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This is a proprietary document of Kirloskar Brothers Limited28-May-13 1

Kirloskar Brothers Limited.

Financial Analysts Meet

Quarter 4

FY 2012-13


These materials may contain forward-looking statements regarding Kirloskar Brothers Ltd.

(KBL), our corporate plans, future financial condition, future results of operations, future

business plans and strategies. All such forward-looking statements are based on our

management's assumptions and beliefs in the light of information available to them at this

time. These forward-looking statements are, by their nature, subject to significant risks and

uncertainties and actual results, performance and achievements may be materially different

from those expressed in such statements. Factors that may cause actual results, performance

or achievements to differ from expectations include, but are not limited to, regulatory

changes, future levels of industry product supply, demand and pricing, weather and weather

related impacts, wars and acts of terrorism, development and use of technology, acts of

competitors and other changes to business conditions. KBL undertakes no obligation to

revise any such forward-looking statements to reflect any changes in KBL’s expectations with

regard thereto or any change in circumstances or events after the date hereof.

Disclaimer


Companywide Highlights

� The company initiatives to improve the Balance Sheet quality is showing results through

reduction in borrowings by Rs. 82 cr during FY’13 & positive cash generation of Rs. 105 cr

during FY’13.

� Product sector focus results into 20% sales growth over FY’12.

� Focus on selective sale depending upon customer financial position continues.

� Focus on closure of old projects and recovery of retention money is gaining momentum.

� Slow decision making continued to affect the overall business environment.

� Power sector continues to face hurdles in the form of cash crunch and slow project

execution.


Sector Highlights

Irrigation

� Improvement in product order booking during the year.

� Received first LLC VT pump order with favorable payment terms and margin.

� Commissioned Kythanhalli, Chimalgi and Bhima - Stage – I projects.

� Thrust on site closures and retention money recovery continues.

Water Resource Management

� For HMWSSB Godavari order, 9 high head large HSC pumps with HT motors were despatched.

� Split case pumps dispatched for Alexandria Water project in Egypt.

� 5 sites were closed in Q4 and 20 sites were closed in FY13.

� Order for 3 Sewage Pumping stations from Karad Municipal Corporation received


Power

� Repeat order received for cooling water (CW) pump package for Termozulia III CCPP in Venezuela.

� Commissioned:

� 7 pump sets (39,825 m3/hr) for 3 units of 5x660MW Adani Tiroda TPP.

� CW system for 5 x 800 MW Mundra UMPP, Coastal Gujarat Power Ltd.

� Successful spinning of KBL's first Pelton turbines (2 x 2 MW) in Himachal Pradesh.

� Primary Heat Transfer Pump : 50 hrs. integrated testing with BHEL motor and performance test

completed successfully.

� Rani Perunad HEP project handed over to KSEB and retention payment collected.

Sector Highlights


Gas, Oil and Defense

� Completion certificate received from ONGC for offshore fire water pump package. KBL is now

qualified as an independent offshore contractor for fire water pumps / packages.

� Commissioned the Impounding Pump House at Mazagon Dock Modernization Project for ITD.

� Order received from BPCL, Kochi for Kochi Integrated Refinery Expansion Project.

Industry

� Continued focus on pre-tendering activities

� Focus on marketing activities to position KBL better in this sector

Customer Spares and Service

� Inauguration of refurbishment centers at New Delhi and Jamshedpur.

� Launching of Quick Response (QR) codes and SAP CRM version 7.1.

Sector Highlights


Building and Construction

� 21 secondary HVAC projects bagged across the region.

� Introduced Primary Variable Flow (PVF) control panel in the market.

� Released high suction, pressure and high efficiency end suction pumps.

Distribution

� Project Reach sessions held at 2 metros and 4 other States

� Energy Audit leads were generated.

� Total 150 new Dealers / Distributors, 10,500 Retailers appointed during the year.

Sector Highlights


Factory Highlights

Kirloskarvadi

� The Small and Medium Pumps Division (SMPD) of Kirloskarvadi factory achieved the highest ever

monthly despatches.

� Material cost reduction exceeded plan.

� 8th Recertification Audit of Quality Management System completed and received the certificate .

� Besides regular achievements / activities on energy saving front, this year five wind mills registered

for renewable energy certification under Renewable Energy Certification Registry of India and

achieved benefits of around 5,500 certificates per annum.


Factory Highlights

Dewas / Shirwal / Kaniyur / Sanand Factories

� Dewas foundry awarded with prestigious national level "Laxmanrao Kirloskar Award" for Best Foundry

of the Year 2012.

