Ibh Report

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A
report
On
Indian Business House
KIRLOSKAR GROUP OF COMPANIES
Prepared
Under the guidance of
Mr. Jai Singh
Director
IIeBM
Pune
INDIAN INSTITUTE OF e-BUSINESS MANAGEMENT,
WAKAD,PUNE
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INDIAN BUISNESS HOUSE- KIRLOSKAR GROUP
They are a 1.20 billion US Dollars engineering conglomerate driving critical

industries. They are century old pioneers in our areas of specialization like power,
construction and mining, agriculture, industry and transport, oil and gas and
environment protection with a range of world-class industrial products and turnkey
services.
They are made up of 8 major group companies, each led by the best engineering and
managerial talent in India. In addition to engineering, they have interests in civic
utility systems and in Information Technology and communication.
Their multi-unit, multi-product, multi-location conglomerate is built on the plinths of

Experience, Expertise, Quality, Innovation and Values in the business. Their best
play is successful work and creation of a new industrial order where they can provide
tailor made solutions to the customers.
At Kirloskar, listening to the customer and his needs is a tradition as old as the group
itself. For it is they who drive us further, make us reach higher, and engineer better
solutions. In the customer's often unspoken wish for better implements lies the seed
for a new invention, a path-breaking industrial concept.
THEY ARE KIRLOSKAR GROUP OF COMPANIES
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1. ORIGIN AND FOUNDER

1.1 THE FOUNDER AND THE FIRST FACTORY VILLAGE
The Kirloskar story starts with Laxmanrao Kirloskar, the

founder. A man who believed that an understanding of one's
environment and reality was essential to the manufacture of
path-breaking industrial implements. From this steadfast belief
was born the iron plough, the first Kirloskar product. Originally
intended as an essential aid to agriculture, the plough soon
became an icon of reform and revolution.
A highlight of the early history of the group is Kirloskarvadi,

India's first industrial township. A model factory-village created
Laxmanrao by Laxmanrao and his band of dedicated workers.
Kirloskar
In January 1910, when the Kirloskar were being ousted from Belgaum to make room
for a new suburb, they found themselves in dire need of a place to live and work.
Sensing this need, the Raja of the princely state of Aundh, who admired and respected
Laxmanrao Kirloskar, offered the latter all the land he needed in Aundh state.
Two months later, Laxmanrao Kirloskar set foot on 32 acres of barren land strewn with
cacti and infested with cobras. Driven by his faith in human ability, Laxmanrao bonded
together 25 workers and their families and succeeded in transforming the barren
expanse into his dream village.
Ramuanna, Laxmanrao's brother, planned and administered the township, Shamburao

Jambhekar doubled as engineer and all-round healing man, K.K.Kulkarni, an
unsuccessful student, became a manager, treasurer and odd jobs man, Mangeshrao Rege
was the clerk and chief accountant, Anantrao Phalnikar, a school drop-out flowered into
an imaginative engineer. Such was our founder's faith in the human being that,
Tukaram Ramoshi and Pirya Mang, both convicted dacoits, became the trusted guards
of Kirloskarvadi 3
2. HISTORY, VISION ,MISSION
2.1. THE HISTORY OF KIRLOSKAR

It has now been more than a century since the Kirloskar story started. They started with
an aim of becoming the pioneers in fields in which country needed innovation. In the
100 years and more that they have been in existence as a family and as an organization,
they have been seminal to Indian agricultural and industrial development. They gave
India its first iron plough, pump and engine, inventions that were devised from the need
of the hour and went on to become signs of the time Which is why group history can in
many ways can be considered a history of the economic and industrial revolution in
India.
2.2. VISION
Business for us is the best service, customer care and a lifelong relationship.
Where are they headed?
We believe in synergy and its limitless power of unifying. It is not limited to our group.
It extends to the realms of customer/collaborator relations, investor interactions and into
market trends analyses and technological advances. It is the only way we ensure that
when an endeavor is made by several different elements, the result is of a far higher
quality than what could have been achieved by each element acting alone. Our policies
and practices help in treating the customer as the most important part of our family. We
do work for profit but our profits are guided by the motives which suit best the
customer needs.
How do they plan to reach there?
For the Kirloskar Group, engineering excellence is not an end, but a journey. An array
of business solutions stand testimony to the fact, that good business values, pillared by
expertise can work wonders. Solutions, which are crafted from a solid base of
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developing and manufacturing, generate reliable products and superior service. Through
which, continual measurement of customer satisfaction is offered. It's a commitment
rather than a ritual.
From our early agricultural implements to our hi-tech engineering products, we've been
always weaving our corporate goals into our clients' expectations by providing
expertise and delivering technology that they can benefit from and rely on us at globally
competitive prices.
Today, we are in the process of concentrating our collective energies on core industry
sectors to give us a sustainable competitive edge in terms of both quality and price.
The Kirloskar Group's customer base currently ranges from heavy industries like power
generation, steel and chemicals to the mechanic in his workshop and the farmer in the
fields. Across this wide spectrum of clients, many of whom are overseas, the one thing
that remains consistent is that they all matter to us and call us for more of our service,
products and better solutions.
2.3 MISSION
1. To provide quality services while following sound business practices.
2. To enhance the standards of ethical conduct, which are based on core Kirloskar
group values.
3. To evolve as good corporate citizens by implementing highest Degree of
transparency, integrity, accountability and corporate Social responsibility.
4. To further achieve good corporate governance by complying with all laws, rules, and
regulations applicable to the Company and fulfilling responsibilities towards
stakeholders.
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5. To comply with all applicable laws, rules, regulations and Regulatory orders.
6. To acquire appropriate up to date knowledge of requirements of Compliances under
various applicable statues.
7. To ensure that proper legal compliance management system is in place for reviewing
and reporting the status of compliances under various laws.
8. To act in utmost good faith and in accordance with highest Standards of personal and
professional integrity, honesty and ethical conduct in respect of all transactions.
9. To avoid scrupulously ‘conflicts of interest’ with the Company.
10. Not to exploit for their own personal gain, opportunities that are discovered through
the use of the Company’s property (including intellectual property), information or
position.
11. Not to divert to his/her own advantage any business Opportunity that the Company
is pursuing.
12. To deal fairly with the stakeholders and employees of the Company.
13. To maintain the confidentiality of sensitive information of the Company or that of
any stakeholder to which the Company has a duty of confidentiality to maintain, except
when disclosure unauthorized or legally mandated. The confidential information
includes all information not in the public domain that might be of use to competitors or
harmful to the Company or companies in the Kirloskar group, if disclosed.
14. Not to use of confidential information for own advantage or profit.
15. To protect Company’s assets and properties, including
Intellectual property and ensure its efficient use.
16. To ensure the use of Company’s property for legitimate Business purposes.
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17. To ensure to have a proper system of safeguarding the interest of all stakeholders.
18. To disclose necessary information to the Company, at regular intervals in respect of
various declarations under the various acts, rules and regulations, including the
companies Act, 1956, and the details of related parties from time to time.
19. To promote ethical and responsible decision making.
20. To contribute in the most effective manner to achieve the vision and mission of the
Company.
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3. CORE BUISNESSES AND COMPANIES
They are made up of 8 major group companies, who are players in major sectors like
(1) MANUFACTURING
(2) OIL AND GAS
(3) POWER
(4) CONSTRUCTION AND MINING
(5) AGRICULTURE
(6) INDUSTRY AND TRANSPORT
Each led by the best engineering and managerial talent in India. In addition to
engineering, they also have interests in civic utility systems and in Information
Technology and communication. These 8 companies form the core of Kirloskar
group. Each company is a renowned name in its own area of operation and is
respected world wide for its services and products. For them manufacturing is just
not limited to their factory premises and their products. It is also about world class
service.
· Kirloskar Brothers Limited. (KBL)

