KIRLOSKAR BROTHERS LIMITED

A Kirloskar Group Company

NOTICE

NOTICE is hereby given that the 102nd Annual General Meeting (AGM) of the Members of KIRLOSKAR
BROTHERS LIMITED will be held on Wednesday, the 10th day of August, 2022 at 11.00 a.m., Indian Standard
Time (IST), through Video Conferencing/ Other Audio Visual Means (VC/OAVM) facility to transact the following
business:

ORDINARY BUSINESS:

1. To receive, consider and adopt

a) the Audited Standalone Financial Statements of the Company for the Financial Year ended March
31, 2022, together with the Reports of Auditors and Board thereon; and

b) the Audited Consolidated Financial Statements of the Company for the Financial Year ended
March 31, 2022, together with the Report of the Auditors thereon.

2. To declare Dividend on equity shares of the Company for the Financial Year 2021-22.

3. To appoint a Director in place of Mr. Pratap Shirke (DIN 00104902), who retires by rotation and being
eligible, offers himself for re-appointment.

4. Re-appointment of Statutory Auditors:

To consider and if thought fit, pass with or without modification(s), the following resolution as an Ordinary
Resolution:

“RESOLVED THAT pursuant to the provisions of Section 139, 142 and other applicable provisions, if any
of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014 (including any statutory
modification(s) or re-enactment thereof for the time being in force) and pursuant to the recommendation
of the Audit and Finance Committee and the Board of Directors, M/s. Sharp and Tannan Associates,
Chartered Accountants, Mumbai (Firm Registration No. 109983W) be and are hereby re-appointed as the
Statutory Auditors of the Company for a second term of 5 (Five) years to hold office from the conclusion
of 102nd Annual General Meeting till the conclusion of 107th Annual General Meeting.

RESOLVED FURTHER THAT the Board of Directors of the Company (including its Committee thereof)
be and is hereby authorised to finalise the remuneration plus out of pocket, travelling and any other
expenses etc., if any, as may be mutually agreed upon and to do all such acts, deeds, matters and things
as may be considered necessary, desirable or expedient to give effect to this Resolution.”

SPECIAL BUSINESS:

5. To consider and if thought fit, pass with or without modification(s), the following resolution as an Ordinary
Resolution:

“RESOLVED THAT pursuant to the provisions of Section 148 and other applicable provisions, if any, of
the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014 (including any statutory
modification(s) or re-enactment thereof for the time being in force) and pursuant to the recommendation
of the Audit and Finance Committee, the remuneration amounting to ` 825,000/- (Rupees Eight Lakhs
Twenty Five Thousand Only) excluding GST and other taxes as may be applicable and out of pocket
and travelling expenses, if any, payable to M/s. Parkhi Limaye & Co., Cost Accountants, Pune (Firm

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 Registration No. 000191), appointed by the Board of Directors of the Company as the Cost Auditors to
conduct the audit of the cost records of the Company for the Financial Year 2022– 23, be and is hereby
ratified and confirmed.”
By order of the Board of Directors
For KIRLOSKAR BROTHERS LIMITED

Devang Trivedi
Company Secretary
Pune: May 24, 2022 ICSI Membership No. A13339

NOTES:

1. Additional information pursuant to Regulation 36 of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations 2015 and the Statement of Material Facts pursuant to Section 102 of the
Companies Act, 2013 (“the Act”) setting out material facts concerning the business under Item Nos.
3 to 5 of the accompanying Notice, is annexed hereto. The Board of Directors of the Company at its
meeting held on May 24, 2022, considered that the Special Business under Item Nos. 5 being considered
unavoidable, be transacted at the 102nd AGM of the Company.

2. General instructions for accessing and participating in the 102nd AGM through VC/OAVM facility
and voting through electronic means including remote e-Voting.

a. In view of the COVID-19 pandemic and in terms of Ministry of Corporate Affairs (‘MCA’) in continuation
to its previous General Circulars No. 20/2020 dated 5th May, 2020, No. 02/2021 dated 13th January,
2021, No. 21/2021 dated 14th December, 2021, further extended the relaxation vide Circular No.
02/2022 dated 5th May 2022 (‘MCA Circulars’) and in terms of The Securities and Exchange Board
of India (‘SEBI’) in continuation to its previous Circulars No. SEBI/HO/CFD/CMD1/CIR/P/2020/79
dated 12th May, 2020, No. SEBI/HO/CFD/CMD2/CIR/P/2021/11 dated 15th January, 2021 further
extended the relaxation vide Circular No. SEBI/HO/CFD/CMD2/ CIR/P/2022/62 dated 13th May, 2022,
and in compliance with the provisions of the Act and with the Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘SEBI Listing Regulations’),
the AGM of the Company is being conducted through VC/OAVM facility, which does not require
physical presence of members at a common venue. The deemed venue for the AGM shall be the
Registered Office of the Company.

b. In terms of the MCA Circulars, the physical attendance of Members has been dispensed with, there
is no requirement of appointment of proxies. Accordingly, the facility of appointment of proxies by
Members under Section 105 of the Act will not be available for the AGM. However, in pursuance of
Section 113 of the Act, representatives of the Members may be appointed for the purpose of voting
through remote e-Voting, for participation in the AGM through VC/OAVM facility and e-Voting during
the AGM.

c. In line with the aforementioned MCA Circulars and SEBI Circulars, the Notice of the AGM along
with the Integrated Annual Report is being sent only through electronic mode to those Members
whose email addresses are registered with the Company / Depository Participants. The Members
may note that notice of the AGM and the Integrated Annual Report for the Financial Year 2021-22 is
also available on the website of the Company at www.kirloskarpumps.com, on the website of BSE
Limited (BSE) at www.bseindia.com, on the website of National Stock Exchange of India Limited
(NSE) at www.nseindia.com and also on the website of National Securities Depositories Limited
(NSDL) at www.evoting.nsdl.com.

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 d. Since the AGM will be held through VC/OAVM facility, the Route Map is not annexed in this Notice.

e. NSDL will be providing facility for voting through remote e-Voting, for participation in the AGM
through VC/OAVM facility and e-Voting during the AGM.

f. Members may join the AGM through VC/OAVM facility by following the procedure as mentioned
below which shall be kept open for the Members from 10:30 a.m. IST i.e. 30 minutes before the
time scheduled to start the AGM and the Company may close the window for joining the VC/OAVM
facility 30 minutes after the scheduled time to start the AGM.

g. Members may note that the VC/OAVM facility, provided by NSDL, allows participation of 1,000
Members on a first-come-first-serve basis. The large shareholders (i.e. shareholders holding 2% or
more shareholding), Promoters, Institutional Investors, Directors, Key Managerial Personnel, the
Chairpersons of the Audit Committee, Nomination and Remuneration Committee and Stakeholders
Relationship Committee, Auditors, etc. can attend the AGM without any restriction on account of
first-come-first-serve principle.

h. Attendance of the Members participating in the AGM through VC/OAVM facility shall be counted
for the purpose of considering the quorum under Section 103 of the Act.

i. Pursuant to the provisions of Section 108 of the Act and any other applicable provisions, read with
Rule 20 of the Companies (Management and Administration) Rules, 2014 (as amended), Secretarial
Standards on General Meetings (SS-2) issued by the Institute of Company Secretaries of India (ICSI)
and Regulation 44 of SEBI Listing Regulations, 2015 read with MCA Circulars and SEBI Circulars,
the Company is providing remote e-Voting facility to its Members in respect of the business to be
transacted at the AGM and facility for those Members participating in the AGM to cast vote through
e-Voting system during the AGM.

3. Instructions for Members for remote e-Voting are as under:

a. The remote e-Voting period will commence on Sunday, August 07, 2022 (9:00 am IST) and will
end on Tuesday, August 09, 2022 (5:00 pm IST). During this period, Members of the Company,
holding shares either in physical form or in dematerialized form, as on the cut-off date of August
03, 2022, may cast their vote by remote e-Voting. The remote e-Voting module shall be disabled by
NSDL for voting thereafter. Once the vote on a resolution is cast, the Member shall not be allowed
to change it subsequently.

b. A person who is not a Member as on the cut-off date should treat this Notice of AGM for information
purpose only.

c. The details of the process and manner for remote e-Voting are explained herein below:

How do I vote electronically using NSDL e-Voting system?

The way to vote electronically on NSDL e-Voting system consists of “Two Steps” which are mentioned
below:

Step 1: Access to NSDL e-Voting system

A) Login method for e-Voting and joining virtual meeting for Individual shareholders holding
securities in demat mode

In terms of SEBI circular dated December 9, 2020 on e-Voting facility provided by the Listed
Companies, Individual shareholders holding securities in demat mode are allowed to vote through
their demat account maintained with Depositories and Depository Participants. Shareholders are
advised to update their mobile number and email Id in their demat accounts in order to access
e-Voting facility.

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 Login method for Individual shareholders holding securities in demat mode is given below:

Type of Shareholders Login Method

Individual Shareholders holding 1.  Existing IDeAS user can visit the e-Services website of NSDL
securities in demat mode with viz. https://eservices.nsdl.com either on a Personal Computer
NSDL or on a mobile. On the e-Services home page click on the
“Beneficial Owner” icon under “Login” which is available
under ‘IDeAS’ section, this will prompt you to enter your existing
User ID and Password. After successful authentication, you will
be able to see e-Voting services under Value added services.
Click on “Access to e-Voting” under e-Voting services and you
will be able to see e-Voting page. Click on company name or
e-Voting service provider i.e. NSDL and you will be re-directed
to e-Voting website of NSDL for casting your vote during the
remote e-Voting period or joining virtual meeting & voting during
the meeting.
2.   If you are not registered for IDeAS e-Services, option to register
is available at https://eservices.nsdl.com. Select “Register
Online for IDeAS Portal” or click at https://eservices.nsdl.com/
SecureWeb/ IdeasDirectReg.jsp
3.   Visit the e-Voting website of NSDL. Open web browser by typing
the following URL: https://www.evoting.nsdl.com/ either on a
Personal Computer or on a mobile. Once the home page of
e-Voting system is launched, click on the icon “Login” which is
available under ‘Shareholder/Member’ section. A new screen
will open. You will have to enter your User ID (i.e. your sixteen
digit demat account number held with NSDL), Password/OTP
and a Verification Code as shown on the screen. After successful
authentication, you will be redirected to NSDL Depository site
wherein you can see e-Voting page. Click on company name or
e-Voting service provider i.e. NSDL and you will be redirected
to e-Voting website of NSDL for casting your vote during the
remote e-Voting period or joining virtual meeting & voting during
the meeting.
4. Shareholders/Members can also download NSDL Mobile App
“NSDL Speede” facility by scanning the QR code mentioned
below for seamless voting experience.

Individual Shareholders holding 1. Existing users who have opted for Easi / Easiest, they can login
securities in demat mode with through their user id and password. Option will be made available
CDSL to reach e-Voting page without any further authentication. The
URL for users to login to Easi / Easiest are https://web.cdslindia.
com/myeasi/home/login or www.cdslindia.com and click on
New System Myeasi.
2. After successful login of Easi/Easiest the user will also be able
to see the e-Voting Menu. The Menu will have links of e-Voting
service provider i.e. NSDL. Click on NSDL to cast your vote.
3. If the user is not registered for Easi/Easiest, option to register
is available at https://web.cdslindia.com/myeasi/Registration/
EasiRegistration
4. Alternatively, the user can directly access e-Voting page by
providing Demat Account Number and PAN, from a link in
www.cdslindia.com home page. The system will authenticate the
user by sending OTP on registered Mobile & Email as recorded
in the demat Account. After successful authentication, user will
be provided links for the respective ESP i.e. NSDL where the
e-Voting is in progress.
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Individual Shareholders (holding You can also login using the login credentials of your demat account
securities in demat mode) login through your Depository Participant registered with NSDL/CDSL for
through their depository e-Voting facility. Upon logging in, you will be able to see e-Voting
participants option. Click on e-Voting option, you will be redirected to NSDL/
CDSL Depository site after successful authentication, wherein you
can see e-Voting feature. Click on company name or e-Voting service
provider i.e. NSDL and you will be redirected to e-Voting website
of NSDL for casting your vote during the remote e-Voting period or
joining virtual meeting & voting during the meeting.
Important note: Members who are unable to retrieve User ID/ Password are advised to use Forget User ID
and Forget Password option available at above mentioned website.
Helpdesk for Individual Shareholders holding securities in demat mode for any technical issues
related to login through Depository i.e. NSDL and CDSL.
Login type Helpdesk details
Individual Shareholders holding securities in demat Members facing any technical issue in login can
mode with NSDL contact NSDL helpdesk by sending a request at
[email protected] or call at toll free no.: 1800 1020
990 and 1800 22 44 30
Individual Shareholders holding securities in demat Members facing any technical issue in login can
mode with CDSL contact CDSL helpdesk by sending a request at
[email protected] or contact at
022- 23058738 or 022-23058542-43
B) Login Method for e-Voting and joining virtual meeting for shareholders other than Individual
shareholders holding securities in demat mode and shareholders holding securities in physical
mode.
How to Log-in to NSDL e-Voting website?
1. Visit the e-Voting website of NSDL. Open web browser by typing the following URL: https://www.
evoting.nsdl.com/ either on a Personal Computer or on a mobile.
2. Once the home page of e-Voting system is launched, click on the icon “Login” which is available
under ‘Shareholder/Member’ section.
3. A new screen will open. You will have to enter your User ID, your Password/OTP and a Verification
Code as shown on the screen.
Alternatively, if you are registered for NSDL e-services i.e. IDEAS, you can log-in at https://eservices.
nsdl.com/ with your existing IDEAS login. Once you log-in to NSDL e-services after using your log-in
credentials, click on e-Voting and you can proceed to Step 2 i.e. Cast your vote electronically.
4. Your User ID details are given below:

Manner of holding shares i.e. Demat (NSDL or CDSL) Your User ID is:
or Physical
a) For Members who hold shares in demat account with 8 Character DP ID followed by 8 Digit
NSDL. Client ID
For example if your DP ID is IN300***
and Client ID is 12****** then your
user ID is IN300***12******.
b) For Members who hold shares in demat account with 16 Digit Beneficiary ID
CDSL. For example if your Beneficiary ID is
12************** then your user ID is
12**************
c) For Members holding shares in Physical Form. EVEN Number followed by Folio
Number registered with the company
For example if Folio number is 001***
and EVEN is 101456 then user ID is
101456001***

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5. Password details for shareholders other than Individual shareholders are given below:
a) If you are already registered for e-Voting, then you can use your existing password to login and cast
your vote.
b) If you are using NSDL e-Voting system for the first time, you will need to retrieve the ‘initial password’
which was communicated to you. Once you retrieve your ‘initial password’, you need to enter the
‘initial password’ and the system will force you to change your password.
c) How to retrieve your ‘initial password’?
(i) If your email ID is registered in your demat account or with the company, your ‘initial password’
is communicated to you on your email ID. Trace the email sent to you from NSDL from your
mailbox. Open the email and open the attachment i.e. pdf file. Open the .pdf file. The password
to open the .pdf file is your 8-digit client ID for NSDL account, last 8 digits of client ID for CDSL
account or folio number for shares held in physical form. The .pdf file contains your ‘User ID’ and
your ‘initial password’.
(ii) If your email ID is not registered, please follow steps mentioned below in process for those
shareholders whose email ids are not registered.
6. If you are unable to retrieve or have not received the “Initial password” or have forgotten your password:
a) Click on “Forgot User Details/Password?” (If you are holding shares in your demat account with
NSDL or CDSL) option available on www.evoting.nsdl.com.
b) “Physical User Reset Password?” (If you are holding shares in physical mode) option available on
www.evoting.nsdl.com.
c) If you are still unable to get the password by aforesaid two options, you can send a request at
[email protected] mentioning your demat account number/folio number, your PAN, your name and
your registered address etc.
d) Members can also use the OTP (One Time Password) based login for casting the votes on the
e-Voting system of NSDL.
7. After entering your password, tick on Agree to “Terms and Conditions” by selecting on the check box.
8. Now, you will have to click on “Login” button.
9. After you click on the “Login” button, Home page of e-Voting will open.
Step 2: Cast your vote electronically and join General Meeting on NSDL e-Voting system.
How to cast your vote electronically and join General Meeting on NSDL e-Voting system?
1. After successful login at Step 1, you will be able to see all the companies “EVEN” in which you are
holding shares and whose voting cycle and General Meeting is in active status.
2. Select “EVEN” of company for which you wish to cast your vote during the remote e-Voting period
and casting your vote during the General Meeting. For joining virtual meeting, you need to click
on “VC/OAVM” link placed under “Join General Meeting”.
3. Now you are ready for e-Voting as the Voting page opens.
4. Cast your vote by selecting appropriate options i.e. assent or dissent, verify/modify the number of
shares for which you wish to cast your vote and click on “Submit” and also “Confirm” when
prompted.
5. Upon confirmation, the message “Vote cast successfully” will be displayed.
6. You can also take the printout of the votes cast by you by clicking on the print option on the con
firmation page.
7. Once you confirm your vote on the resolution, you will not be allowed to modify your vote.
8. In case of any queries, you may refer the Frequently Asked Questions (FAQs) for
Shareholders and e-Voting user manual for Shareholders available at the download section of
www.evoting.nsdl.com or call on toll free no. 1800-22-44-30 or send a request at [email protected]
or contact Mr. Amit Vishal, Assistant Vice President or Ms. Pallavi Mhatre, Senior Manager, National
Securities Depository Ltd., at the designated email ID: [email protected] or at telephone nos. :

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 1800 1020 990 and 1800 22 44 30 who will also address the grievances connected with the
voting by electronic means. Members may also write to the Company Secretary at the Company’s
email address [email protected].
Any person holding shares in physical form and non-individual shareholders, who acquires shares of
the Company and becomes member of the Company after the notice is sent through e-mail and holding
shares as of the cut-off date i.e. July 08, 2022 may obtain the login ID and password at sending a
request at [email protected] or issuer/RTA however, if you are already registered with NSDL for remote
e-voting, then you can use your existing user ID and password for casting your vote. If you forgot your
password, you can reset your password by using “Forgot User Details / Password” or “Physical User
Reset Password” option available on www.evoting.nsdl.com or call on toll free no. 1800 1020 990
and 1800 22 44 30. In case of Individual Shareholders holding securities in demat mode who acquires
shares of the Company and becomes a Member of the Company after sending of the Notice and holding
shares as of the cut-off date i.e. July 08, 2022 may follow steps mentioned in the notice of the AGM under
“Access to NSDL e-voting system”.

4. Process for those Members whose email ids are not registered for procuring User id and
password and registration of email ids for e-Voting on the resolutions set out in this Notice:
a. In case shares are held in physical mode, please provide Folio No., Name of shareholder,
scanned copy of the share certificate (front and back), PAN (self-attested scanned copy of PAN
card), AADHAR (self-attested scanned copy of Aadhar Card) by email to
[email protected].
b. In case shares are held in demat mode, please provide DPID-CLID (16 digit DPID + CLID or
16 digit beneficiary ID), Name, client master or copy of Consolidated Account Statement, PAN
(self attested scanned copy of PAN card), AADHAR (self-attested scanned copy of Aadhar Card)
to [email protected]. If you are an Individual shareholder holding securities in
demat mode, you are requested to refer to the login method explained at step 1 (A) i.e. Login
method for e-Voting and joining virtual meeting for Individual shareholders holding
securities in demat mode.
c. Alternatively Shareholder/Members may send a request to [email protected] for procuring user
id and password for e-voting by providing above mentioned documents.
d. In terms of SEBI circular dated December 9, 2020 on e-Voting facility provided by Listed
Companies, Individual shareholders holding securities in demat mode are allowed to vote through
their demat account maintained with Depositories and Depository Participants. Shareholders are
required to update their mobile number and email ID correctly in their demat account in order to
access e-Voting facility.

5. Instructions for Members for participating in the AGM through VC/OAVM are as under:
a. Member will be provided with a facility to attend the AGM through VC/OAVM through the NSDL
e-Voting system. Members may access by following the steps mentioned above for Access to NSDL
e-Voting system. After successful login, you can see link of “VC/OAVM link” placed under “Join
meeting” menu against company name. You are requested to click on VC/OAVM link placed under
Join Meeting menu. The link for VC/OAVM will be available in Shareholder/Member login where the
EVEN of Company will be displayed. Please note that the members who do not have the User ID
and Password for e-Voting or have forgotten the User ID and Password may retrieve the same by
following the remote e-Voting instructions mentioned in the notice to avoid last minute rush.
b. Members are encouraged to join the Meeting through Laptops for better experience.
c. Further Members will be required to allow Camera and use Internet with a good speed to avoid any
disturbance during the meeting.
d. Please note that Participants Connecting from Mobile Devices or Tablets or through Laptop connecting
via Mobile Hotspot may experience Audio/Video loss due to Fluctuation in their respective network.
It is therefore recommended to use Stable Wi-Fi or LAN Connection to mitigate any kind of aforesaid
glitches.

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 e. Members can submit questions in advance with regard to the financial statements or any other
matter to be placed at the AGM, from their registered email address, mentioning their name, DP
ID and Client ID number /folio number and mobile number, to reach the Company’s email address
[email protected] at least 48 hours in advance before the start of the meeting i.e. by
August 8, 2022 by 11:00 a.m. IST. Such questions by the Members shall be taken up during the
meeting and replied by the Company suitably.
f. Members, who would like to ask questions during the AGM with regard to the financial statements or
any other matter to be placed at the AGM, need to register themselves as speaker by sending their
request from their registered email address mentioning their name, DP ID and Client ID number/folio
number and mobile number, to reach the Company’s email address [email protected]
at least 48 hours in advance before the start of the AGM i.e. by August 8, 2022 by 11:00 a.m. IST.
Those Members who have registered themselves as speakers shall be allowed to ask questions
during the AGM, on first-come-first-serve basis and subject to availability of time.
g. Institutional Investors who are Members of the Company, are encouraged to attend and vote in the
AGM through VC/OAVM Facility.
6. Instructions for Members for e-Voting during the AGM are as under:
a. The procedure for e-Voting on the day of the AGM is same as the instructions mentioned above for
remote e-voting.
b. Only those Members/ Shareholders, who will be present in the AGM through VC/OAVM facility and
have not cast their vote on the Resolutions through remote e-Voting and are otherwise not barred
from doing so, shall be eligible to vote through e-Voting system in the AGM.
c. Members who have voted through Remote e-Voting will be eligible to attend the AGM. However,
they will not be eligible to vote at the AGM.
The details of the persons who may be contacted for any grievances connected with the facility
for e-Voting on the day of the AGM shall be the same persons mentioned for Remote e-voting i.e.
Mr. Amit Vishal, Assistant Vice President - NSDL or Ms. Pallavi Mhatre, Senior Manager- NSDL at
the designated email ID: [email protected] or at telephone number 1800 1020 990/ 1800 224 430.

7. Other Guidelines for Members :

a. It is strongly recommended not to share your password with any other person and take utmost
care to keep your password confidential. Log in to the e-Voting website will be disabled upon 5
unsuccessful attempts to key in the correct password. In such an event, you will need to go through
the “Forgot User Details/Password?” or “Physical User Reset Password?” option available on
www.evoting.nsdl.com to reset the password.
b. The voting rights of Members shall be in proportion to their share in the paid-up equity share capital
of the Company as on the cut-off date of August 03, 2022.
c. Any person, who acquires shares of the Company and becomes Member of the Company after
the Company sends the Notice of the AGM by email and holds shares as on the cut-off date i.e.
July 8, 2022, may obtain the User ID and password by sending a request to the Company’s email
address [email protected]. However, if you are already registered with NSDL for remote
e-Voting then you can use your existing user ID and password for casting your vote. If you forgot your
password, you can reset your password by using “Forgot User Details/Password?” or “Physical User
Reset Password?” option available on www.evoting.nsdl.com.
d. A person, whose name is recorded in the Register of Members or in the Register of Beneficial Owners
maintained by the depositories as on the cut-off date only shall be entitled to avail the facility of
remote e-Voting or casting vote through e-Voting system during the AGM. Mr. Shyamprasad Limaye,
Practicing Company Secretary from Pune, has been appointed as the Scrutinizer to scrutinize
the remote e-Voting process and vote cast through e-Voting system during the AGM in a fair and
transparent manner.
e. During the AGM, the Chairman shall, after response to the questions raised by the Members in
advance or as a speaker at the AGM, formally propose to the Members participating through VC/

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 OAVM Facility to vote on the resolutions as set out in the Notice of the AGM and announce the start
of the casting of vote through e-Voting system. After the Members participating through VC/OAVM
Facility, eligible and interested to cast votes, have cast the votes, the e-Voting will be closed with the
formal announcement of closure of the AGM.
f. The Scrutinizer shall after the conclusion of e-Voting at the AGM, first download the votes cast at the
AGM and thereafter unblock the votes cast through remote e-Voting and shall make a consolidated
Scrutinizer’s Report of the total votes cast in favour or against, invalid votes, if any, and whether the
resolution has been carried or not, and such Report shall then be sent to the Chairman within 2
working days from the conclusion of the AGM, who shall then countersign and declare the result of
the voting forthwith.
g. The Results declared along with the report of the Scrutinizer shall be placed on the website of
the Company at www.kirloskarpumps.com and on the website of NSDL at www.evoting.nsdl.com
immediately after the declaration of Results by the Chairman. The Results shall also be immediately
forwarded to the BSE and NSE.
8. Pursuant to the MCA Circulars and SEBI Circular, in view of the prevailing situation, owing to the difficulties
involved in dispatching of physical copies of the Notice of the AGM and the Integrated Annual Report for
the Financial Year 2021-22 are being sent only by email to the Members. Therefore, Members, whose
email addresses are not registered with the Company or with their respective Depository Participant/s
and who wish to receive the Notice of the AGM and the Integrated Annual Report for the Financial
Year 2021-22 and all other communication sent by the Company, from time to time, can get their email
address registered by following the steps as given below: -
a. For Members holding shares in physical form, please send scan copy of a signed request letter
mentioning your folio number, complete address, email address to be registered along with scanned
self-attested copy of the PAN and any document (such as Driving Licence, Passport, Bank Statement,
Aadhar) supporting the registered address of the Member, by email to the Company’s email address
[email protected]
b. For the Members holding shares in demat form, please update your email address through your
respective Depository Participant/s.
9. The Notice of the AGM and the Integrated Annual Report for the Financial Year 2021-22, will be available
on the website of the Company at www.kirloskarpumps.com and the website of BSE and NSE. The
Notice of AGM will also be available on the website of NSDL at www.evoting.nsdl.com.
10. Income tax on Dividend will be deducted as per the prescribed rates in the Income Tax Act, 1961 (the IT
Act). In general, to enable compliance with TDS requirements, Members are requested to complete and
/ or update their Residential Status, PAN, Category as per the IT Act with their Depository Participants or
in case shares are held in physical form, with the Company by sending email to the Company’s email
address at [email protected].
11. Pursuant to the provisions of Section 124 of the Act, Investor Education and Protection Fund Authority
(Accounting, Audit, Transfer and Refund) Rules, 2016 as amended (IEPF Rules) read with the relevant
circulars and amendments thereto, the amount of dividend remaining unpaid or unclaimed for a period
of seven years from the due date is required to be transferred to the Investor Education and Protection
Fund (IEPF), constituted by the Central Government.
The Company has been sending reminders to the Members having unpaid/ unclaimed dividends before
transfer of such dividend(s) to IEPF. Details of the unpaid/ unclaimed dividend are also uploaded on the
website of the Company at www.kirloskarpumps.com. Members who have not encashed Final Dividend
2014-15 or any subsequent dividend declared by the Company, are advised to write to the Company
immediately.
12. The unclaimed dividend for the Financial Year 2013-14 has been transferred to IEPF, pursuant to the
applicable provisions of Section 124 of the Act. In terms of the said Section read with relevant rules, the
amount transferred to the Unpaid Dividend Account, which remains unpaid or unclaimed for a period
of 7 consecutive years or more from the date of such transfer, shall be transferred by the Company to
IEPF. Accordingly, the unpaid/ unclaimed dividend for the Financial Years 2014-15 onwards will become

9
 transferable at the end of 7 years from the respective dates of transfer of such amount to the Unclaimed
Dividend Account to IEPF.
As per the provisions of the Investor Education and Protection Fund Authority (Accounting, Audit,
Transfer and Refund) Rules, 2016, the underlying shares in respect of which the dividend has remained
unclaimed / unpaid for 7 years or more will be transferred to IEPF. Accordingly, the Company has
transferred underlying shares, in respect of which the dividend remained unpaid / unclaimed for
consecutive 7 years up to the Financial Year 2013-14.
In terms of the provisions under the said Rule, the said shares and the dividend transferred to IEPF can
be claimed by the shareholders or his or her legal heir/successor/nominee subject to the compliance of
certain conditions as mentioned in the said Rule. The procedure for the same is available on the website
of the Company at www.kirloskarpumps.com.
The details of transfer of unpaid/unclaimed dividend to IEPF are given below:

Financial Year Type of dividend Dividend in Rs. Date of Due Date of transfer
per share declaration to the IEPF Account
2014 -15 Final 0.50 27-Jul-15 September, 2022
2015 -16 Interim 0.50 14-Mar-16 April, 2023
2016 -17 Final 1.00 27-Jul-17 September, 2024
2017 -18 Final 2.50 27-Jul-18 September, 2025
2018 -19 Final 2.50 12-Aug-19 September, 2026
2019 - 20 Interim 2.00 14-Feb-20 March, 2027
2019 - 20 Final 0.50 25-Sept-20 October, 2027
2020 - 21 Final 1.50 09-Sept-21 October, 2028

In terms of the IEPF (Uploading of information regarding unpaid dividend amount lying with the Companies)
Rules, 2012, the details of unclaimed dividend up to 2020-21 have been uploaded on the Company’s website
www.kirloskarpumps.com. This will facilitate the Members to claim their unclaimed dividend. Members are
therefore, requested to check and send their claims if any, for the relevant Financial Years from 2014-15
onwards before the respective amounts become due for transfer to IEPF.

13. In terms of the SEBI Listing Regulations, 2015 securities of listed companies can only be transferred in
dematerialized form with effect from April 1, 2019. In view of the above, Members are advised to dematerialize
shares held by them in physical form.
14. Electronic copy of all the documents referred to in the accompanying Notice of the AGM and the Statement
of material facts shall be available for inspection in the Investor Section of the website of the Company at
www.kirloskarpumps.com.
15. During the AGM, Members with prior intimation of 48 hours, may access the scanned copy of Register of
Directors and Key Managerial Personnel and their shareholding maintained under Section 170 of the Act
and the Register of Contracts and Arrangements in which Directors are interested, maintained under Section
189 of the Act, upon Login to NSDL e-Voting system at https://www.evoting.nsdl.com.

10
 ANNEXURE TO THE NOTICE OF 102nd ANNUAL GENERAL MEETING
I. Details of Director seeking Re-Appointment as required under Regulation 36 of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 and Secretarial Standards (SS-2)
Item No. 3
Mr. Pratap B. Shirke (DIN 00104902), age 71, is a Non-Executive, Non-Independent Director on the Board of Kirloskar
Brothers Limited. Mr. Pratap B. Shirke is associated with the Company since 20th July 2007.
He holds a Degree in Civil Engineering from College of Engineering, Pune and a Master’s degree from Stanford
University, USA. He has also done his MBA from Stanford University.
In 1974, he went to Dubai and founded the Pan Gulf Group of Companies for executing construction projects in
Dubai, Saudi Arabia, Yemen, Iraq and Kuwait.
In 1983, he moved to London and formed Oak Group PLC, which owned a chain of hotels in and around UK.
In 1987, he got involved in shipping business and purchased a number of Panamax dry bulk cargo vessels. Pan
Gulf Group activities cover Ship Management, Hotels, Commercial Properties, Energy Management and Ship
Ownership.
He also serves on the Boards of B. G. Shirke Construction Technology Private Limited, North of England P&I
Association Ltd., Oak Group Ltd., SPP Pumps Ltd., Northern Navigation Fund II, Kirloskar Brothers International
B.V., Kirloskar Pompen B.V., and North of England P&I DAC.
Mr. Pratap Shirke has expertise in management, Governance and overall experience in industry.
Mr. Pratap Shirke holds 20,000 equity shares in the Company.
Mr. Pratap B. Shirke attended 5 (five) Board meetings of the Company held during the year 2021-22. He is also a
member of the Audit and Finance Committee of the Board.
Mr. Pratap B. Shirke will be entitled for sitting fees as may be decided by the Board from time to time and commission,
if any, as may be approved by the Board. For details of his remuneration drawn last year, one can refer reporting
under ‘Report on Corporate Governance’.
Apart from Mr. Shirke, none of the Directors, Key Managerial Personnel and/or their relatives are deemed to be
concerned or interested, directly or indirectly, financially or otherwise, in the proposed resolution.
The Board recommends his re-appointment as a Non-Executive, Non-Independent Director, liable to retire by
rotation and passing of this resolution as an Ordinary Resolution.
II. Additional Information pursuant to Regulation 36(5) of SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015
Item No. 4
The members of the Company at 97th Annual General Meeting (AGM) held on July 27, 2017 approved the
appointment of M/s. Sharp & Tannan Associates, Chartered Accountants (Firm Registration No. 109983W) as the
Statutory Auditors of the Company for a term of 5 consecutive years with effect from conclusion of 97th AGM until the
conclusion of 102nd AGM.
In accordance with the provisions of Section 139, 142 and other applicable provision, if any of the Companies Act,
2013 (the Act) and the Companies (Audit and Auditors) Rules, 2014, the Company can appoint or re-appoint an
audit firm as Statutory Auditors for not more than two terms of five consecutive years.
The Board of Directors at its meeting held on May 24, 2022, based on the recommendation of the Audit & Finance
Committee, approved the re-appointment of M/s. Sharp & Tannan Associates, as the Statutory Auditors of the
Company for a second term of 5 consecutive years from the conclusion of the ensuing 102nd AGM until the conclusion
of the 107th AGM.
i) Proposed statutory audit fees payable to auditors
Statutory audit fees up to ` 80,00,000/- (Rupees Eighty Lacs only) for the year ending March 31, 2023
plus applicable taxes and reimbursement of out of pocket expenses.
The Company would also obtain certifications which are to be mandatorily to be received from the Statutory
Auditors under various regulations, in addition to the audit services.

11
 The Board of Directors and Audit & Finance Committee shall approve the revision in the remuneration of the
Statutory Auditors for the balance part of the tenure, based on the performance review and any additional
efforts on account of changes in regulations or management processes or any other assignment or
considerations.
ii) Terms of appointment
5 (five) years from the conclusion of 102nd AGM until the conclusion of the 107th AGM of the Company.
iii) Basis of recommendation and auditor credentials
M/s. Sharp & Tannan Associates, consented to their appointment and confirmed that their appointment, if
made, would be in accordance with the provisions of Section 139 read with Section 141 of the Act. They also
confirmed that they have subjected themselves to peer review process of the Institute of Chartered Accountants
of India (ICAI) and hold a valid certificate issued by the ‘Peer Review Board of ICAI’. M/s. Sharp & Tannan
Associates has also furnished a declaration confirming its independence in terms of section 141 of the Act and
declared that it has not taken up any prohibited non-audit assignments for the Company.
M/s. Sharp & Tannan Associates, in the past five years demonstrated all round capabilities in audit services.
They have confirmed that they are independent, as required by the relevant ethical/independence requirements
as mentioned in the Act and the Code of Ethics issued by the ICAI, that are relevant to their audit of the
standalone and consolidated financial statements under the provisions of the Act and Rules made thereunder.
They are not under the relationship that would be thought to influence their independence as auditors of the
Company.
M/s. Sharp & Tannan Associates was constituted on 1 July 1976, a partnership firm having firm registration no.
as 109983W and registered with the Institute of Chartered Accountants of India. The Firm is registered in
Mumbai, having branch offices at Pune, Vadodara, Ahmedabad and Associate offices at Bengaluru, Chennai,
Hyderabad, New Delhi and Panjim (Goa). The Firm has a staff of over 150 people and 11 Partners and carry
out audit of various companies listed on stock exchanges in India.
M/s. Sharp & Tannan Associates has deployed a strong audit team of senior audit professionals for the
Company during the last audit term. They have strong presence in the region and relevant experience in the
listed entities of similar type and size.
Based on the recommendation made by the Audit & Finance Committee, after assessing the performance
of M/s. Sharp & Tannan Associates and considering their experience and expertise, the Board recommends
the re-appointment of M/s. Sharp &Tannan Associates as Statutory Auditors for the second term of 5 years, as
set out in the Resolution no. 4 for approval of the Members as an Ordinary Resolution.
None of the Directors, Key Managerial Personnel and/or their relatives are deemed to be concerned or interested,
directly or indirectly, financially or otherwise, in the proposed resolution.
III. Statement of material facts as required under Section 102 of the Companies Act 2013
Item No. 5
In terms of Section 148 of the Act read with The Companies (Cost Records and Audit) Rules, 2014 including any
statutory modification(s) or re-enactment thereof, for the time being in force, the Company is required to get its cost
records audited by a Cost Accountant and the remuneration to be paid to such Cost Accountant would be required to
be approved by the Members of the Company. The Board of Directors of the Company at its meeting held on May 24,
2022 has appointed M/s. Parkhi Limaye & Co., Pune, as Cost Auditors in terms of the provisions of Section 148 of the
Act, read with the Companies (Audit and Auditors) Rules, 2014, for the purpose of auditing the cost records of the
Company for the Financial Year 2022-23 on a yearly remuneration of ` 825,000/- (Rupees Eight Lacs Twenty-Five
Thousand Only) excluding GST and other taxes as may be applicable and out of pocket and travelling expenses, if
any. None of the Directors, Key Managerial Personnel and/or their relatives are deemed to be concerned or interested,
directly or indirectly financially or otherwise, in the proposed resolution.
The Board recommends passing of this resolution as an Ordinary Resolution.
By order of the Board of Directors
For KIRLOSKAR BROTHERS LIMITED

Devang Trivedi
Company Secretary
ICSI Membership No – A13339
Pune: May 24, 2022
12
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
BOARD OF DIRECTORS Sanjay C. Kirloskar Chairman and Managing Director
Pratap B. Shirke
Alok S. Kirloskar
Rakesh Mohan
Rama S. Kirloskar
Rajeev V. Kher (Upto January 24, 2022)
Pradyumna Vyas (Upto May 15, 2022)
Shailaja Kher (Upto May 15, 2022)
M. S. Unnikrishnan
Shrinivas V. Dempo
Shobinder S. Duggal
Ramni D. Nirula
Vivek Pendharkar Independent Director (w.e.f. October 29, 2021)
Amitava Mukherjee Independent Director (w.e.f. October 29, 2021)
Rekha Sethi Independent Director (w.e.f. October 29, 2021)

Chief Financial Officer Chittaranjan M. Mate

Company Secretary Raghunath Apte (upto November 26, 2021)
Devang Trivedi (w.e.f. March 18, 2022)

Auditors M/s. Sharp & Tannan Associates - Chartered Accountants, Pune

Bankers Bank of India Citibank N.A.

Canara Bank EXIM Bank
HDFC Bank Limited ICICI Bank Limited

Registered & “Yamuna”, Survey No. 98 (3 to 7), Plot No. 3,

Corporate Office Baner, Pune – 411 045, Maharashtra (India).
Phone (020) 67214444 Fax: (020) 67211136
Email: [email protected]
Website: www.kirloskarpumps.com

Works Kirloskarvadi, Dewas, Shirwal, Kondhapuri, Coimbatore (Kaniyur),

Ahmedabad (Sanand)

Registar & Transfer Big Share Services Private Limited,

(R&T) Agent Unit: Kirloskar Brothers Limited
Office No S6-2, 6th Floor, Pinnacle Business Park,
Next to Ahura Centre, Mahakali Caves Road,
Andheri (East), Mumbai – 400093.
Email id: [email protected]
Tel.: (022) 62638200 Fax No.: (022) 62638299
Information for Shareholders

Annual General Meeting :

Day & Date : Wednesday, August 10, 2022
Time : 11.00 a. m.
Venue : Video Conferencing / Other Audio
Visual Means (“VC/OAVM”)
Deemed Venue : “YAMUNA”, Survey No. 98 (3 to 7),
Plot No. 3, Baner, Pune – 411 045
Maharashtra (India).

1
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company

DECADE AT A GLANCE
(Amount in Million `)

Particulars **Ind AS **IGAAP

2022 2021 2020 2019 2018 2017 2016 2015 2014 2013
Revenue from Opera- 21,659 17,999 20,970 22,235 19,135 17,355 16,387 16,257 17,598 18,724
tions
Other Income 357 190 254 247 189 182 208 113 55 70
Material Cost 13,169 10,703 11,618 13,205 11,288 9,975 9,898 10,471 11,696 13,204
Other 7,171 5,613 7,704 7,408 6,508 6,318 5,833 4,934 4,504 4,107
Expenses
Interest 158 241 302 262 253 315 382 413 409 443
Depreciation 407 383 400 366 352 397 408 497 346 320
Profit Before Tax 1,111 1,249 1,200 1,241 923 533 74 55 698 719
Income Tax Provision 330 317 408 368 267 203 (33) (30) 221 285
Net Profit After Tax 782 932 792 873 656 330 107 85 477 434
Share Capital 159 159 159 159 159 159 159 159 159 159
Reserves 11,095 10,523 9,608 9,244 8,796 8,221 7,903 7,804 7,842 7,627
Net Worth 11,254 10,682 9,767 9,403 8,955 8,380 8,062 7,963 8,001 7,786
Imports 844 652 576 1,042 504 382 403 524 671 473
Exports 1301 1,354 2,511 2,199 1,311 1,667 1,245 1,280 1,184 1,544
Basic 9.85 11.74 9.97 11.00 8.26 4.16 1.36 1.07 6.00 5.47
Earnings Per Share (`)
(Face Value of ` 2/-)
Dividend % 150%* 150% 125% 125% 125% 50% 25% 25% 125% 100%
Book Value Per 141.73 134.52 123.00 118.42 112.78 105.53 101.53 100.30 100.82 98.11
Share (`)

Notes :
Previous years’ figures have been regrouped to make them comparable.
* Final Dividend Recommended @150%.
** Ind AS - Indian Accounting Standards
** IGAAP - Indian Generally Accepted Accounting Principles

1
Integrated Annual Report 2021-22

BOARD’S REPORT TO THE MEMBERS

Your Directors present the 102nd Board Report and the Audited Financial
Statements of the Company for the Financial Year ended March 31, 2022 together
with the reports of the Auditors thereon.

FINANCIAL RESULTS
The financial results of the Company for the Financial Year 2021-22 as compared
with the previous Financial Year are as under:
Year ended Year ended
March 31, 2022 March 31, 2021
(Amt. in Million `) (Amt. in Million `)
Revenue from operations 21,659 17,999
Other income 357 189
Total 22,016 18,188
Profit before tax 1,111 1,249
Tax expense 329 317
Profit for the period 782 932
Other comprehensive income 28 23
Surplus in Profit & Loss Account 4,317 3,402
brought forward from previous year
Dividend (238) (40)
Available surplus 4,889 4,317

DIVIDEND
The Board of Directors have recommended a Dividend @ 150%,
amounting to ` 3.00 per equity share for the Financial Year 2021-22
(` 3.00 per equity share as Final Dividend for 2020-21).
Your Company has formulated a policy for Dividend Distribution which is
disclosed on the website of the Company and can be accessed at https://
www.kirloskarpumps.com/wp-content/uploades/2021/09/Dividend-
Distribution-Policy-2021.pdf

OPERATIONS OF THE COMPANY

The revenue from operations for the year under review is ` 21,659 Million,
which is more by 20% compared to the previous Financial Year.
The Financial Year 2021-22 witnessed the revival of the economy post
relief from the covid pandemic. The opening of businesses and markets
helped your Company to return to a full operation based on robust
demand from across the sectors. Operations across all plants scaled to
full potential while strictly following covid guidelines. This helped to serve
customers of the Company with the best products and services in the
best possible ways.
Overall demand from industry sectors including building & construction,
chemical, pharma, steel, coal, sugar, power and textile helped the
Company register good growth in these segments.
Revival of the residential building segment and continued focus on
communicating the benefits of intelligent water management pumping
system helped the Company achieve more delivery of its Hydro
Pneumatic Pressure Boosting (HYPN) pumping system. During the
period, for the first time, Kirloskar Brothers Limited (KBL) supplied 104
HYPN systems to HPCL’s residential township in Barmer, Rajasthan.

108
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
Your Company continues to maintain a leadership position in the firefighting pumping system, especially
Multi-Stage Multi-Outlet (MSMO) firefighting pumps, winning many new customers in this segment.
In the Oil & Gas segment, KBL developed a new pump in horizontal execution for the IOCL 3G Ethanol project.
Revival of large water projects and good enquiry from large OEMs resulted in a significant number of orders
for the supply of high head multi-stage pumps, split case pumps, and Large Vertical Turbine (VT) pumps. We
were particularly pleased to be part of the Gujarat Water Supply and Sewage Board (GWSSB), Hafeshwar
project, where VT pumps of the Company were installed with 35 mtrs suspension length. The project was
inaugurated by Honourable Prime Minister Shri Narendra Modi Ji. Your Company has successfully executed
Jaipur – Bisalpur Augmentation project by increasing the total capacity of the scheme without interrupting the
existing Infrastructure where 18+ large Pumps were supplied.
Your Company continues to focus on gaining more customer traction for product concepts like Pump as Turbine
(PAT), which can generate green power continuously using the pressure available in the water supply pipeline,
reducing carbon footprints and saving cost in the long run. Solar pumping is another potential segment where
we registered significant growth in FY 21-22.
With many irrigation projects being executed, we supplied large and medium-range VT pumps for projects in
Madhya Pradesh, Gujarat and Orissa. Also, during the period, we supplied pumps for Haryana Lift Irrigation
Schemes and UP Irrigation Dept (CESPO).
Successful shifting of Valve manufacturing to Kirloskarvadi resulted in streamlining valve operations, adding a
significant advantage to the business. The Valve business registered good growth mainly due to demand from
the Middle East and Asia-Pacific region.
Your Company continues to play its part in making India Atmanirbhar in the defence sector by successfully
completing an Indigenisation project of “Magazine Fire Fighting System” in coordination with Mazagaon Dock
Shipbuilders Ltd.
In the retail segment, a series of energy-efficient pumps both in the monobloc and submersible pump category
have been launched to further consolidate the Company’s position in the agricultural and domestic segments.
The pumps, including AARNA, ANAYA, RIAN, Jaldaksh, Jalhasti, Jaltara and submersible pumps like KP4
Jalraaj UVA and NEO Series Pumps, are made with advanced technology and consume less energy for high
performance. Further, introducing new energy-efficient pump series equivalent to IE4 and IE5 efficiencies
helped the Company in gaining new market penetration. In this regard, KBL launched 53 variants of Monobloc
pumps with IE4 Super Premium Efficiency motors and 16 variants of Monobloc pumps (up to 5 HP) sets with
Ultra-Premium Efficiency IE5 motors.
Focus on value-added and sustainable products, including Lowest Life-cycle Cost (LLC) pumps, dewatering
pumps, micro hydropower generator - PICO, process pumps, HVAC, sewage pumps and booster pumps,
among others, helped gain growth in these product sales. Your Company also witnessed continued acceptance
of its signature IoT based remote pump monitoring system – KirloSmart. With more advanced features, the
Company is confident of winning more customers in future for this product.
During FY 21-22, rising electricity requirements lead to expansion projects in power industry resulting in the
demand for pumps. This is mainly for pumps required in Flue Gas Desulfurization (FGD) project in Thermal
Power plants. The opening of an Advanced Technology Product Division (ATPD) at Kirloskarvadi has further
strengthened our capability in the nuclear power segment.
Your Company is committed to manufacturing high-quality products through its state-of-the-art plants using
the latest technology like 3D printers. KBL continues to invest in improving manufacturing competitiveness.
Recently, Sanand plant of the Company, a dedicated submersible pump manufacturing plant, was awarded
Silver Medal and the Kaniyur plant, an all-women operated plant, was awarded a bronze medal by NAMC
(National Award for Manufacturing Competitiveness 2021), which shows our commitment to manufacturing best
quality pumps. Also, the material testing lab of the Kirloskarvadi plant is now NABL accredited in accordance
with ISO/IEC 17025: 2017.
The focus on research and development continues to help maintain KBL’s leadership position on the
technological forefront in the fluid management business. During the period, the Company received multiple
patents, reiterating its commitment to continue to follow the path of adding value through innovation. The

109
Integrated Annual Report 2021-22

Company developed a ballast pump for the special navy application and solids handling pump type SHL
250/40 M1 for handling 131 mm solid size. Your Company has designed, developed and completed model
testing of the Francis Turbine Pump (FTP) for 30 MW. These projects speak volumes of the Company’s R&D
capability.
Your Company has also achieved product improvement in the Valve sector through the development of a Non-
Rising Sluice Valve (NRSV) of 1200 mm size of PN 2.0, 1400 mm size of PN 2.0 and Butterfly Valve of 1200 mm
size of rating AWWA #150, size 1400 of rating PN6, 2300 mm size of rating PN10.
Your Company remains committed to strengthening the capability of channel partners in faster product delivery
and service. To take this forward, it has opened the Authorised Pump Original Equipment Manufacturer
(APOEM) plants across the country. These plants have a stocking, servicing and testing facilities along with
skilled manpower to support installation and commissioning. Strategically located, these plants will reaffirm
KBL’s commitment in providing unmatched value for the customers.
Service remains the focus area both from a revenue and customer satisfaction point of view. Having industry-
leading skilled manpower helped the Company gain many customers. Successful commissioning of 104
VT Pumps in MRT Skytrain Project-Bangkok, Thailand and the execution of Annual Maintenance Contracts
(AMC) with big clients speaks volume of the commitment and high-class service capabilities of the company’s
experienced service team.
Your Company was awarded ‘India’s Most Ethical Company’, which reflects the honesty with which it conducts
business and remains committed to adding value for the customers through innovative products and superior
service. Also, through CSR activities, the Company has always walked an extra mile to give back to the
community.
There were no material changes or commitments to report that affected the Company’s financial position
that occurred between the end of the Financial Year and the date of this report.

STATUTORY DISCLOSURES

1. ANNUAL RETURN
As per provisions of Section 92(3) read with Section 134 of the Companies Act, 2013 ('the Act'), the
Annual Return of the Company is placed on the website of the Company at https://www.kirloskarpumps.
com/investors/shareholders-meetings/

2. NUMBER OF MEETINGS OF THE BOARD

During the Financial Year under review, 5 Board meetings were held, the details of which are appearing
in the Report on Corporate Governance.

3. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Act, the Board of Directors to the best of its knowledge and ability
confirm that:
(a) in preparation of the annual accounts, the applicable accounting standards have been followed.
(b) they have selected such accounting policies and applied them consistently and made judgments
and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the Financial Year and of the profit of the Company for that period.
(c) they have taken proper and sufficient care for the maintenance of adequate accounting records in
accordance with the provisions of this Act, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities.
(d) they have prepared the annual accounts on a going concern basis; and
(e) they have laid down internal financial controls to be followed by the Company and such internal
financial controls are adequate and operating effectively.
(f) the directors have devised proper systems to ensure compliance with the provisions of all applicable
laws and that such systems are adequate and operating effectively.

110
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
4. INDEPENDENT DIRECTORS’ DECLARATION
All Independent Directors of the Company have given declaration under Section 149 (7) of the Act, that
they meet the criteria laid down in Section 149 (6) of the Act.

5. DISCLOSURE REQUIRED UNDER SECTION 134(3)(e)

The Board has adopted a Board Diversity Policy which sets the criterion for appointment as well as
continuance of Directors, at the time of re-appointment of director in the Company. As per the policy,
the Board has an optimum combination of members with appropriate balance of skill, experience,
background, gender and other qualities of directors required by the directors for the effective functioning
of the Board.
The Nomination and Remuneration Committee recommends remuneration of the Directors, subject to
overall limits set under the Act, as outlined in the Remuneration Policy. As per the policy, the Executive
Director is entitled to fixed salary, commission based on performance evaluation and other non-
monetary benefits. In case of Non-Executive Directors, apart from receiving sitting fees, they are entitled
to commission on the basis of criterion as per the policy.
The Remuneration Policy is available on the website of the Company at https://www.kirloskarpumps.
com/wp-content/uploades/2020/01/Remuneration-Policy.pdf The salient features of this policy are as
follows:
- Philosophy: The Company strongly believes that the system of Corporate Governance protects
the interest of all stakeholders by inculcating transparent business operations and accountability
from management towards fulfilling the consistently high standard of Corporate Governance in all
facets of the Company’s operations.
- Objective: Transparent process of determining remuneration at the Board and Senior Management
level and appropriate balance between the elements comprising the remuneration.
- Coverage: The policy covers remuneration to Executive, Non-Executive Directors, Key Managerial
Personnel and Senior Managerial Personnel.

6. REPORT OF AUDITORS
During the Financial Year under review, there are no qualifications, adverse remarks or disclaimers made
by the Statutory Auditor on the financial statements of the Company and by the Secretarial Auditor in
his Secretarial Audit Report, which is annexed herewith as an Annexure VI. There are no cases of fraud
detected and reported by the Auditor under Section 143(12) during the Financial Year.
In terms of the provisions of Section 139 of the Companies Act, 2013, read with the applicable rules made
thereunder, M/s. Sharp & Tannan Associates, Chartered Accountants (Firm Registration No.109983W)
would complete their term of 5 years as the Statutory Auditors of the Company at the ensuing 102nd AGM.
They have been recommended by the Board of Directors to be appointed as Statutory Auditors for the
second term of 5 consecutive years with effect from the conclusion of 102nd Annual General Meeting till
the conclusion of 107th Annual General Meeting. The Statutory Auditor have confirmed its eligibility and
necessary certificates as required under the Act have been received. Their appointment for the second
term is subject to the approval of the shareholders of the Company at the ensuing 102nd AGM.
Mr. Shyamprasad Limaye (CP No. 572), Practicing Company Secretary was appointed as Secretarial
Auditor of the Company as per Section 204 of the Act, for the Financial Year 2021-22. Mr. Shyamprasad
Limaye has been re-appointed as Secretarial Auditor of the Company for the Financial Year 2022-23.
M/s. Parkhi Limaye & Co. (Firm Registration No. 000191) have been appointed as Cost Auditor of the
Company as per Section 148 of the Act, read with applicable rules made thereunder for the Financial
Year 2022-23. Their remuneration is subject to the approval by the Members at the ensuing 102nd AGM.

7. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

The details of loans, guarantees or investments under Section 186 of the Act, are available under Note
no. 5, 7 and 35E of notes to accounts, attached to the Standalone Financial Statements.

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Integrated Annual Report 2021-22

The full particulars are available in the Register maintained under Section 186 of the Act, which is available
for inspection during business hours on all working days (except Saturday and Sunday).
8. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All contracts/arrangements /transactions entered by the Company during the Financial Year 2021-22
with the related parties were in the ordinary course of business and at arm’s length basis. There were
no transactions required to be disclosed in Form AOC-2 (Annexure V). During the Financial Year, the
Company has not entered into contract/arrangement/transactions with the related parties which could
be considered material in accordance with the Company’s ‘Policy on Materiality of Related Party
Transactions and Dealing with Related Party Transactions’. The said policy is available on the website of
the Company.
Further, we draw your attention to Note no. 35 of the Standalone Financial Statements of the Company
for details of related party transactions.

9. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

EARNINGS AND OUTGO
Details of energy conservation, technology absorption, research and development and foreign exchange
earnings and outgo as required under Section 134(3)(m) of the Act, read with the applicable rules are
given as an Annexure I to this Report.

10. RISK MANAGEMENT

The Risk Management Committee of the Company meets at regular intervals and identifies the top
risks and prioritises those risks. Particulars about this Committee are given in the Report on Corporate
Governance.

11. CORPORATE SOCIAL RESPONSIBILITY REPORT

The Company has a Corporate Social Responsibility Policy as per the requirements of the Act and the
same is available on the website of the Company.
The salient features of this policy are as follows:
- The Company believes that serving society is a primary purpose.
- Perceivable improvement in attitude, culture and values amongst employees and community.
- Conservation of natural resources and commitment to Green Environment.
- Developing business processes which are environmentally and socially sustainable.
The Corporate Social Responsibility Report in the required format is given as an Annexure II to this
report.

12. BOARD EVALUATION

The Board has formulated a Board Evaluation Policy for evaluation of individual Directors as well as the
entire Board and Committees thereof. The evaluation framework is divided into parameters based on
various performance criteria. The evaluation process for the Financial Year ended on March 31, 2022 has
been carried out.
In compliance with the requirements under Schedule IV of the Act, read with Regulation 25(3) of SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015, a meeting of Independent Directors
was held on November 10, 2021 primarily to discuss the matters mentioned under the said Schedule. All
the Independent Directors of the Company attended the same.

13. PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES, ASSOCIATE AND JOINT

VENTURES
Following are the highlights of performance of subsidiaries, associate and joint venture companies and
their contribution to the overall performance of the Company during the period under review.

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 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
i. Karad Projects and Motors Limited
The revenue for the year under review is ` 4,775 million which is 55% more as compared to the
previous year. This constitutes 13% of gross consolidated revenue.
ii. The Kolhapur Steel Limited
The revenue for the year under review is ` 314 million which is 50% more as compared to the
previous year. This constitutes 1% of gross consolidated revenue.
iii. Kirloskar Corrocoat Private Limited
The revenue for the year under review is ` 258 million which is 28% more as compared to the
previous year. This constitutes 1% of gross consolidated revenue.
iv. Kirloskar Brothers International B.V. (consolidated)
The revenue for the year under review is ` 8,775 million which is 6% less as compared to the
previous year. This constitutes 25 % of gross consolidated revenue.
v. Kirloskar Ebara Pumps Limited (Joint Venture)
The revenue for the year under review is ` 2,234 million which is 22% more as compared to the
previous year.
The financial position of the subsidiaries and joint venture companies is given in AOC-1, in this
Annual Report.
14. OTHER STATUTORY DISCLOSURES AS REQUIRED UNDER RULE 8(5) OF THE COMPANIES
(ACCOUNTS) RULES, 2014
(i) Financial summary/highlights are included elsewhere in the Report.
(ii) There was no change in the nature of business during the year under review.
(iii) Changes in Directors and Key Managerial Personnel
- Mr. Pratap Shirke (DIN 00104902) is liable to retire by rotation at the ensuing Annual
General Meeting and being eligible offers himself for re-appointment.
- Mr. Rajeev Kher (DIN 01192524) ceased to be Director with effect from January 24, 2022
on completion of his term as an Independent Director of the Company.
- Mr. Pradyumna Vyas (DIN 02359563) and Ms. Shailaja Kher (DIN 08450568) ceased to
be Directors with effect from May 15, 2022 on completion of their term as Independent
Directors of the Company.
- At the 101st Annual General Meeting held on 9th September 2021, the Shareholders have
approved the appointment of Ms. Rama Kirloskar (DIN 07474724) as the Joint Managing
Director of the Company for a period of five years with effect from August 3, 2021.
- Mr. Shobinder Duggal (DIN 00039580), Ms. Ramni Nirula (DIN 00015330) and Mr. Shrinivas
Dempo (DIN 00043413) were appointed as Additional Directors of the Company with effect
from May 25, 2021. The Shareholders at the 101st Annual General Meeting held on
9th September, 2021 have approved their appointment as Independent Directors of the
Company with effect from May 25, 2021 for a term upto May 24, 2026.
- Mr. Vivek Pendharkar (DIN 02791043), Mr. Amitava Mukherjee (DIN 00003285) and
Ms. Rekha Sethi (DIN 06809515) were appointed as Additional Directors of the Company
with effect from October 29, 2021. The Shareholders vide resolution passed through
Postal Ballot on December 14, 2021 have approved their appointment as Independent
Directors of the Company with effect from October 29, 2021 for a term upto October
28, 2026.
- Mr. Raghunath Apte ceased to be the Company Secretary & Compliance Officer with effect
from November 26, 2021.
- Mr. Devang Trivedi was appointed as the Company Secretary & Compliance Officer with
effect from March 18, 2022.

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(iiia) The Board is of the opinion that Mr. Shobinder Duggal, Ms. Ramni Nirula, Mr. Shrinivas Dempo,
Mr. Vivek Pendharkar, Mr. Amitava Mukherjee and Ms. Rekha Sethi - Independent Directors of the
Company who were appointed during the year, possess the requisite qualifications, experience,
expertise including proficiency.
(iv) No company has become or ceased to be a subsidiary, joint venture or associate company of the
Company, during the year.
Material Subsidiaries
Regulation 16 of the Listing Regulations 2015, defines a ‘material subsidiary’ to mean a subsidiary,
whose income or net worth exceeds ten percent of the consolidated income or net worth
respectively, of the listed entity and its subsidiaries in the immediately preceding accounting year.
Under this definition, Karad Projects & Motors Limited (‘KPML’), an Unlisted Indian Subsidiary, SPP
Pumps Limited (UK) and Kirloskar Brothers International B.V., Unlisted Foreign Subsidiaries, are
material subsidiaries of the Company.
The subsidiaries of the Company function independently, with an adequately empowered Board
of Directors and adequate resources. For more effective governance, the minutes of Board
Meetings of subsidiaries of the Company are placed before the Board of Directors of the Company
for their review at every quarterly Meeting.
In addition to the above, Regulation 24 of the Listing Regulations requires that at least one
IndependentDirector on the Board of Directors of the listed entity shall be a Director on the Board of
Directors of an unlisted material subsidiary, whether incorporated in India or not. For this provision,
material subsidiary means a subsidiary, whose income or net worth exceeds twenty percent of
the consolidated income or net worth respectively, of the listed entity and its subsidiaries in the
immediately preceding accounting year. However, there is no Subsidiary which falls under this
definition of unlisted material subsidiary for the financial year ended March 31, 2022.
The other requirements as prescribed under Regulation 24 of the Listing Regulations for Subsidiary
Companies have been complied with.
Secretarial Audit of Material Unlisted Indian Subsidiary
Karad Projects & Motors Limited (‘KPML’), a material subsidiary of the Company carried out
Secretarial Audit for the Financial Year 2021-22 pursuant to Section 204 of the Companies Act, 2013
and Regulation 24A of the Listing Regulations. The Secretarial Audit Report of KPML submitted by
Mr. Abhijit Dakhawe, Practicing Company Secretary is attached as Annexure VII to this Report and it
does not contain any qualification, reservation or adverse remark or disclaimer.
(v) Details relating to Deposits
The Company neither accepts nor renews matured deposits since January 2003 and there were
no deposits accepted by the Company as covered under Chapter V of the Act read with Rules
made thereunder.
(vi) The details of Deposit which are not in compliance with the requirement of the Chapter V of the
Act – NA.
(vii) No significant and material orders were passed by the regulators or court or tribunals impacting
the going concern status and Company’s operations in future.
(viii) Details in respect of adequacy of internal financial controls with reference to the financial
statements
The Company has adequate internal financial control systems in place. The control systems are
regularly reviewed by the external auditors and their reports are presented to the Audit and Finance
Committee.
The Company has an Internal Audit Charter specifying mission, scope of work, independence,
accountability, responsibility and authority of Internal Audit Department. The internal audit reports
are reported to Audit and Finance Committee along with management response.

