financial position of the Company that has occurred between the end
of financial year and the date of this report.
STATUTORY DISCLOSURES
1. EXTRACT OF ANNUAL RETURN
Extract of Annual Return in Form MGT-9 as per provisions of Section 134
read with Section 92(3) of the Companies Act, 2013 (the Act) is given
in Annexure I to this report.
2. NUMBER OF MEETINGS OF THE BOARD
During the financial year under review, 6 (six) Board meetings were
held, the details are appearing elsewhere in this report.
3. DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) of the Act, the Board of Directors report
that
(a) in the preparation of the annual accounts, the applicable
accounting standards had been followed;
(b) the directors had selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year and of the profit and
loss of the Company for that period;
(c) the directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities;
(d) the directors had prepared the annual accounts on a going concern
basis; and
(e) the directors, had laid down internal financial controls to be
followed by the Company and that such internal financial controls are
adequate and were operating effectively;
(f) the directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
4. INDEPENDENT DIRECTORS'' DECLARATION
All independent Directors of the Company have given declaration under
Section 149 (7) of the Act, that he / she meets the criteria laid down
in Section 149 (6) of the Act.
5. DISCLOSURE REQUIRED UNDER SECTION 134(3)(E)
The Board has adopted a Board Diversity Policy which sets the criterion
for appointment as well as continuance of Directors, including
independent Directors, at the time of re-appointment as Director in the
Company. As per the policy, the Board will have an optimum combination
of members with appropriate balance of skill, experience, background,
gender and other qualities of Directors required for the effective
functioning of the Board.
The Nomination and Remuneration Committee recommends remuneration of
the Directors, subject to the overall limits set under the Act, as
outlined in the Remuneration Policy recommended by the Committee and
approved by the Board. As per the policy, the executive Directors are
entitled for a fixed salary, other non- monetary benefits etc., and
commission based on performance evaluation of the Director. In case of
non- executive Directors, apart from receiving sitting fees, they may
be given commission on the basis of criterion as per the policy.
The Remuneration policy is given in Annexure II.
6. REPORT OF AUDITORS
Your Company is already in the regime of unqualified financial
statements. During the Financial Year under review also, there are no
qualifications or adverse remarks or disclaimers made by the Statutory
Auditor of the Company in their Audit Report and by the Company
Secretary in practice in his Secretarial Audit Report, which are
annexed herewith as Annexure VIII.
M/s. P G. Bhagwat, Chartered Accountants (Firm Registration no.
101118W) the Auditors retire at the ensuing Annual General Meeting and
are eligible for re-appointment. The requisite certificate as required
under the Act has been received. The Audit and Finance Committee has
recommended their re-appointment and the annual audit fees.
Mr. M. J. Risbud, Practicing Company Secretary (CP No. 185) has been
appointed as Secretarial Auditor as per Section 204 of the Act, 2013
for the Financial Year 2015-16.
Parkhi Limaye & Co. (Firm Registration No. 191) have been appointed as
Cost Accountant as per Section 148 of the Act, read with applicable
rules made thereunder for the Financial Year 2015-16. Their
remuneration is subject to approval by the shareholders.
7. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
The details of loans, guarantees or investments under Section 186 of
the Act, are available under note no. A-11 and A-17 of notes to
accounts, attached to the Standalone Financial Statements.
The full particulars are available in the Register maintained under
Section 186 of the Act, which is available for inspection during
business hours on all working days (except Saturday and Sunday).
8. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All contract/arrangement/transactions entered by the Company during the
Financial Year 2014-15, with the related parties were in the ordinary
course of business and on arm''s length basis. During the year the
Company has not entered into contract/arrangement/transactions with
related parties which could be considered material in accordance with
the Company''s ''Policy on Materiality of Related Party Transactions
and Dealing with Related Party Transactions''. The said policy is
uploaded on the Company''s website.
Further, we draw your attention to Note no C-17 of the Standalone
Financial Statements of the Company for details.
9. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
Details of energy conservation, technology absorption, research and
development and foreign exchange earnings as required under Section
134(3)(m) of the Act read with applicable rules are given in the
Annexure III to this Report.
10. RISK MANAGEMENT
The Risk Management Committee meets at regular intervals and identifies
the top risks and prioritises those risks. The progress and review
status of those identified risks are presented to the Audit and Finance
Committee every quarter.
11. CORPORATE SOCIAL RESPONSIBILITY REPORT
The Corporate Social Responsibility Report in the required format is
given in Annexure IV.
12. BOARD EVALUATION
The Board has formulated a Board Evaluation Policy for evaluation of
individual Directors as well as the entire Board and committees of the
Board. The evaluation framework is divided into parameters based on the
various performance criteria to be done annually. The evaluation for
the year ended March 31, 2015 has been completed.
13. PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES AND JOINT
VENTURES
Subsidiaries:
i. Karad Projects and Motors Limited
The revenue under review is Rs. 2,455,915,024/- which is 21.4% more as
compared to the previous year.
ii. Kirloskar Systech Limited
The revenue under review is Rs. 203,124,070/- which is 660.2% more as
compared to the previous year.
iii. The Kolhapur Steel Limited
The revenue under review is Rs. 314,178,244/- which is 39.3% more as
compared to the previous year.
iv. Kirloskar Corrocoat Private Limited
The revenue under review is Rs. 715,580,568/- which is 94.6% more as
compared to the previous year.
v. Kirloskar Brothers International B.V (consolidated)
The revenue under review is Rs. 9,747,974,297/- which is 10.5% more as
compared to the previous year.
vi Kirloskar Ebara Pumps Limited (Joint Venture)
The revenue under review is Rs. 1,70,184/- which is 105% more as compared
to the previous year.
The financial position of the subsidiaries and joint venture companies
is given in AOC-1, elsewhere in the Annual Report.
14. OTHER STATUTORY DISCLOSURES AS REQUIRED UNDER RULE 8(5) OF THE
COMPANIES (ACCOUNTS) RULES, 2014
(i) Financial summary/highlights are already included elsewhere in the
Report;
(ii) There has been no change in the nature of the business during the
year under review;
(iii) Directors and Key Managerial Personnel:
- Mr. Rahul C. Kirloskar - Non Executive Director, resigned as Director
of the Company with effect from April 22, 2014.
- Mr. U. V Rao - Independent Director, demised on January 24, 2015.
- Mr. A. N. Alawani - Non Executive Director, resigned as a Director of
the Company with effect from April 23, 2015.
- Mr. Kishor Chaukar - Additional Director appointed by the Board with
effect from April 27, 2015, in the category of Independent Director.
Board recommends his appointment as an Independent Director at the
ensuing Annual General Meeting.
- Mr. Sanjay C. Kirloskar, Chairman and Managing Director, Mr. Umesh
Shastry, Chief Financial Officer and Mr. Sandeep Phadnis, Company
Secretary were appointed as Key Managerial Personnel pursuant to
Section 203 of the Companies Act, 2013;
In view of the resignation of Mr. A. N. Alawani and in order to comply
with the requirements of Section 152(6) of the Act read with Articles
of Association of the Company, Mr. Sanjay C. Kirloskar - Chairman and
Managing Director will be considered to be a Director whose period of
office is liable to determination by rotation.
Mr. Alok Kirloskar, Non-Executive Director is liable to retire by
rotation and being eligible offers himself for re-appointment.
(iv) Companies which have become or ceased to be subsidiaries, joint
ventures or associate companies during the year:
Kirloskar Brothers International (Pty) Ltd. - South Africa, was formed
during the year as a step down subsidiary of the Company.
(v) Details relating to Deposits :
The Company neither accepts nor renews matured deposits since January
2003 and there were no deposits accepted by the Company as covered
under Chapter V of the Act read with Rules thereunder.
(vi) No significant and material orders were passed by the Regulators
or court or tribunals impacting the going concern status and
company''s operations in future.
(vii) Details in respect of adequacy of internal financial controls
with reference to the Financial Statement:
The Company has an Internal Audit Charter specifying mission, scope of
work, independence, accountability, responsibility and authority of
Internal Audit Department. The internal audit reports are initially
presented to the Executive Committee consisting of the Chairman and
Whole Time Director and significant observations and follow up actions
thereon are reported to Audit and Finance Committee.
(viii) Other disclosures required under Companies Act, 2013 as may be
applicable:
- Composition of the Audit and Finance Committee has been disclosed
under Corporate Governance Report;
- Establishment of vigil mechanism: The Company has already in place a
''Whistle Blower Policy'' as a vigil mechanism since 2008. The details
of the same are reported under Corporate Governance Report;
- Disclosure as required under Section 197(12) of the Act read with
applicable rules and details as per Rule 5 of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 are
given in Annexure V & Annexure VI.