· Kirloskar Ferrous Industries Limited. (KFIL)
· Kirloskar Middle East FZE. (KMEF)
· Kirloskar Oil Engines Limited. (KOEL)
· Kirloskar Pneumatic Company Limited. (KPCL)
· Kirloskar Proprietary Limited. (KPL)
They are also proud partners in joint ventures with companies like Ebara Corporation,
Toyota Motor Corporation, the renowned auto manufacturer.
· Kirloskar Ebara Pumps Limited. (KEPL)
They take equal pride in shaping capable managers and dedicated human beings at
Kirloskar Institute of Advanced Management Studies. It is their education center for
imparting knowledge to the managers of tomorrow.
· Kirloskar Institute of Advanced Management Studies (KIAMS)
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4.BUSINESS PHILOSOPHY BUSINESS POLICIES
4.1. BUSINESS PHILOSOPHY
4.1.1 STRATEGIC DIRECTION OF KIRLOSKAR
Attain cost leadership through effective development of measures such as
Ø Rationalization of supplier base and getting them committed.
Ø Increased inventory turns.
Ø Rev up operational efficiencies.
Ø Enhance man-machine utilization (flexible set ups, multi-skiling QC, kaizens).
Ø Instill respect for money across stake-holder
4.1.2 THEIR THRUST AREAS.
Ø Reduce number of suppliers.
Ø Reduce material inventory.
Ø Reduce working capital.
Ø Reduce shop rejection.
Ø Reduce tool cost.
Ø Reduce machine maintenance cost.
Ø Improve productivity- man, machine, and money.
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4.2. BUSINESS POLICIES
It’s happening at Kirloskar. We’ll continue to make it happen
The Kirloskar Way
CUSTOMER ORIENTATION
The customer is our strategic partner in growth and an endless source of inspiration. We
will encompass change and intensify our operations to face the challenge of the
World Trade Order in the Global market. Unite each person, process, department and
company within the group in cross functional teams to create engineering solutions for
our customers.
Through our Distribution network, focus at delivering goods and services efficiently at
minimal cost while keeping low inventory and receivables
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QUALITY
Quality can always get better. We can achieve zero rejections by constantly upgrading
the technology and resources.
COST CONTROL
There is no product or process for which cost cannot be reduced further.
We must emphasize Process Orientation where only the processes leading to the final
deliverables at economical cost matter.
There is no limit to a person’s work density if you standardized work and change to
process oriented working
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CASH MANAGEMENT
With efficient working capital management, net working capital can be zero, or
negative. Achieve 100 inventory turns per year.
ENVIRONMENT MANAGEMENT
Design and produce environmentally friendly products in environmentally friendly
factories.
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5. PROGRESS OVER THE YEARS
Ø 1888--- The Beginning.
Ø 1903--- Indian’s First Iron Plough.
Ø 1920--- Incorporation.
Ø 1920--- Kirloskar Brothers Ltd.
Ø 1927--- India’s First Centrifugal Pump.
Ø 1937--- India’s First Diesel Engine.
Ø 1940--- India’s First Electric Motors and India’s First Lathe.
Ø 1941--- Mysore Kirloskar Ltd.
Ø 1946--- Kirloskar Oil Engines Ltd.
Ø 1946--- Kirloskar Electric Ltd.
Ø 1954--- India’s First Reciprocating Compressor.
Ø 1958--- Kirloskar Pneumatic Ltd.
Ø 1958--- Technical Agreement for Large Pumps.
Ø 1960--- Technical Agreement for Vertical Turret Lathes.
Ø 1968--- Manufacture of Hermetic Compressors.
Ø 1973--- Large scale Exports to Europe.
Ø 1983--- Joint Design of Pumps with French Company.
Ø 1988--- Centenary Year Portable Fire- fighting Pumps.
Ø 1988--- India’s first Canned Motor Pumps.
Ø 1988--- Joint Venture for Process Pumps.

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Ø 1988--- Kirloskar Ebara Pumps.
Ø 1991--- Collaboration for Sub- mersible Pumps.
Ø 1993--- Joint Venture for Hermetic Compressors.
Ø 1993--- Kirloskar Copeland.
Ø 1995--- India’s First Concrete Volute Pumps.
Ø 1998--- Technical Agreement for Small Hydel Turbines.
Ø 2001--- Introduction of Pressed Stainless Steel Pumps.
Ø 2001--- World’s Largest Pumping Project EPC Contract won- SARDAR
SAROVAR.
Ø 2003--- Acquisition of SPP, UK.
Ø 2006--- JV with Corrocoat, UK.
Ø 2006--- Divestment of Kirloskar Copeland.
Ø 2006--- Acquisition of ABAN Construction.
Ø 2007--- Kirloskar Brother takes over management of ailing Kolhapur Steel.
Ø 2007--- Andhra Pradesh Govt. order for Kirloskar Brother.
Ø 2007--- Kirloskar Brother to issue 2:1 bonus share.
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2.1. ORGANIZATIONAL STRUCTURE
KOEL
PUNE, AHMEDNAGAR, NASIK, PHURSUNGI
BUISNESS SERVICES
(a) AUTO COMPONENTS (A) SECUTARIAL AND

LEGAL
Pune, Ahmednagar, Nasik Pune
(B) LARGE ENGINES & (b) MANAGEMENT

SPARES SERVICES
Pune- HR, Personnel, IT
Nasik corporate
(C)SMALL ENGINES & (c) CORPORATE FINANCE

SPARES
Pune
Phursungi
17 offices and 14 depots
(D)MEDIUM ENGINES & (d) OTHER OPERATIONS

SPARES
Pune
Pune and Phursungi
9 offices and depots
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2.2 REVISED VISION,MISSION AND OUTLOOK
2.2.1 REVISED VISION
2.2.1.1 REVISED VISION 2012

COMPANY LEVEL TARGET
In the am today, we agreed to the company level target as - profit of Rs. 950 cr. On sale
of Rs. 8,500 cr. By 2012. To attain the profit of Rs. 950 cr precisely figures are as under.
Sbu Sales Profit P/s
Se 1,300 115 8.8%
Me 3,500 454 13.0%
Le 700 73 10.4%
Acbg 225 23 10.2%
Export 2,800 285 10.2%
Total 8,525 950 11.1%
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These numbers are in the following statements
COMPANY VISION 2012:
They will become globally major player in off – highway engines and power
generation businesses by offering winning combinations of quality, cost and
delivery through innovation and unmatched service. Thus, they will strive to
attain amongst top ten positions worldwide in selected engine businesses. While
pursuing the above, they will continue to enhance the value of engine bearing and
valves business.
2.2.2 COMPANY MISSION 2012

· Profit of Rs. 950 cr. On sales of Rs. 8,525 cr.
· Achieve cii exim business excellence score of 600+ points by assessment year
2012
· Sebg vision 2012
To achieve 50% of sales from newly developed compact and reliable engines,
pump sets and generating sets which will be introduced from 2007.Superior
manufacturing and efficient distribution will differentiate them in traditional
products.
Sebg mission 2012

· Profit of rs. 115 cr. On sales of rs. 1,300 cr. From domestic markets
2010
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Mebg vision 2012

To be a business generating by design, manufacture and sales of off-highway
engines and generating sets. We will offer alternate liquid and gas fuel choices.
By 2012, 40% of their yearly sales will be through export sbu by offering winning
combination of quality, cost and delivery in their products and services through
innovation and unmatched service by creating a process centric organization, and,
will move up the value chain by offering comprehensive solutions over product
life.
Mebg mission 2012

· Profit of rs. 454 cr. On sales of rs. 3,500 cr. From domestic markets
2010
Lebg vision 2012.
To manufacture, sell and service engines and generating sets above 1.5 mw by
strengthening and leveraging our position in India and expand power
generation business in the regional countries. By 2012, 35% of our yearly sales
will be from gas engines and 10% of our yearly sales will be through export sbu.
Lebg mission 2012

· Profit of rs. 73 cr. On sales of rs. 700 cr. From domestic markets
· Maintain leadership position in India, in propulsion of Defence marine
ships.
· Develop turnkey project capability
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Acbg vision 2012

We will enhance the value of engine bearings and engine valves business by
offering winning combination of quality, cost and delivery through process centric
organization. By 2012, 40% of our yearly sales will be through export sbu.
Acbg mission 2012

· Profit of rs. 23 cr. On sales of rs. 225 cr. From domestic markets
· Be lowest cost producer of bearings offering lowest development time
· Achieve delivered ppm <50
Export vision 2012

We will be globally significant player in generating sets (20-600 kva) and diesel
engines (20-700 hp) for off-highway use. We will achieve 15% of yearly sales
from engines in range 700 to 2000 hp and products using alternate liquid and gas
fuels. These will be introduced from 2009. We will generate 10% of our yearly
sales from engine bearings and valves.
We will offer appropriate technology at attractive value-price relationship, and our
focus will be Europe and china for oem businesses and Asia, Africa and middle
east for distribution business.
Export mission 2012

