You are here » Home » Companies » Company Overview » Kirloskar Brothers Ltd

Kirloskar Brothers Ltd.

BSE: 500241 Sector: Engineering
BSE 00:00 | 18 Sep 115.90 -0.10






NSE 00:00 | 18 Sep 115.80 0.10






OPEN 116.50
52-Week high 180.95
52-Week low 76.00
P/E 14.13
Mkt Cap.(Rs cr) 920
Buy Price 115.60
Buy Qty 165.00
Sell Price 117.00
Sell Qty 79.00
OPEN 116.50
CLOSE 116.00
52-Week high 180.95
52-Week low 76.00
P/E 14.13
Mkt Cap.(Rs cr) 920
Buy Price 115.60
Buy Qty 165.00
Sell Price 117.00
Sell Qty 79.00

Kirloskar Brothers Ltd. (KIRLOSBROS) - Director Report

Company director report

Your Directors present the 99th Annual Report and the Audited FinancialStatements of the Company for the year ended March 31 2019 together with the reports ofthe Auditors and Board thereon.


The financial results of the Company for the Financial Year 2018-19 as compared withthe previous Financial Year are as under:

Year ended March 31 2019 Year ended March 31 2018
(Amt. in Million ) (Amt. in Million )
Revenue from Operations 22234.86 19345.63
Other income 247.08 188.65
Total 22481.94 19534.28
Profit before tax 1240.56 923.32
Tax Expense 368.35 267.46
Profit for the period 872.21 655.86
Other Comprehensive Income (1.71) 9.47
Surplus in Profit & Loss Account brought forward from previous year 2590.00 2015.13
Available surplus 3037.65 2590.00


The Board of Directors have recommended a Dividend of 125% amounting to र 2.50 perequity share for the Financial Year 2018-19 ( र 2.50 per equity share for 2017-18)


The revenue from operations for the year under review is र 22234.86 million whichis more by 11.49% compared to the previous year. The product sectors continued with thegrowth trend which was largely contributed by the turnaround in Industry and Oil & Gassectors. Alignment to various stakeholders and customer centric approach resulted inimprovement in sales in the Product business. The Power sector managed to secure repeatorders from the Nuclear business which is a testimony to the customers confidence in KBLand its capabilities. With focus on marketing efforts to tap the global nuclearopportunities KBL bagged its first direct order in the nuclear power domain from ITERFrance world's largest nuclear fusion project.

RERA implementation and provisions for punitive actions against defaulters slowed downthe launch of new projects which had an impact on the Building and Construction sector.

To consolidate position in the retail business your Company launched 14 variants in4" submersible pump range and 10 variants in 6" and above range. In the surfacepump range total 4 models were launched including the Swimming Pool pump.

Your Company further extended its reputation as India's leading provider of customisedwater-cleansing pumping solutions by launching the Kirloskar Vertical Multi-stage (KVM)pump which has been predominantly developed for use in RO plants and the K-Kleen 25technology. In RO plants the KVM pump would be used for pumping water at high pressureacross the membranes to facilitate delivery of potable and safe drinking water. Meanwhilethe K-Kleen-25 which can be mounted on any mini range of pumps is a unique chlorinationtechnology designed exclusively for improving the quality of water delivered through thepump. For the Small Pumps Business channel partner fraternity the KBLOne4All app waslaunched for retailers and traders. This application enabled bringing all stakeholders onthe same platform.

On the export business front Concrete Volute pumps supplied for BMA Thailand projectand pumps for Cooling Water and Auxiliary Cooling Water application for EGAT and Marubeniprojects were successfully commissioned. The Binh Bo Pumping Station project in Vietnamwas also successfully commissioned and handed over during the year.

