Annual Report 2008-09

KIRLOSKAR BROTHERS LIMITED
8 9th A n n u a l R e p o r t 2 0 0 8 - 0 9
Painting the future GREEN.

S ince its inception over a century ago, the Kirloskar Group has contributed
significantly to the Green revolution in India and has been a harbinger of
prosperity to millions.
The colour Green is synonymous with growth and prosperity and symbolises
balance, harmony and renewal. At Kirloskar, we imbibe the spirit of Green, and strive
endlessly with single-minded zeal to spread the colour of prosperity and growth in
India and across the world.
Even in these trying times, your Company has excelled by continuous innovation,
proactive planning and strategic measures.
By setting new engineering benchmarks and redefining paradigms, we are all set to
paint the future GREEN. And ready to harvest the global opportunities that the future
holds.
Achievements in Green
Developing eco-friendly products
Star Attraction
Unique, energy efficient, 7.5 HP monobloc surface water pump with a
'Five Star' rating by BEE, it lifts 16 liters of water per second. This is four
liters more compared to any other pump of similar HP. It consumes 7.6
amperes of electricity as against 12 amperes consumed by other makes.
The Bureau of Energy Efficiency (BEE) and Ministry of Power plan to
launch a scheme to replace all old and energy intensive pumps on farms
with this KBL pump all over India free of charge.

th
Board of Directors
Sanjay Kirloskar Chairman & Managing Director
Gautam Kulkarni Vice Chairman
Vikram Kirloskar Executive Director
M. S. Kirloskar
S. S. Marathe (Upto 28.09.2008)
S. N. Inamdar
M. G. Padhye (Upto 16.12.2008)
Rahul Kirloskar
U. V. Rao
R. K. Srivastava Whole Time Director
P. S. Jawadekar
J. R. Sapre Whole Time Director
A. N. Alawani
Lalita D. Gupte
Pratap B. Shirke
Company Secretary
G. P. Kulkarni
Auditors
M/s. P. G. Bhagwat, Chartered Accountants
Bankers
Bank of India
Canara Bank
HDFC Bank Limited
ICICI Bank Limited
CitiBank N.A.
Registered Office
Udyog Bhavan, Tilak Road, Pune 411 002
Phone : (020) 24440770 Fax : (020) 24402083
Email : kblin@kbl.co.in Website : www.kbl.co.in
Group Website : www.kirloskar.com
New Corporate office

"YAMUNA", Survey No. 98 (3-7), Baner,
Pune - 411 045, Maharashtra (India)
Phone : (020) 27214598 Fax : (020) 27211136
Email : kblin@kbl.co.in Website : www.kbl.co.in
Group Website : www.kirloskar.com
Works
Kirloskarvadi, Dewas, Shirval, Kondhapuri
Information for Shareholders Contents Page No.
Annual General Meeting Decade at a Glance 2

Directors' Report 3
Day & Date : Friday, July 17, 2009 Management Discussion & Analysis 10
Time : 11.00 a. m. Report on Corporate Governance 35
Venue : "YAMUNA", Survey No.98 (3-7) Auditors' Report 49
Baner, Pune - 411 045 Balance Sheet 52
Profit & Loss Account 53
Dates of Book : July 4, 2009 to July 17, 2009 Cash Flow Statement 54
Closure (both days inclusive) Schedules to the Accounts 55
Statement relating to Subsidiary Companies 86
Consolidated Financial Statements 88
1
DECADE AT A GLANCE
(Rupees in Millions)
Particulars 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Net Sales 3713 4162 3746 4757 5078 7309 9246 13,400 15,251 18,309
Other Income 79 295 82 72 225 132 750 2,408 430 359
Material Cost 2162 2557 2279 3126 3393 4859 6093 9,290 11,126 13,927
Other Expenses 1270 1493 1209 1371 1405 1896 1965 2,563 2,704 3,249
Interest 120 141 106 75 65 48 55 84 169 303
Depreciation 72 78 83 85 107 100 97 121 182 207
Profit before tax 168 188 151 172 333 538 1786 3750 1,500 982
Income tax provision 43 48 28 52 68 31 63 385 399 312
Net Profit after tax 125 140 123 120 265 507 1723 3365 1,101 670
Share Capital 71 71 71 71 71 71 212 212 212 212
Reserves 1215 1321 1352 1459 1565 1832 2932 5808 6,409 6,879
Net Worth 1286 1392 1423 1530 1636 1903 3144 6020 6,621 7,091
Imports 51 54 49 119 144 261 606 987 1,152 2,084
Exports 456 586 585 585 572 1005 685 2266 1,483 2,240
Basic Earnings per Share

(Rs.) (Face Value of Rs. 2/-) 3.54 3.98 3.48 3.41 7.51 14.17 15.42 31.82 10.41 6.34
Basic Earnings per Share

(Rs.)(Face Value of Rs. 2/-)
(Excluding Extraordinary
Income/Expense) 3.54 3.15 3.48 3.41 7.51 14.17 10.70 14.76 10.41 6.34
Dividend % 45.00 45.00 45.00 45.00 200.00 300.00 200.00 200.00 200.00 *100.00
Book Value per Share (Rs.) 36.48 39.47 40.37 43.40 46.40 53.97 29.69 56.92 62.60 67.05
Debt Equity Ratio 0.54 0.53 0.41 0.24 0.29 0.18 0.06 0.08 0.09 0.03
Notes :
Previous years' figures have been regrouped to make them comparable.
* Dividend Recommended 100%
Figures of Earning per Share and Book Value per Share are calculated for all the reported years above after considering the subdivision
of equity share of Rs. 10/- each to share of Rs. 2/- each.
2
th
DIRECTORS' REPORT TO THE MEMBERS

Your Directors present the 89th Annual Report and the Audited Annual Accounts Net Sales
of the Company for the year ended March 31, 2009.
FINANCIAL RESULTS 18,000
16,000
The financial results of the Company for the year 2008-09 as compared with the 14,000
previous year are as under: - 12,000
Rs. M
10,000
Current Previous 8,000
Year ended Year ended 6,000
March 31, March 31, 4,000

2005 2006 2007 2008 2009
2009 2008 Year
(Rs.) (Rs.)
Sales 18,309,447,980 15,251,461,446
Other income 359,135,347 429,536,631
Total 18,668,583,327 15,680,998,077
Profit before tax 982,203,176 1,500,406,123 Net Worth

Provision for tax 311,916,578 399,039,651
Profit after tax 670,286,598 1,101,366,472
Surplus in Profit & Loss Account 7,000
brought forward from previous year 506,879,134 600,468,691 6,000
Available surplus 1,177,165,732 1,701,835,163 5,000
4,000
APPROPRIATIONS
Rs. M
3,000
Your Directors propose to appropriate the available surplus as under :- 2,000
Dividend @ 100% (200%) 1,000
on 105,764,355 equity 2005 2006 2007 2008 2009
shares of Rs. 2/- each 211,528,710 423,057,420 Year
Additional tax on Dividend 35,949,305 71,898,609

Transferred to General Reserve 400,000,000 700,000,000
Balance carried to Balance Sheet 529,687,717 506,879,134
TOTAL 1,177,165,732 1,701,835,163
Profitability continues to be under pressure due to various factors. During the Import & Export
current year, as with other industries, there was an impact on the manufacturing
sector due to global economic situations. There have been instances of delay in
project execution and non fulfilment of commitments due to financial crisis faced by
small vendors. 2,500
2,000
The Company is addressing the issue of cost reductions, inventory control and 1,500
Rs. M
faster realization of debtors. During the year the Company has restructured its 1,000
business into various sectors to address each market segments. This sectoral 500
approach which was introduced in the current year is showing encouraging results -
for exploring different market segments. 2005 2006 2007 2008 2009
Year
DIVIDEND
Import Export
Directors recommend a dividend of 100% (Rs. 2/- per equity share) for the year.
SCHEME OF ARRANGEMENT
It is proposed to transfer certain non-core investments to a separate Company to be

formed for this purpose through Scheme of Arrangement. A Company "Kirloskar Earning per Share
Brothers Investments Limited" has been formed and the details of the scheme
would be separately sent to the shareholders after directions of the High Court.
STATUTORY DISCLOSURES 35.00
30.00
1. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND 25.00
FOREIGN EXCHANGE
Rs.
20.00
Details of energy conservation, technology absorption, research and 15.00
development and foreign exchange earnings as required under Section 217 10.00
(1) (e) of the Companies Act, 1956, are given in the Annexure - I to this Report. 5.00
-
2005 2006 2007 2008 2009
2. PARTICULARS OF EMPLOYEES Year
Information regarding employees in accordance with Section 217 (2A) of the

Companies Act, 1956 is given in the Annexure - II to this Report.
3
3. SUBSIDIARY COMPANIES
During the year, the Company has become a Subsidiary Company of Better Value Holdings Private Limited, one of the
promoters and a Kirloskar group Company.
On February 2, 2009, the Company made an application to the Central Government under section 212(8) of the
Companies Act, 1956 for exemption from attaching the annual accounts of the subsidiary companies. However, since
the approval is still pending with the Government, we provide separately the respective annual accounts and other
documents of subsidiary companies.
During the year, the Company has acquired majority shares of The Kolhapur Steel Limited (TKSL), a Company
engaged in the business of manufacturing of alloy steel castings, catering to sugar, cement, steel, pumps, valves,
marine and other general engineering industrial sectors. TKSL which was a sick company registered under the Board
for Industrial and Financial Reconstruction (BIFR), has become subsidiary company during the year. The captive
demands of the Company for quality steel castings would be catered by TKSL. TKSL has reported profit for the year
ended March 31, 2009 and the financials of the subsidiary are provided separately with this annual report.
The subsidiary company Kirloskar Silk Industries Limited, has approached the Government authorities seeking their
approval for change of purpose of the land allotted for a specific purpose. The application is pending with the
Government authorities.
As contemplated earlier, the Joint Venture Company namely Kirloskar Brothers LLC was not formed at Oman as the
project at Sohar in Oman has been executed.
4. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Board of Directors report that
lIn the preparation of the annual accounts, the applicable accounting standards have been followed and there
was no material departure from the accounting standards.
lAccounting policies have been selected and applied consistently and that the judgements and estimates made
are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as at March
31, 2009 and of the profit of the Company for the period April 1, 2008 to March 31, 2009.
lProper and sufficient care has been taken for the maintenance of adequate accounting records, in accordance
with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing
and detecting fraud and other irregularities, and
lThe annual accounts have been prepared on a going concern basis.
5. CASH FLOW
A cash flow statement for the year ended March 31, 2009 is attached to the Balance Sheet.
SAFETY, HEALTH AND ENVIRONMENT

The prestigious international certification OHSAS 18001 has been awarded to Kirloskarvadi plant of the Company for
ensuring and achieving occupational health and safety standards of the persons connected with Kirloskarvadi plant. Our
Dewas and Shirval plants have already been certified, while the Kondhapuri plant will be applying for certification in the
current year.
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges, Management Discussion and Analysis Report,
Report on Corporate Governance, Auditors Certificate on Corporate Governance and the declaration by the Chairman and
Managing Director regarding affirmations for compliance with the Company's Code of Conduct are annexed to this report.
EMPLOYEE STOCK OPTION SCHEME (ESOS)

During the year 2007-08, Company launched the Employees' "Share a Vision" Stock Option Scheme, 2007 (ESOS - 2007).
During the year, first tranch of options got vested. The exercise price offered is at Rs. 200/- per option to be converted into an
equity share on exercise.
The Management has formulated under ESOS - 2007, a proposal of providing stock options at Rs. 2/- per option to award
employee for their outstanding, exemplary performance in getting sustainable results.
The guidelines for issue of Stock Options at Rs. 2/- each under ESOS-2007 to reward exemplary performances of the
employees of the Company have been circulated.
The disclosures required to be made under the Securities and Exchange Board of India (Employee Stock Option Scheme
and Employee Stock Purchase Scheme) Guidelines, 1999 and a certificate from the Statutory Auditors with regards to
compliance of the guidelines, is provided as Annexure - III to this report.
4
th
FIXED DEPOSITS
The Company is neither accepting nor renewing the matured deposits since January, 2003. As on March 31, 2009, deposits
from public and shareholders aggregating to Rs. 913,000/- have matured but have not been claimed. The Company has
sent reminders for the same.
CORPORATE SOCIAL RESPONSIBILITY

The Company has a defined policy on Corporate Social Responsibility. The main thrust is on social health and education.
However, company also undertakes various other activities for economic development of the society. At Kirloskarvadi plant,
various facilities are provided for the benefit of the entire society. Various health camps have been organised - free health
check-up, fitness programs, blood donation camps are conducted by the Company. Company also organized Disaster
Management program for enhancing the level of awareness, where more than forty local representatives attended the
program. In the field of education, Kirloskar Brothers Limited (KBL) gives donation to local schools and colleges. The
Company has also sponsored a turbo machinery course for students of a local engineering college. Our Dewas unit has
joined hands with Municipal Corporation for propagating rain water harvesting. The Company has also sponsored various
training and education oriented programs to the social workers and Non Governmental Organisations.
The Company also continues to support a few Organisations’ activities in the field of education in rural areas and such other
social causes.
CENTENARY CELEBRATION
Kirloskarvadi manufacturing plant has entered its centenary year. During 1910 our founder, Shri Laxmanrao Kirloskar first
came to Kirloskarvadi to establish the factory and township. The Company has planned certain events to celebrate the
centenary year.
A NEW CORPORATE OFFICE

During last few years, the operational activities of the Company have increased tremendously. The Company has been
operating from various locations in the city. A need was therefore felt to operate from a single office and the Company has
built a new corporate office. The new building, named “Yamuna”, is prominently located at Baner on Mumbai-Bangalore
highway. It has an area admeasuring 12000 square meters and has many unique features of a “Green” building. The
Company will soon apply for obtaining a LEED (Leadership in Energy and Environmental Design) rating for this site.
DIRECTORS
With a deep regret, we report the sad demise of Mr. Sharatchandra S. Marathe, Member of the Board of Directors of the
Company since 1985. Mr. Marathe had wide experience in the fields of economics and industry. He was on the Boards of
many other corporates and also on various prestigious committees formed by the Government. His knowledge and guidance
was of a great help to the Company.
Mr. Madhav G. Padhye resigned from the Board with effect from December 16, 2008 due to health problems. Mr. Padhye was
associated with the Company for the last 19 years. He has wide experience in the Civil Engineering, Government service
and Water Resource Development Projects. His expertise and guidance to the Board and the Company has been
noteworthy.
The Board wishes to place on record their gratitude for the guidance received from Mr. Marathe and Mr. Padhye during their
tenures as Directors of the Company.
Mr. Gautam Kulkarni, Mr. A. N. Alawani and Mr. S. N. Inamdar, retire by rotation at the ensuing Annual General Meeting and
being eligible offer themselves for re-appointment.
AUDITORS
M/s. P. G. Bhagwat, the Auditors retire at the ensuing Annual General Meeting and are eligible for re-appointment. The
requisite certificate pursuant to section 224 of the Companies Act, 1956 has been received. The Audit and Finance
Committee has recommended their re-appointment and the annual audit fees.
ACKNOWLEDGEMENTS
Your Directors wish to place on record their appreciation of the unstinted support and co-operation given by banks and
financial institutions. Your Directors would further like to record their appreciation of the efforts of every employee for the
results achieved during the difficult economic conditions faced this year.
For and on behalf of the Board of Directors,
SANJAY KIRLOSKAR
CHAIRMAN
Pune : June 2, 2009
5
ANNEXURE – I TO THE DIRECTORS' REPORT
A. Conservation of Energy
The Company continues to take additional steps for Conservation of Energy. During the year, Company has
undertaken adoption of divided blast cupola to improve coke to metal ratio, installation of hanger type shot
blasting to reduce power consumption, installation of turbo ventilators in the entire factory including stores
and security offices, adoption of energy efficient motors, de-rating of motors, energy saver for CNC turning
lathes to reduce power cost.
Additional measures taken include replacement of power transformer by energy efficient transformer and
VCB for transformers on/off to reduce transmission loss, Bio gas plant for guest house to reduce LPG
consumption, PID controller for heat treatment furnace to reduce power consumption, Energy
management - staggering of melting zone for foundry which reduced demand by 800 KVA, Optimization of
illumination to reduce connect load of 40kw
B. Technology Absorption
1. Research and Development (R&D)
a. Specific area in which R & D carried out by the Company
- Double volute pumps in end suction series of pumps designed to operate at 2900 rpm.
- Horizontal split case pump 2 stage for desalination application.
- Horizontal split case pump with split mechanical seal.
- New product development for high head and high discharge application.
- Development of BHA600 pumps for Suriname project, BHA series enhancement to meet global
requirement.
- Indigenous development of metallic volute pump
- Weight reduction of components for VT pumps and valves
- Development of AWWA series of Air Valves
- Development of 3000 mm, 1700 mm and Ebonite lined butterfly valves.
b. Benefits
- Global reference for Large Vertical Pumps
- Reduction in product lead time
- Competitive edge through product positioning
- Application coverage
- Improved quality of the product
- Competitive product cost
c. Future plan of action

- Development of high pressure metallic volute pumps with guide vane arrangement
- Development of BHA pumps for series enhancement
- Development of Large flow VT pumps for various power plants
- In-house development of 200 Ton capacity thrust bearing for high capacity concrete volute pumps
- Design and Development of double seal butterfly valves
- Design and Development of dual plate check valves
- Development of pumps for Marine and Defense application
- Development of High pressure, high temperature pump for Nuclear Thermal test facility
- Water mist system for sub marine simulation
d. Expenditure on R & D (Including new product development)

a. Capital Rs. 56,707,375/-
b. Recurring Rs. 204,156,669/-
c. Total Rs. 260,864,044/-
d. Total R & D Expenditure as a Percentage of total turnover 1.42 %
6
th
2. Technology absorption, adaptation and innovation

a. Efforts, in brief, made towards technology absorption, adaptation and Innovation
- Electronic control of pumping of operation is successfully developed. Also the remote monitoring
through internet connection is developed.
- Development of Ni Al bronze castings with radiography quality.
- Development UP extended range of split case pump with thrubore design.
- Development of Valves Internal Pictorial Display System and Application for the patent.
- Development of new impeller locking arrangement for easy assembly and weight reduction.
b. Benefits derived as a result of the above efforts

- Due to development of UP extended range, there is substantial reduction in thru put time and cost
reduction.
- Import substitution
- Technology Up-gradation
c. Technology imported during the last 5 years
Technology Imported Year of Has If not fully absorbed, areas where this
Import technology been has not taken place, reasons therefor
fully absorbed? and future plan of action
Metallic volute pumps, Ebara 2004 Yes Not applicable
Corporation, Japan
Axial Flow Pumps from SIHI, 2004 Yes Not applicable
Germany
3D modeling & Structural 2005 Yes - to extent of Not applicable
Analysis of Components - Modeling &
Softwares Structural Analysis
Condensate Extraction 2005 Yes Not applicable
pumps from SIHI, Germany
- CV and MV Pumps 2008 Yes Not applicable
- Deep well Pumps
C. Foreign Exchange Earnings and Outgo

Exports Activities :
The company has export order bookings of Rs. 2300 million and sales of Rs. 2310 million, showing growth
of 56% over the last year.
The company has orders from various countries viz. Vietnam, Greece, Spain, Italy, Sudan, Egypt, Sohar,
Kazakhstan, etc. for irrigation / power / water supply projects.
The company's thrust on Africa and Latin America will continue for intense distribution and project
business. Further, the continuous efforts are made to establish Kirloskar brand in Europe.
The Company is constantly exploring new export markets for its products and also striving to increase the
range of products in existing markets and to expand our market share to exports in Southern and Central
America.
Foreign exchange earnings and outgo:
Earnings Rs. 2,480,965,346/-
Outgo Rs. 2,084,419,438/-
7
ANNEXURE – II TO THE DIRECTORS' REPORT
Information under Section 217(2A) read with Companies (Particulars of employees) Rules, 1975 and forming part of the
Directors' Report for the year ended March 31, 2009.
Name & (Age) Qualifications Designation/ Nature Date of Gross Last employment
of duties commencement Remuneration
of employment & Rs.
(Experience)
Sanjay Kirloskar Bachelor of Science Managing Director 02/05/1983 17685755 Manager,

(52) (M.E), Illinois (31) Kirloskar Cummins Ltd.,
Inst. of Tech. USA Pune
Vikram Kirloskar Bachelor of Executive Director 06/06/2001 19190148 -

(50) Science (Mech.) (27)
MIT, USA
R. K. Srivastava M. Tech Whole Time Director 15/05/1989 8942863 General Manager (Tech),
(62) (I.I.T. Bombay) (37) Worthington Pump India Ltd.,
Kolkata
J. R. Sapre Bachelor of Science Whole Time Director 01/04/2002 8748187 Vice President - (MED) Marketing,
(64) (43) Kirloskar Oil Engines Ltd., Pune
Anant R. Sathe CA, LLB Vice President - Corporate 01/11/2003 3323255 Sr. Vice President - Finance,
(56) Finance & Accounts (33) Kirloskar Pneumatic Company
Ltd., Pune
Sanjeev Shripad Date B.E.(Mech) Vice President 20/07/1970 2836172 -

(59) DIIT(Industrial Design) (Technical) - R & D and Quality (39)
Dr. J. T. Kshirsagar PHD (Engg.), Vice President & Head of 08.10.1996 3195841 I.I.Sc, Bangalore
(54) ME (Mechanical) Corporate Research & (30)
Engineering Development
Y. S. Rana M. Tech. Vice President -Power 17.02.1997 3078376 Sr. Marketing Manager,
(58) (Design Engg.) (30) Jyoti Ltd.
Avinash W. Purandare BE (Electrical) Vice President 01/03/2005 2839467 Consulting Practice Head (SCM),
(49) - Corporate Global Marketing (27) SAP India (P) Ltd., Bangalore
G. M. Maheshwari BE (Electrical) Vice President - Domestic & 24.02.2004 3082206 General Manager, Crompton
(59) Agricultural Pumps (37) Greaves Ltd.
M. R. Pattewar B.E. (Mech), DIBM, Vice President - Irrigation 27.08.1992 2743219 Executive Officer, KSB Pumps,
(46) DBM, MDBA (Mktg) (24) Pune
Pradeep G. Chapalgaonkar B.E. (Chem Engg), Dip Vice President - Industry 01.04.2004 2826236 CEO,Master Handlers Pvt. Ltd.
(48) in Mktg. (25)
D. B. Nimbalkar B.Com, MSW Vice President - Corp. HRM & C 01.01.2005 2614931 Vice President, Traspek Silox,
(56) (38) Baroda
L.H. Dabi B.E. (Mech) Vice President - Corp. 15.11.1975 2683083 -

(57) International Instit (34)
Vijay Mattoo BE (Electrical) Vice President & Head of 02.05.2006 1476212 Mather & Platt Pumps Ltd.
(49)* Strategic Business Group - (25)
Projects and Engineered Pumps
Ravindra Murthy B.S. (Mech Eng) Vice President - Distribution 22.05.2008 2264465 VP & SBU Head, Kirloskar Oil
(55)* (32) Enginees Ltd.
Narendra D. Wagh B.E. (Production Vice President - Industrial 28.08.2008 1610540 Head - Corp. Mfg. Services,
(54)* Engineering) Pumps (31) Suzlon Energy Ltd.
*Employed for the part of the year
NOTES :
1. Designation denotes the nature of duties also.
2. Other terms and conditions are as per the service rules and conditions of the Company.
3. The nature of the employment of all the above employees is contractual.
4. Gross Remuneration comprises of salary, commission, allowance, medical, other perquisites and companies
contribution to PF and Superannuation funds.
5. None of the above employee is a relative of a director of the Company, except Mr. Sanjay Kirloskar, who is a brother of
Mr. Rahul Kirloskar.
6. None of the employees holds 2% or more of the paid-up equity share capital of the company.
8
th
ANNEXURE – III TO THE DIRECTORS' REPORT

Disclosures under the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee
Stock Purchase Scheme) Guidelines, 1999 –
Particulars Employees' “Share a Vision”
Stock Option Scheme, 2007
a. Number of Options granted 552,250 options

b. Pricing Formula Rs. 200
c. Number of Options vested 142,405 Options
d. Number of Options exercised Nil
e. Total number of shares arising out of exercise of Options Nil
f. Number of Options lapsed 81,535 options
g. Variation in the terms of the Options No variations
h. Money realized by exercise of Options Nil
i. Total number of Options in force 470,715 options
j. Employee wise details of options granted to -
i. Senior Management Personnel None
ii. Any other employee who receives a grant in any None
one year of option amounting to 5% or more of
options granted during the year
iii. Identified employees who were granted options, None
during any one year, equal to or exceeding 1% of
the issued capital (excluding outstanding warrants
and conversions) of the company at the time of grant
k. Diluted Earnings Per Share (EPS) pursuant to issue of Rs. 6.34
shares on exercise of option calculated in accordance with
Accounting Standard (AS) 20 - Earnings Per Share
l. Where the company has calculated the employee Net Profit
compensation cost using the intrinsic value of the stock As reported 670,286,598
options, the difference between the employee Add - Intrinsic value 46,869,708
compensation cost so computed and the employee Less - Fair Value 47,386,062
compensation cost that shall have been recognized if As Adjusted 669,770,244
it had used the fair value of the options, shall be disclosed.
The impact of this difference on profits and on EPS of Basic EPS
the company shall also be disclosed. As reported 6.34
As Adjusted 6.34
Diluted EPS
As Reported 6.34
As Adjusted 6.34
m.1 Weighted average exercise prices for options
whose exercise price -
i. equals market price Nil
ii. exceeds market price Nil
iii. is less than market price Rs. 200
m.2 Weighted fair values for options whose exercise price -

i. equals market price Nil
ii. exceeds market price Nil
iii. is less than market price (As on grant date) Rs. 260.39
n. A description of the method and significant assumptions No options have been granted during 2008-09
used during the year to estimate the fair values of options,
including the following
weighted-average information: -
1. risk free rate
2. expected life
3. expected volatility
4. expected dividends and
5. the price of the underlying share in the market at the
time of option grant.
AUDITORS' CERTIFICATE
We have examined the books of account and other relevant records and based on the information and explanations given to us, certify that in
our opinion, the company has implemented the Employees' "Share a Vision" Stock Option Scheme, 2007, in accordance with the Securities
and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and resolution of
the Company in the 87th Annual General Meeting held on July 20, 2007.
For M/s P. G. BHAGWAT
Chartered Accountants
Pankaja Bhagwat
Partner
Pune : June 2, 2009 Membership No. 86155
9
Management Discussion and Analysis
WORLD ECONOMY
2008 saw the world economy go through a difficult phase.
The world's economic growth rate is projected to fall to half
percent or even zero in 2009, the lowest, since the Second
World War. Despite wide-ranging strategic initiatives
implemented by governments the world over, the financial
strain remains acute, bringing down the large economies. For
instance, Germany, France, Spain, UK, Japan and United
States, are projected to contract in 2009. Imports to these and
many other developed nations too are expected to decline
during the year. A sustained economic recovery seems
unlikely until the financial sector's credibility is restored and
credit markets are unclogged. Towards this end, the monetary
and fiscal policies need to become even more supportive of
aggregate demand and maintain this stance while developing
strategies to ensure long-term fiscal sustainability.
International cooperation is the key in formulating and
implementing these policies.
10
89th Annual Report 2008-09
INDIAN ECONOMY
In the last four years (2004-05 to 2007-08), the Indian
economy shifted gears to a high growth phase, recording
7.5%, 9.4%, 9.6% and 9% GDP growth rates respectively.
Though there is a view that the Indian growth trajectory was
led by external trade and foreign capital inflows, it was also a
product of internal growth, albeit complemented by exports.
India's GDP growth in the quarter ending December 2008, fell
to 5.3% - from 8.9%, a year earlier. Inflation fell to a 6 year
low of nearly 3% late February, 2009. Forex deposits have
fallen by more than 30% in less than 6 months.
Analysts expected the Indian economy to grow at about 7% in
2008-09, as compared to the last three years when it rose 9%
approximately. It is expected to dip further in 2009-10 as a
result of the global economic crisis. However, fiscal deficit will
act as a stimulant and deter GDP growth to slip below
6 - 6.5%.
Thus, the Indian economy remains relatively unaffected by the
financial crisis. In fact, India is showing symptoms of a mere
'slowdown' whereas other developed nations are reeling
under impact of 'recession'. This slowdown however, is likely
to result in reduced tax and excise collections. Fiscal deficit
may increase exponentially posing major challenges before the
new government.
11
GLOBAL PUMP MARKET OUTLOOK AND GROWTH DRIVERS
The world pump market is governed by the demand in United  Most governments in Asia and in Africa are likely to
States, European Union and Japan. With these countries increase their spending on infrastructure projects like
burdened by recession, market forecasts up to 2013 have irrigation and drinking water schemes.
been revised to a compounded average growth rate of just  The world is moving towards energy efficient products and
0.3% from 3-4%. The global market for centrifugal pumps in services to be able to sustain the growth rates achieved in
2009 and 2010 is likely to contract, while that for positive the past few years with petroleum being the primary
displacement pumps will post good gains. Consolidation of energy source.
players in the pump industry through mergers and
acquisitions, may catch momentum in 2009 -10 in spite of the
present recessionary trends.
Although water and sewage, power, building services,
industry, oil and gas are major drivers of the global pump
market, for KBL, water, power and irrigation will continue to
be chief market drivers.
Factors affecting growth of the global pump industry:
 Per capita availability of water in Asia is less than other
continents; and it will continue to grow rapidly, thus
increasing demand for delivery and treatment of that
water. Rising consumption with decreasing supplies of
uncontaminated water is pushing up the market of
desalination plants for treating seawater.
 Urbanization of Asia has seen relocation of more than one
billion migrants from villages to cities. This is creating
pressure on the existing infrastructure including delivery of
utility water and removal and treatment of wastewater.
12
STRATEGY AND POLICY

