Your Directors have pleasure in presenting this Report with Audited Annual Accounts of
the Company for the year ended 31st March, 2023.
1. COMPANY SPECIFIC INFORMATION
1.1. Financial Summary & Highlights
The financial results for the year ended 31st March, 2023 are summarized below:
H in Million
|
2022-23 |
2021-22 |
| Total Income |
12,505.24 |
10,334.97 |
| Profit before tax |
1,432.76 |
1,141.24 |
| Tax Expense (Current & Deferred tax) |
346.95 |
292.00 |
| Profit after tax |
1,085.81 |
849.24 |
| Other Comprehensive Income / (Loss), net of tax |
555.16 |
141.79 |
| Total Comprehensive Income for the year |
1,640.97 |
991.03 |
| Transferred to General Reserve |
1,000.00 |
500.00 |
Your Company registered a total income of _ 12,505.24 Million for the financial year
2022-23, against _ 10,334.97 Million of the previous year. Your Company earned a net
profit of _ 1,085.81 Million compared to _ 849.24 Million earned in last year. Your
Company registered 21% growth in Total Income and over 27% growth in Net Profit as
compared to previous year.
During the year, your Company continues to maintain the status of debt free company.
1.2 Reserves
During the reporting year, _ 1,000 Million has been transferred to the General Reserves
of the Company.
1.3 Dividend
During the reporting year, the Board of Directors declared an interim dividend of _
2.50 (125%) per equity share of _ 2/- each.
The Board of Directors had recommended a final dividend of _ 3/- (150%) per equity
share of _ 2/- each for the year 2022-23 which will be paid subject to the approval of
shareholders in the ensuing Annual General Meeting.
The Company has paid / recommended total dividend of _ 5.50 (275%) per equity share of
_ 2/- each for the year 2022-23.
The dividend distribution policy is available on the following Weblink:
https://www.kirloskarpneumatic.com/investors/for- share-holders/company-policies
1.4 Major events that occurred during the year
Listing of Shares on NSE:
During the year, the certain Promoters and Promoter Group have diluted their equity
shares of your Company thereby increase the liquidity in the market. The Promoters and
Promoter Group are as on date holding 39% equity shares of your Company. As such there is
no change in the control of the Company.
During the year, your Company has made an application for listing of its existing
equity shares on the National Stock Exchange of India Limited (NSE). NSE has permitted to
list 64,634,690 equity shares of _ 2/- each of your Company and admitted the same to
dealings with effect from 26th April, 2023.
Thus, your Company is now listed on both the nationwide trading terminals i.e. BSE
& NSE. As such, increase in liquidity and listing on nationwide stock exchanges will
help our approx. 30,000 Members and Investors to deal in the equity shares of the Company
easily and effectively.
Accreditation to Metrology Lab:
Metrology Laboratory is Accredited in accordance with the standard "ISO / IEC
17025:2017 - General requirements for the Competence of testing & calibration
Laboratories" in the field of "Calibration" for our Calibration facilities
at Hadapsar Plant from National Accreditation Board for Testing & Calibration
Laboratories.
1.5 Segment-wise position of business and its operations
In terms of provisions of Indian Accounting Standards ("IND AS") 108 –
Operating Segments, during the reporting year, the Chief Operating Decision Maker
evaluates the Company's performance comprising various segments. Accordingly, segmental
information has been reported under Compression Systems and other Non-Reportable Segments
which include remaining non-qualifying segments.
Compression Systems registered a robust growth over the previous year by earning
revenue of _ 11,569 Million as compared to _ 9,609 Million in the previous year.
2. CAPITAL STRUCTURE
2.1 Increase in Share Capital
During the year, the Company allotted 189,400 equity shares of _ 2/- each upon the
exercise of the options granted to employees of the Company pursuant to KPCL Employee
Stock Option Scheme 2019 (‘KPCL ESOS 2019' or ‘the Scheme'). Issued Capital,
Subscribed Capital and Paid-up Capital of the Company therefore increased by _ 378,800 and
was _ 129,269,380/- consisting of 64,634,690 equity shares of _ 2/- each as on 31st March,
2023.
2.2 Employee Stock Option Scheme
Your Company introduced KPCL ESOS 2019 in order to motivate, incentivize and reward its
employees. Your Company views employee stock options as an instrument that would enable
the employees to share the value they create for the Company and align individual
objectives of the employees with the objectives of the Company.
The Nomination and Remuneration Committee at its meeting held on 22nd October, 2019,
29th April, 2021 and 19th October, 2022 respectively approved the grant of 684,000,
104,000 and 164,000 stock options exercisable into 684,000, 104,000 and 164,000 Equity
Shares of H 2/- each of the Company to its specified employees.
The Scheme is in compliance with the applicable provisions of the Companies Act, 2013
and the Rules issued thereunder, Securities and Exchange Board of India (Share Based
Employee Benefits) Regulations, 2014 ("Employee Benefit Regulations") upto 12th
August, 2021, the Securities and Exchange Board of India (Share Based Employee Benefits
and Sweat Equity) Regulations, 2021 w.e.f. 13th August, 2021 and other applicable
regulations, if any.
The details of options granted, vested, exercised, lapsed / cancelled during the year
2022-23 and outstanding at the end of the year is provided in Note No. 26 to the Financial
Statements for the year ended 31st March, 2023. During the year, 189,400 equity shares
were allotted as a result of exercise of options resulting into realization of _
25,542,000. The Company has granted 4,000 options to Key Managerial Personnel namely Mr
Jitendra Shah, Company Secretary during the year. None of the employee was granted options
in any one year amounting to five percent or more during the year. Further, no employee
was identified to whom options granted one percent or more of the issued capital of the
company at the time of grant during the year. During the year, the Company has not made
any variations in the KPCL ESOS 2019.
