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A WILLIAMSON MAGOR GROUP ENTERPRISEWebsite: www.kilburnengg.com

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Fluid Bed Dryer for Chemical Industry

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Kilburn Engineering LimitedA WILLIAMSON MAGOR GROUP ENTERPRISE

Website: www.kilburnengg.com

Board of Directors

Deepak Khaitan Supriya MukherjeeSubir Ranjan Dasgupta Amritanshu Khaitan Gobind SarafManmohan Singh

ChairmanManaging Director

Company Secretary

Amee B. Joshi

Auditors

M/s Deloitte Haskins & Sells, Mumbai

Bankers

United Bank of IndiaUnion Bank of IndiaThe Federal Bank Ltd.IDBI Bank Ltd.

Registered Office

Four Mangoe Lane,Surendra Mohan Ghosh Sarani, Kolkata – 700 001.Tel. No.: (033) 2231 3337 / 3450Fax No.: (033) 2231 4768

Corporate Office

112, Minerva Industrial Estate,P. K. Road, Mulund W), Mumbai – 400 080.Tel. No.: (022) 2593 6200Fax No.: (022) 2519 7580 / 7554

Factory

Plot No. E/32, MIDC, Taloja Industrial Area,District Raigad, Maharashtra – 410 208.

Registrars & Transfer Agents

Maheshwari 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]

Contents Page

Directors’ Report 02

Management Discussion &

Analysis Report 06

Report on Corporate Governance 10

Auditors’ Report 23

Annual Accounts alongwith Notes to

Accounts 26

Abstract of Balance Sheet 44

Report & Accounts 2009 - 2010


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REPORT OF THE DIRECTORS

FOR THE FINANCIAL YEAR ENDED MARCH 31, 2010The Directors of your Company are pleased to present the 22nd Annual Report and Audited Statement of Accounts for the financial year ended March 31, 2010.

Year ended 31st March, 2010

(Rs. In Lac)

Year ended 31st March, 2009

(Rs. In Lac)

FINANCIAL RESULTS

Sales and Services 9302 9,181

Gross Profit before interest and depreciation 804 557

Interest 114 145

Depreciation 126 121

Operating Profit 564 291

Prior Period Income/(Expense) - (3)

Profit before tax 564 288

Tax Expenses (MAT, FBT and DTA) 133 376

Profit/(Loss) after tax 431 (88)

Profit from Sale of Land (net of tax) - 7,391

Net Profit 431 7,303

Balance brought forward from previous year 6187 (66)

Excess Provision for Dividend Written Back (Including Dividend Tax) 5 -

Amount available for appropriation 6623 7,237

Less: Appropriations

Proposed Dividend 199 269

Tax on Dividend 33 46

Transfer to Capital Redemption Reserve 20 5

Transfer to General Reserve 21 730

Balance carried forward to Balance Sheet 6,350 6,187

DIVIDEND

Your Directors are pleased to recommend dividend of Rs. 1.50 per equity share of Rs. 10/- each.

OPERATIONS - 2009-2010

In view of the unprecedented global economic downturn, the Company’s plan to increase its sales did not materialize as the user industries in several cases decided to defer their capex plans. Your Company witnessed considerable decline in order inflow for Process equipment for about a year from 2nd half of 2008-09. The shortfall in order inflow of Process equipment was partly bridged by increase in orders for Tea Dryers.

Your Directors are pleased to report that despite the industrial slow down, your Company has achieved marginal increase in turnover at Rs. 9302 lac (P.Y. Rs. 9181 lac). The Company however succeeded in nearly doubling its Operating Profit at Rs. 564 lac after absorbing additional relocation related expenses.

CURRENT YEAR AND FUTURE OUTLOOK

During the last two years your Company had to face several constraints on account of shifting its manufacturing

Kilburn Engineering Limited

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operations to new locations as also the adverse impact of economic meltdown. With the signs of reversal of Industrial slow down from the third quarter of 2009-10, the Company expects to improve its operations substantially in the current year for its two groups of products namely Process Equipment and Food Processing. With the expected growth and increase in demand for our products from user industries namely Oil and Gas, Chemical, Petro chemical, Fertilizers, Food, Power and Steel Plant etc., your Company’s future outlook in terms of sustainable growth in sales and profitability appears to be encouraging.

Process Equipment

During the year under review, your Company has supplied Rotary Dryers to Companies in Europe, U.S.A. and Egypt. In the domestic sector, your Company executed, for the first time, orders for 600 TPD Calciner for Light Soda Ash for two reputed Companies in the Industry. With the revival of the industrial scenario, order booking has improved from the last quarter of 2009-10. Your Company has bagged orders from Oil and Gas Industry both from India and abroad. Your Company is also targeting orders for various types of Dryers to meet the customized requirement for diverse applications. Your Company has taken several measures to ensure timely execution of large orders having long delivery period. Your Company’s continued focus on cost reduction/control are yielding results.

Food Processing Equipment

Buoyancy in the Tea Industry is continuing. Your Company has sold higher number of Dryers during the period. Your Company has exported Tea Dryers to Vietnam and Africa. The upturn in the Tea industry is expected to continue in the years ahead. 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 50 Ton and reducing moisture content from 36% to 12%. With the installation of the new range of Paddy Dryers for non-Basmati including raw paddy applications, your Company will be able to plan its growth in sales for Paddy Dryers in the years ahead.

SALE OF BHANDUP LAND

As reported last year, the amount of Rs. 5850 Lac was outstanding from Housing Development & Infrastructure Ltd. (HDIL) on account of sale of Bhandup land. Your Company has received Rs. 5850 lac during the year.

NEW PROJECT

As reported last year, the agreement entered into with Conwood Pre-fab Ltd. for purchase of their land at Dhamangaon was terminated. During the year under review, your Company has received back the advance of Rs. 800 Lac paid to them.

Your Company acquired approx 8 acres of land at MIDC, Plot No. 6, Bhiwandi Kalyan Road, Saravali, Dist. Thane during the year and has embarked on the setting up of State-of-the-Art manufacturing facility at this location. The project involving an outlay of nearly Rs. 60 crore is expected to be completed by the end of the financial year 2010-11.

Your Company received an allotment letter dated May 21, 2008 from Asansol-Durgapur Development Authority for 20 acres of land. During the year no further development in the matter has taken place.

SHARE BUY BACK

The offer for buy back of equity shares was concluded in January 2010 with the total buy back of 2,40,032 equity shares of Rs. 10/- each. The Post Buyback Paid up capital of the Company is Rs. 1325.58 lac.

DIRECTORS

Pursuant to Article 87 of Articles of Association of the Company, Mr. Amritanshu Khaitan and Mr. Subir Ranjan Dasgupta retire at the ensuing Annual General Meeting of the Company and being eligible, offer themselves for re-appointment.


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AUDITORS

M/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 considered 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 Institute of Chartered Accountants of India (ICAI). Being eligible, they offer themselves for re-appointment as Statutory Auditors for the FY 2010-11.

AUDIT COMMITTEE

Your 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 STATEMENT

Pursuant 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 judgements 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.

MANAGEMENT DISCUSSION & ANALYSIS

A separate report on Management Discussion & Analysis, is appended to this Annual Report as Annexure “A” and forms part of this Directors’ Report.

HUMAN RESOURCE DEVELOPMENT

Your Company considers human resources as its most critical asset and is putting in place various practices to ensure healthy work environment. Industrial relations continued to be cordial and harmonious throughout the year.

ADDITONAL INFORMATION

The 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.

The 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 as during the year ended March 31, 2010 none of its employees had drawn more than or equal to Rs. 2,00,000/- per month, if employed in part of the financial year, and more than or equal to Rs. 24,00,000/- per annum, if employed throughout the financial year.


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CORPORATE GOVERNANCE

In 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.

COLLABORATORS

The 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.

ACKNOWLEDGEMENT

Your 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 organisations for their continuous co-operation and support in progress of the Company and also look forward to their continued confidence and trust in the Company.

For and on behalf of the Board

Supriya Mukherjee Subir Ranjan Dasgupta

Mumbai, May 28, 2010 Managing Director Director


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ANNEXURE “A” FORMING PART OF DIRECTORS’ REPORT 2009-10MANAGEMENT DISCUSSION AND ANALYSIS REPORT

1) Industry Structure, Development & Outlook

Kilburn is a technology led Company, specialized in process design, engineering, manufacturing, project management and installation of equipment and systems for various process plant. The Company is a leader in solid, liquid, gas drying systems and specially designed skid mounted packages for offshore platforms. Its products have diverse applications in industries like chemical, petrochemical, fertilizer, steel, refineries, oil and gas, power, food processing, etc. The Company’s focus is to meet the requirement of critically customized process equipment. The development of the Company primarily hinges on the growth plan of its user industries.

