FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2020
The Directors of your Company are pleased to present the 32nd Annual Reportand Audited Statement of Accounts for the financial year ended 31st March2020.
(INR in Lac)
| ||Year ended 31st March 2020 ||Year ended 31st March2019 |
|Revenue from Operations ||13114 ||14386 |
|Other Income ||1917 ||2001 |
|Total Revenue ||15031 ||16387 |
|Total Expenses (excluding finance cost & depreciation) ||12206 ||13404 |
|Earnings Before Finance Costs & Depreciation (EBIDTA) ||2825 ||2983 |
|Finance Costs ||1722 ||1711 |
|Depreciation & Amortization Expenses ||414 ||422 |
|Profit Before Tax ||689 ||850 |
|Tax Expenses ||172 ||258 |
|Profit for the Year ||517 ||592 |
Board of Directors did not recommend dividend for FY: 2019-20 in view of the impact ofCovid pandemic on business operations of the Company.
OPERATIONAL REVIEW & STATE OF THE COMPANY'S AFFAIRS
Your company is primarily engaged in Designing Manufacturing & CommissioningCustomized / Critical Equipments/Systems for critical applications across a wide range ofindustries.
Process Equipments (PE): During the year major orders have been bagged for RotaryDryers and Calciners for Soda Ash and Carbon Black from reputed customers in that sector.
Kilburn has established itself in manufacturing reliable sludge dryers in collaborationwith Nara Machinery of Japan. During the year it has bagged a record of 19 sludge dryersworth 18 crores.
During the year Kilburn bagged orders from the process industry worth 76 crores.
Food Processing Equipment
Despite very low tea prices and market sentiments being poor Kilburn maintained itsleadership in the tea dryer business reaching the level of the previous year. Bangladeshand Africa markets continue to be focus export markets for tea dryers and witheringmachine.
During the year Kilburn installed a fully automated withering machine at one of thegardens of Leading
KILBURN ENGINEERING LTD.
Tea Company in Kenya. This is the first of its kind of withering machine and receivedwide appreciation from tea growers in Africa.
The total order booking during the year 2019-20 was Rs 98 crores with a closing orderbook of Rs 69 crores.
Your Company operates primarily in two divisions viz Process Equipment and Tea DryingEquipment. The future outlook based on orders in hand and the expected order inflowappears to be encouraging.
A detailed review of the outlook of each division is incorporated in the ManagementDiscussion and Analysis Report in Annexure I which forms part of this Report.
a) Statutory Auditors: At the AGM on 13.08.2019 M/S. V. Singhi & AssociatesChartered Accountants (FRN:311017E) were appointed as Statutory Auditors to fill thecausal vacancy caused by resignation of previous auditors M/s. S R B C & CO LLPChartered Accountants for a tenure of five years upto AGM to be held in 2024.
b) Internal Auditors: M/s. Bhide & Bhide Chartered Accountants were appointed asInternal Auditors by the Board of Directors for 2019 - 20 and they have conducted internalaudits periodically and submitted their reports to the Audit Committee. Their reports havebeen reviewed by the Statutory Auditors and the Audit Committee.
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 2019-20 and theirappointment is proposed for 2020 - 21 at the remuneration set out in the notice of AGM andexplanatory statement thereto.
d) Secretarial Auditors: M/s. Dhrumil M. Shah
Mumbai were appointed as secretarial auditor of the Company for the Financial Year2019-20 as required under section 204 of The Companies Act 2013 read with the applicablerules. The Secretarial Audit Report for 2019 - 20 forms part of the Annual Report asAnnexure - VII.
Statutory Auditors' Report
The audit report for Financial year 2019 - 20 has a qualified opinion as following:
Basis for Qualified Opinion
As detailed in Note 5b to the accompanying Ind AS financial statements the Company hasInter Corporate Deposits ('ICDs') and interest accrued thereon receivable from groupcompanies amounting to ' 10816 lakhs and ' 1927 lakhs respectively as on 31st March2020. Considering the financial position of these group companies and in the absence ofsufficient and appropriate audit evidence in relation to recoverability of these ICDs andaccrued interest thereon we are unable to determine whether any adjustments are requiredto the carrying value of these ICDs and interest accrued thereon.
Qualified opinion in the Audit Report on Internal Financial Controls under Clause (i)of Sub-section 3 of Section 143 of The Companies Act 2013 reads as following:
The Company did not have an appropriate internal control system for recoverability ofInter Corporate Deposits (ICDs) given to group companies and interest thereon which couldpotentially result in the Company not recording adequate provision for doubtful ICDs andrecognising interest revenue without establishing reasonable certainty of ultimatecollection.