· Profit of rs. 285 cr. On sales of rs. 2,800 cr.
· Attain position of “best company to deal with”
· Offer customized solutions in shortest development time
· Strengthening distribution to full 3s capability
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2.2.3 OUTLOOK
Given the growth momentum and prevailing buoyancy in both the industry and
services sector, they expect the pace to continue during the next fiscal, albeit with
some moderation. The monitoring tightening over the next two years is expected
to affect corporate bottom lines, with moderation in overall demand. They expect
the overall Gross Domestic Product to grow in the range of 7.9 to 8.4% in 2007-
08.
Assuming the normal monsoon, the Gross Domestic Product growth in agriculture
can be expected to continue in alignment with the long term average growth 3%
per annum. If the buoyancy in the services remain unchanged, about 9.5% growth
seems feasible while industrial growth will be expected to deliver about 8.4%.
Even though the recent dip in global crude oil prices and the downward revision in
the domestic prices of petrol and diesel have limited the pressure on the Wholesale
Price Index Inflation, for the moment, continued effort from organization of the
Petroleum Exporting Countries is likely to keep the pressure up to push it back,
thus not providing a sustained comfort for headline Wholesale Price Index
Inflation. They are expecting the average inflation for the year 2007-08 in the 5-
5.5% range. A significant differential in interest rate with respect to international
markets, together with an unbeat sentiment, may attract significant capital inflows,
thereby adding liquidity to the market. However, this influx could offset the RBI’s
objective of monetary tightening. To ensure retention of export competitiveness,
any significant appreciation in the currency is expected to be monitored carefully
by the RBI.We also expect he rupee to trade at 40-42 against the Dollar by the end
of this fiscal .
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2.3 H.R, MARKETING, FINANCEAND SAFETY
POLICIES
2.3.1 HUMAN RESOURCES AND INDUSTRIAL RELATIONS
KBL emphasizes on the quality of its human
optical, which it considers it’s most important
asset. The Corporate Human Resource
Management and Communication
(CHRM&C) function strives towards
development of competence amongst all strata
of people to fill today’s slots and to address
future organizational and individual needs. It
has assessed the impact of its policies and is
taking measures to retain and to attract talent
on an on going basis.
The CHRM&C department is committed to
support and be a facilitator of change through
implementation of most technique for
productivity improvement, 5’S’ and business
excellence model implementation.
Employee relations at all locations are
harmonious and cordial as always. Collective
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forums comprising Management and Union representatives are extensively used
for amicable redressing of grievances.
2.3.1.1 HUMAN RESOURCE STRENGTHS
Total Employees :-2551
Engineers :-636
Vendors Over : - 500
Dealer : - 900
Harmonious labour relations since 1942
2.3.2 MARKETING
Market Trend
Ø Preference to a total fluid handling solution provider
Ø Shift in market from EPC / turnkey projects to water management/water
business ( BOOT / BOT projects )
Ø Rising awareness and needs of energy efficient and low life cycle cost
Ø for pumping systems
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KBL Approach
Ø Focus on infrastructure segments - water supply, irrigation & power as total
fluid handling solution provider
Ø Positioning & strategising to address global pump market- Capacities,
World class products and services
Ø Strengthening global distribution network and business
Ø Association with worldwide Consultants & EPC contractors.
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2.3.2.1 MARKET SERVED
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2.3.2.2 MARKET SHARE BY END-USE INDUSTRIES
IN
SI
GI
INSIGHT INTO BUSINESS
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NATIONAL NETWORK
GLOBAL FOOTPRINTS
12 Overseas offices in
• Ajman
• Atlanta
• Cairo
• Johannesburg
• Miami
• Muscat
• Nairobi
• Paris
• Phnom Penh
• Reading
• Singapore
• Vientiane
50 dealers
31 service contact points
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ASSOCIATIONS WITH GLOBAL CONSULTANTS AND EPC CONTRACTORS
ASSOCIATIONS WITH GOVERNMENTS
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2.3.3 FINANCIAL PERFORMANCE
For the first time company’s turnover
and booking have exceeded the Rs 10000
million mark, Net Sales has achieved a
growth of 45% over last year to reach
Rs.13999 million.
Profit before tax is Rs 3750 million as against Rs 1786 million in the previous
year, thereby registering a growth of 113%.Profit Before Tax (without
extraordinary income), stands at Rs 1341 million as against Rs 1037 million in the
previous year, registering a growth of 29%. Borrowings which have gone up from
Rs 252 million to Rs 1470 million and term loans, which went up from Rs 149
million to Rs 449 million and have helped fuel our growth. Depreciation and
amortization has increased to Rs 121 million from Rs 97 million in the previous
year, while interest has increased from Rs55 million to Rs 84 million.
2.3.3.1 FIVE YEARS FINANCIALS 2.3.3.1.1 TURNOVER
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2.3.3.1.2 EBDITA & EBDITA W/O EXTRA-ORDINARY INCOME
2.3.3.1.3 PROFIT BEFORE TAX
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2.3.3.1.4 EARNINGS PER SHARE
2.3.3.1.5 DIVIDEND- PAYOUT / PERCENTAGE
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2.3.3.1.6 BOOK VALUE PER SHARE
2.3.3.1.7 TURNOVER PER EMPLOYEE
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2.3.3.1.8 NET WORTH AND BORROWINGS
2.3.3.1.9 ASSETS
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SAFETY POLICIES
Pune-based Kirloskar Pneumatic offers lifestyle modification workshops, in-house
yoga training facility, Art of Living courses, diabetes management Programmes
and regular check ups for employees as well as their spouses and parents. Health
data analysis has helped in identification of staffers suffering from elementary
stages of life-threatening diseases, thereby prompting them to go for preventive
treatment. The company strives not only to bring in attitudinal and behavioral
changes in employees, but also to offer preventive as well as curative help.
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2.4. CORPORATE GOVERNANCE
2.4.1 CORPORATE GOVERNANCE STATEMENT
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
2.4.2 COMPANIES PHILOSOPHY ON CODE OF GOVERNANCE
The Company’s philosophy of Corporate Governance aims at establishing and
practicing a system of good corporate governance which will assist the
management in managing the company’s business in an efficient and transparent
manner towards fulfilling the corporate objectives and to meet the obligations and
best sub serve the interests of the stakeholders, namely:
· Shareholders: as providers of risk capital, to provide them reasonable
returns and enhance shareholder value.
· Customers: to provide adequate customer service focusing the activities on
customer expectations and meeting them.
· Environment: to adhere to the environment standards to make the product
and process environment friendly and gradually move towards the three
“R’s”-reduce, reuse and recycle.
· Employees: to promote development and well being.
· Society: to maintain Company’s economic viability as producer of goods
and services.
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· Other stakeholders: fulfilling the obligations towards other stakeholders
namely government, suppliers creditors etc.
2.4 APPROACH TOWARDS THE ENVIRONMENT
Environment
Environmental Protection at KBL
Environmental Protection at KOEL
Their culture of conscientious engineering encompasses pollution

control, waste management, effluent treatment and eco-friendly
engineering. Being a manufacturing group it becomes inevitable for
them to take care of the environment. They take full care to meet the
environment friendly norms. They have the environment policy to
initiate and monitor pollution control practices and to improve
continuously the environment. All of their products are tested to be environment
friendly. Moreover, they are manufactured under stringent norms of the least possible
emission and waste to meet the standards.
Their contribution to the environment
- ISO-14001 Environment Management System - Implemented by Kirloskar Brothers

Limited and Kirloskar Oil Engines Ltd., the group's frontline companies. To initiate
and monitor pollution control practices and to improve continuously the
environment.
- The R1040 water-cooled engine, manufactured by Kirloskar Oil Engines Ltd., is

totally environment friendly and conforms to the norms for year 2000.
What is the ISO-14001 Environment Management System?
ISO-14001 is a member of the ISO-14000 family of international standards which

cover management of the environment. The IS0-14001 Standard provides a
structured process to achieve continuous improvements in the organisation's
environmental performance. It is based on the dynamic and cyclic process of "plan,
implement, check and review".
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The Policy
The organisation's environmental policy, as enunciated by the top management must

reflect its commitment :
a) To comply with relevant environmental legislation and regulations.
b) To make continual environmental improvement and prevention of pollution.

This policy is to be documented, implemented, and communicated to all employees.
It must also be available to the public, on request.
The Plan
The organisation establishes procedures that will :
a) Identify environmental aspects of its activities /products /services which it can

control and over which it can be expected to have influence, so as to know the factors
which have significant impact on the environment (air, water or land).
b) Identify the legal and other environmental regulations which apply to the
organisation's activities /products/services.
In keeping with its environmental policy, and taking into account the areas of
significant impact, the organisation sets appropriate environmental objectives and
targets for itself. These targets should be measurable where practicable.
Technological options, financial and operational requirements too, have their say in
the shaping of these objectives. Time-frames are set, and the personnel who will
implement the environment policy are identified.
Implementation and operation
The ISO-14001 system is integrated with the overall management system for smooth
operation. Roles and responsibilities are defined and communicated across the
company.
Specific managers are assigned the tasks of :
a) Ensuring that system requirements are implemented in keeping with the

international standard.
b) Reporting to top management for review, with a view to improving the system.
Employees at each function/level must be made aware of each one's particular

responsibility as also the significant environmental impact/benefits of their work
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activities. They must fully realize the importance of conforming to environmental

policy and the consequences - possibly hazardous - of non-conformance.
Procedures are laid down to identify/deal with emergency and potential - emergency
situations and to prevent or mitigate adverse environmental impact.
Resources (human, technological, and financial) are committed to implement the

system. Training needs are identified and provided for.
Checks and correction
The organisation's operations which could have a significant impact on the

environment must be monitored and measured on a regular basis. To this end,
detailed environmental records are maintained.
Responsibility is assigned
a) To investigate any non-conformance.
b) To take action in case of adverse impact.
Periodic environmental audits are submitted to management. These determine

whether the environment management system is conforming
1) To the organisation's environment objectives
2) To environment legislation and
3) To the requirements of the international standard.
Review
Periodic reviews by the management are needed to ensure that the system is
performing effectively. In light of the audit results, the management may consider
changes in its environment policy and objectives or, if need be, initiate action to
tackle any major non-conformance.
The benefits
Implementation of ISO-14001 promises :
Improved operational efficiency with better utilization of materials/resources,

reduced costs and wastage and reduced pressure on the environment. Assurance to
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interested parties and increasing access to world markets encourages partnership

