Transcript
P a i n t i n g t h e f u t u r e G R E E N .
KIRLOSKAR BROTHERS LIMITEDt h8 9 A n n u a l R e p o r t 2 0 0 8 - 0 9
Developing eco-friendly products
Star Attraction
Unique, energy efficient, 7.5 HP monobloc surface water pump with a
'Five Star' rating by BEE, it lifts 16 liters of water per second. This is four
liters more compared to any other pump of similar HP. It consumes 7.6
amperes of electricity as against 12 amperes consumed by other makes.
The Bureau of Energy Efficiency (BEE) and Ministry of Power plan to
launch a scheme to replace all old and energy intensive pumps on farms
with this KBL pump all over India free of charge.
ince its inception over a century ago, the Kirloskar Group has contributed
significantly to the Green revolution in India and has been a harbinger of
prosperity to millions.
The colour Green is synonymous with growth and prosperity and symbolises
balance, harmony and renewal. At Kirloskar, we imbibe the spirit of Green, and strive
endlessly with single-minded zeal to spread the colour of prosperity and growth in
India and across the world.
Even in these trying times, your Company has excelled by continuous innovation,
proactive planning and strategic measures.
By setting new engineering benchmarks and redefining paradigms, we are all set to
paint the future GREEN. And ready to harvest the global opportunities that the future
holds.
S
Achievements in Green
Board of DirectorsSanjay Kirloskar Chairman & Managing DirectorGautam Kulkarni Vice ChairmanVikram Kirloskar Executive DirectorM. S. KirloskarS. S. Marathe (Upto 28.09.2008)S. N. InamdarM. G. Padhye (Upto 16.12.2008)Rahul KirloskarU. V. RaoR. K. Srivastava Whole Time DirectorP. S. JawadekarJ. R. Sapre Whole Time DirectorA. N. Alawani Lalita D. Gupte Pratap B. Shirke
Company SecretaryG. P. Kulkarni
AuditorsM/s. P. G. Bhagwat, Chartered Accountants
BankersBank of IndiaCanara BankHDFC Bank LimitedICICI Bank LimitedCitiBank N.A.
Registered OfficeUdyog Bhavan, Tilak Road, Pune 411 002Phone : (020) 24440770 Fax : (020) 24402083Email : kblin@kbl.co.in Website : www.kbl.co.in Group Website : www.kirloskar.com
New Corporate office "YAMUNA", Survey No. 98 (3-7), Baner,Pune - 411 045, Maharashtra (India)Phone : (020) 27214598 Fax : (020) 27211136Email : kblin@kbl.co.in Website : www.kbl.co.in Group Website : www.kirloskar.com
Works Kirloskarvadi, Dewas, Shirval, Kondhapuri
Information for Shareholders
Annual General Meeting
Day & Date : Friday, July 17, 2009Time : 11.00 a. m.Venue : "YAMUNA", Survey No.98 (3-7)
Baner, Pune - 411 045
Dates of Book : July 4, 2009 to July 17, 2009 Closure (both days inclusive)
Contents Page No.
Decade at a Glance 2Directors' Report 3Management Discussion & Analysis 10Report on Corporate Governance 35Auditors' Report 49Balance Sheet 52Profit & Loss Account 53Cash Flow Statement 54Schedules to the Accounts 55Statement relating to Subsidiary Companies 86Consolidated Financial Statements 88
KIRLOSKAR BROTHERS LIMITEDth
1
DECADE AT A GLANCE
(Rupees in Millions)
Notes :
Previous years' figures have been regrouped to make them comparable.
* Dividend Recommended 100%
Figures of Earning per Share and Book Value per Share are calculated for all the reported years above after considering the subdivision of equity share of Rs. 10/- each to share of Rs. 2/- each.
Particulars 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Net Sales 3713 4162 3746 4757 5078 7309 9246 13,400 15,251 18,309
Other Income 79 295 82 72 225 132 750 2,408 430 359
Material Cost 2162 2557 2279 3126 3393 4859 6093 9,290 11,126 13,927
Other Expenses 1270 1493 1209 1371 1405 1896 1965 2,563 2,704 3,249
Interest 120 141 106 75 65 48 55 84 169 303
Depreciation 72 78 83 85 107 100 97 121 182 207
Profit before tax 168 188 151 172 333 538 1786 3750 1,500 982
Income tax provision 43 48 28 52 68 31 63 385 399 312
Net Profit after tax 125 140 123 120 265 507 1723 3365 1,101 670
Share Capital 71 71 71 71 71 71 212 212 212 212
Reserves 1215 1321 1352 1459 1565 1832 2932 5808 6,409 6,879
Net Worth 1286 1392 1423 1530 1636 1903 3144 6020 6,621 7,091
Imports 51 54 49 119 144 261 606 987 1,152 2,084
Exports 456 586 585 585 572 1005 685 2266 1,483 2,240
Basic Earnings per Share (Rs.) (Face Value of Rs. 2/-) 3.54 3.98 3.48 3.41 7.51 14.17 15.42 31.82 10.41 6.34
Basic Earnings per Share (Rs.)(Face Value of Rs. 2/-) (Excluding Extraordinary Income/Expense) 3.54 3.15 3.48 3.41 7.51 14.17 10.70 14.76 10.41 6.34
Dividend % 45.00 45.00 45.00 45.00 200.00 300.00 200.00 200.00 200.00 *100.00
Book Value per Share (Rs.) 36.48 39.47 40.37 43.40 46.40 53.97 29.69 56.92 62.60 67.05
Debt Equity Ratio 0.54 0.53 0.41 0.24 0.29 0.18 0.06 0.08 0.09 0.03
2
KIRLOSKAR BROTHERS LIMITED
DIRECTORS' REPORT TO THE MEMBERS thYour Directors present the 89 Annual Report and the Audited Annual Accounts
of the Company for the year ended March 31, 2009.
FINANCIAL RESULTS
The financial results of the Company for the year 2008-09 as compared with the previous year are as under: -
Current PreviousYear ended Year endedMarch 31, March 31,
2009 2008(Rs.) (Rs.)
Sales 18,309,447,980 15,251,461,446Other income 359,135,347 429,536,631Total 18,668,583,327 15,680,998,077
Profit before tax 982,203,176 1,500,406,123Provision for tax 311,916,578 399,039,651Profit after tax 670,286,598 1,101,366,472Surplus in Profit & Loss Account brought forward from previous year 506,879,134 600,468,691Available surplus 1,177,165,732 1,701,835,163
APPROPRIATIONSYour Directors propose to appropriate the available surplus as under :-Dividend @ 100% (200%) on 105,764,355 equity shares of Rs. 2/- each 211,528,710 423,057,420Additional tax on Dividend 35,949,305 71,898,609Transferred to General Reserve 400,000,000 700,000,000Balance carried to Balance Sheet 529,687,717 506,879,134TOTAL 1,177,165,732 1,701,835,163
Profitability continues to be under pressure due to various factors. During the current year, as with other industries, there was an impact on the manufacturing sector due to global economic situations. There have been instances of delay in project execution and non fulfilment of commitments due to financial crisis faced by small vendors.
The Company is addressing the issue of cost reductions, inventory control and faster realization of debtors. During the year the Company has restructured its business into various sectors to address each market segments. This sectoral approach which was introduced in the current year is showing encouraging results for exploring different market segments.
DIVIDEND
Directors recommend a dividend of 100% (Rs. 2/- per equity share) for the year.
SCHEME OF ARRANGEMENT
It is proposed to transfer certain non-core investments to a separate Company to be formed for this purpose through Scheme of Arrangement. A Company "Kirloskar Brothers Investments Limited" has been formed and the details of the scheme would be separately sent to the shareholders after directions of the High Court.
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 - II to this Report.
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
Rs
. M
Net Sales
Year
2005 2006 2007 2008 2009
Net Worth
7,000
6,000
5,000
4,000
3,000
2,000
1,000
Rs
. M
Year
2005 2006 2007 2008 2009
2,500
2,000
1,500
1,000
500
-
Year
Rs
. M
Import & Export
Import Export
2005 2006 2007 2008 2009
Earning per Share
35.00
30.00
25.00
20.00
15.00
10.00
5.00
-2005 2006 2007 2008 2009
Year
Rs
.
th
3
3. SUBSIDIARY COMPANIESDuring the year, the Company has become a Subsidiary Company of Better Value Holdings Private Limited, one of the promoters and a Kirloskar group Company.
On February 2, 2009, 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. However, since the approval is still pending with the Government, we provide separately the respective annual accounts and other documents of subsidiary companies.
During the year, the Company has acquired majority shares 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 and other general engineering industrial sectors. TKSL which was a sick company registered under the Board for Industrial and Financial Reconstruction (BIFR), has become subsidiary company during the year. The captive demands of the Company for quality steel castings would be catered by TKSL. TKSL has reported profit for the year ended March 31, 2009 and the financials of the subsidiary are provided separately with this annual report.
The subsidiary company Kirloskar Silk Industries Limited, has approached the Government authorities seeking their approval for change of purpose of the land allotted for a specific purpose. The application is pending with the Government authorities.
As contemplated earlier, the Joint Venture Company namely Kirloskar Brothers LLC was not formed at Oman as the project at Sohar in Oman has been executed.
4. DIRECTORS' RESPONSIBILITY STATEMENTPursuant to Section 217 (2AA) of the Companies Act, 1956, the Board of Directors report that
lIn the preparation of the annual accounts, the applicable accounting standards have been followed and there was no material departure from the accounting standards.
lAccounting 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, 2009 and of the profit of the Company for the period April 1, 2008 to March 31, 2009.
lProper 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
lThe annual accounts have been prepared on a going concern basis.
5. CASH FLOWA cash flow statement for the year ended March 31, 2009 is attached to the Balance Sheet.
SAFETY, HEALTH AND ENVIRONMENTThe prestigious international certification OHSAS 18001 has been awarded to Kirloskarvadi plant of the Company for ensuring and achieving occupational health and safety standards of the persons connected with Kirloskarvadi plant. Our Dewas and Shirval plants have already been certified, while the Kondhapuri plant will be applying for certification in the current year.
CORPORATE GOVERNANCEPursuant 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)During the year 2007-08, Company launched the Employees' "Share a Vision" Stock Option Scheme, 2007 (ESOS - 2007). During the year, first tranch of options got vested. The exercise price offered is at Rs. 200/- per option to be converted into an equity share on exercise.
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.
The guidelines for issue of Stock Options at Rs. 2/- each under ESOS-2007 to reward exemplary performances of the employees of the Company have been circulated.
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.
4
FIXED DEPOSITS The Company is neither accepting nor renewing the matured deposits since January, 2003. As on March 31, 2009, deposits from public and shareholders aggregating to Rs. 913,000/- have matured but have not been claimed. The Company has sent reminders for the same.
CORPORATE SOCIAL RESPONSIBILITY The Company has a defined policy on Corporate Social Responsibility. The main thrust is on social health and education. However, company also undertakes various other activities for economic development of the society. At Kirloskarvadi plant, various facilities are provided for the benefit of the entire society. Various health camps have been organised - free health check-up, fitness programs, blood donation camps are conducted by the Company. Company also organized Disaster Management program for enhancing the level of awareness, where more than forty local representatives attended the program. In the field of education, Kirloskar Brothers Limited (KBL) gives donation to local schools and colleges. The Company has also sponsored a turbo machinery course for students of a local engineering college. Our Dewas unit has joined hands with Municipal Corporation for propagating rain water harvesting. The Company has also sponsored various training and education oriented programs to the social workers and Non Governmental Organisations.
The Company also continues to support a few Organisations’ activities in the field of education in rural areas and such other social causes.
CENTENARY CELEBRATION Kirloskarvadi manufacturing plant has entered its centenary year. During 1910 our founder, Shri Laxmanrao Kirloskar first came to Kirloskarvadi to establish the factory and township. The Company has planned certain events to celebrate the centenary year.
A NEW CORPORATE OFFICE During last few years, the operational activities of the Company have increased tremendously. The Company has been operating from various locations in the city. A need was therefore felt to operate from a single office and the Company has built a new corporate office. The new building, named “Yamuna”, is prominently located at Baner on Mumbai-Bangalore highway. It has an area admeasuring 12000 square meters and has many unique features of a “Green” building. The Company will soon apply for obtaining a LEED (Leadership in Energy and Environmental Design) rating for this site.
DIRECTORS With a deep regret, we report the sad demise of Mr. Sharatchandra S. Marathe, Member of the Board of Directors of the Company since 1985. Mr. Marathe had wide experience in the fields of economics and industry. He was on the Boards of many other corporates and also on various prestigious committees formed by the Government. His knowledge and guidance was of a great help to the Company.
Mr. Madhav G. Padhye resigned from the Board with effect from December 16, 2008 due to health problems. Mr. Padhye was associated with the Company for the last 19 years. He has 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 their gratitude for the guidance received from Mr. Marathe and Mr. Padhye during their tenures as Directors of the Company.
Mr. Gautam Kulkarni, 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.
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 the difficult economic conditions faced this year.
For and on behalf of the Board of Directors,
SANJAY KIRLOSKAR CHAIRMAN
Pune : June 2, 2009
KIRLOSKAR BROTHERS LIMITEDth
5
ANNEXURE – I TO THE DIRECTORS' REPORT
A. Conservation of Energy
The Company continues to take additional steps for Conservation of Energy. During the year, Company has undertaken adoption of divided blast cupola to improve coke to metal ratio, installation of hanger type shot blasting to reduce power consumption, installation of turbo ventilators in the entire factory including stores and security offices, adoption of energy efficient motors, de-rating of motors, energy saver for CNC turning lathes to reduce power cost.
Additional measures taken include replacement of power transformer by energy efficient transformer and VCB for transformers on/off to reduce transmission loss, Bio gas plant for guest house to reduce LPG consumption, PID controller for heat treatment furnace to reduce power consumption, Energy management - staggering of melting zone for foundry which reduced demand by 800 KVA, Optimization of illumination to reduce connect load of 40kw
B. Technology Absorption
1. Research and Development (R&D)
a. Specific area in which R & D carried out by the Company
- Double volute pumps in end suction series of pumps designed to operate at 2900 rpm.
- Horizontal split case pump 2 stage for desalination application.
- Horizontal split case pump with split mechanical seal.
- New product development for high head and high discharge application.
- Development of BHA600 pumps for Suriname project, BHA series enhancement to meet global requirement.
- Indigenous development of metallic volute pump
- Weight reduction of components for VT pumps and valves
- Development of AWWA series of Air Valves
- Development of 3000 mm, 1700 mm and Ebonite lined butterfly valves.
b. Benefits
- Global reference for Large Vertical Pumps
- Reduction in product lead time
- Competitive edge through product positioning
- Application coverage
- Improved quality of the product
- Competitive product cost
c. Future plan of action
- Development of high pressure metallic volute pumps with guide vane arrangement
- Development of BHA pumps for series enhancement
- Development of Large flow VT pumps for various power plants
- In-house development of 200 Ton capacity thrust bearing for high capacity concrete volute pumps
- Design and Development of double seal butterfly valves
- Design and Development of dual plate check valves
- Development of pumps for Marine and Defense application
- Development of High pressure, high temperature pump for Nuclear Thermal test facility
- Water mist system for sub marine simulation
d. Expenditure on R & D (Including new product development)
a. Capital Rs. 56,707,375/-
b. Recurring Rs. 204,156,669/-
c. Total Rs. 260,864,044/-
d. Total R & D Expenditure as a Percentage of total turnover 1.42 %
6
2. Technology absorption, adaptation and innovation
a. Efforts, in brief, made towards technology absorption, adaptation and Innovation
- Electronic control of pumping of operation is successfully developed. Also the remote monitoring through internet connection is developed.
- Development of Ni Al bronze castings with radiography quality.
- Development UP extended range of split case pump with thrubore design.
- Development of Valves Internal Pictorial Display System and Application for the patent.
- Development of new impeller locking arrangement for easy assembly and weight reduction.
b. Benefits derived as a result of the above efforts
- Due to development of UP extended range, there is substantial reduction in thru put time and cost reduction.
- Import substitution
- Technology Up-gradation
c. Technology imported during the last 5 years
Technology Imported
Metallic volute pumps, Ebara Corporation, Japan
Axial Flow Pumps from SIHI, Germany
3D modeling & Structural Analysis of Components -Softwares
Condensate Extract ion pumps from SIHI, Germany
- CV and MV Pumps - Deep well Pumps
Year ofImport
2004
2004
2005
2005
2008
Has technology been fully absorbed?
Yes
Yes
Yes - to extent of Modeling &
Structural Analysis
Yes
Yes
If not fully absorbed, areas where this has not taken place, reasons therefor and future plan of action
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
C. Foreign Exchange Earnings and Outgo
Exports Activities :
The company has export order bookings of Rs. 2300 million and sales of Rs. 2310 million, showing growth of 56% over the last year.
The company has orders from various countries viz. Vietnam, Greece, Spain, Italy, Sudan, Egypt, Sohar, Kazakhstan, etc. for irrigation / power / water supply projects.
The company's thrust on Africa and Latin America will continue for intense distribution and project business. Further, the continuous efforts are made to establish Kirloskar brand in Europe.
The Company is constantly exploring new export markets for its products and also striving to increase the range of products in existing markets and to expand our market share to exports in Southern and Central America.
Foreign exchange earnings and outgo:
Earnings Rs. 2,480,965,346/-
Outgo Rs. 2,084,419,438/-
KIRLOSKAR BROTHERS LIMITEDth
7
ANNEXURE – II TO THE DIRECTORS' REPORT
Information under Section 217(2A) read with Companies (Particulars of employees) Rules, 1975 and forming part of the Directors' Report for the year ended March 31, 2009.
Name & (Age)
Sanjay Kirloskar(52)
Vikram Kirloskar(50)
R. K. Srivastava(62)
J. R. Sapre (64)
Anant R. Sathe(56)
Sanjeev Shripad Date(59)
Dr. J. T. Kshirsagar (54)
Y. S. Rana (58) Avinash W. Purandare(49)
G. M. Maheshwari (59)
M. R. Pattewar (46)
Pradeep G. Chapalgaonkar(48)
D. B. Nimbalkar (56)
L.H. Dabi (57)
Vijay Mattoo (49)*
Ravindra Murthy (55)*
Narendra D. Wagh (54)*
Qualifications
Bachelor of Science (M.E), IllinoisInst. of Tech. USA
Bachelor of Science (Mech.)MIT, USA
M. Tech (I.I.T. Bombay)
Bachelor of Science
CA, LLB
B.E.(Mech)DIIT(Industrial Design)
PHD (Engg.), ME (Mechanical)
M. Tech. (Design Engg.)
BE (Electrical)
BE (Electrical)
B.E. (Mech), DIBM, DBM, MDBA (Mktg)
B.E. (Chem Engg), Dip in Mktg.
B.Com, MSW
B.E. (Mech)
BE (Electrical)
B.S. (Mech Eng)
B.E. (Production Engineering)
Designation/ Nature of duties
Managing Director
Executive Director
Whole Time Director
Whole Time Director
Vice President - Corporate Finance & Accounts
Vice President(Technical) - R & D and Quality
Vice President & Head of Corporate Research & Engineering Development
Vice President -Power
Vice President- Corporate Global Marketing
Vice President - Domestic & Agricultural Pumps
Vice President - Irrigation
Vice President - Industry
Vice President - Corp. HRM & C
Vice President - Corp. International Instit
Vice President & Head of Strategic Business Group - Projects and Engineered Pumps
Vice President - Distribution
Vice President - Industrial Pumps
Date of commencement of employment & (Experience)
02/05/1983 (31)
06/06/2001(27)
15/05/1989 (37)
01/04/2002 (43)
01/11/2003(33)
20/07/1970(39)
08.10.1996 (30)
17.02.1997 (30)
01/03/2005(27)
24.02.2004 (37)
27.08.1992(24)
01.04.2004(25)
01.01.2005(38)
15.11.1975(34)
02.05.2006 (25)
22.05.2008(32)
28.08.2008(31)
Gross Remuneration Rs.
17685755
19190148
8942863
8748187
3323255
2836172
3195841
3078376
2839467
3082206
2743219
2826236
2614931
2683083
1476212
2264465
1610540
Last employment
Manager, Kirloskar Cummins Ltd., Pune
-
General Manager (Tech), Worthington Pump India Ltd.,Kolkata
Vice President - (MED) Marketing, Kirloskar Oil Engines Ltd., Pune
Sr. Vice President - Finance, Kirloskar Pneumatic Company Ltd., Pune
-
I.I.Sc, Bangalore
Sr. Marketing Manager, Jyoti Ltd.
Consulting Practice Head (SCM), SAP India (P) Ltd., Bangalore
General Manager, Crompton Greaves Ltd.
Executive Officer, KSB Pumps, Pune
CEO,Master Handlers Pvt. Ltd.
Vice President, Traspek Silox, Baroda
-
Mather & Platt Pumps Ltd.
VP & SBU Head, Kirloskar Oil Enginees Ltd.
Head - Corp. Mfg. Services, Suzlon Energy Ltd.
*Employed for the part of the year
NOTES :1. Designation denotes the nature of duties also.2. Other terms and conditions are as per the service rules and conditions of the Company.3. The nature of the employment of all the above employees is contractual.4. Gross Remuneration comprises of salary, commission, allowance, medical, other perquisites and companies
contribution to PF and Superannuation funds.5. None of the above employee is a relative of a director of the Company, except Mr. Sanjay Kirloskar, who is a brother of
Mr. Rahul Kirloskar.6. None of the employees holds 2% or more of the paid-up equity share capital of the company.
8
ANNEXURE – III TO THE DIRECTORS' REPORT
Disclosures under the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 –
Particulars Employees' “Share a Vision” Stock Option Scheme, 2007
a. Number of Options granted 552,250 optionsb. Pricing Formula Rs. 200c. Number of Options vested 142,405 Optionsd. Number of Options exercised Nile. Total number of shares arising out of exercise of Options Nilf. Number of Options lapsed 81,535 optionsg. Variation in the terms of the Options No variationsh. Money realized by exercise of Options Nili. Total number of Options in force 470,715 optionsj. Employee wise details of options granted to -
i. Senior Management Personnel Noneii. Any other employee who receives a grant in any None
one year of option amounting to 5% or more of options granted during the year
iii. Identified employees who were granted options, Noneduring any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant
k. Diluted Earnings Per Share (EPS) pursuant to issue of Rs. 6.34shares on exercise of option calculated in accordance with Accounting Standard (AS) 20 - Earnings Per Share
l. Where the company has calculated the employee Net Profitcompensation cost using the intrinsic value of the stock As reported 670,286,598options, the difference between the employee Add - Intrinsic value 46,869,708compensation cost so computed and the employee Less - Fair Value 47,386,062compensation cost that shall have been recognized if As Adjusted 669,770,244it had used the fair value of the options, shall be disclosed. The impact of this difference on profits and on EPS of Basic EPSthe company shall also be disclosed. As reported 6.34
As Adjusted 6.34
Diluted EPSAs Reported 6.34 As Adjusted 6.34
m.1 Weighted average exercise prices for options whose exercise price -i. equals market price Nilii. exceeds market price Niliii. is less than market price Rs. 200
m.2 Weighted fair values for options whose exercise price -i. equals market price Nilii. exceeds market price Niliii. is less than market price (As on grant date) Rs. 260.39
n. A description of the method and significant assumptions No options have been granted during 2008-09used during the year to estimate the fair values of options, including the followingweighted-average information: -1. risk free rate 2. expected life3. expected volatility4. expected dividends and 5. the price of the underlying share in the market at the
time of option grant.
AUDITORS' CERTIFICATEWe have examined the books of account and other relevant records and based on the information and explanations given to us, certify that in our opinion, the company has implemented the Employees' "Share a Vision" Stock Option Scheme, 2007, in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and resolution of
ththe Company in the 87 Annual General Meeting held on July 20, 2007. For M/s P. G. BHAGWAT
Chartered Accountants
Pankaja BhagwatPartner
Membership No. Pune : June 2, 2009 86155
KIRLOSKAR BROTHERS LIMITEDth
9
2008 saw the world economy go through a difficult phase.
The world's economic growth rate is projected to fall to half
percent or even zero in 2009, the lowest, since the Second
World War. Despite wide-ranging strategic initiatives
implemented by governments the world over, the financial
strain remains acute, bringing down the large economies. For
instance, Germany, France, Spain, UK, Japan and United
States, are projected to contract in 2009. Imports to these and
many other developed nations too are expected to decline
during the year. A sustained economic recovery seems
unlikely until the financial sector's credibility is restored and
credit markets are unclogged. Towards this end, the monetary
and fiscal policies need to become even more supportive of
aggregate demand and maintain this stance while developing
strategies to ensure long-term fiscal sustainability.
International cooperation is the key in formulating and
implementing these policies.
Management Discussion and Analysis
WORLD ECONOMY
10
In the last four years (2004-05 to 2007-08), the Indian
economy shifted gears to a high growth phase, recording
7.5%, 9.4%, 9.6% and 9% GDP growth rates respectively.
Though there is a view that the Indian growth trajectory was
led by external trade and foreign capital inflows, it was also a
product of internal growth, albeit complemented by exports.
India's GDP growth in the quarter ending December 2008, fell
to 5.3% - from 8.9%, a year earlier. Inflation fell to a 6 year
low of nearly 3% late February, 2009. Forex deposits have
fallen by more than 30% in less than 6 months.
Analysts expected the Indian economy to grow at about 7% in
2008-09, as compared to the last three years when it rose 9%
approximately. It is expected to dip further in 2009-10 as a
result of the global economic crisis. However, fiscal deficit will
act as a stimulant and deter GDP growth to slip below
6 - 6.5%.
Thus, the Indian economy remains relatively unaffected by the
financial crisis. In fact, India is showing symptoms of a mere
'slowdown' whereas other developed nations are reeling
under impact of 'recession'. This slowdown however, is likely
to result in reduced tax and excise collections. Fiscal deficit
may increase exponentially posing major challenges before the
new government.
INDIAN ECONOMY
KIRLOSKAR BROTHERS LIMITEDth89 Annual Report 2008-09
11
GLOBAL PUMP MARKET OUTLOOK AND GROWTH DRIVERS
The world pump market is governed by the demand in United
States, European Union and Japan. With these countries
burdened by recession, market forecasts up to 2013 have
been revised to a compounded average growth rate of just
0.3% from 3-4%. The global market for centrifugal pumps in
2009 and 2010 is likely to contract, while that for positive
displacement pumps will post good gains. Consolidation of
players in the pump industry through mergers and
acquisitions, may catch momentum in 2009 -10 in spite of the
present recessionary trends.
Although water and sewage, power, building services,
industry, oil and gas are major drivers of the global pump
market, for KBL, water, power and irrigation will continue to
be chief market drivers.
Factors affecting growth of the global pump industry:
Per capita availability of water in Asia is less than other
continents; and it will continue to grow rapidly, thus
increasing demand for delivery and treatment of that
water. Rising consumption with decreasing supplies of
uncontaminated water is pushing up the market of
desalination plants for treating seawater.
Urbanization of Asia has seen relocation of more than one
billion migrants from villages to cities. This is creating
pressure on the existing infrastructure including delivery of
utility water and removal and treatment of wastewater.
Most governments in Asia and in Africa are likely to
increase their spending on infrastructure projects like
irrigation and drinking water schemes.
The world is moving towards energy efficient products and
services to be able to sustain the growth rates achieved in
the past few years with petroleum being the primary
energy source.
12
STRATEGY AND POLICY
Keeping pace with the Indian economy, KBL too has grown in
the last four years (from 2003-04 to 2007-08) at a
compounded average growth rate of 32%. We did expect
sustaining this growth rate would pose a challenge; like time
and cost over-runs in a few projects, rising material costs,
orders with fixed prices, maintaining positive cash flows and
increasing focus on products.
At KBL, we began changing ourselves last year itself to face
these challenges. Reasons have been identified and corrective
actions addressing issues in working capital management are
being implemented.
These strategies, however, will take a little time to give us
expected results in operations, especially on the backdrop of
the global financial crisis and slowdown.
To develop a more customer and market oriented
organization, KBL has restructured itself into sector-wise
business groups, corporate global marketing and global
sourcing as new functions. It has also created a pool of
manufacturing operations and existing corporate functions to
nurture an innovation driven work culture and customer
centric organization.
As for manufacturing operations, world class operational
efficiency targets will be the driving force. The newly created
corporate level functions of sourcing, marketing, business
development and strategy will provide a cutting edge to
formulate strategies for sustainable growth.
KIRLOSKAR BROTHERS LIMITEDth89 Annual Report 2008-09
As a policy, we will use resources judiciously by employing
efficient equipment, create less waste, follow green concepts
and try to make the world a better place to live in. Our
corporate office, is an indication of our commitment to
conserve nature.
This mindset has found its expression in various innovative
endeavors as follows:
BEE rated five star energy labeling of our monobloc
pumpsets [saving power]
Pending patent for the innovative solar pump controller
[using renewable power]
Automatically switching dual voltage motors based on
rural and varying line voltages, for which the patent
application is on the anvil [saving different pumps for
different areas, thereby saving inventory]
13
We have crossed the INR 2380 million turnover in our export
business. Our international strategy will continue to focus on
creating the global brand 'Kirloskar' in centrifugal pumps and
pumping systems. While creating a global brand, we will act
local while going ahead to create a multi cultural, multi
national team to establish this global brand.
We have created more than 15 new references in Europe
under brand 'Kirloskar' in pumps. Orders have flowed in from
Chile to Egypt and Vietnam; from varied sectors, like energy,
irrigation, industry, building, etc. making our presence felt
worldwide.
Orders from Southern Regional and Balikera Hunter Water,
Australia, Astana in Kazakhstan and Sohar in Oman have been
executed satisfactorily.
