sustainabilty report

8/12/2019 Sustainabilty Report

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Sustainability

S u s t a i n a b i l i t y

R e p o r t

2 0 0 9 - 1 0

KIRLOSKAR BROTHERS LIMITED

S

ustainab

ility

Sustainability


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CMDsMessageKirloskar Brothers Limited, a pioneer in the field ofmanufacture of engineering goods, has specialized inthe production of fluid handling equipment to vitalsectors of our country and the world.

We have been pursuing many initiatives for theconservation of natural resources which has been the

focus area for not only cost reduction and maintainingour competitive edge but also to ensure that ourbusiness is sustainable. We would like to plan forbalanced growth in a manner that when we achieveour economic targets, we also support the society andthe environment.

Sustainability Reporting is demonstration of ourcommitment to protect the environment and contributeto society as a responsible corporate citizen.

We will measure our performance for sustainability

based on globally accepted standards and find ways toreduce the adverse impact on the environment on acontinual basis.

World over, companies have become more consciousof their responsibility towards society and theenvironment and there are various reportingframeworks available. We will continue to incorporaterelevant aspects from global standards and worktowards assessment of the carbon footprint of ouroperations and activities. This will become thefoundation to find ways to reduce our impact on the

environment on a continual basis.Our world faces a challenge related to climate changeand every organization will need to contribute anddefine the norms for sustainable business. While thechallenge is great, we are confident that this will be asmall step towards achieving the final goal of doingbusiness in a socially and environmentally responsibleway.

Sanjay C KirloskarChairman and Managing Director

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Description of Key Impacts, Risks andOpportunities:

Kirloskar Brothers Limited has been growingconsistently and it has achieved its targeted salesrevenue for the year 2009-10 with a growth rate ofover 10% for the year.

The company celebrated the Centenary Year of itsestablishment at Kirloskarvadi in 2010. To match theoccasion a dividend of 275% was declared for theyear.

Profitability has always been under pressure due tohigher material costs than targeted. This was a resultdue to adverse sales mix as compared to projected

sales mix.Return on capital ( ROCE) achieved was 19.2% ascompared to target of 21.2%.

We have identified a number of risks over the periodwhich are of critical importance to our company. Risksare based on their impact on the company's businessand likelihood of their occurance. The riskmanagement committee formed for the purpose takesstock of these anticipated risks and plans for necessary

mitigation measures for identified risks. The companyhas successfully mitigated a number of risks with thehelp of the risk control system.

The company has identified following growth drivers:

Rising cost of energy will lead to growth of energyefficient pumping solutions

Scarcity of drinking water will lead to increasingdemand for better water and waste watermanagement technologies and solutions.

Desalination and various filtration technologies arewitnessing huge demand globally

Opportunity of irrigation projects in developingcountries like Africa, Latin America and Asia.

The company has organized itself in 9 customer centricsectors and this will provide growth on a larger scalefor each of the sectors.

The manufacturing plants will focus on innovation andcost leadership through operational excellence. Theplants will also focus on expanding productioncapacities to meet market requirements and gainhigher market share.

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Name of the Organization:

Primary Brands, Products and Services:

Kirloskar Brothers Limited is one of the worlds leadingmanufacturers of Pumps and Valves for water andother fluids, Hydraulic Turbines and Fire Fightingpumps. The company also undertakes turnkeyprojects.

Kirloskar Brothers Limited manufactures centrifugalpumps with flow rates ranging from 2 cubic meters perhour to 120 000 cubic meters per hour and deliveryhead from 24 meters to 850 meters. These pumps aresingle stage or multi stage and find applications indomestic, agriculture, industry, irrigation and utilities.

Kirloskar Brothers Limited also manufactures valvesfrom size ranging from diameters of 100 mm to 4000mm.

The company manufactures hydraulic turbines for thehydro electric power generation.

Kirloskar Brothers Limited takes up projects as an EPCcontractor for various sectors like irrigation, watersupply, power and oil and gas.

Kirloskar Brothers Limited has a subsidiary in the UKcalled SPP Pumps Limited which specializes inmanufacture of fire-fighting pumps and systems.

Kirloskar Corrocoat Private Limited is a joint venturebetween Kirloskar Brothers Limited and Corrocoat ofUK. It manufactures corrosion resistant coatings forvarious mechanical components exposed to water andcorrosive environments.

subsidiary which specializes in various civilconstruction projects like roads, tunnels, oil and gaspipe lines etc.

Gondwana Engineers Limited is a subsidiary whichspecializes in providing solutions for drinking water

supply and waste water (domestic sewage) treatmenton EPC basis to State and Central Governmentagencies.

The Kolhapur Steel Limited is a subsidiary whichmanufactures steel castings up to 25 tons.

Kirloskar Construction and Engineers Limited is a

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Organizational Profile

Our manufacturing plants

Yamuna LEED Platinum rated Corporate Office

Kirloskarvadi

Dewas

Shirwal

Kondhapuri


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Business Areas and Operational Structure:

Nature of Ownership and Legal form:

Markets Served:

Kirloskar Brothers Limited has 4 manufacturing plantsin India which manufacture pumps, turbines andvalves. These are located at Kirloskarvadi,Kondhapuri, Shirwal in Maharashtra and Dewas inMadhya Pradesh

It has following subsidiaries and Joint ventures whichadd value and facilitate its diverse range of activities:

Kirloskar Ebara Pumps LimitedThe Kolhapur Steel LimitedKirloskar Corrocoat LimitedKirloskar Construction Engineers LimitedGondwana Engineers Limited

SPP Pumps Limited

Kirloskar Brothers Limited is a public limited companylisted on 2 stock exchanges, Bombay Stock Exchangeand National Stock Exchange of India Limited.

Kirloskar Brothers Limited has major operations inIndia with export to more than 90 countries. This reportgives details of the Indian operations.

The following key elements provide the picture of scale

of the organization:

Element Size/Number/Value

Number of Permanent Employees 2359 [ Staff + Workmen]Net Sales FY2009-2010 Rs MillionVolume of Products Sold

20178Power Driven Pumps: 279,414 NosValves: 28,892 NosTurbines: 6 Nos.Electric Motors: 24,123 NosAlloy Iron Castingsincluding Steel Castings including castiron castings: 875 Metric Tons

Total Net Current Assets Rs. 5942.1 MillionGross Debt Rs. 3572.4 MillionShare Capital Rs. 159 Million * refer note belowLargest Shareholder Promoters

stas of 31 March 2010

*The Scheme of Arrangement between KBL and KirloskarBrothers Investments Ltd. (KBIL) and their respectiveshareholders, has come into effect on March 2, 2010, upongetting all statutory approvals. Pursuant to the said Scheme,certain investments in shares held by KBL, stands transferred

and vested in KBIL without any further act or deed and bedeemed to have been transferred to and vested in KBIL. TheCompany has issued and allotted shares, after reduction of

capital to the shareholders pursuant to the Scheme ofArrangement. The trading permission for Company'sshareshas been received.

During the last 12 months there has not been anysignificant change in the size, structure or ownership.

The corporate office is located at following address:

Kirloskar Brothers LimitedYamuna Survey No. 98(3-7)Baner, Pune 411 045 ( Maharashtra) INDIA

The company has following overseas operations :

Kirloskar Brothers International BV

Kirloskar Brothers Europe BV

Kirloskar Brothers (Thailand) Limited

Kirloskar Brothers Egypt

Following Business Related, Process Related andIndividual awards have been received by KirloskarBrothers Limited:

1. CII- EXIM Bank recognition in the category ofStrong Commitment to Excel for 2009.

2. CII TCM Division has given Level 4- rating toDewas Plant of Kirloskar Brothers Limited for TotalCost Maturity Model

3. Golden Peacock Award for Corporate SocialResponsibility for the year 2010

4. Best Pavillion Award in Power India Exhibition2009 at Bandra Kurla Complex, Mumbai, during24.11.09 to 26.11.09 in 54 square meterscategory.

5. LEED Platinum Rating for Green Building toYamuna' awarded by Indian Green BuildingCouncil.

6. CII Energy Conservation Award for KirloskarvadiPlant

7. Golden Peacock award for Innovation

Significant Changes during the reportingperiod regarding size, structure or ownership:

Location of Organizations Headquarters:

Number of countries in which organizationoperates with major operations:

Awards received in the reporting period:

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Reporting Period for information provided:

Date of most recent previous report:

Reporting Cycle

Contact points for questions regarding thereport or its contents:

Process of defining report content

The information provided in this report is for thefinancial year 2009-2010.

This is the first report in as per the GRI G3 guidelines.

The reporting cycle for this GRI report is Annual.