Keeping pace with the Indian economy, KBL too has grown in As a policy, we will use resources judiciously by employing
the last four years (from 2003-04 to 2007-08) at a efficient equipment, create less waste, follow green concepts
compounded average growth rate of 32%. We did expect and try to make the world a better place to live in. Our
sustaining this growth rate would pose a challenge; like time corporate office, is an indication of our commitment to
and cost over-runs in a few projects, rising material costs, conserve nature.
orders with fixed prices, maintaining positive cash flows and This mindset has found its expression in various innovative
increasing focus on products. endeavors as follows:
At KBL, we began changing ourselves last year itself to face  BEE rated five star energy labeling of our monobloc
these challenges. Reasons have been identified and corrective pumpsets [saving power]
actions addressing issues in working capital management are  Pending patent for the innovative solar pump controller
being implemented. [using renewable power]
These strategies, however, will take a little time to give us  Automatically switching dual voltage motors based on
expected results in operations, especially on the backdrop of rural and varying line voltages, for which the patent
the global financial crisis and slowdown. application is on the anvil [saving different pumps for
To develop a more customer and market oriented different areas, thereby saving inventory]
organization, KBL has restructured itself into sector-wise
business groups, corporate global marketing and global
sourcing as new functions. It has also created a pool of
manufacturing operations and existing corporate functions to
nurture an innovation driven work culture and customer
centric organization.
As for manufacturing operations, world class operational
efficiency targets will be the driving force. The newly created
corporate level functions of sourcing, marketing, business
development and strategy will provide a cutting edge to
formulate strategies for sustainable growth.
13
INTERNATIONAL BUSINESS STRATEGY
We have crossed the INR 2380 million turnover in our export
business. Our international strategy will continue to focus on
creating the global brand 'Kirloskar' in centrifugal pumps and
pumping systems. While creating a global brand, we will act
local while going ahead to create a multi cultural, multi
national team to establish this global brand.
We have created more than 15 new references in Europe
under brand 'Kirloskar' in pumps. Orders have flowed in from
Chile to Egypt and Vietnam; from varied sectors, like energy,
irrigation, industry, building, etc. making our presence felt
worldwide.
Orders from Southern Regional and Balikera Hunter Water,
Australia, Astana in Kazakhstan and Sohar in Oman have been
executed satisfactorily.
14
RISKS AND CONCERNS

Exponentially rising fiscal deficit, lower tax and excise
collections and falling exports are likely to delay the tough
decisions that the Central Government may require to take to
fight economic slowdown. This can delay infrastructure
project decisions and fund flows.
Capacity enhancements effected by the top 20 global pump
players, before the slowdown will make it difficult to have full
capacity utilization and lead to price competition, straining
profit margins.
As the economic downturn seems to continue through
2009-10, dangers of deflation loom ahead.
Buoyancy of raw material prices, extraordinary exchange rate
fluctuations like those observed in 2008 up to August 2008
and after, may cause major problems during execution of
contracts.
15
Sectoral Overview
POWER
This business group caters to the needs of power industry - United States were commissioned at the Sandow 5 Project in
conventional and renewable. Considering the chronic Texas for Bechtel, United States of America. Similarly the first
shortage of power, this sector is bound to emerge as a major condensate extraction pump for overseas market was
market driver for decades to come. The Power group is proud dispatched for Glow Thailand Project, Doosan. Other major
to have successfully completed the sump model test of power project orders for Isle of Grain and Staythorpe in United
cooling water system for India's first ultra mega power project Kingdom from Alstom, Sugen in Gujarat for Siemens Germany
of 4000 MegaWatt (5 x 800 MW) at Kirloskarvadi. This was were executed on time. With success stories like these, the
the largest sump model test for cooling water system to be Kirloskar brand is getting strengthened in the global power
conducted in India. Circulating cooling water and Non-Active sector.
Process Water (NAPW) pump packages for Nuclear Power
Corporation's Kaiga project have been commissioned. The
boiler feed pump system for Essar Power project too has been
installed and is operational. Among the prestigious orders won
this year, is the cooling water pump package for first fast
breeder reactor project - BHAVINI, in the nuclear power
segment. Our brand image in the national power industry was
used to win over the customer in the overseas markets.
Approvals from few more global EPC contractors in Power
sector were obtained and we also received orders from them
including:
&Maire and Technimont, Italy, for Colbun Project, Chile
&Metka Metal Construction, Aliveri V, Greece
&Sevilla, Lebrija I, Spain
&Alstom, Switzerland (6th repeat order) for Fujirah
The first two cooling water pumps supplied by Kirloskar in the
4
CW pumps installed at Sandow 5 project, USA of Bechtel
16
WATER RESOURCE MANAGEMENT

This business group addresses the needs of water supply,  HUDA, Hyderabad for up-gradation of a 20 MLD sewage
water treatment and waste water treatment segments. treatment plant
Water, like power is a major market driver for the pump  Tikoe and Thetsane Industrial Area, Maseru, Republic of
industry and equipment peripheral to water industry. Water Lesotho for a 20 MLD water treatment plant
stressed regions in the world are on the rise, thanks to
We have won the trust of authorities at Cape Preston,
uncurbed urbanization, growing industrialization, increasing
Australia, for desalination project pumping 144,000 cubic
pollution levels and absence of sufficient teeth to the
meters of water per day. We are supplying them pumps in
legislation to deal with water pollution across the world. India
super duplex stainless steel with spares, which marks the
is no exception. Such a scenario demands better and better
entry of KBL in the global desalination market.
water management, with latest technologies, cheaper
methods and sustainable operations. In line with our mission to be in water business and enhance
reach and capabilities of this business group, we have signed
This business group continues to serve municipal
an Memorandum of Understanding with Enzen Water
corporations, water and sewerage boards of India. Delhi Jal
Solutions Private Limited, They have expertise in water
board's Vishwakarma project, Nagpur municipal corporation's
distribution, management modeling and technology which will
Gorewada and Mahadula projects and Maharashtra Jal
enable us to address the BOOT /BOT projects or public private
Pradhikaran's Malegaon project went on stream this year. At
partnership projects coming up in this sector.
Vasna project, a six stage well point dewatering system was
deployed. Also the first sewage pumping station of RUIDP, The Sohar project in Oman was the first international EPC
Kota, with our newly developed and bigger model of contract won by us against stiff competition. The project
submersible sewage pumps was pre-commissioned. involved setting up a sea water pumping system for the
common cooling water system. The entire project activity
We made significant in-roads in waste water treatment
demonstrated our project management capabilities and
segment in India as well as overseas, based on the Gondwana
expertise.
Engineers Limited's strengths. Orders received include:
 Steel Authority of India Llimted, Bhilai for a 30 million liters
per day (MLD) sewage treatment plant
 Vadodara municipal Sewa Sadan for a 8.5 MLD sewage
treatment plant
 Pune municipal corporation for a 40 MLD sewage treatment
plant
4
Kirloskar pumping station at Sohar Industrial Port Company (SIPC), Sohar, Oman
17
IRRIGATION
This business group primarily meets the needs of irrigation at
macro level through the infrastructural projects and supplying
appropriate products on a mass scale to institutional irrigation
customers, generally at government level. Projects in the past
from the World's largest pumping system on Narmada Branch
canal for SSNNL to the various lift irrigation projects executed
in Andhra Pradesh have been handled by this business group.
All the remaining pumping stations, which are a part of world's
largest pumping system are close to being commissioned.
With focus on completion and execution as a strategy this
year, the group completed the execution for Hanmapur,
Rampur, Mulwad Baluthi, Sinamoda, Devlapur, Guthpa,
Brandix, Taraka, Thimmapur, Rajan, Kollur, Kawardha and
Jalundra lift irrigation schemes in Karnataka, Andhra Pradesh
and Gujarat.
Parallel operations of pumps at all the three sites - Intake
(Gangaram), Nagaram and Bhimganpur for the Godavari lift
irrigation scheme were also successfully completed. Other
major projects like Gandikota, PADA and Bheema are nearing
completion.
Along with the corporate international institutional business
function, this sector business group plans to aggressively
target the international irrigation market. Green revolution
projects in the African continent will be targeted by leveraging
the success stories of our irrigation projects in Senegal and
Laos. Orders worth US $25 million were booked thanks to this
strategy of taking up international irrigation projects. The
result invoicing worth US $ 10 million completed this year.
4
Khed pumping station, Narmada Water Resources, Water Supply
and Kalpasar Department
18
INDUSTRY
This business group takes care of the requirements coming
from the different industrial segments such as metal
manufacturing (mainly Steel), mining (Coal and others) ,
process oriented segments like cement, chemicals, paper,
sugar, textile, pharma, and other industries.
This business sector had to bear the maximum brunt of the
financial crisis, which adversely affected its performance.
Therefore, the sector adopted a 'focus' based approach, in
which only the customers with firm requirements and sound
financial health were approached. The strategy was to build
long term relationships with industrial customers, to get
repeat orders and minimize cost in terms of marketing efforts
and time lost. Our Customer Relationship Management (CRM)
initiatives were a significant step in this direction. The success
stories in steel, textile, sugar and mining sectors were
strategically leveraged in international markets. As a step
towards entering the North American market, an agreement
with the sales and service partner 'Hydro Inc.' for the Steel
industry in United States of America was finalized. Excellent
ratings received from steel major Pohang Iron and Steel
Company, illustrate the resolve of the unit towards fostering a
relationship based on customer confidence. The group
concentrated on the market diversification as a part of the risk
mitigation strategy. Orders received from Austria and Yemen
were a part of this strategy. Orders from West Coast Papers
were won against stiff competition from major players in the
pumps market. This exhibits our capability for servicing critical
application areas.
19
OIL AND GAS
This business group provides customized solutions to the Oil
and Gas industry. The dynamics of the oil and gas industry
require special attention on our part because of critical nature
of applications and adherence to the strict norms and
standards. So a business group exclusively focused on Oil and
Gas industry was formed.
After the restructuring, the group has focused on
understanding the needs of this sector very systematically and
is in the process of firming up strategic development and
business plans for the coming years.
It has also assessed its present strength in oil and gas industry
and is leveraging these strengths to win customer confidence
from the select applications to begin with.
To cite a few examples, successful packaged pumping
solutions have been given to ONGC at Shibsagar (India), Al
Mazroui Engineering for SEWA, Emirates Oil company,
Sharjah (UAE) and Reliance, at its Jamnagar facility. The
highlight at Reliance was the successful demonstration of
sequential auto-start.
20
BUILDING AND CONSTRUCTION

This business group caters to the demands of infrastructure
development projects - particularly those in the real estate.
Rapid urbanization is the market driver for this fast growing
market in the recent past. The marketing activities of the
group laid emphasis on providing an excellent customer
experience. Launch of on-line fire pump selection package
based on specifications through the web portal was an
example. The group won prestigious orders from Delhi Metro
Rail Corporation for its phase II project, vying with formidable
international competition. Mumbai International Airport,
Thiruvananthapuram international airport, Jawaharlal Nehru
stadium - Delhi for 2010 Common-wealth games and Metro
Rail - Kolkata were a few other establishments, which trusted
Kirloskar pumping systems. A 24 hours service backup was
put in place through a strategic nationwide tie up and proved
to be a source of competitive advantage in getting business.
The group was successful in expanding its business across
different geographies For e.g., package order secured from the
government of Tajikistan which won us several orders for the
dewatering, sewage submersible design pumps.
Commercial Complex
Educational Institutes
Hospital
Multiplex
Hydro Pneumatic and

HVAC Pump House
Swimming Pool
Fire Fighting Pump House

Water Distribution Water
Sewage Recycling
Water Treatment Plant
Treatment Plant
21
DEFENSE AND MARINE
This business group offers customized solutions to the
Defense and Marine segments. Being a new segment for KBL,
our team spent more time in understanding the needs of this
sector and assessing our strengths to match the requirements.
We have made a start by organizing our activities for long term
business relationships. We have approached authorities in the
defense establishment and marine organizations from where
we have received initial positive response. The orders from
Pipavav Shipyard illustrate the start of a successful venture.
Business linked development plans are being drawn out
carefully for both the segments of this sector, understanding
the nuances of customer needs and priorities.
22
DISTRIBUTION
This business group looks after our channel partners and the
business coming through them. This is one of the most
important business groups, which is in charge of all our
distributors, dealers and retail outlets where our mass
produced pumps are made available to the customers.
Standard pumps, standardized packages, motors, alternators
and allied standard peripherals are sold through this group.
Volume driven cost leadership is their guiding principle behind
the strategies adopted. Steps are also being taken to make a
shift to innovative products to differentiate ourselves from
commodity like products in the market place. 5 star energy
rating by Bureau of Energy for our monobloc pumpsets for the
least energy consumption, tie up with Copper Promotion
Council for energy efficient motors, pumpsets and energy
auditing are some examples of these differentiating strategies.
In addition to the marketing's first P for product, this market is
quite influenced by the other 3 P's of marketing - promotion,
place and people. Strategies of over 100 new distribution
Memorandum of Understandings, system for E-warranty,
retailer certification, scratch cards scheme for domestic pump
retailers and the scheme of pump replacements illustrate this
group's balanced focus on all the 4 P's of marketing.
Considering the credit crunch resulting from financial crisis,
the commercial policies too have been tightened and have
been made cash centric, keeping the volume driven cost
leadership strategy in mind.
4
First energy efficient surface pump in India with 5 star rating by
The Bureau of Energy Efficiency (BEE)
23
CUSTOMER SUPPORT AND SERVICE
In line with the strategy of providing excellent customer
experience, the focus on customer support and service is
being reoriented with pragmatic measures such as:
 Improving the mechanism of listening keenly to end users
through our retail chain or original equipment
manufacturers
 Prompt response to the customer calls by making adequate
manpower and IT architecture available through dealers
and service centers
 Re-organizing the set up with separate teams for spares
and service and one stop outlets
 Focusing on annual maintenance and operation and
maintenance contracts with long term arrangement
 World class delivery mechanism of spare parts by
rationalizing the 16 digit part numbers
This customer service strategy will help create sustainable
competitive advantage in the long run for KBL.
24
Works Overview KIRLOSKAR BROTHERS LIMITED
KIRLOSKARVADI
This manufacturing facility, with India's second industrial
township, established in 1910 enters its centenary year in 'Centrifugal Pumps and Valves' as per Indian naval
2009-10. It has received the Occupational Health and Safety requirements after verification of capability and capacity.
Assessment Series, OHSAS 18001 certification, and a Managing liquidity, supply chain and growing expectations of
National Award for Excellence in Water Management, from customers are the main challenges facing Kirloskarvadi works
the Confederation of Indian Industry (CII) for in 2008 in and we have a right combination of experience and youth to
recognition of efforts on conservation and the effective use of face these challenges successfully and achieve its vision and
water and energy as well. mission.
The 1000 parts per million (ppm) concept has been

implemented across the small and medium pump shops for
reducing rejection and a policy of continuous improvements in
various operational parameters was implemented. Small
capital investments were made for assembly modernization,
impeller cleaning booths, medium frequency induction
furnaces for cast iron and non-ferrous foundries and laser
engraving machines for spares in small and medium pumps.
Development of 60 Hertz frequency drive for testing of large
pumps up to 4 MegaWatts, up-gradation of painting processes
to meet the norms of global EPC contractors like Bechtel and
Alstom, wooden set up for sump model to reduce cost and
installation time, heat transfer pump manufacturing facilities
like clean room and test set up, capability of single piece
casting weighing 9.2 tons are a few examples of resources
added in the large pump shop.
Kirloskarvadi has received certificate of registration from
Directorate General Quality Assurance (DGQA) for supply of
25
DEWAS AND SHIRVAL
KBL became the first pump company in India to achieve the
distinction of FIVE star rating from Bureau of Energy created at Dewas. These panels are being used for testing of
Efficiency, Government of India for the 8 models of 'KDS' solar pumping systems. During non-testing period, these
series monobloc pumpsets manufactured in Dewas. In view of panels are being used for energizing the pumps at the Effluent
the energy crisis being encountered globally, there is a need Treatment Plant, which result in energy savings.
for energy efficient products. About 30% of electricity

generated in India is consumed by agricultural sector. Kirloskar
monobloc pump models deliver water at efficiencies at least
20% more than ISI requirements. Savings in terms of energy
are up to 30% or more.
The Dewas factory obtained Level 3 rating from Total Cost
Management (TCM) maturity model operational level
efficiency for first time in the country. The factory's congenial
atmosphere got a boost by the formation of internal union of
workmen. Facilities for in-house machining along with
assembly, testing, painting and packing for aluminum motors
have been created. Processes focused on significant
improvements in quality and aesthetics were also deployed.
Solar pump demonstration was conducted at Bhatinda and
Ludhiana, in association with Punjab Energy Development
Agency (PEDA). These demonstrations were attended by
senior PEDA officials and around 200 farmers.
Demonstrations were also conducted at M.P. Urja Vikas
Nigam, Bhopal, on the occasion of 'Rajiv Gandhi Akshay Urja
Divas'. The event was graced by the State Energy Minister
and Senior officials of M.P. Urja Vikas Nigam and MNRE. Solar
panels of 4000 Wp were installed in the solar park cum lab
26
KONDHAPURI
Our Kondhapuri factory exceeded its targets for first time in
the last three financial years on the basis of process and
productivity improvements.
A new manufacturing facility within the factory was
commissioned with capital investment of about INR 90
million. This facility will help increase the large size valve
capacity as well as capability to make up to 4000 mm size
Valve. We have obtained CE marking certification for Butterfly
Valves and Sluice Valves. The factory successfully completed
the development and supply of many new products and
received prestigious orders from the water, energy and
industry sectors.
4
3000 mm Butterfly Valve under manufacturing
27
HUMAN RESOURCE MANAGEMENT
Our HR team would like to share the encouraging Gallup
Survey results from the employee engagement survey
conducted recently. We have been doing this survey from
2004. We have also taken steps based on the concerns
observed and the opportunities for improvements pointed out
from the survey. These efforts by our HR team have increased
the overall satisfaction, advocacy, loyalty and employee
engagement levels, pride score, leadership communication
score and work-life balance score significantly. Superior /
subordinate quality time and management have shown
improvement, although not significant. A few areas are still
found to be critical and clarity of roles is not evident.
Necessary steps have already been taken to ensure
improvement in 2009-10. Harmonious industrial relations
have been maintained at all our manufacturing locations.
Amity International University awarded KBL with an HR
Excellence Award in 2008.
The total number of employees is 2,932.
I AM KBL
28
RESEARCH, DEVELOPMENT AND ENGINEERING

This function now stands integrated with product
development and engineering departments at all the factories
categorized under the central research and engineering
function. This has enhanced involvement of the central
research team up to production stage in all the new
development projects and not limited to computer aided
designs. This will expedite the new product development
process and reduce the time from market feedback to drawing
board to prototype for standard products.
A number of standard product up-gradations and
developments in various pump ranges for diverse applications
were completed this year. Customized developments of
metallic volute pumps, concrete volute pumps for ultra mega
power projects as well as KBL's largest ever vertical mixed
flow pumps are the highlights of developments made this
year. Computational Fluid Dynamics (CFD) analysis of 27 vital
projects and structural analysis of 20 critical projects was
carried out for customers, both in India and abroad.
4
CFD analysis of Rajivsagar PS1 Sump 4
Sarju Runner Solid Model
29
GLOBAL MARKETING, BUSINESS DEVELOPMENT AND STRATEGY
This corporate function was a new creation after the
restructuring and redefining the past functions to focus on
marketing in its true classical meaning, specific business
development projects and strategy dialogue process. The
various roles played by this department include those in
International distribution, CRM - lead generation and
nurturing, market and competitive intelligence, business
development, mergers and acquisitions, brand promotion and
marketing communication and last but not the least the
strategic dialogue. The department is expected to perform to
add value to business strategies and assist in driving corporate
strategies based on environment and analysis of market
situation.
30
FINANCIAL PERFORMANCE
The company has achieved a growth of over 20% in net sales
over the last year to reach INR 18,309 million.
Profit before tax is INR 982 million as against INR 1500 million
in the previous year. The main reasons in reduction in
profitability are higher rate of interest and cost of finance,
delay in execution of certain projects and rise in raw material
cost for part of the year.
Borrowings have further gone up from INR 1912 million to INR
3204 million.
Depreciation and amortization has increased to INR 207
million from INR 182 million in the previous year, while interest
has increased from INR 169 million to INR 303 million.
31
BRIDGING OCEANS
4
Sanjay Kirloskar meets the Honorable President of Senegal, 4
Malik Akhtar at the Valves factory at Kondhapuri
SE Maitre Abdoulaye Wade, New Delhi during Africa Summit
4
T C Venkatsubramanian and Prabhakar Dalal, of EXIM Bank at KBLs 4
Ms. Christine Ting Sing Ling, Engineer and Ravi Chandran, Senior Manager
showroom in Vientiane, with L H Dabi, Vice President, Corporate International from Public Utilities Board, Singapore, visiting Kirloskarvadi plant
Institutional Business
32
EXHIBITING EXCELLENCE
4
Aquatech, Amsterdam, Netherlands 4
Singapore International Water Week 2008
4
Achema 2009, Frankfurt Germany 4
Power-Gen International, Orlando, USA
4
Pumps, Valves and Systems Expo, Baroda 4
Power-Gen Europe 2008 - Milan, Italy
33
INTERNAL CONTROL SYSTEM
The company has adequate internal control system. Regular
internal audits are being conducted, as per the audit calendar
drawn at the beginning of the year, to examine the efficacy
and adequacy of internal controls. For this purpose, the
company has continued the practice of appointing
professional firms of chartered accountants.
The internal audit reports are initially presented to the
executive committee of the management, consisting of the
Chairman and two Executive Directors. The recommendations
made in these reports are taken up for implementation by this
executive committee.
The final audit report presentation is made to the audit
committee during which the executive committee, as
mentioned above, apprises the audit committee of its plans to
implement audit recommendations.
On the basis of these reviews, the audit committee directs the
management to take appropriate actions.
The company has initiated audit procedures in the subsidiary
companies.
Cautionary Statement: Statements in the Management Discussion and Analysis describing the company’s projections and estimates are forward looking statements and progressive
within the meaning of applicable security laws and regulations. Actual results may vary from those expressed or implied depending upon economic conditions, government policies
34 and incidental factors.
th
REPORT ON CORPORATE GOVERNANCE

1. The Company's philosophy on Code of Corporate Governance :
The Company strongly believes that the system of Corporate Governance protects the interest of all the
stakeholders by inculcating transparent business operations and accountability from management towards
fulfilling the consistently high standard of Corporate Governance in all facets of the Company's operations.
2. Board of Directors :
The Board comprises of an optimal complement of independent professionals as well as Company
executives having in-depth knowledge of business. As on the date of this report, there are thirteen directors
of whom one is Managing Director, one is Executive Director, two are Whole Time Directors and nine (69%)
are non executive directors of whom seven (53%) are independent directors.
During the financial year under review, six Board meetings were held on the following dates: April 22, 2008,
July 18, 2008, August 12, 2008, October 23, 2008 , January 20, 2009 and March 18, 2009
None of the Directors on the Board hold the office of director in more than 15 companies or membership of
committees of the Board in more than 10 committees or chairmanship of more than 5 committees.
The details are explained in the Table below :
Name of Designation / Board Attendance No. of other No. of Committees

Director Category of Meetings at last AGM Directorships of which Member /
Directorship @ attended held Chairman*
Mr. Sanjay Kirloskar CMD 6 Present 13 2/1
Mr. Gautam Kulkarni VC/NED 6 Present 7 2/0
Mr. Vikram Kirloskar ED 3 Absent 10 4/2
Mr. S.S. Marathe
(Upto 28.09.2008) NED (I) 3 Present Not Applicable Not Applicable
Mr. M.S. Kirloskar NED (I) 6 Present 0 0/1
Mr. M.G. Padhye
(Upto 16.12.2008) NED (I) 4 Present Not Applicable Not Applicable
Mr. S.N. Inamdar NED (I) 4 Present 10 2/4
Mr. Rahul Kirloskar NED 6 Present 12 1/0
Mr. R.K. Srivastava WTD 6 Present 5 0/0
Mr. U.V. Rao NED (I) 6 Present 7 3/2
Mr. P.S.Jawadekar NED (I) 5 Present 3 1/0
Mr. J.R. Sapre WTD 6 Present 4 0/0
Mr. A.N. Alawani NED (I) 6 Present 6 4/0
Mrs. Lalita D. Gupte NED (I) 3 Present 7 5/0
Mr. Pratap B. Shirke NED (I) 5 Absent 9 2/0
Mr. Sanjay Kirloskar and Mr. Rahul Kirloskar are brothers. None of the other directors is related to any other
director.
@ CMD - Chairman and Managing Director, VC - Vice Chairman, ED - Executive Director,
NED - Non Executive Director, I - Independent, WTD - Whole Time Director.
* Committee Membership of Audit Committee and Investors' Grievance Committee is considered for this
purpose.
(1) Directorships in Private Limited Companies, Foreign Companies are included in the above table.
(2) An independent director is a non-executive director who, apart from receiving director's remuneration, does
not have any material pecuniary relationship or transactions with the Company, its promoters or its
management or its subsidiaries and associates which in the judgement of the Board, may affect his
independence of judgement and complying with other conditions as prescribed under Clause 49 of the
listing agreement.
(3) All the relevant information suggested under Annexure 1A of Clause 49 is furnished to the Board from time
to time.
3. Code of Conduct :
The Company has introduced a Code of Conduct for Directors and members of Senior Management. The
Code is made effective from April 1, 2005. It has been uploaded on the Company's website, www.kbl.co.in
All Board members and senior management personnel have affirmed compliance with the code. A
declaration to that effect signed by Mr. Sanjay Kirloskar, Chairman and Managing Director is appearing
elsewhere in the annual report.
35
4. Audit and Finance Committee :
The Audit and Finance Committee was constituted in July, 2000. This committee is constituted in line with
the provisions of Clause 49 of the Listing Agreement read with section 292A of the Companies Act, 1956. It
comprised of five Directors viz. Mr. S. N. Inamdar as the Chairman, Mr. S. S. Marathe, Mr. Gautam Kulkarni,
Mr. U. V. Rao and Mr. P. S. Jawadekar as Members. Mr. S. N. Inamdar is a Non-Executive Independent
Director. After the sad demise of Mr. S. S. Marathe, senior member of the Board, on September 28, 2008,
the Audit and Finance Committee was reconstituted and Mr. Pratap B. Shirke has been appointed as
Member of the Committee with effect from October 23, 2008. Thus the Company fulfils the requirements
under the code.
The terms of reference of the Audit and Finance committee include the matters specified in clause 49 (II) of
the Listing Agreement with the Stock Exchanges. The terms of reference of the Audit and Finance
Committee includes the following:
A)
Overseeing the Company's financial reporting process and disclosure of its financial information to
ensure that the financial statement is correct, sufficient and credible.
Recommending the appointment of external auditors, fix their remuneration.
Reviewing with the management the quarterly & annual financial statements before submission to the
Board focusing primarily on
— Any change in the accounting policies & practices.
— Major accounting entries based on exercise of judgement by management.
— Significant adjustments arising out of audit.
Qualifications in draft audit report.
Compliance with Stock Exchanges legal and accounting requirements concerning financial
statements.
Any related party transactions.
Structure & strength of internal audit department reporting structure, coverage and frequency of
internal audit, financial & risk management policies particularly relating to foreign exchange
exposure.
Defaults in the payment to depositors, debenture-holders, shareholders & creditors.
Reporting by management on key financial ratios.
Reporting on recovery of dues, delays and reasons therefor.
Statements accompanying Public Issue of any security.
Reporting on branch audits, if any. Full access to information and data.
To obtain outside legal or other professional advice.
To secure attendance of outsiders with relevant expertise, if it considers necessary.
Approval of payment to statutory auditors for any other services rendered by statutory auditors.
Matters required to be included in the Directors' Responsibility Statement to be included in the Board's
report in terms of clause (2AA) of section 217 of the Companies Act, 1956.
Discussion with internal auditors on any significant findings and follow up thereon.
Reviewing the findings of any internal investigations by the internal auditor into matters where there is
suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting
the matter to the Board.
Discussion with statutory auditors before the audit commences, about the nature and scope of audit
as well as post audit discussion to ascertain any area of concern.
Carrying out any other function as per directions from the Board from time to time.
B)
Power to investigate
Power to summon officers
Power to access information and data
Power to review systems/controls
36
th
During the year, six Audit and Finance committee meetings were held on April 22, 2008, July 18, 2008,
September 19, 2008, October 23, 2008, January 20, 2009 and February 6, 2009
Attendance at Audit and Finance Committee meetings :
Member's Name No. of Meetings attended Member's Name No. of Meetings attended
Mr. S. N. Inamdar 6 Mr. S. S. Marathe
(Upto 28.9.2008) 3
Mr. Gautam Kulkarni 5 Mr. U. V. Rao 6
Mr. P. S. Jawadekar 5 Mr. Pratap B. Shirke
(w.e.f.23.10.2008) 1
5. Remuneration of Directors :
Remuneration Committee
The remuneration committee was constituted in the year 1999. The Members of the committee were, Mr. S.
S. Marathe - Chairman, Mr. S. N. Inamdar, Mr. M. G. Padhye and Mr. Gautam Kulkarni
However, after the sad demise of Mr. S. S. Marathe on September 28, 2008, Mr. P. S. Jawadekar, has been
appointed as Chairman of the Committee on October 23, 2008.
Consequently, due to the resignation tendered by Mr. M. G. Padhye with effect from December 16, 2008,
Mr. A. N. Alawani has been appointed as a member of the Committee on January 20, 2009. The present
Members of the committee are as under:-
Mr. P. S. Jawadekar, Chairman, Mr. S. N. Inamdar, Mr. Gautam Kulkarni and Mr. A. N. Alawani
During the year, Remuneration Committee meetings were held on April 22, 2008 and on July 18, 2008.
Attendance at Remuneration Committee Meetings :
Member's Name No. of Meetings attended Member's Name No. of Meetings attended
Mr. S. S. Marathe 2 Mr. S. N. Inamdar 2
(Upto 28.9.2008)
Mr. M.G. Padhye 2 Mr.Gautam Kulkarni 2
(Upto16.12.2008)
Mr. P. S. Jawadekar NA Mr. A. N. Alawani NA
(w.e.f.23.10.2008) (w.e.f.20.01.2009)
Remuneration to Directors :
— The payments made to executive directors have been reviewed by the Remuneration Committee from time
to time and confirmed by the Board of Directors.
— Non Executive Directors were paid a sitting fee of Rs.10,000/- for every meeting of the Board and
Committee attended by them. Based on their membership of various committees and their time involved in
the operations of the Company, the non-executive directors will be paid up to an aggregate amount of Rs.
7,565,000/- for the year ended March 31, 2009, by way of a commission.
— There are no pecuniary relationships or transactions of the non-executive directors' vis-a-vis the Company.
— All elements of remuneration package for all directors have been provided in the statement hereinafter.
— Except whatever is stated in the statement, there is no other fixed component or performance linked
incentives to any director.
During last year, under the Employees' "Share a Vision" - Stock Option Scheme, 2007 (ESOS - 2007),
20,000 stock options were granted to each of the two Non-promoter whole-time Directors and 10,000 stock
options were granted to each of the Independent Directors. Under the scheme, each option is convertible
into One Equity Share (Face Value Rs. 2/-) of the Company upon vesting, at an Exercise price of Rs. 200/-
per share.
Subject to the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee
Stock Purchase Scheme) Guidelines, 1999 and the terms of the ESOS - 2007, the options, after one year of
the grant would vest in 3 annual instalments of 30%, 30% and 40% and the same should be exercisable
within a period of 3 years from the date of vesting.
First tranche of options i.e. 30% of the total options have been vested on August 31, 2008.
37
Details of remuneration paid/payable to Directors for the year 2008-09 are as follows :
Name of Sitting Commission Salary Contribution Perquisites Others Total