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 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
(ix) Your Company is required to maintain the Cost records as required under Section 148(1) of the
Act and accordingly, such accounts and records are maintained by the Company for the Financial
year ended on March 31, 2022.
(x) The details of application made or any proceedings pending under the Insolvency and Bankruptcy
Code, 2016 (31 of 2016) during the year along with their status as at the end of the Financial Year
– Nil.
(xi) The details of the difference between amount of the valuation done at the time of one-time
settlement and the valuation done while taking loan from the Banks or Financial Institutions along
with the reason thereof - Nil
(xii) Other disclosures required under the Companies Act, 2013 as may be applicable
- Composition of the Audit and Finance Committee has been disclosed in Corporate
Governance Report.
- Establishment of Vigil Mechanism: The Company has already in place a ‘Whistle Blower
Policy’ as a Vigil Mechanism since 2008. The details of the same are reported in Corporate
Governance Report.
- Disclosures as required under Section 197(12) of the Act read with the applicable rules and
details as per Rule 5(2) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 are given as Annexure III & Annexure IV.
(xiii) Other Disclosure
The Company has filed a suit against Kirloskar Proprietary Limited (KPL) relating to the use,
assignment and ownership of the trademark “Kirloskar”. The Company has made appropriate
pleadings in the Suit and has inter-alia, challenged the unlawful termination and sought declaration,
injunction and other appropriate relief/s. KPL subsequently has withdrawn the termination letters
with effect from March 3, 2020.
In compliance with the order of the Hon’ble Pune Commercial Court, the Company has deposited
the claimed Royalty amount by way of cheque in safe custody of Ld. Nazir District Court, Pune
Civil Court from the period October 2018 until 3rd quarter 2021-22, without prejudice to its rights
and contentions. The cheques upon their expiry have been replaced by fresh cheques in terms of the
order of the Hon’ble Court.

15. CASH FLOW

Cash flow statement for the Financial Year ended on March 31, 2022 is attached to the Balance Sheet.
SAFETY, HEALTH AND ENVIRONMENT

Safety and Health

• All KBL manufacturing plants have achieved ‘Zero reportable accidents’.
• Behavioral change from Unsafe practice to safe practice was more focused. Behavior Based
Safety checks are improved from 4500 per year to 5500 per year.
• Identifying, reporting and taking corrective / preventive actions (CAPA) by the employees is one
of the major indicators of Good Safety Culture. It also indicates the involvement of all employees
in the safety. Compliance of Corrective Action and Preventive action is around 85%.
• Apart from ISO system audits, our plants have been audited for Internal safety audits. Safety
checks are carried out at project sites by project site employees.
• Safety Mitra (Safety Stewards) concept is introduced in the manufacturing Plants.
• Material Handling Safety is a big concern especially in our type of industry. A special drive was
undertaken to ensure Safe lifting tools, tackles are used.
• Safety Training is an important element to increase Safety awareness and improve Safe Culture,

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training provided 4.2 Man-hours/employee/year against the target 3 Man-hours/employee/year.

• Utmost care and steps have been taken to control COVID-19 spread and to work safely across
the organisation. These include checking of body temperature at entry gate, use of hand sanitizer
and maintenance of social distancing to the extent possible at workplace.
• Initiatives were undertaken to increase COVID-19 awareness among employees and community,
including displaying boards and hoardings, distribution of pamphlets and awareness programmes.
Environment and Energy
Through sustainability policy, the Company is committed to achieve excellence in overall sustainable
performance through integration of economic, environmental and social dimensions. As a part of its
sustainability initiative, the focus is on various aspects to reduce adverse impact on the environment,
which include conservation of natural resources, reduce use of resources and emission of carbon,
develop products with low ecological footprint, promoting energy efficient products, promoting use of
renewable sources of energy, conserving biodiversity and engaging with stakeholders and communities
for sustainability practices.
As a part of commitment towards conserving fossil fuels and depending more on renewable energy
sources, the Company has installed and made operational roof top solar power panels at manufacturing
locations and Corporate Office for a capacity of 4.6 MW, which is yielding green power with good
efficiency. This is in addition to the generation of 4 MW wind power by Kirloskarvadi plant.
For the purpose of optimum utilization of resources and continual improvement, the Company monitors
and reviews the important parameters impacting environment such as Carbon footprint, Energy
consumption, Water consumption, Material consumption and Waste generation. The Company has also
initiated few green initiatives like plantation of trees to minimize heat load on buildings, use of ply boards
and recyclable metallic cage instead of wood, use of furnace slag for constructing roads and floorings
and modifying shopfloor layouts to minimize material flow and multitasking using value stream mapping.
Through Confederation of Indian Industry (CII), the Company has completed “Life Cycle Assessment
(LCA)” study on a sample product to evaluate impact of manufacturing on environment so that it can
initiate actions to improve the same. In continuation of this initiative, it has now selected different range
of products to assess GHG emission impact on environment due to manufacturing of those products.
Thus, the Company shall continue with its efforts to improve and contribute to help India achieve its
commitment to be Carbon Neutral by 2070.
“Commitment towards the Environment” is one of our Values. Our corporate office is a green building
with LEED Platinum Certification. At corporate office and manufacturing locations, we have extensive
daylight harvesting to save energy and rain water harvesting system to conserve water. All our plants are
“zero waste water discharge” units.
The Company has a patented low cost, permanent solution to depleting groundwater & unreliable
monsoon known as ‘Kedia Farm Pattern’ - KFP (Patented) RWH. KFP can solve drinking water problem
of a village and ‘Make Rural India Water Secure’ for all times to come.
In order to encourage manufacturing plants to implement more and more energy saving projects, the
Company organizes energy conservation competition (ENCON) at KBL group level through independent
energy auditors. The Company shares best practices and achievements with all plants and also award
teams for innovative ideas and energy saving performances.
Your Company is committed to the integration of environment performance considerations in the
procurement process to have a minimal impact on the environment. It also encourages its suppliers to
adopt green sustainable supply chain practices.
All manufacturing plants of the Company are certified to Environment Management System (ISO
14001:2015), Energy Management System (ISO 50001:2018), Quality Management System (ISO
9001:2015) and Occupational Health and Safety Management System (ISO 45001:2018) under Integrated
Management System Certification.

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 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
CORPORATE GOVERNANCE
Pursuant to Securities and Exchange Board of India (SEBI) (Listing Obligations and Disclosure Requirements),
Regulations 2015, Management Discussion and Analysis Report, Report on Corporate Governance, Auditor’s
Certificate on Corporate Governance, Certificate pursuant to Schedule V read with Regulation 34 (3) and the
declaration by the Chairman and Managing Director regarding affirmations for compliance with the Company’s
Code of Conduct are annexed to this report.

DISCLOSURE UNDER THE 'SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION,

PROHIBITION AND REDRESSAL) ACT, 2013'
Your Company has complied with the provisions relating to the constitution of Internal Complaints Committee
under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and in
terms of Section 22 of this Act, read with Sexual Harassment of Women at Workplace (Prevention, Prohibition
and Redressal) Rules, 2013, we report that for the Financial Year ended on March 31, 2022:

1 No. of complaints received in the year Nil

2 No. of complaints disposed off in the year Nil
3 Cases pending for more than 90 days NA
4 No. of workshops and awareness programmes conducted in the year 2
5 Nature of action by employer or District Officer, if any NA
ACKNOWLEDGEMENTS

Your Directors wish to place on record their appreciation of the unstinted support and co-operation given by
the banks and financial institutions. Your Directors would further like to record their appreciation of the efforts
by the employees of the Company and wish to express their gratitude to the Members for their continued trust
and support.

For and on behalf of the Board of Directors,

Sanjay C. Kirloskar
Chairman & Managing Director
DIN 00007885
Pune: May 24, 2022

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Annexure I

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION,

FOREIGN EXCHANGE EARNINGS AND OUTGO

A) Conservation of energy:
(i) Steps taken or impact on conservation of energy
1. Plants have been upgraded to smart energy data logger from traditional energy meters. In this
system, the data is being automatically captured & displayed resulting accurate and real time
data.
2. Replacement of induction / MHL / CFL lamps with energy efficient LED lamps.
3. Installation of timer & temperature sensor on water heater to reduce idle running.
4. Installation of VFD for compressor and VTL Machine.
5. Monthly checking of leakage to restrict loss of compressed air.
6. Reduction in use of main transformers during weekly offs and holidays.
7. Installation of “True Demand Utilization System” for maximum utilization of Sanctioned demand to
reduce operation of DG sets.
8. Scheduling awareness amongst employees by celebrating energy conservation week.
9. Communication of energy conservation projects through weekly bulletin for horizontal deployment.
10. Achieving reduction in energy consumption at various stages of manufacturing like machining,
testing and casting through initiatives like reduction in machining allowance, reduction in rejection
and rework, replacing old inefficient motors with new efficient motors and selection of medium
frequency furnace for foundry project.
11. Replacement of old inefficient shot blasting machine with new.
12. Laser calibration of all critical CNC machines to improve productivity.
13. Refurbishment of HT Furnace to eliminate chamber heat loss.
14. Installation of timers for AC & Air circulators.
15. Installation of Quick Release Couplings (QRC) for Pneumatic Grinders & Paint Guns to reduce
joint air leakages.
16. Replacement of RO water pumps with energy efficient pumps.
17. Replacement of office conventional AC with VRV (Multi-Split Type Air Conditioners) AC.
18. Modification of 1HT Furnace from diesel fired to gas fired to increase fuel efficiency & reduce air
pollution.
19. Up-gradation of wet-type painting process to energy efficient dry type process.
20. Maximizing use of IE4 class motors during revamping / maintenance projects.
21. Installation of energy efficient BLDC fans for canteen and office.
22. Energy Audit of Pumps and other energy potential equipment.

(ii) Steps taken by the Company for utilizing alternate sources of energy

1. Installation of “Net Metering” at manufacturing plant to export generated solar energy during
holidays.

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 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
2. Installation of solar water heater for utilization of hot water in canteen.
3. Installation of Bio-gas plant for disposing canteen food waste and gas generated from this plant
is being used for canteen.
4. Power generation during testing of pump using newly developed “Pump as Turbine” concept.
5. Use of transparent roof sheets and wind ventilators to maximize use of natural light and proper
ventilation.
6. Procurement of E-bikes for travel within plant.
7. Enhancement in Solar rooftop power generating capacity by 50 KW.
(iii) Capital investment on energy conservation

Plant CER Justification Amount

(` in Million)
KOV Replacement of;
1. old 25 Tn EOT crane by new 30 Tn EOT crane 8.74
2. existing old Plate Conveyor Mould Handling System by new Hydraulic
Operated Mould Handling System at CI Foundry
3. Flow meter at Pump Testing Lab with new Fow meter
5 Tn Crane installed for handling heavy patterns 2.630
Provision of hoist for casting handling in fettling shop 1.64
Vertical rack storage system for silica sand bags, FC Stores, hydro plates 1.15
Installed wet type paint booth with Crane extension 0.80
Portable air plasma cutting machine for cutting higher thickness 0.54
Kaniyur 3 & 1 Phase Motor & Performance testing panel 0.75
Electric stacker for stores 0.75
Procurement of Digital Height gauge 0.52
Dewas Dual station auto CNC impeller balancing machine. 3.8

B) Technology absorption:
(i) Efforts made towards technology absorption
• Completed re-engineering of 36’ large split case pump.
• Developed pumps for nuclear application in Primary circuit of Nuclear power plant.
• Developed Main Ballast pump for special naval application.
• Developed large axial flow pump type BHA 1075S to cater hydrocarbon application.
• Development of BT 10 DT L(V) vertical split case pumps in LLC range.
• Development SHL 250/40M1 pump with 131mm solid handling capability.
• Developed submersible pump type NS150/26N with mid-mount arrangement for Mazgaon
Dock Limited.
• Completed model testing for Indigenously designed Kaplan turbine for KSEB project.
• Completed model testing of 30 MW Francis Turbine Pump.
• Developed complete range for Pump as turbine (PaT) /PICO.
• Developed 53 variants of Monobloc pumps with IE4 Super Premium Efficiency motors.
• Developed 16 variants of Monobloc pumps (up to 5 HP) sets with Ultra Premium Efficiency
IE5 motors.

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Integrated Annual Report 2021-22

• Developed indigenous submersible dewatering CW pumps up to 3 HP as an import

substtution.
• Developed and released 24 variants in 4” submersible pumps with economical motor design
with improved efficiency and performance.
• Development Completed (NRSV) -DN 1200 PN 2.0 & DN 1400 PN 2.0.
• New Product Development of Butterfly Valve size DN3000 PN10, PN16, PN20, DN2100 PN10,
DN2300 PN10.
• Optimization of Large Size Butterfly Valve (BFV) - Total 04 Sizes (DN1200 AWWA #150,
DN1400 PN6, DN1800 PN10 & DN2400 PN10).
• Product improvement by enhancing features for Butterfly Valve (BFV) like Blow-out Proof
design, Ingress Protection - Total 09 Sizes.
(ii) Benefits derived like product improvement, cost reduction, product development or import
substitution:
• Capability enhancement to meet customer requirements.
• Import substitution.
• Upgradation of product for conservation of energy.
• Enhanced product performance in economy range.
• Competitive edge with Ultra-premium efficiency products.
• Development of indigenized Auto Priming system.
• Reduction in product development time and cost.

(iii) In case of imported technology (imported during the last three years reckoned from the
beginning of the Financial Year) – NIL
(a) The details of technology imported;
(b) The year of import;
(c) Whether the technology been fully absorbed;
(d) If not fully absorbed, areas where absorption has not taken place and the reasons thereof.

(iv) Expenditure incurred on Research and Development

(Amount in Million `)
Revenue expenditure 234.30
Capital Expenditure 0.46
Total 234.76

C) Foreign Exchange earnings and outgo (Amount in Million `)

Foreign Exchange earned in terms of actual inflows during the year 1,158.00
Foreign Exchange outgo during the year in terms of actual outflows 844.00

120
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
ANNEXURE II
ANNUAL REPORT ON CSR ACTIVITIES

1. Brief outline on CSR Policy of the Company:

Kirloskar Brothers Limited enjoys a legacy of over a century of making a positive difference in the area
of socio – economic development of the less privileged communities and other stakeholders, by being
a responsible business house through adoption of appropriate business processes and strategies and
by carrying out various initiatives towards its social obligations for the society in the vicinity of all its
manufacturing locations. The activities are carried out by the Company and its implementing agency,
Vikas Charitable Trust.

2. Composition of CSR Committee:

Sl. Name of Director Designation /Nature Number of meetings Number of meetings
No. of Directorship of CSR Committee of CSR Committee
held during the year attended during the
year
1. Mr. Pradyumna Vyas Chairman 2 2
(upto May 15, 2022)
2. Mr. Sanjay C. Kirloskar Member 2 2
3. Ms. Rama Kirloskar Member 2 2
4. Mr. Rajeev Kher Member (up to 2 1
January 24, 2022)
5. Ms. Rekha Sethi Member (w.e.f. 2 NA
February 10, 2022)
6. Mr. Vivek Pendharkar Chairman 2 NA
(w.e.f. May 16, 2022)

3. Provide the web-link where https://www.kirloskarpumps.com/composition-of-various-

Composition of CSR committee, committes-of-board/
CSR Policy and https://www.kirloskarpumps.com/wp-content/
uploads/2020/01/CSR-policy-Ammended-upto-May-2017.pdf
CSR projects approved by the https://www.kirloskarpumps.com/wp-content/
board are disclosed on the website uploads/2021/07/CSR-Annual-Action-Plan-2021-22.pdf
of the company.
4. Provide the details of Impact NA.
assessment of CSR projects
carried out in pursuance of sub- The Average CSR obligation of the Company is less than INR 10
rule (3) of rule 8 of the Companies Crores.
(Corporate Social responsibility
Policy) Rules, 2014, if applicable
(attach the report).
5. Details of the amount available NA
for set off in pursuance of sub-
rule (3) of rule 7 of the Companies
(Corporate Social Responsibility
Policy) Rules, 2014 and amount
required for set off for the financial
year, if any
Sl. No. Financial Amount available for set-off from Amount required to be set off
Year preceding financial years (in `) for the financial year, if any
(in `)
Not Applicable
TOTAL

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Integrated Annual Report 2021-22

6. Average net profit of the company as per Section 135(5). ` 1,30,81,64,841/-

of the Companies Act, 2013, (the Act')
7. (a) Two percent of average net profit of the company as per ` 26,163,297/-
Section 135(5) of the Act.
(b) Surplus arising out of the CSR projects or programmes or Nil
activities of the previous financial years.
(c) Amount required to be set off for the financial year, if any. Nil
(d) Total CSR obligation for the financial year (7a+7b-7c). ` 261,63,297/-

8. (a) CSR amount spent or unspent for the financial year:

Total Amount Amount Unspent (in `)

Spent for the Total Amount transferred to Amount transferred to any fund specified under
Financial Year. Unspent CSR Account as per Schedule VII as per second proviso to Section
(in `) Section 135(6) of the Act 135(5) of the Act

Amount Date of Name of the Fund Amount Date of

transfer transfer
26,384,262 Nil NA NA NA NA

(b) Details of CSR amount spent against ongoing projects for the Financial Year:
1 2 3 4 5 6
Sl. Name Item from the List of Local Location of the Project
No. of the activities in Schedule VII area project duration
Project to the Act (Yes/No)
State District.
1 Neerchakra Rural Development – Safe Yes Maharashtra Satara & Upto September, 2021
Project Drinking Water Solapur
2 Firefighting Disaster Prevention & Yes Madhya Ujjain Upto March, 2022
system for Management Pradesh
Mahakaal Temple
3 Support to Promoting healthcare Yes Maharashtra Pune Upto March, 2024
Medical including Preventive
Institution/ Healthcare
Hospital for the
infrastructure
upgradation
1 7 8 9 10 11
Sl. Amount Amount spent in the Amount Mode of Mode of Implementation -
No. allocated for the current transferred Implementation – Through Implementing
project Financial Year to Unspent Direct Agency
(in `) (in `) CSR (Yes/No)
Name CSR
Account for
Registration
the
number
project as
per
Section
135(6) (in `)
1 850,000 346,000 NA No Vikas CSR00006556
Charitable
Trust
2 9,000,000 612,770 NA No Vikas CSR00006556
Charitable
Trust
3 10,000,000 3,585,744 NA No Vikas CSR00006556
Charitable
Trust
Total 4,544,514

122
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
(c) Details of CSR amount spent against other than ongoing projects for the financial year:
1 2 3 4 5 6 7 8
Sl. Name of the Item from Local Location of the Amount Mode of Mode of
No Project the list of area Project spent implementation implementation -
activities in (Yes/ for the -Direct Through
schedule VII No) project (Yes/No) implementing agency
to the Act State District (in `) Name CSR
registration
number
1 Activities related to Disaster Yes Madhya Dewas 45,000 Yes - -
COVID-19 -– Masks Management Pradesh
and Sanitizer
distribution
2 Contribution for Rural Yes Madhya Dewas 250,000 Yes - -
development of Development Pradesh
District Hospital, Program
Dewas
3 Activities related to Disaster Yes Tamil Nadu Kaniyur 135,400 Yes - -
COVID-19 - Distri- Management
bution of Dry ration,
Meals
4 Activities related to Disaster Yes Tamil Nadu Kaniyur 30,100 Yes - -
COVID-19 – Masks Management
and Sanitizer
distribution
5 Contribution to Rural Yes Maharashtra Sangli 1,350,000 Yes - -
Gram Panchyat Development
(Kundal and Program
Ramandnangar)
6 Activities related to Disaster Yes Maharashtra Sangli 27,022 Yes - -
COVID-19 – Management
Distribution of Dry
ration and Meals
7 Activities related to Disaster Yes Maharashtra Sangli 893,000 Yes - -
COVID-19 – Oxygen Management
Concentrator
distribution to
Hospitals
8 Flood relief Disaster Yes Maharashtra Sangli 31,313 Yes - -
operations Management
9 Project Jal Skill Yes Across India Across 7,698,000 Yes - -
Dakshata through Development India
Indian Plumbing
Skill Council (IPSC)
10 Contribution for Education Yes Maharashtra Sangli 2,000,000 Yes - -
Technical Lab
Development at RIT,
Islampur
11 Skills Development Education Yes Maharashtra Sangli 282,500 Yes - -
through German
Chamber of
Commerce
12 Anamitra Promotiing Yes Maharashtra Pune 600,000 Yes - -
Foundation -Mid healthcare
Day Meals for slum including
children preventive
healthcare
13 Biodiversity Ensuring Yes Maharashtra Pune 1,906,500 Yes - -
Restoration environmental
Project, COD, Dehu, sustainability,
Pune through For- ecological
rest (NGO) balance,
protection of
flora and fauna
14 Contribution to Environment Yes Maharashtra Sangli 366,961 No Vikas CSR00006556
Institute of Education & Charitable
Environment Sustainable Trust
Education and Development
Research, Bharati Program
Vidyapeeth
University

123
Integrated Annual Report 2021-22

1 2 3 4 5 6 7 8
Sl. Name of the Item from the Local Location of the Project Amount Mode of Mode of implementation
No Project list of activities area spent for implementa- - Through implementing
in schedule VII (Yes/ the project tion -Direct agency
to the Act No) State District (in `) (Yes/No) Name CSR
registration
number
15 Contribution to Disaster Yes Maharashtra Pune 25,000 No Vikas CSR00006556
Anamitra Management Charitable
Foundation – Trust
Meal support to
Flood affected
people
16 Infrastructure Education and Yes Maharashtra Sangli 1,952,900 No Vikas CSR00006556
Development Development Charitable
Costs – Kirloskar Trust
High School and
Junior College
17 Grant to Genset Environment No Nagaland 267,044 No Vikas CSR00006556
Wildlife Education & Charitable
Conservation Sustainable Trust
Society India for Development
5KV Gensets. Program
18 Grant for printing Education and Yes Maharashtra Pune 267,900 No Vikas CSR00006556
of Literary works Development Charitable
Trust
19 Grant paid to Ensuring Yes Maharashtra Pune 103,840 No Vikas CSR00006556
Indian environmental Charitable
Herpetological sustainability, Trust
Society, Pune ecological
balance,
protection of
flora and fauna
20 Grant paid to pur- Promoting Yes Maharashtra Sangli 2,131,500 No Vikas CSR00006556
chase of Medical health care Charitable
Testing Equip- including Trust
ment (SMF Shri preventive
Siddhivinayak health care
Ganpati Cancer
Hospital, Miraj)
21 Grant paid to Promoting Yes Maharashtra Kolhapur 800,000 No Vikas CSR00006556
Lotus Medical health care Charitable
Foundation, including Trust
Kolhapur for preventive
HIV prevention health care
program
22 Contribution to Animal Welfare No Assam Tinsukia 477,768 No Vikas CSR00006556
Wildlife Trust of Charitable
India -Petrolling Trust
Bikes for Forest
rangers
TOTAL 21,641,748

(d) Amount spent in Administrative Overheads 198,000/-

(e) Amount spent on Impact Assessment, if applicable 0
(f) Total CSR obligation for the Financial Year 26,384,262/-
(8b+8c+8d+8e)

124
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company

(g) Excess amount for set off, if any - NA

Sl. Particulars Amount (in `)
No.
i. Two percent of average net profit of the Company as per Section 135(5) 26,163,297/-
ii. Total amount spent for the Financial Year 26,384,262/-
iii. Excess amount spent for the Financial Year [(ii)-(i)] 2,20,965/-
iv. Surplus arising out of the CSR projects or programmes or activities of the Nil
previous Financial Years, if any
v. Amount available for set off in succeeding Financial Years [(iii)-(iv)] Nil

9. (a) Details of Unspent CSR amount for the preceding three financial years:

Sl. Preceding Amount transferred to Amount spent in Amount transferred to any fund Amount
No. Financial Unspent CSR Account the reporting specified under Schedule VII as per remaining to
Year under Section 135 (6) Financial Year Section 135(6), if any be spent in
(in `) (in `) succeeding
Name of the Amount Date of
Financial
Fund (in `) transfer
Years (in `)
Nil

(b) Details of CSR amount spent in the financial year for ongoing projects of the preceding financial year(s):

1 2 3 4 5 6 7 8 9
Sl. Project Name of The Financial Project Total Amount Amount Cumulative Status of the
No. ID Project Year in duration allocated for spent on the Amount project –
which the the project project in spent at Completed/
project was (in `) the reporting the end of Ongoing
commenced Financial reporting
Year (in `) Financial
Year (in `)
1 __ Neerchakra Project 2020-21 Upto 850,000 346,000 __ Completed
September,
2021
2 __ Firefighting 2020-21 Upto March, 9,000,000 612,770 __ Completed
system for 2022
Mahakaal Temple

10. In case of creation or acquisition of capital asset, furnish the details relating to the asset so created or acquired
through CSR spent in the Financial Year
(Asset-wise details):
(a) Date of creation or acquisition of the capital asset(s). -
(b) Amount of CSR spent for creation or acquisition of capital asset. -
(c) Details of the entity or public authority or beneficiary under whose name such capital asset is -
registered, their address etc.
(d) Provide details of the capital asset(s) created or acquired (Including complete address and -
location of
the capital asset)
11. Specify the reason(s), if the company has failed to spend two per cent of the average net profit NA
as per Section 135(5).

Sd/ Sd/
Sanjay C. Kirloskar Vivek Pendharkar
Member Chairman CSR Committee
(DIN 00007885) (DIN 02791043)

Date : May 24, 2022

125
Integrated Annual Report 2021-22

Annexure III
Disclosure as required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of The
Companies (Appointment and Remuneration of the Managerial Personnel) Rules, 2014

(i) The ratio of the remuneration of each director to Managing Director - 55.86: 1
the median remuneration of the employees of the Joint Managing Director - 14.45:1@
Company for the Financial Year Non-Executive Directors - 25.74:1
(Median Remuneration is ` 8,51,620/-)
(ii) The percentage increase in remuneration of each Managing Director - (3.39%)
Director, Chief Financial Officer, Chief Executive *Non-Executive Directors - 31.73%
Officer, Company Secretary or Manager, if any, in Chief Financial Officer - 18.96%
the Financial Year Company Secretary - (40.52%)**
(iii) The percentage increase in the median remuneration 9.5%
of employees in the Financial Year
(iv) The number of permanent employees on the roll of As on March 31, 2022
the Company Staff - 1121
Workmen - 1399
(v) Average percentile increase already made in the Refer above mentioned point no.(ii) for
salaries of employees other than the managerial comparison with the percentile increase in the
personnel in the last Financial Year and its comparison managerial remuneration
with the percentile increase in the managerial
remuneration and justification thereof and point
out, if there are any exceptional circumstances for
increase in the managerial remuneration
(vi) Affirmation that the remuneration is as per the Yes
remuneration policy of the Company
* Mr. Shobinder Duggal, Ms. Ramni Nirula and Mr.Shrinivas Dempo were appointed as Directors w.e.f. May 25, 2021.
* Mr. Vivek Pendharkar, Mr. Amitava Mukherjee and Ms. Rekha Sethi was appointed as Directors w.e.f. October 29, 2021.
* Mr. Rajeev Kher ceased to be Director of the Company w.e.f. January 24, 2022.
** Mr. Sandeep Phadnis resigned as a Company Secretary w.e.f. April 9, 2021, Mr. Raghunath Apte resigned as a Company Secretary with effect
from November 26, 2021 and Mr. Devang Trivedi appointed as a Company Secretary w.e.f. March 18, 2022. Accordingly, proportionate salary
has been considered while calculation.
@ Ms. Rama Kirloskar was appointed as Joint Managing Director of the Company w.e.f. August 03, 2021.

126
 Annexure IV
Statement of details of employees falling under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

Sr. Name of the Designation Remuneration Nature of Qualifications Date of Age of Last Percentage of Whether Name of
No. employee of received employment, and commence- such employment equity shares any such such
employee (in Rs. Mln) whether experience of ment of employee held by such held by the employee Director
contractual the employee employment employee employee in is a or
or otherwise before joining the Company relative of Manager
the Company within the any Director
meaning of or Manager
clause (iii) of of the
sub-rule (2) * Company
1 Sanjay Chairman 52.39 Contractual Bachelor of 02-05-1983 65 Kirloskar 22.48 Yes Mr. Alok
Chandrakant and Science (M.E.) Cummins (#17,847,465) Kirloskar;
Kirloskar Managing Limited, Pune
Ms. Rama
Director
Kirloskar
2 Ms. Rama Joint 14.65 Contractual Double Major 03-08-2021 33 Kirloskar Ebara Nil Yes Mr. Sanjay
Sanjay Managing in Mathematics Pumps Ltd. Kirloskar
Kirloskar Director and Biology
Mr. Alok
Kirloskar
3 Chittaranjan CFO, Senior 10.64 Regular C.A., B. Com, 03-06-2015 66 Kirloskar Ebara Nil No NA
Madhukar Vice Pumps Limited
Mate President
and
Head - CFA
4 Shingo Vice 10.42 Contractual Master’s in 01-06-2021 67 Japan Nil No NA
Nakamura President & (Fixed Term Chemical Management
Head - Contract) Environment Association
TQPM Engg. & Consulting
Graduate in (JMAC)
Chemical
Engg.
5 Anurag Sr. Vice 9.44 Regular B. Tech - 30-11-2015 52 Volvo Eicher Nil No NA
Vohra ** President & Mech., PG Dip Commercial
Head - India Mgt. Vehicles Limited
Business
A Kirloskar Group Company
KIRLOSKAR BROTHERS LIMITED

127
128
Sr. Name of the Designation Remuneration Nature of Qualifications Date of Age of Last Percentage of Whether Name of
No. employee of received employment, and commence- such employment equity shares any such such
employee (in Rs. Mln) whether experience of ment of employee held by such held by the employee Director
contractual the employee employment employee employee in is a or
or otherwise before joining the Company relative Manager
the Company within the of any
meaning of Director or
clause (iii) of Manager
Integrated Annual Report 2021-22

sub-rule (2) * of the

Company
6 Vikas Vice 9.20 Regular B.E. - Electrical 01-03-1997 47 N.A. 0.0% (750) No NA
Agarwal President & & Electronics
Head -
Water &
Irrigation
7 Ravi Vice Presi- 9.17 Regular PG Dip. in HR; 24-04-2013 51 Praj Industries Nil No NA
Bhushan dent & Head LLB, B.A., Limited
Sinha - CHRMC
8 Amit AVP & Head 8.00 Regular ICWA, PGD 08-08-2016 49 RSPL Ltd Nil No NA
Shukla - CIC – Finance,
B. Com,
9 Ravindra Vice Presi- 7.66 Regular M. Tech, 06-09-1988 58 N.A. 0.0% (1500) No NA
Sharanappa dent & Head B.E. - Mech.
Birajdar - CRED
10 Supriyo Vice Presi- 7.34 Regular B.E. – 28-05-2018 55 KSB Pumps Nil No NA
Bhowmik dent & Head Chemical Ltd.
- ESD
11 Nirmal Vice Presi- 6.38 Regular B.E. - Mech. 02-09-1986 60 N.A. Nil No NA
Chandra dent & Head
Tiwari ** - Small
Pump
Operations
** Mr. Anurag Vohra & Mr. Nirmal Tiwari left the services of the Company w.e.f. 01st October, 2021 and 10th November, 2021 respectively.
# Out of these, Mr. Sanjay C. Kirloskar holds 16,085,546 (Previous year - 16,077,118) equity shares in the individual capacity, 1,758,904 (Previous Year - 1,758,904) equity shares as
a Trustee of Kirloskar Brothers Limited Employees Welfare Trust Scheme and 3,015 (Previous Year - 3,015) equity shares as a Trustee of C.S. Kirloskar Testamentary Trust.
* Position as on 31st March, 2022
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
Annexure V
Form No. AOC-2

[Pursuant to clause (h) of sub section (3) of Section 134 of the Act and
Rule 8(2) of the Companies (Accounts) Rules, 2014]

Form for disclosure of particulars of contracts/arrangements entered into by the company with related parties
referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arm’s length
transactions under third proviso thereto:

1. Details of contracts or arrangements or transactions not at arm’s length basis:

Name(s) of the Nature of Duration of Salient terms of Justification for Date(s) of Amount paid Date on which
related party contracts/ the contracts / the contracts or entering into approval by the as advances, the resolution
and nature of arrangements/ arrangements/ arrangements such contracts Board if any was passed
relationship transactions transactions or transactions or arrangements in general
including the or transactions meeting as
value, if any required under
first proviso
to Section 188
- NIL -

2. Details of material contracts or arrangement or transactions at arm’s length basis:

Name(s) of the Nature of Duration of Salient terms of Justification for Date(s) of Amount paid Date on which
related party contracts/ the contracts / the contracts or entering into approval by the as advances, the resolution
and nature of arrangements/ arrangements/ arrangements such contracts Board if any was passed
relationship transactions transactions or transactions or arrangements in general
including the or transactions meeting as
value, if any required under
first proviso
to
Section 188
- NIL -

Please refer Note No. 35 of the Standalone Financial Statements of the Company.

129
Integrated Annual Report 2021-22

Annexure VI
Form No. MR-3

SECRETARIAL AUDIT REPORT

[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014]
For the Financial Year ended 31st March, 2022.

To,
The Members of,
Kirloskar Brothers Limited
(CIN: L29113PN1920PLC000670)
Yamuna, S No.98/3 - 7
Plot No.3, Baner, Pune - 411045

I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence
to good corporate practices by Kirloskar Brothers Limited (hereinafter called as “the Company”). Subject to
limitation of physical interaction and verification of records caused by COVID-19 Pandemic, while taking review
for the financial year, the Secretarial Audit was conducted in a manner that provided me a reasonable basis for
evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.
Based on my verification of the books, papers, minute books, forms and returns filed and other records
maintained by the Company and also the information provided by the Company, its officers, agents and
authorised representatives during the conduct of Secretarial Audit, and subject to letter annexed herewith, I
hereby report that in my opinion, the Company has, during the audit period covering the financial year ended on
31st March, 2022, complied with the applicable statutory provisions listed hereunder and also that the Company
has proper Board-processes and compliance mechanism in place subject to the reporting made hereinafter:
I have examined the books, papers, minute books, forms and returns filed and other records maintained by the
Company for the financial year ended on 31st March, 2022, according to the provisions of:
1) The Companies Act, 2013 (the Act) and the rules made thereunder;
2) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder;
3) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;
4) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent
of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;
5) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India
Act, 1992 (‘SEBI Act’) to the extent applicable: -
(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers)
Regulations, 2011;
(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;
(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2018;
(d) The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014;

130
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations,
2008 and The Securities and Exchange Board of India (Issue and Listing of Non-Convertible
Securities) Regulations, 2021.
(f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents)
Regulations, 1993 regarding the Companies Act and dealing with client;
(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 and
The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021;
(h) The Securities and Exchange Board of India (Buy-back of Securities) Regulations, 2018; and
(i) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015.
I have also examined compliance with the applicable clauses of the following:-
(i) Secretarial Standards pursuant to Section 118(10) of the Act, issued by the Institute of Company
Secretaries of India.
(ii) Listing Agreements entered into by the Company with BSE Limited and National Stock Exchange
of India Limited as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015,
During the period under review the Company has complied with the provisions of the Act, rules, regulations,
guidelines, standards, etc. mentioned above.
I further report that the Board of Directors of the Company is duly constituted with proper balance of executive
directors, non-executive directors and independent directors including a woman director. The changes in the
composition of the Board of Directors that took place during the period under review were carried out in
compliance with the provisions of the Act.
Adequate notices were given to all directors to schedule the Board Meetings including Committees thereof,
alongwith agenda and detailed notes on agenda at least seven days in advance, and a system exists for seeking
and obtaining further information and clarifications on the agenda items before the meeting and for meaningful
participation at the meeting by the directors. The decisions at the meeting were carried unanimously.
I further report that there are adequate systems and processes in the Company commensurate with the size
and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and
guidelines.
I further report that during the audit period, there was no other event/action having major bearing on affairs of
the Company.

Place : Pune Shyamprasad D. Limaye

Dated: 24th May, 2022 F.C.S. 1587 C.P. 572
UDIN: F001587D000373631

131
Integrated Annual Report 2021-22

Annexure VII
Form No. MR-3
SECRETARIAL AUDIT REPORT
[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014]
For the Financial Year Ended 31st March, 2022

To,
The Members,
Karad Projects and Motors Limited,
Plot No. B-67/68, MIDC, Karad Industrial Area,
Tasawade, Karad - 415109

I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence
to good corporate practices by Karad Projects and Motors Limited (CIN: U45203PN2001PLC149623)
(hereinafter called the “Company”). Secretarial Audit was conducted in a manner that provided me a reasonable
basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.
Based on my verification of the Company’s books, papers, minute books, forms and returns filed and other
records maintained by the Company and also the information provided by the Company, its officers, agents
and authorized representatives during the conduct of secretarial audit, I hereby report that in my opinion, the
Company has, during the audit period covering the Financial Year ended on 31st March 2022 complied with the
statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-
mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:
I have examined the books, papers, minute books, forms and returns filed and other records maintained by the
Company for the financial year ended on 31st March 2022 according to the provisions of:
(i) The Companies Act, 2013 (the Act) and the Rules made thereunder;
(ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the Rules made thereunder (during the
year under review not applicable to the Company);
(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder (during the year under
review not applicable to the Company, as the shares of the company are not in dematerialized form);
(iv) Foreign Exchange Management Act, 1999 and the Rules and Regulations made thereunder to the extent
of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings (during
the year under review not applicable to the Company as the Company does not have any foreign direct
investment, overseas direct investment and external commercial borrowings);
(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India
Act, 1992 (‘SEBI Act’): -
(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers)
Regulations, 2011 (during the year under review not applicable to the Company as the Company is
an unlisted company);
(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015
(during the year under review not applicable to the Company as the Company is an unlisted
company);
(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2018 (during the year under review not applicable to the Company as the Company is
an unlisted company and not proposing to get its securities listed);

132
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
(d) The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations,
2021 (during the year under review not applicable to the Company as the Company is an unlisted
company);
(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations,
2008 (during the year under review not applicable to the Company as the Company is an unlisted
company and not proposing to get debt securities listed);
(f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents)
Regulations, 1993 regarding the Companies Act and dealing with Client (during the year under
review not applicable to the Company as the Company is not availing services of Registrars to an
Issue and Share Transfer Agents);
(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021 (during
the year under review not applicable to the Company as the Company has not done delisting of
shares); and
(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018 (during the
year under review not applicable to the Company as the Company is an unlisted company);
(vi) As informed to me, no other law is applicable specifically to the Company.
I have also examined compliance with the applicable clauses of the following:
(i) Secretarial Standards issued by The Institute of Company Secretaries of India.
I have not examined compliance with the applicable clauses of the following since it is not applicable
to the Company during the period under review:
(i) The Listing Agreements entered into by the Company with Stock Exchange(s);
During the period under review, the Company has complied with the provisions of the Acts, Rules,
Regulations, Guidelines, Standards etc. mentioned above.
I further report that
The Board of Directors of the Company is duly constituted with proper balance of Executive Directors and
Non-Executive Directors. The Changes in the composition of the Board of Directors that took place during the
period under review were carried out in compliance with the provisions of the Act. Being an unlisted public
company, which is a wholly owned subsidiary, appointment of independent directors is exempted.
Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda
were sent at least seven days in advance and a system exists for seeking and obtaining further information and
clarifications on the agenda items before the meeting and for meaningful participation at the meeting.
All decisions of the Board are carried through unanimously. As per the records provided by the Company, none
of the member of the Board dissented on any resolution passed at the meeting.
I further report that there are adequate systems and processes in the company commensurate with the size
and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and
guidelines.
I further report that during the audit period there were no specific events / actions having a major bearing on
the Company’s affairs in pursuance of the above referred laws, rules, regulations, guidelines, etc.

Place : Pune
Dated: 29th April, 2022 Abhijit Dakhawe
UDIN:F006126D000222012 Company Secretary
FCS # 6126 CP No # 4474
This report is to be read with Annexure A which forms an integral part of this report.

133
Integrated Annual Report 2021-22

Annexure A

To,
The Members,
Karad Projects and Motors Limited,
Plot No. B-67/68, MIDC, Karad Industrial Area,
Tasawade, Karad - 415109

Our report of even date is to be read along with this letter.

1. Maintenance of secretarial records is the responsibility of the management of the Company. Our
responsibility is to express an opinion on these secretarial records based on our audit.

2. We have followed the audit practices and process as were appropriate to obtain reasonable assurance
about the correctness of the contents of the secretarial records. The verification was done on test basis
to ensure that correct facts are reflected in secretarial records. We believe that the process and practices,
we followed provide a reasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of
the Company.

4. Wherever required, we have obtained the Management Representation about the compliance of laws,
rules and regulations and happening of events etc.

5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards
is the responsibility of management. Our examination was limited to the verification of procedure on test
basis.

6. The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the
efficacy or effectiveness with which the management has conducted the affairs of the Company.

Place : Pune
Dated: 29th April, 2022 Abhijit Dakhawe
UDIN:F006126D000222012 Company Secretary
FCS # 6126 CP No # 4474

134
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
BUSINESS RESPONSIBILITY REPORT
Kirloskar Brothers Limited’s Business Responsibility Report 2021-22 follows the National Voluntary Guidelines
on Social, Environmental and Economic Responsibilities of Business, as notified by the Ministry of Corporate
Affairs (MCA), Government of India. We also publish a comprehensive Integrated Report annually, some portion
of the Integrated Report covering areas based on the framework of International Integrated Reporting Council
(IIRC) as well as in accordance with Global Reporting Initiative (GRI) standards ‘Comprehensive’ option and
National Voluntary Guidelines, areindependently assured by ‘Ernst and Young Associates LLP’. The said sec-
tion covering from Page No. 13 to 107 of the Integrated Report will be available at http://www.kirloskarpumps.
com/investors-financial-information-annual-reports.aspx
Our Business Responsibility Report includes our responses to questions on our practices and performance on
key principles defined by Regulation 34(2)(f) of SEBI (Listing Obligations and Disclosure Requirements) Reg-
ulations 2015,covering topics across environment, governance, and stakeholder relationships. In keeping with
the guiding principles of integrated reporting, we have provided cross-references to the reported data within
the main sections of this Integrated Annual Report for all aspects that are material to us and to our stakeholders.
SECTION A: GENERAL INFORMATION ABOUT THE COMPANY
1. Corporate Identity Number (CIN) of the Company: L29113PN1920PLC000670
2. Name of the Company: Kirloskar Brothers Limited
3. Registered address: Yamuna, Survey No. 98 (3 to7), Plot No. 3, Baner, Pune 411 045
PhNos.(020) 6721 4444
4. Website : www.kirloskarpumps.com
5. E-mail id : [email protected]
6. Financial Year reported : 2021-22
7. Sector(s) that the Company is engaged in (industrial activity code-wise):Pumps (NIC code 2812)
8. List three key products/services that the Company manufactures/provides (as in balance sheet): Pumps,-
Valves and Hydro Turbines
9. Total number of locations where business activity is undertaken by the Company :
(a) Number of International Locations (Provide details of major 5) – International presence is through
the Company’s subsidiaries.
(b) Number of National Locations: 14 (Corporate Headquarters, 5 Manufacturing locations & 8 Re-
gional Sales offices)
10. Markets served by the Company – Local/State/National/International - Information provided in Integrated
Annual report
SECTION B: FINANCIAL DETAILS OF THE COMPANY
1. Paid up Capital (INR) - INR 158,817,852
2. Total Turnover (INR) - INR 22,016 Mn
3. Total profit after taxes (INR) - INR 782 Mn
4. Total Spending on Corporate Social Responsibility (CSR) as percentage of profit after tax (%) -2% of
average net profits of the Company made during the three immediately preceding financial years. Refer
to Annexure III to the Board’s report in the Integrated Annual Report, Page No. 49.
5. List of activities in which expenditure in 4 above has been incurred:-
Refer to Annexure III to the Board’s report in the Integrated Annual Report, Page No. 75

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Integrated Annual Report 2021-22

SECTION C: OTHER DETAILS

1. Does the Company have any Subsidiary Company/ Companies? - Yes
2. Do the Subsidiary Company/Companies participate in the BR Initiatives of the parent company? If yes,
then indicate the number of such subsidiary company(s) – 3
3. Do any other entity/entities (e.g. suppliers, distributors etc.) that the Company does business with, par-
ticipate in the BR initiatives of the Company? If yes, then indicate the percentage of such entity/entities?
[Less than 30%, 30-60%, More than 60%] – No
SECTION D: BR INFORMATION
1. Details of Director/Directors responsible for BR
(a) Details of the Director/Director responsible for implementation of the BR policy/policies
1. DIN Number - 00007885
2. Name – Mr. Sanjay C. Kirloskar
3. Designation - Chairman and Managing Director
(b) Details of the BR head

No. Particulars Details

1 DIN Number (if applicable) NA
2 Name Mr. Manish Patel
3 Designation Associate Vice President & Head - CQA
4 Telephone number +912067214453
5 e-mail id [email protected]

2. Principle-wise (as per NVGs) BR Policy/policies:

The National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business
(NVGs) released by the Ministry of Corporate Affairs has adopted nine areas of Business Responsibility.
Accordingly, the Board of Directors of the Company has formulated following policies against the respec-
tive Principles:
P1 Business should conduct and govern themselves with Ethics, Transparency and Accountability–
Policy on Ethics, Transparency and Accountability
P2 Businesses should provide goods and services that are safe and contribute to sustainability
throughout their life cycle – Policy on Product Life Cycle Sustainability
P3 Businesses should promote the wellbeing of all employees–Policy on Employee Well Being
P4 Businesses should respect the interests of, and be responsive towards all stakeholders, especially
those who are disadvantaged, vulnerable and marginalized – Policy on Stakeholders Engagement
P5 Businesses should respect and promote human rights – Policy on Human Rights
P6 Business should respect, protect, and make efforts to restore the environment – Policy on Preser-
vation of Environment
P7 Businesses, when engaged in influencing public and regulatory policy, should do so in a respon-
sible manner – Policy on Responsible Advocacy
P8 Businesses should support inclusive growth and equitable development – Policy on Inclusive
Growth & Equitable Development

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 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
P9 Businesses should engage with and provide value to their customers and consumers in a respon-
sible manner – Policy on Customer Value
a) Details of compliance (Reply in Y/N)

No Questions P1 P2 P3 P4 P5 P6 P7 P8 P9
1 Do you have a policy/ policies for.... Y Y Y Y Y Y Y Y Y
2 Has the policy beenformulated in Y Y Y Y Y Y Y Y Y
consultation with the relevant stake-
holders?
3 Does the policy conform to any na- The policies are based on Integrated Reporting
tional / international standards? If yes, frameworkof International Integrated Reporting Coun-
specify? (50 words) cil (IIRC) aswell as in accordance with Global Report-
ing Initiative(GRI) standards ‘Comprehensive’ option
and NationalVoluntary Guidelines.
4 Has the policy being approved by the Y Y Y Y Y Y Y Y Y
Board? Is yes, has it been signed by
MD/ owner/ CEO/ appropriate Board
Director?
5 Does the company have a specified Y Y Y Y Y Y Y Y Y
committee of the Board/ Director/
Official to oversee the implementation
of the policy?
6 Indicate the link for the policy to be https://www.kirloskarpumps.com/investors/policies/
viewed online?
7 Has the policy been formally com- Y Y Y Y Y Y Y Y Y
municated to all relevant internal and
external stakeholders?
8 Does the company have in-house Y Y Y Y Y Y Y Y Y
structure to implement the policy/
policies.
9 Does the Company have a grievance Y Y Y Y Y Y Y Y Y
redressal mechanism related to the
policy/ policies to address stakehold-
ers’ grievances related to the policy/
policies?
10 Has the company carried out indepen- N N N N N N N N N
dent audit/ evaluation of the working
of this policy by an internal or external
agency?

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Integrated Annual Report 2021-22

(b) If answer to the question at serial number 1 against any principle, is ‘No’, please explain why: (Tick up to
2 options)

No Questions P1 P2 P3 P4 P5 P6 P7 P8 P9
1 The company has not understood the
Principles
2 The company is not at a stage where
it finds itself in a position to formulate
and implement the policies on speci-
fied principles
Not Applicable
3 The company does not have financial
or manpower resources available for
the task
4 It is planned to be done within next 6
months
5 It is planned to be done within the next √ √ √ √ √ √ √ √ √
1 year
6 Any other reason (please specify) Not Applicable

3. Governance related to BR
(a) Indicate the frequency with which the Board of Directors, Committee of the Board or CEO to assess
the BR performance of the Company. Within 3 months, 3-6 months, Annually, More than 1 year
-The Board of Directors, committees of the Board, assesses the BR performance of theCompany
for every three months. For more information, read the Corporate governance report, which is
partof this Integrated Annual Report.
(b) Does the Company publish a BR or a Sustainability Report? What is the hyperlink for viewing this
report? How frequently it is published?
Hyperlink is: https://www.kirloskarpumps.com/investors/annual-report/
Integrated Report is published Annually
SECTION E: PRINCIPLE-WISE PERFORMANCE
Principle 1
1. Does the policy relating to ethics, bribery and corruption cover only the company? Yes/ No. – No,
itapplies across the KBL Group and extends to our suppliers and partners.
2. Does it extend to the Group/Joint Ventures/Suppliers/Contractors/NGOs/Others? - Our corporate
governance practices apply across the KBL Group and extends to our suppliers and partners. Our Code
of Conduct and Ethics complies with the legal requirements of applicable laws and regulations, including
anti-bribery and anti-corruption policies, ethical handling of conflicts of interest, and fair, accurate and
timely disclosure of reports and documents that are filed with the required regulatory authorities.
3. How many stakeholder complaints have been received in the past financial year and what percentage
was satisfactorily resolved by the management? If so, provide details thereof, in about 50 words or so.
– Refer page no. 36 of Integrated Annual Report.
Principle 2
1. List up to 3 of your products or services whose design has incorporated social or environmental
concerns, risks and/or opportunities - Information given in Integrated report.

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 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
2. For each such product, provide the following details in respect of resource use (energy, water, raw
material etc.) per unit of product(optional):Information given in Integrated report
(a) Reduction during sourcing/production/ distribution achieved since the previous year throughout
the value chain?
(b) Reduction during usage by consumers (energy, water) has been achieved since the previous
year?
3. Does the company have procedures in place for sustainable sourcing (including transportation)? (a) If
yes, what percentage of your inputs was sourced sustainably? Also, provide details thereof, in about 50
words or so. – Information given in Integrated AnnualReportunder Natural capital.
4. Has the company taken any steps to procure goods and services from local & small producers, including
communities surrounding their place of work?Yes
(a) If yes, what steps have been taken to improve their capacity and capability of local and small
vendors. Information given in Integrated Annual Report
5. Does the company have a mechanism to recycle products and waste? If yes, what is the percentage of
recycling of products and waste (separately as 10%). Also, provide details thereof, in about 50 words or
so. – Information given in Integrated Annual Report
Principle 3
1. Please indicate the Total number of employees Refer page no. 60 of Integrated Annual Report.
2. Please indicate the Total number of employees hired on temporary/contractual/casual basis. - Refer
page no. 60 of Integrated Annual Report.
3. Please indicate the Number of permanent women employees. - Refer page no. 60 of Integrated Annual
Report.
4. Please indicate the Number of permanent employees with disabilities - Refer page no. 59 of Integrated
Annual Report.
5. Do you have an employee association that is recognized by management. - Refer page no. 59 of
Integrated Annual Report.
6. What percentage of your permanent employees is members of this recognized employee association?
Refer page no. 59 of Integrated Annual Report.
7. Please indicate the Number of complaints relating to child labour, forced labour, involuntary labour,
sexual harassment in the last financial year and pending, as on the end of the financial year.

No Category No. of complaints filed No. of complaints pending as

during the financial year on end of the financial year
1 Child labour/forced labour/ Nil Nil
involuntary labour
2 Sexual harassment Nil Nil
3 Discriminatory employment Nil Nil

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Integrated Annual Report 2021-22

8. What percentage of your under mentioned employees were given safety & skill upgradation training in
the last year? - Refer page no. 59 of Integrated Annual Report.
(a) Permanent Employees
(b) Permanent Women Employees
(c) Casual/Temporary/Contractual Employees
(d) Employees with Disabilities
Principle 4
1. Has the company mapped its internal and external stakeholders? Yes/No - Yes
2. Out of the above, has the company identified the disadvantaged, vulnerable & marginalized stakeholders
Refer Page no. 75 in Integrated Annual Report.
3. Are there any special initiatives taken by the company to engage with the disadvantaged, vulnerable and
marginalized stakeholders. If so, provide details thereof, in about 50 words or so.Information given in
Integrated Annual Report, Page No. 75
Principle 5
1. Does the policy of the company on human rights cover only the company or extend to the Group/Joint
Ventures/Suppliers/Contractors/NGOs/Others?–The policy is applicable to all the business divisions of
the Company only.
2. How many stakeholder complaints have been received in the past financial year and what percent was
satisfactorily resolved by the management? –Nil
Principle 6
1. Does the policy related to Principle 6 cover only the company or extends to the Group/Joint Ventures/
Suppliers/Contractors/NGOs/others.–The policy is applicable to all the business divisions of the KBL
and its business associates, subsidiaries, joint ventures, suppliers, contractors, NGO and other entities
which are directly dealing with the company either in the business operations or in its CSR activities
2. Does the company have strategies/ initiatives to address global environmental issues such as climate
change, global warming, etc? Y/N. If yes, please give hyperlink for webpage etc. – Yes. Information
available in Integrated ReportunderEnergy, emission etc.
3. Does the company identify and assess potential environmental risks? Y/N : Yes,Information given in
Integrated Annual Report. Refer Page no. 39
4. Does the company have any project related to Clean Development Mechanism? If so, provide details
thereof, in about 50 words or so. Also, if Yes, whether any environmental compliance report is filed?No.
5. Has the company undertaken any other initiatives on – clean technology, energy efficiency, renewable
energy, etc. Y/N. If yes, please give hyperlink for web page etc. Information given in Integrated Annual
Report, Page No. 82 to 84
6. Are the Emissions/Waste generated by the company within the permissible limits given by CPCB/SPCB
for the financial year being reported? Yes.
7. Number of show cause/ legal notices received from CPCB/SPCB which are pending (i.e. not resolved to
satisfaction) as on end of Financial Year. Nil.

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 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
Principle 7
1. Is your company a member of any trade and chamber or association? If Yes, Name only those major
ones that your business deals with:
(a) Federation of Indian Chambers of Commerce and Industry (FICCI)
(b) Confederation of Indian Industries (CII)
2. Have you advocated/lobbied through above associations for the advancement or improvement of public
good? Yes/No; if yes specify the broad areas (drop box: Governance and Administration, Economic
Reforms, Inclusive Development Policies, Energy security, Water, Food Security, Sustainable Business
Principles, Others)–Yes, Energy Security, Water, Inclusive Development Policies, Sustainable Business
Principles.
Principle 8
1. Does the company have specified programmes/initiatives/projects in pursuit of the policy related to
Principle 8? If yes details thereof. Information available in Integrated Report and Annual Report on
Corporate Social Responsibility.
2. Are the programmes/projects undertaken through in-house team/own foundation/external NGO/
government structures/any other organization?Information available in Integrated Annual Report and
Corporate Social Responsibility Report
3. Have you done any impact assessment of your initiative?-Information available in Integrated Annual
Report and Annual Report on Corporate Social Responsibility.
4. What is your company’s direct contribution to community development projects- Amount in INR and the
details of the projects undertaken? Information available in Integrated Annual Report and Annual Report
on Corporate Social Responsibility.
5. Have you taken steps to ensure that this community development initiative is successfully adopted by
the community? Please explain in 50 words, or so. - Information available in Integrated Annual Report.
Principle 9
1. What percentage of customer complaints/consumer cases are pending as on the end of financial year-7
numbers of consumer court cases are pending as on 31st March 22 for Small Pump Business.
2. Does the company display product information on the product label, over and above what is mandated as
per local laws? Yes/No/N.A./Remarks (additional information)–Yes, Technical information, IOM manuals.
Information given in Integrated Annual Report
3. Is there any case filed by any stakeholder against the company regarding unfair trade practices,
irresponsible advertising and/or anti-competitive behaviour during the last fiveyears and pending as on
end of financial year. If so, provide details thereof, in about 50 words or so- Nil
4. Did your company carry out any consumer survey/ consumer satisfaction trends? – Yes, Customer
satisfaction survey started in May 2021 and ended in December 2021.

141
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
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 consistently the high standard of Corporate Governance in all facets of the Company’s
operations.

2. Board of Directors:

As on March 31, 2022, there were Fourteen Directors on the Board, comprising of a Managing Director
and Joint Managing Director and Twelve (85.71%) Non-Executive Directors of whom Ten (71.42%)
were Independent Directors. There were 3 (three) Woman Directors including 2 (Two) as Independent
Directors.

The Board’s composition is an optimal complement of independent professionals having an in-depth

knowledge of business.

During the year under review, 5 (Five) Board meetings were held on the following dates:

May 25, 2021, August 03, 2021, October 29, 2021, February 10, 2022 and March 18, 2022.

According to the provisions of Regulation 17A of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 none of the Directors on the Board hold the office of director, including
an alternate directorship if any, in more than 7 companies at the same time.

None of the Directors are holding directorship in more than 7 public companies or holding membership
of committees of the Board in more than 10 committees or chairpersonship of more than 5 committees
across all listed entities in which he/she is a Director. Necessary disclosures regarding committee
positions in other public companies as on March 31, 2022 have been made by the Directors. None
of the Directors except Mr. Sanjay C. Kirloskar, Mr. Alok Kirloskar, son of Mr. Sanjay C. Kirloskar and
Ms. Rama Kirloskar daughter of Mr. Sanjay C. Kirloskar, are related to each other.

The above limits are determined as follows:

a. the limit of the committees on which a director is serving in all public limited companies,
whether listed or not, are included and all other companies including private limited companies,
foreign companies and companies formed under Section 8 of the Companies Act, 2013, are
excluded.

b. for the purpose of determination of limit, chairpersonship and membership of only Audit and
Stakeholders’ Relationship Committees are considered.

Independent Directors are non-executive directors as defined under Regulation 16(1)(b) of the Securities
and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015
(‘SEBI Listing Regulations, 2015’) read with Section 149(6) of the Companies Act, 2013 (‘the Act’). The
maximum tenure of independent directors is in compliance with the Act. All the Independent Directors
have confirmed that they meet the criteria as mentioned under Regulation 16(1)(b) of the SEBI Listing
Regulations, 2015 read with Section 149(6) and 150 of the Act read with relevant Rules thereunder.

The Managing Director of the Company is serving as an Independent Director in two listed companies.

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Integrated Annual Report 2021-22

The details are explained in the Table below:

Name of Designation Board Attendance No. of other No. of Names of the Category of
Director / Category of Meetings at last AGM Directorships Committees listed Companies directorship
Directorship attended held* of which where the person in other listed
@ Member / is director companies @
Chairperson
in other
Companies*
Mr. Sanjay CMD (P) 5 Present 7 2/1 KPT Industries INED
Kirloskar Limited (formerly
known as Kulkarni
Power Tools Ltd.)

DCM Shriram INED

Industries Ltd.
Ms. Rama JMD (P)) $ 5 Present 3 1/0 -- --
Kirloskar
Mr. Pratap Shirke NED 5 Present 15 0/0 -- --
Mr. Alok Kirloskar NED (P) 5 Present 17 0/0 -- --
Mr. Pradyumna INED 5 Present 4 3/1 Titan Company Ltd. INED
Vyas
Dynamatics
Technology India INED
Ltd.
Dr. Rakesh INED 5 Present 1 0/0 Dixon Technology INED
Mohan India Ltd.
Mr. Rajeev Kher# INED 3 Present 2 2/0 Goodyear India Ltd. INED
Ms. Shailaja Kher INED 5 Present 0 0/0 -- --
Mr. M.S. INED 5 Present 2 0/0 KEC International INED
Unnikrishnan Limited
Mr. Shobinder INED 4 Present 2 1/0 SBI Life Insurance INED
Duggal## Company Ltd.

PI Industries Ltd. INED

Mr. Shrinivas INED 4 Present 13 1/0 Automobile INED
Dempo## Corporation of Goa
Ltd.

Hindustan Foods NED

Ltd.

Goa Carbon Ltd. NED

Ms. Ramni INED 4 Present 5 2/0 DCM Shriram Ltd INED
Nirula## .
PI Industries Ltd. INED

Usha Martin Ltd. INED

HEG Ltd. INED

Mr. Amitava INED 2 NA 6 2/2 Godrej Properties INED
Mukherjee### Ltd.
Mr. Vivek INED 2 NA 0 0/0 -- --
Pendharkar###
Ms. Rekha INED 2 NA 4 2/0 CESC Ltd. INED
Sethi###
Samvardhana INED
Motherson
International Ltd.
(formerly known as
Motherson - Sumi
Systems Ltd.)

Spensers Retail Ltd. INED

@ CMD – Chairman and Managing Director, JMD-Joint Managing Director, NED – Non-Executive Director, INED – Independent Non-
Executive Director and P – Promoter.

(1) *Directorships and committee positions in private and public limited companies, foreign companies are included in the above table
excluding Kirloskar Brothers Limited and Section 8 Companies.

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 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
(2) All the relevant information suggested under Schedule II of the SEBI Listing Regulations, 2015 is furnished to the Board from time to time.

(3) #Ceased to be a Director with effect from January 24, 2022.

(4) ## Appointed with effect from May 25, 2021.

(5) ### Appointed with effect from October 29, 2021.

(6) $ Ms. Rama Kirloskar was appointed as Joint Managing Director of the Company w.e.f. August 03, 2021.

During the year under review, meeting of the Independent Directors was held on November 10, 2021. The Independent
Directors, inter-alia, reviewed the performance of non-independent directors, Chairman of the Company and the
Board as a whole.
Statement showing number of Equity Shares of ` 2/- each of the Company, held by the Non-Executive Directors as
on March 31, 2022:
Non-Executive Directors No. of Shares % of Paid-up Capital
Mr. Pratap B. Shirke 20,000 0.02
Mr. Alok S. Kirloskar 6,187 0.01
Ms. Rama Kirloskar (upto August 3, 2021) 0 0.00
Dr. Rakesh Mohan 0 0.00
Mr. Pradyumna Vyas 0 0.00
Mr. M.S. Unnikrishnan 0 0.00
Mr. Rajeev Kher* 0 0.00
Ms. Shailaja Kher 0 0.00
Mr. Shobinder Duggal@ 0 0.00
Mr. Shrinivas Dempo@ 0 0.00
Ms. Ramni Nirula@ 0 0.00
Mr. Amitava Mukherjee$ 0 0.00
Mr. Vivek Pendharkar$ 0 0.00
Ms. Rekha Sethi$ 0 0.00

* Ceased to be a Director with effect from January 24, 2022.

@ Appointed with effect from May 25, 2021.
$ Appointed with effect from October 29, 2021.

