Kirloskar Oil Engines : Annual Report for 2022-23

Kirloskar Oil Engines Limited

A Kirloskar Group Company	Oil Engines

BE

YOU

Annual Report

2022-23

Contents

02-68

Corporate Overview

Corporate Information______________________________________________02

Performance in FY 2022-23

Gross Sales

About the report

Kirloskar Group_____________________________________________________06

KOEL at a Glance___________________________________________________08

Milestones_ ________________________________________________________12

Business overview_________________________________________________14

Strategy for growth_________________________________________________18

Chairman's message_______________________________________________22

Managing Director's message______________________________________24

Business model_ ___________________________________________________26

Governance________________________________________________________28

ESG excellence_____________________________________________________30

Key material issues_______________________________________________31

Stakeholder engagement___________________________________________32

Financial Capital____________________________________________________36

Manufactured Capital______________________________________________40

Intellectual Capital__________________________________________________46

Human Capital_____________________________________________________52

Social and Relationship Capital_ ____________________________________58

Natural Capital_____________________________________________________62

Board of Directors__________________________________________________66

Senior Management________________________________________________68

69-176

Statutory Reports

Notice of the Annual General Meeting______________________________69

Report of the Directors_ ____________________________________________83

H 4,073Crore

EBITDA

H 427Crore

PBT

H 364Crore

PAT

H 270Crore

Standalone performance - the numbers are rounded off to the nearest decimal.

We are pleased to present our Annual Report, which includes voluntary information to the extent available to us, in accordance with the reporting framework developed and designed by International Integrated Reporting Council (IIRC). This report is primarily intended to address the information requirements of investors (our equity and prospective investors). Our endeavour is to present this information in a manner that is also relevant to all the key stakeholders. This report also aligns with the

Scope and boundary

This report covers information on all business operations of Kirloskar Oil Engines Limited, including disclosures through six capitals as defined by International Integrated Reporting Council (IIRC). This report describes our business model, significant risk, opportunities and overall performance and related outcomes. The parameters for the financial capital covered in this report are in relation

to 'Kirloskar Oil Engines Limited' on a standalone basis.

Reporting period

The reporting period for the Annual Report is 1st April, 2022 to 31st March, 2023. However, certain portions of the report provide facts and numbers from prior years in order to give readers a complete picture.

Auditors' reports

To ensure the integrity of facts and information, the financial statements are

audited by G. D. Apte & Co., Chartered Accountants and the 'Independent Auditor's Report' has been duly incorporated as part of this report.

Stakeholder feedback

Stakeholders' constructive participation and feedback are welcomed and appreciated.

Email: [e-mail]

Website: www.kirloskaroilengines.com

Forward-looking statements

This report contains forward looking statements that describe our expectations, based on reasonable assumptions and past performance. These are subject to change in light of developments in the industry, geographical market conditions, government regulations, laws and other incidental factors. These statements must not be used as a guarantee of our future performance, as the underlying assumptions could change materially.

Management Discussion and Analysis_____________________________109

Report on Corporate Governance __________________________________119

Business Responsibility and Sustainability Report _________________138

177-352

Financial Statements

Standalone Financial Statements including Auditor's Report______ 178

Form AOC - 1_____________________________________________________255

Consolidated Financial Statements including Auditor's Report____260

For more

information,

please, visit our

website:

following:

The Companies Act, 2013

Indian Accounting Standards

The Securities and Exchange

Board of India (Listing Obligations

and Disclosure Requirements)

Regulations, 2015

Our Capitals

Financial		Manufactured	Intellectual
Capital		Capital	Capital

Human	Social and	Natural
Capital	Relationship Capital	Capital

Mark 'Kirloskar' used in any form as prefix or suffix and mark are owned by Kirloskar Proprietary Limited and Kirloskar Oil Engines Limited is the permitted user.

