i Draft Letter of Offer - Kilburn (Private and Confidential) For equity ...

Draft Letter of Offer - Kilburn 

(Private and Confidential) 

For equity shareholders of the Company only 

KILBURN ENGINEERING LIMITED 

(Incorporated as a public company, limited by shares, under the Companies Act, 1956 on 7 th September 1987 and 

obtained the Certificate for Commencement of Business under section 149(3) of Companies Act , 1956 from Registrar 

of Companies, West Bengal, Kolkata on 16 th September, 1987.) 

Registered Office : Four Mangoe Lane, Surendra Mohan Ghosh Sarani, Kolkata-700001. 

Tel: (033) 22435391, 22489434/35. 

Fax: (033) 22488114, 22481919 

Email-: administrator@wmg.co.in 

Head Office and Works : Subhash Nagar, Bhandup (West), Mumbai - 400 078 

Tel.: (022) 2566 3101/ 0210 

Fax: (022) 2566 8436 

Email: kilburn@bom3.vsnl.net.in 

Issue of 67,47,900 Equity Shares of Rs.10 each for cash at a premium of Rs. 15/- per Equity Share 

aggregating to Rs. 1686.98 lacs on rights basis to the existing Equity Shareholders of Kilburn Engineering 

Ltd. (the “Company”/KEL”) in the ratio of One Equity Share for Every Equity Share (i.e. 1:1) held as on the 

record date i.e. [·], 2005. 

The face value of the Equity Shares is Rs. 10/- per share and the Issue Price is 2.5 times the face value 

GENERAL RISKS 

Investment in equity and equity related securities involve a degree of risk and investors should not invest any funds 

in this issue unless they can afford to take the risk of losing their investment. Investors are advised to read the risk 

factors carefully before taking an investment decision in this Issue. For taking an investment decision, investors 

must rely on their own examination of the Issuer and the Issue including the risks involved. The securities have not 

been recommended or approved by the Securities and Exchange Board of India (SEBI) nor does SEBI guarantee the 

accuracy or the adequacy of this document. 

The attention of investors is drawn to the statement of Risk Factors appearing on page nos. (___) to (___) of 

this Letter of Offer. 

ISSUER’S ABSOLUTE RESPONSIBILITY 

The Issuer, having made all reasonable inquiries, accepts responsibility for, and confirms that this Letter of Offer 

contains all information with regard to the Issuer and the Issue, which is material in context of the Issue, that the 

information contained in this Letter of Offer is true and correct in all material respects and is not misleading in any 

material respect, that the opinions and intentions, expressed herein are honestly held and that there are no other 

facts, the omission of which makes this document as a whole or any of such information or the expression of any 

such opinions or intentions misleading in any material respect. 

LISTING 

The existing equity shares of the Company are listed on The Bombay Stock Exchange Ltd. (BSE) (Designated 

Stock Exchange) and The Calcutta Stock Exchange Association Ltd. (CSE). Applications will be made to the BSE 

and the CSE for permission to deal in and for an official quotation in respect of the equity shares of the Company 

being offered in terms of this Letter of Offer. The Company has received ‘in-principle’ approval from BSE and 

CSE for listing of the equity shares being offered through this Rights Issue vide their letters dated _____ and ____ 

respectively. 

LEAD MANAGER TO THE ISSUE 

REGISTRAR TO THE ISSUE 

IDBI CAPITAL MARKET SERVICES LIMITED 

8 th Floor, Bakhtawar, 

Nariman Point, 

Mumbai-400021. 

Tel: (022)56371212/15 Fax (022) 22885850 

e-mail:kilburn@idbicapital.com 

SEBI Registration No: INM000010866 

AMBI Registration No: AMBI/ 088 

ISSUE OPENS ON: (•) 2005 

LAST DATE FOR RECEIVING REQUESTS FOR SPLIT FORMS (•) 2005 

ISSUE CLOSES ON: (•) 2005 

i 

INTIME SPECTURM REGISTRY LIMITED 

C-13, Pannalal Silk Mills Compound, 

LBS Road, Bhandup West, 

Mumbai – 400 078 

Tel.: (022) 2592 3837 Fax: (022) 2567 2693 

e-mail: isrl@vsnl.com 

SEBI Regn. No.: INR 00003761

TABLE OF CONTENTS 

Section Description Page nos. 

I DEFINITION & ABBREVIATIONS 

II 

III 

IV 

V 

VI 

VII 

VIII 

IX 

X 

XI 

XII 

Conventioanl /General Terms 

Offer Related Terms 

Company/ industry Related Terms 

Abbreviations 

Forward Look Statements 

RISK FACTORS 

INTRODUCTION 

Industry 

Company Overview 

Competition 

Selected Financial Information 

General Information 

Company 

Board of Directors 

Issue Management Team 

Capital Structure 

Particulars to the Issue 

Objects of the Issue 

Schedule of Implementation 

Interim use of Funds 

Basic Terms of Issue 

Basis of Issue Price 

Statement of Tax Benefits 

ABOUT THE ISSUER COMPANY 

Industry Overview 

Business Overview 

Details of Business of the Company 

Key Industry Regulations 

HISTORY & CORPORATE STRUCTURE OF THE COMPANY 

MANAGEMENT 

Board of Directors & related details 

Compliance with Corporate Governance 

Management Organisation Structure 

Key Management Personnel 

PROMOTERS / PRINCIPAL SHAREHOLDERS 

FINANCIAL STATEMENT 

Financial information 

Financial information of Group Companies 

Management Discussion & Analysis of Financial condition and Results of 

Operations as Reflected in Financial Statement 

LEGAL & OTHER INFORMATION 

Outstanding litigations & Material Developments 

Government Approvals/ Licensing Arrangements 

ii

XIII 

XIV 

XV 

XVI 

OTHER REGULATORY & STATUTORY DISCLOSURES 

OFFERING INFORMATION 

Terms of Issue 

Issue Procedure 

General Instructions 

DESCRIPTION OF EQUITY SHARES & TERMS OF THE 

ARTICLES OF ASSOCIATION 

OTHER INFORMATION 

Material Contracts 

Declaration 

iii

CONVENTIONAL/ GENERAL TERMS 

I. DEFINITIONS & ABBREVIATIONS 

Act : The Companies Act, 1956 as Amended 

The Issued, Subscribed and Paid Up Equity Share Capital of 

Equity Shares 

: the Company and the additional equity share of the Company 

offered pursuant to The Rights Issue 

Means a holder/beneficial owner of equity shares of the 

Equity Shareholders 

: Kilburn Engineering Limited as on the record date 

i.e.___________. 

A depository registered with SEBI under the SEBI 

Depository 

: (Depository and Participant) Regulations, 1996, as amended 

from time to time. 

Guidelines / SEBI 

Guidelines : 

SEBI (Disclosure and Investor Protection) Guidelines, 2000 

and subsequent amendments thereto 

ISIN 

International securities identification number allotted by the 

: 

depository 

Sole Lead Manager/IDBI Capital : IDBI Capital Market Services Limited 

Registrars / Registrars To The 

Issue/ Registrar And Share Transfer : 

Intime Spectrum Registry Ltd. 

Agent / R&T Agents 

Rights Issue : Present issue of equity shares of Rs. 10 each 

UIN 

Unique identification number 

OFFER RELATED TERMS 

CAF : Composite Application Form 

Bankers To The Issue : To be Appointed 

LOF / Letter Of Offer 

Letter of Offer of the Company for the rights issue of 

: 

67,47,900 equity shares of Rs. 10 each 

Record Date : __________, 2005 

COMPANY/INDUSTRY RELATED TERMS 

Articles or AOA : Articles of Association of the Company 

AIA : Authorized Inspeciton Agency 

ASME : The American Society of Mechanical Engineers 

Board : 

The Board of Directors of the Company or The Committee 

uthorized to act on its behalf 

BPVC : Boiler and Pressure Vessel Code 

EOT Crane : Electric Overhead Travelling Crane 

ERP : Enterprise Resource Planning 

Company/Issuer/KEL : Kilburn Engineering Limited 

MRP 

Material Resource Planning 

Memorandum Or MOA : Memorandum Of Association 

MSME : Master of Science in Mechanical Engineering 

RVA : Raad Voor Accreditatie, a Dutch Council for Accreditation 

VFBD : Vibro Fluid Bed Dryer 

ABBREVIATIONS 

Act : The Companies Act, 1956 And Amendments Thereto 

ACA : Associates of Chatered Accountant 

AMIE : Associate member of the Institute of Engineering 

AY : Assessment Year 

AGM : Annual General Meeting 

AS : 

Accounting Standard As Issued By The Institute Of Chartered 

Accountants Of India 

BCCI : Bengal Chamber of Commerce & Industry 

BIFR : Board for Industrial and Financial Reconstruction 

iv

BSE/Designated Stock Exchange : The Bombay Stock Exchange Ltd. 

CAF : Comosite Application Form 

CDSL 

Central Depository Services (India) Limited 

CII : Confederation of Indian Industry 

CSE : The Calcutta Stock Exchange Association Limited 

DEMAT : Dematerialized (Electronic/Depository as the context may be) 

DBM : Diploma in Business Management 

DGFT : Directorate General of Foreign Trade 

DP : Depository Participant 

DME : Diploma in Mechanical Engineering 

EBIDTA : Earnings Before Interest Depreciation and Tax 

EGM : Extra-Ordinary General Meeting 

ERO : Eastern Regional Office 

EPS : Earnings Per Share 

FCNR : Foreign Currency Non Resident 

FDI : Foreign Direct Investment 

FEMA : 

Foreign Exchange Management Act 1999 and the subsequent 

amendments thereto 

FERA : Foreign Exchange Regulation Act, 1973 

FICCI : Federation of Indian Chambers of Commerce & Induatry 

FII : 

Foreign Institutional Investor As Defined Under Sebi 

(Foreign Institutional Investors) Regulations, 1995 Registered 

With Sebi And As Defined Under Fem (Transfer Or Issue Of 

Security By A Person Resident Outside India) Regulations, 

2000 And Under Other Applicable Laws In India 

FIPB : Foreign Investment Promotion Board 

FY : Financial Year 

GBIFR : Gujarat Board Of Industrial And Financial Reconstruction 

GOI / Government : Government Of India 

GIC : General Insurance Company Ltd. 

GoG : Government of Gujarat 

HUF : Hindu Undivided Family 

ICC : Indian Chamber of Commerce Calcutta 

IT : Income-Tax Act 1961 

Lead Manager To The Issue 

IDBI Capital Market Services Ltd. 

LoF : Letter Of Offer 

MIS 

Management Information System 

MPCB : Maharashtra Pollution Control Board 

NIC : National Insurance Company Limited 

NR : Non Resident 

NRE ACCOUNT : Non Resident External Account 

NRI : Non Resident Indian 

NRO ACCOUNT : Non Resident Ordinary Account 

NSDL : National Securities Depository Limited 

NSE : The National Stock Exchange Of India Limited 

OIC : Oriental Insurance Company Ltd. 

OCB : Overseas Corporate Bodies 

PAN/GIR No. : 

Income Tax Permanent Account Number/General Index 

Reference Number 

PDIDT : Profit before Depreciation on Income 

QAC : Quality Assurance & Control 

RBI : Reserve Bank Of India 

SBI : State Bank Of India 

SEBI : Securities And Exchange Board Of India 

SEBI (SAST) Regulations, 1997 

: 

SEBI (Substantial Acquisition of Shares and Takeovers) 

Regulations, 1997 And subsequent amendments thereto 

Stock Exchanges : BSE And CSE Referred To Collectively 

UTI : Unit Trust Of India 

In this Letter of Offer, all references to “Rs.” or “INR” refer to Rupees, the lawful currency of India. 

References to the singular also refer to the plural and one gender also refers to any other gender wherever 

applicable. 

v

FORWARD-LOOKING STATEMENTS 

Statements included in this Letter of Offer which contain words or phrases such as “will”, “aim”, “will 

likely result”, “believe”, “expect”, “will continue”, “anticipate”, “estimate”, “intend”, “plan”, 

“contemplate”, “seek to”, “future”, “objective”, “goal”, “project”, “should”, “will pursue” and similar 

expressions or variations of such expressions, that are “forward-looking statements”. Actual results may 

differ materially from those suggested by the forward looking statements due to risks or uncertainties 

associated with the Company’s expectations with respect to, but not limited to, the Company’s ability to 

successfully implement its strategy, its growth and expansion, technological changes, its exposure to 

market risks, general economic and political conditions in India which have an impact on its business 

activities or investments, the monetary and interest policies of India, inflation, deflation, unanticipated 

turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices, the 

performance of the financial markets in India and globally, changes in domestic and foreign laws, 

regulations and taxes and changes in competition in the industry. 

For further discussion of factors that could cause the Company’s actual results to differ, see the section 

entitled “Risk Factors” beginning on page no. ( ) of this Letter of Offer. By their nature, certain market 

risk disclosures are only estimates and could be materially different from what actually occurs in the 

future. As a result, actual future gains or losses could materially differ from those that have been 

estimated. In accordance with SEBI requirements, the Company will ensure that investors are informed 

of material developments until such time as the grant of listing and trading permission by the Stock 

Exchanges for the equity shares being issued. 

Use of Market Data 

Unless stated otherwise, macroeconomic and industry data used throughout this Letter of Offer has been 

obtained from publications prepared by Government sources, industry sources and data generally 

available in the public domain. Such publications generally state that the information contained therein 

has been obtained from sources believed to be reliable but that their accuracy and completeness are not 

guaranteed and their reliability cannot be assured. Although we believe that industry data used in this 

Letter of Offer is reliable, it has not been independently verified. 

vi

II. RISK FACTORS 

(The Letter of Offer also includes statistical data regarding the engineering industry. This data has been 

obtained from industry publications, reports and other sources that the Company and the Lead Manager 

believe to be reliable. Neither the Company nor the Lead Manager has independently verified such data.) 

A. INTERNAL RISK FACTORS 

Risks Related To The Company 

1. Profitability of the Company has been negative in the past. 

The Company undertook an expansion project in the year 1995 for setting up additional facilities in 

Baroda. Thereafter, in the year 1999 the Company witnessed a slide in sales coupled with an increase in 

input cost due to the following reasons: 

‣ Overall recessionary trend in the economy (more particularly the Capital Goods Industry) the 

Company witnessed a decline in sales. 

‣ An increase in the cost of salaries and wages, other manufacturing expenses and administrative 

and selling expenses (consequent to setting up of the new plant at Baroda) the Company had to 

bear an increase in input costs. 

With the increase in input costs on one hand and decrease in sales on the other, the margins, both at gross 

and operating levels, eroded. As a result of this, the Company has reported a loss from the FY 1998 

onwards upto the FY2004 ( as per the restated financials disclosed on page no. _____ of this Letter of 

Offer). Losses incurred by the Company during the past five years are as given below: 

(Rs. in Lacs) 

For the Financial 

Year ending 30 th 

September, 

2001 2002 2003 2004 2005 

(twelve months 

period) 

Loss( as restated) 645.75 67.35 379.39 53.33 - 

2. KEL was declared sick u/s 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 

1985 in November 2000. The Company has reported a profit during the FY 2004 and as per the 

audited financials for the twelve months period ended on September 30, 2005. However, the 

networth of the Company as on 30 th September, 2005, as per the audited figures, is negative. 

KEL was declared as a sick industrial undertaking by the Board for Industrial and Financial 

Reconstruction vide its order dated November 10, 2000 and Industrial Development Bank of India 

has been appointed as the Operating Agency. The rehabilitation scheme, prepared by the Operating 

Agency and approved by BIFR, is presently being implemented. The Company has witnessed a 

turnaround in turnover and profits during the twelve months period ending, 30 th September, 2005, 

owing to the Rehabilitation Scheme and on the back of the overall growth in the economy, 

specifically in the engineering segment. However, the networth as at 30 th September, 2005 is Rs. 

(2197.28) Lacs. 

3. The company has delayed the redemption of its debentures during the year 1998 upto 2004. 

KEL has issued the following debentures: 

• 1,15,000, 14% non-convertible debentures of Rs. 100/- each aggregating to Rs. 115 Lacs. The same 

were redeemable in five equal annual instalments commencing on 28 th November, 1995. 

• 2,00,000, 20.50% non-convertible debentures of Rs. 100- each aggregating to Rs. 200 Lacs. The 

same were redeemable (after being rolled over) at par on 8 th August, 1999. 

• 5,00,000, 18.50% non-convertible debentures of Rs. 100/- each aggregating to Rs. 500 Lacs. The 

same were redeemable at par in three equal annual installments commencing on 21 st November, 

1999. 

The Company has failed to redeem the above debentures as scheduled from the year 1998 onwards. The 

redemption of the said debentures has been rescheduled as a part of the Rehabilitation Scheme approved 

vii

y BIFR and the Company is in the process of redeeming the same. The Company, as per the 

Rehabilitation Scheme approved by BIFR, shall redeem the rolled over debentures by September 2007. 

4. The Company had not redeemed its debentures as scheduled from the year 1998 upto the year 

2004. In view of this, directors of KEL were disqualified from being appointed as directors in 

terms of Section 274(1)(g) of the Companies Act, 1956 during the period from the year 1999 

upto the year 2004. Further as per Section 274(1)(g) of the Companies Rules, 2003 directors of 

KEL were disqualified from reappointment in the year 2004. During this year one of the 

directors has been reappointed in the Company. The said director had subsequently resigned 

w.e.f 16 th July, 2004. However, considering the rescheduled redemption of debentures as per 

the Rehabilitation Scheme approved by BIFR, none of the directors is disqualified as on date. 

5. The company has not been regular in payment of statutory dues in the past. 

The Company has not been regular in depositing certain statutory dues pertaining to Provident Fund, 

Employee State Insurance, Income Tax, Sales Tax and Service Tax dues in the past till the sanction of the 

BIFR Rehabilitation Scheme. 

6. The company has defaulted in payment of interest and principal on the term loans and other 

secured loans availed from banks and financial institutions in the past. 

KEL had availed of Term Loans and other secured loans from Banks and Financial Institutions from time 

to time aggregating to Rs. 804.78 Lacs as on 30 th September, 2005. The Company had defaulted in 

repayment of principal and interest thereon on the said loans from the year 1999 upto year 2004. The 

Company approached the Board for Industrial and Financial Reconstruction in the year 2000 and the 

Rehabilitation Scheme was approved in May, 2004. The Scheme is presently under implementation. The 

dues pending as on date are provided under the head “Status of Sanction” on page no. _____ o f this 

Letter of Offer. 

7. Legal/Regulatory Risk 

Litigations, Disputes/ Defaults pending against the Company 

There are 36 litigations/ disputes pending against the Company as detailed below: 

Particulars of the cases No. of cases Amount involved 

where quantifiable 

(Rs. Lacs) 

Civil Proceedings 8 23.98 

(with interest thereon) 

Labour Related Cases 4 Not ascertained 

Labour matters pertaining to Baroda 11 Not ascertained 

Criminal 8 58.37 

Income /SalesTax 4 260.62 

Central Excise Act/Customs 1 13.12 

For further information please refer para under “ Outstanding Litigations and Material Developments” on 

page no. ____ of this Letter of Offer. 

Legal Notices received by the Company 

The Company has received 34 Legal Notices amounting to Rs. 139.60 Lacs from various suppliers. 

However, the legal notices have been suitably replied by the Company and there are no further 

developments. The said amount has not been included as Contingent Liability in the annual accounts of 

the Company. 

8. License under Shops and Establishment Act for Kolkata office 

The Company has not obtained a license under the Shops and Establishment Act in respect of the 

registered office of the Company located at Kolkata. 

viii

9. Non-Renewal of Pollution Control Clearance 

The Company is engaged in the business of manufacturing capital goods. As per the management, the 

operations do not result in release of effluents either into water or air. The Company had received 

Consent No. BO/Mum-30/PC-104, dated 24 th February, 1997, from Maharashtra Pollution Control Board 

(MPCB) for carrying on its business activities and the same was valid up 31/07/1998. Owing to the 

losses incurred, the Company had closed down its business operations at the Bhandup factory from 

15/10/1999 till 31/12/2001. During this period and subsequently upto the year 2004, the Company had 

failed to renew the consent received from the MPCB. However, the Company has made an application to 

MPCB, vide its letter no. KEL/HRD/07/2004-05 dated 28th July, 2005, for renewal of the consent w.e.f. 

01/08/1998 upto 31/07/2007. Approval of the same is still awaited. 