The certificate from M/s. SVD & Associates, Company Secretaries, Secretarial
Auditors of the Company, confirming that the Scheme has been implemented in accordance
with the aforesaid regulations and in accordance with the resolution passed by the Company
at its Annual General Meeting held on 20th July, 2019, will be placed before the
shareholders at the ensuing Annual General Meeting. A copy of the same will be available
for inspection at the Company's website and can be accessed on the weblink:
https://www.kirloskarpneumatic.com/ investors/for-share-holders/agm-results
The disclosures relating to the implementation of the Scheme, details of options
granted, changes to the Scheme, if any, etc. are placed on the website of the Company as
required under the Securities and Exchange Board of India (Share Based Employee Benefits
and Sweat Equity) Regulations, 2021 and can be accessed on the following
weblink:https://www.kirloskarpneumatic.com/investors/for-share-holders/agm-results
In line with the IND AS 102 on ‘Share Based Payments' issued by the Institute of
Chartered Accountants of India ("ICAI"), your Company has computed the cost of
equity - settled transactions by using the fair value of the options at the date of the
grant and recognized the same as employee compensation cost over the vesting period.
3. AWARDS
During the reporting year, your Company was consecutively recognized with prestigious
and diverse external accolades which include:
• "Prize for Leadership in HR Excellence" and "Prize for sustained
excellence" during HR in 13th CII HR Excellence Assessment 2022-23
• "Excellence Award Trophy" at 36th National Convention on Quality
Concepts (NCQC – 2022)
• "Gold Award Trophy" at 37th Chapter Convention on Quality Concepts
(CCQC – 2022)
• Mr Arun Adiverekar was awarded with "QCI Champion Award" during the
QCI Silver Jubilee Celebration, held in New Delhi on 6th October, 2022 for his outstanding
contributions that improved manufacturing quality through new technology application and
advanced Quality tools.
4. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
No Loans, Guarantees covered under the provisions of Section 186 of the Companies Act,
2013 are given / provided / made during the reporting year. However, a Letter of Comfort
provided to State Bank of Mauritius (SBM) with respect to Kirloskar Management Services
Private Limited to the tune of _ 100 Million in the past.
During the reporting year, the Company has not made any investment except investments
in Mutual Funds and Fixed Deposits.
5. INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Details of the transfer/s to the IEPF made during the year are mentioned below:
During the reporting year, your Company transferred following amount and shares to the
Investor Education and Protection Fund:
| Final Dividend for the year 2014-15 |
_ 1,221,750 |
| No. of shares of _ 2/- each |
79,780 |
Year wise amount of unpaid / unclaimed dividend lying in the unpaid account up to the
year and the corresponding shares, which are liable to be transferred to the IEPF and the
due dates for such transfer:
| Sr. No. |
Year |
Unpaid / Unclaimed Dividend as on 31-03-2023 |
Corresponding Number of Equity Shares of the Company |
Due Date of Transfer |
| 1 |
Dividend 2015-16 (Interim) |
1,630,006 |
232,858 * |
19th April, 2023 |
| 2 |
Dividend 2015-16 (Interim - PHL) |
1,374,876 |
152,764 # |
6th May, 2023 |
| 3 |
Dividend 2016-17 (Interim - PHL) |
1,185,668 |
158,089 # |
3rd May, 2024 |
| 4 |
Final Dividend 2016-17 |
4,179,300 |
417,930 * |
1st September, 2024 |
| 5 |
Final Dividend 2017-18 |
3,769,644 |
314,137 * |
29th August, 2025 |
| 6 |
Dividend 2018-19 (Interim) |
1,572,011 |
1,572,011 ** |
28th February, 2026 |
| 7 |
Final Dividend 2018-19 |
2,315,976 |
1,543,984 ** |
25th August, 2026 |
| 8 |
Dividend 2019-20 (Interim) |
1,603,505 |
1,603,505 ** |
28th February, 2027 |
| 9 |
Dividend 2019-20 (Second Interim) |
3,036,912 |
1,786,419 ** |
9th April, 2027 |
| 10 |
Final Dividend 2020-21 |
4,766,124 |
1,361,750 ** |
25th August, 2028 |
| 11 |
Dividend 2021-22 (Interim) |
1,967,767 |
1,229,854 ** |
5th March, 2029 |
| 12 |
Final Dividend 2021-22 |
3,144,180 |
1,310,075 ** |
25th August, 2029 |
| 13 |
Dividend 2021-22 (Interim) |
2,942,686 |
1,177,074 ** |
2nd March, 2030 |
Note : # The Sr No. 2 & 3 states the amount of dividend declared &
paid and corresponding no of shares thereto of erstwhile Pneumatic Holdings Limited, which
was merged into the Company w.e.f. 28th April, 2017 by virtue of the order of the Hon'ble
National Company Law Tribunal, Mumbai.
* Before sub-division, Equity Share having face value of _ 10/- each. ** After
sub-division, Equity Share having face value of _ 2/- each.
6. DIRECTORS
i. Demise of Director
Your Directors, report with a deep sense of grief, the passing away of Mr Vikram S
Kirloskar, Non-Executive Director and Promoter of the Company on 29th November, 2022.