The details of familiarisation programme imparted to the Directors is available at https://www.kirloskarpumps.com/investors/

familiarisation-programme-for-independent-directors/
The List of core skills/expertise/competencies identified by the Board as required in the context of its business(es)
and sector(s) for the Company to function effectively and those actually available with the Board:
The Board has formulated a Policy on Board Skill Matrix of the Company. In terms of the said policy, the Board of the
Company comprising of skill-based directors who collectively, have the skills, knowledge and experience to effectively
govern and direct the organization as required in the context of its business(es) and sector(s) for it to function effectively and
those actually available with the Board. The List of core skills/expertise/competencies identified and collectively possessed
by the Board are as under:
 Governance skills (that is, skills directly relevant in performing the Board’s key functions);
 Industry skills (that is, skills relevant to the industry or section in which the organization predominantly operates);
and
 Personal attributes or qualities that are generally considered desirable to be an effective Director.

157
158
The List of directors possessing core skills/expertise/competencies identified by the Board as required in the context of its business(es) and sector(s) for the
Company to function effectively and those actually available with the Board:

Personnel Details Committee Areas of expertise

Name Director Independence NED/ Audit NRC SRC CSR RMC Strategy Policy Finance Legal IT Exec. Commercial International
since EXE Framework Mgmt.
Mr. Sanjay Kirloskar 1985 NA EXE NA Yes Yes Yes NA Yes Yes Yes
Integrated Annual Report 2021-22

Mr. Alok Kirloskar 2012 NA NED NA NA Yes NA NA Yes Yes Yes

Mr. Pratap Shirke 2007 NA NED Yes NA NA NA NA Yes Yes Yes Yes Yes
Ms. Rama Kirloskar 2017 NA EXE NA NA NA Yes Yes Yes Yes Yes
Dr. Rakesh Mohan 2017 Yes NA Yes Yes NA NA NA Yes Yes Yes Yes Yes
Mr. Rajeev Kher 2019 Yes NA Yes Yes NA Yes NA Yes Yes Yes
Ms. Shailaja Kher 2019 Yes NA NA NA Yes NA NA Yes Yes Yes
Mr. Pradyumna Vyas 2019 Yes NA NA NA NA Yes NA Yes Yes Yes
Mr. M.S.Unnikrishnan 2020 Yes NA Yes Yes NA NA Yes Yes Yes Yes Yes Yes Yes Yes
Mr. Shobinder 2021 Yes NA Yes NA NA NA NA Yes Yes Yes Yes Yes
Duggal
Mr. Shrinivas Dempo 2021 Yes NA NA Yes NA NA NA Yes Yes Yes
Ms. Ramni Nirula 2021 Yes NA Yes NA NA NA NA Yes Yes Yes
Mr. Amitava 2021 Yes NA Yes NA Yes NA NA Yes Yes Yes Yes Yes
Mukherjee
Mr. Vivek 2021 Yes NA NA NA NA NA NA Yes Yes Yes Yes
Pendharkar
Ms. Rekha Sethi 2021 Yes NA NA NA NA Yes NA Yes Yes Yes
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
Confirmation from the Board on Independent Directors:
In the opinion of the Board, the Independent Directors fulfil the conditions specified in SEBI Listing
Regulations, 2015 and are independent of the management.

Resignation of Independent Director:

None of the Independent Directors has resigned during the Financial Year ended at March 31, 2022.

3. Audit and Finance Committee:

The Audit and Finance Committee is in compliance with the requirements under Regulation 18 of the
SEBI Listing Regulations, 2015 read with Section 177 of the Act.

The terms of reference of the Audit and Finance Committee include the matters specified in Schedule II
(Part C) of the SEBI Listing Regulations, 2015. The terms of reference of the Audit and Finance Committee
include the following:

A)  Oversight of the Company’s financial reporting process and disclosure of its financial information
to ensure that the financial statement is correct, sufficient and credible.
 Recommendation for appointment, remuneration and terms of appointment of auditors of the
Company.
 Approval of payment to statutory auditors for any other services rendered by the statutory auditors.
 Reviewing with the management, the annual financial statements and auditors’ report thereto
before submission to the Board for approval, with particular reference to:
a. Matters required to be included in the Director’s Responsibility Statement to be included in
the Board’s report in terms of clause (c) of sub-section 3 of Section 134 of the Act.
b. Changes, if any, in the accounting policies & practices and reasons for the same.
c. Major accounting entries involving estimates based on exercise of judgement by
management.
d. Significant adjustments made in the financial statements arising out of audit findings.
e. Compliance with listing and other legal requirements relating to financial statements.
f. Qualification in draft Audit Report
 Reviewing with the management, the quarterly financial statements before submission to the
Board for approval.
 Reviewing with the management, the statement of uses / application of funds raised through an
issue (public issue, rights issue, preferential issue etc.), the statement of funds utilized for purposes
other than those stated in the offer document / prospectus / notice and the report submitted by the
monitoring agency, monitoring the utilisation of proceeds of a public or rights issue and making
appropriate recommendations to the Board to take up steps in this matter.
 Review and monitor the auditor’s independence and performance and effectiveness of audit
process.
 Approval or any subsequent modification of transactions of the Company with related parties.
 Scrutiny of inter-corporate loans and investments.
 Valuation of undertakings or assets of the Company, wherever it is necessary.
 Evaluation of internal financial controls and risk management systems.
 Reviewing with management, performance of statutory and internal auditors, adequacy of the
internal control systems.

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Integrated Annual Report 2021-22

 Reviewing the adequacy of internal audit function, if any, including the structure of the internal
audit department, staffing and seniority of the official heading the department, reporting structure
coverage and frequency of internal audit.
 Discussion with internal auditors of 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 the 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.
 To look into the reasons for substantial defaults in the payment to the depositors, debenture
holders, shareholders (in case of non-payment of declared dividends) and creditors.
 To review the functioning of the Whistle Blower mechanism.
 Approval for appointment of CFO (i.e., the Whole-Time Finance Director or any other person
heading the finance function or discharging that function) after assessing the qualifications,
experience and background, etc. of the candidate.
 Carrying out any other function as is mentioned in the terms of reference of the Committee by the
Board and to carry out investigation in relation to the items specified above.
 To review the following information:
1) management discussion and analysis of financial condition and results of operations.
2) statement of significant related party transactions (as defined by the audit committee),
submitted by the management.
3) management letters / letters of internal control weaknesses issued by the statutory auditors.
4) internal audit reports relating to internal control weaknesses.
5) The appointment, removal and terms of remuneration of the Chief Internal Auditor shall be
subject to review by the audit committee.
6) statement of deviations:
(a) Quarterly statement of deviation(s) including report of monitoring agency, if
applicable, submitted to stock exchange(s).
(b) Annual statement of funds utilized for purposes other than those stated in the offer
document/prospectus/notice.
B)  Power to investigate any activity within its terms of reference.
 Power to seek information from any employee.
 Power to obtain outside legal or other professional advice.
 Power to secure attendance of outsiders with relevant expertise, if considered necessary.
The Committee was re-constituted with effect from August 03, 2021 and inducted Mr. M.S. Unnikrishnan
as a member of the Committee. The Committee was further re-constituted with effect from October
29, 2021. Mr. Shobinder Duggal and Ms. Ramni Nirula were appointed as members of the Committee.
Mr. Rajeev Kher being a Chairman of the Committee and Dr. Rakesh Mohan, Mr. Pratap Shirke and
Mr. M.S. Unnikrishnan being the other members of the Committee.
Mr. Rajeev Kher ceased to be a Director and Chairman of the Committee on completion of his term as
an Independent Director on January 24, 2022. Mr. Shobinder Duggal was appointed as a Chairman of
the Committee with effect from February 09, 2022. The Committee was further re-constituted with effect
from February 10, 2022 and inducted Mr. Amitava Mukherjee as a member of the Committee. Dr. Rakesh

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 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
Mohan, Mr. Pratap Shirke, Mr. M.S. Unnikrishnan and Ms. Ramni Nirula being the other members of the
Committee.
Mr. Rajeev Kher was present at the AGM of the Company held for the Financial Year 2020-21 as the
Chairman of the Committee.
During the year, 7 (Seven) meetings of Audit and Finance Committee were held on May 25, 2021, August
03, 2021, August 26, 2021, October 29, 2021, February 09, 2022, February 14, 2022 and March 17, 2022.
Attendance at Audit and Finance Committee meetings:

Member’s Name No. of Meetings Member’s Name No. of Meetings

attended attended
Mr. Rajeev Kher* 4 Dr. Rakesh Mohan 7
Mr. Pratap B. Shirke 7 Mr. M.S. Unnikrishnan** 5
Mr. Shobinder Duggal*** 3 Ms. Ramni Nirula*** 2
Mr. Amitava Mukherjee**** 2
* Ceased to be a Director and Chairman of the Committee with effect from January 24, 2022.
** Appointed as a member of the Committee with effect from August 03, 2021.
*** Appointed as a member of the Committee with effect from October 29, 2021.

**** Appointed as a member of the Committee with effect from February 10, 2022.

4. Nomination and Remuneration Committee:

The Nomination and Remuneration Committee is constituted in compliance with the requirements under
Regulation 19 of the SEBI Listing Regulations, 2015 read with Section 178 of the Act.
The terms of reference of the Committee are as follows:
 Regularly review the structure, size and composition (including the skills, knowledge, experience
and diversity) of the Board and make recommendations to the Board with regard to any changes.
 To identify and nominate for the approval of the Board, candidates to fill Board vacancies as and
when they arise.
 To evaluate the balance of skills, knowledge, experience and diversity of the person to be appointed
on the Board and in the light of this evaluation prepare a description of the role and capabilities
for a particular appointment.
 To make recommendations to the Board concerning suitable candidates for the role of Senior
Independent Director.
 To formulate policy relating to the remuneration of the Directors and Key Managerial Personnel.
 Formulation of the criteria for determining qualifications, positive attributes and independence of a
director and recommend to the Board of Directors a policy relating to the remuneration of the
Directors, Key Managerial Personnel and other employees.
 Formulation of criteria for evaluation of performance of Independent Directors and the Board of
Directors.
 Devising a Policy on diversity of Board of Directors.
 Identifying persons who are qualified to become directors and who may be appointed in senior
management in accordance with the criteria laid down and recommend to the Board of Directors
their appointment and removal.
 Whether to extend or continue the term of appointment of the Independent Director, on the basis
of the report of performance evaluation of Independent Directors.

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The Committee was re-constituted with effect from February 10, 2022 consequent upon cessation of
Mr. Rajeev Kher as a Director and member of the Committee with effect from January 24, 2022 and
Mr. Shrinivas Dempo was appointed as a Member of the Committee. Dr. Rakesh Mohan-Chairman,
Mr. Sanjay C. Kirloskar and Mr. M. S. Unnikrishnan being the other members of the Committee.
Dr. Rakesh Mohan is an Independent Non-Executive Director. He was present at the AGM of the Company
for the Financial Year 2020-21.
During the year, 4 (Four) Nomination and Remuneration Committee meeting were held on May 25, 2021,
August 03, 2021, October 29, 2021 and March 18, 2022.
Attendance at the meeting:

Member’s Name No. of Meetings Member’s Name No. of Meetings

attended attended
Dr. Rakesh Mohan 4 Mr. Rajeev Kher* 3
Mr. Sanjay C. Kirloskar 4 Mr. Shrinivas Dempo** 1
Mr. M. S. Unnikrishnan 4

*Ceased to be a Director and member with effect from January 24, 2022.

** Appointed as a member with effect from February 10, 2022.

Criteria for performance evaluation of Independent Directors:

As required under Regulation 19 (4) & Schedule II Part D of the SEBI Listing Regulations, 2015 and
in terms of the Act, the criteria for performance evaluation of the Independent Directors and Board of
Directors has been laid down in the ‘Board Evaluation Policy’ formulated by the Company. This policy
evaluates the performance of the Board, including its Committees and individual directors. Evaluation
criteria includes ethical conduct, objectivity, value addition, participation, attendance and various other
qualitative as well as quantitative parameters which have had an impact on the Board process becoming
more and more effective.
5. Remuneration to Directors:
Remuneration policy has been formulated for the Directors, Key Managerial Personnel (KMP) and Senior
Managerial Personnel. The major objectives of the policies are transparent process of determining
remuneration at Board and Senior Management level of the Company which would strengthen
confidence of stakeholders in the Company and its management and help in creation of long-term value
for them and appropriate balance between the elements comprising the remuneration so as to attract
potential high performing candidates for critical position in the Company for attaining continual growth in
business. The revisions in the remunerations of the KMP and Senior Managerial Personnel will be made
as per the terms of the policy.
 There are no pecuniary relationships or transactions of the Non-Executive Directors vis-a-vis the
Company.
 The payment made to the Executive Director has been reviewed by the Nomination and
Remuneration Committee from time to time and confirmed by the Board of Directors.
 The sitting fees paid to the Non-Executive Directors for attending the Board and Committee
meetings was restored from ` 60,000/- to ` 75,000/- for every meeting of the Board and
Committee with effect from May 25, 2021.
 All elements of remuneration package for all Directors have been provided in the statement
hereinafter.
 The salient features and a link on the website of the Company regarding the remuneration policy
of the Directors, KMP and Senior Management has been included elsewhere, in the Annual
Report.

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 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
 Except whatever is stated in the statement, there is no other fixed component or performance
linked incentives to any director.
Criteria of making payment to Non-Executive Directors:
Non-Executive Directors have been paid sitting fees for attending Board / Committee meetings. On
recommendation of Nomination and Remuneration Committee, the Board has also recommended a
payment of commission to Non-Executive Directors. There has been no payment apart from this to any
Non-Executive Director.
Details of remuneration paid to Directors for the Financial Year 2021–22 are as follows:
Amount in ` Million

Name of Director Sitting Commission/ Salary Contribution Perquisites Others Total

Fees Bonus on to Statutory
Profits## Funds
Executive Director
Mr. Sanjay Kirloskar - 32.06 9.00 3.18@ 6.51 - 50.75
Ms. Rama Kirloskar# 0.15 7.18 3.95 2.35 1.18 - 14.80
Non –Executive Directors
Mr. Pratap Shirke 0.90 1.30 - - - - 2.20
Mr. Alok Kirloskar 0.45 1.30 - - - - 1.75
Dr. Rakesh Mohan 1.20 1.30 - - - - 2.50
Mr. Rajeev Kher* 0.83 1.08 - - - - 1.91
Mr. Pradyumna Vyas 0.53 1.30 - - - - 1.83
Ms. Shailaja Kher 0.45 1.30 - - - - 1.75
Mr. M.S. Unnikrishnan 1.20 1.30 - - - - 2.50
Mr. Shobinder Duggal** 0.53 1.19 - - - - 1.72
Mr. Shrinivas Dempo** 0.38 1.19 - - - - 1.57
Ms. Ramni Nirula** 0.45 1.19 - - - - 1.64
Mr. Amitava 0.30 0.65 - - - - 0.95
Mukherjee***
Mr. Vivek Pendharkar*** 0.15 0.65 - - - - 0.80
Ms. Rekha Sethi*** 0.15 0.65 - - - - 0.80
Figures are rounded off to the next figure.
# Sitting fees paid for Board Meetings held upto May 25, 2021 and thereafter she was not paid sitting fees being appointed as an
executive director of the Company.
* Ceased to be Director with effect from January 24, 2022.
** Appointed with effect from May 25, 2021.
*** Appointed with effect from October 29, 2021.
## The amount of Commission is paid on the basis of criteria as prescribed under Remuneration Policy.

@ The contribution made to Statutory Funds are not considered while calculating the limits prescribed for remuneration.

The Board of Directors of the Company decides the remuneration of Directors on the basis of
recommendation from Nomination and Remuneration Committee (N&RC) subject to the overall limits
provided under the Act, rules made thereunder and as per the SEBI Listing Regulations, 2015 including
any amendments, modifications and re-enactments thereto and compliance of related provisions
provided therein.

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Directors’ Service Contract Details:

Name of Executive Director Service Contract and Period Severance Fees

Mr. Sanjay C. Kirloskar Agreement dt.03.02.2021

Period: 19.11.2020 to 18.11.2025 Three years or unexpired period,
Agreement dt.09.09.2021 whichever is less.
Ms. Rama S. Kirloskar
Period: 03.08.2021 to 02.08.2026

6. Particulars of Directors to be re-appointed at an ensuing Annual General Meeting:

Mr. Pratap B. Shirke (DIN 00104902) is proposed to be re-appointed as a Non-Executive Director
liable to retire by rotation.
His brief profile, shareholdings and other directorship details are included in the Notice for the 102nd
Annual General Meeting.
7. Stakeholders Relationship Committee:
The Stakeholders Relationship Committee is in compliance with the requirements under Regulation 20
of the SEBI Listing Regulations, 2015 read with Section 178 of the Act.
The terms of reference of the Committee are as follows:
 Specifically looks into the mechanism of redressal of grievances of shareholders.
 Looks into the redressal of investors’ complaints relating to transfer / transmission of shares, non-
receipt of Annual Reports, non-receipt of declared dividends, issue of new/duplicate certificates,
general meetings etc.
 Considers and resolves the grievances of security holders of the Company.
 Approves transmission of shares held in physical mode beyond threshold limit of 1500 shares
of ` 2/- each without the succession certificate, probate, letter of administration or Court
Decree, subject to the fulfilment of other conditions as may be deemed necessary.
 Considers the issue of duplicate share certificates under the Common Seal of the Company in
terms of the requirements of the Companies (Share Capital and Debenture) Rules, 2014.
 Review of measures taken for effective exercise of voting rights by the shareholders.
 Review of adherence to the service standards adopted by the Company in respect of various
services being rendered by the R&T agent.
 Review of various measures and initiatives taken by the Company for reducing the quantum of
unclaimed dividends and ensuring timely receipt of dividend warrants / annual report / statutory
notices by the shareholders of the Company.
The Committee was re-constituted on February 10, 2022. Mr. Amitava Mukherjee was appointed as a
member of the Committee. Ms. Shailaja Kher, Chairperson of the Committee and Mr. Sanjay C. Kirloskar
and Mr. Alok S. Kirloskar being the other members.
Ms. Shailaja Kher was Non-Executive Independent Director and she was present at the AGM of the
Company held for the Financial Year 2020-21 as the Chairperson of the Committee.
During the year, 1 (One) Stakeholders’ Relationship Committee meeting was held on May 25, 2021.

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 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
The Company Secretary is designated as a “Compliance Officer” who oversees the redressal of the
investors’ grievances.
Name and designation of Compliance Officer:
Mr. Sandeep A. Phadnis, Company Secretary (up to April 9, 2021)
Associate Vice President and Head – Corporate Secretarial
Mr. Raghunath Apte, Company Secretary (up to November 26, 2021)
General Manager and Head – Corporate Secretarial
Mr. Devang Trivedi, Company Secretary (with effect from March 18, 2022)
General Manager and Head – Corporate Secretarial
The Company has always valued its relationship with its stakeholders. This philosophy has been
extended to investors’ relationship. The 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.
Details of Shareholders’ complaints received:
No complaint was received during the year as on March 31, 2022.
With reference to Regulation 13 of the SEBI Listing Regulations, 2015, the Company is registered on the
SCORES platform which enables handling of Investor Complaints electronically.
The Company has also designated an exclusive e-mail Id [email protected] for investors to
register their grievances, if any. This helps the Company to resolve investors’ grievances immediately.
The Company has displayed the said e-mail Id on its website.
The ‘Frequently Asked Questions’ by the shareholders along with the requisite formats are placed under
the Investors Section of the website of the Company at https://www.kirloskarpumps.com/investors/faq-
to-shareholders/
The shareholders are requested to give their feedback through the ‘feedback form’ which is available in
the FAQs to Shareholders on the website of the Company.
Risk Management Committee:
The Risk Management Committee is in compliance with the requirements under Regulation 21 of the
SEBI Listing Regulations, 2015.
The terms and references of the Committee are as under:
(1) To formulate a detailed Risk Management Policy which shall include:
(a) A framework for identification of internal and external risks specifically faced by the listed
entity, in particular including financial, operational, sectoral, sustainability (particularly, ESG
related risks), information, cyber security risks or any other risk as may be determined by
the Committee.
(b) Measures for risk mitigation including systems and processes for internal control of identified
risks.
(c) Business continuity plan.
(2) To ensure that appropriate methodology, processes and systems are in place to monitor and
evaluate risks associated with the business of the Company.
(3) To monitor and oversee implementation of the Risk Management Policy, including evaluating the
adequacy of Risk Management Systems.
(4) To periodically review the Risk Management Policy, at least once in two years, including by
considering the changing industry dynamics and evolving complexity.

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(5) To keep the Board of Directors informed about the nature and content of its discussions,
recommendations, and actions to be taken.
(6) The appointment, removal and terms of remuneration of the Chief Risk Officer (if any) shall be
subject to review by the Risk Management Committee.
The Committee is constituted with effect from May 25, 2021. The Committee comprises of
Mr. M.S. Unnikrishnan-Chairman and Ms. Rama Kirloskar, Mr. C.M. Mate being the members.
During the year, 2 (Two) meetings of Risk Management Committee were held on August 03, 2021 and
January 28, 2022.
Attendance at the meeting:

Member’s Name No. of Meetings Member’s Name No. of Meetings

attended attended
Mr. M.S. Unnikrishnan 2 Ms. Rama Kirloskar
2
Mr. C.M. Mate 2

General Meetings:
Details of last three Annual General Meetings held:

i) 99th Annual General Meeting August 12, 2019: 11.00 A. M.

Yamuna, Survey No.98 (3 to 7), Plot No. 3,
Baner, Pune - 411 045.
No special resolution was passed at this meeting.

ii) 100th Annual General Meeting September 25, 2020: 11.00 A. M.

(Pursuant to MCA circulars Virtual AGM was Yamuna, Survey No.98 (3 to 7), Plot No. 3,
held due to COVID-19) Baner, Pune - 411 045.
Special resolution for re-appointment of Mr. Kishor Chaukar (DIN 00033830) as an Independent
Director of the Company was placed before the Shareholders for their approval but was not
approved.

iii) 101st Annual General Meeting September 09, 2021: 11.00 A. M.

(Pursuant to MCA circulars Virtual AGM was Yamuna, Survey No.98 (3 to 7), Plot No. 3,
held due to COVID-19) Baner, Pune - 411 045.
No special resolution was passed at this meeting.

Postal Ballot:

Postal ballot for appointment of Independent Directors

Postal Ballot Voting Period 15th November 2021 to 14th December 2021
Ordinary Resolutions were passed for appointment of Mr. Amitava Mukherjee, Mr. Vivek Pendharkar and
Ms. Rekha Sethi as Independent Directors of the Company.
Mr. Shyamprasad Limaye-Practising Company Secretary was appointed as Scrutiniser and conducted
the Postal Ballot exercise.

Procedure for Postal Ballot has been followed as prescribed under the Companies Act, 2013 and SEBI
Listing Regulations, 2015.

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 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
Means of Communication:
 Quarterly results are displayed on the Company’s website ‘www.kirloskarpumps.com’ immediately
after its submission to the Stock Exchanges. The Company’s website also displays official news
releases.
 The quarterly results are published in the newspapers viz. Financial Express and Loksatta.
 Presentations for analysts are uploaded on the Company’s website.

General Shareholders information:

102nd Annual General Meeting
Day & Date : Wednesday, August 10, 2022
Time : 11.00 A.M. (IST)
Deemed Venue : Registered Office at “Yamuna” Survey No. 98 (3 to 7),
Plot No.3, Baner, Pune – 411 045.
Financial Year : 1st April to 31st March
Record Date for dividend : August 3, 2022
Dividend payment date : September 8, 2022
Listing on Stock Exchanges : Company’s equity shares are listed on
BSE Limited and National Stock Exchange of
India Limited, Mumbai.
Corporate Identification No. (CIN) : L29113PN1920PLC000670
Stock codes / Symbol : BSE Limited – 500241
National Stock Exchange of India Limited –
KIRLOSBROS –EQ
ISIN : INE732A01036

Addresses of stock exchanges:

BSE Limited National Stock Exchange of India Limited
Phiroze Jeejeebhoy Towers, Exchange Plaza, Plot No. C/1,G Block
Dalal Street, Bandra-Kurla Complex, Bandra (East)
Mumbai – 400 051 Mumbai – 400 001
Tel. No. (022) 2272 1233/34 Tel. No. (022) 2659 8100/8114
Fax No. (022) 2272 1919 Fax No. (022) 2659 8120

The Annual Listing Fees have been paid to both BSE Limited and National Stock Exchange of India
Limited (NSE).

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Market Price data:

Month Quotations on BSE Quotations on NSE

High (`) Low (`) High (`) Low (`)
April 2021 285.00 210.10 278.30 210.30
May 2021 420.00 237.45 420.65 236.85
June 2021 490.00 381.55 489.40 381.10
July 2021 504.75 406.15 499.20 405.50
August 2021 432.80 344.10 432.90 344.00
September 2021 395.25 341.15 394.70 340.10
October 2021 428.20 374.85 427.45 372.20
November 2021 394.95 341.55 394.95 341.00
December 2021 388.95 312.00 388.00 311.35
January 2022 398.70 319.30 399.40 317.65
February 2022 385.00 300.00 388.00 300.00
March 2022 315.00 270.00 314.00 270.00

Performance in comparison to broad based indices - BSE sensex:

Quotes on BSE Index to 100

200

150

100

50

0
Apr 21 May 21 Jun 21 Jul 21 Aug 21 Sep 21 Oct 21 Nov 21 Dec 21 Jan 22 Feb 22 Mar 22

High (KBL)
Sensex

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 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company

Performace in comparison to broad based indices-NSE S&P CNX Nifty:

Quotes on NSE Index to 100

200

150

100

50

0
Apr 21 May 21 Jun 21 Jul 21 Aug 21 Sep 21 Oct 21 Nov 21 Dec 21 Jan 22 Feb 22 Mar 22

High (KBL) Nifty

Registrar and Transfer (R&T) Agent:

M/s. Big Share Services Private Limited has been appointed as R&T Agent of the Company.

Share Transfers, dematerialisation of shares, dividend payment and all other investor related activities are
attended and processed at the office of the R&T Agent at the following address:
M/s. Big Share Services Private Limited
(Unit: Kirloskar Brothers Limited),
Office No S6-2, 6th Floor, Pinnacle Business Park,
Next to Ahura Centre, Mahakali Caves Road,
Andheri (East) Mumbai – 400093.
Email id: [email protected]
Tel.: 022-62638200 Fax No.: 022-62638299

Share transfer system:

Pursuant to Regulation 40 of SEBI Listing Regulations, 2015 as amended by SEBI notification dated
June 8, 2018 with effect from April 1, 2019 shares held in demat form only can be transferred. In compliance
with these Regulations, every year a Practising Company Secretary audits the system of transfer and a
certificate to that effect is issued.

Out of total paid-up share capital, 97.99% share capital is held in dematerialised form with National
Securities Depository Limited and Central Depository Services (India) Limited as on March 31, 2022.

The Company has established connectivity with both the Depositories through its R&T Agent,
M/s. Big Share Services Private Limited.

Shareholders are advised to notify to the Company or R&T Agent, any change of address and Bank
details, immediately.

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Integrated Annual Report 2021-22

Dematerialisation of equity shares and liquidity as on 31st March, 2022:

Equity shares Number of shares % of total shares

Held in dematerialised form in NSDL 74,046,979 93.25
Held in dematerialised form in CDSL 3,768,814 4.75
Physical 1,593,133 2.00
Total 79,408,926 100.00

Distribution of Shareholding as on March 31, 2022:

Nominal value of Number of % to total Total face % to total face

shares (In `) holders holders value (In `) value
From To
1 5000 22022 95.80 9836176 6.19
5001 10000 512 2.23 3607220 2.27
10001 20000 236 1.03 3296660 2.08
20001 30000 61 0.27 1519356 0.96
30001 40000 34 0.15 1251516 0.79
40001 50000 22 0.10 1010818 0.64
50001 100000 44 0.19 3147974 1.98
100001 above 57 0.25 135148132 85.10
TOTAL 22988 100.00 158817852 100.00

Outstanding GDRs/ ADRs / warrants or any convertible instruments etc.:

As of date, the Company has not issued these types of Securities.
Foreign Exchange Risk
During the Financial Year 2021-22, the Company has managed the foreign exchange risk and
hedged to the extent considered necessary. The details of foreign currency exposure are disclosed
in Note No. 40D to the Financial Statements.
Plant locations:

1 Kirloskarvadi 2 Dewas
Dist. Sangli – 416 308 Station Road, Dewas – 455 001
Maharashtra Madhya Pradesh
Tel. No. (02346) 222301 – 05, Tel. No. (07272) 227397,227401/405/409
222361 – 222365
3 Shirwal 4 Kondhapuri
Gat No. 117, Shindevadi, Gat No. 252/2 + 254/2,
Tal. Khandala, Kondhapuri,
Dist. Satara – 412 801 Tal. Shirur, Dist. Pune – 412 208
Maharashtra Maharashtra
Tel. No. (02169) 244360 / 244370 / 244322 Tel. No. (02137) 240041, 240025, 240047

5 Kaniyur Village 6 Sanand

S.F.No. 324/1, Moperipalayam Sr. No. 254/1,
Road Thattampudur, Kaniyur Village Ahmedabad-Viramgam Highway,
Karumathampatti – PO, Village Chharodi,
Coimbatore – 641 659 Tal. Sanand, Dist. Ahmedabad – 382 170
Tamil Nadu Gujarat
Tel. No. (0421) 2904699 Tel. No. (02717) 273310

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 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
Investor contacts:
Company Address : Registrar and Transfer Agent :
Secretarial Department, Big Share Services Private Limited,
Kirloskar Brothers Limited, (Unit: Kirloskar Brothers Limited )
Registered Office at “Yamuna”, Office No S6-2, 6th Floor, Pinnacle Business Park,
Survey No. 98 (3 to 7), Plot No. 3, Baner, Next to Ahura Centre, Mahakali Caves Road,
Pune – 411 045 Andheri (East), Mumbai – 400093
Tel. No. (020) 6721 4444 Email id: [email protected]
Fax No. (020) 6721 1136 Tel.: (022) 62638200 Fax No.: (022) 62638299
E-mail : [email protected]

Depositories for equity shares :

National Securities Depository Limited Central Depository Services (India) Ltd.
Trade World – A Wing, 4th & 5th Floor, Marathon Futurex, A-Wing, 25th Floor,
Kamala Mills Compound, Lower Parel, NM Joshi Marg, Lower Parel,
Mumbai – 400 013 Mumbai – 400 013
Tel. No. (022) 2499 4200 Tel. No. (022) 2305 8640
Fax No. (022) 2497 6351

Credit Rating obtained by the entity along with revisions thereto during the relevant financial year,
for all debt instruments of such entity or any fixed deposit programme or any scheme or proposal
of the listed entity involving mobilisation of funds whether in India or abroad:
The Company received Credit rating of “CRISIL A1+(CRISIL A one plus rating)” on `100 Crore Commercial
Paper programme.

8. Disclosures:
i. There are no materially significant transactions made by the Company with its promoters, directors
or the management, their subsidiaries or relatives etc. any related parties which have potential
conflict with the interests of the Company at large.
ii. There is no non-compliance by the Company, no penalties and strictures imposed on the
Company by the Stock Exchange(s) or SEBI or any statutory authority on any matter related to
capital markets, during the last three years.

iii. a. Whistle Blower Policy:

The Company has already in place and implemented a Whistle Blower Policy (‘the Policy’).
This 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. Thus, any employee / stakeholder 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 and through training programmes from time to time. The Policy has also been
uploaded on the Company’s website.

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b. Policy for prevention of sexual harassment at work:

The Company has also in place and implemented a policy for prevention of sexual harassment
at work. This provides 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.

Disclosure under the ‘Sexual Harassment of Women at Workplace (Prevention, Prohibition

and Redressal) Act, 2013’:
In terms of Section 22 of the above-mentioned Act, read with Sexual Harassment of Women
at Workplace (Prevention, Prohibition and Redressal) Rules, 2013, during the year ended
on March 31, 2022, the status of complaint(s) is as follows:
1. No. of Complaints received in the year: Nil
2. No. of Complaints disposed off in the year: Nil
3. Cases pending for more than 90 days: NA
4. No. of workshops and awareness programmes conducted in the year: 02
5. Nature of action by employer or District Officer, if any: NA
c. Code of Ethics:
The Company released its ‘Code of Ethics’ on March 10, 2019. This is one of the most
important documents of the Company and a guide to ethical behaviour for personnel with
the Company
iv. All mandatory requirements of the SEBI Listing Regulations, 2015 have been complied with by the
Company and the extent of adoption of non-mandatory requirements is given hereunder:
Discretionary requirements as per Schedule II Part E:
1. The Board:
The Company has an Executive Chairman and the office with required facilities is provided
and maintained at the Company’s expenses for use by the Chairman.
2. Shareholders’ Rights:
The half-yearly financial results are published in the English and Vernacular newspapers
and are also displayed on the Company’s website. No separate circulation of the financial
performance was sent to the shareholders for the year under consideration.
3. Modified Opinion in Audit Report:
The Company is already in the regime of financial statements with unmodified audit
opinion.
4. Reporting of Internal Auditor:
The Internal Auditor’s reports are presented to the Audit and Finance Committee.
The Board has adopted certain policies viz. Code of Corporate Governance, Corporate
Disclosure Policy, Legitimate Purpose Policy under SEBI (Prohibition of Insider Trading)
Regulations, 2015.
5. Web links for following on www.kirloskarpumps.com:
a) Familiarisation programme of Independent Directors:
https://www.kirloskarpumps.com/investors/familiarisation-programme-for-
independent-directors/

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A Kirloskar Group Company
b) Policy for determining ‘material’ subsidiaries :
https://www.kirloskarpumps.com/wp-content/uploads/2020/01/Policy_Material-
Subsidiary-Company.pdf
c) Policy on dealing with related party transactions :
https://www.kirloskarpumps.com/wp-content/uploads/2022/04/Related-Party-
Policy-18.03.2022.pdf
6. Details of utilisation of funds raised through preferential allotment or qualified institutions
placement as specified under Regulation 32 (7A).
The Company has not raised any fund through preferential allotment or qualified institutions
placement as specified under Regulation 32 (7A).
7. Separate meeting of Independent Directors
Independent Directors of the Company met on November 10, 2021 to review and discuss
on the matters required under SEBI Listing Regulations, 2015.
8. Payment of consolidated fees to the Statutory Auditor:
The Company has paid fees of ` 7.3 Million on consolidated basis to Statutory Auditor
M/s. Sharp and Tannan Associates (Firm Registration No.109983W)-Chartered Accountants,
Mumbai during the Financial Year ended on March 31, 2022 (Refer Note No. 31).

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DECLARATION FOR COMPLIANCE WITH CODE OF CONDUCT

To the members of KIRLOSKAR BROTHERS LIMITED

Pursuant to Regulation 34 (3) read with Schedule V Para D of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 (Listing Regulations, 2015), 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.
All Board members and Senior Management Personnel have affirmed compliance with the Code of Conduct.

For Kirloskar Brothers Limited

Sanjay C. Kirloskar
Pune : May 24, 2022 Chairman and Managing Director

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 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
Practicing Company Secretary’s Certificate on Corporate Governance
[Pursuant to Clause E of Schedule V to the Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015]
To,
The members of
KIRLOSKAR BROTHERS LIMITED
(CIN: L29113PN1920PLC000670)
‘Yamuna’ Survey No.98 (3 to 7)
Plot No.3, Baner, Pune - 411 045.

I have examined and subject to limitation of physical interaction and verification of records caused by
COVID-19 Pandemic lock down; the compliance of Corporate Governance by Kirloskar Brothers Limited
(‘the Company’), for the year ended 31st March, 2022, as stipulated in Regulations 17, 18, 19, 20, 22, 23, 24,
25, 26, 27 and clauses (b) to (i) of sub regulation (2) of regulation 46 and para C, D and E of Schedule V of the
Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015
(collectively referred to as SEBI Listing Regulations, 2015).
The compliance of Corporate Governance is the responsibility of the Company’s Management. The Examination
of compliance was carried out and was limited to the methods, processes, procedures and implementation
thereof, adopted by the company for ensuring the compliance of Corporate Governance. It is neither an audit
nor an expression of opinion of the financial statements of the Company.
In my opinion and to the best of my information and according to the explanations given to us, I certify that the
company has complied with the Corporate Governance as stipulated in the abovementioned applicable Listing
Regulations.
I 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.

Place : Pune
Dated: May 24, 2022 Shyamprasad D. Limaye
UDIN : F001587D000373750 F.C.S 1587 C.P 572
Practising Company Secretary

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Integrated Annual Report 2021-22

Practicing Company Secretary’s Certificate on Appointment /

Re-appointment of Directors
Certificate
[Pursuant to Schedule V read with Regulation 34(3) of the SEBI Listing Regulations (as amended)]

In the matter of Kirloskar Brothers Limited (CIN: L29113PN1920PLC000670) having its Registered Office at
Yamuna, S No.98/3 – 7, Plot No.3 Baner, Pune – 411045.

On the basis of examination of the books, minute books, forms and returns filed and other records maintained
by the Company and declarations made by the directors and explanations given by the Company and subject
to limitation of physical interaction and verification of records caused by Covid-19 Pandemic;

I certify that the following persons are Directors of the Company (during 01/04/2021 to 31/03/2022) and none
of them have been debarred or disqualified from being appointed or continuing as directors of companies by
the Board/Ministry of Corporate Affairs or any such statutory authority.

Sr. Name of Director DIN Designation

No.
1 Sanjay Chandrakant Kirloskar 00007885 Managing Director
2 Pratap Baburao Shirke 00104902 Non-Executive Director
3 Alok Sanjay Kirloskar 05324745 Non-Executive Director
4 Rama Sanjay Kirloskar 07474724 Jt. Managing Director
5 Rakesh Mohan 02790744 Independent Director
6 *Rajeev Kher 01192524 Independent Director
7 Shailaja Shrikrishna Kher 08450568 Independent Director
8 Pradyumna Rameshchandra Vyas 02359563 Independent Director
9 Mangalath Unnikrishnan 01460245 Independent Director
10 Ramni Nirula 00015330 Independent Director
11 Shobinder Duggal 00039580 Independent Director
12 Shrinivas Vasudeva Dempo 00043413 Independent Director
13 Vivek Sharad Pendharkar 02791043 Independent Director
14 Rekha Sethi 06809515 Independent Director
15 Amitava Mukherjee 00003285 Independent Director
* Mr. Rajeev Kher (DIN 01192524) ceased to be a Director of the Company w.e.f. 24/01/2022.

Place : Pune Shyamprasad D. Limaye
Dated: : May 24, 2022 F.C.S 1587 C.P 572
UDIN : F001587D000373717 Practicing Company Secretary

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 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company

Financial Statements
(Standalone)

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INDEPENDENT AUDITOR’S REPORT

To the members of KIRLOSKAR BROTHERS LIMITED

Report on the audit of the standalone financial statements

Opinion

We have audited the accompanying standalone financial statements of Kirloskar Brothers Limited (hereinafter
referred as “the Company”), which comprise the balance sheet as at 31 March 2022, the statement of profit and
loss (including other comprehensive income), the cash flow statement and the statement of changes in equity
for the year then ended and notes to the standalone financial statements, including a summary of significant
accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid
standalone financial statements give the information required by the Companies Act, 2013 (hereinafter referred
as “the Act”) in the manner so required and give a true and fair view in conformity with the Indian Accounting
Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards)
Rules, 2015 as amended (hereinafter referred as “Ind AS”) and other accounting principles generally accepted
in India, of the state of affairs (financial position) of the Company as at 31 March 2022, and its profit (financial
performance including other comprehensive income), its cash flows and the changes in equity for the year
ended on that date.

Basis for opinion

We conducted our audit in accordance with the Standards on Auditing (hereinafter referred as “SAs”) specified
under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor’s
responsibilities for the audit of the standalone financial statements section of our report. We are independent
of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of
India together with the ethical requirements that are relevant to our audit of the standalone financial statements
under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities
in accordance with these requirements and the Code of Ethics.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion on the standalone financial statements.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the standalone financial statements of the current period. These matters were addressed in the context of our
audit of the standalone financial statements taken as a whole, in forming our opinion thereon and we do not
provide a separate opinion on these matters. We have determined the key audit matters as described below:
A. Accounting treatment for customer contracts where performance obligations are satisfied over time
B. Carrying value of investments in subsidiaries and joint ventures
A. Accounting treatment for customer contracts where performance obligations are satisfied over
time
Description of key audit matter:
Revenue amounting to Rs. 1,355 million reported in the Company’s standalone financial statements
pertains to customer specific long-term contracts and the same are required to satisfy the recognition and
measurement criteria as enunciated in IND AS 115, ‘Revenue from Contracts with Customers’. In case of
these contracts the revenue is recognised over time and is based on a percentage completion method

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A Kirloskar Group Company
(POC) for each of such contracts. The stage of project completion is determined based on a ratio of project
costs actually incurred till the period / year end to the planned / estimated total cost to complete the said
project. This necessarily involves estimations and certain assumptions to be made by the management
in determining the total planned costs and an appropriate allocation of costs actually incurred on each
project. This inherently creates certain uncertainties and results in complexities in accounting treatment
wherein incorrect assumptions and estimates can lead to revenue being recognised in incorrect
accounting periods thereby impacting the results. In addition, in POC method revenue recognition and
respective collections do not follow a linear trend irrespective of stage completion determined by the
company. Collections do depend on satisfaction of certain other performance obligations as laid down
in the respective project agreements. Consequently, those amounts that remain as receivables whose
due dates for payments depend on other conditions give rise to certain receivables that are due and
others not due for payment, requiring the Company to adopt a differential accounting classification
and treatment. While assessing the contractual obligations as at any period close, change orders and
/ or cancellations are required to be considered by the Company to adopt an appropriate accounting
treatment for revenues already recognised, valuation of work in progress and respective receivables.
Considering these factors, in the context of our audit this matter was of significance and hence a key
audit matter (Refer note 30 to the standalone financial statements).
Description of Auditor’s response:
With a view to verify the alignment of the Company’s project accounting system with the actual progress
of the project and its status at any period close, we designed our audit procedures related to this area
to obtain an understanding of project acceptance and execution process and the related accounting
controls including verification of compliance with IND AS 115 – ‘Revenue from contracts with customers’.
These included inter-alia, reading through the material contracts and formation of a standard checklist
to note the terms and conditions and considerations required to be taken note of for appropriate
financial accounting till a project is finally executed and closed. We discussed with the management
the risks associated with the project execution to understand requirement of any specific recognition of
financial accounting considerations and developed requisite key controls requiring audit attention and
review. The Company has automated through its accounting software the method of calculating the
percentage of completion method which we have verified on test basis. We reviewed planned costs,
their latest estimates, rationale for revision in estimates based on information shared by the management
in our discussions, approvals to such revisions in the estimates and compared them with latest costs
to complete, related mathematical accuracy and, on a sample, basis validated resulting recognition
of revenue. We discussed with management the status of amount receivable and have verified the
evidence supporting the recoverability in sample cases. We verified the calculations of expected credit
loss provisions and corroborated with specific management discussions on major projects.
B. Carrying value of investments in subsidiaries and joint ventures
Description of key audit matter:
The Company has invested an amount of Rs. 3,469 Million in subsidiaries and joint ventures. These
investments are stated at cost in the financial statement. One of the foreign subsidiaries has further
invested in step-down foreign companies including certain acquisitions made in the past with a view
to become one of the global leaders in the area of Company’s operations. These foreign subsidiaries
have their individual gestation periods and have been incurring losses in past few years. Given the multi
layered investment structure and being subjected to international business dynamics, the Company is
required to evaluate their individual financial status and value propositions to determine carrying value
of these investments in light of group’s overall stated business plans and its vision, both in domestic and
international markets, and hence requires a close monitoring by the management of these situations.
Against this background, this matter was of significance in the context of our audit (Refer note 5 to the
standalone financial statements).

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Description of Auditor’s response:

We have obtained audited financial statements of these subsidiaries and joint ventures and have
compared their net worth against investment by the ultimate holding Company. As our standard auditing
procedure, we have sent to the auditors of all subsidiaries and joint ventures a group reporting instruction
requiring each auditor to respond with his comments. Component auditors have not raised any major
concern on the ability of the entities to operate as a going concern. Management has provided us with
the business plans and how in their business judgement any negative net worth is either compensated
with improving business conditions in some of these entities or have additional assets whose market
values have adequate coverage to offset the negative net worth condition within the larger scheme of
business prospects as a group. Going forward our regular audit procedures are designed to keep a
follow up on outcomes of these management assertions.
Information other than the standalone financial statements and auditor’s report thereon
The Company’s Management and Board of Directors are responsible for the preparation of the other
information. The other information comprises the Board’s report and management discussion and
analysis included in the annual report but does not include the standalone financial statements and our
auditor’s report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the
other information identified above and, in doing so, consider whether the other information is materially
inconsistent with the standalone financial statements or our knowledge obtained during the course of
our audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information, we are required to report that
fact. We have nothing to report in this regard.
Managements and Board of Directors responsibilities for the standalone financial statements
The Company’s Management and Board of Directors are responsible for the matters stated in section
134(5) of the Act with respect to the preparation of these standalone financial statements that give a
true and fair view of the financial position, financial performance, cash flows and changes in equity of
the Company in accordance with the accounting principles generally accepted in India, including the
Ind AS. This responsibility also includes maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding of the assets of the Company and for preventing and
detecting frauds and other irregularities; selection and application of appropriate accounting policies;
making judgments and estimates that are reasonable and prudent; and design, implementation and
maintenance of adequate internal financial controls, that were operating effectively for ensuring the
accuracy and completeness of the accounting records, relevant to the preparation and presentation of
the standalone financial statements that give a true and fair view and are free from material misstatement,
whether due to fraud or error.
In preparing the standalone financial statements, Company’s Management and Board of Directors are
responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless management
either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do
so.
The Board of Directors are responsible for overseeing the Company’s financial reporting process.
Auditor’s responsibilities for the audit of the standalone financial statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit

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 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reason-
ably be expected to influence the economic decisions of users taken on the basis of these standalone financial
statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
A. Identify and assess the risks of material misstatement of the standalone financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting
a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
B. Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible
for expressing our opinion on whether the Company has adequate internal financial controls system in
place and the operating effectiveness of such controls
C. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
D. Conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report
to the related disclosures in the standalone financial statements or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the Company to cease to continue as
a going concern.
E. Evaluate the overall presentation, structure and content of the standalone financial statements, including
the disclosures, and whether the standalone financial statements represent the underlying transactions
and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in
aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the
standalone financial statements may be influenced. We consider quantitative materiality and qualitative factors
in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect
of any identified misstatements in the standalone financial statements.
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that
may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of
most significance in the audit of the standalone financial statements of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not
be communicated in our report because the adverse consequences of doing so would reasonably be expected
to outweigh the public interest benefits of such communication.

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Report on other legal and regulatory requirements

1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”), issued by the central
government of India in terms of sub-section (11) of section 143 of the Act, we give in the “Annexure A”,
a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. As required by section 143 (3) of the Act and based on our audit, we report that:
a) We have sought and obtained all the information and explanations which to the best of our
knowledge and belief were necessary for the purposes of our audit;
b) In our opinion, proper books of account as required by law have been kept by the Company so
far as it appears from our examination of those books;
c) The balance sheet, the statement of profit and loss (including other comprehensive income),
statement of changes in equity and the statement of cash flows dealt with by this report are in
agreement with the books of account;
d) In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified
under section 133 of the Act, read with rule 7 of the Companies (Accounts) Rules, 2014;
e) On the basis of the written representations received from the directors as on 31 March 2022 taken
on record by the Board of Directors, none of the directors are disqualified as on 31 March 2022
from being appointed as a director in terms of section 164 (2) of the Act;
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company
and the operating effectiveness of such controls, refer to our separate report in “Annexure B”;
our report expresses an unmodified opinion on the adequacy and operating effectiveness of the
Company’s internal financial controls over financial reporting;
g) With respect to the other matters to be included in the auditor’s report in accordance with the
requirements of section 197(16) of the Act, as amended, we report that in our opinion and to the
best of our information and according to the explanations given to us, the remuneration paid by
the Company to its directors during the year is in accordance with the provisions of section 197 of
the Act; and
h) With respect to the other matters to be included in the auditor’s report in accordance with rule
11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our
information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations as at 31 March 2022 on its
financial position in its standalone financial statements - refer note 28 to the standalone
financial statements.
ii. The Company has made provision, as required under the applicable law or Ind AS, for
material foreseeable losses, if any, on long term contracts including derivative contracts -
refer note 38 to the standalone financial statements.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor
Education and Protection Fund by the Company.
iv. Reporting on rule 11(e):
(a) The Management has represented that, to the best of its knowledge and belief, as
stated in note no. 47 B (2), no funds (which are material either individually or in the
aggregate) have been advanced or loaned or invested (either from borrowed funds
or share premium or any other sources or kind of funds) by the Company to or in any
other person(s) or entity(ies), including foreign entities (“Intermediaries”), with the
understanding, whether recorded in writing or otherwise, that the Intermediary shall,
directly or indirectly lend or invest in other persons or entities identified in any manner

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 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
whatsoever by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any
guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(b) The Management has represented, that, to the best of its knowledge and belief, as
stated in note no. 47B(3), no funds (which are material either individually or in the
aggregate) have been received by the Company from any person(s) or entity(ies),
including foreign entities (“Funding Parties”), with the understanding, whether
recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or
invest in other persons or entities identified in any manner whatsoever by or on behalf
of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or
the like on behalf of the Ultimate Beneficiaries.
(c) Based on the audit procedures that has been considered reasonable and appropriate
in the circumstances, nothing has come to our notice that has caused us to believe
that the representations under sub-clause (i) and (ii) of rule 11(e), as provided under
(a) and (b) above, contain any material misstatement.
v. The dividend for the previous year, declared and paid by the Company during the year is in
accordance with section 123 of the Act, as applicable.

For Sharp & Tannan Associates

Chartered Accountants
Firm’s Registration no. 109983W
by the hand of

Tirtharaj Khot
Partner
Membership no.(F) 037457
UDIN:22037457AJNLAU7571
Pune, 24 May 2022

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Annexure A to the Independent Auditor’s Report

(Referred to in paragraph 1 under the heading, “Report on Other Legal and Regulatory Requirements” of our
report on even date)

(i) (a) (A) The Company is maintaining proper records showing full particulars, including quantitative
details and situation of Property, Plant and Equipment.
(B) The Company is maintaining proper records showing full particulars of intangible assets.
(b) The Property, Plant and Equipment have been physically verified by the management at regular
intervals based on the programme of verification in a phased manner which in our opinion is
reasonable. No material discrepancies were noticed during such physical verification conducted
by the Company during the year.
(c) According to the information, explanation and representation provided to us and based on
verification carried out by us, title deeds of all the immovable properties (other than properties
where the Company is the lessee, and the lease agreements are duly executed in favour of the
lessee) disclosed in the financial statements are held in the name of the Company.
(d) According to the information, explanation and representation provided to us and based on
verification carried out by us, the Company has neither revalued its Property, Plant and Equipment
(including Right of Use assets) nor intangible assets during the year. Accordingly, reporting under
paragraph 3(i)(d) of the Order is not applicable.
(e) According to the information, explanation and representation provided to us and based on
verification carried out by us, no proceedings have been initiated or are pending against the
company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988
(45 of 1988) and rules made thereunder. Accordingly, reporting under paragraph 3(i)(e) of the
Order is not applicable.
(ii) (a) Physical verification of inventory, except goods-in-transit has been conducted at reasonable
intervals by the management and in our opinion the coverage and procedure of such verification
is appropriate. Discrepancies noticed on physical verification were less than10% in the aggregate
for each class of inventory and the same have been properly dealt with in the books of account.
(b) According to the information, explanation and representation provided to us and based on
verification carried out by us, during the year, the Company has been sanctioned working capital
limits in excess of five crore rupees, in aggregate, from banks or financial institutions on the basis
of security of current assets. The quarterly statements filed by the Company with such banks or
financial institutions are in agreement with the books of account of the Company.
(iii) According to the information, explanation and representation provided to us and based on verification
carried out by us, the Company has not made any investments in, provided any security or granted any
secured loans or secured or unsecured advances in the nature of loans, to companies, firms, limited
liability partnerships or any other parties during the year. The Company has provided guarantee to
companies and has not provided guarantee to firms, limited liability partnerships or any other parties
during the year.
(a) During the year, the Company has provided guarantee to its subsidiaries and other than subsidiaries
(direct and indirect). Details of guarantees provided are as follows (also refer note 35E for details):

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 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company

Guarantees
Particulars Provided Balance outstanding as at
during the year 31 Mar 2022
Aggregate amount during the year Rs. 714.97 Mn Rs. 4,635.97 Mn
- Subsidiaries
- Other than Subsidiaries Rs. 484.78 Mn Rs. 4,628.02 Mn

(b) According to the information, explanation and representation provided to us and based on
verification carried out by us, the unsecured loan given to The Kolhapur Steel Limited(TKSL) in
FY 2008-09 was under an Order from Board for Industrial and Financial Reconstruction (BIFR),
without any specific agreed terms for charge of interest and repayment. Unsecured loan given to
TKSL during FY 19-20 is with specified terms and conditions.
Considering the above-mentioned facts and materiality of the amounts, in our opinion the terms
and conditions of all loans and advances in the nature of loans and guarantees provided are not
prejudicial to the Company’s interest.
(c) According to the information, explanation and representation provided to us and based on
verification carried out by us, schedule of repayment of principal and payment of interest has
been stipulated for loan given to TKSL during the financial year 2019-20 and repayments/ receipts
are regular.
(d) According to the information, explanation and representation provided to us and based on
verification carried out by us, no amount is overdue for more than ninety days. Accordingly, the
reporting under para 3(iii)(d) is not applicable.
(e) According to the information, explanation and representation provided to us and based on
verification carried out by us, no loan or advance in the nature of loan granted has fallen due
during the year. Accordingly, the reporting under para 3(iii)(e) is not applicable.
(f) According to the information and explanations provided to us, the unsecured loan given to TKSL
in FY 2008-09 was under an Order from Board for Industrial and Financial Reconstruction (BIFR),
without any specific agreed terms for charge of interest and repayment, details are as follows.
(Amount in Rs. Mn)
Particulars TKSL
Aggregate amount of loans/ advances in nature of loans to related party
(other than promoters)
- Repayable on demand (A) -
- Agreement does not specify any terms or period of repayment (B) 9.61
Total (A+B) 9.61
Percentage of loans/ advances in nature of loans to the total loans 6.02%

(iv) According to the information, explanation and representation provided to us and based on verification
carried out by us, the Company has complied with provisions of section 185 and section 186 of the Act.
(v) According to the information, explanation and representation provided to us and based on verification
carried out by us, the Company has not accepted deposits or deemed deposits to which the directives
issued by the Reserve Bank of India and the provisions of Sections 73 to 76 of the Act and the rules
framed there under, are applicable. Accordingly, reporting under para 3(v) is not applicable.
(vi) The Central Government has specified maintenance of cost records under section 148(1) of the Act. We
have broadly reviewed these records relating to materials, labour and other items of cost maintained by
the Company and 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.

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(vii) In respect of statutory dues:

(a) The Company is regular in depositing undisputed statutory dues including Goods and Services
Tax, provident fund, employees’ state insurance, income-tax, sales-tax, service tax, duty of
customs, duty of excise, value added tax, cess, and any other statutory dues, as applicable, to the
appropriate authorities. According to the information and explanations given to us and based on
verification carried out by us on test basis, there are no arrears of statutory dues outstanding as
on the last day of the financial year concerned for a period of more than six months from the date,
they became payable.
(b) The details of statutory dues referred to in sub- paragraph (a) above which have not been deposited
with the concerned authorities as on 31 March, 2022, on account of dispute are given below:

Name of Nature of Amount Amount Period Forum where Dispute

statute dues involved unpaid to which is Pending
Rs. Million Rs. Million amount
Relates
22.91 20.86 2011-12, Additional
2012-13, Commissioner
2016-17 &
2017-18
73.24 73.24 2005-06, C.T.O., Telangana
2008-09,
2009-10,
2010-11 &
2013-14
24.58 24.58 1994-95, Commissioner of
LST, GST, 1995-96, Appeal
Sales Tax Sales Tax, 2000-01,
of Various CST, WCT 2006-07,
States VAT 2007-08,
(including 2011-12
interest, to 2017-
penalty, etc, 18
if any) 1.07 1.07 1994-95, Deputy
1995-96, Commissioner
2000-01
311.24 311.24 1989- High court
90 to
1992- 93,
2008-09,
2009-10,
2011-12 &
2014-15
52.29 48.29 2003-04, Tribunal
2009-10,
2013-14
7.52 7.52 2009-10 Appeal Tribunal
to 2012-
Chapter Service Tax 13
V of (including 95.73 95.73 2004-05 CESTAT
Finance interest, to 2007-
Act, 1994 penalty, etc, if 08
any)
1.14 1.14 2012-13 Superintendent
902.52 902.52 2012-13 Supreme Court

186
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company

Name of Nature of Amount Amount Period Forum where Dispute

statute dues involved unpaid to which is Pending
Rs. Million Rs. Million amount
Relates
7.12 7.12 2003-04, CESTAT
2015-16 &
2016-17
Excise Duty 1.35 1.35 2006-07 Commissioner Appeal
Central (including to 2009-
Excise interest, 10
Act, 1944 penalty, etc,
if any) 6.36 6.36 2013-14 DGGI
to 2016-
17
0.14 0.14 1996-97 Deputy Commissioner
3.66 - 2017-18 Revision Authority
21.23 21.23 2007-08 High court
The Income Tax 132.51 132.51 2013-15 & CIT (Appeals)
Income (including 2016-17
Tax Act, interest,
1961 penalty, etc,
if any)

(viii) According to the information, explanation and representation provided to us and based on verification
carried out by us, there are no transactions which are not recorded in the books of account and have
been surrendered or disclosed as income during the year in the tax assessments under the Income Tax
Act, 1961. Accordingly, reporting under para 3(viii) is not applicable.
(ix) (a) According to the information, explanation and representation provided to us and based on
verification carried out by us, the Company has not defaulted in repayment of loans or other
borrowings or in the payment of interest thereon to any lender. Accordingly, reporting under para
3(ix)(a) is not applicable.
(b) According to the information, explanation and representation provided to us and based on
verification carried out by us, we report that the company has not been declared as willful defaulter
by any bank or financial institution or other lender. Accordingly, reporting under para 3(ix)(b) is not
applicable.
(c) According to the information, explanation and representation provided to us and based on
verification carried out by us, the term loans availed by the Company during the year, were applied
by the Company for the purposes for which the loans were obtained.
(d) According to the information, explanation and representation provided to us and based on
verification carried out by us, funds raised on short term basis have not been utilised for long term
purposes. Accordingly, reporting under para 3(ix)(d) is not applicable.
(e) According to the information, explanation and representation provided to us and based on
verification carried out by us, we report that the company has not taken any funds from any entity
or person on account of or to meet the obligations of its subsidiaries, associates or joint ventures.
Accordingly, reporting under para 3(ix)(e) is not applicable.
(f) According to the information, explanation and representation provided to us and based on
verification carried out by us, we report that the company has not raised loans during the year on
the pledge of securities held in its subsidiaries, joint ventures or associate companies. Accordingly,
reporting under para 3(ix)(f) is not applicable.

187
Integrated Annual Report 2021-22

(x) (a) According to the information, explanation and representation provided to us and based on
verification carried out by us, the Company has not raised moneys by way of initial public offer
or further public offer (including debt instruments). Accordingly, reporting on para 3(x)(a) is not
applicable.
(b) According to the information, explanation and representation provided to us and based on
verification carried out by us, the company has not made any preferential allotment or private
placement of shares or convertible debentures (fully, partially or optionally convertible) during the
year. Accordingly, reporting on para 3(x)(b) is not applicable.
(xi) (a) According to the information, explanation and representation provided to us and based on
verification carried out by us, no fraud by the Company or any material fraud on the Company by
its officers or employees has been noticed or reported during the year.
(b) During the year, no report under sub-section (12) of section 143 of the Companies Act has been
filed by the auditors in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors)
Rules, 2014 with the Central Government.
(c) During the year, we have taken into consideration the whistle blower complaints received by the
company during the year while determining the nature, timing and extent of audit procedures.
(xii) The Company is not a Nidhi Company. Accordingly, reporting on para 3(xii) of the order is not applicable.
(xiii) According to the information, explanation and representation provided to us and based on verification
carried out by us, all transactions with the related parties are in compliance with sections 177 and 188 of
the Act, wherever applicable, and the details have been disclosed in the financial statements as required
by the applicable IND AS.
(xiv) (a) According to the information, explanation and representation provided to us and based on
verification carried out by us, the company has an internal audit system commensurate with the
size and nature of its business.
(b) We have considered, the internal audit reports issued during the year and pertaining to the year
under audit.
(xv) According to the information, explanation and representation provided to us and based on verification
carried out by us, the company has not entered into any non-cash transactions with its directors or
persons connected with its directors and hence provisions of section 192 of the Companies Act, 2013
are not applicable to the company. Accordingly, reporting on para 3(xv) of the order is not applicable.
(xvi) (a) According to the information, explanation and representation provided to us and based on
verification carried out by us, the Company is not required to be registered under Section 45-IA of
the Reserve Bank of India Act, 1934. Accordingly, reporting on para 3(xvi)(a) is not applicable.
(b) According to the information, explanation and representation provided to us and based on
verification carried out by us, the company has not conducted any Non-Banking Financial or
Housing Finance activities without a valid Certificate of Registration (CoR) from the Reserve Bank
of India as per the Reserve Bank of India Act, 1934. Accordingly, reporting on para 3(xvi)(b) is not
applicable.
(c) According to the information, explanation and representation provided to us and based on
verification carried out by us, the company is not a Core Investment Company (CIC) as defined in
the regulations made by the Reserve Bank of India. Accordingly, reporting on para 3(xvi)(c) of the
order is not applicable.
(d) According to the information, explanation and representation provided to us and based on
verification carried out by us, the group does not have CIC as part of the group. Accordingly,
reporting on para 3(xvi)(d) of the order is not applicable.