between industry and the regulatory authority. It enhances corporate image, improves
staff morale and the work environment. Importantly, it also helps in building an
environment-conscious nation. The ISO-14001 Standard has been accepted
enthusiastically by the Indian industry, with 25 companies receiving the certification
as of October 1997 (Bajaj Auto, Godrej, INDAL, NALCO, IOC, etc.). By
implementing this Standard, these companies have made substantial gains both in
terms of saving on resources and preventing environmental degradation.
Environmental Protection at KBL
They say charity begins at home. KBL proved it when it

extensively started participating in activities that helped in
the environmental protection. In keeping with the ethos of
the Kirloskar Group in the conservation of the environment,
KBL's involvement in social plantation work began way
back in 1905. It has done outstanding work in tree plantation and greening in and
around its plant at Kirloskarvadi. Once a barren, rocky area where only cactus and
acacia trees could grow, Kirloskarvadi is today transformed into a lush green
township.
Today, Kirloskarvadi boasts of over 28,000 trees. What is more, the survival rate
of these is as high as 99%! The trees include Eucalyptus, Mango, Silver Oak,
Cypress, Tamarind, and Jack Fruit amongst others.
KBL has helped this cause at the grass root level by setting up institutions like
Tree Growers Co-operation etc. It has encouraged plantations by schools, co-
operative societies and Gram Panchayats by supplying them seedlings and
necessary guidance. The company has also helped the Sagareshwar Sanctuary and
Kranti Smruti Van at Balwadi, in its vicinity.
KBL installed a waste treatment plant in 1975 for the treatment of industrial and
domestic effluent water. The treated water is circulated in the premises and used
for watering lawns.
Moreover, waste foundry sand has been successfully recycled and used in the
preparation of the Golf Course at Kirloskarvadi.
In the manufacturing process carried out in Kirloskar Brothers Limited,

Kirloskarvadi, there is a possibility of the environment being disturbed due to the
following activities.
· The domestic effluents flowing from the colony.

· The Industrial effluents flowing from the manufacturing process like coolant oil,
cynide salt liquid, waste-water emerging from the painting booth.
· Pollution of air due to melting of metal flying dust in foundries and the corrocoat
application unit, heating off material in the heat treatment process.
40
To meet the environment threats the company takes following measures:
1. Installation of the industrial and domestic effluent treatment plant

(Activated sludge process).
(a) Tank capacity: - 750 cubic meters / day.
2. Installation of the Industrial effluent treatment plant (Cynide Slats)

(a) Tank capacity: - 9000 liters
(b) Methods of treatment: - Alkaline chlorination method for cynide destruction.
3. Hazardous waste management: - After neutralizing solid salts by alkaline

chlorination method, the salts are dried and dumped in our scrap yard, in the
under-ground pits, 6/8 feet deep and covered with mud.
Features of air pollution control equipments
1. Closed circuit moulding sand preparation and reconditioning plant installed in

the Heavy / ACS Foundry.
2. Dust Collection plant for C.I. Foundry sand plant. Installed capacity: - 110 H.P.
3. Industrial dust collector units connected to all the three shot blasting chambers.
4. Hot blast, ash trap type cupolas installed in C.I. Foundry to capture particulate
matters.
5. Six electrical induction furnaces used in foundries.
The company has also fostered a culture of concern for nature amongst its
employees and surroundings communities through regular workshops, seminars
and films.
In the near future, KBL plans to support reputed worldwide nature conservation
bodies in tree plantation drives and other nature conservation activities.
KBL's activities have been recognized by the State Government of Maharashtra,

which bestowed the prestigious Vanashree Award in the year 1992 on it.
41
Environmental Protection at KOEL
KOEL is the first diesel engine manufacturing company in India to get the
prestigious EMS 14001 certificate. They also have the honors of being ISO/ EMS
14001 certified company from Nov.1999. They regularly comply with all statuary
legislations in terms of standards set by state & central pollution control boards &
proactively meeting future regulations today. They have taken efforts to meet the
norms and have been quite successful in it. A few that they can mention are:
1.A) They have remade a PMC nala flowing from our premises so that proper flow
is maintained & all water drains leading to nala, except rainwater is stopped.
B) All effluent streams are connected to ETP plant, where treated water meets
stringent norms of recycled water so that water is used for gardening activity.
Today, they are zero discharge company.
C) Closed loop system introduced to all water consumption areas so that recycled
water is reused again & again. This has reduced our water consumption from
92000 Kiloliters to 10000 Kiloliters per month.
2) By adopting EMS systems, they have achieved substantial reduction in natural

recourses such as water, power, oils & wood during last three years.
3) They have constructed a scrap yard where a facility for segregation of all waste
materials, measurement of wastes & proper disposal of each category of waste for
recycling to authorized recyclers is ensured.
4) They have eliminated hazardous processes such as electroplating; phosphatizing

etc. thus, helping them curtail the use of hazardous chemicals.
Their efforts have made them successful in creating awareness regarding the
environment in all their employees & are also continuously training them for
awareness regarding environmental matters. The result is that a Kirloskar
employee is highly aware about environment care and is a regular participant in
environment protection exercises.
They will continue to take care of the environment and ensure that our efforts help
others in living healthily.
42
2.5.1 POLLUTION
2.5.1.1 AS INDIVIDUALS:
Ø Ensure our vehicles adhere to stringent pollution norms.
Ø Organize can pools amongst friends to maximize individuals per vehicle.
Ø Shift to more efficient and less polluting fuels.
Ø Club tasks and plan our route efficiently.
Ø No revving at the red signal; the counter on the street light tells you when
to restart your vehicle.
Ø Walk / cycle short distances especially in inner city areas.
2.5.2.2 BUILD PRESSURE ON PUBLIC ADMINISTRATION:
Ø To make separate cycling / walking tracks. The way vehicles hurtle down
the roads spewing exhaust, scares even the most enthusiastic pedestrians /
cyclists off the roads.
Ø To ensure every residential locality has service provides, schools, etc. at a
walking distance; commute if you ‘want to’- not because you ‘have to’.
Ø To revamp public transport system. It should become an alternative of
choice rather than a poor substitute to personal transport.
2.5.2.3 OPPORTUNITY OF IT
Ø Entrepreneurs to boost IT in their organizations. This will make commuting
to office, or shopping for standard products, a redundant activity.
Ø It will ease road congestion, pollution and save money. Discover the
opportunity cost of huge funds spent on broadening roads.
43
2.5.3 CONSERVATION OF ENERGY
Major energy conservation measures taken include:
1. Installation of two 160 KVA and one 100KVA synchronized invertors to use
power generated during generating set testing.
2. Installation of seven 800kW Wind Energy converters to feed the generated
power to the grid at Panchpatta, Nashik, Maharashtra.
3. Installation of VFD with motor.
4. Installation of LED lamps in place of CFL lamps in garden.
5. Installation of Occupancy sensors in toilets.
6. Installation of FRP fan blades in place of Aluminium fan blade for industrial air
circulators.
7. Replacement of 5 HP pumps by 1 HP pump on component washing machine.
8. Installation of auto monitoring system for compressors.
The measurable energy saved from these projects is about 1.2 Million kWh &
wind energy fed to Maharashtra State
Electricity Distribution Company Limited grid is 1.0 million kWh.
Following energy conservation projects are planned:
1. Waste heat recovery of Aluminium melting furnaces.
2. Use of synchronized invertors with alternator to feed generated power during
endurance testing of engines.
3. Waste heat recovery from Compressors.
4. Solar steam generation system.
44
2.5.4 ECOLOGY
2.5.4.1 TERRESTRIAL ECOLOGY
Most of the area is agricultural land, impacted by number of anthropogenic
activities. There are few patches of scrub / forestland which have been conserved
as reserve forest. However, most of these patches lack natural vegetation. It is
dominated by prosopis. The scrubland shows presence of sacarum sp. And
members of Acacia and Zizipus.
2.5.4.1 AQUATIC ECOLOGY
Aquatic communities of all the location shows that major life forms are autotrophs
i.e. phytoplankton. Zooplanktons are very few in numbers. The aquatic ecosystem
is populated by Euglena and Eunotia acus type of phytoplankton the density of
zooplankton is very low. However Epiphranes sp. is the dominating one.
2.6. CORPORATE SOCIAL RESPONSIBILITY