Mr Vikram S Kirloskar was a Fourth generation member of the illustrious Kirloskar
Family. He played a leading role in the automotive sector. He was also elected as
President of the Society of Indian Automobile Manufacturers during 2013-15. He also served
on the Govt. of India Development Council for Automobiles and the National Council for
Electric Mobility. He was President of Confederation of Indian Industry during 2019-20 and
was the Chairman of CII Council on making manufacturing future ready and CII task force on
green Hydrogen.
He was recognized by the Karnataka Government and presented with the "Suvarna
Karnataka" award.
The Company immensely benefitted from his foresight and vision, pursuit of excellence,
desire for quality enrichment and leadership during his tenure as member of the Board. His
mentorship to senior colleagues in the organisation is irreplaceable and remains a source
of inspiration forever. Mr Vikram Kirloskar's passing away will be irreparable loss to the
Company.
Your Directors place on record their warm and sincere appreciation for enormous
contribution extended by Mr Vikram S Kirloskar during his tenure on the Board.
ii. Directors and Key Managerial Personnel
During the year, Mr D R Swar and Mr K Venkataramanan have ceased to be Directors with
effect from 20th July, 2022 and 27th July, 2022, respectively, on completion of their
tenure. The Company places on record appreciation for their valuable and continued
guidance over the years.
Your Company appointed Mr Pravir Kumar Vohra as an Independent Director with effect
from 19th October, 2022 to hold office for a term of Five (5) consecutive years upto 18th
October, 2027.
Mr Rahul C Kirloskar, retires by rotation at the ensuing Annual General Meeting and
being eligible offers himself for re-appointment. The necessary resolution for appointment
of Mr Rahul C Kirloskar is proposed for approval in the forthcoming Annual General
Meeting.
Pursuant to the recommendation of Nomination and Remuneration Committee, the Board of
Directors at its meeting held on 27th April, 2023, has subject to approval of the members
at the forthcoming 48th Annual General Meeting scheduled on 20th July, 2023 approved the
reappointment of Mr K Srinivasan as the Managing Director of the Company from 26th
October, 2023 to 31st March, 2026. The necessary resolution for appointment of Mr K
Srinivasan is proposed for approval in the forthcoming Annual General Meeting.
The Board of Directors is of the opinion that the Independent Directors holds the
highest standard of integrity and possess necessary expertise and experience including
proficiency in the field in which the Company operates.
iii. Declaration from Independent Directors and Statement on Compliance of Code of
Conduct
Your Company has received necessary declarations from all its Independent Directors
stating that they meet the criteria of independence as provided in Sub-section (6) of
Section 149 of the Companies Act, 2013 and Regulation 16 (1) (b) of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015.
The Independent Directors have complied with the code for Independent Directors
prescribed in Schedule IV to the Companies Act, 2013.
All the Directors and Senior Management Personnel have also complied with the Code of
Conduct of the Company as required under SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 for its Directors and Senior Management.
iv. Directors Appointment and Remuneration Policy
The Board, on the recommendation of the Nomination and Remuneration Committee, adopted
a policy for selection and appointment of Directors, Key Managerial Personnel (KMP) and
Senior Management Personnel. Policy also prescribes the guidelines for determining the
remuneration of Executive Directors, Non-Executive Directors, KMP and Senior Management.
The Nomination and Remuneration Policy is available on the Company's website on the
following weblink:
https://www.kirloskarpneumatic.com/investors/for-share-holders/company-policies
v. Board Evaluation
The annual evaluation framework for assessing the performance of Directors comprises of
the following key areas:
a) Attendance in the meetings, participation and independence during the meetings;
b) Interaction with Management;
c) Role and accountability of the Board;
d) Knowledge and proficiency; and
e) Strategic perspectives or inputs.
The evaluation involves assessment by the Nomination and Remuneration Committee and
Board of Directors. A member of the Nomination and Remuneration Committee and Board does
not participate in the discussion of his / her evaluation.
Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 (10) of the
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has
carried out performance evaluation of its own performance and that of its committees and
individual Directors.
vi. Number of Meetings of the Board
A calendar of meetings is prepared and circulated in advance to the Directors. During
the year, five Board Meetings were convened and held, the details of which are given in
the Report on Corporate Governance. The intervening gap between the meetings was within
the period prescribed under the Companies Act, 2013 and SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015.
vii. Composition of Committee Meetings
The composition of the Audit Committee, Nomination and Remuneration Committee,
Stakeholders' Relationship Committee, Corporate Social Responsibility Committee and Risk
Management Committee constituted by the Board under the Companies Act, 2013 and SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015 as well as changes in
the composition, if any and no. of meetings held during the year forms part of the Report
on Corporate Governance.
viii. Directors' Responsibility Statement
To the best of their knowledge and belief and according to the information and
explanation obtained by them, the Directors in terms of clause (c) of Sub-section (3) of
Section 134 state that:
a) In the preparation of the annual accounts, the applicable Indian Accounting
Standards (IND AS) have been followed and there have been no material departures;
b) Accounting policies as mentioned in the financial statements have been selected and
applied consistently and made judgments and estimates that are reasonable and prudent so
as to give a true and fair view of the state of affairs of the company as at 31st March,
2023 and of the profit of the company for the year ended on that date;
c) Proper and sufficient care has been taken for the maintenance of adequate accounting
records in accordance with the provisions of the Companies Act, 2013 for safeguarding the
assets of the company and for prevention and detection of fraud and other irregularities;
d) The annual accounts have been prepared on a going concern basis;
e) Proper internal financial controls have been laid down for the company and that such
internal financial controls are adequate and are operating effectively; and f) Proper
systems to ensure compliance with the provisions of all applicable laws are in place and
that such systems are adequate and operating effectively.
7. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All related party transactions which were entered into during the financial year were
on an arm's length basis and in the ordinary course of business. There are no materially
significant related party transactions made by the Company with Promoters and Promoter
Group, Directors, Key Managerial Personnel or other designated persons which may have a
potential conflict with the interest of the Company at large.
The statement that the transactions are at arm's length and in the ordinary course of
business is supported by a certificate from the Managing Director. The Company has also
obtained the certificate from a Chartered Accountant on periodical basis.
All Related Party Transactions have been placed before the Audit Committee for their
approval and to the Board, as and when required.
In certain cases, prior omnibus approval of the Audit Committee is obtained on a yearly
basis. The transactions entered into pursuant to the omnibus approval so granted are
reviewed by the Audit Committee on a quarterly basis.
The policy on Related Party Transactions as approved by the Board is uploaded on the
Company's website.
The disclosures as per IND AS for transactions with related parties are provided in the
Financial Statement of the Company.
8. RISK MANAGEMENT
The Company has in place a Risk Management Committee of the Board, details of which
form part of the Corporate Governance Report.
The Company has a Risk Management framework to identify, evaluate business risks and
opportunities. To strengthen the risk management framework, Company has Segment Level Risk
Committees, Corporate Risk Management Committee and Board level Risk Management Committee.
This framework seeks to minimize adverse impact on the business objectives and enhance the
Company's competitive advantage.
9. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System commensurate with the size, scale and
complexity of its operations. The scope of the Internal Audit is decided by the Audit
Committee and the Board. To maintain its objectivity and independence, the Board has
appointed an external Auditor, which reports to the Audit Committee of the Board on a
periodic basis.
The Internal Auditor monitors and evaluates the efficacy and adequacy of Internal
Control Systems in the Company, its compliance with operating systems, accounting
procedures and policies for various functions of the Company. Based on the report of
Internal Auditor, process owners undertake corrective action wherever required in their
respective areas and thereby strengthen the controls further. Audit observations and
actions taken thereof are presented to the Audit Committee of the Board on periodic basis.
During the reporting year, Internal Financial Controls laid down by the Board were
tested for adequacy & effectiveness and no reportable material weakness in the design
or operations was observed. The Company has policies and procedures in place for ensuring
proper and efficient conduct of its business, safeguarding of assets, prevention and
detection of frauds and errors, accuracy and completeness of accounting records and timely
preparation of reliable financial information. Statutory Auditors have also given
unmodified audit opinion on adequacy of internal financial control systems with reference
to financial statements.
10. AUDITORS
a) Statutory Auditors
The Members of the Company appointed Kirtane & Pandit LLP, Firm Registration No.
105215W/W100057, Chartered Accountants as the Statutory Auditors of the Company for a term
of five (5) consecutive years from the conclusion of the 46th Annual General Meeting till
the conclusion of the 51st Annual General Meeting of the Company.
There are no qualifications, reservations or adverse remarks or disclaimers made by the
Statutory Auditors in their Audit Report for the year ended 31st March, 2023.
b) Cost Auditors
The Board of Directors had, on the recommendation of the Audit Committee, appointed M/s
Sudhir Govind Jog, a proprietary firm to audit the cost accounts of the Company for the
financial year 2023-24 on a remuneration of _ 0.65 Million.
As required under the Companies Act, 2013, the remuneration payable to the cost auditor
is required to be placed before the Members in a general meeting for their ratification.
Accordingly, a resolution seeking Members' ratification for the remuneration payable to
M/s Sudhir Govind Jog, a proprietary firm as Cost Accountant for the year ended on 31st
March, 2024 is proposed for approval in the forthcoming Annual General Meeting.
c) Secretarial Auditors
Pursuant to the provisions of Section 204 of the Companies
Act,2013andtheCompanies(AppointmentandRemuneration of Managerial Personnel) Rules, 2014,
the Company has appointed M/s. SVD & Associates, a partnership firm of Company
Secretaries in Practice to undertake the Secretarial Audit of the Company. The report of
the Secretarial Audit is annexed herewith as Annexure "1".
There are no qualifications, reservations or adverse remarks or disclaimer made by the
Secretarial Auditors in their Secretarial Audit Report for the year ended 31st March,
2023.
M/s. SVD & Associates, has submitted Annual Secretarial Compliance Report as laid
down in SEBI Circular CIR/CFD/CMD1/27/2019 dated 8th February, 2019 and has also confirmed
that the Company has complied with all applicable SEBI Regulations and circulars /
guidelines issued in line thereunder, for the financial year 2022-23.
11. SECRETARIAL STANDARDS
Your Company is in compliance with the revised Secretarial Standards on Meetings of the
Board of Directors (SS-1) and Secretarial Standards on General Meetings (SS-2) issued by
The Institute of Company Secretaries of India.
12. REPORTING OF FRAUDS BY AUDITORS
During the reporting year, neither the Statutory Auditors nor the Secretarial Auditors
has reported to the Audit Committee, under Section 143 (12) of the Companies Act, 2013,
any instance of fraud committed against the Company by its officers or employees.
Therefore, no details are required to be provided in the Board's report.