10. There are certain contingent liabilities that the Company has not provided for. 

As on 30 th September, 2005 the Company has some contingent liabilities detailed below, determination 

of which against the Company may adversely affect the financial position: 

( Rs. In Lacs) 

Particulars 

As on 30 th September, 

2005 

a) Demand raised by ESIC 0.80 

b) Liability in respect of non submission of C Form pertaining to 

138.80 

Baroda Works 

c) Guarantees issued by Banks 681.07 

d) Claims raised by contractors/others 86.38 

e) Demand notice from DGFT for non-fulfilling of export obligations 137.00 

f) Liquidated damages for delay in execution of contracts 18.50 

11. Shortfall in Promise versus Performance 

Significant shortfall in the performance vis-a-vis the promise made in the offer document issued by the 

company in respect of the Rights Issue of equity shares in the year 1993 is as detailed below: 

Particulars of the Issue 

% Shortfall 

1993 1994 1995 1996 

Income from Operations 10 16.95 42.43 46.35 

Profit Before Tax 9.80 -- -- 69.59 

Profit After Tax 27.27 -- -- 54.12 

Networth 0.63 0.17 -- 10.73 

NAV 0.64 -- -- 9.71 

EPS 27.36 -- -- 53.68 

(For further details please refer to page no. ____ of this Letter of Offer.) 

12. The equity shares of the Company are included in the ‘Z’ category by BSE. 

The equity shares of the company are categorized under the ‘Z’ group w.e.f. 31 st December, 2001 based 

on the Securities and Exchange Board of India’s directive to place all companies that had not signed up 

with both depositories as on 30 th September, 2001 in the trade-to-trade segment. The Company has 

entered into an agreement for dematerialization of its equity shares with both the depositories has taken 

steps for recategorisation of the equity shares by removal from the ‘Z’ Group. 

13. Compensation of workers at Baroda Unit 

KEL’s unit at Baroda was ceased operations and was closed w.e.f. November, 2001. The erstwhile 

workers of the Baroda Unit of the Company have claimed for wages for the period of closure of the 

factory (viz. from November 2001 to January 2003) through the Industrial Tribunal, Baroda. Though, the 

Company has made a provision of Rs. 41.24 Lacs, the balance Rs. 109.04 Lacs has not been provided for 

in the books, since the same is not been recognized as a contingent liability. 

ix

14. The Company has not entered into a legal agreement in respect of the premises where the 

registered office of the Company is situated. 

The registered office of the Company is located at Kolkata. The premises are owned by Williamson 

Magor & Co. Ltd., promoter of KEL. The Company has not entered into any agreement in respect of the 

said premises. The Company has not been paying any rent for the said premises. 

15. Any increase in labour costs and work stoppages may adversely impact the performance of the 

Company. 

The Company operates in the engineering segment which is highly labour intensive. Though the workers 

of the Company are not affiliated to any external labour union, any labour unrest may adversely impact 

the performance of the Company. 

Employee Cost forms and labour charges form 15.81 % of the total direct expenses of the Company for 

the twelve months period ended 30 th September, 2005. Thus any increase in the cost of labour will 

significantly increase the cost of production and adversely impact the profit margins of the Company. 

Risks Related To The Business 

16. The engineering industry is cyclical.. 

Heavy engineering industry is an intermediate industry and its demand depends on a variety of end-user 

industries such as power, mining, oil and gas, consumer goods, automotive and the general 

manufacturing sector. The beginning of a widespread economic slowdown leads to cancellation of 

investments on capital goods across the industries. Thus, a slowdown adversely impacts the heavy 

engineering industry much before it affects other sectors. On the other hand, the heavy engineering 

industry is among the last to benefit from an upturn since capacity creation occurs after end-user 

industries fully utilize their own capacities and feel positive about the long-term demand scenario. 

17. High Cost of Raw Material 

The basic raw material required by the Company is carbon steel and stainless steel. The revenues of the 

Company are subject to the fluctuation in the prices of metals such as steel and stainless steel. With the firming 

up of the steel prices witnessed since the last two years, the cost of production has also increased. During the 

twelve months period ended on 30 th September, 2005 cost of raw material was 63.95 % of the total expenditure 

incurred by the Company. 

Further, the Company produces capital goods that cater to the specific requirements of client. The raw material 

required for manufacturing such products have to match the specifications and may not be readily available in 

the market. Any delay in procurement of raw material impacts the cost of production and the profitability of the 

Company. 

Risks Related To The Proposed Capital Expenditure 

18. The Company has allocated an amount of Rs. 145 Lacs out of the funds raised through this rights 

issue towards installation of a temporary shed and erection of EOT Crane. The Company has 

received an approval from the Bombay Municipal Corporation (‘BMC’) vide their letter no. 

CE/998/9PES/AS dated July 07, 2005 for construction of the shed and the same is for a period upto 

six months from the date of the approval i.e. upto January 07, 2005. Subsequent to the expiry of the 

approval, the shed, if already erected, could be re quired to be demolished if so instructed by BMC. 

However, as per the Management, the said approval can be further extended to a maximum of two 

years. 


issue towards implementation of ERP package. The management has estimated this amount on the 

basis of a quotation dated 6 th July, 2004 received from Godrej Infotech Limited and proposes to get 

it revised in due course. 


issue towards procurement of certain capital goods. The Company has not received any quotations 

for the same and has not placed any orders for the capital goods mentioned on page no. ____ of this 


x

Risks Related To Other Ventures Of The Promoters 

21. Losses incurred by other ventures of the promoters are as follows: 

(Rs. In Lacs) 

Particulars 2003 2004 2005 

Metals Center Limited 376.15 470.36 873.38 

Eveready Industries Limited -- 38.27 -- 

McLeod Russel India Limited 0.06 198.07 1974.78 

Williamson Financial Services 2208.63 186.64 145.78 

Limited 

The Standard Batteries Limited 20.09 - - 

Dufflaghur Investments Limited 528.63 338.68 14.61 

22. Litigations and Disputes against Group Companies 

The details of litigations and disputes pending against the companies belonging to the group are 

detailed under the head “ Litigations and Disputes” on page no. ____ of this Letter of Offer. 

23. Some of the listed Group Companies have not been regular in complying with the provisions of 

the listing agreement entered into by them with the stock exchanges. 

Equity shares of shree Durga Agencies Limited and Nirvan Commercial Co. Ltd., tow of the 

companies belonging to the group, are listed on the CSE. The companies have applied for voluntary 

delisting of their equity shares from the CSE in the year 2004 pursuant to a special resolution passed 

by the shareholders to this effect. These companies have not been delisted from the CSE as on date. 

However, both the companies have not been complying with the requirement of disclosures to be 

made by listed companies in terms of the listing agreement and have not been paying the listing fee. 

24. Metals Center Limited, McLeod Russell Limited and The Standard Batteries Limited, companies 

belonging to the group, have accumulated losses exceeding their equity capital. 

25. Infrequently traded scrips in the group. 

Standard Batteries Ltd., one of the companies belonging to the group, had reduced its equity share capital 

from Rs 10,34,22,500/- divided into 1,03,42,250 equity shares of Rs 10/- each to Rs 51,71,125/- divided 

into 1,03,42,250 equity shares of Rs 0.50 each by the canceling Rs 9.50 of every share of Rs 10/- each 

w.e.f. March 14, 2002 (Record Date). The Company is yet to receive approval for listing of the equity 

shares of Rs. 0.50 from the stock exchanges where they were listed. As a result of this equity shares of 

the company have been suspended from trading on the BSE since 11 th February, 2002. 

B. EXTERNAL RISK FACTOTRS 

1. Risk of Competition 

The Company faces competition from smaller players in the business who offers competitive prices. 

However, none of the competitors have the range of products that KEL manufactures. In the overseas 

market, the Company faces competition from Eastern Europe and China. These countries are improving 

their technology and manufacturing capabilities and are likely to pose a threat to equipment 

manufacturers in India. 

2. Sensitivity to the Economy and Extraneous Factors 

The industrial production has been on an upswing since the year 2004 with the capital goods segment 

recording a growth of 18.9% in April-May 2005-06 against 11.6% in the corresponding period of 

previous year. The growth in the revenues of KEL has reflected this upward trend. However, this 

buoyant phase in the industry depends on the performance of the other segments of the industry, more 

particularly the petrochemical industry and the FMCG segment where the product range of the company 

is in demand. These on the other hand depend on the overall performance of the economy and the growth 

figures achieved by India and the other important markets in the world. 

xi

3. KEL’s performance is linked to the stability of policies and the political situation in India 

Policies pursued by the Government of India, including relaxing restrictions on the private sector, have 

been conducive to liberalization of the economy and overall growth in all sectors. Any slowdown in the 

liberalization process or political instability may slowdown the growth in the economy, which may have 

an adverse effect on the capital market and investor confidence. 

4. The Company is subject to the risk of foreign exchange fluctuation 

During the twelve months period ended on 30 th September, 2005 the Company has earned 38.97 % of its 

revenues in foreign currency. Thus any fluctuation in the foreign exchange rates is likely to impact the 

profitability of the Company. 

5. The performance of the Company is linked to the economic growth of the client economies in the 

world like USA, China, France, Africa, etc. 

The Company supplies capital goods to other countries in the world like USA, China, France, Africa, etc. A 

robust growth in these economies ensures a healthy market for the Company’s products. Thus the profitability 

of the Company depends on the political stability and economic growth of these countries. 

NOTES TO RISK FACTORS 

1. 

Adjusted Pre-issue Networth (as on 30/09/2005) 

Adjusted Pre-issue Net Asset Value (as on 

30/09/2005) 

Issue Size 

Negative 

Negative 

Cost per share to the promoter Rs. 24.19 

Rights Issue of 67,47,900 Equity Shares of Rs. 

10/- each for cash at a premium of Rs. 15/- per 

Equity Share aggregating Rs. 1686.98 lacs. 

2. There is no interest of promoters/directors/key management personnel other than reimbursement of 

expenses incurred or normal remuneration or benefits. 

3. The transaction since past 6 months on the stock exchange in the shares of the Company by the 

Promoters/Directors of the Company are as follows: 

S.No. Name of the 

shareholder 

1. Shree Durga 

Agencies 

2. United Machine 

Co. Ltd. 

No. 

shares 

bought 

of 

No. of 

shares sold 

Date of 

transaction 

--- 3,43,300 20-27 

Sep.’05 

3,43,300 --- 20-27 

Sep.’05 

Price 

(in Rs.) 

74.2356 

--- 

Nature of 

transaction 

Inter-Se 

transfer in 

promoter 

group 

4. For Related party disclosures under Accounting Standard 18 issued by the Institute of Chartered 

Accountants of India please refer to para under ‘ Related Party Transactions’ on page no. ___ of this 


5. The lead manager and the Company shall update this Letter of Offer and keep the shareholders/public 

informed of any material changes till the listing and trading commencement. 

xii

III. INTRODUCTION 

INDUSTRY 

The Heavy Engineering Industry comprises capital goods/machinery and equipment and can be broadly 

classified into electrical machinery and equipment and non-electrical machinery and equipment 

segments. The electrical machinery comprises power generation, transmission and distribution 

equipment like motors and generators, switchgears and transformers. The non-electrical machinery 

segment comprises machines and equipment used in various industries like material handling equipment, 

boilers, etc. Transport equipment has not been considered as a segment of heavy engineering industry in 

this report. 

STRUCTURE OF THE INDUSTRY 

Heavy engineering industry is integrated with various core sectors for its demand. The demand is derived 

primarily from capacity creations in sectors like infrastructure and general manufacturing including 

process industries. The Indian engineering industry, including the transport equipment segment, is 

estimated at around Rs. 1.2 trillion. The share of heavy engineering is about 80% of the value while rest 

was contributed by light engineering sector. The enterprise mix of the Indian engineering industry 

comprises primarily large Indian companies without foreign collaborations, subsidiaries of multinational 

companies, joint ventures of domestic and foreign companies and medium sized companies maintaining 

regional dominance. 

Key Issues Facing The Players 

Increase in Raw Material Prices 

A sharp increase in raw material prices has resulted in a small increase in the profit margins for the heavy 

engineering industry even though revenue has registered much higher growth during the last two years. 

Raw materials contribute to almost 50% of the operating costs of heavy engineering companies and a 

sharp increase in the input prices like those of steel including special steel, aluminium and copper have 

resulted in lower than expected growth in profitability. 

Deman Supply Position 

Heavy engineering sector has witnessed a steady rise in demand from FY2003 onwards. The following 

figure illustrates the increase in capital goods production index for the period 2002 to 2004. 

Heavy engineering sector has continued with its good performance in 2004-05 also. The growth in the 

capital goods production index for the period April 04 to Jan 05 was 12.9% which was significantly 

higher than 10.7% registered for the corresponding period of the previous year. The index posted a 

double-digit growth in each month of 2004-05, except for November 2004. Overall growth in the index 

was led by the machinery and equipment segment, which grew by 20.89% during the period April 04 to 

Jan 05 while the growth was 11.83% for the corresponding period of the previous year. 

OUTLOOK 

Heavy engineering industry has been performing well after the recession that it faced in FY2002. The 

ROCE has increased up to the level of 20% for FY2004. The index of production of capital goods has 

increased by 12.9% during the period April 2004 to January 2005 as compared to 10.66% during the 

same months the previous year. The index of production of machinery and equipment has posted a 

1

growth of 20.89% during April 2004 to January 2005 as compared to 11.83% during the same months 

the previous year. 

The demand in the engineering sector is expected to be maintained primarily on account of the 

government’s focus on infrastructure development in the country, which is expected to continue in the 

medium term. Stable sales growth has been observed in the heavy engineering industry in light of the 

existing demand. Net profit margin of heavy engineering industries has improved and adverse changes in 

the same are not expected in the medium term in light of the stable demand. However, operating profit 

have stagnated due to rise in raw material costs and reduction in import duties. Any further reduction in 

peak import duties in the short to medium term will lead to increased imports and higher competition in 

the industry. The heavy engineering industry is expected to further improve upon the performance of 

FY2004 in the near to medium term. 

India is emerging as a preferred outsourcing destination for design and manufacture of machinery and 

equipment. India has a large pool of skilled labour force and the labour costs are amongst the lowest in 

the world. Recession in FY2002 forced the heavy engineering companies to restructure their operations 

and downsize the number of employees that increased their efficiency. Development of Special 

Economic Zones and incentives for exports are expected to increase the flow of FDI in the sector. 

COMPANY OVERVIEW 

Kilburn Engineering Ltd.(KEL) was incorporated in Kolkatta in the State of West Bengal on September 

07, 1987. During the year 1989, KEL acquired the erstwhile Industrial Machinery Division of Macneill 

& Magor group (presently known as Williamson Magor & Co. Ltd.) through a Scheme of Arrangement 

sanctioned by the Honourable Calcutta High Court. 

Manufacturing Activities: 

KEL specialises in all types of drying systems for Chemical, Petrochemicals, Food, Oil & Gas and 

several other industries. KEL has vast experience in providing solutions for drying and processing 

several products - be it breakfast cereals, rubber, sand, carbon black, tea, salt, sodium cyanide, heavy and 

fine chemicals or ceramic tiles. 

The Company’s Its major activities are in the areas of design, engineering, manufacturing and installation 

of Solid Drying Systems, Fluid Bed Drying Systems, Heat Transfer and Combustion Systems, 

Absorption Systems, Oil Field Systems, Material Handling Systems, Air Handling Systems, Fabrication 

of Equipment, etc. 

Competition 

KEL manufactures equipment for diverse industries being chemical/ petrochemical and food processing. 

Kilburn’s range of products is diverse and authentic published data for existing and projected growth is 

not available. As per the management, the Company is among the leading manufacturers of Tea Dryers 

worldwide and is a significant player for Rotary Dryers in the Carbon Black industry. Domestically the 

company is one of the major suppliers of dryers of various kinds. KEL faces competition from smaller 

players in the business and few of the competitors have the wide range of products that KEL 

manufactures. However these competitors are able to offer better prices. In the overseas market KEL 

faces competition from Eastern Europe and China. 

SELECTED FINANCIAL INFORMATION 

Following selected financial data have been prepared in accordance with Indian Accounting Standards, in 

conjunction with our financial statements and related notes and "Management's Discussions and 

Analysis". The audited financial statements have been prepared in Indian rupees and have been prepared 

in accordance with Indian Accounting Standards for the fiscal years ended 2001,2002, 2003, 2004 and 

twelve months period ending on 30 th September, 2005. The Company has vide its lette dated 12 th 

September, 2005 applied to the Registrarof Companies, West Bengal seeking permission to : 

(a) extend the Financial Year to a period of 18 months(from October 01, ’04 to March 31, ’06) 

ending on March 31, 2006 and 

2

(b) extend the time for holding the next Annual general Meeting of the Company until 23 rd 

September, 2006. 

3

STATEMENT OF PROFITS & LOSSES AS RESTATED 

(Rs.in lacs) 

Financial Year ended 30th September Year ended 30 th 

September 

Particulars 2001 2002 2003 2004 2005 

Income 

Sales : 

Of products manufactured by the 

Company 1,219.67 1,586.73 2,048.80 2,473.70 4,440.82 

Of products traded in by the Company - - - - - 

Total 1,219.67 1,586.73 2,048.80 2,473.70 4,440.82 

Other Income 514.06 369.37 118.58 84.52 66.45 

Increase / (Decrease) in inventories (95.29) 219.06 (104.22) 193.16 (81.50) 

1,638.44 2,175.16 2,063.16 2,751.38 4,425.77 

Expenditure 

Raw Materials Consumed 606.20 879.83 873.35 1,422.42 2,402.36 

Staff Costs 432.76 335.38 210.23 188.82 272.35 

Other manufacturing Expenses 143.38 143.71 225.16 359.04 489.81 

Administration Expenses 408.43 360.14 312.45 318.35 397.28 

Selling & Distribution Expenses 83.67 45.33 44.51 106.07 183.98 

Other Expenses 76.25 46.50 - 15.60 10.74 

Interest 995.90 1,159.26 1,494.38 241.49 198.76 

Depreciation 199.34 161.31 141.93 41.48 26.42 

Provision/(Write back) 0f Diminution in 

value of Investment 24.00 (34.20) (25.50) 142.13 (87.43) 

Net Profit Before Tax and 

extraordinary Items (1,331.49) (956.30) (1,213.35) (84.02) 531.50 

Extraordinary/Exceptional/Prior Period 

Income/(Expenses) (31.68) (58.59) (103.68) 4,178.05 - 

Less: Tax Provision/( Refund) - - (25.77) - 8.79 

Profit/ (Loss) after tax as per audited 

statements of accounts (1,363.17) (1,014.89) (1,291.26) 4,094.03 522.71 

Impact of Adjustments on account of 

changes in Accounting Policies and 

Prior Period Items (Refer Note 2 of 

Annexure III) 

717.42 947.54 911.87 (4,147.36) - 

Restated Profit & Loss (645.75) (67.35) (379.39) (53.33) 522.71 

Balance brought forward (4,095.07) (4,740.82) (4,808.17) (5,187.56) (5,219.22) 

Adjustment prior to 1999-2000 - - - - - 

Restated Profit /(Loss) for the year (645.75) (67.35) (379.39) (53.33) 522.71 

Less: Transfer from General Reserve/ 

DRR - - - 21.67 99.21 

Balance carried forward (4,740.82) (4,808.17) (5,187.56) (5,219.22) (4,597.30) 

4

STATEMENT OF ASSETS AND LIABILITIES, AS RESTATED 

As at September' 30 

(Rs.in lacs) 

2001 2002 2003 2004 2005 

A Fixed Assets 

Gross Block 3198.76 3185.89 3188.89 677.16 718.05 

Less: Depreciation 1273.58 1422.80 1564.73 468.91 495.32 

Net Block 1925.18 1763.09 1624.16 208.25 222.73 

Capital Work in progress - - - - 0.73 

Less: Revaluation Adjustment [Refer 

Note 2 (A)(v) of Annexure III] - - - - - 

Net Block after adjustment of 

Revaluation Reserve 

1925.18 1763.09 1246.76 208.25 

223.46 

B Investments 43.38 77.2 109.6 37.37 124.80 

C 

Current Assets, Loans & 

Advances: 

Inventories 256.73 489.79 424.33 509.27 455.26 

Sundry Debtors 203.47 197.71 369.08 508.97 607.64 

Cash & Bank Balances 175.02 219.6 248.95 192.54 138.09 

Loans & Advances 221.85 143.60 157.88 157.24 199.42 

Other Current Assets - - - - - 

D Liabilities and Provisions: 

Secured Loans 2706.58 2662.78 2719.24 1159.95 804.78 

Unsecured Loans 1060.82 1009.22 1052.39 1283.60 1328.63 

Current Liabilities and Provisions 1795.11 1797.04 1588.48 1890.07 1812.54 

E Networth 

F Represented by 

1. a. Share Capital 674.79 674.79 674.79 674.79 674.79 

b. Advance against Share Capital 825.00 825.00 825.00 825.00 825.00 

2. Reserves 1021.11 1021.11 1021.11 999.44 900.23 

3. Profit & Loss Account (4740.82) (4808.17) (5187.56) (5219.22) (4597.30) 

Less: Revaluation Reserves - - - - - 

Reserves (Net of Revaluation 

Reserves) (3719.71) (3787.06) (4166.45) (4219.78) (3697.07) 

Less: Misc. Expenditure 516.96 290.78 136.87 - - 

Networth (2736.88) (2578.05) (2803.53) (2719.99) (2197.28) 

The above details should be read in conjunction with the ‘Accounting Policies’ and the ‘Notes to the 

Accounts’. For detailed financial statements, prepared in accordance with Indian Accounting Standards, 

as required by Guidelines, please refer, 'Auditor's Report" of this Letter of Offer. 