� Dewas awarded “The Best Corporate Social Responsibility Practices” organized by World CSR

Congress, Mumbai. More than 500 companies from 30 countries participated.

� Kaniyur participated in the 25th Regional Work Skill Competition organized by CII and obtained the

third position at regional level in Tamil Nadu.

� Kaniyur also secured second position in 2013 Productivity Competition by Coimbatore Productivity

Council.

� Sanand is certified for IMS MS (EMS + OHSAS) and received ISO 9001 certification with zero non-

conformity .


Factory Highlights

Kondhapuri

� New product developments :

� Triple duty valves 2” to 8”.

� 3800 mm Butterfly Valve (BFV), PN6 (largest valve manufactured by KBL so far).

� Butterfly Valves as per AWWA C504 : 2500 mm BFV (CI) and 2400 mm BFV.

� Development Glandless Sluice Valves – 50 mm to 350 mm.

� Dual Plate Check Valves – 350 mm and 900 mm.

� Stage I audit for EnMS 50001 (Energy Management System) completed through BV - recommended for

certification.


Companywide Pending Orders

Sector 1Q 2Q 3Q 4Q 4Q

(Rs.in Crores) Jun-12 Sep-12 Dec-12 Mar-13 % of Total

IRRIGATION 1,277 1,234 1,207 1,149 55%

WATER RESOURCE MANAGEMENT 237 223 262 218 10%

POWER 633 585 585 521 25%

GAS OIL DEFENSE 111 75 64 72 3%

INDUSTRY 85 63 57 47 2%

BUILDING & CONSTRUCTION 30 29 26 31 2%

DISTRIBUTION 43 41 31 40 2%

CUSTOMER SERVICE & SPARES 31 31 21 23 1%

TOTAL 2,447 2,281 2,253 2,101 100%

KBL Standalone Q 1 Q 2 Q 3 Q 4

Orders Received 401 315 372 397

2012-13

Rs. In Crores

KBL Consolidated Q 1 Q 2 Q 3 Q 4

Orders Received 588 519 635 709

Pending Orders on Hand 2809 2645 2,652 2,637

2012-13

Rs. In Crores


Q4 Financials – Standalone Highlights

� A few figures shown in this presentation are as per the old Schedule VI format so as to be consistent

with previous years. As a result, these figures may not exactly match with the published results which

are as per the revised Schedule VI format.

� The Company’s initiatives to improve Balance Sheet quality shows results through :

� Reduction in borrowings by Rs. 53 cr during Q4 and by Rs. 82 cr during FY 12-13.

� Positive cash generation of Rs.49 cr during Q4 and Rs. 105 cr during FY 12-13.

� Net reduction in Retention Debtors by Rs. 14 cr during Q4 and Rs. 25 cr during FY 12-13.

(Collected Rs. 120 cr and generated Rs. 95 cr during the year)

� Improved sales and operating profit from product sectors over PY.

� Revenue from operations is Rs. 1,872 cr as against Rs. 1,782 cr in PY – rise of 5%.

� Product sectors sales are at Rs. 1,079 cr as against Rs. 896 cr in PY, (rise of 20%). Project sector sales

are at Rs. 776 cr as against Rs. 871 cr in PY, (fall of 11%).



… cont’d…

� With more focus on product sales, including to project sectors, civil sale has gone down to 6% as

against 9% and own product sales going up from 58% in FY12 to 60% in FY 13.

� Composite material cost as % to sales has decreased to 71.0% from 71.6% in PY.

� Total finance cost including bank charges and foreign exchange loss on borrowings is lower at Rs.

44 cr as against Rs. 54 cr in previous year.

� PBT is Rs. 72 cr as against Rs. 34 cr in PY.

� The main reasons for rise in PBT compared to PY are as under:

� PY includes write off / provision of KCEL claims of Rs. 63 cr.

� PY includes profit on sale of GEL – Rs. 35 cr.

� Increased Product sector PBT

� Increased Project sector loss mainly due to cost overruns and losses incurred for execution

and closure of various old projects.



… cont’d…

� The effective tax rate for the current period is high due to following reasons:

� Previous year PBT includes Rs. 35 cr profit on sale of investment which attracted lower tax rate

being long term capital gain.

� The Income Tax department based on its survey, had raised additional tax liability on the

Company, which has been paid during the quarter ending March 31, 2013. The short provision

for tax in respect of earlier six years, consequent to the additional tax claim, has been

appropriately provided and disclosed by the Company in the financial statements for the year

ended on March 31, 2013.