188
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
(xvii) According to the information, explanation and representation provided to us and based on verification
carried out by us, the company has not incurred cash losses in the current financial year and in the
immediately preceding financial year. Accordingly, reporting on para 3 (xvii) of the order is not applicable.
(xviii) There has been no resignation of the statutory auditors during the year. Accordingly, reporting on para
3(xviii) of the order is not applicable.
(xix) According to the information, explanation and representation provided to us and on the basis of the
financial ratios, ageing and expected dates of realization of financial assets and payment of financial
liabilities, other information accompanying the financial statements, our knowledge of the Board
of Directors and management plans and based on our examination of the evidence supporting the
assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty
exists as on the date of the audit report that company is not capable of meeting its liabilities existing at
the date of balance sheet as and when they fall due within a period of one year from the balance sheet
date. We, however, state that this is not an assurance as to the future viability of the company. We further
state that our reporting is based on the facts up to the date of the audit report and we neither give any
guarantee nor any assurance that all liabilities falling due within a period of one year from the balance
sheet date, will get discharged by the company as and when they fall due.
(xx) (a) There is no unspent amount towards Corporate Social Responsibility (CSR) on other than
ongoing projects required a transfer to a Fund specified in Schedule VII to the Companies Act in
compliance with second proviso to sub section (5) of section 135 of the Act. Accordingly, reporting
on para 3(xx)(a) of the order is not applicable.
(b) There is no unspent amount towards Corporate Social Responsibility (CSR) in respect of ongoing
projects requiring a transfer to a special account in compliance with sub-section (6) of section 135
of the Act. Accordingly, reporting on para 3(xx)(b) of the order is not applicable.
(xxi) According to the information, explanation and representation provided to us and based on verification
carried out by us, there have been no qualifications or adverse remarks by the respective auditors in the
Companies (Auditor’s Report) Order (CARO) reports of the companies.

For Sharp & Tannan Associates

Chartered Accountants
Firm’s Registration no. 109983W
by the hand of

Tirtharaj Khot
Partner
Membership no.(F) 037457
UDIN:22037457AJNLAU7571
Pune, 24 May 2022

189
Integrated Annual Report 2021-22

Annexure B to the Independent Auditor’s Report

Referred to in paragraph 2 (F) under the heading, “Report on other legal and regulatory requirements”
of our report on even date:
Report on the Internal Financial Controls
[under Clause (i) of sub-section 3 of section 143 of the Companies Act, 2013 (“the Act”)]

Opinion
We have audited the internal financial controls over financial reporting of Kirloskar Brothers Limited (hereinafter
referred as “the Company”) as of 31 March 2022 in conjunction with our audit of the standalone financial
statements of the Company for the year ended on that date.
In our opinion and to the best of our information and according to the explanations given to us, the Company
has, in all material respects, an adequate internal financial controls system over financial reporting and such
internal financial controls over financial reporting were operating effectively as at 31 March 2022, based on
the internal financial control over financial reporting criteria established by the Company considering the
essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls
Over Financial Reporting (hereinafter referred as “the guidance note”) issued by the Institute of Chartered
Accountants of India (hereinafter referred as “ICAI”).
Managements and Board of Directors responsibility for internal financial controls
The Company’s Management and Board of Directors are responsible for establishing and maintaining internal
financial controls based on the internal control over financial reporting criteria established by the Company
considering the essential components of internal control stated in the guidance note. These responsibilities
include the design, implementation and maintenance of adequate internal financial controls that were operating
effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s
policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and
completeness of the accounting records, and the timely preparation of reliable financial information, as required
under the Act.
Auditor’s responsibility
Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting
based on our audit. We conducted our audit in accordance with the guidance note and the Standards on
Auditing issued by ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable
to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with
ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate
internal financial controls over financial reporting was established and maintained and if such controls operated
effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial
controls system over financial reporting and their operating effectiveness. Our audit of internal financial
controls over financial reporting included obtaining an understanding of internal financial controls over
financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design
and operating effectiveness of internal control based on the assessed risk. The procedures selected depend
on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone
financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion on the Company’s internal financial controls system over financial reporting.
Meaning of internal financial controls over financial reporting
A Company’s internal financial control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of standalone financial statements for

190
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
external purposes in accordance with generally accepted accounting principles. A Company’s internal financial
control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets
of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of standalone financial statements in accordance with generally accepted accounting principles,
and that receipts and expenditures of the Company are being made only in accordance with authorizations
of management and directors of the Company; and (3) provide reasonable assurance regarding prevention
or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a
material effect on the standalone financial statements.
Inherent limitations of internal financial controls over financial reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility
of collusion or improper management override of controls, material misstatements due to error or fraud may
occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial
reporting to future periods are subject to the risk that the internal financial control over financial reporting may
become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.

For Sharp & Tannan Associates

Chartered Accountants
Firm’s Registration no. 109983W
by the hand of

Tirtharaj Khot
Partner
Membership no.(F) 037457
UDIN:22037457AJNLAU7571
Pune, 24 May 2022

191
Integrated Annual Report 2021-22

BALANCE SHEET AS AT 31 MARCH 2022

(Amounts in Million `)
Particulars Note No As at 31 March 2022 As at 31 March 2021
ASSETS
Non-current assets
Property, plant and equipment 3A 3,420.800 2,914.123
Capital work-in-progress 214.425 719.921
Investment property 4 5.020 5.020
Other intangible assets 3A 22.776 34.167
Right to use assets 3B 64.329 36.845
Financial assets
Investments 5 3,113.936 3,364.863
Trade receivables 6 246.004 465.541
Loans 7 150.000 150.000
Other financial assets 8 84.441 96.767
Deferred tax assets (net) 19 365.755 330.717
Other non-current assets 9 968.620 992.362
Total non-current assets 8,656.106 9,110.326
Current assets
Inventories 10 4,192.581 3,744.928
Financial assets
Investments 5 1,584.198 1,268.231
Trade receivables 6 4,088.001 3,491.890
Cash and cash equivalents 11 A 1,548.662 604.319
Other bank balances 11 B 14.971 18.107
Loans 7 9.614 10.414
Other financial assets 8 853.677 991.811
Other current assets 9 2,705.562 3,241.905
Total current assets 14,997.266 13,371.605
TOTAL ASSETS 23,653.372 22,481.931
EQUITY AND LIABILITIES
Equity
Equity share capital 12 158.818 158.818
Other equity 13 11,095.109 10,523.413
Total equity 11,253.927 10,682.231
LIABILITIES
Non-current liabilities
Financial liabilities
Borrowings 14 824.738 337.526
Lease liabilities 46 42.923 15.272
Trade payables 15 73.220 87.125
Other financial liabilities 16 0.580 2.123
Provisions 17 204.319 191.022
Other non-current liabilities 18 687.959 215.184
Total non-current liabilities 1,833.739 848.252
Current liabilities
Financial liabilities
Borrowings 14 1,539.596 1,052.658
Lease liabilities 46 23.841 23.841
Trade payables
- Micro, small and medium enterprises 15 650.041 857.466
- Others 15 3,871.064 3,825.248
Other financial liabilities 16 1,004.490 1,255.873
Other current liabilities 18 3,051.152 3,611.401
Provisions 17 425.522 324.961
Total current liabilities 10,565.706 10,951.448
Total liabilities 12,399.445 11,799.700
TOTAL EQUITY AND LIABILITIES 23,653.372 22,481.931
Corporate information 1
Significant accounting policies 2
See accompanying notes to financial statements 3 - 47B
The accompanying notes 1 to 47 (B) form an integral part of the financial statements

As per our report of even date attached For and on behalf of the Board of Directors
For SHARP & TANNAN ASSOCIATES
Chartered Accountants
(ICAI Firm Regn. No. 109983W) Sanjay Kirloskar Shobinder Duggal
Chairman and Managing Director Director
DIN: 00007885 DIN: 00039580

TIRTHARAJ KHOT Chittaranjan Mate Devang Trivedi

Partner Chief Financial Officer Company Secretary
Membership No: (F) - 037457
Pune : 24 May 2022 Pune : 24 May 2022 Pune : 24 May 2022

192
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31 MARCH 2022
(Amounts in Million `)
Particulars Note No Year ended Year ended
31 March 2022 31 March 2021
Income
Revenue from operations 20 21,659.422 17,998.573
Other income 21 357.202 189.651

Total income
22,016.624 18,188.224

Expenses

Cost of raw materials consumed 22 A 12,065.299 8,696.213

Purchases of stock-in-trade 1,321.965 1,660.503

Changes in inventories of finished goods, stock -in-
trade and work-in-progress 22 B (217.853) 345.633
Employee benefits expense 23 2,508.542 2,254.727
Finance costs 24 157.892 241.287
Depreciation and amortization expense 25 406.790 382.723

Other expenses 26 4,411.692 3,317.275

Total expenses
20,654.327 16,898.361

Profit before exceptional items and tax 1,362.297 1,289.863

Less : Exceptional items 5 250.927 40.914

Profit before tax
1,111.370 1,248.949
Tax expenses 19
(1) Current tax 328.423 359.591
(2) Deferred tax (35.026) (42.934)
(3) Short provision of earlier years 36.272 -

Total tax expenses

329.669 316.657

Profit after tax for the year

781.701 932.292

Other comprehensive income 27

Items that will not be reclassified to profit or loss 22.349 33.328
Income tax relating to items that will not be reclassified to profit or loss 5.873 (10.409)
Items that will be reclassified to profit or loss - -
Income tax relating to items that will be reclassified to profit or loss - -

Other comprehensive income

28.222 22.919

Total comprehensive income for the year (comprising of profit for the year and
other comprehensive income for the year) 809.923 955.211
Earnings per equity share 32
(1) Basic 9.85 11.74
(2) Diluted
9.85 11.74

Corporate information 1
Significant accounting policies 2
See accompanying notes to financial statements 3 - 47B
The accompanying notes 1 to 47 (B) form an integral part of the financial statements

As per our report of even date attached For and on behalf of the Board of Directors
For SHARP & TANNAN ASSOCIATES
Chartered Accountants
(ICAI Firm Regn. No. 109983W) Sanjay Kirloskar Shobinder Duggal
Chairman and Managing Director Director
DIN: 00007885 DIN: 00039580

TIRTHARAJ KHOT Chittaranjan Mate Devang Trivedi

Partner Chief Financial Officer Company Secretary
Membership No: (F) - 037457
Pune : 24 May 2022 Pune : 24 May 2022 Pune : 24 May 2022

193
Integrated Annual Report 2021-22

CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2022

(Amounts in Million `)
Particulars Year ended Year ended
31 March 2022 31 March 2021
A Cash flow from operating activities
Profit before tax 1,111.370 1,248.949
Adjustments for :-
1 Depreciation / amortization 406.790 382.723
2 (Profit) /loss on sale / write-off of fixed assets 0.476 9.404
3 Bad debts written off 83.694 111.983
4 Advances, deposits and claims written off 8.304 7.484
5 Liquidated damages 77.817 (27.065)
6 Provision for loss on long term contracts (5.861) (17.305)
7 Provision slow-non moving inventory 28.890 62.673
8 Provision for doubtful debts, advances and claims 77.534 207.170
9 Interest income (26.844) (31.422)
10 Dividend income (250.692) (53.334)
11 Interest expenses 124.345 201.708
12 Unrealized exchange ( gain)/ loss - others 3.313 9.940
13 Profit on sale of mutual funds (32.192) (27.006)
14 Impairment of investment 250.927 40.914
Operating profit before working capital changes 1,857.871 2,126.816
Adjustments for :-
1 (Increase)/ decrease in inventories (476.543) 389.370
2 (Increase)/ decrease in trade receivables (631.432) (327.870)
3 (Increase)/ decrease in financial assets 151.379 53.938
4 (Increase)/ decrease in non-financial assets 487.267 469.540
5 Increase/ (decrease) in trade payable (159.887) 176.771
6 Increase/ (decrease) in financial liabilities (259.311) 74.206
7 Increase/ (decrease) in non-financial liabilities (87.474) (196.750)
8 Increase/ (decrease) in provisions 147.332 (70.413)
Cash generated from operations 1,029.202 2,695.608
9 Income tax (paid ) / refunded (net) (249.732) (268.304)
Net cash from operating activities 779.470 2,427.304
B Cash flow from investing activities
1 Purchase of fixed assets (Including right to use lease assets as per Ind AS 116) (424.539) (574.094)
2 Investment in subsidiary company - (490.094)
3 Purchase of mutual funds (5,779.890) (8,354.000)
4 Sale of mutual funds 5,496.120 7,563.000
5 Interest received 18.484 31.346
6 Dividend received 250.692 53.334
7 Repayment of loans from subsidiaries 0.800 -
Net cash from/ (used in) investment activities (438.333) (1,770.508)
C Cash flow from financing activities
1 Proceeds from borrowing 1,891.797 800.000
2 Repayment of borrowings (917.647) (2,504.564)
3 Interest paid (114.680) (243.225)
4 Payment of dividend and tax thereon (241.507) (43.639)
Net cash used in financing activities 617.963 (1,991.428)
Unrealized exchange gain / (loss) in cash and cash equivalents (14.757) (7.118)
Net increase / (decrease) in cash and cash equivalents 959.100 (1,334.632)
1 Cash & cash equivalents at beginning of year 604.319 1,946.069
2 Cash & cash equivalents at end of year (refer note 11A) 1,548.662 604.319

Note :- The above statements of cash flow has been prepared using the “indirect method” as per Ind AS 7.
There are no reconciliation items in relation to financing activities for which disclosure is required as per Ind AS 7.
Refer note 43 for cash outflow on account of corporate social responsibility.

As per our report of even date attached For and on behalf of the Board of Directors
For SHARP & TANNAN ASSOCIATES
Chartered Accountants
(ICAI Firm Regn. No. 109983W) Sanjay Kirloskar Shobinder Duggal
Chairman and Managing Director Director
DIN: 00007885 DIN: 00039580

TIRTHARAJ KHOT Chittaranjan Mate Devang Trivedi

Partner Chief Financial Officer Company Secretary
Membership No: (F) - 037457
Pune : 24 May 2022 Pune : 24 May 2022 Pune : 24 May 2022

194
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2022
(Amounts in Million `)

A. Equity Share Capital

Balance as at Changes in equity share Balance as at

1 April 2020 capital during the year 31 March 2021
158.818 - 158.818

Balance as at Changes in equity share Balance as at

1 April 2021 capital during the year 31 March 2022
158.818 - 158.818

B. Other Equity

Reserves and Surplus

Capital Capital Securities General Retained Total
Reserve redemption Premium reserve Earnings
reserve
Balance as at 1 April 0.172 4.000 414.604 5,787.407 3,401.723 9,607.906
2020
Profit for the year 932.292 932.292
Other comprehensive 22.919 22.919
income
Dividend (39.704) (39.704)
Balance as at 31 0.172 4.000 414.604 5,787.407 4,317.230 10,523.413
March 2021
Profit for the year 781.701 781.701
Other comprehensive 28.222 28.222
income
Dividend (238.227) (238.227)
Balance as at 31 0.172 4.000 414.604 5,787.407 4,888.926 11,095.109
March 2022

As per our report of even date attached For and on behalf of the Board of Directors
For SHARP & TANNAN ASSOCIATES
Chartered Accountants
(ICAI Firm Regn. No. 109983W) Sanjay Kirloskar Shobinder Duggal
Chairman and Managing Director Director
DIN: 00007885 DIN: 00039580

TIRTHARAJ KHOT Chittaranjan Mate Devang Trivedi

Partner Chief Financial Officer Company Secretary
Membership No: (F) - 037457
Pune : 24 May 2022 Pune : 24 May 2022 Pune : 24 May 2022

195
Integrated Annual Report 2021-22

NOTES TO ACCOUNTS :
Significant accounting policies
Notes to the financial statements for the year ended 31st March 2022
(All amounts are in Indian rupees rounded in millions, unless otherwise stated)

1. Corporate information
Kirloskar Brothers Limited (“KBL” or “the Company”) is a public limited company domiciled in India
and incorporated under the provisions of the Indian Companies Act. KBL is engaged in providing fluid
management solutions globally. The core products of the company are Engineered Pumps, Industrial
Pumps, Agriculture and Domestic Pumps, Valves, and Hydro turbines.

2. Significant accounting policies

2.1 Basis of preparation

The financial statements have been prepared in accordance with the provisions of Indian
Accounting Standards (Ind-AS) notified under the Companies Act, 2013 (“the Act”) (to the extent
notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). The Ind AS
have been prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian
Accounting Standards) Rules, 2015.
In addition, the guidance notes/announcements issued by the Institute of Chartered Accountants
of India (ICAI) are also applied except where compliance with other statutory promulgations
require a different treatment.
Company maintains it’s accounts on accrual basis following historical cost convention except
for certain financial instruments which are measured at fair values. The financial statements have
been prepared on accrual and going concern basis.
The financial statements have been approved for issue by the Board of Directors at it’s meeting
held on 24 May 2022.
2.2 Basis of measurement
The financial statements have been prepared on a historical cost basis, except for the following
items, which are measured on an alternative basis in accordance with Ind AS on each reporting
date.

Items Measurement basis

Share based payment transactions Fair value
Defined benefit plan – plan assets Fair value

2.3 Current or non-current classification

All assets and liabilities have been classified as current or non-current as per the Company’s normal
operating cycle and other criteria as set out in the Division II of Schedule III to the Companies Act,
2013.
Based on the nature of products and the time between acquisition of assets for processing and
their realisation in cash and cash equivalents, the Company has ascertained its operating cycle
as 12 months for the purpose of current or non-current classification of assets and liabilities for
product business. In case of project business, operating cycle is dependent on life of specific
project/ contract/ service, hence current non-current bifurcation relating to project is based on
expected completion date of project which generally exceeds 12 months.

196
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
NOTES TO ACCOUNTS : (CONTD.)
Significant accounting policies (Contd.)
2.4 Functional and presentation currency
These financial statements are presented in Indian Rupees (INR), which is the Company’s
functional currency. All financial information is presented in INR MN rounded off to three decimal
places, except share and per share data, unless otherwise stated.
2.5 Use of judgements, estimates and assumptions
The preparation of financial statements in conformity with Ind AS requires the management
to make judgments, estimates and assumptions that affect the reported amounts of revenue,
expenses, current assets, non-current assets, current liabilities, non-current liabilities and
disclosure of the contingent liabilities at the end of each reporting period. The estimates are based
on management’s best knowledge of current events and actions, however, due to uncertainty
about these assumptions and estimates, actual results may differ from these estimates.
This note provides an overview of the areas that involved a higher degree of judgement or
complexity and of items which are more likely to be materially adjusted due to estimates and
assumptions turning out to be different than those originally assessed.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised prospectively.
Critical estimates and judgements
The areas involving critical estimates or judgements are:
• Estimation of defined benefit obligation - The cost of the defined benefit gratuity and
pension plan, and the present value of the gratuity/pension obligation are determined
using actuarial valuations. An actuarial valuation involves making various assumptions that
may differ from actual developments in the future. (Refer note – 34)
• Estimation of leave encashment provision - The cost of the leave encashment and the
present value of the leave encashment obligation are determined using actuarial valuations.
(Refer note 38)
• Impairment of receivables - The impairment provisions for financial receivables disclosed
are based on assumptions about risk of default and expected credit loss. (Refer note 40)
• Decommissioning liability - Initial estimate of dismantling and restoration liability requires
significant judgement about cost inflation index and other factors. (Refer note 38)
• Provision for warranty claims - Provision is recognised based on the key assumptions
about likelihood and magnitude of an outflow of resources. (Refer note 38)
• Estimation of provision for loss on long term contract - The provision is recognised when
the estimated cost exceeds the estimated revenue for constructions contracts as per
Ind AS 115. (Refer note 38)
2.6 Inventories
Inventories are valued at the lower of cost and net realizable value. The cost is calculated on moving
weighted average method. Costs incurred in bringing each product to its present location and conditions
are accounted for as follows:
• Raw materials: cost includes cost of purchase excluding taxes subsequently recoverable from
tax authorities and other costs incurred in bringing the inventories to their present location and
condition. However, these items are considered to be realizable at cost if the finished products in
which they will be used, are expected to be sold at or above cost.

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Significant accounting policies (Contd.)
• Finished goods and work in progress: cost includes cost of direct materials, labour and a
systematic allocation of fixed and variable production overhead that are incurred in converting
raw material into work in progress / finished goods based on the normal operating capacity and
actual capacity respectively.
• Traded goods: Cost includes cost of purchase and other costs incurred in bringing the inventories
to their present location and condition.
Based on ageing of inventory and it’s future potential to generate economic benefit, company
provides for slow and non-moving inventory using provision matrix. This provision is reversed
once such inventory is consumed or expected to be consumed.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated
costs of completion and the estimated costs necessary to make the sale. Assessment of net-
realizable value is made at regular intervals (each reporting period) and at change of events.
2.7 Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at banks, cash on hand and highly
liquid short-term deposits with an original maturity of three months or less, which are subject to an
insignificant risk of changes in value.
The deposits maintained by the Company with banks and financial institutions comprise time
deposits, which can be withdrawn by the Company at any point without prior notice or penalty on
the principal.
While other bank balances include, margin money, deposits, earmarked balances with bank, and
other bank balances with bank which have restrictions on repatriation.
2.8 Statement of Cash Flows
Statement of Cash Flows is prepared segregating the cash flows into operating, investing and
financing activities. Cash flow from operating activities is reported using indirect method, adjusting
the profit before tax for the effects of:
• changes during the period in inventories and operating receivables and payables
transactions of a non-cash nature;
• non-cash items such as depreciation, provisions, unrealized foreign currency gains and
losses; and
• all other items for which the cash effects are investing or financing cash flows.
Cash and cash equivalents (including bank balances) shown in the Statement of Cash Flows
exclude items which are not available for general use as at the date of Balance Sheet.
2.9 Property, plant and equipment (PPE)
Measurement
Freehold land is carried at historical cost. All other items of PPE are measured at cost of acquisition
or construction less accumulated depreciation and accumulated impairment loss, if any.
The cost of an item of PPE comprises its purchase price, including import duties net of credits and
other non-refundable taxes or levies and any directly attributable cost of bringing the asset to its
working condition for its intended use; any discounts and rebates are deducted in arriving at the
purchase price.
Own manufactured PPE is capitalized at cost including an appropriate share of overheads.
Administrative and other general overhead expenses that are specifically attributable to

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A Kirloskar Group Company
NOTES TO ACCOUNTS : (CONTD.)
Significant accounting policies (Contd.)
construction or acquisition of PPE or bringing the PPE to working condition are allocated and
capitalized as a part of the cost of the PPE.
Borrowing costs directly attributable to the construction or acquisition of a qualifying asset upto
completion or acquisition are capitalised as part of the cost. The present value of the expected
cost for the decommissioning of an asset after its use is included in the cost of the respective asset
if the recognition criteria for a provision is met.
When parts of an item of PPE have different useful lives, they are accounted for as separate items
(major components) of PPE.
PPE under construction are disclosed as capital work-in-progress.
Advances paid towards the acquisition of PPE outstanding at each reporting date are disclosed
under “Other non-current assets”.
Subsequent costs
The cost of replacing a part of an item of PPE is recognised in the carrying amount of the item if
it is probable that the future economic benefits embodied within the part will flow to the Company
and its cost can be measured reliably. The carrying amount of the replaced part is derecognized.
The costs of the day-to-day servicing of PPE are recognised in the statement of profit and loss as
incurred.
Disposal
An item of PPE is derecognized upon disposal or when no future benefits are expected from its
use or disposal. Gains and losses on disposal of an item of PPE are determined by comparing the
proceeds from disposal with the carrying amount of PPE, and are recognised within other income/
expenses in the statement of profit and loss.
Depreciation
Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other
amount substituted for cost, less its residual value.
The residual values, useful lives and method of depreciation of PPE is reviewed at each financial
year end and adjusted prospectively, if appropriate. Depreciation on additions to/deductions from
owned assets is calculated pro rata to the period of use. Further, extra shift depreciation is provided
wherever applicable. Depreciation charge for impaired assets if any is adjusted in future periods in
such a manner that the revised carrying amount of the asset is allocated over its remaining useful
life.
Depreciation is recognised in the statement of profit and loss on a straight-line basis over the
estimated useful lives of each part of an item of PPE as prescribed in Schedule II of the Companies
Act 2013 except in the case of patterns as mentioned below where the management based on the
technical evaluation have estimated the life to be lower than the life prescribed in schedule II.
Patterns – Useful life 1-7 Years

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Significant accounting policies (Contd.)
Life of assets considered as per schedule II -

Particulars Life
Building 60 Years
Factory Building 30 Years
Plant and Equipment 3-22 Years
Furniture and Fixtures 10 Years
Vehicles 8 Years
Office equipment 5 Years
Railway Siding 15 Years

2.10 Investment property

Investment property is a property, being land or building or part of it, (including those under
construction) that is held to earn rental income or for capital appreciation or both but not held for
sale in ordinary course of business, use in manufacturing or rendering services or for administrative
purposes.
Upon initial recognition, investment property is measured and reported at cost, including
transaction costs. The cost of investment property includes its purchase price and directly
attributable expenditure, if any. Subsequent expenditure is capitalised to the asset’s carrying
amount only when it is probable that future economic benefits associated with expenditure will
flow to the company and the cost of the item can be measured reliably. All other repairs and
maintenance costs are expensed when incurred.
Subsequent to initial recognition, investment property is stated at cost less accumulated
depreciation and accumulated impairment loss, if any. The estimated useful life and residual
values are reviewed at each financial year end and the effect of any change in the estimates of
useful life/ residual value is accounted on prospective basis. Investment property in the form of
land is not depreciated.
Investment properties are derecognised either when they have been disposed of or when they
are permanently withdrawn from use and no future economic benefit is expected from their
disposal. The difference between the net disposal proceeds and the carrying amount of the asset
is recognised in the statement of profit and loss in the period of derecognition.
2.11 Intangible assets
Recognition and measurement
Intangible assets are recognised when the asset is identifiable, is within the control of the Company
and it is probable that the future economic benefits that are attributable to the asset will flow to the
Company and cost of the asset can be reliably measured.
Intangible assets acquired by the Company that have finite useful lives are measured at cost less
accumulated amortisation and accumulated impairment losses (if any).
Intangible assets with indefinite useful lives (Goodwill) are not amortised, but are tested for
impairment annually, either individually or at the cash-generating unit level.
Subsequent measurement
Subsequent expenditure is capitalised only when it increases the future economic benefits
embodied in the specific asset to which it relates.

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A Kirloskar Group Company
NOTES TO ACCOUNTS : (CONTD.)
Significant accounting policies (Contd.)
Amortisation
Amortisation is calculated over the cost of the asset, or other amount substituted for cost, less
its residual value. Amortisation is recognised in statement of profit and loss on a straight-line
basis over the estimated useful lives of intangible assets from the date that they are available for
use, since this most closely reflects the expected pattern of consumption of the future economic
benefits embodied in the asset. The method of amortisation and useful life is reviewed at the end
of each accounting year with the effect of any changes in the estimate being accounted for on a
prospective basis.
The estimated useful life of an identifiable intangible asset is based on a number of factors
including the effects of obsolescence, demand, competition, and other economic factors (such
as the stability of the industry, and known technological advances), and the level of maintenance
expenditures required to obtain the expected future cash flows from the asset.
Computer software is amortised over the period of three years.
Amortization on impaired assets is provided by adjusting the amortization charge in the remaining
periods so as to allocate the asset’s revised carrying amount over its remaining useful life.
Research and development costs –
Research costs are expensed as incurred. Development expenditures on an individual project are
recognised as an intangible asset when the Company can demonstrate:
• The technical feasibility of completing the intangible asset so that the asset will be available for
use or sale
• Its intention to complete and its ability and intention to use or sell the asset
• How the asset will generate future economic benefits
• The availability of resources to complete the asset
• The ability to measure reliably the expenditure during development
Following initial recognition of the development expenditure as an asset, the asset is carried at
cost less any accumulated amortisation and accumulated impairment losses. Amortisation of the
asset begins when development is complete and the asset is available for use. It is amortised over
the period of expected future benefit. Amortisation expense is recognised in the statement of profit
and loss.
During the period of development, the asset is tested for impairment annually.
2.12 Interest in joint operations
The company as joint operator recognizes in relation to its interest in a joint operation, it’s share
in the assets/ liabilities held / incurred jointly with the other parties of the joint arrangements.
Revenue is recognised for it’s share of revenue from the sale of output by the joint operator.
Expenses are recognised for it’s share of expenses incurred jointly with the other parties of the
joint arrangements.
2.13 Borrowing costs
Borrowing costs are interest and other costs that an entity incurs in connection with the borrowing
of funds. Borrowing cost also includes exchange differences in relation to the foreign currency
borrowings to the extent those are regarded as an adjustment to the borrowing costs.

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Significant accounting policies (Contd.)
Borrowing costs directly attributable to the acquisition, construction or production of a qualifying
asset are capitalised in the cost of that asset. Qualifying assets are those assets which necessarily
takes a substantial period of time to get ready for its intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their
expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are expensed in the period in which they are incurred.
2.14 Revenue recognition
Company recognizes revenue from contracts with customers when it satisfies a performance
obligation.
Revenue is measured at transaction price i.e. Consideration to which Company expects to be
entitled in exchange for transferring promised goods or services to a customer, excluding amounts
collected on behalf of third parties and after considering effect of variable consideration, significant
financing component, if any.
For contracts with multiple performance obligations, transaction price is allocated to different
performance obligations based on their standalone selling price. In such case, revenue recognition
criteria is applied separately to different performance obligations, in order to reflect the substance
of the transaction and revenue is recognised separately for each obligation as and when the
recognition criteria for the component is fulfilled.
Sale of goods
Revenue from the sale of goods is recognized when control of the goods is transferred to the
buyer. For contracts that permit the customer to return an item, revenue is recognized to the extent
that it is highly probable that a significant reversal in the amount of cumulative revenue recognized
will not occur. Amounts included in revenue are net of returns, trade allowances, rebates, goods
and service tax, value added taxes.
Customer loyalty programs
The Company allocates a portion of the consideration received to loyalty points. This allocation
is based on the relative stand-alone selling prices. The amount allocated to the loyalty programs
is deferred, and is recognized as revenue when loyalty points are redeemed or the likelihood of
the customer redeeming the loyalty points becomes remote. The deferred revenue is included in
contract liabilities.
Rendering of services
Revenue is recognized over the time as and when customer receives the benefit of company’s
performance and the company has an enforceable right to payment for services transferred.
Construction Contracts
Contract revenue includes initial amount agreed in the contract plus any variations in contract
work, claims and incentive payments, to the extent that it is probable that they will result in revenue
and can be measured reliably.
Contract revenue and contract cost arising from fixed price contract are recognized in accordance
with the percentage completion method (POC).
The stage of completion is measured with reference to cost incurred to date as a percentage of
total estimated cost of each contract. Until such time (50% of project cost in case of civil projects
outside India and 25% of project cost in case of other projects) where the outcome of the contract
cannot be ascertained reliably, the Company recognizes revenue equal to actual cost.

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A Kirloskar Group Company
NOTES TO ACCOUNTS : (CONTD.)
Significant accounting policies (Contd.)
Full provision is made for any loss estimated on a contract in the year in which it is first foreseen.
Where the Company is involved in providing operation and maintenance services under a single
construction contract, then the consideration is allocated on a relative stand-alone price basis
between various obligations of a contract.
For contracts where progress billing exceeds the aggregate of contract costs incurred to-date and
recognized profits (or recognized losses, as the case may be), the surplus is shown as the amount
due to customers under other non financial liabilities.
For contracts where the aggregate of contract costs incurred to-date and recognized profits (or
recognized losses, as the case may be) exceed progress billing, the deficit is shown as the amount
due from customers. Amount due from customers is shown as part of other non-financial assets
as the contractual right for consideration is dependant on completion of contractual milestones.
Amounts received before the related work is performed are disclosed in the Balance Sheet as a
liability towards advance received. Amounts billed for work performed but yet to be paid by the
customer are disclosed in the Balance Sheet as trade receivables.
The amount of retention money held by the customers is disclosed as part of other current assets
2.15 Other income
Interest is recognized on a time proportion basis determined by the amount outstanding and the
rate applicable using the effective interest rate (EIR) method. Dividend income and export benefits
are recognised in the statement of profit and loss on the date that the Company’s right to receive
payment is established.
Interest receivable on customer dues is recognised as income in the Statement of Profit and Loss
on accrual basis provided there is no uncertainty towards its realization
Other items of income are accounted as and when the right to receive such income arises and it
is probable that the economic benefits will flow to the Company and the amount of income can be
measured reliably.
2.16 Foreign currencies transactions
Transactions and balances
Transactions in foreign currency are recorded at exchange rates prevailing at the date of
transactions. Exchange differences arising on foreign exchange transactions settled during the
year are recognised in the statement of profit and loss of the year.
Monetary assets and liabilities denominated in foreign currencies which are outstanding, as at
the reporting period are translated at the closing exchange rates and the resultant exchange
differences are recognised in the statement of profit and loss.
Non-monetary assets and liabilities denominated in foreign currencies that are measured in terms
of historical cost are translated using the exchange rate at the date of the transaction.
2.17 Employee benefits
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, expected cost of bonus and
short term compensated absences, leave travel allowance etc. are recognized in the period in
which the employee renders the related service.

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Significant accounting policies (Contd.)
Post-employment benefits

Defined contribution plans

The company’s superannuation scheme, state governed provident fund scheme related to
Dewas, Kaniyur, Sanand factories and employee state insurance scheme are defined contribution
plans. The company has no further payment obligations once the contributions have been paid.
The contributions are recognised as employee benefit expenses when they are due.
Defined Benefit Plans
The employees’ gratuity fund schemes and 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 of a maturity period equivalent to the weighted
average maturity profile of the defined benefit obligations as at the balance sheet date, having
maturity periods approximating to the terms of related obligations.
Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling,
excluding amounts included in net interest on the net defined benefit liability and the return on
plan assets (excluding amounts included in net interest on the net defined benefit liability), are
recognised immediately in the balance sheet with a corresponding debit or credit to retained
earnings through other comprehensive income (OCI) in the period in which they occur.
Remeasurements are not reclassified to the statement of profit and loss in subsequent periods.
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 recognise the obligation on net basis.
When the benefits of the plan are changed or when a plan is curtailed, the resulting change in
benefits that relates to past service or the gain or loss on curtailment is recognised immediately in
the statement of profit and loss. Net interest is calculated by applying the discount rate to the net
defined benefit liability or asset. The company recognises gains/ losses on settlement of a defined
plan when the settlement occurs.
The Company pays contribution to a recognized provident fund trust in respect of above-mentioned
Provident Fund Schemes.
Other long-term employee benefit
Compensated absences liabilities mean, the liabilities for earned leave that are not expected to
be settled wholly within twelve months after the end of the reporting period in which the employee
render the related service. They are therefore measured as the present value of expected future
payments to be made in respect of services provided by employees up to the end of the reporting
period using the projected unit credit method. The benefits are discounted using the market yields
at the end of the reporting period that have terms approximating the terms of the related obligation.
Re-measurements as a result of experience adjustments and change in actuarial assumptions are
recognised in the statement of profit and loss.

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 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
NOTES TO ACCOUNTS : (CONTD.)
Significant accounting policies (Contd.)
2.18 Income taxes
Income tax expense comprises current and deferred tax. It is recognised in the statement of profit
and loss except to the extent that it relates to a business combination or items recognised directly
in equity or in OCI.
Current tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or
paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those
that were enacted at the reporting date in the country where the company operates and generates
taxable income. Current tax assets and liabilities are offset only if certain criteria are met and such
offsetting is legally enforceable.
Deferred tax
Deferred tax is provided using the balance sheet method on temporary differences between the
tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the
reporting date.
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 the accounting period based on prevailing enacted or subsequently enacted regulations.
Deferred tax liabilities are recognized for all timing differences. Deferred tax assets are recognized
for deductible timing differences only to the extent there is reasonable certainty that sufficient
future taxable income will be available against which such deferred tax assets can be realized.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part
of the deferred tax asset to be utilized. Unrecognized deferred tax assets are re-assessed at each
reporting date and are recognised to the extent that it has become probable that future taxable
profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the
year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have
been enacted or substantively enacted at the reporting date.
Deferred tax assets and liabilities are offset only if certain criteria are met.
2.19 Share-based payments
Share based compensation benefits are provided to the employees (including senior executives)
of the company under the Company’s Employee Stock Option Scheme, whereby employees
render services as consideration for equity instruments (equity-settled transactions).
Equity-settled transactions
The fair value of the options granted to employees is recognised as an employee benefit expense
with a corresponding increase in equity. The total amount to be expensed is determined by
reference to the fair value of the options granted:
That cost is recognised, together with a corresponding increase in share-based payment (SBP)
reserves in equity, over the period in which the performance and/or service conditions are fulfilled
in employee benefits expense. The cumulative expense recognised for equity-settled transactions
at each reporting date until the vesting date reflects the extent to which the vesting period has
expired and the Company’s best estimate of the number of equity instruments that will ultimately
vest. The statement of profit and loss expense or credit for a period represents the movement in

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Significant accounting policies (Contd.)
cumulative expense recognised as at the beginning and end of that period and is recognised in
employee benefits expense.
When the terms of an equity-settled award are modified, the minimum expense recognised is
the expense had the terms had not been modified, if the original terms of the award are met. An
additional expense is recognised for any modification that increases the total fair value of the
share-based payment transaction, or is otherwise beneficial to the employee as measured at
the date of modification. Where an award is cancelled by the entity or by the counterparty, any
remaining element of the fair value of the award is expensed immediately through profit or loss.
The dilutive effect of outstanding options is reflected as additional share dilution in the computation
of diluted earnings per share.
2.20 Provisions
A Provision is recognized when the Company has a present obligation (legal or constructive) as a
result of a past event and it is probable that an outflow of resources embodying economic benefits
will be required to settle the obligation and a reliable estimate can be made of the amount of the
obligation.
If the effect of the time value of money is material, provisions are discounted using a current
pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is
used, the increase in the provision due to the passage of time is recognised as a finance cost in
the statement of profit and loss.
Warranty provisions
A provision for warranty is recognised when the underlying products and services are sold to the
customer based on historical warranty data and at its best estimate using expected value method.
The initial estimate of warranty-related costs is revised annually.
Provision for decommissioning and site restoration
The Company has a legal obligation for decommissioning of windmills and restoring the site
back to its original condition. Decommissioning and restoration costs are measured initially at its
best estimate using expected value method. The present value of initial estimates is provided as
a liability and corresponding amount is capitalised as a part of the windmill. The estimated future
costs of decommissioning are reviewed annually and adjusted as appropriate. Changes in the
estimated future costs or in the discount rate applied are added to or deducted from the cost of
the asset.
Contingent liabilities
Contingent liability is disclosed when,
• company has a present obligation arising from past events, when it is not probable that an
outflow of resources will be required to settle the obligation; or
• present obligation arising from past events, when no reliable estimate is possible; or
• A possible obligation arising from past events where the probability of outflow of resources is
not remote.
Provisions and contingent liabilities are reviewed at each Balance Sheet date.

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 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
NOTES TO ACCOUNTS : (CONTD.)
Significant accounting policies (Contd.)
2.21 Leases
Company has adopted Ind AS 116 ‘Leases’ from 1 April 2019. On transition, company has
recognized right-to-use asset equal to lease liability which is the present value of the remaining
lease payments, discounted using incremental borrowing rate at the date of initial application i.e.
1 April 2019.
Lease is a contract that provides to the customer (lessee) the right to use an asset for a period of
time in exchange for consideration.
A Company as a Lessee
A lessee is required to recognise assets and liabilities for all leases with a term that is greater
than 12 months, unless the underlying asset is of low value, and to recognise depreciation of
leased assets separately from interest on lease liabilities in the statement of Profit and Loss.
Initial Measurement
Right to use asset
At the commencement date, the Company measures the right-of-use asset at cost.
The cost of the right-of-use asset shall comprise:
• the amount of the initial measurement of the lease liability
• any lease payments made at or before the commencement date, less any lease incentives
received;
• any initial direct costs incurred by the lessee; and
• an estimate of costs to be incurred by the lessee in dismantling and removing the underlying
asset, restoring the site on which it is located or restoring the underlying asset to the
condition required by the terms and conditions of the lease, unless those costs are incurred
to produce inventories. The lessee incurs the obligation for those costs either at the
commencement date or as a consequence of having used the underlying asset during a
particular period.
Lease liability
At the commencement date, the Company measures the lease liability at the present value of
the lease payments that are not paid at that date. The lease payments are discounted using the
interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily
determined, the Company uses its incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise the following
payments:
• fixed payments (including in-substance fixed payments), less any lease incentives
receivable;
• variable lease payments that depend on an index or a rate, initially measured using the index
or rate as at the commencement date;
• amounts expected to be payable by the Company under residual value guarantees;
• the exercise price of a purchase option if the Company is reasonably certain to exercise that
option; and payments of penalties for terminating the lease, if the lease term reflects the
lessee exercising an option to terminate the lease

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Significant accounting policies (Contd.)
Subsequent measurement

Right to use assets

Subsequently the Company measures the right-of-use asset at cost less any accumulated
depreciation and any accumulated impairment losses. ROU assets are depreciated from the
commencement date on a straight-line basis over the shorter of the lease term and useful life of
the underlying asset. ROU assets are evaluated for recoverability whenever events or changes in
circumstances indicate that their carrying amounts may not be recoverable.
Lease Liability
Subsequently the Company measures the lease liability by:
• increasing the carrying amount to reflect interest on the lease liability at the interest rate
implicit in the lease, if that rate can be readily determined or the Company’s incremental
borrowing rate.
• reducing the carrying amount to reflect the lease payments made; and
• re-measuring the carrying amount to reflect any reassessment or lease modifications or to
reflect revised in substance fixed lease payments.
B Company as a Lessor
Leases in which the company does not transfer substantially all the risks and rewards of
ownership of an asset are classified as operating leases. Rental income from operating lease
is recognised on a straight-line basis over the term of the relevant lease unless the payments
to the lessor are structured to increase in line with expected general inflation to compensate
for the lessor’s expected inflationary cost increases or another systematic basis is available.
Initial direct costs incurred in negotiating and arranging an operating lease are added to the
carrying amount of the leased asset and recognised over the lease term on the same basis
asrental income. Contingent rents are recognised as revenue in the period in which they
are earned.
Leases are classified as finance leases when substantially all of the risks and rewards of
ownership transfer from the company to the lessee. Amounts due from lessees under finance
leases are recorded as receivables at the company’s net investment in the leases. Finance
lease income is allocated to accounting periods to reflect a constant periodic rate of return on
the net investment outstanding in respect of the lease.
2.22 Impairment of non-financial assets
The company assesses at each balance sheet date whether there is any indication that an asset or
cash generating unit (CGU) may be impaired. If any such indication exists, the company estimates
the recoverable amount of the asset. The recoverable amount is the higher of an asset’s or CGU’s
fair value less costs of disposal or its value in use. Where the carrying amount of an asset or
CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its
recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of money
and the risks specific to the asset.
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable
amount.

208
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
NOTES TO ACCOUNTS : (CONTD.)
Significant accounting policies (Contd.)
Impairment losses are recognised in the statement of profit and loss.
An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is
reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount
that would have been determined, net of depreciation or amortisation, if no impairment loss had
been recognised.
2.23 Fair value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The fair value measurement is
based on the presumption that the transaction to sell the asset or transfer the liability takes place
either:
• In the principal market for the asset or liability, or
• In the absence of a principal market, in the most advantageous market for the asset or
liability
The principal or the most advantageous market must be accessible by the company. The fair
value of an asset or a liability is measured using the assumptions that market participants would
use when pricing the asset or liability, assuming that market participants act in their economic best
interest.
A fair value measurement of a non-financial asset considers a market participant’s ability to
generate economic benefits by using the asset in its highest and best use or by selling it to
another.
The company uses valuation techniques that are appropriate in the circumstances and for which
sufficient data are available to measure fair value, maximizing the use of relevant observable
inputs and minimizing the use of unobservable inputs.
• Level 1- Quoted (unadjusted) market prices in active markets for identical assets or liabilities
• Level 2 - Valuation techniques for which the lowest level input that is significant to the fair
value measurement is directly or indirectly observable
• Level 3 - Valuation techniques for which the lowest level input that is significant to the fair
value measurement is unobservable
For assets and liabilities that are recognised in the financial statements on a recurring basis,
the company determines whether transfers have occurred between levels in the hierarchy by
re-assessing categorization (based on the lowest level input that is significant to the fair value
measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the company has determined classes of assets and
liabilities based on the nature, characteristics and risks of the asset or liability and the level of the
fair value hierarchy as explained above.
2.24 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial
liability or equity instrument of another entity.

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Integrated Annual Report 2021-22

NOTES TO ACCOUNTS : (CONTD.)

Significant accounting policies (Contd.)
Financial assets

Initial recognition and measurement

All financial assets are recognised initially at fair value. Purchases or sales of financial assets that
require delivery of assets within a time frame established by regulation or convention in the market
place (regular way trades) are recognised on the trade date, i.e., the date that the Company
commits to purchase or sell the asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
• Debt instruments at amortised cost
• Debt instruments at fair value through other comprehensive income (FVTOCI)
• Debt instruments, derivatives and equity instruments at fair value through profit or loss
(FVTPL)
• Equity instruments measured at fair value through other comprehensive income (FVTOCI)
Financial assets are subsequently measured at amortised cost if,
• the asset is held within a business model whose objective is to hold assets in order to collect
contractual cash flows; and
• The contractual terms of instrument give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
Derecognition
The Company derecognises a financial asset when the contractual rights to the cash flows from
the financial asset expire, or it transfers the rights to receive the contractual cash flows in a
transaction in which substantially all of the risks and rewards of ownership of the financial asset
are transferred or in which the company neither transfers nor retain substantially all of the risks
and rewards of ownership and it does not retain control of the financial asset.
Impairment of financial asset
Company applies expected credit loss (ECL) model for measurement and recognition of
impairment loss on the following financial assets and credit risk exposure:
• Financial assets that are debt instruments, and are measured at amortised cost e.g., loans,
debt securities, deposits, trade receivables and bank balance
• Financial assets that are debt instruments and are measured as at FVTOCI
• Lease receivables
• Trade receivables or any contractual right to receive cash or another financial asset that
result from transactions that are within the scope of Ind AS 11 and Ind AS 18
• Loan commitments which are not measured as at FVTPL
• Financial guarantee contracts which are not measured as at FVTPL
The company follows ‘simplified approach’ for recognition of impairment loss allowance on:
• Trade receivables or contract revenue receivables; and
• All lease receivables resulting from transactions within the scope of Ind AS 17

210
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
NOTES TO ACCOUNTS : (CONTD.)
Significant accounting policies (Contd.)
The application of simplified approach does not require the Company to track changes in credit
risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting
date, right from its initial recognition. For recognition of impairment loss on other financial assets
and risk exposure, the Company determines that whether there has been a significant increase in
the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL
is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime
ECL is used.
Financial liabilities

Initial recognition and measurement

The company initially recognises loans and advances, deposits, debt securities issued and
subordinated liabilities on the date on which they are originated. All other financial instruments
(including regular-way purchases and sales of financial assets) are recognised on the trade date,
which is the date on which the company becomes a party to the contractual provisions of the
instrument.
A financial liability is measured initially at fair value plus, for an item not at fair value through profit
or loss, transaction costs that are directly attributable to its acquisition or issue.
Financial guarantee contracts
Financial guarantee contracts issued by the company are those contracts that require a payment
to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make
a payment when due in accordance with the terms of a debt instrument. Financial guarantee
contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are
directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the
higher of the amount of loss allowance determined and the amount recognised less cumulative
amortisation.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled
or expires. When an existing financial liability is replaced by another from the same lender on
substantially different terms, or the terms of an existing liability are substantially modified, such an
exchange or modification is treated as the derecognition of the original liability and the recognition
of a new liability. The difference in the respective carrying amounts is recognised in the statement
of profit or loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the consolidated
balance sheet if there is a currently enforceable legal right to offset the recognised amounts
and there is an intention to settle on a net basis, to realise the assets and settle the liabilities
simultaneously.
Derivative financial instruments

Initial recognition and subsequent measurement

The Company uses derivative financial instruments, such as forward currency contracts to hedge
its foreign currency risks. Such derivative financial instruments are initially recognised at fair value
on the date on which a derivative contract is entered into and are subsequently re-measured at
fair value. Derivatives are carried as financial assets when the fair value is positive and as financial
liabilities when the fair value is negative.

211
Integrated Annual Report 2021-22

NOTES TO ACCOUNTS : (CONTD.)

Significant accounting policies (Contd.)
2.25 Earnings per share (EPS)
Basic EPS is calculated by dividing the profit for the year attributable to equity holders of the
company by the weighted average number of equity shares outstanding during the financial
year, adjusted for bonus elements in equity shares issued during the year and excluding treasury
shares.
Diluted EPS adjust the figures used in the determination of basic EPS to consider
• The after-income tax effect of interest and other financing costs associated with dilutive
potential equity shares, and
• The weighted average number of additional equity shares that would have been outstanding
assuming the conversion of all dilutive potential equity shares (if any).
2.26 Segment reporting
Operating segments are reporting in a manner consistent with the internal reporting to the chief
operating decision maker (CODM).
The board of directors of the company assesses the financial performance and position of the
company and makes strategic decisions. The Board of Directors, which are identified as a CODM,
consists of chief executive officer, chief financial officer and all other executive directors.
Company operates in single reporting segment of ‘Fluid Machinery and Systems’
2.27 Recent accounting pronouncement
The Ministry of Corporate Affairs (MCA) on 5 April 2022, vide Notification dated 23 March 2022 has
issued Companies (Indian Accounting Standard) Amendment Rules, 2022 in consultation with the
National Financial Reporting Authority (NFRA).
The notification states that these rules shall be applicable from 1 April 2022 and would thus be
applicable for the financial year ending 31 March 2023.
The amendments to Ind ASs are intended to keep the Ind ASs aligned with the amendments made
in IFRS.
• Amendments to Ind AS 16, “Property, Plant and Equipment”
The amendments to Ind AS 16 issued by the Ministry of Corporate Affairs amends provisions
regarding proceeds from selling items produced while bringing an asset into the location
and condition necessary for it to be capable of operating in the manner intended by
management.
• Amendments to Ind AS 37, “Provisions, Contingent Liabilities and Contingent Assets”
The amendments to Ind AS 37 issued by the Ministry of Corporate Affairs amends provisions
regarding costs a company should include as the cost of fulfilling a contract when assessing
whether a contract is onerous.
• Amendments to 101, “First-time Adoption of Indian Accounting Standards”
The amendments to Ind AS 101 issued by the Ministry of Corporate Affairs amends
provisions to simplify the application of Ind AS 101 by a subsidiary that becomes a first-time
adopter after its parent in relation to the measurement of cumulative translation differences.
• Ind AS 103, “Business Combination”
The amendments to Ind AS 103 issued by the Ministry of Corporate Affairs amends provisions
to:

212
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company

NOTES TO ACCOUNTS : (CONTD.)

Significant accounting policies (Contd.)
- substitute the word ‘Conceptual Framework for Financial Reporting under Indian Accounting
Standards (Conceptual Framework)’ with the words ‘Conceptual Framework of Financial
Reporting in Ind AS’.
- add to Ind AS 103 a requirement that, for transactions and other events within the scope of
Ind AS 37 , an acquirer applies Ind AS 37 (instead of the Conceptual Framework) to identify the
liabilities it has assumed in a business combination
- add to Ind AS 103 an explicit statement that an acquirer does not recognise contingent assets
acquired in a business combination.

213
214
NOTES TO ACCOUNTS : (CONTD.)
Note 3A: Property, Plant and Equipment
(Amounts in Million `)
Property, plant and equipment Intangible Assets

Land Land Buildings Plant & Furniture Office Vehicles Railway Total Computer Sales tax Total
Integrated Annual Report 2021-22

free hold lease hold equipment & fixtures equipment siding software deferral
rights

Gross Block
As at 1 April 2020 425.049 75.157 1,700.736 4,808.206 145.573 41.017 91.759 1.528 7,289.025 276.454 31.730 308.184
Additions - - 20.349 368.065 2.347 5.985 0.484 - 397.230 15.125 - 15.125
Disposals - - (11.462) (28.416) (1.053) (0.058) (0.435) - (41.424) (0.458) - (0.458)
As at 31 March 2021 425.049 75.157 1,709.623 5,147.855 146.867 46.944 91.808 1.528 7,644.831 291.121 31.730 322.851
Additions - - 225.934 614.563 0.650 12.928 16.363 - 870.438 4.648 - 4.648
Disposals - - - (48.910) (0.764) (0.004) (3.688) - (53.366) - - -
As at 31 March 2022 425.049 75.157 1,935.557 5,713.508 146.753 59.868 104.483 1.528 8,461.903 295.769 31.730 327.499
Depreciation/ Amortisation
As at 1 April 2020 - 5.634 447.483 3,787.258 119.407 23.339 59.695 1.520 4,444.336 238.571 31.553 270.124
Charge for the year - 1.003 40.708 257.083 5.706 6.965 6.924 0.003 318.392 18.841 0.177 19.018
Depreciation on disposal - - (2.134) (28.342) (1.051) (0.058) (0.435) - (32.020) (0.458) - (0.458)
As at 31 March 2021 - 6.637 486.057 4,015.999 124.062 30.246 66.184 1.523 4,730.708 256.954 31.730 288.684
Charge for the year - 1.003 47.319 296.324 5.147 6.635 6.854 0.003 363.285 16.039 - 16.039
Depreciation on disposal - - - (48.434) (0.764) (0.004) (3.688) - (52.890) - - -
As at 31 March 2022 - 7.640 533.376 4,263.889 128.445 36.877 69.350 1.526 5,041.103 272.993 31.730 304.723
Net block
As at 1 April 2020 425.049 69.523 1,253.253 1,020.948 26.166 17.678 32.064 0.008 2,844.689 37.883 0.177 38.060
As at 31 March 2021 425.049 68.520 1,223.566 1,131.856 22.805 16.698 25.624 0.005 2,914.123 34.167 - 34.167
As at 31 March 2022 425.049 67.517 1,402.181 1,449.619 18.308 22.991 35.133 0.002 3,420.800 22.776 - 22.776
Notes:
a) Plants and machines acquired out of proceeds of term loan, are pledged as security against the loan.
b) During the year no provision envisaged for impairment loss .
c) Refer note no 29 for estimated amount of contract remaining to be executed on capital account.
d) Company has not revalued any property, plant and equipment during the FY 2021-22 and FY 2020-21
e) All title deeds of immovable properties are held in the name of company
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)
Note 3B : Right to use assets

Particulars Amt
(` in Million)
Opeing balance as at 1 April 2020 160.293
Net addition / (deletion )during the year (78.135)
Depreciation (45.313)
Balance as at 31 March 2021 36.845
Net addition / (deletion) during the year 54.950
Depreciation (27.466)
Balance as at 31 March 2022 64.329

Note 4 : Investment property

Particulars Amt
(` in Million
Land
Gross Block
As at 1 April 2020 5.020
Additions
Disposals -
As at 31 March 2021 5.020
Additions -
Disposals -
As at 31 March 2022 5.020

Depreciation and Impairment

As at 1 April 2020 -
Charge for the year -
Depreciation on disposals -
As at 31 March 2021 -
Charge for the year -
Depreciation on disposals
As at 31 March 2022 -
Net block
As at 1 April 2020 5.020
As at 31 March 2021 5.020
As at 31 March 2022 5.020

Fair Value
The company obtains independent valuations for its investment property. The valuation model considers
current prices in active market.
The main inputs used are the rental growth rates, expected vacancy rates, terminal yields and discount rates
based on comparable transactions and industry data. All resulting fair value estimates for investment properties
are included in level 3.
Fair value as at 31 March 2017 was ` 58.303 MN. and there is no significant movement in fair value over last 5
years.

215
216
Note 5 : Financial assets: Investments
Particulars As at 31 March 2022 As at 31 March 2021
I Long term investments - at cost
Trade Investments
(a) Investment in Equity and Preference instruments 3,113.931 3,364.858
(b) Capital contribution in partnership firm 0.005 0.005
II Current investments 1,584.198 1,268.231
Integrated Annual Report 2021-22

Total 4,698.134 4,633.094

Particulars 31 March 2022 31 March 2021

Aggregate amount of quoted investments 84.198 1,268.231
Aggregate amount of unquoted investments 3,113.936 3,364.863
Sr Particulars Face Value Partly Paid / Extent of holding (%) No. of Shares / Units Amount in Million Rupees
No Fully paid As at As at As at As at As at As at
31 March 2022 31 March 2021 31 March 2022 31 March 2021 31 March 2022 31 March 2021
Non-current investments
NOTES TO ACCOUNTS : (CONTD.)

(1) Investments at fair value through Other

comprehensive income
Investment in Structured Entities
Kirloskar Proprietary Limited * INR 100 Fully Paid - 2 2 - -
(2) Investment in equity shares (unquoted)
accounted at cost
a Investment in Joint venture
1 Kirloskar Ebara Pumps Limited INR 10 Fully Paid 45% 45% 225,000 225,000 2.747 2.747
b Investment in Subsidiaries
1 The Kolhapur Steel Limited INR 1 Fully Paid 99% 99% 266,315,115 266,315,115 343.884 343.884
2 Kirloskar Corrocoat Private Limited INR 10 Fully Paid 65% 65% 3,250,000 3,250,000 94.000 94.000
3 Kirloskar Brothers International B V Euro 100 Fully Paid 100% 100% 236,851 198,076 1,398.025 1,398.025
4 Karad Projects & Motors Ltd. INR 10 Fully Paid 100% 100% 13,952,450 13,952,450 1,480.643 1,480.643
(3) Investment in 6% non cumulative convertible preference shares (unquoted) accounted at cost
1 The Kolhapur Steel Limited INR 1 Fully Paid 100% 100% 150,000,000 150,000,000 150.000 150.000
Investment in Partnership Firm
1 KBL Synerge LLP** NA NA 50% 50% NA NA 0.005 0.005
Provision for impairment of investment (##) (355.368) (104.441)
Total investment in equity shares of 3,113.936 3,364.863
subsidiaries and joint venture
Current investments
(1) Investments at fair value through profit and
loss
Investment in mutual funds 1,584.198 1,268.231
* The investment in unquoted equity shares is ` 200/- and therefore not seen in the above table.
All subsidiaries, joint venture and associate companies are incorporated and have place of business as India except, the Kirloskar Brothers International B.V. is incorporated and has place of business
as Netherland.
** KBL Synerge LLP a limited liability partnership was formed in year 2017 between Kirloskar Brothers Ltd, Mrs. Sneha Phatak and Synerge Overseas Pte. Ltd. This LLP has been created for a short
term project. Following are the details of total capital and share of each partner in it. Currently KBL Synerge LLP is not operative.
(Amounts in Million `)
 NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)

Name of Partner Capital Share in

Contributed Partnership and
(Rs) profit (%)
Kirloskar Brothers Limited 5,000 50
Synerge Overseas Pte. Ltd 2,600 26
Mrs. Sneha Phatak 2,400 24
Total 10,000 100
(##) During the year company has made further provision for partial impairment of it’s investment in the subsidiary company viz. ‘The Kolhapur Steel Limited’, which is treated and
disclosed as an exceptional item.
The Company has complied with the number of layers for its holding in downstream companies prescribed under clause (87) of section 2 of the Companies Act, 2013 read with the
Companies (Restriction on number of Layers) Rules, 2017.
Company has not made any additional investment in it’s group companies during the year. (In FY 2020-21 company has made additional investment of Rs 340 Mn in it’s wholly owened
subsidiary Kirloskar Brothers International B.V. for making the further investment in step down subaidiaries.)
A Kirloskar Group Company
KIRLOSKAR BROTHERS LIMITED

217
Integrated Annual Report 2021-22

NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)
Note 6 : Financial assets: Trade receivables

Particulars As at 31 As at
March 2022 31 March 2021
Non-current
Unsecured, considered good 246.004 465.541
Doubtful 764.443 803.041
1,010.447 1,268.582
Less : Provision for significant increase in credit
risk and credit impaired receivables 764.443 803.041
246.004 465.541
Current
Unsecured, considered good
From related parties 652.166 822.074
Others 3,435.835 2,669.816
4,088.001 3,491.890
Total trade receivables 4,334.005 3,957.431

Trade receivables are non-interest bearing and are generally on terms of 1 to 90 days. Refer note 44 (A) for
ageing.

Note 7 : Financial assets: Loans

Particulars As at As at
31 March 2022 31 March 2021
Non-current
Advances to related parties (Refer note 36)
Unsecured, considered good 150.000 150.000
150.000 150.000
Current
Advances to related parties (Refer note 36)
Unsecured, considered good 9.614 10.414
9.614 10.414
Total loans 159.614 160.414

218
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)
Note 8 : Financial assets: Other financial assets

Particulars As at As at
31 March 2022 31 March 2021
Non-current
(a) Claims receivable
Unsecured, considered good
Other Miscellaneous Claim 16.422 16.743
Doubtful 12.552 12.545
28.974 29.288
Less : Provision for significant increase in credit risk and credit
impaired claims 12.552 12.545
16.422 16.743
(b) Fixed deposits with the original maturity of more than
12 months 18.406 28.137
(c) Security deposits
Unsecured, considered good 49.613 51.887
Doubtful 11.147 18.274
60.760 70.161
Less : Provision for significant increase in credit risk and credit
impaired deposits 11.147 18.274
49.613 51.887
84.441 96.767
Current
(a) Claims receivable
Unsecured, considered good 20.268 26.544
(b) Interest accrued 8.908 0.548

(c) Security deposits 824.501 964.719
Unsecured, considered good
853.677 991.811
Total other financial asset 938.118 1,088.578

219
Integrated Annual Report 2021-22

NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)
Note 9 : Other assets

Particulars As at As at
31 March 2022 31 March 2021
Non-current
(a) Advances to supplier of capital goods 74.493 198.103
(b) Advances to supplier and others
Unsecured, considered good 275.884 16.480
Doubtful 70.340 72.576
346.224 89.056
Less : Provision for significant increase in credit risk and credit
impaired advances 70.340 72.576
275.884 16.480
(c) Prepaid expenses 3.366 2.883
(d) Retention (Net of provision) 371.489 458.690
(e) Advance income tax (Net of provision) 243.388 316.206
968.620 992.362
Current
(a) Advances to supplier and others
Unsecured, considered good
Advances to related parties 109.950 80.020
Others 86.271 426.382
196.221 506.402
(b) Prepaid expenses 113.768 156.147
(c) Gross amount due from customer for project related work 203.097 231.799
(d) Retention 1,013.052 1,195.388
(e) Balances with government authorities 1,179.424 1,152.169
2,705.562 3,241.905
Total other assets 3,674.182 4,234.267

Note 10 : Inventories

Particulars As at As at
31 March 2022 31 March 2021
(a) Raw Materials * 1,046.265 822.184
(b) Work-in-progress 1,606.401 1,391.149
(c) Finished goods 1,201.655 1,090.530
(d) Stock-in-trade 242.206 350.730
(e) Stores and spares 96.054 90.335
(Mode of valuation refer note 2.6 )
Total inventories 4,192.581 3,744.928

* Include goods in transit - ` 45.835 MN (PY 2020-21 : ` 47.000 MN)

220
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)
Amounts recognised in profit or loss
Write-down/(back) of inventories to net realizable value/ any loss due to it’s obsolete nature (net of reversal)
amounted to ` 29.027 MN (PY 2020-21: (`64.623 MN)) These were recognised as expenses during the year.