5

IV. GENERAL INFORMATION 

KILBURN ENGINEERING LIMITED 

(Incorporated as a public company, limited by shares, under the Companies Act, 1956 on 7 th September 1987 and 

obtained the Certificate for Commencement of Business under section 149(3) of Companies Act , 1956 from Registrar 

of Companies, West Bengal, Kolkata on 16 th September, 1987.) 

Registered Office : Four Mangoe Lane, Surendra Mohan Ghosh Sarani, Kolkata-700001. 

Tel: (033) 22435391, 22489434/35. 

Fax: (033) 22488114, 22481919 

Email-: administrator@wmg.co.in 

Head Office and Works : Subhash Nagar, Bhandup (West), Mumbai - 400 078 

Tel.: (022) 2566 3101/ 0210 

Fax: (022) 2566 8436 

Email: kilburn@bom3.vsnl.net.in 

Address of the Registrar of 

Companies 

Dear Shareholder(s), 

: Nizam Palace, 11 M Buildings, 2nd Floor, 234/4, A.J.C.B. Road, 

Kolkata - 700020 

Pursuant to the resolutions passed by the Board of Directors of the Company at its meetings held on May 

27, 2005 and resolution passed by the shareholders in the Extraordinary General Meeting held on 

September 12, 2005, it has been decided to make the following offer to the Equity Shareholders of the 

Company: 

Issue of 67,47,900 Equity Shares of Rs.10 each for cash at a premium of Rs. 15/- per Equity 

Share aggregating to Rs. 1686.98 lacs on rights basis to the Equity Shareholders of Kilburn 

Engineering Limited (the “Company”/ “KEL”) in the ratio of One Equity Share for every One 

Equity Share held on the record date i.e. [_____], 2005. 

Statutory Declaration 

In the reasonable opinion of the Board, there are no circumstances that have arisen since the date of the 

last financial statement disclosed in the Letter of Offer, that materially or adversely affect or are likely to 

affect the performance or profitability of the Company or value of its assets or its ability to pay its 

liabilities within the next twelve months. 

Important 

1. This Issue is applicable only to those shareholders whose names appear as beneficial owners as per the 

list to be furnished by depositories in respect of the Equity Shares held in the electronic form and on 

the register of members of the Company in respect of the Equity Shares held in physical form at close 

of business hours on _____, 2005, i.e. the Record Date. 

2. Shareholders' attention is drawn to RISK FACTORS appearing on Page ____ to ____of this Letter of 

Offer. 

3. Please ensure that the CAF is received with this Letter of Offer. 

4. Please read this Letter of Offer and the instructions contained therein and in the CAF carefully, before 

filling in the CAF. The instructions contained in the CAF are an integral part of this Letter of Offer and 

must be carefully followed. Application is liable to be rejected if it is not in conformity with the terms 

of the Letter of Offer and/or the Composite Application Form viz. CAF. 

5. All enquiries in connection with this Letter of Offer or CAF should be addressed to the Registrars to 

the Issue viz. Intime Spectrum Registry Limited, quoting the registered folio number / DP ID/client ID 

number and the serial number of the CAF and his/her full name and address. 

6. In case the original CAF is not received, lost or misplaced by the shareholder, the Registrars/Company 

will issue a duplicate CAF on the request of the shareholder who should furnish the registered folio 

number/DP ID/client ID number and his/her full name and address to the Registrars/Company. Please 

note that those applicants who are making the application in the duplicate CAF should not utilize the 

original CAF for any purpose including renunciation, even if it is received/found subsequently. In case 

6

the original and the duplicate CAFs are lodged for subscription, allotment will be made on the basis of 

the duplicate CAF and the original CAF will be ignored. 

7. The Rights Issue will be kept open for a minimum period of 30 days. If extended, it will be kept open 

for a maximum period of 60 days. 

8. The Lead Managers and the Company shall make all information available to the Equity Shareholders 

and no selective or additional information would be available for a section of the Equity shareholders 

in any manner whatsoever including at presentations, in research or sales reports etc. after filing of the 

draft Letter of Offer with SEBI/Stock Exchange 

9. The Lead Managers and the Company shall update the Letter of Offer and keep the public informed of 

any material changes till the listing and trading commences. 

10. All the legal requirements as applicable till the filing of the Letter of Offer with the Designated Stock 

Exchange have been complied with. 

Board of Directors of company 

Name 

Mr. Deepak Khaitan 

Mr. V. R. Sinha 

Mr. S. Mukherjee 

Mr. P. K. Mogal 

Mr. A. U. Katra 

Mr. P. K. Khaitan 

Mr. S. R. Dasgupta 

Mr. Amritanshu Khaitan 

Designation 

Chairman 

Managing Director 

Director 

Director 

Director- Nominee Director (IDBI) 

Director 

Director 

Additional Director 

ISSUE MANAGEMENT TEAM 

Company Secretary and Compliance Officer 

Mr. B. N. Shah 

Company Secretary 

Kilburn Engineering Limited 

Subhash Nagar, Bhandup ( W), 

Mumbai – 400 078. 

Tel.: (022) 2566 3101 

Fax: (022) 2566 8436 

E-mail: kilburn@bom3.vsnl.net.in 

Bankers to the Company 

United Bank of India 

25, Sir P. M. road, 

Fort, Mumbai – 400 001 

Tel.: ( 022) 2287 1261 

Fax.: ( 022) 2288 6909 

Union Bank of India 

Sai Arcade, 

N. S. Road, 

Mulund(W), Mumbai – 400 080 

Tel (022) 2560 4723 

Fax: (022) 2561 0247 

The Federal Bank Ltd. 

32, Mumbai Samachar Marg, 

Fort, Mumbai – 400 001 

Tel: 2268 0000 

Fax: 2566 4464 

Issue Management Team 

Lead Manager to the Issue 

7

IDBI Capital Market Services Limited 

8 th floor, Bhaktawar, 

Nariman Point, 

Mumbai – 400 021 

Tel: +91 – 22 – 56371212 

Fax: +91 – 22 – 22885848 

Email: kilburn@idbicapital.com 

Website: www.idbicapital.com 

Contact Person: Ms. Sangya Mishr 

Registrar to the Issue: 

Intime Spectrum Registry Ltd. 

C-13, Pannalal Silk Mills Compound, 

LBS Road, Bhandup West, 

Mumbai – 400 078 

Tel.: (022) 2592 3837 

Fax: (022) 2567 2693 

e-mail: isrl@vsnl.com 

Contact Person: Mr. Kishore Thakkar 

Bankers to the Issue 

To be appointed 

Auditors of the Company: 

Deloitte Haskins & Sells 

Chartered Accountants 

31, Nutan Bhanat Society, Alkapuri, 

Baroda- 390 007 

Tel.: (265) 2333776 

Fax: (265) 2339 729 

CREDIT RATING 

The present issue being a rights equity issue, credit rating is not required. 

TRUSTEES 

This being an issue of Equity Shares, appointment of Trustees is not required. 

MONITORING AGENCY 

Not Applicable 

APPRAISING ENTITY 

Not Applicable 

MINIMUM SUBSCRIPTION 

i) If the Company does not receive the minimum subscription of 90% of the issued amount on the date of 

closure of the issue, or if the subscription level falls below 90% after the closure of issue on account of 

cheques having been returned unpaid or withdrawal of applications, the Company shall forthwith 

refund the entire subscription amount received within 42 days from the date of closure of the issue . 

ii) If there is a delay beyond 8 days after the Company becomes liable to pay the subscription amount 

(i.e. 42 days after closure of the issue), the Company shall pay interest for the delayed period at rates 

prescribed under sub-sections (2) and (2A) of Section 73 of the Companies Act, 1956. 

In case this Rights Issue is undersubscribed after considering the number of Equity Shares applied as per 

entitlement/ renouncement and additional Equity Shares, the undersubscribed portion shall be applied for 

8

y the persons in the promoter group (as disclosed on page no. ____ of this Letter of Offer) only after the 

close of the Issue. 

UNDERWRITING ARRANGEMENTS 

The Rights Issue of equity shares is not underwritten. 

ISSUE SCHEDULE 

ISSUE OPENS ON 

LAST DATE FOR 

ISSUE CLOSES ON 

RECEIVING 

REQUESTS FOR SPLIT 

FORM 

(●) 2005 (●) 2005 (●) 2005 

9

V. CAPITAL STRUCTURE OF THE COMPANY 

(Rs. in Lacs) 

NO. OF SHARES 

NOMINAL 

VALUE 

ISSUE 

AMOUNT 

A. Authorised Capital* 

-2,17,47,900 Equity Shares of Rs.10/- each 

- 82,52,100 Preference Shares of Rs. 10/- each 

2174.79 

825.21 

B. Issued Capital 

- 67,47,900 Equity Shares of Rs.10/- each 674.79 -- 

C. Subscribed and Paid-up Capital 

- 67,47,900 Equity Shares of Rs.10/- each 674.79 -- 

D. Present Rights Issue in the ratio of one equity shares for 

every equity shares held as on _______ ( Record Date) 

- 67,47,900 Equity Shares of Rs.10/- each at a premium of 

Rs. 15/- per share 

-- 

-- 

674.79 1686.98 

E. Post Issue Capital 

1,34,95,800 Equity Shares of Rs.10/- each 1349.58 -- 

F. Share Premium Account 

Before the Offer 

After the Offer 

838.53 

1850.72 

* At the Extraordinary General Meeting held on September 12, 2005, the Authorised Share Capital was 

rectified and re-classified from 67,47,900 equity shares of Rs.10/- each and 82,52,100 Preference Shares 

of Rs. 10/- each to 2,17,47,900 Equity Shares of Rs.10/- each and 82,52,100 Preference Shares of Rs. 

10/- each aggregating to Rs. 3000 Lacs. 

Changes in the authorized capital of the company since incorporation are given below: 

Date of change AGM/ EGM Authorised capital pursuant to 

change 

Incorporation - 39,90,000 equity shares of Rs. 

10/- each and 1000 redeemable 

preference shares of Rs. 100/- 

each aggregating to Rs. 400 lacs. 

02/11/1992 EGM 99,90,000 equity shares of Rs. 



each aggregating to Rs. 1000 

lacs. 

28/08/1996 AGM 1,49,90,000 equity shares of Rs. 



each aggregating to Rs. 1500 

lacs. 

27/10/2003 EGM 67,47,900 equity shares of Rs. 

10/- each and 82,52,100 

redeemable preference shares of 

Rs. 10/- each aggregating to Rs. 

1500 lacs. ( Please refer to note 

(a) below this table) 

12/09/2005 EGM 2,17,47,900 equity shares of Rs. 

10/- each and 82,52,100 

redeemable preference shares of 

Rs. 10/- each aggregating to Rs. 

3000 Lacs. 

Note (a): The Authorised share capital of the company was increased from Rs. 15 Crores to Rs. 30 

Crores by resolution of the shareholders passed at the Extra Ordinary general Meeting held on 

10

October 6, 1999. However, the Company did not complete the required formalities including 

filing of Form 5 with requisite RoC fee. At EGM held on October 27, 2003 the company 

reclassified the authorized share capital into 67,47,900 (Sixty Seven Lac Forty Seven 

Thousand Nine Hundred) equity shares of Rs. 10/- each and 82,52,100 (Eighty Two Lac Fifty 

Two Thousand One Hundred) Redeemable Preference Shares of Rs. 10/- each without 

considering the increase from Rs. 15 Crores to Rs. 30 Crores in the Extra Ordinary General 

Meeting held on October 6, 1999. The Company has since filed the requisite form with 

Registrar of Companies for implementing the said increase and paid the requisite ROC filing 

fees/ additional fees to the Registrar of Companies, West Bengal as per the resolution passed 

at the EGM held on October 6, 1999 for the increased authorized share capital from Rs. 15 

Crores to Rs. 30 Crores. Subsequently, at the extraordinary general meeting held on 

September 12, 2005, the authorised share capital was rectified and re-classified from 

67,47,900 equity shares of Rs.10/- each and 82,52,100 preference shares of Rs. 10/- each to 

2,17,47,900 equity shares of Rs.10/- each and 82,52,100 preference shares of Rs. 10/- each 

aggregating to Rs. 3000 lacs 

NOTES TO CAPITAL STRUCTURE: 

1) Details of present Equity Share Capital are as follows: 

Sr. 

No 


allotment 

1 Subscribers to 

the 

Memorandum 

Face 

Value 

(Rs) 

Issue 

Price 

(Rs) 


shares 

Reasons for allotment 

(Bonus, swap etc.) 

10 10 7 Initial Subscription to the 

Memorandum 

2 4 th June, 1990 10 10 5,28,000 Equity shares allotted to 

Williamson Magor & Co. Ltd. 

for acquisition of Kilburn 

Division under Scheme of 

arrangement approved by the 

Calcutta High Court. 

3 4 th June, 1990 10 10 28,42,793 Equity shares allotted to 

directors and relatives of the 

Company and Williamson 

Magor & Co. Ltd.( earlier 

Macneill & Magor Ltd.) 

Consideration 

Cash 

% to 

Present 

Capital 

Negligible 

Non Cash 7.82 

Cash 42.13 

4 21 st May, 1993 10 35 33,77,100 Rights Issue in the ratio of 1:1 Cash 50.05 

TOTAL 67,47,900 100.00 

Promoters’ Contribution and Lock-in 

The present issue being a rights issue, provisions of promoters’ contribution and lock-in are not 

applicable. However, Promoters and persons in the promoter group have agreed to put the equity shares 

allotted to them pursuant to this rights issue under a voluntary lock-in for a period of one year from the 

date of allotment in this issue. 

2. Present Rights Issue : 

Type of Instrument Ratio Face Value 

(Rs.) 


shares 

Issue Price 

(Rs.) 

Consideration 

Equity Shares 1:1 10/- 67,47,900 25/- Cash 

3. Existing shareholding pattern of the Company is given below:- 

A. Promoter's Holding 

Category 

No of 

Share held 

Percentage of 

Present Capital 

(%) 

11

Indian Promoters 

Williamson Magor & Co.Ltd 

McLeod Russel Inia Ltd. 

Metals Centre Limited 

Shree Durga Agencies Ltd 

Nirvan Commercial Co. Ltd 

United Machine Co. Ltd. 

Foreign Promoters 

Persons Acting in Concert 

1201700 

908068 

727100 

279493 

352000 

361800 

-- 

-- 

17.81 

13.46 

10.78 

4.14 

5.22 

5.36 

-- 

-- 

Sub Total 3844343 56.97 

B. Non-Promoters Holding - - 

1 Institutional Investors 

a. Mutual Funds and UTI 500 0.01 

b. Banking, Financial Institution / Insurance Companies 

(Central/StateGovernment Institutions/ Non-Govt. 

Instituttions) 

17300 0.22 

c. FIIs -- 0 

Sub Total 17800 0.26 

2 Others 

a. Private Corporate Bodies 384805 5.70 

b. Indian Public 2450352 36.31 

c. NRIs / OCBs 8000 0.12 

d. Directors and Relatives 4000 0.06 

e. Clearing Members and Office Bearers 38600 0.57 

Sub Total 2885757 42.77 

Grand Total 6747900 100.00 

Directors/Relatives mentioned in 2 (d) above are not in control of the Company. 

4. The shareholding pattern of the promoter group and directors pre and post issue is as detailed below: 

Particulars 

No. of Equity 

Shares of 

Rs.10/- each 

Present 

% of 

Present 

Capital 

a) Promoters 

Williamson Magor & Co.Ltd 1201700 17.81 

Post Rights ( refer to 

notes below this table) 


Equity 

Shares of 

Rs.10/- each 

7688686 

% of 

post 

issue 

capital 

56.98 

b) Immediate relative of promoters (Spouse, 

parent, child, brother, sister) 

c) Company in which 10% or more of the 

share capital is held by the promoter his 

immediate relative firm or HUF in which the 

promoter or his immediate relative is a 

member 

McLeod Russel Inia Ltd. 

Metals Centre Limited 

Shree Durga Agencies Ltd 

Nirvan Commercial Co. Ltd 

United Machine Co. Ltd. 

d) Company in which the Company 

mentioned in (c) above holds 10% or more 

of the share capital 

908068 

727100 

279493 

352000 

361800 

-- -- 

13.46 

10.78 

4.14 

5.22 

5.36 

-- -- 

12

e) HUF in which aggregate share of the 

promoter and his immediate relatives is equal 

or more than 10% of the total 

-- -- 

Total 3844343 56.97 76,88,686 56.97 

Notes: 

The Company witnessed a decline in sales and increase in input cost from the year 1998 onwards and 

reported 100% erosion in networth during the FY 1999. Subsequently, the Company made a reference to 

the Board for Industrial and Financial Reconstruction (BIFR) vide its application dated 14 th April, 2000. 

In the FY 2000, the Company, received share application money towards Cumulative Preference Shares 

of Rs. 100/- each to the extent of Rs. 8.25 crores from group companies viz. Dufflaghur Investments 

Limited and the erstwhile Natex Investment & Marketing Ltd. (later merged with Metals Centre Limited) 

in order to fund its operations. However the preference shares were not allotted to these companies. In 

the meantime the funds received were used in the year 2000 to repay the unsecured loan availed from 

HDFC (For details please refer to page no. ___ of this Letter of Offer). The said application money 

remains pending for allotment. 

At the BIFR hearing held on 31/12/2002, the bench had ordered the conversion of the application money 

brought in by the promoter group into equity/preference capital. The bench on 14/05/2004 sanctioned the 

Rehabilitation Scheme. However, due to non-availability of appropriate authorized share capital, the 

preference shares could not be allotted. KEL now proposes to allot equity shares to the aforementioned 

companies in respect of their rights entitlement/ renunciation received against the funds brought in. 

Metals Centre Limited has vide its letter dated July 01, 2005 withdrawn its share application money 

towards Cummulative Preference shares and agreed for conversion of the said amount into an interest 

free loan. Further, the company has, in compliance with BIFR order dated 14/05/2004, agreed to the 

allotment of equity shares in lieu of the said loan amount. Dufflaghur Investments Limited has also vide 

its letter dated July 01, 2005 withdrawn its share application money towards Cumulative Preference 

shares and agreed for conversion of the said amount into an interest free loan. The Promoter, Williamson 

Magor & Co. Ltd., has agreed to the transfer of the loan amount of Rs. 4.25 Crores due by KEL to 

Dufflaghur Investments Limited in its name. The promoter has, in compliance with BIFR order dated 

14/05/2004, further granted its consent vide its letter dated July 1,2005 for the conversion of the said loan 

amount into equity shares. 

As on date, the interest free unsecured loan lying in the accounts of KEL to be utilized as application 

money towards allotment of shares in this rights issue are as follows: 

Name of the entity 

Amount 

( Rs. in Lacs) 

Metals Centre Limited 400 

Williamson Magor & Co. Ltd. 425 

The constituents of the promoter group shall collectively subscribe to the promoter group’s entire rights 

entitlement in the Issue. The Company has received confirmation from the following companies 

belonging to the promoter group to renounce their rights in favour of Metals Centre Limited and/or 

Williamson Magor & Co. Ltd. : 

Date of the Letter Name of entity renouncing its entitlement 

01/07/2005 Mcleod Russel India Limited 

01/07/2005 Ichamati Investments Pvt. Ltd. 

01/07/2005 United Machine Co. Ltd. 

26/07/2005 Shree Durga Agencies Limited 

26/07/2005 Nirvan Commercial Co. Ltd. 

13

Williamson Magor & Company Ltd. has undertaken to subscribe to the additional shares in the event 

of shortfall in the Rights Issue, if any, so that the issue is subscribed atleast to the extent of 90%. In 

case shareholders other than the promoters/directors do not subscribe to the issue the shareholding 

pattern of the company will be as follows: 

Category 

No. of equity 

shares 

Pre Issue 

% No. of equity 

shares* 

Post Issue 

Promoter 3845044 56.98 9918154 77.36 

Non Promoter 2883056 42.73 2883056 22.64 

Total 6747900 100.00 12821010 100.00 

* Considering subscription to the extent of 90% of the issue size by the promoter group. 

% 

The acquisition of additional securities and subscription to the shortfall shall be exempt in terms of 

proviso to Regulation 3(1)(b)(ii) of the SEBI (Substantial Acquisition of Shares and Takeovers) 

Regulations, 1997. Further this acquisition will not result in change in control of management of the 

Company. Also refer to the paragraph “Basis of allotment” on [page no. ____ of this Letter of 

Offer]. As such other than meeting the Object of the issue as mentioned on page no. ___ of this 

Letter of Offer, there is no other intention/purpose of this issue, including any intention to delist the 

Company. The promoter currently holds 56.98% of the present equity share capital of the Company. 