13. CORPORATE GOVERNANCE
The Company strives to maximize the wealth of the shareholders by managing the affairs
of the Company with pre-eminent level of accountability, transparency and integrity. A
report on Corporate Governance including the relevant Auditors' Certificate regarding
compliance with the conditions of Corporate Governance as stipulated in Regulation 34 (3)
read with Part E of Schedule V of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 is annexed and forms part of the Annual Report.
State of Company's affairs and future outlook is provided in the Management Discussion
and Analysis Report, annexed hereto forming part of Directors' Report.
14. ANNUAL RETURN
The Annual Return as provided under Sub-section (3) of Section 92 of the Companies Act,
2013 is available on the web-link: https://www.kirloskarpneumatic.com/
investors/for-share-holders/agm-results
15. CORPORATE SOCIAL INITIATIVES
The Board has established a CSR Committee to monitor its CSR activities. On the
recommendation of the CSR Committee, the Board of Directors has adopted a CSR Policy in
line with the Companies Act, 2013.
As part of its initiatives under Corporate Social Responsibility (CSR), your Company
has undertaken projects in the areas of Promoting Education, Education of Girls,
Environment and Health. These projects are largely in accordance with Schedule VII of the
Companies Act, 2013 and are also aligned with SDGs (Sustainability Development Goals).
This year was the first year where everyone started to live a normal life and learned
to co-exist with the waning COVID-19 pandemic. This meant that we could reconnect and
engage with our community stakeholders in physical ways as usual. The year marked
consolidating as well as refocusing of our CSR initiatives.
With focus on youth skilling and employability, a new initiative is started by
collaborating with NTTF (Nettur Technical Training Foundation). Eligible students are
selected with due consideration for DEI (Diversity, Equity and Inclusion) and based on
various socio-economic criteria. These selected candidates are supported for a 3 year
diploma program in Mechatronics and Smart Factory.
Bharari and KaShi initiatives that promote girls' education were continued with renewed
enthusiasm. Improvements like setting up of a book library, organizing life skills
workshops helped enhancing the impacts on overall development of the girl students from
5th to 10th Std.
DISHA initiative aimed at creating awareness about HIV AIDS in general community as
well as school, college students also reached out to people living with HIV through
medical camps, counselling sessions, matrimonial melava etc.
As WaSH intervention, water filtration and purification plants were created for schools
in the vicinity of your Company's factory locations to ensure clean and safe drinking
water to the students.
RRM (Ram Nadi Restoration Mission) School Initiative created awareness about river
restoration amongst teachers and students of schools located nearby Ram Nadi river basin
through activities such as wall paintings, workshops and competitions (elocution,
drawings, essays etc). The 3rd Online Ram Nadi Festival as a part of Kirloskar Vasundhara
Initiative highlighted the contributions made through such activities.
KIAMS – Contribution to Kirloskar Institute of Advanced Management Studies were
continued by contributing _ 12 Million during the year to promote education.
The details on CSR activities are provided in Management Discussion and Analysis
Report.
The CSR policy is available on the website of the Company.
CSR Policy in brief:
The focus of CSR activities will be on Education, Environment and Health.
While devising projects, care would be taken to promote education, health and
sanitation, protect the environment and minimize adverse impact, if any, on the society at
large.
The Company shall spend at least Two percent (2%) of the average net profits,
calculated in accordance with the provisions of the Companies Act, 2013 and Rules
thereunder, made by it in three immediately preceding financial years, in every financial
year.
The Annual Report on CSR Activities is annexed herewith as Annexure "2".
16. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
The information on conservation of energy, technology absorption and foreign exchange
earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with
Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as Annexure
"3".
17. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
Business Responsibility and Sustainability Report as required under Regulation 34(2)(f)
of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended,
forms part of this Annual Report.
18. MATERIAL CHANGES AND COMMITMENTS, BETWEEN THE DATE OF BALANCE SHEET AND THE DATE OF
REPORT
There have been no material changes and commitments, affecting the financial position
of the Company which have occurred between the end of financial year of the Company to
which the Financial Statements relate and the date of this Report.
19. MAINTENANCE OF COST RECORDS
Your Company confirms that the maintenance of cost records as specified by the Central
Government under Sub-section (1) of Section 148 of the Companies Act, 2013, is required by
the Company and accordingly such accounts and records are made and maintained.
20. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators / Courts which would
impact the going concern status of the Company and its future operations. During the year,
no application was made or any proceeding was pending under the Insolvency and Bankruptcy
Code, 2016 against the Company.
21. VIGIL MECHANISM / WHISTLE BLOWER POLICY
During the reporting year, your Company revised the Whistle Blower Policy / Vigil
Mechanism. Your Company has adopted Whistle Blower Policy / Vigil Mechanism with the
objectives of enhancing the standards of ethical conduct for the highest degree of
transparency, integrity, accountability and corporate social responsibility.
Your Company has established a vigil mechanism for Directors and Employees of the
Company and other persons dealing with the Company to report their genuine concerns,
details of which have been given in the Report on Corporate Governance.
To encourage the employees, your Company has launched Kirloskar Ethical Helpline to
report their genuine concerns.
22. FIXED DEPOSIT
Your Company has discontinued accepting fixed deposits since 2001-02. As such, as of
31st March, 2023 there are no fixed deposits outstanding.
23. PARTICULARS OF EMPLOYEES
Disclosures with respect to the remuneration of Directors and Employees as required
under Section 197 (12) of the Companies Act, 2013 read with Rule 5 (1) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 have been annexed as
Annexure "4" to this Report.