Director Fees on Profits $ to
Statutory
Funds
(Rs.) (Rs.) (Rs.) (Rs.) (Rs.) (Rs.) (Rs.)
Executive Directors
Mr.Sanjay Kirloskar - 7500000 6487200 1749600 1948955 - 17685755
Mr.Vikram Kirloskar - 7500000 6480000 1749600 3460548 - 19190148
Mr.R. K. Srivastava - 5000000 2400000 648000 894863 - 8942863
Mr. J.R. Sapre - 5000000 2400000 648000 700187 - 8748187
Non-Executive
Directors
Mr. Gautam Kulkarni 130000 1160000 - - - - 1290000
Mr. S. S. Marathe 80000 680000 - - - - 760000
(Upto 28.09.2008)
Mr. M. S. Kirloskar 80000 410000 - - - 289462* 779462
Mr. M. G. Padhye 80000 340000 - - - - 420000
(Upto16.12.2008)
Mr. S. N. Inamdar 140000 1240000 - - - 250000 1630000
Mr. Rahul Kirloskar 60000 360000 - - - - 420000
Mr. U. V. Rao 130000 1285000 - - - - 1415000
Mr. P.S.Jawadekar 110000 1075000 - - - - 1185000
Mr. A. N. Alawani 70000 385000 - - - - 455000
Mrs. Lalita D. Gupte 30000 180000 - - - - 210000
Mr. Pratap B. Shirke 60000 450000 - - - - 510000
$ subject to approval of Members

*Includes pension as an ex-employee of the company.
Directors' Service Contracts' Details :
Executive Directors Service Contract and Period Severance Fees

Mr.Sanjay Kirloskar Agreement dt.19.11.2005 :: Period: 19.11.05 to 18.11.10 **
Mr.Vikram Kirloskar Agreement dt. 26.07.2006 :: Period: 06.06.06 to 05.06.11 Nil
Mr. R. K. Srivastava Agreement dt.22.10.2005 :: Period: 19.09.05 to 18.09.10 Nil
Mr. J. R. Sapre Agreement dt.28.07.2005 :: Period: 29.04.05 to 28.04.10 Nil
** Three years or unexpired period, whichever is less.

Statement showing number of Equity Shares of Rs. 2/- each of the Company held by the present Non
Executive Directors as on March 31, 2009 :
Non–Executive Directors No. of shares % to paid up capital
Mr.Gautam Kulkarni 55665 0.053
Mr. M. S. Kirloskar 1500 0.001
Mr. S. N. Inamdar 43755 0.041
Mr. Rahul Kirloskar 14985 0.014
Mr. U. V. Rao -- --
Mr. P.S.Jawadekar -- --
Mr. A. N. Alawani 10000 0.009
Mrs. Lalita D. Gupte -- --
Mr. Pratap B. Shirke -- --
38
th
6. Particulars of Directors to be re-appointed and appointed at an ensuing Annual General Meeting :
Mr. Gautam Kulkarni
Mr. Gautam Achyut Kulkarni (51) started his career in 1978 as a Trainee in Kirloskar Oil Engines Limited
(KOEL). He underwent extensive training in the Servicing, production and Tech Center (R & D) until 1983.
In 1983, he was assigned to look after Kirloskar Filters Limited (KFL) and was appointed as its Chief
Executive. In April 1984, he was appointed as the Managing Director of KFL. During his tenure with KFL, the
Sales Income grew from Rs. 125 mn. to Rs. 600 mn.
In the year 1992, he was appointed as Vice President of the Company (KBL), while he was attached to the
Corporate Office of the Group. In 1998, he joined Kirloskar Oil Engines Limited as a Joint Managing Director
and played a major role in KOEL's turn around process with the help of major re-structuring and reduction in
debts and interest burden of KOEL. In July 2000, he was co-opted as a director of the Company and has
been appointed as the Vice Chairman.
He is a member of the Audit and Finance Committee, Remuneration Committee and Compensation
Committee of the Company.
Other Directorships
Kirloskar Oil Engines Limited
Kirloskar Engines India Limited
Kirloskar Systems Limited
Achyut & Neeta Holdings & Finance Private Limited
Navsai Investments Private Limited
SPP pumps Limited, England

Kirloskar Brothers International B.V., Netherlands
Other Committee positions :
Company Name Audit Shareholders' Remuneration

Committee Grievance Committee Committee
Kirloskar Oil Engines Limited -- Member --
He is holding 55665 (0.053%) Equity Shares of Rs. 2/- each of the Company. He is not related to any other
director on the Board of the Company.
Mr. A. N. Alawani
Mr. Anil Narayan Alawani (64) is a Chartered Accountant and has been associated with the Kirloskar Group
of Companies since 1977. Prior to his appointment in Kirloskar Oil Engines Limited, he was associated with
Inex Engine Valves Limited and Kirloskar Consultants Limited. He retired as Director-Finance of Kirloskar
Oil Engines Limited in August, 2005.
He has experience in Import Export and Labour Matters besides his core area of Finance and Taxation. His
expertise in Corporate Tax Planning and Finance has helped the Kirloskar Group companies in financial
restructuring and taxation matters.
He is a member of the Remuneration Committee, Investors' Grievance Committee and Committee for
Scheme of Arrangement of the Company.
39
Other Directorships
Kirloskar Ferrous Industries Limited
Kirloskar Integrated Technologies Limited
(Formerly known as Kirloskar Kisan Equipment Limited)
Kirloskar Systems Limited
Kothrud Power Equipment Limited
Denso Kirloskar Industries Private Limited

Denso Kirloskar Industries Private Ltd. Member -- Member

Kirloskar Systems Limited Member -- Member
Kirloskar Ferrous Industries Limited -- Member Member
Mr. S. N. Inamdar
Mr. Shrikrishna Narhar Inamdar (64) is a Commerce and a Law graduate and an Advocate by profession. He
has had a brilliant academic career having stood first in first class in Pune and Bombay University for B.Com
and LLB examinations respectively.
He has been in practice for more than three decades. He has specialization in Tax and allied laws.
He has also been associated with several charitable institutions.
He is a Chairman of Audit and Finance Committee, Committee for Scheme of Arrangement and a member of
Remuneration Committee and compensation committee in the Company.
Other Directorships :
Finolex Industries Limited
Finolex Infrastructure Limited
Force Motors Limited
Kirloskar Ferrous Industries Limited
Kulkarni Power Tools Limited
Kirloskar Proprietary Limited
Sakal Papers Limited
Sudarshan Chemical Industries Limited
Ugar Sugar Works Limited
Man Force Trucks Private Limited
40
th

Finolex Industries Limited Chairman Member Chairman
Force Motors Limited -- -- Chairman
Kirloskar Ferrous Industries Limited Chairman -- Chairman
Sudarshan Chemical Industries Limited Member -- Member
Ugar Sugar Works Limited Chairman -- Chairman
7. Shareholders' / Investors' Grievance Committee :
Company has Share Transfer, Transmission and Investors' Grievance Committee.
Mr. M. G. Padhye, a non-executive independent Director was Chairman of the committee. Other members
were Mr. M. S. Kirloskar and Mr. Sanjay Kirloskar. After the resignation tendered by Mr. M. G. Padhye with
effect from December 16, 2008, the committee was reconstituted on January 20, 2009. The present
members of the committee are Mr. M. S. Kirloskar, Chairman, Mr. A. N. Alawani and Mr. Sanjay Kirloskar.
During the year under the report, two Investors' Grievance committee meetings were held on October 13,
2008 and March 28, 2009.
Attendance at Investors' Grievance committee meetings :
Member's Name No. of Meetings attended

Mr. M.G. Padhye
(Upto 16.12.2008) 1
Mr. M.S. Kirloskar 2
Mr. Sanjay Kirloskar 1
Mr. A. N. Alawani
(w.e.f. 20.01.2009) -
Company has always valued its relationship with its stakeholders. This policy has been extended to
Investor relationship. Company's secretarial department is continuously monitoring the complaints /
grievances of the investors and is always taking efforts to reduce the response time in resolving the
complaints / grievances.
Name and designation of Compliance Officer:

Mr. G. P. Kulkarni, Vice President & Head - Legal and Company Secretary
No. of Shareholders' complaints received :

The total number of complaints received and replied to the satisfaction of the Shareholders during the year
ended March 31, 2009 were 26 and there were no complaints / Share transfers outstanding / Pending as
on March 31, 2009.
With reference to clause 47(f) of the Listing Agreement, Company has designated exclusive e-mail ID as
grievance.redressal@kbl.co.in for investors to register their grievances, if any. This has been initiated by
the Company to resolve such investors' grievances, immediately. The Company has displayed the said e-
mail ID on its website for the use of investors.
The Company has introduced a system in the secretarial department, through which a feedback, from
shareholders who are visiting the office, is taken on department's overall services to the investors. The
analysis of the feedbacks obtained from shareholders, who have visited the department for one or the
other services is placed before the Investors' Grievance Committee meetings. The overall analysis of
feedbacks indicates that the commendable services are provided to the investors by the secretarial
department of the Company, with regard to promptness and quality of services.
41
8. General Body Meetings :
Details of last three Annual General Meetings held :
i) 86th Annual General Meeting July 21, 2006 : 11.00 AM

Tilak Smarak Mandir,
Tilak Road, Pune - 411 030.
Special resolutions passed:

— Reappointment of Mr. Vikram S. Kirloskar as Executive Director for a period of five years with effect
from June 6, 2006
— For amendment to Articles of Association in accordance with the model regulations prescribed by
the National Stock Exchange of India Limited (NSE), in order to list Company's equity shares on
NSE.
— For approval of shareholders for payment of commission to non-executive directors for five financial
years from April 1, 2005.
— For approval of shareholders for allowing re-imbursement of travelling and other expenses to Mr.
M.S. Kirloskar, Non Executive Independent director, as per the provisions of Corporate
Governance.
— For approval of shareholders for issuing shares under Employee Stock Option Scheme.
ii) 87th Annual General Meeting July 20, 2007 : 11.00 AM

— For approval of shareholders for issuing shares under Employee Stock Option Scheme to
employees and Directors of the company.
— For approval of shareholders for issuing shares under Employee Stock Option Scheme to
employees and Directors of the subsidiaries.
iii) 88th Annual General Meeting July 18, 2008 : 11.00 AM

— For approval of shareholders for holding and continue to hold an office or place of profit in the
Company as General Manager - Corporate Marketing by Mr. Alok Kirloskar, son of Mr. Sanjay C.
Kirloskar, Chairman and Managing Director of the Company.
— For approval of shareholders for increase in remuneration package for Mr. Alok Kirloskar, as
General Manager - Corporate Marketing.
In the last year, no special resolution has been passed through Postal Ballot.
42
th
9. Disclosures :
i. Disclosures on materially significant related party transactions i.e. transactions of the Company of
material nature, with its promoters, directors or the management, their subsidiaries or relatives etc.
that may have potential conflict with the interests of the Company at large.
There are no materially significant transactions made by the Company with its promoters, directors or
the management, their subsidiaries or relatives etc. which have potential conflict with the interest of
the Company at large.
ii. Details of non compliance by the Company, penalties and strictures imposed on the Company by
Stock Exchange or SEBI or any statutory authority on any matter related to capital markets, during
the last three years.
None
iii. Whistle Blower Policy and Policy for prevention of sexual harassment at work.
The company has formulated and implemented the Whistle Blower Policy ("the Policy") during the
last financial year. This would inter alia provide a mechanism for employees of the Company and
other persons dealing with the Company to report to the Chairman of the Audit and Finance
Committee; any instance of unethical behaviour, actual or suspected fraud or violation of the
Company's code of conduct. Thus any employee has access to the Audit and Finance Committee.
The Policy has been communicated to all the Employees of the Company and other persons dealing
with the Company, through circular/display on the Notice Board/ display on the Intranet. The policy
has also been uploaded on the company website.
Policy for prevention of sexual harassment at work :
The company has also formulated and implemented the Policy for prevention of sexual harassment
at work during the last financial year. This would inter alia provide a mechanism to prevent or deter
the commission of acts of Sexual Harassment or inappropriate behaviour at work and to ensure that
all employees are treated with respect and dignity. Under the said policy, the procedures for the
resolution, settlement or prosecution of acts or instances of Sexual Harassment have also been
provided for.
iv. All mandatory requirements of Clause 49 of the Listing Agreement have been complied with by the
Company and the extent of adoption of non-mandatory requirements is given hereunder.
Non-Mandatory requirements :
The Board -
The Company has Executive Chairman and the office with required facilities is provided and maintained at
the Company's expenses for use by the Chairman.
No policy has been fixed on tenure of Independent Directors.
Remuneration Committee -
Committee is already in place and complying with related non-mandatory requirements.
Shareholders' Rights -
The half-yearly financial results are published in the English and Vernacular newspapers and are also
displayed on the Company's website and also have been separately circulated to the shareholders, since
half year ended September, 2007.
Audit qualifications -
The Company is already in the regime of unqualified financial statements.
43
Training of Board Members -
The present Board of Directors is already comprised of well experienced and responsible members of the
society and they themselves have represented as faculties to many training institutes.
Mechanism for evaluating Non-executive Board Members -
No specific mechanism is in place in the Company.
Whistle Blower Policy -
The Company has a Whistle Blower Policy. It inter alia provides a mechanism for employees of the
Company and other persons dealing with the Company to report to the Chairman of the Audit and Finance
Committee; any instance of unethical behaviour, actual or suspected fraud or violation of the Company's
code of conduct. It also provides for adequate safeguards against victimisation of such employees. Further,
the existence of the mechanism has been appropriately communicated within the organisation.
10. Means of Communication :
— Half yearly reports to each household of shareholders -

The results of the Company are published in national and regional newspapers. The half yearly
financial results have been separately circulated to each household of shareholders, since half year
ended September, 2007.
— Quarterly results -
The quarterly results are generally published in the newspapers viz. Indian Express, Loksatta,
Economic Times, Times of India, Maharashtra Times and The Hindu - Business Line. These are also
displayed on the Company's website 'www.kbl.co.in' shortly after its submission to the Stock
Exchanges. The Company's website also displays official news releases.
— Presentation to Institutional Investors or to analysts -

A presentation was made to analysts on August 2, 2008. The said presentation was forwarded to
Bombay Stock Exchange and National Stock Exchange and uploaded on the Company's website.
— Whether the Management Discussion and Analysis Report is a part of Annual Report or not?
The Management Discussion and Analysis Report is a part of the Annual Report.
11. General Shareholder information :
89th Annual General Meeting
Day & Date : Friday, July 17, 2009

Time : 11.00 A.M.
Venue : "Yamuna" Survey No.98 (3-7) Baner, Pune - 411 045
Financial Year : 1st April to 31st March
Dates of book closure : Saturday, July 4, 2009 to Friday, July 17, 2009 (Both days inclusive)
Dividend payment date : On or after July 31, 2009, subject to shareholders' approval
Listing on Stock Exchanges : The Company's equity shares are listed on Bombay Stock Exchange
Limited and National Stock Exchange of India Limited, Mumbai
Listing fees payment : The Annual Listing fees have been paid and there is no outstanding
payment towards the stock exchanges, as on date
Stock codes / Symbol : Bombay Stock Exchange Limited - 500241
National Stock Exchange of India Limited - KBL - EQ
44
th
Market Price data :

Month Quotations on B S E Quotations on N S E
High (Rs.) Low (Rs.) High (Rs.) Low (Rs.)
April 2008 329.85 222.00 329.00 223.05
May 2008 292.65 226.90 289.95 226.00
June 2008 233.00 171.10 245.00 184.00
July 2008 211.00 145.60 211.90 145.35
August 2008 177.00 140.00 179.80 138.00
September 2008 152.20 110.00 150.00 110.00
October 2008 127.00 69.00 126.00 69.00
November 2008 130.00 71.50 130.00 71.15
December 2008 91.65 72.50 93.00 72.65
January 2009 87.95 59.00 89.00 60.25
February 2009 82.65 67.25 82.90 64.00
March 2009 89.00 66.00 89.80 65.35
Performance in comparison to broad based indices - BSE sensex :
Performance in comparison to broad based indices - NSE S&P CNX Nifty :
45
Registrar and Transfer Agent :
The Company appointed Intime Spectrum Registry Limited, as its Registrar and Transfer Agent (R & T Agent)
with effect from April 1, 2003. The name of the R & T Agent has been changed to "Link Intime India Private
Limited" with effect from January 6, 2009, consequent to acquisition of stake in the Intime Spectrum by Link
Market Services Group Pty Limited, Sydney, Australia. Share Transfers, dematerialisation of shares, dividend
payment and all other investor related activities are attended and processed at the office of the Registrar and
Transfer Agent at the following address:-
Link Intime India Private Limited,

(Unit: Kirloskar Brothers Limited),
Block No. 202, 2nd Floor, Akshay Complex,
Near Ganesh Temple, Off Dhole Patil Road,
Pune - 411 001
Tel. No. (020) 26053503 Fax No. (020) 26051629
E.mail : pune@linkintime.co.in
Share transfer system :
The authority to approve transfer of shares upto 10000 shares has been delegated to the Company Secretary
and Deputy Company Secretary. The proposals for transfer of shares above 10000 shares are placed before the
Investors' Grievance Committee/Board. The share transfers received are processed within 15 days from the
date of receipt subject to the transfer instrument being valid and complete in all respects. In compliance with the
Listing guidelines, every six months, a practising Company Secretary audits the system of transfer and a
certificate to that effect is issued.
Out of total paid-up share capital, 91.43% share capital is held in dematerialised form with National Securities
Depository Limited and Central Depository Services (India) Limited as on March 31, 2009.
The Company has established connectivity with both the Depositories through the Registrar, Link Intime India
Private Limited.
Members are advised to notify to the Company or Registrar and Transfer Agent, any change of address,
immediately.
For the benefit of members, certain information, procedures and forms, which are being asked for by the
members frequently, viz. Letter about change of address, ECS form, Nomination Form, Indemnity/Affidavit etc.
for issue of duplicate certificates, Transmission form, application for obtaining sub-divided shares of Rs. 2/-
each alongwith general FAQs etc. are uploaded on the Company's website www.kbl.co.in under section
"Information for Shareholders".
Distribution of Shareholding as on March 31, 2009 :
Nominal value of shares Number of % to total Total face value % to total

(In Rupees) holders holders (In Rupees) face value
From To
1 5000 16704 91.07 12553830 5.93
5001 10000 852 4.65 5992692 2.83
10001 20000 444 2.42 6106352 2.89
20001 30000 126 0.69 3022746 1.43
30001 40000 50 0.27 1730440 0.82
40001 50000 24 0.13 1053360 0.50
50001 100000 65 0.35 4366954 2.06
100001 Above 77 0.42 176702336 83.54
TOTAL 18342 100.00 211528710 100.00
46
th
Shareholding Pattern as on March 31, 2009 :
Sr. No. Category No. of shares % of shareholding

1 Promoters' Holding*
Indian Promoters 1428229 1.35
Bodies Corporate 64487357 60.97
2 Non Promoters' Holding
Mutual Funds 6574921 6.22
Financial Institutions / Banks 142222 0.13
Insurance Companies 5404836 5.11
Foreign Institutional Investors 2048623 1.94
Private Corporate Bodies 4718290 4.46
Indian Public 20709722 19.59
Non Resident Indians 250155 0.23
TOTAL 105764355 100.00
*Out of Promoter's holding, no share has been pledged by the Promoters or persons under Promoter Group.
Outstanding GDRs/ ADRs / warrants or any convertible instruments etc. :
As of date, the Company has not issued these types of Securities.
Plant locations :
1. Kirloskarvadi 2. Dewas
Kirloskarvadi - 416 308. Opposite Railway Station,
Dist. Sangli. Ujjain Road, Dewas - 455 001.
Tel No. (02346) 222301 - 05 Tel No. (07272) 227302 -04
3. Shirval 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.
Tel No. (02169) 244360 / 244370 /244322 Tel No. (02137) 270217 / 270116 /270140
Investor Contacts :
Company Address : Registrar and Transfer Agent :
Secretarial Department, Link Intime India Private Limited,
Kirloskar Brothers Limited, (Unit: Kirloskar Brothers Limited),
"Yamuna", Survey No. 98 (3-7) Block No. 202, 2nd Floor, Akshay Complex,
Baner, Near Ganesh Temple, Off Dhole Patil Road,
Pune - 411 045 Pune - 411 001
Tel. No. (020) 27211030 Tel. No. (020) 26053503
Fax No. (020) 27211136 Fax No. (020) 26051629
Email : secretarial@kbl.co.in E.mail : pune@linkintime.co.in
grievance.redressal@kbl.co.in
Addresses of stock exchanges : National Stock Exchange of India Limited,

Bombay Stock Exchange Limited Exchange Plaza, Bandra-Kurla Complex,
Phiroze Jeejeebhoy Towers, Bandra (East)
Dalal Street, Mumbai - 400 051
Mumbai - 400 001 Tel. No. (022) 2659 8236
Tel. No. (022) 2272 1233 Fax No. (022) 2659 8237
Fax No. (022) 2272 2061
Depositories for equity shares : Central Depository Services (India) Ltd.

National Securities Depository Limited Phiroze Jeejeebhoy Towers,
Trade World - A Wing, Kamala Mills Compound 16th Floor,
Lower Parel, Dalal Street
Mumbai - 400 013 Mumbai - 400 001
Tel. No. (022) 2499 4200 Tel. No. (022) 2272 3333
Fax No. (022) 2497 2993 / 6351 Fax No. (022) 2272 3199 / 2072
47
The constituents of 'Group' as prescribed in Regulation 3(1)(e)(i) of Securities and Exchange Board of India
(Substantial Acquisition of Shares and Takeovers) Regulations, 1997 comprises Better Value Holdings Private
Limited, Kirloskar Oil Engines Limited, Kirloskar Engines India Limited, Kirloskar Pneumatic Company Limited,
Kirloskar Ferrous Industries Limited, Pooja Credits Private Limited, Kirloskar Silk Industries Limited, Kirloskar
Constructions and Engineers Limited, Gondwana Engineers Limited, The Kolhapur Steel Limited, Kirloskar
Corrocoat Private Limited, Kirloskar Systems Limited, Asara Sales & Investments Private Limited, Cees
Investments and Consultants Private Limited, Navsai Investments Private Limited, Prakar Investments Private
Limited, Alpak Investments Private Limited, Achyut & Neeta Holdings & Finance Private Limited,
SriHarihareshwara Finance & Investments Private Limited, VikramGeet Investments and Holdings Private
Limited, Kirloskar Integrated Technologies Limited (Formerly known as Kirloskar Kisan Equipments Limited),
Kothrud Power Equipment Limited, Koppal Mines & Minerals Private Limited, Kirloskar Proprietary Limited, G. G.
Dandekar Machine Works Limited, Mahila Udyog Limited, Kirloskar Chillers Private Limited, Hematic Motors
Private Limited, Pressmatic Electro Stampings Private Limited, Quadromatic Engineering Private Limited,
Suman Kirloskar, Mrinalini Kirloskar, Neeta A. Kulkarni, Atul C. Kirloskar, Arti Kirloskar, Gauri Kirloskar, Aditi
Kirloskar, Sanjay C. Kirloskar, Pratima Kirloskar, Alok Kirloskar, Rama Kirloskar, Rahul C. Kirloskar, Alpana
Kirloskar, Alika Kirloskar, Aman Kirloskar, Gautam A. Kulkarni, Jyotsna Kulkarni, Nihal Kulkarni, Shruti Kulkarni,
Ambar Kulkarni, Komal Kulkarni, Vikram S. Kirloskar, Geetanjali Kirloskar, Manasi Kirloskar, Roopa Gupta and
Chandrashekhar H. Naniwadekar.
DECLARATION FOR COMPLIANCE WITH CODE OF CONDUCT

To the members of KIRLOSKAR BROTHERS LIMITED
Pursuant to Clause 49 I (D) (ii) of the Listing Agreement, I hereby declare that all Board members and senior
management personnel are aware of the provisions of the Code of Conduct laid down by the Board and made
effective from April 1, 2005. All Board members and senior management personnel have affirmed compliance
with the code of Conduct.
For Kirloskar Brothers Limited
Sanjay Kirloskar
Pune : June 2, 2009 Chairman and Managing Director
CERTIFICATE
To the members of KIRLOSKAR BROTHERS LIMITED
We have examined the compliance of conditions of Corporate Governance by KIRLOSKAR BROTHERS
LIMITED for the year ended on March 31, 2009, as stipulated in clause 49 of the Listing Agreement of the said
company with stock exchanges.
The compliance of conditions of Corporate Governance is the responsibility of the management. Our
examination was limited to procedures and implementation thereof, adopted by the company for ensuring the
compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on
the financial statements of the company.
In our opinion and to the best of our information and according to the explanations given to us, we certify that the
company has complied with the conditions of Corporate Governance as stipulated in the above-mentioned
Listing Agreement.
We further state that such compliance is neither an assurance as to the future viability of the company nor the
efficiency or effectiveness with which the management has conducted the affairs of the company.