In case the promoters and persons in the promoter group subscribe to the unsubscribed portion in the 

issue to the extent stated above, the public shareholding after the Rights Issue may fall below the 

“permissible minimum level” as specified in the listing condition or listing agreement and thus sub 

clause 17.1 and 17.2 of the SEBI (Delisting of Securities) Guidelines, 2003 will be applicable in this 

issue. Accordingly, the promoters have undertaken to make an offer for sale of their holdings to 

bring the public shareholding at the level specified in the listing agreement within a period of three 

months. 

Further, Promoters and persons in the promoter group have agreed to put the equity shares allotted to 

them pursuant to this rights issue under a voluntary lock-in for a period of one year from the date of 

allotment in this issue. 

5. The Company has not issued any warrant, option, convertible loan, debenture or any other securities 

convertible at a later date into equity, which would entitle the holders to acquire further equity 

shares of the Company. 

6. The equity shares of the Company have been included in the ‘Z’ group by BSE. The equity shares of 

the Company are being traded in compulsory dematerialised mode. The market lot of the equity 

shares is 1 (one). 

7. Details of transactions by the promoters / their associate concerns during last 6 months are as 

follows: 

S.No. Name of the 

shareholder 

1. Shree Durga 

Agencies 

2. United Machine 

Co. Ltd. 

No. 

shares 

bought 



shares sold 


transaction 

--- 3,43,300 20-27 

Sep.’05 

3,43,300 --- 20-27 

Sep.’05 

Price 

(in Rs.) 

74.24 

74.24 

Nature of 

transaction 

Inter-Se 

transfer 

amongst 

promoter 

group 

Other than the above there are no transactions in the securities of the Company during preceding 6 months 

which were financed/undertaken directly or indirectly by the promoters, their relatives, their group companies 

or associates or by the above entities directly or indirectly through other persons. 

14

8. The ten largest shareholders two years prior to the date of filing of this Draft Letter of Offer with Stock 

Exchanges are as follows : 

Sr. 

No. 

Name of the Shareholders 

Number of 

Equity Shares 


shareholding 

(%) 

1. Williamson Magor & Co. Ltd. 1201700 17.8 

2. Salsar Industrial Services Ltd. 663300 9.9 

3. Metals Centre Ltd. 659800 9.8 

4. Shree Durga Agencies Ltd. 620793 9.2 

5. Eveready Indstries India Ltd. 577468 8.56 

6. Nirvan Commercial co. Ltd. 352000 5.21 

7. The Bishnauth Tea Co. Ltd. 326700 4.84 

8. Bhagirath Pasari 145000 2.14 

9. Administrator of the Specified Undertaking 122100 1.8 

10. United Machine Co. Ltd. 20500 0.3 

Total 4689361 69.48 

9. The ten largest shareholders as on 10 days prior to the date of filing of the Draft Letter of Offer with 

Stock Exchanges are as follows: 

Sr. 

No. 



Equity Shares 


shareholding 

(%) 


2. Salsar Industrial Services Ltd. 663300 9.9 

3. Metals Centre Ltd. 659800 9.8 


5. Eveready Indstries India Ltd. 577468 8.56 

6. Nirvan Commercial co. Ltd. 352000 5.21 

7. The Bishnauth Tea Co. Ltd. 326700 4.84 


9. Administrator of the Specified Undertaking 122100 1.8 


Total 4689361 69.48 

10. The ten largest shareholders as on the date of filing of the Draft Letter of Offer with Stock Exchanges are as 

follows: 

Sr. 

No. 



Equity Shares 


shareholding 

(%) 


2. McLeod Russel India Ltd. 908068 13.46 

3. Metal Centre Ltd. 727100 10.78 


5. Nirvan Commercial Co. Ltd. 352000 5.22 



8. Hawa Faisal Zubair & Hawa Bilkis Zubair 83100 2.1 

9. V Nagesh 56900 0.84 

10. Kalyan Ugam Pvt. Ltd. 39600 0.59 

Total 4154861 61.56 

11. The Company/Promoters/Directors/Lead Merchant Bankers have not entered into buyback or similar 

arrangements for purchase of securities issued by the Company. 

12. The entire price of Rs. 25/- per share is payable on application. Since the shares allotted will be fully paid –up at 

the time of allotment, the forfeiture clause will not be applicable to the equity shares being allotted in terms of 

this Letter of Offer. 

15

13. The present rights issue is being made in the ratio of one equity share for every one equity share held as on 

record date and will not lead to any fractional entitlements. 

14. The total number of shareholders as on the date of filing the Draft Letter of Offer with the stock exchange is 

8852. 

15. At any given time there shall be only one denomination for the shares of the Company and the disclosures and 

accounting norms specified by SEBI from time to time will be complied with. 

16. The Company shall not make any further issue of capital whether by way of issue of bonus shares, preferential 

allotment, rights issue or public issue or in any other manner during the period commencing from the submission 

of the Letter of Offer to SEBI for the Rights Issue till the securities referred in the Letter of Offer have been 

listed or application money refunded on account of failure of the issue. 

17. The Company does not propose to alter the capital structure by way of split or consolidation of the denomination 

of the shares or the issue of shares on a preferential basis or issue of bonus or rights or further public issue of 

shares or any other securities within a period of six months from the date of opening of the present issue. 

16

OBJECTS OF THE ISSUE 

VI. PARTICULARS OF THE ISSUE 

The present rights issue of 67,47,900 equity shares of Rs. 10/- each at a premium of Rs. 15/- per share 

aggregating to Rs. 1686.98 lacs is being made to meet the following objectives: 

1) Compliance with BIFR order dated May 14, 2004, which requires that the Company issues 

shares to the promoter/promoter group company who had brought in Rs. 825 lacs for repayment 

of HDFC loan. 

2) Implementation of ERP computerization programme. 

3) Part repayment of secured loans, sales tax loans and sales tax dues. 

4) Capital expenditure. 

5) Issue expenses. 

1) Compliance with BIFR order: 

During the year 2000, the Company received share application money to the extent of Rs. 825 Lacs from 

two companies belonging to the promoter group [being Metals Centre Limited (earlier known as Natex 

Investment and Marketing Ltd.) and Dufflaghur Investments Limited] towards cumulative redeemable 

preference shares of Rs. 10/- each. The said amount of Rs. 825 lacs brought in by the Promoters was 

utilized for repayment of an unsecured loan from HDFC as detailed below: 

( Rs. In Lacs) 

Towards repayment of Principal 800.00 

Towards Interest thereon 25.00 

As on date the Company has not allotted any shares in respect of the said share application money. The 

Company was declared sick by the BIFR on November 10, 2000 and one of the directions issued by the 

bench, in its order dated 31/12/2002, was that advance against share capital amounting to Rs. 825 lacs 

brought in by the Promoter Group be converted either into preference share or into equity share capital. 

The Rehabilitation Scheme was approved by the BIFR and a sanctioned vide its Order dated May 14, 

2004. 

After the sanction of the Rehabilitation Scheme and as per the direction of the BIFR, the company is 

required to allot Equity/Preference shares to the aforementioned companies against the funds brought in. 

Pursuant to this both Metals Center Limited and Dufflaghur Investments Limited have withdrawn their 

application for redeemable preference shares and the money is lying in the account of the company as 

unsecured interest free loan. Williamson Magor & Co. Ltd., the promoter, has agreed to the transfer of 

the loan amount of Rs. 4.25 Crores due by KEL to Dufflaghur Investments Limited in its name. Both 

Metals Center Limited and Williamson Magor & Co. Ltd. have in compliance with BIFR order dated 

14/05/2004, further granted their consent for the conversion of the said loan amount into equity shares. 

Considering that the funds brought in by the companies in the promoter group has been utilized for the 

repayment of the HDFC loan, and further to BIFR directive to allot either preference /equity shares to 

these companies against the share application money brought in, it has become essential to allot equity 

shares to them to the extent of the unsecured interest free loan. Hence the management proposes to allot 

equity shares to the aforementioned companies. 

The Company has received confirmation from the following companies in the promoter group to 

renounce their rights in favour of Metals Center Limited and/or Williamson Magor & Co. Ltd. : 

Date of the Letter Name of entity renouncing its entitlement 





17


2) Implementation of the ERP package: 

Kilburn Engineering specializes in process design, manufacture, supply and field installation of various 

process plant equipment. Apart from the major raw material required the company has to source some of 

the parts/components /accessories required for manufacturing the various equipment in a timely manner 

to enable smooth manufacture and supply of the finished equipment to customers. The Company has 

Material Resource Planning software to aid in this process. However, in face of the growing demand for 

its products the company needs to implement an ERP package in order to efficiently manage the 

inventory and to enable timely execution of the orders received. 

The ERP will also enable integration of the manufacturing process with financial accounting enabling 

MIS/monitoring of costs in a more efficient manner. As per the quotation received by the Company from 

Godrej Infotech Limited dated July 06, 2004, the total estimated expenditure towards implementation of 

the ERP package is Rs. 50.00 Lakhs consisting of software and hardware. 

3) Part repayment of secured loans, sales tax loans and sales tax dues: 

The rehabilitation scheme sanctioned by the BIFR vide their order dated May 14, 2004 stipulates a 

repayment schedule for secured loans. Apart from the secured loans the Company is yet to repay certain 

outstanding sales tax loan as well as some sales tax arrears. The Company has already approached the IC 

Cell, The Industries Commissioner, and Gandhinagar for one time settlement of the Sales Tax dues under 

Option -3 of the Scheme for Relief to the Sick Industrial Company registered under BIFR/GoG. The 

same has been revised to Optiuon –1 vide letter dated August 25, 2005. The said option will enable the 

Company in seeking a waiver on the Interest amount and the penal interest. 

The total principal amount of the outstanding loans as on September 30, ’05 and sales tax loan is Rs. 

1117.37 Lacs. Details of such principal amounts outstanding are as follows: 

Particulars 

Rs. In Lacs 

IDBI Term Loan 107.99 

Debentures 61.62 

Banks 385.62 

Sales Tax Loans & Sales Tax Dues 562.14 

Total 1117.37 

Out of the Issue proceeds, the Company proposes to utilize an amount of Rs. 525 Lacs towards 

repayment of the above dues. Balance requirement of funds would be met through internal accruals. The 

Company proposes to make part/ full payments against these loans, at the appropriate time, based on 

overall assessment of the need of funds for additional capital expenditure which is likely to be required 

over the next 24 months and which is outlined under object no. (4) below. 

4) Capital Expenditure 

During the past two years, the Company has received orders from some reputed customers in the United 

States and in Europe. To enable execution of orders from these and other customers, the company needs 

to augment its manufacturing facilities. The company proposes to achieve this by erecting a covered shed 

admeasuring approximately 9056 sq. ft, equipped with over head crane, in the existing premises at 

Bhandup, Mumbai. The Company has obtained permission from the Bombay Municipal Corporation 

vide their letter No. CE/998/9PES/AS dated July 07, 2005, for construction of such a shed temporarily, 

within the Company’s premises in Bhandup, Mumbai. The said shed as per the permission can be erected 

for a period of six months starting from the date of the permission i.e. July 07, 2005. As per the 

management, the said permission can be extended for a further period of six months and upto a 

maximum period of two years. In the long run the Company proposes to acquire additional premises to 

accommodate the larger scale of operations. A capital expenditure of Rs. 145 Lacs is envisaged towards 

installation of the shed and overhead crane. The Company has received quotation of Rs. 68.01 Lacs from 

Mukand Limited for supplying the 20Tx20M span EOT Crane. The Company proposes to complete the 

installation by December, 2005. 

18

Additional Capital Expenditure 

The Company has recorded a turnover of Rs. 4440 Lacs during the twelve months period ended on 30 th 

September, 2005 as against the total turnover of Rs. 2473 lacs during the entire FY 2004. The Company 

expects a continuing appreciable growth in its sales turnover and therefore it may be necessary to acquire 

certain machinery as detailed below to augment its capacity: 

Description Nos. Cost 

(Rs. in Lacs)* 

MIG Welding Machines 5 24 

Welding Rotator of 100 ton 1 

Extra Idlers 5 40 

Welding Column & Boom 1 

18 

Submerged Arc Welding 1 

Multi Header Drilling M/C 1 34 

Total 116 

*The above costs are inclusive of Excise duty, sales tax/ VAT 

The Company proposes to incur additional capital expenditure, at the appropriate time, based on overall 

assessment of the need of funds for repayment of loans disclosed under (3) above. Presently, the 

Company proposes to utilize an amount of Rs. 116 Lacs towards the above additional capital 

expenditure. 

The abovementioned capital expenditure would help in optimum utilization of existing capacity. 

5) Issue Expenses: 

The expenses of rights issue to be incurred by the Company are estimated to be around Rs. 25.98 lacs as 

detailed below: 

Particulars 

Rs. In Lacs 

Fee to Intermediaries 12.00 

Statutory Fee 4.00 

Advertising 3.00 

Printing, Stationery and Despatch 6.98 

Total 25.98 

APPRAISAL 

The project is not being appraised by any Bank or Financial Institution. 

SCHEDULE OF IMPLEMENTATION 

The Company proposes to use the funds raised for the above mentioned objectives over a period of 24 

months as given below: 

Object Commencement Completion 

Implementation of ERP package January 2006 June 2006 

Part repayment of secured loans, March 2006 September 2006 

sales tax loans and sales tax dues 

Erection of Factory Shed and 

Installation of EOT Crane 

November 2005 December, 2005 

19

BASIC TERMS OF ISSUE 

The Equity Shares now being offered are subject to the terms of this Letter of Offer, the CAF, the 

Memorandum and Articles of the Company, approvals under the Foreign Direct Investment Scheme of 

Government of India, FEMA, if applicable, Guidelines issued by SEBI, the Act, the guidelines, 

notifications and regulations for the issue of capital and for the listing of securities issued by the 

Government and/or other statutory authorities and bodies from time to time and such terms and 

conditions as may be incorporated in the Letter of Allotment/Share Certificate or any deed or document 

executed by the Company regarding the Rights Issue. The principal terms and conditions of the Offer are 

as follows: 

i. Present Issue: Rights issue of 67,47,900 equity shares of Rs. 10/- each in a ratio of 1:1 

ii. Face Value: Each Equity Share shall have a face value of Rs.10/-. 

iii. Offer Price: Rs.25/- per Share 

20

BASIS OF THE ISSUE PRICE 

Quantitative Factors 

1. Earning per Share (EPS) 

Financial Year EPS (Rs.) Weight used 

2002-03 (5.62) 1 

2003-04 (0.79) 2 

2004-05 (twelve months period ended as on 7.75 3 

30 th September, 2005) 

Weighted Average 2.68 

2. Price Earnings Ratio (P/E Ratio) 

Based on EPS for the twelve months ended on 30 th September, 2005 of Rs. 

7.75 

3.23 

3. Industry P/E 

Highest 109.4 

Average 17.3 

Lowest 6.6* 

(Lowest P/E ratio for the industry segment is 2.6 being that of KEL. Hence the same has been ignored for 

the above comparison) 

(Source: Capital Market Vol. XX/18 Nov. 07 to Nov.20, 2005 Segment: Engineering) 

4. Return on networth 

The Company has been incurring losses from the FY1998 upto the FY 2004. During this period the 

networth of the Company was eroded. The Company has reported a profit for the twelve months period 

ended on 30 th September, 2005. However the networth of the Company continues to be negative. Hence 

the Return on Networth has not been calculated. 

5. Net Asset Value (NAV) per share 

As on 30/09/2005 (Rs.) ( 32.56) 

After the issue based on 30 th September, 2005 results (3.79) 

6. Minimum Return on Networth required to maintain Pre-Issue EPS 

The post issue networth of the Company continues to be negative. Hence the minimum Return on 

Networth required to maintain the pre-issue EPS has not been calculated. 

7. Peerset Analysis 

There are few companies in the same line of business as KEL. Hence a conclusive comparison of KEL 

with any listed company cannot be made. However a comparison with some of the companies in the 

Engineering Segment is as follows: 

Name of the 

Company 

Sales 

( Rs. In 

Lacs) 

PAT 

( Rs. In 

Lacs) 

Equity 

( Rs. In 

Lacs) 

EPS 

( Rs.) 

Disa India Ltd. 3380 450 151 29.5 13.9 711 

Eimco Elecon Ind. 9710 880 577 14.7 18.5 283 

Ltd. 

GMM Pflauder 8050 760 293 24.6 15.1 512 

Guj. Apollo E 6360 540 700 7.4 9.9 111 

Kabra Extrusion 7020 490 686 6.6 10.6 72 

GEI Hammon 6080 220 1202 1.7 16.8 40 

Kilburn Engg. Ltd. 2460 50 675 0.8 2.6 45 

P/E 

(x) 

Price as on 

28/10/2005 

21

The Company approached BIFR for a rehabilitation package in the year 1999. IDBI was appointed as the 

Operating Agency and the Rehabilitation Scheme was sanctioned in the year 2004. The Scheme is 

presently under implementation. The prospects of the Engineering industry have improved substantially 

during the past two years. Kilburn has witnessed a turnaround in its operations and has reported a profit 

for the twelve monthe period ended on 30 th September, 2005. As such the Company is on the path of 

recovery and the present issue is being made to part finance certain capital expenditure necessary for its 

revival. The equity shares are being issued at a price of Rs. 25/- per share i.e at a P/E of 3.23 times on the 

basis of the EPS of Rs.7.75 for the twelve months period ended on 30 th September, 2005 which is lower 

than the lowest P/E multiple for the industry segment in which the Company operates. The issue price is 

at a discount of 47.20 % to the Market Price of the shares on the BSE (Rs. 47.35 per share as on 

10/11/2005). The price of the equity shares as on 27 th May, 2005, the date of the Board Meeting held for 

considering the issue of equity shares on a Rights Basis was Rs. 62.50 and was Rs. _____ as on ______ 

being the record date set for the Rights Issue. In view of the above the price of Rs. 25/- per share is 

justified. 

22

TAX BENEFITS TO THE COMPANY AND ITS SHAREHOLDERS 

The Company has received letter no. 631/ 2005- 06 dated November 01, 2005 from Deloitte Haskins & 

Sells specifying the tax benefits available to the Company and its shareholders under the Direct Tax 

Laws. The contents of the same are given below. Unless otherwise specified, sections referred to are 

sections of the Income Tax Act, 1961 ( the Act). 

To the Company 

A1. Under the Income Tax Act, 1961 

• Benefit under Section 115 JB of the Act 

Company being a sick industrial company, while computing the book profit, tax at 7.5% 

payable under Section 115JB of the Act, the book profits shall be reduced by the amount of 

profits earned by the Company on and from the assessment year in which the said company has 

become a sick industrial company and ending with the assessment year during which the entire 

net worth of such company becomes equal to or exceeds the accumulated losses. 

• Benefits of unabsorbed business/ long term capital losses and allowances 

Company has unabsorbed losses/ allowances under the Act which can be carried forward for set 

off against the income under the Act of future years as unders : 

Unabsorbed business losses of Rs. 159,420,357.00 

In view of the provisions of Section 72 of the Act, Company can carry forward the unabsorbed 

business losses for a period of eight assessment years immediately succeeding the assessment 

year in which the loss was first computed. 

Unabsorbed depreciation of Rs. 51,515,237.00 

In view of the provisions of Seciton 32 of the Act, Company can carry forward the unabsorbed 

depreciation allowance of earlier years for an indefinite period to be set off against business 

income under the Act of future years. 

Unabsorbed long term capital losses of Rs. 46,091,098.00 

In view of the provisions of Section 74 of the Act, Company can carry forward the unabsorbed 

long term capital losses for a period of eight assessment years immediately succeeding the 

assessment year in which the loss was first computed to be set off against long term capital 

gains under the Act of future years. 

• Deduction under Section 35 of the Act 

In accordance with and subject to the provisions of Section 35 of the Act, the Company would be 

entitled to deduction in respect of expenditure laid out or expended on scientific research related to 

the business. 

• Dividend exempt under Section 10(34) of the Act 

Under Section 10(34) of the Act, dividend income earned by the company referred to in Section 115- 

O of the Act, will be exempt from tax in the hands of the Company. 

• Income from specified mutual fund exempt under Section 10(35) of the Act 

In accordance with and subject to the provisions of Section 10(35) of the Act, the following income 

shall be exempt in the hands of the Company : 

(a) Income received in respect of the units of a Mutual Fund specified under Clause (23D) of 

Section 10 of the Act; or 

(b) Income received in respect of units from the Administrator of the specified undertaking; or 

23

(c) Income received in respect of units from the specified company. 

• Exemption from Capital Gain under Section 10(38) of the Act 

In terms of Section 10(38) of the Act, any long term capital gains arising to a company from transfer 

of long term capital asset being equity shares in any other company or a unit of an equity oriented 

fund would not be liable to tax if the following conditions are satisfied : 

(a) The transaction of sale of such equity share is entered into on or after 1 October, 2004. 

(b) The transaction is chargeable to securities transaction tax under Chapter VII of the Finance (No. 