Kirloskar Oil Engines Limited		Statutory Reports
Oil Engines	Financial Statements
A Kirloskar Group Company

Corporate Overview

Corporate information			Decade at a glance
BOARD OF DIRECTORS			STATUTORY AUDITORS			REGISTERED OFFICE										J in Crore (unless otherwise stated)
																			Ind AS				Indian GAAP
					G. D. Apte & Co., Chartered Accountants			Laxmanrao Kirloskar Road, Khadki,
Atul Kirloskar						Sr.	Particulars	2022-23	2021-22	2020-21	2019-20	2018-19	2017-18	2016-17	2015-16	2014-15	2013-14
											No.
Executive Chairman upto 31st March 2023									Pune - 411 003, Maharashtra.
and Non-ExecutiveNon-Independent			SECRETARIAL AUDITOR				Ph. No. 020 - 25810341	1	Gross Sales	4,073	3,268	2,664	2,841	3,117	2,860	2,818	2,587	2,641	2,475
Director & Chairman w.e.f. 1st April 2023
Gauri Kirloskar			Mr. Mahesh J. Risbud,			www.kirloskaroilengines.com	2	Net Sales	4,073	3,268	2,664	2,841	3,117	2,804	2,614	2,406	2,473	2,287
Managing Director			Practicing Company Secretary
LOCATION OF FACTORIES	3	Profit Before Tax	364	263	231	225	336	222	252	205	205	243
Rahul Kirloskar
		BANKERS
		Pune, Kagal, Nasik, Rajkot and Bhare
Mahesh R. Chhabria					4	Profit After Tax	270	208	170	170	225	150	174	165	143	178
Vinesh Kumar Jairath			State Bank of India
						5	Dividend (%)	250	200	200	200	250	250	250	250	250	250
M. Lakshminarayan			Bank of Maharashtra
				6	Dividend per share (H)	5	4	4	4	5	5	5	5	5	5
upto 11th August 2022			HDFC Bank Limited
Satish Jamdar
				7	Dividend Amount	72	58	58	58	72	72	72	72	72	72
		ICICI Bank Limited
Sunil Shah Singh			HSBC Limited					8	Earning Per Share (H)	19	14	12	12	16	10	12	11	10	12
Kandathil Mathew Abraham
REGISTRAR AND						9	Book Value Per Share (H)	161	148	137	126	123	113	112	100	93	88
Dr. Shalini Sarin
					SHARE TRANSFER AGENT
Yogesh Kapur					10	Share Capital	29	29	29	29	29	29	29	29	29	29
Link Intime India Private Limited
Purvi Sheth
		Block No. 202, 2nd Floor,					11	Reserves and Surplus	2,303	2,111	1,954	1,801	1,746	1,608	1,588	1,415	1,313	1,238
Arvind Goel			'Akshay' Complex, Near Ganesh Temple,
				12	Shareholders' Funds	2,332	2,139	1,983	1,830	1,775	1,637	1,617	1,444	1,341	1,267
Additional Director w.e.f. 19th May 2023
					Off Dhole Patil Road, Pune- 411 001
CHIEF FINANCIAL OFFICER							13	Loan Funds	75	97	78	15	13	17	12	7	-	-
		Ph. No. 020 - 26161629 / 26160084
Anurag Bhagania					14	Total Capital Employed	2,407	2,236	2,061	1,845	1,788	1,654	1,629	1,451	1,341	1,267
w.e.f. 22nd September 2022
								15	Net Block	425	450	446	362	399	422	440	477	514	543
COMPANY SECRETARY
AND HEAD LEGAL												Till 30 June 2017 Excise duty was applicable and included in Gross sale
														All numbers are rounded off
Smita Raichurkar

CIN: L29100PN2009PLC133351

As a part of our constant endeavor to improve shareholder services, we have initiated a shareholders' satisfaction survey. Please spare a few minutes of your valuable time to fill this questionnaire. The Link is available on the Company's website

viz.https://www.kirloskaroilengines.com/shareholders-survey

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Kirloskar Oil Engines Limited		Statutory Reports
Oil Engines	Financial Statements
A Kirloskar Group Company

Corporate Overview

As society changes and progresses, we at Kirloskar keep up with the pace by constantly evolving. Our philosophy, which has been the foundation of our organisation

for over 134 years, focuses on the progress of humanity.