� Net current assets have reduced to Rs. 512 Cr from Rs. 567 cr in previous year (by 10%)

� Inventory reduced by Rs. 27 cr over March 12.

� Trade receivables have increased from Rs. 298 cr in the PY to Rs. 355 cr in the CY due to higher sales

in March, which are recovered / recoverable in April / May.

� Total borrowings have reduced to Rs. 268 cr from Rs. 350 cr in March 2012.

This is a proprietary document of Kirloskar Brothers Limited

Rs. In Crores

Year FY 09 FY 10 FY 11 FY 12 FY 13

Turnover 1,831 2,018 1,947 1,782 1,872

Domestic 1,602 1,848 1,764 1,667 1,718

Exports 229 169 183 115 154

Total Assets 1,036 1,078 1,096 1,101 1,043

Net Current Assets 421 594 630 567 512

Investment 338 190 167 215 215

Fixed Assets 277 294 299 319 316

28-May-13 15

Five year Financials – Standalone


Rs. In Crores


Shareholder's Funds 709 713 743 754 779

Subscribed Capital 21 16 16 16 16

Reserves 688 698 728 738 763

Borrowings 321 357 349 350 268

28-May-13 16


… cont’d…


Rs. In Crores


EBDITA 149 233 178 118 148

% to Sales 8% 12% 9% 7% 8%

EBDITA w/o extra ordinary income & expense 149 233 245 146 148

% to Sales 8% 12% 13% 8% 8%

PBT 98 173 103 34 72

% to Sales 5% 9% 5% 2% 4%

PBT w/o extra ordinary income & Expense 98 173 170 62 72

% to Sales 5% 9% 9% 3% 4%

Profit After Tax 67 118 61 31 43

% to Sales 4% 6% 3% 2% 2%

PAT w/o extra ordinary income 67 118 128 59 43

% to Sales 4% 6% 7% 3% 2%

Cash Profit 88 144 91 61 75

28-May-13 17


… cont’d…



Earnings Per Share - Rs. 6 15 8 4 5

Cash Earnings Per Share - Rs. 8 18 12 8 10

Dividend Payout - Rs. In Crores 21 44 28 16 16

Dividend - % 100% 275% 175% 100% 100%

Book Value / Share - Rs. Per Share 67 90 94 95 98

Market Cap - Rs in Crores 816 2,073 1,055 992 1,179

No. of Employees 2,723 2,932 2,965 3,053 3,103

Turnover / Employee - Rs in Crores 0.7 0.7 0.7 0.6 0.6

28-May-13 18


… cont’d…


Five year Financials – Consolidated

Rs. In Crores


Turnover 2,453 2,659 2,670 2,554 2,612

Domestic 1,945 2,160 2,201 2,056 2,078

Exports 508 499 469 498 534

Total Assets 1,219 1,256 1,255 1,264 1,271

Net Current Assets 501 728 734 730 718

Investment 277 11 5 2 4

Goodwill 47 65 78 71 72

Fixed Assets 394 451 439 462 478


Five year Financials – Consolidated

… cont’d…

Rs. In Crores


EBDITA 200 276 262 184 215

% to Sales 8% 10% 10% 7% 8%

PBT 129 192 159 75 112

% to Sales 5% 7% 6% 3% 4%

Profit After Tax 83 113 98 51 66

% to Sales 3% 4% 4% 2% 3%

Cash Profit 113 152 144 97 115

Rs. In Crores


Shareholder's Funds 813 792 855 881 931

Subscribed Capital 21 16 16 16 16

Reserves 792 776 839 865 915

Borrowings 398 452 392 376 334


Consolidated Accounts – 2012 -13

Rs. In Crores

Mar-13 Mar-12 Mar-13 Mar-12 Mar-13 Mar-12 Mar-13 Mar-12 Mar-13 Mar-12

PARENT COMPANY

KIRLOSKAR BROTHERS LTD 1,879 1,828 72 34 29 3 43 31 10.0% 6.5%

SUBSIDIARY COMPANIES

KIRLOSKAR BROTHERS INTERNATIONAL B V 658 591 44 43 13 13 31 31 21.2% 30.1%

THE KOLHAPUR STEEL LTD. 38 34 1 1 (0) 0 1 1 8.2% 10.9%

KIRLOSKAR CORROCOAT PVT LTD. 27 29 2 2 3 1 (1) 1 21.5% 18.2%

KIRLOSKAR SYSTECH LTD. 3 3 1 0 0 0 0 0 192.0% 123.1%