Mr Pradip KhistiAssociate Vice PresidentCorporate Quality AssuranceKirloskar Brothers LimitedYamuna, Survey No. 98(3-7)Baner , Pune 411045e-mail : [email protected]: (020) 27214255

Mr N M IngleGeneral ManagerBusiness ExcellenceKirloskar Brothers LimitedYamuna, Survey No. 98(3-7)Baner , Pune 411045e-mail: [email protected]: (020) 27214259

This Sustainability Report is for the period April 2009 toMarch 2010, which is the financial year in India. Weare committed to publish such report every year. It maybe integrated with the annual financial report fromnext year. This report includes both core and additionalperformance indicators of Global Reporting InitiativeGeneration 3( GRI- G3) guidelines, as applicable tothe Company. The report focuses on strategy of thecompany in relation to its Economic, Environmentaland Social responsibility.

The Company intends to contribute to society through

issues of Health and Education addressed inMillennium Development Goals (MDGs) of the UnitedNations.

Report Parameters

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Boundary of the report

Specific limitations on the scope or boundary ofthe report

Basis for reporting on joint ventures,subsidiaries, leased facilities, outsourcedoperations, and other entities that cansignificantly affect comparability from period toperiod and/or between organizations

Data measurement techniques and the basesof calculations

This report includes information related to KirloskarBrothers Limited which has 4 manufacturing plants anda Corporate Office in Pune. In the coming years we willextend the scope of reporting on the importantindicators for regional offices and also extend this tomajor subcontractors and suppliers where companymay have significant control and influence.

The report here does not cover all the indicators of theGRI G3 guidelines as tracking of some of theindicators is in progress and will be covered in

subsequent reports.

The information reported here is sourced from theAnnual Report of Kirloskar Brothers Limited for theyear 2009-2010 ending March 2010

Kirloskar Brothers Limited has implemented SAP

enterprise resource management system. Variousmodules related to Finance, Production Planning,Materials Management, Sales and distribution and

Quality Management are implemented. Most of thedata is retrieved from the SAP system.

The financial data has been sourced from the AnnualReport. The financial processes and qualitymanagement processes related to ISO 9000,ISO14000, ISO18000 are audited by the internal aswell as external auditors.

The table is covered at the end of this report.

This report is not subjected to external assurance.

Explanation of the effect of any re-statementsof information provided in earlier reports

Significant changes from previous reportingperiods in the scope, boundary, ormeasurement methods applied in the report

Table identifying the location of the StandardDisclosures in the report GRI Index Assurance

External assurance statement

This is not applicable as this is the first report.

This is not applicable as this is the first report.

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Name of the Committee Role

Audit Committee The Audit Committee functions according to its terms of references

Containing its powers, scope and role in accordance with the

provisions of Companies Act, 1956, listing requirements

applicable to the Company. The same is reviewed from time

to time. The full terms of references are available on

Companys website under Annual Report.

RemunerationCommittee

Review and decide the remuneration of the Managing Director

and the Executive Directors. Suggested disclosures as per

clause 49 of the Listing agreement are made in Annual Report.

Investors GrievanceCommittee

Oversee the redressal of investors complaints pertaining to

share transfers, non-receipt of annual reports, dividend payments,

issue of duplicate certificates, transmission (with and without

legal representation) of shares and other miscellaneous

complaints. The status of complaints and their redressal is

disclosed in the Annual Report.

Governance Structure including responsibilityfor sustainability

Number of members of the highest governancebody that are independent and/or non-

executive members

The terms of reference of the audit and financecommittee have been provided in the report onCorporate Governance Appearing in the AnnualReport 2009-10.

The audit committee is constituted with 4 independentdirectors and 1 non-executive director. Theremuneration committee is constituted with 3independent directors and 1 non-executive director.The shareholders committee is constituted with 2independent directors and 1 executive director.

The respective committees independently function inthe area assigned to them.

There are 7 independent and non-executive memberson the Board of Directors of the company.

Governance:

Commitments andEngagement

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Mechanisms for shareholders and employeesto provide recommendations or direction to thehighest governance body

Shareholders / Investors / Stakeholders

A monthly report on shareholders complaints andresponses thereon, is prepared by the secretarialdepartment which is then placed before Investors'Grievance Committee meeting.

Investors' Grievance Committee reviews investorgrievance redressal procedure and provides guidanceon protection of the interests of the investors.

On recommendations of the Investors' GrievanceCommittee, the Company has taken various investors

friendly initiatives like sending nominations forms,arranging factory visits, etc. Critical feedback,complaints and suggestions received from investorsare considered appropriately and addressed. Aquarterly report on shareholders complaints is placedat Board meeting.

The Company has whistle-blower and prevention ofsexual harassment at work policies for all theemployees and stakeholders in place. Awareness isbeing created amongst all the concerned byworkshops held across all the places of business of the

Company.Information is available to the shareholders through

Organisation Sturcture

CHAIRMAN & MANAGING DIRECTOR

WHOLE TIME DIRECTORCORPORATE

FINANCE

CORP.FUNCTIONS

WHOLE TIME DIRECTOR

SECTORS

GLOBAL

SOURCING

R&D

QUALITY

ASSURANCEIRRIGATION

POWER

WATER

RESOURCE

MANAGEMENT

CORP.FUNCTIONSSECTORS MANUFACTURING

INFORMATION

CENTER

GLOBAL

MARKETING

&Strategy

INSTITUTIONAL

INTERNATIONAL

BUSINESS

AFTER SALES

& SERVICE

DISTRIBUTION

KONDHAPURI

(VALVES)

DEWAS &

SHIRVAL

KIRLOSKARVADI

SECRETARIAL &

LEGAL

Corp. Human

Resource

MARINE &

OIL & GAS

INDUSTRY

BUILDING &

CONSTRUCTION

Annual Reports and half-yearly communications,besides release of unaudited quarterly financialstatements, under intimation to Stock Exchanges. An

analyst meeting is arranged every quarter to discussthe quarterly financial results. This information is alsoavailable on the Company's website. A businessoverview which is a part of the Directors Reportunder Management Discussions & Analysis (MDA),reviews Indian & global markets with their impact onthe company business. MDA also includes sections onthe Strategy and Policy, International Business andStrategy, Sustainability and Growth Initiative, Risks andConcerns, Operating and Sectoral Performance,Research and Development activities, Financial

performance, Human Resource Management,Corporate Social Responsibility and Internal ControlSystems.

Channel partners/Suppliers:

A Supplier Relationship Management programme andDealer Management System are in place and theManagement Committee reviews the programmefrom time to time. The key indicators of review aresupplier coverage and the efficiency of transactionswith the Company.

The Company also organizes vendor meets wheresuppliers can touch base with senior management andshare their thoughts and inputs.

Corp. Internal

Audit

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Employees

The Management Committee reviews the employees'issues on a regular basis. One to one feedback,

employee satisfaction, employee growth plan andorganization culture are discussed in these meetings.

The Board is also kept informed of senior level changesin management, status on signing of Union wageagreements, remuneration of senior executives, etc.

The Company is also planning to implement acomprehensive Customer Relationship managementprogram which is being reviewed by the ManagementCommittee. This program ensures that the Customers

are treated in a fair manner and their needs are alsocaptured and responded to through this programme.

The performances of the Whole-time Directors areevaluated / reviewed by the Remuneration Committee.The Company pays remuneration by way of salary,perquisites and allowances (fixed component),

incentive remuneration and commission. TheCompany has granted options under ESOS to all itsDirectors. Approval of the shareholders is obtained forpayment of remuneration to the Executive andcommission to Non-Executive Directors and adequatedisclosures on terms of appointment, tenure andremuneration are included in the Explanatory Notes tothe Notice of the General Meeting. The Report onCorporate Governance in the Annual Report containsdetails of the remuneration drawn by the Whole-timeDirectors. Remuneration by way of commission paid tothe Non Executive Directors is decided by the Board ofDirectors and distributed to them based on theirattendance and contribution at the Board andCommittee meetings. Approval of the shareholders istaken for payment of commission to Non-ExecutiveDirectors which is within the limits prescribed under theCompanies Act, 1956. Appropriate disclosures aremade in the notice of the General Meetings. The

Annual Report also contains details of theremuneration paid to the Directors - both Executiveand Non-Executive Directors.

To ensure that no conflict of interests arise among thehighest governing body, transparency in operations

Customers:

Linkage between compensation for membersof the highest governance body, seniormanagers, and executives, and theorganisation's performance (including socialand environmental performance)

Processes in place for the highest governancebody to ensure conflicts of interest are avoided

and disclosure policies for governance ismaintained.Proper and timely disclosures are made to publicthrough stock exchanges and circulation in news

papers, regarding disclosure of price sensitiveinformation. Every year the Board members and seniormanagement personnel provide declaration on theircompliance with the Code of Conduct.

Directors are selected based on the following criteria:

Qualification and Expertise in the field

Business experience and achievements

Ability to bring in the external perspective

Being a global player, Kirloskar Brothers Limited has itsVision, Mission and Value statements in place.Workshops at various levels to create awarenessamongst the employees are being conducted for corevalues. Further it has ensured that its corporategovernance practices are compatible with the best in

the Country.