KBL was conferred with the "BHARATSEN - 2018" award by Embassy of IndiaSenegal in recognition of its outstanding contribution in strengthening bilateralrelations between India and Senegal in the year 2018. This award was conferred recognisingthe contribution of KBL in increasing rice production in the Republic of Senegal. A bookon Quality titled "Excellence through Quality Prism" was released by theCorporate Quality Assurance department thereby reflecting the various efforts that theCompany continuously undertake to maintain supreme quality standards in all our endeavors.The Kirloskarvadi and Dewas plants received GREENCO Gold award during the CII GREENCOSummit-2018 held in Chennai. KBL was recognised amongst the Top 100 Organisations withInnovative HR Practices during the Asia Pacific HRM Congress hosted by World HRD Congress.Your Company was also recognised among Pune's Best Employer Brands for the year 2018 byWorld HRD Congress. To strengthen the maintenance processes and increase productivity theTotal Productive Maintenance (TPM) initiative was launched at Kirloskarvadi and Dewasplants. Your Company continues to increase its dependency on renewable energy. At SanandPlant a roof top solar power plant of 150 kW capacity was installed and its utilisationwas started from June 2018 as part of the plant's energy conservation initiative. KBLwhich was incorporated in 1920 is celebrating the 100th year of itsincorporation this year. In Financial Year 2019-20 the Company has planned variousactivities to commemorate this milestone year.

There were no material changes or commitments to report which affect the financialposition of the Company that has occurred between the end of Financial Year and the dateof this report.



The Annual Return of the Company for the year ended March 31 2019 is placed on thewebsite of the Company at Extractof Annual Return in Form MGT-9 as per provisions of Section 92(3) read with Section 134 ofthe Companies Act 2013 (the Act) is given in Annexure I to this Report.


During the Financial Y0ear under review 6 (six) Board meetings were held the detailsof which are appearing in the Report on Corporate Governance.


Pursuant to Section 134(3) (c) of the Act the Board of Directors to the best of itsknowledge and ability confirm that: (a) in preparation of the annual accounts theapplicable accounting standards have been followed; (b) the directors have selected suchaccounting policies and applied them consistently and made judgments and estimates thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe Company at the end of the Financial Year and of the profit and loss of the Company forthat period;

(c) the directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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) thedirectors have laid down internal financial controls to be followed by the Company andsuch internal financial controls are adequate and operating effectively; (f) the directorshave devised proper systems to ensure compliance with the provisions of all applicablelaws and that such systems are adequate and operating effectively.


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.


The Board has adopted a Board Diversity Policy which sets the criterion for appointmentas well as continuance of Directors at the time of re-appointment of director in theCompany. As per the policy the Board has an optimum combination of members withappropriate balance of skill experience background gender and other qualities ofdirectors required by the directors for the effective functioning of the Board.

The Nomination and Remuneration Committee recommends remuneration of the Directorssubject to overall limits set under the Act as outlined in the Remuneration Policy. Asper the policy the Executive Director is entitled to fixed salary commission based onperformance evaluation and other non-monetary benefits. In case of Non-ExecutiveDirectors apart from receiving sitting fees they are entitled to commission on the basisof criterion as per the policy.

The Remuneration Policy is available on the website of the Company at The salient features:

- Philosophy: The Company strongly believes that the system of Corporate Governanceprotects the interest of all the stakeholders by inculcating transparent businessoperations and accountability from management towards fulfilling the consistently highstandard of Corporate Governance in all facets of the Company's operations.

- Objective: Transparent process of determining remuneration at the Board and SeniorManagement level and appropriate balance between the elements comprising the remuneration.

- Coverage: The policy covers remuneration to Executive Non-Executive Directors KeyManagerial Personnel and Senior Managerial Personnel.


During the Financial Year under review there are no qualifications adverse remarksor disclaimers made by the Statutory Auditor on the financial statements of the Companyand by the Secretarial Auditor in his Secretarial Audit Report which is annexed herewithas Annexure VI. There are no cases of fraud detected and reported by the Auditorunder Section 143(12) during the Financial Year.

M/s. Sharp & Tannan Associates Chartered Accountants (Firm RegistrationNo.109983W) have been appointed as Statutory Auditor of the Company for a period of 5years from the conclusion of 97th Annual General Meeting till the conclusionof 102nd Annual General Meeting by the shareholders of the Company. TheStatutory Auditor have confirmed its eligibility and necessary certificates as requiredunder the Act have been received.

Mr. Shyamprasad Limaye (CP No. 572) Practicing Company Secretary was appointed as aSecretarial Auditor of the Company as per Section 204 of the Companies Act 2013 for theFinancial Year 2018-19.