In accordance with the provisions of Section 197 (12) of the Companies Act, 2013 and
Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014, the names and other particulars of Employees are available at the Registered Office
of the Company during working hours for a period of 21 days before the Annual General
Meeting and shall be made available to any shareholder on request.
24. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION
AND REDRESSAL) ACT, 2013
Your Company has formulated ‘Prevention of Sexual Harassment of Women at Workplace
Policy' and the highlights are communicated to all Employees and also displayed across all
its locations as well as on its intranet.
Your Company has complied with provisions relating to constitution of Internal
Committee (IC) under the Sexual Harassment of Women at Workplace (Prevention, Prohibition
and Redressal) Act, 2013. IC meets every quarter and submits the minutes of meeting to the
employer i.e. Managing Director. During the reporting year, four such meetings were
conducted and no complaint has been received.
During the reporting year, to create ongoing awareness, your Company has:
• Continued with a PoSH Awareness Module in its employee induction program. During
the reporting year, 10 such programs were conducted for 129 employees.
• Online training provided through KORE – Platform to 223 employees during
the reporting year.
In addition to the above, as a social responsibility, your Company has also extended
awareness sessions for 30 employees and 35 students of the other entities through 1
workshop.
25. EMPLOYEES
Your Company has taken several initiatives for Human Resource Development and manpower
retention. Manpower is classified under Frontend, Internal and Support functions for
better Customer Reach and Support. Assessment of performance through a robust and
interactive PMS procedure, identifying Learning needs through the 70-20-10 format, Career
Counselling and Skill Development Programs are some of the initiatives adopted by your
Company. Training programs are designed to enhance skills, knowledge and behaviour.
Employees are motivated through empowerment and rewarded for good performance. Adoption of
5S across the Company has led to a clean and healthy environment. Your Company has
achieved an India benchmark employee engagement score of 85 in the engagement survey 2019
conducted by an external Independent Agency. In the FY-22 your Company conducted an
internal survey and the engagement levels were unmoved and your Company has benchmark
score of 84 within Kirloskar Group. CII conferred us with the "Prize for Leadership
in HR Excellence-2022". Your Company has won this for the 4th consecutive year. Your
Company is also one out of the two organizations who have achieved this consistency in the
Country. For this consistent performance, CII has specially recognised your Company with a
certificate "Prize for sustained excellence in HR".
Your Company has 749 permanent employees on its rolls as on 31st March, 2023.
26. ACKNOWLEDGEMENT
The Directors wish to convey their appreciation to all employees for their individual
efforts and collective contribution to your Company's performance in the rapidly changing
environment. The Directors would also like to thank the shareholders, customers, dealers,
suppliers, bankers and all other stakeholders for their continued support and confidence
in the management of the Company.
|
For and on behalf of the Board of Directors |
|
sd/- |
|
Rahul C Kirloskar |
| Date : 27th April, 2023 |
Executive Chairman |
| Place: Pune |
DIN 00007319 |
ANNEXURE "3" TO THE BOARD'S REPORT
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
[Section 134 of the Companies Act, 2013 read with Rule 8 (3) of the Companies (Accounts)
Rules, 2014]
Conservation of natural resources and environment protection is of utmost importance to
all of us. Your Company's commitment to energy conservation is evident from consistent
implementation and recognition of our ENCON projects.
A. CONSERVATION OF ENERGY
i. The steps taken or impact on conservation of Energy:
Total 23 Nos. ENCON projects implemented by using new technology, by waste elimination,
by reuse and recycling in different areas like power, process, lighting and natural
resources. Some of the projects are as under:
a. Continuous projects
• Switch ‘OFF' power transformer T5-1,500 kVA, T8-1,600 kVA and T1-500 kVA at
no load condition at Hadapsar and Isolation of 1,500 kVA transformer from HT and LT side
at Saswad.
• Proper utilization of stress relieving and heat treatment furnaces to get energy
efficiency by improving on net weight loading and TOD tariff.
• Switching off machines during lunch & tea time.
• Timer controlled switching ON / OFF of street light.
• Use of dry type paint booth to eliminate water consumption for painting
operation.
• Use of energy efficient LED lights, energy efficient motors at shop floor and
office area, street light in all divisions.
• Timer based operation of domestic water circulation pump at Hadapsar Plant.
• Saving in water consumption by maintaining water filtration plant at Saswad
Plant.
• Maximum demand control through remote control operation.
b. Process improvement projects
• Use of small baffle furnace for shrink fit instead of pit type 1 ton capacity
furnace.
• Use of modified heat treatment cycle for ferritization annealing process
resulting in heating temperature reduction from 930?C to 730?C.
• Energy saving by switching Coolant filtration motor pump during cycle instead of
keeping continuously ON of two CNC machines.
• Isolation of 4,500 kVA transformer from HT & LT side at Saswad.
• Synchronising of 5 nos. compressors to reduce energy consumption.
• Eliminate the DG Set operation to reduce specific fuel consumption.
• Use of direct heating instead of indirect heating system on Phosphating plant
and improve heat transfer efficiency.
• Multiple crank case loading at Phosphating plant.
• Reduction in air grid pressure by 0.5 bar of compressed air at foundry
compressor to achieve energy saving.
• Reduction in surface temperature loss while pouring of molten metal in foundry.
• Process improvement in cycle time reduction by 1.5 hrs at heat treatment
carburizing furnaces.
• Use of face driver attachment for all type of centre shaft for turning
operation.