Pankaja Bhagwat
Partner
Pune : June 2, 2009 Membership No. 86155
48
th
AUDITORS' REPORT TO THE MEMBERS OF KIRLOSKAR BROTHERS LIMITED
1. We have audited the attached balance sheet of Kirloskar Brothers Limited as at 31st March, 2009, the
profit and loss account and also the cash flow statement of the company for the year ended on that date,
annexed thereto. These financial statements are the responsibility of the company's management. Our
responsibility is to express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 [as amended by Companies (Auditor's
Report) (Amendment) Order, 2004] issued by the Central Government of India in terms of sub-section (4A)
of section 227 of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified
in paragraph 4 and 5 of the said order.
4. Further to our comments in the annexure referred to in paragraph 3 above, we report that:
(i) we have obtained all the information and explanations which to the best of our knowledge and belief
were necessary for the purposes of our audit;
(ii) in our opinion proper books of account as required by law have been kept by the company so far as
appears from our examination of those books;
(iii) the balance sheet, the profit and loss account and cash flow statement dealt with by this report are in
agreement with the books of account;
(iv) in our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this
report comply with the accounting standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956;
(v) on the basis of the written representations received from the directors as on 31st March, 2009, and
taken on record by the board of directors, we report that none of the directors is disqualified as on 31st
March, 2009 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274
of the Companies Act, 1956;
(vi) in our opinion and to the best of our information and according to the explanations given to us, the
accounts, read together with the notes thereon, give the information required by the Companies Act,
1956 in the manner so required and give a true and fair view in conformity with the accounting principles
generally accepted in India:
(a) in the case of the balance sheet, of the state of affairs of the company as at 31st March, 2009 ;
(b) in the case of the profit and loss account of the profit for the year ended on that date;
(c) in the case of the cash flow statement, of the cash flows for the year ended on that date.

Pankaja Bhagwat
Partner
Membership No.: 86155
Pune : April 30, 2009
49
ANNEXURE
Re: Kirloskar Brothers Limited
Referred to in paragraph 3 of our report of even date
(i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
(b) The fixed assets have been physically verified by the management at reasonable intervals. According to information and
explanation given to us, no material discrepancies were noticed on such verification.
(c) The fixed assets, which were disposed off during the year, do not form substantial part of the fixed assets owned by the
company.
(ii) (a) The inventory was physically verified during the year by the management. In our opinion, the frequency of verification is
reasonable.
(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to
the size of the company and the nature of its business.
(c) The company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks
and the book records were not material.
(iii) (a) The company has not granted any loans secured or unsecured to companies, firms or other parties covered in the register
maintained as per section 301 of the Companies Act, 1956.
Accordingly, the provisions of clause 4 (iii) (b) (c) and (d) are not applicable to the company.
(b) The company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register
maintained as per section 301 of the Companies Act, 1956.
Accordingly, the provisions of clause 4 (iii) (f) and (g) are not applicable to the company.
(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system
commensurate with the size of the company and the nature of its business with regard to purchase of inventory and fixed assets and
for the sale of goods and services. During the course of audit we have not observed any continuing failure to correct major
weaknesses in internal control system.
(v) (a) According to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section
301 of the Companies Act, 1956 have been entered in the register to be maintained under that section.
(b) According to the information and explanations given to us, the transactions made in pursuance of such contracts or
arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant
time.
(vi) In our opinion and according to the information and explanations given to us, the company has complied with the directives issued by
the Reserve Bank of India and the provisions of section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and
the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. As informed to us, no order
has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other
Tribunal.
(vii) In our opinion, the company has an internal audit system commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account relating to materials, labour and other items of cost maintained by the company
pursuant to the rules made by the Central Government for the maintenance of cost records under section 209 (1) (d) of the Companies
Act, 1956 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have
not however made a detailed examination of records with a view to determine whether they are accurate and complete.
(ix) (a) The company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor
education and protection fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise
duty, cess and other material statutory dues applicable to it.
According to information and explanation given to us, no undisputed amounts payable in respect of statutory dues were in
arrears, as at 31st March, 2009 for a period of more than six months from the date they became payable.
(b) According to information and explanation given to us, there are no dues of income tax, sales tax, wealth tax, service tax, custom
duty, excise duty and cess which have not been deposited on account of any dispute other than those mentioned in the
Appendix to this report.
(x) The company has no accumulated losses as at 31st March, 2009. The company has not incurred cash losses during the financial year
and in the immediately preceding financial year.
(xi) In our opinion and according to information and explanations given to us, the company has not defaulted in repayment of dues to a
financial institution or bank. The company has no debenture holders.
(xii) According to information and explanation given to us, the company has not granted loans and advances on the basis of security by
way of pledge of shares, debentures and other securities. Accordingly, the provisions of clause 4 (xii) of the Companies (Auditor's
Report) Order, 2003 are not applicable to the company.
(xiii) In our opinion, the company is not a chit fund or a nidhi/mutual benefit fund/society. Accordingly, the provisions of clause 4 (xiii) of the
Companies (Auditor's Report) Order, 2003 are not applicable to the company.
50
th
(xiv) According to information and explanation given to us, the company is not dealing in or trading in shares, securities, debentures and
other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to
the company.
(xv) In our opinion, the terms and conditions on which the company has given guarantees for loans taken by others from banks or financial
institutions are not prejudicial to the interest of the company.
(xvi) In our opinion, the term loans have been applied for the purpose for which they were raised.
(xvii) According to information and explanation given to us, we report that no funds raised on short-term basis have been used for long-term
investment.
(xviii) According to information and explanation given to us, the company has not made any preferential allotment of any shares to parties
and companies covered under section 301 of the Companies Act, 1956.
(xix) According to information and explanation given to us, the company has not issued any debentures. Accordingly, the provisions of
clause 4 (xix) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.
(xx) According to information and explanation given to us, the company has not made any public issue to raise money. Accordingly, the
provisions of clause 4 (xx) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.
(xxi) According to information and explanation given to us, no fraud on or by the company has been noticed or reported during the course of
our audit.
For M/S P. G. BHAGWAT

Pankaja Bhagwat
Partner
Membership No.: 86155
Pune : April 30, 2009.
Appendix (Referred to in clause (ix) (b) of the Annexure to the Auditor's Report)
Sr. Name of the Statue Nature of Dues Rs. in Forum where dispute is pending
Million
1 Central Sales Tax Act Sales Tax 0.24 Additional Commissioner, Bhopal
25.29 Additional Deputy Commissioner
0.69 Assistant Commissioner, MP
0.41 State High Court
2 Sales Tax acts of various states Sales Tax 0.01 Commercial Tax Officer,
Corporate Charge
0.05 Sales Tax Appellate
4.91 Assistant Commissioner
0.62 Deputy Commissioner
0.17 Sales Tax Officer , Kochi
0.81 Additional Deputy Commissioner
1.85 Bangalore Tribunal
1.55 A.P Tribunal
52.45 State High Court
3 Central Excise Act Excise Duty 13.22 Joint/Assistant Commissioner

( Central Commissioner)
1.13 Delhi Tribunal
4 The Income Tax Act 1961 Income Tax 395.32 Commissioner of Income Tax
Appeals
51
BALANCE SHEET AS AT MARCH 31, 2009
Schedule 2009 2008
Rupees Rupees
SOURCES OF FUNDS :
Shareholders' Funds
Capital 1 211,528,710 211,528,710
Reserves and Surplus 2 6,787,799,285 6,364,990,702
Employee Stock Options outstandings 121,855,582 133,004,975

Less : Deferred employee compensation expense 29,787,458 88,970,333
92,068,124 44,034,642
7,091,396,119 6,620,554,054
Loan Funds
Secured Loans 3 1,808,661,549 1,566,515,302
Unsecured Loans 4 1,395,682,632 345,522,632
3,204,344,181 1,912,037,934
Deferred Tax-net 5 65,086,267 78,169,689
Total 10,360,826,567 8,610,761,677
APPLICATION OF FUNDS :
Fixed Assets 6
Gross Block 3,349,492,805 2,743,820,288
Less: Depreciation 1,298,156,225 1,124,758,974
Net Block 2,051,336,580 1,619,061,314
Capital work-in-progress including capital advances 704,733,584 322,356,492
2,756,070,164 1,941,417,806
Intangible Assets 7
Gross Block 87,657,961 83,947,687
Less: Amortization 77,713,190 70,103,508
Net Block 9,944,771 13,844,179
Investments 8 3,383,750,571 3,472,947,307
Current Assets, Loans & Advances

Inventories 9 1,556,655,133 1,329,886,084
Gross amount due from customers for project
related contract work 10 2,244,317,546 1,914,974,553
Sundry debtors 11 6,126,484,258 4,524,684,338
Cash and bank balances 12 99,949,039 758,728,757
Other current assets 13 437,059,763 309,233,630
Loans and advances 14 3,238,063,251 2,282,949,364
13,702,528,990 11,120,456,726
Less: Current Liabilities & Provisions
Current Liabilities 15 8,292,534,699 6,891,251,926
Gross amount due to customers for
project related contract work 16 681,146,885 324,612,815
Provisions 17 517,786,345 722,039,600
9,491,467,929 7,937,904,341
Net Current Assets 4,211,061,061 3,182,552,385
Total 10,360,826,567 8,610,761,677
Notes to Accounts 25
The schedules referred to above and the notes to accounts form an integral part of the Balance Sheet
As per our report of even date attached For and on behalf of the Board of Directors
For M/s P.G. Bhagwat
Chartered Accountants SANJAY KIRLOSKAR S. N. INAMDAR
Chairman & Managing Director Director
PANKAJA BHAGWAT G. P. KULKARNI A. R. SATHE
Partner Company Secretary Vice President (Finance)
PUNE : April 30, 2009 PUNE : April 30, 2009
52
th
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2009
Schedule 2009 2008

Rupees Rupees
INCOME
Sales 18 18,309,447,980 15,251,461,446
Other income 19 359,135,347 429,536,631
Total 18,668,583,327 15,680,998,077
EXPENDITURE
Materials consumed 20 13,926,768,676 11,125,807,554
Payments and benefits to employees 21 943,816,573 850,505,163
Operating and other expenses 22 2,310,171,677 1,856,670,285
Interest 23 303,200,468 168,854,653
Depreciation and amortization 207,350,133 182,088,160
17,691,307,527 14,183,925,815
Less: Expenses capitalized 4,927,376 3,333,861
Total 17,686,380,151 14,180,591,954
Profit/(Loss) before tax 982,203,176 1,500,406,123
Provision for tax 24 311,916,578 399,039,651
Profit/(Loss) after tax 670,286,598 1,101,366,472
Balance brought forward from previous year 506,879,134 600,468,691
Profit available for appropriation 1,177,165,732 1,701,835,163
Appropriations
Proposed dividend 211,528,710 423,057,420
Additional tax on dividend 35,949,305 71,898,609
Transfer to General Reserve 400,000,000 700,000,000
Surplus carried to Balance Sheet 529,687,717 506,879,134
1,177,165,732 1,701,835,163
Basic Earning per Equity Share (Refer Note No.12) 6.34 10.41
Diluted Earning per Equity Share (Refer Note No.12) 6.34 10.39
The schedules referred to above and the notes to accounts form an integral part of the Profit and Loss Account
53
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2009
2009 2008
Rupees Rupees
A. Cash flow from operating activities
Net profit before taxation and extraordinary items 982,203,176 1,500,406,123
Adjustments for
(Profit) / loss on sale of fixed assets (983,694) (3,954,533)
Employees Stock Option - Compensation
debited to Profit and Loss Account ( Net ) 48,033,482 44,034,642
Provision for doubtful debts and advances 70,609,776 18,549,702
Interest income (101,943,584) (113,036,296)
Dividend income (145,191,738) (168,772,378)
Interest expenses 303,200,468 168,854,653
Operating profits before working capital changes 1,363,278,019 1,628,170,073
(Increase) /decrease in trade and other receivables (2,487,101,162) (2,085,180,571)
(Increase) /decrease in inventories (226,769,049) (459,073,762)
Increase/(decrease) in sundry creditors 1,788,333,088 1,805,804,977
Cash generated from operations 437,740,896 889,720,717
Income tax (paid) /refunded (292,878,843) (410,223,674)
Net cash from operating activities 144,862,053 479,497,043
B. Cash flow from investing activities
Purchase of fixed assets (1,022,765,402) (498,521,559)
Proceeds from sale of fixed assets 5,646,013 7,689,416
(Purchase) /Sale of investments 89,196,736 (95,966,717)
Interest received 104,210,047 111,859,096
Dividend received 141,577,338 168,370,778
Advance to subsidiaries (628,364,767) (16,678,639)
Net cash from investing activities (1,310,500,035) (323,247,625)
C. Cash flow from financing activities
(Repayment) / proceeds of / from long term borrowings (net) 676,705,456 70,336,072
(Repayment) / proceeds of / from other borrowings (net) 615,600,791 433,048,779
Interest paid (298,642,337) (151,718,631)
Dividend paid (414,907,037) (208,045,196)
Tax on dividend paid (71,898,609) (35,949,304)
Net cash used in financing activities 506,858,264 107,671,720
Net increase in cash and cash equivalents (658,779,718) 263,921,138
Cash and cash equivalents at the beginning of the year 758,728,757 494,807,619
Cash and cash equivalents at the end of the year 99,949,039 758,728,757
54
th
SCHEDULE TO THE ACCOUNTS

2009 2008
Rupees Rupees
SCHEDULE 1 : SHARE CAPITAL
Authorized
250,000,000 ( 250,000,000 ) equity shares of Rs.2/- (Rs.2/-) each 500,000,000 500,000,000
500,000,000 500,000,000
Issued
105,907,030 ( 105,907,030 ) equity shares of Rs.2/- (Rs.2/-) each 211,814,060 211,814,060
Subscribed and paid up

105,764,355 ( 105,764,355) equity shares of Rs.2/- (Rs.2/-) each 211,528,710 211,528,710
Out of the above

( i ) 165,000 (165,000) equity shares of Rs.2/- (Rs.2/-) each
were allotted as fully paid up pursuant to contract for
consideration other than cash.
( ii ) 88,499,975 (88,499,975) shares of Rs.2/- (Rs.2/-) each

were allotted as fully paid up bonus shares by
capitalisation of General Reserve and Share Premium
( iii ) 53,207,342 (52,694,805) shares of Rs.2/- (Rs.2/-) each

are held by Better Value Holdings Pvt. Limited,
the holding company. 211,528,710 211,528,710
SCHEDULE 2 : RESERVES AND SURPLUS

Capital Reserve 172,443 172,443
Capital Redemption Reserve 4,000,000 4,000,000
Share Premium Account 395,881,752 395,881,752
General Reserve
Balance as per last account 5,458,057,373 4,808,203,160
Less : Liabilities on account of Employee Benefits - 50,145,787
(Net of Deferred Tax) [Refer note No B -16 ]
Add: Transfer from Profit and Loss Account 400,000,000 700,000,000
5,858,057,373 5,458,057,373
Profit and Loss Account 529,687,717 506,879,134

6,787,799,285 6,364,990,702
55
SCHEDULE TO THE ACCOUNTS (CONTD.)
2009 2008
Rupees Rupees
SCHEDULE 3 : SECURED LOANS

Loans and advances from banks
Cash / Export Credit facilities 1,663,207,001 1,047,606,210
[Secured by hypothecation of tangible movable assets
and book debts of the Company]
Other loans and advances
From Exim Bank 145,454,548 518,909,092
[Secured by way of hypothecation of movable
fixed assets and mortgage of immovable
properties of the Company (both present and future)]
1,808,661,549 1,566,515,302
SCHEDULE 4 : UNSECURED LOANS

Interest free loan under Sales Tax Deferral Scheme 55,462,632 55,462,632
Inter Corporate Deposits 40,000,000 50,000,000
Short term Loans and advances
a) Packing Credit in Foreign Currency from CitiBank N.A. 230,220,000 240,060,000
b) from Bank of India 670,000,000 -
c) from Calyon Bank 400,000,000 -
1,395,682,632 345,522,632
SCHEDULE 5 : DEFERRED TAX-NET

Deferred Tax Liabilities
On depreciation/amortization of fixed assets 165,499,236 152,759,957
165,499,236 152,759,957
Deferred tax assets
On employees voluntary retirement schemes 441,770 5,697,416
On provision for doubtful debts/advances 47,465,723 23,465,461
Provision for employee benefits 50,669,592 43,365,117
Other timing differences 1,835,884 2,062,274
100,412,969 74,590,268
65,086,267 78,169,689
56
th
SCHEDULE 6 : FIXED ASSETS Rupees

Land Free/ Buildings Railway Plant & Furniture & Vehicles Total Previous
Lease Hold Siding Machinery Fittings Year
Gross Block
At 01.04.2008 209,902,536 342,221,361 1,483,851 2,072,371,805 68,638,429 49,202,306 2,743,820,288 2,393,775,293
Additions - 279,769,216 52,474 334,106,789 12,629,934 10,119,623 636,678,036 372,856,799
Deductions - 991,247 - 21,927,159 2,018,259 6,068,854 31,005,519 22,811,804
At 31.03.2009 209,902,536 620,999,330 1,536,325 2,384,551,435 79,250,104 53,253,075 3,349,492,805 2,743,820,288
Depreciation/
Amortization
At 01.04.2008 - 76,260,583 1,393,887 991,626,369 32,354,525 23,123,610 1,124,758,974 970,517,758
For the year - 9,960,920 30,943 180,456,692 4,951,203 4,340,693 199,740,451 173,318,137
Recouped - 692,662 - 20,782,768 1,267,452 3,600,318 26,343,200 19,076,921
At 31.03.2009 - 85,528,841 1,424,830 1,151,300,293 36,038,276 23,863,985 1,298,156,225 1,124,758,974
Net Block
At 31.03.2009 209,902,536 535,470,489 111,495 1,233,251,142 43,211,828 29,389,090 2,051,336,580 1,619,061,314
Assets under Erections
including capital advances 704,733,584 322,356,492
At 31.03.2009 209,902,536 535,470,489 111,495 1,233,251,142 43,211,828 29,389,090 2,756,070,164 1,941,417,806

At 31.03.2008 209,902,536 265,960,778 89,964 1,080,745,436 36,283,904 26,078,696 1,619,061,314
Note: Building includes cost of hangars jointly owned with other companies
2009 2008
Rupees Rupees
SCHEDULE 7: INTANGIBLE ASSETS - COMPUTER SOFTWARE
Gross Block
At 01.04.2008 83,947,687 73,732,447
Additions 3,710,274 10,215,240
Deductions - -
At 31.03.2009 87,657,961 83,947,687
Amortization
At 01.04.2008 70,103,508 61,333,485
For the year 7,609,682 8,770,023
Recouped - -
At 31.03.2009 77,713,190 70,103,508

Net Block At 31.03.2009 9,944,771 13,844,179
57
2009 2008
Rupees Rupees
SCHEDULE 8 : INVESTMENTS
Long Term Investments (At cost)
A. Trade
Quoted
73,903,270 (73,903,270) equity shares of Rs.2/- each
in Kirloskar Oil Engines Limited 404,980,851 404,980,851
4,547,254 (4,547,254) equity shares of Rs. 10/- each

in Kirloskar Pneumatic Company Ltd. 125,655,633 125,655,633
530,636,484 530,636,484
Unquoted
2 (2) equity share of Rs.100/- each in Kirloskar
Proprietary Ltd., a company under same management 200 200
1,272 (1,272) ordinary shares of K. Sh. 1,000/- each

in Kirloskar Kenya Ltd. 850,662 850,662
225,000 (225,000) equity shares of Rs. 10/- each

in Kirloskar Ebara Pumps Ltd. 2,747,272 2,747,272
112,500 (112,500) equity shares of Singapore $ 1/- each

in Kirsons Trading Pte Ltd. 2,525,731 2,525,731

in Quadromatic Engineering Pvt. Ltd., a
company under same management. 240,000 240,000

in Hematic Motors Pvt. Ltd., a company
under same management. 10,446,862 10,446,862

in Pressmatic Electro Stampings Pvt. Ltd., a
company under same management. 4,281,802 4,281,802
2,500,000 (2,500,000 ) equity shares of Rs. 10/- each

in Kirloskar Corrocoat Private Limited 25,000,000 25,000,000
46,092,529 46,092,529
B. Other than trade
Quoted
400 (400) equity shares of Rs. 10/- each
in Housing Development Finance Corporation Ltd. 9,500 9,500
1,081 (1,081 ) equity shares of Rs. 10/- each

in I C I C I Bank Ltd. 100,000 100,000

in Kulkarni Power Tools Ltd. 301,500 301,500
411,000 411,000
58
th

2009 2008
Rupees Rupees
Unquoted
1 (1) equity share of Rs. 50/- each in
Maharashtra State Co-operative Bank Ltd. 53 53
100 (100) equity shares of Rs. 5,000/- each
in Kranti Sahakari Sakhar Karkhana Ltd. 500,000 500,000
2,597,760 (2,597,760) equity shares of Rs.10/- each
in Kirloskar Toyoda Textile Machinery Ltd. 26,107,490 26,107,490
26,607,543 26,607,543
C. In Subsidiary Companies
Unquoted
Fully Paid Up
3,445,477(3,445,477) equity shares of Rs.10/- each
in Pooja Credits Private Ltd. 34,454,770 34,454,770
1,950,000 (1,950,000) equity shares of GBP 1/- each
in SPP Pumps Ltd. 149,226,964 149,226,964
2,000,130 (2,000,130) equity shares of Rs. 10/- each
in Kirloskar Silk Industries Ltd. 20,001,300 20,001,300
6,150,002 (6,150,002 ) equity shares of Rs. 10/- each
in Kirloskar Constructions and Engineers Ltd. 613,300,000 613,300,000
in Gondwana Engineers Ltd. 76,360,000 76,360,000
16,311,083 ( - ) equity shares of Rs. 1/- each
in The Kolhapur Steel Ltd. 93,843,591 -
Partly Paid up
2,000 (2,000 ) ordinary equity shares of Euro 100/- each
in Kirloskar Brothers International B V
(Amount paid per share Euro 70 each) 8,606,717 8,606,717
1,000,000 ( - ) common shares of Baht 10/- each
in Kirloskar Brothers (Thailand) Limited
(Amount paid per share Baht 2.5 each) 3,209,673 -
999,003,015 901,949,751
D. Government Securities
Unquoted
- (5,500) capital gains bonds 2002 of Rs.10,000/- each
of National Housing Bank. - 55,000,000
- (4,375) capital gains bonds of Rs.10,000/- each
of National Bank for Agriculture & Rural Development - 43,750,000
- (4,375) Non Convertible Redeemable Taxable Bonds - Series -V
of Rs. 10,000/- each of Rural Electrification Corporation Ltd. - 43,750,000
- (4,375) SIDBI Capital gains Bonds of Rs.10,000/- each
of Small Industries Development Bank of India. - 43,750,000
88,000 (88,000 ) Non Convertible Redeemable
Taxable Bonds - Series -VI of Rs.10,000/-
each of Rural Electrification Corporation Ltd. 880,000,000 880,000,000
89,000 (89,000 ) Non Convertible Redeemable
Taxable Bonds - of Rs.10,000/-
each of National Highways Authority of India. 890,000,000 890,000,000
1,770,000,000 1,956,250,000
E. Other Investment
350,685 (350,685) Units of Rs. 20/- each
of HDFC Group Unit Linked Option Plan B 11,000,000 11,000,000
3,383,750,571 3,472,947,307
Aggregate amount of quoted investments 531,047,484 531,047,484
Market value 4,924,683,428 9,857,722,409
Aggregate amount of unquoted investments 2,852,703,087 2,941,899,823
59
2009 2008
Rupees Rupees
SCHEDULE 9 : INVENTORIES
Raw materials and components 587,376,486 600,846,166

Stores and spares 38,453,275 49,912,003
Work-in-progress 689,028,964 456,663,554
Finished goods 241,796,408 222,464,361
1,556,655,133 1,329,886,084
SCHEDULE 10 : GROSS AMOUNT DUE FROM CUSTOMERS

FOR PROJECT RELATED CONTRACT WORK
Cost incurred plus recognized profits less recognized losses 26,107,504,191 20,963,928,282
Less: Progress billing 23,863,186,645 19,048,953,729
2,244,317,546 1,914,974,553
SCHEDULE 11 : SUNDRY DEBTORS
Debts outstanding for a period exceeding six months

Unsecured, considered good 1,722,506,860 1,283,411,132
Considered doubtful 129,977,452 60,012,654
Other debts
6,256,461,710 4,584,696,992
Less: Provision for doubtful debts 129,977,452 60,012,654
6,126,484,258 4,524,684,338
SCHEDULE 12 : CASH AND BANK BALANCES
Cash on hand 934,370 801,431

Balances with schedule banks
On current accounts 92,661,428 593,396,044
On deposit accounts 6,225,000 163,701,056
Balances with other banks
On current accounts 128,241 830,226
99,949,039 758,728,757
Name of other bank Current Maximum

account balance
Bank Atlantic - USA 128,241 3,114,363
Previous year (830,226) (2,455,244)
SCHEDULE 13 : OTHER CURRENT ASSETS

Interest accrued on investments 38,985,773 41,252,236
Dividend due from a subsidiary company 4,016,000 401,600
Claims receivable 394,057,990 267,579,794
437,059,763 309,233,630
60
th

2009 2008
Rupees Rupees
SCHEDULE 14 : LOANS AND ADVANCES
Unsecured considered good

Advances and loans to subsidiaries 690,047,217 61,682,450
Advances recoverable in cash or kind or for
value to be received 1,934,276,003 1,704,486,244
Balances with customs, excise, etc. 850,416 609,999
Deposit with railways, post and others 585,457,423 456,617,322
Advance income tax (net of provision for tax) 27,432,192 59,553,349
3,247,731,940 2,291,973,076
Less: Provision 9,668,689 9,023,712
3,238,063,251 2,282,949,364
SCHEDULE 15 : CURRENT LIABILITIES
Acceptances 81,637,916 92,874,073

Sundry Creditors
(i) Total outstanding dues to Micro Small and Medium
Enterprises (Refer Note no B - 15 ) - -
(ii) Total outstanding dues of other creditors other than
Micro Small and Medium Enterprises 5,837,628,090 4,829,582,362
5,837,628,090 4,829,582,362
Dues to subsidiary companies 218,812,780 25,338,215
Advances and deposits from customers 2,032,953,297 1,842,800,073
Items covered by Investor Education and Protection Fund
(a) Unpaid dividend 44,687,068 36,536,685
(b) Unpaid matured deposits 913,000 1,149,500
Other liabilities 48,378,584 40,005,185
Interest accrued but not due on loans and advances 27,523,964 22,965,833
8,292,534,699 6,891,251,926
SCHEDULE 16 : GROSS AMOUNT DUE TO CUSTOMERS FOR

PROJECT RELATED CONTRACT WORK
Progress billing 6,364,273,849 2,481,335,853

Less: Cost incurred plus recognized profits less recognized losses 5,683,126,964 2,156,723,038
681,146,885 324,612,815
SCHEDULE 17: PROVISIONS

Provision for product warranties 31,856,656 28,257,897
Provision for leave encashment 219,193,903 181,826,030
Provision for pension benefits (Ex-employees) 19,257,771 16,999,644
517,786,345 722,039,600
61
2009 2008
Rupees Rupees
SCHEDULE 18 : SALES AND CONTRACT REVENUE
Sales (Gross) 10,158,965,921 8,579,399,196

Less: Excise duty recovered 577,912,640 588,593,358
9,581,053,281 7,990,805,838
Project related revenue 8,728,394,699 7,260,655,608
18,309,447,980 15,251,461,446
SCHEDULE 19 : OTHER INCOME
Income from investments

Interest from long term investments
[Tax deducted at source Rs. nil (Rs. nil)] 100,845,915 107,600,729
Dividend income
(a) Trade investment 125,903,748 168,294,375
(b) Subsidiaries 19,176,099 401,600
(c) Other investments - long term 111,891 76,403
Other interest received [Tax deducted at source
Rs. 284,786/- (Rs.1,127,711/- )] 1,097,669 5,435,567
Profit on sale of fixed assets 3,802,079 6,290,860
Royalty received 1,334,443 2,660,769
House rent 752,868 611,337
Recovery of bad debts 51,449,253 84,798,511
Miscellaneous income 54,661,382 53,366,480
359,135,347 429,536,631
SCHEDULE 20 : MATERIALS CONSUMED
Raw materials consumed 8,817,342,405 7,774,444,593