INTERNATIONAL BUSINESS STRATEGY
14
Exponentially rising fiscal deficit, lower tax and excise
collections and falling exports are likely to delay the tough
decisions that the Central Government may require to take to
fight economic slowdown. This can delay infrastructure
project decisions and fund flows.
Capacity enhancements effected by the top 20 global pump
players, before the slowdown will make it difficult to have full
capacity utilization and lead to price competition, straining
profit margins.
As the economic downturn seems to continue through
2009-10, dangers of deflation loom ahead.
Buoyancy of raw material prices, extraordinary exchange rate
fluctuations like those observed in 2008 up to August 2008
and after, may cause major problems during execution of
contracts.
KIRLOSKAR BROTHERS LIMITEDth89 Annual Report 2008-09
RISKS AND CONCERNS
15
Sectoral Overview
POWER
United States were commissioned at the Sandow 5 Project in
Texas for Bechtel, United States of America. Similarly the first
condensate extraction pump for overseas market was
dispatched for Glow Thailand Project, Doosan. Other major
power project orders for Isle of Grain and Staythorpe in United
Kingdom from Alstom, Sugen in Gujarat for Siemens Germany
were executed on time. With success stories like these, the
Kirloskar brand is getting strengthened in the global power
sector.
This business group caters to the needs of power industry -
conventional and renewable. Considering the chronic
shortage of power, this sector is bound to emerge as a major
market driver for decades to come. The Power group is proud
to have successfully completed the sump model test of
cooling water system for India's first ultra mega power project
of 4000 MegaWatt (5 x 800 MW) at Kirloskarvadi. This was
the largest sump model test for cooling water system to be
conducted in India. Circulating cooling water and Non-Active
Process Water (NAPW) pump packages for Nuclear Power
Corporation's Kaiga project have been commissioned. The
boiler feed pump system for Essar Power project too has been
installed and is operational. Among the prestigious orders won
this year, is the cooling water pump package for first fast
breeder reactor project - BHAVINI, in the nuclear power
segment. Our brand image in the national power industry was
used to win over the customer in the overseas markets.
Approvals from few more global EPC contractors in Power
sector were obtained and we also received orders from them
including:
Maire and Technimont, Italy, for Colbun Project, Chile
Metka Metal Construction, Aliveri V, Greece
Sevilla, Lebrija I, Spain
Alstom, Switzerland (6th repeat order) for Fujirah
The first two cooling water pumps supplied by Kirloskar in the
&
&
&
&
4CW pumps installed at Sandow 5 project, USA of Bechtel
16
HUDA, Hyderabad for up-gradation of a 20 MLD sewage
treatment plant
Tikoe and Thetsane Industrial Area, Maseru, Republic of
Lesotho for a 20 MLD water treatment plant
We have won the trust of authorities at Cape Preston,
Australia, for desalination project pumping 144,000 cubic
meters of water per day. We are supplying them pumps in
super duplex stainless steel with spares, which marks the
entry of KBL in the global desalination market.
In line with our mission to be in water business and enhance
reach and capabilities of this business group, we have signed
an Memorandum of Understanding with Enzen Water
Solutions Private Limited, They have expertise in water
distribution, management modeling and technology which will
enable us to address the BOOT /BOT projects or public private
partnership projects coming up in this sector.
The Sohar project in Oman was the first international EPC
contract won by us against stiff competition. The project
involved setting up a sea water pumping system for the
common cooling water system. The entire project activity
demonstrated our project management capabilities and
expertise.
WATER RESOURCE MANAGEMENT
This business group addresses the needs of water supply,
water treatment and waste water treatment segments.
Water, like power is a major market driver for the pump
industry and equipment peripheral to water industry. Water
stressed regions in the world are on the rise, thanks to
uncurbed urbanization, growing industrialization, increasing
pollution levels and absence of sufficient teeth to the
legislation to deal with water pollution across the world. India
is no exception. Such a scenario demands better and better
water management, with latest technologies, cheaper
methods and sustainable operations.
This business group continues to serve municipal
corporations, water and sewerage boards of India. Delhi Jal
board's Vishwakarma project, Nagpur municipal corporation's
Gorewada and Mahadula projects and Maharashtra Jal
Pradhikaran's Malegaon project went on stream this year. At
Vasna project, a six stage well point dewatering system was
deployed. Also the first sewage pumping station of RUIDP,
Kota, with our newly developed and bigger model of
submersible sewage pumps was pre-commissioned.
We made significant in-roads in waste water treatment
segment in India as well as overseas, based on the Gondwana
Engineers Limited's strengths. Orders received include:
Steel Authority of India Llimted, Bhilai for a 30 million liters
per day (MLD) sewage treatment plant
Vadodara municipal Sewa Sadan for a 8.5 MLD sewage
treatment plant
Pune municipal corporation for a 40 MLD sewage treatment
plant
4Kirloskar pumping station at Sohar Industrial Port Company (SIPC), Sohar, Oman
KIRLOSKAR BROTHERS LIMITEDth89 Annual Report 2008-09
17
IRRIGATION
This business group primarily meets the needs of irrigation at
macro level through the infrastructural projects and supplying
appropriate products on a mass scale to institutional irrigation
customers, generally at government level. Projects in the past
from the World's largest pumping system on Narmada Branch
canal for SSNNL to the various lift irrigation projects executed
in Andhra Pradesh have been handled by this business group.
All the remaining pumping stations, which are a part of world's
largest pumping system are close to being commissioned.
With focus on completion and execution as a strategy this
year, the group completed the execution for Hanmapur,
Rampur, Mulwad Baluthi, Sinamoda, Devlapur, Guthpa,
Brandix, Taraka, Thimmapur, Rajan, Kollur, Kawardha and
Jalundra lift irrigation schemes in Karnataka, Andhra Pradesh
and Gujarat.
Parallel operations of pumps at all the three sites - Intake
(Gangaram), Nagaram and Bhimganpur for the Godavari lift
irrigation scheme were also successfully completed. Other
major projects like Gandikota, PADA and Bheema are nearing
completion.
Along with the corporate international institutional business
function, this sector business group plans to aggressively
target the international irrigation market. Green revolution
projects in the African continent will be targeted by leveraging
the success stories of our irrigation projects in Senegal and
Laos. Orders worth US $25 million were booked thanks to this
strategy of taking up international irrigation projects. The
result invoicing worth US $ 10 million completed this year.
4Khed pumping station, Narmada Water Resources, Water Supply and Kalpasar Department
18
INDUSTRY
KIRLOSKAR BROTHERS LIMITEDth89 Annual Report 2008-09
This business group takes care of the requirements coming
from the different industrial segments such as metal
manufacturing (mainly Steel), mining (Coal and others) ,
process oriented segments like cement, chemicals, paper,
sugar, textile, pharma, and other industries.
This business sector had to bear the maximum brunt of the
financial crisis, which adversely affected its performance.
Therefore, the sector adopted a 'focus' based approach, in
which only the customers with firm requirements and sound
financial health were approached. The strategy was to build
long term relationships with industrial customers, to get
repeat orders and minimize cost in terms of marketing efforts
and time lost. Our Customer Relationship Management (CRM)
initiatives were a significant step in this direction. The success
stories in steel, textile, sugar and mining sectors were
strategically leveraged in international markets. As a step
towards entering the North American market, an agreement
with the sales and service partner 'Hydro Inc.' for the Steel
industry in United States of America was finalized. Excellent
ratings received from steel major Pohang Iron and Steel
Company, illustrate the resolve of the unit towards fostering a
relationship based on customer confidence. The group
concentrated on the market diversification as a part of the risk
mitigation strategy. Orders received from Austria and Yemen
were a part of this strategy. Orders from West Coast Papers
were won against stiff competition from major players in the
pumps market. This exhibits our capability for servicing critical
application areas.
19
OIL AND GAS
This business group provides customized solutions to the Oil
and Gas industry. The dynamics of the oil and gas industry
require special attention on our part because of critical nature
of applications and adherence to the strict norms and
standards. So a business group exclusively focused on Oil and
Gas industry was formed.
After the restructuring, the group has focused on
understanding the needs of this sector very systematically and
is in the process of firming up strategic development and
business plans for the coming years.
It has also assessed its present strength in oil and gas industry
and is leveraging these strengths to win customer confidence
from the select applications to begin with.
To cite a few examples, successful packaged pumping
solutions have been given to ONGC at Shibsagar (India), Al
Mazroui Engineering for SEWA, Emirates Oil company,
Sharjah (UAE) and Reliance, at its Jamnagar facility. The
highlight at Reliance was the successful demonstration of
sequential auto-start.
20
This business group caters to the demands of infrastructure
development projects - particularly those in the real estate.
Rapid urbanization is the market driver for this fast growing
market in the recent past. The marketing activities of the
group laid emphasis on providing an excellent customer
experience. Launch of on-line fire pump selection package
based on specifications through the web portal was an
example. The group won prestigious orders from Delhi Metro
Rail Corporation for its phase II project, vying with formidable
international competition. Mumbai International Airport,
Thiruvananthapuram international airport, Jawaharlal Nehru
stadium - Delhi for 2010 Common-wealth games and Metro
Rail - Kolkata were a few other establishments, which trusted
Kirloskar pumping systems. A 24 hours service backup was
put in place through a strategic nationwide tie up and proved
to be a source of competitive advantage in getting business.
The group was successful in expanding its business across
different geographies For e.g., package order secured from the
government of Tajikistan which won us several orders for the
dewatering, sewage submersible design pumps.
Commercial Complex
Hospital
Multiplex
Water Recycling
Swimming Pool
Water Distribution
Water Treatment PlantSewage Treatment Plant
Educational Institutes
Fire Fighting Pump House
Hydro Pneumatic andHVAC Pump House
KIRLOSKAR BROTHERS LIMITEDth89 Annual Report 2008-09
BUILDING AND CONSTRUCTION
21
DEFENSE AND MARINE
This business group offers customized solutions to the
Defense and Marine segments. Being a new segment for KBL,
our team spent more time in understanding the needs of this
sector and assessing our strengths to match the requirements.
We have made a start by organizing our activities for long term
business relationships. We have approached authorities in the
defense establishment and marine organizations from where
we have received initial positive response. The orders from
Pipavav Shipyard illustrate the start of a successful venture.
Business linked development plans are being drawn out
carefully for both the segments of this sector, understanding
the nuances of customer needs and priorities.
22
This business group looks after our channel partners and the
business coming through them. This is one of the most
important business groups, which is in charge of all our
distributors, dealers and retail outlets where our mass
produced pumps are made available to the customers.
Standard pumps, standardized packages, motors, alternators
and allied standard peripherals are sold through this group.
Volume driven cost leadership is their guiding principle behind
the strategies adopted. Steps are also being taken to make a
shift to innovative products to differentiate ourselves from
commodity like products in the market place. 5 star energy
rating by Bureau of Energy for our monobloc pumpsets for the
least energy consumption, tie up with Copper Promotion
Council for energy efficient motors, pumpsets and energy
auditing are some examples of these differentiating strategies.
In addition to the marketing's first P for product, this market is
quite influenced by the other 3 P's of marketing - promotion,
place and people. Strategies of over 100 new distribution
Memorandum of Understandings, system for E-warranty,
retailer certification, scratch cards scheme for domestic pump
retailers and the scheme of pump replacements illustrate this
group's balanced focus on all the 4 P's of marketing.
Considering the credit crunch resulting from financial crisis,
the commercial policies too have been tightened and have
been made cash centric, keeping the volume driven cost
leadership strategy in mind.
4First energy efficient surface pump in India with 5 star rating by The Bureau of Energy Efficiency (BEE)
KIRLOSKAR BROTHERS LIMITEDth89 Annual Report 2008-09
DISTRIBUTION
23
CUSTOMER SUPPORT AND SERVICE
In line with the strategy of providing excellent customer
experience, the focus on customer support and service is
being reoriented with pragmatic measures such as:
Improving the mechanism of listening keenly to end users
through our retail chain or original equipment
manufacturers
Prompt response to the customer calls by making adequate
manpower and IT architecture available through dealers
and service centers
Re-organizing the set up with separate teams for spares
and service and one stop outlets
Focusing on annual maintenance and operation and
maintenance contracts with long term arrangement
World class delivery mechanism of spare parts by
rationalizing the 16 digit part numbers
This customer service strategy will help create sustainable
competitive advantage in the long run for KBL.
24
This manufacturing facility, with India's second industrial
township, established in 1910 enters its centenary year in
2009-10. It has received the Occupational Health and Safety
Assessment Series, OHSAS 18001 certification, and a
National Award for Excellence in Water Management, from
the Confederation of Indian Industry (CII) for in 2008 in
recognition of efforts on conservation and the effective use of
water and energy as well.
The 1000 parts per million (ppm) concept has been
implemented across the small and medium pump shops for
reducing rejection and a policy of continuous improvements in
various operational parameters was implemented. Small
capital investments were made for assembly modernization,
impeller cleaning booths, medium frequency induction
furnaces for cast iron and non-ferrous foundries and laser
engraving machines for spares in small and medium pumps.
Development of 60 Hertz frequency drive for testing of large
pumps up to 4 MegaWatts, up-gradation of painting processes
to meet the norms of global EPC contractors like Bechtel and
Alstom, wooden set up for sump model to reduce cost and
installation time, heat transfer pump manufacturing facilities
like clean room and test set up, capability of single piece
casting weighing 9.2 tons are a few examples of resources
added in the large pump shop.
Kirloskarvadi has received certificate of registration from
Directorate General Quality Assurance (DGQA) for supply of
KIRLOSKARVADI
Works Overview KIRLOSKAR BROTHERS LIMITEDth89 Annual Report 2008-09
'Centrifugal Pumps and Valves' as per Indian naval
requirements after verification of capability and capacity.
Managing liquidity, supply chain and growing expectations of
customers are the main challenges facing Kirloskarvadi works
and we have a right combination of experience and youth to
face these challenges successfully and achieve its vision and
mission.
25
DEWAS AND SHIRVAL
KBL became the first pump company in India to achieve the
distinction of FIVE star rating from Bureau of Energy
Efficiency, Government of India for the 8 models of 'KDS'
series monobloc pumpsets manufactured in Dewas. In view of
the energy crisis being encountered globally, there is a need
for energy efficient products. About 30% of electricity
generated in India is consumed by agricultural sector. Kirloskar
monobloc pump models deliver water at efficiencies at least
20% more than ISI requirements. Savings in terms of energy
are up to 30% or more.
The Dewas factory obtained Level 3 rating from Total Cost
Management (TCM) maturity model operational level
efficiency for first time in the country. The factory's congenial
atmosphere got a boost by the formation of internal union of
workmen. Facilities for in-house machining along with
assembly, testing, painting and packing for aluminum motors
have been created. Processes focused on significant
improvements in quality and aesthetics were also deployed.
Solar pump demonstration was conducted at Bhatinda and
Ludhiana, in association with Punjab Energy Development
Agency (PEDA). These demonstrations were attended by
senior PEDA officials and around 200 farmers.
Demonstrations were also conducted at M.P. Urja Vikas
Nigam, Bhopal, on the occasion of 'Rajiv Gandhi Akshay Urja
Divas'. The event was graced by the State Energy Minister
and Senior officials of M.P. Urja Vikas Nigam and MNRE. Solar
panels of 4000 Wp were installed in the solar park cum lab
created at Dewas. These panels are being used for testing of
solar pumping systems. During non-testing period, these
panels are being used for energizing the pumps at the Effluent
Treatment Plant, which result in energy savings.
26
KONDHAPURI
43000 mm Butterfly Valve under manufacturing
KIRLOSKAR BROTHERS LIMITEDth89 Annual Report 2008-09
Our Kondhapuri factory exceeded its targets for first time in
the last three financial years on the basis of process and
productivity improvements.
A new manufacturing facility within the factory was
commissioned with capital investment of about INR 90
million. This facility will help increase the large size valve
capacity as well as capability to make up to 4000 mm size
Valve. We have obtained CE marking certification for Butterfly
Valves and Sluice Valves. The factory successfully completed
the development and supply of many new products and
received prestigious orders from the water, energy and
industry sectors.
27
HUMAN RESOURCE MANAGEMENT
Our HR team would like to share the encouraging Gallup
Survey results from the employee engagement survey
conducted recently. We have been doing this survey from
2004. We have also taken steps based on the concerns
observed and the opportunities for improvements pointed out
from the survey. These efforts by our HR team have increased
the overall satisfaction, advocacy, loyalty and employee
engagement levels, pride score, leadership communication
score and work-life balance score significantly. Superior /
subordinate quality time and management have shown
improvement, although not significant. A few areas are still
found to be critical and clarity of roles is not evident.
Necessary steps have already been taken to ensure
improvement in 2009-10. Harmonious industrial relations
have been maintained at all our manufacturing locations.
Amity International University awarded KBL with an HR
Excellence Award in 2008.
The total number of employees is 2,932.
I AM KBL
28
This function now stands integrated with product
development and engineering departments at all the factories
categorized under the central research and engineering
function. This has enhanced involvement of the central
research team up to production stage in all the new
development projects and not limited to computer aided
designs. This will expedite the new product development
process and reduce the time from market feedback to drawing
board to prototype for standard products.
A number of standard product up-gradations and
developments in various pump ranges for diverse applications
were completed this year. Customized developments of
metallic volute pumps, concrete volute pumps for ultra mega
power projects as well as KBL's largest ever vertical mixed
flow pumps are the highlights of developments made this
year. Computational Fluid Dynamics (CFD) analysis of 27 vital
projects and structural analysis of 20 critical projects was
carried out for customers, both in India and abroad.
RESEARCH, DEVELOPMENT AND ENGINEERING
4CFD analysis of Rajivsagar PS1 Sump 4Sarju Runner Solid Model
KIRLOSKAR BROTHERS LIMITEDth89 Annual Report 2008-09
29
GLOBAL MARKETING, BUSINESS DEVELOPMENT AND STRATEGY
This corporate function was a new creation after the
restructuring and redefining the past functions to focus on
marketing in its true classical meaning, specific business
development projects and strategy dialogue process. The
various roles played by this department include those in
International distribution, CRM - lead generation and
nurturing, market and competitive intelligence, business
development, mergers and acquisitions, brand promotion and
marketing communication and last but not the least the
strategic dialogue. The department is expected to perform to
add value to business strategies and assist in driving corporate
strategies based on environment and analysis of market
situation.
30
FINANCIAL PERFORMANCE
The company has achieved a growth of over 20% in net sales
over the last year to reach INR 18,309 million.
Profit before tax is INR 982 million as against INR 1500 million
in the previous year. The main reasons in reduction in
profitability are higher rate of interest and cost of finance,
delay in execution of certain projects and rise in raw material
cost for part of the year.
Borrowings have further gone up from INR 1912 million to INR
3204 million.
Depreciation and amortization has increased to INR 207
million from INR 182 million in the previous year, while interest
has increased from INR 169 million to INR 303 million.
KIRLOSKAR BROTHERS LIMITEDth89 Annual Report 2008-09
31
BRIDGING OCEANS
4Sanjay Kirloskar meets the Honorable President of Senegal, SE Maitre Abdoulaye Wade, New Delhi during Africa Summit
4Malik Akhtar at the Valves factory at Kondhapuri
4T C Venkatsubramanian and Prabhakar Dalal, of EXIM Bank at KBLs showroom in Vientiane, with L H Dabi, Vice President, Corporate International Institutional Business
4Ms. Christine Ting Sing Ling, Engineer and Ravi Chandran, Senior Manager from Public Utilities Board, Singapore, visiting Kirloskarvadi plant
32
EXHIBITING EXCELLENCE
4Achema 2009, Frankfurt Germany
4Singapore International Water Week 20084Aquatech, Amsterdam, Netherlands
4Power-Gen International, Orlando, USA
4Power-Gen Europe 2008 - Milan, Italy 4Pumps, Valves and Systems Expo, Baroda
KIRLOSKAR BROTHERS LIMITEDth89 Annual Report 2008-09
33
The company has adequate internal control system. Regular
internal audits are being conducted, as per the audit calendar
drawn at the beginning of the year, to examine the efficacy
and adequacy of internal controls. For this purpose, the
company has continued the practice of appointing
professional firms of chartered accountants.
The internal audit reports are initially presented to the
executive committee of the management, consisting of the
Chairman and two Executive Directors. The recommendations
made in these reports are taken up for implementation by this
executive committee.
The final audit report presentation is made to the audit
committee during which the executive committee, as
mentioned above, apprises the audit committee of its plans to
implement audit recommendations.
On the basis of these reviews, the audit committee directs the
management to take appropriate actions.
The company has initiated audit procedures in the subsidiary
companies.
INTERNAL CONTROL SYSTEM
Cautionary Statement: within the meaning of applicable security laws and regulations. Actual results may vary from those expressed or implied depending upon economic conditions, government policies and incidental factors.
Statements in the Management Discussion and Analysis describing the company’s projections and estimates are forward looking statements and progressive
34
REPORT ON CORPORATE GOVERNANCE
1. The Company's philosophy on Code of Corporate Governance :
The Company strongly believes that the system of Corporate Governance protects the interest of all the 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.
2. Board of Directors :
The Board comprises of an optimal complement of independent professionals as well as Company executives having in-depth knowledge of business. As on the date of this report, there are thirteen directors of whom one is Managing Director, one is Executive Director, two are Whole Time Directors and nine (69%) are non executive directors of whom seven (53%) are independent directors.
During the financial year under review, six Board meetings were held on the following dates: April 22, 2008, July 18, 2008, August 12, 2008, October 23, 2008 , January 20, 2009 and March 18, 2009
None of the Directors on the Board hold the office of director in more than 15 companies or membership of committees of the Board in more than 10 committees or chairmanship of more than 5 committees.
The details are explained in the Table below :
Mr. Sanjay Kirloskar and Mr. Rahul Kirloskar are brothers. None of the other directors is related to any other director.
@ CMD - Chairman and Managing Director, VC - Vice Chairman, ED - Executive Director,
NED - Non Executive Director, I - Independent, WTD - Whole Time Director.
* Committee Membership of Audit Committee and Investors' Grievance Committee is considered for this purpose.
(1) Directorships in Private Limited Companies, Foreign Companies are included in the above table.
(2) An independent director is a non-executive director who, apart from receiving director's remuneration, does not have any material pecuniary relationship or transactions with the Company, its promoters or its management or its subsidiaries and associates which in the judgement of the Board, may affect his independence of judgement and complying with other conditions as prescribed under Clause 49 of the listing agreement.
(3) All the relevant information suggested under Annexure 1A of Clause 49 is furnished to the Board from time to time.
3. Code of Conduct :
The Company has introduced a Code of Conduct for Directors and members of Senior Management. The Code is made effective from April 1, 2005. It has been uploaded on the Company's website, www.kbl.co.in All Board members and senior management personnel have affirmed compliance with the code. A declaration to that effect signed by Mr. Sanjay Kirloskar, Chairman and Managing Director is appearing elsewhere in the annual report.
Mr. Gautam Kulkarni VC/NED 6 Present 7 2/0Mr. Vikram Kirloskar ED 3 Absent 10 4/2Mr. S.S. Marathe(Upto 28.09.2008) NED (I) 3 Present Not Applicable Not ApplicableMr. M.S. Kirloskar NED (I) 6 Present 0 0/1Mr. M.G. Padhye(Upto 16.12.2008) NED (I) 4 Present Not Applicable Not Applicable Mr. S.N. Inamdar NED (I) 4 Present 10 2/4Mr. Rahul Kirloskar NED 6 Present 12 1/0Mr. R.K. Srivastava WTD 6 Present 5 0/0Mr. U.V. Rao NED (I) 6 Present 7 3/2Mr. P.S.Jawadekar NED (I) 5 Present 3 1/0Mr. J.R. Sapre WTD 6 Present 4 0/0Mr. A.N. Alawani NED (I) 6 Present 6 4/0Mrs. Lalita D. Gupte NED (I) 3 Present 7 5/0Mr. Pratap B. Shirke NED (I) 5 Absent 9 2/0
Mr. Sanjay Kirloskar CMD 6 Present 13 2/1
Name of Director
Designation / Category of Directorship @
Board Meetings attended
Attendance at last AGM
No. of other Directorships
held
No. of Committees of which Member /
Chairman*
KIRLOSKAR BROTHERS LIMITEDth
35
4. Audit and Finance Committee :
The Audit and Finance Committee was constituted in July, 2000. This committee is constituted in line with the provisions of Clause 49 of the Listing Agreement read with section 292A of the Companies Act, 1956. It comprised of five Directors viz. Mr. S. N. Inamdar as the Chairman, Mr. S. S. Marathe, Mr. Gautam Kulkarni, Mr. U. V. Rao and Mr. P. S. Jawadekar as Members. Mr. S. N. Inamdar is a Non-Executive Independent Director. After the sad demise of Mr. S. S. Marathe, senior member of the Board, on September 28, 2008, the Audit and Finance Committee was reconstituted and Mr. Pratap B. Shirke has been appointed as Member of the Committee with effect from October 23, 2008. Thus the Company fulfils the requirements under the code.
The terms of reference of the Audit and Finance committee include the matters specified in clause 49 (II) of the Listing Agreement with the Stock Exchanges. The terms of reference of the Audit and Finance Committee includes the following:
A)
�Overseeing the Company's financial reporting process and disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible.
�Recommending the appointment of external auditors, fix their remuneration.
�Reviewing with the management the quarterly & annual financial statements before submission to the Board focusing primarily on
— Any change in the accounting policies & practices.
— Major accounting entries based on exercise of judgement by management.
— Significant adjustments arising out of audit.
�Qualifications in draft audit report.
�Compliance with Stock Exchanges legal and accounting requirements concerning financial statements.
�Any related party transactions.
�Structure & strength of internal audit department reporting structure, coverage and frequency of internal audit, financial & risk management policies particularly relating to foreign exchange exposure.
�Defaults in the payment to depositors, debenture-holders, shareholders & creditors.
�Reporting by management on key financial ratios.
�Reporting on recovery of dues, delays and reasons therefor.
�Statements accompanying Public Issue of any security.
�Reporting on branch audits, if any. Full access to information and data.
�To obtain outside legal or other professional advice.
�To secure attendance of outsiders with relevant expertise, if it considers necessary.
�Approval of payment to statutory auditors for any other services rendered by statutory auditors.
�Matters required to be included in the Directors' Responsibility Statement to be included in the Board's report in terms of clause (2AA) of section 217 of the Companies Act, 1956.
�Discussion with internal auditors on any significant findings and follow up thereon.
�Reviewing the findings of any internal investigations by the internal auditor into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board.
�Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post audit discussion to ascertain any area of concern.
�Carrying out any other function as per directions from the Board from time to time.
B)
�Power to investigate
�Power to summon officers
�Power to access information and data
�Power to review systems/controls
36
Member's Name No. of Meetings attended Member's Name No. of Meetings attended
Mr. S. N. Inamdar 6 Mr. S. S. Marathe(Upto 28.9.2008) 3
Mr. Gautam Kulkarni 5 Mr. U. V. Rao 6
Mr. P. S. Jawadekar 5 Mr. Pratap B. Shirke(w.e.f.23.10.2008) 1
During the year, six Audit and Finance committee meetings were held on April 22, 2008, July 18, 2008, September 19, 2008, October 23, 2008, January 20, 2009 and February 6, 2009
Attendance at Audit and Finance Committee meetings :
5. Remuneration of Directors :
Remuneration Committee
The remuneration committee was constituted in the year 1999. The Members of the committee were, Mr. S. S. Marathe - Chairman, Mr. S. N. Inamdar, Mr. M. G. Padhye and Mr. Gautam Kulkarni
However, after the sad demise of Mr. S. S. Marathe on September 28, 2008, Mr. P. S. Jawadekar, has been appointed as Chairman of the Committee on October 23, 2008.
Consequently, due to the resignation tendered by Mr. M. G. Padhye with effect from December 16, 2008, Mr. A. N. Alawani has been appointed as a member of the Committee on January 20, 2009. The present Members of the committee are as under:-
Mr. P. S. Jawadekar, Chairman, Mr. S. N. Inamdar, Mr. Gautam Kulkarni and Mr. A. N. Alawani
During the year, Remuneration Committee meetings were held on April 22, 2008 and on July 18, 2008.
Attendance at Remuneration Committee Meetings :
Member's Name No. of Meetings attended Member's Name No. of Meetings attended
Mr. S. S. Marathe(Upto 28.9.2008)
Mr. M.G. Padhye 2 Mr.Gautam Kulkarni 2(Upto16.12.2008)
Mr. P. S. Jawadekar NA Mr. A. N. Alawani NA(w.e.f.23.10.2008) (w.e.f.20.01.2009)
2 Mr. S. N. Inamdar 2
Remuneration to Directors :
—to time and confirmed by the Board of Directors.
— Non Executive Directors were paid a sitting fee of Rs.10,000/- for every meeting of the Board and Committee attended by them. Based on their membership of various committees and their time involved in the operations of the Company, the non-executive directors will be paid up to an aggregate amount of Rs. 7,565,000/- for the year ended March 31, 2009, by way of a commission.
— There are no pecuniary relationships or transactions of the non-executive directors' vis-a-vis the Company.
— All elements of remuneration package for all directors have been provided in the statement hereinafter.
— Except whatever is stated in the statement, there is no other fixed component or performance linked incentives to any director.
During last year, under the Employees' "Share a Vision" - Stock Option Scheme, 2007 (ESOS - 2007), 20,000 stock options were granted to each of the two Non-promoter whole-time Directors and 10,000 stock options were granted to each of the Independent Directors. Under the scheme, each option is convertible into One Equity Share (Face Value Rs. 2/-) of the Company upon vesting, at an Exercise price of Rs. 200/- per share.
