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Kilburn Engineering Ltd.

BSE: 522101 Sector: Engineering
NSE: KILBUNENGG ISIN Code: INE338F01015
BSE LIVE 15:40 | 17 Nov 76.75 2.25
(3.02%)
OPEN

75.45

HIGH

77.45

LOW

75.00

NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 75.45
PREVIOUS CLOSE 74.50
VOLUME 24660
52-Week high 93.50
52-Week low 45.00
P/E 13.85
Mkt Cap.(Rs cr) 102
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 75.45
CLOSE 74.50
VOLUME 24660
52-Week high 93.50
52-Week low 45.00
P/E 13.85
Mkt Cap.(Rs cr) 102
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Kilburn Engineering Ltd. (KILBUNENGG) - Auditors Report

Company auditors report

TO THE MEMBERS OF KILBURN ENGINEERING LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of KILBURN ENGINEERING LIMITED(the "Company") which comprise the Balance Sheet as at 31stMarch 2017 the Statement of Profit and Loss and the Cash Flow Statement for the yearthen ended and a summary of the significant accounting policies and other explanatoryinformation.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 (the " Act") with respect to the preparationof these financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards prescribedunder section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit.

In conducting our audit we have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit of the financial statements in accordance with the Standards onAuditing specified under Section 143(10) of the Act. Those Standards require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.

We believe that the audit evidence obtained by us is sufficient and appropriate toprovide a basis for our qualified audit opinion on the financial statements.

Basis for Qualified Opinion

The Company has made a partial provision for diminution in value of its investment inequity shares of Mcnally Bharat Engineering Company Limited for reason stated in note26.4. We are unable to express an opinion on the extent of other than temporarydiminution if any in the value of investment in view of significant reduction in marketprice of the shares.

This matter was qualified in our report on the financial statements for the year ended31st March 2016.

Qualified Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matter described in the Basis forQualified Opinion paragraph above the aforesaid financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at 31st March 2017 and its profit and its cash flows for the yearended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143 (3) of the Act based on our audit we report to theextent applicable that:

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

b) Except for the possible effects of the matter described in the Basis for QualifiedOpinion paragraph above in our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

d) Except for the possible effects of the matter described in the Basis for QualifiedOpinion paragraph above relating to Accounting Standard 13 Accounting for Investments inour opinion the aforesaid financial statements comply with the Accounting Standardsprescribed under section 133 of the Act.

e) The matter described in the Basis for Qualified Opinion paragraph above in ouropinion may have an adverse effect on the functioning of the Company.

f) On the basis of the written representations received from the directors and taken onrecord by the Board of Directors none of the directors is disqualified as on 31stMarch 2017 from being appointed as a director in terms of Section 164 (2) of the Act.

g) The qualification relating to the maintenance of accounts and other mattersconnected therewith are as stated in the Basis for Qualified Opinion paragraph above.

h) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A". Our report expresses a qualified opinion on theadequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

i) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations as at the year-end onits financial position in its financial statements;

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts as at the year-end;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

iv. The Company has provided requisite disclosures in the financial statements asregards its holding and dealings in Specified Bank Notes as defined in the NotificationS.O. 3407(E) dated the 8th November 2016 of the Ministry of Finance duringthe period from 8th November 2016 to 30th December 2016. Based onthe audit procedures performed and the representations provided to us by the managementwe report that the disclosures are in accordance with the books of accounts maintained bythe Company and as produced to us.

2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm's Registration No. 117364W)
G. K. Subramaniam
Place: Kolkata Partner
Date : 29th May 2017 (Membership No. 109839)

ANNEXURE "A" TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 1 (h) under 'Report on other Legal and RegulatoryRequirements' of our Report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Act

We have audited the internal financial controls over financial reporting of KILBURNENGINEERING Limited (the "Company") as of 31st March 2017 inconjunction with our audit of the financial statements of the Company for the year endedon that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit conducted in accordance with theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India andthe Standards on Auditing prescribed under Section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our qualified audit opinion on the Company's internal financialcontrols system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Basis for Qualified Opinion

According to the information and explanations given to us and based on our audit amaterial weakness has been identified as at 31st March 2017 in the Company'sinternal control system with respect to valuation of the Investment in shares of McnallyBharat Engineering Company Limited in view of the significant reduction in the marketprice of the shares as described in Note 26.4 of the Financial Statement which couldresult in stating the investments at a value higher than its realisable value.

A 'material weakness' is a deficiency or a combination of deficiencies in internalfinancial control over financial reporting such that there is a reasonable possibilitythat a material misstatement of the company's annual or interim financial statements willnot be prevented or detected on a timely basis.

Qualified Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects maintained adequate internal financialcontrols over financial reporting as of 31st March 2017 based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note and except for thepossible effects of the material weakness described above on the achievement of theobjectives of the control criteria the Company's internal financial controls overfinancial reporting were operating effectively as of 31st March 2017.