Note 11 A : Cash and cash equivalents

Particulars As at As at
31 March 2022 31 March 2021
(a) Balances with bank
In current account 484.550 420.692
In EEFC accounts 104.094 174.594
Fixed deposits 959.365 8.374
(b) Cash on hand 0.653 0.650
(c) Cheques on hand - 0.009
Total cash and cash equivalents 1,548.662 604.319

Note 11 B : Other bank balances

Particulars As at As at
31 March 2022 31 March 2021
(a) Earmarked balances with bank
Unpaid dividend accounts 11.600 14.880
(b) Margin money 3.371 3.227
Total other bank balances 14.971 18.107

Note 12: Equity share capital

Particulars As at As at
31 March 2022 31 March 2021
Authorised
250,000,000 ( 250,000,000 ) equity shares of ` 2/- each
(` 2/-) each 500.000 500.000
Issued, subscribed & fully paid up
79,408,926 (79,408,926) equity shares of ` 2/- each (` 2/-) each 158.818 158.818
Total equity share capital 158.818 158.818

(a) Terms/rights attached to equity shares

The company has only one class of equity shares, having face value of ` 2/- per share. Each holder of
equity share is entitled to one vote per share and has a right to receive dividend as recommended by the
board of directors subject to the necessary approval from the shareholders. In the event of liquidation
of the company, the holders of equity shares will be entitled to receive remaining assets of the company
after distribution of all preferential amounts. The distribution will be in proportion to the number of equity
shares held by the shareholders.
For the year ended 31 March 2022 the board of directors have proposed final dividend of ` 3.00 (2021:
` 3.00) per share subject to shareholders’ approval.

221
Integrated Annual Report 2021-22

NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)
(b) Reconciliation of share capital

Particulars As at As at 31 As at As at
31 March 2022 March 2022 31 March 2021 31 March 2021
Number Amount Number Amount
(Million `) (Million `)
Shares outstanding at the 79,408,926 158.818 79,408,926 158.818
beginning of the year
Shares Issued during the - - - -
year under ESOS
Shares outstanding at the 79,408,926 158.818 79,408,926 158.818
end of the year

(c) Details of shareholder holding more than 5% shares

Particulars As at As at As at As at
31 March 2022 31 March 2022 31 March 2021 31 March 2021
No. of Shares % of Holding No. of Shares % of Holding
Kirloskar Industries Limited 18,988,038 23.91% 18,988,038 23.91%
Mr. Sanjay Chandrakant 17,847,465 22.48% 17,847,465 22.48%
Kirloskar *
Mrs. Pratima Sanjay 13,849,488 17.44% 13,849,488 17.44%
Kirloskar
Nippon Life India 4,278,923 5.39% 4,278,923 5.39%
Trustee Ltd. ( A/C Nippon
India Small Cap Fund)

(d) Details of shares held by promoters

Particulars As at As at As at As at
31 March 2022 31 March 2022 31 March 2021 31 March 2021
No. of Shares % of Holding No. of Shares % of Holding
Mr. Sanjay Chandrakant 17,847,465 22.48% 17,847,465 22.48%
Kirloskar *
Mr. Rahul Chandrakant 404,501 0.51% 404,501 0.51%
Kirloskar
Mr. Atul Chandrakant 398,888 0.50% 398,888 0.50%
Kirloskar
Mr. Vikram Shreekant 70,236 0.09% 70,236 0.09%
Kirloskar
Ms. Jyotsna Gautam 441,805 0.56% 441,805 0.56%
Kulkarni

There is no change in shares held by promoters’ during the FY 2021-22 and FY 2020-21. Details of
shares held by promoter’s group are available on Company’s website.
* includes 1,761,919 (PY : 1,761,919), 2% (2%) shares held in the capacity of a trustee.
For the period of five years immediately preceding the date as at which the balance sheet is prepared,
no shares are
i. allotted as fully paid up pursuant to contracts without payment being received in cash
ii. allotted as fully paid shares by way of bonus shares
iii. bought back.

222
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)
Note 13: Other equity

Particulars As at As at
31 March 2022 31 March 2021
(a) Capital reserve 0.172 0.172
(b) Capital redemption reserve 4.000 4.000
(c) Securities premium 414.604 414.604
(d) General reserves 5,787.407 5,787.407
(e) Retained Earning
Opening balance 4,317.230 3,401.723
Add : Total comprehensive income for the year 809.923 955.211
Balance available for appropriation 5,127.153 4,356.934
Less : Appropriations :
Final and interim dividend paid 238.227 39.704
Sub total 238.227 39.704
Closing balance 4,888.926 4,317.230
Total other equity 11,095.109 10,523.413

Capital reserve:
The company had recognised profit or loss on purchase, sale, issue or forfeiture/ cancellation of own equity
instrument to capital reserve.
Capital redemption reserve:
The Company had recognised capital redemption reserve on redemption of preference shares from its retained
earnings as per the then applicable provisions of Companies Act, 1956.
Securities premium :
The amount received in excess of face value of the equity shares is recognised in Securities Premium Reserve.
In case of equity-settled share based payment transactions, the difference between fair value on grant date and
nominal value of share is accounted as securities premium.
General reserve:
The Company has transferred a portion of the net profit of the Company before declaring dividend to general
reserve pursuant to the earlier provisions of Companies Act 1956. Mandatory transfer to general reserve is not
required under the Companies Act 2013.
Retained earnings:
Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve,
dividends or other distributions paid to shareholders.

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Integrated Annual Report 2021-22

NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)
Note 14 : Financial liabilities: Borrowings

Particulars As at As at
31 March 2022 31 March 2021
Non-current
Secured
(a) Term loan from ICICI bank - 117.647
(Terms of loan: Term loan is repayable in 17 quarterly
instalments starting from 31 March 2018. The loan carries
interest as MCLR+ 3 months spread. The loan is secured
against fixed asset purchased out of this borrowing.)
Less- Current maturities of non-current borrowings - 117.647
- -
(b) Term loan from HDFC bank 856.971 472.537
(Terms of loan: Term loan is repayable in 19 quarterly
instalments starting from 31 March 2020 and another
fresh loan of ` 550 MN taken in FY-21-22 and is
repayable in 18 quarterly instalments starting from
31 January 2022. Loan carries interest rates in range
of 6.95% to 7.30% p.a. The loan is secured against
fixed asset purchased out of this borrowing.)
Less- Current maturities of non-current borrowings 257.233 135.011
599.738 337.526
(c) Term loan from EXIM bank 300.000 -
(Terms of loan: Term loan is repayable in 16 quarterly
instalments starting from 30 June 2022. The loan carries
interest as 6.85% p.a. The loan is secured against fixed asset
purchased out of this borrowing.)

Less- Current maturities of non-current borrowings 75.000 -

225.000 -

Total non-current borrowings 824.738 337.526

Current
Secured
1) Loans repayable on demand from bank
(i) Cash / export credit facilities 197.363 -
(ii) Working capital demand loans/ Short term loans 1,010.000 800.000
(Terms of loans: Loan carries interest @ 4.45% to 6.55%
per annum and secured against the inventory and receivables)
Total secured loan - Current 1,207.363 800.000
Current maturities of long term loan 332.233 252.658
Total current borrowings 1,539.596 1,052.658
Total borrowings 2,364.334 1,390.184

224
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)
1. The quarterly returns or statements filed by the Company for working capital limits with such
banks and financial institutions are in agreement with the books of account of the Company.
2. The company has utilized loans for the specific purpose for which same are availed.
3. The Company is not declared as willful defaulter by any bank or financial institution (as defined
under the Companies Act, 2013) or consortium thereof or other lender in accordance with the
guidelines on willful defaulters issued by the Reserve Bank of India.
4. The Company does not have any charges or satisfaction which is yet to be registered with Registrar of
Companies (ROC) beyond the statutory period.

Note 15 : Financial liabilities: Trade payables

Particulars As at As at
31 March 2022 31 March 2021
Non-current
(a) Total outstanding dues of creditors other than micro, small
and medium enterprises 73.220 87.125
73.220 87.125
Current
(a) Total outstanding dues of micro, small and medium enterprises
(refer note 42) 650.041 857.466
(b) Total outstanding dues of creditors other than micro, small
and medium enterprises 3,871.064 3,825.248
4,521.105 4,682.714
Total trade payables 4,594.325 4,769.839

Terms and conditions of the above financial liabilities:

Trade payables are non-interest bearing and are normally settled on 60-day terms except dues to micro and
small enterprises which are settled in 45 days or contractual term whichever is earlier. Refer note 44(B) for
ageing.

225
Integrated Annual Report 2021-22

NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)
Note 16: Other financial liabilities
Particulars As at As at
31 March 2022 31 March 2021
Non-current
(a) Financial guarantee contracts with banks for subsidiary
company 0.580 2.123
0.580 2.123
Current
(a) Investor Education & Protection fund (will be credited
as and when due).
Unclaimed dividends 11.600 14.880
(b) Others
Trade deposits 82.858 102.157
Interest accrued 29.115 19.450
Salary and reimbursements 367.325 352.823
Payables on account of purchases of fixed assets 8.665 38.005
Provision for expenses 502.410 716.478
Financial guarantee contracts with bank for subsidiaries 2.517 12.080
992.890 1,240.993
1,004.490 1,255.873
Total other financial liabilities 1,005.070 1,257.996
Terms and conditions of the above financial liabilities:
1) Other payables are non-interest bearing.
2) For explanations on the Company’s credit risk management processes, (refer note 40)
Note 17: Provisions
Particulars As at As at
31 March 2022 31 March 2021
Non-current
Provision for employee benefits
(a) Compensated absences (refer note 38) 136.410 132.347
(b) Pension scheme (refer note 34) 23.987 23.811
160.397 156.158
Other provision (refer note 38)
(a) Provision for product warranty 35.030 26.646
(b) Provision for decommissioning and restoration costs 8.892 8.218
43.922 34.864
204.319 191.022
Current
Provision for employee benefits
(a) Compensated absences (refer note 38) 149.203 140.156
(b) Gratuity & provident fund (refer note 34) 33.016 24.267
182.219 164.423
Other provision (refer note 38)
(a) Provision for product warranty 229.629 141.003
(b) Provision for loss on long term contracts 13.674 19.535
243.303 160.538
425.522 324.961
Total provisions 629.841 515.983

226
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)
Note 18: Other liabilities

Particulars As at As at
31 March 2022 31 March 2021
Non-current
(a) Gross amount due to customers for project related
contract work 165.624 64.859
(b) Advance from customer 522.335 150.325
687.959 215.184
Current
(a) Gross amount due to customers for project related
contract work 1,398.859 1,620.061
(b) Advance from customer 1,458.066 1,856.328
(c) Contribution to PF and superannuation 1.418 19.461
(d) Statutory dues 106.202 24.525
(e) Deferred revenue 86.607 91.026
3,051.152 3,611.401
Total other non-financial liabilities 3,739.111 3,826.585

Note 19 : Income tax

(1) The major components of income tax expense for the period ended 31 March 2022 and 31 March
2021 are:
(a) Statement of profit and loss

Particulars Year ebded Year ebded

31 March 2022 31 March 2021
Current income tax:
Current income tax charge 328.423 359.591
Adjustments in respect of income tax of previous year 36.272 -
Deferred tax:
Relating to origination and reversal of temporary differences (35.026) (42.934)
Income tax expense reported in the statement of
profit and loss 329.669 316.657

(b) Statement of other comprehensive income (OCI)

Current tax related to items recognised in OCI during the year:

Particulars Year ebded Year ebded

31 March 2022 31 March 2021
Income tax charged to OCI (5.873) 10.409

227
Integrated Annual Report 2021-22

NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)
(2) Reconciliation of tax expense and the accounting profit multiplied by India’s domestic tax rate for
the year ended 31 March 2022 and 31 March 2021:

Particulars Year ebded Year ebded

31 March 2022 31 March 2021
Accounting profit before tax 1,111.370 1,248.949
At India’s statutory income tax rate of 25.168% (a) 279.710 314.335
Adjustments
Add: Exempt income
Dividend 250.692 53.334
Subtotal (b) 250.692 53.334
Less : Non deductible expenses
Provision for advances/ deposits and write off 1.968 0.210
Interest payable to MSMED vendors 4.893 2.025
Fines and penalties 0.010 0.302
Donation 27.189 24.030
Provision for impairment of investment 250.927 40.914
Subtotal (c) 284.987 67.481
Sub total (d) = (b-c) (34.295) (14.147)
Tax impact of above adjustments (8.631) (3.561)
Rate difference on opening DTA/ DTL - 5.188
Other items (5.056) (3.949)
Short provision for earlier years (36.272) -
Total (e) (49.959) (2.322)
Tax expenses at effective rate (a-e) 329.669 316.657
Tax expenses recorded in books 329.669 316.657

(3) Movement in deferred tax

(a) Balance sheet

Deferred tax relates to the following: DTL/ (DTA) As at As at

31 March 2022 31 March 2021
Property, plant and equipment (Depreciation) 72.202 69.720
Employee benefits (91.219) (74.576)
Provision for doubtful debts and advances (347.085) (325.961)
Others - DTA/DTL 0.347 0.100
(365.755) (330.717)

Net deferred tax liabilities/(assets) (365.755) (330.717)

228
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)

Reflected in balance sheet as As at As at

31 March 2022 31 March 2021
Deferred tax asset 438.304 400.537
Deferred tax liability 72.549 69.820

Net deferred tax asset 365.755 330.717

(b) Statement of profit and loss

Particulars Year ebded Year ebded

31 March 2022 31 March 2021
Property, plant and equipment (Depreciation) 2.482 (3.831)
Employee benefits - compensated absences (16.643) 7.979
Provision for doubtful debts and advances (21.124) (46.637)
Others 0.259 (0.445)

Deferred tax expense/(income) (35.026) (42.934)

(4) Movement in Current tax

(a) Balance sheet

Reflected in balance sheet as Year ebded Year ebded

31 March 2022 31 March 2021
Non- current advance tax 243.388 316.206

(b) Statement of profit and loss and other comprehensive income

Movement in current tax Year ebded Year ebded

31 March 2022 31 March 2021
Current tax (asset)/ liability as at beginning of year (316.206) (417.902)
Add: Additional provision during the year - Statement of Profit
and loss account 364.695 359.591
Add: Additional provision during the year - Other
comprehensive income (5.873) 10.409
Less: Current tax paid during the year (Net of refund received
for previous year and adjustment for TDS receivable
for previous years ) (286.004) (268.304)
Non Current tax (asset)/ liability as at end of year (243.388) (316.206)

229
Integrated Annual Report 2021-22

NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)
Note 20: Revenue from operations

Particulars Year ended Year ended

31 March 2022 31 March 2021
(a) Sale of products
(Refer note 30 for the construction contract revenue) 20,760.253 17,463.112
(b) Sale of services 590.207 391.233
21,350.460 17,854.345
(c) Other operating revenues (majorly includes scrap sales
and exports benefits) 308.962 144.228
Total 21,659.422 17,998.573

Note 21: Other income

Particulars Year ended Year ended

31 March 2022 31 March 2021
(a) Interest Income
From customers and others 27.624 52.412
On income tax and sales tax refund - 28.374
(b) Release of deferred income 14.324 17.341
(c) Profit on sale of mutual fund investment 32.192 27.006
(d) Dividend income from subsidiary and
joint venture companies 250.692 53.334
(e) Foreign exchange difference (net) 21.641 -
(f) Other non-operating income 10.729 11.184
Total 357.202 189.651

Note 22: Cost of raw materials consumed , Changes in inventories of finished goods, stock -in- trade
and work-in-progress
Particulars Year ended Year ended
31 March 2022 31 March 2021
(A) Cost of raw material consumed 12,065.299 8,696.213

(B) Changes in inventories of finished goods,

work-in-progress and stock-in-trade
Opening Stock (refer note 10)
Finished goods 1,090.530 1,326.962
Work-in- progress 1,391.149 1,491.540
Stock in trade 350.730 359.540
2,832.409 3,178.042
Closing Stock (refer note 10)
Finished goods 1,201.655 1,090.530
Work-in- progress 1,606.401 1,391.149
Stock in trade 242.206 350.730
3,050.262 2,832.409
Total change in inventories (217.853) 345.633

230
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)
Note 23: Employee benefits expense

Particulars Year ended Year ended

31 March 2022 31 March 2021
(a) Salaries, wages and bonus * 2,248.634 2,014.416
(b) Defined contribution plans
Contribution to provident fund, superannuation fund and ESIC 27.609 33.353
(c) Defined benefit plans
Gratuity, Provident fund and Pension 118.827 113.976
(d) Welfare expenses 113.472 92.982
Total 2,508.542 2,254.727
* Includes payment on account of Voluntary Retirement Scheme ` 5.520 MN (PY 2020-21 - `13.930 MN).

Note 24: Finance costs

Particulars Year ended Year ended

31 March 2022 31 March 2021
(a) Interest expense
(at effective interest rate/ market rate of interest) 124.345 201.708
(b) Other borrowing costs
(includes bank guarantee commission, LC charges,
loan processing charges) 33.547 39.579
Total 157.892 241.287

Note 25: Depreciation and amortization expense

Particulars Year ended Year ended

31 March 2022 31 March 2021
(a) Depreciation on property, plant and equipment 363.285 318.392
(b) Amortization of intangible assets 16.039 19.018
(c) Amortisation of right to use assets (Lease) 27.466 45.313
Total 406.790 382.723

231
Integrated Annual Report 2021-22

NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)
Note 26: Other expenses

Particulars Year ended Year ended

31 March 2022 31 March 2021
Other Manufacturing Expenses
Stores and spares consumed 864.653 523.789
Processing charges 393.703 251.371
Power and fuel 336.097 256.168
Repairs and maintenance
Plant and machinery 174.467 79.718
Buildings 61.261 30.290
Other 38.375 32.406

Other expenses
Subvention charges - 1.096
Rent 28.040 13.587
Rates and taxes 66.621 49.761
Travel and conveyance 111.080 60.318
Communication expenses 75.068 74.133
Insurance 40.821 44.461
Directors’ sitting fees 7.650 5.565
Royalties and fees * 52.495 44.258
Freight and forwarding charges 339.396 331.861
Brokerage and commission 10.252 12.250
Advertisements and publicity 127.702 173.821
Provision for product warranty 289.649 112.623
Loss on sale/disposal of fixed assets 0.476 9.404
Provision for doubtful debts, advances and claims 77.541 206.886
Bad debts written off 83.694 111.983
Advances, deposits and claims written off 8.304 7.484
Auditor’s remuneration (refer note 31) 7.913 8.000
Professional, consultancy and legal expenses 479.533 321.393
Security services 48.260 46.573
Computer services 203.078 163.183
Non-executive directors remuneration 13.550 12.000
Stationery and Printing 8.893 6.161
Training course expenses 0.796 0.339
Outside labour charges 298.054 189.156
Corporate social responsibility expenses (refer note 43) 26.447 24.763
Other miscellaneous expenses 137.823 112.474
Total 4,411.692 3,317.275
* As specified in note given in the Board’s Report in respect of legal proceeding pending against KPL, the Company has in
the interim, without prejudice to all its rights and contentions, including those in the pending proceedings, in compliance
with the order of Hon’ble commercial court, Pune has deposited the claimed royalty amount by way of cheque in safe cus-
tody of the Ld. Nazir, District court, Pune from the quarter ended October 2018 onwards until 3rd quarter of 2021-22.

232
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)

Note 27: Other comprehensive income

Particulars Year ended Year ended

31 March 2022 31 March 2021
Items that will not be reclassified to profit or loss
Remeasurements gains and losses on post employment benefits 22.349 33.328
Tax on remeasurements gains and losses 5.873 (10.409)
Total 28.222 22.919

Note 28 : Contingent liabilities

Particulars As at As at
31 March 2022 31 March 2021
Other money for which the company is contingently
liable for (Matter Subjudice)
a) Central excise and service tax 1,046.772 1,040.727
b) Sales tax 265.577 385.789
c) Income tax 132.511 706.217
d) Labour matters 53.472 48.733
e) Other legal cases 167.383 156.228
Total 1,665.715 2,337.694

The company does not expect any reimbursement in respect of the above contingent liabilities. It is not
practicable to estimate the timing of cash flow if any with respect to above matters.

Note 29 : Commitments

Particulars As at As at
31 March 2022 31 March 2021
a) Estimated amount of contracts remaining to be executed
on capital account and not provided for (net of capital
advances) 233.472 192.126
b) Letters of credit outstanding 521.605 734.617

233
Integrated Annual Report 2021-22

NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)
Note 30 : Additional disclosures as required by Ind AS 115 ‘Revenue from contracts with customers’
A) Additional details in relation to contracts satisfied over the period

Particulars As at As at
31 March 2022 31 March 2021
a) Contract revenue recognised as revenue for the year 1,355.112 1,122.462
b) Advances received 1,054.477 1,188.916
c) Amount of retentions 1,384.541 1,654.078
d) Gross amount due from customer
Contract costs incurred 9,214.744 7,803.484
Recognised profits less recognised losses 2,508.579 2,383.279
Less: Progress billing 11,444.914 9,849.565
Less: Provision for gross amount due from customer 75.312 105.399
203.097 231.799
e) Gross amount due to customer
Contract costs incurred 26,036.160 27,590.155
Recognised profits less recognised losses 4,888.535 4,752.598
Less: Progress billing 32,489.178 34,027.673
(1,564.483) (1,684.920)

B) Disaggregation of revenue from sale of products / services

Particulars Year ended Year ended

31 March 2022 31 March 2021
a) Within India 20,071.401 16,500.345
b) Outside India 1,279.059 1,354.000
21,350.460 17,854.345

C) Reconciliation of revenue from sale of products / services with the contracted price

Particulars Year ended Year ended

31 March 2022 31 March 2021
a) Contracted price 21,674.655 18,041.755
Less - trade discounts, volume rebates, late delivery charges etc 324.195 187.410
21,350.460 17,854.345

234
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)

Note 31: Remuneration to auditors

Particulars Year ended Year ended

31 March 2022 31 March 2021
a) Audit fees 5.200 5.200
b) Limited review fees 2.100 2.100
c) Certification services 0.475 0.397
d) Expenses reimbursed 0.138 0.303
7.913 8.000

Note 32 : Earning per Share (Basic and diluted)

Particulars Year ended Year ended

31 March 2022 31 March 2021
a) Profit before tax 1,111.370 1,248.949
Less : Tax expenses 329.669 316.657
Profit after tax 781.701 932.292
b) Weighted average number of equity shares used
as denominator 79,408,926 79,408,926
c) Basic earning per share of nominal value of ` 2/- each 9.85 11.74

Note 33: Expenditure on research & development activities

Particulars Year ended Year ended

31 March 2022 31 March 2021
a) Revenue expenditure 234.302 166.517

b) Capital Expenditure 0.464 1.475
234.766 167.992

235
Integrated Annual Report 2021-22

NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)
Note 34 : Employee benefits
i. Defined Contribution Plans:
Amount of ` 27.609 MN. (PY - ` 33.353 MN.) is recognised as an expense towards defined
contribution plan and included in Employees benefits expense (Note-23 in the Profit and Loss
Statement.)
ii. Defined Benefit Plans:
a) The amounts recognised in Balance Sheet are as follows: Funded Plan

Particulars As at 31 March 2022 As at 31 March 2021

Gratuity Provident Gratuity Provident
Plan* Fund Plan Fund
(Funded) (Funded) (Funded) (Funded)

A. Amount to be recognised in Balance Sheet

Present Value of Defined Benefit Obligation 511.767 1,586.091 465.490 1,490.666
Less: Fair Value of Plan Assets 458.990 1,605.918 469.109 1,466.401
Amount to be recognised as liability or (asset) 52.777 (19.827) (3.619) 24.265
B. Amounts reflected in the Balance Sheet
Liabilities 52.777 - 24.265
Assets - 19.827 3.621 -
Net Liability/(Assets) 52.777 (19.827) (3.621) 24.265
* On conservative basis the company has not recognised the gratuity plan asset in the financials.

b) The amounts recognised in the Profit and Loss Statement are as follows: Funded Plan

Particulars 2021-22 2020-21

Gratuity Provident Gratuity Provident
Plan Fund Plan Fund
(Funded) (Funded) (Funded) (Funded)
1 Current Service Cost 33.467 48.860 35.894 45.656
2 Acquisition (gain)/ loss - - - -
3 Past Service Cost - - - -
3 Net Interest (income)/expenses (0.219) (2.951) 1.100 (3.384)
5 Actuarial Losses/(Gains) - - - -
6 Curtailment (Gain)/ loss - - - -
7 Settlement (Gain)/loss - - - -
8 Others (Transfer In / (Out)) 0.460 - - -
Net periodic benefit cost recognised in the 33.708 45.909 36.994 42.272
statement of profit & loss-
(Employee benefit expenses - Note 23)

236
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)

c) The amounts recognised in the statement of other comprehensive income (OCI) : Funded Plan

Particulars 2021-22 2020-21

Gratuity Provident Gratuity Provident
Plan Fund Plan Fund
(Funded) (Funded) (Funded) (Funded)
1 Opening amount recognised in OCI outside profit
and loss account - - - -
2 Remeasurements for the year - Obligation
(Gain)/loss 26.201 26.523 (31.909) 112.434
3 Remeasurement for the year - Plan assets
(Gain) / Loss (2.867) (74.100) (8.705) (101.192)
4 Total Remeasurements Cost / (Credit ) for the year
recognised in OCI 23.334 (47.577) (40.614) 11.242
5 Less: Accumulated balances transferred to
retained earnings 23.334 (47.577) (40.614) 11.242
Closing balances (remeasurement (gain)/loss
recognised OCI - - - -

d) The changes in the present value of defined benefit obligation representing reconciliation of
opening and closing balances thereof are as follows: Funded Plan

Particulars As at 31 March 2022 As at 31 March 2021

Gratuity Provident Gratuity Provident
Plan Fund Plan Fund
(Funded) (Funded) (Funded) (Funded)
1 Balance of the present value of Defined benefit
Obligation at the beginning period 465.490 1,490.666 486.197 1,333.342
2 Acquisition adjustment - - - -
3 Transfer in/ (out) 0.460 - - -
4 Interest expenses 28.035 88.609 28.049 76.208
5 Past Service Cost - - - -
6 Current Service Cost 33.467 48.860 35.894 45.656
7 Curtailment Cost / (credit) - - - -
8 Settlement Cost/ (credit) - - - -
9 Benefits paid (41.886) (168.354) (52.741) (168.051)
10 Employee Contribution - 99.787 - 91.077
11 Remeasurements on obligation - (Gain) / Loss 26.201 26.523 (31.909) 112.434
Present value of obligation as at the end of
the year 511.767 1,586.091 465.490 1,490.666

237
Integrated Annual Report 2021-22

NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)

e) Changes in the fair value of plan assets representing reconciliation of the opening and closing
balances thereof are as follows: Funded Plan

Particulars As at 31 March 2022 As at 31 March 2021

Gratuity Provident Gratuity Provident
Plan Fund Plan Fund
(Funded) (Funded) (Funded) (Funded)
1 Fair value of the plan assets as at beginning
of the period 469.109 1,466.401 450.136 1,323.956
2 Acquisition adjustment - - - -
3 Transfer in/(out) - - - -
4 Interest income 28.255 91.560 26.950 79.592
5 Contributions 0.645 142.211 36.060 129.712
6 Benefits paid (41.886) (168.354) (52.742) (168.051)
7 Amount paid on settlement - - - -
8 Return on plan assets, excluding amount
recognized in Interest Income - Gain / (Loss) 2.867 74.100 8.705 101.192
Fair value of plan assets as at the end of the period 458.990 1,605.918 469.109 1,466.401

f) Net interest (Income) /expenses: Funded Plan

Particulars As at 31 March 2022 As at 31 March 2021

Gratuity Provident Gratuity Provident
Plan Fund Plan Fund
(Funded) (Funded) (Funded) (Funded)
1 Interest ( Income) / Expense – Obligation 28.035 88.609 28.049 76.208
2 Interest (Income) / Expense – Plan assets (28.255) (91.560) (26.950) (79.592)
3 Net Interest (Income) / Expense for the year (0.220) (2.951) 1.099 (3.384)

g) The broad categories of plan assets as a percentage of total plan assets of Employee’s Gratuity
Scheme are as under:
All plan assets are maintained in a trust fund managed by a public sector insurer viz; LIC of India.
LIC has a sovereign guarantee and has been providing consistent and competitive returns over the
years.
h) The amounts pertaining to defined benefit plans are as follows: Funded Plan

Particulars As at 31 March 2022 As at 31 March 2021

Gratuity Provident Gratuity Provident
Plan Fund Plan Fund
(Funded) (Funded) (Funded) (Funded)
Defined Benefit Obligation 511.767 1,586.091 465.490 1,490.666
Plan Assets 458.990 1,605.918 469.109 1,466.401
Surplus/(Deficit) (52.777) 19.827 3.619 (24.265)

238
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)

i) The amounts recognised in Balance Sheet are as follows: Non-Funded Plan

Particulars As at 31 March 2022 As at 31 March 2021

Pension Scheme Pension Scheme
(Non-Funded) (Non-Funded)
A. Amount to be recognised in Balance Sheet
Present Value of Defined Benefit Obligation 23.987 23.811
Less: Fair Value of Plan Assets - -
Amount to be recognised as liability or (asset) 23.987 23.811

B. Amounts reflected in the Balance Sheet

Liabilities 23.987 23.811
Assets - -
Net Liability/(Assets) 23.987 23.811

j) The amounts recognised in the Profit and Loss Statement are as follows: Non Funded Plan

Particulars As at 31 March 2022 As at 31 March 2021
Pension Scheme Pension Scheme
(Non-Funded) (Non-Funded)
1 Current Service Cost - -
2 Acquisition (gain)/ loss - -
3 Past Service Cost
3 Net Interest (income)/expenses 1.531 1.622
5 Actuarial Losses/(Gains) - -
6 Curtailment (Gain)/ loss - -
7 Settlement (Gain)/loss - -
8 Others
Net periodic benefit cost recognised in the 1.531 1.622
statement of profit & loss- (Employee benefit
expenses - Note 23)

239
Integrated Annual Report 2021-22

NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)

k) The amounts recognised in the statement of other comprehensive income (OCI) : Non Funded
Plan
Particulars As at 31 March 2022 As at 31 March 2021
Pension Scheme Pension Scheme
(Non-Funded) (Non-Funded)
1 Opening amount recognised in OCI outside profit
and loss account - -
2 Remeasurements for the year - Obligation
(Gain)/loss 1.894 (0.022)
3 Remeasurement for the year - Plan assets
(Gain) / Loss - -
4 Total Remeasurements Cost / (Credit ) for the year
recognised in OCI 1.894 (0.022)
5 Less: Accumulated balances transferred to
retained earnings 1.894 (0.022)
Closing balances (remeasurement (gain)/loss
recognised OCI - -

l) The changes in the present value of defined benefit obligation representing reconciliation of
opening and closing balances thereof are as follows: Non Funded Plan

Particulars As at 31 March 2022 As at 31 March 2021

Pension Scheme Pension Scheme
(Non-Funded) (Non-Funded)
1 Balance of the present value of 23.811 25.507
Defined benefit Obligation as at beginning of the
period -
2 Acquisition adjustment - -
3 Transfer in/ (out) - -
4 Interest expenses 1.531 1.622
5 Past Service Cost - -
6 Current Service Cost - -
7 Curtailment Cost / (credit) - -
8 Settlement Cost/ (credit) - -
9 Benefits paid (3.249) (3.296)
10 Remeasurements on obligation - (Gain) / Loss 1.894 (0.022)
Present value of obligation as at the end of
the period 23.987 23.811

240
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)

m) Net interest (Income) /expenses Non Funded Plan

Particulars Pension Scheme

(Non-Funded)
2021-22 2020-21
1 Interest ( Income) / Expense – Obligation 1.531 1.622
2 Interest (Income) / Expense – Plan assets - -
3 Net Interest (Income) / Expense for the year 1.531 1.622

n) The amounts pertaining to defined benefit plans are as follows:Non Funded Plan

Particulars Pension Scheme

(Non-Funded)
2021-22 2020-21
Defined Benefit Obligation 23.987 23.811
Plan Assets - -
Surplus/(Deficit) (23.987) (23.811)

Basis used to determine the overall expected return:

The net interest approach effectively assumes an expected rate of return on plan assets equal to the beginning
of the year Discount Rate. Expected return of 6.3% (PY 6.1%) has been used for the valuation purpose.
o) Principal actuarial assumptions at the balance sheet date (expressed as weighted averages)
1 Discount rate as at 31-03-2022 - 6.80% (PY- 6.30%)
2 Expected return on plan assets as at 31-03-2022- 6.3%( PY- 6.1%)
3 Salary growth rate : For Gratuity Scheme - 8% (PY - 7%)
4 Attrition rate: For gratuity scheme the attrition rate is taken at 11% (PY - 7%)
5 The estimates of future salary increase considered in actuarial valuation take into account inflation,
seniority, promotion and other relevant factors, such as supply and demand in the employment
market.
p) 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 specified ex-employees wherein the beneficiaries
are entitled to defined monthly pension.

q) The Company expects to fund Rs 52.77 MN (P.Y Rs NIL) towards its gratuity plan in the year 2022-23.

r) Sensitivity analysis
Sensitivity analysis indicates the influence of a reasonable change in certain significant assumptions
on the outcome of the Present value of obligation(PVO). Sensitivity analysis is done by varying
(increasing/ decreasing) one parameter at a time and studying its impact

241
Integrated Annual Report 2021-22

NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)

Change in assumption Effect on Gratuity obligation

As at 31 March 2022 As at 31 March 2021

1 Discount rate
Increase by 1% to 7.8% (PY -7.3%) 487.436 438.508
Decrease by 1% to 5.8% (PY- 5.3%) 538.607 495.765

2 Salary increase rate
Increase by 1% to 9% (PY- 8%) 533.541 491.123
Decrease by 1% to 7% (PY- 6%) 491.587 442.114

3 Withdrawal rate
Increase by 1% to 12.0% (PY - 8%) 510.438 464.477
Decrease by 1% to 10.0% (PY - 6%) 513.212 466.604

Change in assumption Effect on Provident Fund obligation

As at 31 March 2022 As at 31 March 2021

1 Discount rate
Increase by 0.5% to 7.5% (PY- 6.8%) 1,569.087 39.114
Decrease by 0.5% to 6.5% (PY- 5.8%) 1,603.893 83.262
2 Interest rate
Increase by 0.50% to 8.60% (PY- 9.00%) 1,603.236 81.454
Decrease by 050% to 7.60% (PY - 8.00%) 1,568.937 39.765

Change in assumption Effect on Pension Effect on Pension

obligation obligation
As at 31 March 2022 As at 31 March 2021
1 Discount rate
Increase by 1% to 8.2% (PY -7.9%) 22.769 22.578
Decrease by 1% to 6.2% (PY- 5.9%) 25.332 25.180

242
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)

Note 35 :Related Party Disclosures

(A) Names of the related party and nature of relationship where control/ significant influence
exists

Sr. Name of the related party Nature of relationship

No.
1 Karad Projects and Motors Limited Subsidiary Company
2 The Kolhapur Steel Limited Subsidiary Company
3 Kirloskar Corrocoat Private Limited Subsidiary Company
4 Kirloskar Brothers International BV Subsidiary Company
5 SPP Pumps Limited Subsidiary of Kirloskar Brothers International B.V.
6 Kirloskar Brothers(Thailand) Limited Subsidiary of Kirloskar Brothers International B.V.
7 SPP Pumps (MENA) LLC Subsidiary of Kirloskar Brothers International B.V.
8 Kirloskar Pompen BV Subsidiary of Kirloskar Brothers International B.V.
9 Micawber 784 Proprietary Limited Subsidiary of Kirloskar Brothers International B.V.
10 SPP Pumps International Proprietary Subsidiary of Kirloskar Brothers International B.V.
Limited
11 Rotaserve Limited Subsidiary of Kirloskar Brothers International B.V.
12 SPP France S.A.S Subsidiary of SPP Pumps Limited
13 SPP Pumps Inc Subsidiary of SPP Pumps Limited
14 SPP Pumps South Africa Proprietary Subsidiary of SPP Pumps International Proprietary
Limited Limited
15 Braybar Pumps Proprietary Limited Subsidiary of SPP Pumps International Proprietary
Limited
16 Rodelta Pumps International BV Subsidiary of Kirloskar Brothers International B.V.
17 Rotaserve BV Subsidiary of Kirloskar Pompen BV
18 SPP Pumps Real Estate LLC Subsidiary of SPP Pumps Inc
19 SyncroFlo Inc. Subsidiary of SPP Pumps Inc
20 SPP Pumps (Asia) Ltd Subsidiary of Kiroskar Brothres (Thailand) Ltd
21 SPP Pumps (Singapore) Ltd Subsidiary of Kiroskar Brothres (Thailand) Ltd
22 Rotaserve Mozambique Subsidiary of SPP Pumps International Proprietary
Limited
23 KBL synerge LLP Associate of Kirloskar Brothers Limited
24 Kirloskar Ebara Pumps Limited Joint venture of Kirloskar Brothers Limited

243
Integrated Annual Report 2021-22

NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)

Note 35 :Related Party Disclosures

(B) : Names of related parties with whom transactions have been entered into:

1) Subsidiary Companies Karad Projects and Motors Limited

The Kolhapur Steel Limited
Kirloskar Corrocoat Private Limited
SPP Pumps Limited
SPP Pumps Inc.
Kirloskar Pompen B.V
Kirloskar Brothers (Thailand) Limited
Rodelta Pumps International BV
SPP Pumps International Proprietary Limited
SyncroFlo Inc.
Rotaserve B.V.

2) Joint Venture Kirloskar Ebara Pumps Limited

3) Key Management Personnel Mr. Sanjay Kirloskar
Mr. Pratap Shirke
Mr. Alok Kirloskar
Ms. Rama Kirloskar
Mr. Rakesh Mohan
Mr. Rajeev Kher
Ms. Shailaja Kher
Mr. Pardyumn Vyas
Mr. S. Unnikrishnan
Mr. Amitava Mukherjee
Ms. Rekha Sethi
Mr. Vivek Pendharkar
Mr. Shobinder Duggal
Mr. Shrinivas Dempo
Ms. Ramni Nirula

4) Relatives of Key Management Personnel Mrs.Pratima Kirloskar (wife of Mr. Sanjay Kirloskar)
Mrs.Suman Kirloskar (mother of Mr. Sanjay Kirloskar)

5) Post Employee Benefit Plans Kirloskar Brothers Ltd Employees Prov. Fund For Engg.
Factory
Kirloskar Brothers Ltd Staff Members Prov. Fund
Kirloskar Brothers Limited,Kirloskarvadi Employee
Gratuity Fund
Kirloskar Brothers Executive Staff Superannuation
fund

244
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)

Note 35 :Related Party Disclosures

(C) Disclosure of related parties transactions

Sr. Nature of transaction/relationship/ 2021-22 2020-21

No. major parties Amount Amount for Amount Amount for
Major Major
parties * parties *

1 Purchase of goods & services 4,240.619 2,703.957
Subsidiary/Fellow subsidiary Companies
Karad Projects and Motors Limited 3,940.758 2,421.239

2 Sale of goods/contract revenue 854.057 844.402

Subsidiary/Fellow subsidiary Companies
SPP Pumps Limited 203.343 174.813
Kirloskar Brothers (Thailand) Ltd. 221.489 273.246
SPP Pumps Inc. 174.276 181.434
Rodelta Pumps International BV 10.057 17.665
The Kolhapur Steel Limited 113.131 73.604

3 Rendering Services 133.412 108.401

Subsidiary/Fellow subsidiary Companies/
Joint venture
Kirloskar Corrocoat Private Limited 8.674 7.992
Kirloskar Ebara Pumps Limited 53.745 29.238
SPP Pumps Limited 38.363 39.396

4 Receiving Services 29.429 125.583

Subsidiary/Fellow subsidiary Companies /
Joint Venture
Kirloskar Brothers (Thailand) Ltd. 13.535 15.587
Kirloskar Ebara Pumps Limited 0.869 12.752
Karad Projects and Motors Limited 1.631 22.104
Kirloskar Pompen B.V. - 12.910
Kirloskar Corrocoat Private Limited 3.411 1.771
SPP Pumps Limited 3.195 -
Relatives of Key Management Personnel
Mrs Pratima Kirloskar 6.405 5.417

5 Interest Received 12.750 12.715

The Kolhapur Steel Limited 12.750 12.715

6 Purchase of fixed assets - 51.500

Subsidiary/Fellow subsidiary Companies/
Joint venture
Kirloskar Ebara Pumps Limited - 51.500

245
Integrated Annual Report 2021-22

NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)

Note 35 :Related Party Disclosures

(C) Disclosure of related parties transactions

Sr. Nature of transaction/relationship/ 2021-22 2020-21

No. major parties Amount Amount for Amount Amount for
Major Major
parties * parties *

7 Investment Made - 490.093
Subsidiary/Fellow subsidiary Companies
Kirloskar Brothers International B.V - 340.093
The Kolhapur Steel Limited - 150.000

8 Dividend Paid 95.169 14.672

Key Management Personnel
Mr. Sanjay Kirloskar (**) 53.542 8.254
Relatives of Key Management Personnel
Mrs. Pratima Kirloskar 41.548 6.405

9 Dividend Received 250.690 53.334

Subsidiary/Fellow subsidiary Companies/
Joint Venture
Karad Projects & Motors Limited 237.190 48.834
Kirloskar Ebara Pumps Limited 13.500 4.500

10 Remuneration Paid 86.947 96.997

Key Management Personnel
Short Term Employee Benefit
Mr. Sanjay Kirloskar 47.570 50.258
Ms. Rama Kirloskar 12.305 1.300

Commission on profits
Mr. Pratap Shirke 1.300 1.300
Mr. Alok Kirloskar 1.300 1.300
Mr. Kishor Chaukar - 0.650
Mr. Rakesh Mohan 1.300 1.300
Mr. Rajeev Kher 1.083 1.300
Mrs. Shailaja Kher 1.300 1.300
Mr. Pradyumna Vyas 1.300 1.300
(**) Includes dividend received in capacity of trustee of ` 5.285 Mn. (PY- ` 0.814 Mn.)

246
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)

Note 35 :Related Party Disclosures

(C) Disclosure of related parties transactions (contd.)

Sr. Nature of transaction/relationship/ 2021-22 2020-21

No. major parties Amount Amount for Amount Amount for
Major Major
parties * parties *

Commission on profits (Continued)
Mr. S. Unnikrishnan 1.300 1.300
Mr. Shobinder Duggal 1.192 -
Mr. Shrinivas Dempo 1.192 -
Ms. Ramni Nirula 1.192 -
Mr. Amitava Mukherjee 0.650 -
Mr. Vivek Pendharkar 0.650 -
Ms. Rekha Sethi 0.650 -

Key Management Personnel

Sitting Fees
Mr. Pratap Shirke 0.848 0.810
Mr. Alok Kirloskar 0.450 0.375
Mr. Kishor Chaukar - 0.270
Mr. Rakesh Mohan 1.200 1.020
Ms. Rama Kirloskar 0.150 0.570
Mr. Rajeev Kher 0.803 1.155
Mrs. Shailaja Kher 0.503 0.375
Mr. Pardyumn Vyas 0.420 0.495
Mr. S. Unnikrishnan 1.125 0.495
Mr. Shobinder Duggal 0.473 -
Mr. Shrinivas Dempo 0.338 -
Ms. Ramni Nirula 0.405 -
Mr. Amitava Mukherjee 0.135 -
Mr. Vivek Pendharkar 0.150 -
Ms. Rekha Sethi 0.135 -
Post Employment Benefit
Mr. Sanjay Kirloskar 3.180 30.123
Ms. Rama Kirloskar 2.348 -

247
Integrated Annual Report 2021-22

NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)

Note 35 :Related Party Disclosures

(C) Disclosure of related parties transactions (contd.)

Sr. Nature of transaction/relationship/ 2021-22 2020-21

No. major parties Amount Amount for Amount Amount for
Major Major
parties * parties *

11 Reimbursement Received 28.734 26.753
Subsidiary/ Fellow Subsidiary Company/
Joint Venture
Kirloskar Ebara Pumps Limited 2.851 5.444
SPP Pumps Limited 15.912 13.496
Spp Pumps Inc 4.368 0.674
Rodelta Pumps International BV 0.093 0.641
Rotaserve B.V. - 4.285
Kirloskar Brothers (Thailand) Ltd. 4.127 -

12 Reimbursement Paid 71.521 62.108

Subsidiary/ Fellow Subsidiary Company
Kirloskar Brothers (Thailand) Ltd. 5.544 5.671
Rodelta Pumps International BV 49.344 53.551
Kirloskar Ebara Pumps Limited 13.178 0.002

13 Business Advance/ Loan Given 71.585 105.643

Subsidiary/ Fellow Subsidiary Company
The Kolhapur Steel Limited 54.051 36.477
SPP Pumps Limited 17.534 63.776

14 Advance/Loan Repaid/Utilised/Written off 0.800 -

Subsidiary/ Fellow Subsidiary Company
The Kolhapur Steel Limited 8.000 -

15 Contribution Paid for Post Employment

Benefit Plan 46.740 84.289
Provident Fund 44.636 39.575
Superannuation Trust 2.104 8.504
Gratuity - 36.210

16 Corporate Guarnatees Given 714.978 880.595

The Kolhapur Steel Limited - 85.500
Kirloskar Corrocoat Private Limited - 204.850
SPP Pumps Limited 341.132 -
SPP Pumps International Proprietary Limited - 105.112
Rodelta Pumps International B. V. 222.232 -
Kirloskar Brothers(Thailand) Limited 75.807 485.133
Kirloskar Pompen B.V. 75.807 -
“* Major parties denote entities who account for 10% or more of the aggregate for that category of transaction.

248
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)

Note 35 :Related Party Disclosures

(D) Amount due to/from related parties

Sr. Nature of transaction/relationship/ 2021-22 2020-21

No. major parties Amount Amount for Amount Amount for
Major Major
parties parties

1 Accounts receivable
Subsidiary/Fellow subsidiary Companies/
Joint Venture 765.542 846.901
SPP Pumps Ltd. 57.396 56.816
Kirloskar Brothers (Thailand) Ltd. 157.285 302.966
SPP Pumps (MENA) L.L.C. 1.096 1.424
Braybar Pumps Proprietary Limited - 0.052
SPP Pumps South Africa Proprietary Limited 41.805 0.827
Spp Pumps Inc. 16.132 24.977
Kirloskar Ebara Pumps Limited 44.992 11.296
SyncroFlo Inc. - 0.018
Rodelta Pumps International BV 74.536 92.320
The Kolhapur Steel Ltd 284.571 120.634
SPP Pumps International Proprietary Limited - 35.789
Kirloskar Brothers Pompen BV 82.491 197.311
Rotaserve B.V. 1.954 0.655
Karad Projects And Motors Limited 0.694 1.816
SPP France S A S - -
Kirloskar Corrocoat Private Limited 2.590

2 Accounts payable
Subsidiary/Fellow subsidiary Companies/
Joint Venture 755.396 941.351
Karad Projects And Motors Limited 678.788 820.119
Kirloskar Corrocoat Pvt Ltd. 3.739 5.081
Rodelta Pumps International BV 4.775 11.248
SPP Pumps Ltd. 0.829 21.227
Kirloskar Brothers (Thailand) Ltd. 10.165 8.028
Spp Pumps Inc. 1.347 14.705
Kirloskar Brothers Pompen BV 53.737 53.898
Rotaserve B.V. 2.016 0.287
SPP Pumps International Proprietary Limited - 6.758

249
Integrated Annual Report 2021-22

NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)

Note 35 :Related Party Disclosures

(D) Amount due to/from related parties

Sr. Nature of transaction/relationship/ 2021-22 2020-21

No. major parties Amount Amount for Amount Amount for
Major Major
parties parties

3 Key Management Personnel (#) 53.640 45.050
Mr. Sanjay Kirloskar 32.058 34.000
Mr. Pratap Shirke 1.300 1.300
Mr. Alok Kirloskar 1.300 1.300
Mr. Kishor Chaukar - 0.650
Mr. Rakesh Mohan 1.300 1.300
Ms. Rama Kirloskar 7.176 1.300
Mr. Rajeev Kher 1.080 1.300
Mrs. Shailaja Kher 1.300 1.300
Mr. Pradyumna Vyas 1.300 1.300
Mr. S. Unnikrishnan 1.300 1.300
Mr. Amitava Mukherjee 0.650
Ms. Rekha Sethi 0.650
Ms. Ramini Niruala 1.192
Mr. Shrinivas Dempo 1.192
Mr. Shobinder Duggal 1.192
Mr. Vivek Pendharkar 0.650

4 Relatives of Key Management Personnel 0.870

Mrs Pratima Kirloskar 0.870

(#) Commission to Chairman- Managing Director and Non-Executive Directors is approved in board meeting
held on 24th May 2022. Payment will be made in the year 2022-23

250
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)

Note 35 :Related Party Disclosures

(E) Corporate Guarantees: Below mentioned guarantees have been provided by the company to
banks on behalf of subsidiary companies for availing financial facilities.

Sr. Particulars As at 31 March 2022 As at 31 March 2021

No. Amount Amount
i) By the company to ICICI Bank Ltd. on behalf of
Kirloskar Pompen B.V. (EURO 7,350,000) 622.250 632.828

ii) By the company to Citi Bank on behalf of

SPP Pumps Ltd.(USD 2,000,000) - 147.009

iii) By the company to Citi Bank on behalf of

Kirloskar Brothers (Thailand) Ltd. (USD 5,750,000) - 422.652

iv) By the company to Citi Bank on behalf of

Kirloskar Pompen B.V. (USD 1,750,000) - 128.633

v) By the company to Citi Bank on behalf of

Kirloskar Brothers International Pty. Ltd.
(USD 2,500,000) - 183.762

vi) By the company to ICICI Bank Ltd. on behalf of

The Kolhapur Steel Limited. 185.500 185.500

vii) By the company to ICICI Bank Ltd. on behalf of

SPP Pumps Ltd. (GBP 23,100,000 ) 2,299.660 2,331.970

viii) By the company to ICICI Bank Ltd. on behalf of

The Kirloskar Corrocoat Private Limited. 190.000 190.000

ix) By the company to Sinhan Bank Ltd. on behalf of

The Kirloskar Corrocoat Private Limited. 14.850 14.850

x) By the company to Axis Bank on behalf of

SPP Pumps International Proprietary
Limited (USD 14,30,000) 108.404 105.112

xi) By the company to Axis Bank on behalf of

Kirloskar Brothers (Thailand) Ltd. (USD 66,00,000) 500.327 485.133

xii) By the company to Citi Bank on behalf of

SPP Pumps Ltd.(USD 4,500,000) 341.132 -

xiii) By the company to Citi Bank on behalf of

Kirloskar Pompen B.V. (USD 1,000,000) 75.807 -

xiv) By the company to Citi Bank on behalf of

Kirloskar Brothers (Thailand) Ltd. (USD 1,000,000) 75.807

xv) By the company to ICICI Bank Ltd. on behalf of

Rodelta pumps International B.V. (EURO 2,625,000) 222.232
4,635.969 4,827.449

251
Integrated Annual Report 2021-22

NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)

Note 36 : Disclosure pursuant to Schedule V read with regulations 34(3) and 53(f) of the SEBI (Listing
Obligations And Disclosure Requirements) Regulations, 2015 :
A Loans and advances in the nature of loans for working capital requirements :

Name of the Company Balance as at Maximum

outstanding

As at As at As at As at
31 March 2022 31 March 2021 31 March 2022 31 March 2021

To Subsidiary Companies
The Kolhapur Steel Limited * 159.614 160.414 160.414 160.414
To Associates
KBL Synerge LLP - - - -

* Consists of Rs 9.610 MN out of Rs. 57.500 MN unsecured loan given under order from Board for Industrial
and Financial Reconstructions (BIFR) in 2008-09 without any specific agreed terms for charge of interest and
repayment. Balance loan of Rs 150.000 Mn is with specified terms and conditions.
B Loans and advances in the nature of loans to firms/companies in which directors are interested
: NIL
C Investment by the loanee (borrower) in the shares of the Company or subsidiary of the Company
: NIL
Note:- Loans to employees 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.

Note 37 : Joint Venture and Jointly controlled operations

a) List of Joint Venture

Sr Name of the Joint Venture Description Ownership Interest Country of

No Incorporation
1 Kirloskar Ebara Pumps Limited Jointly controlled 45% India
entity

b) Financial Interest in Jointly controlled entities

Sr. Name of the Joint Venture Summarized financial information
No
As at As at
31 March 2022 31 March 2021
1 Kirloskar Ebara Pumps Limited Assets 2,342.219 2,119.749
Liabilities 572.133 607.666
2021-22 2020-21
Income 2,305.913 1,909.661
Expenses
(including tax expenses) 2,020.501 1,707.005
Profit after tax 285.412 202.656
Other comprehensive income 2.590 1.615
Total comprehensive income 288.002 204.271

252
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)

c) Contingent liabilities, if any, incurred in relation to interest in Joint Ventures: For income tax -
Nil (`13.282 Million)
d) Capital commitments, if any, in relation to interest in Joint Ventures : ` 23.627 Million
(`15.837 Million)
e) List of Jointly controlled operations :

Sr Name of the Jointly controlled Description Ownership Country of

No operation Interest Incorporation
1 HCC - KBL Jointly controlled operations NA India
2 KBL – MCCL Jointly controlled operations NA India
3 KCCPL – IHP – BRC – TAIPPL – KBL JV Jointly controlled operations NA India
4 IVRCL – KBL JV Jointly controlled operations NA India
5 Maytas – KBL JV Jointly controlled operations NA India
6 Larsen & Toubro – KBL JV Jointly controlled operations NA India
7 KBL-MEIL-KCCPL JV Jointly controlled operations NA India
8 KBL – PLR JV Jointly controlled operations NA India
9 KBL – Koya – VA Tech JV Jointly controlled operations NA India
10 KBL – PIL Consortium Jointly controlled operations NA India
11 Larsen & Toubro – KBL – Maytas JV Jointly controlled operations NA India
12 IVRCL – KBL – MEIL JV Jointly controlled operations NA India
13 Pioneer – Avantica – ZVS – KBL JV Jointly controlled operations NA India
14 AMR – Maytas – KBL – WEG JV Jointly controlled operations NA India
15 Indu – Shrinivasa Constructions –
KBL – WEG JV Jointly controlled operations NA India
16 MEIL – KBL – IVRCL JV Jointly controlled operations NA India
17 MEIL – Maytas – KBL JV Jointly controlled operations NA India
18 KCCPL – TAIPPL – KBL JV Jointly controlled operations NA India
19 KBL-SPML JV Jointly controlled operations NA India
20 MEIL - KBL JV Jointly controlled operations NA India
21 MAYTAS – MEIL – KBL JV Jointly controlled operations NA India
22 Gondwana - KBL JV Jointly controlled operations NA India
23 MEIL -PRASAD-KBL CONSORTIUM Jointly controlled operations NA India
24 JCPL - MEIL - KBL CONSORTIUM Jointly controlled operations NA India
25 KBL -PTIL UJV Jointly controlled operations NA India
26 KBL - RATNA - JOINT VENTURE Jointly controlled operations NA India
27 MEIL-KBL-WEG CONSORTIUM Jointly controlled operations NA India
28 MEIL-KBL- ( KDWSP ) JV Jointly controlled operations NA India
29 KBL and TCIPL JOINT VENTURE Jointly controlled operations NA India
30 ACPL & KBL JV Jointly controlled operations NA India
31 Kirloskar Brothers Ltd. JV Jointly controlled operations NA India
32 ITD CEMENTATION INDIA LIMITED JV Jointly controlled operations NA India
33 GSJ - KBL JV Jointly controlled operations NA India
34 JBL-KBL-GSJ JV Jointly controlled operations NA India

253
Integrated Annual Report 2021-22

NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)

Note 38 : Details of provisions and movements in each class of provisions

Particulars
Provision for Provision for Provision for Provision for
compensated product decommissioning loss on
absences warranty and restoration long term
cost contracts
Carrying amount as at 1 April 2020 296.598 218.959 7.595 36.839
Add: Provision during the year 2020-21
(net of excess/ short provision of earlier year) 11.970 112.623 - 0.554
Add: Unwinding of discounts - 5.220 0.623
Less: Amount utilized during the year 2020-21 (36.065) (169.153) - (17.858)
Carrying amount as at 31 March 2021 272.503 167.649 8.218 19.535

Add: Provision during the year 2021-22

(net of excess/ short provision of earlier year) 41.650 289.649 - 3.369
Add: Unwinding of discounts - 2.979 0.674 -
Less: Amount utilized during the year 2021-22 (28.540) (195.618) - (9.230)
Carrying amount as at 31 March 2022 285.613 264.659 8.892 13.674
Non-current provision 136.410 35.030 8.892 -
Current provision 149.203 229.629 - 13.674

Compensated absences
The cost of the leave encashment and the present value of the leave encashment obligation are determined
using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from
actual developments in the future. These include the determination of the discount rate; future salary increases
and mortality rates.
Provision for warranty
Provision for warranty is made for estimated warranty claims in respect of products sold, which are under
warranty at the end of the reporting period. These claims are expected to be settled as per schedule of warranty
i.e. upto18 months. Management records the provision based on the historical warranty claims information and
any recent trends that may suggest future claims could differ historical amount.
Provision for decommissioning and restoration cost
A provision has been recognised for decommissioning and restoration costs associated with windmills on
lease hold land. The company is committed to restore the site at the end of useful life of windmills.
Provision for long term contract
A provision is made for the expected loss of the projects, where the estimated cost is more than the estimated
revenue. Changes in estimated cost and estimated revenue are assessed by the management at the end of
reporting period based on the price variation received/ given, change in the scope of project and revision of
estimates regarding date of completion, expected costs to be incurred, changes in external circumstances
such as applicable tax rates etc.

254
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)

Note 39 : Fair Value Measurements

As per assessments made by the management fair values of all financial instruments carried at amortised costs
(except as specified below) are not materially different from their carrying amounts since they are either short
term nature or the interest rates applicable are equal to the current market rate of interest.
The Company has not performed a fair valuation of its investment in unquoted ordinary shares which are
classified as FVOCI (refer Note 5), as the Company believes that impact of change on account of fair value is
insignificant.

Sr.No Particulars Carrying value

As at As at
31 March 2022 31 March 2021
Financial Asset
Levelled at Level 1
a) Carried at fair value through profit and loss
Investment in mutual funds 1,584.198 1268.231

Levelled at Level 2

b) Carried at amortized cost

Trade receivables 4,334.005 3,957.431
Advances to subsidiaries 159.614 160.414
Other financial assets 938.118 1,088.578
Cash and cash equivalent 1,548.662 604.319
Other bank balances 14.971 18.107

Levelled at Level 3
c) Investments in unquoted equity shares (FVOCI) * 0.000 0.000

Financial Liabilities

Levelled at Level 2
a) Carried at amortized cost
Non-current borrowings 824.738 337.526
Current borrowings 1,539.596 1,052.658
Trade payable 4,594.325 4,769.839
Other current financial liabilities 1,001.973 1,243.793
Lease liability 66.764 39.113
Financial guarantee contracts 3.097 14.203

* The investment in unquoted equity shares is ` 200/- and therefore not seen in the above table.

255
Integrated Annual Report 2021-22

NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)

Note 40: Financial risk management policy and objectives

Company’s principal financial liabilities, comprise loans and borrowings, trade and other payables, and
financial guarantee contracts. The main purpose of these financial liabilities is to finance company’s operations
and to provide guarantees to support its operations. Company’s principal financial assets include advances to
subsidiaries, trade and other receivables, security deposits and cash and cash equivalents, that derive directly
from its operations.
In order to minimize any adverse effects on the financial performance of the company, it has taken various
measures. This note explains the source of risk which the entity is exposed to and how the entity manages the
risk and impact of the same in the financial statements.

Risk Exposure arising from Measurement Management

Credit risk Cash and cash equivalents, Aging analysis, Diversification of bank deposits,
trade receivables, financial External credit rating credit limits and letters of credit
assets measured at (wherever available)
amortised cost.
Liquidity risk Borrowings and other Rolling cash flow Availability of committed credit lines
liabilities forecasts and borrowing facilities
Market risk- Long term borrowings at Sensitivity Analysis Mixed portfolio of fixed and variable
Interest rate risk variable rate interest rate loans
Market risk - Recognised financial assets Sensitivity Analysis Management follows established
Foreign Currency and liabilities not risk management policies,
Risk denominated in Indian including use of derivatives
rupee (INR) like foreign exchange forward con
tracts, where the economic
conditions match the company’s
policy.

The company’s risk management is carried out by management, under policies approved by the board of
directors. Company’s treasury identifies, evaluates and hedges financial risks in close co­operation with the
company’s operating units. The board provides written principles for overall risk management, as well as
policies covering specific areas, such as foreign exchange risk, credit risk, and investment of excess liquidity.
No major change in assumptions and methods used for risk assessments is made during the year.
(A) Credit Risk
Credit risk in case of the Company arises from cash and cash equivalents, deposits with banks and
financial institutions, as well as credit exposures to customers including outstanding receivables.
Credit risk management
Credit risk arises from the possibility that counter party may not be able to settle their obligations as
agreed. To manage this, the Company periodically assesses the reliability of customers, taking into
account the financial condition, current economic trends, and analysis of historical bad debts and ageing
of accounts receivable. Individual risk limits are set accordingly.
The company considers the probability of default upon initial recognition of asset and whether there
has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To
assess whether there is a significant increase in credit risk the company compares the risk of a default
occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition.
It considers reasonable and supportive forward looking information such as:
(i) Actual or expected significant adverse changes in business,
(ii) Actual or expected significant changes in the operating results of the counterparty,
(iii) Financial or economic conditions that are expected to cause a significant change to counterparty’s
ability to meet its obligations,

256
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)

(iv) Significant increases in credit risk on other financial instruments of the same counterparty,
(v) Significant changes in the value of collateral supporting the obligation or in the quality of third-party
guarantees or credit enhancements.
The company provides for expected credit loss in case of trade receivables, claims receivable and
security deposits when there is no reasonable expectation of recovery, such as a debtor declaring
bankruptcy or failing to engage in a repayment plan with the company etc.
For the security deposits and claims receivable, provision for expected loss is made considering 12
months expected credit loss. Provision for lifetime credit loss is made if there is significant increase in
credit risk for such financial assets.
In respect of trade receivable, company uses the simplified approach for the provision for expected
loss. The lifetime expected loss provision is recognised based on the provision matrix as decided by the
management, based on the historical experience of recoverability. The company categorizes a receivable
for provision for doubtful debts/write off when a debtor fails to make contractual payments greater than
1 year past due in case product business and 4 years past due in case of project business. In addition
to this company also provides the expected loss based on the overdue number of days for receivables
as per the provision matrix. Where loans or receivables have been written off, the company continues
to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made,
these are recognised in profit or loss.
Provision for expected credit loss
Financial assets for which loss allowance is measured using Expected Credit Losses (ECL) model as per
Ind AS 109,

Exposure to Risk As at As at
31 March 2022 31 March 2021
Trade Receivables 5,098.448 4,760.472
Less : Expected Loss 764.443 803.041

4,334.005 3,957.431
Security Deposits 885.261 1,034.880
Less : Expected Loss 11.147 18.274

874.114 1,016.606
Claims Receivable 49.242 55.832
Less : Expected Loss 12.552 12.545
36.690 43.287

Trade receivables ageing used in the provision matrix for life time expected credit loss is as -

As at As at
31 March 2022 31 March 2021
Trade Receivables
Neither past due nor impaired 2,122.918 1,734.442
Past due but not impaired
Less than 180 days 927.560 559.610
181 - 365 days 316.030 482.402
More than 365 days 967.497 1,180.977
Total 4,334.005 3,957.431

257
Integrated Annual Report 2021-22

NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)

Reconciliation of loss provision

Trade receivables Others

Loss allowance as at 1 April 2020 694.197 42.836

Changes in loss allowance 108.844 (12.017)
Loss allowance as at 31 March 2021 803.041 30.819
Changes in loss allowance (38.598) (7.120)
Loss allowance as at 31 March 2022 764.443 23.699

B) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding
through an adequate amount of committed credit facilities to meet obligations when due and to close out
market positions. Due to the dynamic nature of the underlying businesses, company maintains flexibility
in funding by maintaining availability under committed credit lines.
Management monitors rolling forecasts of the company’s liquidity position (comprising the undrawn
borrowing facilities below) and cash and cash equivalents on the basis of expected cash flows. This
is carried out in accordance with practice and limits set by the company. In addition, the company’s
liquidity management policy involves projecting cash flows and considering the level of liquid assets
necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory
requirements and maintaining debt financing plans.

