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Kilburn Engineering

BSE: 522101|NSE: KILBUNENGG|ISIN: INE338F01015|SECTOR: Engineering - Heavy
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Directors Report Year End : Mar '18    Mar 16

The Directors of your Company are pleased to present the 30th Annual Report and Audited Statement of Accounts for the financial year ended 31st March, 2018.

FINANCIAL RESULTS

(Rs. In Lac)

Year ended 31st March, 2018

Year ended 31st March, 2017

Total Revenue

13,142

15,711

Total Expenses (excluding finance cost & depreciation)

10,503

12,729

Earnings Before Finance Costs & Depreciation (EBIDTA)

2,639

2,982

Finance Costs

1,722

1,196

Depreciation & Amortization Expenses

433

435

Profit Before Tax

484

1,351

Tax Expenses

149

418

Profit for the Year

335

933

DIVIDEND

Despite the depressed results; the Board of Directors have recommended a dividend of '' 10% i.e. Rs.1/- per Equity Shares of Rs.10 each.

REVIEW OF RESULTS - 2017-18

Detailed overview of the company''s operations during the year under review and a discussion on the future outlook has been covered in the Management discussion and analysis attached as Annexure - I to this report.

FUTURE OUTLOOK

Your company is primarily engaged in Designing, Manufacturing, & Commissioning Customized / Critical Equipments/Systems for critical equipments across a wide range of various industries.

A. Process Equipments (PE) : The Company started with an opening order book of Rs.69 Cr. The Company''s order booking is mainly dependent on replacement, demand and capacity increase plans of user industries. Since the product caters to diverse industrial sectors, the demand is never consistent over the years. During the second half year, most of the user industries deferred their CAPEX Plans resulting in a delay in receipt of orders from customers both domestic and international.

PE Developments till 31.03.2018: The Company Received Rs.34 Cr. orders during the 2nd half year out of which Rs.19 Cr. were received in February / March 2018. The delayed receipt of orders left no scope for achieving significant progress in execution of the order under Percentage Completion Method of Accounting. This resulted in a substantial drop in the top line in the 3rd & 4th quarter and the unexecuted orders at the end of the year.

B. i) Food Processing Equipments: Your Company which operates mainly in Tea industry started with an order book of Rs.4 Cr. as at 01.04.2017. The progress of orders was slow due to draught and stagnation in the tea industry but resurgence of the domestic tea industry from second quarter of financial the year resulted in making up the order book. As on 31.03.2018 the unexecuted orders in hand was Rs.18 Cr.

ii) Continuous Withering System (CWS) :

As you are aware your Company developed and commissioned a Continuous Withering System (CWS) in one of the group companies last year. During the year under review the Company received an order for CWS from an overseas group company. The order received during 2016-17 was successfully commissioned during the year under review. The projects involve redesign of certain key equipments in our existing system (due to difference in the quality of the Tea caused by climatic conditions abroad). Your Company successfully completed supply / erection and commissioning of this system during 2017-18.

Successful working of our CWS in the African region will give definite marketing advantage to your Company. Further orders for our dryers along with CWS are expected during the year from Africa. It is to be stated that your Company has been able to give better quality and cost effective solution for withering and drying of Tea in the African market.

Your Company is also taking necessary steps to re-establish itself in Coconut Dryer Segment both in India and abroad. The results are encouraging.

AUDITORS

a) Statutory Auditors : At the AGM on 25.09.2017, M/s. S R B C & CO LLP, Chartered Accountants (Firm''s Registration no. : 324982E / E300003 ) were appointed as Statutory Auditors as per the provisions of Section 139(2) of the Companies Act, 2013 and the rules framed thereunder, upto the conclusion of Annual General Meeting to be held in 2022.

b) Internal Auditors : M/s. SPAN & Associates, Chartered Accountants were appointed as internal auditors by the Board of directors for 2017 -18 and they have conducted internal audits periodically and submitted their reports to the Audit Committee. Their reports have been reviewed by the Statutory Auditors and the Audit Committee. Their reappointment is for year 2018-19 has been proposed.

c) Cost Auditors : Your Company appointed M/s. D. Sabyasachi& Co. ( FRN : 00369 ) Cost Accountants as Cost Auditors of the Company for the Financial Year 2017-18 and their appointment is proposed for 2018 - 19 at the remuneration set out in the notice of AGM and explanatory statement thereto.

d) Secretarial Auditors : M/s. Dhrumil M. Shah, Mumbai were appointed as secretarial auditor of the Company for the Financial Year 2017-18, as required under section 204 of The Companies Act, 2013 read with the applicable rules. The Secretarial Audit Report for 2017 - 18 forms part of the Annual Report as Annexure - VII.