Mr. Shyamprasad Limaye has been re-appointed as Secretarial Auditor of the Company forthe Financial Year 2019-20.

M/s. Parkhi Limaye & Co. (Firm Registration No. 000191) have been appointed as CostAuditor of the Company as per Section 148 of the Act read with applicable rules madethereunder for the Financial Year 2019-20. Their remuneration is subject to the approvalby the Members.


The details of loans guarantees or investments under Section 186 of the Act areavailable under Note no. 5 and 35D of notes to accounts attached to the StandaloneFinancial Statements.

The full particulars are available in the Register maintained under Section 186 of theAct which is available for inspection during business hours on all working days (exceptSaturday and Sunday).


All contracts/arrangements /transactions entered by the Company during the FinancialYear 2018-19 with the related parties were in the ordinary course of business and at arm'slength basis except a few transactions as disclosed in Form AOC-2 as per Annexure VI.During the year the Company has not entered into contract/ arrangement/transactions withrelated parties which could be considered material in accordance with the Company's‘Policy on Materiality of Related Party Transactions and Dealing with Related PartyTransactions'. The said policy is available on the website of the Company.

Further we draw your attention to Note no. 35 of the Standalone Financial Statementsof the Company for details of related party transactions.


Details of energy conservation technology absorption research and development andforeign exchange earnings and outgo as required under Section 134(3)(m) of the Act readwith the applicable rules are given in Annexure II to this Report.


The Risk Management Committee meets at regular intervals and identifies the top risksand prioritises those risks. The Audit and Finance Committee is updated about the same.


The Company has a Corporate Social Responsibility Policy as per the requirements of theAct and the same is available on the website of the Company.

The Corporate Social Responsibility Report in the required format is given in AnnexureIII to this report.


The Board has formulated a Board Evaluation Policy for evaluation of individualDirectors as well as the entire Board and Committees thereof. The evaluation framework isdivided into parameters based on various performance criteria. The evaluation for the yearended March 31 2019 has been completed.

In compliance with the requirements under Regulation 25(3) of SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 a meeting of Independent Directors washeld on December 17 2018 primarily to discuss the matters mentioned under Schedule IV ofthe Companies Act 2013. All the Independent Directors of the Company attended the same.


Following are the highlights of performance of subsidiaries associates and jointventure companies and their contribution to the overall performance of the Company duringthe period under review. i. Karad Projects and Motors Limited The revenue for the yearunder review is र 3254 million which is 3.2% less as compared to the previous year.This constitutes 8.5% of consolidated revenue.

ii. The Kolhapur Steel Limited

The revenue for the year under review is र 360 million which is 21.2% less ascompared to the previous year. This constitutes 0.9% of consolidated revenue. iii.Kirloskar Corrocoat Private Limited The revenue for the year under review is र 278million which is 19.7% less as compared to the previous year. This constitutes 0.7% ofconsolidated revenue. iv. Kirloskar Brothers International B.V. (consolidated) The revenuefor the year under review is र 12032 million which is 45.3% more as compared to theprevious year. This constitutes 31.5% of consolidated revenue. v. Kirloskar Ebara PumpsLimited (Joint Venture) The revenue for the year under review is र 1652 million whichis 3.8% more as compared to the previous year.

The financial position of the subsidiaries and joint venture companies is given inAOC-1 elsewhere in the Annual Report.


(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) Directorsand Key Managerial Personnel:

- Mr. S. N. Inamdar (DIN 00025180) – Independent Director resigned from the Boardwith effect from July 28 2018.

- Mr. Rajeev Kher (DIN 01192524) – Additional Director was appointed by the Boardwith effect from January 25 2019. The Board recommends his appointment as an IndependentDirector at the ensuing Annual General Meeting.

- Mr. Tilak Dhar (DIN 00204912) – Additional Director was appointed by the Boardwith effect from March 22 2019. The Board recommends his appointment as a Non-ExecutiveDirector at the ensuing Annual General Meeting.

- Mr. Pratap Shirke (DIN 00104902) – Completed his term as an Independent Directorof the Company. Mr. Pratap Shirke has expressed his willingness to continue the office ofthe Director in the capacity of Non-Executive Director with effect from April 12019. TheBoard of Directors have appointed Mr. Pratap Shirke as an Additional Director in thecategory of Non-Executive Director with effect from April 1 2019. The Board recommendshis appointment as Non-Executive Director at the ensuing Annual General Meeting.

