Kilburn Engineering Limited · 2011-09-08 · Mr. Subir Ranjan Dasgupta Mr. Amritanshu Khaitan Mr. Gobind Saraf Mr. Manmohan Singh Company Secretary Ms. Amee B. Joshi VP Finance &

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Report & Accounts 2010 - 2011

CONTENTS Page

Directors’ Report 2 Management Discussion & Analysis Report 5Report on Corporate Governance 8Auditors’ Report 20Annual Accounts alongwith Notes to Accounts 22Abstract of Balance Sheet 40

Board of DirectorsMr. Deepak Khaitan ChairmanMr. Supriya Mukherjee Managing DirectorMr. Subir Ranjan Dasgupta Mr. Amritanshu Khaitan Mr. Gobind SarafMr. Manmohan Singh

Company SecretaryMs. Amee B. Joshi

VP Finance & Chief Financial OfficerMr. A. Suresh

AuditorsM/s Deloitte Haskins & Sells, Mumbai

BankersUnited Bank of IndiaUnion Bank of IndiaThe Federal Bank Ltd.IDBI Bank Ltd.HDFC Bank Ltd.The Karur Vysya Bank Ltd.

Registered OfficeFour Mangoe Lane,Surendra Mohan Ghosh Sarani,Kolkata – 700 001.Tel. No.: (033) 2231 3337 / 3450Fax No.: (033) 2231 4768E-mail: [email protected]

Corporate Office112, Minerva Industrial Estate,P. K. Road, Mulund (W),Mumbai – 400 080.Tel. No.: (022) 2593 6200Fax No.: (022) 2591 7580 / 7554E-mail: [email protected]

FactoryPlot No. 6, MIDC Industrial Area,Saravali, Kalyan Bhiwandi Road,Thane – 421 311.

Registrars & Transfer AgentsMaheshwari Datamatics Pvt. Ltd.6, Mangoe Lane, Surendra Mohan Ghosh Sarani, 2nd Floor, Kolkata – 700 001. Tel. No.: (033) 2243 5809 / 5029; 2248 2248Fax No.: (033) 2248 4787E-mail: [email protected]

Kilburn Engineering Limited A WILLIAMSON MAGOR GROUP ENTERPRISE

Website: www.kilburnengg.com

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Kilburn Engineering Limited

REPORT OF THE DIRECTORSFOR THE FINANCIAL YEAR ENDED MARCH 31, 2011

The Directors of your Company are pleased to present the 23rd Annual Report and Audited Statement of Accounts for the Financial Year ended March 31, 2011.

Year ended31st March, 2011

(Rs. In Lac)

Year ended31st March, 2010

(Rs. In Lac)

FINANCIAL RESULTS

Sales and Services 13305 9302Gross Profit before interest, finance charges and depreciation 1734 910

Interest & Finance charges 304 220Depreciation 96 126Profit before tax 1334 564Tax Expenses 422 133Profit after tax 912 431Balance brought forward from previous year 6350 6187Excess Provision for Dividend Written Back 0 5Amount available for appropriation 7262 6623Less: AppropriationsProposed Dividend 332 199Tax on Dividend 55 33Transfer to Capital Redemption Reserve - 20Transfer to General Reserve 91 21

Balance carried forward to Balance Sheet 6,784 6,350

DIVIDEND Your Directors are pleased to recommend dividend of Rs. 2.50 per equity share of Rs. 10/- each.

YEAR IN RETROSPECTGross sales for the Financial Year under review were Rs. 13305 Lac as against Rs. 9302 Lac for the previous Financial Year registering an increase of 43%. The Profit Before Tax of Rs.1334 Lac and the Profit After Tax of Rs. 912 Lac for the Financial Year under review as against Rs. 564 Lac and Rs. 431 Lac respectively for the previous Financial Year, improved by 136% and 112% respectively.

Your Company’s export turnover has increased from Rs. 2144 Lac to Rs. 4137 Lac registering an increase of 93 % over the previous Financial Year. During the year under review, your Company has executed a number of relatively large orders of critically customized Process Equipment. The Company during the year under review had to absorb the incidence of higher input cost but a number of other measures taken by the Company towards productivity cost control/ reduction in several areas helped to neutralize the impact of higher input cost to some extent.

FUTURE OUTLOOK

Process EquipmentThe Company has substantially strengthened its manufacturing infrastructure during the year. The order inflow has been somewhat sluggish in last six months though the Company has been receiving several enquiries from the end users/ con-sultants for its diverse product range. In some cases, the customers have deferred and slowed down their capex decisions. The ongoing marketing initiatives coupled with the newly setup manufacturing facility are expected to yield better inflow of Process Equipment orders in the future. Your Company’s continued focus on cost reduction/ control are yielding results.

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Food Processing EquipmentThe continuing boom in the Tea industry is expected to augment our sales for Tea Dryers in the current year. Your Com-pany, a market leader in Tea Dryers, will launch during the current year a latest model of Tea Dryer incorporating some new features benefitting the customers. As reported last year, your Company has developed the entire range of Paddy Dryers for the Rice Mills (Basmati / Non Basmati / Raw Paddy) with varying capacities of 3 Ton to 15 Ton. A number of such new dryers have been supplied to several large Rice Mills and are in the process of being commissioned in six differ-ent states. Post analysis of the performance of these equipments, your Company will be able to plan its growth in sales in this segment in the years ahead.

NEW PROJECT/ RELOCATIONThe project involving an outlay of Rs.65 crore (approx.) is nearing completion. The new project is expected to contribute significantly in achieving substantial growth in sales and profitability of the Company in the years ahead.

As planned, the shifting of major part of manufacturing operations in a phased manner from the existing location of Taloja & Mulund at the new site is expected to be completed by the end of 2nd quarter of the current year. During the current year, manufacturing operations will be carried out at the new site & at Mulund, Mumbai.

As regards the allotment of 20 acres of land from Asansol Durgapur Development Authority (ADDA), no further develop-ment in the matter has taken place since May 2008. The Company was informed that ADDA is in the process of acquiring the land.

DIRECTORSPursuant to Article 87 of Articles of Association of the Company, Mr. Deepak Khaitan and Mr. Manmohan Singh retire at the ensuing Annual General Meeting of the Company and being eligible, offer themselves for re-appointment.

AUDITORSM/s Deloitte Haskins & Sells, Statutory Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting of the Company. The Company has obtained a certificate from them stating that their appointment, if con-sidered and approved, will be within the limits of Section 224(1B) of the Companies Act, 1956. The Company has also obtained a certificate from them stating that they have subjected themselves to the Peer Review Process of The Institute of Chartered Accountants of India (ICAI). Being eligible, they offer themselves for re-appointment as Statutory Auditors for the FY 2011-12.

AUDIT COMMITTEEYour Directors have, in compliance with the provisions of Section 292A of the Companies Act, 1956 and Clause 49 of the Listing Agreement, constituted the Audit Committee of the Board. As on date, the members of the Audit Committee are Mr. Gobind Saraf (Chairman), Mr. Manmohan Singh, Mr. Subir Ranjan Dasgupta and Mr. Supriya Mukherjee.

DIRECTORS’ RESPONSIBILITY STATEMENTPursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, the Board of Directors of your Company hereby confirms:

1) that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departure;

2) that the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the Profit and Loss of the Company for the period;

3) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4) that the Directors have prepared the annual accounts on a going concern basis.

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MANAGEMENT DISCUSSION & ANALYSISA separate report on Management Discussion & Analysis, covering the following areas is appended to this Annual Report as Annexure “A” and forms part of this Directors’ Report;

1) Industry Structure, Development & Outlook2) Financial performance vis-à-vis operational performance3) Opportunities & Threats4) Segment wise or Product wise performance5) Risks & Concerns6) Internal Control Systems & their adequacy7) Human Resource Development8) Gentle word of Caution

HUMAN RESOURCE DEVELOPMENTThe Company considers human resources as its most critical asset and is putting in place various practices to ensure healthy work environment. The Company has recruited 49 employees (including 36 engineers) during the year at senior levels to meet the ambitious future growth plans of the Company. Industrial relations continued to be cordial and harmonious throughout the year.

CONSERVATION OF ENERGY, TECHNICAL ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGOThe information relating to Conservation of Energy, Technical Absorption and Foreign Exchange Earnings and Outgo as required to be disclosed pursuant to Section 217(1)(e) of the Companies Act, 1956 read with The Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988, as amended, is appended to this Annual Report as Annexure “B” and forms part of this Directors’ Report.

PERSONNELThe requirement of the provisions of Section 217(2A) of the Companies Act, 1956, read with The Companies (Particulars of Employees) Rules, 1975, as amended, is not applicable to the Company.

CORPORATE GOVERNANCEIn compliance with Clause 49 of the Listing Agreement, a detailed Report on Corporate Governance is enclosed as a part of this Annual Report. A certificate from a Practising Company Secretary regarding compliance of the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement, is appended to this Annual Report and forms part of this Directors’ Report.

COLLABORATORSThe Board places on record its sincere appreciation to its collaborators Nara Machinery Co. Ltd., Japan and Carrier Vibrating Equipment Inc, of USA for extending their valuable support and co-operation.

ACKNOWLEDGEMENTYour Directors thank the Central Government, Government of West Bengal, Government of Maharashtra as also the Government agencies, bankers, local bodies, stock exchanges, shareholders, customers, vendors, employees of the Company and other related organizations for their continuous co-operation and support in the progress of the Company and also look forward to their continued confidence and trust in the Company.

For and on behalf of the Board

Deepak KhaitanMumbai, May 28, 2011 Chairman

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ANNEXURE “A” FORMING PART OF DIRECTORS’ REPORT 2010-11 MANAGEMENT DISCUSSION AND ANALYSIS REPORT

1) Industry Structure, Development & Outlook Engineering industry in India is characterized by a few large players who serve all industrial segments. In addition,

there are SMEs with a lesser turnover who serve particular segments of industry. Further, there are micro enterprises who do need base fabrication and machining works.

Kilburn Engineering Ltd. is a leader in process design, engineering, manufacturing, project management and installation of equipment and systems for various process plants across the world. The Company provides solutions for drying of solid, liquid and gas products in industries like chemical, petrochemical, fertilizer, steel, refineries, oil and gas, power, food processing, etc. Kilburn is a single manufacturer of drying equipments across all industrial segments whereas its competitors cater to only certain segments. The Company also has infrastructure and expertise for handling exotic material such as Nickel, Inconel, Duplex Stainless Steel and other exotic material. The Company also has a highly qualified and talented pool of expertise in mechanical, chemical, metallurgical, electrical and instrumentation disciplines.

The Company largely deals with two groups of products viz. Process Equipment and Food Processing Equipment. The Company’s current and future performance in respect of these two groups of products has been outlined in the Directors’ Report.

During the current year, the Company will be shifting its operations to a state of art manufacturing facility set up at MIDC, Saravali, Thane. The facility has adequate shop floor area (158000 Sq. ft.) and aggregate overhead crane capacity over 200 Tons distributed over four bays.

The Company’s fabrication, skills and excellent infrastructure at the new factory is expected to increase order inflow for supply of Pressure Vessels, Reactors, Heat Exchangers, Rotary Dryers, Calciners etc.