DIRECTOR''S RESPONSIBILITY STATEMENT

Pursuant to the provision of Section 134 (5) of the Companies Act, 2013, the Board of Directors of your Company hereby confirms :

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

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

3) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 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.

5) the directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

6) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

CORPORATE GOVERNANCE

Report on Corporate Governance has been attached herewith as Annexure - II pursuant to the provisions of Regulation 34(3) and 53(f) read with schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Management discussion and Analysis report which outlines the salient points in the company''s performance human resources and other salient points is attached as Annexure - I.

EMPLOYEE RELATIONS

Employees'' relations were cordial throughout the year (there was some unrest in the second half). Several HR, IR initiatives including several training programs to improve employee relations and commitments have been initiated during the year and have been well accepted.

The tripartite long term agreement with the bargainable employees of your Company has expired during the year. Keeping in mind the long-term vision of the Company and its sustainability, the management has worked out a strategy of maximum outreach to all the employees by regular communication of the business plans and delivery requirements. Along with this, a well thought fall back plan has been put in place to maintain continuity at cost.

Both these together has ensured that relations remained cordial throughout the year and the strategy of the Company has been well accepted.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required to be disclosed pursuant to Section 134 (3) (m) of the Companies Act, 2013 read with The Companies (Accounts) Rules, 2014, as amended, is appended to this Annual Report as Annexure VIII and forms part of this Directors'' Report.

ADEQUACY OF INTERNAL CONTROL SYSTEM WITH RESPECT TO THE FINANCIAL STATEMENTS

The Company has a comprehensive system of internal control which is being strengthened. The internal control system is also subject to review by auditors.

The Company has appointed a firm of auditors for conducting internal audit on a half yearly basis and the report is considered by the Audit Committee of the Board headed by a Non-executive Independent Director.

DIRECTORS

Mr.Supriya Mukherjee continued as Managing Director of the Company during the year, as per terms of appointment approved by members. Board of directors had reappointed Mr. Mukherjee as Managing Director for a tenure of one year since 01.04.2017 at the same terms of remuneration, which was approved by members of the Company at AGM on 25th September, 2017.

Mr.SubirChaki was appointed as an additional director by the Board in their meeting held on 13th November, 2017. In view of the rich experience of Mr.SubirChaki, he was designated as Whole Time Director (Operations) w.e.f. 13th November, 2017. In their meeting held on 14th February, 2018, Board resolved to appoint Mr.SubirChaki as Managing Director w.e.f 01-04-2018 consequent to the retirement of Mr.Supriya Mukherjee on 31-03-2018 on completion of his tenure, subject to the approval of the members.

Mr.AmritanshuKhaitan, director retires by rotation pursuant to Section 152 of The Companies Act, 2013 at the ensuing Annual General Meeting of the Company and being eligible, offers himself for re-appointment.

DECLARATIONS BY INDEPENDENT DIRECTORS

Necessary declarations from all the Independent Directors of the Company, confirming that they meet the criteria of independence as prescribed, have been received.

KEY MANAGERIAL PERSONNEL

During the year 2017 - 18, following officials continued as Key Managerial Personnel, pursuant to section 203 of The Companies Act, 2013 :

i. Mr.Supriya Mukherjee, Managing Director

ii. Mr.SubirChaki , Whole Time Director

iii. Mr. Suresh Shenoi (A. Suresh), Chief Financial Officer

iv. Mr.ArvindBajoria, Company Secretary

BOARD EVALUATION

Securities Exchange Board of India (SEBI) vide its circular no. SEBI /HO /CFD /CMD /CIR /P /2017/004 dated 5th January, 2017 had issued a guidance note on Board Evaluation which inter alia contains indicative criterion for evaluation of the Board of Directors, its Committees and the individual members of the Board.