Kirloskar Brothers Limited has adopted Ravi Kirloskar

Process for determining the qualifications andexpertise of the members of the highestgove rnance body f o r gu id ing theorganisation's strategy on economic,environmental, and social topics

Mission statement, company values and codesof conduct

The Mission, Vision and Values of Kirloskar BrothersLimited are given below:

MissionKirloskar Brothers Limited shall be knownglobally as a reliable, innovative and costeffective solution provider in Hydraulic Machines& Systems and in Water Business

VisionKirloskar Brothers Limited shall be amongst the

first five pump companies in the world by the year2015 and become the preferred choice ofCustomers as well as Employees.

Values:- Developing and Working with Mutual Trust- Building and nurturing Teamwork- Assessing and Enhanc ing Employee

Satisfaction Level- Giving the Best to Customer and giving Value

for the Money- Enhancing Relation with Stakeholders

Maintaining Fairness in Dealing with Customersand Suppliers

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Quality Prize on the basis of the CII-EXIM Bank awardmodel for Business Excellence as a means for drivingexcellence. In order to track process on long-term

strategic goals, a Balanced Score Card methodologyis used. This enables the Company to go beyondfinancial performance to incorporate considerationsof environment and society.

There is a structured process for risk assessment andrisk mitigation. A committee consisting of seniorleaders is constituted to identify the risks for business.

All the officers i.e. general manager and above areinvolved in the assessment of risk and its likely impacton the business. This committee periodically reviewsrisks and actions are planned and implemented tominimize them. The Audit Committee and the Boardtakes review of the total process of risk management inthe organization. The Audit Committee also reviewsthe adequacy of internal control systems with theManagement, External and Internal Auditors.Management then implements actions to mitigate

residual risks. The Management is accountable forintegration of risk management practices into day today activities. The risk management and internalcontrols framework adopted by the Company providesthe Board a reasonable assurance on the effectivenessand efficiency of the Company's operations, thesafeguarding of the Company's assets and theCompany's compliance with laws and regulations.

The organisation has adopted the Balanced Scorecardconcept and a Performance Appraisal System which isfairly transparent and formal procedure for decidingdirector, senior and middle managementremuneration.

The company has formed a Risk ManagementCommittee to identify risks at the company level. Risksare propritized and risk owners are assigned the

actions to be taken to mitigate the risks and reduce theimpact and likelihood of these risks.

The company has implemented a review of projects for

Procedures of the highest governance body foroverseeing the organisation's identificationand management of economic, environmental,and social performance, including relevantrisks and opportunities

Processes for evaluating the highestgovernance body's own performance,particularly with respect to economic,

environmental, and social performance

Implementation of the precautionary principle

significant concerns related to cost, quality or time andthese are addressed at the highest level of themanagement.

The Corporate Research and Developmentdepartment along with product engineering, developnew products based on customer expectations,performance of existing products and market analysis.Each business sector has made new productdevelopment plans and the contribution of newproducts as a % of sales stands at 20%.

Kirloskar Brothers Limited intends signing the UnitedNations Global Compact. Through this voluntaryinitiative, the Company commits itself to the tenprinciples that range from Human Rights protection,Labour Standards, Environmental Protection and Anti-Corruption.

Kirloskar Brothers Limited is a member of leadingindustry associations like CII (Conference of IndianIndustries), FICCI (Federation of Indian Chambers ofCommerce and Industries) and ASSOCHAM

(Association of Chambers of Commerce of India).

Kirloskar Brothers Limited has signed following :

CII Code of Affirmative Action for theunderprivileged class.

CII Code for Ecologically SustainableBusiness Growth

CII - Head Africa CommitteeMCCIA - Executive Committee

Kirloskar Brothers Limited's various stakeholders arelisted below:

Shareholders

Ex terna l l y deve loped economic ,environmental, and social charters, principles,or other initiatives to which the organisationsubscribes or endorses

Memberships in associat ions and/or

national/international advocacy organizations;

List of stakeholder groups engaged by theorganization

Examples of stakeholder groups are:

Communities;

Civil society;

Customers;

Shareholders and providers of capital;

Suppliers; and

Employees, other workers, and their tradeunions.

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Stakeholder Stakeholder Engagement Processes

Shareholders Annual General Body Meet ing, One-to- one meet ings.

Customers Surveys. Focus Groups, One-to-one meetings.

Suppliers and vendors Surveys. Focus Groups. Workplace assessments. One-to-one

meetings.

Employees Surveys. Focus Groups. Workplace assessments. One-to-one

meetings. On-line feedback and discussion

Families of Employees

Trade Unions Workplace assessments . One-to-one meetings.

Other Workmen One - t o -one meetings.

Representatives of

Society/ NGOs

One - t o -one meetings.

Financial Institutions

and Bankers


Government

Bodies/Local Bodies


Media One - to - one meetings.

Customers

Suppliers and vendors

Employees

Families of employees Trade Unions

Other Workmen

Representatives of Society and socialorganizations/NGOs

Government Bodies/ Local bodies

Financial Institutions/ Bankers

In identifying the stakeholders for this report we haveconsidered factors of Materiality Analysis and theextent and interaction intensity.

Media

Citizens of countries where it has operations

Basis for identification and selection ofstakeholders

Approaches to stakeholder engagement,including frequency of engagement by typeand by stakeholder groupStatements on key concerns raised bystakeholders and how organization hasresponded to those key topics and concerns,including through its reporting.

The company has appointed a professional agency tomanage the shareholder correspondence. Company

regularly monitors the performance of the said agency.Company has provided draft formats of frequentlyused documents on its website for shareholders. Thecompany has one designated e-mail address forredressal of shareholder grievances. The number ofgrievances received and replied by the company arepublished in the newspaper every quarter withfinancial results.

The Company conducts customer perception surveys,customer meets to understand their needs and

concerns. Similarly employee surveys and regularfeedbacks help understand their expectations andconcerns. Specific action plans are implemented toaddress these concerns.

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Net Fixed Assets 2927

Investments 1902

Net Current Assets 5942

Intangible Assets 14

Total Assets ( Net) 10786

Loans 3572

Net Worth 7133

Share Capital 159

Reserve 6905 Employee Stock Options Outstanding 69

Summarized Balance Sheet:Rs. In Million

Direct Economic Value Generated

The Details of the revenue and its distribution ispresented in pie-chart below:

Economic Performance

The consolidated financial statements are given indetail in the Annual Report 2009.

For the financial year ended on March 2010, thecompany's subsidiaries and associated companieshave improved the sales from Rs 24257 Million inFinancial year 2009 to Rs 26589 Million in thefinancial year 2010. This is 9.6% growth over previousyear. The profits after tax have also increased from Rs

833 Million in financial year 2008-09 to Rs 1132Million in financial year 2009-10. The profitability hasimproved from 3.43 % to 4.25% on aggregate basis.

2445,12%

14987,74%

Interest

Dividend

Depreciation

Reserve

Employees

Operation & Other Expenses

Taxes and Duties

Materials

554,3%

335,2%500,2% 265,1%

300,2%895,4%

All Values Rs. In Million and %

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Sales 20178

Other income 479Expenditure

Materials 14986

Employee Cost 895

Operating and other expenses 2448

Depreciation 264

Total Expenditure 18930

Profit before tax 1730

Profit after tax 1175

Balance brought forward from previous year 530

Appropriations

Proposed dividend 436

Additional tax on diviedend 64

General Reserve 300

Surplus carried to Balance Sheet 905

Summarized Profit and Loss Account:

Rs in Million

Financial implications and other risks andopportunities for the organisation's activitiesdue to climate change

Coverage of the organisation's definedbenefit plan obligations

Significant financial assistance received fromthe government

Range of ratios of standard entry level wagecompared to local minimum wage at significant

locations of operation

Procedure for local hiring

Availability of power is limited which will impact theuse of pumps.

Scarcity of water and increasing requirement ofdrinking water will provide opportunities for watertreatment plants.

Demand for energy efficient products like 5 starrated pumps will increase.

The company has received no financial assistancefrom the government during the reporting period.

In most of the cases the wages to permanent workmenare 2 times to 2.5 times of the prescribed minimum.This is to compensate for the skill and the tenure ofservice.

Major areas of operations in India lie in Kirloskarvadi,Kondhapuri and Shirwal in Maharashtra and Dewasin Madhya Pradesh. Our survey of the data indicatesthat more than 70% of our employees belong to localareas. While there is no documented policy for localhiring, in order to ensure longer retention, candidatesbelonging to local area are welcome to join theorganization subject to their meeting job requirements.