After a period of recession, most segments in engineering industries have revived especially chemical industries in India which forms a substantial part of your Company’s customer base. Industrial growth has been around 8% and is expected to grow at higher rate during 2011-12. As the products are in the capital goods sector the development of the Company is dependent on the expansion of customer industries, their investment decisions and their capital outlay. The Company has strengthened its marketing and manufacturing set up. This together with the new plant should give the Company adequate inflow of orders.

Your Company is a Government approved R & D House with inhouse pilot plant facilities. Your Company has ISO:9001 and ASME U Stamp accredition. All above factors will place the Company at a competitive and favourable position in getting orders.

In the food processing equipments, your Company has developed a new dryer model for Tea which will be launched very shortly. During 2010 -11, the Company has sold and commissioned dryers for Tea and Rice Mill Industry which are capable of reducing moisture from 36% to 12%.

Your Company is also in the process of registration with consultants wherever not registered so far.

In Sugar dryer market the Company hopes to increase its presence significantly during the year.

In the Paddy Drying equipment, the Company has supplied paddy drying equipments to 8 new Customers during the year which are in the process of installation. The Company expects orders from other Customers based on the performance of the existing machines.

Your Company’s competitive pricing and better product quality vis-à-vis competition gives the Company significant opportunities for growth in sales and profitability.

However, increase in input cost, delay in investment decisions by the customers could affect the companies revenues and margins.

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2) Financial Performance vis-à-vis Operational Performance Financial performance has been separately dealt with under the Directors’ Report.

3) Opportunities and Threats The completion of the state of the art factory will substantially strengthen the manufacturing infrastructure of your

Company during the year. The focus of the Company has shifted on establishing improved marketing initiatives and systems. This coupled with the new set up is expected to yield results in terms of high order inflow and turnover.

The Company continues to face threats in the export market from countries in East Europe and China for Process Equipment. The increase in input costs and adverse impact on the exchange rate may act as threats affecting the Company’s margin.

4) Segment wise or Product wise performance The Company is primarily engaged in designing and manufacturing drying systems for diverse applications. The

Company largely deals with two groups of products viz. Process Equipment and Food Processing Equipment. The Company’s current and future performance in respect of these two groups of product has been outlined in the Directors’ Report.

5) Risks & Concerns The Company is prone to risks specific to engineering industry like volatility in fluctuating input cost, delay in receipt

of imported materials etc.

Besides the Company’s earnings are exposed to fluctuations in exchange rates. The Company constantly reviews its forex exposure and adopts appropriate hedging policies to mitigate currency risks.

6) Internal Control Systems and their Adequacy Internal control and management information system of the Company envisages flow of information to the

management on various functions like marketing, process, execution, logistics, finance and HR. Internal auditors who report to the Board of Directors cover areas selected by the Audit Committee for their periodic audit. The observations of the internal auditors are reviewed and corrective action advised by the Audit Committee is implemented and where necessary system of management audit by a Senior Officer continues during the current year.

7) Human Resource Development Company has recruited 49 employees (including 36 engineers) during the year at senior levels to meet ambitious

future growth plans of the Company. Industrials relations continued to be cordial and harmonious throughout the year. As on March 31, 2011, the Company had 148 employees on rolls.

8) Gentle word of Caution Some of the statements in this management discussion and analysis report describing the Company’s objectives, projections,

estimates and expectations maybe ‘Forward Looking Statements’ within the meaning of applicable laws and regulations. Actual results might differ substantially or materially from those expressed or implied. Important developments that could affect the Company’s operations include a downtrend in industry, significant changes in political and economic environment in India, tax laws, foreign exchange fluctuation, custom duties, litigations and labour relations.

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ANNEXURE “B” FORMING PART OF DIRECTORS’ REPORT 2010-11INFORMATION PURSUANT TO SECTION 217(1)(e) OF THE COMPANIES ACT, 1956 READ WITH THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988.A. Conservation of energy:

a) Energy conservation measures taken: The Company’s production activity is not energy intensive.b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy: The Company is planning to install necessary equipments for optimizing energy usage at its new location.c) Impact of the measure at (a) and (b) above for reduction of energy consumption and consequent impact on the cost of

production of goods: Impact of measures being undertaken can be identified after implementation.d) Total energy consumption and energy consumption per unit of production: Total consumption – 230518 KWH Consumption per unit – 131.88 KWH/MT

B. Research and Development (R&D):1. SpecificareasinwhichR&DcarriedoutbytheCompany:

a) Commissioned phase VI tea dryer model for efficient drying and dedusting system. With this new development, exhaust gases are free from any carry over of fibre. Balanced push pull system which result into no side spillage of tea.

b) Development of complete paddy drying system – from parboiling plant to final drying of paddy using the concept of fluidization.

c) Development of steaming system for proper gelatinization of soaked paddy which increases the overall yield of rice. d) Development of continuous vacuum conductive type dryer for application in pharmaceutical and chemicals which

degraded during drying at high temperature.e) Development of orthodox tea dryer for Darjeeling Tea.

2. BenefitsderivedasaresultoftheaboveR&D:a) Clean environment and improvement in quality of final product.b) Energy efficient system with overall decrease in operating costs.c) With the increase in final yield, increase in profitability of rice mills. d) Heavy batch type equipment will be replaced with continuous, efficient drying system.

3. FuturePlanofaction: Through R&D efforts, develop more efficient drying systems for diverse range of products.

4. ExpenditureonR&D:a) Capital : Nilb) Recurring : Rs. 39.43 Lacc) Total : Rs. 39.43 Lacd) Total R&D expenditure as a percentage of total turnover : 0.30%

C. Technology absorption, adaptation and innovation:a) Efforts, in brief, made towards Technology absorption, adaptation and innovation. Research on coal drying system for power plant using normal steam / waste steam as heat source will provide following

benefits – - Improve the efficiency of boiler - Resolve the number of mechanical issues related to the movement / crushing of coal.b) Benefits derived as a result of the above efforts e.g.,product improvement, cost reduction, product development, import

substitution, etc.Enhancement in Company’s capacity to provide a broader range of process plant and systems.c) Technology import : NA

D. Foreign exchange earnings and outgo:a) Activities relating to exports, initiative taken to increase exports, development of new export markets for products and

services and export plans: The Company’s executives visited prospective customers overseas. The Company also actively participated in ACHEMA fair

and explored available opportunities.b) Total foreign exchange used and earned: Total foreign exchange used – Rs. 1081 Lac Total foreign exchange earned – Rs. 4137 Lac

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I. Company’s Philosophy Continuous maintenance and enhancement of Stakeholders’ value has always been at the helm of Company’s

objective. The vision of Kilburn Engineering Limited (KEL) is to strive continuously to give optimum returns to Stakeholders’ and to uphold the core values of transparency, integrity, honesty, fairness, equity and accountability in all spheres, which are fundamental to the Company.

The Company endeavours and follows the best ethical and good corporate governance policy and thereby ensures the compliance with all applicable statutory and regulatory provisions of laws. It is firmly believed that good governance practices would ensure efficient conduct of the affairs of the Company and help the Company to achieve its goal of maximizing value for all its stakeholders.

II. Board of Directors The composition of the Board is in conformity with Clause 49 of the Listing Agreement entered into with Stock

Exchanges. The Board of Directors of your Company consists of 6 (Six) Directors, out of which 3 (Three) are Independent Directors. The Chairman of the Board is a Non-Executive Director. i) Details of Composition & Category of Board, their attendance at the Board Meetings and last Annual General

Meeting, Directorship held in other Companies, Committee Chairmanship / Membership held in other Companies as at March 31, 2011 are as given below:

REPORT ON CORPORATE GOVERNANCE(Pursuant to Clause 49 of the Listing Agreement)

ii) None of the Non-Executive Directors of the Company have any pecuniary relationship and / or transaction with the Company. The disclosure of fees / compensation, if any, paid to the Non-Executive Directors is done at appropriate place later in this Report on Corporate Governance.

iii) During the year 2010-11, the Board of Directors of your Company met 4 times on 28/5/2010, 11/8/2010, 12/11/2010 and 14/2/2011.

The intervening period between any two meetings did not exceed more than 4 months as prescribed under Clause 49 of the Listing Agreement.

iv) The compliance reports of all applicable laws are placed before the Board periodically. All the material and important items pertaining to the development and working of the Company is included with a detailed note

Sr. No

Name of theDirector

Category

No. of Board Meetings during the year 2010-11

Attendance at the last AGM held on 31.08.10

Directorship in other public companies1

Committee position held in other public companies2

Held Attended Chairman Member

1Mr. Deepak KhaitanChairman

Non-Executive

4 2 No 7 - 1

2Mr. Supriya MukherjeeManaging Director

Executive 4 4 Yes 1 - -

3Mr. Subir Ranjan Dasgupta

Independent 4 3 Yes 3 - -

4 Mr. Amritanshu Khaitan Non-Executive

4 1 Yes 4 - -

5 Mr. Gobind Saraf Independent 4 3 Yes 2 - -

6 Mr. Manmohan Singh Independent 4 4 Yes 1 - -

1 Directorship held in Private Companies, Section 25 Companies, Foreign Companies and as an alternate director is not included. 2 Only Audit Committee and Shareholders’ Grievance Committee are taken into consideration as per the provisions of Clause 49

of Listing Agreement. None of the Directors of the Company is a member of more than 10 committees or acts as a Chairman of more than 5 committees across all the Companies wherein he is a director.

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in the Agenda and the same is circulated to the Board well in advance, so as to enable them to take strategic decisions. The information which could not be circulated to the Board, in advance, is placed at the table during the Board Meeting. The information as specified in Annexure IA of the Clause 49 of the Listing Agreement is provided to the Board as and when applicable and material.

v) The Board has adopted “Code of Conduct for Board Members and Senior Management of the Company”. All the Board Members and Senior Management have affirmed the compliance with the said Code of Conduct during the year 2010-11. A declaration to this effect signed by Managing Director is appended to this Report of Corporate Governance. The Code of Conduct is available on the website of the Company i.e., www.kilburnengg.com.

III. Audit Committee

i) Composition of the Audit Committee, particulars of meetings held and attended during the year 2010-11: The composition of the Audit Committee is in conformity with Clause 49 of the Listing Agreement entered into

with Stock Exchanges. The Audit Committee of the Board comprises of following members:

Name Position Held Category

Mr. Gobind Saraf Chairman Non-Executive Independent Director

Mr. Subir Ranjan Dasgupta Member Non-Executive Independent Director

Mr. Manmohan Singh Member Non-Executive Independent Director

Mr. Supriya Mukherjee Member Managing Director

Ms. Amee B. Joshi Secretary Company Secretary & Compliance Officer

All the members of the Audit Committee are financially literate and considering their professional background and experience, have acquired respective management, financial, accounting and legal expertise. The Chairman of the Audit Committee is a Non-Executive Independent Director. The Chairman of the Audit Committee was present at the previous Annual General Meeting held on 31st August, 2010.

The VP-Finance & Chief Financial Officer of the Company and Statutory Auditors are invitees to the meetings of the Audit Committee. The Company Secretary acts as the Secretary to the Committee.