2) Act, 2004. 

To the Members of the Company 

B1. Under the Income Tax Act, 1961 

1. Resident Members 

• In terms of Section 10(23D) of the Act, all mutual funds set up by public sector banks or public 

financial institutions or mutual funds registered under the Securities and Exchange Board of 

India or authorized by the Reserve Bank of India subject to the conditions specified therein are 

eligible for exemption from income tax on their entire income, including income from 

investments in the shares of the company. 

• By virtue of Section 10(34) of the Act, income earned by way of dividend income from 

domestic company referred to in Section 115-O of the Act, are exempt from tax in the hands of 

the shareholders. 

• In terms of Section 10(38) of the Act, any long term capital gains arising to a shareholder from 

transfer of long term capital asset being equity shares in the company would not be liable to tax 

in the hands of the shareholders if the following conditions are satisfied : 

(a) The transaction of sale os such equity share is entered into on or after 1 October, 2004. 

(b) The transaction is chargeable to securities transaction tax under Chapter VII of the 

Finance (No.2) Act, 2004. 

• Under Section 48 read with Section 2(29B) of the Act, if the company’s shares are sold after 

being held for more than twelve months, the gains [in case not covered under Section 10(38) of 

the Act], if any, will be treated as long term capital gains and the gains shall be calculated by 

deducting from the gross consideration, the indexed cost of acquisition/ improvement and 

expenditure incurred wholly and exclusively in connection with the transfer. However, in terms 

of the fifth proviso to Section 48 of the Act, no deduction of amount paid on account of 

securities transaction tax will be allowed in computing the income chargeable to tax as capital 

gains. 

• Under Section 54EC of the Act and subject to the conditions and to the extent specified therein, 

long term capital gains [in cases not covered under Section 10(38) of the Act] arising on the 

transfer of shares of the Company shall not be chargeable to capital gains tax if the capital gains 

are invested within a period of six months after the date of such transfer in long-term specified 

assets and held for a period of atleast three years. 

• Under Section 54ED of the Act and subject to the conditions and to the extent specified therein, 

long term capital gains [in cases not covered under Section 10(38) of the Act] on the transfer of 

shares of the Company, as and when it is listed shall not be chargeable to capital gains tax if the 

capital gains are invested in shares of an Indian Company forming part of an eligible issue of 

capital, within a period of six months after the date of such transfer and are held for a period of 

atleast one year. Eligible issue of capital means issue of equity shares which satisfies the 

following conditions, namely :- 

(a) the issue is made by a public company formed and registered in India; 

(b) the shares forming part of the issue are offered for subscription to the public. 

Further, the public issue of shares of the Company would also qualify as an eligible issue of 

capital and long term capital gains would qualify for the benefit of Section 54ED of the Act if 

the capital gains are invested in shares of the Company. 

• Under Section 54F of the Act, long term capital gains [in cases not covered under Section 

10(38) of the Act] arising to an individual or Hindu Undivided Family (HUF) on transfer of 

shares of the Company shall not be chargeable to capital gains tax subject to other conditions, if 

24

the net consideration from such shares are utilized for purchase of residential house property 

within a period of one year before or two years after the date on which the transfer took place or 

for construction of residential house property within a period of three years after the date of 

transfer. Such benefit will not be available if: 

(a) The individual or Hindu Undivided Family: 

(i) Owns more than one residential house, other than the new residential house, 

on the date of transfer of share; or 

(ii) purchases another residential house within a period of one year after the date 

(iii) 

of transfer of the shares; or 

constructs another residential house within a period of three years after the 

date of transfer of shares and 

(b) The income from such residential house, other than the one residential house owned on the 

dateof transfer of the shares, is chargeable under the head “Income from house property”. 

• In terms of Section 111A of the Act and other relevant provisions of the Act, any short term 

capital gains arising to a shareholder from transfer of short term capital asset being equity shares 

in the Company would be liable to tax at the rate of 10% (plus applicable surcharge and 

education cess) if the following conditions are satisfied : 

(a) the transaction of sale of such equity share is entered into on or after 1 October, 2004 

(b) the transaction is chargeable to securities transaction tax under Chapter VII of the Finance 

(No.2) Act, 2004. 

Further, the public issue of shares of the Company would also qualify as an eligible issue of 



• Under Section 54F of the Act, long term capital gains [in cases not covered under Section 

10(38) of the Act] arising to an individual or Hindu Undivided Family (HUF) on transfer of 

shares of a company shall not be chargeable to capital gain tax subject to other conditions, if the 

net consideration from such shares are utilized for purchase of residential house property within 

a period of one year before or two years after the date on which the transfer took place or for 

construction of residential house property within a period of three years after the date of 

transfer. Such benefit will not be available if : 

(a) The individual or Hindu Undivided Family: 

(i) 

(ii) 

(iii) 

Owns more than one residential house, other than the new residential house, 

on the date of transfer of share; or 

purchases another residential house within a period of one year after the date 

of transfer of the shares; or 

constructs another residential house within a period of three years after the 

date of transfer of shares and 

(b) The income from such residential house, other than the one residential house owned on the 

dateof transfer of the shares, is chargeable under the head “Income from house property”. 


capital gains arising to a shareholder from transfer of short term capital asset being equity shares 



(a) the transaction of sale of such equity share is entered into on or after 1 October, 2004 

(b) the transaction is chargeable to securities transaction tax under Chapter VII of the Finance 

(No.2) Act, 2004 

• Under Section 112 of the Act and other relevant provisions of the Act, long term capital gains 

[in cases not covered under Section 10(38) of the Act], arising on transfer of shares in the 

Company held for more than twelve months, shall be taxed at a rate of 20% (plus applicable 

surcharge and education cess). The amount of such tax should however, be limited to 10% (plus 

applicable surcharge and education cess) without indexation, at the option of the shareholder, if 

the transfer is made after listing of shares. 

• Under Section 115-I of the Act, a non-resident India (i.e. an individual being a citizen of India 

or person of India origin who is not a “resident”) shareholder has an option to be governed by 

the provisions of Chapter XII-A of the Income Tax Act, 1961 viz. “Special Provisions Relating 

to Certain Incomes of Non-Residents” which are as follows :- 

(a) Under Section 115E of the Act, where shares in the company are acquired or subscribed for 

in convertible foreign exchange by a Non Resident Indian, capital gains arising to the nonresident 

Indian on transfer of shares held for a period exceeding 12 months, shall, in cases 

not covered under Section 10(38) of the Act, be concessionally taxed at the rate of 10% 

(plus applicable surcharge and education cess). (Reference may also be made tot eh 

provisions of Section 115D of the Act). 

25

(b) Under the provisions of Section 115F of the Act, long term capital gains [in cases not 

covered under Section 10(38) of the Act] arising to a non-resident Indian from the transfer 

of shares of the company subscribed to in convertible foreign exchange shall not be 

chargeable to Income Tax, if the net consideration is reinvested in specified assets within 

six months of the date of transfer. If only part of the net consideration is so reinvested, the 

exemption shall be proportionately reduced. The amount so exempted shall be chargeable 

to tax subsequently, if the specified assets are transferred or converted into money within 

three years from the date of their acquisition. 

• Under provisions of Section 115G of the Act, it shall not be necessary for a Non-Resident 

Indian to furnish his return of Income if his only source of income is investment income or long 

term capital gains or both arising out of assets acquired, purchased or subscribed in convertible 

foreign exchange and tax deductible at source has been deducted therefrom. 

2. Non Resident Indians/ Members other than FIIs and Foreign Venture Capital Investors) 

• By virtue of Section 10(34) of the Act, income earned by way of dividend income from 

domestic company referred to in Section 115-O of the Act, are exempt from tax in the hands of 

the shareholders. 

• In terms of Section 10(38) of the Act, any long term capital gains arising to a shareholder from 

transfer of long term capital asset being equity shares in the Company would not be liable to tax 

in the hands of the shareholder if the following conditions are satisfied : 

a) The transaction of sale of such equity share is entered into on or after 1 October, 

2004. 

b) The transaction is chargeable to securities transaction tax under Chapter VII of the 


• Under Section 54EC of the Act and subject to the conditions and to the extent specified therein, 

long term capital gains [in cases not covered under Section 10(38) of the Act] arising on the 


are invested within a period of six months from the date of such transfer in long term specified 

assets and held for a period of atleast three years. 



shares of the company, as and when it is listed shall not be chargeable to capital gains tax if the 

capital gain are invested in shares of an Indian company forming part of an eligible issue of 

capital, within a period of six months after the dateof such transfer and are held for a period of 

atleast one year. Eligible issue of capital means issue of equity shares which satisfies the 

following conditions, namely :- 

a) the issue is made by a public company formed and registered in India; 

b) the share forming part of the issue are offered for subscription to the public. 

• Under Section 112 of the Act and other relevant provisions of the Act, long term capital gains, 

[in cases not covered under Section 10(38) of the Act], arising on transfer of shares int eh 

Company held for more than twelve months, shall be taxed at a rate of 20% (plus applicable 

surcharge and education cess) after indexation as provided in the second proviso to Section 48 

of the Act. The amount of such tax could, however, be limited to 10% (plus applicable 

surcharge and education cess) without indexation, at the option of the shareholder, if the transfer 

is made after listing of shares. 

3. Foreign Institutional Investors (FIIs) 

• In terms of Section 10(34) of the Act, any income by way of dividends referred to in Section 

115-O (i.e. dividends declared, distributed or paid on or after 1 April 2003) received on the 

shares of the company is exempt from tax. 

• In terms of Section 10(38) of the Act, any long term capital gains arising to an investor from 

transfer of long term capital asset being equity shares in the Company would not be liable to tax 

in the hands of the investor if the following conditions are satisfied : 

a) The transaction of sale of such equity share is entered into on or after 1 October, 

2004. 



26


capital gains arising to a shareholder from transfer of short term capital asset beign equity shares 



a) The transaction of sale of such equity share is entered into on or after 1 October 

2004. 



• The income by way of short term capital gains or long term capital gains [in cases not covered 

under Section 10(38) of the Act] realized by the FIIs is taxable @30% and 10% respectively 

(plus applicable surcharge and education cess) as per section 115AD of the Act. However in 

case of such long term capital gains, the tax is levied on the capital gains computed without 

considering the cost indexation and computation of gains in foreign exchange. Further, in terms 

of the fifth proviso to Section 48 of the Act, no deduction of amount paid on account of 

securities transaction tax will be allowed in computing the income chargeable to tax as capital 

gains. 

• Under Section 54EC of the Act and subject to the conditions and to the extent specifed therein, 

long term capital gains [in case not covered under Section 10(38) of the Act] arising on the 


are invested within a period of six months after the date of such transfer in long –term specified 

assets and held for a period of at least three years. 



shares of the company, as and when it is listed, shall not be chargeable to capital gains tax if the 

capital gains tax if the capital gain are invested in shares of an Indian Company forming part of 

an eligible issue of capital, within a period of six months after the date of such transfer and are 

held for a period of atleast one year. Eligible issue of capital means issue of equity shares 

which satisfies the following conditions namely :- 

a) the issue is made by a public company formed and registered in India; 

b) the shares forming part of the issue are offered for subscription to the 

public. 

Further, the public issue of shares of the company would also qualify as an eligible issue of 



4. Venture Capital Companies /Funds 

• In terms of Section 10(23FB) of the Act, all Venture Capital Companies /Funds registered with 

Securities and Exchange Board of India, subject to the conditions specified, are eligible for 

exemption from income tax on their entire income, including income from investment in the 

shares of the Company. 

B2. Under the Wealth Tax Act, 1957 

Notes : 

• Shares of the Company held by the shareholder are not treated as an asset within the meaning of 

Section 2(ea) of the Wealth Tax Act, 1957, hence the shares are not liable to Wealth Tax. 

i. All the above benefits are as per the current tax laws as amended by the Finance Act, 2005. 

ii. In respect of non-residnets, the liability to tax and the tax rates mentioned above are further subject 

to any benefits available under the Double Taxation Avoidance Agreements, if any, between India 

and the country in which the non-resident is a tax resident. 

iii. The current positions of tax benefits available to the company and to its shareholders is provided for 

general information purposes only. In view of the individual nature of tax consequences, each 

investor is advised to consult his/ her own tax advisor with respect to specific tax consequences of 

his /her participation in the issue. 

iv. The tax benefits listed above are not exhaustive and are based on information explanations and 

representations obtained from the Company and on the basis of our understanding of the business 

activities and operations of the company. While all reasonable care has been taken in the 

preparation of this opinion, Deloitte Haskins and Sells accepts no responsibility for any errors or 

omissions therein or for any loss sustained by any person who relies on it. 

27

VII. ABOUT THE ISSUER COMPANY 

INDUSTRY OVERVIEW 

(Source :Report on Heavy Engineering Segment May 2005 by ICRA Information Grading and Research 

Services) 

INTRODUCTION 

The development of a strong and vibrant engineering and capital goods sector in India had been at the 

core of the industrial strategy ever since the planning process initiated in 1951. The philosophy during 

those years was import substitution, which was pursued with vigour and priority was given to develop 

the basic and capital goods sector. 

Today India is among a handful of nations among the developing countries to have a strong engineering 

and capital goods base. It is more-or-less fully self-sufficient and supplies the most sophisticated and 

state-of-the-art machinery and equipment to the various sectors of the economy. 

The sector currently serves a wide cross section of industry segments ranging from consumer durables, 

chemicals and petrochemicals, fertilisers to defence equipment, power, oil & gas, refinery, mining, 

nuclear, automobiles, textiles. Today, India has very well developed and diversified industrial machinery 

/ capital base capable of manufacturing the entire range of industrial machinery. The industry has also 

successfully been able to absorb manufacturing technology over the years, and has achieved world class 

quality control - ASME Code stamps, ISO 9000 certifications. 

The industry's annual production stood at Rs 950 billion in 2000, with an investment of Rs 350 billion. 

Its contribution to the exchequer in terms of customs, excise and sales tax is estimated to be in excess of 

Rs 220 billion and exports were in the region of Rs 30.54 billion. The sector employs more than 20 lakh 

persons and the average employment per crore of investment is over 50 times than that of a commodity 

production industry. 

Heavy engineering industry is integrated with various core sectors for its demand. The demand is derived 

primarily from capacity creations in sectors like infrastructure and general manufacturing including 

process industries. The Indian engineering industry, including the transport equipment segment, is 

estimated at around Rs. 1.2 trillion. The share of heavy engineering is about 80% of the value while rest 

was contributed by light engineering sector. The enterprise mix of the Indian engineering industry 

comprises primarily large Indian companies without foreign collaborations, subsidiaries of multinational 

companies, joint ventures of domestic and foreign companies and medium sized companies maintaining 

regional dominance. 

Government Policies 

The tremendous strides that the sector has made over the past four decades has primarily been possible 

because of the government’s support in providing a conducive policy environment. The first attempt was 

to de-license 24 industries as far back as 1975. Among the industries de-licensed were industrial 

machinery, machine tools and other equipment. 

Broad banding of the machine tool industry in 1983 followed this. The year 1985 saw a further 

delicensing of 25 broad groups of industries including several items of industrial machinery for non - 

MRTP, non - FERA companies. Industrial machinery sector was also broad -banded covering chemical, 

pharmaceutical, petrochemical and fertiliser machinery subsequently. In August 1987, a Technology Up 

gradation Fund was launched for five groups of capital goods industries. 

The decade of the nineties was marked primarily for the dismantling of the high tariff walls. After having 

to adjust in the initial years, this sector in fact responded very positively and successfully retooled, 

restructured and reengineered and clocked very healthy growth rates in the years 1995-96 and 1996-97. 

1991-92 to 1995-96: The period from 1991-92 to 1995-96 actually saw the tariffs on capital goods falling 

sharply by a significant 70 per cent and on an average the reduction each year was above 30 per cent. 

28

Analytical Profile of Heavy Engineering Industry 

Threat of Substitutes: Heavy 

Engineering, as an industry, is of vital 

importance to the Indian Economy. 

The threat from substitutes is low, 

since substitution for majority of the 

heavy engineering products is not 

possible. 

Bargaining Power of Suppliers : 

companies in the light 

engineering sector act as major 

suppliers to heavy engineering 

industries. The large number of 

players in light engineering sector 

and fragmented market result in 

weak supplier power. 

Inter-Firm Rivalry: Heavy 

engineering is considerably 

technology itensive with few players 

having required capabilities. While 

this limits the competition to an 

extent, growth in Indian infrastructure 

sector has led to foreign engineering 

majors forming joint ventures with 

Indian Partners 

Bargaining Power of Buyers : 

Limited number of players/ specific 

technology requirements of different 

buyers maintain a moderate 

bargaining power for heavy 

engineering. The bargaining power of 

buyers increase as one moves towards 

medium to light engineering on 

account of increase in number of 

players. 

Barriers to entry: remain high in 

heavy engineering on account of 

relatively higher investment and 

technology requirements. 

The Heavy Engineering Industry can be broadly classified into two groups as given below :- 

Heavy Engineering 

Electrical Machinery and 

Equipment 

Non-electrical Machinery 

and Equipment 

Key Issues Facing the Players 

Cyclicality 

Heavy engineering industry is an intermediate industry and its demand depends on a variety of end-user 

industries such as power, mining, oil and gas, consumer goods, automotive and the general 

manufacturing sector. A diverse mix of industries in the end-user segment results in now volatility in 

revenues in a normal business cycle. But, beginning of a widespread economic slowdown leads to 

cancellation of investments on capital goods across the industries. Thus, a slowdown adversely impacts 

the heavy engineering industry much before it affects other sectors. On the other hand, the heavy 

engineering industry is among the last to benefit from an upturn since capacity creation occurs after enduser 

industries fully utilize their own capacities and feel positive about the long-term demand scenario. 

The figure below compares overall industrial performance and the performance of the capital goods 

sector and illustrates the cyclical trend in the performance of the heavy engineering sector. 

29

Lowering of Import Duties 

Reduction in import duties has led to increased imports of capital goods. The cut in peak customs duty 

from 20% to 15% and in customs duty on textile machinery from 20% to 10% in the budget 2005-06 is 

expected to result in higher competition for domestic players in the heavy engineering industry. Customs 

duty exemption is already provided for National Highway projects, which has resulted in considerable 

imports in this segment. A further reduction in the peak customs duty in the short to medium term can 

not be ruled out. 

Basic customs duty is zero or 5% on capital goods required for various purposes such as projects 

financed by international organisations, mega power projects, drinking water supply projects, fertiliser / 

coal mining / power generation projects and setting up crude petroleum refinery. Manufacturing sector is 

allowed to import capital goods at 5% basic customs duty under Export Promotion Capital Goods 

(EPCG) scheme. Moreover, import duties on some of the raw materials like alloy steel that are used as 

input by the heavy engineering industry are higher than the import duties on the machines and 

equipment. This inverted duty structure results in a cost disadvantage for heavy engineering companies. 

The reduction in customs duties on copper, aluminium and alloy steel from 15% to 10% in budget 2005- 

06 is a step to correct the inverted duty structure. 

The following table provides the overview of customs duty for the heavy engineering sector. Customs 

duty for most of the categories of project imports has been reduced to 5%. 

Increase in Raw Material Prices 

A sharp increase in raw material prices has resulted in a small increase in the profit margins for the heavy 

engineering industry even though revenue has registered much higher growth during the last two years. 

Raw materials contribute to almost 50% of the operating costs of heavy engineering companies and a 

sharp increase in the input prices like those of steel including special steel, aluminium and copper have 

resulted in lower than expected growth in profitability. 

Demand Supply Position 

Heavy engineering sector has witnessed a steady rise in demand from FY2003 onwards. The following 

figure illustrates the increase in capital goods production index for the period 2002 to 2004. 

30

Heavy engineering sector has continued with its good performance in 2004-05 also. The growth in the 

capital goods production index for the period April 04 to Jan 05 was 12.9% which was significantly 

higher than 10.7% registered for the corresponding period of the previous year. The index posted a 

double-digit growth in each month of 2004-05, except for November 2004. Overall growth in the index 

was led by the machinery and equipment segment, which grew by 20.89% during the period April 04 to 

Jan 05 while the growth was 11.83% for the corresponding period of the previous year. 

Demand for almost all the segments has recorded a double-digit growth in 2004. 

Imports 

Indian Government has been continually reducing the import duty on capital goods, which has led to 

increase in imports in the sector. Imports in the heavy engineering sector are mostly for the equipment 

that require very high technological inputs or items that are required in small numbers and hence are not 

produced in the country. Second-hand equipment contributes to a significant proportion of imports as 

they offer a cost-effective option for Indian companies. The imports in the capital goods sector during 

April to January period from 2002-03 to 2004-05 increased at a compounded rate of 27.8%. 

The following table provides a segment-wise break-up of the imports in the capital goods sector. 