In the year 2007, Company has contributed to various social causes to the extent
of approximately Rs. 6.2 million.
Company continues the following initiatives:
Ø Free Health and Yoga awareness campaigns and free health check-ups
organized for the nearby communities
Ø Free Spectacle Distribution done for the nearby communities
Ø Free Computer Literacy Programmes conducted for woman and children
from the nearby communities
45
Ø Tree plantation drive conducted in nearby schools
Ø Awards given to meritorious students from nearby schools
Ø Environment awareness camps and free PUC camps conducted for students
in nearby colleges
Ø Save the Girl Child campaign organized
Ø Free raincoats distributed in nearby communities
Ø Study visits organized for school children and women group from the
nearby communities
Ø Workshops on self-employment and creation of self help groups, organized
for women from nearby communities
Ø Public Newspaper stand created for nearby communities
Ø Conducting Cricket Matches in surrounding communities
Ø Tree plantation encouraged by distributing saplings
Ø Free pollution check of two wheelers for students organized.
Ø Free Health check for poor sections of surrounding community organized.
Ø Maintenance of roads adjoining Company’s plants
Ø Rs 700,000 to CII Kashmir Earthquake Relief Fund.
Ø Rs 500,000 to INTACH for River Cleaning Project.
2.7.1. COMPANIES CONTROLLED BY THE BUSINESS HOUSE
2.7.1.1) KIRLOSKAR BROTHERS LIMITED:-
Ø Industrial Pumps
Ø Projects and Engineered Pumps
Ø Agriculture and Domestic Pumps
46
Ø Valves
Ø Hydro Turbines
Year of Establishment : 1888
Year of Incorporation : 1920
Main Product : Centrifugal Pumps
Sales turnover (2006-07) : Consolidated Sales Rs.17878 million (US $ 436
million)
Total Sales : Rs. 15808 million (US $ 386 million)
Exports : Rs. 2266 million (US $ 55 million)
Manufacturing plants and Year of Establishment:
Dewas (1962) (Madhya Pradesh),
Kirloskarvadi (1910),
Kondhapuri (2001),
Shirval (1992) (Maharashtra)
Marketing Network : Domestic Regional Offices 16
Ahmedabad, Bangalore, Baroda, Bhubaneshwar, Calcutta, Chennai, Indore,
Jaipur, Kochi, Lucknow, Mumbai, Nagpur, New Delhi, Pune, Ranchi,
Secunderabad
Overseas Offices : Ajman, Cairo, Johannesburg, Miami, Nairobi, Phnom Penh.
Dealers: Domestic 900
Dealers: Overseas 45
47
2.7.1.1 EVOLUTION OF KIRLOSKAR BROTHERS LIMITED
48
2.7.1..2) Kirloskar Oil Engines Limited:-
Ø Diesel / Gas Engines
Ø Thin Walled Bearings
Ø Engine Valves
Year of incorporation: 1946
Sales Income, year ending March 31, 2007: USD 446 Million
No. of employees: 2,000 approx
Business areas
We are the acknowledged leader in Engines, Engine Bearings, Engine Valves,
Diesel Generating Sets, and Grey Iron Castings. Engines are the preferred
choice when it comes to powering Agricultural Machinery, Construction &
Material Handling Machinery, Marine applications and equipment used by
Armed Forces (Military).
Diesel Generating Sets in the range 2 Kva to 6 MW are preferred by the
industry at large, households and the service sector comprising of banks,
telecommunication establishments, commercial use buildings, hotels and
restaurants. We also offer generating sets over 1 MW that run on Heavy Fuel
Oils. Similarly, Engine Bearings and Engine Valves are the chosen ones for
OEM use in automobiles and other engines.
Product range
Product range includes Diesel Engines, Irrigation Pump sets, Diesel
Generating Sets, Engine Bearings and Engine Valves and Grey Iron Castings.
49
Chairman & Managing Director
Mr. Atul C. Kirloskar
Joint Managing Director
Mr. Gautam Kulkarni
2.7.1.3) KIRLOSKAR FERROUS INDUSTRIES LIMITED:-
Ø Grey Iron Castings
Ø Pig Iron
Product range
Grey Iron castings: 1 kg - 500 kg single piece weight
S.G Iron castings: 1 Kg ~ 70 Kg single piece weight
Investment castings: 1 gram ~ 1 Kg single piece weight
Pig Iron: Foundry Grade, S.G. Iron Grade & Basic Grade
Chairman & Managing Director
Mr. Atul C. Kirloskar - Chairman
Mr. R. V. Gumaste - Managing Director
Manufacturing units
Kirloskar Ferrous Industries Ltd., Bevinahalli Village (Near Hospet)
Kirloskar ferrous Industries Ltd., Solapur
50
Year of establishment: 1991
Sales turnover 2006-07: INR 5,251 Million (Net)
No. of Employees:
1,349
Values:
To achieve the mission and vision, KFIL would pursue following values:
Ø Customer Orientation.
Ø Vendor Development (Critical link in the business)
Ø Development of Human Resource (Trust, Positive attitude, Integrity,
Team-Work, Respect for individual, concern for quality, cost, 5S,
Safety, a personal habit, Being proactive, Solving problems,
Networking, Working for WIN-WIN agreements, continuous
improvement and result oriented)
Ø Process & Product excellence.
2.7.1.4) KIRLOSKAR PNEUMATIC COMPANY LIMITED:-
Ø Reciprocating Compressors
Ø Screw Compressors
Ø Turbo Compressors
Ø Industrial and Marine Gears
Ø Air Conditioning & Refrigeration Projects
Ø Ice plants
51
Year of incorporation: 1958

No. of employees: 900
Kirloskar Pneumatic Company Limited (KPCL) is a part of ‘Kirloskar Group’
one of the largest engineering Conglomerate in India in the field of
Refrigeration, Gas and Air Compression, Fluid handling, Prime movers and
transmission.
(KPCL) is known since 1958 as the leading manufacturer of a wide range of
Customized refrigeration systems, Packages, Engineered Sets and Open type
Reciprocating refrigeration Compressors. KPCL has countrywide Sales &
Service Network for upkeep of every refrigeration System/package it builds &
Compressor manufactures. The International Network in the Middle East,
Vietnam, Cambodia, Africa, and Australia has resulted in Customer satisfaction
abroad through trouble free operation of our KC series Open type
Reciprocating Industrial Refrigeration Compressor. With over 24,000 Open
type Reciprocating Refrigeration & AC Compressors working satisfactorily all
over the world, today we are one of the World’s largest Compressor
manufacturer in the field of Industrial refrigeration.
KPCL has successfully build & commissioned more than 1500 Refrigeration
Systems/packages in India & Abroad since its Commencement in 1969 for
System engineering Contracting operation Today, KPCL offer unmatched
technical expertise in the Refrigeration technology over the pass two decades &
today this technical expertise and manufacturing capability is recognized world
over by our competitors and customers alike.
52
In early 80’s KPCL was licensee of Howden Compressors Ltd., UK (HCL) for
the manufacturing, marketing & Packaging of Screw Compressors, in India.
They then progressed to become a leading packager of twin-screw compressors
manufactured by Howden Compressor Ltd for Refineries, Petrochemicals,
Naval Application, Dairies, breweries etc.
Their focus has been to ensure that they meet their commitments to customers
with emphasis on delivery and quality. Their Corporate Quality Policy has
reaffirmed this commitment.
2.7.1.5) KIRLOSKAR EBARA PUMPS LTD.1988:-
JV KBL: 45%, Sales Rs. 720 M
Ø API Process
Ø Boiler Feed Pumps
Kirloskar Ebara Pumps Limited (KEPL) was established on 13th January 1988
as a Joint Venture promoted by Kirloskar Brothers Limited (KBL) and Ebara
Corporation with a mission to manufacture and supply of rotary equipments
like Process Pumps, Steam Turbines, Fans, Blowers etc. required for critical
applications in Hydrocarbon Processing Industries and for Power Projects.
Business areas
The process pumps manufactured are required by hydrocarbon industries for a variety
of applications covering critical areas involving handling of process water,
petrochemicals, hazardous and toxic liquids at moderately high temperatures, as well
as for cryogenic applications. These pumps have major markets in refineries,
53
petrochemical industries, fertilizer industries as well as nuclear power plants. The
multistage pumps have applications mostly in power generating sector as well as
reverse osmosis process
54
2.7.1.6) KIRLOSKAR CHILLERS PVT. LTD. 1995: -Chillers
2.7.1.7) TOYOTA KIRLOSKAR MOTORS LTD. 1997: -
Ø High End Light Motor
Ø Vehicles (Innova & Corolla)
Toyota Kirloskar Auto Parts (TKAP) plans to increase production of manual
transmission parts to 2.3 lakh units next year and wipe out losses of around Rs 70 crore
in another two-three years.
The increase in production to 2.3 lakh units from the existing 1.7 lakh units will also
depend on the finalisation of the small car project of Toyota Kirloskar Motor. The small
car project is expected to be finalised in another six months.Another Rs 40 crore may
be needed for expanding the existing capacity, the official said.
TRANSMISSION PARTS
The transmission parts are manufactured at both TKAP as well as at Kirloskar Toyoda
Textile Machinery. Toyota has invested around Rs 400 crore in both the plants for
manufacturing the transmission parts. The total revenue of TKAP is around Rs 500
crore for 2005-06.
TKAP is a global resource for the International Motor Vehicle project, making and
supplying R type manual transmission to seven vehicle assembly plants of Toyota
across the world. It is also considered the first Indian auto transmission component
maker who will be a global source for a tier 1 component.