Subject to the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the terms of the ESOS - 2007, the options, after one year of the grant would vest in 3 annual instalments of 30%, 30% and 40% and the same should be exercisable within a period of 3 years from the date of vesting.
The payments made to executive directors have been reviewed by the Remuneration Committee from time
First tranche of options i.e. 30% of the total options have been vested on August 31, 2008.
KIRLOSKAR BROTHERS LIMITEDth
37
$ subject to approval of Members*Includes pension as an ex-employee of the company.
Directors' Service Contracts' Details :
Executive Directors Service Contract and Period Severance Fees
Mr.Sanjay Kirloskar Agreement dt.19.11.2005 :: Period: 19.11.05 to 18.11.10 **
Mr.Vikram Kirloskar Agreement dt. 26.07.2006 :: Period: 06.06.06 to 05.06.11 Nil
Mr. R. K. Srivastava Agreement dt.22.10.2005 :: Period: 19.09.05 to 18.09.10 Nil
Mr. J. R. Sapre Agreement dt.28.07.2005 :: Period: 29.04.05 to 28.04.10 Nil
** Three years or unexpired period, whichever is less.
Details of remuneration paid/payable to Directors for the year 2008-09 are as follows :
Statement showing number of Equity Shares of Rs. 2/- each of the Company held by the present Non Executive Directors as on March 31, 2009 :
Non–Executive Directors No. of shares % to paid up capital
Mr.Gautam Kulkarni 55665 0.053Mr. M. S. Kirloskar 1500 0.001Mr. S. N. Inamdar 43755 0.041Mr. Rahul Kirloskar 14985 0.014Mr. U. V. Rao -- --Mr. P.S.Jawadekar -- --Mr. A. N. Alawani 10000 0.009Mrs. Lalita D. Gupte -- --Mr. Pratap B. Shirke -- --
Name ofDirector Fees on Profits $ to
StatutoryFunds
(Rs.) (Rs.) (Rs.) (Rs.) (Rs.) (Rs.) (Rs.)
Sitting Commission Salary Contribution Perquisites Others Total
Executive Directors Mr.Sanjay Kirloskar - 7500000 6487200 1749600 1948955 - 17685755Mr.Vikram Kirloskar - 7500000 6480000 1749600 3460548 - 19190148Mr.R. K. Srivastava - 5000000 2400000 648000 894863 - 8942863Mr. J.R. Sapre - 5000000 2400000 648000 700187 - 8748187
Non-Executive
Directors Mr. Gautam Kulkarni 130000 1160000 - - - - 1290000Mr. S. S. Marathe 80000 680000 - - - - 760000(Upto 28.09.2008) Mr. M. S. Kirloskar 80000 410000 - - - 289462* 779462Mr. M. G. Padhye 80000 340000 - - - - 420000(Upto16.12.2008) Mr. S. N. Inamdar 140000 1240000 - - - 250000 1630000Mr. Rahul Kirloskar 60000 360000 - - - - 420000Mr. U. V. Rao 130000 1285000 - - - - 1415000Mr. P.S.Jawadekar 110000 1075000 - - - - 1185000Mr. A. N. Alawani 70000 385000 - - - - 455000Mrs. Lalita D. Gupte 30000 180000 - - - - 210000Mr. Pratap B. Shirke 60000 450000 - - - - 510000
38
Company Name Audit Committee Grievance Committee Committee
Kirloskar Oil Engines Limited -- Member --
Shareholders' Remuneration
6. Particulars of Directors to be re-appointed and appointed at an ensuing Annual General Meeting :
Mr. Gautam Kulkarni
Mr. Gautam Achyut Kulkarni (51) started his career in 1978 as a Trainee in Kirloskar Oil Engines Limited (KOEL). He underwent extensive training in the Servicing, production and Tech Center (R & D) until 1983.
In 1983, he was assigned to look after Kirloskar Filters Limited (KFL) and was appointed as its Chief Executive. In April 1984, he was appointed as the Managing Director of KFL. During his tenure with KFL, the Sales Income grew from Rs. 125 mn. to Rs. 600 mn.
In the year 1992, he was appointed as Vice President of the Company (KBL), while he was attached to the Corporate Office of the Group. In 1998, he joined Kirloskar Oil Engines Limited as a Joint Managing Director and played a major role in KOEL's turn around process with the help of major re-structuring and reduction in debts and interest burden of KOEL. In July 2000, he was co-opted as a director of the Company and has been appointed as the Vice Chairman.
He is a member of the Audit and Finance Committee, Remuneration Committee and Compensation Committee of the Company.
Other Directorships
Kirloskar Oil Engines Limited
Kirloskar Engines India Limited
Kirloskar Systems Limited
Achyut & Neeta Holdings & Finance Private Limited
Navsai Investments Private Limited
SPP pumps Limited, EnglandKirloskar Brothers International B.V., Netherlands
Other Committee positions :
He is holding 55665 (0.053%) Equity Shares of Rs. 2/- each of the Company. He is not related to any other director on the Board of the Company.
Mr. A. N. Alawani
Mr. Anil Narayan Alawani (64) is a Chartered Accountant and has been associated with the Kirloskar Group of Companies since 1977. Prior to his appointment in Kirloskar Oil Engines Limited, he was associated with Inex Engine Valves Limited and Kirloskar Consultants Limited. He retired as Director-Finance of Kirloskar Oil Engines Limited in August, 2005.
He has experience in Import Export and Labour Matters besides his core area of Finance and Taxation. His expertise in Corporate Tax Planning and Finance has helped the Kirloskar Group companies in financial restructuring and taxation matters. He is a member of the Remuneration Committee, Investors' Grievance Committee and Committee for Scheme of Arrangement of the Company.
KIRLOSKAR BROTHERS LIMITEDth
39
Other DirectorshipsKirloskar Ferrous Industries LimitedKirloskar Integrated Technologies Limited (Formerly known as Kirloskar Kisan Equipment Limited)Kirloskar Oil Engines LimitedKirloskar Systems LimitedKothrud Power Equipment LimitedDenso Kirloskar Industries Private Limited
Other Committee positions :
Company Name Audit Committee Grievance Committee Committee
Denso Kirloskar Industries Private Ltd. Member -- Member
Kirloskar Systems Limited Member -- Member
Kirloskar Ferrous Industries Limited -- Member Member
Shareholders' Remuneration
He is holding 10000 (0.009%) Equity Shares of Rs. 2/- each of the Company. He is not related to any other director on the Board of the Company. Mr. S. N. Inamdar
Mr. Shrikrishna Narhar Inamdar (64) is a Commerce and a Law graduate and an Advocate by profession. He has had a brilliant academic career having stood first in first class in Pune and Bombay University for B.Com and LLB examinations respectively.
He has been in practice for more than three decades. He has specialization in Tax and allied laws.
He has also been associated with several charitable institutions.
He is a Chairman of Audit and Finance Committee, Committee for Scheme of Arrangement and a member of Remuneration Committee and compensation committee in the Company.
Other Directorships :
Finolex Industries Limited
Finolex Infrastructure Limited
Force Motors Limited
Kirloskar Ferrous Industries Limited
Kulkarni Power Tools Limited
Kirloskar Proprietary Limited
Sakal Papers Limited
Sudarshan Chemical Industries Limited
Ugar Sugar Works Limited
Man Force Trucks Private Limited
40
Other Committee positions :
Company Name Audit Committee Grievance Committee Committee
Finolex Industries Limited Chairman Member ChairmanForce Motors Limited -- -- ChairmanKirloskar Ferrous Industries Limited Chairman -- ChairmanSudarshan Chemical Industries Limited Member -- MemberUgar Sugar Works Limited Chairman -- Chairman
Shareholders' Remuneration
He is holding 43755 (0.04%) Equity Shares of Rs. 2/- each of the Company. He is not related to any other director on the Board of the Company.
7. Shareholders' / Investors' Grievance Committee :
Company has Share Transfer, Transmission and Investors' Grievance Committee. Mr. M. G. Padhye, a non-executive independent Director was Chairman of the committee. Other members were Mr. M. S. Kirloskar and Mr. Sanjay Kirloskar. After the resignation tendered by Mr. M. G. Padhye with effect from December 16, 2008, the committee was reconstituted on January 20, 2009. The present members of the committee are Mr. M. S. Kirloskar, Chairman, Mr. A. N. Alawani and Mr. Sanjay Kirloskar.
During the year under the report, two Investors' Grievance committee meetings were held on October 13, 2008 and March 28, 2009.
Attendance at Investors' Grievance committee meetings :
Member's Name No. of Meetings attended
Mr. M.G. Padhye(Upto 16.12.2008) 1
Mr. M.S. Kirloskar 2
Mr. Sanjay Kirloskar 1
Mr. A. N. Alawani(w.e.f. 20.01.2009) -
Company has always valued its relationship with its stakeholders. This policy has been extended to Investor relationship. Company's secretarial department is continuously monitoring the complaints / grievances of the investors and is always taking efforts to reduce the response time in resolving the complaints / grievances.
Name and designation of Compliance Officer: Mr. G. P. Kulkarni, Vice President & Head - Legal and Company Secretary
No. of Shareholders' complaints received :The total number of complaints received and replied to the satisfaction of the Shareholders during the year ended March 31, 2009 were 26 and there were no complaints / Share transfers outstanding / Pending as on March 31, 2009.
With reference to clause 47(f) of the Listing Agreement, Company has designated exclusive e-mail ID as grievance.redressal@kbl.co.in for investors to register their grievances, if any. This has been initiated by the Company to resolve such investors' grievances, immediately. The Company has displayed the said e-mail ID on its website for the use of investors.
The Company has introduced a system in the secretarial department, through which a feedback, from shareholders who are visiting the office, is taken on department's overall services to the investors. The analysis of the feedbacks obtained from shareholders, who have visited the department for one or the other services is placed before the Investors' Grievance Committee meetings. The overall analysis of feedbacks indicates that the commendable services are provided to the investors by the secretarial department of the Company, with regard to promptness and quality of services.
KIRLOSKAR BROTHERS LIMITEDth
41
8. General Body Meetings :
Details of last three Annual General Meetings held :
i) 86th Annual General Meeting July 21, 2006 : 11.00 AM Tilak Smarak Mandir, Tilak Road, Pune - 411 030.
Special resolutions passed:
— Reappointment of Mr. Vikram S. Kirloskar as Executive Director for a period of five years with effect from June 6, 2006
— For amendment to Articles of Association in accordance with the model regulations prescribed by the National Stock Exchange of India Limited (NSE), in order to list Company's equity shares on NSE.
— For approval of shareholders for payment of commission to non-executive directors for five financial years from April 1, 2005.
— For approval of shareholders for allowing re-imbursement of travelling and other expenses to Mr. M.S. Kirloskar, Non Executive Independent director, as per the provisions of Corporate Governance.
— For approval of shareholders for issuing shares under Employee Stock Option Scheme.
ii) 87th Annual General Meeting July 20, 2007 : 11.00 AM Tilak Smarak Mandir, Tilak Road, Pune - 411 030.
Special resolutions passed:
— For approval of shareholders for issuing shares under Employee Stock Option Scheme to employees and Directors of the company.
— For approval of shareholders for issuing shares under Employee Stock Option Scheme to employees and Directors of the subsidiaries.
iii) 88th Annual General Meeting July 18, 2008 : 11.00 AM Tilak Smarak Mandir, Tilak Road, Pune - 411 030.
Special resolutions passed:
— For approval of shareholders for holding and continue to hold an office or place of profit in the Company as General Manager - Corporate Marketing by Mr. Alok Kirloskar, son of Mr. Sanjay C. Kirloskar, Chairman and Managing Director of the Company.
— For approval of shareholders for increase in remuneration package for Mr. Alok Kirloskar, as General Manager - Corporate Marketing.
In the last year, no special resolution has been passed through Postal Ballot.
42
9. Disclosures :
i. Disclosures on materially significant related party transactions i.e. transactions of the Company of material nature, with its promoters, directors or the management, their subsidiaries or relatives etc. that may have potential conflict with the interests of the Company at large.
There are no materially significant transactions made by the Company with its promoters, directors or the management, their subsidiaries or relatives etc. which have potential conflict with the interest of the Company at large.
ii. Details of non compliance by the Company, penalties and strictures imposed on the Company by Stock Exchange or SEBI or any statutory authority on any matter related to capital markets, during the last three years.
None
iii. Whistle Blower Policy and Policy for prevention of sexual harassment at work.
The company has formulated and implemented the Whistle Blower Policy ("the Policy") during the last financial year. This would inter alia provide a mechanism for employees of the Company and other persons dealing with the Company to report to the Chairman of the Audit and Finance Committee; any instance of unethical behaviour, actual or suspected fraud or violation of the Company's code of conduct. Thus any employee has access to the Audit and Finance Committee.
The Policy has been communicated to all the Employees of the Company and other persons dealing with the Company, through circular/display on the Notice Board/ display on the Intranet. The policy has also been uploaded on the company website.
Policy for prevention of sexual harassment at work :
The company has also formulated and implemented the Policy for prevention of sexual harassment at work during the last financial year. This would inter alia provide a mechanism to prevent or deter the commission of acts of Sexual Harassment or inappropriate behaviour at work and to ensure that all employees are treated with respect and dignity. Under the said policy, the procedures for the resolution, settlement or prosecution of acts or instances of Sexual Harassment have also been provided for.
iv. All mandatory requirements of Clause 49 of the Listing Agreement have been complied with by the Company and the extent of adoption of non-mandatory requirements is given hereunder.
Non-Mandatory requirements :
The Board -
The Company has Executive Chairman and the office with required facilities is provided and maintained at the Company's expenses for use by the Chairman.
No policy has been fixed on tenure of Independent Directors.
Remuneration Committee -
Committee is already in place and complying with related non-mandatory requirements.
Shareholders' Rights -
The half-yearly financial results are published in the English and Vernacular newspapers and are also displayed on the Company's website and also have been separately circulated to the shareholders, since half year ended September, 2007.
Audit qualifications -
The Company is already in the regime of unqualified financial statements.
KIRLOSKAR BROTHERS LIMITEDth
43
Training of Board Members -
The present Board of Directors is already comprised of well experienced and responsible members of the society and they themselves have represented as faculties to many training institutes.
Mechanism for evaluating Non-executive Board Members -
No specific mechanism is in place in the Company.
Whistle Blower Policy -
The Company has a Whistle Blower Policy. It inter alia provides a mechanism for employees of the Company and other persons dealing with the Company to report to the Chairman of the Audit and Finance Committee; any instance of unethical behaviour, actual or suspected fraud or violation of the Company's code of conduct. It also provides for adequate safeguards against victimisation of such employees. Further, the existence of the mechanism has been appropriately communicated within the organisation.
10. Means of Communication :
— Half yearly reports to each household of shareholders -
The results of the Company are published in national and regional newspapers. The half yearly financial results have been separately circulated to each household of shareholders, since half year ended September, 2007.
— Quarterly results -
The quarterly results are generally published in the newspapers viz. Indian Express, Loksatta, Economic Times, Times of India, Maharashtra Times and The Hindu - Business Line. These are also displayed on the Company's website 'www.kbl.co.in' shortly after its submission to the Stock Exchanges. The Company's website also displays official news releases.
— Presentation to Institutional Investors or to analysts -
—
A presentation was made to analysts on August 2, 2008. The said presentation was forwarded to Bombay Stock Exchange and National Stock Exchange and uploaded on the Company's website.
Whether the Management Discussion and Analysis Report is a part of Annual Report or not?
The Management Discussion and Analysis Report is a part of the Annual Report.
11. General Shareholder information :
th89 Annual General Meeting
Day & Date : Friday, July 17, 2009
Time : 11.00 A.M.
Venue : "Yamuna" Survey No.98 (3-7) Baner, Pune - 411 045
Financial Year : 1st April to 31st March
Dates of book closure : Saturday, July 4, 2009 to Friday, July 17, 2009 (Both days inclusive)
Dividend payment date : On or after July 31, 2009, subject to shareholders' approval
Listing on Stock Exchanges : The Company's equity shares are listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited, Mumbai
Listing fees payment : The Annual Listing fees have been paid and there is no outstanding payment towards the stock exchanges, as on date
Stock codes / Symbol : Bombay Stock Exchange Limited - 500241National Stock Exchange of India Limited - KBL - EQ
44
Market Price data :
Performance in comparison to broad based indices - BSE sensex :
Performance in comparison to broad based indices - NSE S&P CNX Nifty :
M o n t h Quotations on B S E Quotations on N S E
High (Rs.) Low (Rs.) High (Rs.) Low (Rs.)
April 2008 329.85 222.00 329.00 223.05
May 2008 292.65 226.90 289.95 226.00
June 2008 233.00 171.10 245.00 184.00
July 2008 211.00 145.60 211.90 145.35
August 2008 177.00 140.00 179.80 138.00
September 2008 152.20 110.00 150.00 110.00
October 2008 127.00 69.00 126.00 69.00
November 2008 130.00 71.50 130.00 71.15
December 2008 91.65 72.50 93.00 72.65
January 2009 87.95 59.00 89.00 60.25
February 2009 82.65 67.25 82.90 64.00
March 2009 89.00 66.00 89.80 65.35
KIRLOSKAR BROTHERS LIMITEDth
45
Registrar and Transfer Agent :
The Company appointed Intime Spectrum Registry Limited, as its Registrar and Transfer Agent (R & T Agent) with effect from April 1, 2003. The name of the R & T Agent has been changed to "Link Intime India Private Limited" with effect from January 6, 2009, consequent to acquisition of stake in the Intime Spectrum by Link Market Services Group Pty Limited, Sydney, Australia. Share Transfers, dematerialisation of shares, dividend payment and all other investor related activities are attended and processed at the office of the Registrar and Transfer Agent at the following address:-
Link Intime India Private Limited, (Unit: Kirloskar Brothers Limited), Block No. 202, 2nd Floor, Akshay Complex, Near Ganesh Temple, Off Dhole Patil Road, Pune - 411 001 Tel. No. (020) 26053503 Fax No. (020) 26051629 E.mail : pune@linkintime.co.in
Share transfer system :
The authority to approve transfer of shares upto 10000 shares has been delegated to the Company Secretary and Deputy Company Secretary. The proposals for transfer of shares above 10000 shares are placed before the Investors' Grievance Committee/Board. The share transfers received are processed within 15 days from the date of receipt subject to the transfer instrument being valid and complete in all respects. In compliance with the Listing guidelines, every six months, a practising Company Secretary audits the system of transfer and a certificate to that effect is issued.
Out of total paid-up share capital, 91.43% share capital is held in dematerialised form with National Securities Depository Limited and Central Depository Services (India) Limited as on March 31, 2009.
The Company has established connectivity with both the Depositories through the Registrar, Link Intime India Private Limited.
Members are advised to notify to the Company or Registrar and Transfer Agent, any change of address, immediately.
For the benefit of members, certain information, procedures and forms, which are being asked for by the members frequently, viz. Letter about change of address, ECS form, Nomination Form, Indemnity/Affidavit etc. for issue of duplicate certificates, Transmission form, application for obtaining sub-divided shares of Rs. 2/- each alongwith general FAQs etc. are uploaded on the Company's website www.kbl.co.in under section "Information for Shareholders".
Distribution of Shareholding as on March 31, 2009 :
Nominal value of shares (In Rupees) holders holders (In Rupees) face value
From To
1 5000 16704 91.07 12553830 5.93
5001 10000 852 4.65 5992692 2.83
10001 20000 444 2.42 6106352 2.89
20001 30000 126 0.69 3022746 1.43
30001 40000 50 0.27 1730440 0.82
40001 50000 24 0.13 1053360 0.50
50001 100000 65 0.35 4366954 2.06
100001 Above 77 0.42 176702336 83.54
TOTAL 18342 100.00 211528710 100.00
Number of % to total Total face value % to total
46
Shareholding Pattern as on March 31, 2009 :
Plant locations :
Investor Contacts :
Sr. No. Category No. of shares % of shareholding
1 Promoters' Holding*
Indian Promoters 1428229 1.35
Bodies Corporate 64487357 60.97
2 Non Promoters' Holding
Mutual Funds 6574921 6.22
Financial Institutions / Banks 142222 0.13
Insurance Companies 5404836 5.11
Foreign Institutional Investors 2048623 1.94
Private Corporate Bodies 4718290 4.46
Indian Public 20709722 19.59
Non Resident Indians 250155 0.23
TOTAL 105764355 100.00
*Out of Promoter's holding, no share has been pledged by the Promoters or persons under Promoter Group.
Outstanding GDRs/ ADRs / warrants or any convertible instruments etc. :
As of date, the Company has not issued these types of Securities.
1. KirloskarvadiKirloskarvadi - 416 308.Dist. Sangli.Tel No. (02346) 222301 - 05
3. ShirvalGat No. 117, Shindevadi, Tal. Khandala,Dist. Satara - 412 801.Tel No. (02169) 244360 / 244370 /244322
2. Dewas Opposite Railway Station, Ujjain Road, Dewas - 455 001.Tel No. (07272) 227302 -04
4. KondhapuriGat No. 252/2 + 254/2,Kondhapuri,Tal : Shirur, Dist. Pune - 412 208.Tel No. (02137) 270217 / 270116 /270140
Company Address :Secretarial Department,Kirloskar Brothers Limited,"Yamuna", Survey No. 98 (3-7)Baner, Pune - 411 045Tel. No. (020) 27211030Fax No. (020) 27211136Email : secretarial@kbl.co.ingrievance.redressal@kbl.co.in
Addresses of stock exchanges :Bombay Stock Exchange LimitedPhiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001 Tel. No. (022) 2272 1233Fax No. (022) 2272 2061
Depositories for equity shares :National Securities Depository LimitedTrade World - A Wing, Kamala Mills CompoundLower Parel, Mumbai - 400 013Tel. No. (022) 2499 4200Fax No. (022) 2497 2993 / 6351
Registrar and Transfer Agent :Link Intime India Private Limited,(Unit: Kirloskar Brothers Limited),Block No. 202, 2nd Floor, Akshay Complex,Near Ganesh Temple, Off Dhole Patil Road,Pune - 411 001Tel. No. (020) 26053503Fax No. (020) 26051629E.mail : pune@linkintime.co.in
National Stock Exchange of India Limited,Exchange Plaza, Bandra-Kurla Complex,Bandra (East)Mumbai - 400 051Tel. No. (022) 2659 8236Fax No. (022) 2659 8237
Central Depository Services (India) Ltd.Phiroze Jeejeebhoy Towers,16th Floor, Dalal StreetMumbai - 400 001Tel. No. (022) 2272 3333Fax No. (022) 2272 3199 / 2072
KIRLOSKAR BROTHERS LIMITEDth
47
DECLARATION FOR COMPLIANCE WITH CODE OF CONDUCT
To the members of KIRLOSKAR BROTHERS LIMITED Pursuant to Clause 49 I (D) (ii) of the Listing Agreement, I hereby declare that all Board members and senior management personnel are aware of the provisions of the Code of Conduct laid down by the Board and made effective from April 1, 2005. All Board members and senior management personnel have affirmed compliance with the code of Conduct.
For Kirloskar Brothers Limited
Sanjay KirloskarChairman and Managing DirectorPune : June 2, 2009
CERTIFICATE
To the members of KIRLOSKAR BROTHERS LIMITEDWe have examined the compliance of conditions of Corporate Governance by KIRLOSKAR BROTHERS LIMITED for the year ended on March 31, 2009, as stipulated in clause 49 of the Listing Agreement of the said company with stock exchanges.
The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof, adopted by the company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the company.
In our opinion and to the best of our information and according to the explanations given to us, we certify that the company has complied with the conditions of Corporate Governance as stipulated in the above-mentioned Listing Agreement.
We further state that such compliance is neither an assurance as to the future viability of the company nor the efficiency or effectiveness with which the management has conducted the affairs of the company.
For M/s P. G. BHAGWATChartered Accountants
Pankaja BhagwatPartner
Membership No. Pune : June 2, 2009 86155
The constituents of 'Group' as prescribed in Regulation 3(1)(e)(i) of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 comprises Better Value Holdings Private Limited, Kirloskar Oil Engines Limited, Kirloskar Engines India Limited, Kirloskar Pneumatic Company Limited, Kirloskar Ferrous Industries Limited, Pooja Credits Private Limited, Kirloskar Silk Industries Limited, Kirloskar Constructions and Engineers Limited, Gondwana Engineers Limited, The Kolhapur Steel Limited, Kirloskar Corrocoat Private Limited, Kirloskar Systems Limited, Asara Sales & Investments Private Limited, Cees Investments and Consultants Private Limited, Navsai Investments Private Limited, Prakar Investments Private Limited, Alpak Investments Private Limited, Achyut & Neeta Holdings & Finance Private Limited, SriHarihareshwara Finance & Investments Private Limited, VikramGeet Investments and Holdings Private Limited, Kirloskar Integrated Technologies Limited (Formerly known as Kirloskar Kisan Equipments Limited), Kothrud Power Equipment Limited, Koppal Mines & Minerals Private Limited, Kirloskar Proprietary Limited, G. G. Dandekar Machine Works Limited, Mahila Udyog Limited, Kirloskar Chillers Private Limited, Hematic Motors Private Limited, Pressmatic Electro Stampings Private Limited, Quadromatic Engineering Private Limited, Suman Kirloskar, Mrinalini Kirloskar, Neeta A. Kulkarni, Atul C. Kirloskar, Arti Kirloskar, Gauri Kirloskar, Aditi Kirloskar, Sanjay C. Kirloskar, Pratima Kirloskar, Alok Kirloskar, Rama Kirloskar, Rahul C. Kirloskar, Alpana Kirloskar, Alika Kirloskar, Aman Kirloskar, Gautam A. Kulkarni, Jyotsna Kulkarni, Nihal Kulkarni, Shruti Kulkarni, Ambar Kulkarni, Komal Kulkarni, Vikram S. Kirloskar, Geetanjali Kirloskar, Manasi Kirloskar, Roopa Gupta and Chandrashekhar H. Naniwadekar.
48
AUDITORS' REPORT TO THE MEMBERS OF KIRLOSKAR BROTHERS LIMITED
1. We have audited the attached balance sheet of Kirloskar Brothers Limited as at 31st March, 2009, the profit and loss account and also the cash flow statement of the company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 [as amended by Companies (Auditor's Report) (Amendment) Order, 2004] issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in paragraph 4 and 5 of the said order.
4. Further to our comments in the annexure referred to in paragraph 3 above, we report that:
(i) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;
(ii) in our opinion proper books of account as required by law have been kept by the company so far as appears from our examination of those books;
(iii) the balance sheet, the profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account;
(iv) in our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;
(v) on the basis of the written representations received from the directors as on 31st March, 2009, and taken on record by the board of directors, we report that none of the directors is disqualified as on 31st March, 2009 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;
(vi) in our opinion and to the best of our information and according to the explanations given to us, the accounts, read together with the notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:
(a) in the case of the balance sheet, of the state of affairs of the company as at 31st March, 2009 ;
(b) in the case of the profit and loss account of the profit for the year ended on that date;
(c) in the case of the cash flow statement, of the cash flows for the year ended on that date.
For M/s P. G. BHAGWAT Chartered Accountants
Pankaja BhagwatPartner
Membership No.: Pune : April 30, 2009
86155
KIRLOSKAR BROTHERS LIMITEDth
49
ANNEXURE Re: Kirloskar Brothers LimitedReferred to in paragraph 3 of our report of even date
(i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
(b) The fixed assets have been physically verified by the management at reasonable intervals. According to information and explanation given to us, no material discrepancies were noticed on such verification.
(c) The fixed assets, which were disposed off during the year, do not form substantial part of the fixed assets owned by the company.
(ii) (a) The inventory was physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.
(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.
(c) The company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.
(iii) (a) The company has not granted any loans secured or unsecured to companies, firms or other parties covered in the register maintained as per section 301 of the Companies Act, 1956.
Accordingly, the provisions of clause 4 (iii) (b) (c) and (d) are not applicable to the company.
(b) The company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained as per section 301 of the Companies Act, 1956.
Accordingly, the provisions of clause 4 (iii) (f) and (g) are not applicable to the company.
(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchase of inventory and fixed assets and for the sale of goods and services. During the course of audit we have not observed any continuing failure to correct major weaknesses in internal control system.
(v) (a) According to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register to be maintained under that section.
(b) According to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.
(vi) In our opinion and according to the information and explanations given to us, the company has complied with the directives issued by the Reserve Bank of India and the provisions of section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. As informed to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.
(vii) In our opinion, the company has an internal audit system commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account relating to materials, labour and other items of cost maintained by the company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not however made a detailed examination of records with a view to determine whether they are accurate and complete.
(ix) (a) The company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues applicable to it.
According to information and explanation given to us, no undisputed amounts payable in respect of statutory dues were in arrears, as at 31st March, 2009 for a period of more than six months from the date they became payable.
(b) According to information and explanation given to us, there are no dues of income tax, sales tax, wealth tax, service tax, custom
duty, excise duty and cess which have not been deposited on account of any dispute other than those mentioned in the Appendix to this report.
(x) The company has no accumulated losses as at 31st March, 2009. The company has not incurred cash losses during the financial year and in the immediately preceding financial year.
(xi) In our opinion and according to information and explanations given to us, the company has not defaulted in repayment of dues to a
financial institution or bank. The company has no debenture holders.
(xii) According to information and explanation given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, the provisions of clause 4 (xii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.
(xiii) In our opinion, the company is not a chit fund or a nidhi/mutual benefit fund/society. Accordingly, the provisions of clause 4 (xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.
50
KIRLOSKAR BROTHERS LIMITED
(xiv) According to information and explanation given to us, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.