Table 2: Segment-wise Break-up of Capital Goods Imports - April to January 

31

Exports 

India is increasingly gaining acceptance as a preferred manufacturing base for heavy machinery and 

equipment. Exports of engineering goods have increased at a compounded rate of 33.4% during the April 

to January period from 2002-03 to 2004-05. During April 2004 to January 2005, engineering goods as a 

sector contributed to 20.4% of total exports from the country up from 19.4% during the same moths the 

previous year. The following figures give an overview of export performance for the months of April to 

January from 2002-03 to 2004-05. 

The following table provides a segment-wise break-up of the exports of the engineering goods. 

However, if we exclude ferrous and non-ferrous metals and alloys from the engineering goods 

exports for a fair assessment of heavy engineering industry exports, total exports will be in the 

range of US$ 9.0-9.5 billion for the period April 2004 to January 2005. 

KEY GROWTH FACTORS 

Heavy engineering industry is witnessing growth in domestic demand as well as exports. The 

major factors contributing to impressive domestic demand are buoyant Indian economy and 

increased infrastructure expenditure. 

OUTLOOK 

Heavy engineering industry has been performing well after the recession that it faced in FY2002. The 

ROCE has increased up to the level of 20% for FY2004. The index of production of capital goods has 

increased by 12.9% during the period April 2004 to January 2005 as compared to 10.66% during the 

same months the previous year. The index of production of machinery and equipment has posted a 

growth of 20.89% during April 2004 to January 2005 as compared to 11.83% during the same months 

the previous year. 

32

The demand in the engineering sector is expected to be maintained primarily on account of the 

government’s focus on infrastructure development in the country, which is expected to continue in the 

medium term. Stable sales growth has been observed in the heavy engineering industry in light of the 

existing demand. Net profit margin of heavy engineering industries has improved and adverse changes in 

the same are not expected in the medium term in light of the stable demand. However, operating profit 

have stagnated due to rise in raw material costs and reduction in import duties. Any further reduction in 

peak import duties in the short to medium term will lead to increased imports and higher competition in 

the industry. The heavy engineering industry is expected to further improve upon the performance of 

FY2004 in the near to medium term. 

India is emerging as a preferred outsourcing destination for design and manufacture of machinery and 

equipment. India has a large pool of skilled labour force and the labour costs are amongst the lowest in 

the world. Recession in FY2002 forced the heavy engineering companies to restructure their operations 

and downsize the number of employees that increased their efficiency. Development of Special 

Economic Zones and incentives for exports are expected to increase the flow of FDI in the sector. 

33

BUSINESS OVERVIEW 

Kilburn Engineering Ltd. (“KEL”) specialises in design, engineering, manufacturing, supply and 

commissioning of all types of drying systems for Chemical, Petrochemicals, Food, Oil & Gas and several 

other industries. KEL has vast experience in providing solutions for drying and processing several 

products - be it breakfast cereals, rubber, sand, carbon black, tea, salt, sodium cyanide, heavy and fine 

chemicals or ceramic tiles. 

INFRASTRUCTURE FACILITIES & UTILITIES 

Office And Factory 

Kilburn’s Corporate Office and Works are located at Bhandup, Mumbai. The premises are spread over 

three adjacent plots of land admeasuring 10 acres. The land is owned by the Company. 

Factory Building 

KEL’s factory building consists of: 

• A Machine Shop measuring 32 Mtrs Long and 8 Mtrs. wide wherein various machines such as 

Lathe Machine, Milling Machine, Shaping Machine, Drilling Machine, Dynamic Balancing 

Machine etc. are installed for machining of components and sub-assemblies is carried on; 

• A Light Bay measuring 64 Mtrs Long and 8 Mtrs. wide mainly consisting of components, subassembly 

and products weighing upto 2 MT for handling the fabricated components; 

• A Heavy Bay measuring 64 Mtrs Long and 8 Mtrs. wide wherein fabrication of heavy 

equipments is done. Sub-assembling and assembling of products transferred from the light bay 

are also carried out here. This bay consists of 2 nos. overhead cranes fo 5 Tons and 10 Tons 

respectively; and 

• A Steel Yard measuring 40 Mtrs Long and 8 Mtrs. wide wherein raw materials are stored and 

the same is handled with the help of a 2MT overhead crane. 

Kilburn has a full-fledged workshop complete with all necessary machines, equipment and facilities for 

fabrication, assembly & testing of products and systems. The workshop has its full set of instruction 

procedures for all process - be it electrode, welding to precision assembly. 

Office Building 

The factory building admeasuring about 1500 Sq. Mtrs. enables to carry out various day to day activities 

of the Company pertaining to designing, engineering, research and development, manufacturing, 

marketing, Project & Engineering, Accounting and Administration/ HRD in a smooth, uninterrupted and 

efficient manner. 

PLANT AND MACHINERY 

The general and critical fabrication equipments for making components and sub-assemblies (apart from 

those mentioned under the sub heading ‘ Machine Shop’ under para ‘Factory Building’ above) includes 

the following: 

1. Press Brake Godrej Make 160T capacity; 

2. Hydraulic press 300 MT capacity x 4 metric span; 

3. Shearing Machine Simtool Make (3M x 13mm thk.); 

4. Plate Blending Machine 25mm x 2.5 mtrs.; 

5. Plate Bending Machine 16 mm x 1.5 mtrs.; 

6. Cutting Machines –various capacities; 

7. Welding Machines –various processes and capacities; 

8. Pneumatic Compressor for Pneumatic Grinding and chipping; 

9. Diesel Generator Ashok Leyland with Kirloskar Alternator 150 KVA. 

34

Industrial blower testing facility 

Kilburn has a well equipped Industrial Blower Testing Facility equipped with electrical and control panel 

instruments to test the performance of the blowers. 

Pilot Plant & Test Center 

The Company has its own Pilot Plant & Test Centre for Research and Development wherein trial of 

products before designing the system/ equipment for various fabricated equipments/ systems is installed. 

Integrated computer system for MRP and CAD/CAM Activities 

QUALITY ASSURANCE 

Quality Assurance (QA) is the most active function at Kilburn. All equipments are subjected to rigorous 

inspection and quality control right from the receipt of raw material to despatch to customers' project site. 

Kilburn has been on the approved list of consultants and inspection agencies and is known for its 

stringent sense of quality. 

Kilburn has been working with Consultants and Inspection Agencies like Lloyds (LRIS), Det Norske 

Veritas (DNV), TUV , Engineers India Ltd. (EIL), KPG, H & G, UHDE, Toyo Engineering and several 

large business houses & organizations e.g. Oil and Natural Gas Corpoartion, IPCL, GACL, GAIL, 

CABOT (USA), etc. The QA department has arrangements for all types of non - destructive testing, 

including radiography (RT), Ultra Sonic Testing (UT), Magnetic Particle Test and Vibrations & Noise 

Measurement. Kilburn Engineering has implemented and maintained a Quality Management System for 

its entire operations as per the International Quality Management System. KEL had received its ISO- 

9001 Certification in 1998 and has thereafter upgraded its Quality Management System to the 

latest 2000 version. The ISO-9001 certification has been awarded by M/s. DET Norske Veritas (DNV) 

of Netherlands and accredited by the RVA. Kilburn manufactures High Pressure Vessels and has 

acquired "U-Stamp" for manufacture of coded pressure vessels. 

DESIGN AND ENGINEERING 

KEL employs engineers from various disciplines of engineering to design, develop and engineer 

equipment and systems to customer's specifications alongwith national and international standards. The 

designs and engineering confirm to local legal, industrial and allied regulators of the industries. Kilburn 

has a well equipped CAD center well connected on LAN for quick processing and access to its vast data 

bank of product tests, specifications, equipment design and field data. This enables to harness experience 

from past designs and installations and thereby provide continual improvement and optimum solutions. 

The Engineering & Production group is in close and constant touch with the Marketing group for quick 

updating of changes in customer specifications. 

MANUFCTURING PROCESS 

KEL manufactures various type of fabricated equipment which involves : 

(1) Material Testing 

Raw materials are purchased subject to Material Test Certificate or tested by KEL Quality Control 

Department before processing from the vendors. 

(2) Material Marking 

This activity is being carried out by fitter/ fabricators in shop under the supervision of Engineers 

wherein the raw materials viz. plates, rods and sheets are being marked as per fabrication drawing. 

(3) Material Cutting 

35

Materials have to be cut to the required shapes and sizes so as to make them fit for welding. 

Generally, oxy-acetylene gas is used for cutting carbon steel materials while the stainless steel 

materials are cut by plasma process. KEL has refurbished CNC plasma cutting machine which can 

cut both stainless steel and carbon steel. Rods, bars etc. of greater thickness are cut by mechanical 

hacksaw machine whereas those with lower thickness are cut by shearing machine. 

(4) Fit up 

Once the required materials are cut into the desired shapes the components are required to be fit up 

for welding. These activities are carried out by the fabricator /fitter under supervision of shop floor 

engineer. Quality Control Department checks the fit up before further processing the same. 

(5) Welding 

The welding engineers lay down the required procedure for welding. 

(6) Machining 

Machining of various components is carried out as per the drawings. However, machining of bigger 

components is not done by the company. 

(7) Assembly, Pressure Testing & Mechanical run trial 

Once the various components are duly welded and machined, assembly of the equipmwents are 

carried out as per the drawings. Pressure testing is carried out wherever required. Mechanical 

running trial for rotating equipment is as per the test requirements. 

RAW MATERIAL 

The major raw material used by the Company are Carbon Steel (plates and sheets), Stainless Steel (plates 

and sheets) and Special Alloying material (Hastalloy, Inconel plates and sheets). Major suppliers of these 

raw materials to the company are: 

Carbon Steel 

Stainless Steel 

Special alloy material 

Steel Authority of India 

Jindal Ltd. 

VDM Thyssen Krupp, Germany 

The Company produces specially designed machinery to suit the specific requirements of the client. This 

involves use of raw material meeting certain specifications and are not always available readily from the 

suppliers. This at times leads to a delay in procurement of raw material. This being a crucial element in 

the manufacturing process, the Company has installed a MRP software package to minimise such gaps in 

the supply chain. 

The steel industry, in general, is on the upswing, due to strong growth in demand propelled particularly 

by the demand for steel in China. The increased production of steel has in turn led to rise in prices of raw 

materials like scrap, coking coal and metallurgical coke. 

UTILITIES 

Power 

The unit has a connected load of 450 KVA (250 KVA on a non continuous basis). The Company has a 

present requirement of 350KVA. The estimated requirement after the capital expenditure will be 

450KVA, which has already been approved. 

Water 

Water is needed only for human consumption. The Company has adequate water supply and does not 

envisage any problem in the supply. 

36

Pollution Control 

The Company is engaged in the business of manufacturing capital goods. As per the management, the 

operations do not result in release of effluents either into water or air. The Company had received 

consent from Maharashtra Pollution Control Board (MPCB) for carrying on its business activities and the 

same was valid up 31/07/1998. Owing to the losses incurred, the Company had closed down its business 

operations at the Bhandup factory from 15/10/1999 till 31/12/2001. During this period and subsequently 

upto the year 2004, the Company had failed to renew the consent received from the MPCB. However, 

the Company has made an application to MPCB, vide its letter no. KEL/HRD/07/2004-05 dated 28th 

July, 2005, for renewal of the consent w.e.f. 01/08/1998 upto 31/07/2007 

MANPOWER 

The Company has a total strength of 95 personnel working at its Mumbai Office and 17 other personnel 

engaged in marketing primarily at Kolkatta and Delhi. The company also has a strength of 15 

contractual employees. The proposed construction of the factory shed may entail recruitment of 

additional labour, which the company proposes to recruit on a contract basis. In view of the increase in 

the number of orders to be implemented the company proposes to increase its managerial staff by 

recruiting atleast seven more persons. The Company has already taken steps for increasing its managerial 

staff. 

COLLABORATIONS 

The Company presently has the following collaborations: 

Name of the Collaborator Duration Type of Collaboration Consideration 

Nara Machinery Company 5 years w.e.f. 

Limited 

01/06/2005 

Carrier 

Equipment Inc. 

PRODUCTS 

Vibrating 

5 years w.e.f. 

3/10/2003 

Grant of Rights for: 

(i) Manufacture, use and 

sell the licensed products 

in the exclusive licensed 

territory and, 

( ii )Manufacture, use and 

sell in the non-exclusive 

licensed territory with 

prior permission from 

Nara 

Exclusive right to 

manufacture and sell the 

products under the 

Agreement within the 

licensed territories. 

Royalty: 

Internal Sales: 5% 

Exports: 8% 

Engineering Fee: 3% of 

all product lines. 

Royalty as agreed upon 

depending on the Net 

Selling Price. 

KEL manufactures a range of dryers used in various industry segments like petrochemicals,chemicals, 

tea, coconut, sugar and other FMCG manufacturers. Some of the products are detailed below: 

Solid Dryers 

• Rotary Dryers, Calciners, Klins & Coolers 

• Fluid Bed Dryers And Coolers. 

• Flash Dryers. 

• Paddle Dryers And Coolers. 

• Spray Dryers. 

• Conveyorised / Band / Tunnel Dryers. 

• Vibrating Fluid Bed Dryers And Coolers. 

Fabricated Equipments 

37

• Pressure Vessels. 

• Heat Exchangers. 

• Columns. 

• Reactors. 

• Silos. 

Heat Transfer Systems 

• Direct and Indirect Fired Heaters, Furnaces. 

• Finned Tube Heaters and Coolers. 

• Waste Incineration Systems. 

Material Handling Systems 

• Pneumatic Conveyors & Silos. 

• Vibratory Conveyors, Feeders & Spiral Elevators. 

Absorption Systems 

• Air / Gas / Liquid Drying Systems. 

• Solvent / Vapour Recovery Systems. 

• Catalytic Purifications Systems. 

Air & Dust Handling Systems 

• Industrial Centrifugal Fans. 

• Cyclones. 

• Bag Filters. 

Oil Field Systems 

• Utility Gas Drying Systems. 

• Gas Conditioning Systems. 

• Inlet Manifolds. 

• Test Separators. 

• Water Injection Manifolds. 

CLIENTELE 

Some of the clients serviced by KEL during the past three years are given below. 

NAME OF THE CLIENT 

Apar Industries Limited 

KRBL Ltd. 

Thai Carbon Black Public Co. Ltd. Thailand 

Finolex Industries Ltd. 

Tata Chemicals Ltd. 

Oriental Carbon Black Co. Ltd. 

SRF Ltd. 

Larsen & Toubro Ltd. 

Cabot India Ltd. 

India Petrochemicals Corporation Ltd. 

Saudi Basic Industries Ltd., Saudi Arabia 

Cabot Corporation, Ville Platte 

EQUIPMENT/ ITEM 

Band Dryer 

10. VFBD –Model 1 PD 15T 

a) Paddle Dryer 15T 

a) Pelletizers 

b) Rotary Dryer 

Fresh Air Heater 

Hydrator 

Band Dryer 

HF Rotary Kiln 

a) Instrument Utility Gas System 


c) Natural Gas Drying System 

d) IUG System for ONGC Offshore 

Main Unit Filter 

Upgradation of Existing Rotary 

Tube Banks for FBD 

Rotary Dryer 

38

Bertrams Chemical Plant Ltd. 

Cabot France 

Galaxy Surfactants Ltd. 

Navin Fluorine 

IPCL 

FEDO 

ONGC 

GNFC 

GSFC 

Samsung, Korea 

KHIC, Korea 

Formosa Plastics, Taiwan 

Gas Turbine Research Establishment 

(Defence Ministry, Govt. of India) 

Reliance Industries LTd. 

Futura Polymers/ PEPSI 

Visakhapatnam Steel Plant 

Nuclear Power Corpn. 

Purechem, Thailand 

Chemplast 

Brooke Bond 

Nara Machinery, Japan 

Baroda Rayon 

Hindustan Lever Ltd. 

Sanmar Groups 

SPIC 

Khamam Refinery 

Mistubishi Heavy Inds. Ltd. 

Nirma Ltd. 

Cochin Refinery Ltd./ UOP 

Hindustan Petroleum Corp. /UOP 

Jindal Praxair Oxygen Co. Ltd. 

Petroface International Ltd. 

Pushpa Polymers Pvt. :td. 

Continental Carbon India Ltd. 

J Ray McDermott Middle East Inc. 

Caustic Soda Prilling 

Rotary Dryer 

Conveyorised Dryer 

Rotary Kiln 

a) Rotary Dryers 

b) Gas /Liquid Dryers 

c) Pressure Vessels 

a) A) Ammonia Synthesis Dryer 

b) Rotary Dryers 

c) Heat Exchangers 

d) Pressure Vessels 

a) Oil Field Packages 

b) Pressure Vessels 

c) Heat Exchangers 

d) Tanks 

a) Rotary Dryer 

b) Flash Dryer 

Fluid Bed Dryers 

Oil Field Packages & Heat Exchangers 

Oil Field Packages & Heat Exchangers 

Rotary Drums 

Supersonic Test Tunnel with high 

pressure, high temperature, fast response 

Fired Heater along with control and 

measurement system 

Blowers 

Crystallizer 

a) Air Drying System 


a) Heavy Water Recovery System 

b) Cupro Nickel /SS Heat Exchangers 

Flash & Fluid Bed Dryer 

Fluid Bed Dryer & Silos 

Instant Coffee Plant consisting of 

Evaporators, Extractors, Spray Dryer 

etc. 

Crystallisers, Dryers, Pollution Control 

Systems 

Crystalliser & Dryer 

Spray Dryers, Flash Dryers 

Fluid Bed Dryers 

Drying Systems 

Pressure Vessels and Tanks 

Incinerator 

Rotary Calciners, Hydrators & Coolers 

Adsorbers & Surge Drum for PSA 

polybed unit (DHDS Proj.) 

Adsorbers & Surge Drum for PSA 

polybed unit (DHDS Proj.) 

High Pressure Oxygen & Nitrogen 

Receivers (cap. 200 x 100 m 3 ) 

Pressure Vessel (CS & SS Clad) 

Jacketed SS Clad Devolatizers 

Rotary Dryer 

IUG System for ONGC Offshore 

INNOVATIONS 

39

Kilburn’s R&D Test Centre is involved in an ongoing research and development activity and analyses 

the feedback from full-scale field models and from the customers. As a result of the efforts made by the 

R&D team the Company has developed the following new products: 

TEA DRYER 

The vibratory fluid bed dryer tea popularly known as VFBD and Vibro in the tea industry in the world is 

now available in its Phase-V version for all sizes. VFBD is now available for drying Orthodox Tea as 

well. This VFBD has very low consumption of power and fuel. Kilburns improved design of mixing 

chamber with the special feature of independent control flow of temperature zones contributes to uniform 

drying and maintaining of uniform temperature. The Stainless Steel Deflector Plate facilitates falling of 

fine dust back into drying chamber leaving no fly off resulting in clean and hygienic consumption. 

While the stainless steel construction involves a wet section for the dust extractor. The improved 

aerodynamic plenum chamber involves a uniform distribution of airflow across width resulting in 

uniform drying. The VFBD performance is enhanced due to the alarm guiding operator resulting in 

better instrumentation. 

ROTARY DRYER FOR CARBON BLACK 

Kilburn has supplied several rotary dryers for Carbon Black. These dryers have proved their superiority 

quality and operational performance. 

PADDY DRYER 

The procedure of milling rice involves cooking soaked paddy for gelatinisation of Starch. The available 

equipment does not have the thermal efficiency required for the process. The existing process leads to an 

increase in the moisture content of the soaked paddy, which has to be further processed by drying. This 

increases the additional heat load. 

Rice processing mills generally use a batch processing for soaking, steaming and drying to attain the 

required moisture level. The paddle cookers developed by KEL use the conductive type cooking system 

wherein the soaked paddy is indirectly uniformly heated for gelatinization of soaked paddy. The new 

process innovated helps in avoiding this increase in moisture content thereby increasing fuel efficiency of 

the process and also converts the process into a continuous process. As the paddle cookers work on a 

continuous basis, the batch system of steaming is avoided and the batch time reduces to 4 hours from the 

usual 9 to 10 hours. 

Vibrating system for drying of soaked steamed paddy works on the principle of fluidization; drying rate 

is high resulting in compact and highly efficient system. Vibrating type fluid bed can work very 

efficiently during constant rate drying for removal of surface moisture. Fluidized bed drying provides 

uniform moisture in partial dried paddy. Residence time in such dryers is very short (3 to 5 minutes) and 

can be well controlled. As the moisture handled is low evaporation load reduces in the dryers. 

The energy consumption per kilogram (expected utility consumption is in the range of 0.2 Kg. of steam/ 

kg of paddy) of water evaporated decreases with increasing moisture level of paddy and drying air 

temperature resulting in recycling of exhaust air. Corrosion problem due to high humidity can be 

avoided which occur usually at the initial stage of drying. 