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Hyderabad water supply pump house

Chennai metro water supply pump house

Panjarpol (Mumbai) water supply pump house withsound proof enclosures


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Development and impact of infrastructureinvestments and services provided primarily forpublic benefit through commercial, in kind, or

pro bono engagement

Indirect economic impacts, including extent ofimpacts

Infrastructure related to Bank ATM, Post Office,School, Hospital, Social Club, Sports facility areprovided to public at Kirloskarvadi.

Financial assistance for creating infrastructe at schoolsand colleges near Kirloskarvadi,

Impact of energy efficient products : the Companiesenergy efficient products and services lead to

significant economic savings for users.In various sectors our products have generated indirect employment for many people.

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LLC (Lowest Life Cycle Cost) Pumps: A KBL

Strategy for sustainabilityThe initial capital costs for a pumping installation are a

fraction of the whole life cost. The cost of Energy,

unplanned downtime resulting in loss of productivity

and lower life expectancy of the consumable parts

such as seals and bearings can account for as much as

80% of the total life cycle cost. The following are the

costs associated with a pumping installation:

Initial Cost Installation and Commissioning (Start-up) Cost Energy Cost

Operating Cost cost of labor to operate thepumping installation

Maintenance and Repair Cost : depends on thetime and frequency of service and the cost ofmaterials .

Downtime and Loss of Production Cost Environmental Cost Disposal Cost

Kirloskar Brothers Limited (KBL) and its subsidiary SPP

Pumps, UK have introduced 'Lowest Life Cycle Cost

(LLC) concept' into the market for

Vertical Turbine Pumps and Split case pumps

These pumps are designed for longevity and

incorporate many standard features, which facilitate

ease of maintenance.These pumps offer significant savings for the energy

and maintenance costs and therefore while their initial

cost is high the payback period is about 1.5 years to 3

years.

The reliability and long life is achieved by high L10 life

bearings having more than 50000 hours of life.

The design allows downtime to be as low as 2 hours.

The company has sold 33such pumps in Europeanmarket in the financial year 2009-10. 31 pumps were

exported in the previous year.

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Environmental Performance

Location wise Consumption in 2009-2010 Metric TonsMaterial

used by

Type

Unit

Kirloskarvadi Dewas

&

Shirwal Kondhapuri

Steel Metric

Tons

MT)

7027 1296.42 500

Cement Metric

Tons MT

322.5 165.3 0

Copper MT 0.65 296.2 28

Coke MT 1089 0 0

Lime Stone MT 556 0 0

Oils Ki loliters 31 70 27

Paints,

Primers,

Thinners

133.5 69.8 0

Rubber 146 43.3 4

Plastic - 14 28

Total materials used by type

Percentage of materials used that are recycledinput materials

Energy saved due to conservation

More than 30% of input raw material is recycled in thefoundry operations at Kirloskarvadi. 28% of input rawmaterial is recycled at Dewas foundry operations.

Energy conservation is given very high priority at alllocations in Kirloskar Brothers Limited .

Conservation efforts not only reduce operational costsbut such efforts also help protect the environment, byreducing pollution due to the power generationprocesses.

Energy conservation projects are promotedthroughout the organization and there is internalKirloskar Group award instituted to encourageoutstanding work done for conservation of energy.

Some of the major energy saving and conservationinitiatives implemented at various locations of the

company are highlighted below:

4.2

17.7

0.65

1.08CII National Award for Excellence in Energy

Management

0

0

0

0

0

Reduction in electrical power consumption atKirloskarvadi plant

25

20

15

10

5

0

21.8 21.1

2008-09 2009-10

Million kW-hr

1400

1200

1000

800

600

400

200

02008-09 2009-10

kW-hr / Rs. Million Sales

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Location wise Consumption in 2009-2010Direct Energy

Consumption

by EnergySource

Kirloskarvadi Dewas Shirwal Kondhapuri

Electricity

Consumption

(kWHr)

14824336 4834976 88836

Coke (Metric Tons) 1089.15 0 0 Diesel HSD(Kilolitres)

4.3 1188.76 L 21.9

Diesel ( LDO)(Kilolitres)

5.871 0

Direct and Indirect energy use

Location wise Consumption in 2009-2010Indirect

EnergyConsumption

by Energy

Source


Captive Power

Consumption

(kWHr)

6676 11880 0

Wind Power 6500267 2465672 0

Restructuring the cupola in cast iron foundry to availmaximum coke to metal ratio

Energy savers for separate lighting and fansupply feeders in shops

Electronic ballasts and electronic regulators

Energy efficient transformers and motors

BEE star labeled AC's and fans

Retrofitting oil cooled reactors for compressormotor

HYPN water pumping system

'Polarizer' fuel saving equipment for forklifts,

Rickshaws etc.Transvector nozzles and guns for compressed airapplications

Electronically controlled pneumatic valves forcompressed air

SMC' digital pressure controller to minimizepressure band

TFT monitors in place of CRT monitors forcomputers

LED street light

Reduction in voltage level for overall factory tominimize transmission and distribution losses

APFC panels for individual feeders

Increasing setting point for centralized airconditioners

Restructuring of transformers to keep minimumtransmission loss

VCB's/ACB's in place of GOD for transmission anddistribution of electricity for shutting OFFtransformers in no load condition

Rescheduling of maximum load for 'A' zoneoperation

Details of Projects implimented at Dewas:

Kondhapuri:

Initiatives to use renewable energy sourcesand increase energy efficiency

Replacement of Old motors with Energy Efficientmotors -12 Nos.

Replacement of Rural 22 KV HT Line with 22 KVexpress feeder

Replacement of Desktop CRT Monitors with LCDMonitors - 26 Nos.

Replacement of 28 Watt Tube lights with 18 WattCFL Energy efficient lights at Mezzanine floor office

Improvement of Power factor from 0.99 to 1.00

Details of solar and wind power projects atKirloskarvadi :

Planned

Solar Battery Charging system for battery vehicle

Solar office lighting

2.4 MW windmill

Implemented

Solar Pumping system for Cupola water

Solar water heater for housing colony

Bio gas Plant for Bachelor hostel

Biomass gasifier for generation of electricity fromwaste wood

Small solar-wind turbine for street lights

The Company has received subsidy from MEDA forwaste heat recovery from cupola project, Biomassgasifier and small wind-solar turbine for s treet lights

Purchase of wind power

Installation of 3.5kW solar panel for R&D lab.

0

330066

168

-

-

0

17


19/42

Total water use

Water sources significantly affected by waterwithdrawal

Total recycling and reuse of water

Location and size of land owned, leased ormanaged in bio-diversity rich habitats

Description of the major impacts onbiodiversity

Water recycling is extensively used this includes - Rainwater harvesting. Water is also collected from roofsand around the manufacturing unit and fed to the borewells.

Water Management System

Maintenance of water distribution networkQuality of waterOptimization and leakage surveysWater re-circulation systems

Closed loop hydro testing of pumps.Rain water harvesting projectsMeter ing of al l end users for waterconsumption.

Kirloskar Brothers Limited has no land owned, leasedor managed in bio-diversity rich habitats.

There is no impact on bio-diversity due to the

Some of the major water conservation activitiesimplemented are listed below:

They comprise the following broad areas:

Intake Management

Sprinkler system/ drip irrigation for lawns andgardens

company's operations. Therefore this item is notapplicable to our operations.

The Company protects all habitat in its premises.

There is no impact of companys operations on suchsensitive areas.

Based on fuel consumption (Coke, HSD & LPG) data at

each location is considered for Direct GHGcalculation. Ref. Site: Calculation Tools for CorporateGHG Accounting - GHG Protocol Initiative. htmbelong to World Resources Institute and WorldBusiness Council for Sustainable Development isbeing used for the computation of Direct GHGemission. CII - GBC Electricity Consumption data ateach works is considered for the Indirect GHGcomputations. CO2 coefficients have been arrived bya weighted average emission for generators supplyingto the grid in the state of Maharashtra and MadhyaPradesh.

Indirect emissions due to outbound logistics andemployee travel (domestic and international) have notbeen considered as these were not monitored in thereporting year.

4 MW windmill farm

Solar Water Heaters

Solar Lighting System

Solar Pumping System

Fuel change over from HSD to LPG

Improvement of Energy Efficiency of equipment

Biogas plant

Optimum transport system

Change over cupola to divided blast cupola

Transparent sheet for factory shop roof

All old equipment working on CFC-12 have beenreplaced with units operating on R-22 / R-134a.