(xv) In our opinion, the terms and conditions on which the company has given guarantees for loans taken by others from banks or financial institutions are not prejudicial to the interest of the company.
(xvi) In our opinion, the term loans have been applied for the purpose for which they were raised.
(xvii) According to information and explanation given to us, we report that no funds raised on short-term basis have been used for long-term investment.
(xviii) According to information and explanation given to us, the company has not made any preferential allotment of any shares to parties
and companies covered under section 301 of the Companies Act, 1956.
(xix) According to information and explanation given to us, the company has not issued any debentures. Accordingly, the provisions of clause 4 (xix) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.
(xx) According to information and explanation given to us, the company has not made any public issue to raise money. Accordingly, the provisions of clause 4 (xx) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.
(xxi) According to information and explanation given to us, no fraud on or by the company has been noticed or reported during the course of our audit.
Pankaja Bhagwat
86155
For M/S P. G. BHAGWAT Chartered Accountants
Partner
Membership No.: Pune : April 30, 2009.
th
Appendix (Referred to in clause (ix) (b) of the Annexure to the Auditor's Report)
Sr. Name of the Statue Nature of Dues Rs. in Forum where dispute is
Million
1 Central Sales Tax Act Sales Tax 0.24
25.29 Additional Deputy Commissioner
0.69 Assistant Commissioner, MP
0.41 State High Court
2 Sales Tax acts of various states Sales Tax 0.01 Commercial Tax Officer, Corporate Charge
0.05 Sales Tax Appellate
4.91 Assistant Commissioner
0.62 Deputy Commissioner
0.17 Sales Tax Officer , Kochi
0.81 Additional Deputy Commissioner
1.85 Bangalore Tribunal
1.55 A.P Tribunal
52.45 State High Court
3 Central Excise Act Excise Duty 13.22 Joint/Assistant Commissioner( Central Commissioner)
1.13 Delhi Tribunal
4 The Income Tax Act 1961 Income Tax 395.32 Commissioner of Income Tax Appeals
pending
Additional Commissioner, Bhopal
51
BALANCE SHEET AS AT MARCH 31, 2009
Schedule 2009 2008 Rupees Rupees
SOURCES OF FUNDS :
Shareholders' FundsCapital 1 211,528,710 211,528,710
Reserves and Surplus 2 6,787,799,285 6,364,990,702
Employee Stock Options outstandings 121,855,582 133,004,975 Less : Deferred employee compensation expense 29,787,458 88,970,333
92,068,124 44,034,642 7,091,396,119 6,620,554,054
Loan FundsSecured Loans 3 1,808,661,549 1,566,515,302 Unsecured Loans 4 1,395,682,632 345,522,632
3,204,344,181 1,912,037,934 Deferred Tax-net 5 65,086,267 78,169,689
Total 10,360,826,567 8,610,761,677 APPLICATION OF FUNDS :
Fixed Assets 6Gross Block 3,349,492,805 2,743,820,288 Less: Depreciation 1,298,156,225 1,124,758,974 Net Block 2,051,336,580 1,619,061,314 Capital work-in-progress including capital advances 704,733,584 322,356,492
2,756,070,164 1,941,417,806
Intangible Assets 7 Gross Block 87,657,961 83,947,687 Less: Amortization 77,713,190 70,103,508 Net Block 9,944,771 13,844,179
Investments 8 3,383,750,571 3,472,947,307 Current Assets, Loans & AdvancesInventories 9 1,556,655,133 1,329,886,084 Gross amount due from customers for project related contract work 10 2,244,317,546 1,914,974,553 Sundry debtors 11 6,126,484,258 4,524,684,338 Cash and bank balances 12 99,949,039 758,728,757 Other current assets 13 437,059,763 309,233,630 Loans and advances 14 3,238,063,251 2,282,949,364
13,702,528,990 11,120,456,726 Less: Current Liabilities & ProvisionsCurrent Liabilities 15 8,292,534,699 6,891,251,926 Gross amount due to customers for project related contract work 16 681,146,885 324,612,815 Provisions 17 517,786,345 722,039,600
9,491,467,929 7,937,904,341 Net Current Assets 4,211,061,061 3,182,552,385
Total 10,360,826,567 8,610,761,677 Notes to Accounts 25
The schedules referred to above and the notes to accounts form an integral part of the Balance Sheet
As per our report of even date attached For and on behalf of the Board of Directors
For M/s P.G. BhagwatChartered Accountants SANJAY KIRLOSKAR S. N. INAMDAR
Chairman & Managing Director Director
G. P. KULKARNI A. R. SATHE Partner Company Secretary Vice President (Finance)
PUNE : April 30, 2009 PUNE : April 30, 2009
PANKAJA BHAGWAT
52
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2009
Schedule 2009 2008
Rupees Rupees
INCOME
Sales 18 18,309,447,980 15,251,461,446
Other income 19 359,135,347 429,536,631
Total 18,668,583,327 15,680,998,077
EXPENDITURE
Materials consumed 20 13,926,768,676 11,125,807,554
Payments and benefits to employees 21 943,816,573 850,505,163
Operating and other expenses 22 2,310,171,677 1,856,670,285
Interest 23 303,200,468 168,854,653
Depreciation and amortization 207,350,133 182,088,160
17,691,307,527 14,183,925,815
Less: Expenses capitalized 4,927,376 3,333,861
Total 17,686,380,151 14,180,591,954
Profit/(Loss) before tax 982,203,176 1,500,406,123
Provision for tax 24 311,916,578 399,039,651
Profit/(Loss) after tax 670,286,598 1,101,366,472
Balance brought forward from previous year 506,879,134 600,468,691
Profit available for appropriation 1,177,165,732 1,701,835,163
Appropriations
Proposed dividend 211,528,710 423,057,420
Additional tax on dividend 35,949,305 71,898,609
Transfer to General Reserve 400,000,000 700,000,000
Surplus carried to Balance Sheet 529,687,717 506,879,134
1,177,165,732 1,701,835,163
Basic Earning per Equity Share (Refer Note No.12) 6.34 10.41
Diluted Earning per Equity Share (Refer Note No.12) 6.34 10.39
Notes to Accounts 25
The schedules referred to above and the notes to accounts form an integral part of the Profit and Loss Account
As per our report of even date attached For and on behalf of the Board of Directors
For M/s P.G. BhagwatChartered Accountants SANJAY KIRLOSKAR S. N. INAMDAR
Chairman & Managing Director Director
G. P. KULKARNI A. R. SATHE Partner Company Secretary Vice President (Finance)
PUNE : April 30, 2009 PUNE : April 30, 2009
PANKAJA BHAGWAT
KIRLOSKAR BROTHERS LIMITEDth
53
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2009
2009 2008
Rupees Rupees
A. Cash flow from operating activities
Net profit before taxation and extraordinary items 982,203,176 1,500,406,123
Adjustments for
Depreciation and amortization 207,350,133 182,088,160
(Profit) / loss on sale of fixed assets (983,694) (3,954,533)
Employees Stock Option - Compensation
debited to Profit and Loss Account ( Net ) 48,033,482 44,034,642
Provision for doubtful debts and advances 70,609,776 18,549,702
Interest income (101,943,584) (113,036,296)
Dividend income (145,191,738) (168,772,378)
Interest expenses 303,200,468 168,854,653
Operating profits before working capital changes 1,363,278,019 1,628,170,073
(Increase) /decrease in trade and other receivables (2,487,101,162) (2,085,180,571)
(Increase) /decrease in inventories (226,769,049) (459,073,762)
Increase/(decrease) in sundry creditors 1,788,333,088 1,805,804,977
Cash generated from operations 437,740,896 889,720,717
Income tax (paid) /refunded (292,878,843) (410,223,674)
Net cash from operating activities 144,862,053 479,497,043
B. Cash flow from investing activities
Purchase of fixed assets (1,022,765,402) (498,521,559)
Proceeds from sale of fixed assets 5,646,013 7,689,416
(Purchase) /Sale of investments 89,196,736 (95,966,717)
Interest received 104,210,047 111,859,096
Dividend received 141,577,338 168,370,778
Advance to subsidiaries (628,364,767) (16,678,639)
Net cash from investing activities (1,310,500,035) (323,247,625)
C. Cash flow from financing activities
(Repayment) / proceeds of / from long term borrowings (net) 676,705,456 70,336,072
(Repayment) / proceeds of / from other borrowings (net) 615,600,791 433,048,779
Interest paid (298,642,337) (151,718,631)
Dividend paid (414,907,037) (208,045,196)
Tax on dividend paid (71,898,609) (35,949,304)
Net cash used in financing activities 506,858,264 107,671,720
Net increase in cash and cash equivalents (658,779,718) 263,921,138
Cash and cash equivalents at the beginning of the year 758,728,757 494,807,619
Cash and cash equivalents at the end of the year 99,949,039 758,728,757
As per our report of even date attached For and on behalf of the Board of Directors
For M/s P.G. BhagwatChartered Accountants SANJAY KIRLOSKAR S. N. INAMDAR
Chairman & Managing Director Director
G. P. KULKARNI A. R. SATHE Partner Company Secretary Vice President (Finance)
PUNE : April 30, 2009 PUNE : April 30, 2009
PANKAJA BHAGWAT
54
SCHEDULE TO THE ACCOUNTS
2009 2008Rupees Rupees
SCHEDULE 1 : SHARE CAPITAL
Authorized
250,000,000 ( 250,000,000 ) equity shares of Rs.2/- (Rs.2/-) each 500,000,000 500,000,000
500,000,000 500,000,000
Issued
105,907,030 ( 105,907,030 ) equity shares of Rs.2/- (Rs.2/-) each 211,814,060 211,814,060
Subscribed and paid up
105,764,355 ( 105,764,355) equity shares of Rs.2/- (Rs.2/-) each 211,528,710 211,528,710
Out of the above
( i ) 165,000 (165,000) equity shares of Rs.2/- (Rs.2/-) each
were allotted as fully paid up pursuant to contract for
consideration other than cash.
( ii ) 88,499,975 (88,499,975) shares of Rs.2/- (Rs.2/-) each
were allotted as fully paid up bonus shares by
capitalisation of General Reserve and Share Premium
( iii ) 53,207,342 (52,694,805) shares of Rs.2/- (Rs.2/-) each
are held by Better Value Holdings Pvt. Limited,
the holding company. 211,528,710 211,528,710
SCHEDULE 2 : RESERVES AND SURPLUS
Capital Reserve 172,443 172,443
Capital Redemption Reserve 4,000,000 4,000,000
Share Premium Account 395,881,752 395,881,752
General Reserve
Balance as per last account 5,458,057,373 4,808,203,160
Less : Liabilities on account of Employee Benefits - 50,145,787
(Net of Deferred Tax) [Refer note No B -16 ]
Add: Transfer from Profit and Loss Account 400,000,000 700,000,000
5,858,057,373 5,458,057,373
Profit and Loss Account 529,687,717 506,879,134
6,787,799,285 6,364,990,702
KIRLOSKAR BROTHERS LIMITEDth
55
SCHEDULE TO THE ACCOUNTS (CONTD.)2009 2008
Rupees Rupees
SCHEDULE 3 : SECURED LOANS
Loans and advances from banks
Cash / Export Credit facilities 1,663,207,001 1,047,606,210
[Secured by hypothecation of tangible movable assets
and book debts of the Company]
Other loans and advances
From Exim Bank 145,454,548 518,909,092
[Secured by way of hypothecation of movable
fixed assets and mortgage of immovable
properties of the Company (both present and future)]
1,808,661,549 1,566,515,302
SCHEDULE 4 : UNSECURED LOANS
Interest free loan under Sales Tax Deferral Scheme 55,462,632 55,462,632
Inter Corporate Deposits 40,000,000 50,000,000
Short term Loans and advances
a) Packing Credit in Foreign Currency from CitiBank N.A. 230,220,000 240,060,000
b) from Bank of India 670,000,000 -
c) from Calyon Bank 400,000,000 -
1,395,682,632 345,522,632
SCHEDULE 5 : DEFERRED TAX-NET
Deferred Tax Liabilities
On depreciation/amortization of fixed assets 165,499,236 152,759,957
165,499,236 152,759,957
Deferred tax assets
On employees voluntary retirement schemes 441,770 5,697,416
On provision for doubtful debts/advances 47,465,723 23,465,461
Provision for employee benefits 50,669,592 43,365,117
Other timing differences 1,835,884 2,062,274
100,412,969 74,590,268
65,086,267 78,169,689
56
SCHEDULE 6 : FIXED ASSETS Rupees
Land Free/ Buildings Railway Plant & Furniture & Vehicles Total Previous
Lease Hold Siding Machinery Fittings Year
Gross Block
At 01.04.2008
Additions
Deductions
At 31.03.2009
Depreciation/
Amortization
At 01.04.2008
For the year
Recouped
At 31.03.2009
Net Block
At 31.03.2009
Assets under Erections
including capital advances
At 31.03.2009
At 31.03.2008
Note: Building includes cost of hangars jointly owned with other companies
2009 2008
Rupees Rupees
SCHEDULE 7: INTANGIBLE ASSETS - COMPUTER SOFTWARE
Gross Block
At 01.04.2008 83,947,687 73,732,447
Additions 3,710,274 10,215,240
Deductions - -
At 31.03.2009 87,657,961 83,947,687
Amortization
At 01.04.2008 70,103,508 61,333,485
For the year 7,609,682 8,770,023
Recouped - -
At 31.03.2009 77,713,190 70,103,508
Net Block At 31.03.2009 9,944,771 13,844,179
209,902,536 342,221,361 1,483,851 2,072,371,805 68,638,429 49,202,306 2,743,820,288 2,393,775,293
- 279,769,216 52,474 334,106,789 12,629,934 10,119,623 636,678,036 372,856,799
- 991,247 - 21,927,159 2,018,259 6,068,854 31,005,519 22,811,804
209,902,536 620,999,330 1,536,325 2,384,551,435 79,250,104 53,253,075 3,349,492,805 2,743,820,288
- 76,260,583 1,393,887 991,626,369 32,354,525 23,123,610 1,124,758,974 970,517,758
- 9,960,920 30,943 180,456,692 4,951,203 4,340,693 199,740,451 173,318,137
- 692,662 - 20,782,768 1,267,452 3,600,318 26,343,200 19,076,921
- 85,528,841 1,424,830 1,151,300,293 36,038,276 23,863,985 1,298,156,225 1,124,758,974
209,902,536 535,470,489 111,495 1,233,251,142 43,211,828 29,389,090 2,051,336,580 1,619,061,314
704,733,584 322,356,492
209,902,536 535,470,489 111,495 1,233,251,142 43,211,828 29,389,090 2,756,070,164 1,941,417,806
209,902,536 265,960,778 89,964 1,080,745,436 36,283,904 26,078,696 1,619,061,314
SCHEDULE TO THE ACCOUNTS (CONTD.)
KIRLOSKAR BROTHERS LIMITEDth
57
SCHEDULE TO THE ACCOUNTS (CONTD.)2009 2008
Rupees RupeesSCHEDULE 8 : INVESTMENTS
Long Term Investments (At cost)
A. Trade Quoted73,903,270 (73,903,270) equity shares of Rs.2/- each in Kirloskar Oil Engines Limited 404,980,851 404,980,851
4,547,254 (4,547,254) equity shares of Rs. 10/- each in Kirloskar Pneumatic Company Ltd. 125,655,633 125,655,633
530,636,484 530,636,484 Unquoted 2 (2) equity share of Rs.100/- each in Kirloskar
Proprietary Ltd., a company under same management 200 200
1,272 (1,272) ordinary shares of K. Sh. 1,000/- each in Kirloskar Kenya Ltd. 850,662 850,662
225,000 (225,000) equity shares of Rs. 10/- each in Kirloskar Ebara Pumps Ltd. 2,747,272 2,747,272
112,500 (112,500) equity shares of Singapore $ 1/- each in Kirsons Trading Pte Ltd. 2,525,731 2,525,731
24,000 (24,000) equity shares of Rs. 10/- each in Quadromatic Engineering Pvt. Ltd., a company under same management. 240,000 240,000
10,472 (10,472) equity shares of Rs. 100/- each in Hematic Motors Pvt. Ltd., a company
under same management. 10,446,862 10,446,862
8,325 (8,325) equity shares of Rs. 100/- each in Pressmatic Electro Stampings Pvt. Ltd., a
company under same management. 4,281,802 4,281,802
2,500,000 (2,500,000 ) equity shares of Rs. 10/- each in Kirloskar Corrocoat Private Limited 25,000,000 25,000,000
46,092,529 46,092,529 B. Other than trade Quoted 400 (400) equity shares of Rs. 10/- each
in Housing Development Finance Corporation Ltd. 9,500 9,500
1,081 (1,081 ) equity shares of Rs. 10/- each in I C I C I Bank Ltd. 100,000 100,000
60,000 (60,000) equity shares of Rs. 5/- each in Kulkarni Power Tools Ltd. 301,500 301,500
411,000 411,000
58
SCHEDULE TO THE ACCOUNTS (CONTD.)2009 2008
Rupees Rupees Unquoted 1 (1) equity share of Rs. 50/- each in
Maharashtra State Co-operative Bank Ltd. 53 53 100 (100) equity shares of Rs. 5,000/- each in Kranti Sahakari Sakhar Karkhana Ltd. 500,000 500,000 2,597,760 (2,597,760) equity shares of Rs.10/- each in Kirloskar Toyoda Textile Machinery Ltd. 26,107,490 26,107,490
26,607,543 26,607,543 C. In Subsidiary Companies Unquoted Fully Paid Up 3,445,477(3,445,477) equity shares of Rs.10/- each
in Pooja Credits Private Ltd. 34,454,770 34,454,770 1,950,000 (1,950,000) equity shares of GBP 1/- each in SPP Pumps Ltd. 149,226,964 149,226,964 2,000,130 (2,000,130) equity shares of Rs. 10/- each in Kirloskar Silk Industries Ltd. 20,001,300 20,001,300 6,150,002 (6,150,002 ) equity shares of Rs. 10/- each in Kirloskar Constructions and Engineers Ltd. 613,300,000 613,300,000 40,160 (40,160) equity shares of Rs. 100/- each in Gondwana Engineers Ltd. 76,360,000 76,360,000 16,311,083 ( - ) equity shares of Rs. 1/- each in The Kolhapur Steel Ltd. 93,843,591 -
Partly Paid up 2,000 (2,000 ) ordinary equity shares of Euro 100/- each
in Kirloskar Brothers International B V (Amount paid per share Euro 70 each) 8,606,717 8,606,717
1,000,000 ( - ) common shares of Baht 10/- each in Kirloskar Brothers (Thailand) Limited
(Amount paid per share Baht 2.5 each) 3,209,673 - 999,003,015 901,949,751
D. Government Securities Unquoted
- (5,500) capital gains bonds 2002 of Rs.10,000/- each of National Housing Bank. - 55,000,000 - (4,375) capital gains bonds of Rs.10,000/- each of National Bank for Agriculture & Rural Development - 43,750,000 - (4,375) Non Convertible Redeemable Taxable Bonds - Series -Vof Rs. 10,000/- each of Rural Electrification Corporation Ltd. - 43,750,000
- (4,375) SIDBI Capital gains Bonds of Rs.10,000/- each of Small Industries Development Bank of India. - 43,750,000
88,000 (88,000 ) Non Convertible Redeemable Taxable Bonds - Series -VI of Rs.10,000/-
each of Rural Electrification Corporation Ltd. 880,000,000 880,000,000 89,000 (89,000 ) Non Convertible Redeemable Taxable Bonds - of Rs.10,000/-
each of National Highways Authority of India. 890,000,000 890,000,000 1,770,000,000 1,956,250,000
E. Other Investment 350,685 (350,685) Units of Rs. 20/- each
of HDFC Group Unit Linked Option Plan B 11,000,000 11,000,0003,383,750,571 3,472,947,307
Aggregate amount of quoted investments 531,047,484 531,047,484 Market value 4,924,683,428 9,857,722,409Aggregate amount of unquoted investments 2,852,703,087 2,941,899,823
KIRLOSKAR BROTHERS LIMITEDth
59
SCHEDULE TO THE ACCOUNTS (CONTD.)2009 2008
Rupees Rupees
SCHEDULE 9 : INVENTORIES
Raw materials and components 587,376,486 600,846,166
Stores and spares 38,453,275 49,912,003
Work-in-progress 689,028,964 456,663,554
Finished goods 241,796,408 222,464,361
1,556,655,133 1,329,886,084
SCHEDULE 10 : GROSS AMOUNT DUE FROM CUSTOMERS
FOR PROJECT RELATED CONTRACT WORK
Cost incurred plus recognized profits less recognized losses 26,107,504,191 20,963,928,282
Less: Progress billing 23,863,186,645 19,048,953,729
2,244,317,546 1,914,974,553
SCHEDULE 11 : SUNDRY DEBTORS
Debts outstanding for a period exceeding six months
Unsecured, considered good 1,722,506,860 1,283,411,132
Considered doubtful 129,977,452 60,012,654
Other debts
Unsecured, considered good 4,403,977,398 3,241,273,206
6,256,461,710 4,584,696,992
Less: Provision for doubtful debts 129,977,452 60,012,654
6,126,484,258 4,524,684,338
SCHEDULE 12 : CASH AND BANK BALANCES
Cash on hand 934,370 801,431
Balances with schedule banks
On current accounts 92,661,428 593,396,044
On deposit accounts 6,225,000 163,701,056
Balances with other banks
On current accounts 128,241 830,226
99,949,039 758,728,757
Name of other bank Current Maximum account balance
Bank Atlantic - USA 128,241 3,114,363
Previous year (830,226) (2,455,244)
SCHEDULE 13 : OTHER CURRENT ASSETS
Interest accrued on investments 38,985,773 41,252,236
Dividend due from a subsidiary company 4,016,000 401,600
Claims receivable 394,057,990 267,579,794
437,059,763 309,233,630
60
SCHEDULE TO THE ACCOUNTS (CONTD.)2009 2008
Rupees RupeesSCHEDULE 14 : LOANS AND ADVANCES
Unsecured considered good
Advances and loans to subsidiaries 690,047,217 61,682,450
Advances recoverable in cash or kind or for
value to be received 1,934,276,003 1,704,486,244
Considered doubtful 9,668,689 9,023,712
Balances with customs, excise, etc. 850,416 609,999
Deposit with railways, post and others 585,457,423 456,617,322
Advance income tax (net of provision for tax) 27,432,192 59,553,349
3,247,731,940 2,291,973,076
Less: Provision 9,668,689 9,023,712
3,238,063,251 2,282,949,364
SCHEDULE 15 : CURRENT LIABILITIES
Acceptances 81,637,916 92,874,073
Sundry Creditors
(i) Total outstanding dues to Micro Small and Medium
Enterprises (Refer Note no B - 15 ) - -
(ii) Total outstanding dues of other creditors other than
Micro Small and Medium Enterprises 5,837,628,090 4,829,582,362
5,837,628,090 4,829,582,362
Dues to subsidiary companies 218,812,780 25,338,215
Advances and deposits from customers 2,032,953,297 1,842,800,073
Items covered by Investor Education and Protection Fund
(a) Unpaid dividend 44,687,068 36,536,685
(b) Unpaid matured deposits 913,000 1,149,500
Other liabilities 48,378,584 40,005,185
Interest accrued but not due on loans and advances 27,523,964 22,965,833
8,292,534,699 6,891,251,926
SCHEDULE 16 : GROSS AMOUNT DUE TO CUSTOMERS FOR PROJECT RELATED CONTRACT WORK
Progress billing 6,364,273,849 2,481,335,853
Less: Cost incurred plus recognized profits less recognized losses 5,683,126,964 2,156,723,038
681,146,885 324,612,815
SCHEDULE 17: PROVISIONS
Proposed dividend 211,528,710 423,057,420
Additional tax on dividend 35,949,305 71,898,609
Provision for product warranties 31,856,656 28,257,897
Provision for leave encashment 219,193,903 181,826,030
Provision for pension benefits (Ex-employees) 19,257,771 16,999,644
517,786,345 722,039,600
KIRLOSKAR BROTHERS LIMITEDth
61
SCHEDULE TO THE ACCOUNTS (CONTD.)2009 2008
Rupees RupeesSCHEDULE 18 : SALES AND CONTRACT REVENUE
Sales (Gross) 10,158,965,921 8,579,399,196 Less: Excise duty recovered 577,912,640 588,593,358
9,581,053,281 7,990,805,838Project related revenue 8,728,394,699 7,260,655,608
18,309,447,980 15,251,461,446
SCHEDULE 19 : OTHER INCOME
Income from investments Interest from long term investments
[Tax deducted at source Rs. nil (Rs. nil)] 100,845,915 107,600,729 Dividend income (a) Trade investment 125,903,748 168,294,375 (b) Subsidiaries 19,176,099 401,600
(c) Other investments - long term 111,891 76,403 Other interest received [Tax deducted at source Rs. 284,786/- (Rs.1,127,711/- )] 1,097,669 5,435,567 Profit on sale of fixed assets 3,802,079 6,290,860 Royalty received 1,334,443 2,660,769 House rent 752,868 611,337 Recovery of bad debts 51,449,253 84,798,511 Miscellaneous income 54,661,382 53,366,480
359,135,347 429,536,631
SCHEDULE 20 : MATERIALS CONSUMED
Raw materials consumed 8,817,342,405 7,774,444,593 Stores and spares consumed 372,510,773 341,335,969 Processing charges 295,920,126 174,618,898 Purchase of traded goods 4,692,692,829 3,004,436,415
14,178,466,133 11,294,835,875 (Increase) / Decrease in stocksOpening stock Work-in-progress 456,663,554 291,587,129 Finished goods 222,464,361 218,512,465
679,127,915 510,099,594Closing stock Work-in-progress 689,028,964 456,663,554 Finished goods 241,796,408 222,464,361
930,825,372 679,127,915 (251,697,457) (169,028,321)
13,926,768,676 11,125,807,554 SCHEDULE 21 : PAYMENTS AND BENEFITS TO EMPLOYEES
Salaries, wages and bonus 848,551,428 768,990,409 Payment under Voluntary Retirement Schemes - 490,000 Contribution to provident fund and E.S.I. 43,120,522 40,292,598 Gratuity (11,464,808) (14,116,434)Welfare expenses 59,273,910 58,543,136 Pension benefits 4,335,521 (3,694,546)
943,816,573 850,505,163
62
SCHEDULE TO THE ACCOUNTS (CONTD.)
2009 2008
Rupees Rupees
SCHEDULE 22 : OPERATING AND OTHER EXPENSES
Power & fuel 134,006,775 140,032,430
Repairs and maintenance
Plant and machinery 72,670,281 101,134,203
Buildings 35,704,584 39,434,380
Rent 47,467,732 40,175,699
Rates and taxes 8,364,155 7,099,097
Travel and conveyance 236,536,638 213,214,324
Postage and telephone 43,997,577 43,059,628
Insurance 113,391,932 103,774,510
Director's sitting fees 970,000 810,000
Director's remuneration 62,015,136 56,657,533
Royalties and fees 47,987,895 33,488,397
Cash discount 31,074,891 18,168,105
Freight and forwarding charges 205,174,284 156,732,948
Brokerage and commission 264,427,519 206,602,931
Advertisements and publicity 70,427,837 102,952,965
Provision for product warranty 44,854,966 31,991,272
Excise duty paid 15,995,473 34,774,235
Bank charges 129,594,989 101,836,235
Loss on sale/disposal of fixed assets 2,818,385 2,336,327
Bad debts written off 4,288,396 3,492,307
Provision for doubtful debts and advances 70,609,776 18,549,702
Donations 5,249,294 12,862,000
Other miscellaneous expenses 662,543,162 387,491,057
2,310,171,677 1,856,670,285
SCHEDULE 23 : INTEREST
Interest
On fixed loans and debentures 46,403,973 43,254,138
On other loans 256,796,495 125,600,515
303,200,468 168,854,653
SCHEDULE 24 : PROVISION FOR TAX
Income tax for the year
Current 306,000,000 360,000,000
Deferred (13,083,422) 22,939,651
Fringe Benefit Tax 19,000,000 16,100,000
311,916,578 399,039,651
KIRLOSKAR BROTHERS LIMITEDth
63
SCHEDULE 25:
A) SIGNIFICANT ACCOUNTING POLICIES
1 Basis of preparation of financial statements
(Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956.
b) The financial statements have been prepared under the historical cost convention on an accrual basis.
c) The accounting policies applied by the Company are consistent with those used in the previous year.
2 Fixed Assets
Fixed assets are stated at cost less accumulated depreciation. Cost comprises the purchase price and any other attributable cost of bringing the asset to its working condition for its intended use. Financing costs relating to acquisition of qualifying fixed assets are also included to the extent they relate to the period till such assets are ready to be put to use.
3 Depreciation
Depreciation on fixed assets has been provided in a manner that amortizes the cost of the assets over their estimated useful lives as detailed below:
a) On assets acquired prior to 01.08.1987, on a straight-line method at the rates determined in the year of acquisition under section 205 (b) of the Companies Act, 1956. No depreciation is provided on assets scrapped or sold during the year.
b) On assets other than patterns, acquired on or after 01.08.1987, on straight line method as per Schedule-XIV to the Companies Act, 1956.
c) On patterns, on straight line method on the basis of estimated useful life as given below:
Sr. Particulars Rate of
No Depreciation
1 Patterns with estimated useful life of less than one year & one time use 100%
2 Patterns with estimated useful life of more than one year but less than eight years. 20%
3 Patterns with estimated useful life of more than eight years. 11.31%
4 Intangible Assets
Computer Software
Computer software is amortized on straight line method over a period of three years.