KIRLOSKAR CONSTRUCTION & ENGINEERS LTD 13 62 (16) (16) (3) 0 (13) (17) -158.8% -68.6%

HEMATIC MOTORS PVT. LTD. 217 216 14 21 5 7 9 14 17.9% 36.6%

SUB TOTAL 2,835 2,764 117 86 46 24 71 62

JOINT VENTURE COMPANIES

KIRLOSKAR EBARA PUMPS LTD. (SHARE 45%) 58 86 (2) 0 0 0 (2) 0 -4.1% 1.6%

SUB TOTAL 2,892 2,850 115 87 46 25 69 62

LESS INTRA GROUP TRANSACTIONS 264 246 3 12 - - 3 12 - -

TOTAL (KBL) 2,628 2,603 112 75 46 25 66 51 11.7% 9.3%

ROCE %

PARTICULARS TOTAL INCOME PROFIT / LOSS

BEFORE TAX

INCOME TAX PROFIT AFTER

TAX


Consolidated Accounts – 2012 -13 …

Cont’d

Rs. In Crores

Mar-13 Mar-12 Mar-13 Mar-12 Mar-13 Mar-12

PARENT COMPANY

KIRLOSKAR BROTHERS LTD 779 754 268 350 1,047 1,104


KIRLOSKAR BROTHERS INTERNATIONAL B V ** 169 136 44 11 213 148

THE KOLHAPUR STEEL LTD. 7 7 6 7 12 14

KIRLOSKAR CORROCOAT PVT LTD. 12 13 0 1 13 14

KIRLOSKAR SYSTECH LTD. 0 0 - - 0 0

KIRLOSKAR CONSTRUCTION & ENGINEERS LTD 10 23 - - 10 23

HEMATIC MOTORS PVT. LTD. 66 57 27 8 93 65

SUB TOTAL 1,042 990 345 378 1,388 1,368


KIRLOSKAR EBARA PUMPS LTD. (SHARE 45%) 48 50 2 4 50 55

SUB TOTAL 1,090 1,041 348 382 1,438 1,423

LESS INTRA GROUP TRANSACTIONS 153 152 14 6 166 159

TOTAL (KBL) 937 889 334 376 1,271 1,264

PARTICULARS Net Worth Borrowings Total Liabilities


Consolidated Accounts – 2012 -13 …

Cont’d

Rs. In Crores

Mar-13 Mar-12 Mar-13 Mar-12 Mar-13 Mar-12 Mar-13 Mar-12

PARENT COMPANY

KIRLOSKAR BROTHERS LTD 516 570 316 319 215 215 1,047 1,104


KIRLOSKAR BROTHERS INTERNATIONAL B V 126 92 87 56 - 0 213 148

THE KOLHAPUR STEEL LTD. 1 4 11 10 - - 12 14

KIRLOSKAR CORROCOAT PVT LTD. 4 6 8 9 - - 13 14

KIRLOSKAR SYSTECH LTD. (0) (0) 0 0 1 1 0 0

KIRLOSKAR CONSTRUCTION & ENGINEERS LTD (7) (5) 17 28 0 0 10 23

HEMATIC MOTORS PVT. LTD. 70 42 23 23 0 0 93 65

SUB TOTAL 710 708 463 444 215 216 1,388 1,368


KIRLOSKAR EBARA PUMPS LTD. (SHARE 45%) 24 30 24 25 2 - 50 55

SUB TOTAL 734 738 487 469 218 216 1,438 1,423

LESS INTRA GROUP TRANSACTIONS 16 8 63 63 214 214 166 159

TOTAL (KBL) 718 730 423 406 4 2 1,271 1,264

Net Current

Assets

Fixed Assets Investments Total AssetsPARTICULARS


The Way Forward

Irrigation

� Balance invoicing with recovery of outstandings.

� Support EPC contractors during tendering for product orders.

� Focus to continue on retention money collection and site closure.

Power

� Focus on value added products and services.

� Selective approach for new orders based on classification of customers.

� Proactive approach to amend the payment terms and commercial conditions.

� Prioritize site closure of old projects and sale based on payment terms and recovery.

� Strengthen project monitoring through MS Projects.

� Close monitoring of retention debtors .


The Way Forward

Water Resource Management

� Expedite execution for major pending items for new and ongoing projects.

� Target small and medium size electromechanical pumping packages and Sewage Treatment

Plants (STP) through effective partnership.

� All site related activities to be completed so as to collect payment related to installation,

commissioning and retention

Gas, Oil and Defense

� Continue marketing efforts for replacement business.