Habitats protected or restored

Number of IUCN Red List species and nationalconservation list species with habitats in areasaffected by operations, by level of extinctionrisk

Greenhouse Gas Emissions

Initiatives to reduce GHG emissions

Use and emission of Ozone DepletingSubstances (ODS)

Location wise Consumption in 2009- 2010

Kirloskarvadi Dewas Shirwal Kondhapuri Corporate

Office Pune

Total Water

Consumption in

meter cube3

(m )

319781 34584 950 21463 16058

Location wise recycled water in 2009- 2010

Kirloskarvadi Dewas Shirwal Kondhapuri Corporate

Office Pune

Total Water

Consumption in

meter cube

100000 21387.44 0 3525.3*

* Data for Corporate Office in Pune is from July 2009 toMarch 2010

3(m )

0

18


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Nox, SO2, and other significant Emissions bytype

Total water discharge by quality anddestination

Total amount of waste by type and destination

The details of emissions are given in table below:

Treated effluents are periodically monitored forcompliance with permissible limits of State PollutionControl Board (mass/volume). All values are found tobe in compliance.

All waste at manufacturing units is collected properlyand finally disposed off through Ministry OfEnvironment and Forests / approved recyclers orvendor of Maharashtra Pollution Control Board or MPPollution Control Board.

Significant spills of chemicals, oils, and fuels interms of total number and total volume

All production, transport, import, or export ofany waste deemed hazardous

Impacts of activities and operations onprotected and sensitive areas

Initiatives to mitigate environmental impactsof products and services

Incidents of and fines for non-compliance withall applicable international declarations /conventions / treaties, and national, sub-national, regional and local regulationsassociated with environmental issues

Environmental Impacts of transportingproducts and other goods and materials usedfor the organisation's operations andtransporting members of workforce

There were no significant spills of chemicals, oils orfuels in the reporting period.

No hazardous wastes are being imported or exported.However, hazardous wastes generated in variousproduction processes like waste or used oil, non-ferrous metal i.e. waste copper dross/ plates,hazardous wastes (lead bearing type), batteriesdefined as "hazardous" in Schedule-4 of HazardousWastes (Management & Handling) Amendment Rules

2003 are sold to the MoEF/CPCB Registered Re-cyclers/ Re-refiners/ Re-processors only.

These are being transported as per the statutoryrequirements.

There is no impact of activities / operations on suchsensitive areas.

The Company continuously improves the energyefficiency of its products. Engine Driven Pumps areprovided with acoustic enclosures / canopies toreduce the noise levels.

There is strict adherence to the norms applied totransport products, materials and employees. Vehiclecondition check, Pollution Under Control (PUC)checks are in place to avoid any significantenvironmental impacts during transportation.

There is no incidence of any fine or non-compliancewith respect to any national, regional and local

regulations associated with environmental issues.

Location wise NOx , So2 Emissions in 2009-2010EmissionType

Limit

Kondhapuri

SuspendedParticulate

Matter(SPM)Micrograms/m^3

500

Sulfur Dioxide 120

Nitrogen-all

Oxides

120

RespirableParticulate

Matter ( RPM)

150

Kirloskarvadi

98

28

31

72

Dewas

170

22

28

Location wise discharge by Water Body Type in 2009-2010Water Body

Type


Total

Suspended

Solids (TSS)

Total Oil and

Grease

Bio-

Chemaical

Oxygen

Demand

(BOD)

Chemical

Oxygen

Demand

(COD)

76

0.8

24.8

180

1369

1.8

3.6

46

16

0

8.6

21.1

96.5

55.6

44.3

--

146

8

69

211

19


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Reduction in Energy consumption in foundries

Metal being poured in a

large mould

Metal being poured in a

large mould

Energy cost trends and targets

800

600

400

200

0

2007-08 2008-09 2009-10

Cast Iron Foundry kWh/ton

800

700

650

600

2007-08 2008-09 2009-10

Heavy Foundry kWh/ton

2007-08 2008-09 2009-10

800

600

400

200

0

Non Ferrous Foundry kWh/ton

2007-08 2008-09 2009-10

730

720

710

700

690

Alloy Cast Steel Foundry kWh/ton

Energy Cost as % to Sales

2007-08 2008-09 2009-10

3

2.5

1.5

2

1

0.5

0

1.8

1.6

1.4

1

1.2

0.8

0.6

0.40.2

02010-11 2011-12 2012-13 2013-14 2014-15

Energy Cost as % to Sales

20


22/42

Contribution of renewable energy

Use of Solar, Wind and Bio-mass energy

40

35

30

25

20

15

10

5

0

Renewable Energy Million kWh

Total Energy Million kWh

2010-11 2011-12 2012-13 2013-14 2014-15

21


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Energy Audit of Pumping Systems: Supporting

other organizations in reduction of carbon

foot-print by more than 5500 tonsKirloskar Brothers Limited offers a unique Energy

Audit Program which helps customers saving of

electricity consumption. Pumping Energy Audit is

conducted by Certified Energy Managers and based

on findings, recommendations for suitable pumps,

motors and improvement in the pumping layout are

given to the customers.

There are about 20 organizations where theseenergy audits were conducted during last one year.

Some organizations have already implemented the

22

recommendations and are benefitted up to 30%

energy savings. This has helped save 11 million

kWhr electricity and more than Rs. 40 million inenergy bill. Many more organizations are convincedabout the audit outcome and are in the process of

implementation of audit recommendations. These

customers are from various types of industries like

Automotive, Manufacturing, Chemical, Process,

Water Supply / Lift Irrigation Schemes, etc.

The payback period of the investments made for

these improvements have been in the range of 2

months to 2 years depending upon type of industry,

type of pumps, pump working hours, etc.


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Total Workforce by regionThe workforce in various business sectors, corporate

functions and manufacturing plants are given in tablebelow:

Social Performance

23

Corporate Functions 164 14

Building & Constructions 13

Customer Sevice & Spare 37 6Defence & Marine 10

Distribution 76

Industry 39 1

Irrigation 106 1Oil & Gas 16

Power 102

Water Resource Management 76 6Sector Shared Services 64 19

Kirloskarvadi Operations 341 534 348

Dewas Operations 127 512Kondhapuri Operations 38 30 1

Shirwal Operations 9 25Grand Total 1218 1148 349

Workforce numbers*

Functional Area Staff Workmen Temporary

st* as on 31 March 2010

Total rate of employee turnover

Benefits provided to full-time employees thatare not provided to temporary or part-timeemployees

Annual Attrition Percentage for staff categoryemployees was 12.6%

Senior Management ; 14.3%

Middle Management: 10.4%Junior Management: 13.3%

Employee Benefits

(i) Gratuity

The Company has an obligation towards gratuity, adefined benefit retirement plan covering eligibleemployees. The plan provides for a lump sum payment

to vested employees at retirement, death while inemployment or on termination of employment of anamount equivalent to 15 days salary payable for each


25/42

completed year of service. Vesting occurs uponcompletion of five years of service.

The Company makes annual contributions to gratuityfund established as trust. The Company accounts forthe liability for gratuity benefits payable in future basedon an independent actuarial valuation.

(ii) Superannuation Fund

(iii) Provident Fund

Eligible employees of the Company are entitled toreceive benefits under the Provident Fund, a definedcontribution plan, in which both employees and theCompany make monthly contributions at a specified

percentage of the covered employees' salary (currently12% of employees' basic salary). The contributions asspecified under the law are paid to the Provident Fundand Pension Fund set up as irrevocable trust by theCompany or to the respective Regional Provident FundCommissioner and the Central Provident Fund underthe State Pension scheme. The Company is generallyliable for annual contributions and any shortfall in thefund assets based on the government specifiedminimum rates of return or pension and recognisessuch contributions and shortfall, if any, as an expense

in the year incurred.

(iv) Leave Encashment:

The Company provides for the encashment of leavesubject to certain rules. Employees are entitled toaccumulate leave, subject to certain limits, for futureencashment. This accumulated leave can be encashedat the time of superannuation.Some other benefits advanced to the permanentemployees are:

Allowances like Conveyance Allowance, Education

Allowance and Leave Travel Assistance.

Kirloskar Brothers Limited has internal unions at itsmanufacturing units at Kirloskarvadi, Dewas,Kondhapuri and Shirwal. These unions formrepresentative bodies of the workmen and negotiatewith the management and settlements signed withthese unions respectively cover all permanentworkmen present.

Percentage of employees covered by collectivebargaining agreement

Minimum notice period(s) regardingoperational changes, including whether it isspecified in collective agreements

For Notice period regarding operational we follow theprocedures mentioned in the Industrial Disputes Act(21 days). This Act was passed by the Central

Government of India to make provisions forinvestigation and settlement of industrial disputes andcame into existence in April 1947.

Kirloskar Brothers Limited has a Safety Health andEnvironment (SHE) policy, which encompasses allregulatory norms along with International LabourOrganisation recommendations. A process isestablished for recording, reporting, analysing and

taking action on accidents and unsafe conditions.There bipartite committees include Safety Committee,Works Committee, Canteen Committee and JointDevelopment Councils. These committees thus cover100% of the workforce.