15. CASH FLOW
Cash flow statement for the year ended March 31,2015 is attached to the
Balance Sheet.
safety; health and environment
Safety and Health
All our manufacturing plants are certified for Occupational Health and
Safety Assessment Series (OHSAS) standards ISO 18001 and Environment
Management System (ISO 14001).
The Company''s corporate office and four plants namely Sanand
(Ahmedabad), Kaniyur (Coimbatore), Kirloskarvadi, Dewas are audited for
SA8000.
Achievements -
Mega Plantation (6000 nos.) was carried out in Dewas on 31st July 2014
Dewas manufacturing facility bagged CII-Silver rating -Green-co
certification.
Dewas manufacturing facility bagged ''Gold Safety Award 2014'', which was
organized by ''Greentech Foundation'', New Delhi.
Dewas manufacturing facility secured winner (First) position in ''MT
Award 2014 Excellence in Safety'', organized by ''Manufacturing Today
Magazine'', Mumbai.
Safety Inspection/Audits -
Periodic internal audits of all our manufacturing units are being
conducted to ensure legal compliance, OHSAS 18001, ISO 14001
requirements and standard industrial practices. Corporate procedures
are developed implemented to ensure common understanding and
requirements throughout the Company.
Safety inspections of all manufacturing plants, project sites and
corporate office are being carried out frequently to find out short
falls and to make improvements.
Internal audit non-compliances (NCs) and area for improvements are
tracked through the issue tracking mechanism. Points raised during
safety inspections and unsafe observations are tracked through the
Incident management system, which is developed in 2014. All types of
accidents/incidents are also tracked through this system.
Safety Committees -
Safety committees in the manufacturing plants meet regularly to discuss
on various environment, health and safety related issues. Workmen have
equal number of participation in the safety committees. It is
encouraged to have departmental safety committees for bigger plants.
Minutes of safety committee meetings are made available to all for
review. Issues raised in the meetings help to Environment Health Safety
improvement and reduce accidental situations.
Training -
Safety Training is provided to all employees including contract
employees. Induction training is an initial activity for all new
entrants. More than 1000 man-days were used for safety training in
2014-15 excluding induction training. Mock drills are regularly
conducted to ensure the emergency preparedness. Lacunae observed in the
mock drill are bridged immediately. A vigorous induction program is in
place for all new entrants. Training programs on health awareness and
food habits are organized for the benefit of employees.
An initiative is taken to implement the Safety passport system in Dewas
and Kirloskarvadi plants. More than 1500 employees were trained by an
external agency.
Environment Health Safety (EHS) Compliance -
Company strives for 100% compliance with EHS requirements. To verify
that our facilities are meeting regulatory compliance requirements, all
the project sites and manufacturing plants are audited frequently.
Others -
Occupation Health Centre (OHC) at corporate office and major
manufacturing units provide immediate medical needs. Medical facility
is extended to nearby villages around Kirloskarvadi. As part of
preventive measures, all employees above 40 years of age undergo
comprehensive annual medical check-up; counselling sessions are
conducted for employees based on their medical check-up. Medical
check-up of all the persons working in manufacturing plants are done
annually.
A special drive was undertaken to report near miss, unsafe acts and
condition throughout Company''s plants in September - October.
A new fire tender with latest facilities is procured for Kirloskarvadi
plant.
Safety week is celebrated at all locations of manufacturing plants,
offices and project sites with number of activities, competitions and
awareness programs.
Environment
All our manufacturing plants are certified for the Environment
Management System (ISO14000). Our Kondhapuri plant has also received
certification for Energy Management System (ISO50001). It is the first
company in Pune region to achieve this certification.
We monitor our direct and indirect energy consumption which is reported
in our annual sustainability report. A group wise Energy Conservation
(ENCON) competition encourages all our manufacturing plants to reduce
the overall energy consumption.
Pumping systems consume around 30% energy in industries. Energy Audit
services launched by the Company have helped industries in replacing
old pumping systems by energy efficient pumping systems. Our energy
efficient pumping solutions and Lowest Life Cycle Cost pumps have
significantly reduced the energy consumption.
We have a special cell called Pump Energy Assessment and Solution Cell
which provides sustainable solutions for reducing carbon footprint at
customer''s end. The team consists of certified Energy Managers and
Energy Auditors. We are certified by BEE i.e. Bureau of Energy
Efficiency, as an Energy Service Company, Grade 2.
During the year 2014-15, we have saved around 2430183 kW of energy and
prevented the emission of 2528.8 tCO2e at customer''s end.
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreements with the Stock
Exchanges, Management Discussion and Analysis Report, Report on
Corporate Governance, Auditors'' Certificate on Corporate Governance
(Annexure VII) and the declaration by the Chairman and Managing
Director regarding affirmations for compliance with the Company''s
Code of Conduct are annexed to this report.
EMPLOYEE STOCK OPTION SCHEME (ESOS)
As you are aware, during the year 2007-08, the Company launched the
Employees'' "Share a Vision" Stock Option Scheme, 2007 (ESOS-2007).
The Management has formulated under ESOS - 2007, a proposal of
providing stock options at Rs. 2/- per option to award employees for
their outstanding, exemplary performance in getting sustainable
results. During the year, 20,000 options have been granted to the Whole
Time Director as a part of commission for the year 2013-14.
Auditors'' Certificate as required under the SEBI (Share Based
Employee Benefits) Regulations, 2014 with regard to compliance of the
regulations is provided as Annexure VII to this report.
DISCLOSURE UNDER THE "SEXUAL HARASSMENT OF WOMAN AT WORKPLACE
(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013".
In terms of Section 22 of the above mentioned Act, read with Sexual
Harassment of Woman at Workplace (Prevention, Prohibition and
Redressal) Rule, 2013, we report as follows for the year ended on March
31,2015:
1 No. of Complaints received in the year Nil
2 No. of Complaints disposed off in the year Nil
3 Cases pending for more than 90 days Nil
4 No. of workshops and awareness programmes
conduced in the year 75
5 Nature of action by employer or District
Officer, if any NA
ACKNOWLEDGMENTS
Your Directors wish to place on record their appreciation of the
unstinted support and co-operation given by banks and financial
institutions. Your Directors would further like to record their
appreciation of the efforts by the employees of the company
For and on behalf of the Board of Directors,
Sanjay C. Kirloskar
Chairman & Managing Director
DIN 00007885
Pune: April 27, 2015
Mar 31, 2014
THE MEMBERS
The Directors present the 94th Annual Report and the Audited Annual
Accounts of the Company for the year ended March 31,2014.
FINANCIAL RESULTS
The financial results of the Company for the year 2013-14 as compared
with the previous year are as under: -
Year ended Year ended
March 31, 2014 March 31, 2013
Revenue from Operations 17,516,340,754 18,723,978,939
Other income 54,616,152 69,995,455
Total 17,570,956,906 18,793,974,394
Profit before tax 697,546,094 719,478,435
Tax Expense 220,671,149 135,001,177
Profit for the period from
continuing 476,874,945 584,477,258
operations
Short Provision of income tax on
account of earlier years - 150,000,000
Profit for the period 476,874,945 434,477,258
Surplus in Profit & Loss
Account 1,449,112,037 1,241,391,915
brought forward from previous
year
Available surplus 1,925,986,982 1,675,869,173
DIVIDEND
Directors are pleased to recommend a dividend of 125% (Rs. 2.50 per
equity share) for the year.
APPROPRIATIONS
Your Directors propose to appropriate the available surplus as under:-
Dividend of Rs. 2.50 @ 125% (100%) on 79,358,451 (79,358,451) equity
198,396,128 158,716,902
shares of Rs. 2/- each
Dividend distribution tax 32,132,101 24,592,508
Transfer to General Reserve 47,687,495 43,447,726
Balance carried to
Balance Sheet 1,647,771,258 1,449,112,037
Total 1,925,986,982 1,675,869,173
OPERATIONS
The revenue from operations for the year under review was Rs. 1752
Crores, which is less than 6.85% compared to the previous year.
The Company focused on improving operational efficiencies across the
supply chain to increase productivity. Assembly of a pump in a record
time of 20 seconds at Kaniyur (Coimbatore) plant, exemplifies our
productivity improvement measures. Information Technology tools and
processes were leveraged to streamline and enhance effectiveness of
business functions like marketing, manufacturing, after sales support
and human resource.
Product business was promoted by enhancing the channel network across
India and introduction of new products for different market segments.