Stores and spares consumed 372,510,773 341,335,969
Processing charges 295,920,126 174,618,898
Purchase of traded goods 4,692,692,829 3,004,436,415
14,178,466,133 11,294,835,875
(Increase) / Decrease in stocks
Opening stock
Work-in-progress 456,663,554 291,587,129
Finished goods 222,464,361 218,512,465
679,127,915 510,099,594
Closing stock
Work-in-progress 689,028,964 456,663,554
Finished goods 241,796,408 222,464,361
930,825,372 679,127,915
(251,697,457) (169,028,321)
13,926,768,676 11,125,807,554
SCHEDULE 21 : PAYMENTS AND BENEFITS TO EMPLOYEES
Salaries, wages and bonus 848,551,428 768,990,409

Payment under Voluntary Retirement Schemes - 490,000
Contribution to provident fund and E.S.I. 43,120,522 40,292,598
Gratuity (11,464,808) (14,116,434)
Welfare expenses 59,273,910 58,543,136
Pension benefits 4,335,521 (3,694,546)
943,816,573 850,505,163
62
th

2009 2008
Rupees Rupees
SCHEDULE 22 : OPERATING AND OTHER EXPENSES
Power & fuel 134,006,775 140,032,430

Repairs and maintenance
Plant and machinery 72,670,281 101,134,203
Buildings 35,704,584 39,434,380
Rent 47,467,732 40,175,699
Rates and taxes 8,364,155 7,099,097
Travel and conveyance 236,536,638 213,214,324
Postage and telephone 43,997,577 43,059,628
Insurance 113,391,932 103,774,510
Director's sitting fees 970,000 810,000
Director's remuneration 62,015,136 56,657,533
Royalties and fees 47,987,895 33,488,397
Cash discount 31,074,891 18,168,105
Freight and forwarding charges 205,174,284 156,732,948
Brokerage and commission 264,427,519 206,602,931
Advertisements and publicity 70,427,837 102,952,965
Provision for product warranty 44,854,966 31,991,272
Excise duty paid 15,995,473 34,774,235
Bank charges 129,594,989 101,836,235
Loss on sale/disposal of fixed assets 2,818,385 2,336,327
Bad debts written off 4,288,396 3,492,307
Donations 5,249,294 12,862,000
Other miscellaneous expenses 662,543,162 387,491,057
2,310,171,677 1,856,670,285
SCHEDULE 23 : INTEREST
Interest
On fixed loans and debentures 46,403,973 43,254,138
On other loans 256,796,495 125,600,515
303,200,468 168,854,653
SCHEDULE 24 : PROVISION FOR TAX

Income tax for the year
Current 306,000,000 360,000,000
Deferred (13,083,422) 22,939,651
Fringe Benefit Tax 19,000,000 16,100,000
311,916,578 399,039,651
63
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS
A) SIGNIFICANT ACCOUNTING POLICIES

1 Basis of preparation of financial statements
a) The financial statements have been prepared to comply in all material respects with The Companies
(Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956.
b) The financial statements have been prepared under the historical cost convention on an accrual
basis.
c) The accounting policies applied by the Company are consistent with those used in the previous year.
2 Fixed Assets
Fixed assets are stated at cost less accumulated depreciation. Cost comprises the purchase price and any
other attributable cost of bringing the asset to its working condition for its intended use. Financing costs
relating to acquisition of qualifying fixed assets are also included to the extent they relate to the period till
such assets are ready to be put to use.
3 Depreciation
Depreciation on fixed assets has been provided in a manner that amortizes the cost of the assets over their
estimated useful lives as detailed below:
a) On assets acquired prior to 01.08.1987, on a straight-line method at the rates determined in the year
of acquisition under section 205 (b) of the Companies Act, 1956. No depreciation is provided on
assets scrapped or sold during the year.
b) On assets other than patterns, acquired on or after 01.08.1987, on straight line method as per
Schedule-XIV to the Companies Act, 1956.
c) On patterns, on straight line method on the basis of estimated useful life as given below:
Sr. Particulars Rate of

No Depreciation
1 Patterns with estimated useful life of less than one year & one time use 100%
2 Patterns with estimated useful life of more than one year but less than eight years. 20%
3 Patterns with estimated useful life of more than eight years. 11.31%
4 Intangible Assets
Computer Software
Computer software is amortized on straight line method over a period of three years.
5 Inventories
a) Inventories are valued at the lower of cost and net realizable value.
b) The cost is calculated on weighted average method.
c) Cost comprises costs of purchase, costs of conversion and other costs incurred in bringing the
inventories to their present location and condition.
6 Construction Contracts
a) Contract revenue and contract costs arising from fixed price contracts are recognized in accordance
with the percentage of completion method.
b) The stage of completion is measured by reference to costs incurred to date as a percentage of total
estimated costs for each contract.
c) Full provision is made for any loss in the year in which it is first foreseen.
64
th
SCHEDULE 25: NOTES FORMING PART OF ACCOUNTS (CONTD.)
7 Research and Development

Research and development costs are expensed as incurred, except for development costs which relate to
the design and testing of new or improved materials, products or processes which are recognized as an
asset to the extent that it is expected that such assets will generate future economic benefits.
8 Revenue Recognition
a) Sale of products and services are recognized when the significant risks and rewards of ownership of
the goods have passed to the buyer and when services are rendered.
b) Where the ability to assess the ultimate collection with reasonable certainty is lacking at the time of
raising any claim, revenue recognition is postponed to the extent of uncertainty involved. In such
cases revenue is recognized only when it is reasonably certain that the ultimate collection will be
made.
9 Foreign Currency Transactions

a) Initial Recognition: Transactions denominated in foreign currencies are recorded at the exchange
rates prevailing on the date of the transaction.
b) Conversion: At the year end, monetary items denominated in foreign currencies other than those
covered by forward contracts are converted into rupee equivalents at the year-end exchange rates.
c) Forward Exchange Contracts: In respect of transactions covered by forward exchange contracts,
the difference between the forward rate and the exchange rate at the date of the transaction is
recognized as income or expense over the life of the contract.
d) Exchange Differences: All exchange differences arising on settlement/conversion on foreign
currency transactions are included in the Profit and Loss Account.
e) Foreign entities: Assets and liabilities of foreign entities are translated into rupee equivalents using
year-end spot foreign exchange rates. Revenues and expenses are translated monthly at average
exchange rates.
10 Leases
Operating lease payments are recognized as an expense in the profit and loss account on a straight-line
basis over the lease term.
11 Borrowing Costs
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying
asset are capitalized as part of the cost of that asset. Other borrowing costs are recognized as an expense
in the period in which they are incurred.
12 Investments
Investments that are readily realizable and intended to be held for not more than a year are classified as
current investments. All other investments are classified as long-term investments.
a) Current investments are carried at lower of cost and fair value determined on an individual
investment basis.
b) Long-term investments are carried at cost. However, provision for diminution in value is made to
recognize a decline other than temporary in the value of the investments.
13 Employee Benefits
Short term compensated absence benefits (both vesting and non vesting) are accounted for on the basis of
the actual valuation of the leave entitlement as on the balance sheet date.
The actuarial valuations in respect of post employment defined benefit plans and long term employee
benefits as at the balance sheet date are measured using Projected Unit Credit Method.
65
I. Short Term Employee Benefits:

All employee benefits payable wholly within twelve months of rendering the services are classified as
short term employee benefits. Benefits such as salaries, wages, and short term compensated
absence, etc. and the expected cost of bonus, is recognized in the period in which the employee
renders the related service.
II. Post-Employment Benefits:
a) Defined Contribution Plans:

The Company's superannuation scheme, state governed provident fund scheme related to Dewas
factory and employee state insurance scheme are defined contribution plans. The contribution
paid/payable under the scheme is recognized during the period in which the employee renders the
related service.
b) Defined Benefit Plans:

The employees' gratuity fund scheme, provident fund scheme managed by a Trust and pension
scheme are the Company's defined benefit plans. The present value of the obligation under such
defined benefit plans is determined based on actuarial valuation using the Projected Unit Credit
Method, which recognizes each period of service as giving rise to additional unit of employee benefit
entitlement and measures each unit separately to build up the final obligation.
The obligation is measured at the present value of the estimated future cash flows. The discount
rates used for determining the present value of the obligation under defined benefit plans, is based
on the market yields on Government Securities as at the balance sheet date, having maturity periods
approximating to the terms of related obligations.
Actuarial gains and losses are recognized immediately in the profit & loss account.
In case of funded plans, the fair value of the plan's assets is reduced from the gross obligation under
the defined benefit plans, to recognize the obligation on net basis.
Gains or losses on the curtailment or settlement of any defined benefit plan are recognized when the
curtailment or settlement occurs. Past service cost is recognized as expenses on a straight-line basis
over the average period until the benefits become vested.
The Company pays contribution to a recognized provident fund trust in respect of all locations except
Dewas factory. The guidance note on implementing AS 15, Employees Benefits (Revised 2006)
issued by the Institute of Chartered Accountants of India (ICAI) states that provident funds set up by
employer, which requires interest shortfall to be met by the employer, needs to be treated as a
defined benefit plan. In the absence of clear guidelines on the issue of Actuarial Valuation related to
the interest shortfall to be made by the employer, the Company's actuary has expressed their inability
to reliably measure the provident fund liability of the Company's recognized provident fund.
Accordingly, the Company is unable to exhibit the related disclosures.
III. Long Term Employee Benefits:

The obligation for long term employee benefits such as long term compensated absences, is
recognized in the same manner as in the case of defined benefit plans as mentioned in note II (b)
above.
66
th
IV. Termination Benefits:

Where termination benefits such as compensation under voluntary retirement scheme is payable
within a year of the balance sheet date, the actual amount of termination benefits is accounted as
expense in year of accrual. Where termination benefits are payable beyond one year of the balance
sheet date, the discounted amount of termination benefits is amortised over a definite period.
14 Employee Stock Options Scheme
In respect of stock options granted pursuant to the Company's Employee Stock Option Scheme, the
intrinsic value of the options (excess of market price of the share over the exercise price of the option) is
treated as discount and accounted as employee compensation cost over the vesting period.
15 Taxes on Income
a) Tax on income for the current period is determined on the basis of taxable income after considering
the various deductions available under the Income Tax Act, 1961.
b) Deferred tax is recognized on timing differences between the accounting income and the taxable
income for the year. The tax effect is calculated on the accumulated timing differences at the end of
accounting period based on prevailing enacted or subsequently enacted regulations.
16 Segment Accounting
a) The accounting policies for individual segments are in line with accounting policies of the Company.
b) Segment revenue from inter segment transactions is accounted on the basis of transfer price agreed
between the segments. Such transfer prices are determined with reference to the desired margins.
17 Accounting for interests in Joint Ventures
Type of Joint Venture
A. Jointly Controlled Operations

Company's share of revenue, expenses, assets and liabilities are included in revenues, expenses,
assets and liabilities respectively.
B. Jointly Controlled Entities

Investment in such Joint Ventures is carried at cost after providing for any permanent diminution in
value, if applicable. Income on investments in incorporated Jointly Controlled Entities is recognized
when the right to receive the same is established.
18 Provisions
A provision is recognized when an enterprise has a present obligation as a result of a past event and it is
probable that an outflow of resources is expected to settle the obligation, in respect of which a reliable
estimate can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the
current management estimates.
B] OTHER NOTES
1 Interest paid - others Rs. 256,796,495/- (Rs.125,600,515/-) is net of Rs.27,020,156/- (Rs.29,029,732/-)

being interest received from customers and on deposits. [Tax deducted at source Rs.1,724,577/-
(Rs.3,036,232/-)]
2 Net loss on foreign currency transactions on revenue accounts recognised in the profit and
loss account is Rs.107,867,741 /- ( Rs.16,249,217/-).
67
2009 2008
Rupees Rupees
3 Estimated amount of contracts remaining to be executed on
capital account and not provided for 189,734,603 552,334,210
4 Contingent liabilities not provided for in respect of :

a) Guarantees:
By the Company to ICICI Bank Ltd. on behalf of
SPP Pumps Ltd. , UK 147,040,000 159,960,000
By the Company to Barclays Bank Ltd. on behalf
of SPP Pumps Ltd. , UK 294,080,000 319,920,000
By the Company to Citi Bank N A. on behalf of
SPP Pumps Ltd. , UK 588,160,000 639,840,000
By the Company to Indian Overseas Bank Ltd.
on behalf of Kirloskar Constructions &
Engineers Ltd., Chennai 800,000,000 500,000,000
By the Company to Bank of Maharashtra on
behalf of Gondwana Engineers Limited 145,000,000 -
b) Central Excise (Matter Subjudice) 14,347,263 4,482,000
c) Sales Tax (Matter Subjudice) 89,056,373 98,386,118
d) Income Tax (Matter Subjudice) 395,323,477 -
e) Labour Matters (Matter Subjudice) 39,278,282 35,320,699
f) Other Legal Cases ( Matter Subjudice ) 18,792,301 11,232,651
g) Letters of Credit Outstanding 2,366,640,832 1,284,654,309
5 Construction Contracts:
a. Contract revenue recognised as revenue
for the year ended 31st March 2009 8,728,394,699 7,260,655,608
b. The aggregate amount of contract costs incurred
and recognised profits less recognised losses
upto 31st March 2009 31,790,631,155 23,120,651,320
c. Amount of advances received as on 31st March 2009
for contracts in progress 935,338,671 782,137,542
d. Amount of retentions as on 31st March 2009 for
contracts in progress 410,720,520 249,424,764
6 Remuneration to Auditors
Statutory Auditors :
a) Audit Fees 1,654,500 1,685,400
b) Tax Audit Fees 150,000 150,000
c) Certification and other services 688,250 972,995
d) Expenses reimbursed 507,048 362,742
68
th
2009 2008
Rupees Rupees
7 Managerial Remuneration
Computation of Managerial Remuneration in accordance
with section 198 of the Companies Act,1956
Profit as per profit and loss account before
provision for taxation 982,203,176 1,500,406,123
Add:
Managerial remuneration 54,450,136 50,287,533
Directors' remuneration 7,565,000 6,370,000
Directors' fees 970,000 810,000
1,115,798,088 1,576,423,358
Less :
Capital profit on sale of fixed assets 1,136,470 1,657,690
Employee benefits debited to General Reserve - 56,868,940
1,136,470 58,526,630
1,114,661,618 1,517,896,728
Commission to other Directors @ 1% 11,146,616 15,178,967

Restricted to 7,565,000 6,370,000
Details of Managerial Remuneration

a) Salary 17,767,200 17,692,560
b) Contribution to provident fund and superannuation fund 4,795,200 4,774,950
c) Commission 25,000,000 21,500,000
d) Perquisites 6,887,736 6,320,023
54,450,136 50,287,533
e) Estimated value of other benefits 116,817 95,472
TOTAL 54,566,953 50,383,005
8 Expenditure in foreign currencies

i) Interest 9,530,280 1,465,967
ii) Professional fees 29,205,216 30,942,651
iii) Royalty 458,512 -
iv) Other matters 346,633,215 125,324,306
9 Earnings in Foreign Currencies

i) F.O.B. value of goods exported 2,239,672,656 1,483,499,424
ii) Others 241,292,690 13,398,331
10 C.I.F. Value of Imports

i) Raw materials, components & spare parts 1,883,493,356 1,111,426,134
ii) Capital goods 200,926,083 40,549,198
11 Expenditure Incurred on Research and

Development activities undertaken during the year
Capital 16,707,375 5,734,927
Revenue 34,156,669 60,375,574
TOTAL 50,864,044 66,110,501
69
2009 2008
Rupees Rupees
12 Earning per Share ( Basic and diluted )
I - Basic
a) Profit for the year before tax 982,203,176 1,500,406,123
Less : Attributable tax thereto 311,916,578 399,039,651
Profit after tax 670,286,598 1,101,366,472
b) Total number of equity shares at the end of the year

used as denominator 105,764,355 105,764,355
c) Basic earning per share of nominal value of Rs 2/- each 6.34 10.41
II - Diluted
a) Profit for the year before tax 982,203,176 1,500,406,123
670,286,598 1,101,366,472
b) Total number of equity shares at the end of the year 105,764,355 105,764,355
c) Add : Weighted average number of potential equity

shares on account of employee stock options - 277,615
Weighted average number of shares outstanding

d) Diluted earning per share of nominal value of Rs 2/- each 6.34 10.39
13 Advances recoverable in cash or kind or for value to be received include

a) Advance recoverable from Companies under same management
1) Kirloskar Systems Limited 5,248,345 5,248,345
Maximum amount outstanding during the year 5,248,345 5,248,345
2) Kirloskar Proprietary Limited - -
Maximum amount outstanding during the year 3,547,000 5,200,000
3) Pressmatic Electrostampings Pvt. Limited 284,843 -
Maximum amount outstanding during the year 732,519 -
4) Quadromatic Engineering Pvt. Limited 348,765 -
Maximum amount outstanding during the year 348,765 -
14 Amount of Borrowing Cost Capitalised during the year 29,203,312 9,250,002
15 As per the information available with the Company till date; none of the suppliers have informed the
Company about their having registered themselves under the "Micro, Small and Medium Enterprises
Development Act, 2006". As such, information as required under this Act, cannot be compiled and
therefore, not disclosed for the year.
16 Employee Benefits :
i Defined Contribution Plans

Amount of Rs 43,120,522/-; is recognised as an expense and included in "Payments and Benefits
to Employees" (Schedule 21) in the profit and loss account.
70
th
ii Defined Benefit Plans

a) The amounts recognised in Balance Sheet are as follows :
Rupees
As at 31-03-2009 As at 31-03-2008
Particulars Gratutity Plan Pension Scheme Gratutity Plan Pension Scheme
(Funded) (Non Funded) (Funded) (Non Funded)
A. Amount to be recognised in Balance Sheet
Present value of defined benefit obligation 183,076,249 19,257,771 176,344,206 16,999,644
Less: Fair value of plan assets 208,657,491 - 190,460,641 -
Amount to be recognised as
liability or (asset) (25,581,242) 19,257,771 (14,116,435) 16,999,644
B. Amounts reflected in the Balance Sheet

Liabilities - 19,257,771 - 16,999,644
Assets 25,581,242 - 14,116,435 -
Net Liability/(Assets) (25,581,242) 19,257,771 (14,116,435) 16,999,644
b) The amounts recognised in Profit and Loss Account are as follows :

Rupees
As at 31-03-2009 As at 31-03-2008
1 Current Service Cost 12,455,848 - 12,026,064 -
2 Interest Cost 14,006,496 1,386,089 15,044,895 -
3 Expected Return on Plan Assets 35,022,607 - 14,600,907 -
4 Actuarial Losses/(Gains) (2,904,544) 2,949,432 (26,586,487) (3,694,546)
5 Past Service Cost - - - -
6 Effect of any curtailment or settlement - -
7 Actuarial Gain not recognised in books - - -
8 Adjustment for earlier years - - -
Total included in Schedule 21
"Payment to Employees" (11,464,807) 4,335,521 (14,116,435) (3,694,546)
Actual Return on Plan Assets 9.40% 9.35% -
c) The changes in the present value of defined benefit obligation representing reconciliation of
opening and closing balances thereof are as follows:
Rupees
As at 31-03-2009 As at 31-03-2008
1 Balance of the present value of
Defined benefit Obligation as at 01-04-2008 176,344,206 16,999,644 188,061,185 22,830,190
2 Add: Current Service Cost 12,455,848 - 12,026,064 -
Add: Interest Cost 14,006,496 1,386,089 15,044,895 -
3 Add/(less): Actuarial losses / (gains) (2,904,544) 2,949,432 (25,672,009) (3,694,546)
4 Less: Benefits paid (16,825,757) (2,077,394) (13,115,929) (2,136,000)
5 Balance of the present value of
Defined Benefit Obligation
as at 31-03-2009 183,076,249 19,257,771 176,344,206 16,999,644
71
d) Changes in the fair value of plan assets representing reconciliation of the opening and closing
balances thereof are as follows
Rupees
Gratutity
Particulars Plan (Funded)
31.03.2009 31.03.2008
1 Opening balance of the fair value of the
plan assets as at 01-04-2008 190,460,641 179,793,799
2 Add: Expected Return on plan assets 35,022,607 14,600,907
3 Add/(less) : Actuarial gains/(losses) - 914,477
4 Add: Contribution by the employer - 8,267,387
5 Less: Benefits paid 16,825,757 13,115,929
6 Closing balance of the plan assets as at 31-03-2009 208,657,491 190,460,641
e) The broad categories of plan assets as a percentage of total plan assets as at 31-03-2009 of
Employee's Gratuity Scheme are as under :
Sr. No Description Percentage (%)

2009 2008
1 Central Govt. Securities 56.09 63.28
2 State Govt. Securities 11.18 13.57
3 Approved Marketable Securities 2.96 0.24
4 Bonds/Debentures etc. 22.03 17.67
5 Loans 0.36 0.47
6 Equity 5.64 2.43
7 Liquid Fund/Money Market Instrument 1.72 2.34
8 Preference Shares 0.02 -
Grand Total 100.00 100.00
Basis used to determine the overall expected return

Life Insurance Corporation (LIC) manages the investments of Employee Gratuity Scheme. Expected
rate of return on investments is determined based on the assessment made by the LIC at the
beginning of the year on the return expected on its existing portfolio, alongwith the estimated
incremental investments to be made during the year. Yield on the portfolio is calculated based on a
suitable mark-up over the benchmark Government securities of similar maturities.
f) Principal actuarial assumptions at the balance sheet (expressed as weighted averages)

1 Discount rate as at 31-03-2009 - 8%
2 Expected return on plan assets as at 31-03-2009 - 9.4%
3 Salary growth rate : For Gratuity Scheme - 8%
4 Attrition rate: For gratuity scheme the attrition rate varies from 1% to 4% for various age groups.
5 The estimates of future salary increases, considered in actuarial valuation, taken into account
inflation, seniority, promotion and other relevant factors, such as supply and demand in the
employment market.
72
th
g) The amounts pertaining to defined benefit plans are as follows:

Rupee
As at 31-03-2009 As at 31-03-2008
Particulars Gratutity Pension Scheme Gratutity Pension Scheme
Plan (Funded) (Non Funded) Plan (Funded) (Non Funded)
Defined Benefit Obligation 183,076,249 19,257,771 176,344,206 16,999,644
Plan Assets 208,657,491 - 190,460,641 -
Surplus/(Deficit) 25,581,242 (19,257,771) 14,116,435 (16,999,644)
h) General descriptions of defined plans:
1 Gratuity Plan:
The Company operates gratuity plan wherein every employee is entitled to the benefit equivalent to
fifteen days salary last drawn for each completed year of service. The same is payable on
termination of service, or retirement, whichever is earlier. The benefit vests after five years of
continuous service.
2 Company's Pension Plan:
The company operates a Pension Scheme for a specified ex-employees wherein the beneficiaries
are entitled to defined monthly pension.
17 Quantitative information in respect of Opening/Closing Stocks of goods manufactured :

Particulars Unit Opening Stock Closing Stock
Qty Value in Qty Value in
Rupees Rupees
Power Driven Pumps Nos. 13,505 78,153,903 * 11,432 87,856,670
(13,752) (107,805,295) (13,505) (78,153,903)
Electric Motors Nos. 3,315 20,938,698 ** 3,659 33,070,078
(3,336) (10,897,627) (3,315) (20,938,698)
Valves Nos. 13 13 14 14
(56) (197,396) (13) (13)
Spares and Others - 25,798,432 - 12,295,724
(-) (22,080,059) (-) (25,798,432)
TOTAL 124,891,046 133,222,486
(140,980,377) (124,891,046)
Note : * Excludes 920 ( 366 ) Nos. of power driven pumps scrapped.

** Excludes 207 (50 ) Nos of motors scrapped.
18 Quantitative information in respect of Opening/Closing Stocks of Trading Articles :

Particulars Unit Opening Stock Closing Stock
Qty Value in Qty Value in
Rupees Rupees
Pumps Nos. 11,837 23,824,798 * 5,895 15,595,331
(8,605) (29,642,693) (11,837) (23,824,798)
Valves Nos. 1,638 3,566,323 2,000 2,219,222
(2,017) (2,543,051) (1,638) (3,566,323)
Motors Nos. 1 21,189 ** - 75,597
(1) - (1) (21,189)
Alternators Nos. 251 4,948,520 248 5,803,347
(147) (2,797,092) (251) (4,948,520)
Transformers Nos. - - - -
(2) (566,475) (-) (-)
Others - 65,212,485 - 84,880,425
- (41,982,777) - (65,212,485)
TOTAL 97,573,315 108,573,922
(77,532,088) (97,573,315)
* Excludes 356 (2) No of pumps scrapped & excludes 13 (Nil) No. of pumps theft.
** Excludes 1 (Nil) no of motor scrapped.
73
19 Quantitative information in respect of Sales of Manufactured Products :
Particulars 2008-09 Previous Year

Unit * @ Value * @ Value
Qty. Rupees Qty. Rupees
Power Driven Pumps Nos. 207,180 7,699,508,855 229,228 6,387,602,449
Valves Nos. 26,653 1,007,789,944 27,671 668,362,000
Turbines Nos. 8 35,941,679 8 33,257,168
Electric Motors Nos. 23,309 250,685,614 29,607 234,802,223
Alloy Iron Castings
including Steel Castings
& Cast Iron Castings
} M.T. 1,114 272,697,342 1,099 183,663,745
Spare Parts and Others 1,309,794,501 1,298,594,413

Services and Job Order Receipts 607,686,869 344,520,605
Civil Receipts 1,860,242,936 2,559,335,565
TOTAL 13,044,347,740 11,710,138,168
* Includes 389 (185) Power driven pumps, 304 (542) Valves, included in Construction and project
related revenue.
20 Quantitative information in respect of Purchases and Sales of Trading Articles :
Particulars Unit Purchases Sales

Value * @ Value
Qty. Rupees Qty. Rupees
Pumps Nos. 152,244 291,181,300 157,817 389,096,046
(160,998) (334,688,528) (157,764) (425,712,619)
Valves Nos. 24,178 62,213,991 23,816 123,283,288
(11,642) (88,367,672) (12,021) (104,364,655)
Transformers Nos. 1,173 218,549,690 1,173 337,746,502
(1,644) (229,325,724) (1,646) (354,249,352)
Alternators Nos. 6,334 124,846,541 6,337 152,030,409
(7,806) (139,831,060) (7,702) (162,512,698)
Others - 3,995,901,308 - 4,723,847,435
- (2,212,223,431) - (2,770,075,368)
TOTAL 4,692,692,830 5,726,003,680

(3,004,436,415) (3,816,914,692)
* Includes 20 (Nil) Pumps, 303 (135) Valves, 1109 (1601) Transformers included in Construction &
Project Related Revenue
@ Includes Progress billing of Rs. 9,189,298,139/- (Rs. 7,536,247,022/-) related to construction

contracts accounted in the profit and loss account as Project related revenue of Rs. 8,728,394,699/-
(Rs. 7,260,655,608/-) in terms of Accounting Standard 7 on Construction Contracts.
74
th
21 Consumption of Raw Materials, Components and Spare Parts:
2008-09 Previous Year
Particulars Rupees Percentage Rupees Percentage
Imported 382,591,596 4.34 393,979,691 5.07
Indigenous 8,434,750,809 95.66 7,380,464,902 94.93
TOTAL 8,817,342,405 100.00 7,774,444,593 100.00
22 Details of Raw Materials Consumption :
2008-09 Previous Year

Particulars Unit Quantity Value Quantity Value
a) Pig Iron M.T. 5,253.59 140,555,056 4,707.00 90,914,869
b) Castings Nos 691,848 270,470,423 631,928 519,283,436
c) Stator Stacks Nos. 121,566 219,939,021 178,134 85,050,976
d) Rotors Nos. 151,872 83,422,058 186,374 174,829,381
e) Motors Nos. 5,079 2,093,409,761 5,096 2,361,517,251
f) Engines Nos. 1,044 127,678,549 949 115,867,997
g) Motor Frames Nos. 22,475 105,384,649 27,291 122,330,179
h) Others - 5,776,482,889 - 4,304,650,504
TOTAL : 8,817,342,405 7,774,444,593
75
23 Details of Licensed Capacity, Installed Capacity and Production of goods manufactured :
Sr. Class of Goods Unit Licensed capacity Installed capacity Production

No. 2008-09 Previous 2008-09 Previous 2008-09 Previous
Year Year Year
1. Power Driven Pumps Nos. 194,000 194,000 194,000 194,000 @ 206,107 229,348
2. Metal Cutting including