SUGAR DRYER 

VIBRO-FLUDISED SYSTEM FOR DRYING AND COOLING OF SUGAR 

Based on the extensive research and development of the field data, KEL has developed a vibratory bed 

dryer, which undertakes uniform drying, and cooling of sugar crystals. The dryer mainly works on the 

principle of vibration wherein the wet sugar crystals are dried. Measured quantity of sugar crystals from 

centrifuge is fed into the drying chamber and hot air is passed underneath a perforated tray carrying sugar 

crystals. Wet sugar is effectively fluidized by a combination of hot air and vibrations. The drying/ 

cooling of sugar crystals is uniform because of excellent mixing of sugar crystals with fluidizing media. 

40

Generally, in a vibrating hopper dryer there is a horizontal sliding movement leading to fine generation 

and non-uniform drying of surgar crystals because of large bed heights and also results in slight brownish 

colour of the sugar crystals. Whereas in fludisation intense heat and mass transfer due to vibration 

movement provides for an extremely efficient removal of surface moisture and product heat. The gentle 

treatment to sugar results in maintaining the crystal structure and retains the crystals brightness. 

Moreover, the vibrating springs supported the plenum/ drying chamber are made of special steel which 

provides infinite life. As the vibratory fluid bed dryer/ cooler contact parts are in stainless steel 

construction results in hygienic construction. 

MARKET 

KEL primarily manufactures a large range of industrial dryers. There is no statistical data available on 

the demand for these products in India or abroad. However, being a part of the capital goods segment, 

one can expect the growth in demand to follow the overall industrial growth pattern. Led by a strong 

performance from the manufacturing sector, the overall industrial production (measured in terms of the 

Index of Industrial Production [IIP with base year 1993-94=100]) recorded a growth of 9.6 % during 

April-May 2005-06 compared to 7.9% recorded in April-May 2004-05. 

MARKETING 

Kilburn designs, manufactures and installs critical equipment for client industries in the chemical, petrochemical 

and food processing sectors. Equipment supplied by Kilburn includes various kinds of dryers 

including rotary dryers and calciners, heaters, coolers, fans and skid mounted packages. Kilburn also 

specializes in manufacture of equipment systems for the soda ash, caustic soda and PVC industries. 

Kilburn supplies on a routine basis dryers to the tea industry where it is a market leader in the domestic 

market and significant supplier for other tea producing countries. In the last two years, Kilburn has 

developed dryers for rice paddy processing and for drying of sugar, a diversification for the company. 

Kilburn has developed business relationships with some prominent international customers over the last 

three years in the carbon black industry and in particular as a supplier to Cabot Corporation of USA and 

the Aditya Birla Group. Kilburn is also in the process of developing supplier relationships with other 

international customers, which include Komline Sanderson, USA and GMF Gouda of Holland. Bertrams 

Chemical Plants and Equipment of Switzerland is also a customer for past many years. Domestically, 

Kilburn has been a supplier to prominent companies including Nirma Limited, Reliance Industries, 

Larsen & Toubro, SRF Limited, Apar Limited and others. 

Kilburn will continue to focus on these and other customers both in the overseas and domestic markets to 

consolidate long-term stable relationships. Kilburn is focusing on improvement of products to the Tea 

industry as well as in the diversification into rice paddy and sugar dryers. Overall, the Company’s 

objective is to obtain a balance between exports and domestic sales to ensure improving efficiencies and 

products concurrently enabling a reasonable growth pattern in the coming years. 

COMPETITION 

KEL manufactures equipment for diverse industries in chemical/ petrochemical and food processing. 

KEL’s range of products is diverse and authentic published data for existing and projected growth is not 

available. Company’s assessment is that worldwide it is a market leader in Tea Dryers and a significant 

player for Rotary Dryers in the Carbon Black industry. Domestically the company is a major supplier of 

dryers of various kinds. Competition is from smaller players in the business and none of the competitors 

have the range of products Kilburn manufactures, however these competitors are able to offer better 

prices. Some of the players in the capital goods segment who manufacture some of the products 

manufactured by Kilburn are listed below: 

Name of the Company 

L & T – Niro Ltd. 

Sulzer India Ltd. 

FFE Minerals India Pvt. Ltd 

Indcone Ltd. 

GEI Hamon 

Mojj Engineering System Ltd. 

Vikram Forging 

Products manufactured 

Rotary and Fluid Bed Drier 

Fluid Bed Drier 

Rotary Drier 

Air Drier 

Air Handling system (Fin fan cooler) 

Flash Drier, Spray Drier and paddle drier 

Tea Drier 

41

In the overseas market, competition for the company’s products is from Eastern Europe and China. 

KEY INDUSTRY REGULATIONS 

ASME Boiler & Pressure Vessel Code : 

The Code establishes rules of safety governing the design, fabrication and inspection of boilers and 

pressure vessels, and nuclear power plant components. The objective of the rules is to assure reasonably 

certain protection of life and property and to provide a margin for deterioration in service. ASME Code 

Symbol Stamps are used by Certificate Holders to indicate that stamped items conform to the latest 

edition of the ASME Boiler and Pressure Vessel Code. Utilization of the ASME Code Symbol Stamp is 

a means of complying with the laws and regulation in most of the US and Canada as well as other 

countries throughout the world. 

There are 17 Symbol Stamps associated with the non-nuclear sections of the Code for which Certificates 

of Authorisation are issued by ASME. The rules of the Code are revised annually in addenda and 

become mandatory six months after publication. Applicants are required to have a contract or agreement 

with a accredited Authorized Inspeciton Agency (AIA) under which the inspection services are to be 

furnished and which states the mutual responsibilities of both parties. 

Applicants are required to have and demonstrate a quality control system to establish that all code 

requirements including design, fabrication, examination (by the manufacturere, inspection by the AIA), 

pressure testing and certification will be met. The quality control system must be documented in a 

manual which supports understaning of the system. The “U-Stamp” granted to Pressure Vessels is valid 

for a period of 3 years from the date of the certificate. The renewal notices will be sent to the Certificate 

Holders six to eight months prior to the expiration date of the Certificate. 

RvA Accreditation Marks 

An accreditation mark is the symbol used by the accredited body to communicate its accredited status. 

An RvA accreditation mark is the combination af the RvA logo in association with an identification of 

the accredited area and the registration number of the accredited body concerned. The Regulation for 

Accreditation (RAC) is the basic document for all organizations that are accredited or wish to be 

accredited. It contains the rules and regulations applied by the RvA (Dutch Accreditation Council RvA) 

in addition to the accreditation criteria. 

Organisation that perform testing, calibration, inspection, certification, verification, attestation or 

organize proficiency testing may be accredited by RvA. After the accrediation has been granted, it shall 

be periodically reviewed with regard to it validity. To this end, the RvA normally carries out an annual 

survelliance assessment and re-assessment within four years. During the accreditation period, the scope 

of the accreditation may be changed. 

Various other General Laws & Regulations applicable to the industry : 

(1) The Industrial Disputes Act, 1947 

This Act makes provisions for investigation and settlement of industrial disputes and for providing 

certain safeguards to the workers. This Act applies to all establishments and undertakings carrying on 

any systematic activity by co-operation between an employer and his workmen for the production, 

supply or distribution of goods or services. 

(2) The Minimum Wages Act, 1948 

The wages of the workers in the un-organised sector of employment are primarily fixed under the 

Minimum Wages Act, 1948. Under the Act both Central and State governments are appropriate 

governments for fixation/ revision of minimum rates of wages in respect of the scheduled employments 

falling under their respective jurisdiction. The minimum Wages Act provides for periodic revision of 

minimum rates of wages. As per Section 22 of the Act, any person violating the provisions shall be 

42

punished with imprisonment which may extend to 6 months or fine which may extend upto Rs.500/- or 

both. 

(3) The Payment of Wages Act, 1936 

The Payment of Wages Act, 1936 was enacted to regulate the payment of wages to certain classes of 

persons employed in industry with the object to provide for a speedy and effective remedy to the 

employees arising out of illegal deductions or unjustified delay made in paying the wages to them. At 

present the Act applies only to those who are in receipt of wages whose average is below Rs 1,600 per 

month. The Central government is responsible for the administration of the Act in railways, mines, 

oilfields and air transport services, while State governments are responsible in factories and other 

industrial establishments. 

(4) The Contract Labour (Regulation and Abolition) Act, 1970 

The Contract Labour (Regulation and Abolition) Act, 1970 has been enacted to regulate the employment 

of contract labour in certain establishments and for matters connected therewith. The Act applies to every 

establishment in which 20 or more workmen are employed or were employed on any day on the 

preceding 12 months as contract labour and to every contractor who employs or who employed on any 

day of the preceding 12 months 20 or more workmen. Every such establishment is required to get itself 

registered under the Act. Principal Employer should maintain register of contractors in prescribed form. 

Control over contract labour will be exercised by ‘Appropriate Government’. Appropriate Government 

means Central Government in case of railways, docks, IFCI, ESIC, LIC, ONGC, UTI, Airport Authority, 

industry carried on by or under authority of Central Government. State Government in case of other 

industrial disputes 

(5) The Factories Act, 1948 

The Factories Act, 1948 is the principal legislation for regulating various aspects relating to safety, health 

and welfare of workers employed in factories. This Act is a Central enactment which aims at protecting 

workers employed in factories from industrial and occupational hazards. State governments and union 

territory administrations frame rules under the Act and enforce provisions of the Act and rules through 

their factory inspectorates. If the employment is less than these numbers, the unit gets covered under 

Shop & Establishment Act. Factory should be licensed / registered with Chief Inspector of Factories and 

the license / registration has to be renewed every year. 

(6) Workmen’s Compensation Act, 1923 

The Act provides for payment of compensation to workmen and their dependents in case of injury and 

accident (including certain occupational disease) arising out of and in the course of employment and 

resulting in disablement or death. The Act applies to railway servants and persons employed in any such 

capacity as is specified in Schedule II of the Act. Schedule II includes persons employed in factories, 

mines, plantations, mechanically propelled vehicles, construction works and certain other hazardous 

occupations. 

(7) The Payment of Gratuity Act, 1972 

The Payment of Gratuity Act, 1972 is applicable to factories, mines, oil fields, plantations, ports, 

railways, motor transport undertakings, companies, shops and other establishments. The Act provides for 

payment of gratuity at the rate of 15 days’ wages for each completed year of service subject to a 

maximum of Rs 3,50,000. In the case of seasonal establishment, gratuity is payable at the rate of seven 

days’ wages for each season. The Act does not affect the right of an employee to receive better terms of 

gratuity under any award or agreement or contract with the employer. 

(8) Employees’ State Insurance Act, 1948 

The Employees’ State Insurance Act is applicable in the first instance, to non-seasonal factories using 

power and employing 10 or more persons and non-power using factories employing 20 or more persons. 

Under the enabling provisions contained in the Act, the Act is being extended by the State governments 

to new classes of establishments, namely, shops, hotels, restaurants, cinemas, including preview theatres, 

road motor transport undertakings and newspaper establishments employing 20 or more persons. 

43

Employees working though contractor are also covered. It covers employees drawing wages not 

exceeding Rs 6,500 with effect from 1 January 1997. Employer’s contribution is 4.75% of total wage bill 

of all employees in respect of every wage period while the employee’s contribution is 1.75% of wages. 

The contribution has to be paid within 21 days from close of the month. It is payable by a challan in 

authorised bank. If the contribution is not paid in time, interest @ 12% is payable. ESIC authorities can 

impose ‘damages’ varying between 5% to 25% of arrears of contribution 

(9) Employees' Provident Fund and Miscellaneous Provisions Act 1952 

The Employees’ Provident Funds and Miscellaneous Provisions Act covers three schemes i.e. PF 

(Provident Fund scheme), FPF (Family Pension Fund scheme) and EDLI (Employees Deposit Linked 

Insurance scheme). The Act is applicable to Factories amongst various other establishments. Coverage 

under the Act is presently restricted to establishments employing 20 or more persons. It is further 

restricted to those drawing wages up to Rs 6,500 per month. Lower contribution in certain cases such as 

any establishment registered with Board for Industrial and Financial Reconstruction (BIFR) as a sick 

company and the same at the lower rate of contribution continues till its net worth is positive. Lower 

contribution for any other establishment which has accumulated loss equal to or more than its assets and 

has also suffered cash loss in last two years is also permissible. 

(10) Payment of Bonus Act, 1965 

The Act is applicable to (a) any factory employing 10 or more persons where any processing is carried 

out with aid of power (b) Other establishments (established for purpose of profit) employing 20 or more 

persons. Minimum bonus payable is 8.33% and maximum is 20%. Bonus is payable annually within 8 

months from close of accounting year. Bonus is payable to all employees whose salary or wages do not 

exceed Rs 3,500 per month provided they have worked for at least 30 days in the accounting year. 

However, for calculation of bonus, maximum salary of Rs 2,500 is considered. The Act does not apply 

to any institution established not for purposes of profit. 

44

VIII. HISTORY AND CORPORATE STRUCTURE OF THE COMPANY 

HISTORY AND MAJOR EVENTS 

Kilburn Engineering Ltd. (KEL), incorporated in Kolkata in the State of West Bengal on September 07, 

1987, acquired the erstwhile Industrial Machinery Division of Macneill & Magor Group (presently 

known as Williamson Magor & Co. Ltd.) as a going concern (with facilities at Bhandup, Mumbai), 

through a Scheme of Arrangement sanctioned by the Honourable Calcutta High Court. The acquisition 

was effective from April 01, 1989. 

KEL specializes in design, engineering, manufacture, project management and commissioning of turnkey 

packages of a variety of process plants, equipment and systems in the area of heat and mass transfer 

employed in core sector industries like Petrochemcials, Fertilisers, Chemicals, Refineries, Oil and Gas, 

Food Processing etc. 

KEL has entered into technical collaboration and alliance with Carrier Vibrating Equipment Inc. and 

Nara Machinery Company Limited. In addition to the above, the Company has already assimilated 

technology through various collaborations it had entered in the past. The company has over the years 

gained expertise in the design, engineering, manufacture and installation of various types of equipment 

and systems derived out of in-house R&D as well as through association with overseas collaborators. 

SLIDE IN PERFORMANCE 

The Company’s dealing with institutions /banks was satisfactory till the end of 1997/ early 1998. 

Subsequently, the Company witnessed a slide in sales coupled with an increase in input cost due to the 

following reasons: 

‣ Due to the overall recessionery trend in the economy (more particularly the Engineering 

Industry) the Company witnessed a decline in sales. 

‣ Due to an increase in the cost of salaries and wages, other manufacturing expenses and 

administrative and selling expenses (consequent to setting up of the new plant at Baroda) the 

Company had to bear an increase in input costs. 

With the increase in input costs on one hand and decrease in sales on the other the margins, both at gross 

and operating levels, eroded. The Company started defaulting in its payments to institutions and banks 

from the financial year 1998 –99 onwards. 

RESTRUCTING & REHABILITATION 

The Company approached the Board for Industrial and Financial Reconstruction (BIFR) in the year 

2000 and was declared sick by BIFR vide its Order dated November 10, 2000. IDBI was appointed as 

the Operating Agency under Section 17(3) of the Sick Industrial Companies (Special Provisions) Act, 

1985 (SICA) to formulate a rehabilitation proposal for the company. In its Order passed at the BIFR 

hearing held on December 31, 2002, the Bench also directed the company that the sum of Rs. 825 Lacs 

brought in by the promoters and shown as advance against share capital should be converted into equity/ 

preference shares. The rehabilitation scheme envisaged various fiscal reliefs and concessions from the 

lenders/ bankers and the implementation date was October 1, 2003. BIFR sanctioned said scheme in 

May 2004 leading to a delay of eight months in the implementation of the scheme. The rehabilitation 

scheme is presently under implementation. 

THE REHABILITATION SCHEME 

M/s. Kilburn Engineering Ltd. (KEL) filed a reference with BIFR on 14 th April, 2000 and was declared 

as a sick industrial company in terms of Section 3(1)(o) of the Sick Industrial Companies (Special 

Provisions) Act, 1985 (hereinafter referred to as the ‘Act’) vide its Order dated: 10 th November, 2000. 

BIFR in the hearing held on December 31, 2002 passed its order which included the following : 

(a) the sum of Rs. 825 Lacs brought in by the promoters and shown as advance against share capital 

to be converted into equity/ preference capital; 

45

(b) In case the company proposed to sell its Baroda unit, it shall settle VRS with both the Officers 

Associations as well as Workers’ Union; 

Restructuring proposed under the Rehabilitation Scheme is outlined below: 

The total amount due to banks and financial institutions at the time of the sanction of the Scheme were as 

follows: 

Particulars 

IDBI 

Term 

Loan 

Foreign 

Currency 

Loan 

Debenture 

Holders 

Working Capital 

Banks 

Principal 595.10 274.39 746 940 867 

Sundry 

Creditors 

As per the Scheme part of the above dues were to be paid as One Time Settlement (OTS) and the balance 

in installments upto the year 2007/2008. 

COST OF REHABILITATION SCHEME : 

The cost of proposed Rehabilitation Scheme aggregates Rs. 1838 Lacs as per details given below : 

(Rs. in Lacs) 

Particulars 

Amount 

Payment of allotment price to GIDC 23 

Payment of Notified area taxes etc. 50 

OTS of Institutional and Bank Dues 1615 

Upfront VRS payment to Mumbai (Bhandup) workers 100 

VRS payment to Vadodara (Baroda) workers 50 

Total 1838 

MEANS OF FINANCE : 

The proposed Rehabilitation Scheme which is estimated at Rs. 1838 Lacs as given above is proposed to 

be financed as under : 

(Rs. in Lacs) 

Particulars 

Amount 

Promoters contribution 100 

Sale proceeds from Baroda Unit 1100 

Sale of investments 78 

Release of margin money from Federal Bank 150 

Internal Accruals 415 

Total 1838 

PROGRESS OF IMPLEMENTATION OF THE SCHEME : 

(As on 30 th June, 2005) 

The time frame for completion of the scheme /incurring expenditure as per the sanctioned scheme is from 

October 2003 to September 2009.The progress in implementation of`the sanctioned scheme as on 30 th 

June, 2005 as per the report submitted by the Company to the OA is detailed below: 

Cost of the Project: 

Particulars 

Payment of 

allotment price 

to GIDC 

As per 

Scheme 

approved by 

BIFR 

Expenditure incurred 

During the 

half year 

ended June 

‘05 

Cumulative 

upto period 

ended June 

‘05 

Balance 

expenditure 

to be incurred 

(Rs. Lacs) 

Revised cost 

23 --- 24 --- 24 

46

Payment of 

50 --- 34 --- 34 

Notified area 

taxes etc. 

OTS of 

1615 --- 1615 --- 1615 

Institutional & 

Bank Dues 

Upfront VRS 

100 42 100 --- 100 

payment to 

Mumbai 

(Bhandup) 

Workers 

VRS payment 

50 -- 46 --- 46 

to Vadodara 

(Baroda) 

Workers 

Total 1838 42 1820 -- 1819 

Notes: 

a) Payment of Notified Area Taxes and other related payments amounted to Rs. 34 Lacs and no further 

amount is due. 

b) Company was to pay Rs. 1615 Lacs to institutions and Banks by 31 st March, 2004 under OTS. An 

amount of Rs. 1100 Lacs was paid out of the sales proceeds of the Baroda Factory prior to 

31.03.2004. Balance amount was progressively paid. As on 31.12.2004 the entire amount has been 

repaid along with interest thereon. Subsequent installments have since been paid regularly. 

c) Mumbai workers were to be paid Rs. 100 Lacs. As per revised agreement Rs. 100 Lacs has been 

paid. 

d) The compensation payable to Baroda Workmen worked out to Rs. 46 Lacs instead of Rs. 50 Lacs. 

e) Revised cost of the scheme is Rs. 1819 Lacs instead of Rs. 1838 Lacs in view of the saving of Rs. 19 

Lacs in payment of Notified Area Taxes and VRS of Baroda workers. 

TURN AROUND 

During FY 1999-2000 despite total income reducing by about 42% when compared to the previous year 

on a year-to-year basis the Company earned a gross profit of Rs. 101 Lacs as against gross loss in the 

previous year. However, it incurred operating loss of Rs. 1079 Lacs. 

During the year 2000-01 the Company’s operations were severely constrained due to lack of working 

capital facilities. However, during the year 2001-02 the Company’s operations improved with sales 

registering around 30% increase over the previous year. This was due to the fact that Tea auction prices 

which had fallen in the previous year improved resulting in improved domestic demand. 

During the year 2002-03 the Company registered a growth of nearly 29% in net sales over the previous 

year and reported a PDIDT of Rs. 391.59 Lacs compared to Rs. 309.89 Lacs in the previous year. 

During the year the Company successfully executed orders from reputed customers including Nuclear 

Power Corporation of India Ltd., J. Ray McDermott Middle East Inc., Abu Dhabi, Continental Carbon 

Ltd. and Nirma Ltd.. 

The year 2003-04 witnessed a growth of 21% in sales and services over the previous year. The company 

registered exports of 25.50% of the total sales and services. 

Over the period of three years ending on 30 th September, 2005 the Company witnessed a steady recovery 

and has reported an increase in turnover and operating profits. The EBIDTA has grown at a Compounded 

Annual Growth Rate of 41.01% over this period following the upcycle in the industry. 

