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Kirloskar Brothers Ltd.

BSE: 500241 Sector: Engineering
NSE: KIRLOSBROS ISIN Code: INE732A01036
BSE LIVE 15:40 | 12 Dec 280.15 2.30
(0.83%)
OPEN

274.80

HIGH

283.30

LOW

269.00

NSE 15:23 | 12 Dec 279.70 2.90
(1.05%)
OPEN

274.85

HIGH

280.75

LOW

273.35

OPEN 274.80
PREVIOUS CLOSE 277.85
VOLUME 7976
52-Week high 297.40
52-Week low 156.40
P/E 51.69
Mkt Cap.(Rs cr) 2,224
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 274.80
CLOSE 277.85
VOLUME 7976
52-Week high 297.40
52-Week low 156.40
P/E 51.69
Mkt Cap.(Rs cr) 2,224
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Kirloskar Brothers Ltd. (KIRLOSBROS) - Chairman Speech

Company chairman speech

KIRLOSKAR BROTHERS LIMITED ANNUAL REPORT 2007-2008 CHAIRMAN'S REPORT Dear Shareholders, The performance of the company in the last year was not in line with our expectations. Our growth in sales at 14% was lower than the growth rate of the previous 3 years. There was a lack of progress on many projects in various states. Despite the addition of a distribution network which led to higher sales of Industrial and Engineered pumps, we could not increase our total international sales. This, in turn reduced the profitability of the company. While, there has been a tremendous rise in raw material prices, various initiatives have been undertaken to reduce its effect. Other measures have been taken to improve our margins. Our order board as on April 1, 2008 stands at over Rs. 40 billion. While the year has not been upto expectations, the scope for growth in both, water and power infrastructure is immense. The Central Government and various State Governments have committed to large programs to improve water supply facilities for urban as well as rural areas for drinking as well as irrigation purposes. Water and sewage treatment facilities also have to be developed. Similarly, the demand for power is set to grow. You would be happy to know that our company has completed the installation of one of the world's largest Hydro Pneumatic systems for a 2800 apartment complex in India. It has also received prestigious orders from the Public Utility Board, Singapore as well as Rand Water in South Africa for large pumps for water supply and water treatment. We have also received repeated orders from Bechtel International and Alstom Power for our circulating water pumps for power stations in the United States and United Kingdom, respectively. These references which signify international acceptance of our products and services by global majors will raise the company's profile in international markets. Our Focus Africa program continues. At the India Africa Summit held in April in New Delhi, the Government of India has committed US $5 billion for Africa and the main area identified for cooperation is Food Security. You would be happy to know that our supply of pumpsets to Senegal is beginning to make a difference in that country. We have supplied approximately 2400 pumpsets ranging from 5 KW to 90 KW. About 65% of these pumps had been distributed to farmers by the Government by the year end, and many of them have been pumping water to the existing farms. About 15000 additional hectares of land has been brought under cultivation as a result. The installed pumps are now in operation for the last 3 to 4 months and it is expected that another 100,000 tons of rice will be available for consumption. Once the entire batch of 2400 pumps is operational and working full time, another 60,000 hectares of land will be brought under cultivation. In times to come, 2 to 3 crops per year is a definite possibility. Working with us, the Government of Senegal plans to provide sufficient irrigation facilities to make Senegal self sufficient in rice production in the next 4 to 5 years. The Indian pump industry has started feeling the heat of globalization as all the top ten global players are in the process of firming up their presence and expanding their operations on Indian soil. As the largest Indian pump company, we have global competition for every product in each segment that we operate in. I am sure that such competition would benefit our customers and make us a better company as well. In October, 2006, we had taken over the construction business of the reputed Aban group. The company now renamed 'Kirloskar Constructions and Engineers Limited', has achieved sales of Rs. 961 million last year. We expect the company to come into profit in the near future. KBL continues to move from being a product company to being a total solution provider. We completed our acquisition of Gondwana Engineers Limited, a Nagpur based company engaged in the supply of water treatment and sewage treatment plants. Our company's requirement of steel castings for large pumps and valves has increased tremendously in recent years. It was therefore thought prudent to take over the management of The Kolhapur Steel Limited (TKSL), a company engaged in the business of manufacturing of alloy steel castings catering to sugar, cement, steel, pumps, valves, marine, earth moving and other general engineering industries sectors. The Honourable Board for Industrial and Financial Reconstruction (BIFR) has recently approved the modified rehabilitation scheme of TKSL and the Company would acquire about 81% of equity share capital of TKSL. The captive demands of the company for quality steel castings would be catered by TKSL. SPP Pumps Limited, our subsidiary company in the United Kingdom has done well in 2007. Turnover rose by 28% to Pound 43.60 million and profits after tax by 66% to Pound 1.49 million. Many joint development programs for products and markets between the two companies are progressing well. As Kirloskar Brothers becomes a larger company, there are many new opportunities for expansion in business around the globe. In order to have a proper structure for all overseas investments, we have established Kirloskar Brothers International B.V. in the Netherlands. We have also established a joint venture company Kirloskar Brothers Europe B.V. with a local partner, Industrial Pump Group (IPG). IPG, a sales and service company, has introduced our large pumps at the plants of many European customers. We are also looking at setting up operations in Thailand to service the South East Asian markets. You are aware of our Company's Vision and Mission. In order to achieve targets and ensure future scalability, the management has re-structured its entire business operations and a sectoral approach has been introduced. This is to enable both product and project leadership, customer intimacy and operational excellence. An overview of the operating performance of business units has been taken in the Management Discussion and Analysis. More thrust has also been given on research and developmental activities to explore innovative ideas in fluid machines and system engineering and applications. This would help the company to improve product quality and its working efficiency further. The wholehearted efforts of our team were recognized and acknowledged through many awards last year. Some of the awards received were the National Award for 'Excellence in Energy Management 2007' by Confederation of India Industry (CII) and 'The Innovation for India Awards 2008' organised by Marico Foundation, for innovation approach in Siphon Action, 'ENERTIA Award 2007', the first ever national award for sustainable development and 'The Golden Peacock Award' for innovative product. I am glad to inform you that the Company is constructing its own corporate office building at Baner, in the outskirts of Pune. This office building will aspire to achieve LEED (Leadership in Energy and Environmental Design) - Platinum rated Green Building status. As you are aware, the company has township adjoining the factory in Kirloskarvadi. This township was set up by our founder Mr. Laxmanrao Kirloskar in 1910. It has grown with the factory, but lately a need has been felt that it needs to be modernized in order to attract and retain the best talent. We are therefore investing in new residential and social facilities to ensure that it remains an attractive and modern place to live in. Business expansion and profitable growth is possible only with effective support of all my colleagues. I would like to thank our Board members for their consistent support and guidance to help management achieve the Company's vision. I also appreciate the efforts of all our employees for building the strength of the Company. In order to communicate business developments to shareholders from time to time, we have forwarded the half yearly results of the company to you in October, 2007. We wish to continue the practice in future. Continuous efforts are being taken on all fronts to enhance the business of the company and presence through out the world. I look forward to continuing this journey to meet challenges in the years to come. Sincerely, Sanjay Kirloskar Chairman & Managing Director