Kirloskar Brothers Limited provides curative andpreventive health services to the employees, their

families as well as the community at large. It views itsinitiatives as a part of its social responsibility and as aninvestment in improving social capital. Of theseinitiatives, some have been highlighted in the care ofemployees and their dependent family members.

Kirloskar Brothers Limited is also committed to takeinitiatives to combat the spread of HIV/AIDS. Itundertakes extensive training programs to bringawareness about such serious diseases as also issuesrelated to maternal health and child health.

Safety has been a concern for Kirloskar BrothersLimited and the Company is taking steps to reduce theinjuries and accidents. All the manufacturing units arecertified under Occupational Health and SafetyStandards OHSAS 18001.

OHSAS 18001 is an Occupation Health and SafetyAssessment Series for health and safety managementsystems. It is intended to help an organization tocontrol occupational health and safety risks.

Formal Joint Management-Worker Health andSafety Committees

Risk-control programmes in place to assist workforce members, their families or communitymembers regarding serious diseases

Health and Safety topics covered

24


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their supervisor. Formal evaluation ratings areassigned at the end of the year. PMS instills a highperformance culture in the organisation.

The details of location-wise gender diversity is given infollowing table:

Kirloskar Brothers Limited has followed anondiscrimination policy in employment andcompensation. Remuneration is not based on gender,social,status or age and is linked to responsibility levelsand performance.

All employees have the opportunity to advance theircareers. During the performance review a potentialreview and career progression plan is also discussedwith each employee. All employees have theopportunity of moving to higher levels. The vacanciesare internally advertised and based on meritemployees can be selected for the higher levelpositions internally.

Gender Diversity by Employee category

Ratio of basic salary of men to women byemployee category

Location Male Female Male Female( Staff) ( Staff) ( Workmen) ( Workmen)

Kirloskarvadi 333 4 525 0

Dewas 124 3 511 3

Kondhapuri 35 0 30 0

Shirwal 9 0 25 0

Corporate and 642 45 43 1Regional Offices

TOTAL 1143 52 1134 4

Average hours of training per year peremployee by employee category

Skill Management and Managing Career

Endings

Employees receiving regular performance andcareer development reviews

Average Training hours per employee per year for2009-10 are as given below:

Kirloskar Brothers Limited focuses on continualupgradation of competencies and skills of itsemployees. Staff category employees are giventraining on technical aspects as also managerialcompetencies and behavioral competencies.

Workmen are given training to develop multi-skillingand productivity improvement techniques like MOST[Maynard Operations Sequence Technique]

All employees are evaluated based on performanceand merit. The Company has implementedperformance management system which requirestarget setting and review process on quarterly basis. In the performance management system, Individualperformance plans are cascaded from the AnnualOperating Plans of the respective department.

The targets address the 4 perspectives of the BalanceScore Card bringing business and customer focus toall levels. Employees have an opportunity to developtheir own view of their performance and discuss it with

25

Senior Management 64.5 hours

Middle Management 36.0 hours

Junior Management 28.5 hours

Workment 9.0 Hours

stas on 31 March 2010


27/42

Human Rights Screening for Suppliers andContractors

Employee training on Policy and Proceduresconcerning Human Rights

Incidents of Discrimination:

Support to Freedom of Association andCollective Bargaining:

Kirloskar Brothers Limited has Supplier and Dealerassessment process to take care of issues related tosocial aspects before inducting them in organisation.

All legal and regulatory requirements need to be

fulfilled before final selection. The companyperiodically audits job contractors for adherence tolabour laws and other statutory requirement likeminimum wages, PF, payment of gratuity etc. therebyensuring prevention of violation of Human Rights andemployment malpractices.

In addition to Code of Coduct which covers the aspectof non-discrimination, the company has implementeda Whistle Blower policy. The policy explicitly mentionspre-requisites to ensure that the identity of the whistleblower is kept confidential.

No incidents have been reported under this policy forthe year 2009-10.

Booklet on Code of Ethics and Code of Conduct isgiven to each staff category employee present as alsoto every new employee.

In keeping with the spirit of the Constitution of Indiawherein Right of Association is a Fundamental Right,Kirloskar Brothers Limited respects the rights ofassociation of its employees and has a constructiverelationship with trade unions at all locations.Employees are free to join Trade Unions, as it believesthat most individual and collective grievances can beresolved through bipartite forums.

Approximately 1148 employees of the permanentcategory, who come under the unionised category, arecovered by collective bargaining agreements. Theseagreements include health and safety provisions alongwith compensation structures in the form of aMemorandum of Understanding (MoU) between the

Human Rights

26


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management and the recognised Union as per theprovisions of the applicable labour legislations. TheseMoUs are signed every three years, after negotiations

between representive committees of the union and theManagement. While the union membership may varyfrom each location, all eligible employees, irrespectiveof his membership, enjoy the benefits as agreed in theMoU.

Kirloskar Brothers Limited upholds the law of notemploying children in any of its factories. It is bound

by statutory legislation (Factories Act, 1948) andproper records are maintained in this regard.

Operations identified as having significant riskfor incidents of child labour, and measurestaken to contribute to the elimination of childlabour

Contribution to Elimination of Forced andCompulsory Labour

Total number of incidents of violationsinvolving rights of indigenous peopleandactions taken [ Rights of Indigenous People]

Kirloskar Brothers Limited strictly adheres to the laws

of the land with regard to forced and compulsorylabour, which are prohibited under various acts andstatutes.

Kirloskar Brothers Limited has not violated rights ofindigenous people as none of its operations haveimpacted directly or indirectly any indigenous people.Therefore this item is not applicable for reporting.

27


29/42

The Company has a Corporate Social Responsibility

(CSR) Cell which includes members of the topmanagement.

The Company conducts society perception surveys toassess social as well as environmental impact of itsproducts and operations. The Company has beenable to proactively contribute to preservation andprotection of the environment and has alsocontributed to integrated social development.

Through its CSR activities, the Company aims toupgrade the quality of life of the communities around

the Company's areas of operations. In a structuredapproach, the Company's CSR Committee guides andreviews the CSR activities. In all its CSR initiatives, theCompany recognises and respects diverse communityneeds by undertaking specific and need-basedinitiatives across locations.

All staff category empolyees have been trained inorganizations anti-corruption policies and

procedures through Code of Ethics.

There are no incidents of corruption reported duringthe year 2009-10.

There are no financial or non-monetary grants madeto any political party during the reporting year.

Nature, scope, and effectiveness of anyprogrammes and practices that assess andmanage the impacts of operations on

communities, including entering, operating,and exiting

Percentage of employees trained inorganisation's anti-corruption policies andprocedures

Actions taken in response to incidents ofcorruption

Total value of financial and in-kindcontributions to political parties, politicians,and related institutions by country

Total number of legal ac t ions foranticompetitive behaviour, anti-trust, andmonopoly practices and their outcomes:

ocietyS

28

Street plays on social issues

Lessons on energy conservation for schoolchildren


30/42

No such legal actions have been filed against thecompany. No misleading statements have been madeabout our competitor's products and services.

Any information regarding competitors is collectedonly through legally permitted sources. The Companydoes not engage in activities which generate orsupport the formation of monopolies, dominant

market positions, cartels and similar unfair tradepractices.

There are no fines/sanctions for non-compliance withlaws and regulations.

Fines/sanctions for non-compliance with lawsand regulations

29

Case Study

The children at schools around Kirloskarvadi belongto the rural area where the parents are generallyfarmers. The family atmosphere does not provide the

necessary inputs and opportunities for the children todevelop themselves to be at par with the children ofcities. This need was identified during the interactionwith teachers of the schools and during the societyperception survey. In order to respond to this issue,an innovative program of personality developmentfor these students was developed by KirloskarBrothers Limited.

This program was conducted at 10schools and itth th

covered 780 students of 10 and 12 standard.

The training module covered lectures on topics likecommunication skills, teamwork, guidance onadolescent issues of students, healthy diet, hygiene,and career development.

Case StudyThe schools need infrastructural support for makingclean drinking water available to students.

School students have facility of drinking water but itwas not safe & evidence of many water bornedisaeases .The need identified during Adarsh shalaevaluation . Now it is observed that there is reductionin water borne diseases.

15 schools were provided with the aqua guardwater purifiers. This has benefitted by 7500children studying in these schools.


31/42

Case Study

Schools in the rural area always face difficulty ingetting the equipment and facilities like musicalinstruments and computers. This need wasidentified during the evaluation of schoolsunder Adarsh Shala competition . In responseto this need the company has provided sets of

Musical Instruments to 3schools.

This will help 1130 school childrenopportunity to learn music.

24schools were provided the computerswhich will benefit 22000school children.

Case Study

While there are continuous efforts to reduce thedirect impact on GHG emission, the company alsobelieves that plantation of trees also has a positive

impact on reducing carbon. About 980plants wereplanted around Kirloskarvadi.