We now have more than 15,000 retailers as a part of our channel
network. We marketed value added products like solar pump, hydel
turbines and energy saving Lowest Life-Cycle Cost (LLCÂ) pumps in line
with our strategy to promote sustainability. We developed primary and
secondary heat transfer pumps for the nuclear industry.
In the projects business, leveraging of financial control led to the
improvement in balance sheet. Our strategy of being selective in
projects business continued and we are glad to report that our
customers have appreciated our organization''s stand on payment terms
since it is of mutual benefit. Institutionalization of best in class
project management practices helped in better project control and
closure of the projects ahead of time with healthy cash flows.
STATUTORY DISCLOSURES
1. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
Details of energy conservation, technology absorption, research and
development and foreign exchange earnings and outgo as required under
Section 217 (1) (e) of the Companies Act, 1956, are given in the
Annexure I to this Report.
2. PARTICULARS OF EMPLOYEES
As per provisions of Section 219 (1) (b) (iv) of the Companies Act,
1956, the Directors'' Report and Accounts are being sent to the
shareholders excluding the statement giving particulars of employees
under Section 217 (2A) of the said Act. Any shareholder interested in
obtaining a copy of the statement, may write to the Company Secretary
at the Registered Office of the Company.
3. SUBSIDIARY COMPANIES
During the year, Kirloskar Brothers International B.V., Netherlands
(KBI BV), a wholly owned subsidiary company of the Company, has
acquired balance 40% holdings in Kirloskar Brothers Europe B.V.,
Netherlands (KBE BV). As a result, KBE BV has now become a wholly owned
subsidiary of KBI BV
During the year, SPP Pumps LP Georgia, USA, has acquired SyncroFlo
Inc., Georgia, USA. SyncroFlo is a pioneer in the domestic water
booster industry. SPP Pumps LP is owned by SPP Pumps Limited, UK, which
is a wholly owned subsidiary of Kirloskar Brothers International B.V,
Netherlands, a wholly owned subsidiary of the Company.
As you were aware, the Scheme of Arrangement and Amalgamation of
erstwhile, Hematic Motors Private Limited with Kirloskar Constructions
and Engineers Limited (the ''Scheme''), was sanctioned by the Honourable
High Court of the Judicature at Bombay on March 1, 2013. During the
year 2013-14, the Honourable High Court at the Judicature at Madras, by
its orders dated June 23,2013, has also sanctioned the Scheme and
subsequently, the same was made effective on July 29,2013. Also, in
terms of the said Scheme, the name of the erstwhile Kirloskar
Constructions and Engineers Limited was changed as ''Karad Projects and
Motors Limited''.
During the year Company has executed an agreement for the transfer of
Corporate Information Centre (CIC) division of the Company to Kirloskar
Systech Limited (KSL), a wholly owned subsidiary of the Company. CIC
supported the Company for IT hardware and software maintenance, e-mail,
internet and intranet facilities and other IT related services. All the
existing assets of CIC shall now vest in KSL.
KSL is engaged in providing engineering design and information
technology related services to the Company, its subsidiaries and
external parties Transfer of assets from CIC will help KSL expand its
business activities and become one of the competent players in the IT
Industry.
The Kolhapur Steel Limited (TKSL), Company''s subsidiary, has incurred
losses for the year ended March 31, 2014, exceeding the net worth as on
that date. TKSL has, thus, become sick as per Section 3 (1) (o) of the
Sick ndustrial Companies (Special Provisions) Act, 1985. TKSL is in the
process of filing a reference to the Board set up under the said Act.
TKSL has plans of revival. The Company has already initiated some
measures to revive TKSL. The Company is considering infusing some fresh
capital in TKSL in order to make it a viable entity.
The Government of India, Ministry of Corporate Affairs vide General
Circular No. 2/2011, has granted general exemption under Section 212
(8) of Companies Act, 1956 to companies from attaching subsidiary
companies'' documents viz. Balance Sheet, Profit and Loss account,
Directors'' and Auditors'' Reports etc. to the Balance Sheet of a holding
company.
Accordingly, we have attached certain information in respect of the
Company''s subsidiaries for the respective financial years.
Further, we hereby undertake that annual accounts for the subsidiary
companies and the related detailed information will be made available
to shareholders seeking such information. The annual accounts of the
subsidiary companies will also be kept open for inspection of
shareholders.
The consolidated financial statement of subsidiaries prepared as per
the applicable provisions and duly audited by the statutory auditors,
is presented elsewhere in this annual report.
4. DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Board of
Directors report that
- In the preparation of the annual accounts, the applicable accounting
standards have been followed and there was no material departure from
the accounting standards;
- Accounting policies have been selected and applied consistently and
that the judgements and estimates made are reasonable and prudent, so
as to give a true and fair view of the state of affairs of the Company
as at March 31,2014 and of the profit of the Company for the period
April 1,2013 to March 31,2014;
- Proper and sufficient care has been taken for the maintenance of
adequate accounting records, in accordance with the provisions of
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
- The annual accounts have been prepared on a going concern basis.
5. CASH FLOW
A cash flow statement for the year ended March 31,2014 is attached to
the Balance Sheet.
SAFETY, HEALTH AND ENVIRONMENT
Safety and Health
All our manufacturing plants are certified for Occupational Health and
Safety Assessment Series (OHSAS) standards IS018001.
Periodic safety audits of all our manufacturing units and project sites
including corporate office, ensures compliances to safety norms. Review
of audit findings is conducted and actions are initiated to improve the
safety performance. ''Safety Committees'' at corporate and manufacturing
units have been formed to monitor the intent of safety throughout the
organisation. Periodic emergency evacuation training programs and mock
drills are conducted at corporate office, project sites and
manufacturing locations to ensure preparedness to face the
eventualities.
Safety scorecard is reviewed on regular basis. Contractors'' employees
at sites and operation units are provided training on safety. Actions
required in improving safety conditions are communicated to the
relevant site through safety manager. EHS bulletins and safety
guidelines are periodically circulated all across the organisation for
sharing and creating awareness on safety related matters. Corporate
safety committee guides and monitors all sites and manufacturing units,
to improve near miss, accident and implementation of all statutory
requirements related to safety, so as to achieve our goal of zero
accident and zero man days lost.
Occupation health centre (OHC) at corporate office and major
manufacturing units provide immediate medical needs and support to the
employees in keeping their good health. Training programs on health
awareness and food habits are organized for the benefit of employees.
We also conduct First Aid training programs for creating awareness and
developing basic skills amongst our employees to deal in emergency
conditions.
As part of preventive measure, all employees above 30 years of age
undergo annual medical check-up. Counselling sessions are conducted
for employees based on their medical check-up.
A joint committee of workmen and management governs the canteen
activities to ensure that hygienic and nutritious food is provided to
employees.
Environment
All our manufacturing plants are certified for the Environment
Management System (ISO 14000). Our Kondhapuri plant has also received
certification for Energy Management System (ISO 50001). It is the first
Company in Pune region to achieve this certification.
Our plants at Kaniyur, Kondhapuri and Dewas have applied for ''GreenCo''
certification of Confederation of Indian ndustries. We are happy to
inform you that our Dewas plant has achieved ''Silver'' rating in its
first attempt on GreenCo and has become the first Indian Pump
manufacturing plant to achieve this rating. We monitor our direct and
indirect energy consumptions which are reported in our annual
sustainability reports. Energy Conservation (ENCON) competition
encourages all our manufacturing plants to reduce the overall energy
consumption.
Pumping systems consume around 30% energy in industries. The Energy
Audit services launched by the Company have helped industries in
replacing old pumping systems by energy efficient pumping systems. Our
energy efficient pumping solutions and LLCÂ pumps have significantly
reduced the energy consumption.
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the listing agreement with the Stock
Exchanges, Management Discussion and Analysis Report, Report on
Corporate Governance, Auditors'' Certificate on Corporate Governance and
the declaration by the Chairman and Managing Director regarding
affirmations for compliance with the Company''s Code of Conduct are
annexed to this report.
EMPLOYEE STOCK OPTION SCHEME (ESOS)
As you are aware, during the year 2007-08, Company launched the
Employees'' "Share a Vision" Stock Option Scheme, 2007 (ESOS-2007).
The Management has formulated under ESOS - 2007, a proposal for
providing stock options at Rs. 2/- per option to award employee for their
outstanding, exemplary performance in getting sustainable results.
During the year, 35975 options have been granted.