The Company witnessed considerable decline in the inflow of orders which began from the third quarter of 2008-09 following the unprecedented global economic slowdown. Fortunately, the industrial scenario started showing signs of revival from the third quarter of 2009-10. The Company’s order book has also started improving. The order book as on 31st March, ’10 at Rs.65 crore provides a good base for achieving substantially higher sales in the current fiscal.

During the current year, the Company proposes to focus on value added products. The thrust given by the Government of India on power generation enhances the prospects of supplies of Coal Dryers to Thermal power plants. The products of the Company are being evaluated by consultants in the Thermal Power industry to determine the suitability to new plants being set up. Demand potential for specialized and heavy fabricated equipments such as pressure vessels, reactors, heat exchangers is encouraging for petroleum, chemical, infrastructure industry and refineries. With the Company’s experience in fabrication of exotic material such as Nickel, Inconel, Duplex Stainless Steel and the setting up of a new modern facility with ASME “U” Stamp certification with heavy handling facilities, the Company can expect to get value added orders for these equipment. The Company is already a lead manufacturer of Rotary Dryers/ Calciners of large capacity systems in India. The Company is also an established manufacturer of I.U.G. for the oil and gas industry. The Company expects increased demand for its product for the oil & gas industry.

In order to supplement its manufacturing efforts and maximize production, the Company has started expanding its base of sub-contracting/ outsourcing.

Apart from the Process Equipment as discussed above, the Company has strong presence in the Food Processing industry. The Company continues to be a leader in manufacturing and marketing Tea Dryers. The buoyancy in the tea industry has been continuing and the Company has substantially increased its sales of Tea Dryers. The Company expects to improve further its performance in this segment.

The Company’s R&D has designed complete range of Paddy Dryers of various capacities for applications of all categories of paddy viz. basmati and non-basmati. The dryers are meant for continuous steaming to final drying. The new range of equipment is designed to reduce moisture content from 36% to 12%. The Company’s technology involving vibrating equipment in substitution of the batch type LSU dryer, will have an edge in terms of higher production, better quality, lesser breakages and lower utility costs. The Paddy Dryer is expected to benefit immensely the rice mill industry.

As regards Sugar Dryer, the Company has supplied its drying systems to a number of large companies in the sugar industry. The Company will strengthen its marketing efforts in this segment.

While the Tea Dryer is already patented, we expect patents to be granted during the current year for all types of Paddy and Sugar dryers manufactured by the Company.

2) Financial Performance vis-à-vis Operational Performance

Financial performance has been separately dealt with under the Directors’ Report.


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3) Opportunities and Threats

Your Company expects sustainable industrial growth in the country across several sectors. The diverse uses of the Company’s products and the customers’ acceptance of our product quality with competitive pricing should provide opportunities for significant growth in Sales & Profitability in the years ahead.

Increase in input cost specially the cost of steel and other inputs may act as a major threat which will have adverse bearing on the margins of the product.

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) New Project

The details of the New Project have been separately dealt with under the Directors’ Report.

6) Risks and Concerns

The Company is in the engineering segment and caters to the requirement of several industries for their capital equipment. By its nature, engineering business is exposed to risks at several stages. The orders involving long execution period are more prone to volatility in execution, fluctuating input costs, etc. The Company has put in place proper systems to ensure timely completion of various activities involved right from receipt of enquiry to the commissioning of the equipment. Strict adherence to the time schedule will greatly minimize the risks involved.

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.

7) Internal Control Systems and their adequacy

Your Company has an effective and adequate Internal Control and Management Information System in place with particular emphasis on shop floor operations, quality control, delivery commitments, budget variances, etc. Your Company’s Internal Auditors are engaged in reviewing and analyzing the effectiveness and adequacy of the Internal Control Systems. The Internal Auditors submit periodical review reports to the management and the same are presented to the Audit Committee for review and suggestion along with Management replies to the observations made by the Internal Auditors. Additionally, the Company has introduced management audit by a senior officer of the Company to conduct in depth study of certain specific areas.

8) Human Resource Development

Your Company considers human resources as its most critical asset and is putting in place various practices to ensure healthy work environment. Industrial relations continued to be cordial and harmonious throughout the year. As on March 31, 2010, the Company had 144 employees on rolls.

9) 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 2009-10:INFORMATION 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 — 201211 KWH

Consumption per unit — 144.24 KWH/M.T

B. Research and Development (R&D):

1. Specific areas in which R&D carried out by the Company:

a) Development of Phase VI tea dryer models for drying of tea.

b) Improvement in development of drying of Rooibos tea using two temperature drying and fluidized concept.

c) Development of drying of garnet sand – special type sand using vibratory dryer.

d) Development of steamed raw paddy dryer.

e) Development of energy efficient system for drying of hysil insulation blocks.

2. Benefits derived as a result of the above R&D:

a) Improvement in quality with decrease in production cost.

b) In cases listed above, costly conveyorised dryer can be replaced using vibratory dryer. Use of fluidized bed and two temperature drying concept will improve quality of product.

c) By use of continuous steaming system, different grade of steamed rice can be made with lower utility requirement.

3. Future plan of action:

Through R&D efforts, develop more efficient drying system for diverse range of products.


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4. Expenditure on R&D:

a) Capital : Nil

b) Recurring : Rs. 36.45 Lac

c) Total : Rs. 36.45 Lac

d) Total R&D expenditure as a percentage of total turnover : 0.39%

C. Technology absorption, adaptation and innovation:

a) Efforts, in brief, made towards technology absorption, adaptation and innovation:

The Company maintained its steady pace of adsorption of technology from existing collaborators. Coal drying technology from our collaborators will be applied to the power industry.

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.

b) Total foreign exchange used and earned:

Total foreign exchange used - Rs. 608 Lac

Total foreign exchange earned - Rs. 2,144 Lac


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

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 and accountability, which are fundamental to the Company.

The Company endeavors 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, 2010:

Sr.

No.

Name of the Director Category No. of Board Meetings during

the year 2009-10

Attendance at the

last AGM held on

29.09.09

Directorship in other public

companies1

Committee position held in other public

companies2

Held Attended Chairman Member

1 Mr. Deepak Khaitan Chairman

Non-Executive 6 3 No 7 - 1

2 Mr. Supriya Mukherjee Managing Director Executive 6 6 Yes 1 - -

3 Mr. Subir Ranjan Dasgupta Independent 6 5 Yes 2 - -

4 Mr. Amritanshu Khaitan Non-Executive 6 2 No 4 - -

5 Mr. Gobind Saraf Independent 6 6 Yes 2 - -

6 Mr. Manmohan Singh Independent 6 3 No 1 - -

1 Directorship held in Private Companies, Section 25 Companies and Foreign Companies 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.Mr. Suvamoy Saha ceased to be a director w.e.f. April 11, 2009.

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 2009-10, the Board of Directors of your Company met 6 times on 25/5/2009, 29/6/2009, 31/7/2009, 29/10/2009, 8/1/2010 and 29/1/2010.

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


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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 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 2009-10. 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 2009-10:

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 CategoryMr. Gobind Saraf Chairman Non-Executive Independent DirectorMr. Subir Ranjan Dasgupta Member Non-Executive Independent DirectorMr. Manmohan Singh Member Non-Executive Independent DirectorMr. Supriya Mukherjee Member Managing Director

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 29th September, 2009.

The 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 2009-10:

During the year 2009-10, five meetings of the Audit Committee were held and attended by the members as per the details given below;

Sr. No.

Name of Director Meetings / Attendance2/4/2009 29/6/2009 31/7/2009 29/10/2009 29/1/2010

1 Mr. Suvamoy Saha* Present NA NA NA NA2 Mr. Gobind Saraf Present Present Present Present Present3 Mr. Subir Ranjan

Dasgupta#NA Present Absent Present Present

4 Mr. Manmohan Singh Absent Absent Present Absent Present5 Mr. Supriya

MukherjeePresent Present Present Present Present

* Ceased to be a member w.e.f. April 11, 2009. # Admitted as a member w.e.f. May 25, 2009.