55
OTHER PRODUCTS
Apart from manufacturing manual transmission parts, TKAP also makes propeller
shafts and front and rear axles. Toyota Motor Corporation has a 64 per cent stake in the
joint venture while Toyota Industries Corporation has a 26 per cent stake. The rest is
with Kirloskar Systems.
The company would provide sales and service for a wide range of material handling
equipment produced at their Takaham plant in Japan. The joint venture expects 25 per
cent increase in revenues to around Rs 220 crores in 2006-07. The company expects to
sell between 800 units and 1,000 units of the newly launched forklifts by 2010.
2.7.1.8) TOYOTA GOSEI 1998:-Non-Metallic Components
2.7.1.9) DENSO KIRLOSKAR 1998:-Engine Radiators
2.7.1.10) TOYOTA KIRLOSKAR AUTO PARTS 2002: Metallic Auto
Components
2.7.1.11) SPP PUMPS LTD. 2003: KBL 97.5%, Sales Rs. 2180 M
Ø Centrifugal Pumps &
Ø Packaged Pumping Systems
2.7.1.12) KIRLOSKAR CORROCOAT PVT. LTD. 2006: JV KBL: 65%,
Sales Rs. 92 M
Ø Anti-Corrosion Coating Products
56
2.7.1.13) Aban Construction Pvt. Ltd. 2006: Sales Rs. 1092 M
Ø Civil Construction & Pipelines
Kirloskar Brothers Ltd. (KBL has acquired 100 % of the equity share capital of the
Chennai based Aban Constructions Private ltd. Aban Constructions Private Ltd. a part
of the well known Aban Group of companies, Chennai was set-up in 1969. It is mainly
into the business of oil and gas cross country pipe fines and civil construction projects
such as tunnels, bridges and roads, 'water and sewerage, and other industrial plants. The
present turnover of the company is about Rs 90 crores. The company caters to various
reputed customers such as IOCL, GAIL, SPCL, Port Trusts and State Electricity Boards
and so on. With this acquisition the company is poised to become Engineering,
Procurement and Construction Company with the opportunity to participate in the Oil
and Gas sector, therefore achieving its objective of synergy of operations along with
diversification.
57
2.7.2 EXPORT EARNINGS
In the year under review, there was a growth of 8% at Rs. 1,390 million in exports of
company. The company believes that the momentum in exports established by the
cumulated annual growth rate (CAGR) of 32% over last 3 years will continue. Growth
in sales by developing OEM customers was 88% in this year as compared to previous
year and will form a larger share of exports.
The sales through distributors in the traditional markets grew by 8% in this year as
compared to previous year. The auto component business recorded a growth of 40%
and increased its presence in the after market segment in Middle East Asia and Europe.
The Export Oriented Unit (EoU) with capacity to manufacture 12,000 generating sets
per year is being set up to cater to the growing sales.
The company has created has created a strategic business unit for exports to have
focused attention on important growth of market
4,432
4,500 3,884
4,000
3,500
3,000
2,500
2,000
1,052 1,275
1,500 1,046
1,000
500
2002 2003 2004 2005 2006
Group Exports
58
2.7.2.1 MARKET PRESENCE ACROSS SECTORS
59
2.7.3 TECHNOLOGY ABSORPTION, ADAPTATION AND

INNOVATION
(A) RESEARCH AND DEVELOPMENT (R&D)
Specific areas in which R&D carried out by the Company
Ø Development of engines for power generation to meet EURO-COM Stage II
emission norms.
Ø Finalized on specific sets of engines and Gensets working on Alternate fuels like
CNG and formally launched them.
Ø Development of small portable pump set for agricultural market is in advanced
stage of validation after product clinic.
Ø High horse power engine has completed the test bench evaluation and would be
ready to go to field trials shortly.
Ø Research project for preparedness to meet US 2014+ emission norms, on
development of a new Combustion technology (HCCI) through a joint
development project with Cambridge University.
Future Plans for Action
Ø Development and stabilize the R&D facilities for development of new materials
and processes.
Ø Product portfolio optimization through development of high power engines.
Ø In view of new norms in November 2007, update the emission status of present
products.
Ø Tailoring of engines to meet new markets.2

60
INNOVATIONS
LATEST PATENT
• A US patent has been awarded for
Siphon creation and breaking
arrangement designed by KBL for
Concrete volute and vertical turbine
pumps for Sardar Sarovar project.
This energy efficient siphon
arrangement provides:
Ø Reduction in installed power by
8.5 MW
Ø Energy saving of 34.96 million
units per annum
Ø Saving in electricity cost by
Rs.12.23 crores per annum
· First and only Indian Pump Company to launch FM approved, UL listed Fire
fighting pumps in India bringing world class safety norms in India
· Increasing business potential from building sector e.g. airports, ports, malls,
multiplexes, hotels, hospitals, …
• Small Vertical Turbine Pump Range introduced
61
2.8.1 IMPACT OF LPG ON THE CURRENT BUSINESS
AND FUTURE PROSPECTS

In the context of globalization of Indian economy Kirloskar Brother limited felt the
need for upgradation of technologies and capabilities for manufacturing compressors.
After negotiation with Copeland Corporation, U.S.A., it was decided to bring in the
state of the art technology in to a new joint venture company.
Kirloskar Copeland Limited, the joint venture company took over the compressors
division ( at Karad and Atit ) of Kirloskar Brothers Limited from 1st April 1993.The
formation of this joint venture company is a step towards the commitment to offer latest
and advanced technology product to the customer’s .It will be possible to offer cost
effective, environment friendly and energy efficient design to meet customer
requirement. Thus Kirloskar Copeland Limited will continue to retain its place as
market leader.
Copeland Corporation of U.S.A. is a subsidiary of Emerson Electric Company, U.S.A.
It is the largest compressor manufacturing company in the world and pioneers of the
world’s most advanced “Scroll” compressor technological innovations.
Kirloskar Brothers Limited a leading engineering company has been in the forefront of
Refrigeration and Air conditioning industry in India since last many years. Kirloskar
Brothers Limited (KBL) was started in 1888 and incorporated in 1920. KBL began its
activities with the manufacture of iron ploughs and chaff cutters and soon its products
created a revolution in agriculture implements and methods used in those days.
62
Kirloskar Brothers Limited identified changing needs and shifted its manufacturing
focus. Today, it is the largest manufacture of a variety of pumps, valves, CNC machine
Tools, and Hermetic Compressors and Agricultural implements in India. Kirloskar
Brothers Limited started production of Hermetic Compressors way back in 1966 at
Kirloskarvadi in technical collaboration with Tecumseh Products Company, U.S.A.
when it was decided to establish a separate division for Hermetic Compressors
production, about 16 acres of land was procured near Karad on Dhebewadi Road, one
km off the Pune-Bangalore National Highway. After the completion of the factory
building in 1971, the compressor manufacturing activity was shifted to Karad.
Sophisticated modern machinery, excellent engineering facilities, trained and highly
skilled manpower resources helped the division achieve and maintain a high standard of
quality, as well as adapted imported technology to Indian conditions.
After the formation of joint venture with Copeland Corporation, U.S.A., the state of the
art, ultra modern plant was established at Atit. The new manufacturing plant is focused
on state of the art products like CR6, CK3 and Semi hermetic.
KCL caters to various Original Equipment Manufactures (O.E.M.)engaged in
manufacture of Air-conditioning and Refrigeration appliances such as Refrigerators,
Deep Freezers, Water Coolers and Room Air-conditioners.
The product is well established in the market for quality and reliability. The product is
also certified by Bureau of Indian standards .In recognition of the performance of this
Division it has received National Productivity Awards. KCL has been exporting
products to various Countries with Air conditioning and Refrigeration Appliances.
63
2.8.2 FUTURE PROSPECT AND OUTLOOK

1 .Kirloskar brother has taken over the management of Kolhapur steel limited (TKSL)
ON 10TH SEPTEMBER 2007.
2. The company has acquired 100 % equity share capital of Gondwana Engineers
private limited for a total consideration of Rs 76.36 million. The company has executed
the necessary share purchase agreement to that effect at Pune. Gondwana Engineers
private limited (G.E.P.L) is the company started by M.r S.D Shangarbawar a technocrat
in the year 1982.
3. Kirloskar group of companies has now entered with joint venture with Toyota
motors. Toyota plans to increase its market share in the MUV and car markets
alongside increasing productivity. Toyota plans to increase 10 % per year in the future.
Toyota will also plan to continue working with component manufacturers to help and
guide them on quality, cost and delivery. Toyota plans to invest us$ 28.3 million to
increase production capacity from 45000 to 60000.
4.” Focus Africa “campaign:
(a) Identified and looking at Africa as future continent.
(b) The concept of Green revolution in Africa is introduced by Kirloskar brothers.
5. New opportunity – Nuclear power:
(a) KBL- one of the only three manufacturers of primary moderator circulation canned
motor pump over 200 kW.
(b) Indo-us nuclear treaty to open up huge opportunity for KBL.
(C) Bechtel association and recent order will be an added advantage.