Management's response to the Audit qualification:
Considering the financial position of these group companies the Company has obtainedunconditional and irrevocable personal guarantee from Promoter Director for the saidInter- Corporate Deposits as collateral security in case the borrowers are unable to repaythe ICDs and interest accrued thereon.
Further a promoter group level restructuring is currently underway to monetize assetsto meet up the various liability of the group companies (owned by same promoter) includingthe settlement of outstanding ICDs. During the year the Group Companies have graduallycommenced Interest payments and will continue to do so. The management has assessed therecoverability of the said ICDs including interest receivable thereon and has consideredthe same to be good and recoverable.
The Company is implementing appropriate Internal Control System to ensure timelyrecovery of the Inter Corporate Deposits ( ICD's ) placed with group companies alongwithinterest thereon.
Management response to auditor's observations in secretarial audit report
Due to frequent changes in statutory and system requirements from time to time fewdelays and lapses occurred in the process of filing of prescribed documents and necessarysteps were taken to rectify the same and required systems were put in place to avoid suchdelays in future.
DIRECTOR'S RESPONSIBILITY STATEMENT
Pursuant to the provision of Section 134 (5) of the Companies Act 2013 the Board ofDirectors of your Company hereby confirms:
1) that in the preparation of the annual accounts the applicable accounting standardshave been followed along with proper explanation relating to material departure;
2) that the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at the end of thefinancial 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 ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
4) that the Directors have prepared the annual accounts on a going concern basis.
5) that the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
6) that the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
MANAGEMENT DISCUSSION & ANALYSIS
A separate report on Management Discussion & Analysis is appended to the AnnualReport as Annexure "I" and forms part of this Director's Report;
Report on Corporate Governance has been attached herewith as Annexure - II pursuant tothe provisions of Regulation 34(3) and 53(f) read with schedule V of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
The tripartite agreement with the trade unions was signed during the year. Employeerelations remained cordial.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information relating to Conservation of Energy Technology Absorption and ForeignExchange Earnings and Outgo as required to be disclosed pursuant to Section 134 (3) (m) ofthe Companies Act 2013 read with The Companies (Accounts) Rules 2014 as amended isappended to this Annual Report as Annexure "VIII" and forms part of thisDirectors' Report.
ADEQUACY OF INTERNAL CONTROL SYSTEM WITH RESPECT TO THE FINANCIAL STATEMENTS TheCompany has a comprehensive system of internal control which is being strengthened. Theinternal control system is also subject to review by auditors.
The Company has appointed a firm of auditors for conducting internal audit on aquarterly basis and the report is considered by the Audit Committee of the Board headed bya Non-executive Independent Director. DIRECTORS
Mr. Subir Chaki continued as Managing Director of the Company during the year as perterms of appointment approved by members. Board of directors had reappointed Mr. Chaki asManaging Director for a tenure of two years with effect from 01.04.2018 at the terms ofremuneration which was approved by members of the Company at AGM on 28thSeptember 2018 and his tenure ended on 31.03.2020. Board appointed him as Whole TimeDirector w.e.f. 1st April 2020 for one year subject to the approval ofmembers of the Company.
Mr. Manmohan Singh independent director had resigned with effect from 30.04.2019 dueto his health reasons. Mr. Padam Kumar Khaitan independent director has resigned witheffect from 28.05.2019 due to his preoccupations with profession of Legal practice.
Mrs. Priya Saran Chaudhri Non Executive Director has resigned with effect from 22ndJuly 2019 due to her other pre-occupations.
Mr. Amitav Roy Choudhury was appointed as an Independent Director in the Board Meetingheld on 29th May 2019. His appointment was approved by the members at 31stAGM held on 13.08.2019 for a tenure of five years.
Mr. Subir Ranjan Dasgupta Independent Director had resigned with effect from 19thJune 2019 due to other preoccupations.
There are no material reasons for resignation by Independent Directors other than thereason mentioned above.
Mr. Gobind P. Saraf was appointed as Independent Director for a second tenure of fiveyears at Annual General Meeting held on 13th August 2019. Members also
approved his continued appointment after completion of 75 years of age.
Mr. Mahesh Shah was appointed as an additional director on 06.08.2019 and his tenureended on the close of 31st Annual General Meeting on 13.08.2019. Board ofdirectors approved his appointment as an additional director and designated him asIndependent Director for a tenure of five years in their meeting held on 13.08.2019subject to the approval of the members.