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.


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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:

a) Overseeing the Company’s financial reporting process to ensure disclosure of financial information as per the requirements of Stock Exchanges 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, results of operations and 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 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 qualification, experience & background, etc. of the Candidate.

IV. Remuneration Committee

i) Composition of the Remuneration Committee, particulars of meetings held and attended during the year 2009-10:

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


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the approval of shareholders and Central Government, wherever necessary. The detail of composition of Remuneration Committee is as follows:

Name Position Held CategoryMr. Gobind Saraf Chairman Non-Executive Independent DirectorMr. Subir Ranjan Dasgupta Member Non-Executive Independent DirectorMr. Manmohan Singh Member Non-Executive Independent Director

During the year 2009-10, 1 meeting of Remuneration Committee was held on 7/1/2010, which was attended by Mr. Gobind Saraf and Mr. Subir Ranjan Dasgupta.

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 2009-10, Mr. Supriya Mukherjee, Managing Director was paid Rs. 73.20 Lac as Salary, Rs. 21.00 Lac as Bonus, Rs. 4.17 Lac as Perquisites and Rs. 13.47 Lac was contributed to the retirement funds. He does not hold any equity shares in the Company as on March 31, 2010. 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 details of relationship between Directors inter-se, sitting fees paid to Non-Executive Directors during the year 2009-10 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, 2010

Mr. Deepak Khaitan Father of Mr. Amritanshu Khaitan

9,000 1,201

Mr. Amritanshu Khaitan

Son of Mr. Deepak Khaitan

6,000 NIL

Mr. Suvamoy Saha — 3,000 NA*

Mr. Subir Ranjan Dasgupta

— 27,000 NIL

Mr. Gobind Saraf — 45,000 91Mr. Manmohan Singh — 18,000 NIL

* Ceased to be a Director w.e.f. April 11, 2009.


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The Non-Executive Directors are paid sitting fees of Rs. 3,000/- for each meeting of the Board and of Committee thereof attended by them. 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.

i) The Committee as of March 31, 2010 comprises of following members:

Name Position Held Category

Mr. Gobind Saraf Chairman Non-Executive Independent Director

Mr. Supriya Mukherjee Member Managing Director

Mr. Manmohan Singh Member Non-Executive Independent Director

ii) Name and Designation of Compliance Officer:

Ms. Amee B. Joshi

Company 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 held and attendance thereof during the year 2009-10:

The power to approve the share transfer / transmission and dematerialization and / or rematerialisation has been delegated severally to Mr. A. Suresh, 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 Pvt. Ltd., 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 2009-10, three meetings were held and attended by the members as per the details given below:

Sr. No. Name of Director Meetings / Attendance

29/6/2009 29/10/2009 29/1/2010

1 Mr. Gobind Saraf Present Present Present

2 Mr. Supriya Mukherjee Present Present Present

3 Mr. Manmohan Singh Absent Absent 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;


15

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 2009-10 is as follows:

Nature of Complaints Number of Complaints Received

Number of Complaints Resolved

Non-receipt of Declared Dividend 4 4

Non-receipt of Share Certificates 3 3

Non-receipt of Annual Reports 2 2

Shares not dematerialized / rematerialized NIL NIL

Others NIL NIL

Total 9 9

VI. General Body Meetings

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

Financial year AGM No. Day & Date Venue Time

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

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

11.00 a.m

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

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

10.00 a.m

2006-07 19th Tuesday, 27th

August, 2007Williamson Magor Hall, The Bengal Chamber of Commerce and Industry, 6, Netaji Subhash Road, Kolkata – 700 001

11.00 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

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.

19th NIL NA


16

iii) Details of resolutions passed through Postal Ballot:

During the year 2009-10, none of the resolution was 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.

VII. Disclosures

i) Related party transactions:

Related party transactions have been disclosed under Note 18 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 transaction is made to the Board every year by the Directors as and when they become interested. Further, interested Directors neither participate nor vote in the transaction wherein they have potential interest.

ii) Disclosure of Accounting treatment:

The financial statements of the Company for the year ended March 31, 2010 are prepared in conformity with the Accounting Standards.

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 reviews 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 re-appointed at the ensuing Annual General Meeting of the Company is attached to the Notice of Annual General Meeting.


17

viii) Compliances:

a) During the last three years ending on March 31, 2010, 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.

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 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, 2010 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, 2010.

xi) Certificate of compliance:

The Certificate of Practising Company Secretary confirming compliance with all requirement of the Clause 49 of the Listing Agreement for the year ended March 31, 2010 is appended to this report and forms part of the Directors’ 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.


18

xiii) General Shareholders Information:

a) Annual General Meeting

Date : August 31, 2010

Time : 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 2010-11 (tentative schedule)

Quarter Results

Ending on June 30, 2010 : Second week of August 2010

Ending on September 30, 2010 : Second week of November 2010

Ending on December 30, 2010 : Second week of February 2011

Year ended March 31, 2011 : In the month of May 2011

AGM is proposed to be held on September 2011.

c) Date of Book Closure : Wednesday, August 25, 2010 to Tuesday, August 31, 2010 (both days inclusive)

d) Dividend Payment date : If declared, will be paid on or after September 6, 2010

e) Listing on Stock Exchanges : The Bombay Stock Exchange Ltd. (BSE), Mumbai

The Calcutta Stock Exchange Association Ltd. (CSE), Kolkata

The Annual Listing fees for the year 2009-10 has been paid to the above two Stock Exchanges within the stipulated time.

f) Stock Code :

The Bombay Stock Exchange Ltd.

: 522101

The Calcutta Stock Exchange

Association Ltd. : 21022

g) 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 2009 20.65 16.80 17.15 110688 11492.10 9546.29

May 2009 24.25 16.00 22.75 162120 14930.54 11621.30

June 2009 24.35 18.00 23.15 146358 15600.30 14016.95

July 2009 31.15 24.00 30.85 333908 15732.81 13219.99

August 2009 36.00 27.20 36.00 986439 16002.46 14684.45

September 2009 48.75 35.85 40.50 1210979 17142.52 15356.72

October 2009 42.00 34.35 35.20 486527 17493.17 15805.20

November 2009 45.00 32.00 44.15 572794 17290.48 15330.56

December 2009 50.95 41.50 45.50 378754 17530.94 16577.78


19

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)

January 2010 57.30 42.15 46.00 484680 17790.33 15982.08

February 2010 60.90 45.45 53.15 648116 16669.25 15651.99

March 2010 59.80 52.00 56.05 384223 17793.01 16438.45

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

KEL Share Price and Sensex Movement (For FY 2009-10)

i) Registrars and Transfer Agents : Maheshwari Datamatics Pvt. Ltd. 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]

j) Share Transfer System:

The physical transfer of shares is processed and approved by the Company in co-ordination with Maheshwari Datamatics Pvt. Ltd., atleast once in every fortnight. The Share Certificates after effecting transfer are dispatched 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 Pvt. Ltd. within 21 days from the date of receipt of the request.

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

0

10

20

30

40

50

60

70

Apr-0

9

May

-09

Jun-

09

Jul-0

9

Aug-

09

Sep-

09

Oct

-09

Nov

-09

Dec

-09

Jan-

10

Feb-

10

Mar

-10

KEL

Clo

sing

Pric

e (R

s.)

0.00

2,000.00

4,000.00

6,000.00

8,000.00

10,000.00

12,000.00

14,000.00

16,000.00

18,000.00

20,000.00

SEN

SEX

(Poi

nts)

BSE CLOSE SENSEX


20

k) Distribution of shareholding as on March 31, 2010:

Equity Shares held

No. of Shareholders

% of Shareholders

Number of Shares held

% of Shares held

1-500 8252 88.02 1350473 10.19

501-1000 562 5.99 462201 3.49

1001-2000 253 2.70 395822 2.99

2001-3000 98 1.05 256987 1.94

3001-4000 42 0.45 147872 1.11

4001-5000 42 0.45 199367 1.50

5001-10000 64 0.68 491378 3.71

Above 10000 62 0.66 9951668 75.07

Total 9375 100.00 13255768 100.00

Shareholding pattern as on March 31, 2010:

Category No. of Shares held

Percentage of

Shareholding

No. Shares Pledged or otherwise

encumbered

Percentage of Shares

Pledged

A Promoters’ Holding

1 Promoters

Indian 7575022 57.14 3000000 39.60

Foreign - - - -

B Public Shareholding

2 Institutional Investors

a. Mutual Funds and UTI 2000 0.02 - -

b. Banks, Financial Institutions

1800 0.01 - -

c. Insurance Companies - - - -

d. Foreign Institutional Investors

- - - -

3 Others

a. Bodies Corporate 1123666 8.48

b. Indian Public 4530084 34.17

c. NRIs / OCBs 23196 0.18

d. HUF

Total (1+2+3) 13255768 100.00 3000000 22.63

l) 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, 2010, 95.46% of outstanding Equity shares of the Company are held in dematerialized form.