The improvements in cupola furnace by way of

increased pre-heat zone has resulted in 20%reduction of coke cosnusption. Similarly use of LPGreplacing diesel for mold baking has resulted in

26%reduction of GHG emission last year.

30

700

600

500

400

300

200

100

02008-09 2009-10

618.12

461.59

45004000350030002500200015001000

5000

2008-09 2009-10

GHG Ton4035

3265


32/42

Case Study :

Stakeholder Engagement on

Energy Saving Pledge.

The other initiatives included exhibition of energysaving devices.

Energy conservation week is celebrated during 21-26 December 2009. There were many activities thatwere conducted as part of this week. [ list?] Localnewspapers reports widely cover this event.

Energy Saving Pledge.

Energy ConservationThe message of energy conservation is propogatedacross many stakeholders of the company andincluded Employees, Vendors, Banks, Schools,

Village Panchayats

All the stakeholders have shown their commitmentto conserve energy. They demonstrated thisthrough taking the

31

Case Study :

Cleaning the River Ramnadi

Ramnadi river is located in Baner area in Pune. It isvery close to the Yamuna corporate office of ourcompany. Our employees as part of the Eco-grouphave joined hands with local NGO VasundharaSwachata Abhiyan and have actively participated incleaning of the river. They have also interacted withlocal people to encourage their involvement incleaning the river. Additionally tree plantation hasbeen done along the bank of Ramnadi. About 100trees were planted in cooperation with this NGO.

The group is now planning to take up WasteManagement- Explaining importance ofsegregating solid and wet waste to the local people.

They are motivating people to segregate the wasteand ensure appropriate disposal so that it does nothave adverse impact on environment.

6 employee volunteers contributed about 100hours for the above initiative in the last one year.


33/42

Life cycle stages in which health and safetyimpacts of products and services are assessed

Total number of incidents of non-compliancewith regulations and voluntary codesconcerning health and safety impacts ofproducts and services during their life cycle, bytype of outcomes

Total number of incidents of non-compliance

with regulations and voluntary codesconcerning product and service informationand labelling, by type of outcomes

Practices related to customer satisfaction,including results of surveys measuringcustomer satisfaction

Programmes for adherence to laws, standards,and voluntary codes related to marketingcommunications, including advertising,promotion, and sponsorship

Kirloskar Brothers Limited puts high priority on safeworking environment. The Company meets all safetyregulations of concerned markets and goes beyondthe safety regulations to provide safer products .

There has been a continuous up-gradation in productsafety with new technologies being brought in.

The Company has never received any sanctions forviolation of regulatory norms.

There were no such incidents of non-compliance withregulations and voluntary codes concerning productand service information and labelling.

Customer feedback is collected through customermeets, day-to-day interactions and formal surveys.Each business sector prepares action plans to improvethe customer satisfaction on continual basis.

adheres to all norms, standards and voluntarycodes related to marketing communications, includingadvertising, promotion, and sponsorship. No falseclaims and /or unfair means are used while promoting

a product or a service. The company also adheres tosustainability norms for the marketing tools such asavoiding neon signs, use of art paper calendar and

KBL

Product Responsibility

32


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promotion material etc. Gift articles are also made ofeco-friendly materials.

There was an incidence of violation of Weights andMeasures Act in respect of a product where sticker onone box was not available. The company has paidcompounding fee to the Government authorities.

Total number of incidents of non-compliancewith regulations and voluntary codesconcerning marketing communications,including advertising, promotion, andsponsorship by type of outcomes

Total number of substantiated complaintsregarding breaches of customer privacy andlosses of customer data

Monetary value of significant fines for non-compliance with laws and regulationsconcerning the provision and use of productsand services

No such complaints have been made. The Companyrespects customer privacy.

There were no fines for non-compliance with laws andregulations concerning the provision and use ofproducts and services.

33


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Disclosure onManagement Approach

(DMA):

Economic Indicators

The company's vision indicates its managementapproach towards growth in terms of economicindicators. The companys leaders engage indeveloping annual operating plans as well as longrange plans for profitable growth. The company hasestablished a risk management committee to identifyrisks and take proactive steps to mitigate them. Thecompany considers that its business has direct as wellas indirect economic benefits to the nation with theinfrastructure projects completed in the area of water ,irrigation and power. The company conducts analysisof competitors and their technology to develop astrategy for technology development and introducenew products to maintain a competitive edge.

Environmental Indicators:

The company's plants have been certified for the

Environment management System for ISO 14000. Ithas also signed the CII code on EcologicallySustainable Business Growth. The companyencourages the philosophy of Reduce, Reuse andRecycle in all its operations. Therefore monitoring ofenergy, water and other greenhouse gas emissionsand their control is of prime importance. The companyadvocates strict adherence to pollution control normsand ensures related statutory compliances.

Labor Practices and Decent Work Indicators

The company considers its employees as its most

important asset. It believes that employees have theright of collective bargaining and encourages ahealthy relationship with its unions. For managerialemployees, it strives to develop leadership as alsotechnical and behavioral competencies to enhancetheir performance and provide them opportunity togrow. The company does not believe in discriminationof any kind while employing people.

The Company tracks its performance related to safetyand health of all its employees and continuallydevelops plans to improve them. The 4 manufacturingplants are certified for Occupational Health and Safetystandards OHSAS 18000. Performance related tohealth and safety is monitored in review meetings by

plant heads and regular audits ensure compliance tothe requirements of the standard.

Human Rights Indicators

The company respects and follows all statutoryrequirements including strict prohibition of childlabour and compulsory labour or forced labour.

Society Indicators

The company has adopted a Code of Conduct and aCode of Ethics. All employees are trained in thesecodes which covers the anti-corruption policy of the

company and policy on taking or giving gifts. Thecompany is neutral to all political parties and does notgive any donations to specific parties. The companyhas decided to work for the community in the vicinity ofits operations in the area of health and education. Thisis in line with the millennium development goals of theUnited Nations. It undertakes programs for healthcheck-ups, training on awareness of serious diseases,health care of expecting mothers and children.

Product Responsibility Indicators

Company endeavors to develop products that have

minimal impact on the safety , health and environmentall through its supply chain. Kirloskar Brothers Limitedis proud to have developed lowest life cycle costpumps. The Research and Development departmentcontinuously develops products that are safer, morereliable and more energy efficient.The company follows all laws relating to marketingcommunication, advertising, promotions andsponsorships.

34


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Statement from Chairman & 1Managing Director

Description of Key Issues, Risks 2and Opportunities

2.1 Name of the Organization 3

2.2 Primary Brands, Products and 3Services

2.3 Operational Structure 4

2.4 Location of Headquarter 42.5 Countries with Major Operations 4

2.6 Nature of Ownership and Legal 4Form

2.7 Markets Served 4

2.8 Scale of the Organization 4

2.9 Significant changes in size and 4structure or ownership

2.10 Awards received 4

3.1 Reporting Period 53.2 Recent previous report 5

3.3 Reporting Cycle 5

3.4 Contact Persons 5

3.5 Report Content 5

3.6 Boundary of the Report 6

3.7 Limitations of the Report 6

3.8 Basis for reporting on subsidiaries 6and associate companies

3.9 Data Measurement Techniques 6

3.10 Restatements 6

3.11 Significant Changes from previous 6reporting period

3.12 GRI Content Index 35

6

4.1 Governance Structure and Board 7Composition

4.2 7

4.3 Independent and /or non-executivemembers

4.4 Mechanisms for shareholders and 8employees to provide recommendationsto the highest governance body

1.1

1.2

3.13 Policies and current practices forseeking external assurance

Non Executive status of the chair

GRI Content Index

Aspect PageNo.

Indicator

1. Profile

2. Organizational Profile

3. Report Parameters

4. Governance, Commitments and Engagement

Aspect PageNo.

Indicator

4.5 Linkage between compensation 9and performance of the board body

4.6 Process to avoid conflict of interest 9

4.7 Process to determine expertise of 9Board members

4.8 Statements and application of 9Mission, Vision, Values and Codeof Conduct

4.10 Evaluating the performance of 10highest governing body

Approach to risk management in 10operational planning

4.12 Charters, initiatives and principles 10that organization subscribes to

4.13 Membership in associations and 10national / international

organizations

4.14 Stakeholder engagement 10

4.15 Identification and selection of 11stakeholders

4.16 Approach to stakeholder 11

Engagement

34

EC1 Economic Performance 12

EC2 Financial implications and other 13risks and opportunities for theorganizations activities due toclimate change

EC3 Coverage of the organizationsdefined benefit plan obligations

EC4 Significant Financial Assistance 13Received from the Government

EC5 Range of ratios of standard entry 13level wage compared to localminimum wage at significantlocations of operation

EC6 Policy, practices and proportion ofspending on locally based suppliers

EC7 Procedure for local hiring 13

EC8 Development and impact of 14infrastructure investments andservices provided primarily forpublic benefit through commercial,in kind, or pro bono engagement

EC9

4.9 Overseeing Risks and Opportunities 10by governance bodies

4.11

Indirect Economic Impacts 14

Disclosure on Management Approaches

5. Economic Performance Indicators

35

*

*

GRI indicators are not reported*


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Aspect PageNo.