5 Inventories
a) Inventories are valued at the lower of cost and net realizable value.
b) The cost is calculated on weighted average method.
c) Cost comprises costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.
6 Construction Contracts
a) Contract revenue and contract costs arising from fixed price contracts are recognized in accordance with the percentage of completion method.
b) The stage of completion is measured by reference to costs incurred to date as a percentage of total estimated costs for each contract.
c) Full provision is made for any loss in the year in which it is first foreseen.
NOTES FORMING PART OF ACCOUNTS
a) The financial statements have been prepared to comply in all material respects with The Companies
64
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
7 Research and Development
Research and development costs are expensed as incurred, except for development costs which relate to the design and testing of new or improved materials, products or processes which are recognized as an asset to the extent that it is expected that such assets will generate future economic benefits.
8 Revenue Recognition
a) Sale of products and services are recognized when the significant risks and rewards of ownership of the goods have passed to the buyer and when services are rendered.
b) Where the ability to assess the ultimate collection with reasonable certainty is lacking at the time of raising any claim, revenue recognition is postponed to the extent of uncertainty involved. In such cases revenue is recognized only when it is reasonably certain that the ultimate collection will be made.
9 Foreign Currency Transactions
a) Initial Recognition: Transactions denominated in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction.
b) Conversion: At the year end, monetary items denominated in foreign currencies other than those covered by forward contracts are converted into rupee equivalents at the year-end exchange rates.
c) Forward Exchange Contracts: In respect of transactions covered by forward exchange contracts, the difference between the forward rate and the exchange rate at the date of the transaction is recognized as income or expense over the life of the contract.
d) Exchange Differences: All exchange differences arising on settlement/conversion on foreign currency transactions are included in the Profit and Loss Account.
e) Foreign entities: Assets and liabilities of foreign entities are translated into rupee equivalents using year-end spot foreign exchange rates. Revenues and expenses are translated monthly at average exchange rates.
10 Leases
Operating lease payments are recognized as an expense in the profit and loss account on a straight-line basis over the lease term.
11 Borrowing Costs
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of that asset. Other borrowing costs are recognized as an expense in the period in which they are incurred.
12 Investments
Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments.
a) Current investments are carried at lower of cost and fair value determined on an individual investment basis.
b) Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.
13 Employee Benefits
Short term compensated absence benefits (both vesting and non vesting) are accounted for on the basis of the actual valuation of the leave entitlement as on the balance sheet date.
The actuarial valuations in respect of post employment defined benefit plans and long term employee benefits as at the balance sheet date are measured using Projected Unit Credit Method.
KIRLOSKAR BROTHERS LIMITEDth
65
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
I. Short Term Employee Benefits:
All employee benefits payable wholly within twelve months of rendering the services are classified as short term employee benefits. Benefits such as salaries, wages, and short term compensated absence, etc. and the expected cost of bonus, is recognized in the period in which the employee renders the related service.
II. Post-Employment Benefits:
a) Defined Contribution Plans:
The Company's superannuation scheme, state governed provident fund scheme related to Dewas factory and employee state insurance scheme are defined contribution plans. The contribution paid/payable under the scheme is recognized during the period in which the employee renders the related service.
b) Defined Benefit Plans:
The employees' gratuity fund scheme, provident fund scheme managed by a Trust and pension scheme are the Company's defined benefit plans. The present value of the obligation under such defined benefit plans is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.
The obligation is measured at the present value of the estimated future cash flows. The discount rates used for determining the present value of the obligation under defined benefit plans, is based on the market yields on Government Securities as at the balance sheet date, having maturity periods approximating to the terms of related obligations.
Actuarial gains and losses are recognized immediately in the profit & loss account.
In case of funded plans, the fair value of the plan's assets is reduced from the gross obligation under the defined benefit plans, to recognize the obligation on net basis.
Gains or losses on the curtailment or settlement of any defined benefit plan are recognized when the curtailment or settlement occurs. Past service cost is recognized as expenses on a straight-line basis over the average period until the benefits become vested.
The Company pays contribution to a recognized provident fund trust in respect of all locations except Dewas factory. The guidance note on implementing AS 15, Employees Benefits (Revised 2006) issued by the Institute of Chartered Accountants of India (ICAI) states that provident funds set up by employer, which requires interest shortfall to be met by the employer, needs to be treated as a defined benefit plan. In the absence of clear guidelines on the issue of Actuarial Valuation related to the interest shortfall to be made by the employer, the Company's actuary has expressed their inability to reliably measure the provident fund liability of the Company's recognized provident fund. Accordingly, the Company is unable to exhibit the related disclosures.
III. Long Term Employee Benefits:
The obligation for long term employee benefits such as long term compensated absences, is recognized in the same manner as in the case of defined benefit plans as mentioned in note II (b) above.
66
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
IV. Termination Benefits:
Where termination benefits such as compensation under voluntary retirement scheme is payable within a year of the balance sheet date, the actual amount of termination benefits is accounted as expense in year of accrual. Where termination benefits are payable beyond one year of the balance sheet date, the discounted amount of termination benefits is amortised over a definite period.
14 Employee Stock Options Scheme
In respect of stock options granted pursuant to the Company's Employee Stock Option Scheme, the intrinsic value of the options (excess of market price of the share over the exercise price of the option) is treated as discount and accounted as employee compensation cost over the vesting period.
15 Taxes on Income
a) Tax on income for the current period is determined on the basis of taxable income after considering the various deductions available under the Income Tax Act, 1961.
b) Deferred tax is recognized on timing differences between the accounting income and the taxable income for the year. The tax effect is calculated on the accumulated timing differences at the end of accounting period based on prevailing enacted or subsequently enacted regulations.
16 Segment Accounting
a) The accounting policies for individual segments are in line with accounting policies of the Company.
b) Segment revenue from inter segment transactions is accounted on the basis of transfer price agreed between the segments. Such transfer prices are determined with reference to the desired margins.
17 Accounting for interests in Joint Ventures
Type of Joint Venture
A. Jointly Controlled Operations
Company's share of revenue, expenses, assets and liabilities are included in revenues, expenses, assets and liabilities respectively.
B. Jointly Controlled Entities
Investment in such Joint Ventures is carried at cost after providing for any permanent diminution in value, if applicable. Income on investments in incorporated Jointly Controlled Entities is recognized when the right to receive the same is established.
18 Provisions
A provision is recognized when an enterprise has a present obligation as a result of a past event and it is probable that an outflow of resources is expected to settle the obligation, in respect of which a reliable estimate can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current management estimates.
B] OTHER NOTES
1 Interest paid - others Rs. 256,796,495/- (Rs.125,600,515/-) is net of Rs.27,020,156/- (Rs.29,029,732/-) being interest received from customers and on deposits. [Tax deducted at source Rs.1,724,577/- (Rs.3,036,232/-)]
2 Net loss on foreign currency transactions on revenue accounts recognised in the profit and loss account is Rs.107,867,741 /- ( Rs.16,249,217/-).
KIRLOSKAR BROTHERS LIMITEDth
67
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
2009 2008 Rupees Rupees
3 Estimated amount of contracts remaining to be executed on
capital account and not provided for 189,734,603 552,334,210
4 Contingent liabilities not provided for in respect of :
a) Guarantees:
By the Company to ICICI Bank Ltd. on behalf of
SPP Pumps Ltd. , UK 147,040,000 159,960,000
By the Company to Barclays Bank Ltd. on behalf
of SPP Pumps Ltd. , UK 294,080,000 319,920,000
By the Company to Citi Bank N A. on behalf of
SPP Pumps Ltd. , UK 588,160,000 639,840,000
By the Company to Indian Overseas Bank Ltd.
on behalf of Kirloskar Constructions &
Engineers Ltd., Chennai 800,000,000 500,000,000
By the Company to Bank of Maharashtra on
behalf of Gondwana Engineers Limited 145,000,000 -
b) Central Excise (Matter Subjudice) 14,347,263 4,482,000
c) Sales Tax (Matter Subjudice) 89,056,373 98,386,118
d) Income Tax (Matter Subjudice) 395,323,477 -
e) Labour Matters (Matter Subjudice) 39,278,282 35,320,699
f) Other Legal Cases ( Matter Subjudice ) 18,792,301 11,232,651
g) Letters of Credit Outstanding 2,366,640,832 1,284,654,309
5 Construction Contracts:
a. Contract revenue recognised as revenue
for the year ended 31st March 2009 8,728,394,699 7,260,655,608
b. The aggregate amount of contract costs incurred
and recognised profits less recognised losses
upto 31st March 2009 31,790,631,155 23,120,651,320
c. Amount of advances received as on 31st March 2009
for contracts in progress 935,338,671 782,137,542
d. Amount of retentions as on 31st March 2009 for
contracts in progress 410,720,520 249,424,764
6 Remuneration to Auditors
Statutory Auditors :
a) Audit Fees 1,654,500 1,685,400
b) Tax Audit Fees 150,000 150,000
c) Certification and other services 688,250 972,995
d) Expenses reimbursed 507,048 362,742
68
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
2009 2008 Rupees Rupees
7 Managerial Remuneration
Computation of Managerial Remuneration in accordance
with section 198 of the Companies Act,1956
Profit as per profit and loss account before
provision for taxation 982,203,176 1,500,406,123
Add:
Managerial remuneration 54,450,136 50,287,533
Directors' remuneration 7,565,000 6,370,000
Directors' fees 970,000 810,000
Provision for doubtful debts and advances 70,609,776 18,549,702
1,115,798,088 1,576,423,358
Less :
Capital profit on sale of fixed assets 1,136,470 1,657,690
Employee benefits debited to General Reserve - 56,868,940
1,136,470 58,526,630
1,114,661,618 1,517,896,728
Commission to other Directors @ 1% 11,146,616 15,178,967
Restricted to 7,565,000 6,370,000
Details of Managerial Remuneration
a) Salary 17,767,200 17,692,560
b) Contribution to provident fund and superannuation fund 4,795,200 4,774,950
c) Commission 25,000,000 21,500,000
d) Perquisites 6,887,736 6,320,023
54,450,136 50,287,533
e) Estimated value of other benefits 116,817 95,472
TOTAL 54,566,953 50,383,005
8 Expenditure in foreign currencies
i) Interest 9,530,280 1,465,967
ii) Professional fees 29,205,216 30,942,651
iii) Royalty 458,512 -
iv) Other matters 346,633,215 125,324,306
9 Earnings in Foreign Currencies
i) F.O.B. value of goods exported 2,239,672,656 1,483,499,424
ii) Others 241,292,690 13,398,331
10 C.I.F. Value of Imports
i) Raw materials, components & spare parts 1,883,493,356 1,111,426,134
ii) Capital goods 200,926,083 40,549,198
11 Expenditure Incurred on Research and
Development activities undertaken during the year
Capital 16,707,375 5,734,927
Revenue 34,156,669 60,375,574
TOTAL 50,864,044 66,110,501
KIRLOSKAR BROTHERS LIMITEDth
69
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
2009 2008 Rupees Rupees
12 Earning per Share ( Basic and diluted )
I - Basic
a) Profit for the year before tax 982,203,176 1,500,406,123
Less : Attributable tax thereto 311,916,578 399,039,651
Profit after tax 670,286,598 1,101,366,472
b) Total number of equity shares at the end of the year
used as denominator 105,764,355 105,764,355
c) Basic earning per share of nominal value of Rs 2/- each 6.34 10.41
II - Diluted
a) Profit for the year before tax 982,203,176 1,500,406,123
Less : Attributable tax thereto 311,916,578 399,039,651
670,286,598 1,101,366,472
b) Total number of equity shares at the end of the year 105,764,355 105,764,355
c) Add : Weighted average number of potential equity
shares on account of employee stock options - 277,615
Weighted average number of shares outstanding
used as denominator 105,764,355 106,041,970
d) Diluted earning per share of nominal value of Rs 2/- each 6.34 10.39
13 Advances recoverable in cash or kind or for value to be received include
a) Advance recoverable from Companies under same management
1) Kirloskar Systems Limited 5,248,345 5,248,345
Maximum amount outstanding during the year 5,248,345 5,248,345
2) Kirloskar Proprietary Limited - -
Maximum amount outstanding during the year 3,547,000 5,200,000
3) Pressmatic Electrostampings Pvt. Limited 284,843 -
Maximum amount outstanding during the year 732,519 -
4) Quadromatic Engineering Pvt. Limited 348,765 -
Maximum amount outstanding during the year 348,765 -
14 Amount of Borrowing Cost Capitalised during the year 29,203,312 9,250,002
15 As per the information available with the Company till date; none of the suppliers have informed the Company about their having registered themselves under the "Micro, Small and Medium Enterprises Development Act, 2006". As such, information as required under this Act, cannot be compiled and therefore, not disclosed for the year.
16 Employee Benefits :
i Defined Contribution Plans
Amount of Rs 43,120,522/-; is recognised as an expense and included in "Payments and Benefits to Employees" (Schedule 21) in the profit and loss account.
70
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
ii Defined Benefit Plans
a) The amounts recognised in Balance Sheet are as follows :
Rupees
As at 31-03-2009 As at 31-03-2008
Particulars Gratutity Plan Pension Scheme Gratutity Plan Pension Scheme(Funded) (Non Funded) (Funded) (Non Funded)
A. Amount to be recognised in Balance Sheet
Present value of defined benefit obligation 183,076,249 19,257,771 176,344,206 16,999,644
Less: Fair value of plan assets 208,657,491 - 190,460,641 -
Amount to be recognised as
liability or (asset) (25,581,242) 19,257,771 (14,116,435) 16,999,644
B. Amounts reflected in the Balance Sheet
Liabilities - 19,257,771 - 16,999,644
Assets 25,581,242 - 14,116,435 -
Net Liability/(Assets) (25,581,242) 19,257,771 (14,116,435) 16,999,644
b) The amounts recognised in Profit and Loss Account are as follows :
Rupees
As at 31-03-2009 As at 31-03-2008
Particulars Gratutity Plan Pension Scheme Gratutity Plan Pension Scheme(Funded) (Non Funded) (Funded) (Non Funded)
1 Current Service Cost 12,455,848 - 12,026,064 -
2 Interest Cost 14,006,496 1,386,089 15,044,895 -
3 Expected Return on Plan Assets 35,022,607 - 14,600,907 -
4 Actuarial Losses/(Gains) (2,904,544) 2,949,432 (26,586,487) (3,694,546)
5 Past Service Cost - - - -
6 Effect of any curtailment or settlement - -
7 Actuarial Gain not recognised in books - - -
8 Adjustment for earlier years - - -
Total included in Schedule 21
"Payment to Employees" (11,464,807) 4,335,521 (14,116,435) (3,694,546)
Actual Return on Plan Assets 9.40% 9.35% -
c) The changes in the present value of defined benefit obligation representing reconciliation of opening and closing balances thereof are as follows:
Rupees
As at 31-03-2009 As at 31-03-2008
Particulars Gratutity Plan Pension Scheme Gratutity Plan Pension Scheme(Funded) (Non Funded) (Funded) (Non Funded)
1 Balance of the present value of
Defined benefit Obligation as at 01-04-2008 176,344,206 16,999,644 188,061,185 22,830,190
2 Add: Current Service Cost 12,455,848 - 12,026,064 -
Add: Interest Cost 14,006,496 1,386,089 15,044,895 -
3 Add/(less): Actuarial losses / (gains) (2,904,544) 2,949,432 (25,672,009) (3,694,546)
4 Less: Benefits paid (16,825,757) (2,077,394) (13,115,929) (2,136,000)
5 Balance of the present value of
Defined Benefit Obligation
as at 31-03-2009 183,076,249 19,257,771 176,344,206 16,999,644
KIRLOSKAR BROTHERS LIMITEDth
71
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
d) Changes in the fair value of plan assets representing reconciliation of the opening and closing balances thereof are as follows
Rupees
Gratutity
Particulars Plan (Funded)
31.03.2009 31.03.2008
1 Opening balance of the fair value of the
plan assets as at 01-04-2008 190,460,641 179,793,799
2 Add: Expected Return on plan assets 35,022,607 14,600,907
3 Add/(less) : Actuarial gains/(losses) - 914,477
4 Add: Contribution by the employer - 8,267,387
5 Less: Benefits paid 16,825,757 13,115,929
6 Closing balance of the plan assets as at 31-03-2009 208,657,491 190,460,641
e) The broad categories of plan assets as a percentage of total plan assets as at 31-03-2009 of Employee's Gratuity Scheme are as under :
Sr. No Description Percentage (%)
2009 2008
1 Central Govt. Securities 56.09 63.28
2 State Govt. Securities 11.18 13.57
3 Approved Marketable Securities 2.96 0.24
4 Bonds/Debentures etc. 22.03 17.67
5 Loans 0.36 0.47
6 Equity 5.64 2.43
7 Liquid Fund/Money Market Instrument 1.72 2.34
8 Preference Shares 0.02 -
Grand Total 100.00 100.00
Basis used to determine the overall expected return
Life Insurance Corporation (LIC) manages the investments of Employee Gratuity Scheme. Expected rate of return on investments is determined based on the assessment made by the LIC at the beginning of the year on the return expected on its existing portfolio, alongwith the estimated incremental investments to be made during the year. Yield on the portfolio is calculated based on a suitable mark-up over the benchmark Government securities of similar maturities.
f) Principal actuarial assumptions at the balance sheet (expressed as weighted averages)
1 Discount rate as at 31-03-2009 - 8%
2 Expected return on plan assets as at 31-03-2009 - 9.4%
3 Salary growth rate : For Gratuity Scheme - 8%
4 Attrition rate: For gratuity scheme the attrition rate varies from 1% to 4% for various age groups.
5 The estimates of future salary increases, considered in actuarial valuation, taken into account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
72
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
17 Quantitative information in respect of Opening/Closing Stocks of goods manufactured :
Particulars Unit Opening Stock Closing Stock Qty Value in Qty Value in
Rupees RupeesPower Driven Pumps Nos. 13,505 78,153,903 * 11,432 87,856,670
(13,752) (107,805,295) (13,505) (78,153,903)Electric Motors Nos. 3,315 20,938,698 ** 3,659 33,070,078
(3,336) (10,897,627) (3,315) (20,938,698)Valves Nos. 13 13 14 14
(56) (197,396) (13) (13)Spares and Others - 25,798,432 - 12,295,724
( - ) (22,080,059) ( - ) (25,798,432)TOTAL 124,891,046 133,222,486
(140,980,377) (124,891,046)
Note : * Excludes 920 ( 366 ) Nos. of power driven pumps scrapped. ** Excludes 207 (50 ) Nos of motors scrapped.
18 Quantitative information in respect of Opening/Closing Stocks of Trading Articles :
Particulars Unit Opening Stock Closing StockQty Value in Qty Value in
Rupees RupeesPumps Nos. 11,837 23,824,798 * 5,895 15,595,331
(8,605) (29,642,693) (11,837) (23,824,798)Valves Nos. 1,638 3,566,323 2,000 2,219,222 (2,017) (2,543,051) (1,638) (3,566,323)Motors Nos. 1 21,189 ** - 75,597
(1) - (1) (21,189)Alternators Nos. 251 4,948,520 248 5,803,347
(147) (2,797,092) (251) (4,948,520)Transformers Nos. - - - - (2) (566,475) ( - ) ( - )Others - 65,212,485 - 84,880,425
- (41,982,777) - (65,212,485)TOTAL 97,573,315 108,573,922
(77,532,088) (97,573,315)
* Excludes 356 (2) No of pumps scrapped & excludes 13 (Nil) No. of pumps theft.** Excludes 1 (Nil) no of motor scrapped.
g) The amounts pertaining to defined benefit plans are as follows:Rupee
As at 31-03-2009 As at 31-03-2008
Particulars Gratutity Pension Scheme Gratutity Pension Scheme Plan (Funded) (Non Funded) Plan (Funded) (Non Funded)
Defined Benefit Obligation 183,076,249 19,257,771 176,344,206 16,999,644 Plan Assets 208,657,491 - 190,460,641 - Surplus/(Deficit) 25,581,242 (19,257,771) 14,116,435 (16,999,644)
h) General descriptions of defined plans:
1 Gratuity Plan:
The Company operates gratuity plan wherein every employee is entitled to the benefit equivalent to fifteen days salary last drawn for each completed year of service. The same is payable on termination of service, or retirement, whichever is earlier. The benefit vests after five years of continuous service.
2 Company's Pension Plan:
The company operates a Pension Scheme for a specified ex-employees wherein the beneficiaries are entitled to defined monthly pension.
KIRLOSKAR BROTHERS LIMITEDth
73
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
19 Quantitative information in respect of Sales of Manufactured Products :
Particulars 2008-09 Previous Year
Unit * @ Value * @ Value
Qty. Rupees Qty. Rupees
Power Driven Pumps Nos. 207,180 7,699,508,855 229,228 6,387,602,449
Valves Nos. 26,653 1,007,789,944 27,671 668,362,000
Turbines Nos. 8 35,941,679 8 33,257,168
Electric Motors Nos. 23,309 250,685,614 29,607 234,802,223
Alloy Iron Castings
including Steel Castings M.T. 1,114 272,697,342 1,099 183,663,745
& Cast Iron Castings
Spare Parts and Others 1,309,794,501 1,298,594,413
Services and Job Order Receipts 607,686,869 344,520,605
Civil Receipts 1,860,242,936 2,559,335,565
TOTAL 13,044,347,740 11,710,138,168
* Includes 389 (185) Power driven pumps, 304 (542) Valves, included in Construction and project related revenue.
20 Quantitative information in respect of Purchases and Sales of Trading Articles :
Particulars Unit Purchases Sales
Value * @ Value
Qty. Rupees Qty. Rupees
Pumps Nos. 152,244 291,181,300 157,817 389,096,046
(160,998) (334,688,528) (157,764) (425,712,619)
Valves Nos. 24,178 62,213,991 23,816 123,283,288
(11,642) (88,367,672) (12,021) (104,364,655)
Transformers Nos. 1,173 218,549,690 1,173 337,746,502
(1,644) (229,325,724) (1,646) (354,249,352)
Alternators Nos. 6,334 124,846,541 6,337 152,030,409
(7,806) (139,831,060) (7,702) (162,512,698)
Others - 3,995,901,308 - 4,723,847,435
- (2,212,223,431) - (2,770,075,368)
TOTAL 4,692,692,830 5,726,003,680
(3,004,436,415) (3,816,914,692)
* Includes 20 (Nil) Pumps, 303 (135) Valves, 1109 (1601) Transformers included in Construction & Project Related Revenue
@ Includes Progress billing of Rs. 9,189,298,139/- (Rs. 7,536,247,022/-) related to construction contracts accounted in the profit and loss account as Project related revenue of Rs. 8,728,394,699/- (Rs. 7,260,655,608/-) in terms of Accounting Standard 7 on Construction Contracts.
}
74
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
21 Consumption of Raw Materials, Components and Spare Parts:
2008-09 Previous Year
Particulars Rupees Percentage Rupees Percentage
Imported 382,591,596 4.34 393,979,691 5.07
Indigenous 8,434,750,809 95.66 7,380,464,902 94.93
TOTAL 8,817,342,405 100.00 7,774,444,593 100.00
22 Details of Raw Materials Consumption :
2008-09 Previous Year
Particulars Unit Quantity Value Quantity Value
a) Pig Iron M.T. 5,253.59 140,555,056 4,707.00 90,914,869
b) Castings Nos 691,848 270,470,423 631,928 519,283,436
c) Stator Stacks Nos. 121,566 219,939,021 178,134 85,050,976
d) Rotors Nos. 151,872 83,422,058 186,374 174,829,381
e) Motors Nos. 5,079 2,093,409,761 5,096 2,361,517,251
f) Engines Nos. 1,044 127,678,549 949 115,867,997
g) Motor Frames Nos. 22,475 105,384,649 27,291 122,330,179
h) Others - 5,776,482,889 - 4,304,650,504
TOTAL : 8,817,342,405 7,774,444,593
KIRLOSKAR BROTHERS LIMITEDth
75
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
23 Details of Licensed Capacity, Installed Capacity and Production of goods manufactured :
Sr. Class of Goods Unit Licensed capacity Installed capacity Production
No. 2008-09 Previous Previous PreviousYear Year Year
1. Power Driven Pumps Nos. 194,000 194,000 194,000 194,000 @ 206,107 229,348
2. Metal Cutting includingGrinding Machines " 736 736 736 736 - -
3. Reduction Gear Units " 1,200 1,200 1,200 1,200 - -
4. Valves " 70,070 70,070 70,070 70,070 26,654 27,628
5. Ploughs " 3,216 3,216 3,216 3,216
6. Alloy Iron Castings * * * *including Steel Castings M.T. 120 120 120 120
7. Cast Iron Castings M.T. 2,500 2,500 2,500 2,500
8. Cast Iron Castings 1,113.526 1,099.270 including Alloy M.T. 5,000 5,000 5,000 5,000Steel castings for Automotive purposes
9. Turbines Nos. 8 8
10 Electric Motors Nos. @@ 23,872 29,639
2008-09 2008-09
@ Includes 80 ( 1 ) for own use.
@@ Includes 12 ( 3 ) for own use.
* Per annum on single shift basis.
Notes :
a) Licensed Capacity includes registered capacities for activities existing prior to the Industries (Development Regulation) Act, 1951, but does not include licenses held for captive capacities.
b) It is not practicable to indicate precisely installed capacity of each type of product manufactured by the Company, as the capacity of various facilities available is overlapping for each product. Besides, the Company manufactures a very large range amongst the licensed products which, in turn, is decided by actual demand from time to time. Also the Company buys components, parts and other services from outside. The installed capacities as indicated above are estimates as certified by the Managing Director and accepted by the Auditors.
c) In terms of notification no. 477E dt. 25-7-91 issued by Department of Industrial Development, industrial licenses are not required for the products manufactured by the Company except centrifugal pumps manufactured at Dewas below 10 cm x 10 cm which are reserved for small scale sector. Revalidation of industrial license in this range of pumps is under process.
}
76
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
24. Related Party Disclosures
(A) Names of the related party and nature of relationship where control exists
Name of the related party Nature of relationship
1. Better Value Holdings Pvt. Ltd. Holding Company
2. Pooja Credits Pvt. Ltd. Subsidiary Company
3. Kirloskar Silk Industries Ltd. Subsidiary Company
4. Kirloskar Constructions and Engineers Ltd. Subsidiary Company
5. Gondwana Engineers Ltd. Subsidiary Company
6. Kirloskar Brothers International B. V. Subsidiary Company
7. The Kolhapur Steel Limited (from 02.08.2008) Subsidiary Company
8. Kirloskar Brothers Europe B.V. (From 13.05.2008) Subsidiary of Kirloskar Brothers International BV
9. Kirloskar Brothers (Thailand) Ltd. (From 26.09.2008) Subsidiary Company
10. SPP Pumps Ltd. U K. Subsidiary Company
11. SPP Pumps France EURL Subsidiary of SPP Pumps Ltd. U K
12. Certified Engines Ltd Subsidiary of SPP Pumps Ltd. U K
13. SPP (South Africa) (Pty) Ltd. Subsidiary of SPP Pumps Ltd. U K
14. SPP Pumps LP Subsidiary of SPP Pumps Ltd. U K
15. SPP France S A S Subsidiary of SPP Pumps Ltd. U K
16. SPP Pumps Management LLC Subsidiary of SPP Pumps Ltd. U K
17. SPP Pumps Holdings LLC Subsidiary of SPP Pumps Ltd. U K
18 . Hematic Motors Pvt. Ltd. Fellow Subsidiary Company
19. Pressmatic Electro Stampings Pvt. Ltd. Fellow Subsidiary Company
20. Quadromatic Engineering Pvt. Ltd. Fellow Subsidiary Company
21. Vakasa Electricals Pvt. Ltd. Fellow Subsidiary Company
22. Moreshwar Electricals Pvt. Ltd. Fellow Subsidiary Company
23. Ila Electricals Pvt. Ltd. Fellow Subsidiary Company
24. Kirloskar Oil Engines Limited Fellow Subsidiary Company
25. Kirloskar Pneumatic Company Limited Fellow Subsidiary Company
26. Kirloskar Systems Limited Fellow Subsidiary Company
27. Kirloskar Proprietary Limited Fellow Subsidiary Company
KIRLOSKAR BROTHERS LIMITEDth
77
1) Purchases of Goods - 991,284,120 70,669,193 - - - 1,061,953,313
- (65,173,660) (279,014,797) - - - (344,188,457)
2) Sale of Goods - 302,293,811 1,277,601 - - - 303,571,412
- (196,041,132) (751,975) - - - (196,793,107)
3) Rendering of Services - 19,441,708 11,769,810 - - - 31,211,518
- (19,221,408) (17,878,322) - - - (37,099,730)
4) Receiving of Services - 5,849,512 - 450,000 2,610,000 - 8,909,512
- - (564,989) - (2,820,000) (450,000) (3,834,989)
5) Dividend Received - 127,029,847 18,050,000 - - - 145,079,847
- (401,600) (9,119,700) - - - (9,521,300)
6) Dividend Paid 211,625,340 630,000 - 5,217,216 256,400 - 217,728,956
- - (210,000) (3,050,598) (124,200) (105,389,610) (108,774,408)
7) Interest Received - 8,204,440 - - - - 8,204,440
- (7,546,442) - - - - (7,546,442)
8) Interest Paid - 2,854,795 - - - - 2,854,795
- - (665,754) - - - (665,754)
9) Investment Made - 97,053,263 - - - - 97,053,263
- (84,966,717) - - - - (84,966,717)
10) Remuneration Paid - - - 54,450,136 530,000 - 54,980,136
- - - (50,287,533) (1,272,601) - (51,560,134)
11) Payment received towards repayment of loan - 8,800,000 - - - - 8,800,000
- (47,000,000) - - - - (47,000,000)
12) Sale of Fixed Assets - - - - - - -
- - (181,600) - - - (181,600)
13) Loan Given - 630,790,392 - - - - 630,790,392
- (69,500,000) - - - - (69,500,000)
14) Reimbursement of Expenses - 23,281,680 5,548,635 - - - 28,830,315
- (8,179,132) (2,714,059) - - - (10,893,191)
15) Inter Corporate Deposit Repayment - 20,000,000 - - - - 20,000,000
- - - - - - -
16) Deposit Paid - - - 1,700,000 3,400,000 - 5,100,000
- - - - - (5,000,000) (5,000,000)
17) Inter Corporate Deposit Recd - 10,000,000 - - - - 10,000,000
- - (50,000,000) - - - (50,000,000)
18) Royalty Paid - 47,137,925 - - - - 47,137,925
- - - - - - -
19) Royalty Received - 1,334,443 - - - - 1,334,443
- - - - - - -
20) Commission Paid - 5,582,167 - - - - 5,582,167
- - - - - - -
21) Balance Outstanding Debit (Credit) - 604,973,056 (3,543,242) (23,300,000) 3,400,000 - 581,529,814
- 145,421,151 (119,052,086) (21,500,000) 3,510,000 5,248,345 13,627,410
B) Related Party Transactions (In Rupees)
Nature of Transaction Holding Subsidiary Associates Key Relatives Enterprises Total Company & Fellow & Joint Management of Key over
Subsidiary Ventures Personnel Management which keyCompanies Personnel managerial
personnel ortheir relativesexercisesignificant influence
78
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
(C)
1) Holding Compnay Better Value Holdings Pvt. Ltd.2) Subsidiary Companies Pooja Credits Pvt. Ltd.