64
6. Kirloskar is now going to launch world largest pumping scheme.
Scheme include –
-26 concrete volute pumps.
-22 vertical turbine pumps
- 4, 10000 lit/sec
- 4620 town and villages
- 5.4 lakh hectares under irrigation.
-5 pumping stations and 3 power stations.
-Drinking water to over 30 million people.
KBL conceived and implemented this scheme on Engineering, procurement and
construction basis.
65
( 2.9) MILESTONES
The Kirloskar Group enters the field of Post Harvest Machinery manufacture
1912
with the establishment of G.G. Dandekar Machine Works Ltd.
1946 Kirloskar Oil Engines Ltd. established.
1949 5 hp Peter type engine manufactured at KOEL
1954 1st 5 engines exported to Germany
1957 Manufacture of engine half bearings started at KOEL
Collaboration agreement between KOEL and MAN-Germany (40 to 300 hp

1960
engines)
1964 Poona Industrial Hotels Ltd. established.
G.G. Dandekar Machine Works Ltd. enters into technical collaboration with
1967 F.H. Schule GmbH, Germany for manufacture of modern rice milling
machinery.
Licence agreement between SEMT Pielstick of France and KOEL for the PA
1977
series of compact marine engines.
66
KOEL gets licence to manufacture engines up to 3000 hp in collaboration with

1979
SEMT Pielstick, France, KOEL introduces Aluminium Tin Bearings.
KOEL signs collaboration agreement with Deutz AG, for manufacturing air-
1989
cooled engines under technical licence.
1991 45 types of engine bearings and bushes specially developed and
exported to MIBA Glietlager AG, Austria by KOEL's Auto
Components Division.
1993 KOEL's Auto Components Division became the first Indian company
in the bearings industry to receive ISO 9001 certification.
Kirloskar Ferrous Industries Ltd. established. : Crankcase machining
1994 in line facility for Pielstick engines acquired by KOEL - largest in
India, KOEL manufactures the first PA series heavy fuel engines in
India - the first such series designed by SEMT Pielstick.
1996 R1040 series of water-cooled engines (15-125 hp) developed at
KOEL's Techcentre, KOEL celebrates 50 years of operations,
Kirloskar Middle-East established in Ajman, U.A.E.
1997 Kirloskar Filters Ltd. merged with KOEL in August. A new company
Kirloskar Knecht Filters Ltd. was formed in October. : Launch of
A17X half bearings. : Kirloskar Briggs & Stratton Power Equipment
Pvt. Ltd. established in collaboration with Briggs & Stratton, U.S.A.,

for the manufacture of petrol/kerosene engines, gensets and
pumpsets.
68
69
3.1 FUTURE PROSPECT AND OUTLOOK
1. Future Plans
As a part of kirloskar’s growth strategy, KBL is targeting markets in Europe, the USA,
Africa, and South East Asia. It has as a strong brand presence in the EU through various
tie-ups with leading suppliers. The company is planning to increase its focus on special
production.
Kirloskar Brothers Limited in the UK SPP Pumps Limited
SPP Pumps Limited UK is a subsidiary of KBL India. The company has been
manufacturing pumps for over 100 years in the UK, and it was acquired
by KBL for approximately EUR 10 million. It is among a the significant players in
the fire fighting pump packages, lowest life cycle cost series pumps of vertical
mixed flow type & horizontal split case type for water circulation, and the
contractors pumps.The company’s product range also includes water supply,
circulation and distribution, dewatering, drainage, and irrigation pump systems.
It employs approximately 120 personnel and generated revenues of
approximately EUR 44 million in 2005-06. SPP Pumps Ltd. has also
established a facility in Atlanta, USA for manufacturing fire-fighting pump
packages. It has an office in France, through which it supplies its products
across Europe.
Kirloskar Corrocoat Pvt. Limited
Kirloskar Corrocoat Pvt. Ltd. is a joint venture between KBL and Corrocoat Ltd. UK. It
specializes in manufacturing corrosion-resistant products and also undertakes turnkey
projects for various coating applications. The company provides high-quality products
and services to diverse industries, including power generation, oil and gas,
70
petrochemicals, marine, water and wastewater, general industry, etc. This association
will facilitate the targeting of the anti-corrosion market in a focused manner, thereby
enabling a gain of substantial presence in the EU market.
Kirloskar Brothers Ltd’s future plan with EU Countries
KBL has a strong presence in the centrifugal pump market in the EU.The company’s
products are projects such as government contracts, which will utilize the company’s
products. KBL has plans to further reduce the life-cycle cost of its pumps to become
more competitive in international markets.
The top management of Toyota Kirloskar Motor Private Limited met the Chief
Minister N.Dharam Singh and Industries Minister P.G.R.Sindhia here on Tuesday
fuelling speculation about the car makers plan to expand operations by setting up a
second manufacturing unit in the State with an additional investment of Rs.1,500
crores.
However, the delegation of the joint venture between Japan's largest carmaker, Toyota
Motor Corporation (99 per cent equity) and the Kirloskar Group (one per cent stake),
was tight-lipped about the meeting attended by company's Managing Director, Atsushi
Toyoshima, among others Able to produce good quality vehicles according to
production plan even with alterations included. No TMC support required for mass
production. According to plan able to implement division of labor in production
preparation able to produce good quality vehicles.
‘Focus Africa’ campaign:
(a) Identified and looking at Africa as future continent.
(b) The concept of Green revolution in Africa is introduced by Kirloskar brothers.

71
New opportunity – Nuclear power:
(a) KBL- one of the only three manufacturers of primary moderator circulation
canned motor pump over 200 kW.
(b) Indo-us nuclear treaty to open up huge opportunity for KBL.
(c) Bechtel association and recent order will be an added advantage.
Kirloskar is now going to launch world largest pumping scheme.
Scheme include –
-26 concrete volute pumps.
-22 vertical turbine pumps
- 4, 10000 lit/sec
- 4620 town and villages
- 5.4 lakh hectares under irrigation.
-5 pumping stations and 3 power stations.
-Drinking water to over 30 million people.
KBL conceived and implemented this scheme on Engineering, procurement and
construction basis.
2. Factors of future prospectus

(1) Cost
(2) Quantity
(3) Quality
(4) Global Competitiveness

(5) Safety the Environment
(6) Self-reliance 72
(7) Human resources Development
(8) Engineering Development
(9) Secure strong Capacities/ Capabilities to support Future growth
(10) Further growth of the Next generation
4.2 SUCCESSION PLANNING
Business succession planning involves planning for the smooth continuation and
success of a business which depends greatly on the availability of competent people. Be
it profit or non-profit organization, one of the concerns is there may be no successor to
drive it once the leader or key person leaves – either by choice or by circumstances.
Without succession planning, a business that has become successful can just as easily
fall. The business grows because there is a leader (probably the owner) with experience,
drive and ability. Without proper succession planning, the future success of the business
is left to chance once that leader is gone.
Under such a circumstance, if it succeeds at all, it is by default rather than planned.
That is not all. The passing of the baton from one generation to the next is often
clouded by the stakeholders’ differing views and agendas. Without proper planning, the
clashes of views and agendas can pull the business in several directions and this may
wreck an otherwise viable business.

73
4.2.1 Succession planning of Kirloskar group of companies
It was in the mid-1920s that Laxmanrao Kirloskar started manufacturing world class
diesel engines for the first time in India. Sticking largely to engineering related
products, it has grown over the next three generations. A majority of its revenue comes
from its core businesses of castings and forgings, pumps, engines, electric motors,
power equipment, and compressors. During 1956-80, the group was led by SL
Kirloskar. The group has been conservative in growth and has closely held ownership
within the family. In fact, the group turnover has come down from Rs.9.50 billion in
1999 to Rs.7.45 billion in 2004, with the net worth also depleting simultaneously
While the family is unified, and the six members of the fourth generation in the age
group of 41-49 are actively involved in business, they have not embarked on any
aggressive growth options. The group is led by the last member of the third generation,
who is now 54 years old. He has worked towards synergizing relationships among
family members and making them think as a group.
Although all the male members of the fourth generation are actively involved in
managing group companies, they have developed mechanisms for mutual consultation
regularly. Their exposure and experience with TQM methods from collaboration with
Toyota, Japan provided all of them with a common platform to compare and exchange
notes. Their long association with the companies and their non-family manages have
helped the group work as a single entity. While this has helped build smooth internal
synergies, it is found to be inadequate to build long term business competitiveness

75
4.1 STALWARTS OF KIRLOSKAR GROUP OF

COMPANIES
Ø Shantanurao Laxmanrao Kirloskar

Founder, Kirloskar group
Born - 28th May , 1903
Died - 24 April, 1994(aged 90)
Spouse -Yamutai Kirloskar
Children - Chandrakant Kirloskar & Srikant Kirloskar
76
Ø Sanjay Kirloskar : Chairman and Managing Director of Kirloskar group

Born – 22nd march, 1957
City - Nagpur, India
Salary - Rs.275 million
Children - Alok Kirloskar & Rama Kirloskar
Ø S.V. Paradkar
Chairman Kirloskar Ebara Pumps Limited
Ø M.R Atul .C. Kirloskar

Chairman and Managing Director
Kirloskar Oil and Engines Limited
Ø Gautam Kulkarni
Joint Managing Director
Kirloskar Oil and Engines Limited
Ø M.R H.R Mustikar

Managing Director
Kirloskar Pneumatic Company Limited
Ø M.R R.V .Gumaste

Managing Director
Kirloskar Ferrous Industries Limited
Ø M.R S, K. Sonapati
Joint manager
Ø Kirloskar Middle East FZE
77
4.2 CONCLUSION
The Kirloskar Group (consisting of Kirloskar Brothers, Kirloskar Oil Engines,