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


21

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

n) Plant Location : Kilburn Engineering Limited C/o Puntual Trading Limited Plot No. E/32, MIDC Taloja Industrial Area, District Raigad Maharashtra – 410 208

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

Corporate Office 112, Minerva Industrial Estate, P. K. Road Mulund (West), Mumbai – 400 080. Tel No.: 022 25936200 Fax No.: 022 25917580 / 7554 E-mail: [email protected]

Registrars & Transfer Agents Maheshwari Datamatics Pvt. Ltd. 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]

For and on behalf of the Board

Supriya Mukherjee Subir Ranjan Dasgupta

Mumbai, May 28, 2010 Managing Director Director


22

DECLARATION OF COMPLIANCE WITH CODE OF CONDUCTI, Mr. 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 a 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, 2010.

Supriya Mukherjee

Mumbai, May 27, 2010 Managing Director

CORPORATE GOVERNANCE CERTIFICATETo,

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 for the financial year ended 31st March 2010.

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 & CO.

PRACTISING COMPANY SECRETARIES

DHRUMIL SHAH

PROPRIETOR

Mumbai, May 28, 2010 ACS 22541, CP 8978


23

AUDITORS’ REPORTTO THE MEMBERS OF KILBURN ENGINEERING LIMITED

1. We have audited the attached Balance Sheet of Kilburn Engineering Limited as at 31st March, 2010, the Profit and Loss account and also 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 amounts 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, 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 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 comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

v. Without qualifying our opinion, we draw attention to Note 2(c) of Schedule 17B to the financial statements relating to certain contingencies affecting the financial statements. We have relied on the legal opinion obtained by the Company in this matter;

vi. Our report for the previous year ended 31st March 2009 was qualified regarding non provision for balance consideration of Rs. 5850 lac receivable on sale of Company’s property. Refer Note no. 3 of Schedule 17B;

vii. 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, 2010;

ii. in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date and

iii. in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.


24

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 (ic), (vi), (viii), (x), (xii), (xiii), (xiv), (xv), (xvi), (xviii) (xix) and (xx) of paragraph 4 of CARO are not applicable to the Company for the year.

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.

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.

viii. On the basis of written representations received from the directors, as on 31st March, 2010 and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2010 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. SALIVATI Partner

Mumbai, May 28, 2010 (Membership No. 34004)


25

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 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, 2010 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 disputed income tax, sales 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, 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.

11. 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 material fraud on the Company was noticed or reported during the year.

For DELOITTE HASKINS & SELLS Chartered Accountants

(Registration No. 117364W)

R. SALIVATI Partner

Mumbai, May 28, 2010 (Membership No. 34004)


26

BALANCE SHEETAs at 31st March, 2010

As at 31st March, 2010

As at 31st March,2009

Schedule Rs. In Lac Rs. In Lac Rs. In Lac Rs. In LacSOURCES OF FUNDSShareholders’ Funds :Share Capital 1 1,325.58 1,345.11Reserves and Surplus 2 8,936.74 8,769.40

Loan Funds :Secured Loans 3 436.37 1,206.23Unsecured Loans 4 30.85 467.22 30.85 1,237.08

Deferred Tax Liability (Note 10 of Schedule 17B)

9.80 51.81

10,739.34 11,403.40APPLICATION OF FUNDSFixed Assets :Gross Block 5 2,052.82 873.34Less : Depreciation 422.19 295.71Net Block 1,630.63 577.63Capital Work in Progress (Including capital advances)

296.73 1,927.36 455.18 1,032.81

Investments 6 232.63 64.67

Current Assets, Loans and AdvancesInventories 7 1,001.49 1,723.32Sundry Debtors 8 2,712.00 2,307.38Cash and Bank Balances 9 5,028.15 2,145.67Loans and Advances 10 3,014.60 9,258.57

11,756.24 15,434.94

Less : Current Liabilities and Provisions 11Current Liabilities 2,581.62 3,628.81Provisions 600.73 1,511.12

3,182.35 5,139.93Net Current Assets 8,573.89 10,295.01Miscellaneous Expenditure 12 5.46 10.91(To the extent not written off or adjusted)

10,739.34 11,403.40Significant Accounting policies & Notes to accounts

17

The Schedules referred to above form an integral part of the Balance Sheet of the Company.This is the Balance Sheet referred to in our report of even date.

For and on behalf of For and on behalf of the Board of DirectorsDELOITTE HASKINS & SELLSChartered Accountants

Supriya MukherjeeManaging Director

Subir Ranjan DasguptaDirector

R. SalivatiPartner

A. SureshChief Financial Officer

Amee JoshiCompany Secretary

Mumbai, May 28, 2010 Mumbai, May 28, 2010


27

Schedule Year ended 31st March,2010

Year ended 31st March,2009

Rs. In Lac Rs. In LacINCOMESales and Services 13 9,302.05 9,181.22Excise Duty (579.82) (683.02)

8,722.23 8,498.20Other Income 14 470.26 386.52

9,192.49 8,884.72EXPENDITUREOperating Expenses 15 7,657.38 8,010.65(Increase)/Decrease in Stock of Finished Goods and Work in Progress

16 730.52 302.06

Depreciation 5 126.48 120.68Diminution in value of Investments — 15.56Interest (Note 8 of Schedule 17B) 114.00 144.85

8,628.38 8,593.80Profit before Prior Period item, Extraordinary Item and Tax

564.11 290.92

Less: Prior Period Items (Note 16 of Schedule 17B) — 3.15

Profit Before Taxation and Extraordinary Item 564.11 287.77Current Tax 175.50 —Fringe Benefit Tax — 17.30Deferred Tax (42.01) 358.80

Profit / (Loss) Before Extraordinary Item 430.62 (88.33)Extraordinary item (Net of Tax) (Note 3 of Schedule 17B)

17— 7,391.72

Profit After Extraordinary item 430.62 7,303.39Balance Brought Forward From Previous Year 6,187.33 (66.50)Excess Provision for Dividend Written back (Including Dividend Tax) 4.57 —

Amount available for Appropriation 6,622.52 7,236.89Less: AppropriationsProposed Dividend 198.84 269.02Tax on Dividend 33.02 45.72Transfer to Capital Redemption Reserve 19.53 4.48Transfer to General Reserve 21.53 730.34Balance Carried Forward to Balance Sheet 6,349.60 6,187.33Basic & Diluted Earning Per Share of Rs. 10 Each(Note 13 of Schedule 17B)EPS - Before Extraordinary items 3.23 (0.65)EPS - After Extraordinary items 3.23 54.12Significant Accounting policies & Notes to accounts

17

PROFIT AND LOSS ACCOUNTFor the year ended 31st March, 2010

The Schedules referred to above form an integral part of the Profit and Loss Account of the Company.This is the Profit and Loss Account referred to in our report of even date.