Ms. Arundhuti Dhar was appointed as an additional director on 06.08.2019 and her tenureended on the close of 31st Annual General Meeting on 13.08.2019. Board ofdirectors approved her appointment as an additional director and designated her asIndependent Director for a tenure of five years in their meeting held on 13.08.2019subject to the approval of the members. Requisite Notices have been received from Membersproposing the appointment of the said Independent Directors
DECLARATIONS BY INDEPENDENT DIRECTORS
Necessary declarations from all the Independent Directors of the Company confirmingthat they meet the criteria of independence as prescribed have been received.
KEY MANAGERIAL PERSONNEL
During the year 2019 - 20 following officials continued as Key Managerial Personnelpursuant to section 203 of The Companies Act 2013:
i. Mr. Subir Chaki Managing Director
ii. Mr. Sachin J. Vijayakar Chief Financial Officer
iii. Mr. Arvind Bajoria 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 BoardEvaluation which inter alia contains indicative criterion for evaluation of the Board ofDirectors its Committees and the individual members of the Board.
Pursuant to the new Evaluation Framework adopted by the Board the Board evaluated theperformance of the Board its Committees and the Individual Directors. After theevaluation process was complete the Board was of the view that the performance of theBoard as a whole was adequate and fulfilled the parameters stipulated in the evaluationframework. The Board also ensured that the Committees functioned adequately andindependently in terms of the requirements of the Companies Act 2013 and the ListingRegulations and at the same time supported as well as coordinated with the Board to helpin its decision making. The individual Directors' performance was also evaluated and theBoard was of the view that the Directors fulfilled their applicable responsibilities andduties as laid down by the Listing Regulations and the Companies Act 2013 and at the sametime contributed with their valuable knowledge experience and expertise to grab theopportunity 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 & CompanyLimited is holding 4319043 equity shares constituting 32.58% of total shareholding of theCompany so it is an associate company within the meaning of section 2 (6) of TheCompanies Act 2013.
RELATED PARTY TRANSACTIONS
Your Board has developed and approved a Related Party Transactions Policy for purposesof identification and monitoring of related party transactions and the same has beendisplayed 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 Transactionspertaining to contracts with Related Parties forms a part of this Report as Annexure - IX.
Details of the ratio of the remuneration of each director to the median employee'sremuneration 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. Subir Chaki Managing Director is the only Executive Director in receipt ofremuneration and remuneration details are available in the corporate governance detailsattached to this directors' report.
The Company has formulated a vigil mechanism for Directors and employees of the Companyto report concerns about unethical behaviour actual or suspected fraud or violation ofthe company's code of conduct or ethics policy. The VIGIL MECHANISM is available on thewebsite of Company and can be accessed at http://www. kilburnengg.com/company-policy-main.
The Company has formulated a Remuneration Policy for Directors Key ManagerialPersonnel and employees of the Company to ensure that adequate remuneration paid toattract retain and motivate the senior management employees to run the companysuccessfully. 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.
Directors have adopted risk management policy to identify the risks involved in allactivities of the Company. The main objective of this policy is to ensure sustainablebusiness growth and to promote a pro-active approach in identifying reporting evaluatingand mitigating risks associated with the business. The policy guides the board inidentification of various business risks and to take appropriate steps to mitigate thesame.
CORPORATE SOCIAL RESPONSIBILITY
The Company has constituted Corporate Social Responsibility (CSR) Committee incompliance with provisions of Section 135 of the Companies Act 2013 and SEBI ListingRegulations with Mr. Amritanshu Khaitan (Chairman) Mr. Mr. Subir Chaki (Member) Mr.Mahesh Shah (Member) and Mr. Amitav Roy Choudhury. The CSR Committee laid down the CSRpolicy of the Company which can be accessed at http:// www.kilburnengg.com/company-policy-main/. The Company made a total CSR expenditure amounting to ' 18.00 Lacs(through various implementing agencies) during the FY: 2019-20. The details of saidexpenditure 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 partof the Board's report.
During the year under review:
a. Your Company has constituted an Internal Committee (IC) to consider and resolve allsexual harassment complaints reported by women employees. The constitution of IC is as perthe Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013. There were no complaints reported or cases filed pursuant to the Sexual Harassmentof Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
b. Your Company has not accepted any deposit from the public falling within the ambitof Section 73 of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules2014.
c. There were no significant or material orders passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
The Directors place on record its sincere appreciation to all its Collaborators forextending their valuable support and co-operation.
The Directors wish to convey their appreciation to their Customers Bankers DealersSuppliers Stock Exchanges Government and all other Stakeholders for the excellentassistance and cooperation. The Directors' also thank all the employees of the Company fortheir valuable service and support during the year.
For and on behalf of the Board
|Place : Kolkata ||Aditya Khaitan |
|Date : 22nd July 2020 ||Chairman |