Meetings and Attendance during the year 2010-11: During the year 2010-11, four meetings of the Audit Committee were held and attended by the members as per

the details given below:

Sr. No. Name of Director Meetings / Attendance

28/5/2010 11/8/2010 12/11/2010 14/2/2011

1 Mr. Gobind Saraf Absent Present Present Present

2 Mr. Manmohan Singh Present Present Present Present

3 Mr. Subir Ranjan Dasgupta Present Present Absent Present

4 Mr. Supriya Mukherjee Present Present Present Present

The minutes of Audit Committee Meeting are noted by the Board of Directors of the Company at the Board meeting after getting approved by the Audit Committee.

ii) Terms of reference The terms of reference of the Audit Committee includes the mandatory matters specified in Clause 49 of the Listing

Agreement and also covers the matters specified under Section 292A of the Companies Act, 1956. The terms of reference of the Audit Committee are broadly detailed as under:

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a) Overseeing the Company’s financial reporting process to ensure disclosure of financial information as per the requirements of Stock Exchange and the Company Law requirements and to ensure that the financial statements are correct and credible.

b) Review of quarterly, half yearly and annual financial statements before submission to the Board for approval.

c) Review of Management Discussion & Analysis of financial condition and results of operations, statement of significant related party transactions.

d) Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of the Statutory Auditors and Internal Auditors and the fixation of audit fees.

e) Review of adequacy of internal control systems, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure, coverage and frequency of internal audit and further recommending to the Internal Auditors the nature and scope of internal audit.

f) Review of reports of Statutory and Internal Auditors and replies of the management thereof.

g) Review of the findings of any internal investigations by the Internal Auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board.

h) Review of the annual financial statements with the management before submission to the Board for approval, with particular reference to :• Matters required to be included in the Directors’ Responsibility Statement to be included in the Board’s

report in terms of Clause (2AA) of Section 217 of the Companies Act, 1956.• Changes, if any, in accounting policies and practices and reasons for the same.• Major accounting entries involving estimates based on exercise of judgment of management.• Significant adjustments made in the financial statements arising out of audit findings.• Compliance with listing and other legal requirements relating to financial statements.• Disclosures of any related party transactions.• Qualifications in the draft audit report.

i) Review of management representation letters to be issued to the Statutory Auditors.

j) Looking into the reasons for substantial defaults in payments to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors.

k) Reviewing compliances as regards the Company’s Whistle Blower Policy.

l) Approval of the appointment of the Chief Financial Officer (CFO) of the Company after assessing the qualifications, experience & background, etc. of the Candidate.

IV. Remuneration Committee

i) Composition of the Remuneration Committee, particulars of meetings held and attended during the year 2010-11:

The Board has constituted Remuneration Committee for fixing and approving the remuneration / commission payable to Executive and Non-Executive Directors of the Company, however, subject to the approval of shareholders and Central Government, wherever necessary. The composition of Remuneration Committee is as follows:

Name Position Held Category

Mr. Gobind Saraf Chairman Non-Executive Independent Director

Mr. Subir Ranjan Dasgupta Member Non-Executive Independent Director


During the year 2010-11, 2 meetings of Remuneration Committee were held on 11/8/2010 and 14/2/2011, which were attended by Mr. Gobind Saraf, Mr. Subir Ranjan Dasgupta and Mr. Manmohan Singh.

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ii) Terms of reference:a) To determine and set forth, in consultation with Board, the Remuneration package of Executive Directors of

the Company;b) To determine and approve the remuneration and commission / incentive payable to the Managing Director of

the Company for each financial year;c) To approve the sitting fees / commission payable to the Non-Executive Directors of the Company;d) To approve, in the event of loss or inadequacy of profits in any given financial year, the minimum remuneration

payable to the Managing Director and Wholetime Directors within the limits as specified in Schedule XIII of the Companies Act, 1956.

iii) Employee Stock Option Scheme: The Company does not have any Employee Stock Option Scheme in place.

iv) Remuneration Policy: The Company’s remuneration policy is based on the link between individual performance and business

performance. Through its Remuneration policy, the Company endeavors to attract, retain, develop and motivate a high performance workforce. The remuneration to the Directors is determined by the Board within the statutory limits based on the recommendation of Remuneration Committee and subject to the approval of shareholders and Central Government, if required.

During the year 2010-11, Mr. Supriya Mukherjee, Managing Director was paid Rs. 92.40 Lac as Salary, Rs. 27.00 Lac as Bonus, Rs. 5.90 Lac as Perquisites and Rs. 18.17 Lac was contributed to the retirement funds. He does not hold any equity shares in the Company as on March 31, 2011. His tenure as per the agreement is from April 1, 2008 till March 31, 2011. The notice period is 6 months and no severance fees is payable to him.

The Board of Directors of the Company by a resolution passed on March 12, 2011 has re-appointed Mr. Supriya Mukherjee as Managing Director of the Company for a period of 3 years commencing from April 1, 2011 subject to the approval of the shareholders at the ensuing Annual General Meeting of the Company and the Central Government. The terms and conditions of his re-appointment are attached to the notice of the ensuing Annual General Meeting.

The details of relationship between Directors inter-se, sitting fees paid to Non-Executive Directors during the year 2010-11 and the number of equity shares held by them is as follows:

Name Relationship between Directors inter-se

Sitting fees paid for Board Meetings and Committee Meetings (In Rs.)

Number of Equity Shares held in KEL as on March 31, 2011

Mr. Deepak KhaitanFather of Mr. Amritanshu Khaitan

13,000 1,201

Mr. Amritanshu KhaitanSon of Mr. Deepak Khaitan

3,000 NIL

Mr. Subir Ranjan Dasgupta - 45,000 NIL

Mr. Gobind Saraf - 1,12,000 91

Mr. Manmohan Singh - 91,000 NIL

The Non-Executive Directors were paid sitting fees of Rs. 3,000/- for each meeting of the Board and of Committee thereof attended by them upto August 31, 2010. The Board of Directors have, at their meeting held on August 11, 2010, increased the sitting fees from Rs. 3,000/- to Rs. 10,000/- for each meeting of the Board and of Committee thereof attended by the Non-Executive Director on or after September 1, 2010, subject to the approval of the shareholders at the ensuing Annual General Meeting of the Company. Except for sitting fees, Non-Executive Directors are not paid any remuneration and / or commission.

V. Shareholders / Investors’ Grievance cum Share Transfer Committee

The Shareholders / Investors’ Grievance cum Share Transfer Committee of the Board has been constituted in line with the requirements of Clause 49 of the Listing Agreement.

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Name Position Held CategoryMr. Gobind Saraf Chairman Non-Executive Independent Director

Mr. Supriya Mukherjee Member Managing Director


ii) Name, Designation and Contact details of Compliance Officer:Ms. Amee B. JoshiCompany Secretary

112, Minerva Industrial Estate,P. K. Road, Mulund (W), Mumbai – 400 080.

Tel. No.: 022 25936200 (Ext. 287); E-mail: [email protected]

iii) Procedure for approval and details of meetings and attendance during the year 2010-11:

The power to approve the share transfer / transmission and dematerialization and / or rematerialisation has been delegated severally to Mr. A. Suresh, VP- Finance & Chief Financial Officer and Ms. Amee B. Joshi, Company Secretary. The request for share transfer/transmission, dematerialization/rematerialisation and issue of new share certificates in lieu of old/worn-out/lost/defaced/split/consolidation, etc., is processed and attended atleast once in a fortnight in co-ordination with Maheshwari Datamatics Private Limited, Registrars & Transfer Agents of the Company.

All the above requests processed during a quarter are then taken into record for approval of Shareholders / Investors’ Grievance cum Share Transfer Committee.

During the year 2010-11, four meetings were held and attended by the members as per the details given below:

i) The Committee as of March 31, 2011 comprises of following members:

Sr. No. Name of Director Meetings / Attendance

28/5/2010 11/8/2010 12/11/2010 14/2/2011

1 Mr. Supriya Mukherjee Present Present Present Present2 Mr. Gobind Saraf Absent Present Present Present

3 Mr. Manmohan Singh Present Present Present Present

iv) Terms of reference: a) To look into the redressal of shareholders and investors complaints like non-receipt of notices / annual reports,

non-receipt of declared dividends, non-receipt of share certificates, etc;b) To approve and register share transfer and transmission;c) To expedite the process of dematerialization and / or rematerialisation of shares;d) To take on record the Certificate taken under Clause 47 (c) of the Listing Agreement from Practising Company

Secretary;e) To take on record the Secretarial Audit Report submitted by Practising Company Secretary every quarter.

v) Details of Investors’ Complaints/Grievance and their status: The details of Investors’ Complaints received and redressed by the Company and Maheshwari Datamatics Pvt. Ltd.

during the year 2010-11 is as follows:

Nature of Complaints Number of Complaints Received Number of Complaints Resolved

Non-receipt of Declared Dividend 8 8

Non-receipt of Share Certificates 3 3

Non-receipt of Annual Reports 1 1

Shares not dematerialized / rematerialized

NIL NIL

Others NIL NIL

Total 12 12

13


VI. Subsidiary CompaniesThe Company does not have any subsidiary companies.

VII. General Body Meetings i) Details of last three Annual General Meetings (AGM):

Financial year AGM No. Day & Date Venue Time

2009-10 22nd Tuesday, 31st August, 2010

Williamson Magor Hall, The Bengal Chamber of Commerce and Industry, 6, Netaji Subhash Road, Kolkata – 700 001

10.30 a.m

2008-09 21st Tuesday, 29th September, 2009


11.00 a.m

2007-08 20th Friday, 26th September, 2008


10.00 a.m

ii) Details of Special resolutions passed in last three Annual General Meetings (AGM):

AGM No.No. of Special resolutions passed

Particulars of Special resolutions

22nd NIL NA

21st NIL NA

20th 2 (Two)

1. Appointment of Mr. Supriya Mukherjee as Managing Director of the Company for a period of three years w.e.f. April 1, 2008;2. Keeping of Register of Members / Debentureholders and other documents specified under Section 159 and 160 of the Companies Act, 1956 at the office of Registrars and Share Transfer Agents of the Company i.e., Maheshwari Datamatics Pvt. Ltd.

iii) Details of resolutions passed through Postal Ballot:

During the year 2010-11, none of the resolutions were passed through Postal Ballot. As on date of this Report, none of the resolutions are proposed to be passed through Postal Ballot. As and when required, the Postal Ballot shall be conducted in accordance with the provisions of Section 192A of the Companies Act, 1956 and The Companies (Passing of Resolutions through Postal Ballot) Rules, 2001.

VIII. Disclosures

i) Related party transactions:

Related party transactions have been disclosed under Note 15 of Schedule 17B of Audited Accounts in accordance with “Accounting Standard 18”. A statement in summary form of transactions with related parties in the ordinary course of business is periodically placed before the Audit Committee for review and recommendation to the Board for their approval.

No material transactions are entered with related parties in conflict with the interest of the Company’s business. All the transactions with related parties are entered at arm’s length price. The Disclosure of interest in any of the transaction is made to the Board every year by the Directors and as and when they become interested. Further, interested Directors neither participate nor vote in the transaction wherein they have potential interest.