Kirloskar Constructions and Engineers Ltd. Kirloskar Silk Industries Ltd.Gondwana Engineers Ltd. SPP Pumps Ltd., UKCertified Engines Ltd.SPP (South Africa) (Pty) Ltd. SPP Pumps LP SPP Pumps Management LLCSPP Pumps Holdings LLCSPP Pumps France EURLSPP France S A SKirloskar Brothers International B V The Kolhapur Steel Limited (From 02.08.2008)Kirloskar Brothers Europe B.V. (From 13.05.2008)Kirloskar Brothers (Thailand) Ltd. (From 26.09.2008)
3) Fellow Subsidiary Companies Hematic Motors Pvt. Ltd.Pressmatic Electro Stampings Pvt. Ltd.Quadromatic Engineering Pvt. Ltd.Vakasa Electricals Pvt. Ltd.Moreshwar Electricals Pvt. Ltd.Ila Electricals Pvt. Ltd.Kirloskar Oil Engines LimitedKirloskar Pneumatic Company LimitedKirloskar Sytems Ltd.Kirloskar Proprietary Limited
4) Joint Ventures Kirloskar Ebara Pumps Ltd.Kirloskar Corrocoat Pvt. Ltd.
5) Key Management Personnel Mr. Sanjay KirloskarMr. Vikram KirloskarMr. R. K. SrivastavaMr. J. R. Sapre
6) Relatives of Key Management Mrs. Pratima Kirloskar Wife of Mr. S. C. KirloskarPersonnel Mr. Alok Kirloskar Son of Mr. S. C. Kirloskar
Ms. Rama Kirloskar Daughter of Mr. S. C. KirloskarMrs. Suman Kirloskar Mother of Mr. S. C. KirloskarMr. Atul Kirloskar Brother of Mr. S. C. KirloskarMr. Rahul Kirloskar Brother of Mr. S. C. KirloskarMrs. Geetanjali Kirloskar Wife of Mr. Vikram KirloskarMrs. Mrinalini Kirloskar Mother of Mr. Vikram KirloskarMrs. Vijayalaxmi Srivastava Wife of Mr. R. K. SrivastavaMrs. Asha J. Sapre Wife of Mr. J. R. Sapre
7) Jointlly controlled operations HCC – KBL Joint Venture KBL – MCCL Joint VentureKCCPL – IHP – BRC – TAIPPL – KBL JVIVRCL – KBL JVMaytas – KBL JVLarsen & Toubro – KBL JVKBL-MEIL-KCCPL JVKBL – PLR JVKBL – Koya – VA Tech JVKBL – PIL ConsortiumLarsen & Toubro – KBL – Maytas JVIVRCL – KBL – MEIL JVPioneer – Avantica – ZVS – KBL JVAMR – Maytas – KBL – WEG JVIndu – Shrinivasa Constructions – KBL – WEG JVMEIL – KBL – IVRCL JVMEIL – Maytas – KBL JVKCCPL – TAIPPL – KBL JV
Names of Related Parties with whom transactions have been entered into:
KIRLOSKAR BROTHERS LIMITEDth
79
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
(D) Disclosure pursuant to clause 32 of the listing agreement regarding loans and advances to subsidiary and associate companies:
Loans and advances in the nature of loans: Rupees
Sr. No. Name of the Company Balance as at Maximum outstanding 31.03.2009 31.03.2008 31.03.2009 31.03.2008
A To Subsidiary Companies 1 Pooja Credits Pvt. Ltd. - - - 2,600,000 2 Kirloskar Silk Industries Ltd. 406,404 406,404 406,404 406,404 3 Kirloskar Constructions and
Engineers Ltd. 505,550,000 45,000,000 505,550,000 45,000,000 4 Gondwana Engineers Ltd. 13,000,000 15,500,000 15,500,000 19,500,000 5 Kirloskar Brothers International B V
(Its Subsidiary) - - - - 6 SPP Pumps Ltd. (its Subsidiaries) - - - - 7 The Kolhapur Steel Limited 118,940,392 - 121,940,392 - 8 Kirloskar Brothers (Thailand) Ltd. - - - -
TOTAL 637,896,796 60,906,404 643,396,796 67,506,404
B To Fellow Subsidiary CompaniesHematic Motors Pvt Ltd - - - - Pressmatic Electro Stampings Pvt. Ltd. - - - - Quadromatic Engineering Pvt. Ltd. - - - - TOTAL - - - -
C Loans and advances in the nature of loan where there is,i) No repayment schedule:
Sr. No. Name of the Company Balance as at Maximum outstanding 31.03.2009 31.03.2008 31.03.2009 31.03.2008
1 Pooja Credits Pvt. Ltd. - - - 2,600,000 2 Kirloskar Silk Industries Ltd. 406,404 406,404 406,404 406,404 3 Kirloskar Constructions and
Engineers Ltd. 505,550,000 45,000,000 505,550,000 45,000,000 4 Gondwana Engineers Ltd. 13,000,000 15,500,000 15,500,000 19,500,000 5 The Kolhapur Steel Limited 118,940,392 - 121,940,392 -
ii) No interest charged:
Sr. No. Name of the Company Balance as at Maximum outstanding 31.03.2009 31.03.2008 31.03.2009 31.03.2008
1 Kirloskar Silk Industries Ltd. 406,404 406,404 406,404 406,404 2 Kirloskar Constructions and
Engineers Ltd. * 505,550,000 - 505,550,000 - 3 The Kolhapur Steel Limited 57,500,000 - 57,500,000 -
* Note: Interest was charged during the Financial year 2007-2008, on the loan to Kirloskar Constructions and Engineers Ltd.
D Loans and advances in the nature of loans to firms/companies in which directors are interested: NIL
E Investment by the loanee (borrower) in the shares of the Company or subsidiary of the Company : NIL
Note:- Loans to employees including directors under various schemes of the company (such as housing loan, furniture loan, education loan etc.) have been considered to be outside the purview of this disclosure requirements.
80
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
25. Particulars related to Joint Ventures :
a) List of Joint Ventures
Sr. No. Name of the Joint Venture Description Ownership Country of Interest Incorporation
1 Kirloskar Ebara Pumps Ltd. Jointly 45% India controlled entity
2 Kirloskar Corrocoat Pvt. Ltd. Jointly 50% India controlled entity
3 HCC – KBL Joint Venture Jointly N A India controlled operations
4 KBL – MCCL Joint Venture Jointly N A India controlled operations
5 KCCPL – IHP – BRC – TAIPPL – KBL JV Jointly N A India controlled operations
6 IVRCL – KBL JV Jointly N A India controlled operations
7 Maytas – KBL JV Jointly N A India controlled operations
8 Larsen & Toubro – KBL JV Jointly N A India controlled operations
9 KBL-MEIL-KCCPL JV Jointly N A India controlled operations
10 KBL – PLR JV Jointly N A India controlled operations
11 KBL – Koya – VA Tech JV Jointly N A India controlled operations
12 KBL – PIL Consortium Jointly N A India controlled operations
13 Larsen & Toubro – KBL – Maytas JV Jointly N A India controlled operations
14 IVRCL – KBL – MEIL JV Jointly N A India controlled operations
15 Pioneer – Avantica – ZVS – KBL JV Jointly N A India controlled operations
16 AMR – Maytas – KBL – WEG JV Jointly N A India controlled operations
17 Indu – Shrinivasa Constructions – Jointly N A India KBL – WEG JV controlled operations
18 MEIL – KBL – IVRCL JV Jointly N A India controlled operations
19 MEIL – Maytas – KBL JV Jointly N A India controlled operations
20 KCCPL – TAIPPL – KBL JV Jointly N A India controlled operations
KIRLOSKAR BROTHERS LIMITEDth
81
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
b) Financial Interest in Jointly controlled entities
Sr. No. Name of the Joint Venture Company's share in
Rupees Rupees
As at 31st March, 2009 As at 31st March, 2008 1 Kirloskar Ebara Pumps Ltd. Assets 385,701,714 315,685,391
Liabilities 383,451,714 313,435,391
For the year ended For the year ended31st March 2009 31st March 2008
Income 577,083,045 571,948,223 Expenses 410,641,304 442,179,011
As at 31st March 2009 As at 31st March 2008 2 Kirloskar Corrcoat Private Ltd. Assets 88,852,334 67,773,632
Liabilities 63,852,334 42,773,632
For the year ended For the year ended31st March 2009 31st March 2008
Income 151,320,186 126,495,190 Expenses 112,525,508 88,675,174
c) Contingent liabilities , if any , incurred in relation to interest in Joint Ventures N I Ld ) Capital commitments , if any , in relation to interest in Joint Ventures N I L
26. Details of provisions and movements in each class of provisions.
Particulars As at 31st March,2009 (Rs.)
Income Tax WarrantyRupees Rupees
Carrying amount at the beginning of the year 1,259,682,546 28,257,896 (899,682,546) (25,998,716)
Additional provision made during the year 306,000,000 31,856,656 (360,000,000) (28,257,896)
Amount used during the year - 28,257,896 - (25,998,716)
Unused amounts reversed during the year - - - -
Carrying amount at the end of the year 1,565,682,546 31,856,656 (1,259,682,546) (28,257,896)
Brief description of the nature of the obligation and the expected timing of any resulting outflows of economic benefits:-
Product WarrantyAccruals have been made in respect of warranties given by the Company for the sales made and services rendered during the year based on past experience.
Income Tax (Current tax)Tax payable to the Government in accordance with the provision of the Income Tax Act, 1961.
82
27.a ) Details of Derivative Instruments (for hedging)
Nil
b ) Details of foreign currency exposures that are not hedged by a derivative instrument or otherwise:
Particulars Amount in Foreign Currency Equivalent amount in Indian Rupees
Liability
Sundry Creditors 4,027,985 JPY 2,094,552
(51,300,511) (20,658,716)
2,039,013 EUR 138,754,845
(819,395) (51,941,418)
18,148 GBP 1,334,288
(42,630) (3,409,527)
15,514,415 USD 793,717,492
(11,420,305) (456,926,413)
Loans 4,500,000 USD 230,220,000
(6,000,000) (240,060,000)
Advances received from Customers 1,363,369 EUR 92,777,285
(1,234,514) (78,255,874)
34,718 GBP 2,552,496
(15,569) (1,245,201)
5,580,638 USD 285,505,446
(4,170,624) (166,866,681)
Assets
Advances to Suppliers 2,778,196 EUR 186,083,573
(2,570,316) (160,361,997)
540,873 GBP 39,213,293
(301,551) (23,786,379)
3,750,249 USD 190,212,626
(1,761,221) (69,850,027)
92,243,078 JPY 47,043,969
(14,034,390) (5,651,649)
Sundry Debtors 2,547,164 EUR 170,609,018
(1,436,254) (89,607,911)
732,591 GBP 53,112,872
(672,606) (53,055,180)
6,185,707 USD 313,739,075
(12,218,041) (484,567,498)
Bank Accounts 998 EUR 66,862
(998) (62,281)
1,634,325 USD 8,334,555
(72,586) (2,878,744)
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
KIRLOSKAR BROTHERS LIMITEDth
83
28. Stock Option Schemes
performance and other eligibility criteria. The Options are vested over a period of three years subject to the discretion of the management and fulfilment of certain conditions
b) The maximum term of ESOP is three years from the vesting date. The ESOP will be settled in the form of Equity Shares.
c) The details of the grants under the Stock Option Scheme are summarised below.
a) The grant of options to the employees under the Stock Option Schemes is on the basis of their
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
29. In accordance with the orders passed by the Honourable Board for Industrial and Financial Reconstruction (BIFR) on May 14, 2008, the Company has acquired all the Equity shares of Rs. 10/- each of The Kolhapur Steel Limited (TKSL) from the existing promoters by executing a Share Purchase Agreement on August 2, 2008 and TKSL has become a subsidiary company of KBL with effect from August 2, 2008.
30. The company, through its subsidiary company Kirloskar Brothers International B.V. , has formed a Company in The Netherlands, on May 13, 2008, namely, “ Kirloskar Brothers Europe B.V. " This is a joint venture company with a local partner, primarily for the distribution of the company’s products in Europe.
31. The company has formed a wholly owned subsidiary company in Thailand namely Kirloskar Brothers (Thailand) Ltd . As per the local laws, the company was permitted to commence business only after getting the approval from Board of Investments, Thailand, which was received in September 2008. The company would source the goods from India and cater to the South East Asian market.
32. The Board has approved the Scheme of Arrangement for transfer of some investments to a separate company. For this purpose, the Company has incorporated a wholly owned subsidiary company “ Kirloskar Brothers Investments Limited” on April 16, 2009.
33. The figures have been regrouped / rearranged wherever necessary. Figures in bracket relate to previous year.
Sr No Particulars 2008-09 2007-08
Grant I Grant II Grant I Grant II
1) Exercise Price - Rs. 200/- 200/- 200/- 200/-
2) Grant Date 31/8/2007 19/1/2008 31/8/2007 19/1/2008
3) Vesting Commences on 31/8/2008 19/1/2009 31/8/2008 19/1/2009
4) Options granted and outstanding at the beginning of the year 486,700 27,750 - -
5) Options granted during the year - - 520,200 32,050
6) Options lapsed during the year 38,285 5,450 32,950 4,300
7) Options exercised during the year - - - -
8) Option outstanding at the end of year 448,415 22,300 487,250 27,750
9) Options granted and outstanding at the end of the year of which
a Options Vested 135,715 6,690 550 -
b Options yet to Vest 312,700 15,610 486,700 27,750
84
BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE(Inserted by Notification No. GSR 388 (E), dated 15.05.1995)
I Registration DetailsRegistration No. : 0 0 0 6 7 0 State Code 1 1
Balance Sheet Date 3 1 0 3 2 0 0 9
Date Month YearII Capital raised during the year ( Amount in Rs. Thousands )
Public Issue Rights Issue
Bonus Issue Private Placement
III Position of Mobilisation and Deployment of FundsTotal Liabilities Total Assets
Sources of FundsPaid up Capital Reserves & Surplus
Secured Loans Unsecured Loans
Employee Stock Options outstanding Deferred Taxes
Application of FundsNet Fixed Assets Investments
Net Current Assets Misc. Expenses
Accumulated Losses Intangible Assets
IV Performance of Company ( Amount in Rs. Thousands )Turnover Total Expenses
V Profit of Company ( Amount Rs. Thousands )
+ - Profit / Loss Before Tax + - Profit / Loss After Tax
+
(Please tick appropriate box + for Profit, - for Loss )Basic Earning per Share in Rs. Dividend Rate %
VI Generic Names of Three Principal Products / Services of Company(As per monetary terms)Item Code No. : (ITC Code)
Product Description :
Item Code No. :(ITC Code)
Product Description :
Item Code No. :(ITC Code)
Product Description :
-- --
-- --
1 0 3 6 0 8 2 6 1 0 3 6 0 8 2 6
2 1 1 5 2 8
1 8 0 8 6 6 2 1 3 9 5 6 8 3
9 2 0 6 8 6 5 0 8 6
2 7 5 6 0 7 0 3 3 8 3 7 5 0
4 2 1 1 0 6 1 --
-- 9 9 4 5
1 8 6 6 8 5 8 3 1 7 6 8 6 3 8 0
9 8 2 2 0 3 6 7 0 2 8 7
6 . 3 4 1 0 0
P U M P S F O R L I Q U I D S
V A L V E S
8 4 . 1 3
8 4 . 8 1
6 7 8 7 7 9 9
+
C O N S T R U C T I O N & P R O J E C T
N - A
R E L A T E D A C T I V I T Y
As per our report of even date attached For and on behalf of the Board of Directors For M/s P.G. BhagwatChartered Accountants SANJAY KIRLOSKAR S. N. INAMDAR
Chairman & Managing Director Director PANKAJA BHAGWAT G. P. KULKARNI A. R. SATHE Partner Company Secretary Vice President (Finance)PUNE : April 30, 2009 PUNE : April 30, 2009
85
KIRLOSKAR BROTHERS LIMITEDth
STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956RELATING TO SUBSIDIARY COMPANIES :
Names of the Pooja Credits Kirloskar Silk Kirloskar SPP Pumps Gondwana Kirloskar Subsidiaries Pvt. Limited Industries Constructions & Ltd. Engineers Brothers Steel Brothers
Limited Engineers (Consolidated) Ltd. International B.V. Limited (Thailand) Ltd. (Consolidated) Limited
1. The Financial year March 31, March 31, March 31, December 31, March 31, December 31, March 31, September 30, of the Subsidiary 2009 2009 2009 2008 2009 2008 2009 2008Companies ended on
2. Holding Company's Controls Controls Controls Controls Controls Controls Controls Controls interest composition of composition of composition of composition of composition of composition of composition of composition of
the Board and the Board and the Board and the Board and the Board and the Board and the Board and the Board and also owns 100% also owns 100% also owns 100% also owns 97.50% also owns 100% also owns 100% also owns 95.95% also owns 100%
of equity of equity of equity of equity of equity of equity of equity of equityshare capital share capital share capital share capital share capital share capital share capital share capital
3. Net aggregate amount of Subsidiary's Profits / (Losses) as far as it concerns members of the holding company not dealt with the Holding Company's accounts :
(i) Profit / (Loss) for the Subsidiary's financial year end Rs. 18,012,162 (10,432) (117,656,084) 113,182,461 23,582,387 (12,960,721) 10,642,752 (570,108)
(ii) Profits / (Losses) for
its previous financial years since becoming subsidiary. Rs. 157,553,498 (2,817,114) (22,378,908) 279,830,613 8,356,894 (442,080) - -
4. Net aggegate amount
of Subsidiary's Profits / (Losses) dealt with in the Holding Company's accounts :
(i) for the Subsidiary's financial year ended March 31, 2009 Nil* Nil Nil Nil Nil Nil Nil Nil
(ii) for its previous financial years Nil** Nil Nil Nil Nil Nil Nil Nil
* - except dividend Rs. 15,160,099 4,016,000
** - except dividend Rs. 50,820,786 - - - 401,600 - -
The Kolhapur Kirloskar
For and on behalf of the Board of Directors
SANJAY KIRLOSKAR S. N. INAMDAR Chairman & Managing Director Director
G. P. KULKARNI A. R. SATHE Company Secretary Vice President (Finance)
PUNE : April 30, 2009
86
87
NOTES
CONSOLIDATED FINANCIAL STATEMENTS
88
CONSOLIDATED FINANCIAL STATEMENTS
Auditors' Report to the Board of Directors of Kirloskar Brothers Limited
We have audited the attached consolidated balance sheet of Kirloskar Brothers Limited (KBL) Group, as at 31st March, 2009 and also the consolidated profit and loss account and the consolidated cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the company's management and have been prepared by the management on the basis of separate financial statements and other financial information regarding components. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the generally accepted auditing standards in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
We did not audit the financial statements of certain subsidiaries, whose financial statements reflect total assets of Rs. 4,835.48 million as at 31st March, 2009, the total revenue of Rs. 6,295.24 million and cash inflows amounting to Rs. 335.15 million for the year then ended. These financial statements and other financial information have been audited by other auditors, whose report have been furnished to us and our opinion is based solely on the reports of other auditors. Our opinion in case of the unaudited financial statements of Kirloskar Brothers International B.V. Consolidated, has been based solely on the report of the management, whose financial statements reflect total assets of Rs. 17.29 million as at 31st March, 2009, the total revenue of Rs. 8.91 million and cash inflow amounting to Rs. 4.17 million for the year then ended. We have been informed that these financial statements are not legally subject to an audit.
We report that the consolidated financial statements have been prepared by the management in accordance with the requirements of Accounting Standard (AS) 21 - Consolidated Financial Statements, Accounting Standard (AS) 23 - Accounting for Investments in Associates in Consolidated Financial Statements and Accounting Standard (AS) 27 - Financial Reporting of Interests in Joint Ventures, prescribed by Companies (Accounting Standards) Rules, 2006.
Based on our audit and on consideration of report of other auditors on separate financial statements and on the other financial information of the components, and to the best of our information and according to explanations given to us, we are of the opinion that the attached consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India:
a) in the case of the consolidated balance sheet, of the state of affairs of KBL Group as at 31st March, 2009;
b) in the case of consolidated profit and loss account, of the profit for the year ended on that date; and
c) in the case of the consolidated cash flow statement, of the cash flows for the year ended 31st March, 2009.
For M/s P. G. BHAGWATChartered Accountants
Pankaja BhagwatPartner
Membership No. 86155
Pune : April 30, 2009
89
KIRLOSKAR BROTHERS LIMITEDth
CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2009
Schedule 2009 2008Rupees Rupees
SOURCES OF FUNDS :Shareholders' FundsCapital 1 211,528,710 211,528,710 Reserves and surplus 2 7,808,157,639 7,197,954,214 Employee Stock options outstandings 121,855,582 133,004,975Less: Deferred employee compensation expenses 29,787,458 88,970,333
92,068,124 44,034,642 8,111,754,473 7,453,517,566
Minority InterestCapital 9,909,588 3,984,745 Reserves and surplus 6,034,842 6,980,279 Total 15,944,430 10,965,024
Loan FundsSecured Loans 3 2,570,528,602 2,308,100,153 Unsecured Loans 4 1,411,094,590 354,248,353
3,981,623,192 2,662,348,506 Deferred Tax-net 5 78,924,501 90,444,732
Total 12,188,246,596 10,217,275,828
APPLICATION OF FUNDS :Fixed Assets 6Gross Block 4,996,671,173 4,032,191,487 Less: Depreciation and Impairment 1,787,578,999 1,480,594,509 Net Block 3,209,092,174 2,551,596,978 Capital work-in-progress including capital advances 713,776,203 327,847,746
3,922,868,377 2,879,444,724 Intangible Assets 7 Gross Block 101,403,688 94,433,936 Less: Amortization 83,890,175 72,506,468 Net Block 17,513,513 21,927,468 Assets under implementation including capital advances. 681,636 -
18,195,149 21,927,468
Goodwill 469,641,079 407,080,463 Investments a) Long Term Investments 2,767,284,707 2,935,012,979 b) Current Investments 9,000 9,000
2,767,293,707 2,935,021,979 Current Assets, Loans & AdvancesInventories 8 2,361,302,709 1,895,552,592 Gross amount due from customers for project related contract work 9 2,342,221,967 2,555,376,206 Sundry debtors 10 8,122,931,600 5,558,893,873 Cash and bank balances 11 531,989,334 856,296,765 Other current assets 12 861,641,635 338,734,410 Loans and advances 13 2,915,692,581 2,545,241,790
17,135,779,826 13,750,095,636 Less: Current Liabilities & Provisions
Current Liabilities 14 10,577,476,524 8,504,933,896 Gross amount due to customers for project related contract work 15 722,722,763 380,034,661 Provisions 16 826,426,604 892,576,321
12,126,625,891 9,777,544,878 Net Current Assets 5,009,153,935 3,972,550,758 Miscellaneous Expenditure (To the extent not written off or adjusted)Preliminary Expenses 1,094,349 1,250,436
Total 12,188,246,596 10,217,275,828 Notes to Accounts 24The schedules referred to above and the notes to accounts form an integral part of the Balance Sheet
As per our report of even date attached For and on behalf of the Board of Directors
For M/s P.G. BhagwatChartered Accountants SANJAY KIRLOSKAR S. N. INAMDAR
Chairman & Managing Director Director
PANKAJA BHAGWAT G. P. KULKARNI A. R. SATHE Partner Company Secretary Vice President (Finance)
PUNE : April 30, 2009 PUNE : April 30, 2009
90
CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2009
Schedule 2009 2008
Rupees Rupees
INCOME
Sales 17 24,526,732,915 20,587,732,083
Other income 18 425,735,691 523,867,817
Total 24,952,468,606 21,111,599,900
EXPENDITURE
Materials consumed 19 17,748,090,313 14,503,667,611
Payments and benefits to employees 20 2,136,871,555 1,801,935,322
Operating and other expenses 21 3,065,673,103 2,497,544,497
Interest 22 410,687,696 233,115,475
Depreciation, amortization and impairment 300,541,016 244,090,967
23,661,863,683 19,280,353,872
Less: Expenses capitalized 4,927,376 3,333,861
Total 23,656,936,307 19,277,020,011
Profit/(Loss) before tax 1,295,532,299 1,834,579,889
Provision for tax 23 462,843,210 505,310,110
Profit/(Loss) after tax before prior year adjustments 832,689,089 1,329,269,779
Prior year Adjustments (22,503) -
Profit/(Loss) after tax after prior year adjustments 832,666,586 1,329,269,779
Less : Minority Share (1,577,791) 3,117,773
Add : Share in Profit of the Associate Companies 18,450,351 35,742,143
Balance brought forward from previous year 433,076,040 396,500,788
Profit available for appropriation 1,285,770,768 1,758,394,937
Appropriations
Proposed dividend 233,528,710 443,607,420
Additional tax on dividend 42,947,185 75,459,334
Transfer to General Reserve 486,532,765 770,510,000
Transferred to retained earnings of Associate Companies 18,450,351 35,742,143
Surplus carried to Balance Sheet 504,311,757 433,076,040
1,285,770,768 1,758,394,937
Basic Earnings per Equity Share ( Refer Note No.8 ) 8.06 12.85
Diluted Earnings per Equity Share ( Refer Note No.8 ) 8.06 12.81
Notes to Accounts 24
The schedules referred to above and the notes to accounts
form an integral part of Profit and Loss Account.
As per our report of even date attached For and on behalf of the Board of Directors
For M/s P.G. BhagwatChartered Accountants SANJAY KIRLOSKAR S. N. INAMDAR
Chairman & Managing Director Director
PANKAJA BHAGWAT G. P. KULKARNI A. R. SATHE Partner Company Secretary Vice President (Finance)
PUNE : April 30, 2009 PUNE : April 30, 2009
KIRLOSKAR BROTHERS LIMITEDth
91
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2009
2009 2008Rupees Rupees
A. Cash flow from operating activities
Net profit before taxation and extraordinary items 1,295,532,299 1,834,579,889
Adjustments for
Depreciation, amortization and impairment 300,541,016 244,090,967
Transfer from Capital Reserve (8,536,041) (8,536,041)
Employees Stock Option debited to Profit & Loss A/c ( Net ) 48,033,482 44,034,642
Loss/(profi)t on sale of fixed assets (289,133) (4,243,790)
(Profit)/loss on sale of investments (102,841) 2,537
Unrealized foreign exchange loss/(gain) 34,994,020 (7,690,513)
Provision for doubtful debts and advances 88,295,586 18,793,006
Provision for diminution in value of investments 25,399 -
Interest income (107,478,221) (116,603,888)
Dividend income (147,025,574) (168,944,501)
Excess provision written back (3,857,905) (717,753)
Prior period expenditure (22,503) -
Sundry irrecoverable balances written off 222,843 795,736
Interest expenses 410,687,696 230,832,055
Operating profits before working capital changes 1,911,020,123 2,066,392,346
(Increase)/decrease in trade and other receivables (3,355,486,948) (2,976,976,813)
(Increase)/decrease in inventories (432,393,375) (442,453,723)
Increase/(decrease) in sundry creditors 2,601,134,516 2,545,438,097
Cash generated from operations 724,274,317 1,192,399,907
Income tax paid (444,358,176) (519,172,290)
Net cash from operating activities 279,916,141 673,227,617
B. Cash flow from investing activities
Purchase of fixed assets (1,265,449,743) (952,663,724)
Proceeds from sale of fixed assets 5,965,932 8,145,474
(Purchase)/Sale of investments 92,905,551 (126,383,847)
Interest received 107,337,545 114,649,307
Dividend received 147,427,174 168,944,501
Advance to subsidiaries (115,374,375) (16,678,639)
Net cash from investing activities (1,027,187,916) (803,986,928)
C. Cash flow from financing activities
Proceeds from issuance of Share Capital 6,201,873 -
Proceeds from issuance of Share Capital from Joint Venturer 5,512,776 -
(Repayment)/proceeds of / from long term borrowings (net) 715,113,173 417,596,144
(Repayment)/proceeds of / from other borrowings (net) 609,712,633 472,140,122
Interest paid (404,835,778) (213,696,033)
Dividend paid (433,303,422) (216,217,857)
Tax on dividend paid (77,610,919) (37,343,710)
Net cash used in financing activities 420,790,336 422,478,666
Net increase in cash and cash equivalents (326,481,439) 291,719,355
Cash and cash equivalents at the beginning of the year 856,296,765 543,186,974
Add : Due to acquisition of subsidiary 2,174,008 21,390,436
Sub Total 858,470,773 564,577,410
Cash and cash equivalents at the end of the year 531,989,334 856,296,765
As per our report of even date attached For and on behalf of the Board of Directors
For M/s P.G. BhagwatChartered Accountants SANJAY KIRLOSKAR S. N. INAMDAR
Chairman & Managing Director Director
PANKAJA BHAGWAT G. P. KULKARNI A. R. SATHE Partner Company Secretary Vice President (Finance)
PUNE : April 30, 2009 PUNE : April 30, 2009
92
SCHEDULE TO THE CONSOLIDATED ACCOUNTS2009 2008
Rupees RupeesSCHEDULE 1 : SHARE CAPITALAuthorized250,000,000 (250,000,000) equity shares of Rs.2/- (Rs.2/-) each 500,000,000 500,000,000 500,000,000 500,000,000 Issued105,907,030 (105,907,030) equity shares of Rs.2/- (Rs.2/-) each 211,814,060 211,814,060
Subscribed and paid up 105,764,355 (105,764,355) equity shares of Rs.2/- (Rs.2/-) each 211,528,710 211,528,710
53,207,342 (52,694,805) shares of Rs.2/- (Rs.2/-) each are held by BetterValue Holdings Pvt. Limited, the holding Company.