Grinding Machines " 736 736 736 736 - -
3. Reduction Gear Units " 1,200 1,200 1,200 1,200 - -
4. Valves " 70,070 70,070 70,070 70,070 26,654 27,628
5. Ploughs " 3,216 3,216 3,216 3,216
}
6. Alloy Iron Castings * * * *
including Steel Castings M.T. 120 120 120 120
7. Cast Iron Castings M.T. 2,500 2,500 2,500 2,500
8. Cast Iron Castings 1,113.526 1,099.270

including Alloy M.T. 5,000 5,000 5,000 5,000
Steel castings for
Automotive purposes
9. Turbines Nos. 8 8
10 Electric Motors Nos. @@ 23,872 29,639
@ Includes 80 ( 1 ) for own use.
@@ Includes 12 ( 3 ) for own use.
* Per annum on single shift basis.
Notes :
a) Licensed Capacity includes registered capacities for activities existing prior to the Industries
(Development Regulation) Act, 1951, but does not include licenses held for captive capacities.
b) It is not practicable to indicate precisely installed capacity of each type of product manufactured
by the Company, as the capacity of various facilities available is overlapping for each
product. Besides, the Company manufactures a very large range amongst the licensed products
which, in turn, is decided by actual demand from time to time. Also the Company buys
components, parts and other services from outside. The installed capacities as indicated above
are estimates as certified by the Managing Director and accepted by the Auditors.
c) In terms of notification no. 477E dt. 25-7-91 issued by Department of Industrial Development,
industrial licenses are not required for the products manufactured by the Company except centrifugal
pumps manufactured at Dewas below 10 cm x 10 cm which are reserved for small scale sector.
Revalidation of industrial license in this range of pumps is under process.
76
th
24. Related Party Disclosures
(A) Names of the related party and nature of relationship where control exists
Name of the related party Nature of relationship

1. Better Value Holdings Pvt. Ltd. Holding Company
2. Pooja Credits Pvt. Ltd. Subsidiary Company
3. Kirloskar Silk Industries Ltd. Subsidiary Company
4. Kirloskar Constructions and Engineers Ltd. Subsidiary Company
5. Gondwana Engineers Ltd. Subsidiary Company
6. Kirloskar Brothers International B. V. Subsidiary Company
7. The Kolhapur Steel Limited (from 02.08.2008) Subsidiary Company
8. Kirloskar Brothers Europe B.V. (From 13.05.2008) Subsidiary of Kirloskar Brothers
International BV
9. Kirloskar Brothers (Thailand) Ltd. (From 26.09.2008) Subsidiary Company
10. SPP Pumps Ltd. U K. Subsidiary Company
11. SPP Pumps France EURL Subsidiary of SPP Pumps Ltd. U K
12. Certified Engines Ltd Subsidiary of SPP Pumps Ltd. U K
13. SPP (South Africa) (Pty) Ltd. Subsidiary of SPP Pumps Ltd. U K
14. SPP Pumps LP Subsidiary of SPP Pumps Ltd. U K
15. SPP France S A S Subsidiary of SPP Pumps Ltd. U K
16. SPP Pumps Management LLC Subsidiary of SPP Pumps Ltd. U K
17. SPP Pumps Holdings LLC Subsidiary of SPP Pumps Ltd. U K
18 . Hematic Motors Pvt. Ltd. Fellow Subsidiary Company
19. Pressmatic Electro Stampings Pvt. Ltd. Fellow Subsidiary Company
20. Quadromatic Engineering Pvt. Ltd. Fellow Subsidiary Company
21. Vakasa Electricals Pvt. Ltd. Fellow Subsidiary Company
22. Moreshwar Electricals Pvt. Ltd. Fellow Subsidiary Company
23. Ila Electricals Pvt. Ltd. Fellow Subsidiary Company
24. Kirloskar Oil Engines Limited Fellow Subsidiary Company
25. Kirloskar Pneumatic Company Limited Fellow Subsidiary Company
26. Kirloskar Systems Limited Fellow Subsidiary Company
27. Kirloskar Proprietary Limited Fellow Subsidiary Company
77
B) Related Party Transactions (In Rupees)
Nature of Transaction Holding Subsidiary Associates Key Relatives Enterprises Total

Company & Fellow & Joint Management of Key over
Subsidiary Ventures Personnel Management which key
Companies Personnel managerial
personnel or
their relatives
exercise
significant
influence
1) Purchases of Goods - 991,284,120 70,669,193 - - - 1,061,953,313

- (65,173,660) (279,014,797) - - - (344,188,457)
2) Sale of Goods - 302,293,811 1,277,601 - - - 303,571,412
- (196,041,132) (751,975) - - - (196,793,107)
3) Rendering of Services - 19,441,708 11,769,810 - - - 31,211,518
- (19,221,408) (17,878,322) - - - (37,099,730)
4) Receiving of Services - 5,849,512 - 450,000 2,610,000 - 8,909,512
- - (564,989) - (2,820,000) (450,000) (3,834,989)
5) Dividend Received - 127,029,847 18,050,000 - - - 145,079,847
- (401,600) (9,119,700) - - - (9,521,300)
6) Dividend Paid 211,625,340 630,000 - 5,217,216 256,400 - 217,728,956
- - (210,000) (3,050,598) (124,200) (105,389,610) (108,774,408)
7) Interest Received - 8,204,440 - - - - 8,204,440
- (7,546,442) - - - - (7,546,442)
8) Interest Paid - 2,854,795 - - - - 2,854,795
- - (665,754) - - - (665,754)
9) Investment Made - 97,053,263 - - - - 97,053,263
- (84,966,717) - - - - (84,966,717)
10) Remuneration Paid - - - 54,450,136 530,000 - 54,980,136
- - - (50,287,533) (1,272,601) - (51,560,134)
11) Payment received towards
repayment of loan - 8,800,000 - - - - 8,800,000
- (47,000,000) - - - - (47,000,000)
12) Sale of Fixed Assets - - - - - - -
- - (181,600) - - - (181,600)
13) Loan Given - 630,790,392 - - - - 630,790,392
- (69,500,000) - - - - (69,500,000)
14) Reimbursement of
Expenses - 23,281,680 5,548,635 - - - 28,830,315
- (8,179,132) (2,714,059) - - - (10,893,191)
15) Inter Corporate Deposit
Repayment - 20,000,000 - - - - 20,000,000
- - - - - - -
16) Deposit Paid - - - 1,700,000 3,400,000 - 5,100,000
- - - - - (5,000,000) (5,000,000)
17) Inter Corporate Deposit
Recd - 10,000,000 - - - - 10,000,000
- - (50,000,000) - - - (50,000,000)
18) Royalty Paid - 47,137,925 - - - - 47,137,925
- - - - - - -
19) Royalty Received - 1,334,443 - - - - 1,334,443
- - - - - - -
20) Commission Paid - 5,582,167 - - - - 5,582,167
- - - - - - -
21) Balance Outstanding
Debit (Credit) - 604,973,056 (3,543,242) (23,300,000) 3,400,000 - 581,529,814
- 145,421,151 (119,052,086) (21,500,000) 3,510,000 5,248,345 13,627,410
78
th

(C) Names of Related Parties with whom transactions have been entered into:
1) Holding Compnay Better Value Holdings Pvt. Ltd.

2) Subsidiary Companies Pooja Credits Pvt. Ltd.
Kirloskar Constructions and Engineers Ltd.
Kirloskar Silk Industries Ltd.
Gondwana Engineers Ltd.
SPP Pumps Ltd., UK
Certified Engines Ltd.
SPP (South Africa) (Pty) Ltd.
SPP Pumps LP
SPP Pumps Management LLC
SPP Pumps Holdings LLC
SPP Pumps France EURL
SPP France S A S
Kirloskar Brothers International B V
The Kolhapur Steel Limited (From 02.08.2008)
Kirloskar Brothers Europe B.V. (From 13.05.2008)
Kirloskar Brothers (Thailand) Ltd. (From 26.09.2008)
3) Fellow Subsidiary Companies Hematic Motors Pvt. Ltd.
Pressmatic Electro Stampings Pvt. Ltd.
Quadromatic Engineering Pvt. Ltd.
Vakasa Electricals Pvt. Ltd.
Moreshwar Electricals Pvt. Ltd.
Ila Electricals Pvt. Ltd.
Kirloskar Pneumatic Company Limited
Kirloskar Sytems Ltd.
4) Joint Ventures Kirloskar Ebara Pumps Ltd.
Kirloskar Corrocoat Pvt. Ltd.
5) Key Management Personnel Mr. Sanjay Kirloskar
Mr. Vikram Kirloskar
Mr. R. K. Srivastava
Mr. J. R. Sapre
6) Relatives of Key Management Mrs. Pratima Kirloskar Wife of Mr. S. C. Kirloskar
Personnel Mr. Alok Kirloskar Son of Mr. S. C. Kirloskar
Ms. Rama Kirloskar Daughter of Mr. S. C. Kirloskar
Mrs. Suman Kirloskar Mother of Mr. S. C. Kirloskar
Mr. Atul Kirloskar Brother of Mr. S. C. Kirloskar
Mr. Rahul Kirloskar Brother of Mr. S. C. Kirloskar
Mrs. Geetanjali Kirloskar Wife of Mr. Vikram Kirloskar
Mrs. Mrinalini Kirloskar Mother of Mr. Vikram Kirloskar
Mrs. Vijayalaxmi Srivastava Wife of Mr. R. K. Srivastava
Mrs. Asha J. Sapre Wife of Mr. J. R. Sapre
7) Jointlly controlled operations HCC – KBL Joint Venture
KBL – MCCL Joint Venture
KCCPL – IHP – BRC – TAIPPL – KBL JV
IVRCL – KBL JV
Maytas – KBL JV
Larsen & Toubro – KBL JV
KBL-MEIL-KCCPL JV
KBL – PLR JV
KBL – Koya – VA Tech JV
KBL – PIL Consortium
Larsen & Toubro – KBL – Maytas JV
IVRCL – KBL – MEIL JV
Pioneer – Avantica – ZVS – KBL JV
AMR – Maytas – KBL – WEG JV
Indu – Shrinivasa Constructions – KBL – WEG JV
MEIL – KBL – IVRCL JV
MEIL – Maytas – KBL JV
KCCPL – TAIPPL – KBL JV
79
(D) Disclosure pursuant to clause 32 of the listing agreement regarding loans and advances to
subsidiary and associate companies:
Loans and advances in the nature of loans: Rupees
Sr. No. Name of the Company Balance as at Maximum outstanding

31.03.2009 31.03.2008 31.03.2009 31.03.2008
A To Subsidiary Companies
1 Pooja Credits Pvt. Ltd. - - - 2,600,000
2 Kirloskar Silk Industries Ltd. 406,404 406,404 406,404 406,404
3 Kirloskar Constructions and
Engineers Ltd. 505,550,000 45,000,000 505,550,000 45,000,000
4 Gondwana Engineers Ltd. 13,000,000 15,500,000 15,500,000 19,500,000
5 Kirloskar Brothers International B V
(Its Subsidiary) - - - -
6 SPP Pumps Ltd. (its Subsidiaries) - - - -
7 The Kolhapur Steel Limited 118,940,392 - 121,940,392 -
8 Kirloskar Brothers (Thailand) Ltd. - - - -
TOTAL 637,896,796 60,906,404 643,396,796 67,506,404
B To Fellow Subsidiary Companies

Hematic Motors Pvt Ltd - - - -
Pressmatic Electro Stampings Pvt. Ltd. - - - -
Quadromatic Engineering Pvt. Ltd. - - - -
TOTAL - - - -
C Loans and advances in the nature of loan where there is,

i) No repayment schedule:

31.03.2009 31.03.2008 31.03.2009 31.03.2008
1 Pooja Credits Pvt. Ltd. - - - 2,600,000

Engineers Ltd. 505,550,000 45,000,000 505,550,000 45,000,000
4 Gondwana Engineers Ltd. 13,000,000 15,500,000 15,500,000 19,500,000
ii) No interest charged:

31.03.2009 31.03.2008 31.03.2009 31.03.2008
Engineers Ltd. * 505,550,000 - 505,550,000 -
* Note: Interest was charged during the Financial year 2007-2008, on the loan to Kirloskar Constructions
and Engineers Ltd.
D Loans and advances in the nature of loans to firms/companies in which directors are interested: NIL
E Investment by the loanee (borrower) in the shares of the Company or subsidiary of the Company : NIL
Note:- Loans to employees including directors under various schemes of the company (such as housing
loan, furniture loan, education loan etc.) have been considered to be outside the purview of this disclosure
requirements.
80
th
25. Particulars related to Joint Ventures :

a) List of Joint Ventures
Sr. No. Name of the Joint Venture Description Ownership Country of

Interest Incorporation
1 Kirloskar Ebara Pumps Ltd. Jointly 45% India
controlled entity
2 Kirloskar Corrocoat Pvt. Ltd. Jointly 50% India
controlled entity
3 HCC – KBL Joint Venture Jointly NA India
controlled operations
4 KBL – MCCL Joint Venture Jointly NA India
5 KCCPL – IHP – BRC – TAIPPL – KBL JV Jointly NA India
6 IVRCL – KBL JV Jointly NA India
7 Maytas – KBL JV Jointly NA India
8 Larsen & Toubro – KBL JV Jointly NA India
9 KBL-MEIL-KCCPL JV Jointly NA India
10 KBL – PLR JV Jointly NA India
11 KBL – Koya – VA Tech JV Jointly NA India
12 KBL – PIL Consortium Jointly NA India
13 Larsen & Toubro – KBL – Maytas JV Jointly NA India
14 IVRCL – KBL – MEIL JV Jointly NA India
15 Pioneer – Avantica – ZVS – KBL JV Jointly NA India
16 AMR – Maytas – KBL – WEG JV Jointly NA India
17 Indu – Shrinivasa Constructions – Jointly NA India
KBL – WEG JV controlled operations
18 MEIL – KBL – IVRCL JV Jointly NA India
19 MEIL – Maytas – KBL JV Jointly NA India
20 KCCPL – TAIPPL – KBL JV Jointly NA India
81
b) Financial Interest in Jointly controlled entities
Sr. No. Name of the Joint Venture Company's share in
Rupees Rupees
As at 31st March, 2009 As at 31st March, 2008

1 Kirloskar Ebara Pumps Ltd. Assets 385,701,714 315,685,391
Liabilities 383,451,714 313,435,391
For the year ended For the year ended

31st March 2009 31st March 2008
Income 577,083,045 571,948,223
Expenses 410,641,304 442,179,011
As at 31st March 2009 As at 31st March 2008

2 Kirloskar Corrcoat Private Ltd. Assets 88,852,334 67,773,632
Liabilities 63,852,334 42,773,632
For the year ended For the year ended

31st March 2009 31st March 2008
Income 151,320,186 126,495,190
Expenses 112,525,508 88,675,174
c) Contingent liabilities , if any , incurred in relation to interest in Joint Ventures NIL

d ) Capital commitments , if any , in relation to interest in Joint Ventures NIL
26. Details of provisions and movements in each class of provisions.
Particulars As at 31st March,2009 (Rs.)

Income Tax Warranty
Rupees Rupees
Carrying amount at the beginning of the year 1,259,682,546 28,257,896

(899,682,546) (25,998,716)
Additional provision made during the year 306,000,000 31,856,656

(360,000,000) (28,257,896)
Amount used during the year - 28,257,896

- (25,998,716)
Unused amounts reversed during the year - -

- -
Carrying amount at the end of the year 1,565,682,546 31,856,656

(1,259,682,546) (28,257,896)
Brief description of the nature of the obligation and the expected timing of any resulting outflows of
economic benefits:-
Product Warranty
Accruals have been made in respect of warranties given by the Company for the sales made and
services rendered during the year based on past experience.
Income Tax (Current tax)

Tax payable to the Government in accordance with the provision of the Income Tax Act, 1961.
82
th
27. a ) Details of Derivative Instruments (for hedging)
Nil
b ) Details of foreign currency exposures that are not hedged by a derivative instrument or otherwise:
Particulars Amount in Foreign Currency Equivalent amount in

Indian Rupees
Liability
Sundry Creditors 4,027,985 JPY 2,094,552
(51,300,511) (20,658,716)
2,039,013 EUR 138,754,845
(819,395) (51,941,418)
18,148 GBP 1,334,288
(42,630) (3,409,527)
15,514,415 USD 793,717,492
(11,420,305) (456,926,413)
Loans 4,500,000 USD 230,220,000
(6,000,000) (240,060,000)
Advances received from Customers 1,363,369 EUR 92,777,285
(1,234,514) (78,255,874)
34,718 GBP 2,552,496
(15,569) (1,245,201)
5,580,638 USD 285,505,446
(4,170,624) (166,866,681)
Assets
Advances to Suppliers 2,778,196 EUR 186,083,573
(2,570,316) (160,361,997)
540,873 GBP 39,213,293
(301,551) (23,786,379)
3,750,249 USD 190,212,626
(1,761,221) (69,850,027)
92,243,078 JPY 47,043,969
(14,034,390) (5,651,649)
Sundry Debtors 2,547,164 EUR 170,609,018
(1,436,254) (89,607,911)
732,591 GBP 53,112,872
(672,606) (53,055,180)
6,185,707 USD 313,739,075
(12,218,041) (484,567,498)
Bank Accounts 998 EUR 66,862
(998) (62,281)
1,634,325 USD 8,334,555
(72,586) (2,878,744)
83
28. Stock Option Schemes
a) The grant of options to the employees under the Stock Option Schemes is on the basis of their
performance and other eligibility criteria. The Options are vested over a period of three years subject
to the discretion of the management and fulfilment of certain conditions
b) The maximum term of ESOP is three years from the vesting date. The ESOP will be settled in the form
of Equity Shares.
c) The details of the grants under the Stock Option Scheme are summarised below.
Sr No Particulars 2008-09 2007-08

Grant I Grant II Grant I Grant II
1) Exercise Price - Rs. 200/- 200/- 200/- 200/-
2) Grant Date 31/8/2007 19/1/2008 31/8/2007 19/1/2008
3) Vesting Commences on 31/8/2008 19/1/2009 31/8/2008 19/1/2009
4) Options granted and outstanding at the
beginning of the year 486,700 27,750 - -
5) Options granted during the year - - 520,200 32,050
6) Options lapsed during the year 38,285 5,450 32,950 4,300
7) Options exercised during the year - - - -
8) Option outstanding at the end of year 448,415 22,300 487,250 27,750
9) Options granted and outstanding at the
end of the year of which
a Options Vested 135,715 6,690 550 -
b Options yet to Vest 312,700 15,610 486,700 27,750
29. In accordance with the orders passed by the Honourable Board for Industrial and Financial Reconstruction
(BIFR) on May 14, 2008, the Company has acquired all the Equity shares of Rs. 10/- each of The Kolhapur
Steel Limited (TKSL) from the existing promoters by executing a Share Purchase Agreement on August 2,
2008 and TKSL has become a subsidiary company of KBL with effect from August 2, 2008.
30. The company, through its subsidiary company Kirloskar Brothers International B.V. , has formed a
Company in The Netherlands, on May 13, 2008, namely, “ Kirloskar Brothers Europe B.V. " This is a joint
venture company with a local partner, primarily for the distribution of the company’s products in Europe.
31. The company has formed a wholly owned subsidiary company in Thailand namely Kirloskar Brothers
(Thailand) Ltd . As per the local laws, the company was permitted to commence business only after getting
the approval from Board of Investments, Thailand, which was received in September 2008. The company
would source the goods from India and cater to the South East Asian market.
32. The Board has approved the Scheme of Arrangement for transfer of some investments to a separate
company. For this purpose, the Company has incorporated a wholly owned subsidiary company “ Kirloskar
Brothers Investments Limited” on April 16, 2009.
33. The figures have been regrouped / rearranged wherever necessary. Figures in bracket relate to previous
year.
84
th
BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE

(Inserted by Notification No. GSR 388 (E), dated 15.05.1995)
I Registration Details
Registration No. : 0 0 0 6 7 0 State Code 1 1
Balance Sheet Date 3 1 0 3 2 0 0 9
Date Month Year
II Capital raised during the year ( Amount in Rs. Thousands )
Public Issue Rights Issue
-- --
Bonus Issue Private Placement
-- --
III Position of Mobilisation and Deployment of Funds
Total Liabilities Total Assets
1 0 3 6 0 8 2 6 1 0 3 6 0 8 2 6
Sources of Funds
Paid up Capital Reserves & Surplus
2 1 1 5 2 8 6 7 8 7 7 9 9
Secured Loans Unsecured Loans
1 8 0 8 6 6 2 1 3 9 5 6 8 3
Employee Stock Options outstanding Deferred Taxes
9 2 0 6 8 6 5 0 8 6
Application of Funds
Net Fixed Assets Investments
2 7 5 6 0 7 0 3 3 8 3 7 5 0
Net Current Assets Misc. Expenses
4 2 1 1 0 6 1 --
Accumulated Losses Intangible Assets
-- 9 9 4 5
IV Performance of Company ( Amount in Rs. Thousands )
Turnover Total Expenses
1 8 6 6 8 5 8 3 1 7 6 8 6 3 8 0
V Profit of Company ( Amount Rs. Thousands )
+ - Profit / Loss Before Tax + - Profit / Loss After Tax
+ 9 8 2 2 0 3 + 6 7 0 2 8 7
(Please tick appropriate box + for Profit, - for Loss )
Basic Earning per Share in Rs. Dividend Rate %
6 . 3 4 1 0 0
VI Generic Names of Three Principal Products / Services of Company
(As per monetary terms)
Item Code No. :
(ITC Code)
8 4 . 1 3
Product Description : PU M PS F O R L I Q U I D S
Item Code No. :
(ITC Code)
8 4 . 8 1
Product Description : V A L V E S
Item Code No. : N - A
(ITC Code)
Product Description : C O N S T R U C T I O N & P R O J E C T

R E L A T E D A C T I V I T Y
85
STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956
RELATING TO SUBSIDIARY COMPANIES :
Names of the Pooja Credits Kirloskar Silk Kirloskar SPP Pumps Gondwana Kirloskar The Kolhapur Kirloskar
Subsidiaries Pvt. Limited Industries Constructions & Ltd. Engineers Brothers Steel Brothers
Limited Engineers (Consolidated) Ltd. International B.V. Limited (Thailand)
Ltd. (Consolidated) Limited
1. The Financial year March 31, March 31, March 31, December 31, March 31, December 31, March 31, September 30,
of the Subsidiary 2009 2009 2009 2008 2009 2008 2009 2008
Companies ended on
2. Holding Company's Controls Controls Controls Controls Controls Controls Controls Controls
interest composition of composition of composition of composition of composition of composition of composition of composition of
the Board and the Board and the Board and the Board and the Board and the Board and the Board and the Board and
also owns 100% also owns 100% also owns 100% also owns 97.50% also owns 100% also owns 100% also owns 95.95% also owns 100%
of equity of equity of equity of equity of equity of equity of equity of equity
share capital share capital share capital share capital share capital share capital share capital share capital
3. Net aggregate
amount of
Subsidiary's
Profits / (Losses)
as far as it concerns
members of the
holding company
not dealt with the
Holding Company's
accounts :
(i) Profit / (Loss) for the

Subsidiary's financial
year end Rs. 18,012,162 (10,432) (117,656,084) 113,182,461 23,582,387 (12,960,721) 10,642,752 (570,108)
(ii) Profits / (Losses) for

its previous financial
years since becoming
subsidiary. Rs. 157,553,498 (2,817,114) (22,378,908) 279,830,613 8,356,894 (442,080) - -
4. Net aggegate amount

of Subsidiary's Profits /
(Losses) dealt with in
the Holding Company's
accounts :
(i) for the Subsidiary's

financial year ended
March 31, 2009 Nil* Nil Nil Nil Nil Nil Nil Nil
(ii) for its previous

financial years Nil** Nil Nil Nil Nil Nil Nil Nil
* - except dividend Rs. 15,160,099 4,016,000
** - except dividend Rs. 50,820,786 - - - 401,600 - -
For and on behalf of the Board of Directors
SANJAY KIRLOSKAR S. N. INAMDAR

G. P. KULKARNI A. R. SATHE
Company Secretary Vice President (Finance)
PUNE : April 30, 2009
86
NOTES
87
CONSOLIDATED FINANCIAL STATEMENTS
88
th
CONSOLIDATED FINANCIAL STATEMENTS

Auditors' Report to the Board of Directors of Kirloskar Brothers Limited
We have audited the attached consolidated balance sheet of Kirloskar Brothers Limited (KBL) Group, as at
31st March, 2009 and also the consolidated profit and loss account and the consolidated cash flow statement for
the year ended on that date annexed thereto. These financial statements are the responsibility of the company's
management and have been prepared by the management on the basis of separate financial statements and
other financial information regarding components. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with the generally accepted auditing standards in India. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis for our opinion.
We did not audit the financial statements of certain subsidiaries, whose financial statements reflect total assets
of Rs. 4,835.48 million as at 31st March, 2009, the total revenue of Rs. 6,295.24 million and cash inflows
amounting to Rs. 335.15 million for the year then ended. These financial statements and other financial
information have been audited by other auditors, whose report have been furnished to us and our opinion is
based solely on the reports of other auditors. Our opinion in case of the unaudited financial statements of
Kirloskar Brothers International B.V. Consolidated, has been based solely on the report of the management,
whose financial statements reflect total assets of Rs. 17.29 million as at 31st March, 2009, the total revenue of
Rs. 8.91 million and cash inflow amounting to Rs. 4.17 million for the year then ended. We have been informed
that these financial statements are not legally subject to an audit.
We report that the consolidated financial statements have been prepared by the management in accordance
with the requirements of Accounting Standard (AS) 21 - Consolidated Financial Statements, Accounting
Standard (AS) 23 - Accounting for Investments in Associates in Consolidated Financial Statements and
Accounting Standard (AS) 27 - Financial Reporting of Interests in Joint Ventures, prescribed by Companies
(Accounting Standards) Rules, 2006.
Based on our audit and on consideration of report of other auditors on separate financial statements and on the
other financial information of the components, and to the best of our information and according to explanations
given to us, we are of the opinion that the attached consolidated financial statements give a true and fair view in
conformity with the accounting principles generally accepted in India:
a) in the case of the consolidated balance sheet, of the state of affairs of KBL Group as at 31st March, 2009;
b) in the case of consolidated profit and loss account, of the profit for the year ended on that date; and
c) in the case of the consolidated cash flow statement, of the cash flows for the year ended 31st March, 2009.