14


ii) Disclosure of Accounting treatment:

The financial statements of the Company for the year ended March 31, 2011 are prepared in conformity with the Accounting Standards. From the current year, for project orders, which are executed over a period of time, the Company has adopted progress method of accounting for better presentation of financial statements.

iii) Risk Assessment:

The Company has an effective and efficient Risk Assessment and Management System to track, analyze and mitigate the risks associated with the Company. The Board of Directors periodically review the procedure of Risk Assessment and Management and thereby frame a properly defined network with help of which executive management can control risks. The details of risks associated with the Company and the ways to mitigate those risks are discussed in Management Discussion & Analysis Report annexed to the Directors’ Report.

iv) Proceeds from public issues, rights issues, preferential issues, etc.:

During the year under review, the Company has not raised any proceeds through public issues, rights issues, preferential issues, etc.

v) Remuneration of Directors:

Already disclosed in Clause IV “Remuneration committee” section.

vi) Management:

a) Management Discussion & Analysis report is attached as annexure “A” to Directors’ Report.b) There were no material financial and commercial transactions by Senior Management as defined in Clause

49 of the Listing Agreement where they have personal interest that may have a potential conflict with the interests of the Company at large.

vii) Shareholders:

The brief profile and other information pertaining to Directorship held in other Companies, shareholding, etc, of the Directors proposed to be appointed / re-appointed at the ensuing Annual General Meeting of the Company are attached to the Notice of Annual General Meeting.

viii) Compliances:

a) During the last three years ending on March 31, 2011, there were no non-compliances, penalties, strictures imposed on the Company by Stock Exchanges, SEBI or any other statutory authority, on any matter related to capital markets.

b) The Company has fully complied with all the statutory requirements of Listing Agreement entered into with Stock Exchanges including mandatory requirements of Clause 49.

c) The details of compliance with non-mandatory requirements of Clause 49 of the Listing Agreement is as follows;

i) The Board has set up a Remuneration Committee to determine competitive remuneration package of Executive Directors of the Company. The details of Remuneration Committee are given earlier in this report.

ii) Whistle Blower Policy:

The Company has established a mechanism for employees to report to the management about the unethical behaviour, fraud or violation of Company’s code of conduct. The mechanism provides for adequate safeguard to the victimized employees and spreads the way to curb those practices being followed in the office premises. None of the personnel of the Company has been denied access to the Audit Committee.

15


ix) Means of Communication:

a) Financial results

The quarterly, half yearly and annual results of the Company in the format prescribed under Clause 41 of the Listing Agreement are published in prominent dailies such as Business Standard / Free Press Journal (English) and Sangbad Pratidin / Aajkal (Bengali) and also posted on the website of the Company i.e., www.kilburnengg.com.

b) Other information

Important official news and presentation made to institutional investors or to the analysts is also posted on the Company’s website www.kilburnengg.com, as and when released.

x) CEO/CFO Certificate:

The CEO/CFO Certificate for the year ended March 31, 2011 as required under Clause 49(V) of the Listing Agreement, was placed and taken on record at the Board Meeting of the Company held on May 28, 2011.

xi) Certificate of compliance:

The Certificate of Practising Company Secretary confirming compliance with all requirements of Clause 49 of the Listing Agreement for the year ended March 31, 2011 is appended to this report.

xii) Insider Trading Code:

The Company has adopted Code of Conduct for Prevention of Insider Trading in line with “Model Code of Conduct for Insider Trading” given in Schedule I of SEBI (Prohibition of Insider Trading) Regulations, 1992, as amended till date. The Code of Conduct elaborates ways and measures to deal with unpublished price sensitive information and restricts the insider trading by any of the Directors and Senior Management personnel of the Company.

xiii) General Shareholders Information:

a) Annual General Meeting

Date : Saturday, September 24, 2011Time : 10:30 a.m.Venue : Williamson Magor Hall, The Bengal Chamber of Commerce and Industry, 6, Netaji Subhash Road, Kolkata – 700 001.

b) Financial year 2011-12 (tentative schedule)

Quarter ResultsEnding on June 30, 2011 : Second week of August 2011Ending on September 30, 2011 : Second week of November 2011Ending on December 31, 2011 : Second week of February 2012Year ended March 31, 2012 : In the month of May 2012 AGM is proposed to be held in September 2012.

c) Date of Book Closure : Saturday, September 17, 2011 to Saturday, September 24, 2011 (both days inclusive)

d) Dividend Payment date : If declared, will be paid on or after September 29, 2011

e) Listing on Stock Exchanges : The Bombay Stock Exchange Limited (BSE), Mumbai The Calcutta Stock Exchange Association Limited (CSE), Kolkata The Annual Listing fees for the year 2010-11 has been paid to the above two Stock Exchanges within the stipulated time.

16


f) Stock Code : The Bombay Stock Exchange Ltd. : 522101 The Calcutta Stock Exchange : 21022 Association Ltd.

g) Corporate Identification Number (CIN) : L24232WB1987PLC042956

h) Stock Market Price Data :

Month & Year Share Price of KEL on BSE BSE Sensex

Month's High(Rs.)

Month's Low(Rs.)

Month's Closing Price (Rs.)

Volume of shares traded

(In no.)

Month's High(Index point)

Month's Low(Index point)

April 2010 73.40 55.10 67.25 902827 18047.86 17276.80

May 2010 66.00 56.65 63.20 240958 17536.86 15960.15

June 2010 68.00 57.65 64.50 151640 17919.62 16318.39

July 2010 74.80 63.85 65.90 247954 18237.56 17395.58

August 2010 75.35 66.10 68.30 330130 18475.27 17819.99

September 2010 80.70 66.80 72.60 556208 20267.98 18027.12

October 2010 74.90 67.00 67.95 180853 20854.55 19768.96

November 2010 84.00 65.10 82.40 370407 21108.64 18954.82

December 2010 89.50 70.00 79.60 240534 20552.03 19074.57

January 2011 81.00 66.75 71.35 138742 20664.80 18038.48

February 2011 74.90 64.15 65.25 69749 18690.97 17295.62

March 2011 70.00 60.60 61.25 36441 19575.16 17792.17

i) Performance of share price of the Company in comparison to BSE Sensex:

KEL Share Price and Sensex Movement (For FY 2010-11)

0

10

20

30

40

50

60

70

80

90

100

Apr-1

0

May

-10

Jun-

10

Jul-1

0

Aug-

10

Sep-

10

Oct

-10

Nov

-10

Dec

-10

Jan-

11

Feb-

11

Mar

-11

KEL

Clo

sing

Pric

e (R

s.)

0.00

5,000.00

10,000.00

15,000.00

20,000.00

25,000.00

SEN

SEX

(Poi

nts)

KEL Close Price SENSEX

17


j) Registrars and Transfer Agents : Maheshwari Datamatics Private Limited 6, Mangoe Lane,2nd Floor, Surendra Mohan Ghosh Sarani,

Kolkata – 700 001. Tel No.: (033) 2243 5809 / 5029; 2248 2248 Fax No.: (033) 2248 4787 E-mail: [email protected]

k) Share Transfer System :

The physical transfer of shares is processed and approved by the Company in co-ordination with Maheshwari Datamatics Private Limited, atleast once in every fortnight. The Share Certificates after effecting transfer are despatched to the shareholders within 30 days from the date of receipt of transfer request, if the transfer documents are found technically in order and complete in all respects. The transfer of shares held in Demat mode is processed electronically by Maheshwari Datamatics Private Limited within 21 days from the date of receipt of the request.

The Shares of the Company are compulsorily traded in dematerialized form.

l) Distribution of shareholding as on March 31, 2011:

Equity Shares held No. of Shareholders % of Shareholders Number of Shares held % of Shares held

1-500 7559 87.98 1203252 9.08

501-1000 495 5.76 411687 3.10

1001-2000 248 2.89 388571 2.93

2001-3000 81 0.94 214761 1.62

3001-4000 41 0.48 149131 1.13

4001-5000 34 0.39 160334 1.21

5001-10000 65 0.76 485216 3.66

Above 10000 69 0.80 10242816 77.27

Total 8592 100.00 13255768 100.00

Shareholding pattern as on March 31, 2011:

CategoryNo. of

Shareholders

No. of Shares

held

Percentage of Shareholding

No. Shares Pledged or otherwise

encumbered

Percentage of Shares Pledged

A Promoters’ Holding

1 Promoters

Indian 4 7550537 56.96 - -

B Public Shareholding

2 Institutional Investors

a. Mutual Funds and UTI 2 900 0.01 - -

b. Banks, Financial Institutions 3 1800 0.01 - -

d. Foreign Institutional Investors 1 36690 0.28 - -

3 Others

a. Bodies Corporate 167 967161 7.30 - -

b. Indian Public 8378 4679531 35.30 - -

c. NRIs / OCBs 37 19149 0.14 - -

Total (1+2+3) 8592 13255768 100.00 - -

18


m) Dematerialization of shares and liquidity:

The Company’s Shares are traded in Stock Exchange in dematerialized form and are available for trading in both the Depositories i.e., National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). As on March 31, 2011, 95.70% of outstanding Equity shares of the Company are held in dematerialized form.

ISIN No. of the Company’s Equity Shares is: INE338F01015

n) Outstanding GDRs /ADRs /Warrants or any Convertible instruments, conversion date and likely impact on equity: NIL

o) Plant Location : Kilburn Engineering LimitedPlot No. 6, MIDC Industrial Area, Kalyan Bhiwandi Road, Saravali, Thane 421311

p) Address for Correspondence : Registered OfficeFour Mangoe Lane,Surendra Mohan Ghosh Sarani, Kolkata – 700 001.Tel. No. : 033 22313337/3450Fax No. : 033 22314768E-mail: [email protected]

Corporate Office112, Minerva Industrial Estate, P. K. Road, Mulund (West), Mumbai – 400 080.Tel No.: 022 25936200Fax No.: 022 25917580 / 7554E-mail: [email protected]

Registrars & Transfer AgentsMaheshwari Datamatics Pvt. Ltd.,6, Mangoe Lane, 2nd Floor, Surendra MohanGhosh Sarani, Kolkata – 700 001.Tel No.: (033) 2243 5809 / 5029; 2248 2248Fax No.: (033) 2248 4787E-mail: [email protected]

For and on behalf of the Board

Deepak KhaitanMumbai, May 28, 2011 Chairman

19


Declaration of compliance with Code of ConductI, Supriya Mukherjee, Managing Director of the Company do hereby give this declaration pursuant to Clause 49(I)(D) of the Listing Agreement

The Board has laid down code of conduct for all Board Members and Senior Management of the Company and the same is posted on the website of the Company i.e., www.kilburnengg.com. All the Board Members and Senior Management personnel have affirmed compliances with the code for the year ended March 31, 2011.

Supriya MukherjeeMumbai, May 23, 2011 Managing Director

CERTIFICATE ON CORPORATE GOVERNANCE

To,

The Members of Kilburn Engineering Limited

We have examined relevant records of Kilburn Engineering Limited (the Company) for the purpose of certifying compliance of the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement of the Stock Exchanges in India for the Financial Year ended 31st March 2011.

The compliance of the conditions of Corporate Governance is the responsibility of the Management. Our examination was limited to the procedure and implementation thereof, adopted by the Company for ensuring the Compliance conditions of Corporate Governance.

On the basis of our examination of the records produced, explanations and information furnished by the management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement.

FOR DHRUMIL M. SHAH & COPRACTISING Company SECRETARIES

DHRUMIL SHAHPlace: Mumbai PROPRIETORDate: 28th May, 2011 ACS 22541, CP 8978

20


AUDITORS’ REPORTTO THE MEMBERS OF KILBURN ENGINEERING LIMITED

1. We have audited the attached Balance Sheet of Kilburn Engineering Limited (the Company) as at 31st March, 2011, the Profit and Loss account and the Cash-Flow Statement for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amount and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003, (CARO)issued by the Central Government in terms of section 227 (4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report as follows:i. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary

for the purposes of our audit;ii. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from

our examination of those books;iii. The Balance Sheet, Profit and Loss account and Cash-Flow statement dealt with by this report are in agreement with

the books of account;iv. In our opinion, the Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report are

in compliance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

v. In our opinion and to the best of our information and according to the explanations given to us, the said accounts, give the information required by the Companies Act, 1956 in the manner so required, and give a true and fair view in conformity with the accounting principles generally accepted in India:i. In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011ii. In the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date andiii. In the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.vi. On the basis of written representations received from the directors, as on 31st March, 2011 and taken on record

by the Board of Directors, none of the directors is disqualified as on 31st March, 2011 from being appointed as a director in terms of Section 274 (1) (g) of the Companies Act, 1956.