211,528,710 211,528,710 SCHEDULE 2 : RESERVES AND SURPLUSCapital Reserve Balance as per last account 19,124,057 10,588,016 Add : Increase on account of acquisition of subsidiary - 17,072,082 Less : Transfer to Profit & Loss Account (Refer Note No. 3 I a) 8,536,041 8,536,041
10,588,016 19,124,057 (Includes Rs. 4,701,504/- (4,701,504/-) on the acquisition of Associate Companies and Rs. 73,419/-(73,419/-) on acquisition of interest in a joint venture Co.)
Capital Redemption Reserve 6,625,000 6,625,000
Share Premium Account 395,881,752 395,881,752
General ReserveBalance as per last account 6,137,775,615 5,419,523,069
Less : Liabilities on account of Employee Benefits [net of Deferred Tax] - 52,257,454
Add: Transfer from Profit and Loss Account 486,532,765 770,510,000 6,624,308,380 6,137,775,615
Profit and Loss Account 504,311,757 433,076,040
Aggregate Share in Retained Earnings of Associate Companies Balance as per last account 210,837,495 175,095,352 Add : Transferred from Profit and Loss Account 18,450,351 35,742,143
229,287,846 210,837,495
Foreign Exchange Translation Reserve Balance as per last account (5,365,745) 18,016,840
Addition / (Deduction) for the year 42,520,633 (23,382,585)37,154,888 (5,365,745)
7,808,157,639 7,197,954,214 SCHEDULE 3 : SECURED LOANSLoans and advances from banks Cash/Export Credit facilities 1,979,440,328 1,307,606,658 [Secured by hypothecation of tangible movable assets and
book debts of the company]
Term Loan Secured by hypothecation of Vehicles purchased out of this loan 178,080 445,200
1,979,618,408 1,308,051,858
KIRLOSKAR BROTHERS LIMITEDth
93
SCHEDULE TO THE CONSOLIDATED ACCOUNTS (CONTD.)2009 2008
Rupees RupeesOther loans and advances i) From Bank of India 10,714,835 14,867,372
ii) From EXIM Bank 145,454,548 518,909,092 iv) From Indian Overseas Bank 266,764,788 298,901,782 [Secured by way of hypothecation of movable fixed assets and mortgage of immovable properties of the company ( both present and future). Loan from ICICI (Secured by fixed and floating charge of assets) 167,976,023 167,370,049
2,570,528,602 2,308,100,153 SCHEDULE 4 : UNSECURED LOANS
Interest free loan under Sales Tax Deferral Scheme 70,874,590 64,188,353 Inter Corporate Deposits 40,000,000 50,000,000 Short term Loans and advances
a) Packing Credit in Foreign Currency from Citi Bank N. A. 230,220,000 240,060,000 b) from Bank of India 670,000,000 - c) from Calyon Bank 400,000,000 -
1,411,094,590 354,248,353 SCHEDULE 5 : DEFERRED TAX-NET Deferred Tax Liabilities On depreciation/amortization of fixed assets 228,334,326 192,441,249 On preliminary expenses 52,469 275,492
228,386,795 192,716,741 Deferred tax assets On employees voluntary retirement schemes 441,770 5,697,416 On provision for doubtful debts/advances 49,809,661 23,465,461 Provision for leave encashment and pension 87,371,187 48,155,695 Other timing differences 11,839,676 24,953,437
149,462,294 102,272,009 78,924,501 90,444,732
SCHEDULE 6 : FIXED ASSETS
Land Free/ Buildings Railway Plant & Furniture & Vehicles Total Previous Lease Hold Siding Machinery Fittings Year
Gross BlockAt 01.04.2008 297,000,939 585,797,244 1,523,341 2,881,074,520 164,583,235 102,212,208 4,032,191,487 3,206,070,803 Additions / Assets Acquired 18,180,620 300,564,325 52,474 639,165,531 24,955,347 18,089,904 1,001,008,201 853,645,757 Deductions - 1,622,885 - 25,523,244 2,701,459 6,680,927 36,528,515 27,525,073
At 31.03.2009 315,181,559 884,738,684 1,575,815 3,494,716,807 186,837,123 113,621,185 4,996,671,173 4,032,191,487
Depreciation/AmortisationAt 01.04.2008 - 109,740,051 1,400,932 1,215,857,929 86,109,945 67,485,652 1,480,594,509 1,264,013,919 For the year includingon Assets Acquired - 25,634,507 35,026 284,560,986 17,135,598 7,450,094 334,816,211 240,203,981 Recouped - 709,529 - 24,003,270 1,772,262 3,846,660 30,331,721 23,623,391
At 31.03.2009 - 134,665,029 1,435,958 1,476,415,645 101,473,281 71,089,086 1,785,078,999 1,480,594,509
Provision for Impairment - - - 2,500,000 - - 2,500,000 -
Net BlockAt 31.03.2009 315,181,559 750,073,655 139,857 2,015,801,162 85,363,842 42,532,099 3,209,092,174 2,551,596,978
Assets under Erection 713,776,203 327,847,746 including Capital Advances
At 31.03.2009 315,181,559 750,073,655 139,857 2,015,801,162 85,363,842 42,532,099 3,922,868,377 2,879,444,724
At 31.03.2008 297,000,939 476,057,193 122,409 1,665,216,591 78,473,290 34,726,556 2,551,596,978
Notes : 1. Building includes cost of hangars jointly owned with other companies2. In respect of Fixed Assets, assets acquired includes Rs. 108,920,719/- and depreciation for the year on assets acquired includes Rs. 48,158,901/- on account
of the opening block as on 02.08.2008 of the company acquired during the year namely, The Kolhapur Steel Limited.
(In Rupees)
94
2009 2008Rupees Rupees
SCHEDULE 7 : INTANGIBLE ASSETS
Gross Block
At 01.04.2008 94,433,936 75,917,765
Additions 6,969,752 18,516,171
Deductions - -
At 31.03.2009 101,403,688 94,433,936
Amortization
At 01.04.2008 72,506,468 61,962,522
For the year 11,383,707 10,543,946
Recouped - -
At 31.03.2009 83,890,175 72,506,468
Net Block as at 31.03.2009 17,513,513 21,927,468
Assets under implementation including capital advances. 681,636 -
18,195,149 21,927,468
SCHEDULE 8 : INVENTORIES
Raw materials and components 796,478,622 765,430,425
Stores and spares 77,561,299 50,242,172
Work-in-progress 1,078,591,403 741,438,138
Finished goods 408,671,385 338,441,857
2,361,302,709 1,895,552,592
SCHEDULE 9 : GROSS AMOUNT DUE FROM CUSTOMERS
FOR PROJECT RELATED CONTRACT WORK
Cost incurred plus recognized profits less recognized losses 27,713,307,445 21,976,100,154
Less: Progress billing 25,371,085,478 19,420,723,948
2,342,221,967 2,555,376,206
SCHEDULE 10 : SUNDRY DEBTORS
Debts outstanding for a period exceeding six months
Unsecured, considered good 1,994,337,305 1,345,416,668
Considered doubtful 162,571,039 77,901,211
Other debts
Unsecured, considered good 6,128,594,295 4,213,477,205
8,285,502,639 5,636,795,084
Less: Provision for doubtful debts 162,571,039 77,901,211
8,122,931,600 5,558,893,873
SCHEDULE TO THE CONSOLIDATED ACCOUNTS (CONTD.)
KIRLOSKAR BROTHERS LIMITEDth
95
SCHEDULE TO THE CONSOLIDATED ACCOUNTS (CONTD.)
2009 2008Rupees Rupees
SCHEDULE 11 : CASH AND BANK BALANCES
Cash on hand 6,246,551 5,121,729
Balances with schedule banks
On current accounts 484,101,848 634,165,462
On escrow account - 5,964,338
On deposit accounts 41,459,439 210,215,010
Balances with other banks On current accounts 181,496 830,226
531,989,334 856,296,765
SCHEDULE 12 : OTHER CURRENT ASSETS
Interest accrued on investments 42,477,338 43,107,981
Claims receivable 819,164,297 295,626,429
861,641,635 338,734,410
SCHEDULE 13 : LOANS AND ADVANCES
Unsecured considered good
Advances recoverable in cash or kind or for value to be received 2,156,985,327 1,919,923,460
Considered doubtful 10,083,848 9,438,871
Balances with customs, excise, etc. 15,008,114 15,938,544
Deposits with post & others 714,523,139 542,693,816
Advance Income tax (net of Provision for tax) 29,176,001 66,685,970
2,925,776,429 2,554,680,661
Less: Provision 10,083,848 9,438,871
2,915,692,581 2,545,241,790
SCHEDULE 14 : CURRENT LIABILITIES
Acceptances 81,637,916 92,874,073
Sundry Creditors 7,399,336,308 5,767,446,962
Advances and deposits from customers 2,660,238,515 2,292,851,543
Investor Education and Protection Fund shall be credited by the following amounts namely:
(a) Unpaid dividend 44,783,912 36,581,329
(b) Unpaid Matured Deposits 913,000 1,149,500
Other liabilities 361,106,943 289,209,439
Interest accrued but not due on loans 29,459,930 24,821,050
10,577,476,524 8,504,933,896
SCHEDULE 15 : GROSS AMOUNT DUE TO CUSTOMERS
FOR PROJECT RELATED CONTRACT WORK
Progress billing 7,364,837,239 2,536,757,699
Less: Cost incurred plus recognized profits less recognized losses 6,642,114,476 2,156,723,038
722,722,763 380,034,661
96
SCHEDULE TO THE CONSOLIDATED ACCOUNTS (CONTD.)
2009 2008Rupees Rupees
SCHEDULE 16 : PROVISIONS
Proposed dividend 233,528,710 441,107,420
Additional tax on dividend 40,370,725 75,034,458
Provision for product warranties 77,993,171 57,114,712
Provision for leave encashment 242,876,367 230,324,725
Provision for Pension Benefits 30,115,369 16,999,644
Other provisions 201,542,262 71,995,362
826,426,604 892,576,321
SCHEDULE 17 : SALES AND CONTRACT REVENUE
Sales (Gross) 14,624,994,996 13,671,436,001
Less: Excise duty recovered 651,949,696 610,211,303
13,973,045,300 13,061,224,698
Construction and project related revenue 10,553,687,615 7,526,507,385
24,526,732,915 20,587,732,083
SCHEDULE 18 : OTHER INCOME Income from investments
Interest from long term investments 104,899,523 111,826,924
Dividend income
(a) Trade investment 144,182,568 206,241,733
(b) Other investments - Current 2,731,115 572,795
(c) Other investments - Long term 111,891 76,403
Profit on sale of current investments 102,841 -
Other Interest 2,578,698 5,706,797
Profit on sale of fixed assets 3,803,309 6,580,117
Royalty received 1,334,443 2,660,769
House rent 752,868 577,337
Recovery of bad debts 51,449,253 84,798,511
Agency Commission - 198,056
Miscellaneous income 105,253,141 96,092,334
Transfer from capital reserve (Refer Note No.3 I a) 8,536,041 8,536,041
425,735,691 523,867,817
SCHEDULE 19 : MATERIALS CONSUMED
Raw materials consumed 13,087,603,929 11,189,996,348
Stores and spares consumed 450,357,510 393,582,895
Processing charges 634,228,206 364,257,160
Purchase of traded goods 3,951,783,319 2,815,166,719
18,123,972,964 14,763,003,122
KIRLOSKAR BROTHERS LIMITEDth
97
SCHEDULE TO THE CONSOLIDATED ACCOUNTS (CONTD.)
2009 2008Rupees Rupees
(Increase)/Decrease in stocks
Opening stock
Work-in-progress 764,937,489 490,323,335
Finished goods 346,442,648 330,221,149
1,111,380,137 820,544,484
Closing stock
Work-in-progress 1,078,591,403 741,438,138
Finished goods 408,671,385 338,441,857
1,487,262,788 1,079,879,995
(375,882,651) (259,335,511)
17,748,090,313 14,503,667,611
SCHEDULE 20 : PAYMENTS AND BENEFITS TO EMPLOYEES
Salaries, wages and bonus 1,853,547,674 1,570,615,596
Payment under Voluntary Retirement Schemes 2,811,710 490,000
Contribution to provident fund and E.S.I. 201,738,829 169,947,666
Gratuity 5,607,291 (30,958)
Welfare expenses 68,830,530 64,607,564
Pension Benefits 4,335,521 (3,694,546)
2,136,871,555 1,801,935,322
SCHEDULE 21 : OPERATING AND OTHER EXPENSES
Power & fuel 203,382,123 166,128,697
Repairs and maintenance
Plant and machinery 118,923,335 136,855,941
Buildings 39,685,028 41,941,049
Rent 121,754,595 118,096,058
Rates and taxes 13,184,176 10,257,482
Travel and conveyance 354,219,850 330,285,601
Postage and telephone 76,733,581 80,131,737
Insurance 156,135,466 145,765,139
Directors' sitting fees 1,038,150 854,700
Directors' remuneration 64,373,469 56,949,190
Royalties and fees 48,376,810 35,063,478
Cash discount 31,971,149 18,815,801
Freight and forwarding charges 288,896,152 244,954,398
Brokerage and commission 281,882,883 218,359,513
Advertisements and publicity 83,400,188 113,759,195
Product Warranty 45,232,716 32,626,272
Excise duty paid 15,995,473 36,761,641
Bank charges 164,805,855 138,781,372
Loss on sale/disposal of fixed assets 3,514,177 2,394,101
Loss on disposal of investments - 2,537
98
SCHEDULE TO THE CONSOLIDATED ACCOUNTS (CONTD.)
2009 2008Rupees Rupees
Bad debts written off 9,099,367 6,774,221
Provision for doubtful debts and advances 88,198,223 18,793,005
Provision for decline in value of investments 25,399 -
Donations 10,642,033 15,376,076
Preliminary expenses written off 156,087 156,086
Other miscellaneous expenses 844,046,818 527,661,207
3,065,673,103 2,497,544,497
SCHEDULE 22 : INTEREST
Interest
On fixed loans and debentures 129,222,612 72,187,602
On other loans 281,465,084 160,927,873
410,687,696 233,115,475
SCHEDULE 23 : PROVISION FOR TAX
Income tax for the year
Current 449,533,946 473,063,588
Deferred (10,953,746) 16,603,717
Fringe Benefit Tax 24,174,580 18,683,140
Adjustments for earlier year/s 88,430 (3,040,335)
462,843,210 505,310,110
KIRLOSKAR BROTHERS LIMITEDth
99
SCHEDULE 24 : A ACCOUNTING POLICIES
1. Principles of Consolidation
(i) The consolidated financial statements relate to Kirloskar Brothers Limited (KBL) and
a) its majority owned subsidiary companies, consolidated on a line by line basis by adding together the book values of like items of assets, liabilities, income and expenses, after fully eliminating intra-group transactions and the unrealised profit/ losses on intra-group transactions, and are presented to the extent possible, in the manner as the Company's independant financial statements.
The names of the subsidiary companies, Country of Incorporation, Proportion of Ownership Interest and reporting dates considered in the Consolidated Financial Statements are:
Name of the Company Country of Proportion of Reporting DateIncorporation Ownership Interest of
KBL
Pooja Credits Private Limited India 100% 31st March, 2009
Kirloskar Silk Industries Limited India 100% 31st March, 2009
Kirloskar Constructions and Engineers Ltd. India 100% 31st March, 2009
SPP Pumps Ltd. UK (Consolidated Financial Statements) UK 97.5% 31st December, 2008
Gondwana Engineers Limited India 100% 31st March, 2009
Kirloskar Brothers International B.V
(Consolidated Financial Statements) @ The Netherlands 100% 31st December, 2008
The Kolhapur Steel Limited
(from 02.08.2008) @@ India 95.95% 31st March, 2009
Kirloskar Brothers (Thailand) Limited
(from 26.09.2008) @@@ Thailand 100.00% 30th September 2008
@The Company's subsidiary company, Kirloskar Brothers International B.V. , has formed a subsidiary in The Netherlands namely “Kirloskar Brothers Europe B. V" on 13th May, 2008.
@@ In accordance with the orders passed by the Honourable Board for Industrial and Financial Reconstruction (BIFR) on May 14, 2008, the Company has acquired all the Equity shares of Rs. 10/- each of The Kolhapur Steel Limited (TKSL) from the existing promoters by executing a Share Purchase Agreement on August 2, 2008 and TKSL has become a subsidiary company of KBL with effect from August 2, 2008.
@@@ The Company has formed a wholly owned subsidiary company in Thailand namely Kirloskar Brothers (Thailand) Limited. As per the local laws, the company was permitted to commence business only after getting the approval from Board of Investments, Thailand, which was received in September, 2008.
The excess of cost to the Company of its investment in the subsidiary company over the parents' portion of equity is recognised in the consolidated financial statements as goodwill. The excess of Company's share of equity of the subsidiary company over the cost of acquisition is treated as capital reserve.
b) Its jointly controlled joint venture companies by using proportionate consolidation method which means the consolidated Balance Sheet of KBL includes its share of assets that it controls jointly and its share of liabilities for which it is jointly responsible and the consolidated statement of Profit & Loss of KBL includes its share of the income and expenses of its joint venture companies. Under this method, separate line items of KBL's share of the assets, liabilities, income and expenses of joint venture companies are included in its consolidated financial statements.
NOTES FORMING PART OF THE CONSOLIDATED ACCOUNTS
100
SCHEDULE 24 : NOTES FORMING PART OF THE CONSOLIDATED ACCOUNTS (CONTD.)
Name of the Company Country of Incorporation Ownership Interest of
KBL
Kirloskar Ebara Pumps Limited India 45%
Kirloskar Corrocoat Pvt. Limited India 50%
Share of the assets and liabilities of the above joint venture companies considered for proportionate consolidation :
Particulars Kirloskar Ebara Kirloskar Corrocoat
Pumps Limited Pvt. Limited
Sources of Funds
Reserves & Surplus 354,912,457 42,569,499
Secured Loans 12,087,658 12,336,396
Un-secured Loans 8,218,243 -
Deferred Tax (Net) 8,233,357 1,634,253
Application of Funds
Fixed Assets 161,688,034 43,312,241
Intangible Assets 2,901,987 17,098
Investments 36,636,536 -
Current Assets 332,218,546 71,581,675
Current Liabilities 147,743,389 34,465,216
Net Current Assets 184,475,157 37,116,459
Miscellaneous Expenditure
(to the extent not written off) - 1,094,349
Share of the income and expenses of the above joint venture companies considered for proportionate consolidation :
Particulars Kirloskar Ebara Kirloskar Corrocoat Pumps Limited Pvt. Limited
Income
Sales and Other Income 577,083,045 151,320,186
Expenditure
Materials consumed 285,901,967 77,343,676
Payments and benefits to employees 41,624,672 7,967,432
Operating and other expenses 68,888,008 22,995,002
Interest 594,409 1,803,613
Depreciation and amortization 13,632,248 2,415,785
Provision for Tax 57,939,213 13,467,025
The jointly controlled joint venture companies considered in the consolidated financial statements are :
Proportion of
KIRLOSKAR BROTHERS LIMITEDth
101
SCHEDULE 24 : NOTES FORMING PART OF THE CONSOLIDATED ACCOUNTS (CONTD.)
c) Icompanies. Under this method investment is increased or decreased to recognise KBL's share of profits or losses of the associate companies after the date of acquisition. Distributions received from the associate companies reduce the carrying amount of investments. Where an associate company presents a consolidated financial statement the results and the net assets taken into account are those reported in the associate's consolidated financial statements.
The associate companies considered in the consolidated financial statements :
Name of the company Proportion of Ownership
Interest of KBL
Hematic Motors Pvt. Limited
(consolidated financial statements) 50%
Pressmatic Electrostampings Pvt. Limited 50%
Quadromatic Engineering Pvt. Limited 40.38%
Share of profits and losses of associate companies considered in the consolidated profit and loss account :
Name of the company Share of Profit/(Loss) Rs.
Hematic Motors Pvt. Limited 4,983,245
Pressmatic Electrostampings Pvt. Limited 13,566,332
Quadromatic Engineering Pvt. Limited (99,226)
Total 18,450,351
2 Other Accounting Policies :
a) They are set out in the notes to accounts of the parent company - Kirloskar Brothers Limited.
b) The financial statements of all Indian subsidiaries, associates and joint venture companies have been prepared to comply in all material respects with The Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956 and those of the foreign subsidiaries have been prepared in compliance with the local laws and applicable Accounting Standards.
c) Foreign Currency Transactions
The operations of the foreign subsidiary are not considered as an intergral part of the operations of the parent company. Hence, all monetory and non monetory assets and liabilities have been translated at the exchange rate prevailing as on 31st March 2009.
Income and expenditure have been translated at the average rate of the exchange prevailing for the subsidiary's financial year. Gains and losses arising out of the translation are carried to " Foreign Exchange Translation Reserve."
3 Accounting policies other than those adopted by the parent company for the consolidated financial statements :
I. Subsidiary Companies
a) SPP Pumps Limited (Consolidated):
Goodwill: On the acquisition of subsidiaries, the purchase consideration is allocated between the underlying assets on the basis of the fair value. The difference between the value of the net assets acquired and the purchase price is created as positive or negative goodwill on consolidation. Goodwill arising on acquisitions is capitalised and amortised over its economic life. Negative goodwill is released to the Profit & Loss account in the periods in which the fair value of the non-monetary assets purchased on the same acquisition are recovered, whether through depreciation or sale. For consolidated accounts of Kirloskar Brothers Limited the above refered "Negative Goodwill" is disclosed as Capital Reserve. The proportion of such negative goodwill credited to the profit & loss account to the profit for the year in the consolidated statement is 0.64% (0.46%).
ts associate companies by using equity method for accounting for KBL's investment in its associate
102
SCHEDULE 24 : NOTES FORMING PART OF THE CONSOLIDATED ACCOUNTS (CONTD.)
b) Gondwana Engineers Ltd:
i) Provision for Long term benefits-leave encashment :
Leave encashment is accounted at the time of payment as against the basis of actuarial valuation followed by the Parent Company. The proportion of such provision in the consolidated statement is Nil (Nil) as there is no charge to the Profit and Loss account for the year.
ii) Provision for Defined benefit Plan-Gratuity:
As against the basis of actuarial valuation as at the year end followed by the parent company, the liability is accounted for in the year of accrual as covered by Employees Group Gratuity Scheme of Life Insurance Corporation of India. The annual premium is charged to the Profit & loss account.The proportion of such provision in the consolidated statement is 0.05%. (0.05%).
iii) Depreciation:
Depreciation on fixed assets is provided on Written Down Value method as against Straight Line Method followed by the Parent Company. The proportion of such depreciation in the consolidated statement is 0.30% (0.29%).
II Joint Venture Companies
a) Kirloskar Ebara Pumps Limited
i) Work-in-Progress, raw materials, stores, spares and tools are valued at 'Cost' as against 'Cost or Net Realisable value whichever is lower', followed by the parent company. The proportion of such inventory in the consolidated statement is 4.39% (5.38%).
ii) Intangible Asset: - Technical Knowhow fees, is amortised on Straight Line Method over the term of agreement as against on Straight Line Method over a period of three years. The proportion of such amortisation in the consolidated statements is 6.49% (4.67%).
III Associate Companies
In all Associate Companies
i) Depreciation on fixed assets is provided on Written Down Value method as against Straight Line Method followed by the Parent Company.
ii) Provision for Long term benefits-leave encashment :
As against the basis of actuarial valuation followed by the parent company, provision is made on actual basis for accumulated leave balance at the year end. In case of a subsidiary of Hematic Motors Pvt. Limited the provision is accounted for in the year in which the option of encashment is exercised by the employees.
iii) Provision for Defined benefit Plan-Gratuity:
As against the basis of actuarial valuation as at the year end followed by the parent company, the liability is accounted for in the year of accrual as covered by Employees Group Gratuity Scheme of Life Insurance Corporation of India. The additional amount, if any, payable at the time of pre-mature retirement is accounted for in the year of retirement.
KIRLOSKAR BROTHERS LIMITEDth
103
SCHEDULE 24 : NOTES FORMING PART OF THE CONSOLIDATED ACCOUNTS (CONTD.)
B OTHER NOTES
1)as the current year's figures :
I) Include results of the operations of The Kolhapur Steel Ltd. from 2nd August, 2008 to 31st March, 2009 pursuant to its acquisition.
II) Include results of the operations of Kirloskar Brothers (Thailand) Ltd. from 26th September, 2008 to 30th September, 2008 pursuant to its formation.
III) Include results of the operations of Gondwana Engineers Ltd. from 1st April, 2008 to 31st March, 2009 as against the period from 10th September, 2007 to 31st March, 2008 in the previous year.
IV) Include results of the operations of Kirloskar Brothers International B.V.,The Netherlands (consolidated) from 1st January, 2008 to 31st December, 2008 as against Kirloskar Brothers International B.V.,The Netherlands (standalone) from 30th August, 2007 to 31st December, 2007. Kirloskar Brothers International B.V. , has formed a subsidiary company “ Kirloskar Brothers Europe B.V" on 13th May, 2008.
2) The effect of acquisition and formation of subsidiary companies:
The acquistion of The Kolhapur Steel Ltd. and formation of Kirloskar Brothers (Thailand) Ltd. and Kirloskar Brothers Europe B.V. has resulted in :
I) an increase of Rs. 17,311,221/- (Previous year Rs. 69,500,884/-) in the financial position as on 31st March, 2009 as compared to 31st March,2008.
II) an increase of Rs. 2,383,403/- (Previous year Rs.7,914,814/- ) in group profit net of minority interest for the year ended on 31st March, 2009 as compared to the year ended on 31st March, 2008.
III) The Kolhapur Steel Ltd was acquired for a consideration of Rs.93,843,591/-. Goodwill of Rs.62,560,616/- is recognised in the consolidated financial statements being the excess of consideration paid over the equity of Rs. 31,282,975/- as on the date of acquisition.
3) Kirloskar Silk Industries Ltd.
The company has approached The Development Commissioner, Mumbai, the appropriate authority, seeking change in the usage of land instead of silk manufacturing. In view of the above, the Board of Directors has decided to pursue the said application and hence defer the decision of disposal of land and existing business.
4) Contingent liabilities not provided for in respect of : 2009 2008Rupees Rupees
a) Guarantees:
By the company to ICICI Bank Ltd. on behalf SPP Pumps Ltd. UK 147,040,000 159,960,000
By the company to Barclays Bank Ltd. on behalf SPP Pumps Ltd. UK 294,080,000 319,920,000
By the company to Citi Bank N A on behalf SPP Pumps Ltd. UK 588,160,000 639,840,000
By the company to Indian Overseas Bank Ltd. on behalf of
Kirloskar Constructions and Engineers Ltd. 800,000,000 500,000,000
By the company to Bank of Maharashtra on behalf of
Gondwana Engineers Limited 145,000,000 -
b) Central Excise (Matter Subjudice) 14,347,263 4,482,000
c) Sales Tax (Matter Subjudice) 89,056,373 103,895,118
d) Income Tax (Matter Subjudice) 395,323,477 1,490,064
e) Labour Matters (Matter Subjudice) 39,278,282 35,320,699
f) Other Legal Cases (Matter Subjudice) 18,792,301 27,725,000
g) Letters of Credit Outstanding 2,366,640,832 1,284,654,309
The figures for the year ended March 31, 2009 are not comparable with that of the previous year
104
SCHEDULE 24 : NOTES FORMING PART OF THE CONSOLIDATED ACCOUNTS (CONTD.)