Pankaja Bhagwat
Partner
Membership No. 86155
Pune : April 30, 2009
89
CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2009
Schedule 2009 2008
Rupees Rupees
SOURCES OF FUNDS :
Shareholders' Funds
Capital 1 211,528,710 211,528,710
Reserves and surplus 2 7,808,157,639 7,197,954,214
Employee Stock options outstandings 121,855,582 133,004,975
Less: Deferred employee compensation expenses 29,787,458 88,970,333
92,068,124 44,034,642
8,111,754,473 7,453,517,566
Minority Interest
Capital 9,909,588 3,984,745
Reserves and surplus 6,034,842 6,980,279
Total 15,944,430 10,965,024
Loan Funds
Secured Loans 3 2,570,528,602 2,308,100,153
Unsecured Loans 4 1,411,094,590 354,248,353
3,981,623,192 2,662,348,506
Deferred Tax-net 5 78,924,501 90,444,732
Total 12,188,246,596 10,217,275,828
APPLICATION OF FUNDS :
Fixed Assets 6
Gross Block 4,996,671,173 4,032,191,487
Less: Depreciation and Impairment 1,787,578,999 1,480,594,509
Net Block 3,209,092,174 2,551,596,978
Capital work-in-progress including capital advances 713,776,203 327,847,746
3,922,868,377 2,879,444,724
Intangible Assets 7
Gross Block 101,403,688 94,433,936
Less: Amortization 83,890,175 72,506,468
Net Block 17,513,513 21,927,468
Assets under implementation including capital advances. 681,636 -
18,195,149 21,927,468
Goodwill 469,641,079 407,080,463

Investments
a) Long Term Investments 2,767,284,707 2,935,012,979
b) Current Investments 9,000 9,000
2,767,293,707 2,935,021,979
Current Assets, Loans & Advances
Inventories 8 2,361,302,709 1,895,552,592
Gross amount due from customers for project related contract work 9 2,342,221,967 2,555,376,206
Sundry debtors 10 8,122,931,600 5,558,893,873
Cash and bank balances 11 531,989,334 856,296,765
Other current assets 12 861,641,635 338,734,410
Loans and advances 13 2,915,692,581 2,545,241,790
17,135,779,826 13,750,095,636
Less: Current Liabilities & Provisions
Current Liabilities 14 10,577,476,524 8,504,933,896
Gross amount due to customers for project related contract work 15 722,722,763 380,034,661
Provisions 16 826,426,604 892,576,321
12,126,625,891 9,777,544,878
Net Current Assets 5,009,153,935 3,972,550,758
Miscellaneous Expenditure (To the extent not written off or adjusted)
Preliminary Expenses 1,094,349 1,250,436
Total 12,188,246,596 10,217,275,828
The schedules referred to above and the notes to accounts form
an integral part of the Balance Sheet
90
th
CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2009
Schedule 2009 2008

Rupees Rupees
INCOME
Sales 17 24,526,732,915 20,587,732,083
Other income 18 425,735,691 523,867,817
Total 24,952,468,606 21,111,599,900
EXPENDITURE
Materials consumed 19 17,748,090,313 14,503,667,611
Payments and benefits to employees 20 2,136,871,555 1,801,935,322
Operating and other expenses 21 3,065,673,103 2,497,544,497
Interest 22 410,687,696 233,115,475
Depreciation, amortization and impairment 300,541,016 244,090,967
23,661,863,683 19,280,353,872
Less: Expenses capitalized 4,927,376 3,333,861
Total 23,656,936,307 19,277,020,011
Profit/(Loss) before tax 1,295,532,299 1,834,579,889
Provision for tax 23 462,843,210 505,310,110
Profit/(Loss) after tax before prior year adjustments 832,689,089 1,329,269,779
Prior year Adjustments (22,503) -
Profit/(Loss) after tax after prior year adjustments 832,666,586 1,329,269,779
Less : Minority Share (1,577,791) 3,117,773
Add : Share in Profit of the Associate Companies 18,450,351 35,742,143
Balance brought forward from previous year 433,076,040 396,500,788
Profit available for appropriation 1,285,770,768 1,758,394,937
Appropriations
Transfer to General Reserve 486,532,765 770,510,000
Transferred to retained earnings of Associate Companies 18,450,351 35,742,143
Surplus carried to Balance Sheet 504,311,757 433,076,040
1,285,770,768 1,758,394,937
Basic Earnings per Equity Share ( Refer Note No.8 ) 8.06 12.85
Diluted Earnings per Equity Share ( Refer Note No.8 ) 8.06 12.81
The schedules referred to above and the notes to accounts

form an integral part of Profit and Loss Account.
91
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2009
2009 2008
Rupees Rupees
A. Cash flow from operating activities
Net profit before taxation and extraordinary items 1,295,532,299 1,834,579,889
Adjustments for
Depreciation, amortization and impairment 300,541,016 244,090,967
Transfer from Capital Reserve (8,536,041) (8,536,041)
Employees Stock Option debited to Profit & Loss A/c ( Net ) 48,033,482 44,034,642
Loss/(profi)t on sale of fixed assets (289,133) (4,243,790)
(Profit)/loss on sale of investments (102,841) 2,537
Unrealized foreign exchange loss/(gain) 34,994,020 (7,690,513)
Provision for diminution in value of investments 25,399 -
Interest income (107,478,221) (116,603,888)
Dividend income (147,025,574) (168,944,501)
Excess provision written back (3,857,905) (717,753)
Prior period expenditure (22,503) -
Sundry irrecoverable balances written off 222,843 795,736
Interest expenses 410,687,696 230,832,055
Operating profits before working capital changes 1,911,020,123 2,066,392,346
(Increase)/decrease in trade and other receivables (3,355,486,948) (2,976,976,813)
(Increase)/decrease in inventories (432,393,375) (442,453,723)
Increase/(decrease) in sundry creditors 2,601,134,516 2,545,438,097
Cash generated from operations 724,274,317 1,192,399,907
Income tax paid (444,358,176) (519,172,290)
Net cash from operating activities 279,916,141 673,227,617
B. Cash flow from investing activities
Purchase of fixed assets (1,265,449,743) (952,663,724)
Proceeds from sale of fixed assets 5,965,932 8,145,474
(Purchase)/Sale of investments 92,905,551 (126,383,847)
Interest received 107,337,545 114,649,307
Dividend received 147,427,174 168,944,501
Advance to subsidiaries (115,374,375) (16,678,639)
Net cash from investing activities (1,027,187,916) (803,986,928)
C. Cash flow from financing activities
Proceeds from issuance of Share Capital 6,201,873 -
Proceeds from issuance of Share Capital from Joint Venturer 5,512,776 -
(Repayment)/proceeds of / from long term borrowings (net) 715,113,173 417,596,144
(Repayment)/proceeds of / from other borrowings (net) 609,712,633 472,140,122
Interest paid (404,835,778) (213,696,033)
Dividend paid (433,303,422) (216,217,857)
Tax on dividend paid (77,610,919) (37,343,710)
Net cash used in financing activities 420,790,336 422,478,666
Net increase in cash and cash equivalents (326,481,439) 291,719,355
Cash and cash equivalents at the beginning of the year 856,296,765 543,186,974
Add : Due to acquisition of subsidiary 2,174,008 21,390,436
Sub Total 858,470,773 564,577,410
Cash and cash equivalents at the end of the year 531,989,334 856,296,765
92
th
SCHEDULE TO THE CONSOLIDATED ACCOUNTS

2009 2008
Rupees Rupees
SCHEDULE 1 : SHARE CAPITAL
Authorized
250,000,000 (250,000,000) equity shares of Rs.2/- (Rs.2/-) each 500,000,000 500,000,000
500,000,000 500,000,000
Issued
Subscribed and paid up

53,207,342 (52,694,805) shares of Rs.2/- (Rs.2/-) each are held by Better

Value Holdings Pvt. Limited, the holding Company.
211,528,710 211,528,710
SCHEDULE 2 : RESERVES AND SURPLUS
Capital Reserve
Balance as per last account 19,124,057 10,588,016
Add : Increase on account of acquisition of subsidiary - 17,072,082
Less : Transfer to Profit & Loss Account (Refer Note No. 3 I a) 8,536,041 8,536,041
10,588,016 19,124,057
(Includes Rs. 4,701,504/- (4,701,504/-) on the acquisition of Associate
Companies and Rs. 73,419/-(73,419/-) on acquisition of interest
in a joint venture Co.)
Capital Redemption Reserve 6,625,000 6,625,000
Share Premium Account 395,881,752 395,881,752
General Reserve
Balance as per last account 6,137,775,615 5,419,523,069
Less : Liabilities on account of Employee Benefits
[net of Deferred Tax] - 52,257,454
Add: Transfer from Profit and Loss Account 486,532,765 770,510,000
6,624,308,380 6,137,775,615
Profit and Loss Account 504,311,757 433,076,040
Aggregate Share in Retained Earnings of Associate Companies

Balance as per last account 210,837,495 175,095,352
Add : Transferred from Profit and Loss Account 18,450,351 35,742,143
229,287,846 210,837,495
Foreign Exchange Translation Reserve

Balance as per last account (5,365,745) 18,016,840
Addition / (Deduction) for the year 42,520,633 (23,382,585)
37,154,888 (5,365,745)
7,808,157,639 7,197,954,214
SCHEDULE 3 : SECURED LOANS
Loans and advances from banks
Cash/Export Credit facilities 1,979,440,328 1,307,606,658
[Secured by hypothecation of tangible movable assets and
book debts of the company]
Term Loan Secured by hypothecation of Vehicles purchased

out of this loan 178,080 445,200
1,979,618,408 1,308,051,858
93
SCHEDULE TO THE CONSOLIDATED ACCOUNTS (CONTD.)
2009 2008
Rupees Rupees
Other loans and advances
i) From Bank of India 10,714,835 14,867,372
ii) From EXIM Bank 145,454,548 518,909,092
iv) From Indian Overseas Bank 266,764,788 298,901,782
[Secured by way of hypothecation of movable fixed assets and
mortgage of immovable properties of the company
( both present and future).
Loan from ICICI (Secured by fixed and floating charge of assets) 167,976,023 167,370,049
2,570,528,602 2,308,100,153
SCHEDULE 4 : UNSECURED LOANS
Interest free loan under Sales Tax Deferral Scheme 70,874,590 64,188,353
Inter Corporate Deposits 40,000,000 50,000,000
Short term Loans and advances
a) Packing Credit in Foreign Currency from Citi Bank N. A. 230,220,000 240,060,000
b) from Bank of India 670,000,000 -
c) from Calyon Bank 400,000,000 -
1,411,094,590 354,248,353
SCHEDULE 5 : DEFERRED TAX-NET
Deferred Tax Liabilities
On depreciation/amortization of fixed assets 228,334,326 192,441,249
On preliminary expenses 52,469 275,492
228,386,795 192,716,741
Deferred tax assets
On employees voluntary retirement schemes 441,770 5,697,416
On provision for doubtful debts/advances 49,809,661 23,465,461
Provision for leave encashment and pension 87,371,187 48,155,695
Other timing differences 11,839,676 24,953,437
149,462,294 102,272,009
78,924,501 90,444,732
SCHEDULE 6 : FIXED ASSETS (In Rupees)
Land Free/ Buildings Railway Plant & Furniture & Vehicles Total Previous
Lease Hold Siding Machinery Fittings Year
Gross Block
At 01.04.2008 297,000,939 585,797,244 1,523,341 2,881,074,520 164,583,235 102,212,208 4,032,191,487 3,206,070,803
Additions /
Assets Acquired 18,180,620 300,564,325 52,474 639,165,531 24,955,347 18,089,904 1,001,008,201 853,645,757
Deductions - 1,622,885 - 25,523,244 2,701,459 6,680,927 36,528,515 27,525,073
At 31.03.2009 315,181,559 884,738,684 1,575,815 3,494,716,807 186,837,123 113,621,185 4,996,671,173 4,032,191,487
Depreciation/Amortisation
At 01.04.2008 - 109,740,051 1,400,932 1,215,857,929 86,109,945 67,485,652 1,480,594,509 1,264,013,919
For the year including
on Assets Acquired - 25,634,507 35,026 284,560,986 17,135,598 7,450,094 334,816,211 240,203,981
Recouped - 709,529 - 24,003,270 1,772,262 3,846,660 30,331,721 23,623,391
At 31.03.2009 - 134,665,029 1,435,958 1,476,415,645 101,473,281 71,089,086 1,785,078,999 1,480,594,509
Provision for Impairment - - - 2,500,000 - - 2,500,000 -
Net Block
At 31.03.2009 315,181,559 750,073,655 139,857 2,015,801,162 85,363,842 42,532,099 3,209,092,174 2,551,596,978
Assets under Erection 713,776,203 327,847,746

including Capital Advances
At 31.03.2009 315,181,559 750,073,655 139,857 2,015,801,162 85,363,842 42,532,099 3,922,868,377 2,879,444,724
At 31.03.2008 297,000,939 476,057,193 122,409 1,665,216,591 78,473,290 34,726,556 2,551,596,978
Notes :
1. Building includes cost of hangars jointly owned with other companies
2. In respect of Fixed Assets, assets acquired includes Rs. 108,920,719/- and depreciation for the year on assets acquired includes Rs. 48,158,901/- on account
of the opening block as on 02.08.2008 of the company acquired during the year namely, The Kolhapur Steel Limited.
94
th

2009 2008
Rupees Rupees
SCHEDULE 7 : INTANGIBLE ASSETS

Gross Block
At 01.04.2008 94,433,936 75,917,765
Additions 6,969,752 18,516,171
Deductions - -
At 31.03.2009 101,403,688 94,433,936
Amortization
At 01.04.2008 72,506,468 61,962,522
For the year 11,383,707 10,543,946
Recouped - -
At 31.03.2009 83,890,175 72,506,468
Net Block as at 31.03.2009 17,513,513 21,927,468
Assets under implementation including capital advances. 681,636 -
18,195,149 21,927,468
SCHEDULE 8 : INVENTORIES
Raw materials and components 796,478,622 765,430,425
Stores and spares 77,561,299 50,242,172
Work-in-progress 1,078,591,403 741,438,138
Finished goods 408,671,385 338,441,857
2,361,302,709 1,895,552,592
SCHEDULE 9 : GROSS AMOUNT DUE FROM CUSTOMERS

Cost incurred plus recognized profits less recognized losses 27,713,307,445 21,976,100,154
Less: Progress billing 25,371,085,478 19,420,723,948
2,342,221,967 2,555,376,206
SCHEDULE 10 : SUNDRY DEBTORS

Debts outstanding for a period exceeding six months
Other debts
8,285,502,639 5,636,795,084
Less: Provision for doubtful debts 162,571,039 77,901,211
8,122,931,600 5,558,893,873
95
2009 2008
Rupees Rupees
SCHEDULE 11 : CASH AND BANK BALANCES
Cash on hand 6,246,551 5,121,729
Balances with schedule banks
On current accounts 484,101,848 634,165,462
On escrow account - 5,964,338
On deposit accounts 41,459,439 210,215,010
Balances with other banks
On current accounts 181,496 830,226
531,989,334 856,296,765
SCHEDULE 12 : OTHER CURRENT ASSETS

Interest accrued on investments 42,477,338 43,107,981
Claims receivable 819,164,297 295,626,429
861,641,635 338,734,410
SCHEDULE 13 : LOANS AND ADVANCES

Unsecured considered good
Advances recoverable in cash or kind or for value to be received 2,156,985,327 1,919,923,460
Balances with customs, excise, etc. 15,008,114 15,938,544
Deposits with post & others 714,523,139 542,693,816
Advance Income tax (net of Provision for tax) 29,176,001 66,685,970
2,925,776,429 2,554,680,661
Less: Provision 10,083,848 9,438,871
2,915,692,581 2,545,241,790
SCHEDULE 14 : CURRENT LIABILITIES

Acceptances 81,637,916 92,874,073
Sundry Creditors 7,399,336,308 5,767,446,962
Advances and deposits from customers 2,660,238,515 2,292,851,543
Investor Education and Protection Fund shall be credited by
the following amounts namely:
(a) Unpaid dividend 44,783,912 36,581,329
(b) Unpaid Matured Deposits 913,000 1,149,500
Other liabilities 361,106,943 289,209,439
Interest accrued but not due on loans 29,459,930 24,821,050
10,577,476,524 8,504,933,896
SCHEDULE 15 : GROSS AMOUNT DUE TO CUSTOMERS

Progress billing 7,364,837,239 2,536,757,699
Less: Cost incurred plus recognized profits less recognized losses 6,642,114,476 2,156,723,038
722,722,763 380,034,661
96
th
2009 2008
Rupees Rupees
SCHEDULE 16 : PROVISIONS
Provision for product warranties 77,993,171 57,114,712
Provision for leave encashment 242,876,367 230,324,725
Provision for Pension Benefits 30,115,369 16,999,644
Other provisions 201,542,262 71,995,362
826,426,604 892,576,321
SCHEDULE 17 : SALES AND CONTRACT REVENUE

Sales (Gross) 14,624,994,996 13,671,436,001
Less: Excise duty recovered 651,949,696 610,211,303
13,973,045,300 13,061,224,698
Construction and project related revenue 10,553,687,615 7,526,507,385
24,526,732,915 20,587,732,083
SCHEDULE 18 : OTHER INCOME

Income from investments
Interest from long term investments 104,899,523 111,826,924
Dividend income
(a) Trade investment 144,182,568 206,241,733
(b) Other investments - Current 2,731,115 572,795
(c) Other investments - Long term 111,891 76,403
Profit on sale of current investments 102,841 -
Other Interest 2,578,698 5,706,797
Profit on sale of fixed assets 3,803,309 6,580,117
Royalty received 1,334,443 2,660,769
House rent 752,868 577,337
Recovery of bad debts 51,449,253 84,798,511
Agency Commission - 198,056
Miscellaneous income 105,253,141 96,092,334
Transfer from capital reserve (Refer Note No.3 I a) 8,536,041 8,536,041
425,735,691 523,867,817
SCHEDULE 19 : MATERIALS CONSUMED

Raw materials consumed 13,087,603,929 11,189,996,348
Stores and spares consumed 450,357,510 393,582,895
Processing charges 634,228,206 364,257,160
Purchase of traded goods 3,951,783,319 2,815,166,719
18,123,972,964 14,763,003,122
97
2009 2008
Rupees Rupees
(Increase)/Decrease in stocks
Opening stock
Work-in-progress 764,937,489 490,323,335
Finished goods 346,442,648 330,221,149
1,111,380,137 820,544,484
Closing stock
Work-in-progress 1,078,591,403 741,438,138
Finished goods 408,671,385 338,441,857
1,487,262,788 1,079,879,995
(375,882,651) (259,335,511)
17,748,090,313 14,503,667,611
SCHEDULE 20 : PAYMENTS AND BENEFITS TO EMPLOYEES

Salaries, wages and bonus 1,853,547,674 1,570,615,596
Payment under Voluntary Retirement Schemes 2,811,710 490,000
Contribution to provident fund and E.S.I. 201,738,829 169,947,666
Gratuity 5,607,291 (30,958)
Welfare expenses 68,830,530 64,607,564
Pension Benefits 4,335,521 (3,694,546)
2,136,871,555 1,801,935,322
SCHEDULE 21 : OPERATING AND OTHER EXPENSES

Power & fuel 203,382,123 166,128,697
Repairs and maintenance
Plant and machinery 118,923,335 136,855,941
Buildings 39,685,028 41,941,049
Rent 121,754,595 118,096,058
Rates and taxes 13,184,176 10,257,482
Travel and conveyance 354,219,850 330,285,601
Postage and telephone 76,733,581 80,131,737
Insurance 156,135,466 145,765,139
Directors' sitting fees 1,038,150 854,700
Directors' remuneration 64,373,469 56,949,190
Royalties and fees 48,376,810 35,063,478
Cash discount 31,971,149 18,815,801
Freight and forwarding charges 288,896,152 244,954,398
Brokerage and commission 281,882,883 218,359,513
Advertisements and publicity 83,400,188 113,759,195
Product Warranty 45,232,716 32,626,272
Excise duty paid 15,995,473 36,761,641
Bank charges 164,805,855 138,781,372
Loss on sale/disposal of fixed assets 3,514,177 2,394,101
Loss on disposal of investments - 2,537
98
th
2009 2008
Rupees Rupees
Bad debts written off 9,099,367 6,774,221

Provision for decline in value of investments 25,399 -
Donations 10,642,033 15,376,076
Preliminary expenses written off 156,087 156,086
Other miscellaneous expenses 844,046,818 527,661,207
3,065,673,103 2,497,544,497
SCHEDULE 22 : INTEREST
Interest
On fixed loans and debentures 129,222,612 72,187,602
On other loans 281,465,084 160,927,873
410,687,696 233,115,475
SCHEDULE 23 : PROVISION FOR TAX

Income tax for the year
Current 449,533,946 473,063,588
Deferred (10,953,746) 16,603,717
Fringe Benefit Tax 24,174,580 18,683,140
Adjustments for earlier year/s 88,430 (3,040,335)
462,843,210 505,310,110
99
SCHEDULE 24 : NOTES FORMING PART OF THE CONSOLIDATED ACCOUNTS
A ACCOUNTING POLICIES
1. Principles of Consolidation
(i) The consolidated financial statements relate to Kirloskar Brothers Limited (KBL) and
a) its majority owned subsidiary companies, consolidated on a line by line basis by adding together the
book values of like items of assets, liabilities, income and expenses, after fully eliminating intra-group
transactions and the unrealised profit/ losses on intra-group transactions, and are presented to the
extent possible, in the manner as the Company's independant financial statements.
The names of the subsidiary companies, Country of Incorporation, Proportion of Ownership Interest and
reporting dates considered in the Consolidated Financial Statements are:
Name of the Company Country of Proportion of Reporting Date

Incorporation Ownership Interest of
KBL
Pooja Credits Private Limited India 100% 31st March, 2009
Kirloskar Silk Industries Limited India 100% 31st March, 2009
Kirloskar Constructions and Engineers Ltd. India 100% 31st March, 2009
SPP Pumps Ltd. UK
(Consolidated Financial Statements) UK 97.5% 31st December, 2008
Gondwana Engineers Limited India 100% 31st March, 2009
Kirloskar Brothers International B.V
(Consolidated Financial Statements) @ The Netherlands 100% 31st December, 2008
The Kolhapur Steel Limited
(from 02.08.2008) @@ India 95.95% 31st March, 2009
Kirloskar Brothers (Thailand) Limited
(from 26.09.2008) @@@ Thailand 100.00% 30th September 2008
@The Company's subsidiary company, Kirloskar Brothers International B.V. , has formed a subsidiary in The
Netherlands namely “Kirloskar Brothers Europe B. V" on 13th May, 2008.
@@ In accordance with the orders passed by the Honourable Board for Industrial and Financial
Reconstruction (BIFR) on May 14, 2008, the Company has acquired all the Equity shares of Rs. 10/- each of
The Kolhapur Steel Limited (TKSL) from the existing promoters by executing a Share Purchase Agreement
on August 2, 2008 and TKSL has become a subsidiary company of KBL with effect from August 2, 2008.
@@@ The Company has formed a wholly owned subsidiary company in Thailand namely Kirloskar Brothers
(Thailand) Limited. As per the local laws, the company was permitted to commence business only after
getting the approval from Board of Investments, Thailand, which was received in September, 2008.
The excess of cost to the Company of its investment in the subsidiary company over the parents' portion of
equity is recognised in the consolidated financial statements as goodwill. The excess of Company's share of
equity of the subsidiary company over the cost of acquisition is treated as capital reserve.
b) Its jointly controlled joint venture companies by using proportionate consolidation method which means
the consolidated Balance Sheet of KBL includes its share of assets that it controls jointly and its share of
liabilities for which it is jointly responsible and the consolidated statement of Profit & Loss of KBL includes
its share of the income and expenses of its joint venture companies. Under this method, separate line
items of KBL's share of the assets, liabilities, income and expenses of joint venture companies are
included in its consolidated financial statements.
100
th
SCHEDULE 24 : NOTES FORMING PART OF THE CONSOLIDATED ACCOUNTS (CONTD.)
The jointly controlled joint venture companies considered in the consolidated financial statements are :
Name of the Company Country of Proportion of

Incorporation Ownership Interest of
KBL
Kirloskar Ebara Pumps Limited India 45%
Kirloskar Corrocoat Pvt. Limited India 50%
Share of the assets and liabilities of the above joint venture companies considered for proportionate
consolidation :
Particulars Kirloskar Ebara Kirloskar Corrocoat

Pumps Limited Pvt. Limited
Sources of Funds
Reserves & Surplus 354,912,457 42,569,499
Secured Loans 12,087,658 12,336,396
Un-secured Loans 8,218,243 -
Deferred Tax (Net) 8,233,357 1,634,253
Application of Funds
Fixed Assets 161,688,034 43,312,241
Intangible Assets 2,901,987 17,098
Investments 36,636,536 -
Current Assets 332,218,546 71,581,675
Current Liabilities 147,743,389 34,465,216
Net Current Assets 184,475,157 37,116,459
Miscellaneous Expenditure
(to the extent not written off) - 1,094,349
Share of the income and expenses of the above joint venture companies considered for proportionate
consolidation :
Particulars Kirloskar Ebara Kirloskar Corrocoat

Pumps Limited Pvt. Limited
Income
Sales and Other Income 577,083,045 151,320,186
Expenditure
Materials consumed 285,901,967 77,343,676
Payments and benefits to employees 41,624,672 7,967,432
Operating and other expenses 68,888,008 22,995,002
Interest 594,409 1,803,613
Provision for Tax 57,939,213 13,467,025
101
c) Its associate companies by using equity method for accounting for KBL's investment in its associate
companies. Under this method investment is increased or decreased to recognise KBL's share of
profits or losses of the associate companies after the date of acquisition. Distributions received from the
associate companies reduce the carrying amount of investments. Where an associate company
presents a consolidated financial statement the results and the net assets taken into account are those
reported in the associate's consolidated financial statements.
The associate companies considered in the consolidated financial statements :
Name of the company Proportion of Ownership

Interest of KBL
Hematic Motors Pvt. Limited
(consolidated financial statements) 50%
Pressmatic Electrostampings Pvt. Limited 50%
Quadromatic Engineering Pvt. Limited 40.38%
Share of profits and losses of associate companies considered in the consolidated profit and loss
account :
Name of the company Share of Profit/(Loss) Rs.

Hematic Motors Pvt. Limited 4,983,245
Pressmatic Electrostampings Pvt. Limited 13,566,332
Quadromatic Engineering Pvt. Limited (99,226)
Total 18,450,351
2 Other Accounting Policies :

a) They are set out in the notes to accounts of the parent company - Kirloskar Brothers Limited.
b) The financial statements of all Indian subsidiaries, associates and joint venture companies have been
prepared to comply in all material respects with The Companies (Accounting Standards) Rules, 2006
and the relevant provisions of the Companies Act, 1956 and those of the foreign subsidiaries have been
prepared in compliance with the local laws and applicable Accounting Standards.
c) Foreign Currency Transactions
The operations of the foreign subsidiary are not considered as an intergral part of the operations of the
parent company. Hence, all monetory and non monetory assets and liabilities have been translated at the
exchange rate prevailing as on 31st March 2009.
Income and expenditure have been translated at the average rate of the exchange prevailing for the
subsidiary's financial year. Gains and losses arising out of the translation are carried to " Foreign Exchange
Translation Reserve."
3 Accounting policies other than those adopted by the parent company for the consolidated financial
statements :
I. Subsidiary Companies
a) SPP Pumps Limited (Consolidated):
Goodwill: On the acquisition of subsidiaries, the purchase consideration is allocated between the
underlying assets on the basis of the fair value. The difference between the value of the net assets
acquired and the purchase price is created as positive or negative goodwill on consolidation. Goodwill
arising on acquisitions is capitalised and amortised over its economic life. Negative goodwill is released
to the Profit & Loss account in the periods in which the fair value of the non-monetary assets purchased
on the same acquisition are recovered, whether through depreciation or sale. For consolidated
accounts of Kirloskar Brothers Limited the above refered "Negative Goodwill" is disclosed as Capital
Reserve. The proportion of such negative goodwill credited to the profit & loss account to the profit for
the year in the consolidated statement is 0.64% (0.46%).
102
th
b) Gondwana Engineers Ltd:
i) Provision for Long term benefits-leave encashment :

Leave encashment is accounted at the time of payment as against the basis of actuarial valuation
followed by the Parent Company. The proportion of such provision in the consolidated statement is Nil
(Nil) as there is no charge to the Profit and Loss account for the year.
ii) Provision for Defined benefit Plan-Gratuity:

As against the basis of actuarial valuation as at the year end followed by the parent company, the
liability is accounted for in the year of accrual as covered by Employees Group Gratuity Scheme of Life
Insurance Corporation of India. The annual premium is charged to the Profit & loss account.The
proportion of such provision in the consolidated statement is 0.05%. (0.05%).
iii) Depreciation:
Depreciation on fixed assets is provided on Written Down Value method as against Straight Line Method
followed by the Parent Company. The proportion of such depreciation in the consolidated statement is
0.30% (0.29%).
II Joint Venture Companies

a) Kirloskar Ebara Pumps Limited
i) Work-in-Progress, raw materials, stores, spares and tools are valued at 'Cost' as against 'Cost or
Net Realisable value whichever is lower', followed by the parent company. The proportion of such
inventory in the consolidated statement is 4.39% (5.38%).
ii) Intangible Asset: - Technical Knowhow fees, is amortised on Straight Line Method over the term of
agreement as against on Straight Line Method over a period of three years. The proportion of such
amortisation in the consolidated statements is 6.49% (4.67%).
III Associate Companies

In all Associate Companies
i) Depreciation on fixed assets is provided on Written Down Value method as against Straight Line Method
followed by the Parent Company.
ii) Provision for Long term benefits-leave encashment :

As against the basis of actuarial valuation followed by the parent company, provision is made on actual
basis for accumulated leave balance at the year end. In case of a subsidiary of Hematic Motors Pvt.
Limited the provision is accounted for in the year in which the option of encashment is exercised by the
employees.
iii) Provision for Defined benefit Plan-Gratuity:

As against the basis of actuarial valuation as at the year end followed by the parent company, the
liability is accounted for in the year of accrual as covered by Employees Group Gratuity Scheme of Life
Insurance Corporation of India. The additional amount, if any, payable at the time of pre-mature
retirement is accounted for in the year of retirement.
103
B OTHER NOTES
1) The figures for the year ended March 31, 2009 are not comparable with that of the previous year
as the current year's figures :
I) Include results of the operations of The Kolhapur Steel Ltd. from 2nd August, 2008 to 31st March,
2009 pursuant to its acquisition.
II) Include results of the operations of Kirloskar Brothers (Thailand) Ltd. from 26th September, 2008 to
30th September, 2008 pursuant to its formation.
III) Include results of the operations of Gondwana Engineers Ltd. from 1st April, 2008 to 31st March,
2009 as against the period from 10th September, 2007 to 31st March, 2008 in the previous year.
IV) Include results of the operations of Kirloskar Brothers International B.V.,The Netherlands
(consolidated) from 1st January, 2008 to 31st December, 2008 as against Kirloskar Brothers
International B.V.,The Netherlands (standalone) from 30th August, 2007 to 31st December, 2007.
Kirloskar Brothers International B.V. , has formed a subsidiary company “ Kirloskar Brothers
Europe B.V" on 13th May, 2008.
2) The effect of acquisition and formation of subsidiary companies:

The acquistion of The Kolhapur Steel Ltd. and formation of Kirloskar Brothers (Thailand) Ltd. and
Kirloskar Brothers Europe B.V. has resulted in :
I) an increase of Rs. 17,311,221/- (Previous year Rs. 69,500,884/-) in the financial position as on 31st
March, 2009 as compared to 31st March,2008.
II) an increase of Rs. 2,383,403/- (Previous year Rs.7,914,814/- ) in group profit net of minority interest
for the year ended on 31st March, 2009 as compared to the year ended on 31st March, 2008.
III) The Kolhapur Steel Ltd was acquired for a consideration of Rs.93,843,591/-. Goodwill of
Rs.62,560,616/- is recognised in the consolidated financial statements being the excess of
consideration paid over the equity of Rs. 31,282,975/- as on the date of acquisition.
3) Kirloskar Silk Industries Ltd.