For Deloitte Haskins & Sells,Chartered Accountants

(Registration No. 117364W)

R. SalivatiPartner

Mumbai, 28th May, 2011 (Membership No. 34004)

Annexure to the Auditors’ Report (referred to in paragraph 3 of our report of even date)

1. Having regard to the nature of the Company’s business / activities / results, clauses (i)(c), (vi), (viii), (x), (xii), (xiii), (xiv), (xv), (xviii), (xix) and (xx) of paragraph 4 of CARO are not applicable.

2. In respect of its fixed assets :(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of

fixed assets.(b) The fixed assets were physically verified during the year by the management in accordance with a regular program

of verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

21


3. In respect of its Inventory :(a) As explained to us, the inventories were physically verified during the year by the management at reasonable

intervals.(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification

of inventories followed by the management were reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of inventories and no material discrepancies were noticed on physical verification.

4. The Company has neither granted nor taken any loans, secured or unsecured to / from companies, firms or other parties listed in the Register maintained under section 301 of the Companies Act, 1956.

5. In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any major weakness in such internal control system.

6. In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:(a) The particulars of contracts or arrangements referred to in Section 301 that needed to be entered in the Register

maintained under the said Section have been so entered.(b) Where each of such transaction is in excess of Rs.5 lakhs in respect of any party, the transactions have been made

at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time except in respect of certain purchases for which comparable quotations are not available and in respect of which we are unable to comment.

7. In our opinion, the internal audit functions carried out during the year by a firm of Chartered Accountants appointed by the Management have been commensurate with the size of the Company and the nature of its business.

8. According to the information and explanations given to us in respect of Statutory dues ;(a) The Company has generally been regular in depositing undisputed statutory dues including Provident Fund, Investor

Education and Protection Fund, Employees’ State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Income Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory dues in arrears as at 31st March, 2011 for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, there are no Income Tax, Sales Tax, Service Tax, Custom Duty, Wealth Tax, Excise Duty and Cess dues which have not been deposited on account of any dispute.

9. In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks and financial institutions.

10. In our opinion and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained, other than temporary deployment pending application.

11. In our opinion and according to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company, we report that funds raised on short-term basis have not been used during the year for long-term investment.

12. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud by the Company and no fraud on the Company has been noticed or reported during the year.

For Deloitte Haskins & Sells, Chartered Accountants

(Registration No. 117364W)

R. SalivatiPartner

Mumbai, 28th May, 2011 (Membership No. 34004)

22


BALANCE SHEET As at 31st March, 2011

As at As at Schedule 31st March, 2011 31st March, 2010 Rs. In Lac Rs. In Lac Rs. In Lac Rs. In Lac

SOURCES OF FUNDS Shareholders’ Funds : Share Capital 1 1,325.58 1,325.58 Reserves and Surplus 2 9,462.62 8,936.74 Loan Funds : Secured Loans 3 1,984.60 436.37 Unsecured Loans 4 1,000.00 2,984.60 30.85 467.22 Deffered Tax Liability (Note 7 of Schedule 17B) - 9.80 13,772.80 10,739.34 APPLICATION OF FUNDS Fixed Assets : Gross Block 5 2,199.36 2,052.82 Less : Depreciation 518.36 422.19 Net Block 1,681.00 1,630.63 Capital Work in Progress (Including capital 4,314.43 5,995.43 296.73 1,927.36 advances) Investments 6 207.37 232.63 Deferred Tax Asset (Note 7 of Schedule 17B) 120.75 - Current Assets, Loans and Advances Inventories 7 1,690.83 1,001.49 Sundry Debtors 8 3,906.65 2,712.00 Cash and Bank Balances 9 2,816.39 5,028.15 Loans and Advances 10 3,670.52 3,014.60 12,084.39 11,756.24 Less : Current Liabilities and Provisions 11 Current Liabilities 3,609.30 2,581.62 Provisions 1,025.84 600.73 4,635.14 3,182.35 Net Current Assets 7,449.25 8,573.89 Miscellaneous Expenditure 12 - 5.46 (To the extent not written off or adjusted) 13,772.80 10,739.34 Significant Accounting policies & Notesto accounts 17

The Schedules referred to above form an integral part of the Balance Sheet of the Company.

In terms of our report attached For and on behalf of For and on behalf of the Board of Directors

DELOITTE HASKINS & SELLS Supriya Mukherjee Deepak KhaitanChartered Accountants Managing Director Chairman

R. Salivati Amee Joshi A . SureshPartner Company Secretary VP-Finance&ChiefFinancialOfficer

Mumbai, May 28, 2011 Mumbai, May 28, 2011

23


The Schedules referred to above form an integral part of the Profit and Loss Account of the Company. In terms of our report attached

For and on behalf of For and on behalf of the Board of Directors




PROFIT AND LOSS ACCOUNT For the year ended 31st March, 2011 Year ended Year ended Schedule 31st March, 2011 31st March, 2010 Rs. In Lac Rs. In Lac

INCOME Sales and Services 13 13,304.79 9,302.05 Excise Duty (752.01) (579.82) 12,552.78 8,722.23 Other Income 14 498.93 470.26 13,051.71 9,192.49 EXPENDITURE Operating Expenses 15 11,910.51 7,657.38 (Increase)/Decrease in Stock of Finished Goods and Work in Progress 16 (441.24) 730.52 Depreciation 5 96.17 126.48 Diminution in value of Investments 26.10 - Interest (Note 5 of Schedule 17B) 125.92 114.00 11,717.46 8,628.38 Profit Before Taxation 1,334.25 564.11 Current Tax 552.50 175.50 Deferred Tax (130.56) (42.01)

Profit After Tax 912.31 430.62 Balance Brought Forward From Previous Year 6,349.60 6,187.33 Excess Provision for Dividend Written back (Including Dividend Tax) - 4.57 Amount available for Appropriation 7,261.91 6,622.52 Less: Appropriations Proposed Dividend 331.39 198.84 Tax on Dividend 55.04 33.02 Transfer to Capital Redemption Reserve - 19.53 Transfer to General Reserve 91.23 21.53 Balance Carried Forward to Balance Sheet. 6,784.25 6,349.60 Basic & Diluted Earnings Per Share of Rs. 10 Each 6.88 3.23 (Note 11 of Schedule 17B)

Significant Accounting policies &Notes to accounts 17

24


CASH FLOW STATEMENT For the year ended 31st March, 2011 Year ended Year ended 31st March, 2011 31st March, 2010

Rs. In Lac Rs. In LacA CASH FLOW FROM OPERATING ACTIVITIES ProfitbeforeTaxationandExtraordinaryItem 1,334.25 564.11 Adjustment for : Depreciation 96.17 126.48 Provision for Dimunition in value of investments 26.10 (41.76) Loss on sale of Investments - 19.86 Bad debts and other provisions written back - (23.43) Bad debts written off 193.51 0.76 W/off of Rights Issue Expenses 5.46 5.46 Provision for doubtful debts and advances 23.56 0.50 Provision for liquidated damages, Warranties 321.23 69.23 Creditors written back (1.45) (1.21) Interest charged 125.92 114.00 Dividend Income (4.02) (1.33) Interest Income (385.81) (267.58) Operating profit/ before working capital changes 1,734.92 565.09 Adjustments for : Trade and Other Receivables (2,110.11) 669.54 Inventories (689.34) 721.83 Trade and Other Payables 975.51 (1,031.76) Cash Generated from Operations (89.02) 924.70 Direct Taxes paid (282.18) (1,175.84) Cash flow from Operating Activities before extraordinary items (371.20) (251.14)B CASH FLOW FROM INVESTING ACTIVITIES Purchase of Fixed Assets (4,164.24) (1,021.02) Purchase of Investments (0.84) (216.30) Sale of Investments - 70.24 Interest received 157.97 267.58 Dividend Received 4.02 1.33 Inter corporate deposit given (60.00) - Inter corporate deposit refunded 60.00 (618.57) Cash from Investing Activities (4,003.09) (1,516.74) Extraordinary Item : Sale of immoveable property including advance, net of expense - 5,850.00 Net Cash from Investing Activities (4,003.09) 4,333.26 C CASH FLOW FROM FINANCING ACTIVITIES Equity Shares Bought Back (including Share premium) - (55.52) Dividend paid (228.93) (260.27) Increase in Bank Borrowings 1,548.23 - Increase in other borrowings 1,000.00 - Repayment of Borrowings (30.85) (769.86) Interest paid to Banks/ Others (125.92) (113.99) Net Cash used in Financing Activities 2,162.53 (1,199.64) Net Increase/(decrease) in Cash & Cash Equivalents (A+B+C) (2,211.76) 2,882.48 Cash & Cash Equivalents - Opening Balance 5,028.15 2,145.67 Cash & Cash Equivalents - Closing Balance 2,816.39 5,028.15 Notes 1 The above Cash Flow Statement has been prepared under “Indirect Method” set out in Accounting Standard (AS - 3) :Cash Flow Statements

asnotifiedundertheCompanies(AccountingStandards)Rules,2006. 2 Cash and Cash Equivalent includes Fixed Deposits of Rs 428.71 lacs ( previous year Rs 392.77 lacs) which are charged against guarantees

issued by bank; also includes Rs 261.38 lacs (previous year Rs 4235.6 lac) under Capital Gains Scheme. 3 Figuresrelatingtothepreviousyearhavebeenrecastwherenecessarytoconformtofiguresofthecurrentyear.

For and on behalf of For and on behalf of the Board of Directors




25


Schedules to the Accounts As at As at 31st March, 2011 31st March, 2010 Rs. In Lac Rs. In Lac Rs. In Lac Rs. In Lac

1. SHARE CAPITALAuthorised 8,252,100 Redeemable Preference Shares of Rs.10 Each 825.21 825.21 21,747,900 Equity Shares of Rs. 10 Each 2,174.79 3,000.00 2,174.79 3,000.00 Issued, Subscribed and Paid-Up13,255,768 (Previous Year 13,255,768) Equity Shares of Rs.10 Each 1,325.58 1,325.58

Notes:The above is net off Nil ( Previous Year 195,294) shares bought back during the year.

(Note 21 of Schedule 17B)

1,325.58 1,325.58

2. RESERVES AND SURPLUS Capital Reserve Balance As Per Last Balance Sheet 0.08 0.08 Capital Redemption Reserve Balance As Per Last Balance Sheet 24.01 4.48TransferfromProfitandLossAccount - 24.01 19.53 24.01 (Note 21 of Schedule 17B) Securities Premium Account Balance As Per Last Balance Sheet 1,811.18 1,847.17 Less: Adjustment on account of shares bought back - 1,811.18 35.99 1,811.18

General Reserve Balance As Per Last Balance Sheet 751.87 730.34 TransferfromProfitandLossAccount 91.23 843.10 21.53 751.87 Profit and Loss Account 6,784.25 6,349.60 9,462.62 8,936.74

3. SECURED LOANS From Banks (Note 4 of Schedule 17B) 1,984.60 436.37 Interest Accrued and due - 1,984.60 - 436.37 1,984.60 436.37 4. UNSECURED LOANS Other Loans and Advances From Others 1,000.00 - (This loan is secured by pledge of investments by Group Companies) Deferred Liability - 30.85 1,000.00 30.85

Out of the above, 528,000 equity shares were allotted as fully paid to Williamson Magor and Co. Ltd., without payment being received in cash for acquisition of its Kilburn Division pursuant to the scheme of arrangement approved by the Kolkata High Court.