- Ms. Rama Kirloskar (DIN 07474724) – Non-Executive Director of the Company isliable to retire by rotation and being eligible offers herself for re-appointment.

- Mr. P. S. Jawadekar (DIN 00155177) and Mrs. Lalita D. Gupte (DIN 00043559) completedtheir term as Independent Directors on March 31 2019 and have ceased to be Directors ofthe Company.

- Mr. Pradyumna Vyas (DIN 02359564) – Additional Director was appointed by theBoard with effect from May 16 2019. The Board recommends his appointment as anIndependent Director at the ensuing Annual General Meeting.

- Ms. Shailaja Kher (DIN 08450568) – Additional Director was appointed by theBoard with effect from May 16 2019. The Board recommends her appointment as anIndependent Director at the ensuing Annual General Meeting.

- Mr. Sanjay C. Kirloskar – Chairman and Managing Director Mr. Chittaranjan Mate– Chief Financial Officer and Mr. Sandeep Phadnis – Company Secretary are theKey Managerial Personnel of the Company. The Board wish to place on record itsappreciation for the outstanding contribution of Mr. S. N. Inamdar Mr. P. S. Jawadekarand Mrs. Lalita D. Gupte as members of the Board. They have been an integral part of thesuccess of the Company. The Company benefited from their immense knowledge and valuableguidance.

(iv) No company has become or ceased to be a subsidiary joint venture or associatecompany of the Company during the year.

Name of ‘Kirloskar Brothers International Pty Ltd.' (South Africa) was changed to‘SPP Pumps International Pty Ltd' in this year. (v) Details relating to Deposits:

The Company neither accepts nor renews matured deposits since January 2003 and therewere no deposits accepted by the Company as covered under Chapter V of the Act read withRules made thereunder. (vi) No Significant and material orders were passed by theregulators or court or tribunals impacting the going concern status and Company'soperations in future.

(vii) Details in respect of adequacy of internal financial controls with referenceto the financial statements:

The Company has adequate internal financial control systems in place. The controlsystems are regularly reviewed by the external auditors and their reports are presented tothe Audit and Finance Committee. The Company has an Internal Audit Charter specifyingmission scope of work independence accountability responsibility and authority ofInternal Audit Department. The internal audit reports are reported to Audit and FinanceCommittee along with management response.

(viii) Other disclosures required under the Companies Act 2013 as may beapplicable:

- Composition of the Audit and Finance Committee has been disclosed in CorporateGovernance Report;

- Establishment of Vigil mechanism: The Company has already in place a ‘WhistleBlower Policy' as a Vigil mechanism since 2008. The details of the same are reported inCorporate Governance Report;

- Disclosures as required under Section 197(12) of the Act read with the applicablerules and details as per Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are given in Annexure IV & Annexure V.

- Your Company is required to maintain the Cost records as required under Sec 148(1) ofthe Companies Act 2013 and accordingly such accounts and records are maintained by theCompany for the year ended March 31 2019.

(xi) Other disclosures:

The Company has filed a suit against Kirloskar Proprietary Limited (KPL). This relatesto the use assignment and ownership of the trademark "Kirloskar". The Companybeing the original owner of the said mark had assigned the same to KPL for the purpose ofmaking KPL a central repository of various trademarks and logos on behalf of the variousentities forming part of the Kirloskar Group. Such assignments were made by the Company toKPL through various agreements the first of which was entered into in 1967. The onlyconsideration for such assignment was that KPL would licence the Trademark back to theCompany. These licences were to be permanent. KPL had accordingly from time to timeentered into various user agreements with the Company granting it the licence/ right touse the Trademark with respect to certain products manufactured by the Company. Theseagreements were not for any fixed term.