Exposure to Risk As at As at
31 March 2022 31 March 2021
Interest bearing borrowings
On demand 197.363 -
Less than 180 days 1,342.233 1,052.658
181 - 365 days - -
More than 365 days 824.738 337.526
Total 2,364.334 1,390.184
Other financial liabilities
On demand 94.458 117.037
Less than 180 days 908.773 1,132.796
181 - 365 days 1.259 6.040
More than 365 days 0.580 2.123
Total 1,005.070 1,257.996
Lease liability
On demand - -
Less than 180 days 11.921 11.921
181 - 365 days 11.920 11.920
More than 365 days 42.923 15.272
Total 66.764 39.113
Trade & other payables
Not due 2,749.542 3,090.742
Less than 180 days 644.822 490.138
181 - 365 days 121.920 15.086
More than 365 days 1,078.041 1,173.873
Total 4,594.325 4,769.839

258
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)

Note 40: Financial risk management policy and objectives (Contd.)

The company has access to following undrawn facilities at the end of the reporting year (Interest rates
4.5% - 8.5%)

As at As at
31 March 2022 31 March 2021
Expiring within one year 990.000 1,019.810
Expiring beyond one year - -

C) Market risk - Interest rate risk

The company’s exposure to the risk of changes in market interest rates relates to borrowings with floating
interest rates. To manage the risk, company has created balance portfolio of fixed and variable interest
rate borrowings.
Change of 0.5%, in the base rates will have effect of INR 11.822 MN on the company’s profitability.
(D) Foreign Currency Risk
The company is exposed to foreign exchange risk mainly through its sales to overseas customers and
purchases from overseas suppliers in various foreign currencies.
The company evaluates exchange rate exposure arising from foreign currency transactions and the
company follows established risk management policies, including use of natural hedge between
receivables and payables, use of derivatives like foreign exchange forward contracts to hedge exposure
to foreign currency risk, where the economic conditions match the company’s policy.
Foreign currency exposure :

Financial Assets Currency Amount in Foreign Currency Amount in INR (MN)

(MN)
As at As at As at As at
31 March 31 March 31 March 31 March
2022 2021 2022 2021
Trade EUR 1.075 2.278 90.380 196.083
Receivables GBP 0.045 0.249 4.464 25.156
USD 7.578 8.933 574.332 656.555
Bank Accounts EGP 0.358 0.478 1.482 2.224
EUR 0.051 0.099 4.325 8.499
GBP 0.415 0.244 41.308 24.601
USD 1.042 2.068 78.938 152.012
VND - - - -
XOF 0.144 1.835 0.025 0.239
Other Deposits XOF - 0.500 - 0.065
USD 0.003 0.205
Amount Due from EGP - 0.002 - 0.009
Employees
EUR - 0.006 - 0.486
GBP 0.005 - 0.523 -
XOF - - - -
USD 0.002 0.047 0.174 3.444

259
Integrated Annual Report 2021-22

NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)

Note 40: Financial risk management policy and objectives (Contd.)

The company has access to following undrawn facilities at the end of the reporting year (Interest rates
4.5% - 8.5%)
Financial Currency Amount in Foreign Amount in INR (MN)
Liabilities Currency (MN)
As at As at As at As at
31 March 2022 31 March 2021 31 March 2022 31 March 2021
Trade Payables EGP 0.731 0.731 3.025 3.397
EUR 1.347 2.912 113.330 250.682
GBP 0.038 0.200 3.736 20.216
USD 4.454 4.773 337.554 350.819
JPY - 0.375 - 0.249
VND 15,649.974 15,649.974 51.645 49.610
XOF 149.962 155.666 25.494 20.237
SGD 0.003 0.140
Amount Due to EUR - (0.005) - (0.440)
Employees
XOF - - - -
USD (0.002) (0.002) (0.155) (0.125)

Currency wise net exposure (assets - liabilities)

Particulars Amount in Foreign Amount in INR (MN)

Currency (MN)
As at 31 March As at 31 March As at 31 March As at 31 March
2022 2021 2022 2021
EGP (0.373) (0.250) (1.543) (1.164)
EUR (0.221) (0.535) (18.625) (46.054)
GBP 0.428 0.293 42.558 29.541
USD 4.173 6.276 316.249 461.316
JPY - (0.375) - (0.249)
VND (15,649.974) (15,649.974) (51.645) (49.610)
XOF (149.818) (153.331) (25.469) (19.933)
SGD (0.003) - (0.140) -

Sensitivity Analysis
Currency Amount in INR (MN) Sensitivity % (*) Sensitivity %
2021-22 2020-21 (2021-22) (*)
(2020-21)
EGP (1.543) (1.164) 3.54% 4.74%
EUR (18.625) (46.054) 4.19% 3.11%
GBP 42.558 29.541 4.33% 1.67%
USD 316.249 461.316 3.25% 2.18%
JPY - (0.249) 1.66% 2.54%
VND (51.645) (49.610) 3.01% 1.36%
XOF (25.469) (19.933) 7.96% 1.64%
SGD (0.140) - 3.84% 2.13%

260
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)

Currency Impact on profit (strengthen) Impact on profit (weakening)

2021-22 2020-21 2021-22 2020-21
EGP 0.055 0.055 (0.055) (0.055)
EUR 0.780 1.432 (0.780) (1.432)
GBP (1.843) (0.493) 1.843 0.493
USD (10.278) (10.057) 10.278 10.057
JPY - 0.006 - (0.006)
VND 1.555 0.675 (1.555) (0.675)
XOF 2.027 0.327 (2.027) (0.327)
SGD 0.005 - (0.005) -
Total (7.699) (8.055) 7.699 8.055
(EGP- Egyptian Pound, GBP - Great Britain Pound, EUR- Euro, USD - US Dollar, VND- Vietnamese Dong,
JPY - Japanese Yen, XOF- CFA Franc, SGD - Singapore dollar )

* Sensitivity % are derived based on variation in the exchange rates over the period of last 5 years.

Note 41: Capital management
a) Risk management
The company’s objectives when managing capital are to
- safeguard it’s ability to continue as a going concern, so that it can continue to provide returns for
shareholders and benefits for other stakeholders, and
- Maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the company may adjust the amount of dividends paid
to shareholders, return capital to shareholders, issue new shares, change debt. Consistent with others
in the industry, the company monitors capital on the basis of the following gearing ratio: Net debt (total
borrowings net of cash and cash equivalents, mutual funds and other bank balances) divided by Total
‘equity’ plus net debt.
The company’s strategy is to maintain a gearing ratio within 30%. The gearing ratios were as follows:

Particulars As at As at
31 March 2022 31 March 2021
Loans and borrowings (Including current maturities
of long term debt) 2,364.334 1,390.184
Less: Cash and cash equivalents (Including other
bank balances) 1,563.633 622.426
Less: Investment in mutual funds 1,584.198 1,268.231
Net debt (783.497) (500.473)

Gearing ratio is not applicbale as net debt of company is negative.

261
Integrated Annual Report 2021-22

NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)

b) Dividend

Particulars As at As at
31 March 2022 31 March 2021
Equity Shares
(i) Interim dividend for the year Nil Nil
(ii) Dividends not recognised at the end of the reporting year 238.227 238.227

Since year end the directors have recommended the payment of a final dividend of INR 3 per fully paid
equity share (31 March 2021 - INR 3 ). This proposed dividend is subject to the approval of shareholders
in the ensuing annual general meeting.

Note 42 : Disclosure in respect of micro, small and medium enterprises

The Company has amounts due to suppliers under The Micro, Small and Medium Enterprises Development
Act, 2006, [MSMED Act] as at March 31, 2022. The disclosure pursuant to the said Act is as under:

Particulars Year ended Year ended

31 March 2022 31 March 2021
Total outstanding amount in respect of micro, small and
medium enterprises 650.041 857.466
Other disclosures in respect of micro and small enterprises
Principal amount due and remaining unpaid 2.880 0.276
Interest due on above and unpaid interest 0.066 0.050
Interest paid -
Payment made beyond appointment day 426.961 141.439
Interest due and payable for the period of delay 4.893 1.134
Interest accrued and remaining unpaid
(excluding interest accrued for earlier years) 4.959 1.184
Amount of further interest remaining due and
payable in succeeding years 4.959 -

The identification of suppliers as micro, small and medium enterprise as defined under the Micro, Small and
Medium Enterprises Development Act 2006, was done on the basis of information to the extent provided by
the suppliers of company.
Delay in payment is mainly on account of quality issues of vendors.
Note 43 : Corporate social responsibility expenditures
(a) Amount required to be spent by the Company during the current year is ` 26.163 Million (PY - ` 24.216
Million)
(b) Amount spent by the Company during the current year is ` 26.447 Million (PY - ` 24.763 Million)
The company as per its policy on Corporate Social Responsibility (CSR) and recommendation and
approval of the CSR committee has contributed ` 11 Million towards education through its implementing
agency Vikas Charitable Trust in the current financial year, ` 7.68 Mn on Skill Development Programme
and balance amount on various projects for students and society at large (Technical lab development
at RIT- Islampur, assistance during Covid-19 outbreak, WASH activity for students and donation to
charitable organisation such as Annamitra foundation etc.) The company has not spent any amount
towards construction or acquisition of asset.
Refer board report for detailed disclosure.
262
 NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)
Note 44A : Trade receivables ageing
Trade receivables as at 31 March 2022

Particulars Not due Outstanding for following periods from

due date of payment
Less than 6 months 1-2 2-3 More than Total
6 months to years years 3 years
1 year
Undisputed trade receivables
Considered good 2,122.918 927.560 296.400 271.190 228.980 442.930 4,289.978
Which have significant increase in credit risk - - 13.860 32.170 98.460 548.310 692.800
Credit impaired
Total undisputed trade receivables (a) 2,122.918 927.560 310.260 303.360 327.440 991.240 4,982.778
Disputed trade receivables
Considered good - - 5.770 0.410 - 37.860 44.040
Which have significant increase in credit risk - - - - 23.150 39.020 62.170
Credit impaired - - - - - 9.460 9.460
Total Disputed trade receivables (b) - - 5.770 0.410 23.150 86.340 115.670
Total trade receivables (a+b) 2,122.918 927.560 316.030 303.770 350.590 1,077.580 5,098.448
Provision for increase in significnat risk and credit 764.443
impaired
Net trade receivables 4,334.005
A Kirloskar Group Company
KIRLOSKAR BROTHERS LIMITED

263
264
NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)
Note 44A : Trade receivables ageing (Contd.)
Trade receivables as at 31 March 2021
Integrated Annual Report 2021-22

Particulars Not due Outstanding for following periods from due date of payment Total
Less than 6 6 months 1-2 2-3 More than
months to 1 year years years 3 years
Undisputed trade receivables
Considered good 1,728.918 559.610 450.316 543.583 111.337 511.983 3,905.747
Which have significant increase in credit risk - 32.036 139.911 131.895 456.969 760.811
Credit impaired
Total undisputed trade receivables (a) 1,728.918 559.610 482.352 683.494 243.232 968.952 4,666.558
Disputed trade receivables
Considered good 5.524 - 0.050 9.796 - 36.312 51.682
Which have significant increase in credit risk - - - - - 32.768 32.768
Credit impaired 9.464 9.464
Total Disputed trade receivables (b) 5.524 - 0.050 9.796 - 78.544 93.914
Total trade receivables (a+b) 1,734.442 559.610 482.402 693.290 243.232 1,047.496 4,760.472
Provision for increase in significnat risk and 803.041
credit impaired
Net trade receivables 3,957.431
 NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)
Note 44B : Trade payables ageing
Particulars Year Not due Outstanding for following periods from due date of payment Total
Less than 6 6 months to 1-2 2-3 More than
months 1 year years years 3 years
1 . MSME - Non disputed 2022 627.116 14.527 8.398 650.041
2021 857.060 0.040 0.370 857.470
2. MSME - disputed 2022 - - - - - - -
2021 - - - - - - -
3 . Others - Non disputed 2022 2,094.360 630.295 113.522 257.206 92.091 716.358 3,903.832
2021 2,217.620 490.098 14.716 263.778 61.515 836.194 3,883.921
4 . Others - disputed 2022 28.066 12.386 40.452
2021 16.062 12.386 28.448
Unearned revenue i.e. gross amount due to customer is not considered in above table being in nature of non-financial liability and disclosed in note
18.

Note 44C : Capital work- in- progress

Particulars Year Less than 1-2 2-3 More Total
1 year years years than 3
years
Projects in progress 2022 170.400 25.097 17.143 - 212.640
2021 310.913 366.059 33.924 4.891 715.787
Projects temporarily suspended 2022 - 1.785 - - 1.785
2021 1.785 - - 2.349 4.134
Following projects which were expected to be completed by March 22, got delayed and now expected to be completed as -
Particulars To be completed in
Less than 1 1-2 2-3 More than Total
year years years 3 years
A Kirloskar Group Company
KIRLOSKAR BROTHERS LIMITED

Manufacturing Plant Expension 121.410 - - - 121.410

Augmentation of Existing plant and machinery 6.900 - - - 6.900
Upgradation of IT infrastructure 5.790 - - - 5.790
Windmill and other school building 3.075 1.785 - - 4.860

265
Integrated Annual Report 2021-22

NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)

Note 45: Segment Reporting

Company operates in single reporting segment of ‘Fluid Machinery and Systems’. Information in respect of
other disclosures as required by ‘Ind AS 108- Operating Segments’ is given in consolidated financial statements.

Note 46: Disclosure in respect of Ind AS 116, ‘Leases’

Particulars Year ended Year ended

31 March 2022 31 March 2021
Opening right-to-use asset 36.845 160.293
Net addition / (deletion )during the year 54.950 (78.135)
Depreciation charged during the year (27.466) (45.313)
Closing right-to-use asset 64.329 36.845

Particulars Year ended Year ended

31 March 2022 31 March 2021
Opening lease liability 39.113 169.530
Net addition / (deletion )during the year 54.814 (88.353)
Finance cost 4.109 9.363
Lease payments (31.272) (51.427)
Closing lease liability 66.764 39.113
Non-Current 42.923 15.272
Current 23.841 23.841

Contractual maturities of lease payments

Particulars As at
31 March 2022
Less than one year 32.868
Between 1-2 years 22.899
More than 2 years 20.975

1. Short term leases and leases for low value assets are continued to be accounted for as rent expenses.

2. Total cash outflow for lease arrangements during the year is `59.312 Mn (PY 2020-21 - ` 65.014 Mn)

3. Company has not entered into any sublease arrangements.

266
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company

NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)

Note 47A: Ratio Analysis

Particulars Year ended Year ended Absolute
31 March 2022 31 March 2021 Variance
(%)
Numer- Denomi- % Days Numerator Denomi- % Days
ator nator nator
Current Ratio
[Current assets / current Liability] 14,997.266 10,565.706 1.419 13,371.605 10,951.448 1.221 16.216%
Debt-Equity Ratio
[Debt/Equity] 2,364.334 11,253.927 0.210 1,390.184 10,682.231 0.130 61.538%
(Additional capex loan taken during
the year)
Debt Service Coverage Ratio
[(PBID+ exceptional items) /(Inter- 1,563.763 1,663.941 0.940 1557.637 1254.366 1.242 24.316%
est+ Principal repayment)]
Return on Equity Ratio
[(PAT + exceptional items)/(Total op. 1,032.628 10,968.079 9.415% 973.206 10,224.478 9.518% 1.082%
Equity+Total cl. Equity)/2]
Inventory Turnover
[Consumption /(op. Inventory+cl. 13,169.411 3,968.755 3.318 110 10,702.349 3,970.950 2.695 135 23.117%
Inventory)/2]
Trade Receivables Turnover
[Revenue from operations / (op. 21,659.422 4,145.718 5.225 70 17,998.573 3,948.685 4.558 80 14.634%
receivable+cl. Receivables)/2]
Trade Payable Turnover
[Purchases/(op.payables+cl. Pay- 13,617.064 4,682.082 2.908 126 10,250.306 4,688.769 2.186 167 33.028%
ables)]
(Creditors in terms of days purchases
have come down due to improved
working capital management)
Net Capital Turnover ratio
[Revenue from operations/ Working 21,659.422 4,431.560 4.888 17,998.573 2,420.157 7.437 34.275%
Capital]
(Due to increase in inventory and
receivables consequent to increased
sales of last quarter - working capital
has gone up, which is expected to be
liquidated in near future.)
Net profit Ratio
[PAT before exceptional items/ 1,032.628 21,659.422 4.768% 973.206 17,998.573 5.407% 11.818%
Revenue from operations]
Return on Capital Employed
[PBIT before exceptional items/ 1,486.642 13,252.506 11.218% 1,491.571 11,741.698 12.703% 11.690%
Total capital employed (NW-
DTA+debt+DTL)]
Return on Investment (quoted)
[ROI=(Income received on FD+ MF)/ 41.871 1,910.084 2.192% 40.887 1,466.826 2.787% 21.349%
(Average outside investment)]

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Integrated Annual Report 2021-22

NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)

Note 47B: Others

1. The Company does not have any transaction which is not recorded in the books of accounts that has
been surrendered or disclosed as income during the year in the tax assessments under the Income Tax
Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

2. The company has not advanced or loaned or invested funds (either borrowed funds or share premium
or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary
(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by
or on behalf of the company (Ultimate Beneficiaries) or (ii) provide any guarantee, security or the like to
or on behalf of the Ultimate Beneficiaries

3. The Company has not received any fund from any person(s) or entity(is), including foreign entities
(Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by
or on behalf of the Funding Party (Ultimate Beneficiaries) or (b) provide any guarantee, security or the
like on behalf of the Ultimate Beneficiaries.

4. The Company has not traded or invested in Crypto Currancy or Virtual Currancy during the financial
year

5. No proceedings have been initiated or are pending against the Company for holding any benami property
under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

6. Company has not entered any transactions with companies struck off under section 248 of the Companies
Act, 2013 or section 560 of the Companies Act, 1956

7. Previous year’s figure have been regrouped, wherever required.

For and on behalf of the Board of Directors

Sanjay Kirloskar Shobinder Duggal
Chairman and Managing Director Director
DIN: 00007885 DIN: 00039580


Chittaranjan Mate Devang Trivedi
Chief Financial Officer Company Secretary
Pune : 24 May 2022 Pune : 24 May 2022

268
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
AOC-1
PART “B”: ASSOCIATES AND JOINT VENTURES
Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to
Associate Companies and Joint Venture

Name of Associates/Joint Ventures Kirloskar Ebara Pumps Limited

(` in Million)
1. Latest audited Balance Sheet Date 31st March 2022
2. Shares of Associate/Joint Ventures held by the company on the year
end
No. 225,000
Amount of Investment in Associates/Joint Venture 2.75
Extend of Holding % 45%
3. Date of acquisition of shares 27 January 1988
th

4. Description of how there is significant influence It is Jointly Controlled entity

5. Reason why the associate/joint venture is not consolidated consolidated to the extend of 45%
6. Networth attributable to Shareholding as per latest audited Balance 796.54
Sheet
7. Profit / Loss for the year
(i) Considered in Consolidation 128.44
(ii) Not Considered in Consolidation 156.98
8. Total comprehensive income for the year
(i) Considered in Consolidation 129.60
(ii) Not Considered in Consolidation 158.40

Details of associate KBL Synergy LPP are not provided as yet to commence operations.

269
270
PART “A”: Subsidiaries

Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to
Associate Companies and Joint Venture
(` in Million)
Sr. Name of the Subsidiary Date of Reporting Reporting Relevant Share Reserves Total Total Invest- Turnover Profit Provision Profit Pro- Country % of
No Company acquisition period Currency Exchange Capital & Surplus Assets Liabilities ment before for after posed Holding
Integrated Annual Report 2021-22

Rate Taxation Taxation Taxation Divi-

( BS / PL) dend
1 Karad Projects & Motors Ltd. 9-Sep-06 1-Apr-21 to INR 1/1 139.525 1,526.461 2,754.354 1,088.369 0.005 4,775.310 494.347 147.628 346.719 India 100.00
31-Mar-22
2 The Kolhapur Steel Limited 2-Aug-08 1-Apr-21 to INR 1/1 417.000 (777.920) 344.087 705.007 0.000 314.306 (157.213) 0.316 (157.529) - India 99.00
31-Mar-22
3 Kirloskar Corrocoat Pvt. Ltd. 12-Nov-09 1-Apr-21 to INR 1/1 50.000 28.274 210.382 132.109 0.000 257.565 1.098 (1.221) 2.319 - India 65.00
31-Mar-22
4 Kirloskar Brothers International 30-Aug-07 1-Apr-21 to Euro 84.13 / 1,992.722 (692.648) 1,388.989 88.915 1,172.492 0.000 (265.019) 0.000 (265.019) - The 100.00
BV 31-Mar-22 84.39 Netherlands
5 SPP Pumps Ltd. 15-Feb-10 1-Apr-21 to GBP 99.46 / 298.365 1,074.306 2,535.236 1,162.565 137.515 4,328.283 30.349 (29.001) 59.350 - UK 100.00
31-Mar-22 100.9
6 Kirloskar Brothers(Thailand) 1-Jan-11 1-Apr-21 to Baht 2.28 / 145.082 (140.559) 748.011 743.487 86.254 807.441 (28.968) (2.427) (26.541) - Thailand 100.00
Ltd. 31-Mar-22 2.28
7 SPP Pumps (MENA) L.L.C. 13-Sep-11 1-Apr-21 to EGP 4.16 / 110.732 (233.718) 21.302 144.288 0.000 21.784 (2.262) 0.000 (2.262) - Egypt 100.00
31-Mar-22 4.69
8 Kirloskar Pompen B.V 10-Apr-08 1-Apr-21 to Euro 84.13 / 84.134 (265.848) 169.337 351.051 2.103 95.298 (19.368) 0.000 (19.368) - The 100.00
31-Mar-22 84.39 Netherlands
9 Micawber 784 (Proprietary 29-Oct-09 1-Apr-21 to Rand 5.20/ 4.94 0.001 48.134 118.089 69.954 0.000 0.000 11.350 3.228 8.122 - South Africa 100.00
Ltd.) 31-Mar-22
10 SPP Pumps International PTY 3-Dec-13 1-Apr-21 to Rand 5.20 / 0.001 49.768 302.417 252.649 0.001 275.865 8.521 6.905 1.617 - South Africa 100.00
Limited 31-Mar-22 4.94
11 SPP France S A S 11-Jun-13 1-Apr-21 to Euro 84.13 / 24.745 (30.031) 37.003 42.288 0.000 106.164 (22.096) 0.000 (22.096) - France 100.00
31-Mar-22 84.39
12 SPP Pumps Inc 17-Jul-15 1-Apr-21 to USD 75.79 / 293.560 124.761 754.114 335.793 206.659 1,856.975 46.031 15.735 30.296 - USA 100.00
31-Mar-22 75.24
13 SPP Pumps South Africa 24-Oct-14 1-Apr-21 to Rand 5.20 / 0.001 (161.940) 59.097 221.037 0.000 150.525 7.114 0.537 6.577 - South Africa 100.00
Proprietary Limited 31-Mar-22 4.94
14 Braybar Pumps Limited 13-Oct-14 1-Apr-21 to Rand 5.20 / 0.001 42.074 127.239 85.164 0.000 214.942 18.321 3.100 15.221 - South Africa 100.00
31-Mar-22 4.94
15 Rodelta Pumps International 14-Jul-15 1-Apr-21 to Euro 84.13 / 1.514 (265.868) 325.500 589.854 0.000 151.333 (132.884) 0.000 (132.884) - The 100.00
BV 31-Mar-22 84.39 Netherlands
16 Rotaserve Overhaul B.V. 4-Jan-16 1-Apr-21 to Euro 84.13 / 2.103 79.475 102.819 21.240 0.000 79.634 12.110 0.000 12.110 - The 100.00
31-Mar-22 84.39 Netherlands
17 SPP Pumps Real Estate LLC 16-Aug-12 1-Apr-21 to USD 75.79 / 97.015 20.556 626.174 508.603 0.000 0.000 8.083 0.000 8.083 - USA 100.00
31-Mar-22 75.24
18 Syncroflow Inc. 28-Feb-14 1-Apr-21 to USD 75.79 / 94.235 215.489 543.208 233.483 0.000 1,247.110 91.165 21.581 69.584 - USA 100.00
31-Mar-22 75.24
19 SPP Pumps (Asia) Ltd 27-May-16 1-Apr-21 to Baht 2.28 / 4.559 (15.527) 72.201 83.170 0.059 28.113 (12.276) (0.756) (11.520) - Thailand 100.00
31-Mar-22 2.28
20 SPP Pumps (Singapore) Ltd 29-Jun-16 1-Apr-21 to SGD 56.11 / 81.754 (41.250) 175.390 134.886 0.000 239.269 2.071 0.398 1.674 - Singapore 100.00
31-Mar-22 55.66
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company

Financial Statements
(Consolidated)

271
Integrated Annual Report 2021-22

INDEPENDENT AUDITOR’S REPORT

To the members of KIRLOSKAR BROTHERS LIMITED

Report on the audit of the consolidated financial statements

Opinion
We have audited the accompanying consolidated financial statements of Kirloskar Brothers Limited (hereinafter
referred to as “the Holding Company”) and its subsidiaries (the Holding Company and its subsidiaries together
referred to as “the Group”), which includes Group’s share of profit/loss in its associates and its joint-ventures,
which comprise the consolidated balance sheet as at 31 March 2022, the consolidated statement of profit and
loss (including other comprehensive income), the consolidated cash flow statement and the consolidated
statement of changes in equity for the year then ended, and notes to consolidated financial statements,
including a summary of significant accounting policies and other explanatory information (hereinafter referred
to as “the consolidated financial statements”).
In our opinion and to the best of our information and according to the explanations given to us, and based on
the consideration of reports of other auditors on financial statements (separate/consolidated) of subsidiaries
including associates and joint-ventures as was audited by the other auditors, the aforesaid consolidated
financial statements give the information required by the Companies Act, 2013 (hereinafter referred to as “the
Act”) in the manner so required and give a true and fair view in conformity with the accounting principles
generally accepted in India including and Indian Accounting Standards (“Ind AS”) prescribed under section
133 of the Act read with Companies (Indian Accounting Standards) Rules, 2015, as amended, of consolidated
state of affairs (financial position) of the Group including its associates and joint-ventures as at 31March 2022,
the consolidated profit (financial performance including other comprehensive income), its consolidated cash
flows and the consolidated changes in equity for the year then ended.

Basis for opinion

We conducted our audit of the consolidated financial statements in accordance with the Standards on Auditing
(“SAs”) specified under section 143(10) of the Act. Our responsibilities under those Standards are further
described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our
report. We are independent of the Group including associates and joint-ventures in accordance with the Code
of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that
are relevant to our audit of the consolidated financial statements under the provisions of the Act and the Rules
thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and
the Code of Ethics.
We believe that the audit evidence obtained by us along with the consideration of audit report of the other
auditors referred to in “Other matters” paragraph below, is sufficient and appropriate to provide a basis for our
opinion on the consolidated financial statements.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit
of the consolidated financial statements of the current period. These matters were addressed in the context
of our audit of the consolidated financial statements taken as a whole, in forming our opinion thereon and we
do not provide a separate opinion on these matters. We have determined the key audit matter relevant for the
consolidated financial statements as described below:

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 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
Accounting treatment for customer contracts where performance obligations are satisfied over time
Description of key audit matter:
Revenue amounting to Rs.1,355 million reported in the company’s standalone financial statements pertains to
customer specific long-term contracts and the same are required to satisfy the recognition and measurement
criteria as enunciated in IND AS 115, ‘Revenue from Contracts with Customers’. In case of these contracts the
revenue is recognised over time and is based on a percentage completion method (POC) for each of such
contracts. The stage of project completion is determined based on a ratio of project costs actually incurred
till the period / year end to the planned / estimated total cost to complete the said project. This necessarily
involves estimations and certain assumptions to be made by the management in determining the total planned
costs and an appropriate allocation of costs actually incurred on each project. This inherently creates certain
uncertainties and results in complexities in accounting treatment wherein incorrect assumptions and estimates
can lead to revenue being recognised in incorrect accounting periods thereby impacting the results. In addition,
in POC method revenue recognition and respective collections do not follow a linear trend irrespective of stage
completion determined by the company. Collections do depend on satisfaction of certain other performance
obligations as laid down in the respective project agreements. Consequently, those amounts that remain as
receivables whose due dates for payments depend on other conditions give rise to certain receivables that are
due and others not due for payment, requiring the company to adopt a differential accounting classification
and treatment. While assessing the contractual obligations as at any period close, change orders and / or
cancellations are required to be considered by the company to adopt an appropriate accounting treatment
for revenues already recognised, valuation of work in progress and respective receivables. Considering these
factors, in the context of our audit this matter was of significance and hence a key audit matter (Refer note 30
to the consolidated financial statements).
Description of Auditor’s response:
With a view to verify the alignment of the company’s project accounting system with the actual progress of
the project and its status at any period close, we designed our audit procedures related to this area to obtain
an understanding of project acceptance and execution process and the related accounting controls including
verification of compliance with IND AS 115 – ‘Revenue from contracts with customers’. These included inter-alia,
reading through the material contracts and formation of a standard checklist to note the terms and conditions
and considerations required to be taken note of for appropriate financial accounting till a project is finally
executed and closed. We discussed with the management the risks associated with the project execution
to understand requirement of any specific recognition of financial accounting considerations and developed
requisite key controls requiring audit attention and review. The company has automated through its accounting
software the method of calculating the percentage of completion method which we have verified on test basis.
We reviewed planned costs, their latest estimates, rationale for revision in estimates based on information
shared by the management in our discussions, approvals to such revisions in the estimates and compared
them with latest costs to complete, related mathematical accuracy and, on a sample, basis validated resulting
recognition of revenue. We discussed with management the status of amount receivable and have verified the
evidence supporting the recoverability in sample cases. We verified the calculations of expected credit loss
provisions and corroborated with specific management discussions on major projects.
Information other than the consolidated financial statements and auditor’s report thereon
The Holding Company’s Management and Board of Directors are responsible for the preparation of other
information. The other information comprises the Board’s report and management discussion and analysis
included in the Holding Company’s annual report, but does not include the consolidated financial statements
and our auditor’s report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the

273
Integrated Annual Report 2021-22

consolidated financial statements or our knowledge obtained during the course of our audit or otherwise
appears to be materially misstated. If, based on the work we have performed and based on the work done/
audit reports of other auditors, we conclude that there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report in this regard.
Managements and Board of Directors responsibility for the consolidated financial statements
The Holding Company’s Management and Board of Directors are responsible for the matters stated in section
134(5) of the Act with respect to preparation and presentation of these consolidated financial statements
in term of the requirements of the Act, that give a true and fair view of the consolidated financial position,
consolidated financial performance, consolidated cash flows and consolidated statement of changes in equity
of the Group including its associates and joint-ventures in accordance with the accounting principles generally
accepted in India, including the Ind AS.The respective management and Board of Directors of the companies
included in the consolidated financial statements are responsible for maintenance of adequate accounting
records in accordance with the provisions of the Act for safeguarding of the assets of each Company and for
preventing and detecting frauds and other irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and prudent; and the design, implementation
and maintenance of adequate internal financial controls, that were operating effectively for ensuring the
accuracy and completeness of the accounting records, relevant to the preparation and presentation of the
financial statements/consolidated financial statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error, which has been used for the purpose of preparation of the
consolidated financial statements by the Directors of the Holding Company, as aforesaid.
In preparing the consolidated financial statements, the respective Management and Board of Directors of the
companies included in the Group including its Associates and joint-ventures are responsible for assessing the
ability of each company to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless management either intends to liquidate the
Company or to cease operations, or has no realistic alternative but to do so.
The respective Board of Directors of the companies included in the Group including its associates and joint-
ventures are responsible for over seeing the financial reporting process of each Company.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of these consolidated financial
statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
A. Identify and assess the risks of material misstatement of the consolidated financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting
a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
B. Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for
expressing our opinion on whether the company has adequate internal financial controls system in place
and the operating effectiveness of such controls.

274
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
C. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
D. Conclude on the appropriateness of management’s use of the going concern basis of accounting in
preparation of consolidated financial statement and based on the audit evidence obtained, whether
a material uncertainty exists related to events or conditions that may cast significant doubt on the
appropriateness of this assumption. If we conclude that a material uncertainty exists, we are required to
draw attention in our auditor’s report to the related disclosures in the consolidated financial statements
or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause
the Group including its associates and joint-ventures to cease to continue as a going concern.
E. Evaluate the overall presentation, structure and content of the consolidated financial statements, including
the disclosures, and whether consolidated financial statements represent the underlying transactions
and events in a manner that achieves fair presentation.
F. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group including its associates and joint-ventures to express an opinion on the
consolidated financial statements. We are responsible for the direction, supervision and performance
of the audit of the financial statements of such entities included in the consolidated financial statements
of which we are the independent auditors. For the other entities included in the consolidated financial
statements, which have been audited by other auditors, such other auditors remain responsible for the
direction, supervision and performance of the audits carried out by them. We remain solely responsible
for our audit opinion.
Materiality is the magnitude of misstatements in the consolidated financial statements that, individually or in
aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial
statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the
scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified
misstatements in the financial statements.
We communicate with those charged with governance of the Holding Company and such other entities included
in consolidated financial statements of which we are the independent auditors regarding, among other matters,
the planned scope and timing of the audit and significant audit findings, including any significant deficiencies
in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that
may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were
of most significance in the audit of the consolidated financial statements of the current period and are therefore
the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should
not be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
Other matters
A. The consolidated financial statements include the Ind AS financial statements of three domestic
subsidiaries, whose Ind AS financial statements reflect total assets of Rs. 3,309 million as at 31 March
2022; as well as the total revenue of Rs. 5,347 million, total comprehensive income of Rs. 192 million
and net cash outflow of Rs. 240 million for the year then ended. The Statement also includes the Group’s
share of profit of Rs. 128 million for the year then ended 31 March 2022, in respect of a joint venture,
whose financial statements have not been audited by us. These Ind AS financial statements have been
audited by their respective independent auditors whose audit reports have been furnished to us by the
management and our opinion on the Statement, in so far as it relates to the amounts and disclosures

275
Integrated Annual Report 2021-22

included in respect of these entities, is based solely on the report of such auditors and the procedures
performed by us are as stated in paragraph above.
B. One domestic associate is a non-operative entity and its financial information as at 31 March 2022 is
unaudited. This financial information is provided by the Holding Company’s management in whose
opinion it is not material to the group.
C. The Statement includes the consolidated Ind AS financial statements of one foreign subsidiary, whose
consolidated Ind AS financial statements reflect total assets of Rs. 5,776 million as at 31 March 2022; as
well as the total revenue of Rs. 8,775 million, total comprehensive loss of Rs. 124 million and net cash
outflowof Rs. 118 million for the year then ended. These consolidated Ind AS financial statements have
been reviewed by other auditor whose special purpose report has been furnished to us, and our opinion
on the Statement, in so far as it relates to the amounts and disclosures included in respect of this entity,
is based solely on the report of such auditor and the procedures performed by us as stated in paragraph
above.
Consolidated Ind AS financial statements as mentioned in above paragraph contains eighteen step-
down foreign subsidiaries. These components follow different reporting date being 31 December. Their
financial statements have been audited by their respective auditors for the year ended 31 December
2021. Respective management of these components have prepared financial information for the period
from 1 January 2022 to 31 March 2022 only for the purpose of consolidation with the Ultimate Holding
Company.
 Financial information of fifteen foreign subsidiaries has been prepared by the respective
management for the period from 1 January 2022 to 31 March 2022 only for the purpose of
consolidation with the Ultimate Holding Company. It reflects total assets of Rs. 3,240 million as at
31 March 2022; as well as the total revenue of Rs. 971 million, total comprehensive loss of Rs. 56
million and net cash outflow of Rs. 137 million for the said period.
 Financial information of one foreign subsidiary for the period from 1 January 2022 to 31 March
2022 has been reviewed by their respective auditor and issued a limited review report on which we
have placed our reliance. It reflects total assets of Rs. 2,535 million as at 31 March 2022; as well as
the total revenue of Rs. 924 million, total comprehensive lossof Rs. 98 million and net cash inflow
of Rs. 33 million for the said period.
 According to the information and explanations given to us by the Holding Company’s management,
two foreign subsidiaries are non-operative and their financial information of total assets as at 31
December 2021 and 31 March 2022, total revenue, total comprehensive income and net cash
inflow/outflow for the year/period then ended are not material to the group.
D. These step-down subsidiaries are located outside India and their separate/consolidated financial
statements have been prepared in accordance with accounting principles generally accepted in their
respective countries and which have been audited by local auditors under generally accepted auditing
standards applicable in their respective countries. The Holding Company’s management has converted
the financial statements of these step-down subsidiaries located outside India from accounting principles
generally accepted in their respective countries to accounting principles generally accepted in India.
These conversion adjustments made by the Holding Company’s management have been reviewed by
other auditor.
We believe that the audit evidence obtained by us along with the consideration of audit reports of the other
auditors referred to in the other matter paragraph, is sufficient and appropriate to provide a basis for our audit
opinion on the consolidated financial statements.
Our opinion on the consolidated financial statements, and our report on other legal and regulatory requirements
below, is not modified in respect of the above matters with respect to our reliance on the work done and the
reports of the other auditors and the financial statements certified by the management.

276
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
Report on other legal and regulatory requirements
As required by section 143 (3) of the Act, based on our audit and on the consideration of report of other
auditors on financial statements (separate/consolidated) of such companies as was audited by them and as
mentioned in the ‘Other Matters’ paragraph, we report, to the extent applicable, that:
A. We have sought and obtained all the information and explanations which to the best of ourknowledge and
belief were necessary for the purposes of our audit of the aforesaid consolidated financial statements.
B. In our opinion, proper books of account as required by law relating to preparation of the aforesaid
consolidated financial statements have been kept so far as it appears from our examination of those
books and the reports of other auditors.
C. The consolidated balance sheet, the consolidated statement of profit and loss, the consolidated cash
flow statement and consolidated statement of changes in equity dealt with by this report are in agreement
with the relevant books of account maintained for the purpose of preparation of the consolidated financial
statements.
D. In our opinion, the aforesaid consolidated financial statements comply with the Ind AS specified under
section 133 of the Act, read with rule 7 of the Companies (Accounts) Rules, 2014.
E. On the basis of the written representations received from the directors of the Holding Company as on
31March 2022 taken on record by the Board of Directors of the Holding Company and the reports of the
statutory auditors of subsidiary companies including associates and joint-ventures which are companies
incorporated in India, none of the directors of the subsidiary companies, associates and joint-ventures
which are companies incorporated in India, is disqualified as on 31 March 2022 from being appointed as
a director in terms of section 164(2) of the Act;
F. With respect to the adequacy of internal financial controls over financial reporting of the Group
including its associates and joint-ventures which are companies incorporated in India and the operating
effectiveness of such controls, refer to our separate report in “Annexure A”. Our report expresses an
unmodified opinion on the adequacy and operating effectiveness of the internal financial control over
financial reporting.
G. With respect to the other matters to be included in the auditor’s report in accordance with the requirements
of section 197(16) of the Act, as amended: In our opinion and to the best of our information and according
to the explanations given to us, the remuneration paid by the Group including associates and joint-
ventures, which are companies incorporated in India, where applicable,to its directors during the year is
in accordance with the provisions of section 197 of the Act.
H. With respect to the other matters to be included in the auditor’s report in accordance with rule 11 of
the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information
andaccording to the explanations given to us:
i. the consolidated financial statements disclose the impact of pending litigations as at 31 March
2022 on the consolidated financial position of the Group including its associates and joint-ventures
(refer note 28 to the consolidated financial statements);
ii. the Group including associates and joint-ventures have made provision in the consolidated financial
statements, as required under the applicable law or Ind AS, for material foreseeable loses, if any,
on long term contracts including derivative contracts (refer note 38 to the consolidated financial
statements);
iii. there has been no delay in transferring amounts, required to be transferred, to the Investor
Education and Protection Fund by the Group including its associates and joint-ventures, which
are companies incorporated in India.

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iv. Reporting on rule 11(e):

(a) The Management has represented that, to the best of its knowledge and belief, as stated
in note no. 48(5) no funds (which are material either individually or in the aggregate) have
been advanced or loaned or invested (either from borrowed funds or share premium or any
other sources or kind of funds) by the Company to or in any other person(s) or entity(ies),
including foreign entities (“Intermediaries”), with the understanding, whether recorded in
writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other
persons or entities identified in any manner whatsoever by or on behalf of the Company
(“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the
Ultimate Beneficiaries.
(b) The Management has represented, that, to the best of its knowledge and belief, as stated
in note no. 48(6) no funds (which are material either individually or in the aggregate) have
been received by the Company from any person(s) or entity(ies), including foreign entities
(“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that
the Company shall, directly or indirectly, lend or invest in other persons or entities identified
in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or
provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(c) Based on the audit procedures that has been considered reasonable and appropriate in
the circumstances, nothing has come to our notice that has caused us to believe that the
representations under sub-clause (i) and (ii) of rule 11(e), as provided under (a) and (b)
above, contain any material misstatement.
v. The dividend for the previous year, declared and paid by the Company during the year is in
accordance with section 123 of the Act, as applicable.

For Sharp & Tannan Associates

Chartered Accountants
Firm’s Registration no. 109983W
by the hand of

Tirtharaj Khot
Partner
Membership no.(F) 037457
UDIN:22037457AJNLOP9604
Pune, 24 May 2022

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 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
Annexure A to the Independent Auditor’s Report

Referred to in paragraph (F) under the heading, “Report on Other legal and Regulatory Requirements”
of our report on even date:

Report on the Internal Financial Controls

Under clause (i) of sub-section 3 of section 143 of the Companies Act, 2013
(“the Act”)

Opinion
We have audited the Internal Financial Controls over Financial Reporting of Kirloskar Brothers Limited
(hereinafter referred as “the Holding Company”), its subsidiary companies (the Holding Company and its
subsidiaries together referred to as “the Group”), its associates and joint-ventures, which are companies
incorporated in India, as of 31 March 2022 in conjunction with our audit of the consolidated financial statements
of the Company as of and for the year ended on that date.
In our opinion and to the best of our information and according to the explanations given to us and based on
consideration of reports of other auditors referred to in other matters paragraph below, the Group including
its associates and joint-ventures, which are companies incorporated in India, have, in all material respects, an
adequate internal financial controls system over financial reporting and such internal financial controls over
financial reporting were operating effectively as at 31 March 2022, based on the internal control over financial
reporting criteria established by the respective companies considering the essential components of internal
control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (“the
Guidance Note”) issued by the Institute of Chartered Accountants of India (‘ICAI’).
Managements and Board of Directors responsibility for internal financial controls
The respective Company’s Management and Board of Directors of the of the Holding company and its subsidiary
companies,associates and joint-ventures,which are companies incorporated in India, are responsible for
establishing and maintaining internal financial controls based on the internal control over financial reporting
criteria established by the respective companies considering the essential components of internal control
stated in the Guidance Note. These responsibilities include the design, implementation and maintenance of
adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct
of its business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention
and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely
preparation of reliable financial information, as required under the Act.
Auditors’ responsibility
Our responsibility is to express an opinion on the Group’s including its associates and joint-ventures, which
are companies incorporated in India, internal financial controls over financial reporting based on our audit. We
conducted our audit in accordance with the Guidance Note and the Standards on Auditing, issued by ICAI
and deemed to be prescribed under section 143(10) of the Act, to the extent applicable, to an audit of internal
financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those
Standards and the Guidance Note require that we comply with ethical requirements and plan and perform
the audit to obtain reasonable assurance about whether adequate internal financial controls over financial
reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial
controls system over financial reporting and their operating effectiveness. Our audit of internal financial
controls over financial reporting included obtaining an understanding of internal financial controls over financial
reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and
operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the
auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements,

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whether due to fraud or error.

We believe that the audit evidence we have obtained and the audit evidence obtained by other auditors of the
subsidiary companies, associates and joint-ventures, which are companies incorporated in India, in terms of
their reports referred to in the Other Matters paragraph below,is sufficient and appropriate to provide a basis for
our audit opinion on the Group’s including its associates and joint-ventures which are companies incorporated
in India, internal financial controls system over financial reporting.
Other matters
Our aforesaid report under section 143(3)(i) of the Act on the adequacy and operating effectiveness of the
internal financial controls over financial reporting in so far as it relates to three subsidiaries and a joint-venture,
which are companies incorporated in India, is solely based on corresponding reports of the auditors of such
Companies.
Meaning of internal financial controls over financial reporting
A company’s internal financial control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles. A company’s internal financial control
over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation
of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorisations of management and
directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of
unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the
financial statements.
Inherent limitations of internal financial controls over financial reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility
of collusion or improper management override of controls, material misstatements due to error or fraud may
occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial
reporting to future periods are subject to the risk that the internal financial control over financial reporting may
become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.

For Sharp & Tannan Associates

Chartered Accountants
Firm’s Registration no. 109983W
by the hand of

Tirtharaj Khot
Partner
Membership no.(F) 037457
UDIN:22037457AJNLOP9604
Pune, 24 May 2022

280
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company

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Integrated Annual Report 2021-22

CONSOLIDATED BALANCE SHEET AS AT 31 MARCH 2022

(Amounts in Million `)

Particulars Note As at As at
No. 31 March 2022 31 March 2021
ASSETS
Non-current assets
Property, plant and equipment 3 4,870.379 4,284.421
Capital work-in-progress 267.259 728.833
Investment property 5 2.038 25.088
Goodwill 3 139.157 141.200
Other intangible assets 3 37.309 53.932
Right to use assets 4 274.053 301.712
Financial assets
Investments accounted using equity method 6 796.543 680.442
Investments 6 0.005 0.005
Trade receivables 7 390.283 595.852
Other financial assets 8 252.897 165.666
Deferred tax assets (net) 19 417.750 472.248
Other non-current assets 9 1,036.285 1,036.495
Total non-current assets 8,483.958 8,485.894
Current assets
Inventories 10 6,435.235 6,028.435
Financial assets
Current investment 6 1,584.198 1,268.231
Trade receivables 7 5,295.815 4,636.866
Cash and cash equivalents 11 A 2,292.688 1,735.306
Other bank balances 11 B 298.101 18.615
Other financial assets 8 866.887 1,002.109
Current tax assets (net) 19 92.550 65.753
Other current assets 9 3,417.559 3,904.632
Total current assets 20,283.033 18,659.947
TOTAL ASSETS 28,766.991 27,145.841
EQUITY AND LIABILITIES
Equity
Equity share capital 12 158.818 158.818
Other equity 13 11,615.424 10,888.096
Equity attributable to owners of parents 11,774.242 11,046.914
Non-controlling interest 26.086 25.491
Total equity 11,800.328 11,072.405
LIABILITIES
Non-current liabilities
Financial liabilities
Borrowings 14 1,363.633 840.218
Lease liabilities 46 42.920 80.801
Trade payables 15 74.851 89.440
Other financial liabilities 16 108.448 16.606
Provisions 17 259.433 245.374
Other non-current liabilities 18 687.959 215.184
Total non-current liabilities 2,537.244 1,487.623
Current liabilities
Financial liabilities
Borrowings 14 2,388.326 2,164.685
Lease liabilities 46 166.389 224.296
Trade payables
- Micro, small and medium enterprises 15 683.536 875.852
- Others 15 5,226.980 4,621.710
Other financial liabilities 16 1,527.746 2,059.277
Other current liabilities 18 3,696.678 4,087.110
Provisions 17 739.764 552.883
Total current liabilities 14,429.419 14,585.813
Total liabilities 16,966.663 16,073.436
TOTAL EQUITY AND LIABILITIES 28,766.991 27,145.841
Corporate information 1
Significant accounting policies 2
See accompanying notes to financial statements 3-48
The accompanying notes 1 to 48 form an integral part of the financial statements

As per our report of even date attached For and on behalf of the Board of Directors
For SHARP & TANNAN ASSOCIATES
Chartered Accountants
(ICAI Firm Regn. No. 109983W) Sanjay Kirloskar Shobinder Duggal
Chairman and Managing Director Director
DIN: 00007885 DIN: 00039580

TIRTHARAJ KHOT Chittaranjan Mate Devang Trivedi

Partner Chief Financial Officer Company Secretary
Membership No: (F) - 037457
Pune : 24 May 2022 Pune : 24 May 2022 Pune : 24 May 2022

282
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31 MARCH 2022
(Amounts in Million `)
Particulars Note Year ended Year ended
No. 31 March 2022 31 March 2021
Revenue from operations 20 30,576.277 27,165.402
Other income 21 324.326 537.329
Total Income
30,900.603 27,702.731
Expenses
Cost of raw materials consumed 22 A 15,164.812 12,321.289
Purchases of stock-in-trade 1,651.360 2,131.849
Changes in inventories of finished goods, stock-in -trade and work-in-progress 22 B (13.157) 42.100
Employee benefits expense 23 5,015.526 4,887.691
Finance costs 24 334.677 441.509
Depreciation and amortization expense 25 695.143 679.925
Other expenses 26 6,697.412 5,377.595
Total expenses
29,545.773 25,881.958
Profit before tax
1,354.830 1,820.773
Tax expenses 19
(1) Current tax 423.199 459.843
(2) Deferred tax 79.824 (2.301)
(3) MAT entitlement for earlier years - (174.245)
(4) (Excess)/ Short provision of earlier years 36.477 (1.605)
Total Tax expenses
539.500 281.692
Profit after tax but before share in profit of joint venture company for the year 815.330 1,539.081
Share in profit of joint venture company
128.435 68.373
Profit for the year
943.765 1,607.454
Attributable to
Non-controlling interest 0.408 (3.457)
Equity holder’s of parent 943.357 1,610.911
Other Comprehensive Income 27
Items that will not be reclassified to profit or loss
Remeasurement gains and losses 22.363 34.693
Income tax relating to remeasurement gains and losses 5.968 (10.816)
Share in other comprehensive income of joint venture company 1.165 0.727
Items that will be reclassified to profit or loss
Gains/ losses on currency translation for foreign subsidiaries (7.111) 20.659
Foreign exchange loss of subsidiary company - -
Other Comprehensive Income
22.385 45.263
Total Comprehensive Income for the year (Comprising of net profit after
tax and other comprehensive income for the year) 966.150 1,652.717
Attributable to
Non-controlling interest 0.595 (3.330)
Equity holder’s of parent 965.555 1,656.047
Earnings per equity share 32
(1) Basic 11.88 20.29
(2) Diluted 11.88 20.29

Corporate information 1
Significant accounting policies 2
See accompanying notes to financial statements 3-48
The accompanying notes 1 to 48 form an integral part of the financial statements

As per our report of even date attached For and on behalf of the Board of Directors
For SHARP & TANNAN ASSOCIATES
Chartered Accountants
(ICAI Firm Regn. No. 109983W) Sanjay Kirloskar Shobinder Duggal
Chairman and Managing Director Director
DIN: 00007885 DIN: 00039580

TIRTHARAJ KHOT Chittaranjan Mate Devang Trivedi

Partner Chief Financial Officer Company Secretary
Membership No: (F) - 037457
Pune : 24 May 2022 Pune : 24 May 2022 Pune : 24 May 2022

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CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 MARCH 2022
(Amounts in Million `)
Particulars Year ended Year ended
31 March 2022 31 March 2021
A Cash flows from Operating Activities
Net Profit before taxation and extraordinary items 1,354.830 1,820.773
Adjustments for :-
1 Depreciation / Amortization 695.143 679.925
2 (Profit)/ Loss on sale of Fixed Assets 0.730 9.449
3 Bad debts written off 88.297 124.398
4 Advances, deposits and claims written off 8.304 7.484
5 Provision for loss on long term contracts 21.196 (27.550)
6 Provision for doubtful debts, advances and claims 80.733 164.036
7 Interest Income (54.035) (62.762)
8 Interest Expenses 217.300 314.635
9 Excess provision written back - -
10 Unrealized exchange ( gain)/ Loss 45.009 39.133
11 Profit on sale of mutual funds (32.192) (27.006)
Operating Profit Before Working capital changes 2,425.315 3,042.515
Adjustments for :-
1 (Increase)/ decrease in inventories (406.801) 128.393
2 (Increase)/ decrease in trade receivables (622.409) 20.072
3 (Increase)/ decrease in financial assets (227.977) 28.818
4 (Increase)/ decrease in non-financial assets 415.054 398.108
5 Increase/ (decrease) in trade payable 398.365 134.023
6 Increase/ (decrease) in financial liabilities (446.074) (19.525)
7 Increase/ (decrease) in non-financial liabilities 82.343 (173.769)
8 Increase/ (decrease) in provisions 208.075 (34.896)
Cash Generated from Operations 1,825.891 3,523.739
9 Income Tax (Paid ) / Refunded (414.244) (357.961)
Net Cash from Operating Activities 1,411.647 3,165.778
B Cash flows from Investing Activities
1 Purchase of Fixed Assets (819.524) (758.898)
2 Sale of Fixed Assets 193.356 46.234
3 Investment in subsidiaries, associates and joint venture - -
4 Purchase of Mutual funds (5,779.890) (8,354.000)
5 Sale of Mutual funds 5,496.120 7,563.060
6 Interest Received 42.213 60.445
7 Dividend received 13.500 4.500
Net Cash from Investment Activities (854.225) (1,438.657)
C Cash Flows from Financing Activities
1 Proceeds from borrowing 3,031.186 1,671.181
2 Repayment of borrowings (2,284.130) (4,447.099)
3 Interest Paid (207.635) (334.306)
4 Dividend and tax on dividend paid (241.506) (43.719)
5 Loans and advances to joint venture/ associate - -
Net Cash used in Financing Activities 297.915 (3,153.943)
a Net Increase in Cash and Cash Equivalents (A+B+C) 855.337 (1,426.823)
b Cash & Cash Equivalents at beginning of year 1,735.814 3,169.575
c Unrealized Exchange Gain / (Loss) in cash and cash equivalents (15.332) (6.938)
d Cash & Cash Equivalents at end of year (refer note 11) (a+b+c) 2,575.819 1,735.814
Note : Cash flow is prepared using the indirect method.
There are no reconciliation items in relation to financing activities for which disclosure is required as per Ind AS 7.
Cash & Cash Equivalents includes fixed deposits with original maturity of more than 3 months
Refer note 43 for cash outflow on account of corporate social responsibility.

As per our report of even date attached For and on behalf of the Board of Directors
For SHARP & TANNAN ASSOCIATES
Chartered Accountants
(ICAI Firm Regn. No. 109983W) Sanjay Kirloskar Shobinder Duggal
Chairman and Managing Director Director
DIN: 00007885 DIN: 00039580

TIRTHARAJ KHOT Chittaranjan Mate Devang Trivedi

Partner Chief Financial Officer Company Secretary
Membership No: (F) - 037457
Pune : 24 May 2022 Pune : 24 May 2022 Pune : 24 May 2022

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 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE
YEAR ENDED 31 MARCH 2022
(Amounts in Million `)
A. Equity Share Capital

Balance as at Changes in equity share Balance as at

1 April 2020 capital during the year 31 March 2021
158.818 - 158.818

Balance as at Changes in equity share Balance as at

1 April 2021 capital during the year 31 March 2022
158.818 - 158.818

B. Other Equity

Particulars Reserves and Surplus Total Non- Total

Reserves Controlling
Capital Capital Securities General Foreign Retained and interest
Reserve redemption Premium reserve currency Earnings Surplus
reserve translation
reserve
Balance as at 5.237 9.237 414.700 6,334.597 277.219 2,230.763 9,271.753 28.822 9,300.575
1 April 2020
Profit for the 1,610.911 1,610.911 (3.457) 1,607.454
year
Other 20.659 24.477 45.136 0.126 45.262
comprehensive
income
Dividends and (39.704) (39.704) (39.704)
tax thereof
Balance as at 5.237 9.237 414.700 6,334.597 297.878 3,826.447 10,888.096 25.491 10,913.587
31 March 2021
Profit for the 943.357 943.357 0.408 943.765
year
Other (7.111) 29.309 22.198 0.187 22.385
comprehensive
income
Dividends and (238.227) (238.227) (238.227)
tax thereof
Balance as 5.237 9.237 414.700 6,334.597 290.767 4,560.886 11,615.424 26.086 11,641.510
at 31 March
2022

As per our report of even date attached For and on behalf of the Board of Directors
For SHARP & TANNAN ASSOCIATES
Chartered Accountants
(ICAI Firm Regn. No. 109983W) Sanjay Kirloskar Shobinder Duggal
Chairman and Managing Director Director
DIN: 00007885 DIN: 00039580

TIRTHARAJ KHOT Chittaranjan Mate Devang Trivedi

Partner Chief Financial Officer Company Secretary
Membership No: (F) - 037457
Pune : 24 May 2022 Pune : 24 May 2022 Pune : 24 May 2022

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NOTES TO ACCOUNTS :
Significant accounting policies
Notes to the financial statements for the year ended 31st March 2022
(All amounts are in Indian rupees rounded to the nearest millions, unless otherwise stated)

1. Corporate information
Kirloskar Brothers Limited (“KBL”) is a public limited Company domiciled in India and incorporated
under the provisions of the Indian Companies Act. KBL, its Subsidiaries and Joint Ventures (“Group”)
are engaged in providing fluid management solutions globally. The core products of the company are
Engineered Pumps, Industrial Pumps, Agriculture and Domestic Pumps, Valves, and Hydro turbines.

2. Significant accounting policies

2.1 Basis of preparation

The financial statements have been prepared in accordance with the provisions of Indian
Accounting Standards (Ind-AS) notified under the Companies Act, 2013 (“the Act”) (to the extent
notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). The Ind AS
have been prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian
Accounting Standards) Rules, 2015.
In addition, the guidance notes/announcements issued by the Institute of Chartered Accountants
of India (ICAI) are also applied except where compliance with other statutory promulgations
require a different treatment.
Group maintains it’s accounts on accrual basis following historical cost convention except for
certain financial instruments which are measured at fair values. The financial statements have
been prepared on accrual and going concern basis.
The financial statements have been approved for issue by the Board of Directors at it’s meeting
held on 24th May 2022.
2.2 Basis of consolidation and equity accounting
i. Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is
exposed to, or has rights to, variable returns from its involvement with the entity and has
the ability to affect those returns through its power over the entity. The financial statements of
subsidiaries are included in the consolidated financial statements from the date on which
control commences until the date on which control ceases.
The consolidated financial statements relate to Kirloskar Brothers Limited (KBL) and 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 unrealized profit / losses on intra-group
transactions, and are presented to the extent possible, in the manner as the Company’s
independent financial statements.

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 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)
Significant accounting policies (Contd.)
The names of the subsidiary companies, country of incorporation, and proportion of
ownership interest considered in the consolidated financial statements are:

Name of the Company Country of Proportion of ownership

Incorporation Interest of KBL
Karad Projects and Motors Limited India 100.%
(KPML)
The Kolhapur Steel Limited (TKSL) India 99.78%
Kirloskar Corrocoat Private Limited India 65%
(KCPL)
Kirloskar Brothers International B V The Netherlands 100%
SPP Pumps Limited United Kingdom 100%
Kirloskar Brothers(Thailand) Limited Thailand 100%
SPP Pumps (MENA) L.L.C. Egypt 100%
Kirloskar Pompen B.V The Netherlands 100%
Micawber 784 Proprietary Limited South Africa 100%
SPP Pumps International PTY Limited South Africa 100%
SPP France S A S France 100%
SPP Pumps Inc. USA 100%
SPP Pumps South Africa Proprietary South Africa 100%
Limited
Braybar Pumps Limited South Africa 100%
Rodelta Pumps International BV The Netherlands 100%
Rotaserve Overhaul B.V. The Netherlands 100%
SPP Pumps Real Estate LLC USA 100%
SyncroFlo Inc. USA 100%
SPP Pumps (Asia) Ltd Thailand 100%
SPP Pumps (Singapore) Ltd Singapore 100%
Rotaserve Limited United Kingdom 100%
Rotaserve Mozambique South Africa 100%

Reporting date for Indian subsidiaries and joint venture is 31 March and that for foreign
subsidiaries is 31 December, which is as per the local laws in the respective countries of
incorporation. However, in order to have uniform accounting policies management drawn
financials of 3 months ended 31 March 2022 are also consolidated. Accordingly,
consolidated financials ended 31 March 2022, considers results for foreign subsidiaries for
12 months ended March 2022 only.
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.
ii) Non-controlling interests (NCI)
NCI are measured at their proportionate share of the acquiree’s net identifiable assets at
the date of acquisition. Subsequent to acquisition, the carrying amount of non-controlling
interests is the amount of those interests at initial recognition plus the non-controlling
interests’ share of subsequent changes in equity of subsidiaries.