Disclosures required to be made under the Securities and Exchange Board
of India (Employee Stock Option Scheme and Employee Stock Purchase
Scheme) Guidelines, 1999 and a certificate from the Statutory Auditors
with regard to compliance of the guidelines, is provided as Annexure 11
to this report.
FIXED DEPOSITS
The Company neither accepts nor renews matured deposits since January,
2003. The amount of the unclaimed matured deposits has been transferred
to the Investor Education & Protection Fund Account as and when due and
at present, there is no outstanding unclaimed deposit as on March
31,2014.
CORPORATE SOCIAL RESPONSIBILITY
The Company considers the society as one of the most important
stakeholders. We continue to support the communities close to our
manufacturing plants. Society related initiatives are implemented based
on the needs and expectations of society which are collected through
structured society perception survey and also feedbacks received
through other forums of engagement.
We have continued our focus on development activities in the areas of
education, health, sanitation and hygiene, combating diseases,
promoting maternal health and employability.
Activities in Manufacturing plants
In the area of education, support was provided to upgrade school
buildings and other facilities. Notebooks were distributed to children
in schools near Dewas plant. School children were provided guidance for
competitive examinations. Earn & Learn scheme for ITI apprentices in
collaboration with Yashaswi Institute, Pune continued this year to
improve employability of these apprentices. For empowering women,
various training sessions on skill development were organized.
Self-help groups have been created to address employment of women at
Kirloskarvadi and Dewas. 40 schools near Kirloskarvadi participated in
Adarsha Shala competition.
Health related initiatives for the community around Kirloskarvadi and
Dewas plants included free medical check-up camps with free medicine
distribution. These check-ups were conducted for anaemia, HIV, bone
marrow density etc. To improve health of expecting mothers and
eliminate infant mortality, antenatal care, Garbhsanskar check-up camps
were organized for women. Blood donation camps were also organized at
Kirloskarvadi and Dewas manufacturing units. Awareness sessions were
conducted for life style management and overcoming addictions. Skits
and rallies were organized to create awareness about AIDS in the local
communities.
We have continued our efforts to communicate importance of sanitation
and hygiene to school children through our initiative WASH (Water
Sanitation and Hygiene). The awareness programs were conducted in
municipal schools around Kirloskarvadi, Pune and Dewas. The programs
included enactment of skits, cartoon videos and lectures on adolescent
hygiene, distribution of water purifier systems for schools, etc.
Various awareness programs were organized under the aegis of Vasundhara
Festival in the schools and nearby communities.
DIRECTORS
In terms of the provisions of Companies Act, 2013 and rules thereof
(''the Act''), certain class of companies are mandatorily required to
appoint at least 1/3rd of its total directors, who are complying with
the requirements as mentioned in the Act, as Independent Directors of
the company.
As per the existing composition of the Board of Directors of the
Company. Mr. U. V Rao, Mr. S. N. Inamdar, Mr. PS. Jawadekar, Mrs.
Lalita D. Gupte and Mr. Pratap B. Shirke are existing Independent
Directors of the Company complying with the requirements of the Act.
These Directors have given their declarations regarding fulfilment of
conditions as given under the Act.
Their brief profiles along with other details, are included in the
Explanatory Statement attached to the notice of the Annual General
Meeting.
The Board proposes the appointment of these directors as Independent
Directors at the ensuing Annual General Meeting, not liable to retire
by rotation.
Mr. Vikram S. Kirloskar will retire by rotation at the ensuing Annual
General Meeting and being eligible, offers himself for re-appointment.
His brief profile is appearing in the Report on Corporate Governance of
this Annual Report.
Mr. Rahul C. Kirloskar resigned from the Board of Directors with effect
from April 22,2014, due to personal reasons. Mr. Rahul C. Kirloskar
has been actively associated with the Company for more than a decade.
The Board places on record its appreciation for contribution of Mr.
Rahul C. Kirloskar during his tenure as a director of the Company.
AUDITORS
M/s. R G. Bhagwat, the Statutory Auditors, retire at the ensuing Annual
General Meeting and are eligible for re- appointment. The requisite
certificate as required under the Companies Act, 2013 has been
received. The Audit and Finance Committee has recommended their
re-appointment for the year 2014-15.
ACKNOWLEDGMENTS
Your Directors wish to place on record their appreciation for the
unstinted support and co-operation given by banks and financial
institutions. Your Directors would further like to record their
appreciation for the efforts by the employees of the Company.
For and on behalf of the Board of Directors
Sanjay C. Kirloskar
Chairman and Managing Director
Ahmedabad: April 22,2014
Mar 31, 2013
The Directors present the 93rd Annual Report and the Audited Annual
Accounts of the Company for the year ended March 31, 2013.
FINANCIAL RESULTS
The financial results of the Company for the year 2012-13 as compared
with the previous year are as under: -
Current Previous
Year ended Year ended
March 31,
2013 March 31,
2012
(Rs.) (Rs.)
Revenue from Operations 18,723,978,939 17,818,761,202
Other income 69,995,455 462,787,460
Total 18,793,974,394 18,281,548,662
Profit before tax 719,478,435 339,655,805
Tax Expense 135,001,177 24,669,152
Profit foe the period from continuing 584,477,258 314,986,653
operations
Short Provision of income tax on
account of earlier years 150,000,000 3,100,000
Profit for the period 434,477,258 311,886,653
Surplus in Profit & loss Account 1,241,391,915 1,142,469,029
brought forward from previous year
Available surplus 1,675,869,173 1,454,355,682
DIVIDEND
Directors recommend a dividend of 100% (Rs. 2/- per equity share) for
the year.
APPROPRIATIONS
Your Directors propose to appropriate the available surplus as under :-
Dividend of Rs. 2/- @100% (100%) on 79,358,451 (79,339,701)
equity shares of Rs. 2/- each
158,716,902 158,679,402
Dividend distribution tax 24,592,508 23,095,700
Transferred to General Reserve 43,447,726 31,188,665
Balance carried to Balance Sheet 1,449,112,037 1,241,391,915
Total 1,675,869,173 1,454,355,682
OPERATIONS
The revenue from operations of the Company for the year under review
was Rs.1872 crores, which is more than 5.08% compared to the previous
year.
This year, our focus continued to be on the products business. We are
catering to a broad base of utility and process pumping applications in
the Products Business. In the Projects Business, while being selective
on booking new orders, we are strengthening our project management and
execution capabilities. We have aligned our marketing functions to
provide comprehensive pumping solutions to our customers. Our
manufacturing plants are geared up to the growing demand from the
products business on account of productivity improvement initiatives.
In both Products and Projects businesses, our focus continues to be on
value added solutions. We augmented our capability to deliver small
pumps by commissioning a new plant in Sanand, Gujarat. At the same
time, we are re-engineering our small pump operation''s supply chain to
make it leaner and more responsive. In the current year, we
commissioned spares warehouse and refurbishment centers and appointed
service and spares dealers to improve the reach and responsiveness of
the after sales support.
The economic scenario in the country continues to be challenging. In
the coming year, we will focus on improving margins and cash
generation.
Under Section 133A of the Income Tax Act, the Income Tax department
carried out a survey at the Company premises in January, 2013. Based on
the findings of the survey, the department has raised additional tax
liability on the Company, which has been paid during the quarter. The
short provision for tax in respect of earlier years, consequent to the
additional tax claim, has been appropriately disclosed by the Company
in the financial for the year ended on March 31, 2013.
STATUTORY DISCLOSURES
1. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
Details of energy conservation, technology absorption, research and
development and foreign exchange earnings as required under Section 217
(1) (e) of the Companies Act, 1956, are given in the Annexure to this
Report.
2. PARTICULARS OF EMPLOYEES
The Information required under Section 217 (2A) of the Companies Act,
1956 and the rules made thereunder is provided in annexure forming part
of this Report. As per provisions of section 219(1)(b)(iv) of the said
Act, the Directors'' Report and Accounts are being sent to the
shareholders excluding the statement giving particulars of employees
under Section 217(2A) of the said Act. Any Shareholder interested in
obtaining a copy of the statement, may write to the Company Secretary
at the Registered Office of the Company.
3. SUBSIDIARY COMPANIES
During the year, a Scheme of Arrangement and Amalgamation of Hematic
Motors Private Limited with Kirloskar Constructions and Engineers
Limited (the ''Scheme'') was filed with the Hon''ble High Courts of
Judicature at Bombay and Madras.
The Board of Directors of the Company have passed a resolution on
November 29, 2012 approving the Scheme. The appointed date in terms of
the Scheme is April 1, 2012. The Scheme has been approved by Honourable
Bombay High Court and approval from Honourable Madras High Court is
awaited. The effect of the Scheme will be taken into consideration from
the appointed date after approval from Honourable Madras High Court.