We have considered the material weakness reported above in determining the naturetiming and extent of audit tests applied in our audit of the financial statements of theCompany for the year ended 31st March 2017 and the material weakness hasaffected our opinion on the said financial statements of the Company.

For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm's Registration No. 117364W)
G. K. Subramaniam
Place: Kolkata Partner
Date : 29th May 2017 (Membership No. 109839)

ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 2 under 'Report on other Legal and Regulatory Requirements'

Section of our report of even date)

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The fixed assets were physically verified during the year by the Management inaccordance with a regular programme of verification which in our opinion provides forphysical verification of all the fixed assets at reasonable intervals. According to theinformation and explanation given to us no material discrepancies were noticed on suchverification.

(c) Immovable properties of land and buildings including leasehold land whose titledeeds have been pledged as security for Cash Credit facility are held in the name of theCompany based on the confirmations directly received by us from lenders. In respect ofimmovable properties of leasehold land that have been taken on lease and disclosed asfixed asset in the financial statements the lease agreements are in the name of theCompany where the Company is the lessee in the agreement.

(ii) In our opinion and according to information and explanations given to us theinventories were physically verified during the year by the Management at reasonableintervals and no material discrepancies were noticed on physical verification.

(iii) In our opinion and according to the information and explanations given to us theCompany has granted loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered in the register maintained under section 189 of theCompanies Act 2013 in respect of which:

(a) The terms and conditions of the grant of such loans are in our opinion primafacie not prejudicial to the Company's interest.

(b) The schedule of repayment of principal and payment of interest has been stipulatedand repayments or receipts of principal amounts and interest have been regular as perstipulations.

(c) There is no amount overdue for more than 90 days as at the balance sheet date.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Companies Act2013 in respect of grant of loans. The Company has not made any investments or providedany guarantees.

(v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposit during the year and the provisions of Sections 73 to76 of the Companies Act 2013 are not applicable and hence reporting under clause 3(v) ofthe Order is also not applicable.

(vi) The maintenance of cost records has been specified by the Central Government undersection 148(1) of the Companies Act 2013. We have broadly reviewed the cost recordsmaintained by the Company pursuant to the Companies (Cost Records and Audit) Rules 2014as amended prescribed by the Central Government under sub-section (1) of Section 148 ofthe Companies Act 2013 and are of the opinion that prima facie the prescribedcost records have been made and maintained We have however not made a detailedexamination of the cost records with a view to determine whether they are accurate orcomplete.

(vii) In our opinion and according to the information and explanations given to us inrespect of statutory dues:

(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income-tax Sales Tax Service TaxCustoms Duty Excise Duty Value Added Tax cess and other material statutory duesapplicable to it to the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income-tax Service Tax Customs Duty Excise Duty Value Added Tax cessand other material statutory dues in arrears as at March 31 2017 for a period of morethan six months from the date they became payable.

(c) Details of dues of Income-tax and Value Added Tax which have not been deposited ason March 31 2017 on account of disputes are given below:

Name of Statute Nature of Dues Forum where Dispute is Pending Period to which the Amount Relates Amount (Rs. in lakhs)
Central Sales Tax Act Sales Tax Tribunal (Appeal II) FY 2008-09 13.86
Central Sales Tax Act Central Sales Tax Joint Commissioner of Sales Tax FY 2005-06 488.42
Maharashtra VAT Act VAT Joint Commissioner of Sales Tax FY 2005-06 111.98
Income Tax Act Income Tax Deputy Commissioner of Income Tax A Y 2008-09 18.51
Income Tax Act Income Tax Deputy Commissioner of Income Tax A Y 2010-11 14.15
Income Tax Act Income Tax Deputy Commissioner of Income Tax A Y 2011-12 57.88
Central Excise Act 1994 Excise Duty Additional Commissioner of Central Excise FY 2011-12 70.06

There are no dues of Service Tax and Customs Duty as on March 31 2017 on account ofdisputes.

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of loans or borrowings to and banks. TheCompany has not taken any loan from financial institutions or government and not issuedany debentures.

(ix) In our opinion and according to the information and explanations given to us theterm loans have not been utilized for the purpose for which these have been taken as on 31stMarch 2017. The term loans of ' 110 crores net of processing fees of ' 2.20 crores havebeen deployed as Inter Corporate Deposits of ' 107.80 Crores to Group Companies. TheCompany has not raised moneys by way of initial public offer or further public offer(including debt instruments) and hence reporting to this extent under clause (ix) of theOrder is not applicable.

(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no material fraud on the Company by its officersor employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us theCompany has paid/provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013.

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of theOrder is not applicable.

(xiii) In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 188 and 177 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements etc. as required by theapplicable accounting standards.

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause (xiv) of the Order is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or persons connected with him and hence provisions of section 192 of theCompanies Act 2013 are not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm's Registration No. 117364W)
G. K. Subramaniam
Place: Kolkata Partner
Date : 29th May 2017 (Membership No. 109839)