� Position innovative solutions for Defense.

� Strengthen dealer network.

� Ensure collection of retention payments from ONGC for fire water pump packages.

� Commission and hand over GRSE project.


The Way Forward

Building and Construction

� Booking for FM/UL replacement and new business, Metro- Fire and HVAC.

� FM/UL – target for replacement business in domestic market owing to our competitive

advantage.

� Metro – target new metro projects owing to our strong references.

Industry

� Optimization of product mix to increase margin.

� Business development through replacement business and identifying new markets / upgraded

markets for existing products.

� Key account management for vendors, customers, consultants and OEMs.

� Discipline on commercial terms and conditions.


The Way Forward

Customer Spares and Service

� Focus on untapped customers of Large Pumps Division (LPD) business.

� Modify payment terms.

Distribution

� Ensure optimum utilization of capacity of Sanand plant.

� New range of ETERNA to be introduced for the Industry segment.

� Implement Synchronized Manufacturing and Distribution System (SMDS) with key dealers

� Continue with REACH initiative to further strengthen the footprints of new dealers.


Thank You


Turnover

1,831

2,018 1,947

1,782 1,872

1,602

1,848 1,764

1,667 1,718

229 169 183

115 154

-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

2,400

FY 09 FY 10 FY 11 FY 12 FY 13

Rs.

In C

rore

s

Total Turnover Domestic Exports


Total Assets

0

200

400

600

800

1000

1200

FY 09 FY10 FY11 FY12 FY13

421

594 630 567

512

338

190 167

215

215

277294 299 319

316

NET CURRENT ASSETS INVESTMENTS FIXED ASSETS

1078 10961043

11011036


Net Worth and Borrowings

-

200

400

600

800

1,000

1,200

FY 09 FY 10 FY 11 FY 12 FY 13

709 713 743 754 779

321 357

349 350 268

Rs.

in C

rore

s

NET WORTH BORROWINGS


EBDITA

149 233 178 118 148 149 233 245 146 148

8%

12%

9%

7%

8%8%

12% 13%

8% 8%

0%

2%

4%

6%

8%

10%

12%

14%

-

50

100

150

200

250

300

FY 09 FY 10 FY 11 FY 12 FY 13

Rs.

In C

rore

s

EBDITA

EBDITA W/O EXTRA ORDINARY INCOME & EXPENSE

EBDITA % TO SALES

EBDITA W/O EXTRA ORD INCOME % TO SALES


PBT

98 173 103 34 72 98 173 170 62 72

5%

9%

5%

2%

4%

5%

9% 9%

3%4%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

-

50

100

150

200

250

300

350

400

450

500

FY 09 FY 10 FY 11 FY 12 FY 13

Rs.

In C

rore

s

PBT PBT W/O EXTRA ORDINARY INCOME

PBT % TO SALES PBT W/O EXTRA ORDINARY INCOME


PAT

67 118 61 31 43 67 118 128 59 43

4%

6%

3%

2%

2%

4%

6%

7%

3%

2%

0%

1%

2%

3%

4%

5%

6%

7%

-

20

40

60

80

100

120

140

FY 09 FY 10 FY 11 FY 12 FY 13

PAT

PAT WITHOUT EXTRA ORDINARY INCOME

PAT % TO SALES

PAT WITHOUT EXTRA ORDINARY INCOME


Cash Profit

-

20

40

60

80

100

120

140

160

180

200

FY 09 FY 10 FY 11 FY 12 FY 13

67

118

61

31 43

21

26

30

30

32

Rs. In

Cro

res

PAT WITHOUT EXTRA ORDINARY INCOME DEPRECIATION

144

91

61

75

88


Earning Per Share

6

15

8

4

5

8

18

12

8

10

-

2

4

6

8

10

12

14

16

18

20

FY 09 FY 10 FY 11 FY 12 FY 13

Ru

pees

EARNINGS PER SHARE CASH EARNINGS PER SHARE


Dividend Payout

100%

275%

175%

100% 100%

31.6%

37.1%

45.2%

50.9%

36.5%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

0%

100%

200%

300%

400%

FY 09 FY 10 FY 11 FY 12 FY 13

DIVIDEND % DIVIDEND OUT GO AS % TO PAT


Book Value per Share

67

90 94 95 98

-

20

40

60

80

100

120

FY 09 FY 10 FY 11 FY 12 FY 13

Ru

pees

BOOK VALUE PER SHARE

BOOK VALUE PER SHARE

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