Micawber 784 (Proprietary) Ltd., Kirloskar Brothers Limited''s step down
subsidiary through Wholly Owned Subsidiary Company - Kirloskar Brothers
International B.V. (KBI BV), Netherlands, has acquired balance 10%
holding in Braybar Pumps (Proprietary) Ltd. (Braybar) on November 1,
2012. As a result, Braybar has become 100% subsidiary of Micawber 784
(Proprietary) Ltd.
The financials of the subsidiaries appear elsewhere in this annual
report.
On February 8, 2011 the Government of India, Ministry of Corporate
Affairs vide General Circular No. 2/2011, granted general exemption
under section 212(8) of the Companies Act, 1956 for companies from
attaching subsidiary companies'' documents viz. Balance sheet, Profit
and Loss account, Directors'' and Auditors'' Reports etc. to the Balance
sheet of a holding Company.
As per the said general exemption, instead of the annual accounts of
the subsidiary companies, we have attached certain information in
respect of the Company''s subsidiaries for the respective financial
years.
Further, we hereby undertake that annual accounts for the subsidiary
companies and the related detailed information will be made available
to shareholders seeking such information. The annual accounts of the
subsidiary companies will also be kept open for inspection for
shareholders.
The consolidated financial statement of subsidiaries prepared as per
applicable provisions and duly audited by the statutory auditors, is
presented elsewhere in this annual report.
4. DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Board of
Directors report that
- In the preparation of the annual accounts, the applicable
accounting standards have been followed and there was no material
departure from the accounting standards.
- Accounting policies have been selected and applied consistently and
that the judgements and estimates made are reasonable and prudent, so
as to give a true and fair view of the state of affairs of the Company
as at March 31, 2013 and of the profit of the Company for the period
April 1, 2012 to March 31, 2013.
- Proper and sufficient care has been taken for the maintenance of
adequate accounting records, in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities, and
- The annual accounts have been prepared on a going concern basis.
5. CASH FLOW
A cash flow statement for the year ended March 31, 2013 is attached to
the Balance Sheet.
SAFETY, HEALTH AND ENVIRONMENT
Safety and Health
All our manufacturing plants are certified for Occupational Health and
Safety Assessment Series (OHSAS) standards ISO 18001.
We conduct periodic safety audit of all our manufacturing units and all
our project sites including corporate office. The audit outcomes are
converted into action plans, implemented and periodically reviewed. A
Corporate Safety Committee has been formed to monitor the
implementation of safety standards throughout the organisation.
Periodic mock drills are conducted at the Corporate Office, project
sites and manufacturing locations in order to be prepared to face such
eventualities.
Safety training is also imparted to contract employees at sites and
operation units. We monitor on regular basis the safety statistics
through monthly review sessions. Actions required in improving safety
conditions are communicated to the relevant site through safety
manager. Corporate safety committee guides and monitor all sites and
manufacturing units, to improve near miss, accident and implementation
of all statutory requirements related to safety, so as to achieve our
goal of zero accident and zero man days lost.
We have Occupation Health Centers (OHCs) at the Corporate Office and
major manufacturing units. These OHCs provide immediate medical needs
and support the employees in keeping good health. To improve health
awareness and food habits, various health awareness programmes are
organised.
An annual medical check-up is conducted for all employees and their
spouse, who are above 30 years of age. Based on medical reports,
counselling sessions are conducted and health talks are arranged.
Hygienic and nutritious food is provided to all employees in the
Company canteens. The canteen activities are governed by a joint
committee of workmen and management to ensure clean and hygienic food
services.
Environment
As regards environment protection all our plants comply with the
requirements of Environment Management System (ISO 14000). Our
Kondhapuri Plant has been recommended for certification to the Energy
Management System (ISO 50001) standard. We are planning to get the same
certification for all other manufacturing plants by March 2014.
We have started reporting our direct and indirect energy consumptions
in our sustainability reports. As an initiative to monitor our scope -3
emissions we have started monitoring the carbon emissions due to travel
of employees to workplace and also business air travel. This will help
us identify opportunities to reduce these carbon emissions and reduce
our carbon footprint.
Our Energy Audit services to industries have helped in replacing old
pumping systems consuming more electrical energy. Our energy efficient
pumping solutions and Lowest Life Cycle Cost pumps have helped
industries reduce their energy consumption and save electrical power
for the nation.
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreements with the Stock
Exchanges, Management Discussion and Analysis Report, Report on
Corporate Governance, Auditors'' Certificate on Corporate Governance and
the declaration by the Chairman and Managing Director regarding
affirmations for compliance with the Company''s Code of Conduct are
annexed to this report.
EMPLOYEE STOCK OPTION SCHEME (ESOS)
As you are aware, during the year 2007-08, the Company launched the
Employees'' "Share a Vision" Stock Option Scheme, 2007 (ESOS-2007).
The Management has formulated under ESOS - 2007, a proposal of
providing stock options at Rs. 2/- per option to award employee for
their outstanding, exemplary performance in getting sustainable
results. During the year, 18750 equity shares of Rs. 2/- each have been
allotted.
Consequent to allotment of the above shares under ESOS, the issued and
paid-up share capital of the Company, at the end of the year 2012-13,
stands at Rs. 158,716,902/- i.e. 79,358,451 equity shares of Rs. 2/-
each.
Disclosures required to be made under the Securities and Exchange Board
of India (Employee Stock Option Scheme and Employee Stock Purchase
Scheme) Guidelines, 1999 and a certificate from the Statutory Auditors
with regards to compliance of the guidelines, is provided as Annexure
to this report.
FIXED DEPOSITS
The Company neither accepts nor renews matured deposits since January,
2003. The amount of the unclaimed matured deposits has been transferred
to the Investor Education & Protection Fund Account and at present,
there is no outstanding unclaimed deposit as on 31.03.2013.
CORPORATE SOCIAL RESPONSIBILITY
Our Corporate Social Responsibility (CSR) is based on the CSR policy.
We are committed to developing sustained and constructive relationship
with all our stakeholders to improve the quality of life. We extend
continuous support in development activities in communities located
near our manufacturing units. Our main focus is on health, education
for upliftment of economically backward and under privileged class of
the society. As a socially responsible organization, the Company
continued its efforts in implementing community programs based on the
needs and expectations of society gathered through Society Perception
Survey and other feedbacks through engagement with the society.
Our major CSR activities include career guidance to students, WASH
(Water and sanitation and hygiene), pre- natal courses, women''s health
check-ups, medicare facility for the society, course on effective
parenting, adolescence hygiene, formation of self-help groups,
awareness on de-addiction and oral cancer, AIDS awareness to nearby
villagers, uniform, note books, school bags and sewing machines to
school children and physically challenged children, a mega plantation
at Dewas, blood donation camps, etc.
Activities in Manufacturing plants
As part of preventive measure, free medical check-up camps with free
medicine distribution camps were conducted. Number of beneficiaries has
increased during the year under review. We also conducted blood
donation camps at Kirloskarvadi and Dewas manufacturing units.
In order to contribute to economic development of the society, Earn &
learn scheme for ITI apprentices is implemented in collaboration with
Yashaswi Institute, Pune.
Women empowerment : An Orientation programme on winding of pumps and
motors was conducted for approx. 60 women in the premises of the
manufacturing unit at Dewas for creating a Self Help Group. Under this
scheme, women are given 15 days training after which they may get
employment at our vendors or other industries.
In the field of education, training programme arranged for teachers,
release of special issue on Environment, inauguration of Creativity
Express, distribution of Water Purifier Systems, Pumps at schools, Kali
Umaltana Project at 2 schools, Spardha Pariksha (Competitive Exams) at
25 schools were organized.
We have undertaken environment awareness through seminar, awareness
films, cycle rally, Vasundhra Sanman and Vasundhara Mitra puraskar and
Exhibitions.
Vasundhara International Film Festival organized in Indore and Dewas
for creating awareness towards saving earth for next generation. On
world environment day at Dewas factory "Mega Plantation Event" took
place. Plantation of more than 9000 trees in Dewas area has been done
and further plantation is planned in open land behind factory premises.
Kirloskar WASH (Water, Sanitation and Hygiene) initiative is conducted
every year for Municipal school around Pune, Kondhapuri and
Kirloskarvadi. KBL employees act as volunteers in this programme in
which school children are made aware about hygiene and sanitation.