For and on behalf of For and on behalf of the Board of DirectorsDELOITTE HASKINS & SELLSChartered Accountants



R. SalivatiPartner





28



Rs. In Lac Rs. In LacA CASH FLOW FROM OPERATING ACTIVITIES

Profit/( Loss) before Taxation and Extraordinary Item 564.11 287.77Adjustment for :Depreciation 126.48 120.68Provision for Dimunition in value of investments (41.76) 15.56(Profit)/ Loss on sale of fixed assets/ fixed assets written off — 2.89Loss on sale of Investments 19.86 —Provision for liquidated damages, Warranties written back — (47.00)Bad debts and other provisions written back (23.43) (0.89)Bad debts written off 0.76 1.55W/off of Rights Issue Expenses 5.46 5.46Provision for doubtful advances 0.46 7.82Provision for Warranty 69.24 3.52Creditors written back (1.21) (53.01)Interest charged 113.99 144.85Dividend Income (1.33) (0.67)Interest Income (267.58) (120.03)Operating profit before working capital changes 565.05 368.50Adjustments for :Trade and Other Receivables 669.54 (2126.60)Inventories 721.83 132.31Trade and Other Payables (1031.72) 47.23Cash Generated from Operations 924.70 (1,578.56)Direct Taxes paid (1175.84) (60.23)Cash flow from Operating Activities before extraordinary items (251.14) (1,638.79)

B CASH FLOW FROM INVESTING ACTIVITIESPurchase of Fixed Assets (1021.02) (410.89)Sale of Fixed Assets — 2.80Purchase of Investments (216.30) —Sale of Investments 70.24 —Interest received 267.58 120.03Dividend Received 1.33 0.67Inter corporate deposit (618.57) (1195.24)Cash from Investing Activities (1,516.74) (1,482.63)Extraordinary Item :Sale of immoveable property including advance, net of expense 5850.00 1983.92Net Cash from Investing Activities 4,333.26 501.29

C CASH FLOW FROM FINANCING ACTIVITIESEquity Shares Bought Back (including Share premium) (55.52) (8.95)Dividend paid (260.27) —Increase in Bank Borrowings — 199.56Repayment of Borrowings (769.86) —Interest paid to Banks/ Others (113.99) (144.85)Net Cash used in Financing Activities (1,199.64) 45.76Net Increase/(decrease) in cash & cash equivalents (A+B+C) 2,882.48 (1,091.74)

Cash & Cash Equivalents - Opening Balance 2145.67 3237.41Cash & Cash Equivalents - Closing Balance 5028.15 2145.67

Notes :1 The above Cash Flow Statement has been prepared under “Indirect Method” set out in Accounting Standard (AS - 3): Cash Flow Statements”

as notified under the Companies (Accounting Standards) Rules, 2006.2 Cash and Cash Equivalent includes Fixed Deposits of Rs. 392.77 lac (previous year Rs. 356.38 lac) which are charged against guarantees

issued by bank.3 Figures relating to the previous year have been recast where necessary to conform to figures of the current year.

CASH FLOW STATEMENTFor the year ended 31st March, 2010

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

DELOITTE HASKINS & SELLSChartered Accountants



R. SalivatiPartner





29



Rs. In Lac Rs. In Lac Rs. In Lac Rs. In Lac

1. SHARE CAPITAL

Authorised

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-Up

13,255,768 (Previous Year 13,451,062) Equity Shares of Rs.10 Each

1,325.58 1,345.11

Notes:

The above is net of 195,294 shares bought back during the year (Previous Year 44,738)

(Note 24 of Schedule 17B)

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.

1,325.58 1,345.11

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 4.48 —

Transfer from Profit and Loss Account 19.53 24.01 4.48 4.48


Securities Premium Account

Balance As Per Last Balance Sheet 1,847.17 1,850.71

Less: Adjustment on account of shares bought back 35.99 1,811.18 3.54 1,847.17

General Reserve

Balance As Per Last Balance Sheet 730.34 —

Transfer from Profit and Loss Account 21.53 751.87 730.34 730.34

Profit and Loss Account 6,349.60 6,187.33

8,936.74 8,769.40

3. SECURED LOANS

From Banks (Note 6 of Schedule 17B) 436.37 1,206.23

Interest Accrued and due — 436.37 — 1,206.23

436.37 1,206.23

4. UNSECURED LOANS

Deferred Liability (Note 7 of Schedule 17B) 30.85 30.85

30.85 30.85

Schedules to the Accounts


30

5. FIXED ASSETS (Rs. In Lac)

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-09

Additions Disposals Balance as on

31-Mar-10

Balance as on

1-Apr-09

Deduction on

disposals

Provision for the

year

Balance as on

31-Mar-10

Balance as on

31-Mar-10

Balance as on

31-Mar-09

1 2 3 4 5 6 7 8 9 10

Lease holdLand

— 1,139.56 — 1,139.56 — — 8.20 8.20 1,131.36 —

Building 64.73 — — 64.73 6.40 — 2.16 8.56 56.17 58.33

Furniture and Fittings

68.10 4.43 — 72.53 12.04 — 4.75 16.79 55.74 56.06

Electrical Installations

4.81 — — 4.81 0.44 — 0.36 0.80 4.01 4.37

Motor Vehicles

35.38 — — 35.38 14.29 — 3.36 17.65 17.73 21.08

Plant and Machinery

473.70 23.31 — 497.01 155.38 — 30.50 185.88 311.13 318.32

Office Equipments

89.99 12.17 — 102.16 44.51 — 14.50 59.01 43.15 45.48

Lease HoldImprovements

136.64 — — 136.64 62.65 62.65 125.30 11.34 73.99

Total :- 873.35 1,179.47 — 2,052.82 295.71 — 126.48 422.19 1,630.63 577.63

PreviousYear

1063.95 346.54 537.15 873.34 594.38 419.35 120.68 295.71 577.63



Rs. In Lac Rs. In Lac

6. INVESTMENTS

LONG TERM (At Cost)

QUOTED - Trade Investments

271,337 (Previous year 66,666) Equity Shares of Rs.5 Each of Eveready Industries India Limited

244.48 118.28

66,666 Equity Shares of Rs.5 Each of Mcleod Russel India Limited 71.72 71.72

316.20 190.00

Less : Provision for Diminution in Value 83.57 125.33

232.63 64.67

Aggregate cost of Quoted Investments 316.20 190.00

Aggregate market value of Quoted Investments 341.40 54.97


31




7. INVENTORIES

Stores and Spare Parts 29.45 26.11

Raw - Material and Components 606.07 592.49

Work-In-Progress 365.97 837.52

Finished Goods — 267.20

1,001.49 1,723.32

8. SUNDRY DEBTORS - Unsecured

Debts Outstanding For a Period Exceeding Six Months

424.22 698.04

Other Debts 2,301.23 1,640.83

2,725.45 2,338.87

Less: Provision for Doubtful Debts 13.45 31.49

2,712.00 2,307.38

Considered Good 2,712.00 2,307.38

Considered Doubtful 13.45 31.49

2,725.45 2,338.87

9. CASH AND BANK BALANCES

Cash in Hand 1.60 3.85

Balances with Scheduled Banks:

On Current Account 4,383.78 785.44

On Deposit Account (Note 2(a) of Schedule 17B) 642.77 1,356.38

(Includes Fixed Deposits as Margin Money with Banks) 5,026.55 2,141.82

5,028.15 2,145.67


32




10. LOANS AND ADVANCES (Unsecured)

Advances Recoverable in Cash or in Kind or for Value to be Received (Note 3 of Schedule 17B)

Considered Good 546.31 7,506.30

Considered Doubtful 0.50 10.36

546.81 7,516.66

Less : Provision for Doubtful Advances 0.50 546.31 10.36 7,506.30

Balances with Government Authorities 181.69 127.72

Inter Corporate Deposits 1,898.81 1,280.24

Other Deposits 89.14 101.22

Advance Payment of Tax and Tax Deducted at Source (Net) 134.96 —

MAT Credit Entitlement 163.69 243.09

3,014.60 9,258.57

11. CURRENT LIABILITIES AND PROVISIONS

Current Liabilities

Acceptances 503.98 276.16

Sundry Creditors

- Total Outstanding dues to Micro and Small Enterprises 12.26 7.17

- Others 829.09 841.35 1,264.79 1,271.96

Other Liabilities and Accruals 215.64 416.92

Advances Received from Customers 1,015.81 1,663.77

Unpaid Dividend 4.84 —

2,581.62 3,628.81

Provisions

Provision for employee benefits (Note 17 of Schedule 17B) 55.26 50.59

Provision for taxation — 857.68

Provision for Liquidated Damages & Warranties 69.23 17.07

Provision for others (Note 11 of Schedule 17B) 244.38 271.04

Proposed Dividend 198.84 269.02

Tax on Dividend 33.02 600.73 45.72 1,511.12

3,182.35 5,139.93

12. MISCELLANEOUS EXPENDITURE

(to the extent not written off or adjusted)

(Note 11 of Schedule 17A)

Share issue expenses 5.46 10.91

5.46 10.91


33

Year ended31st March,2010



INCOME:

13. SALES AND SERVICE

Product Sales 9,073.75 9,085.51

Income from Services 228.30 95.71

9,302.05 9,181.22

14. OTHER INCOME

Sale of Scrap 105.33 149.83

Interest on Bank Deposits (Tax deducted at source Rs. 10.78 Lac (Previous year Rs. 17.06 Lac))

125.77 99.01

Interest Others (Tax deducted at source Rs. 5.45 Lac (Previous year Rs. 3.20 Lac))

141.81 21.02

Dividend on Trade Investment 1.33 0.67

Excess Provision written back 6.09 47.00

Doubtful debts provision written back 17.34 0.89

Debit/ Credit Balances written back/off 1.21 53.01

Provision for Dimunition in Value of Long Term Investment Written Back

41.76 0.31

Exchange variation (net) 3.78 —

Miscellaneous Income 25.84 14.78

470.26 386.52

15. OPERATING EXPENSESRaw Material and Bought-Out Components Consumed

Opening Stock 592.49 413.88

Add : Purchases (including Job work Charges ) 4,673.22 5,502.32

Less : Closing Stock 606.07 4,659.64 592.49 5,323.71

Employee Cost

(Including Managerial Remuneration)


Salaries, Wages and Bonus 522.39 474.07

Contribution To Provident and Other Funds 77.37 65.29

Welfare Expenses 91.01 690.77 68.04 607.40


34

Year ended31st March,2010


Rs. In Lac Rs. In Lac Rs. In Lac Rs. In Lac Rs. In LacOthersContract Labour Charges 577.05 513.38Stores, Spares Parts and Loose Tools Consumed (Indigenous) 145.13 152.89Power and Fuel 13.45 59.23Site Expenses 196.92 22.17Rent 179.54 171.48Rates and Taxes 20.29 16.75Repairs and Maintenance - Buildings 10.54 9.33Repairs and Maintenance - Plant and Machinery

27.27 14.87

Repairs and Maintenance - Others 71.38 52.43Factory Upkeep 49.71 58.91Royalty 36.92 32.03Insurance Charges 16.44 14.05Travelling and Conveyance Expenses 203.69 156.94Bank Charges 106.39 145.02Professional Fees 69.07 60.83Advance/Bad debts written off 21.38 18.67Less:Provision for Doubtfull Debts/Advances/Liquidated Damages written back

20.62

0.76

17.12

1.55Provision for Doubtfull Debts/Advances

0.50 7.82

Sales Tax Dues 9.11 0.33Freight, Carriage and Packing Expenses (net of recovery) 191.76 222.25Selling Commision 27.57 8.90Liquidated Damages, Warranties & Rebates

69.23 34.25

Loss on Sale of Long term Investment (net)

19.86

Exchange variation (net) — 89.83Fixed Assets writtenoff — 3.13Right Issue Expenses 5.46 5.46Miscellaneous expenses (Note 12 of Schedule 17B) 258.93 2,306.97 225.71 2,079.54

7,657.38 8,010.65

16. INCREASE IN STOCK OF FINISHED GOODS AND WORK IN PROGRESSStock of Finished GoodsClosing Stock — 267.20Opening Stock 267.20 267.20 161.50 (105.70)

(Increase)/Decrease in Excise duty on Finished Goods

(8.24) (17.59)

Stock of Work-in-ProgressClosing Stock 365.96 837.52Opening Stock 837.52 471.56 1,262.87 425.35

730.52 302.06


35

SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS

(A) SIGNIFICANT ACCOUNTING POLICIES:-

1. Basis of Preparation of Financial Statements The financial statements have been prepared under historical cost convention in accordance with

generally accepted accounting principles and the provisions of the Companies Act, 1956.

2. Use of Estimates The presentation of financial statements requires estimates and assumptions to be made that affect

the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and the estimates are recognized in the period in which the results are known / materialized.

3. Fixed Assets Fixed Assets are recorded at cost. The cost of fixed assets include all costs incidental to acquisition,

commissioning and related internal costs.

4. Depreciation Depreciation is calculated on the assets on straight-line method at the rates and in the manner specified

in Schedule XIV of Companies Act, 1956, except where on a consideration of useful life, based on technical assessment higher depreciation is necessary. Assets costing Rs. 5,000/- or less are fully depreciated in the year of acquisition. Lease hold land and improvements are depreciated over the lease period.

5. Inventories Inventories are valued as under:

- Raw Materials/Components: at lower of cost (determined on monthly weighted average cost basis) and net realizable value.

- Stores and spare parts: at lower of cost (determined on FIFO basis) and net realizable value.

- Work-in-progress and Finished Goods: at lower of weighted average cost (including attributable charges and levies) and net realizable value.

Net realisable value is estimated at the expected selling price less estimated completion and selling costs.

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

investments are stated at lower of cost or fair market value. Dividends are accounted for when declared.

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

date of transaction. Assets and liabilities denominated in foreign currency as at balance sheet date are restated at the exchange rates prevailing on that date. Exchange differences on such restatement or on settlement are recognized in the profit and loss account. The Company’s forward exchange contracts are not held for trading or speculation. The premium arising on entering into such contract is amortised over the life of such contracts and exchange differences arising on such contracts are recognised in the Profit and Loss Account.

8. Revenue Recognition Revenue / Sales are recognized when significant risks and rewards associated with ownership are

transferred to the buyer – generally based on terms of delivery. For jobs completed against specific customer orders and subject to inspection by customer prior to dispatch, revenue is recognized after goods are moved out and invoiced after such inspection.

SCHEDULE 17


36

9. Employee Benefits

Provident fund is a defined contribution scheme and the contributions as required by the statute to Government Provident Fund are charged to profit and loss account during the period in which employees perform the services that the payment covers. Superannuation fund is a defined contribution scheme. The Company contributes a sum equivalent to 15% of eligible employees’ salary to Superannuation Fund administered by trust and managed by a life insurance Company.

Gratuity liability is defined benefit obligation and is funded with Life Insurance Corporation of India. The present value of gratuity obligation is actuarially determined based on the projected unit credit method as at the balance sheet date.

The amount of short term employee benefits expected to be paid in exchange for the services rendered by employee is recognized during the period when the employee renders the service.

The Company accrues the liability for compensated absences based on the actuarial valuation as at the balance sheet date conducted by an independent actuary.

Actuarial gains/losses are immediately taken to the profit and loss account and are not deferred.

10. Provisions, Contingent Liabilities and Contingent Assets Provisions involve substantial degree of estimation in measurement and are recognized when it is

probable that there will be outflow of resources as a result of past events. Separate disclosure in notes to accounts is made for each class of provision made during the year.

Contingent Liabilities (where outflow of resources is not considered probable) are not recognized but are disclosed in notes.

Contingent assets are neither recognized nor disclosed in the financial statements.

11. Deferred Expenses Expenses incurred in relation to issue of shares are amortized over a period of 5 years.

12. Taxes on Income Income Tax expense comprises current tax and deferred tax. Deferred tax is recognized on timing

differences between taxable income and accounting income that are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantially enacted on the balance sheet date. Deferred tax assets are recognized, on consideration of prudence if there is certainty that sufficient future taxable income will be available against which such deferred tax assets will be realized; deferred tax asset consisting of losses / accumulated depreciation is recognized only if there is virtual certainty that the asset will be realized in future. Such assets are reviewed as at each Balance Sheet date to reassess realisability thereof.

13. Borrowing Cost Borrowing costs are recognised as an expense in the period in which they are incurred. The borrowing

costs in respect of funds borrowed to finance the qualifying fixed assets until the assets are ready for commercial use are capitalised.

(B) NOTES TO THE ACCOUNTS:-

1. Estimated amount of Contracts remaining to be executed on capital account Rs. 1,620 Lac (Previous Year Rs. 1,117 Lac).

2. Contingent liabilities:

a) Guarantees and Letters of Credit issued by Banks Rs. 2,821.29 Lac (Previous Year Rs. 1,885.97 Lac) against which FDR of Rs. 392.77 Lac (Previous Year Rs. 356.38 Lac) pledged with Banks.

b) Demand notice from DGFT for non-fulfilling of export obligations Rs. 137 Lac (Previous Year Rs. 137 Lac). The Company expects no liability on this account.

c) The Company is a party to litigation by certain ex-employees in respect of claim for superannuation fund dues / retrenchment compensation arising around the year 2000-2001. The Company has


37

in prior years provided for the probable obligation (included under ‘Provision for Contingencies’). Based on legal opinions obtained, no additional liability is expected and the matters are subjudice.

d) Other claims not acknowledged as debts Rs. 0.80 Lac (Previous Year Rs. 0.80 Lac)

3. The Company entered in to an MOU in November 2007, for sale of property at Bhandup for an aggregate consideration of Rs. 11,500 Lac. During the year 2008 – 09, the Company executed the conveyance deed and accounted for the balance profit of Rs. 7,391.72 Lac (net of tax of Rs. 830 Lac and after adjustment of Minimum Alternate Tax of Rs. 190 Lac). Rs. 5,650 Lac was received till 31st March 2009 and the balance of Rs. 5,850 Lac was received in the current year.