2009 2008
Rupees Rupees
5) Estimated amount of contracts remaining to be
executed on capital account and not provided for 190,563,183 569,628,437
6) Construction Contracts:
a) Contract revenue recognised as revenue for the
year ended 31st March, 2009 10,553,687,615 8,221,983,664
b) The aggregate amount of contract costs incurred and recognised
profits (less recognised losses) upto 31st March, 2009 34,355,421,921 23,428,515,276
c) Amount of advances received as on 31st March, 2009
for contracts in progress 1,305,754,671 1,087,500,034
d) Amount of retentions as on 31st March, 2009
for contracts in progress 603,382,520 304,283,698
7) Related Party Disclosures :
A) Name of the related party and nature of relationship where control exists
Name of the related party Nature of relationship
1. Better Value Holdings Pvt. Ltd. Holding Company
2. Pooja Credits Pvt. Ltd. Subsidiary Company
3. Kirloskar Silk Industries Ltd. Subsidiary Company
4. Kirloskar Constructions and Engineers Ltd. Subsidiary Company
5. Gondwana Engineers Ltd Subsidiary Company
6. Kirloskar Brothers International B. V. Subsidiary Company
7. The Kolhapur Steel Limited (from 02.08.2008) Subsidiary Company
8. Kirloskar Brothers Europe B. V. (from 13.05.08) Subsidiary Company of Kirloskar Brothers International B V
9. Kirloskar Brothers (Thailand) Ltd. (from 26.09.08) Subsidiary Company
10. SPP Pumps Ltd. U K. Subsidiary Company
11. SPP Pumps France EURL Subsidiary of SPP Pumps Ltd. U K
12. Certified Engines Ltd. Subsidiary of SPP Pumps Ltd. U K
13. SPP (South Africa) (Pty) Ltd. Subsidiary of SPP Pumps Ltd. U K
14. SPP Pumps LP Subsidiary of SPP Pumps Ltd. U K
15. SPP France S A S Subsidiary of SPP Pumps Ltd. U K
16. SPP Pumps Management LLC Subsidiary of SPP Pumps Ltd. U K
17. SPP Pumps Holdings LLC Subsidiary of SPP Pumps Ltd. U K
18 . Hematic Motors Pvt. Ltd. Fellow Subsidiary Company
19.Pressmatic Electro Stampings Pvt. Ltd. Fellow Subsidiary Company
20. Quadromatic Engineering Pvt. Ltd. Fellow Subsidiary Company
21. Vakasa Electricals Pvt. Ltd.. Fellow Subsidiary Company
22. Moreshwar Electricals Pvt. Ltd.. Fellow Subsidiary Company
23. Ila Electricals Pvt. Ltd.. Fellow Subsidiary Company
24. Kirloskar Oil Engines Limited Fellow Subsidiary Company
25. Kirloskar Pneumatic Company Limited Fellow Subsidiary Company
26. Kirloskar Systems Limited Fellow Subsidiary Company
27. Kirloskar Proprietary Limited Fellow Subsidiary Company
KIRLOSKAR BROTHERS LIMITEDth
105
1) Purchases of Goods - 70,669,193 445,293,240 - - - 515,962,433
- (279,014,797) - - - - (279,014,797)
2) Sale of Goods - 1,227,601 5,131,072 - - - 6,358,673
- (751,975) - - - - (751,975)
3) Rendering of Services - 11,769,810 7,034,441 - - - 18,804,251
- (17,878,322) - - - - (17,878,322)
4) Receiving of Services - - 5,849,512 450,000 2,610,000 - 8,909,512
- (564,989) - - (2,820,000) (450,000) (3,834,989)
5) Dividend Received - 18,050,000 107,853,748 - - - 125,903,748
- (9,119,700) - - - - (9,119,700)
6) Dividend Paid 211,625,340 - 630,000 5,217,216 256,400 - 217,728,956
- (210,000) - (3,652,598) (124,200) (105,389,610) (109,376,408)
7) Interest Paid - - 2,854,795 - - - 2,854,795
- (665,754) - (235,000) (464,000) - (1,364,754)
8) Remuneration Paid - - - 54,450,136 530,000 - 54,980,136
- - - (50,287,533) (1,272,601) - (51,560,134)
9) Deposits Accepted - - - - - - -
- (50,000,000) - (1,400,000) - - (51,400,000)
10) Deposits Repaid - - - - - - -
- - - (3,231,000) (5,150,000) - (8,381,000)
11) Sale of Fixed Assets - - - - - - -
- (181,600) - - - - (181,600)
12) Reimbursement of Expenses - 5,548,635 8,499,133 - - - 14,047,768
- (2,714,059) - - - - (2,714,059)
13) Deposit paid - - - 1,700,000 3,400,000 5,100,000
- - - - - (5,000,000) (5,000,000)
14) Repayment of Inter Corporate Deposit - - 20,000,000 - - - 20,000,000
- - - - - - -
15) Royalty Paid - - 47,137,925 - - - 47,137,925
- - - - - - -
16) Royalty Received - - 1,334,443 - - - 1,334,443
- - - - - - -
17) Inter Corporate Deposit Received - - 10,000,000 - - - 10,000,000
- (50,000,000) - - - - (50,000,000)
18) Balance Outstanding Debit (Credit) - (3,543,242) (134,412,695) (23,300,000) 3,400,000 - (157,855,937)
- (119,052,086) - (21,500,000) 3,510,000 5,248,345 (131,793,741)
SCHEDULE 24 : NOTES FORMING PART OF THE CONSOLIDATED ACCOUNTS (CONTD.)
B) Related Party Transactions (In Rupees)
Nature of Transaction Holding Associates & Fellow Key Relatives Enterprises TotalCompany Joint Ventures Subsidiary Management of Key over which
Companies Personnel Management key managerialPersonnel personnel or
their relativesexercise
significant influence
106
SCHEDULE 24 : NOTES FORMING PART OF THE CONSOLIDATED ACCOUNTS (CONTD.)
C) Names of Related Parties
1) Holding Company Better Value Holdings Pvt. Ltd.
2) Subsidiary Companies Pooja Credits Pvt. Ltd.
Kirloskar Constructions and Engineers Ltd.
Kirloskar Silk Industries Ltd.
Gondwana Engineers Ltd.
Certified Engines Ltd.
SPP Pumps Ltd., UK
SPP (South Africa) (Pty) Ltd.
SPP Pumps LP
SPP Pumps Management LLC
SPP Pumps Holdings LLC
SPP Pumps France EURL
SPP France S A S
Kirloskar Brothers International B. V.
The Kolhapur Steel Limited (From 02.08.2008)
Kirloskar Brothers Europe B. V. (From 13.05.2008)
Kirloskar Brothers (Thailand) Ltd. (From 26.09.2008)
3) Fellow Subsidiary Companies Hematic Motors Pvt. Ltd.
Pressmatic Electro Stampings Pvt. Ltd.
Quadromatic Engineering Pvt. Ltd.
Vakasa Electricals Pvt. Ltd.
Moreshwar Electricals Pvt. Ltd.
Ila Electricals Pvt. Ltd.
Kirloskar Oil Engines Limited
Kirloskar Pneumatic Company Limited
Kirloskar Sytems Ltd.
Kirloskar Proprietary Limited
4) Joint Ventures Kirloskar Ebara Pumps Ltd.
Kirloskar Corrocoat Pvt. Ltd.
5) Key Management Personnel Mr. Sanjay Kirloskar
Mr. Vikram Kirloskar
Mr. R. K.Srivastava
Mr. J. R. Sapre
6) Relatives of Key
Management Personnel Mrs. Pratima Kirloskar Wife of Mr. S. C. Kirloskar
Mr. Alok Kirloskar Son of Mr. S. C. Kirloskar
Ms. Rama Kirloskar Daughter of Mr. S. C. Kirloskar
Mrs. Suman Kirloskar Mother of Mr. S. C. Kirloskar
Mr. Atul Kirloskar Brother of Mr. S. C. Kirloskar
Mr. Rahul Kirloskar Brother of Mr. S. C. Kirloskar
Mrs. Geetanjali Kirloskar Wife of Mr. Vikram Kirloskar
Mrs. Mrinalini Kirloskar Mother of Mr. Vikram Kirloskar
Mrs. Vijayalaxmi Srivastava Wife of Mr. R. K. Srivastava
Mrs. Asha J. Sapre Wife of Mr. J. R. Sapre
KIRLOSKAR BROTHERS LIMITEDth
107
SCHEDULE 24 : NOTES FORMING PART OF THE CONSOLIDATED ACCOUNTS (CONTD.)
8) Earning per Share (Basic and diluted)
2009 2008
I - Basic Rupees Rupees
Profit for the year before tax 1,315,537,938 1,867,204,259
Less : Attributable tax thereto 462,754,780 508,350,445
Profit after tax 852,783,158 1,358,853,814
Total Number of equity shares at the end of the year
used as denominator 105,764,355 105,764,355
Basic earning per share of nominal value of Rs. 2/- each 8.06 12.85
II - Diluted
Profit for the year before tax 1,315,537,938 1,867,204,259
Less : Attributable tax thereto 462,754,780 508,350,445
852,783,158 1,358,853,814
Total Number of equity shares at the end of the year 105,764,355 105,764,355
Add : Weighted average number of potential equity
shares on account of employee stock options - 277,615
Weighted average number of shares outstanding
used as denominator 105,764,355 106,041,970
Diluted earning per share of nominal value of Rs 2/- each 8.06 12.81
9. Particulars related to Joint Ventures :
List of Joint Ventures
Name of the Joint Venture Description Country of
Incorporation
Kirloskar Ebara Pumps Ltd. Jointly controlled entity India
Kirloskar Corrocoat Pvt. Ltd. Jointly controlled entity India
HCC – KBL Joint Venture - Jointly controlled operations India
KBL – MCCL Joint Venture Jointly controlled operations India
KCCPL – IHP – BRC – TAIPPL – KBL JV Jointly controlled operations India
IVRCL – KBL JV Jointly controlled operations India
Maytas – KBL JV Jointly controlled operations India
Larsen & Toubro – KBL JV Jointly controlled operations India
KBL-MEIL-KCCPL JV Jointly controlled operations India
KBL – PLR JV Jointly controlled operations India
KBL – Koya – VA Tech JV Jointly controlled operations India
KBL – PIL Consortium Jointly controlled operations India
Larsen & Toubro – KBL – Maytas JV Jointly controlled operations India
IVRCL – KBL – MEIL JV Jointly controlled operations India
Pioneer – Avantica – ZVS – KBL JV Jointly controlled operations India
AMR – Maytas – KBL – WEG JV Jointly controlled operations India
Indu – Shrinivasa Constructions – KBL – WEG JV Jointly controlled operations India
MEIL – Maytas – KBL JV Jointly controlled operations India
MEIL – KBL – IVRCL JV Jointly controlled operations India
MEIL – Maytas – KBL JV Jointly controlled operations India
KCCPL – TAIPPL – KBL JV Jointly controlled operations India
Aban-Coastal Joint Venture Jointly controlled operations India
Asian Techs Ltd.- ABCI Infrastructures (P) Ltd Jointly controlled operations India
10. Figures of the previous year have been regrouped/rearranged wherever necessary. Figures in bracket relate to the previous year.
108
SCHEDULE 24 : NOTES FORMING PART OF THE CONSOLIDATED ACCOUNTS (CONTD.)11 Segment Information in respect of KBL and its Subsidiaries and Joint Venture Companies
(A) Primary Segments - Business Segments Pumps Others Eliminations Total AmountRupees Rupees Rupees Rupees
a) Segment Revenue
Sales to External Customers 22,243,496,210 2,283,236,705 - 24,526,732,915
(18,815,021,072) (1,772,711,011) - (20,587,732,083)
Inter Segment Revenue 5,075,202 758,888,261 763,963,463 -
(2,813,763) (166,439,724) (169,253,487) -
Total Segment Revenue 22,248,571,412 3,042,124,967 763,963,463 24,526,732,915
(18,817,834,835) (1,939,150,735) (169,253,487) (20,587,732,083)
b) Segment Result 1,717,483,434 217,442,113 1,934,925,548
(1,966,947,042) (190,946,678) (2,157,893,720)
Less :
I) Interest 410,687,696
(233,115,475)
II) Unallocable Corporate expenditure
(net of other income) 455,567,106
(398,815,601)
Add :
I) Income from Investments 226,861,554
(308,617,246)
Total Profit Before Tax 1,295,532,299
(1,834,579,889)
Less : Provision for Tax 449,622,376
(470,023,253)
Less : Deferred Tax (10,953,746)
(16,603,717)
Less : Fringe Benefit Tax 24,174,580
(18,683,140)
Net Profit 832,689,089
(1,329,269,779)
c) Segment Assets 17,298,071,057 2,110,653,969 - 19,408,725,026
(13,563,016,082) (2,037,483,135) (15,600,499,217)
Unallocable Corporate Assets 4,906,147,461
(4,899,153,868)
Total 24,314,872,487
(15,841,653,444)
d) Segment Liabilities 10,802,739,621 1,542,347,051 - 12,345,086,672
(8,301,854,730) (1,445,979,435) (6,535,817,595)
Unallocable Corporate Liabilities 3,562,043,897
(3,287,336,329)
Total 15,907,130,569
(9,199,650,332)
e) Cost Incurred during the period to
acquire Segment Fixed Assets 613,699,193 387,309,009
(422,665,254) (430,980,503)
f) Depreciation / Amortisation/Impairment 219,556,297 80,984,718
(188,854,371) (55,236,596)
g) Non Cash Expenses other than 154,573,239 21,122,367
Depreciation / Amortisation (24,481,390) (2,351,704)
B) Secondary Segment - Domestic Export Total Rupees Rupees Rupees
a) Segment Revenue Geographic Segment 19,448,498,310 5,078,234,605 24,526,732,915
by location of customer (16,793,237,485) (3,794,494,598) (20,587,732,083)
b) Carrying Amount of Segment Assets by location of assets 23,537,614,676 777,257,811 24,314,872,487
(19,643,309,115) (856,343,971) (20,499,653,086)
c) Cost Incurred during the period to 984,242,992 16,765,209 1,001,008,201
acquire Segment Fixed Assets (844,665,704) (8,980,053) (853,645,757)
KIRLOSKAR BROTHERS LIMITEDth
109
NOTES
110
As many of you are aware, the Kirloskar Group
began large-scale operations with Kirloskar Brothers
Limited's flagship plant in Kirloskarvadi in 1910.
From pioneering India's agricultural success-story
with innovative products like the iron plough to being
the acknowledged leader in engineering solutions
globally, the brand 'Kirloskar' has come a long way.
Having made a difference to the lives of millions worldwide, your Company has brought growth and prosperity across
continents. Celebrating 2009-10 as the centenary year of this remarkable journey, we look forward to transforming fortunes.
This is the legacy of the Kirloskar Group. This is the legacy we will build on.
KIRLOSKAR BROTHERS LIMITED
Regd. Office : Udyog Bhavan, Tilak Road, Pune - 411 002. (INDIA)Tel.:+91 20 2444 0770 Fax:+91 20 2440 2083
E-mail : kblin@kbl.co.in Website: www.kbl.co.in Prin
ted
at V
ikra
m P
rin
ters
Pvt
. L
td.
KIRLOSKAR BROTHERS LIMITEDRegistered Office : Udyog Bhavan, Tilak Road, Pune - 411 002
Dear Shareholders,thSub: Corrigendum to 89 Annual Report 2008-09
Please refer to the enclosed Annual Report 2008-09 of the Company. We draw your attention to the second paragraph on the page No. 4 of the same.
As you are aware, on February 2, 2009, 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.
However, since the approval was pending with the Government till date, we were to provide separately the respective annual accounts and other documents of subsidiary companies.
We are pleased to inform you that on June 17, 2009 the Government of India, Ministry of Corporate Affairs vide letter No. 47/120/2009-CL-III, granted its approval under section 212(8) of the Companies Act, 1956 for the year ended March 31, 2009.
As per the said approval, instead of the annual accounts of the subsidiary companies, we attach certain information in respect of company's subsidiaries for the financial year ended March 31, 2009 / December 31, 2008 / September 30, 2008 and for the corresponding previous year ended March 31, 2008 / December 31, 2007.
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.
thThis communication forms a part of the company's 89 annual report-2008-09.
For KIRLOSKAR BROTHERS LIMITED,
G. P. KULKARNIVice President & Head - Legal
Pune : June 19, 2009 and Company Secretary
Bal
ance
sh
eet
Sha
re C
apita
l 3
4,45
4,77
0 3
4,45
4,77
0 2
0,00
1,30
0 2
0,00
1,30
0 6
1,50
0,02
0 6
1,50
0,02
0 4
,016
,000
4
,016
,000
1
7,00
0,00
0 3
,702
,750
9
,647
,358
3
,155
,665
1
48,3
15,8
00
159
,389
,800
Res
erve
s &
Sur
plus
100
,028
,205
9
9,75
2,60
2 -
-
1
4,92
4,41
9 1
32,5
80,5
03
88,
852,
512
69,
991,
148
26,
247,
000
-
-
436
,687
,544
2
79,2
11,1
62
Min
ority
Inte
rest
6
74,1
31
Ass
ets
Fix
ed A
sset
s -
-
1
8,42
9,62
4 1
8,42
9,62
4 5
78,7
55,5
23
477
,232
,351
8
,020
,554
6
,680
,535
7
5,26
7,03
0 7
2,53
4 -
2
87,5
89,6
75
258
,125
,406
Inta
ngib
le A
sset
s 4
,649
,657
6
,918
,077
6
81,6
36
-
Inve
stm
ents
133
,351
,187
1
33,3
51,1
87
-
-
5,1
00
-
99,
910
99,
910
-
-
-
-
-
(see
not
e 1
for d
etai
ls)
Cur
rent
Ass
ets,
1
,184
,215
8
66,2
87
160
,069
1
60,5
74
1,3
32,0
20,8
33
844
,794
,189
2
51,7
04,3
91
210
,588
,648
1
78,8
30,0
30
3,1
15,1
04
17,
292,
958
3,1
60,4
62
2,1
01,5
33,1
41
1,4
37,5
85,8
58
Def
erre
d Ta
x -
-
-
-
-
8
,643
,177
7
,756
,386
Tota
l Ass
ets
134
,535
,402
1
34,2
17,4
74
18,
589,
693
18,
590,
198
1,9
15,4
31,1
13
1,3
28,9
44,6
17
259
,824
,855
2
17,3
69,0
93
254
,778
,696
3,1
87,6
38
17,
292,
958
3,1
60,4
62
2,3
97,7
65,9
93
1,7
03,4
67,6
50
Lia
bilit
ies
Sec
ured
Loa
ns -
-
-
-
4
87,3
70,8
08
442
,281
,484
6
1,70
8,48
5 2
9,86
8,63
3 2
0,38
7,68
3 -
-
1
67,9
76,0
23
224
,584
,532
Uns
ecur
ed L
oans
-
-
406
,404
4
06,4
04
550
,550
,000
4
5,00
0,00
0 1
3,00
0,00
0 1
5,50
0,00
0 1
26,1
34,1
07
-
-
-
-
Cur
rent
Lia
bilit
ies
and
Pro
visi
ons
52,
427
10,
102
1,0
09,5
35
999
,608
7
84,2
89,3
31
635
,287
,815
9
1,93
3,97
6 9
7,71
8,40
6 6
9,50
6,52
0 9
9,05
1 1
6,25
6,00
5 4
95,0
61
1,6
44,7
86,6
27
1,0
40,2
82,1
56
Def
erre
d Ta
x -
-
-
-
1
6,79
6,53
5 1
2,29
4,79
5 3
13,8
82
274
,906
(4
,496
,615
) -
-
-
-
Tota
l Lia
bili
ties
52,
427
10,
102
1,4
15,9
39
1,4
06,0
12
1,8
39,0
06,6
74
1,1
34,8
64,0
94
166
,956
,343
1
43,3
61,9
45
211
,531
,695
9
9,05
1 1
6,25
6,00
5 4
95,0
61
1,8
12,7
62,6
50
1,2
64,8
66,6
88
Bal
ance
of P
rofi
t & L
oss
Acc
ou
nt
-
-
(2,8
27,5
46)
(2,8
17,1
14)
-
-
-
-
-
(614
,163
) (9
,284
,535
) (4
90,2
64)
-
-
Pro
fit &
Lo
ss A
cco
un
t
Turn
over
18,
266,
340
38,
217,
660
-
-
1,2
21,9
68,1
50
990
,266
,201
6
26,1
17,9
21
265
,585
,337
2
11,9
86,9
19
31,
553
8,9
13,0
59
2,7
32
4,2
65,1
63,6
19
3,4
99,7
51,1
66
Pro
fit b
efor
e ta
xatio
n 1
8,01
2,16
2 3
5,74
6,27
7 (1
0,43
2) (1
1,88
2) (1
09,1
29,3
44)
(42,
674,
102)
36,
063,
668
12,
977,
737
6,0
20,8
29
(564
,596
) (1
2,96
0,72
1) (4
42,0
80)
228
,402
,396
1
67,2
64,5
33
Pro
visi
on fo
r tax
atio
n -
(4
96,6
36)
-
-
8,5
26,7
40
(7,6
46,3
63)
12,
481,
281
4,6
20,8
43
(4,6
21,9
23)
5,5
12
-
-
63,
577,
244
48,
320,
134
Pro
fit a
fter t
axat
ion
18,
012,
162
36,
242,
913
(10,
432)
(11,
882)
(117
,656
,084
) 3
5,02
7,73
9 2
3,58
2,38
7 8
,356
,894
1
0,64
2,75
2 (5
70,1
08)
(12,
960,
721)
(442
,080
) 1
64,8
25,1
52
118
,944
,399
Inte
rim D
ivid
end
15,
160,
099
-
-
-
-
-
-
-
-
Pro
pose
d D
ivid
end
-
-
-
-
-
4,01
6,00
040
1,60
0 -
-
Th
e C
om
pan
y h
as o
bta
ined
ap
pro
val o
f th
e C
entr
al G
ove
rnm
ent u
nd
er s
ecti
on
212
(8) o
f th
e C
om
pan
ies
Act
195
6,(A
ct) f
or n
ot a
ttac
hin
g d
ocu
men
ts o
f its
su
bsi
dia
ries
refe
rred
to in
Sec
tio
n 2
12 (1
) (a)
to (d
) of t
he
Act
to th
e A
nn
ual
Acc
ou
nts
of t
he
Co
mp
any.
As
per
the
said
ap
pro
val,
the
Co
mp
any
is g
ivin
g th
e fo
llow
ing
info
rmat
ion
in re
spec
t of i
ts s
ub
sid
iari
es fo
r th
e fi
nan
cial
yea
r en
ded
Mar
ch 3
1, 2
009
/ Dec
emb
er 3
1, 2
008/
Sep
tem
ber
30,
200
8 an
d fo
r th
e co
rres
po
nd
ing
pre
vio
us
year
en
ded
Mar
ch 3
1, 2
008
/ Dec
emb
er 3
1, 2
007.
Par
ticu
lars
Po
oja
Cre
dit
s P
vt.
Ltd
.K
irlo
skar
Silk
Ind
ust
ries
Ltd
.K
irlo
skar
Co
nst
ruct
ion
sG
on
dw
ana
Th
e K
olh
apu
rK
irlo
skar
Bro
ther
s K
irlo
skar
Bro
ther
sS
PP
Pu
mp
s L
imit
ed&
En
gin
eers
Ltd
. E
ng
inee
rs L
imit
edS
teel
Ltd
.( T
hia
lan
d )
Ltd
. I
nte
rnat
ion
al B
. V.
(Co
nso
lidat
ed(C
on
solid
ated
Fin
anci
al s
tate
men
ts)
Fin
anci
al S
tate
men
ts)
As
at M
arch
As
at M
arch
As
at M
arch
A
s at
Mar
ch
As
at M
arch
As
at M
arch
As
at M
arch
As
at M
arch
As
at M
arch
As
at S
epte
mb
er
As
at D
ecem
ber
A
s at
Dec
emb
erA
s at
Dec
emb
erA
s at
Dec
emb
er31
, 200
931
, 200
831
, 200
931
, 200
831
, 200
931
, 200
831
, 200
931
, 200
831
, 200
930
, 200
831
, 200
831
, 200
731
, 200
831
, 200
7R
up
ees
Ru
pee
sR
up
ees
Ru
pee
sR
up
ees
Ru
pee
sR
up
ees
Ru
pee
sR
up
ees
Ru
pee
sR
up
ees
Ru
pee
sR
up
ees
Ru
pee
s
2
KIRLOSKAR BROTHERS LIMITEDth
No
te 1
:
Det
ails
of I
nve
stm
ents
Kirl
oska
r Inv
estm
ents
& F
inan
ce L
td.
1,1
53,0
00
1,1
53,0
00
Kirl
oska
r Oil
Eng
ines
Ltd
. 5
8,18
8,06
7 5
8,18
8,06
7
Kirl
oska
r Fer
rous
Indu
strie
s Lt
d. 6
9,10
0,00
0 6
9,10
0,00
0
Kirl
oska
r Con
sulta
nts
Ltd.
4,4
55,0
00
4,4
55,0
00
Hem
atic
Mot
ors
Pvt
. Ltd
. 3
,179
,699
3
,179
,699
Pre
ssm
atic
Ele
ctro
Sta
mpi
ngs
Pvt
. Ltd
.
1,1
16,9
98
1,1
16,9
98
Qua
drom
atic
Eng
inee
ring
Pvt
. Ltd
.
706
,039
7
06,0
39
Qua
dran
t Com
mun
icat
ions
Ltd
.
343
,000
3
43,0
00
Ban
k of
Indi
a 9
,000
9
,000
Sai
nath
Sug
ar C
o-op
Fac
tory
1
0,00
0 1
0,00
0
Nat
iona
l Sav
ings
Cer
tific
ate
-
-
2
3,00
0 2
3,00
0
Osw
al A
gro
Ran
jeet
Wea
ving
Mill
-
-
31,
200
31,
200
Mon
sant
o C
hem
ical
Ltd
.
-
-
9,0
40
9,0
40
Ste
rling
Tea
Ltd
.
-
-
26,
670
26,
670
Sub
Tot
al 1
38,2
50,8
03
141
,250
,803
-
-
9
9,91
0 9
9,91
0
Less
: Pro
visi
on fo
r Dec
line
in v
alue
of
Inve
stm
ents
4,8
99,6
16
4,8
99,6
16
-
-
-
-
133
,351
,187
1
36,3
51,1
87
-
-
99,
910
99,
910
Exc
han
ge
Rat
e co
nsi
der
ed
for c
on
vers
ion
1.4
81
68.
91
63.
11
74.
16
79.
69
No
tes
:
In a
ccor
danc
e w
ith th
e or
ders
pas
sed
by th
e H
onou
rabl
e B
oard
for I
ndus
tria
l and
Fin
anci
al R
econ
stru
ctio
n (B
IFR
) on
May
14,
200
8, th
e C
ompa
ny h
as a
cqui
red
all t
he E
quity
sha
res
of R
s. 1
0/- e
ach
of T
he K
olha
pur S
teel
Lim
ited
(TK
SL)
from
the
exis
ting
prom
oter
s by
exe
cutin
g a
Sha
re P
urch
ase
Agr
eem
ent o
n A
ugus
t 2,
2008
and
TK
SL
has
beco
me
a su
bsid
iary
com
pany
of K
BL
with
effe
ct fr
om A
ugus
t 2, 2
008.
The
com
pany
, thr
ough
its
subs
idia
ry c
ompa
ny K
irlos
kar B
roth
ers
Inte
rnat
iona
l B.V
. , h
as fo
rmed
a C
ompa
ny in
The
Net
herla
nds,
on
May
13,
200
8, n
amel
y, “
Kirl
oska
r Bro
ther
s E
urop
e B
.V. "
Thi
s is
a jo
int v
entu
re c
ompa
ny w
ith a
loca
l par
tner
, pr
imar
ily fo
r the
dis
trib
utio
n of
the
com
pany
’s p
rodu
cts
in E
urop
e.
The
com
pany
has
form
ed a
who
lly o
wne
d su
bsid
iary
com
pany
in T
haila
nd n
amel
y K
irlos
kar B
roth
ers
(Tha
iland
) Ltd
. As
per t
he lo
cal l
aws,
the
com
pany
was
per
mitt
ed to
com
men
ce b
usin
ess
only
afte
r get
ting
the
appr
oval
from
Boa
rd o
f Inv
estm
ents
, Tha
iland
, w
hich
was
rece
ived
in S
epte
mbe
r 200
8.
Par
ticu
lars
Po
oja
Cre
dit
s P
vt. L
td.
Kir
losk
ar S
ilk In
du
stri
es L
td.
Kir
losk
ar C
on
stru
ctio
ns
Go
nd
wan
aT
he
Ko
lhap
ur
Kir
losk
ar B
roth
ers
Kir
losk
ar B
roth
ers
SP
P P
um
ps
Lim
ited
& E
ng
inee
rs L
td.
En
gin
eers
Lim
ited
Ste
el L
td.
( Th
iala
nd
) L
td.
In
tern
atio
nal
B. V
. (C
on
solid
ated
(Co
nso
lidat
ed F
inan
cial
sta
tem
ents
)F
inan
cial
Sta
tem
ents
)
As
at M
arch
As
at M
arch
As
at M
arch
A
s at
Mar
ch
As
at M
arch
As
at M
arch
As
at M
arch
As
at M
arch
As
at M
arch
As
at S
epte
mb
er
As
at D
ecem
ber
A
s at
Dec
emb
erA
s at
Dec
emb
erA
s at
Dec
emb
er31
, 200
931
, 200
831
, 200
931
, 200
831
, 200
931
, 200
831
, 200
931
, 200
831
, 200
930
, 200
831
, 200
831
, 200
731
, 200
831
, 200
7R
up
ees
Ru
pee
sR
up
ees
Ru
pee
sR
up
ees
Ru
pee
sR
up
ees
Ru
pee
sR
up
ees
Ru
pee
sR
up
ees
Ru
pee
sR
up
ees
Ru
pee
s
3
a
n
f
n
This
pge
is
ite
ntio
nally
let b
lak
top related