NEW MANUFACTURING UNITS
Our new plant located at Village Chharodi, Tal.:Sanand,
Dist.:Ahmedabad, Gujarat, commenced production on the 20th of June,
2012. This state of the art manufacturing facility will produce energy
efficient submersible pumps and cater to markets across the globe. The
plant is set up on about 14 acres of land with a built-up area of 8500
square meters. This facility employs 64 associates, of which 14 are
women.
DIRECTORS
With a deep regret, we report the sad demise of former Whole Time
Director - Mr. R. K. Srivastava on February 21, 2013 and of Mr. M. S.
Kirloskar, Director on February 28, 2013.
Mr. R. K. Srivastava was associated with our Company for about 23
years. He joined the company as a General Manager and quickly rose to
the position of Vice President by 1994. His knowledge, experience and
contribution to the pump industry were of great help to the Company and
its growth. He was deeply involved in the design and execution of the
world''s largest irrigation scheme for the Sardar Sarovar Narmada Nigam
Ltd. He was also the Chairman of a few of KBL''s subsidiaries.
Mr. Mukundrao Kirloskar was associated with Kirloskar Brothers Limited,
especially with the Kirloskar publications for many decades. His
contribution in the field of Marathi literature is commendable. His
social approach in every aspect helped the company to a great extent.
His creativity, sensitivity and public relations helped him to be a
leading figure in the field of Marathi literature. His contribution in
creating awareness in society through ''Kirloskar'', ''Stree'' and
''Manohar'' magazines is praiseworthy.
The Board wishes to place on record their gratitude for the guidance
received from Mr. R. K. Srivastava and Mr. M.S. Kirloskar during their
tenures as Directors of the Company.
Mr. Vikram S. Kirloskar, Mr. U.V. Rao and Mrs. Lalita D. Gupte, retire
by rotation at the ensuing Annual General Meeting and being eligible
offer themselves for re-appointment.
Mr. Alok S. Kirloskar was co-opted by the Board of Directors as an
Additional Director of the Company with effect from July 18, 2012,
after 92nd Annual General Meeting. As per Articles of Association of
the Company, he holds office till the date of ensuing Annual General
Meeting and is eligible for appointment.
AUDITORS
M/s. P. G. Bhagwat, the Auditors retire at the ensuing Annual General
Meeting and are eligible for re- appointment. The requisite certificate
pursuant to section 224 of the Companies Act, 1956 has been received.
The Audit and Finance Committee has recommended their re-appointment
and the annual audit fees.
ACKNOWLEDGMENTS
Your Directors wish to place on record their appreciation of the
unstinted support and co-operation given by banks and financial
institutions. Your Directors would further like to record their
appreciation of the efforts by the employees of the Company.
For and on behalf of the Board of Directors
Sanjay Kirloskar
Chairman and Managing Director
Pune : May 27, 2013
Mar 31, 2012
The Directors present the 92nd Annual Report and the Audited Annual
Accounts of the Company for the year ended March 31, 2012.
FINANCIAL RESULTS
The financial results of the Company for the year 2011-12 as compared
with the previous year are as under : -
Current Previous
Year ended Year ended
March 31, 2012 March 31, 2011
(Rs.) (Rs.)
Revenue from Operations 17,818,761,202 19,468,850,138
Other income 462,787,460 128,511,812
Total 18,281,548,662 19,597,361,950
Profit before tax 339,655,805 1,028,210,391
Tax Expense 27,769,152 414,610,649
Profit for the period 311,886,653 613,599,742
Surplus in Profit & Loss Account
brought forward from previous 1,142,469,029 905,059,568
year
Available surplus 1,454,355,682 1,518,659,310
APPROPRIATIONS
Your Directors propose to
appropriate the available
surplus as under :-
Dividend @ 100% (175%) on 79,339,701 (79,338,451)
equity shares ofRs. 2/- each 158,679,402 277,684,579
Dividend distribution tax 23,095,700 37,145,728
Transferred to General Reserve 31,188,665 61,359,974
Balance carried to
Balance Sheet 1,241,391,915 1,142,469,029
Total 1,454,355,682 1,518,659,310
DIVIDEND
Directors recommend a dividend of 100% (Rs. 2/- per equity share) for the
year.
OPERATIONS
The revenue from operations of the company for the current year is at Rs.
1782 crores, which is less by 8.47% compared to the previous year.
There have been various internal and external reasons for the reduction
in the revenue from operations.
As you are aware, Power sector has been our thrust area for past
several years. The projects by the Government and private sectors have
either been stopped or deferred for various reasons, the prime cause
being availability of coal.
On Irrigation side, we continued our wait and watch policy for
specified states and planned our revenues in a way that we could
recover the amount immediately.
The Distribution business which mainly caters to Domestic and
Agricultural segment has improved.
During the current year, we expect that the economic situation would
more or less remain the same and we would continue our focus but not go
faster on the top line growth.
STATUTORY DISCLOSURES
1. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
Details of energy conservation, technology absorption, research and
development and foreign exchange earnings as required under Section 217
(1) (e) of the Companies Act, 1956, are given in the Annexure - I to
this Report.
2. PARTICULARS OF EMPLOYEES
Information regarding employees in accordance with Section 217 (2A) of
the Companies Act, 1956 is given in the Annexure à II to this Report.
3. SUBSIDIARY COMPANIES
The company has disposed off its entire stake (100%) in Gondwana
Engineers Limited (GEL), specialized in Water and Sewage Treatment
Plants, for a total consideration of Rs. 47.44 crores through execution
of a Share Purchase Agreement, during May, 2011. The Company has sold
its entire equity stake in GEL to Doshion Veolia Water Solutions Pvt.
Ltd., a group company of Doshion Ltd, Ahmedabad.
During the period, the Company has subscribed to the Equity Shares in
its wholly owned subsidiary viz. Hematic Motors Private Limited, at
the aggregate cost of Rs. 30 crores and to Redeemable Preference Shares
in its other wholly owned subsidiary company viz. Kirloskar
Constructions and Engineers Limited to the tune of Rs. 25 crores.
During September, 2011, the Company through its wholly owned subsidiary
in The Netherlands à Kirloskar Brothers International BV, established
SPP Pumps (MENA) LLC in Cairo, Egypt. This limited liability company is
established for Middle East and North Africa for assembly, packaging
the pumps and the pumping systems of all kinds including their testing
and maintenance.
The performance of the domestic and overseas subsidiary companies has
been good, except in respect of one subsidiary company. The company is
in the process of aligning the operations of its subsidiary companies.
The Financials of subsidiaries appear elsewhere in this annual report.
On February 8, 2011 the Government of India, Ministry of Corporate
Affairs vide General Circular No. 2/2011, granted general exemption
under section 212(8) of the Companies Act, 1956 for companies from
attaching subsidiary companies' documents viz. Balance sheet, Profit
and Loss account, Directors' and Auditors' Reports etc. to the Balance
sheet of a holding Company.
As per the said general exemption, instead of the annual accounts of
the subsidiary companies, we have attached certain information in
respect of Company's subsidiaries for the respective financial years.
Further, we hereby undertake that annual accounts for the subsidiary
companies and the related detailed information will be made available
to the Shareholders, seeking such information. The annual accounts of
the subsidiary companies will also be kept open for inspection for
Shareholders.
The consolidated financial statement of subsidiaries prepared as per
applicable provisions and duly audited by the statutory auditors, is
presented elsewhere in this annual report.
4. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Board of
Directors report that
- In the preparation of the annual accounts, the applicable accounting
standards have been followed and there was no material departure from
the accounting standards.
- Accounting policies have been selected and applied consistently and
that the judgements and estimates made are reasonable and prudent, so
as to give a true and fair view of the state of affairs of the Company
as at March 31, 2012 and of the profit of the Company for the period
April 1, 2011 to March 31, 2012.
- Proper and sufficient care has been taken for the maintenance of
adequate accounting records, in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities, and
- The annual accounts have been prepared on a going concern basis.
5. CASH FLOW
A cash flow statement for the year ended March 31, 2012 is attached to
the Balance Sheet.
SAFETY, HEALTH AND ENVIRONMENT
As you are aware, all our manufacturing plants have been awarded with
the OSHAS 18001 international certificate.
The company has formed Corporate Safety Committee. The Company has
further prepared site safety manuals, corporate safety policy and
safety check list. The Company continues its thrust on safety measures
for employees with regular safety trainings and safety audits. All
safety initiatives are reviewed periodically through committees and
inspection is carried out in the plants.
As a commitment to environment, the Company has selected the
sustainability model and formed a core group to address the relevant
issues. The sustainability report has been prepared and company would
measure performance for sustainability based on the globally accepted
standards and continuously find ways to reduce the adverse impact on
the environment. The said report is vetted by an accounting firm as per
the prevailing practices. The said report is available on company's
website.