4. Pursuant to the termination of the agreement entered into with Conwood Pre-fab Ltd. for the purchase of 8 acres of land, the Company has received back the advance of Rs. 800 Lac paid to them. Further, the Company has on November 17, 2009 entered into a Deed of Assignment with Chemetall – Rai India Ltd. for transfer of lease hold rights in the land located at Plot No.6, MIDC Saravali, Bhiwandi – Kalyan Road, Dist. Thane, admeasuring 30,960 sq. mtrs. at a total consideration of Rs. 867 Lac exclusive of stamp duty, registration fees, site development expenses, MIDC charges, etc. The Company has commenced the implementation of a state-of-the-art manufacturing facility at this location which is expected to be completed by the end of 2010 - 2011.

5. The Company had received an allotment letter dated 21st May 2008 for 20 acres of land from Asansol – Durgapur Development Authority. No further development has taken place in this regard as yet.

6. Secured Loans: Banks

The credit facilities are secured by:

I. Hypothecation of present and future stocks of raw materials, semi finished goods, finished goods and book debts by way of first charge and also by hypothecation of movable plant and machinery by way of first charge.

II. English mortgage of all the Company’s immovable properties both present and future on pari-passu second charge basis. The immovable property of the Company situated at Bhandup which was mortgaged to the Banks has been disposed off. The Company is in the process of securing the facilities by way of equilable mortgage of the Company’s immovable property acquired at Plot No.6, MIDC Saravali, Bhiwandi – Kalyan Road, Dist. Thane.

7. Unsecured Loans: The amount of Rs. 30.85 Lac (Previous Year Rs. 30.85 Lac) represents liability on account of Purchase

of machinery from NBFC’s on lease / Hire Purchase basis. The amount is payable over a period of six years in accordance with the BIFR Scheme, without interest.

8. Interest: (Rs. In Lac)

FY 2009-10 FY 2008-09Short term Loans from Banks 22.39 98.06Others 91.61 46.79Total 114.00 144.85

9. Payment to Directors: (Rs. In Lac)

FY 2009-10 FY 2008-09i) Sitting Fees (a) 1.08 0.93ii) Managerial Remuneration (Refer Note below)Salaries (Including Bonus) 94.20 69.00Contribution to Provident Fund and other Funds 13.47 8.10Perquisites 4.17 3.08 (b) 111.84 80.18Total (a + b) 112.92 81.11


38

Note : The remuneration for the FY 2009-10 has been paid as per the revised Basic Salary of Rs. 3,50,000/-

p.m which was approved by the Board of Directors of the Company at their meeting held on January 8, 2010 and which is within the Basic Salary Grade of Rs. 2,50,000 to Rs. 4,50,000 p.m. as approved by the Central Government vide letter no. SRN/A 40311862-CL.VII dated December 12, 2008 and amendment dated May 6, 2009.

10. In accordance with the Accounting Standard on Accounting for Taxes on Income, Deferred Tax Asset / Liability has been recognized in the Accounts as of the year end as under:

(Rs. In Lac)

Particulars FY 2009-10 FY 2008-09Deferred Tax Liability in respect of difference in WDV as per books and tax

(35.51) (51.81)

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

25.71 -

Net Deferred Tax Asset / (Liability) (9.80) (51.81)

11. 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)

271.04

(271.04)

26.66

(-)

-

(-)

-

(-)

244.38

(271.04)Provision for Liquidated Damages / Warranties

17.07

(64.56)

17.07

(3.99)

-

(47.00)

69.23

(3.50)

69.23

(17.07)

(Figures for the previous year are shown in bracket)

12. Payments to Auditors (Grouped in Miscellaneous Expenses – Schedule 15): (Rs. In Lac)

FY 2009-10 FY 2008-09Audit Fees (including limited reviews) 8.10 5.90Other Services 0.52 0.75Out of Pocket Expenses 0.39 0.01Total 9.01 6.66

13. Earning Per Share (Basic / Diluted): (Rs. In Lac)

FY 2009-10 FY 2008-09A Profit /(loss) before Extraordinary items 430.63 (88.33)B Net Profit after Extraordinary items 430.63 7303.39C Weighed Average Number of Equity Shares used (As denominator

for calculating EPS (In Lac))133.26 134.93

D EPS before Extraordinary Items (A/C) (In Rs.) 3.23 (0.65)

E EPS after Extraordinary Item (B/C) (In Rs.) 3.23 54.12

14. 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 (in Lac)

Amount in Rs (in Lac)

No. of Contracts

Current Firm Commitment USD 45.08 2,105.30 13Previous Firm Commitment USD 13.60 88.42 3


39

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

Year Particulars Currency Amount in FCY (in Lac)

Amount in Rs (in Lac)

Current Receivables USD 4.85 217.21EURO 1.00 59.97

Previous USD 10.66 534.52CHF 0.10 4.54

Current Liabilities USD 9.60 435.09EURO 0.80 48.77

Previous USD 6.78 339.20EURO 8.78 593.63YEN 3.76 7.19

15. Research & Development:

The total amount incurred on Research & Development activities during the year amount to Rs. 36.45 Lac (Previous Year Rs. 29.40 Lac).

16. Prior Period items:

Particulars FY 2009-10 Rs. In Lac

FY 2008-09 Rs. In Lac

Miscellaneous Expenses - 3.15

Total - 3.15

17. Employee Benefits:

a) Defined Contribution Plan:

The Company has recognised, in the profit and loss account for the year ended 31st March, 2010, following amounts as expenses under defined contribution plan under the head ‘Contribution to Provident and Other Funds’ in Schedule 15 – Operating Expenses.

Sr.No. Benefit (Contribution to) FY 2009-10Rs In Lac

FY 2008-09Rs In Lac

1 Provident and Other Funds 35.31 30.302 Superannuation Fund 25.59 25.48

Total 60.90 55.78

b) Defined Benefit Plans:

As per Actuarial valuations as on 31st March, 2010 and in accordance with the revised Accounting Standard 15 on Employee Benefits issued by The Institute of Chartered Accountants of India; Particulars of Gratuity benefit are provided below.

Particulars FY 2009-10Rs In Lac

FY 2008-09Rs In Lac

I Expense recognized in Profit & Loss Account for the yeara. Current Service Cost 6.92 7.75b. Interest cost 5.72 5.18c. Expected return on Plan Assets (6.09) (4.89)d. Actuarial (Gain)/Loss (0.24) 0.16e. Expense recognised during the year 6.31 8.20


40

II Reconciliation of opening and closing balance of Obligationa. Obligation as at the beginning of the year 64.90 62.75b. Current Service Cost 6.92 7.75c. Interest cost 5.72 5.18d. Actuarial (Gain)/Loss 0.24 0.61e. Benefits Paid (0.72) (11.39)f. PV of Obligation as at the end of the year 77.06 64.90

III Change in Plan assetsa. Fair Value of Plan Assets as at the beginning of the year 60.74 58.27b. Expected return on Plan assets 6.09 4.89c. Actuarial Gain/(Loss) 0.49 0.44d. Contributions 15.68 8.53e. Benefits Paid (0.71) (11.39)f. Fair Value of Plan Assets as at the end of the year 82.29 60.74

Provision recognized in the Balance SheetTowards Gratuity as above - 4.15Towards Compensated Absences 55.26 46.44

55.26 50.59

Since the balance in the fund is higher than the Defined benefit obligation as at 31st March 2010, no provision has been made in the books.

Notes 1 Discount rate / return on plan assets taken at 8% p.a considering the benchmark rate

available on Government Securities for the tenure of payment. 2 The estimate of future salary increases considered at 5% p.a taking into account inflation,

seniority, promotion and other relevant factors such as supply and demand in the employment market.

3 100% of Plan Assets are invested in group gratuity scheme offered by LIC of India.