The company has approached The Development Commissioner, Mumbai, the appropriate authority,
seeking change in the usage of land instead of silk manufacturing. In view of the above, the Board of
Directors has decided to pursue the said application and hence defer the decision of disposal of land and
existing business.
4) Contingent liabilities not provided for in respect of : 2009 2008

Rupees Rupees
a) Guarantees:
By the company to ICICI Bank Ltd. on behalf SPP Pumps Ltd. UK 147,040,000 159,960,000
By the company to Barclays Bank Ltd. on behalf SPP Pumps Ltd. UK 294,080,000 319,920,000
By the company to Citi Bank N A on behalf SPP Pumps Ltd. UK 588,160,000 639,840,000
By the company to Indian Overseas Bank Ltd. on behalf of
Kirloskar Constructions and Engineers Ltd. 800,000,000 500,000,000
By the company to Bank of Maharashtra on behalf of
Gondwana Engineers Limited 145,000,000 -
b) Central Excise (Matter Subjudice) 14,347,263 4,482,000
c) Sales Tax (Matter Subjudice) 89,056,373 103,895,118
d) Income Tax (Matter Subjudice) 395,323,477 1,490,064
e) Labour Matters (Matter Subjudice) 39,278,282 35,320,699
f) Other Legal Cases (Matter Subjudice) 18,792,301 27,725,000
g) Letters of Credit Outstanding 2,366,640,832 1,284,654,309
104
th
2009 2008
Rupees Rupees
5) Estimated amount of contracts remaining to be
executed on capital account and not provided for 190,563,183 569,628,437
6) Construction Contracts:
a) Contract revenue recognised as revenue for the
year ended 31st March, 2009 10,553,687,615 8,221,983,664
b) The aggregate amount of contract costs incurred and recognised
profits (less recognised losses) upto 31st March, 2009 34,355,421,921 23,428,515,276
c) Amount of advances received as on 31st March, 2009
for contracts in progress 1,305,754,671 1,087,500,034
d) Amount of retentions as on 31st March, 2009
for contracts in progress 603,382,520 304,283,698
7) Related Party Disclosures :

A) Name of the related party and nature of relationship where control exists
Name of the related party Nature of relationship

1. Better Value Holdings Pvt. Ltd. Holding Company
2. Pooja Credits Pvt. Ltd. Subsidiary Company
3. Kirloskar Silk Industries Ltd. Subsidiary Company
4. Kirloskar Constructions and Engineers Ltd. Subsidiary Company
5. Gondwana Engineers Ltd Subsidiary Company
6. Kirloskar Brothers International B. V. Subsidiary Company
7. The Kolhapur Steel Limited (from 02.08.2008) Subsidiary Company
8. Kirloskar Brothers Europe B. V. (from 13.05.08) Subsidiary Company of Kirloskar Brothers International B V
9. Kirloskar Brothers (Thailand) Ltd. (from 26.09.08) Subsidiary Company
10. SPP Pumps Ltd. U K. Subsidiary Company
11. SPP Pumps France EURL Subsidiary of SPP Pumps Ltd. U K
12. Certified Engines Ltd. Subsidiary of SPP Pumps Ltd. U K
13. SPP (South Africa) (Pty) Ltd. Subsidiary of SPP Pumps Ltd. U K
14. SPP Pumps LP Subsidiary of SPP Pumps Ltd. U K
15. SPP France S A S Subsidiary of SPP Pumps Ltd. U K
16. SPP Pumps Management LLC Subsidiary of SPP Pumps Ltd. U K
17. SPP Pumps Holdings LLC Subsidiary of SPP Pumps Ltd. U K
18 . Hematic Motors Pvt. Ltd. Fellow Subsidiary Company
19.Pressmatic Electro Stampings Pvt. Ltd. Fellow Subsidiary Company
20. Quadromatic Engineering Pvt. Ltd. Fellow Subsidiary Company
21. Vakasa Electricals Pvt. Ltd.. Fellow Subsidiary Company
22. Moreshwar Electricals Pvt. Ltd.. Fellow Subsidiary Company
23. Ila Electricals Pvt. Ltd.. Fellow Subsidiary Company
24. Kirloskar Oil Engines Limited Fellow Subsidiary Company
25. Kirloskar Pneumatic Company Limited Fellow Subsidiary Company
26. Kirloskar Systems Limited Fellow Subsidiary Company
27. Kirloskar Proprietary Limited Fellow Subsidiary Company
105
B) Related Party Transactions (In Rupees)

Nature of Transaction Holding Associates & Fellow Key Relatives Enterprises Total
Company Joint Ventures Subsidiary Management of Key over which
Companies Personnel Management key managerial
Personnel personnel or
their relatives
exercise
significant
influence
1) Purchases of Goods - 70,669,193 445,293,240 - - - 515,962,433
- (279,014,797) - - - - (279,014,797)
2) Sale of Goods - 1,227,601 5,131,072 - - - 6,358,673
- (751,975) - - - - (751,975)
3) Rendering of Services - 11,769,810 7,034,441 - - - 18,804,251
- (17,878,322) - - - - (17,878,322)
4) Receiving of Services - - 5,849,512 450,000 2,610,000 - 8,909,512
- (564,989) - - (2,820,000) (450,000) (3,834,989)
5) Dividend Received - 18,050,000 107,853,748 - - - 125,903,748
- (9,119,700) - - - - (9,119,700)
6) Dividend Paid 211,625,340 - 630,000 5,217,216 256,400 - 217,728,956
- (210,000) - (3,652,598) (124,200) (105,389,610) (109,376,408)
7) Interest Paid - - 2,854,795 - - - 2,854,795
- (665,754) - (235,000) (464,000) - (1,364,754)
8) Remuneration Paid - - - 54,450,136 530,000 - 54,980,136
- - - (50,287,533) (1,272,601) - (51,560,134)
9) Deposits Accepted - - - - - - -
- (50,000,000) - (1,400,000) - - (51,400,000)
10) Deposits Repaid - - - - - - -
- - - (3,231,000) (5,150,000) - (8,381,000)
11) Sale of Fixed Assets - - - - - - -
- (181,600) - - - - (181,600)
12) Reimbursement of
Expenses - 5,548,635 8,499,133 - - - 14,047,768
- (2,714,059) - - - - (2,714,059)
13) Deposit paid - - - 1,700,000 3,400,000 5,100,000
- - - - - (5,000,000) (5,000,000)
14) Repayment of Inter

Corporate Deposit - - 20,000,000 - - - 20,000,000
- - - - - - -
15) Royalty Paid - - 47,137,925 - - - 47,137,925
- - - - - - -
16) Royalty Received - - 1,334,443 - - - 1,334,443
- - - - - - -
17) Inter Corporate

Deposit Received - - 10,000,000 - - - 10,000,000
- (50,000,000) - - - - (50,000,000)
18) Balance Outstanding

Debit (Credit) - (3,543,242) (134,412,695) (23,300,000) 3,400,000 - (157,855,937)
- (119,052,086) - (21,500,000) 3,510,000 5,248,345 (131,793,741)
106
th
C) Names of Related Parties

1) Holding Company Better Value Holdings Pvt. Ltd.
2) Subsidiary Companies Pooja Credits Pvt. Ltd.
Kirloskar Constructions and Engineers Ltd.
Kirloskar Silk Industries Ltd.
Gondwana Engineers Ltd.
Certified Engines Ltd.
SPP Pumps Ltd., UK
SPP (South Africa) (Pty) Ltd.
SPP Pumps LP
SPP Pumps Management LLC
SPP Pumps Holdings LLC
SPP Pumps France EURL
SPP France S A S
Kirloskar Brothers International B. V.
The Kolhapur Steel Limited (From 02.08.2008)
Kirloskar Brothers Europe B. V. (From 13.05.2008)
Kirloskar Brothers (Thailand) Ltd. (From 26.09.2008)
3) Fellow Subsidiary Companies Hematic Motors Pvt. Ltd.
Pressmatic Electro Stampings Pvt. Ltd.
Quadromatic Engineering Pvt. Ltd.
Vakasa Electricals Pvt. Ltd.
Moreshwar Electricals Pvt. Ltd.
Ila Electricals Pvt. Ltd.
Kirloskar Pneumatic Company Limited
Kirloskar Sytems Ltd.
4) Joint Ventures Kirloskar Ebara Pumps Ltd.
Kirloskar Corrocoat Pvt. Ltd.
5) Key Management Personnel Mr. Sanjay Kirloskar
Mr. Vikram Kirloskar
Mr. R. K.Srivastava
Mr. J. R. Sapre
6) Relatives of Key
Management Personnel Mrs. Pratima Kirloskar Wife of Mr. S. C. Kirloskar
Mr. Alok Kirloskar Son of Mr. S. C. Kirloskar
Ms. Rama Kirloskar Daughter of Mr. S. C. Kirloskar
Mrs. Suman Kirloskar Mother of Mr. S. C. Kirloskar
Mr. Atul Kirloskar Brother of Mr. S. C. Kirloskar
Mr. Rahul Kirloskar Brother of Mr. S. C. Kirloskar
Mrs. Geetanjali Kirloskar Wife of Mr. Vikram Kirloskar
Mrs. Mrinalini Kirloskar Mother of Mr. Vikram Kirloskar
Mrs. Vijayalaxmi Srivastava Wife of Mr. R. K. Srivastava
Mrs. Asha J. Sapre Wife of Mr. J. R. Sapre
107
8) Earning per Share (Basic and diluted)

2009 2008
I - Basic Rupees Rupees
Profit for the year before tax 1,315,537,938 1,867,204,259
Profit after tax 852,783,158 1,358,853,814
Total Number of equity shares at the end of the year
Basic earning per share of nominal value of Rs. 2/- each 8.06 12.85
II - Diluted
Profit for the year before tax 1,315,537,938 1,867,204,259
852,783,158 1,358,853,814
Total Number of equity shares at the end of the year 105,764,355 105,764,355
Add : Weighted average number of potential equity
shares on account of employee stock options - 277,615
Weighted average number of shares outstanding
Diluted earning per share of nominal value of Rs 2/- each 8.06 12.81
9. Particulars related to Joint Ventures :
List of Joint Ventures
Name of the Joint Venture Description Country of
Incorporation
Kirloskar Ebara Pumps Ltd. Jointly controlled entity India
Kirloskar Corrocoat Pvt. Ltd. Jointly controlled entity India
HCC – KBL Joint Venture - Jointly controlled operations India
KBL – MCCL Joint Venture Jointly controlled operations India
KCCPL – IHP – BRC – TAIPPL – KBL JV Jointly controlled operations India
IVRCL – KBL JV Jointly controlled operations India
Maytas – KBL JV Jointly controlled operations India
Larsen & Toubro – KBL JV Jointly controlled operations India
KBL-MEIL-KCCPL JV Jointly controlled operations India
KBL – PLR JV Jointly controlled operations India
KBL – Koya – VA Tech JV Jointly controlled operations India
KBL – PIL Consortium Jointly controlled operations India
Larsen & Toubro – KBL – Maytas JV Jointly controlled operations India
IVRCL – KBL – MEIL JV Jointly controlled operations India
Pioneer – Avantica – ZVS – KBL JV Jointly controlled operations India
AMR – Maytas – KBL – WEG JV Jointly controlled operations India
Indu – Shrinivasa Constructions – KBL – WEG JV Jointly controlled operations India
MEIL – Maytas – KBL JV Jointly controlled operations India
MEIL – KBL – IVRCL JV Jointly controlled operations India
MEIL – Maytas – KBL JV Jointly controlled operations India
KCCPL – TAIPPL – KBL JV Jointly controlled operations India
Aban-Coastal Joint Venture Jointly controlled operations India
Asian Techs Ltd.- ABCI Infrastructures (P) Ltd Jointly controlled operations India
10. Figures of the previous year have been regrouped/rearranged wherever necessary. Figures in bracket relate
to the previous year.
108
th

11 Segment Information in respect of KBL and its Subsidiaries and Joint Venture Companies
(A) Primary Segments - Business Segments Pumps Others Eliminations Total Amount
Rupees Rupees Rupees Rupees
a) Segment Revenue
Sales to External Customers 22,243,496,210 2,283,236,705 - 24,526,732,915
(18,815,021,072) (1,772,711,011) - (20,587,732,083)
Inter Segment Revenue 5,075,202 758,888,261 763,963,463 -
(2,813,763) (166,439,724) (169,253,487) -
Total Segment Revenue 22,248,571,412 3,042,124,967 763,963,463 24,526,732,915
(18,817,834,835) (1,939,150,735) (169,253,487) (20,587,732,083)
b) Segment Result 1,717,483,434 217,442,113 1,934,925,548

(1,966,947,042) (190,946,678) (2,157,893,720)
Less :
I) Interest 410,687,696
(233,115,475)
II) Unallocable Corporate expenditure
(net of other income) 455,567,106
(398,815,601)
Add :
I) Income from Investments 226,861,554
(308,617,246)
Total Profit Before Tax 1,295,532,299
(1,834,579,889)
Less : Provision for Tax 449,622,376
(470,023,253)
Less : Deferred Tax (10,953,746)
(16,603,717)
Less : Fringe Benefit Tax 24,174,580
(18,683,140)
Net Profit 832,689,089
(1,329,269,779)
c) Segment Assets 17,298,071,057 2,110,653,969 - 19,408,725,026

(13,563,016,082) (2,037,483,135) (15,600,499,217)
Unallocable Corporate Assets 4,906,147,461
(4,899,153,868)
Total 24,314,872,487
(15,841,653,444)
d) Segment Liabilities 10,802,739,621 1,542,347,051 - 12,345,086,672

(8,301,854,730) (1,445,979,435) (6,535,817,595)
Unallocable Corporate Liabilities 3,562,043,897
(3,287,336,329)
Total 15,907,130,569
(9,199,650,332)
e) Cost Incurred during the period to
acquire Segment Fixed Assets 613,699,193 387,309,009
(422,665,254) (430,980,503)
f) Depreciation / Amortisation/Impairment 219,556,297 80,984,718
(188,854,371) (55,236,596)
g) Non Cash Expenses other than 154,573,239 21,122,367
Depreciation / Amortisation (24,481,390) (2,351,704)
B) Secondary Segment - Domestic Export Total

Rupees Rupees Rupees
a) Segment Revenue Geographic Segment 19,448,498,310 5,078,234,605 24,526,732,915
by location of customer (16,793,237,485) (3,794,494,598) (20,587,732,083)
b) Carrying Amount of Segment Assets by location of assets 23,537,614,676 777,257,811 24,314,872,487

(19,643,309,115) (856,343,971) (20,499,653,086)
c) Cost Incurred during the period to 984,242,992 16,765,209 1,001,008,201

acquire Segment Fixed Assets (844,665,704) (8,980,053) (853,645,757)
109
NOTES
110
As many of you are aware, the Kirloskar Group
began large-scale operations with Kirloskar Brothers
Limited's flagship plant in Kirloskarvadi in 1910.
From pioneering India's agricultural success-story
with innovative products like the iron plough to being
the acknowledged leader in engineering solutions
globally, the brand 'Kirloskar' has come a long way.
Having made a difference to the lives of millions worldwide, your Company has brought growth and prosperity across
continents. Celebrating 2009-10 as the centenary year of this remarkable journey, we look forward to transforming fortunes.
This is the legacy of the Kirloskar Group. This is the legacy we will build on.
Printed at Vikram Printers Pvt. Ltd.

Regd. Office : Udyog Bhavan, Tilak Road, Pune - 411 002. (INDIA)
Tel.:+91 20 2444 0770 Fax:+91 20 2440 2083
E-mail : kblin@kbl.co.in Website: www.kbl.co.in
Registered Office : Udyog Bhavan, Tilak Road, Pune - 411 002
Dear Shareholders,
Sub: Corrigendum to 89th Annual Report 2008-09
Please refer to the enclosed Annual Report 2008-09 of the Company. We draw your attention to the
second paragraph on the page No. 4 of the same.
As you are aware, on February 2, 2009, the company made an application to the Central Government
under section 212(8) of the Companies Act, 1956 for exemption from attaching the annual accounts of
the subsidiary companies.
However, since the approval was pending with the Government till date, we were to provide separately
the respective annual accounts and other documents of subsidiary companies.
We are pleased to inform you that on June 17, 2009 the Government of India, Ministry of Corporate
Affairs vide letter No. 47/120/2009-CL-III, granted its approval under section 212(8) of the Companies
Act, 1956 for the year ended March 31, 2009.
As per the said approval, instead of the annual accounts of the subsidiary companies, we attach certain
information in respect of company's subsidiaries for the financial year ended March 31, 2009 /
December 31, 2008 / September 30, 2008 and for the corresponding previous year ended
March 31, 2008 / December 31, 2007.
Further, we hereby undertake that annual accounts for the subsidiary companies and the related
detailed information will be made available to the Shareholders, seeking such information. The annual
accounts of the subsidiary companies will also be kept open for inspection for Shareholders.
This communication forms a part of the company's 89th annual report-2008-09.
For KIRLOSKAR BROTHERS LIMITED,
G. P. KULKARNI
Vice President & Head - Legal
Pune : June 19, 2009 and Company Secretary
2
The Company has obtained approval of the Central Government under section 212(8) of the Companies Act 1956,(Act) for not attaching documents of its subsidiaries referred to in Section 212 (1) (a) to (d) of the Act to the Annual Accounts of the Company. As per the
said approval, the Company is giving the following information in respect of its subsidiaries for the financial year ended March 31, 2009 / December 31, 2008/ September 30, 2008 and for the corresponding previous year ended March 31, 2008 / December 31, 2007.
Particulars Pooja Credits Pvt. Ltd. Kirloskar Silk Industries Ltd. Kirloskar Constructions Gondwana The Kolhapur Kirloskar Brothers Kirloskar Brothers SPP Pumps Limited
& Engineers Ltd. Engineers Limited Steel Ltd. ( Thialand ) Ltd. International B. V. (Consolidated
(Consolidated Financial statements)
Financial Statements)
As at March As at March As at March As at March As at March As at March As at March As at March As at March As at September As at December As at December As at December As at December
31, 2009 31, 2008 31, 2009 31, 2008 31, 2009 31, 2008 31, 2009 31, 2008 31, 2009 30, 2008 31, 2008 31, 2007 31, 2008 31, 2007
Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees
Balance sheet
Share Capital 34,454,770 34,454,770 20,001,300 20,001,300 61,500,020 61,500,020 4,016,000 4,016,000 17,000,000 3,702,750 9,647,358 3,155,665 148,315,800 159,389,800
Reserves & Surplus 100,028,205 99,752,602 - - 14,924,419 132,580,503 88,852,512 69,991,148 26,247,000 - - 436,687,544 279,211,162
Minority Interest 674,131
Assets
Fixed Assets - - 18,429,624 18,429,624 578,755,523 477,232,351 8,020,554 6,680,535 75,267,030 72,534 - 287,589,675 258,125,406
Intangible Assets 4,649,657 6,918,077 681,636 -
Investments 133,351,187 133,351,187 - - 5,100 - 99,910 99,910 - - - - -
(see note 1 for details)
Current Assets, 1,184,215 866,287 160,069 160,574 1,332,020,833 844,794,189 251,704,391 210,588,648 178,830,030 3,115,104 17,292,958 3,160,462 2,101,533,141 1,437,585,858
Deferred Tax - - - - - 8,643,177 7,756,386
Total Assets 134,535,402 134,217,474 18,589,693 18,590,198 1,915,431,113 1,328,944,617 259,824,855 217,369,093 254,778,696 3,187,638 17,292,958 3,160,462 2,397,765,993 1,703,467,650
Liabilities
Secured Loans - - - - 487,370,808 442,281,484 61,708,485 29,868,633 20,387,683 - - 167,976,023 224,584,532
Unsecured Loans - - 406,404 406,404 550,550,000 45,000,000 13,000,000 15,500,000 126,134,107 - - - -
Current Liabilities and Provisions 52,427 10,102 1,009,535 999,608 784,289,331 635,287,815 91,933,976 97,718,406 69,506,520 99,051 16,256,005 495,061 1,644,786,627 1,040,282,156
Deferred Tax - - - - 16,796,535 12,294,795 313,882 274,906 (4,496,615) - - - -
Total Liabilities 52,427 10,102 1,415,939 1,406,012 1,839,006,674 1,134,864,094 166,956,343 143,361,945 211,531,695 99,051 16,256,005 495,061 1,812,762,650 1,264,866,688
Balance of Profit & Loss Account - - (2,827,546) (2,817,114) - - - - - (614,163) (9,284,535) (490,264) - -
Profit & Loss Account
Turnover 18,266,340 38,217,660 - - 1,221,968,150 990,266,201 626,117,921 265,585,337 211,986,919 31,553 8,913,059 2,732 4,265,163,619 3,499,751,166
Profit before taxation 18,012,162 35,746,277 (10,432) (11,882) (109,129,344) (42,674,102) 36,063,668 12,977,737 6,020,829 (564,596) (12,960,721) (442,080) 228,402,396 167,264,533
Provision for taxation - (496,636) - - 8,526,740 (7,646,363) 12,481,281 4,620,843 (4,621,923) 5,512 - - 63,577,244 48,320,134
Profit after taxation 18,012,162 36,242,913 (10,432) (11,882) (117,656,084) 35,027,739 23,582,387 8,356,894 10,642,752 (570,108) (12,960,721) (442,080) 164,825,152 118,944,399
Interim Dividend 15,160,099 - - - - - - - -
Proposed Dividend - - - - - 4,016,000 401,600 - -

Particulars Pooja Credits Pvt. Ltd. Kirloskar Silk Industries Ltd. Kirloskar Constructions Gondwana The Kolhapur Kirloskar Brothers Kirloskar Brothers SPP Pumps Limited
& Engineers Ltd. Engineers Limited Steel Ltd. ( Thialand ) Ltd. International B. V. (Consolidated
(Consolidated Financial statements)
Financial Statements)
As at March As at March As at March As at March As at March As at March As at March As at March As at March As at September As at December As at December As at December As at December
31, 2009 31, 2008 31, 2009 31, 2008 31, 2009 31, 2008 31, 2009 31, 2008 31, 2009 30, 2008 31, 2008 31, 2007 31, 2008 31, 2007
Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees
Note 1 :
Details of Investments
Kirloskar Investments & Finance Ltd. 1,153,000 1,153,000
Kirloskar Oil Engines Ltd. 58,188,067 58,188,067
Kirloskar Ferrous Industries Ltd. 69,100,000 69,100,000
Kirloskar Consultants Ltd. 4,455,000 4,455,000
Hematic Motors Pvt. Ltd. 3,179,699 3,179,699
Pressmatic Electro Stampings Pvt. Ltd. 1,116,998 1,116,998
Quadromatic Engineering Pvt. Ltd. 706,039 706,039
Quadrant Communications Ltd. 343,000 343,000
Bank of India 9,000 9,000
Sainath Sugar Co-op Factory 10,000 10,000
National Savings Certificate - - 23,000 23,000
Oswal Agro Ranjeet Weaving Mill - - 31,200 31,200
Monsanto Chemical Ltd. - - 9,040 9,040
Sterling Tea Ltd. - - 26,670 26,670

th
Sub Total 138,250,803 141,250,803 - - 99,910 99,910

Less: Provision for Decline in value of
Investments 4,899,616 4,899,616 - - - -
133,351,187 136,351,187 - - 99,910 99,910
Exchange Rate considered
for conversion 1.481 68.91 63.11 74.16 79.69
Notes :
In accordance with the orders passed by the Honourable Board for Industrial and Financial Reconstruction (BIFR) on May 14, 2008, the Company has acquired all the Equity shares of Rs. 10/- each of The Kolhapur Steel Limited (TKSL) from the existing promoters by executing a Share Purchase Agreement on August 2,
2008 and TKSL has become a subsidiary company of KBL with effect from August 2, 2008.
The company, through its subsidiary company Kirloskar Brothers International B.V. , has formed a Company in The Netherlands, on May 13, 2008, namely, “ Kirloskar Brothers Europe B.V. " This is a joint venture company with a local partner , primarily for the distribution of the company’s products in Europe.
The company has formed a wholly owned subsidiary company in Thailand namely Kirloskar Brothers (Thailand) Ltd . As per the local laws, the company was permitted to commence business only after getting the approval from Board of Investments, Thailand , which was received in September 2008.
3
Th
is
pa
ge
is
int
en
tio
na
lly
lef
tb
lan
k

Annual Report 2008-09

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Annual Report 2008-09

Uploaded by

Copyright:

Available Formats

KIRLOSKAR BROTHERS LIMITED

Painting the future GREEN.

Developing eco-friendly products

Unique, energy efficient, 7.5 HP monobloc surface water pump with a

amperes of electricity as against 12 amperes consumed by other makes.

The Bureau of Energy Efficiency (BEE) and Ministry of Power plan to

with this KBL pump all over India free of charge.

New Corporate office

Information for Shareholders Contents Page No.

Annual General Meeting Decade at a Glance 2

Other Income 79 295 82 72 225 132 750 2,408 430 359

Interest 120 141 106 75 65 48 55 84 169 303

Depreciation 72 78 83 85 107 100 97 121 182 207

Income tax provision 43 48 28 52 68 31 63 385 399 312

Share Capital 71 71 71 71 71 71 212 212 212 212

Imports 51 54 49 119 144 261 606 987 1,152 2,084

Basic Earnings per Share

Basic Earnings per Share

Previous years' figures have been regrouped to make them comparable.

* Dividend Recommended 100%

DIRECTORS' REPORT TO THE MEMBERS

FINANCIAL RESULTS 18,000

previous year are as under: - 12,000

Current Previous 8,000

Year ended Year ended 6,000

March 31, March 31, 4,000

Profit before tax 982,203,176 1,500,406,123 Net Worth

Your Directors propose to appropriate the available surplus as under :- 2,000

Dividend @ 100% (200%) 1,000

on 105,764,355 equity 2005 2006 2007 2008 2009

shares of Rs. 2/- each 211,528,710 423,057,420 Year

Additional tax on Dividend 35,949,305 71,898,609

It is proposed to transfer certain non-core investments to a separate Company to be

STATUTORY DISCLOSURES 35.00

1. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND 25.00

Details of energy conservation, technology absorption, research and 15.00

2. PARTICULARS OF EMPLOYEES Year

Information regarding employees in accordance with Section 217 (2A) of the

4. DIRECTORS' RESPONSIBILITY STATEMENT

lThe annual accounts have been prepared on a going concern basis.

SAFETY, HEALTH AND ENVIRONMENT

EMPLOYEE STOCK OPTION SCHEME (ESOS)

CORPORATE SOCIAL RESPONSIBILITY

A NEW CORPORATE OFFICE

For and on behalf of the Board of Directors,

c. Future plan of action

d. Expenditure on R & D (Including new product development)

2. Technology absorption, adaptation and innovation

b. Benefits derived as a result of the above efforts

c. Technology imported during the last 5 years

C. Foreign Exchange Earnings and Outgo

Sanjay Kirloskar Bachelor of Science Managing Director 02/05/1983 17685755 Manager,

Vikram Kirloskar Bachelor of Executive Director 06/06/2001 19190148 -

Sanjeev Shripad Date B.E.(Mech) Vice President 20/07/1970 2836172 -

L.H. Dabi B.E. (Mech) Vice President - Corp. 15.11.1975 2683083 -

*Employed for the part of the year

ANNEXURE – III TO THE DIRECTORS' REPORT

a. Number of Options granted 552,250 options

m.2 Weighted fair values for options whose exercise price -

STRATEGY AND POLICY

RISKS AND CONCERNS

WATER RESOURCE MANAGEMENT

BUILDING AND CONSTRUCTION