Indicator

EN1 Materials Used 16

EN2 Recycled Input Materials 16

EN3 Direct Energy Consumption 17

EN4 Indirect Energy Consumption 17

EN5 Energy Saved 16,17

EN6 Initiatives to provide energy 17efficient products

EN7 Initiatives to reduce indirect energy 17consumption

EN8 Total Water Use 18

EN9 Water sources significantly affected 18

EN10 Total recycling and reuse of water 18

EN11 Location and size of l and owned, 18leased or managed in biodiversityrich habitats

EN12 Impact of activities, products and 18services on biodiversity

EN13 Habitats protected or restored 18

EN14 Strategies, current actions andplans for managing impact on

biodiversityEN15 Number of IUCN species and 18

national conservation list specieswith habitats in areas affected byoperations

EN16 Total direct greenhouse gasemissions

EN17 Total indirect greenhouse gasemissions

EN18 Initiatives to reduce greenhouse 18gas emissions

EN19 Emissions of ozone depleting 18substances

EN20 NOx and SOx and other significant 19emissions

EN21 Total Water Discharge 19

EN22 Total waste by type and disposalmethod

EN23 Total number and volume of 19significant spills

EN24 Weight of waste deemedhazardous

EN25 Identity, size, protected status, and 19biodiversity value of water bodiesand related habitatssignificantly affected by the

6. Environmental performance Indicators

Aspect PageNo.

Indicator

reporting organizations dischargesof water and runoff.

EN26 Initiatives to mitigate the 19environmental impact of productsand services

EN27 Packaging materials that arereclaimed

EN28 Fines and sanctions for non- 19compliance of environmental laws

EN29 Environmental impact of 19transporting organizationsproducts

EN30 Environmental protectionexpenditure and investments

LA1 Total workforce 23

LA2 Total rate of employee turnover 23

LA3 Benefits to full-time employees not 23provided to temporary or part-timeemployees,

LA4 Percentage of employees covered 24by collective bargaining agreement

LA5 Minimum notice period(s) regarding 24operational changes, includingwhether it is specified in collectivebargaining agreements

LA6 Workforce represented in joint 24management-worker health andsafety committees

LA7 Rates of injuries and work relatedfatalities

LA8 Education, training and risk control 25programs to assist workforce, theirfamilies and community members

regarding serious diseases

LA9 Health and safety topics covered in 25formal agreements with tradeunions

LA10 Average hours of training per year 25per employee by employeecategory

LA11 Programs for skill management and 25managing career endings

LA12 Employees receiving regular 25performance and career

development reviewsLA13 Breakdown of employees by 25

category and gender

36

*

*

*

*

*

*

*

7. Social Performance Indicators


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Aspect PageNo.

Indicator Aspect PageNo.

Indicator

and total number of non-monetarysanctions for non-compliance withlaws and regulations

PR1 Life cycle stages in which health 32and safety impacts of productsand services are assessed forimprovement, and percentage ofsignificant products and servicescategories subject to suchprocedures

PR2 Total number of incidents of non- 32

compliance with regulationsconcerning health and safetyimpacts of products and services

PR3 Product and service labeling

PR4 Total number of incidents of non- 32compliance with regulations andvoluntary codes concerning productand service information and labeling,by type of outcomes

PR5 Practices related to customer 32satisfaction, including results ofsurveys measuring customersatisfaction

PR6 Adherence to Regulations 32regarding Marketingcommunications

PR7 Total number of incidents of non- 33compliance with regulations andmarketing voluntary codesconcerning communications,including advertising, promotion,and sponsorship by type ofoutcomes

PR8 Total number of substantiated 33complaints regarding breaches ofcustomer privacy and losses ofcustomer data

PR9 Monetary value of significant fines 33for non-compliance with laws andregulations concerning theprovision and use of products

And services

LA14 Ratio of basic salary of men to 25women by employee category

HR1 Percentage and total number of significant investment agreementsthat include human rights clausesor that have undergone humanrights screening

HR2 Human rights screening for 26suppliers and contractors

HR3 Employee training on policies and 26procedures regarding aspects ofhuman rights

HR4 Total number of incidents of 26discrimination

HR5 Managing risk to freedom of association

HR6 Efforts to eliminate child labour 27

HR7 Efforts to eliminate forced andcompulsory labour

HR8 Percentage of security personneltrained in the organizations policies orprocedures concerning aspects ofhuman rights that are relevant tooperations

HR9 Incidents of violations concerning 28rights of indigenous people

SO1 Programs and practices to assess 28and manage impacts oncommunities

SO2 Business units Analyzed for risksrelated to corruption

SO3 Employees trained in organizations 28anti-corruption policies andProcedures

SO4 Actions taken in response to 28incidents of corruption

SO5 Public policy positions andparticipation in public policydevelopment and lobbying

SO6 Total value of financial and in-kind 28contributions to political parties,politicians, and related institutionsby country

SO7 Total number of legal actions for 28anti-competitive behavior, anti-trust,

and monopoly practices and theiroutcomes

SO8 Monetary value of significant fines 29

Society

Product Responsibility

37

*

*

*

*

*


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Reportexte

rnally

assured

Reportexte

rnally

assured

Reportexte

rnally

assured

GRI Application Level

G3 ProfileDisclosures

G3 ManagementApproachDisclosures

G3 PerformanceIndicators & SectorsSupplementPerformanceIndicators

Reported on:1.12.1-2.103.1-3.8,3.10-3.124.1-4.4,4.14-4.15

Reported on all Criteria listedfor level C plus:1.23.9,3.134.5-4.13,4.16-4.17

Same as requirementLevel B

ManagementApproach disclosedfor eachIndicator

Category

ManagementApproach disclosedfor eachIndicator Category

Report on a minimum of 20Performance Indicators, at leastone from each of;Economic,Environmental,Human Rights, Labor,Society,ProductResponsibility

Report on each core G3 andsupplement* Indicator withdue regard to Materialityprinciple by either:a)Reporting on the indicator,orb)Explaining thereason for its omission.

Not Required

Report on a minimum of 10performance Indicators,including at least one fromeach of ;Economics; Socialand Environmental

Report Application level C C+ B B+ A A+

Kirloskar Brothers Limited is at Level B as per above application level requirement of GRI - G3

38


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FEEDBACK FORM FOR SUSTAINABILITY REPORT 2009-10

This is the first Sustainability Report published by Kirloskar Brothers Limited. We welcome your suggestions to improveour performance and reporting in the future reports. Please spare few minutes of your valuable time and give us yourfeedback.

1. Relevance of Economic, Environment & Social issues covered in the report

High Medium Low

2. Clarity of information provided on above issues in the report

High Medium Low

3. Quality of Design, Layout and Presentation of the report

Excellent Very Good Good

4. Suggest any other issue should be covered in the next sustainability report

Name :

Designation :

Organization :

Contact Address :

E-mail :

Please mail your feedback to:

N.M .IngleBusiness ExcellenceKirloskar Brothers LimitedYamuna, Survey No. 98(3-7)Baner, Pune ( INDIA) [email protected]


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CII - Code for Ecologically Sustainable business growth

Being cognizant of the need of sustainable growth and dwindling stock of natural capital, wecommit ourselves to the attainment of the following Ten - Natural Capital Commandments.

1) Reduce specific consumption of water and energy by 2 - 6% *every year over next tenyears.

2) Reduce specific generation of waste and reduce the quantum of waste going to landfills by 2- 6% every year over next ten years

3) Increase use of renewables including renewable energy by 2- 10 %* every year in placeof non-renewables over next ten years

4) Reduce emission of green house gas emissions and other process emissions by 2 - 6%*every year over next ten years and explore opportunities through Clean DevelopmentMechanism (CDM) and other Carbon Exchange Programs

5) Increase use of recyclables and enhance recyclability of resources embedded in theproduct by 2 10 % *every year over next ten years

6) Increase the share of harvested rain water in overall annual use of water by 2 10 % *every year over next ten years

7) Incorporate life cycle assessment criteria for evaluating new and alternativetechnologies & products

8) Strive to adopt green purchase policy and incorporate latest clean technologies

9) Take lead in promoting and managing product stewardship program, by forgingpartnerships with businesses and communities

10) Reduce depletion of natural capital which is directly attributable to companysactivities, products and services by 2 10 % *every year over next ten years.

We also commit to demonstrate attainment of these commandments in our pursuit to

certifications such as ISO 9001, ISO 14001, OHSAS 18001, SA 8000, Green Buildings, EcoLabels and the lik

sustainabilty report

Documents