During the year under review KPL sent separate notices to terminate the prevailinguser agreements and called upon the Company to enter into fresh user agreements in theirplace. KPL also stated that if the new user agreements were not executed then upon theexpiry of the time stated in the notices the Company would not be entitled to use the"Kirloskar" trademarks. The suggestions of the Company to amend certainprovisions of the new agreement in order to safeguard the rights of the Company were notaccepted by KPL and therefore no fresh user agreements were executed between KPL and theCompany. Accordingly the Company filed a commercial suit against KPL before theCommercial Court Pune for protecting and asserting the Company's permanent right to usethe said trademark by seeking injunctive declaratory and other reliefs. In thealternative the Company has also sought that the assignment of the Trademark by theCompany to KPL be declared as void. After the suit was filed KPL has called upon theCompany to stop using the word "Kirloskar" and any other brand using the saidword in any of Company's business activities. Further during the pendency of the suitthe Company has engaged in ‘without prejudice' discussions with KPL to try and arriveat mutually agreeable resolution to the matter. However as on date the Company and KPLhave been unable to reach an understanding.


Cash flow statement for the year ended March 31 2019 is attached to the Balance Sheet.


• All our manufacturing plants have migrated to ISO 45001 from Occupational Healthand Safety Assessment Series (OHSAS) 18001. Our plants are certified for EnvironmentManagement System (ISO 14001) and SA8000. Periodic internal audits of all ourmanufacturing units are being conducted to ensure legal compliance ISO 45001 ISO 14001and SA8000 requirements.

• Apart from compliance external or internal audits all the manufacturing unitsare audited by cross-plant safety team for verification of EHS compliances and standardindustrial safety practices.

• BBS phase I is now established and now we have initiated BBS phase II inKirloskarvadi and Dewas plants. It is proposed to implement in all other plants.

• Almost 787 safety opportunities have been logged in the incident trackingsystem. It indicates there is increase in safety awareness. Also the average complianceof CAPA is 76%. It helped reduction of unsafe acts and conditions at the workplace.

• Almost 1100 BBS checks have been carried out in the Financial Year 2018-19 ithas helped to re-assure safety at workplace.

• We have used 12263 man-hours exclusively for health and safety training in theyear which is almost 3.4 man-hours per employee/year.

• Overall safety performance of the plants has improved.

Environment and Energy

As a part of our commitment towards conserving fossil fuels and depending more onrenewable energy sources we have installed and made operational roof top solar powerpanels at manufacturing locations and Corporate Office for a capacity of 4.5 MW which isyielding green power with good efficiency. This is in addition to the generation of 4 MWwind power by Kirloskarvadi plant and purchasing of 2 MW wind power at Dewas plant.

Your Company is compliant with Environment Management System (ISO 14001: 2015) andEnergy Management System (ISO 50001: 2011). Our Kirloskarvadi Kondhapuri Dewas Sanandand Kaniyur plants are certified under matrix certification.

For the purpose of optimum utilisation of resources and continual improvement wemonitor and review the important parameters impacting the environment such as carbonfootprint energy consumption water consumption material consumption and wastegeneration.

In order to encourage our manufacturing plants to implement more and more energyconservation projects we have KBL group level energy conservation competition (ENCON) andaward scheme.


Pursuant to Securities Exchange Board of India (SEBI) (Listing Obligations andDisclosure Requirements) Regulations 2015 Management Discussion and Analysis ReportReport on Corporate Governance Auditor's Certificate on Corporate Governance Certificatepusuant to Schedule V read with Regulation 34(3) and the declaration by the Chairman andManaging Director regarding affirmations for compliance with the Company's Code of Conductare annexed to this report.


During the year 2007-08 the Company launched the Employees' "Share a Vision"Stock Option Scheme 2007 (ESOS-2007). The Management had formulated under ESOS –2007 a proposal of providing stock options at र 2/- per option to award employees fortheir outstanding exemplary performance in getting sustainable results. During the yearno allotments were made under ESOS -2007 scheme.


Your Company has complied with the provisions relating to the constitution of InternalComplaints Committee under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and in terms of Section 22 of the this Act read withSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Rules2013 we report that for the year ended on March 31 2019:

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 9
5 Nature of action by employer or District Officer if any NA


Your Directors wish to place on record their appreciation of the unstinted support andco-operation given by the banks and financial institutions. Your Directors would furtherlike to record their appreciation of the efforts by the employees of the Company and wishto 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

DIN 00007885

Pune: May 16 2019