Kirloskar Ferrous Industries, Kirloskar Pneumatic Company, Kirloskar Ebara
Pumps Ltd., Aban Construction Company, SPP Pumps (UK), Gondwana
Engineers Ltd, and The Kolhapur Steels Ltd) is India's largest Engineering and
Construction Conglomerate with sales exceeding $2 Billion. The Kirloskar Group
today exports to over 70 countries and has a brand name to reckon with, especially
within India and over most of Africa, South East Asia and Eastern Europe. The
flagship & holding company, Kirloskar Brothers Limited established in 1888, is
India's largest maker of Pumps and Valves and also undertakes construction
projects through its subsidiary Aban Construction. It is headed by Mr. Sanjay
Kirloskar.
The Kirloskar group of companies was one of the earliest industrial groups which
made a mark in the engineering industry in India. The group produces pumps,
engines, compressors, lathes and electrical equipments like motors, transformers
and generators (it is the world’s largest gensets manufacturer). While Laxmanrao
Kirloskar established the group, his son S. L. Kirloskar played a major role in its
rapid growth.
S. L. Kirloskar was a man who transformed his vision into a promising and
thinking reality, of application of appropriate technology, customer satisfaction
and dauntless integrity. SLK was a global thinker who had the courage and the
confidence in his own country even in the pre-independence era. In 1974, in
cooperation with Deutz-Fahr of Germany, Kirloskar began manufacturing tractors.
They have since ceased tractor production.
78
In 1988, Rajiv Gandhi, the then Prime Minister of India released a

commemorative postage stamp marking the Kirloskar Group's 1 0 0 t h
anniversary.
They are made up of 8 major group companies, who are players in major sectors
like manufacturing, oil and gas, power, construction and mining, agriculture,
industry and transport each led by the best engineering and managerial talent in
India. In addition to engineering, they also have interests in civic utility systems
and in Information Technology and communication. These 8 companies form the
core of Kirloskar group. Each company is a renowned name in its own area of
operation and is respected world wide for its services and products. For them
manufacturing is just not limited to our factory premises and our products. It is
also about world class service.
Kirloskar is the company which lives up its corporate social responsibility. When
the disaster of Tsunami occurs in country then on behalf of the Kirloskar group of
companies, Sanjay C Kirloskar handed over a cheque of Rs. 6.8 Million,
contributing to the Prime Minister’s Relief fund, as aid to the tsunami victims to
Dr. Manmohan Singh, honorable Prime Minister of India.
Recently, KBL and Vikas Charitable Trust jointly organized an Environmental

Awareness Programme for high school students of Andhali, Palus,
Ramanandnagar, Kundal and Takari. Issues like water harvesting, tree plantation,
cleanliness, conservation of natural resources were addressed by S Y Aphale, D M
Kulkarni and R M Kamat. The programme received an enthusiastic response from
teachers as well as students.
In the last couple of years, Kirloskar group has worked relentlessly to increase
exports in sustainable way and also de-risk them by concentrating on sales to
OEMs and institutions. Once such Breakthroughs are achieved; the revenues are
79
stable year after year. Towards this objective, Kirloskar has positioned itself as
cost competitive producer of high quality products and is constantly on look out to
increase exports. A significant step in that direction was announced today by
Kirloskar –acquisition of certain assets and businesses of SPP Pumps Ltd. in
United Kingdom through a joint venture company which would be henceforth
called SPP Pumps Ltd. SPP Pumps Ltd. was a part of Thyssen Bornemiscza group
in UK so it can be assumed that Kirloskar is the company which has great future
because of its efficient management team and great vision.
CURRENT HAPPENINGS AT KIRLOSKAR

Business restructuring plan does not boost Kirloskar Brothers
Kirloskar Brothers declined 1.77% to Rs 222.50 at 15:07 IST on BSE even as the
company said it is reorganising its business into nine divisions to achieve a
revenue target of $1 billion by 2011.
Meanwhile, the BSE Sensex was down 133.26 points, or 0.83%, to 15,929.92, on
weak cues from global markets. US stocks slid on Monday, 2 June 2008, on
renewed fears the credit crunch has yet to run its course after Standard & Poor's
downgraded debt ratings of three big securities companies and Wachovia, the
fourth-largest US bank, ousted its chief executive.
On BSE, 4,275 shares were traded in the counter. The scrip had an average daily
volume of 27,386 shares in the past one quarter.
The stock hit a high of Rs 225 and a low of Rs 215 so far during the day. The
stock had a 52-week high of Rs 527 on 3 October 2007 and the stock hit a 52-
week low of Rs 206.40 on 24 March 2008.
The mid-cap company had underperformed the market over the past one month till
2 June 2008, declining 18.01% compared to the Sensex’s decline of 8.73%. It had
also underperformed the market in the past one quarter, declining 29.87%
compared to Sensex’s decline of 1.69%.
The company’s current equity is Rs 21.15 crore. Face value per share is Rs 2.
80
The current price of Rs 222.50 discounts its Q4 March 2008 annualised EPS of Rs
19.92, by a PE multiple of 11.17.
The business units will deal in products, services and systems and will include
irrigation and rural electrification, water resource management and oil and gas
divisions. The reorganisation is effective from the first week of June 2008, the
company said.
In May 2008, Kirloskar Brother received an order worth Rs 933.76 crore from the
Andhra Pradesh state government's Irrigation & CAD Department for building a
pump house.
On 15 April 2008, the company received a letter of intent for an order worth Rs
166.77 crore from Damodar Valley Corporation - Kolkata in respect of Koderma
thermal power project.
On 1 April 2008, the company received a letter of intent for an order worth Rs
338.92 crore from the Government of Andhra Pradesh, Irrigation & CAD
Department in respect of Rajiv Sagar Lift Irrigation project.
Kirloskar Brothers’ net profit rose 43.4% to Rs 52.66 crore on 26.9% increase in
net sales to Rs 569.01 crore in Q4 March 2008 over Q4 March 2007.
The company is engaged in manufacturing and selling pumps and compressors.

Products of the group include power driven pumps, valves, anti corrosion
products, electric motors, spares and others. The group operates in three segments,
namely, pump, compressors and others.
81

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KIRLOSKAR GROUP OF COMPANIES

Under the guidance of

Mr. Jai Singh

INDIAN INSTITUTE OF e-BUSINESS MANAGEMENT,

INDIAN BUISNESS HOUSE- KIRLOSKAR GROUP

They are a 1.20 billion US Dollars engineering conglomerate driving critical

Their multi-unit, multi-product, multi-location conglomerate is built on the plinths of

THEY ARE KIRLOSKAR GROUP OF COMPANIES

1. ORIGIN AND FOUNDER

The Kirloskar story starts with Laxmanrao Kirloskar, the

A highlight of the early history of the group is Kirloskarvadi,

Ramuanna, Laxmanrao's brother, planned and administered the township, Shamburao

2. HISTORY, VISION ,MISSION

2.1. THE HISTORY OF KIRLOSKAR

Where are they headed?

How do they plan to reach there?

1. To provide quality services while following sound business practices.

3. To evolve as good corporate citizens by implementing highest Degree of

transparency, integrity, accountability and corporate Social responsibility.

regulations applicable to the Company and fulfilling responsibilities towards

6. To acquire appropriate up to date knowledge of requirements of Compliances under

various applicable statues.

and reporting the status of compliances under various laws.

professional integrity, honesty and ethical conduct in respect of all transactions.

9. To avoid scrupulously ‘conflicts of interest’ with the Company.

the use of the Company’s property (including intellectual property), information or

13. To maintain the confidentiality of sensitive information of the Company or that of

when disclosure unauthorized or legally mandated. The confidential information

harmful to the Company or companies in the Kirloskar group, if disclosed.

14. Not to use of confidential information for own advantage or profit.

15. To protect Company’s assets and properties, including

Intellectual property and ensure its efficient use.

18. To disclose necessary information to the Company, at regular intervals in respect of

19. To promote ethical and responsible decision making.

3. CORE BUISNESSES AND COMPANIES

· Kirloskar Brothers Limited. (KBL)

· Kirloskar Ebara Pumps Limited. (KEPL)

· Kirloskar Institute of Advanced Management Studies (KIAMS)

4.BUSINESS PHILOSOPHY BUSINESS POLICIES

4.1. BUSINESS PHILOSOPHY

4.1.1 STRATEGIC DIRECTION OF KIRLOSKAR

Attain cost leadership through effective development of measures such as

Ø Rationalization of supplier base and getting them committed.

Ø Increased inventory turns.

Ø Rev up operational efficiencies.

Ø Enhance man-machine utilization (flexible set ups, multi-skiling QC, kaizens).

Ø Instill respect for money across stake-holder

4.1.2 THEIR THRUST AREAS.

Ø Reduce number of suppliers.

Ø Reduce material inventory.

Ø Reduce working capital.

Ø Reduce shop rejection.

Ø Reduce tool cost.

Ø Reduce machine maintenance cost.

Ø Improve productivity- man, machine, and money.

4.2. BUSINESS POLICIES

It’s happening at Kirloskar. We’ll continue to make it happen

The Kirloskar Way

minimal cost while keeping low inventory and receivables

the technology and resources.

There is no product or process for which cost cannot be reduced further.