26


Schedules to the Accounts 5. FIXED ASSETS

PARTICULARS G R O S S B L O C K ( At cost) D E P R E C I A T I O N NET

BLOCK NET

BLOCK Balance

as on 1-Apr-10

Additions Disposals Balance as on

31-Mar-11

Balance as on

1-Apr-10

Deduction on

disposals

Provision for

the year

Balance as on

31-Mar-11

Balance as on

31-Mar-11

Balance as on

31-Mar 10

1 2 3 4 5 6 7 8 9 10Lease hold Land

1,139.56 - - 1,139.56 8.20 - 21.87 30.07 1,109.49 1,131.36

Building 64.73 0.46 - 65.19 8.56 - 2.17 10.73 54.46 56.17

Furniture and Fittings

72.53 11.76 - 84.29 16.79 - 5.28 22.07 62.22 55.74

Electrical Installations

4.81 - - 4.81 0.79 - 0.36 1.15 3.66 4.01

Motor Vehicles 35.38 106.68 - 142.06 17.66 - 7.97 25.63 116.43 17.72 Plant and Machinery

497.01 15.19 - 512.20 185.88 - 32.04 217.92 294.28 311.12

Office Equipments

102.16 12.45 - 114.61 59.01 - 15.14 74.15 40.46 43.15

Lease Hold Improvements

136.64 - - 136.64 125.30 11.34 136.64 - 11.34

Total :- 2,052.82 146.54 - 2,199.36 422.19 - 96.17 518.36 1,681.00 1,630.63Previous period

873.34 1,179.47 - 2,052.82 295.71 - 126.48 422.19 1,630.63

As at As at

31st March, 2011 31st March, 2010 Rs. In Lac Rs. In Lac Rs. In Lac Rs. In Lac 6. INVESTMENTS

LONG TERM (At Cost) QUOTED - Trade Investments

271,337 Equity Shares of Rs.5 Each of Eveready Industries India Limited 244.48 244.48 66,666 Equity Shares of Rs.5 Each of Mcleod Russel India Limited 71.72 71.72 300 (Previous year Nil) Equity Shares of Rs.10 Each of Mcnally Bharat Engineering Company Ltd. 0.84 - 317.04 316.20 Less : Provision for Diminution in Value 109.67 83.57 207.37 232.63 Aggregate cost of Quoted Investments 317.04 316.20 Aggregate market value of Quoted Investments 303.78 341.40

7. INVENTORIES Stores and Spare Parts 40.99 29.45 Raw - Material and Components 794.12 606.07

Work-In-Progress 386.30 365.97 Finished Goods 469.42 -

1,690.83 1,001.49

8. SUNDRY DEBTORS - Unsecured Debts Outstanding For a Period Exceeding Six Months 872.98 424.22 Other Debts 3,057.22 2,301.23 3,930.20 2,725.45 Less : Provision for Doubtful Debts 23.55 13.45 3,906.65 2,712.00 Considered Good 3,906.65 2,712.00 Considered Doubtful 23.55 13.45 3,930.20 2,725.45

27


Schedules to the Accounts As at As at 31st March, 2011 31st March, 2010 Rs. In Lac Rs. In Lac Rs. In Lac Rs. In Lac

9. CASH AND BANK BALANCES

Cash in Hand 1.85 1.60 Balances with Scheduled Banks :

On Current Account 2,385.83 4,383.78 On Deposit Account (Refer Note 2(a) of schedule 17B) 428.71 2,814.54 642.77 5,026.55 (Includes Fixed Deposits as Margin Money with Banks (Refer Note 2(a) of schedule 17B) and Rs 261.38 lac (Previous year Rs 4235.60 lac) as deposit under Capital Gains Account Scheme)

2,816.39 5,028.15 10. LOANS AND ADVANCES (Unsecured)

Advances Recoverable in Cash or in Kind or for Value to be Received

Considered Good 1,021.06 546.31 Considered Doubtful 0.50 0.50 1,021.56 546.81 Less : Provision for Doubtful Advances 0.50 1,021.06 0.50 546.31 Balances with Government Authorities 369.04 181.69 Inter Corporate Deposits 2,146.93 1,898.81 Other Deposits 105.16 89.14 Advance Payment of Tax and Tax Deducted at Source (Net) 28.33 134.96 MAT Credit Entitlement - 163.69 3,670.52 3,014.60

11. CURRENT LIABILITIES AND PROVISIONS Current Liabilities

Acceptances 276.77 503.98 Sundry Creditors

- Total Outstanding dues to Micro and Small Enterprises - 12.26 - Others 1,766.22 1,766.22 829.09 841.35 Other Liabilities and Accruals 559.97 215.64 Advances Received from Customers 944.90 1,015.81 Due to Customers (Contract related activity) 53.67 - Unpaid Dividend 7.77 4.84

3,609.30 2,581.62 Provisions Provisionforemployeebenefits(Note14of Schedule 17B) 73.98 55.26 Provision for Liquidated Damages & Warranties 321.23 69.23 Provision for others (Note 9 of Schedule 17B) 244.20 244.38 Proposed Dividend 331.39 198.84 Tax on Dividend 55.04 33.02 1,025.84 600.73 4,635.14 3,182.35

12. MISCELLANEOUS EXPENDITURE (to the extent not written off or adjusted)

(Note 11 of Schedule 17A) Share issue expenses - 5.46

- 5.46

28


Schedules to the Accounts Year ended Year ended 31st March, 2011 31st March, 2010 Rs. In Lac Rs. In Lac Rs. In Lac Rs. In Lac

INCOME:

13. SALES AND SERVICE

Product Sales / Project income 13,249.30 9,073.75 Income from Services 55.49 228.30 13,304.79 9,302.05

14. OTHER INCOME Sale of Scrap 101.31 105.33 Interest on Bank Deposits (Tax deducted at source Rs.10.78 Lac (Previous year Rs. 17.06 Lac)) 124.43 125.77 Interest Others (Tax deducted at source Rs. 5.45 Lac (Previous year Rs. 3.20 Lac) 261.38 141.81 Dividend on Trade Investment 4.02 1.33 Excess Provision written back - 6.09 Doubtful debts provision written back - 17.34 Debit/ Credit Balances written back/off 1.45 1.21 Provision for Diminution in Value of Long Term Investment Written Back - 41.76 Exchange variation (net) - 3.78 Miscellaneous Income 6.34 25.84 498.93 470.26

15. OPERATING EXPENSES

Raw Material and Bought-Out Components Consumed Opening Stock 606.07 592.49 Add : Purchases (including Job work Charges) 7,793.49 4,673.22 Less : Closing Stock 794.12 7,605.44 606.07 4,659.64

Employee Cost (Including Managerial Remuneration)

(Note 6 of Schedule 17B) Salaries, Wages and Bonus 664.42 522.39 Contribution To Provident and Other Funds 125.35 77.37 Welfare Expenses 171.57 961.34 91.01 690.77

29


Schedules to the Accounts Year ended Year ended 31st March, 2011 31st March, 2010 Rs. In Lac Rs. In Lac Rs. In Lac Rs. In Lac Rs. In Lac

Others

Contract Labour Charges 670.76 577.05 Stores, Spares Parts and Loose Tools Consumed (Indigenous) 120.07 145.13 Power and Fuel 16.54 13.45 Site Expenses 213.75 196.92 Rent 206.06 179.54 Rates and Taxes 28.83 20.29 Repairs and Maintenance - Buildings 11.85 10.54 Repairs and Maintenance - Plant and Machinery 28.32 27.27 Repairs and Maintenance - Others 75.29 71.38 Factory Upkeep 60.46 49.71 Royalty 67.30 36.92 Insurance Charges 26.20 16.44 Travelling and Conveyance Expenses 236.51 203.69 Bank Charges 177.70 106.39 Professional Fees 128.67 69.07 Advance/Bad debts written off 266.70 21.38 Less:Provision for Doubtful Debts/Advances/ Liquidated Damages written back 73.19 20.62 193.51 0.76 Provision for Doubtfull Debts/Advances 23.56 0.50 Sales Tax Dues 1.09 9.11 Freight, Carriage and Packing Expenses (net of recovery) 265.61 191.76 Selling Commision 80.71 27.57 Liquidated Damages, Warranties & Rebates 321.23 69.23 Loss on Sale of Long term Investment (Net) - 19.86 Exchange variation (net) 77.31 - Right Issue Expenses 5.46 5.46 Miscellaneous expenses (Note 10 of Schedule 17B) 306.94 3,343.73 258.93 2,306.97 11,910.51 7,657.38

16. INCREASE IN STOCK OF FINISHED GOODS AND WORK IN PROGRESS Stock of Finished Goods Closing Stock 469.42 - Opening Stock - (469.42) 267.20 267.20

Increase/(Decrease) in Excise duty on Finished Goods 48.52 (8.24)

Stock of Work-in-Progress Closing Stock 386.30 365.96 Opening Stock 365.96 (20.34) 837.52 471.56 (441.24) 730.52

30


SCHEDULE 17

SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS

(A) SIGNIFICANT ACCOUNTING POLICIES:-

1. Basis of Preparation of Financial Statements Thefinancialstatementshavebeenpreparedunderhistoricalcostconventioninaccordancewithgenerallyaccepted

accountingprinciplesandtheprovisionsoftheCompaniesAct,1956.

2. Use of Estimates Thepresentationoffinancialstatementsrequiresestimatesandassumptionstobemadethataffectthereported

amountofassetsandliabilitiesonthedateofthefinancialstatementsandthereportedamountofrevenuesandexpensesduringthereportingperiod.Differencebetweentheactualresultandtheestimatesarerecognizedintheperiodinwhichtheresultsareknown/materialized.

3. Fixed Assets FixedAssetsarerecordedatcost.Thecostsoffixedassetsincludeallcostsincidentaltoacquisition,commissioning

andrelatedinternalcosts.

4. Depreciation Depreciationiscalculatedontheassetsonstraight-linemethodattheratesandinthemannerspecifiedinSchedule

XIVofCompaniesAct,1956,exceptwhereonaconsiderationofusefullife,basedontechnicalassessmenthigherdepreciationisnecessary.AssetscostingRs.5,000/-orlessarefullydepreciatedintheyearofacquisition.Leaseholdlandandimprovementsaredepreciatedovertheleaseperiod.

5. Inventories Inventoriesarevaluedasunder:

- RawMaterials/Components:atlowerofcost(determinedonmonthlyweightedaveragecostbasis)andnetrealizablevalue.

- Storesandspareparts:atlowerofcost(determinedonFIFObasis)andnetrealizablevalue.- Work-in-progress and Finished Goods: at lower of cost and net realizable value. Cost includes related

overheads- FinishedgoodsarevaluedincludingExciseDuty.