18. Related Party Disclosure: (Rs. In Lac)

Sr. No.

Name of RelatedParty

Nature of Relationship

Nature ofTransaction

TransactionDuring the

Year

Closing Balance

Dr./(Cr.)1 Mr. Supriya Mukherjee Key Management

PersonnelManagerial Remuneration

111.84(80.18)

0.00(0.00)

2 Williamson Magor & Co. Ltd.

Company having Significant influence

ServiceCharges

24.48 (60.00)

-(114.14)

Rent 16.80 (15.70)

(1.40) (-)

Electricity Expenses

3.43 (2.79)

0.04 (-)


19. The amount of Net Exchange Loss / (Gain) of (Rs. 37.51 Lac) (Previous Year Rs. 172.66 Lac) is included in Sales.

20. Segment information for primary segment reporting (by business segments):

Based on the guiding principles given in the Accounting Standard on ‘Segment Reporting’ (AS-17) issued by the Institute of Chartered Accountants of India, the primary segment of the Company is business segment which comprises of Engineering Segment. As the Company operates in a single primary business segment, no segment information thereof is given.


41

Segment information for secondary segment reporting (by geographical segments)

The Company has a customer base within and outside India. (Rs. In Lac)

Particulars India Outside India Total

Revenue 6,577.93(6,815.70)

2,144.31(1,682.50)

8,722.23(8,498.20)

Segment Assets 13,639.06(15,993.35)

277.18(539.06)

13,916.24(16,532.41)

Segment Liabilities 3,165.71(5,402.64)

483.86(974.37)

3,649.57(6,377.01)

Capital Expenditure 1,337.93 (410.89)

—(-)

1,337.93 (410.89)


21. Micro Enterprises and Small Enterprises:

The information as required to be disclosed under the Act and provided in Schedule 11 has been determined to the extent such parties have been identified on the basis of information available with the Company. No interest has been paid or accrued in the books. Considering the volume and payment cycle such amount is not considered to be significant.

22. The Company has bought and sold the following Investments during the year:

Name of the scrip FY 2009 – 10 FY 2008 – 09

Quantity Purchase Cost (Rs. In Lac)

Quantity Purchase Cost (Rs. In Lac)

Eveready Industries India Ltd. 33,334 21.99 - -

23. Disclosures under AS-19 in respect of operating leases:

i) Significant Leasing Agreements :

a) The Company has taken a factory shed and appurtanent land on Leave and Licence basis for the purpose of manufacturing, fabrication, storage of plants and machinery and other allied and permissible commercial activities.

b) The tenure of the agreement is for a period of 3 years commencing from 7th May 2008.

c) The agreement is non cancellable for a period of 2 years.

ii) Lease payments recognised in the Profit and Loss Account : Rs. 179.55 Lac (Previous year 171.48 Lac)

iii) Total of future minimum lease payments under the non-cancellable period of the lease :

a) Not later than 1 year : Rs. 132.00 Lac (Previous year Rs. 132.00 Lac)

b) Later than 1 year and not later than 5 years: Rs. 11.00 Lac (Previous year NIL)

24. Pursuant to the Buyback offer made by the Company during the previous year, 2,40,032 equity shares were bought back for an aggregate amount of Rs. 63.54 Lac by utilizing Share premium account to the extent of Rs. 39.53 Lac. Capital Redemption Reserve of Rs. 24.01 Lac has been created being the nominal value of shares bought back. All the Bought back shares have been extinguished and the Buyback has closed on January 29, 2010.


42

25. Capacity and Production: **

Class of goods Unit Installed Capacity

Actual Production

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

2,446.17*** (2,553.16)

Other Equipments M.T. Nil 19.00 (27.00)


** As certified by the management and relied upon by the auditors being a technical matter.

*** Includes production on job work basis.

26. Sales and Stocks of Finished Goods:

Class of goods

Unit Opening Stock Closing Stock Sales **

Qty. Amount Rs. In Lac



Dryers, DryingSystems &Components thereof.

M.T. 116.00(187.29)

267.21(161.50)

-(116.00)

-(267.21)

2,562.17(2,624.45)

8,429.78(8,301.79)

Other Equipments

M.T. -(-)

-(-)

-(-)

-(-)

19.00 (27.00)

64.15 (100.70)

Total 116.00(187.29)

267.21(161.50)

-(116.00)

-(267.21)

2,581.17(2,651.45)

8,493.93(8,402.49)


** Net of Excise Duty

27. Raw materials and Components Consumed:

Item % Total Amount Rs. In Lac

Raw Materials and Components consumed:-Indigenous 90.38%

(86.95%)3282.00

(3,745.71)Imported 9.62%

(13.05%)349.00

(561.80)Total 100.00%

(100.00%)3631.00

(4307.51) (Figures for the previous year are shown in bracket)

Principal Items of Raw Materials Consumed

Item Unit Quantity Amount Rs. In Lac

Steel M.T. 2543.00(1,775.24)

1815.00(1,721.00)

Components & others M.T. 1816.00(2,586.51)

Total 3631.00(4,307.51)



43

FY 2009-10

Rs. In Lac

FY 2008-09

Rs. In Lac

28. C.I.F. Value of Imports:

Raw materials 226.48 350.37

Components 73.01 119.72

299.49 470.09

29. Expenditure incurred in Foreign Currency:

Traveling Expenses 52.22 44.82

Royalty 36.92 32.03

Selling Commission 14.61 5.30

Technical Knowhow Fees 204.78 91.16

308.53 173.31

30. Earnings in Foreign Currency:

Exports Calculated on F.O.B. basis 2,144.31 1,682.49

Selling Commission - 3.26

2,144.31 1,685.75

31. Comparative financial information is presented in accordance with the ‘Corresponding Figure’ financial reporting framework set out in Auditing and Assurance Standard on Comparatives. Accordingly, amounts and other disclosures for the preceding year are included as an integral part of the current year financial statements, and are to be read in relation to the amounts and other disclosures relating to the current year. Figures of the previous year have been regrouped / reclassified wherever necessary to correspond with the figures of the current financial year. Figures have been rounded off to the nearest Rs. In Lac as per approval from Department of Company Affairs obtained u/s 211 of the Companies Act, 1956.

For and on behalf of the Board of Directors





Mumbai, May 28, 2010


44

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

I Registration Details :

Registration No. Balance Sheet Date

II Capital Raised during the year (Amount in Rs. Thousands)

Public Issue Rights Issue

Bonus Issue Private Placement

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

Total Liabilities Total Assets

Source of Funds

Paid up Capital Reserves & Surplus

Secured Loans Unsecured Loans

Application of Funds

Net Fixed Assets Investments

Net Current Assets Misc. Expenditure

Accumulated Losses

IV Performance of Company (Amount in Rs. Thousands)

Turnover (incl. other income) Total Expenditure

Profit/Loss Before Tax Profit/Loss After Tax

Earning Per Share in Rs. Dividend Rate %

V Genereric Names of Three principal Products/Services of Company (As per monetary terms)

Item Code No. (ITC Code)

Product Description


Product Description


Product Description

2 1 - 4 2 9 5 6

N I L

N I L

1 3 9 2 1 6 9

1 3 2 5 5 8

4 3 6 3 7

1 9 2 7 3 6 2 3 2 6 3

8 6 2 8 3 8

8 5 7 3 8 9

9 1 9 2 4 9

5 6 4 1 1

3 . 2 3

5 4 6

4 3 0 6 2

1 5

8 9 3 6 7 4

3 0 8 5

N I L

N I L

1 3 9 2 1 6 9

1 1

3 1 0 3 2 0 1 0

State Code

Date Month Year

8 4 1 9

Dryers and Drying Systems, Heat Exchangers & Combustion Systems 1 7 4 0

Oil - Field Equipments 3 7 4 8

Pneumatics & Vibrating Conveyors

N I L

Jacket for Chemical Industry

Prop

osed

vie

w o

f the

pla

nt a

t Sar

aval

i

Fluid Bed Dryer for Chemical Industry

Kilburn Engineering Limited 2009-10

SAP

Prin

t Sol

utio

ns P

vt. L

td. P

h.: 0

22 -

4074

100

0

A WILLIAMSON MAGOR GROUP ENTERPRISEWebsite: www.kilburnengg.com

2009-10 - · pdf fileof industrial slow down from the third quarter of 2009-10, the company...

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