Pursuant to the new Evaluation Framework adopted by the Board, the Board evaluated the performance of the Board, its Committees and the Individual Directors for the financial year 2017 - 18. After the evaluation process was complete, the Board was of the view that the performance of the Board as a whole was adequate and fulfilled the parameters stipulated in the evaluation framework. The Board also ensured that the Committees functioned adequately and independently in terms of the requirements of the Companies Act, 2013 and the Listing Regulations and at the same time supported as well as coordinated with the Board to help in its decision making. The individual Directors'' performance was also evaluated and the Board was of the view that the Directors fulfilled their applicable responsibilities and duties as laid down by the Listing Regulations and the Companies Act, 2013 and at the same time contributed with their valuable knowledge, experience and expertise to grab the opportunity and counter the adverse challenges faced by the Company during the year.

HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

Your Company has no holding or subsidiary company. Williamson Magor& Company Limited is holding 4319043 equity shares constituting 32.58% of total shareholding of the Company, so it is an associate company within the meaning of section 2 (6) of The Companies Act, 2013.

RELATED PARTY TRANSACTIONS

Your Board has developed and approved a Related Party Transactions Policy for purposes of identification and monitoring of related party transactions and the same has been displayed on the Company''s website at http:// www.kilburnengg.com/company-policy-main.

The Statement in Form AOC -2 containing the details of the Related Party Transactions pertaining to contracts with Related Parties forms a part of this Report as Annexure - IX.

MANAGERIAL REMUNERATION

Details of the ratio of the remuneration of each director to the median employee''s remuneration and other details as required pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are as per annexure - X.

Mr.Supriya Mukherjee, Managing Director and Mr.SubirChaki Whole Time Director were two Executive Directors in receipt of remuneration, and remuneration details are available in the corporate governance details attached to this directors'' report.

VIGIL MECHANISM

The Company has formulated a vigil mechanism for Directors and employees of the Company to report concerns about unethical behaviour, actual or suspected fraud or violation of the company''s code of conduct or ethics policy. The VIGIL MECHANISM is available on the website of Company and can be accessed at http://www. kilburnengg.com/company-policy-main.

REMUNERATION POLICY

The Company has formulated a Remuneration Policy for Directors, Key Managerial Personnel and employees of the Company to ensure that adequate remuneration paid to attract, retain and motivate the senior management employees to run the company successfully. The Policy is available on the website of the Company at http:// www.kilburnengg.com/company-policy-main/ and also annexed herewith as Annexure - V.

RISK MANAGEMENT

Directors have adopted risk management policy to identify the risks involved in all activities of the Company. The main objective of this policy is to ensure sustainable business growth and to promote a pro-active approach in identifying, reporting, evaluating and mitigating risks associated with the business. The policy guides the board in identification of various business risks and to take appropriate steps to mitigate the same.

The Company has constituted Corporate Social Responsibility (CSR) Committee in 2016-17 in compliance with provisions of Section 135 of the Companies Act 2013 and SEBI Listing Regulations, with Mr.Manmohan Singh (Chairman), Mr.GobindSaraf (Member) and Mr.Supriya Mukherjee (Member). The CSR Committee laid down the CSR policy of the Company which can be accessed at http://www.kilburnengg.com/ company-policy-main/. The Company made a total CSR expenditure amounting to Rs.18.60 Lac (through various implementing agencies) during the FY : 2017-18. The details of said expenditure are given in Annual Report on CSR Activities, attached herewith as Annexure - IV in the form prescribed under the Companies ( Corporate Social Responsibility Policy ) Rules, 2014.

EXTRACT OF THE ANNUAL RETURN

The extract of the annual return in Form No. MGT - 9, as per annexure - VI forms part of the Board''s report.

OTHER DISCLOSURES

During the year under review:

a. There were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

b. Your Company has not accepted any deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

c. There were no significant or material orders passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.

COLLABORATORS

The Directors place on record its sincere appreciation to all its Collaborators for extending their valuable support and co-operation.

ACKNOWLEDGEMENT

The Directors wish to convey their appreciation to their Customers, Bankers, Dealers, Suppliers, Stock Exchanges, Government and all other Stakeholders for the excellent assistance and cooperation. The Directors'' also thank all the employees of the Company for their valuable service and support during the year.

For and on behalf of the Board

Place : Kolkata AdityaKhaitan

Date : 13th August, 2018 Chairman

Source : Dion Global Solutions Limited
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