Netrealizablevalueisestimatedattheexpectedsellingpricelessestimatedcompletionandsellingcosts.

6. Investments Long-term investments are stated at cost less diminution in value other than temporary in nature. Current

investmentsarestatedatlowerofcostorfairmarketvalue.Dividendsareaccountedforwhendeclared.

7. Foreign Currency Transactions Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of

transaction. Assetsand liabilitiesdenominated inforeigncurrencyasatbalancesheetdatearerestatedattheexchangeratesprevailingonthatdate.Exchangedifferencesonsuchrestatementoronsettlementarerecognizedintheprofitandlossaccount.TheCompany’sforwardexchangecontractsarenotheldfortradingorspeculation.Thepremiumarisingonentering into suchcontract isamortizedover the lifeof suchcontractsandexchangedifferencesarisingonsuchcontractsarerecognizedintheProfitandLossAccount.

8. Revenue Recognition Salesarerecognizedwhensignificantrisksandrewardsassociatedwithownershiparetransferredtothebuyer.

Revenuefromcontract relatedactivity is recognizedonprogressmethod; thestageofcompletion ismeasuredbyreferencetotheproportionthatcontractcostsincurredforworkdonetillthebalancesheetdatebearstotheestimatedtotalcontractcosts;fullprovisionismadeforanylossintheperiodinwhichitisforeseen.

9. Employee Benefits ProvidentfundisadefinedcontributionschemeandthecontributionsasrequiredbythestatutetoGovernment

ProvidentFundarechargedtoprofitandlossaccountduringtheperiodinwhichemployeesperformtheservices

31


thatthepaymentcovers.Superannuationfundisadefinedcontributionscheme.TheCompanycontributesasumequivalentto15%ofeligibleemployees’salarytoSuperannuationFundadministeredbytrusteeandmanagedbyalifeinsuranceCompany.

GratuityliabilityisdefinedbenefitobligationandisfundedwithLifeInsuranceCorporationofIndia.Thepresentvalueofgratuityobligationisactuariallydeterminedbasedontheprojectedunitcreditmethodasatthebalancesheetdate.

Theamountofshorttermemployeebenefitsexpectedtobepaidinexchangefortheservicesrenderedbyemployeeisrecognizedduringtheperiodwhentheemployeerenderstheservice.

TheCompanyaccruestheliabilityforcompensatedabsencesbasedontheactuarialvaluationasatthebalancesheetdateconductedbyanindependentactuary.

Actuarialgains/lossesareimmediatelytakentotheprofitandlossaccountandarenotdeferred.

10. Provisions, Contingent Liabilities and Contingent Assets Provisionsinvolvesubstantialdegreeofestimationinmeasurementandarerecognizedwhenitisprobablethat

therewillbeoutflowofresourcesasaresultofpastevents.Separatedisclosureinnotestoaccountsismadeforeachclassofprovisionduringtheyear.

ContingentLiabilities(whereoutflowofresourcesisnotconsideredprobable)arenotrecognizedbutaredisclosedinnotes.

Contingentassetsareneitherrecognizednordisclosedinthefinancialstatements.

11. Deferred Expenses Expensesincurredinrelationtoissueofsharesareamortizedoveraperiodof5years.

12. Taxes on Income Income Tax expense comprises current tax anddeferred tax. Deferred tax is recognizedon timingdifferences

betweentaxableincomeandaccountingincomethatarecapableofreversalinoneormoresubsequentperiods.Deferredtaxassetsandliabilitiesaremeasuredusingtaxratesandtaxlawsthathavebeenenactedorsubstantiallyenacted on the balance sheet date.Deferred tax assets are recognized, on consideration of prudence if thereiscertaintythatsufficientfuturetaxable incomewillbeavailableagainstwhichsuchdeferredtaxassetswillberealized;deferred taxasset consistingof losses /accumulateddepreciation is recognizedonly if there is virtualcertaintythattheassetwillberealizedinfuture.SuchassetsarereviewedasateachBalanceSheetdatetoreassessrealisabilitythereof.

13. Borrowing Cost Borrowingcostsarerecognizedasanexpenseintheperiodinwhichtheyareincurred.Theborrowingcostsin

respectoffundsborrowedtofinancethequalifyingfixedassetsuntiltheassetsarereadyforcommercialusearecapitalized.

(B) NOTES TO THE ACCOUNTS

1. EstimatedamountofContracts remaining tobe executedon capital account, netof advancesRs. 951.17 Lac(PreviousYearRs.1,620Lac)

2. Contingent liabilities a) GuaranteesandLettersofCredit issuedbyBanksRs.2,986.05Lac(PreviousYearRs.2,821.29Lac)against

whichFDRofRs.428.71Lac(PreviousYearRs392.77Lac)pledgedwithBanks.b) DemandnoticefromDGFTfornon-fulfillingofexportobligationsRs.137Lac(PreviousYearRs.137Lac).The

Companyexpectsnoliabilityonthisaccount.c) TheCompanyisapartytolitigationbycertainex-employeesinrespectofclaimforsuperannuationfunddues/

retrenchmentcompensationarisingaroundtheyear2000-2001.TheCompanyhasprovidedfortheprobableobligation.Thisisexpectedtomaterializeonresolutionofthedispute.

d) OtherclaimsnotacknowledgedasdebtsRs.0.80Lac(PreviousYearRs.0.80Lac)

3. Pursuanttoanapplicationdated18thFebruary2008,theCompanyhadreceivedanallotmentletterdated21stMay2008for20acresoflandfromAsansolDurgapurDevelopmentAuthority(ADDA).TheCompanywasinformedthatADDAisintheprocessofacquiringtheland.

32


4. Secured Loans (Banks) Thecreditfacilitiesaresecuredby:

I. EquitableMortgagecreatedbywayofDepositofTitleDeedontheCompany’simmovablepropertysituatedatPlotNo.6,KalyanBhiwandiIndustrialArea,Thane.

II. Hypothecationofpresentandfuturestocksofrawmaterials,semi-finishedgoods,finishedgoodsandbookdebts byway of first charge and also by hypothecation ofmovable plant andmachinery byway of firstcharge.

5. Interest

FY 2010-11Rs. In Lac


Short term Loans from Banks 64.01 22.39

Others 61.91 91.61

Total 125.92 114.00

6. Payment to Directors



i) Sitting Fees 2.64 1.08

ii) Managing Director’s Remuneration (Refer Note below)

Salaries (Including Bonus) 119.40 94.20

Contribution to Provident Fund and other Funds 18.17 13.47

Perquisites 5.90 4.17

Total 146.11 112.92

Note : TheremunerationfortheFY2010-11hasbeenpaidaspertherevisedBasicSalaryofRs.4,50,000/-p.m.which wasapprovedbytheBoardofDirectorsoftheCompanyattheirmeetingheldonAugust11,2010andwhichis withintheBasicSalaryGradeofRs.2,50,000toRs.4,50,000p.m.asapprovedbytheCentralGovernmentvide letterno.SRN/A40311862-CL.VIIdatedDecember12,2008andamendmentdatedMay6,2009.

7. InaccordancewiththeAccountingStandardonAccountingforTaxesonIncome,DeferredTaxAsset/Liabilityhas beenrecognizedintheAccountsasoftheyearendasunder

Particulars FY 2010-11Rs. In Lac


Deferred Tax Liability in respect of difference in WDV as per books and tax (38.03) (35.51)

Deferred Tax Asset in respect of expenses allowable on payment basis under Income Tax Act 158.78 25.71

Net Deferred Tax Asset / (Liability) 120.75 (9.80)

8. From the current year, for project orders,which are executedover a periodof time, theCompanyhas adoptedprogressmethodofaccountingforbetterpresentationoffinancialstatements.TheprofitsfortheyearhavereducedbyRs.53.67Lacasaresultofthischange.

33


9. Disclosure of provisions as required by Accounting Standard 29

(Rs. In Lac)Description of Provision Opening Balance Amount used

during the year

Excess Provision

Written back

Provisions made during

the year

Closing Balance

Provision for Contingencies (Claims under litigation)*

244.38 1.20 - 1.02 -

244.20

(271.04) (26.66) (-) (-) (244.38)

Provision for Liquidated Damages / Warranties #

69.23 69.23 - 321.23 321.23

(17.07) (17.07) (-) (69.23) (69.23)

*ReferNote2(c) #ThetimingofoutflowsofWarrantiesandLiquidateddamageisexpectedtobegenerallywithin1to2years. (Figuresforthepreviousyearareshowninbracket)

10. Payments to Auditors (Grouped in Miscellaneous Expenses – Schedule 15)

FY 2010-11 Rs. In Lac

FY 2009-10 Rs. In Lac

Audit Fees (including limited reviews) 10.00 8.10

Other Services 1.80 0.52

Out of Pocket Expenses 0.04 0.39

Total 11.84 9.01

11. Earnings Per Share (Basic / Diluted)



A ProfitafterTax 912.31 430.62

B Weighed Average Number of Equity Shares used (As denominator for calculating EPS (In Lac)) 132.56 133.26

C Basic / Diluted Earnings per Share (A/B) (In Rs.) 6.88 3.23

Disclosures pursuant to Accounting Standard 7 revised - Construction Contracts

Particulars FY 2010-2011Rs. In Lac

Contract Revenue recognized 2,457.96For Contracts in Progress:

a.Aggregateamountofcostsincurredandrecognizedprofits 654.54b.Advancereceivedfromcustomersforsuchcontracts 524.41c.Amountofretentiondueforsuchcontracts 60.84d.Grossamountduefromcustomersforsuchcontracts 50.47e.Grossamountduetocustomersforsuchcontracts 53.67

34


12. Disclosure Regarding Derivative Instruments

A. The following are the Outstanding Forward Contracts as at the year end for hedging purpose

Year Purpose Currency Amount in FCY Amount in Rs No of Contracts

(in Lac) (in Lac)

Current Receivables and Firm Commitment USD 11.56 513.52 6

Previous Firm Commitment USD 45.08 2,105.30 13

B. The following are the foreign currency exposure not hedged as at the year endYear

Particulars

Currency

Amount in FCY

(in Lac)Amount in Rs

(in Lac)Current Receivables USD 3.08 136.86

EURO 0.30 18.80

Previous USD 4.85 217.21 EURO 1.00 59.97 Current Liabilities USD 0.16 7.20 EURO 0.48 30.38

Previous USD 9.60 435.09Euro 0.80 48.77

13. Research & Development ThetotalamountincurredonResearch&DevelopmentactivitiesduringtheyearamountstoRs.39.43Lac(Previous YearRs.36.45Lac)

14. Employee Benefits

a) DefinedContributionPlan: TheCompanyhasrecognised,intheprofitandlossaccountfortheyearended31stMarch,2011,following

amountsasexpensesunderdefinedcontributionplanunder thehead`Contribution toProvidentandOtherFunds’inschedule15–OperatingExpenses.