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CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)

Significant accounting policies (Contd.)
Changes in the Group’s equity interest in a subsidiary that do not result in a loss of control
are accounted for as equity transactions.
iii) Loss on control
When the Group loses control over a subsidiary, it derecognizes the assets and liabilities of
the subsidiary, and any related NCI and other components of equity. Any interest retained
in the former subsidiary is measured at fair value at the date when the control is lost. Any
resulting gain or loss is recognised in profit or loss.
iv) Equity accounted investees
A joint venture is an arrangement in which the Group has joint control and has rights to
the net assets of the arrangement, rather than rights to its assets and obligations for its
liabilities.
Company has accounted ‘Investment in Associate and joint venture’ under the equity
method as per Ind AS 28, whereby the investment is initially recorded at cost, identifying
any goodwill/capital reserve arising at the time of acquisition. The carrying amount of the
investment is adjusted thereafter for the post acquisition change in the Company’s share of
net assets of the associates/ Joint Venture.
The excess of cost to the Company of its investment in the joint venture/ associates entity is
set off against the adjusted carrying amount of the investment. Distributions received from
the joint venture/ associates reduce the carrying amount of the investment.
The consolidated statement of profit and loss reflects the Company’s share of the results of
the operations of the joint venture company.
Unrealized profits and losses resulting from transactions between the joint venture /
associates and the Company are eliminated to the extent of Company’s interest in the joint
venture/associates.
The names of the associates and joint ventures entities, country of incorporation, and
proportion of ownership interest considered in the consolidated financial statements are:

Name of the Company Country of Incorporation Proportion of ownership

Interest of KBL
KBL Synerge LLP India 50%
Kirloskar Ebara Pumps Ltd. India 45%

v) Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealized income and expenses arising
from intra-group transactions, are eliminated. Unrealized gains arising from transactions
with equity accounted investees are eliminated against the investment to the extent of
the Group’s interest in the investee. Unrealized losses are eliminated in the same way as
unrealized gains, but only to the extent that there is no evidence of impairment.
2.3 Basis of measurement
The financial statements have been prepared on a historical cost basis, except for the following
items, which are measured on an alternative basis in accordance with Ind AS on each reporting
date.
Items Measurement basis
Derivative financial instruments at fair value through profit or loss Fair value
Defined benefit plan – plan assets Fair value

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 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)
Significant accounting policies (Contd.)
2.4 Current or non-current classification
All assets and liabilities have been classified as current or non-current as per the group’s normal
operating cycle and other criteria as set out in the Division II of Schedule III to the Companies Act,
2013.
Based on the nature of products and the time between acquisition of assets for processing and
their realization in cash and cash equivalents, the group has ascertained its operating cycle as 12
months for the purpose of current or non-current classification of assets and liabilities for product
business. In case of project business, operating cycle is dependent on life of specific project/
contract/ service, hence current non-current bifurcation relating to project is based on expected
completion date of project which generally exceeds 12 months.
2.5 Functional and presentation currency
Functional currency of KBL, KPML, TKSL and KCPL is Indian currency. The functional currency
of other foreign subsidiaries is their respective local currency. These financial statements are
presented in Indian Rupees (INR).
All financial information is presented in INR rounded off to three decimal places, except share and
per share data, unless otherwise stated.
2.6 Use of judgements, estimates and assumptions
The preparation of financial statements in conformity with Ind AS requires the management
to make judgments, estimates and assumptions that affect the reported amounts of revenue,
expenses, current assets, non-current assets, current liabilities, non-current liabilities and
disclosure of the contingent liabilities at the end of each reporting period. The estimates are based
on management’s best knowledge of current events and actions, however, due to uncertainty
about these assumptions and estimates, actual results may differ from these estimates.
This note provides an overview of the areas that involved a higher degree of judgement or
complexity and of items which are more likely to be materially adjusted due to estimates and
assumptions turning out to be different than those originally assessed.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised prospectively.
Critical estimates and judgements
The areas involving critical estimates or judgements are:
• Estimation of defined benefit obligation – The cost of the defined benefit gratuity and
pension plan, and the present value of the gratuity/pension obligation are determined using
actuarial valuations. An actuarial valuation involves making various assumptions that may
differ from actual developments in the future. (Refer note – 34)
• Estimation of leave encashment provision - The cost of the leave encashment and the
present value of the leave encashment obligation are determined using actuarial valuations.
(Refer note 38)
• Impairment of goodwill – The group estimates the value in use of a cash generating
unit (CGU) based on the future cash flows after considering the current economic conditions
and trends, estimated future operating results and growth rate. The estimated cash flows are
developed using internal forecasts. The discount rate used for the CGU’s represent the
weighted average cost of capital based on historical market returns of comparable
companies.

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Significant accounting policies (Contd.)
• Impairment of receivables - The impairment provisions for financial receivables disclosed
are based on assumptions about risk of default and expected credit loss (Refer note 40)
• Decommissioning liability – Initial estimate of dismantling and restoration liability requires
significant judgement about cost inflation index and other factors. (Refer note 38)
• Provision for warranty claims – Provision is recognised based on the key assumptions
about likelihood and magnitude of an outflow of resources. (Refer note 38)
• Estimation of provision for loss on long term contract – The provision is recognised when
the estimated cost exceeds the estimated revenue for constructions contracts as per Ind AS
115. (Refer note 38)
2.7 Inventories
Inventories are valued at the lower of cost and net realizable value. The cost is calculated on
moving weighted average method. Costs incurred in bringing each product to its present location
and conditions are accounted for as follows:
• Raw materials: cost includes cost of purchase excluding taxes subsequently recoverable
from tax authorities and other costs incurred in bringing the inventories to their present
location and condition. However, these items are considered to be realizable at cost if the
finished products in which they will be used, are expected to be sold at or above cost.
• Finished goods and work in progress: cost includes cost of direct materials, labor and a
systematic allocation of fixed and variable production overhead that are incurred in
converting raw material into work in progress/ finished goods based on the normal operating
capacity and actual capacity respectively.
• Traded goods: Cost includes cost of purchase and other costs incurred in bringing the
inventories to their present location and condition.
Based on ageing of inventory and its future potential to generate economic benefit, group provides
for slow and non-moving inventory using provision matrix. This provision is reversed once such
inventory is consumed or expected to be consumed.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated
costs of completion and the estimated costs necessary to make the sale. Assessment of net-
realizable value is made at regular intervals (each reporting period) and at change of events.
2.8 Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at banks, cash on hand and highly
liquid short-term deposits with an original maturity of three months or less, which are subject to an
insignificant risk of changes in value.
The deposits maintained by the Group with banks and financial institutions comprise time deposits,
which can be withdrawn by the Group at any point without prior notice or penalty on the principal.
While other bank balances include, margin money, deposits, earmarked balances with bank, and
other bank balances with bank which have restrictions on repatriation.
2.9 Statement of Cash Flows
Statement of Cash Flows is prepared segregating the cash flows into operating, investing and
financing activities. Cash flow from operating activities is reported using indirect method, adjusting
the profit before tax for the effects of:

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A Kirloskar Group Company
CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)
Significant accounting policies (Contd.)
(1) changes during the period in inventories and operating receivables and payables
transactions of a non-cash nature;
(2) non-cash items such as depreciation, provisions, unrealized foreign currency gains and
losses; and
(3) all other items for which the cash effects are investing or financing cash flows.
Cash and cash equivalents (including bank balances) shown in the Statement of Cash Flows
exclude items which are not available for general use as at the date of Balance Sheet.
2.10 Property, plant and equipment (PPE)
Measurement
Freehold land is carried at historical cost. All other items of PPE are measured at cost of acquisition
or construction less accumulated depreciation and accumulated impairment loss, if any.
The cost of an item of PPE comprises its purchase price, including import duties net of credits and
other non-refundable taxes or levies and any directly attributable cost of bringing the asset to its
working condition for its intended use; any discounts and rebates are deducted in arriving at the
purchase price.
Own manufactured PPE is capitalized at cost including an appropriate share of overheads.
Administrative and other general overhead expenses that are specifically attributable to construction
or acquisition of PPE or bringing the PPE to working condition are allocated and capitalized as a
part of the cost of the PPE.
Borrowing costs directly attributable to the construction or acquisition of a qualifying asset up to
completion or acquisition are capitalized as part of the cost. The present value of the expected
cost for the decommissioning of an asset after its use is included in the cost of the respective asset
if the recognition criteria for a provision is met.
When parts of an item of property, plant and equipment have different useful lives, they are
accounted for as separate items (major components) of property, plant and equipment.
PPE under construction are disclosed as capital work-in-progress.
Advances paid towards the acquisition of property, plant and equipment outstanding at each
reporting date are disclosed under “Other non-current assets”.
Subsequent costs
The cost of replacing a part of an item of PPE is recognised in the carrying amount of the item
if it is probable that the future economic benefits embodied within the part will flow to the Group
and its cost can be measured reliably. The carrying amount of the replaced part is derecognized.
The costs of the day-to-day servicing of PPE are recognised in the statement of profit and loss as
incurred.
Disposal
An item of PPE is derecognized upon disposal or when no future benefits are expected from its
use or disposal. Gains and losses on disposal of an item of PPE are determined by comparing the
proceeds from disposal with the carrying amount of PPE, and are recognised within other income/
expenses in the statement of profit and loss.
Depreciation
Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other
amount substituted for cost, less its residual value.

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Significant accounting policies (Contd.)
The residual values, useful lives and method of depreciation of PPE is reviewed at each financial
year end and adjusted prospectively, if appropriate. Depreciation on additions to/deductions from,
owned assets is calculated pro rata to the period of use. Further, extra shift depreciation is provided
wherever applicable. Depreciation charge for impaired assets if any is adjusted in future periods in
such a manner that the revised carrying amount of the asset is allocated over its remaining useful
life.
Depreciation is recognised in the statement of profit and loss generally on a straight-line basis
over the estimated useful lives of each part of an item of PPE and in some cases based on the
technical evaluation made by the management.
2.11 Investment property
Investment property is a property, being land or building or part of it, (including those under
construction) that is held to earn rental income or for capital appreciation or both but not held for
sale in ordinary course of business, use in manufacturing or rendering services or for administrative
purposes.
Upon initial recognition, investment property is measured and reported at cost, including
transaction costs. The cost of investment property includes its purchase price and directly
attributable expenditure, if any. Subsequent expenditure is capitalized to the asset’s carrying
amount only when it is probable that future economic benefits associated with expenditure will
flow to the company and the cost of the item can be measured reliably. All other repairs and
maintenance costs are expensed when incurred. Subsequent to initial recognition, investment
property is stated at cost less accumulated depreciation and accumulated impairment loss, if any.
The estimated useful life and residual values are reviewed at each financial year end and the effect
of any change in the estimates of useful life / residual value is accounted on prospective basis.
Investment property in the form of land is not depreciated. Investment properties in the form of
building are stated at cost less accumulated depreciation on straight line basis, calculated as per
provisions of Schedule II to Companies Act, 2013.
Investment properties are derecognized either when they have been disposed of or when they
are permanently withdrawn from use and no future economic benefit is expected from their
disposal. The difference between the net disposal proceeds and the carrying amount of the asset
is recognised in the statement of profit and loss in the period of derecognition.
2.12 Goodwill and intangible assets
Recognition and measurement
Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill is not amortized
but it is tested for impairment annually or more frequently if events or changes in circumstances
indicate that it might be impaired and is carried at cost less impairment losses. Goodwill is allocated
to the CGUs for the purpose of impairment testing. The allocation is made to those CGUs or group
of CGUs that are expected to benefit from the business combination in which goodwill arose.
Other intangible assets are recognised when the asset is identifiable, is within the control of the
Group, it is probable that the future economic benefits that are attributable to the asset will flow to
the Group and cost of the asset can be reliably measured.
Intangible assets acquired by the Group that have finite useful lives are measured at cost less
accumulated amortization and any accumulated impairment losses.
Intangible assets with indefinite useful lives are not amortized, but are tested for impairment
annually, either individually or at the cash-generating unit level.

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A Kirloskar Group Company
CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)
Significant accounting policies (Contd.)
Subsequent measurement
Subsequent expenditure is capitalized only when it increases the future economic benefits
embodied in the specific asset to which it relates.
Amortization
Amortization is calculated over the cost of the asset, or other amount substituted for cost, less
its residual value. Amortization is recognised in statement of profit and loss on a straight-line
basis over the estimated useful lives of intangible assets from the date that they are available for
use, since this most closely reflects the expected pattern of consumption of the future economic
benefits embodied in the asset. The method of amortization and useful life is reviewed at the end
of each accounting year with the effect of any changes in the estimate being accounted for on a
prospective basis.
Amortization on impaired assets is provided by adjusting the amortization charge in the remaining
periods so as to allocate the asset’s revised carrying amount over its remaining useful life.
Research and development costs –
Research costs are expensed as incurred. Development expenditures on an individual project are
recognised as an intangible asset when the Group can demonstrate:
• The technical feasibility of completing the intangible asset so that the asset will be available
for use or sale
• Its intention to complete and its ability and intention to use or sell the asset
• How the asset will generate future economic benefits
• The availability of resources to complete the asset
• The ability to measure reliably the expenditure during development
Following initial recognition of the development expenditure as an asset, the asset is carried at
cost less any accumulated amortization and accumulated impairment losses. Amortization of the
asset begins when development is complete and the asset is available for use. It is amortized over
the period of expected future benefit. Amortization expense is recognised in the statement of profit
and loss.
During the period of development, the asset is tested for impairment annually.
2.13 Interest in joint operations
The company as joint operator recognizes in relation to its interest in a joint operation, it’s share
in the assets/ liabilities held / incurred jointly with the other parties of the joint arrangements.
Revenue is recognised for its share of revenue from the sale of output by the joint operator.
Expenses are recognised for its share of expenses incurred jointly with the other parties of the
joint arrangements.
2.14 Borrowing costs
Borrowing costs are interest and other costs that an entity incurs in connection with the borrowing
of funds. Borrowing cost also includes exchange differences in relation to the foreign currency
borrowings to the extent those are regarded as an adjustment to the borrowing costs.
Borrowing costs directly attributable to the acquisition, construction or production of a qualifying
asset are capitalized in the cost of that asset. Qualifying assets are those assets which necessarily
takes a substantial period of time to get ready for its intended use or sale. All other borrowing
costs are expensed in the period in which they are incurred.

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Significant accounting policies (Contd.)
Investment income earned on the temporary investment of specific borrowings pending their
expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.
All other borrowing costs are expensed in the period in which they are incurred.
2.15 Revenue recognition
Group recognizes revenue from contracts with customers when it satisfies a performance
obligation.
Revenue is measured at transaction price i.e. Consideration to which group expects to be entitled
in exchange for transferring promised goods or services to a customer, excluding amounts
collected on behalf of third parties and after considering effect of variable consideration, significant
financing component, if any.
For contracts with multiple performance obligations, transaction price is allocated to different
performance obligations based on their standalone selling price. In such case, revenue recognition
criteria are applied separately to different performance obligations, in order to reflect the substance
of the transaction and revenue is recognised separately for each obligation as and when the
recognition criteria for the component is fulfilled.
Sale of goods
Revenue from the sale of goods is recognized when the control of the goods is transferred to the
buyer. For contracts that permit the customer to return an item, revenue is recognized to the extent
that it is highly probable that a significant reversal in the amount of cumulative revenue recognized
will not occur. Amounts included in revenue are net of returns, trade allowances, rebates, goods
and service tax, value added taxes.
Customer loyalty programs
Group allocates a portion of the consideration received to loyalty points. This allocation is based
on the relative stand-alone selling prices. The amount allocated to the loyalty programs is deferred,
and is recognized as revenue when loyalty points are redeemed or the likelihood of the customer
redeeming the loyalty points becomes remote. The deferred revenue is included in contract
liabilities.
Rendering of services
Revenue is recognized over the time as and when customer receives the benefit of company’s
performance and the company has an enforceable right to payment for services transferred.
Construction Contracts
Contract revenue includes initial amount agreed in the contract plus any variations in contract
work, claims and incentive payments, to the extent that it is probable that they will result in revenue
and can be measured reliably.
Contract revenue and contract cost arising from fixed price contract are recognized in accordance
with the percentage completion method (POC). The stage of completion is measured with reference
to cost incurred to date as a percentage of total estimated cost of each contract. Until such time
(50% of project cost in case of civil projects outside India and 25% of project cost in case of other
projects) where the outcome of the contract cannot be ascertained reliably, the Group recognizes
revenue equal to actual cost.
Full provision is made for any loss estimated on a contract in the year in which it is first foreseen.
Where the group is involved in providing operation and maintenance services under a single
construction contract, then the consideration is allocated on a relative stand-alone price basis
between various obligations of a contract.

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A Kirloskar Group Company
CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)
Significant accounting policies (Contd.)
For contracts where progress billing exceeds the aggregate of contract costs incurred to-date and
recognized profits (or recognized losses, as the case may be), the surplus is shown as the amount
due to customers under other non financial liabilities.
For contracts where the aggregate of contract costs incurred to-date and recognized profits (or
recognized losses, as the case may be) exceed progress billing, the deficit is shown as the amount
due from customers. Amount due from customers is shown as part of other non-financial assets
as the contractual right for consideration is dependent on completion of contractual milestones.
Amounts received before the related work is performed are disclosed in the Balance Sheet as a
liability towards advance received. Amounts billed for work performed but yet to be paid by the
customer are disclosed in the Balance Sheet as trade receivables.
The amount of retention money held by the customers is disclosed as part of other current assets.
2.16 Other income
Interest is recognized on a time proportion basis determined by the amount outstanding and the
rate applicable using the effective interest rate (EIR) method. Dividend income and export benefits
are recognised in the statement of profit and loss on the date that the Group’s right to receive
payment is established.
Interest receivable on customer dues is recognised as income in the Statement of Profit and Loss
on accrual basis provided there is no uncertainty towards its realization.
Other items of income are accounted as and when the right to receive such income arises and it
is probable that the economic benefits will flow to the Company and the amount of income can be
measured reliably.
2.17 Foreign currencies transactions
Transactions and balances
Transactions in foreign currency are recorded at exchange rates prevailing at the date of
transactions. Exchange differences arising on foreign exchange transactions settled during the
year are recognised in the statement of profit and loss of the year.
Monetary assets and liabilities denominated in foreign currencies which are outstanding, as at the
end of reporting period are translated at the closing exchange rates and the resultant exchange
differences are recognised in the statement of profit and loss.
Non-monetary assets and liabilities denominated in foreign currencies that are measured in terms
of historical cost are translated using the exchange rate at the date of the transaction.
Group companies
The results and financial position of foreign operations that have a functional currency different
from the presentation currency are translated into the presentation currency as follows:
• Assets and liabilities are translated at the closing rate at the date of that balance sheet
• Income and expenses are translated at average exchange rates, and
• All resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of any net investment in
foreign entities, are recognised in other comprehensive income and accumulated in equity as
foreign currency translation reserve. When a foreign operation is sold, the associated exchange
differences are reclassified to profit or loss, as part of the gain or loss on sale.

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Significant accounting policies (Contd.)
2.18 Employee benefits
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, expected cost of bonus and
short term compensated absences, leave travel allowance etc. are recognized in the period in
which the employee renders the related service.
Post-employment benefits

Defined contribution plans

The Group’s superannuation scheme, state governed provident fund schemes and employee state
insurance scheme are defined contribution plans. The Group has no further payment obligations
once the contributions have been paid. The contributions are recognised as employee benefit
expenses when they are due.
Defined Benefit Plans
The employees’ gratuity fund schemes and provident fund scheme managed by a trust and
pension scheme are the Group’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 of a maturity period equivalent to the weighted
average maturity profile of the defined benefit obligations as at the balance sheet date, having
maturity periods approximating to the terms of related obligations.
Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding
amounts included in net interest on the net defined benefit liability and the return on plan assets
(excluding amounts included in net interest on the net defined benefit liability), are recognised
immediately in the balance sheet with a corresponding debit or credit to retained earnings through
other comprehensive income (OCI) in the period in which they occur. Re-measurements are not
reclassified to the statement of profit and loss in subsequent periods.
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.
When the benefits of the plan are changed or when a plan is curtailed, the resulting change in
benefits that relates to past service or the gain or loss on curtailment is recognised immediately in
the statement of profit and loss. Net interest is calculated by applying the discount rate to the net
defined benefit liability or asset. The Group recognizes gains/ losses on settlement of a defined
plan when the settlement occurs.
The Group pays contribution to a recognized provident fund trusts in respect of above mentioned
Provident Fund schemes.
Other long term employee benefits
Compensated absences liabilities means, the liabilities for earned leave that are not expected to
be settled wholly within twelve months after the end of the reporting period in which the employee
render the related service. They are therefore measured as the present value of expected future
payments to be made in respect of services provided by employees up to the end of the reporting

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A Kirloskar Group Company
CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)
Significant accounting policies (Contd.)
period using the projected unit credit method. The benefits are discounted using the market
yields at the end of the reporting period that have terms approximating the terms of the related
obligation. Re-measurements as a result of experience adjustments and change in actuarial
assumptions are recognised in the statement of profit and loss.
2.19 Income taxes
Income tax expense comprises current and deferred tax. It is recognised in the statement of profit
and loss except to the extent that it relates to a business combination or items recognised directly
in equity or in OCI.
Current tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or
paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those
that were enacted at the reporting date in the country where the Group operates and generates
taxable income. Current tax assets and liabilities are offset only if certain criteria are met.
Deferred tax
Deferred tax is provided using the balance sheet method on temporary differences between the
tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the
reporting date.
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 the accounting period based on prevailing enacted or subsequently enacted regulations.
Deferred tax liabilities are recognized for all timing differences including temporary differences
associated with investment in subsidiaries and associates and interest in joint venture. Deferred
tax assets are recognized for deductible timing differences only to the extent there is reasonable
certainty that sufficient future taxable income will be available against which such deferred tax
assets can be realized.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part
of the deferred tax asset to be utilized. Unrecognized deferred tax assets are re-assessed at each
reporting date and are recognised to the extent that it has become probable that future taxable
profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the
year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have
been enacted or substantively enacted at the reporting date.
Deferred tax assets and liabilities are offset only if certain criteria are met.
2.20 Share-based payments
Share based compensation benefits are provided to the employees (including senior executives)
of the Group under the Group’s Employee Stock Option Scheme, whereby employees render
services as consideration for equity instruments (equity-settled transactions).
Equity-settled transactions
The fair value of the options granted to employees is recognised as an employee benefit expense
with a corresponding increase in equity. The total amount to be expensed is determined by
reference to the fair value of the options granted:

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Significant accounting policies (Contd.)
That cost is recognised, together with a corresponding increase in share-based payment (SBP)
reserves in equity, over the period in which the performance and/or service conditions are fulfilled
in employee benefits expense. The cumulative expense recognised for equity-settled transactions
at each reporting date until the vesting date reflects the extent to which the vesting period has
expired and the Group’s best estimate of the number of equity instruments that will ultimately
vest. The statement of profit and loss expense or credit for a period represents the movement in
cumulative expense recognised as at the beginning and end of that period and is recognised in
employee benefits expense.
When the terms of an equity-settled award are modified, the minimum expense recognised is
the expense had the terms had not been modified, if the original terms of the award are met. An
additional expense is recognised for any modification that increases the total fair value of the
share-based payment transaction, or is otherwise beneficial to the employee as measured at
the date of modification. Where an award is cancelled by the entity or by the counterparty, any
remaining element of the fair value of the award is expensed immediately through profit or loss.
The dilutive effect of outstanding options is reflected as additional share dilution in the computation
of diluted earnings per share.
2.21 Provisions
A Provision is recognized when the Group has a present obligation (legal or constructive) as a
result of a past event and it is probable that an outflow of resources embodying economic benefits
will be required to settle the obligation and a reliable estimate can be made of the amount of the
obligation.
If the effect of the time value of money is material, provisions are discounted using a current pre-
tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used,
the increase in the provision due to the passage of time is recognised as a finance cost in the
statement of profit and loss.
Warranty provisions
A provision for warranty is recognised when the underlying products and services are sold to the
customer based on historical warranty data and at its best estimate using expected value method.
The initial estimate of warranty-related costs is revised annually.
Provision for decommissioning and site restoration
The Group has a legal obligation for decommissioning of windmills and restoring the site back
to its original condition. Decommissioning and restoration costs are measured initially at its best
estimate using expected value method. The present value of initial estimates is provided as a
liability and corresponding amount is capitalized as a part of the windmill. The estimated future
costs of decommissioning are reviewed annually and adjusted as appropriate. Changes in the
estimated future costs or in the discount rate applied are added to or deducted from the cost of
the asset.
Contingent liability is disclosed when Group has:
• a present obligation arising from past events, when it is not probable that an outflow of
resources will be required to settle the obligation; or
• present obligation arising from past events, when no reliable estimate is possible; or
• A possible obligation arising from past events where the probability of outflow of resources
is not remote.
Provisions and contingent liabilities are reviewed at each Balance Sheet date.

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A Kirloskar Group Company
CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)
Significant accounting policies (Contd.)
2.22 Leases
Group has adopted Ind AS 116 ‘Leases’ from 1 April 2019. On transition, Group has recognized
right-to-use asset equal to lease liability which is the present value of the remaining lease payments,
discounted using incremental borrowing rate at the date of initial application i.e. 1 April 2019.
Lease is a contract that provides to the customer (lessee) the right to use an asset for a period of
time in exchange for consideration.
A. Group as a Lessee
A lessee is required to recognised assets and liabilities for all leases with a term that is greater than
12 months, unless the underlying asset is of low value, and to recognize depreciation of leased
assets separately from interest on lease liabilities in the statement of Profit and Loss.
Initial Measurement

Right to use asset

At the commencement date, the Company measures the right-of-use asset at cost.
The cost of the right-of-use asset shall comprise:
• the amount of the initial measurement of the lease liability
• any lease payments made at or before the commencement date, less any lease
incentives received;
• any initial direct costs incurred by the lessee; and
• an estimate of costs to be incurred by the lessee in dismantling and removing the
underlying asset, restoring the site on which it is located or restoring the underlying
asset to the condition required by the terms and conditions of the lease, unless those
costs are incurred to produce inventories. The lessee incurs the obligation for those
costs either at the commencement date or as a consequence of having used the
underlying asset during a particular period.
Lease liability
At the commencement date, the Company measures the lease liability at the present value of
the lease payments that are not paid at that date. The lease payments are discounted using the
interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily
determined, the Company uses its incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise the following
payments:
• fixed payments (including in-substance fixed payments), less any lease incentives
receivable;
• variable lease payments that depend on an index or a rate, initially measured using
the index or rate as at the commencement date;
• amounts expected to be payable by the Company under residual value guarantees;
• the exercise price of a purchase option if the Company is reasonably certain to
exercise that option; and payments of penalties for terminating the lease, if the lease
term reflects the lessee exercising an option to terminate the lease

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Subsequent measurement

Right to use assets

Subsequently the Company measures the right-of-use asset at cost less any accumulated
depreciation and any accumulated impairment losses. ROU assets are depreciated from the
commencement date on a straight-line basis over the shorter of the lease term and useful life of
the underlying asset. ROU assets are evaluated for recoverability whenever events or changes in
circumstances indicate that their carrying amounts may not be recoverable.
Lease Liability
Subsequently the Company measures the lease liability by:
• increasing the carrying amount to reflect interest on the lease liability at the interest rate
implicit in the lease, if that rate can be readily determined or the Company’s incremental
borrowing rate.
• reducing the carrying amount to reflect the lease payments made; and
• re-measuring the carrying amount to reflect any reassessment or lease modifications or to
reflect revised in substance fixed lease payments.
B. Group as a Lessor
Leases in which the company does not transfer substantially all the risks and rewards of ownership
of an asset are classified as operating leases. Rental income from operating lease is recognised
on a straight-line basis over the term of the relevant lease unless the payments to the lessor
are structured to increase in line with expected general inflation to compensate for the lessor’s
expected inflationary cost increases or another systematic basis is available. Initial direct costs
incurred in negotiating and arranging an operating lease are added to the carrying amount of the
leased asset and recognised over the lease term on the same basis as rental income. Contingent
rents are recognised as revenue in the period in which they are earned.
Leases are classified as finance leases when substantially all of the risks and rewards of ownership
transfer from the company to the lessee. Amounts due from lessees under finance leases are
recorded as receivables at the company’s net investment in the leases. Finance lease income is
allocated to accounting periods to reflect a constant periodic rate of return on the net investment
outstanding in respect of the lease.
2.23 Impairment of non-financial assets
The Group assesses at each balance sheet date whether there is any indication that an asset or
cash generating unit (CGU) may be impaired. If any such indication exists, the Group estimates
the recoverable amount of the asset. The recoverable amount is the higher of an asset’s or CGU’s
fair value less costs of disposal or its value in use. Where the carrying amount of an asset or
CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its
recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of money
and the risks specific to the asset.
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable
amount.

300
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)
Significant accounting policies (Contd.)
Impairment losses are recognised in the statement of profit and loss. They are allocated first
to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the
carrying amounts of the other assets in the CGU on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. For other assets, an impairment
loss is reversed only to the extent that the asset’s carrying amount does not exceed the
carrying amount that would have been determined, net of depreciation or amortization, if
no impairment loss had been recognised.
2.24 Fair value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants at the measurement date. The fair value
measurement is based on the presumption that the transaction to sell the asset or transfer
the liability takes place either:
• In the principal market for the asset or liability, or
• In the absence of a principal market, in the most advantageous market for the
asset or liability
The principal or the most advantageous market must be accessible by the Group. The fair
value of an asset or a liability is measured using the assumptions that market participants
would use when pricing the asset or liability, assuming that market participants act in their
economic best interest.
A fair value measurement of a non-financial asset considers a market participant’s ability to
generate economic benefits by using the asset in its highest and best use or by selling it to
another.
The Group uses valuation techniques that are appropriate in the circumstances and for
which sufficient data are available to measure fair value, maximizing the use of relevant
observable inputs and minimizing the use of unobservable inputs.
• Level 1 - Quoted (unadjusted) market prices in active markets for identical
assets or liabilities
• Level 2 - Valuation techniques for which the lowest level input that is significant
to the fair value measurement is directly or indirectly observable
• Level 3 - Valuation techniques for which the lowest level input that is significant
to the fair value measurement is unobservable
For assets and liabilities that are recognised in the financial statements on a recurring basis,
the Group determines whether transfers have occurred between levels in the hierarchy by
re-assessing categorization (based on the lowest level input that is significant to the fair
value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Group has determined classes of assets and
liabilities based on the nature, characteristics and risks of the asset or liability and the level
of the fair value hierarchy as explained above.
2.25 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a
financial liability or equity instrument of another entity.

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CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)

Significant accounting policies (Contd.)
Financial assets
Initial recognition and measurement
All financial assets are recognised initially at fair value. Purchases or sales of financial assets that
require delivery of assets within a time frame established by regulation or convention in the market
place (regular way trades) are recognised on the trade date, i.e., the date that the Group commits
to purchase or sell the asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
• Debt instruments at amortized cost
• Debt instruments at fair value through other comprehensive income (FVTOCI)
• Debt instruments, derivatives and equity instruments at fair value through profit or loss
(FVTPL)
• Equity instruments measured at fair value through other comprehensive income (FVTOCI)
Financial assets are subsequently measured at amortized cost if,
• the asset is held within a business model whose objective is to hold assets in order to
collect contractual cash flows; and
• The contractual terms of instrument give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding.
Derecognition
The Group derecognizes a financial asset when the contractual rights to the cash flows from the
financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction
in which substantially all of the risks and rewards of ownership of the financial asset are transferred
or in which the Group neither transfers nor retain substantially all of the risks and rewards of
ownership and it does not retain control of the financial asset.
Impairment of financial asset
Group applies expected credit loss (ECL) model for measurement and recognition of impairment
loss on the following financial assets and credit risk exposure:
• Financial assets that are debt instruments, and are measured at amortized cost e.g.,
loans, debt securities, deposits, trade receivables and bank balance
• Financial assets that are debt instruments and are measured as at FVTOCI
• Lease receivables
• Trade receivables or any contractual right to receive cash or another financial asset
that result from transactions that are within the scope of Ind AS 11 and Ind AS 18
• Loan commitments which are not measured as at FVTPL
• Financial guarantee contracts which are not measured as at FVTPL
The Group follows ‘simplified approach’ for recognition of impairment loss allowance on:
• Trade receivables or contract revenue receivables; and
• All lease receivables resulting from transactions within the scope of Ind AS 17
The application of simplified approach does not require the group to track changes in credit risk.

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 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)
Significant accounting policies (Contd.)
Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date,
right from its initial recognition. For recognition of impairment loss on other financial assets and
risk exposure, the group determines that whether there has been a significant increase in the
credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is
used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL
is used.
Financial liabilities
Initial recognition and measurement
The Group initially recognizes loans and advances, deposits, debt securities issued and
subordinated liabilities on the date on which they are originated. All other financial instruments
(including regular-way purchases and sales of financial assets) are recognised on the trade
date, which is the date on which the Group becomes a party to the contractual provisions of the
instrument.
A financial liability is measured initially at fair value plus, for an item not at fair value through profit
or loss, transaction costs that are directly attributable to its acquisition or issue.
Financial guarantee contracts
Financial guarantee contracts issued by the Group are those contracts that require a payment to
be made to reimburse the holder for a loss it incurs because the specified debtor fails to make
a payment when due in accordance with the terms of a debt instrument. Financial guarantee
contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are
directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the
higher of the amount of loss allowance determined and the amount recognised less cumulative
amortization.
Derecognition
A financial liability is derecognized when the obligation under the liability is discharged or cancelled
or expires. When an existing financial liability is replaced by another from the same lender on
substantially different terms, or the terms of an existing liability are substantially modified, such an
exchange or modification is treated as the derecognition of the original liability and the recognition
of a new liability. The difference in the respective carrying amounts is recognised in the statement
of profit or loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the consolidated
balance sheet if there is a currently enforceable legal right to offset the recognised amounts
and there is an intention to settle on a net basis, to realize the assets and settle the liabilities
simultaneously.
Derivative financial instruments
Initial recognition and subsequent measurement
The Group uses derivative financial instruments, such as forward currency contracts to hedge its
foreign currency risks. Such derivative financial instruments are initially recognised at fair value
on the date on which a derivative contract is entered into and are subsequently re-measured at
fair value. Derivatives are carried as financial assets when the fair value is positive and as financial
liabilities when the fair value is negative.

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CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)

Significant accounting policies (Contd.)
2.26 Earnings per share (EPS)
Basic EPS is calculated by dividing the profit for the year attributable to equity holders of the
Group by the weighted average number of equity shares outstanding during the financial year,
adjusted for bonus elements in equity shares issued during the year and excluding treasury shares.
Diluted EPS adjust the figures used in the determination of basic EPS to consider
• The after-income tax effect of interest and other financing costs associated with dilutive
potential equity shares, and
• The weighted average number of additional equity shares that would have been outstanding
assuming the conversion of all dilutive potential equity shares (if any).
2.27 Segment reporting
Operating segments are reporting in a manner consistent with the internal reporting to the chief
operating decision maker (CODM).
The board of directors of the company assesses the financial performance and position of the
group and makes strategic decisions. The Board of Directors, which are identified as a CODM,
consists of chief executive officer, chief financial officer and all other executive directors.
Group operates in single reporting segment of ‘Fluid Machinery and Systems’
2.28 Recent accounting pronouncement

Standards issued but not yet effective

The Ministry of Corporate Affairs (MCA) on 5 April 2022, vide Notification dated 23 March 2022 has
issued Companies (Indian Accounting Standard) Amendment Rules, 2022 in consultation with the
National Financial Reporting Authority (NFRA).
The notification states that these rules shall be applicable from 1 April 2022 and would thus be
applicable for the financial year ending 31 March 2023.
The amendments to Ind ASs are intended to keep the Ind ASs aligned with the amendments made
in IFRS.
• Amendments to Ind AS 16, “Property, Plant and Equipment”
The amendments to Ind AS 16 issued by the Ministry of Corporate Affairs amends provisions
regarding proceeds from selling items produced while bringing an asset into the location
and condition necessary for it to be capable of operating in the manner intended by
management.
• Amendments to Ind AS 37, “Provisions, Contingent Liabilities and Contingent Assets”
The amendments to Ind AS 37 issued by the Ministry of Corporate Affairs amends
provisions regarding costs a company should include as the cost of fulfilling a contract
when assessing whether a contract is onerous.
• Amendments to 101, “First-time Adoption of Indian Accounting Standards”
The amendments to Ind AS 101 issued by the Ministry of Corporate Affairs amends
provisions to simplify the application of Ind AS 101 by a subsidiary that becomes a first-time
adopter after its parent in relation to the measurement of cumulative translation differences.

304
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)
Significant accounting policies (Contd.)
• Ind AS 103, “Business Combination”
The amendments to Ind AS 103 issued by the Ministry of Corporate Affairs amends
provisions to:
- substitute the word ‘Conceptual Framework for Financial Reporting under Indian Accounting
Standards (Conceptual Framework)’ with the words ‘Conceptual Framework of Financial
Reporting in Ind AS’.
- add to Ind AS 103 a requirement that, for transactions and other events within the scope of
Ind AS 37 , an acquirer applies Ind AS 37 (instead of the Conceptual Framework) to identify
the liabilities it has assumed in a business combination
- add to Ind AS 103 an explicit statement that an acquirer does not recognise contingent
assets acquired in a business combination.
The above exposure drafts have not been notified by the Ministry of Corporate Affairs (‘MCA’) to
be applicable from 1 April, 2022 as at the date of approval of these financial statements.
On issue of the amendment by MCA, the Company would evaluate the impact of the change in the
consolidated financial statements.

305
306
NOTES TO ACCOUNTS : (CONTD.)
Note 3: Property, Plant and Equipment. Goodwill and Intangible assets
(Amounts in Million `)
Particulars Property, plant and equipment Intangible Assets
Land Land Buildings Plant & Furniture & Office Vehicles Railway Goodwill Computer Other
free hold lease equipment fixtures equipment siding Total software intangible Total
hold assets*
Integrated Annual Report 2021-22

Gross Block
As at 1 April 2020 579.379 85.328 2,691.440 6,708.746 699.154 51.458 122.137 1.714 10,939.356 141.941 323.050 205.289 528.339

Additions - - 23.258 527.790 17.229 6.440 2.853 - 577.570 15.727 0.411 16.138
Disposals /impairment - - (11.462) (77.630) (6.614) (0.061) (3.990) - (99.757) - (13.859) - (13.859)
Exchange difference (4.464) 0.004 34.090 38.726 24.738 0.007 2.271 - 95.371 (0.741) 1.717 1.232 2.949
As at 31 March 2021 574.915 85.332 2,737.326 7,197.632 734.507 57.844 123.271 1.714 11,512.540 141.200 326.635 206.932 533.567
Additions 11.971 - 243.967 779.608 17.795 14.581 30.085 - 1,098.007 6.863 - 6.863
Disposals /impairment - - - (73.114) (2.522) (1.143) (5.728) - (82.507) - (0.043) - (0.043)
Exchange difference (17.103) (0.022) 11.032 17.187 (1.719) (0.004) 0.453 - 9.824 (2.043) (0.409) 0.396 (0.013)
As at 31 March 2022 569.783 85.310 2,992.325 7,921.313 748.060 71.278 148.081 1.714 12,537.864 139.157 333.046 207.328 540.374
Depreciation/ Amortisation
As at 1 April 2020 - 7.646 766.206 5,161.783 593.069 29.970 84.963 1.629 6,645.266 - 279.207 180.693 459.900
Charge for the year - 1.088 71.812 430.172 28.494 7.991 8.348 0.085 547.990 19.863 6.369 26.232
Depreciation on disposal - - (2.134) (32.064) (6.357) (0.059) (3.003) - (43.617) (0.458) - (0.458)
Exchange difference - 0.352 10.022 40.703 26.888 (0.056) 0.571 - 78.480 (7.930) 1.891 (6.039)
As at 31 March 2021 - 9.086 845.906 5,600.594 642.094 37.846 90.879 1.714 7,228.119 - 290.682 188.953 479.635
Charge for the year - 1.544 79.039 435.478 33.876 7.681 8.833 - 566.451 17.512 6.076 23.588
Depreciation on disposal - - - (75.592) (7.362) (1.143) (5.831) - (89.928) (0.043) - (0.043)
Exchange difference - 2.846 (6.953) (7.052) (25.233) (0.003) (0.761) - (37.157) (0.063) (0.052) (0.115)
As at 31 March 2022 - 13.476 917.992 5,953.428 643.374 44.381 93.120 1.714 7,667.485 - 308.088 194.977 503.065
Net block
As at 1 April 2020 579.379 77.682 1,925.234 1,546.963 106.085 21.488 37.174 0.085 4,294.090 141.941 43.843 24.596 68.439
As at 31 March 2021 574.915 76.246 1,891.420 1,597.038 92.412 19.998 32.392 (0.000) 4,284.421 141.200 35.953 17.979 53.932
As at 31 March 2022 569.783 71.834 2,074.333 1,967.885 104.686 26.897 54.961 (0.000) 4,870.379 139.157 24.958 12.351 37.309
Notes:
a) Plants and machines acquired out of proceeds of term loan, are pledged as security against the loan.
b) During the year no provision envisaged for impairment loss .
c) Refer note no 29 for estimated amount of contract remaining to be executed on capital account.
d) Company has not revalued any property, plant and equipment during the FY 2021-22 and FY 2020-21
e) All title deeds of immovable properties are held in the name of company
f) Other intangible assets includes sales tax deferral rights, trade marks, patents and licenses.
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)

Note 4 : Right to use assets

Particulars Amount
Opeing balance as at 1 April 2020 484.058
Net addition / (deletion )during the year (76.749)
Depreciation (105.597)
Balance as at 31 March 2021 301.712
Net addition / (deletion )during the year 77.339
Depreciation (104.998)
Balance as at 31 March 2022 274.053

Note 5 : Investment property

Particulars Amount
Gross Block
As at 1 April 2020 25.724
Additions -
Disposals -
As at 31 March 2021 25.724
Additions -
Disposals 22.944
As at 31 March 2022 2.780

Depreciation and Impairment

As at 1 April 2020 0.530
Charge for the year 0.106
Depreciation on disposals -
As at 31 March 2021 0.636
Charge for the year 0.106
Depreciation on disposals -
As at 31 March 2022 0.742
Net block
As at 1 April 2020 25.194
As at 31 March 2021 25.088
As at 31 March 2022 2.038

307
Integrated Annual Report 2021-22

CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)

Information regarding income and expenditure of investment property

Particulars Year ended Year ended

31 March 2022 31 March 2021
Rental Income derived from investment property - 0.035
Less: Direct operating expenses * - -
Profit arising from investment properties before depreciation
and indirect expenses - 0.035
Less - Depreciation 0.106 0.106
Profit/ (loss) arising from investment properties after
depreciation and indirect expenses (0.106) (0.071)

* Considering the materiality, operating expenses are not apportioned to investment property.
Fair value
The group obtains independent valuations for its investment properties. The valuation model considers current
prices in active market on reliable estimates of future cash-flows.
The main inputs used are the rental growth rates, expected vacancy rates, terminal yields and discount rates
based on comparable transactions and industry data. All resulting fair value estimates for investment properties
are included in level 3.
Fair value as at 31 March 2017 was ` 65.491 Mn. and there is no significant movement in fair value.

Note 6 : Financial assets: Investments

Particulars As at As at
31 March 2022 31 March 2021
I Long term investments - at cost
(a) Investment in Equity instruments 796.543 680.442
(b) Capital contribution in Partnership Firm 0.005 0.005
Total 796.548 680.447
II Current investment 1,584.198 1,268.231
Total 1,584.198 1,268.231

Particulars As at 31 As at
March 2022 31 March 2021
Aggregate amount of quoted investments 1,584.198 1,268.231
Aggregate amount of unquoted investments 796.548 680.447

308
 CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)
Note 6 : Financial assets: Investments (Contd.)

Sr Particulars Face Value Partly Paid / Extent of holding (%) No. of Shares / Units Amount in Million Rupees
No Fully paid
As at As at As at As at As at As at
31 March 2022 31 March 2021 31 March 2022 31 March 2021 31 March 2022 31 March 2021
Non-current investments
(1) Investments at fair value through Other comprehensive income
1 Kirloskar Proprietary Limited * INR 100 Fully Paid - - 512 512 0.005 0.005
(2) Investment accounted using equity method
a Kirloskar Ebara Pumps Limited INR 10 Fully Paid 45% 45% 225,000 225,000 796.538 680.004
b KBL Synerge LLP* NA NA 50% 50% - 0.005 0.005
c SPP Neziv Pump Solution Proprietary Limited Rand 1 Fully Paid 49% 49 - 0.433
Total Investments accounted using equity method 796.543 680.442
Total Investments 796.548 680.447
Current investments
3 Investment accounted using fair value through profit and loss
a Investment in mutual funds 1,584.198 1,268.231
All joint ventures and associate companies are incorporated and have place of business as India. except, the SPP Neziv Pump Solution Propritary Limited, which was joint venture of step down subsidiary
SPP Pumps International PTY Ltd, incorporated and has place of business as South Africa.
*KBL Synerge LLP a limited liability partnership was formed in year 2017 between Kirloskar Brothers Ltd, Mrs. Sneha Phatak and Synerge Overseas Pte. Ltd. This LLP has been created for a short term
project. Following are the details of total capital and share of each partner in it. Currently KBL Synerge LLP is not operative.

Name of Partner Capital Contributed Share in Partnership and

(Rs) profit (%)
Kirloskar Brothers Limited 5,000 50
Synerge Overseas Pte. Ltd 2,600 26
Mrs. Sneha Phatak 2,400 24
Total 10,000 100

The Company has complied with the number of layers for its holding in downstream companies prescribed under clause (87) of section 2 of the Companies Act, 2013 read with the Companies (Restriction
on number of Layers) Rules, 2017.

Company has not made any additional investment in it’s group companies during the year. (In FY 2020-21 company has made additional investment of `340 Mn in it’s wholly owened subsidiary Kirloskar
A Kirloskar Group Company
KIRLOSKAR BROTHERS LIMITED

Brothers International B.V. for making the further investment in step down subsidiaries.)

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CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)
Note 7 : Financial assets: Trade receivables

Particulars As at As at
31 March 2022 31 March 2021
Non-current
Unsecured, considered good 390.283 595.852
Doubtful 622.176 675.177
1,012.459 1,271.029
Less : Provision for significant increase in credit risk and
credit impaired receivables 622.176 675.177
390.283 595.852
Current
Unsecured, considered good 5,295.815 4,636.866
Doubtful 80.913 93.465
5,376.728 4,730.331
Less : Provision for significant increase in credit risk and
credit impaired receivables 80.913 93.465
5,295.815 4,636.866
Total trade receivables 5,686.098 5,232.718

Trade receivables are non-interest bearing and are generally on terms of 1 to 90 days. Refer note 44 (A) for
ageing.

Note 8 : Financial assets: Other financial assets

Particulars As at As at
31 March 2022 31 March 2021
Non-current
(a) Claims receivable
Unsecured, considered good 17.648 17.968
Doubtful 12.545 12.545
30.193 30.513
Less : Provision for significant increase in credit risk and
credit impaired claims 12.545 12.545
17.648 17.968
(b) Fixed deposits with the original maturity of
more than 12 months 151.928 66.479
(c) Interest accrued 0.039 0.037
(d) Security deposits
Unsecured, considered good 83.282 81.182
Doubtful 11.147 18.273
94.429 99.455
Less : Provision for significant increase in credit risk and
credit impaired deposits 11.147 18.273
83.282 81.182
252.897 165.666

310
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)

Note 8 : Financial assets: Other financial assets (Contd.)

Particulars As at As at
31 March 2022 31 March 2021
Current
(a) Claims receivable
Unsecured, considered good 23.146 27.688

(b) Interest accrued 15.026 3.203

(c) Security deposits
Unsecured, considered good 828.715 971.218
866.887 1,002.109
Total other financial asset 1,119.784 1,167.775

Note 9 : Other assets

Particulars As at As at
31 March 2022 31 March 2021
Non-current
(a) Advances to supplier of capital goods 104.108 215.201
(b) Advances to supplier and others
Unsecured, considered good 303.370 28.388
Doubtful 70.340 72.576
373.710 100.964
Less : Provision for doubtful advances 70.340 72.576
303.370 28.388
(c) Prepaid expenses 5.431 9.935
(d) Retention 371.489 458.690
(e) Advance income tax (net of provision) 251.887 324.117
(f) Claims receivable - 0.164
1,036.285 1,036.495
Current
(a) Advances to supplier and others
Unsecured, considered good 288.194 597.535
(b) Prepaid expenses 250.014 295.980
(c) Gross amount due from customer for project related
contract work 203.097 231.799
(d) Retention 1,239.920 1,413.932
(e) Claims receivable 1,436.334 1,365.386
3,417.559 3,904.632
Total other assets 4,453.844 4,941.127

311
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CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)

Note 10 : Inventories

Particulars As at As at
31 March 2022 31 March 2021
(a) Raw Materials (*) 2,119.052 1,747.756
(b) Work-in-progress 2,237.327 2,313.191
(c) Finished goods 1,682.800 1,483.708
(d) Stock-in-trade (*) 249.075 359.146
(e) Stores and spares 146.981 124.634
(Mode of valuation refer note 2.7 )
Total inventories 6,435.235 6,028.435

(*) ‘Include goods in transit - ` 111.876 MN (PY 2020-21 : ` 90.116 MN)

Amounts recognised in profit or loss
Write-down of inventories to net realizable value/ any loss due to it’s obsolete nature (net of reversal) amount-
ed to ` 31.569 MN (PY 2020-21 ` 65.892 MN) was recognised as an expense during the year.

Note 11 A : Cash and cash equivalents

Particulars As at As at
31 March 2022 31 March 2021
(a) Balances with bank
In current and EEFC account (Including cheques on hand) 766.166 1,197.024
Bank deposits 1,525.074 536.159
(b) Cash on hand 1.448 2.123
Total cash and cash equivalents 2,292.688 1,735.306

Note 11 B : Other bank balances

Particulars As at As at
31 March 2022 31 March 2021
(a) Earmarked balances with bank
Unpaid dividend accounts 11.600 14.880
(b) Other deposits 283.131 0.508
(c) Margin money 3.370 3.227
Total other balances 298.101 18.615

312
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)

Note 12: Equity share capital

Particulars As at As at
31 March 2022 31 March 2021
Authorised
250,000,000 ( 250,000,000 ) equity shares of ` 2/- each (`2/-) each 500.000 500.000

Issued, subscribed & fully paid up
79,408,926 (79,408,926) equity shares of ` 2/- each (` 2/-) each 158.818 158.818
158.818 158.818

(a) Terms/rights attached to equity shares

The company has only one class of equity shares, having face value of ` 2/- per share. Each holder of
equity share is entitled to one vote per share and has a right to receive dividend as recommended by the
board of directors subject to the necessary approval from the shareholders. In the event of liquidation
of the company, the holders of equity shares will be entitled to receive remaining assets of the company
after distribution of all preferential amounts. The distribution will be in proportion to the number of equity
shares held by the shareholders.
For the year ended 31 March 2022 the board of directors have proposed final dividend of Rs. 3.00 (FY
2021 : Rs. 3.00) per share subject to shareholder’s approval.

(b) Reconciliation of share capital

Particulars As at As at As at As at
31 March 2022 31 March 2022 31 March 2021 31 March 2021
Number Amount Number Amount
Shares outstanding at the 79,408,926 158.818 79,408,926 158.818
beginning of the year
Shares Issued during the - -
year under ESOS
Shares outstanding at the 79,408,926 158.818 79,408,926 158.818
end of the year

( c) Details of shareholder holding more than 5% shares

Particulars As at As at As at As at
31 March 2022 31 March 2022 31 March 2021 31 March 2021
No. of % of Holding No. of % of Holding
Shares Shares
Kirloskar Industries Limited 18,988,038 23.91% 18,988,038 23.91%
Mr. Sanjay Chandrakant 17,847,465 22.48% 17,847,465 22.48%
Kirloskar *
Mrs. Pratima Sanjay 13,849,488 17.44% 13,849,488 17.44%
Kirloskar
Nippon Life India Trustee 4,278,923 5.39% 4,278,923 5.39%
Ltd. A/C Nippon India Small
Cap Fund

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CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)

(d) Details of shares held by promoters

Particulars As at As at As at As at
31 March 2022 31 March 2022 31 March 2021 31 March 2021
No. of % of Holding No. of % of Holding
Shares Shares
Mr. Sanjay Chandrakant 17,847,465 22.48% 17,847,465 22.48%
Kirloskar *
Mr. Rahul Chandrakant 404,501 0.51% 404,501 0.51%
Kirloskar
Mr. Atul Chandrakant 398,888 0.50% 398,888 0.50%
Kirloskar
Mr. Vikram Shreekant 70,236 0.09% 70,236 0.09%
Kirloskar
Ms. Jyotsna Gautam 441,805 0.56% 441,805 0.56%
Kulkarni

There is no change in shares held by promoters’ during the FY 2021-22 and 2020-21. Details of shares
held by promoter’s group are available on Company’s website.
* includes 1,761,919 (PY - 1,761,919), 2% (PY - 2%) shares held in the capacity of a trustee.
For the period of five years immediately preceding the date as at which the balance sheet is prepared,
no shares are
i. allotted as fully paid up pursuant to contracts without payment being received in cash
ii. allotted as fully paid shares by way of bonus shares
iii. bought back.

314
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)

Note 13: Other equity

Particulars As at As at
31 March 2022 31 March 2021
(a) Capital reserve 5.237 5.237
(b) Capital redemption reserve 9.237 9.237
(c) Securities premium 414.700 414.700
(d) General reserves 6,334.597 6,334.597
(e) Foreign Currency Translation Reserve
Opening balance 297.878 277.219
Add: Current year transfer (7.111) 20.659
Closing balance 290.767 297.878
(f) Retained Earnings
Opening balance 3,826.447 2,230.763
Add : Net profit for the year 943.357 1,610.911
Other comprehensive income for the year 29.309 24.477
Balance available for appropriation 4,799.113 3,866.151
Less : Appropriations :
Final and interim dividend 238.227 39.704
Sub total 238.227 39.704
Closing balance 4,560.886 3,826.447
11,615.424 10,888.096

Capital reserve:
The company has recognised profit or loss on purchase, sale, issue or forfeiture/ cancellation of own equity
instrument to capital reserve.
Capital Redemption Reserve:
The Company has recognised Capital Redemption Reserve on redemption of preference shares from its
retained earnings as per the applicable provisions of Companies Act, 1956.
Securities Premium :
The amount received in excess of face value of the equity shares is recognised in Securities Premium Reserve.
In case of equity-settled share based payment transactions, the difference between fair value on grant date and
nominal value of share is accounted as securities premium.
General reserve:
The Company has transferred a portion of the net profit of the Company before declaring dividend to general
reserve pursuant to the earlier provisions of Companies Act 1956. Mandatory transfer to general reserve is not
required under the Companies Act 2013.

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CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)

Retained Earnings:
Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve,
dividends or other distributions paid to shareholders.
Foreign currency translation reserve
Exchange differences arising on translation of foreign operations are recognised in other comprehensive
income and are accumulated in separate reserve within equity. The cumulative amount is reclassified to profit
and loss, when the investment is disposed off.

Note 14 : Financial liabilities: Borrowings

Particulars As at As at
31 March 2022 31 March 2021
Non-current
Secured
Term loan from various banks 1,738.870 1,120.893

(Terms of loans: Term loans are availed by the group from various
banks across the world. Loans are repayable over the period of 3 to
10 years and carry interest rates varing from 1% to 10.5%. Loans are
secured against fixed assets purchased from proceeds of loan and
corporate guarantees given by holding company)
Less- Current maturities of non- current borrowings 375.237 282.470
1,363.633 838.423
Unsecured
Other unsecured borrowings - 1.795
(Terms of loans: It includes deferral payment liabilities under sales
tax deferral scheme and finance lease obligations. The sale tax
deferral loan is to be repaid in 9 yearly installments starting from
April 2013. Other loan carries market interest rate and are repaid till
December 2020.) 1,363.633 840.218
Current
Secured
Loans repayable on demand from bank
(i)
Cash / export credit facilities and working capital
demand loans 2,013.089 1,882.215
(Terms of loans: Loan carries interest @ 2% to 10.5% per
annum and secured against the inventory, receivables and
mortgage of plant & machinery in some cases)

Total secured loan - Current 2,013.089 1,882.215
Current maturities of long term loan
375.237 282.470
Total current borrowings 2,388.326 2,164.685
Total borrowings 3,751.959 3,004.903

316
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)

1. The quarterly returns or statements filed by the Company and it’s group companies for working capital
limits with such banks and financial institutions are in agreement with the books of account of the
Company and it’s group companies.
2. The group has utilized loans for the specific purpose for which same are availed.
3. The Company or any of its group company is not declared as willful defaulter by any bank or financial
institution (as defined under the Companies Act, 2013) or consortium thereof or other lender in accordance
with the guidelines on willful defaulters issued by the Reserve Bank of India.
4. The Company and it’s group companies do not have any charges or satisfaction which is yet to be
registered with Registrar of Companies (ROC) beyond the statutory period.

Note 15 : Financial liabilities: Trade payables

Particulars As at As at
31 March 2022 31 March 2021
Non-current
Total outstanding dues of creditors other than micro, small and
medium enterprises 74.851 89.440
74.851 89.440
Current
Total outstanding dues of micro, small and medium enterprises
(refer note 42) 683.536 875.852
Total outstanding dues of creditors other than micro, small and
medium enterprises 5,226.980 4,621.710
5,910.516 5,497.562
Total trade payables 5,985.367 5,587.002

Terms and conditions of the above financial liabilities:

Trade payables are non-interest bearing and are normally settled on 60-day terms except dues to micro and
small enterprises which are settled in 45 days or contractual term whichever is earlier. Refer note 44(B) for
ageing.

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CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)

Note 16: Other financial liabilities

Particulars As at As at
31 March 2022 31 March 2021
Non-Current
Other liabilities 108.448 16.606
108.448 16.606
Current
(a) Investor Education & Protection fund (will be credited as
and when due).
Unclaimed dividends 11.600 14.880
(b) Others
Trade deposits 85.177 103.528
Salary and reimbursements 518.204 511.870
Payables on account of purchases of fixed assets 20.479 42.526
Provision for expenses and other liabilities 892.286 1,386.473
1,516.146 2,044.397
1,527.746 2,059.277
Total other financial liabilities 1,636.194 2,075.883

Terms and conditions of the above financial liabilities:

1) Other payables are non-interest bearing.
2) For explanations on the Group’s credit risk management processes, (refer note 40)

318
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)

Note 17: Provisions

Particulars As at As at
31 March 2022 31 March 2021
Non-current
Provisions for employee benefits
(a) Compensated absences (refer note 38) 151.435 147.134
(b) Pension scheme (refer note 34) 38.617 36.286
(c) Gratuity (refer note 34) 23.561 25.013
213.613 208.433
Other provisions
(a) Provision for product warranty (refer note 38) 36.928 28.723
(b) Provision for decommissioning and restoration costs
(refer note 38) 8.892 8.218
45.820 36.941
259.433 245.374
Current
Provisions for employee benefits
(a) Compensated absences (refer note 38) 165.946 156.049
(b) Gratuity and Provident fund (refer note 34) 47.158 32.550
213.104 188.599
Other provisions (refer note 38)
(a) Provision for product warranty 464.104 322.924
(b) Provision for loss on long term contracts 62.556 41.360
526.660 364.284
739.764 552.883
Total provisions 999.197 798.257

Note 18: Other liabilities

Particulars As at As at
31 March 2022 31 March 2021
Non-current
(a) Gross amount due to customers for project related contract work 165.624 64.859
(b) Advance from customer 522.335 150.325
687.959 215.184
Current
(a) Gross amount due to customers for project related contract work 1,398.859 1,620.061
(b) Advances from customer 1,931.786 2,157.982
(c) Contribution to provident fund and superannuation fund 132.915 134.679
(d) Statutory dues 143.994 71.280
(e) Deferred revenue 89.124 103.108
3,696.678 4,087.110
Total other non-financial liabilities 4,384.637 4,302.294

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CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)

Note 19 : Income tax

(1) The major components of income tax expense for the year ended 31 March 2022 and 31 March
2021 are:
(a) Statement of profit and loss

Particulars Year ended Year ended

31 March 2022 31 March 2021
Current income tax:
Current income tax charge (Net of MAT credit entitlement) 423.199 459.843
Adjustments in respect of income tax of previous year 36.477 (175.850)
Deferred tax:
Relating to origination and reversal of temporary differences 79.824 (2.301)
Income tax expense reported in the statement of profit or
loss 539.500 281.692

(b) Statement of other comprehensive income (OCI)

Tax related to items recognised in OCI during in the year:

Particulars Year ended Year ended

31 March 2022 31 March 2021
Related to remeasurement gains and losses
Income tax charged to OCI (5.968) 10.816
Deferred tax charged to OCI - -
(5.968) 10.816

320
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)

(2) Reconciliation of tax expense and the accounting profit multiplied by India’s domestic tax rate for
the year ended 31 March 2022 and 31 March 2021:

Particulars Year ended Year ended

31 March 2022 31 March 2021
Accounting profit before tax 1,354.830 1,820.773
At India’s statutory income tax rate of 25.168%/ (25.168%) (a) 340.984 458.252
Adjustments
Non deductible expenses (b) (34.060) (92.166)
(Including provisions for advances, Interest on TDS, donation,
penalties etc.)
Tax impact of above adjustments (8.572) (23.196)
MAT credit assets (not recorded) / Utilized - -
MAT entitlement for earlier years and other credits of earlier
years - 174.794
Rate difference on opening DTA/ DTL/ different tax rates from 19.540 94.733
holding company
Tax impact of B/F losses (Tax losses on which DTA is not (169.384) (67.248)
recognised)
Other items (3.832) (4.128)
Effect of overseas branch exemption - -
Earlier year excess / short provision (36.268) 1.605
Reversal of deferred tax recognised in earlier years
Total (c) (198.516) 176.560
Tax expenses at effective rate (a-c) 539.500 281.692
Tax expenses recorded in books 539.500 281.692

(3) Movement in deferred tax

(a) Balance sheet

Deferred tax relates to the following: DTL/ (DTA) As at As at

31 March 2022 31 March 2021
Property, plant and equipment (Depreciation) 80.998 84.068
Employee benefits (110.261) (114.355)
Provision for doubtful debts and advances (352.142) (332.294)
Others - (DTA) /DTL 47.192 37.026
(Including deferred tax on undistributed profits of joint venture
and carry forwarded losses)
(334.213) (325.555)
MAT credit (83.537) (146.693)
(417.750) (472.248)
Reflected in balance sheet as
Deferred tax asset 417.750 472.248

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CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)

(b) Statement of profit and loss

Particulars Year ended Year ended

31 March 2022 31 March 2021
Property, plant and equipment (Depreciation) (3.070) (10.531)
Employee benefits 4.094 5.070
Provision for doubtful debts and advances (19.848) (41.442)
Others - (DTA) /DTL 10.166 41.543
(Including deferred tax on undistributed profits of joint venture
and carry forwarded losses)
(8.658) (5.360)
MAT Credit utilised and forex difference 88.482 3.059
Deferred tax expense/(income) 79.824 (2.301)

(2) Movement in Current tax

(a) Balance sheet

Reflected in balance sheet as As at As at

31 March 2022 31 March 2021
Non- current advance tax 251.887 324.117
Current advance tax 92.550 65.753
344.437 389.870

(b) Statement of Profit and loss and other comprehensive income

Particulars Year ebded Year ebded

31 March 2022 31 March 2021
Current tax (asset)/ liability as at beginning of year (389.870) (490.147)
Add: Additional provision during the year - Statement of Profit
and loss account 459.676 283.993
Add: Additional provision during the year - Other
comprehensive income (5.968) 10.816
Less: Current tax paid during the year (Net of refund received
for previous years) (408.275) (194.532)
Non Current tax (asset)/ liability as at end of year (344.437) (389.870)

322
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)
Note 20: Revenue from operations

Particulars Year ended Year ended

31 March 2022 31 March 2021
(a) Sale of products
(Refer note 30 for the construction contract revenue) 29,083.940 26,239.855

(b) Sale of services 858.735 603.224
29,942.675 26,843.079
(c) Other operating revenues (majorly includes scrap sales and
exports benefits) 633.602 322.323
Total 30,576.277 27,165.402

Note 21: Other income

Particulars Year ended Year ended

31 March 2022 31 March 2021
(a) Interest Income
From customers and others 39.643 62.762
On income tax and sales tax refund 0.023 28.570
(b) Release of deferred income 14.369 17.372
(c) Profit on sale of mutual fund investment 32.192 27.006
(d) Other non-operating income 238.099 242.155
(e) Foreign exchange gain - 159.464
Total 324.326 537.329

Note 22: Cost of raw materials consumed , Changes in inventories of finished goods, stock-in -trade and
work-in-progress
Particulars Year ended Year ended
31 March 2022 31 March 2021
(A) Cost of raw material consumed 15,164.812 12,321.289
(B) Changes in inventories of finished goods, work-in-progress
and stock-in-trade
Opening Stock (Refer note 10)
Finished goods 1,483.708 1,671.288
Work-in- progress 2,313.191 2,164.018
Stock in trade 359.146 362.839
4,156.045 4,198.145
Closing Stock (Refer note 10)
Finished goods 1,682.800 1,483.708
Work-in- progress 2,237.327 2,313.191
Stock in trade 249.075 359.146
4,169.202 4,156.045
Total change in inventories (13.157) 42.100

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CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)

Note 23: Employee benefits expense

Particulars Year ended Year ended

31 March 2022 31 March 2021
(a) Salaries, wages and bonus 4,522.001 4,411.449
(b) Defined contribution plans 184.165 198.398
Contribution to provident fund, superannuation fund and ESIC
(c) Defined benefit plans 146.299 141.522
Gratuity, Provident fund and Pension
(d) Welfare expenses 163.061 136.322
Total 5,015.526 4,887.691

Note 24: Finance costs

Particulars Year ended Year ended

31 March 2022 31 March 2021
(a) Interest expense
(at effective interest rate/ market rate of interest) 217.300 314.635
(b) Other borrowing costs
(includes bank guarantee commission, LC charges, loan
processing charges) 117.377 126.874
Total 334.677 441.509

Note 25: Depreciation and amortization expense

Particulars Year ended Year ended

31 March 2022 31 March 2021
(a) Depreciation on property, plant and equipment and investment
property 566.557 548.096
(b) Amortization of intangible assets 23.588 26.232
(c) Amortisation of right to use assets (Lease) 104.998 105.597
Total 695.143 679.925

324
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)

Note 26: Other expenses

Particulars Year ended Year ended

31 March 2022 31 March 2021
Other Manufacturing Expenses
Stores and spares consumed 1,078.991 750.440
Processing charges 826.865 616.155
Power & fuel 479.462 397.211
Repairs and maintenance
Plant and machinery 230.362 133.742
Buildings 100.781 63.042
Other 63.996 47.841
Other expenses
Rent 30.346 38.082
Rates and taxes 124.466 113.725
Travelling and conveyance 187.140 136.624
Communication expenses 99.592 109.703
Insurance 170.016 169.230
Directors’ sitting fees 7.890 5.923
Royalties and fees * 59.659 52.268
Freight and forwarding charges 596.527 538.609
Brokerage and commission 125.935 146.022
Advertisements and publicity 156.147 193.225
Provision for product warranty 358.119 173.428
Loss on sale/disposal of fixed assets 0.730 9.449
Provision for doubtful debts, advances and claims 80.733 164.036
Bad debts written off 88.297 124.398
Advances, deposits and claims written off 8.304 7.484
Auditor’s remuneration (refer note 31) 46.679 41.794
Professional, consultancy and legal expenses 599.681 441.565
Security services 65.967 62.084
Computer services 291.179 252.454
Non-executive directors remuneration 13.550 12.000
Stationery & Printing 39.459 30.010
Training course expenses 20.136 16.649
Outside labour charges 363.581 205.810
Corporate social responsibility expenses (refer note 43) 31.407 29.723
Other miscellaneous expenses 351.415 294.869
Total 6,697.412 5,377.595

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CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)

* As specified in note given in the Board’s Report in respect of legal proceeding pending against KPL, the
Company has in the interim, without prejudice to all its rights and contentions, including those in the pending
proceedings, in compliance with the order of Hon’ble commercial court, Pune has deposited the claimed
royalty amount by way of cheque in safe custody of the Ld. Nazir, District court, Pune from the quarter ended
October 2018 onwards until 3rd quarter of 2021-22.