To the dreamers and the drivers of growth, we say-

May the power always be with you

Limitless

We encourage our customers to boldly embrace the future by breaking free from

At Kirloskar Oil Engines, we believe that partnership powers progress. Progress of a company, of an industry and of a nation. As we partner various sectors that drive the economy, we do everything in our power to understand their unique requirements and anticipate emerging trends while consistently supporting them in their endeavours. We design, develop and build offerings that innovate new avenues of growth for industries, empowering them to be limitless.

Powering life to be limitless

We understand that for life to be limitless, power is essential. The power to move. The power to change. The power to grow. Hence, as we look to the future, we continue to evolve our solutions to enable industries to harness this power. From engines that help the infrastructure sector bridge today with tomorrow to enabling manufacturing industries scale up. Our farm mechanisation equipment is made to empower farmers nurture a better yield. We instil peace of mind with

our firefighting solutions and ensure uninterrupted supply of power to hospitals and airports with our generator sets. We keep pace with the ever-changing world by innovating and adopting newer, cleaner and better technologies - from building combustion engine platforms that use natural gas, ethanol, methanol and biogas based systems to developing higher complex diesel engine systems. But at the heart of our offerings, lies an emphasis on service. We cater to our customers' varied needs, empowering them to unlock a future that is limitless.

convention and living up to their limitless potential.

By addressing the needs of a diverse pool of consumers, we tirelessly ensure that power stays with millions of citizens.

Guided by our values, we have a vision that propels us towards an exciting future full of endless possibilities. With innovation as our driving force, we engineer solutions for tomorrow, always keeping human progress at the forefront. We strive to see beyond challenges and envision the unlimited potential that the future holds.

Being limitless also means a firm commitment to the values we live by: Innovative Thinking, Empathy, Collaboration, Integrity, Excellence, and Value Creation. By designing groundbreaking solutions, we create avenues for innovative services that address problems, generate

value for our customers and society, and hope to exceed their expectations. We operate with empathy and a strong commitment to moving forward together with our customers and partners because, together, we are limitless.

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Kirloskar Oil Engines Limited		Statutory Reports
	Financial Statements
A Kirloskar Group Company	Oil Engines

Corporate Overview

Kirloskar Group

Innovation that empowers and enriches

For more than 134 years, the Kirloskar Group has been a driving force of excellence and innovation.

134+ Years

Of engineering excellence

05

Listed companies

H 20,320 crore

Combined market cap*

H 8,439 crore

Combined net worth of the Group*

6,800+

Employees across the group companies

At the heart of our group's story lies the iron plough. A century ago, our founder, Shri Laxmanrao Kirloskar, started his journey with a small bicycle repair shop in Belgaum, Karnataka, India. Over time, he transformed it into a modest machine tool workshop, manufacturing not only iron ploughs but also chaff cutters - just one example of the engineering innovations that would shape the group's future.

Today, our founder is celebrated as a pioneer of Indian industry and a notable

social reformer. Above all, he was an entrepreneur driven by a passion for innovation that improved people's lives. His enduring legacy provides employment to thousands in India and positively impacts millions of lives, both in India and around the globe.

Today, Kirloskar is recognised as the leader in castings, diesel engine manufacturing, backup power solutions, pneumatic packages, and cooling solutions, serving as a cornerstone for various industries.

With a trail of pioneering achievements, we constantly innovate solutions that defy conventions and unlock a boundless future.

Our group of companies actively operates across diverse sectors, including agriculture, manufacturing, food and beverage, oil and gas, infrastructure, and real estate. The sustainability and profitability of these businesses can largely be attributed to the core values woven into our foundation.

*Market cap based on closing market price of 31st March, 2023

*Listed companies include Kirloskar Ferrous Industries Ltd., Kirloskar Industries Ltd., Kirloskar Oil Engines Ltd., Kirloskar Pneumatic Company Ltd. and Indian Seamless Tubes Ltd. (ISMT).

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