Sr. No. Benefit ( Contribution to ) FY 2010-11Rs In Lac

FY 2009-10Rs In Lac

1 Provident and Other Funds 42.83 35.31

2 Superannuation Fund 55.44 25.59

T O T A L 98.27 60.90

35


b) Defined Benefit PlansAsperActuarialvaluationsason31stMarch,2011andinaccordancewiththerevisedAccountingStandard15onEmployeeBenefitsissuedbyTheInstituteofCharteredAccountantsofIndia;ParticularsofGratuitybenefitareprovidedbelow;

Particulars FY 2010 - 2011Rs. in Lac

FY 2009 – 2010Rs. in Lac

I Expense recognized in Profit & Loss Account for the year a. Current Service Cost 9.82 6.92b. Interest cost 6.36 5.72c. Expected return on Plan Assets (6.58) (6.09)d. Actuarial (Gain)/Loss 3.04 (0.24)e. Past Service Cost 15.88 -f. Expense recognised during the year 28.52 6.31

II Reconciliation of opening and closing balance ofObligation

a. Obligation as at the beginning of the year 77.06 64.90b. Current Service Cost 9.82 6.92c. Interest cost 6.36 5.72

d. Past service cost incurred during the period 15.88 -

e. Actuarial (Gain)/Loss 4.24 0.24f. BenefitsPaid (10.48) (0.72)g. PV of Obligation as at the end of the year 102.87 77.06

III Change in Plan assetsa. Fair Value of Plan Assets as at the beginning of the year 82.29 60.74b. Expected return on Plan assets 6.58 6.09c. Actuarial Gain/(Loss) 1.20 0.49d. Contributions 12.78 15.68e. BenefitsPaid (10.48) (0.71)f. Fair Value of Plan Assets as at the end of the year 92.37 82.29

Provision recognized in the Balance SheetTowards Gratuity as above 10.51 -Towards Compensated Absences 63.47 55.26

73.98 55.26 ExperienceAdjustment*

2007-08 2008-09 2009-10 2010-11

On Plan Liabilities 1.56 0.60 1.29 4.24

On Plan Assets 0.18 0.44 0.49 1.20

*Detailsfortheyear2006-07,notprovidedbytheactuaryNotes:1. Discountrate/returnonplanassetstakenat8.25%p.aconsideringthebenchmarkrateavailableonGovernment

Securitiesforthetenureofpayment.2. Theestimateoffuturesalaryincreasesconsideredat5%p.atakingintoaccountinflation,seniority,promotion

andotherrelevantfactorssuchassupplyanddemandintheemploymentmarket.3. 100%ofPlanAssetsareinvestedingroupgratuityschemeofferedbyLICofIndia.

36


15. Related Party Disclosure(Rs. In Lac)

Sr. No.

Name of RelatedParty

Nature of Relationship

Nature of Transaction

TransactionDuring theYear

Closing Balance Dr./(Cr.)

1 Mr. Supriya Mukherjee Key ManagementPersonnel

ManagerialRemuneration

143.47(111.84)

24.00(0.00)

2 Williamson Magor &Co. Ltd.

Company having Significantinfluence

Service Charges

Rent

Electricity Expenses

24.00 (24.48)

16.80

(16.80)

3.84 (3.43)

5.96(-)

1.66(1.40)

0.31(0.04)

Inadditiontotheabovetransactions,WilliamsonMagor&Co.Ltd.haspledgedsharesheldbythemassecurityforatermloantakenbytheCompanyfromILFSFinancialServicesLimitedduringtheyear.

(Figuresforthepreviousyearareshowninbracket)

16. The amount of Net Exchange Loss / (Gain) of (Rs. 63.52 Lac) (Previous Year Rs (37.51 Lac)) isincludedinSales.

17. Segment information for primary segment reporting (by business segments) BasedontheguidingprinciplesgivenintheAccountingStandardon‘SegmentReporting’(AS-17)issuedbythe

Institute of CharteredAccountants of India, the primary segment of the Company is business segmentwhichcomprisesofEngineeringSegment.AstheCompanyoperatesinasingleprimarybusinesssegment,nosegmentinformationthereofisgiven.

Segment information for secondary segment reporting (by geographical segments) TheCompanyhasacustomerbasewithinandoutsideIndia.

(Rs. In Lac)

Particulars India Outside India Total

Revenue 8,415.27 (6,577.93)

4,137.51(2,144.31)

12,552.78 (8,722.23)

Segment Assets 17,618.04 (13,639.06)

669.18 (277.18)

18,287.22 (13,916.24)

Segment Liabilities 7,195.74 (3,165.71)

37.58 (483.86)

7,233.32 (3,649.57)

Capital Expenditure 4,164.18 (1,337.93)

--

4,164.18 (1,337.93)

(Figuresforthepreviousyearareshowninbracket)

18. Micro Enterprises and Small Enterprises TheinformationasrequiredtobedisclosedundertheActandprovidedinSchedule11hasbeendeterminedtothe

extentsuchpartieshavebeenidentifiedonthebasisofinformationavailablewiththeCompany.Nointeresthasbeenpaidoraccruedinthebooks.Consideringthevolumeandpaymentcyclesuchamountisnotconsideredtobematerial.

37


19. Investments bought and sold during the year(Rs. In Lac)

Sr.No. Name of the scrip

FY 2010 – 11 FY 2009 – 10

Quantity Purchase Cost Quantity Purchase

Cost

1 Eveready Industries India Ltd. - - 33,334 21.99

20. Disclosures under AS-19 in respect of operating leases

i) SignificantLeasingAgreements:

a) TheCompanyhastakenafactoryshedandappurtenantlandonLeaveandLicensebasisforthepurposeofmanufacturing,fabrication,storageofplantsandmachineryandotheralliedandpermissiblecommercialactivities.

b) Thetenureoftheagreementisforaperiodof3yearscommencingfrom7thMay2008.

c) Theagreementisnoncancellableforaperiodof2years.

ii) LeasepaymentsrecognizedintheProfitandLossAccount:Rs.206.06Lac(PreviousyearRs.179.55Lac)

iii) Totaloffutureminimumleasepaymentsunderthenon-cancellableperiodofthelease:Notlaterthan1year: Rs.11.00Lac(PreviousyearRs.132.00Lac)

21. Duringthepreviousyears,2,40,032equityshareswereboughtbackforanaggregateamountofRs.63.54LacbyutilizingSharepremiumaccounttotheextentofRs.39.53Lac.CapitalRedemptionReserveofRs.24.01Lachasbeencreatedbeingthenominalvalueofsharesboughtback.AlltheBoughtbackshareshavebeenextinguishedandtheBuybackhasclosedonJanuary29,2010.

22. Capacity and Production **

Class of goods Unit Installed Capacity

Actual Production

Dryers, Drying Systems & Components thereof M.T. 1,200 (1,200)

2,972.61*** (2,446.17)

Other Equipments M.T. Nil 15.64 (19.00)

(Figuresforthepreviousyearareshowninbracket) **Ascertifiedbythemanagementandrelieduponbytheauditorsbeingatechnicalmatter. ***Includesproductiononjobworkbasis.

38


23. Raw materials and Components Consumed

Item% Total Amount Rs. In Lac

Raw Materials and Components consumed:-

Indigenous

82.57%(90.38%)

5,126.78(3,282.00)

Imported

17.43%(9.62%)

1,082.36 (349.00)

Total 100.00% (100.00%)

6,209.14 (3,631.00)

Principal Items of Raw Materials Consumed

Item Unit Quantity AmountRs. In Lac

Steel M.T.2,972.64 2,017.18

(2,543.00) (1,815.00)

Components & others M.T. 4,191.96

(1,816.00) Total

6,209.14

(3,631.00)(Figures for the previous year are shown in bracket)

FY 2010-11 FY 2008-09 Rs. In Lac Rs. In Lac

24. C.I.F. Value of Imports Raw materials 341.98 226.48 Components 597.18 73.1 939.16 299.49

25. Expenditure incurred in Foreign Currency Travelling Expenses 65.13 52.22 Royalty 67.30 36.92 Selling Commission 9.43 14.61 Technical Knowhow Fees - 204.78 141.86 308.53

26. Earnings in Foreign Currency Exports Calculated on F.O.B. basis 4,112.73 2,144.31 Designing Fees 24.79 - 4,137.52 2,144.31

39


27. TheMinistry of CorporateAffairs,Government of India vide itsGeneralNotificationNo. S.O.301(E) dated8thFebruary,2011issuedunderSection211(3)oftheCompaniesAct,1956hasexemptedcertainclassesofcompaniesfrom disclosing certain information in their profit and loss account. The Company being an ‘export orientedCompany’isentitledtotheexemption.Accordingly,disclosuresmandatedbyparagraphs3(i)(a),3(ii)(a)and3(ii)(d)ofPartII,ScheduleVItotheCompaniesAct,1956havenotbeenprovided.

28. Comparativefinancialinformationispresentedinaccordancewiththe‘CorrespondingFigure’financialreportingframeworksetoutinStandardonAuditingonComparatives.Accordingly,amountsandotherdisclosuresfortheprecedingyearare includedasanintegralpartofthecurrentyearfinancialstatements,andaretobereadinrelationtotheamountsandotherdisclosuresrelatingtothecurrentyear.Figuresofthepreviousyearhavebeenregrouped/reclassifiedwherevernecessarytocorrespondwiththefiguresofthecurrentfinancialyear.FigureshavebeenroundedofftothenearestRs.inLacasperapprovalfromDepartmentofCompanyAffairsobtainedu/s211oftheCompaniesAct,1956.

For and on behalf of the Board of Directors

Supriya Mukherjee Deepak Khaitan Managing Director Chairman

Amee B. Joshi A. Suresh CompanySecretary VP-Finance&ChiefFinancialOfficer

Mumbai,May28,2011

40


BALANCE SHEET ABSTRACT AND THE COMPANY’S GENERAL BUSINESS PROFILE(In terms of Part IV of Schedule VI)

I. Registration Details Registration No. State Code 2 Balance Sheet Date Date Month Year

II. Capital Raised during the year (Amount in Rs. Thousands) Public Issue Rights Issue N I L

Bonus Issue Private Placement N I L

III. Position of Mobilization and Deployment of Funds (Amount in Rs. Thousands)

Total Liabilities Total Assets

SOURCES OF FUNDS Paid up Capital Reserves and Surplus Secured Loans Unsecured loans

APPLICATIONS OF FUNDS Net Fixed Assets Investments Net Current Assets Misc. Expenditure Accumulated Losses

IV Performance of the Company (Amount in Rs. Thousands) Turnover (Incl. Other Income) Total Expenditure Profit/LossBeforeTax Profit/LossAfterTax Earning per Share in Rs. Dividend Rate %

V Generic Names of Three Principal Products /Service of the Company (As per Monetary Terms)

Item Code No.(ITC CODE)

Product Description Item Code No.(ITC CODE)

Product Description

Item Code No.(ITC CODE)

Product Description

3

DryersandDryingSystems,HeatExchangers&CombustionSystems

Oil-FieldEquipments

Pneumatics&VibratingConveyors

1

2 2

2

0

2

9

8

5

3

6

8

1

3

4

0

6

0

0

1

1

1

0

1

1

1

1

N

9

0

7

5

5

4

1

4

.

4

7

7

9

N

7

2

7

0

7

2

N

-

3

8

1

5

1

3

1

7

8

9

1

1

I

5

1

9

5

4

6

7

2

8

1

4

4

2

I

9

6

3

0

4

3

2

N

I

4

4

3

9

9

0

3

4

4

4

2

0

7

9

L

6

1

4

8

3

0

1

5

8

9

0

8

5

L

4

2

7

0

6

1

5

I

L

1

Documents

Kilburn Engineering Limited · 2011-09-08 · Mr. Subir Ranjan Dasgupta Mr. Amritanshu Khaitan Mr. Gobind Saraf Mr. Manmohan Singh Company Secretary Ms. Amee B. Joshi VP Finance &