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreements with the Stock
Exchanges, Management Discussion and Analysis Report, Report on
Corporate Governance, Auditors' Certificate on Corporate Governance and
the declaration by the Chairman and Managing Director regarding
affirmations for compliance with the Company's Code of Conduct are
annexed to this report.
EMPLOYEE STOCK OPTION SCHEME (ESOS)
As you are aware, during the year 2007-08, Company launched the
Employees' ÃShare a Visionà Stock Option Scheme, 2007 (ESOS-2007).
The Management has formulated under ESOS Ã 2007, a proposal of
providing stock options at Rs. 2/- per option to award employee for their
outstanding, exemplary performance in getting sustainable results.
During the year, 21750 options were granted to employees and 1250
equity shares of Rs. 2/- each have been allotted.
Consequent to allotment of above shares under ESOS, the issued and
paid-up share capital of the Company, at the end of the year 2011-12,
stands at Rs. 158,679,402/- i.e. 79,339,701 equity shares of Rs. 2/- each.
The disclosures required to be made under the Securities and Exchange
Board of India (Employee Stock Option Scheme and Employee Stock
Purchase Scheme) Guidelines, 1999 and a certificate from the Statutory
Auditors with regards to compliance of the guidelines, is provided as
Annexure - III to this report.
FIXED DEPOSITS
The Company is neither accepting nor renewing the matured deposits
since January, 2003. As on March 31, 2012, deposits from public and
shareholders aggregating to Rs. 43,000/- have matured but have not been
claimed.
CORPORATE SOCIAL RESPONSIBILITY
The company undertakes its social responsibility directly and also
through trust à Vikas Charitable Trust. The main thrust of this
Corporate Social Responsibility (CSR) initiative is on education and
social health defined in a policy of CSR.
During the year, as a part of CSR and our obligation towards society at
large, your company continued its efforts in implementing Community
Programs in line with the Society Perception Survey with a thrust on
health and education. The prime initiative undertaken by the company
was participation in WASH (Water, Sanitation and Hygiene) program -
organised by the Kirloskar Foundation, with the help of our employees
who volunteered for the program. The Company also contributed to the
Kirloskar Foundation's Clean and Beautiful School competition programme
to encourage overall cleanliness.
Some of the activities carried out by the company are as under:
- Health check-up camps organised at Mahalunge village in a school Ã
about 200 students covered.
- Implementation of earn and learn scheme for school drop out students.
- Organising Blood donation camps, sponsoring scholarships, tree
plantation.
- Medical check-up for villagers, senior citizens and women in nearby
villages of Kirloskarvadi factory conducted.
- Arranged various Health awareness programmes such as lectures,
posters and so on.
NEW MANFACTURING UNITS
A new plant at Kaniyur Village, Karumathampatti - PO near Coimbatore
for small domestic pumps has commenced its production since end June,
2011. This new plant is spread over six acres with installed capacity
of a 5 lac pumps a year. The initial investment in the unit is of about
Rs. 14 crores and has state-of-the-art plant and machinery to manufacture
different models of domestic pumps. It is worth to mention that 90% of
the work force in this plant are women. This plant will strengthen
company's distribution network in Southern India.
The Company has also set up new manufacturing units at Charodi Village,
Sanand, Ahmedabad for the production of Submersible Pumps. The plant
has commenced its test run.
The new plant is equipped with modern plant and machinery. The unit has
some additional features such as formation of suppliers cluster, lean
manufacturing process and so on. With this, the products would be
competitive in cost and quality.
The production at the unit is expected to commence during current year.
This will help the Company to cater to the increasing market demand for
the products.
DIRECTORS
Mr. Gautam A. Kulkarni, Non-Executive Vice Chairman resigned from the
Board of Directors with effect from April 25, 2012, due to his personal
reasons.
Mr. Gautam Kulkarni has been actively associated with the Company for
more than a decade. His expertise and guidance to the Board was of a
great help to the Company on many occasions.
The Board places on record its gratitude for the guidance received from
Mr. Gautam Kulkarni during his tenure as a Vice Chairman and also as a
Member of Audit and Finance committee, Remuneration committee and
Compensation Committee of the Company.
On completion of the term of Mr. R. K. Srivastava as a Whole Time
Director of the Company on May 31, 2012, Mr. Srivastava ceases to be a
Whole Time Director of the Company with effect from May 31, 2012.
Further, Mr. R. K. Srivastava also ceases to be a Director of the
Company with effect from May 31, 2012.
Mr. R. K. Srivastava has been associated with the Company for about 23
years. His knowledge and experience was of a great help to the Company.
The Board also places on record its gratitude for the support received
from Mr. R.K. Srivastava during his tenure with the Company.
Mr. Pratap B. Shirke, Mr. A. N. Alawani and Mr. S.N. Inamdar, retire by
rotation at the ensuing Annual General Meeting and being eligible offer
themselves for re-appointment.
On recommendation from the Remuneration Committee, subject to approval
of the members of the Company, the Board of Directors of the Company
has re-appointed Mr. J. R. Sapre as a Whole Time Director of the
Company with effect from June 1, 2012 for the further period of three
years.
AUDITORS
M/s. P. G. Bhagwat, the Auditors retire at the ensuing Annual General
Meeting and are eligible for re- appointment. The requisite certificate
pursuant to section 224 of the Companies Act, 1956 has been received.
The Audit and Finance Committee has recommended their re-appointment
and the annual audit fees.
ACKNOWLEDGEMENTS
Your Directors wish to place on record their appreciation of the
unstinted support and co-operation given by banks and financial
institutions. Your Directors would further like to record their
appreciation of the efforts of the employees of the Company.
For and on behalf of the Board of Directors,
SANJAY KIRLOSKAR
CHAIRMAN
Pune : May 31, 2012
Mar 31, 2011
The Directors present the 91st Annual Report and the Audited Annual
Accounts of the Company for the year ended March 31, 2011.
FINANCIAL RESULTS
The financial results of the Company for the year 2010-11 as compared
with the previous year are as under: -
Current Previous
Year ended Year ended
March 31, 2011 March 31, 2010
(Rs.) (Rs.)
Sales 19,417,972,360 20,178,370,074
Other income 131,485,675 479,471,733
Total 19,549,458,035 20,657,841,807
Profit before tax 1,030,810,391 1,729,616,298
Provision for tax 417,210,649 554,438,774
Profit after tax 613,599,742 1,175,177,524
Surplus in Profit & Loss Account
brought forward from previous
year 905,059,568 529,687,717
Available surplus 1,518,659,310 1,704,865,241
APPROPRIATIONS
Your Directors propose to appropriate the available surplus as under :-
Dividend @ 175% (275%)
on 79,338,451 (79,330,766) equity
shares of Rs. 2/- each 277,684,579 436,319,213
Additional tax on Dividend 37,145,728 63,486,460
Transferred to General Reserve 61,359,974 300,000,000
Balance carried to Balance Sheet 1,142,469,029 905,059,568
TOTAL 1,518,659,310 1,704,865,241
DIVIDEND
Directors recommend a dividend of 175% (Rs. 3.50 per equity share) for
the year.
SCHEME OF ARRANGEMENT
As you are aware, during the previous year the Scheme of Arrangement
between Kirloskar Brothers Limited (KBL), Kirloskar Brothers Investment
Limited (KBIL) and respective Shareholders was made effective and our
companys shares were listed and traded on the stock exchanges. The
company has remitted the amount towards the fractional entitlements to
the concerned shareholders.
During the current year, the necessary listing and trading permissions
were received in respect of KBIL shares.
STATUTORY DISCLOSURES
1. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
Details of energy conservation, technology absorption, research and
development and foreign exchange earnings as required under Section 217
(1) (e) of the Companies Act, 1956, are given in the Annexure - I to
this Report.
2. PARTICULARS OF EMPLOYEES
Information regarding employees in accordance with Section 217 (2A) of
the Companies Act, 1956 is given in the Annexure à II to this Report.
3. SUBSIDIARY COMPANIES
The Company has incorporated a Wholly Owned Subsidiary - Kirloskar
Systech Limited on August 9, 2010. Kirloskar Systech Limited is
primarily engaged in system engineering, designing and support
services.
During the year, the Company has transferred its 100% shares of two of
the subsidiary companies viz. Pressmatic Electro Stampings Private
Limited (PESPL), Quadromatic Engineering Private Limited (QEPL) to its
another wholly owned subsidiary Hematic Motors Private Limited (HMPL).