• Improvement in net weight loading percentage of heat treatment furnace by
fixture modification.
• Process modification for HP cylinder and gear housing machining operation at Air
Compressor Division.
. New Technology
• Installation of Energy efficient motor IE3 Class on 10/09 Bore Grinding machine.
• Replacement of 22 nos. 60 W AC fan by 32 W AC energy efficient BLDC fans.
• Installation of energy efficient direct drive compressor KRC-4 at 75TR AC plant
instead of belt drive low speed KCX-4 compressor.
• Finish boring machine fluorescent lamp replacement by LED Flood light.
• Energy Saving by reduction in voltage level of lighting stabilizer in foundry.
• Replacement of Reciprocating Compressor by new energy efficient Screw Compressor
in Hofler shop.
• Replacement of less efficient old AC with new energy efficient split Inverter
AC.
• Replaced old conventional transformer by 1,600 kVA energy efficient,
hermetically sealed transformer, losses per IS 1,180 energy efficiency level 2 during TRM
shop expansion.
• VFD based control panel with pressure transducer for controlling pressure of
water circulation of induction furnace.
• Installation of Energy Monitoring System (EMS) system for Hadapsar Plant.
• Use of Human Sensor for office lightening & of AC saver.
• Use of thyrister controlled PID base control panel for heat treatment furnace.
d. Waste elimination
• Use of day light sheet for use natural sunlight for illumination in foundry shop
during day shift working.
• Reduction in Power consumption at foundry shop by providing individual switch to
each fan to switch off instead of common supply to 3 to 4 fans.
• Elimination of 500 kVA (T2) transformer by optimising the load on T4 transformer
hence saving in transformer losses.
• PLC based Automatic cycle instead of manual contactor logic for sand conveying
system to avoid idle running of electrical equipment at HL6 and PV6 units.
• Loading of non VFD compressor and switching off VFD compressor during irregular
demand as motor is switched off after unloading to achieve energy efficiency at Saswad.
• Saving in cutting oil consumption by reusing recovered oil of 28.70 KL from
hobbing burr and grinding dust at Hadapsar. Also reused 18.04 KL testing oil of compressor
after filtration, at Saswad. Total oil recovered and reused is 46.74 KL.
• Use of MS turning burr and metal scrap for making new casting at ferrous
foundry. Total of 273.27 Tonnes of metal scrap is reused to make new ferrous casting.
Conversion of Aluminium turning burr for production of Pistons in Non-Ferrous Foundry.
Total of 2.69 Tonnes of aluminium burr is reused to make Aluminium casting.
• Change in pump operating system to avoid unnecessary pump operation at central
pump house.
As a result of steps taken, your Company avoided 350.70 Tons of emissions & reduced
natural CO2 resources consumption like water, oil, aluminium and casting significantly.
Use of inverter based energy efficient air conditioners, High Bay LED based lighting
systems and LED lighting systems at office area and street lights created positive impact
on employees and elicited a good response.
ii. Steps taken by the company for utilizing alternate sources of energy:
During the year under review, your Company installed and used 680 kWp AC (840 kWp DC)
roof top solar power PV plant in the month of Jan-23 and also used 2kWp capacity off-grid
solar power plant at Hadapsar Plant. Total units generated by utilizing both plants are
180,633 kWh. This 680 kWp roof top solar power PV plant was running for part of the year
and fulfilled 9.71% of energy requirement of Saswad Plant in FY 23. The said solar plant
is designed to cater around 59% of the energy requirement of the Saswad plant if it runs
for the full year.
iii. The capital investment on energy conservation equipments:
Company has made capital investment of _ 38.32 Million on energy conservation
equipments and technologies adoption for the energy efficiency improvement projects.
B. TECHNOLOGY ABSORPTION
i. Efforts made towards technology absorption:
• A new, Khione, series of ammonia screw compressors were developed in-house,
prototyped and successfully launched in the Indian market.
• Experimental validation of indigenously developed new ‘K' (Kirloskar) screw
rotor profile is completed. This rotor profile is better energy efficient.
• Successfully executed import substitution of 7-22 kW Kosmic series, belt-driven
screw compressor blocks (KAS-100 & KAS-200), and packages.
• The testing validation of a Kosmic series, direct-drive bare screw compressor
(KAS-400) for 55 kW and 7.5 bar (g) pressure rating with better energy-efficiency is in
progress.
• Design optimization of the LP & HP stages of the first ‘oil-free' screw
compressor block suitable for 2-stage 160 kW unit is in progress.
• A new age, trolley mounted series of diesel and electric screw compressors with
better energy-efficiency are also commercialised. The flow capacities vary from 300 CFM to
650 CFM while pressure ranging from 100 to 200 psig, suitable for construction and mining
applications.
• Developed digital calculation tool, Reciprocating Performance Assessment Tool
(R-PAT and Gas R-PAT), for optimisation of performance and size of Reciprocating
Compressors for air and gas applications.
• Implemented standardised water cooled Reciprocating Compressors with canopy,
with optimised Compressor layout and common base frame for 26 models, flow range 191 CFM
to 617 CFM.
• Developed KER Compressor packages for 2 hp, 5 hp and 10 hp ratings having
flame-proof and safe area models. Volume flow from 5 to 30 CFM and pressure from 7 to 12.7
bar (g).
• Successful technology demonstration in Centrifugal Compressor for field
interchangeability of gears, increased outer diameter of bearings to remove dependency on
manufacturing inaccuracies.