Note 27: Other Comprehensive Income

Particulars Year ended Year ended

31 March 2022 31 March 2021
Items that will not be reclassified to statement of profit and loss
Remeasurements gains and losses on post employments benefits 22.363 34.693
Tax on Remeasurements gains and losses 5.968 (10.816)
Share in other comprehensive income of joint venture company 1.165 0.727
Items that will be reclassified to statement of profit and loss
Gains/ losses on currency translation for foreign subsidiaries (7.111) 20.659
Total 22.385 45.263

Note 28 : Contingent liabilities

Particulars As at As at
31 March 2022 31 March 2021
Other money for which the company is contingently liable for
i) Central Excise and Service tax (Matter Subjudice) 1,048.672 1,043.720
ii) Sales Tax (Matter Subjudice) 280.723 401.073
iii) Income Tax (Matter Subjudice) 154.024 726.756
iv) Labour Matters (Matter Subjudice) 69.001 64.763
v) Other Legal Cases ( Matter Subjudice ) 503.080 491.925
2,055.500 2,728.237

The company does not expect any reimbursement in respect of the above contingent liabilities. It is not practi-
cable to estimate the timing of cash flow if any with resepct to above matters.

Note 29 : Commitments

Particulars As at As at
31 March 2022 31 March 2021
i) Estimated amount of contracts remaining to be executed on
capital account and not provided for
(net of capital advances) 281.000 273.840
ii) Letters of credit outstanding 521.605 739.936
802.605 1,013.776

326
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)

Note 30 : Additional disclosures as required by Ind AS 115 ‘Revenue from contracts with customers’
a) Additional details in relation to contracts satisfied over the period

Particulars Year ended Year ended

31 March 2022 31 March 2021
a) Contract Revenue recognised as revenue for the year 1,357.765 1,122.462
b) Advances received 1,054.480 1,188.919
c) Amount of retentions 1,611.409 1,872.623
d) Gross amount due from customer
Contract costs incurred 9,216.748 7,803.484
Recognised Profits less recognised Losses 2,509.231 2,383.279
Less: Progress Billing 11,447.570 9,849.566
Less: Provision for gross amount due from customer 75.312 105.398
203.097 231.799
e) Gross amount due to customer
Contract costs incurred 26,036.163 27,590.155
Recognised Profits less recognised Losses 4,888.535 4,752.598
Less: Progress Billing 32,489.181 34,027.673
(1,564.483) (1,684.920)

b) Reconciliation of revenue from sale of products with the contracted price

Particulars Year ended Year ended

31 March 2022 31 March 2021
a) Contracted price 30,306.658 27,238.395
b) Less - trade discounts, volume rebates, late delivery
charges etc 363.983 395.316
Total revenue 29,942.675 26,843.079

Note 31: Remuneration to Auditors

Particulars Year ended Year ended

31 March 2022 31 March 2021
Statutory Auditors :
a) Audit Fees 32.564 29.611
b) Tax Audit Fees 0.426 4.625
c) VAT/ GST Audit Fees 2.555 0.262
d) Limited review fees 3.361 2.100
e) Certification services 0.506 0.424
f) Other services 7.072 4.444
g) Expenses reimbursed 0.195 0.328
Total
46.679 41.794

327
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CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)

Note 32 : Earning per Share (Basic and diluted)

Particulars Year ended Year ended

31 March 2022 31 March 2021
a) Profit for the year before tax 1,354.830 1,820.773
Less : Attributable Tax thereto 539.500 281.692
Add: Share of profit / (loss) in joint venture company 128.435 68.373
943.765 1,607.454
Less: Attributable to Non-controlling interest 0.408 (3.457)
Profit attributable to owners of equity 943.357 1,610.911
b) Weighted average number of equity shares used as
denominator 79,408,926 79,408,926
c) Basic earning per share of nominal value of ` 2/- each 11.88 20.29

Note 33 : Expenditure on Research & Development activities

Particulars Year ended Year ended

31 March 2022 31 March 2021
A Revenue expenditure 245.359 173.405
B Capital Expenditure 0.464 2.427
245.823 175.832

Note 34 :Employee Benefits :

i. Defined Contribution Plans:
Amount of `184.165 Mn.( PY 2020-21 ` 198.398 Mn) is recognised as an expense towards defined
contribution plan and included in Employees benefits expense (Note-23 in the Profit and Loss Statement.)
ii. Defined Benefit Plans:
a) The amounts recognised in Balance Sheet are as follows: Funded Plan

Particulars As at 31 March 2022 As at 31 March 2021

Gratuity Provident Gratuity Provident
Plan Fund Plan Fund
(Funded) (Funded) (Funded) (Funded)
A. Amount to be recognised in Balance Sheet
Present Value of Defined Benefit Obligation 546.318 1,586.091 495.532 1,490.666
Less: Fair Value of Plan Assets 485.812 1,605.918 496.951 1,466.401
Amount to be recognised as liability or (asset) 60.506 (19.827) (1.419) 24.265
B. Amounts reflected in the Balance Sheet
Liabilities 60.506 24.265
Assets - 19.827 1.419
Net Liability/(Assets) 60.506 (19.827) (1.419) 24.265

328
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)

b) The amounts recognised in the Profit and Loss Statement are as follows: Funded Plan

Particulars 2021-22 2020-21

Gratuity Provident Gratuity Provident
Plan Fund Plan Fund
(Funded) (Funded) (Funded) (Funded)
1 Current Service Cost 37.626 48.860 40.025 45.656
2 Acquisition (gain)/ loss - - - -
3 Past Service Cost - - - -
3 Net Interest (income)/expenses (0.088) (2.951) 1.254 (3.384)
5 Actuarial Losses/(Gains) - - - -
6 Curtailment (Gain)/ loss - - - -
7 Settlement (Gain)/loss - - - -
8 Others
Net periodic benefit cost recognised in the 37.538 45.909 41.279 42.272
statement of profit & loss-
(Employee benefit expenses - Note 23)

c) The amounts recognised in the statement of other comprehensive income (OCI) : Funded Plan

Particulars 2021-22 2020-21

Gratuity Provident Gratuity Provident
Plan Fund Plan Fund
(Funded) (Funded) (Funded) (Funded)
1 Opening amount recognised in OCI outside profit
and loss account - - - -
2 Remeasurements for the year - Obligation
(Gain)/loss 27.205 26.523 (33.640) 112.434
3 Remeasurement for the year - Plan assets
(Gain) / Loss (2.066) (74.100) (9.058) (101.192)
4 Total Remeasurements Cost / (Credit ) for the
year recognised in OCI 25.140 (47.577) (42.698) 11.242
5 Less: Accumulated balances transferred to
retained earnings 25.140 (47.577) (42.698) 11.242
Closing balances (remeasurement (gain)/loss
recognised OCI - - - -

329
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CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)

d) The changes in the present value of defined benefit obligation representing reconciliation of
opening and closing balances thereof are as follows: Funded Plan

Particulars As at 31 March 2022 As at 31 March 2021

Gratuity Provident Gratuity Provident
Plan Fund Plan Fund
(Funded) (Funded) (Funded) (Funded)
1 Balance of the present value of Defined benefit
Obligation at the beginning year 495.532 1,490.666 516.202 1,333.342
2 Acquisition adjustment - - - -
3 Transfer in/ (out) 0.460 - - -
4 Interest expenses 29.998 88.609 29.927 76.208
5 Past Service Cost - - - -
6 Current Service Cost 37.626 48.860 40.025 45.656
7 Curtailment Cost / (credit) - - - -
8 Settlement Cost/ (credit) - - - -
9 Benefits paid (44.503) (168.354) (56.982) (168.051)
10 Employee Contribution 99.787 (33.640) 91.077
11 Remeasurements on obligation - (Gain) / Loss 27.205 26.523 112.434
Present value of obligation as at the end of the year 546.318 1,586.091 495.532 1,490.666

e) Changes in the fair value of plan assets representing reconciliation of the opening and closing
balances thereof are as follows: Funded Plan

Particulars As at 31 March 2022 As at 31 March 2021

Gratuity Provident Gratuity Provident
Plan Fund Plan Fund
(Funded) (Funded) (Funded) (Funded)
1 Fair value of the plan assets as at beginning
of the year 496.951 1,466.401 475.604 1,323.956
2 Acquit ion adjustment - - - -
3 Transfer in/(out) - - - -
4 Interest income 30.086 91.560 28.673 79.592
5 Contributions 1.213 142.211 40.599 129.712
6 Benefits paid (44.504) (168.354) (56.983) (168.051)
7 Amount paid on settlement - - - -
8 Return on plan assets, excluding amount
recognized in Interest Income - Gain / (Loss) 2.066 74.100 9.058 101.192
Fair value of plan assets as at the end of the year 485.812 1,605.918 496.951 1,466.401

330
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)

f) Net interest (Income) /expenses: Funded Plan

Particulars 2021-22 2020-21

Gratuity Provident Gratuity Provident
Plan Fund Plan Fund
(Funded) (Funded) (Funded) (Funded)
1 Interest ( Income) / Expense – Obligation 29.998 88.609 29.927 76.208
2 Interest (Income) / Expense – Plan assets (30.086) (91.560) (28.673) (79.592)
3 Net Interest (Income) / Expense for the year (0.088) (2.951) 1.254 (3.384)

g) The broad categories of plan assets as a percentage of total plan assets of Employee’s Gratuity
Scheme are as under:
All plan assets are maintained in a trust fund managed by a public sector insurer viz; LIC of India. LIC
has a sovereign guarantee and has been providing consistent and competitive returns over the years.

h) The amounts pertaining to defined benefit plans are as follows: Funded Plan

Particulars As at 31 March 2022 As at 31 March 2021

Gratuity Provident Gratuity Provident
Plan Fund Plan Fund
(Funded) (Funded) (Funded) (Funded)
Defined Benefit Obligation 546.318 1,586.091 495.532 1,490.666
Plan Assets 485.812 1,605.918 496.951 1,466.401
Surplus/(Deficit) (60.506) 19.827 1.419 (24.265)

i) The amounts recognised in Balance Sheet are as follows: Non Funded Plan

Particulars As at 31 March 2022 As at 31 March 2021

Gratuity Pension Gratuity Pension
Scheme Scheme Scheme Scheme
(Non (Non (Non (Non
Funded) Funded) Funded) (Funded)
A. Amount to be recognised in Balance Sheet
Present Value of Defined Benefit Obligation 29.812 38.617 31.096 36.286
Less: Fair Value of Plan Assets - - - -
Amount to be recognised as liability or (asset) 29.812 38.617 31.096 36.286
B. Amounts reflected in the Balance Sheet
Liabilities 29.812 38.617 31.096 36.286
Assets - -
Net Liability/(Assets) 29.812 38.617 31.096 36.286

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(Amounts in Million `)

j) The amounts recognised in the Profit and Loss Statement are as follows: Non Funded Plan

Particulars 2021-22 2020-21

Gratuity Pension Gratuity Pension
Scheme Scheme
(Non (Non (Non (Non
Funded) Funded) Funded) (Funded)
1 Current Service Cost 1.916 2.292 1.922 2.375
2 Acquisition (gain)/ loss - - - -
3 Past Service Cost - - - 0.041
3 Net Interest (income)/expenses 1.943 1.719 1.955 1.778
5 Actuarial Losses/(Gains) - - - -
6 Curtailment (Gain)/ loss - - - -
7 Settlement (Gain)/loss - - - -
8 Others
Net periodic benefit cost recognised in the 3.859 4.011 3.877 4.193
statement of profit & loss- (Employee benefit
expenses - Note 23)

k) The amounts recognised in the statement of other comprehensive income (OCI) : Non Funded
Plan

Particulars 2021-22 2020-21

Gratuity Pension Gratuity Pension
Scheme Scheme
(Non (Non (Non (Non
Funded) Funded) Funded) (Funded)
1 Opening amount recognised in OCI outside profit
and loss account - - - -
2 Remeasurements for the year - Obligation
(Gain)/loss (1.819) 1.894 0.718 (0.022)
3 Remeasurement for the year - Plan assets
(Gain) / Loss - - - -
4 Total Remeasurements Cost / (Credit ) for the
year recognised in OCI (1.819) 1.894 0.718 (0.022)
5 Less: Accumulated balances transferred to
retained earnings (1.819) 1.894 0.718 (0.022)
Closing balances (remeasurement (gain)/loss
recognised OCI - - - -

332
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)

l) The changes in the present value of defined benefit obligation representing reconciliation of
opening and closing balances thereof are as follows: Non Funded Plan

Particulars 2021-22 2020-21

Gratuity Pension Gratuity Pension
Scheme Scheme
(Non (Non (Non (Non
Funded) Funded) Funded) (Funded)
1 Balance of the present value of - Defined benefit
Obligation as at beginning of the year 31.096 36.286 31.862 35.337
2 Acquisition adjustment - - - -
3 Transfer in/ (out) - - - -
4 Interest expenses 1.943 1.719 1.955 1.778
5 Past Service Cost - - - 0.041
6 Current Service Cost 1.916 2.292 1.922 2.375
7 Curtailment Cost / (credit) - - - -
8 Settlement Cost/ (credit) - - - -
9 Benefits paid (3.324) (3.249) (5.361) (3.296)
10 Remeasurements on obligation - (Gain) / Loss (1.819) 4.187 0.718 3.950
11 Foreign exchange difference - (2.618) - (3.899)
Present value of obligation as at the end of the year 29.812 38.617 31.096 36.286

m) Net interest (Income) /expenses Non Funded Plan

Particulars 2021-22 2020-21

Gratuity Pension Gratuity Pension
Scheme Scheme
(Non (Non (Non (Non
Funded) Funded) Funded) (Funded)
1 Interest ( Income) / Expense – Obligation 1.943 1.719 1.955 1.778
2 Interest (Income) / Expense – Plan assets - - - -
3 Net Interest (Income) / Expense for the year 1.943 1.719 1.955 1.778

n) The amounts pertaining to defined benefit plans are as follows:Non Funded Plan

Particulars 2021-22 2020-21

Gratuity Pension Gratuity Pension
Scheme Scheme
(Non (Non (Non (Non
Funded) Funded) Funded) (Funded)
Defined Benefit Obligation 29.812 38.617 31.096 36.286
Plan Assets - - - -
Surplus/(Deficit) (29.812) (38.617) (31.096) (36.286)

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CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)

Basis used to determine the overall expected return:

The net interest approach effectively assumes an expected rate of return on plan assets equal to the beginning
of the year Discount Rate. Expected return of 6.3 % (PY 2020-21 6.1%) has been used for the valuation purpose.
o) Principal actuarial assumptions at the balance sheet date (expressed as weighted averages)
1 Discount rate as at 31-03-2022 - 6.80% (PY- 6.30%)
2 Expected return on plan assets as at 31-03-2022- 6.3%( PY- 6.1%)
3 Salary growth rate : For Gratuity Scheme - 8% (PY - 7%)
4 Attrition rate: For gratuity scheme the attrition rate is taken at 11% (PY - 7%)
5 The estimates of future salary increase considered in actuarial valuation take into account
inflation, seniority, promotion and other relevant factors, such as supply and demand in the
employment market.
p) 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 specified ex-employees wherein the beneficiaries
are entitled to defined monthly pension.
q) The Company expects to fund ` 52.77 MN (P.Y Rs NIL) towards its gratuity plan in the year
2022-23.

334
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)

Note 35 :Related Party Disclosures

(A) Names of the related party and nature of relationship where control/ significant influence exists

Sr. Name of the related party Nature of relationship

No.
1 Karad Projects and Motors Limited Subsidiary Company
2 The Kolhapur Steel Limited Subsidiary Company
3 Kirloskar Corrocoat Private Limited Subsidiary Company
4 Kirloskar Brothers International BV Subsidiary Company
5 SPP Pumps Limited Subsidiary of Kirloskar Brothers International B.V.
6 Kirloskar Brothers(Thailand) Limited Subsidiary of Kirloskar Brothers International B.V.
7 SPP Pumps (MENA) LLC Subsidiary of Kirloskar Brothers International B.V.
8 Kirloskar Pompen BV Subsidiary of Kirloskar Brothers International B.V.
9 Micawber 784 Proprietary Limited Subsidiary of Kirloskar Brothers International B.V.
10 SPP Pumps International Proprietary Limited Subsidiary of Kirloskar Brothers International B.V.
11 Rotaserve Limited Subsidiary of Kirloskar Brothers International B.V.
12 SPP France S.A.S Subsidiary of SPP Pumps Limited
13 SPP Pumps Inc Subsidiary of SPP Pumps Limited
14 SPP Pumps South Africa Proprietary Limited Subsidiary of SPP Pumps International Proprietary
Limited
15 Braybar Pumps Proprietary Limited Subsidiary of SPP Pumps International Proprietary
Limited
16 Rodelta Pumps International BV Subsidiary of Kirloskar Brothers International B.V.
17 Rotaserve BV Subsidiary of Kirloskar Pompen BV
18 SPP Pumps Real Estate LLC Subsidiary of SPP Pumps Inc
19 SyncroFlo Inc. Subsidiary of SPP Pumps Inc
20 SPP Pumps (Asia) Ltd Subsidiary of Kirloskar Brothres (Thailand) Ltd
(KBTL)
21 SPP Pumps (Singapore) Ltd Subsidiary of Kirloskar Brothres (Thailand) Ltd
(KBTL)
22 Rotaserve Mozambique Subsidiary of SPP Pumps International Proprietary
Limited
23 KBL synerge LLP Associate of Kirloskar Brothers Limited
24 Kirloskar Ebara Pumps Limited Joint venture of Kirloskar Brothers Limited

335
Integrated Annual Report 2021-22

CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)

Note 35 :Related Party Disclosures

(B) : Names of related parties with whom transactions have been entered into:

1) Joint Venture Kirloskar Ebara Pumps Limited

2) Key Management Personnel Mr. Sanjay Kirloskar Mr. K.Taranath

Ms. Rama Kirloskar Mr. Owen Shelvin

Mr. Alok Kirloskar Mr. C.M. Mate

Mr. Pratap Shirke Mr. Stephen Apel

Mr. Rakesh Mohan Mr. Achyut Dhadphale

Mr. Rajeev Kher Ms. Prabha Kulkarni

Mrs. Shailaja Kher Mr. Akshay Dhar

Mr. Pradyumna Vyas Mr. Ravindra Samant

Mr. S. Unnikrishnan Mr. John Karen

Mr. Shobinder Duggal Mr. Mohammed Hassan

Mr. Shrinivas Dempo Mr. Clive Harper

Ms. Ramni Nirula Mr. Bob Tichband

Mr. Amitava Mukherjee Mr. Remko Dubois

Mr. Vivek Pendharkar Mr. Ajeet Kulkarni

Ms. Rekha Sethi

3)
Relatives of Key Management Mrs. Pratima Kirloskar Wife of Mr. Sanjay Kirloskar
Personnel Sanjay Kirloksar HUF HUF of Mr. Sanjay Kirloskar

4) Post Employee Benefit Plans Kirloskar Brothers Ltd Employees Prov. Fund For Engg. Factory
Kirloskar Brothers Ltd Staff Members Prov. Fund
Kirloskar Brothers Limited, Kirloskarvadi Employee Gratuit Fund
Kirloskar Brothers Executive Staff Superannuation fund

5) Substantial Interest Corrocoat Limited, UK

336
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)

(C) Disclosure of related parties transactions

Sr. Nature of transaction/relationship/ 2021-22 2020-21

No. major parties Amount Amount Amount Amount
1 Purchase of goods 33.739 97.405
Joint Venture
Kirloskar Ebara Pumps Limited 27.809 90.605
Substantial Interest
Corrocoat Limited, UK 5.930 6.800

2 Sale of goods/contract revenue 2.324 6.896

Joint Venture
Kirloskar Ebara Pumps Limited 2.324 6.896

3 Rendering Services 78.890 62.087

Joint Venture
Kirloskar Ebara Pumps Limited 78.890 62.087

4 Receiving Services 7.386 18.281

Joint Venture
Kirloskar Ebara Pumps Limited 0.869 12.752
Substantial Interest
Corrocoat Limited, UK 0.112 0.112
Relatives of Key Management Personnel
Mrs. Pratima Kirloskar 6.405 5.417

5 Reimbursement of expenses by KBL 13.178 0.002

Joint Venture
Kirloskar Ebara Pumps Limited 13.178 0.002

6 Dividend received 13.500 4.500

Joint Venture
Kirloskar Ebara Pumps Limited 13.500 4.500

7 Dividend paid 96.504 15.117

Key Management Personnel
Mr. Sanjay Kirloskar (*) 54.405 8.542
Mr. Alok Kirloskar 0.244 0.078
Mr. Pratap Shirke 0.060 0.009
Ms. Rama Kirloskar 0.225 0.075
Relatives of Key Management Personnel
Mrs. Pratima Kirloskar 41.571 6.413

(*) Includes dividend received in capacity of trustee of ` 5.285 Mn. (PY- ` 0.814 Mn.)

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CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)
(C) Disclosure of related parties transactions

Sr. Nature of transaction/relationship/ 2021-22 2020-21

No. major parties Amount Amount for Amount Amount for
Major parties Major parties
8 Remuneration Paid 205.474 210.910
Key Management Personnel
Short Term Employee Benefit
Mr. Sanjay Kirloskar 47.570 50.258
Mr. Ravindra Samant 7.149 6.392
Ms. Rama Kirloskar 23.807 13.737
Mr. Alok Kirloskar 26.795 27.320
Mr. Stefan Apel 21.465 19.222
Mr. Remko Dubois 23.910 22.451
Mr. Ajeet Kulkarni 1.049 10.245
Mr. Owen Shevlin 18.067 17.028
Mr. Mohammed Hassan 1.804 1.626
Mr. John Kahren 21.680 27.326
Mr. Bob Tichband 12.178 15.304
13.109 8.450
Key Management Personnel
Commission on profits
Mr. S Unnikrishnan 1.300 1.300
Mr. Pratap Shirke 1.300 1.300
Mr. Kishor Chaukar - 0.650
Mr. Rakesh Mohan 1.300 1.300
Mr. Rajeev Kher 1.083 1.300
Mr. Pradyumna Vyas 1.300 1.300
Ms. Shailaja Kher 1.300 1.300
Mr. Shobinder Duggal 1.192
Mr. Shrinivas Dempo 1.192
Ms. Ramni Nirula 1.192
Mr. Amitava Mukherjee 0.650
Mr. Vivek Pendharkar 0.650
Ms. Rekha Sethi 0.650
9.030 6.133
Key Management Personnel
Sitting Fees
Mr. Padmakar Jawadekar - 0.030
Mr. Pratap Shirke 2.353 0.810
Mr. Alok Kirloskar 0.480 0.405
Mr. Kishor Chaukar - 0.270
Mr. K.Taranath 0.100 0.133
Mr. Clive Harper 0.030 0.030
Mr. Chittranjan Mate 0.030 0.030
Mr. S.R.Yadwadkar - 0.013

338
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)
(C) Disclosure of related parties transactions

Sr. Nature of transaction/relationship/ 2021-22 2020-21

No. major parties Amount Amount for Amount Amount for
Major Major
parties parties

Mr. Sanjay Kirloskar 0.045 0.055
Ms. Rama Kirloskar 0.150 0.570
Mr. Rakesh Mohan 1.200 1.020
Mr. Rajeev Kher 0.803 1.155
Mr. S Unnikrishnan 1.125 0.495
Mr. Achyut Dhadphale 0.098 0.140
Mr. Anant Sathe - 0.063
Ms. Prabha Kulkarni 0.043 0.045
Mr. Pradyumna Vyas 0.420 0.495
Ms. Shailaja Kher 0.503 0.375
Mr. Shobinder Duggal 0.473 -
Mr. Shrinivas Dempo 0.338 -
Ms. Ramni Nirula 0.405 -
Mr. Amitava Mukherjee 0.135 -
Mr. Vivek Pendharkar 0.150 -
Ms. Rekha Sethi 0.135 -
Mr. Akshay Dhar 0.015 -

Post Employment Benefit 14.948 40.508
Mr. Sanjay Kirloskar 3.180 30.123
Ms. Rama Kirloskar 4.294 1.665
Mr. Ravindra Samant 1.120 1.299
Mr. Alok Kirloskar 2.433 2.581
Mr. Bob Tichband 1.415 3.968
Mr. Mohammed Hassan - 0.025
Mr. Stefan Apel 1.631 -
Mr. John Kahren 0.874 0.846

9 Contribution paid to post Employment

benefit plans 46.740 84.289
Provident Fund 44.636 39.575
Superannuation Fund 2.104 8.504
Gratuity Trust - 36.210

10 Reimbursement received 2.851 15.704

Joint Venture
Kirloskar Ebara Pumps Limited 2.851 15.704

11 Purchase of asset - 51.500

Joint Venture 51.500
Kirloskar Ebara Pumps Limited -

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CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)
( D) Amount due to/from related parties

Sr. Nature of transaction/relationship/ 2021-22 2020-21

No. major parties Amount Amount for Amount Amount for
Major parties Major parties
1 Accounts receivables
Joint Venture 44.980 29.720
Kirloskar Ebara Pumps Limited 44.980 29.720

2 Accounts payables 3.004 37.847
a Joint Venture
Kirloskar Ebara Pumps Limited 1.315 37.592
b Substantial Interest
Corrocoat Limited, UK 1.690 0.256

Key Management Personnel (#) 56.004 48.862

Mr. Sanjay Kirloskar 32.058 34.000
Mr. S Unnikrishnan 1.300 1.300
Mr. Pratap Shirke 1.300 1.300
Mr. Alok Kirloskar 1.300 1.300
Mr. Kishor Chaukar - 0.650
Mr. Rakesh Mohan 1.300 1.300
Ms. Rama Kirloskar 9.540 5.089
Mr. Rajeev Kher 1.080 1.300
Mr. Pradymana Vyas 1.300 1.300
Ms. Shailaja Kher 1.300 1.300
Mr. K.Taranath - 0.012
Mr. Achyut Dhadphale - 0.012
Mr. Amitava Mukherjee 0.650 -
Ms. Rekha Sethi 0.650 -
Ms.Ramini Niruala 1.192 -
Mr. Shrinivas Dempo 1.192 -
Mr. Shobinder Duggal 1.192 -
Mr. Vivek Pendharkar 0.650 -

c Relatives of Key Management Personnel 0.870
Mrs Pratima Kirloskar 0.870

(#) Commission to Chairman- Managing Director and Non-Executive Directors is approved in board meeting
held on 24th May 2022. Payment will be made in the year 2022-23

340
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)

Note 36 : Disclosure pursuant to Schedule V read with regulations 34(3) and 53(f) of the SEBI(Listing
Obligations And Disclosure Requirements) Regulations,2015 :
A Loans and advances in the nature of loans for working capital requirements :

Name of the Company Balance as at Maximum

outstanding

As at As at As at As at
31 March 2022 31 March 2021 31 March 2022 31 March 2021
To Subsidiary Companies
The Kolhapur Steel Limited 159.610 160.414 160.414 160.414
To Associate
KBL Synerge LLP - - - -

* Consists of ` 9.610 MN, out of Rs. 57.500 MN unsecured loan given under order from Board for Industrial
and Financial Reconstructions (BIFR) without any specific agreed terms for charge of interest and repayment.
Balance loan of `150.000 Mn is with specified terms and conditions.
B Loans and advances in the nature of loans to firms/companies in which directors are interested:
NIL
C Investment by the loanee (borrower) in the shares of the Company or subsidiary of the Company
: NIL
Note:- Loans to employees 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.

Note 37 : Joint Venture and Jointly controlled operations

a) List of Joint Venture

Sr Name of the Joint Venture Description Ownership Interest Country of

No Incorporation
1 Kirloskar Ebara Pumps Limited Jointly controlled 45% India
entity

b) Financial Interest in Jointly controlled entities

Sr. Name of the Joint Venture Summarized financial information
No
As at As at
31 March 2022 31 March 2021
1 Kirloskar Ebara Pumps Limited Assets 2,342.219 2,119.749
Liabilities 572.133 607.666
2021-22 2020-21
Income 2,305.913 1,909.661
Expenses
(including tax expenses) 2,020.501 1,707.005
Profit after tax 285.412 202.656
Other comprehensive income 2.590 1.615
Total comprehensive income 288.002 204.271

341
Integrated Annual Report 2021-22

CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)

c) Contingent liabilities, if any, incurred in relation to interest in Joint Ventures: For income tax - Nil
(` 13.282 Million)
d) Capital commitments, if any, in relation to interest in Joint Ventures : ` 23.627 Million (`15.837
Million)
e) List of Jointly controlled operations :

Sr Name of the Jointly controlled Description Ownership Country of

No operation Interest Incorporation
1 HCC - KBL Jointly controlled operations NA India
2 KBL – MCCL Jointly controlled operations NA India
3 KCCPL – IHP – BRC – TAIPPL – KBL JV Jointly controlled operations NA India
4 IVRCL – KBL JV Jointly controlled operations NA India
5 Maytas – KBL JV Jointly controlled operations NA India
6 Larsen & Toubro – KBL JV Jointly controlled operations NA India
7 KBL-MEIL-KCCPL JV Jointly controlled operations NA India
8 KBL – PLR JV Jointly controlled operations NA India
9 KBL – Koya – VA Tech JV Jointly controlled operations NA India
10 KBL – PIL Consortium Jointly controlled operations NA India
11 Larsen & Toubro – KBL – Maytas JV Jointly controlled operations NA India
12 IVRCL – KBL – MEIL JV Jointly controlled operations NA India
13 Pioneer – Avantica – ZVS – KBL JV Jointly controlled operations NA India
14 AMR – Maytas – KBL – WEG JV Jointly controlled operations NA India
15 Indu – Shrinivasa Constructions –
KBL – WEG JV Jointly controlled operations NA India
16 MEIL – KBL – IVRCL JV Jointly controlled operations NA India
17 MEIL – Maytas – KBL JV Jointly controlled operations NA India
18 KCCPL – TAIPPL – KBL JV Jointly controlled operations NA India
19 KBL-SPML JV Jointly controlled operations NA India
20 MEIL - KBL JV Jointly controlled operations NA India
21 MAYTAS – MEIL – KBL JV Jointly controlled operations NA India
22 Gondwana - KBL JV Jointly controlled operations NA India
23 MEIL -PRASAD-KBL CONSORTIUM Jointly controlled operations NA India
24 JCPL - MEIL - KBL CONSORTIUM Jointly controlled operations NA India
25 KBL -PTIL UJV Jointly controlled operations NA India
26 KBL - RATNA - JOINT VENTURE Jointly controlled operations NA India
27 MEIL-KBL-WEG CONSORTIUM Jointly controlled operations NA India
28 MEIL-KBL- ( KDWSP ) JV Jointly controlled operations NA India
29 KBL and TCIPL JOINT VENTURE Jointly controlled operations NA India
30 ACPL & KBL JV Jointly controlled operations NA India
31 Kirloskar Brothers Ltd. JV Jointly controlled operations NA India
32 ITD CEMENTATION INDIA LIMITED JV Jointly controlled operations NA India
33 GSJ - KBL JV Jointly controlled operations NA India
34 JBL-KBL-GSJ JV Jointly controlled operations NA India

342
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)

Note 38: Details of provisions and movements in each class of provisions

Particulars
Provision for Provision for Provision for Provision for
compensated product decommissioning Loss on
Absences warranty and restoration Long Term
cost Contracts
Carrying amount as at 1 April 2020 327.736 363.159 7.595 68.910
Add: Provision during the year 2020-21 net of
reversal of excess provision for earlier years 13.640 186.503 - 0.554
Add: Unwinding of discounts - 5.204 0.623 -
Less: Amount utilized during the year 2020-21 (38.193) (209.559) - (29.504)
Less: Amount reversed during the year 2020-21 - (0.120) - -
Add: Foreign exchange difference 6.460 - 1.400
Carrying amount as at 31 March 2021 303.183 351.647 8.218 41.360
Add: Provision during the year 2021-22 net of
reversal of excess provision for earlier years 44.863 363.926 - 30.945
Add: Unwinding of discounts - 2.580 0.674 -
Less: Amount utilized during the year 2021-22 (30.665) (209.543) - (9.234)
Less: Amount reversed during the year 2021-22 - (5.806) - -
Add: Foreign exchange difference (1.772) - (0.515)
Carrying amount as at 31 March 2022 317.381 501.032 8.892 62.556
Non-current provision 151.435 36.928 8.892 -
Current provision 165.946 464.104 - 62.556

Compensated absences
The cost of the leave encashment and the present value of the leave encashment obligation are determined
using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from
actual developments in the future. These include the determination of the discount rate; future salary increases
and mortality rates.
Provision for warranty
Provision for warranty is made for estimated warranty claims in respect of products sold, which are under
warranty at the end of the reporting period. These claims are expected to be settled in the next 18-24 months.
Management records the provision based on the historical warranty claims information and any recent trends
that may suggest future claims which could differ from historical amount.
Provision for decommissioning and restoration cost
A provision has been recognised for decommissioning and restoration costs associated with windmills on
lease hold land. The Company is committed to restore the site at the end of useful life of windmills.
Provision for long term contract
A provision is made for the expected loss of the projects, where the estimated cost is more than the estimated
revenue. Changes in estimated cost and estimated revenue are assessed by the management at the end of
reporting period based on the price variation received/ given, change in the scope of project and revision of
estimates regarding date of completion, expected costs to be incurred, changes in external circumstances
such as applicable tax rates etc.

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CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)
Note 39: Fair Value Measurements
As per assessments made by the management fair values of all financial instruments carried at amortised
costs (except as specified below) are not materially different from their carrying amounts since they are
either short term nature or the interest rates applicable are equal to the current market rate of interest.

The Company has not performed a fair valuation of its investment in unquoted ordinary shares which are classified
as FVOCI (refer Note 5), as the Company believes that impact of change on account of fair value is insignificant.

Sr.No Particulars Carrying value

As at As at
31 March 2022 31 March 2021
Levelled at Level 1
(a) Carried at fair value through Profit and loss (FVTPL)
Investment in Mutual funds 1,584.198 1,268.231

Levelled at Level 2
(b) Carried at amortised cost
Trade receivable 5,686.098 5,232.718
Other financial assets 1,119.784 1,167.775
Cash and cash equivalent 2,292.688 1,735.306
Other bank balances 298.101 18.615

Levelled at Level 3
(c) Investments in unquoted equity shares (FVOCI) 0.005 0.005

Financial Liabilities

(a) Carried at amortised cost
Non-current borrowings 1,363.633 840.218
Current borrowings 2,388.326 2,164.685
Trade payable 5,985.367 5,587.002
Lease liability 209.309 305.098
Other financial liabilities 1,636.194 2,075.883

344
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)
Note 40: Financial risk management policy and objectives
Group’s principal financial liabilities, comprise loans and borrowings, trade and other payables, and financial
guarantee contracts. The main purpose of these financial liabilities is to finance Group’s operations and to
provide guarantees to support its operations. Group’s principal financial assets include trade and other
receivables, security deposits and cash and cash equivalents, that derive directly from its operations.
In order to minimize any adverse effects on the financial performance of the Group, it has taken various
measures. This note explains the source of risk which the entity is exposed to and how the entity manages the
risk and impact of the same in the financial statements.

Risk Exposure arising from Measurement Management

Credit risk Cash and cash equivalents, Aging analysis, Diversification of bank deposits,
trade receivables, financial External credit rating credit limits and letters of credit
assets measured at (wherever available)
amortised cost.
Liquidity risk Borrowings and other Rolling cash flow Availability of committed credit lines
liabilities forecasts and borrowing facilities
Market risk - Recognised financial assets Sensitivity Analysis Management follows established
Foreign Currency and liabilities not risk management policies,
Risk denominated in Indian including use of derivatives
rupee (INR) like foreign exchange forward
contracts, where the economic
conditions match the company’s
policy.

The Group’s risk management is carried out by management, under policies approved by the board of directors.
Group’s treasury identifies, evaluates and hedges financial risks in close co­operation with the Group’s operating
units. The board provides written principles for overall risk management, as well as policies covering specific
areas, such as foreign exchange risk, credit risk, and investment of excess liquidity.
(A) Credit Risk
Credit risk in case of the Group arises from cash and cash equivalents, deposits with banks and financial
institutions, as well as credit exposures to customers including outstanding receivables.
Credit risk management
Credit risk arises from the possibility that counter party may not be able to settle their obligations as
agreed. To manage this, the Group periodically assesses the reliability of customers, taking into account
the financial condition, current economic trends, and analysis of historical bad debts and ageing of
accounts receivable. Individual risk limits are set accordingly.
The Group considers the probability of default upon initial recognition of asset and whether there has
been a significant increase in credit risk on an ongoing basis throughout each reporting period. To
assess whether there is a significant increase in credit risk, the Group compares the risk of a default
occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition.
It considers reasonable and supportive forward looking information such as:
(i) Actual or expected significant adverse changes in business,
(ii) Actual or expected significant changes in the operating results of the counterparty,
(iii) Financial or economic conditions that are expected to cause a significant change to counterparty’s
ability to meet its obligations,
(iv) Significant increases in credit risk on other financial instruments of the same counterparty,
(v) Significant changes in the value of collateral supporting the obligation or in the quality of third-
party guarantees or credit enhancements.

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CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)

The Group provides for expected credit loss in case of trade receivables, claims receivable and security
deposits when there is no reasonable expectation of recovery, such as a debtor declaring bankruptcy or
failing to engage in a repayment plan with the Group etc.
For the security deposits and claims receivable, provision for expected loss is made considering 12
months expected credit loss. Provision for lifetime credit loss is made if there is significant increase in
credit risk for such financial assets.
In respect of trade receivable, Group uses the simplified approach for the provision for expected loss.
The lifetime expected loss provision is recognised based on the provision matrix as decided by the
management, based on the historical experience of recoverability. The Group categorizes a receivable
for provision for doubtful debts/write off when a debtor fails to make contractual payments greater than 1
year past due in case product business and 4 years past due in case of project business. In addition to
this Group also provides the expected loss based on the overdue number of days for receivables as per
the provision matrix. Where loans or receivables have been written off, the Group continues to engage
in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are
recognised in profit or loss.
Provision for expected credit loss
Financial assets for which loss allowance is measured using Expected Credit Losses (ECL) model as per
Ind AS 109,

Exposure to Risk As at As at
31 March 2022 31 March 2021
Trade Receivables 6,389.187 6,001.360
Less : Expected Loss 703.089 768.642
5,686.098 5,232.718
Security Deposits 923.144 1,070.673
Less : Expected Loss 11.147 18.273
911.997 1,052.400
Claims Receivable 53.339 58.201
Less : Expected Loss 12.545 12.545
40.794 45.656

Trade receivable ageing used in the provision matrix for life time expected credit loss is as -

Trade Receivables As at As at
31 March 2022 31 March 2021
Neither past due nor impaired 2,270.046 1,875.614
Past due but not impaired
Less than 180 days 1,869.694 1,448.337
181 - 365 days 380.054 533.651
More than 365 days 1,166.304 1,375.115
Total 5,686.098 5,232.717

346
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)

Reconciliation of loss provision

Trade receivables Others

Loss allowance as at 1 April 2020 741.479 42.835

Changes in loss allowance 27.163 (12.017)
Loss allowance as at 31 March 2021 768.642 30.818
Changes in loss allowance (65.553) (7.126)
Loss allowance as at 31 March 2022 703.089 23.692

B) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding
through an adequate amount of committed credit facilities to meet obligations when due and to close out
market positions. Due to the dynamic nature of the underlying businesses, Group maintains flexibility in
funding by maintaining availability under committed credit lines.
Management monitors rolling forecasts of the Group’s liquidity position (comprising the undrawn
borrowing facilities below) and cash and cash equivalents on the basis of expected cash flows. This
is carried out in accordance with practice and limits set by the group. In addition, the Group’s liquidity
management policy involves projecting cash flows and considering the level of liquid assets necessary to
meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements
and maintaining debt financing plans.

Exposure to Risk As at As at
31 March 2022 31 March 2021
Interest bearing borrowings
On demand 1,012.705 1,092.629
Less than 180 days 1,380.327 1,082.470
181 - 365 days 4.910 -
More than 365 days 1,354.017 829.804
Total 3,751.959 3,004.903
Other financial liabilities
On demand 95.258 118.104
Less than 180 days 1,424.641 1,817.409
181 - 365 days 2.161 138.250
More than 365 days 114.134 2.120
Total 1,636.194 2,075.883
Lease liability
On demand - -
Less than 180 days 83.195 112.148
181 - 365 days 83.194 112.149
More than 365 days 42.920 80.801
Total 209.309 305.098
Trade & other payables
On demand 2,337.546 2,267.327
Less than 180 days 1,243.145 955.976
181 - 365 days 1,083.301 877.678
More than 365 days 1,321.374 1,486.021
Total 5,985.366 5,587.002

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CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)

The Group has access to following undrawn facilities at the end of the reporting year (Interest rates
6.8% - 10.1%)

As at As at
31 March 2022 31 March 2021
Expiring within one year 1,346.710 1,210.821
Expiring beyond one year - -

Note 40: Financial risk management policy and objectives (continued)

C) Market risk - Interest rate risk
The company’s exposure to the risk of changes in market interest rates relates to borrowings with floating
interest rates. To manage the risk, company has created balance portfolio of fixed and variable interest
rate borrowings.
Change of 0.5%, in the base rates will have effect of ` 18.760 MN on the company’s profitability.
(D) Foreign Currency Risk
The group is exposed to foreign exchange risk mainly through its sales to overseas customers and
purchases from overseas suppliers in various foreign currencies.
The group evaluates exchange rate exposure arising from foreign currency transactions and the group
follows established risk management policies, including use of natural hedge between receivables
and payables, use of derivatives like foreign exchange forward contracts to hedge exposure to foreign
currency risk, where the economic conditions match the group’s policy.

Financial Currency Amount in Amount in INR (MN)

Assets Foreign
Currency (MN)
As at As at As at As at
31 March 2022 31 March 2021 31 March 2022 31 March 2021
Trade Receivables EUR 1.144 0.081 96.192 6.906
GBP 0.139 0.040 13.848 4.025
USD 12.365 11.072 937.107 809.443
SGD 0.003 0.194 0.148 10.567
AED - 0.034 - 0.704
Bank Accounts EGP 0.358 0.478 1.482 2.221
EUR 0.051 0.099 4.325 8.469
GBP 0.514 0.273 51.089 27.471
USD 1.729 2.405 131.069 175.852
VND - 12.254 - 0.038
XOF 0.144 1.835 0.025 0.232
SGD 0.014 0.004 0.766 0.213
AED 0.019 0.009 0.377 0.184
IDR 142.567 107.529 0.755 0.553
CZK 0.719 1.933 2.481 6.632
Other Deposits XOF - 0.500 - 0.063
USD 0.003 0.205
Amount Due from EGP - 0.002 - 0.009
Employees EUR - 0.006 - 0.484
GBP 0.005 - 0.523 -
USD 0.002 0.047 0.174 3.426

348
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)

Financial Currency Amount in Amount in INR (MN)

Liabilities Foreign
Currency (MN)
As at As at As at As at
31 March 2022 31 March 2021 31 March 2022 31 March 2021
Trade Payables EGP 0.731 0.731 3.025 3.391
EUR 1.356 2.088 114.053 179.112
GBP 0.065 0.032 6.481 3.223
USD 4.660 4.539 353.175 331.816
JPY - 0.375 - 24.793
VND 15,649.974 15,649.974 51.645 48.515
XOF 149.962 155.666 25.494 19.723
SGD 0.003 0.023 0.140 1.255
IDR 11.435 0.061
CZK - - - -
AED 0.176 0.069 3.437 1.416
Amount Due to EUR - (0.005) - (0.438)
Employees XOF - - -
USD (0.002) -0.002 (0.155) -0.124

Currency wise net exposure ( assets - liabilities )

Particulars Amount in Foreign Currency (MN) Amount in INR (MN)
As at As at As at As at
31 March 2022 31 March 2021 31 March 2022 31 March 2021
EGP (0.373) (0.250) (1.543) (1.162)
EUR (0.161) (1.898) (13.537) (162.815)
GBP 0.593 0.281 58.979 28.273
USD 9.438 8.987 715.330 657.029
JPY - (0.375) - (24.793)
VND (15,649.974) (15,637.720) (51.645) (48.477)
XOF (149.818) (153.331) (25.469) (19.427)
SGD 0.014 0.175 0.774 9.525
CZK 0.719 1.933 2.481 6.632
AED (0.157) (0.026) (3.059) (0.528)
IDR 142.567 107.529 0.755 0.553
Sensitivity Analysis
Currency Amount in INR (MN) Sensitivity % Sensitivity %
2021-22 2020-21 2021-22 2020-21
EGP (1.543) (1.162) 3.54% 4.78%
EUR (13.537) (162.815) 4.19% 3.11%
GBP 58.979 28.273 4.33% 1.67%
USD 715.330 657.029 3.25% 2.18%
JPY - (24.793) 1.66% 2.54%
VND (51.645) (48.477) 3.01% 0.91%
XOF (25.469) (19.427) 7.96% 1.12%
SGD 0.774 9.525 3.84% 2.13%
CZK 2.481 6.632 6.69% 4.91%
AED (3.059) (0.528) 2.18% 2.68%
IDR 0.755 0.553 1.69% 0.72%

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CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)

Currency Impact on profit (strengthen) Impact on profit (weakening)

2021-22 2020-21 2021-22 2020-21
EGP 0.055 0.055 (0.055) (0.055)
EUR 0.568 5.059 (0.568) (5.059)
GBP (2.556) (0.472) 2.556 0.472
USD (23.232) (14.316) 23.232 14.316
JPY - 0.629 - (0.629)
VND 1.553 0.440 (1.553) (0.440)
XOF 2.027 0.218 (2.027) (0.218)
SGD (0.030) (0.203) 0.030 0.203
CZK (0.166) (0.325) 0.166 0.325
AED 0.067 0.014 (0.067) (0.014)
IDR (0.013) (0.004) 0.013 0.004
Total (21.728) (8.904) 21.728 8.904
* Sensitivity % are derived based on variation in the exchange rates over the period of last 5 years.
(EGP- Egyptian Pound, GBP - Great Britain Pound, EUR- Euro, USD - US Dollar, VND- Vietnamese
Dong, SGD- Singapore Dollar, JPY - Japanese Yen, AED-Arab emirates Dirham, XOF- CFA Franc, IDR-
Indonesian rupiah, MYR- Malaysian Ringgit, CZK - Czech Koruna )

Note 41: Capital management

a) Risk management
The group’s objectives when managing capital are to
- safeguard it’s ability to continue as a going concern, so that it can continue to provide returns for
shareholders and benefits for other stakeholders, and
- Maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid
to shareholders, return capital to shareholders, issue new shares, change debt mix. Consistent with
others in the industry, the group monitors capital on the basis of the following gearing ratio: Net debt
(total borrowings net of cash and cash equivalents, investment in mutual funds and other bank balances)
divided by Total ‘equity’ (including non-controlling interest) plus net debt.
The group’s strategy is to maintain a gearing ratio within 30%. The gearing ratios were as follows:

Particulars As at As at
31 March 2022 31 March 2021
Loans and borrowings (Including current maturities of long term debt) 3,751.959 3,004.904
Less: Cash and cash equivalents (Including other bank balances) 2,590.789 1,753.921
Less: Investment in mutual funds 1,584.198 1,268.231
Net debt (423.028) (17.248)

Gearing ratio is not applicable as net debt of group is negative.

350
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)

‘b) Dividend

Particulars As at As at
31 March 2022 31 March 2021
Equity Shares
(i) Interim dividend for the year -
(ii) Dividends not recognised at the end of the reporting year 238.227 238.227
(iii) Dividends not recognised at the end of the reporting year
payable to non-controlling interest - -

Since year end the directors have recommended the payment of a final dividend of ` 3.00 per fully paid equity
share (31 March 2021 - ` 3.00). This proposed dividend is subject to the approval of shareholders in the ensu-
ing annual general meeting.

Note 42: Disclosure in respect of micro, small and medium enterprises

Group has amounts due to suppliers under The Micro, Small and Medium Enterprises Development Act, 2006,
[MSMED Act] as at March 31, 2022. The disclosure pursuant to the said Act is as under:

Particulars Year ended Year ended

31 March 2022 31 March 2021
Total outstanding amount in respect of Micro, small and medium
enterprises 683.536 875.852
Other disclosures in respect of micro and small enterprises
Principal amount due and remaining unpaid 4.822 3.965
Interest due on above and unpaid interest 0.103 0.050
Interest paid - -
Payment made beyond appointment day 426.961 141.439
Interest due and payable for the period of delay 4.933 1.170
Interest accrued and remaining unpaid (excluding interest
accured for earlier years) 5.036 1.275
Amount of further interest remaining due and payable in
succeeding years 5.087 0.004

The identification of suppliers as micro, small and medium enterprise as defined under the Micro, Small and
Medium Enterprises Development Act 2006, was done on the basis of information to the extent provided by
the suppliers of group.
Delay in payment is mainly on account of quality issues of vendors.

Note 43: Corporate social responsibility expenditures

(a) Amount required to be spent by the group during the current year is ` 30.935 MN (` 29.176 MN)
(b) Amount spent by the group during the current year is ` 31.407 Million (` 29.723 Million)
The company and it’s subsidiaries as per policy on Corporate Social Responsibility(CSR) and recommendation
and approval of the CSR committee has contributed `13.491 MN towards education through its implementing
agency Vikas Charitable Trust and balance amount on various projects for students and society at large
(including Technical lab development at RIT- Islampur, assistance during Covid-19 outbreak, WASH activity for
students and donation to charitable organisation such as Annamitra foundation etc.) The group has not spent
any amount towards construction or acquisition of asset.

351
352
CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)
Note 44 A : Trade receivables ageing (Amounts in Million `)
Integrated Annual Report 2021-22

Trade receivables as at 31 March 2022

Particulars Not due Outstanding for following periods from due date of Total
payment
Less than 6 months 1-2 2-3 More
6 months to years years than 3
1 year years
Undisputed trade receivable
Considered good 2,270.046 1,869.671 360.424 323.138 306.787 511.989 5,642.055
Which have significant increase in credit - - 13.860 32.170 98.460 460.491 604.981
risk
Credit impaired - 0.023 0.000 1.751 1.742 22.965 26.481
Total undisputed trade receivables (a) 2,270.046 1,869.694 374.284 357.059 406.989 995.445 6,273.517
Disputed trade receivables
Considered good - - 5.770 0.410 - 37.860 44.040
Which have significant increase in credit - - - - 23.150 39.020 62.170
risk
Credit impaired - - - - - 9.460 9.460
Total Disputed trade receivables (b) - - 5.770 0.410 23.150 86.340 115.670
Total trade receivables (a+b) 2,270.046 1,869.694 380.054 357.469 430.139 1,081.785 6,389.187
Provision for increase in 703.089
significant risk and credit impaired
Net trade receivables 5,686.098
 CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)
Trade receivables as at 31 March 2021

Particulars Not due Outstanding for following periods from due date of pay- Total
ment
Less than 6 months 1-2 2-3 More than
6 months to years years 3 years
1 year
Undisputed trade receivable
Considered good 1,870.090 1,448.319 499.941 643.371 161.688 557.626 5,181.035
Which have significant increase in credit - - 32.036 139.911 131.895 398.419 702.261
risk
Credit impaired - 0.018 1.624 0.842 3.847 17.820 24.151
Total undisputed trade receivables (a) 1,870.090 1,448.337 533.601 784.124 297.430 973.865 5,907.447
Disputed trade receivables
Considered good 5.524 - 0.050 9.796 - 36.312 51.682
Which have significant increase in credit - - - - - 32.768 32.768
risk
Credit impaired - - - - - 9.464 9.464
Total Disputed trade receivables (b) 5.524 - 0.050 9.796 - 78.544 93.914
Total trade receivables (a+b) 1,875.614 1,448.337 533.651 793.920 297.430 1,052.409 6,001.361
Provision for increase in significant risk 768.643
and credit impaired
Net trade receivables 5,232.718
A Kirloskar Group Company
KIRLOSKAR BROTHERS LIMITED

353
354
CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)
Note 44 B : Trade payables ageing (Amounts in Million `)

Particulars Year Not due Outstanding for following periods from due date of payment Total

Less than 6 6 months to 1-2 2-3 More

months 1 year years years than 3
Integrated Annual Report 2021-22

years
1 . MSME - Non disputed 2022 645.128 20.878 17.531 - - - 683.537
2021 869.838 1.955 4.059 - - - 875.852
2. MSME - disputed 2022 - - - - - - -
2021 - - - - - - -
3 . Others - Non disputed 2022 1,664.352 1,222.267 1,065.770 323.660 144.389 840.939 5,261.377
2021 1,381.427 954.022 873.619 431.188 190.396 852.048 4,682.700
4 . Others - disputed 2022 28.066 - - - - 12.386 40.452
2021 16.062 - - - - 12.386 28.448
Unearned revenue i.e. gross amount due to customer is not considered in above table being in nature of non-financial liability and
disclosed in note 18.

Note 44 C : Capital work- in- progress

Particulars Year Less than 1-2 2-3 More than Total
1 year years years 3 years
Projects in progress 2022 221.527 26.187 17.143 0.617 265.474
2021 319.196 366.059 33.924 5.520 724.699
Projects temporarily 2022 - 1.785 - - 1.785
suspended 2021 1.785 - - 2.349 4.134

Following projects which were expected to be completed by March 22, got delayed and now expected to get
completed as per following table.
Particulars To be completed in
Less than 1 1-2 2-3 More than Total
year years years 3 years
Manufacturing Plant Expansion 121.410 - - - 121.410
Augmentation of Existing P & M 6.900 - - - 6.900
Upgradation of IT infrastructure 5.790 - - - 5.790
Windmill and other school building 3.075 1.785 - - 4.860
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)
Note 45: Segment reporting

Group operates in single reporting segment of ‘Fluid Machinery and Systems’ Group is not having single major
customer having transactions more than 10% of total revenue of group.

Within India Outside India Total

2021-22 2020-21 2021-22 2020-21 2021-22 2020-21
a) Segment Revenue 21,236.586 17,400.758 9,339.691 9,764.644 30,576.277 27,165.402
Geographic Segment
by location of customer
b) Carrying Amount of 5,341.250 5,290.790 1,285.220 1,280.890 6,626.470 6,571.680
non-current assets
other than deferred
tax asset and financial
assets

Note 46: Disclosure in respect of Ind AS 116, ‘Leases’

Right-to-use asset Year ended Year ended

31 March 2022 31 March 2021
Opening right-to-use asset 301.712 484.058
Net addition during the year including forex difference 77.339 (76.749)
Depreciation charged during the year (104.998) (105.597)
Closing right-to-use asset 274.053 301.712

Particulars Year ended Year ended

31 March 2022 31 March 2021
Opening lease liability 305.097 506.181
Net addition / (deletion ) during the year including forex (7.103) (106.251)
Finance cost 12.521 16.306
Lease payments (101.206) (111.139)
Closing lease liability 209.309 305.097
Non-Current 42.920 80.801
Current 166.389 224.296

Contractual maturities of lease payments

Particulars As at
31 March 2022
Less than one year 75.800
Between 1-2 years 52.362
More than 2 years 99.877

1. Short term leases and leases for low value assets are continued to be accounted for as rent expenses.

2. Total cash outflow for lease arrangements during the year is ` 131.552 Mn

3. Group has not entered into any sublease arrangements.

355
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CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)

(Amounts in Million `)

Note 47: Additional information regarding subsidiaries as per Schedule III of The Companies Act,
2013
Name of the Entity in As at 31 March 2022 Year ended 31 March 2022
the Group
Net Assets Share in Profits or Loss Share in Other Share in Total
(Total Assets - Total comprehensive income comprehensive income
Liabilities)
As % of Amount As % of Amount As % of Amount As % of Amount
consoli- consolidated consolidated consolidated
dated net P&L OCI Total
assets comprehen-
sive income
Parent
Kirloskar Brothers 96.442% 11,380.480 78.893% 744.564 94.305% 21.110 79.250% 765.674
Limited (including
effect of consolidation,
elimination and other
adjustment)
Subsidiaries
Indian
1. Karad Projects and 5.896% 695.781 38.647% 364.735 (7.941%) (1.778) 37.567% 362.957
Motors Pvt Ltd
2. The Kolhapur Steel (5.335%) (629.554) (16.382%) (154.609) 7.887% 1.766 (15.820%) (152.843)
Limited
3. Kirloskar Corrocoat (0.376%) (44.400) 0.085% 0.800 (1.278%) (0.286) 0.053% 0.514
Private Limited
Foreign
1. Kirloskar Brothers (3.486%) (411.369) (14.894%) (140.568) 0.000% 0.000 (14.549%) (140.568)
International B V
(Consolidated)
Non-controlling
interest in all
Subsidiaries,
(Investment as per
equity method)
Indian 0.221% 26.087 0.043% 0.408 1.821% 0.408 0.084% 0.816
Foreign 0.000% 0.000 0.000% 0.000 0.000% 0.000 0.000% 0.000
Joint Ventures(invest-
ment as per the equity
method)
Indian
Kirloskar Ebara Pumps 6.638% 783.303 13.609% 128.435 5.206% 1.165 13.414% 129.600
Limited
TOTAL 100.000% 11,800.328 100.000% 943.765 100.000% 22.385 100.000% 966.150

356
 KIRLOSKAR BROTHERS LIMITED
A Kirloskar Group Company
CONSOLIDATED NOTES TO ACCOUNTS : (CONTD.)
(Amounts in Million `)

Note 48: Others

1. The group does not have any transaction which is not recorded in the books of accounts that has been
surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act,
1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.)
2. The group has not traded or invested in Crypto currency or Virtual Currency during the financial year.
3. No proceedings have been initiated or are pending against the Group for holding any benami property
under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
4. Company and its subsidiaries in India have not entered any transactions with companies struck off under
section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956
5. The company has not advanced or loaned or invested funds (either borrowed funds or share premium
or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (In-
termediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary (i)
directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or
on behalf of the company (Ultimate Beneficiaries) or (ii) provide any guarantee, security or the like to or
on behalf of the Ultimate Beneficiaries
6. The Company has not received any fund from any person(s) or entity(is), including foreign entities
(Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company
shall: (a) directly or indirectly lend or invest in other persons or entities identified in any manner whatso-
ever by or on behalf of the Funding Party (Ultimate Beneficiaries) or (b) provide any guarantee, security
or the like on behalf of the Ultimate Beneficiaries.
7. Previous year’s figure have been regrouped, wherever required.

For and on behalf of the Board of Directors

Sanjay Kirloskar Shobinder Duggal
Chairman and Managing Director Director
DIN: 00007885 DIN: 01192524

Chittaranjan Mate Devang Trivedi
Chief Financial Officer Company Secretary

Pune : 24 May 2022 Pune : 24 May 2022

357
Integrated Annual Report 2021-22

358