Further, a Scheme of Amalgamation of Companys step down subsidiaries,
PESPL and QEPL with Companys wholly owned subsidiary - HMPL was filed
with the Honourable Bombay High Court by the said companies.
The same has been approved by the Honourable Court vide its orders
dated April 8, 2011 and the scheme has been made effective on April 25,
2011. As a result, with effect from the appointed date i.e. January 1,
2011 under the scheme, the PESPL and QEPL have been merged with HMPL on
and from appointed date.
On January 1, 2011, the company has transferred the shares held in its
Wholly Owned Subsidiary Kirloskar Brothers (Thailand) Limited (KBTL) to
its other Wholly Owned Subsidiary - Kirloskar Brothers International
B.V (KBI) Netherlands. However, due to negative valuation of KBTL
shares, KBL has transferred the shares at nil value and accounted for
the loss on the transfer. Thus, KBTL ceased to be the direct subsidiary
company of KBL.
The performance of the domestic and overseas subsidiary companies has
been good, except in respect of a few subsidiary companies. The company
is in the process of aligning the operations of its subsidiary
companies.
As a way forward, the company would concentrate on streamlining the
operations of companies involved in manufacturing and take strategic
decisions in respect of companies which are in the project / EPC
business.
The Financials of subsidiaries are appearing elsewhere in this annual
report.
On November 22, 2010, the Company made an application to the Central
Government under section 212(8) of the Companies Act, 1956 for
exemption from attaching the annual accounts of the subsidiary
companies. On February 8, 2011 the Government of India, Ministry of
Corporate Affairs vide General Circular No. 2/2011, granted general
exemption under section 212(8) of the Companies Act, 1956.
Consequently, Company has also received a letter No. 47/29/2011-CL-III
dt. February 14, 2011, from the Ministry of Corporate Affairs, to that
effect.
The consolidated financial statement of subsidiaries prepared as per
applicable provisions and duly audited by the statutory auditors, is
presented elsewhere in this annual report. As per the said general
exemption, instead of the annual accounts of the subsidiary companies,
we have attached certain information in respect of Companys
subsidiaries for the respective financial years.
Further, we hereby undertake that annual accounts for the subsidiary
companies and the related detailed information will be made available
to the Shareholders, seeking such information. The annual accounts of
the subsidiary companies will also be kept open for inspection for
Shareholders.
4. DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Board of
Directors report that
- In the preparation of the annual accounts, the applicable accounting
standards have been followed and there was no material departure from
the accounting standards.
- Accounting policies have been selected and applied consistently and
that the judgements and estimates made are reasonable and prudent, so
as to give a true and fair view of the state of affairs of the Company
as at March 31, 2011 and of the profit of the Company for the period
April 1, 2010 to March 31, 2011.
- Proper and sufficient care has been taken for the maintenance of
adequate accounting records, in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities, and
- The annual accounts have been prepared on a going concern basis.
5. CASH FLOW
A cash flow statement for the year ended March 31, 2011 is attached to
the Balance Sheet.
SAFETY, HEALTH AND ENVIRONMENT
All our manufacturing plants have been awarded with the prestigious
international certificate OSHAS 18001. This is very important step
towards ensuring and achieving occupational Health and Safety standards
for persons connected with these plants.
The Company continues its thrust on safety measures for employees with
regular safety training. Safety audits are also conducted regularly. As
a commitment to environment, the Company has selected the
sustainability model and formed a core group to address the relevant
issues. The first sustainability report was prepared during the year
and company would measure performance for sustainability based on the
globally accepted standards and continuously find ways to reduce the
adverse impact on the environment. The said report is available on
companys website.
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreements with the Stock
Exchanges, Management Discussion and Analysis Report, Report on
Corporate Governance, Auditors Certificate on Corporate Governance and
the declaration by the Chairman and Managing Director regarding
affirmations for compliance with the Companys Code of Conduct are
annexed to this report.
EMPLOYEE STOCK OPTION SCHEME (ESOS)
As you are aware, during the year 2007-08, Company launched the
Employees "Share a Vision" Stock Option Scheme, 2007 (ESOS-2007).
During the year, 3rd tranche of options i.e. 40% of the total options
have been vested on August 31, 2010. The exercise price offered is at
Rs. 200/- per option to be converted into an equity share on exercise.
During the year, 6,185 equity shares of Rs. 2/- each have been allotted
at an exercise price of Rs. 200/- each.
The Management has formulated under ESOS - 2007, a proposal of
providing stock options at Rs. 2/- per option to award employee for
their outstanding, exemplary performance in getting sustainable
results. During the year, 1250 options have been granted to two
employees and 1,500 equity shares of Rs. 2/- each have been allotted at
an exercise price of Rs. 2/- each.
Consequent to allotment of above shares under ESOS, the issued and
paid-up share capital of the Company, at
the end of the year 2010-11, stands at Rs.158,676,902/- i.e. 79,338,451
equity shares of Rs. 2/- each.
The disclosures required to be made under the Securities and Exchange
Board of India (Employee Stock Option Scheme and Employee Stock
Purchase Scheme) Guidelines, 1999 and a certificate from the Statutory
Auditors with regards to compliance of the guidelines, is provided as
Annexure - III to this report.
FIXED DEPOSITS
The Company is neither accepting nor renewing the matured deposits
since January, 2003. As on March 31, 2011, deposits from public and
shareholders aggregating to Rs.390,000/- have matured but have not been
claimed.
CORPORATE SOCIAL RESPONSIBILITY
The company undertakes its social responsibility directly and also
through trust à Vikas Charitable Trust. The main thrust of this
Corporate Social Responsibility (CSR) initiative is on education and
social health defined in a policy of CSR.
During the year, as a part of CSR and our obligation towards society at
large, your Company continued its efforts in implementing Community
Programs in line with the Society Perception Survey with a thrust on
health and education. The prime initiative undertaken by the company
was participation in WASH (Water, Sanitation and Hygiene) program with
the help of our employees who volunteered for the program.
CENTENARY CELEBRATIONS
We celebrated a centenary year of our Kirloskarvadi plant on March 10,
2010. The Centenary Celebrations continued during the year 2010-11, as
we conducted functions at Kolkata, Chennai, Delhi and Mumbai. More than
2000 customers, dealers and well-wishers attended these functions.
During these functions, company felicitated the customers, dealers and
a few employees, who have been with the company for fairly a long time.
The Celebration concluded on March 10, 2011 at Pune. We are very proud
for this achievement and re-confirm our commitments to follow the value
systems framed by our founders.
NEW MANFACTURING UNITS
The Company has initiated the process of setting up new manufacturing
units at Kaniyur Village, Coimbatore and Charodi Village, Sanand,
Ahmedabad for the production of Mini & DCM Pumps and Submersible Pumps,
respectively.
The new plants are equipped with modern plant & machinery. These units
have some additional features such as formation of suppliers cluster,
lean manufacturing process and so on. With this, the products would be
competitive in cost and quality.
The production at the respective units is expected to commence during
current year. This will help the Company to cater to the increasing
market demand for these products.
DIRECTORS
With deep regret, we report the sad demise of Mr. Madhav G. Padhye,
Ex-Director of the Company. Mr. Padhye was associated with the Company
since 1990 till he resigned in December, 2008. He had wide experience
in the Civil Engineering, Government Service and Water Resource
Development Projects. His expertise and guidance to the Board and the
Company has been noteworthy. The Board wishes to place on record its
gratitude for the guidance received from Mr. Padhye.
Mrs. Lalita D. Gupte, Mr. P.S. Jawadekar and Mr. Rahul Kirloskar,
retire by rotation at the ensuing Annual General Meeting and being
eligible offer themselves for re-appointment.
Subject to members approval, the Board has re-appointed Mr. R. K.
Srivastava, Whole Time Director and Mr. Sanjay C. Kirloskar, Managing
Director with effect from September 19, 2010 and November 19, 2010,
respectively.
AUDITORS
M/s. P. G. Bhagwat, the Auditors retire at the ensuing Annual General
Meeting and are eligible for re- appointment. The requisite certificate
pursuant to section 224 of the Companies Act, 1956 has been received.
The Audit and Finance Committee has recommended their re-appointment
and the annual audit fees.
ACKNOWLEDGEMENTS
Your Directors wish to place on record their appreciation of the
unstinted support and co-operation given by banks and financial
institutions. Your Directors would further like to record their
appreciation of the efforts of every employee for the results achieved
during this year.
For and on behalf of the Board of Directors,
SANJAY KIRLOSKAR
CHAIRMAN
Pune : April 26, 2011
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