• Successful Commissioning of AC plants with Oil Free Magnetic bearing Centrifugal
Compressor designed for Indian Navy at INS Mysore.
• Developed single stage KRC-4 refrigeration Reciprocating Compressor operating at
1500 rpm, which produces 75 TR refrigeration capacity of at (-)10?C and 112 TR at 0?C
evaporating temperature with Ammonia.
• Developed two stage KRC-31 Refrigeration Reciprocating Compressor operating at
1500 rpm, which produces 7.5 TR to 45 TR refrigeration capacity of at (-) 40?C & (-)
20 ?C evaporating temperatures with Ammonia.
• Developed single cylinder PCX1 refrigeration Reciprocating Compressor operating
at 1500 rpm, which produces 7.5 TR refrigeration capacity of at (-) 40?C evaporating
temperature with Ammonia.
• Developed KRMS - Kirloskar Remote Management System, a fully integrated IoT
enabled compressor controller suitable for the entire Reciprocating Compressor product
range.
• Developed open flash & closed flash inter-stage gas cooler range for two
stage Refrigeration Compressors.
• Developed high efficiency standard oil separators as per CE-PED directives for
Reciprocating Compressor product range.
ii. Benefits derived like product improvement, cost reduction, product development or
import substitution:
• In-house developed screw compressor block for ammonia compression used for
refrigeration application is an import substitution.
• Performance improvement in screw compressor blocks were achieved using the
design of direct-drive compressors which eliminates the mechanical losses arising in the
drive system.
• KAS-100 & KAS-200 which are in-house designed for 7-22 kW Kosmic series,
provided import substitution of respective power ratings.
• Upgraded design in diesel screw compressor for Indian market will increase the
product performance and organisation's market share in construction and mining sector.
• Reduction in time to assembly, manufacturing, servicing and increase in
reliability through field interchangeability of gears, removable attachment for impeller
& shaft joint, increased outer diameter of bearings of Centrifugal Compressors.
iii. Imported technology (imported during the last three years reckoned from the
beginning of the financial year): NIL.
iv. Expenditure incurred on Research and Development:
_ 128.73 Million
C. FOREIGN EXCHANGE EARNINGS AND OUTGO
Foreign Exchange Earning earned during the year: _ 1,777.07 Million.
Foreign Exchange Outgo during the year: _ 1,216.98 Million.
ANNEXURE "4" TO THE BOARD'S REPORT
Disclosure Pursuant to Section 197 (12) of the Companies Act, 2013 and the Rules made
thereunder
A. Information as per Section 197 (12) and Rule 5 (1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014:
i) & ii) The ratio of the remuneration of each Director to the median remuneration
of the employees of the Company for the financial year and the percentage increase in
remuneration of each Director & KMP in the financial year:
| Sr. No. |
Name of the Director / KMP and designation |
% Increase in Remuneration in the FY 2022-23 |
Ratio of remuneration of each Director / to median remuneration of
employees |
| 1 |
Mr Rahul C Kirloskar, Executive Chairman |
30.05 |
80.09 |
| 2 |
Mr K Srinivasan*, Managing Director |
31.45 |
58.18 |
| 3 |
Mr Atul C Kirloskar, Non-Executive Director |
Nil |
1.20 |
| 4 |
Mr G Krishna Rao, Independent Director |
17.98 |
3.39 |
| 5 |
Mr Sunil Shah Singh, Independent Director |
18.67 |
3.45 |
| 6 |
Dr Ajay Dua, Independent Director |
30.00 |
3.36 |
| 7 |
Mrs Nalini Venkatesh, Independent Director |
Nil |
1.20 |
| 8 |
Mr Tejas Deshpande, Independent Director |
50.00 |
2.04 |
| 9 |
Mr Mahesh Chhabria, Non-Executive Director |
22.73 |
1.75 |
| 10 |
Mr Pravir Kumar Vohra*, Independent Director |
NA |
NA |
| 11 |
Late Mr Vikram S Kirloskar**, Non-Executive Director |
NA |
NA |
| 12 |
Mr K Venkataramanan**, Independent Director |
NA |
NA |
| 13 |
Mr D R Swar**, Non-Executive Director |
NA |
NA |
| 14 |
Mr Suhas S Kolhatkar, Vice President and Chief Financial Officer |
24.10 |
NA |
| 15 |
Mr Jitendra R Shah, Company Secretary & Head Legal |
60.80 |
NA |
Notes:
1. Liability for gratuity and leave encashment is provided on actuarial basis for the
Company as a whole hence the amount pertaining to Key Managerial Personnel cannot be
ascertained separately and hence is not included above.
2. *Details not given as Mr Pravir Kumar Vohra is Director for part of the financial
year 2022-23 i.e. w.e.f. 19th October, 2022.
3. **Details are not given as Late Mr Vikram S Kirloskar, Mr K Venkataramanan and Mr D
R Swar are Directors only for part of the financial year 2022-23 i.e. upto 29th November,
2022, 26th July, 2022 and 19th July, 2022 respectively.
ii) In the financial year, there was an increase of 6.57% in the median remuneration of
employees.
iii) There were 749 permanent employees on the rolls of Company as on 31st March, 2023.
iv) Average percentage increase made in the salaries of employees other than the
managerial personnel in the last financial year i.e. 2022-23 was 10.30% whereas average
percentage increase in the managerial remuneration is 27.49% mainly due to value of
perquisite on the exercise of stock options.
v) The Board affirms that the remuneration is as per the Nomination and Remuneration
policy of the Company.
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