The Company has witnessed a turnaround during the twelve months period ending on 30 th September, 

2005 and has reported a turnover of Rs. Rs. 4440 Lacs which is 79.52% higher than that reported for the 

FY 2004. The Company has also reported a Net Profit of Rs. 522.71 Lacs. 

Major events in the history of the Company are listed below: 

Year 

Event 

1987 Incorporated on 7 th September, in the State of W. Bengal, promoted by Macneil and 

47

Magor group (M&M). 

1989 With a view to manufacture drying system, pneumatic handling system, heat 

exchangers etc., the Company acquired the Kilburn division of M & M (viz., the 

entire industrial machinery factory of M & M situated at revenue villages of 

Bhandup and Nahur in Taluka Kurla) as a going concern by a Scheme of 

Arrangement sanctioned by the High Court of Calcutta with effect from 1 st April, 

1989. 

1990 The Company made its Initial Public Offer of 33,70,793 equity shares of Rs. 10/- per 

share at par. 

1990 With a view to substantial expansion of manufacturing operations from 1,200 TPA 

to 5,200 TPA, the Company acquired a plot at GIDC Industrial Estate at Por- 

Ramangamdi, on the outskirts of Baroda. 

1993 33,70,800 equity shares at a Premium of Rs. 25 per share were allotted on a rights 

basis to the existing shareholders in the ratio of 1:1. Another 88,200 shares were 

offered at the same premium to employees of the Company and employees and 

shareholders of promoter company namely, Williamson Magor & Co. Ltd. out of 

which only 6300 equity shares were subscribed to. The unsubscribe part was allowed 

to lapse. 

1995 The Company issued 14% Non-Convertible debentures aggregating Rs. 115 lakhs on 

private placement basis with UTI. 

The Company issued secured redeemable non-convertible debentures to UTI, LIC, 

GIC, NIC, and OIC aggregating to Rs. 500 Lacs. 

The Company issued secured redeemable debentures to IDBI Mutual Fund 

aggregating to Rs. 200 Lacs. 

2000 The Company was declared sick by BIFR. 

2001 The Companys ceased operations at Baroda and the factory was closed. 

2004 At the AGM of the company held on March 31, 2004, the members of the company 

have approved the Delisting of equity shares of the company from Vadodara Stock 

Exchange. Vadodara Stock Exchange Ltd. letter no. VSE/ED-AK/DELIST/2005, 

dated: 24 th March, 2005 has confirmed the delisting 

Rehabilitation scheme was sanctioned by BIFR in May. 

Disposed off the Baroda Unit pursuant to consent of shareholders in accordance with 

the Rehabilitation scheme approved. 

2005 The Company has reported a turnaround. As per the audited financials for the 12 

months period ended on 30 th September, 2005 the Compnay reported a Net Profit of 

Rs. 522.71 Lacs. 

MAIN OBJECTS OF THE COMPANY 

The Main Object of the Company is: 

• To carry on any business of designers, researchers, developers, manufactures, producers, 

assemblers, installers repairers, maintainers, re-conditioners, dealers, buyers, sellers, 

stockist, distributors, packers, importers, exporters, contractors, and sub-contractors of all 

kinds of Engineering items and in particular the following-: 

Equipment pertaining to Dryers, Mining Equipment, Rotodynamic pumps, Boiler 

Mountings, Mechanical Power transmission equipment, Turnkey plants for Core sector 

Industries, Spare Parts, Consumables and Accessories of any of the above raw materials. 

• To develop, process, design, invent, discover, manufacture, buy, assimilate, import, protect 

and renew, register, apply for grants and licences, or in any way acquire and sell, export, 

deal, trade, grant license for technical, industrial, scientific, commercial, procedural 

information, know how, process, system, patent, trade-mark, invention, model, design 

secret formula, license, technology or similar other property concerning, relating to and/or 

having a bearing upon Engineering products and its related fields and other products 

mentioned in clause 1 above and factories, mills ,workshops, plants, machinery, 

installations vehicles, and equipment of any kind specially used by or in the Engineering 

48

Subsidiary Companies 

Industry and general, administrative secretarial, financial, commercial, accounting, 

management, resource management, taxation, legal, technical , technical, Industrial, 

structural, quality and cost control, energy conservation, effluent and pollution, control and 

other knowledge , expertise, know-how, information and experience specially relating to 

the engineering Industry and to turn to accounts to rights and Information so acquired and 

take up jobs on turnkey contract basis or otherwise and to carry on the business of 

consultancy and service company to supply, provide, maintain and operate services to 

persons, firms, trusts, associations, government and local bodies, companies, corporate 

bodies and other organization specially in the field of engineering technology and Industry. 

The Company has no subsidiaries within the meaning of Section 4 of the Act. 

Shareholders Agreement 

The Company has not entered into any shareholder agreement till date. 

49

Subscription Agreement 

The Company has entered into the following subscription agreements in terms of the debentures issued: 

Type of 

Instrument 

and date of 

issue 

Privately 

Placed 

Secured 

Redeemable 

Debentures 

Privately 

Placed 

Secured 

Redeemable 

Non 

Convertible 

Debentures 


Agreement 

/Allotment 


Agreement: 

25/08/1995 


allotment 

25/08/1995 


Agreement: 

17/11/1995 


allotment 

21/11/1995 

Subscribers Amount Purpose of 

issue 

IDBI 

Mutual 

Fund 

LIC, UTI, 

GIC, NIC, 

OIC 

Rs. 200 

Lacs 

Face value 


debentures: 

Rs. 100/- 

Rs. 500 

Lacs 

Face value 


debentures: 

Rs. 100/- 

To finance 

Long Term 

Working 

Capital 

requirements 

To finance 

Long Term 

Working 

Capital 

requirements 

Interest and 

Redemption 

20% 

18 months 

from the date 

of allotment 

18.5% 

Three equal 

annual 

instalments 

commencing 

on expiry of 

4 th year from 

date of 

allotment 

ending on the 

sixth year 

from the date 

of allotment 

Conversion 

In case of 

default the 

entire 

outstanding 

debentures 

or 20% of 

the 

debentures 

whichever is 

less may be 

converted 

into equity 

shares of the 

Company at 

par. 

None 

The Company had defaulted in the redemption of the above debentures. As per the Rehabilitation 

Scheme sanctioned by the BIFR in May, 2004, the payment of the principal component of the said 

debentures was rescheduled and the interest waived. The Company is yet to pay an amount of Rs. 61.62 

Lacs as on 30 th September, 2005 towards redemption of the above debentures as per the Rehabilitation 

Scheme. 

STRATEGIC PARTNERS 

The Company does not have any strategic or financial partners. 

COLLABORATION 

Please refer to information given on page no. ____ of this Letter of Offer. 

50

IX. MANAGEMENT 

BOARD OF DIRECTORS 

Name, Age, Address, 

Qualification 

Mr. Deepak Khaitan 

51 years 

10, Queens Park, 

Kolkata – 700 019 

B.Com ( Hons), MBA 

(Geneva, Switzerland) 

Mr. V. R Sinha 

66 years 

Designation Other Directorships No. of equity shares 

held in the Kilburn 

Engineering Limited 

Chairman 

• Williamson Magor & 600 

Co. Ltd. 

• Eveready Industries 

India limited 

• B&A Limited 

• Babcock Borsing Ltd. 

• Flender Ltd. 

• Kilburn Chemicals 

Ltd. 

• McNally Bharat 

Engineering Co. Ltd. 

• Williamson Financial 

Services Ltd. 

• WPIL Ltd. 

• The Moran Tea Co. 

(India) Ltd. 

• McLeod Russel India 

Ltd. 

• Majuli Tea Holding 

Ltd., UK 

• Willianson Maknam 

Ltd., UK 

• Williamson Tea 

Assam Ltd. 

Managing Director Masi Consultancy ( P) - 

Ltd. 

N3 Pemino, Altamount 

Road, Mumbai –400 

026 

MSME ( USA), B. Sc. 

(Eng.) – BIT, India 

Mr. S. Mukherjee 

51 years 

Flat 2/2, 4 RA, Phase II, 

Sctor III, Purbachal, 

Salt Lake, Kolkata -700 

Director 

• WPIL Ltd. 


Ltd. 

• One Two Three 

India.com Ltd. 

- 

B.Com ( Hons), C.A. 

Mr. P. K. Khaitan 

53 years 

3, Queens Parl, Kolkata 

–700 019 

Attorney at Law 

Director 

• Cheviot Agro 

Industries Limited 

• Rungamattee Tea & 

Industries Ltd. 

• Shauma Vanijya 

Parishtha Ltd. 

• Williamson Magor & 

Co. Ltd. 

• Woodside Parks Ltd. 

- 

51

Mr. S. R Dasgupta 

60 years 

1, Peck Hay Road, 

# 12-03 

Singapore –228-305 

BA. (Economics) 

Mr. P. K . Mogal 

65 years 

C.M. Banaji Bldg., Flat 

1, Forjett St. X Lane, 

Gowalia Tank, Mumbai 

–400 036 

Director 

Director 

• Manjushree 

Plantations Ltd. 

• Khaitan & Co. 

Consulting Ltd. 

• Mysore Cements Ltd. 


Ltd. 

• Hamilton Research& 

Technology Pvt. Ltd. 

• Time Leverage 

Instruments P Ltd. 


Consulting Ltd. 


• R.V. investment & 

Dealers Ltd. 

• Williamson Tea 

Assam Ltd. 

• WPIL Limited 

• Overseas : 

• Waterbright Pte. Ltd., 

Singapore 

• JSP Nexus Pte. Ltd., 

Singapore 

• California Credit 

Ltd., Singapore 

• Trasnglobal Group, 

U.K. 

• Moran Plc. UK 

• Cosepa Fiscal 

Industries Pvt. 

Limited 

- 

400 

B. Sc. DBM 

Mr. A. U. Katra 

50 yrs. 

H-32, Maker Kundan 

Gardens, Juhu Road, 

Santacruz (West), 

Mumbai –400 049 

Nominee Director 

(IDBI Ltd.) 

• Suryavanshi Spinning 

mills Ltd. 

• SWIL Ltd. 

- 

Mr. Amritanshu 

Khaitan 

23 yrs. 

10 Queens Park, 

Kolkatta –700 019 

B.Com (Hons.) 

Director 

• Ichamati Investments 

Pvt. Ltd. 

• United Machines 

Co.Ltd. 

• Nitya Holdings & 

Properties Pvt. Ltd. 

• Queens Park Property 

Co. Ltd. 

- 

Mr. Deepak Khaitan, aged 51 years, is a Commerce Graduate and an MBA from Geneva (Switzerland). 

He has had in-depth exposure to and involvement in steering diverse business and gained considerable 

experience and expertise in management of Tea, Batteries and Enngineering Industries. Mr. Khaitan was 

52

a president of the Indian Chamber of Commerce Calcutta (ICC) in the year 1991 and he continues to be a 

committed member of ICC. He was also committee member of the Bengal Chamber of Commerce & 

Industry (BCCI), Confederation of Indian Industry (CII) and Federation of Indian Chambers of 

Commerce & Induatry (FICCI). 

Mr. V. R. Sinha, aged 66 years, has completed his MSME ( USA), and B. Sc. ( Eng.) – BIT, India. He 

has an experience of 38 years in Automotive and Engineering Industries in USA and in India. He has a 

wide ranging and top management experience in Finance, Manufacturing, Marketing and negotiating 

investments and licensing agreements involving US, European and Japanese corporations. He has been 

the CEO and Managing Director of standard Batteries Limited (1988-1997), Executive Vice President of 

Hindustan Motors Limited (1987-1988), Vice Chairman and Managing Director of Gabriel India Limited 

(1978-1987). Ford Motor Company in the United States earlier employed Mr. Sinha. 

He has a successful track record of managing manufacturing/marketing companies involving joint 

ventures with foreign collaborators. Mr. Sinha has knowledge and experience in all functional areas and 

also has a substantial experience in turnarounds in earlier assignments. 

Mr. S. Mukherjee, aged 51 years, is a Commerce Graduate and a Fellow of Chartered Accountants of 

India. He has an experience of 30 years in Accounts, Finance and General Management. He is presently 

the President, Corporate Affairs in the Williamsom Magor Group. Prior to this he was the President of 

M/s India Foils Ltd. and earlier managed its subsidiary M/s Light Metals Industries. 

Mr. P. K. Khaitan, 53 years, is an Attorney-at Law. He has an experience in handling corporate and 

commercial affairs and has dealt with joint ventures, foreign collaboration, Foreign Investment etc. He 

has handled various matters pertaining to litigations, arbitration, real estate, labour and Trusts. 

Mr. A. U. Katra, 50 years, is a B.Sc., BGL, CAIIB -I, MBA (Finance). He has experience of 27 years 

in IDBI LTd.in the fields of Project Finance, Indirect Finance and Rehabilitation. 

Mr. P. K. Mogal , aged 65 years, is a B. Sc. And has completed his DBM. He has more than 40 years of 

business experience in various positions in Marketing. 

Mr. S. R. Dasgupta, aged 60 years, has completed his B. A (Economics) . He has a vast experience in 

managing the business and affairs of large companies. He has held positions as Area Chairman of 

Eveready Battery Company for all Asia and Africa Operations (1999-99), the Vice President/ Managing 

Director of Eveready Singapore Pte. Ltd. (1996-98) and President Director- PT Eveready Company 

Indonesia, Jakarta (1986-95) 

Mr. Amritanshu Khaitan, aged 23 years, is a B.Com (Hons.) from St. Xaviers College, Calcutta. He 

has an experience of one year in General Administration. 

COMPENSATION TO MANAGING DIRECTOR 

The compensation paid to the Managing Director, Mr, V. R. Sinha as approved by the Central 

Government u/s 269,198(4)/309(3) and 637AA of the Companies Act, 1956 vide their letter dated 4 th 

July, 2005 is as detailed below: 

(a) 

(b) 

Total remuneration of Rs. 4,52,743/- (Rupees Four Lacs Fifty-two Thousand Seven Hundred 

and Forty-three Only) per month plus use of telephone and car for official use plus one time 

payment of reward of Rs. 10 Lacs for the year 2004-05. 

The appointee shall also be entitled to reimbursement of entertainment expenses actually and 

properly incurred in the course of legitimate business of the Company. A reasonable ceiling in 

such expenses, may, however, be fixed in this regards by the company. 

The above is based on the remuneration approved by the shareholders at the General Body Meeting held 

on 24 th March, 2005 and is as detailed below: 

Remuneration 

Salary Rs. 1,25,000 per month subject to increase of 10% 

per annum at the Boards Discretion 

53

Fixed Bonus 

Equivalent to 4 months basic salary in a year 

Additional Remuneration 

For achieving turnaround of the company a one time payment of Rs. 10 lacs payable during the year 

2004-05. 

Performance linked additional remuneration as given in the table below based on profits before tax of the 

financial year of the company commencing October 01, 2004 without deducting accumulated losses of 

the past years: 

Profit Before Tax for the year as per 

audited P&L Account without 

deducting past losses 

a) between Rs. 6 crores and Rs. 7 

crores 

b) between Rs. 7 crores and Rs.15 

crores 

Additional Remuneration 

payable pro rata to profit 

Rs. 6 Lacs to Rs. 7 Lacs 

Rs. 7 Lacs to Rs. 22 Lacs 

Perquisites 

Category A 

a) The Company shall provide free furnished accommodation and pay rent, electricity, gas and water 

charges subject to a sum not exceeding he annual basic salary. 

b) Medical Reimbursement for self and spouse at actual medical/hospitalization expenses and cost of 

medical insurance in India and/or abroad. 

c) Leave Travel concession for self and spouse by air or first class air conditioned fare by rail once on a 

year to and from any place in India, subject to a ceiling of one months basic salary. 

d) Fees of clubs subject to a maximum of two clubs. This will not include admission and life 

membership fee. 

e) Personal accident insurance premium not to exceed Rs. 6000 per annum. 

Category B 

a) Contribution to provident fund, superannuation fund or annuity fund to the extent these either singly 

or put together are not taxable under the Income Tax Act. 

i. Gratuity payable shall not exceed half months salary for each completed year of service. 

ii. Encashment of leave at the end of tenure as per the company’s rule. 

Category C 

Provision of car for use for the company’s business and telephone at residence will not be considered 

perquisites. Personal long distance calls on telephone and use of car for private purpose shall be billed by 

the company. 

The Managing Director shall also be entitled to reimbursement of entertainment expenses actually and 

properly incurred for the business of the company. 

The Managing Director shall be entitled to first class air or train fare whichever is convenient and 

expeditious to the company and he shall be entitled all expenses incurred by him during such travel 

within India for the business if the Company. 

In the event of his having travelled outside the Indian Union on behalf if the Company or on Company’s 

business he shall be entitled to all expenses incurred by him during such travels including first class 

return air passage. 

Minimum Remuneration 

In the event of loss or inadequacy of profits in any financial year, Managing Director will be paid the 

remuneration as above as minimum remuneration. 

54

CORPORATE GOVERNANCE 

The provisions of “Corporate Governance” as introduced vide Clause 49 (as amended till date) of the 

Listing Agreement entered into are applicable to the Company. The Company has complied with all the 

requirements of the said Corporate Governance clause. 

Details of committees formed under the provisions of corporate governance are as given under: 

Corporate Governance Committees 

Audit Committee 

The Company has been reviewing and making appropriate changes in the composition and working of 

the committee from time to time with a view to bring greater effectiveness in the committee and to 

comply with various requirements under the Companies Act, 1956 and clause 49 of the Listing 

Agreement. 

The current audit committee consists of : 

1. Mr. P.K. Mogal –Chairman 

2. Mr. S. Mukherjee 

3. Mr. A.U. Katra –IDBI Nominee 

All the members of the audit committee are non-executive directors with majority of them being 

independent. 

The terms of reference of the Audit Committee cover the matter specifed for Audit Committee under the 

Listing Agreement and the Companies (Amendment) Act, 2000 and is vested with the following powers: 

• To investigate any activity within its terms of reference. 

• To seek information from any employee. 

• To obtain outside legal or other professional advice. 

• To seek attendance of outsiders with relevant expertise, if considered necessary. 

• Review of Company’s financial reporting process. 

• Review of half yearly and annual financial statements, before submission to the Board. 

• Review with External Auditors, on areas of concern. 

• Review the adequacy of internal control systems. 

• To appoint internal auditors and fix their remuneration. 

• To review whistle blower policy & code of ethics and conduct. 

The Managing Director, General Manager (Finance), Statutory Auditors and the Internal Auditors are 

invitees to the Audit Committee Meetings. 

Remuneration Committee 

The Board of Directors has constituted a Remuneration Committee on April 26, 2004. The present 

committee comprising of Mr. P.K. Khaitan –Chairman, Mr. P.K. Mogal, and Mr. A.U. Katra, all 

independent Directors as members with the following terms of reference : 

(i) to determine and recommend to the Board of Directors the remuneration package of the 

Managing Director including periodical revisions therein, 

(ii) to approve, in the event of loss or inadequate profits in any year, the minimum 

remuneration package payable to the Managing Director and Whole Time Directors within 

the limits and subject to the parameters prescribed in Schedule XIII to the Companies Act, 

1956, 

(iii) to recommend sitting fees/remuneration payable to the Non-Executive Directors. 

Remuneration Policy : The remuneration of the Managing Director is determined by the board on the 

basis of recommendation of the Remuneration Committee, subject to the Shareholders’ approval, Central 

Government approvals and such other approvals as may be necessary. 

Shareholders /Investors Grievance Committee 

55

The Board of Director of Kilburn Engineering Limited constituted the shareholders’ and investors’ 

grievance committee on 30/12/2004 as under : 

Mr. P.K. Khaitan –Chairman 

Mr. P.K. Mogal, Non-Executive Independent Director 

Mr. V.R. Sinha, Managing Direcotr & Mr. A.U. Katra, IDBI Nominee 

Mr. B. N. Shah, Company Secretary was appointed as Compliance Officer w.e.f. 12/09/2005 to look into 

shareholders’ grievances on a day-to-day basis. 

The Committee looks into redressal of investors’ grievances, various matters relating to the transfer and 

transmission of shares, issue of duplicate share certificates, approving of split and consolidation requests, 

non-receit of annual report, matters relating to transfer and registration of shares, complaints of investors 

routed by SEBI/ Stock Exchanges, amounts transferable to Investor Education and Protection Fund, 

Secretarial Audit, as well as matters such as transfer, transmission, dematerialization and 

rematerialisation of shares. In addition, the committee also looks into matters which can facilitate better 

investor services and relations. 

All physical transfers as well as the requests for dematerialization/ rematerialisation are processed in 

fortnightly cycles. 

INTEREST OF DIRECTORS 

All the Directors may be deemed to be interested to the extent of the sitting fees and other remuneration 

for the services rendered and the reimbursement of expenses, if any, payable to them under the articles. 

The Directors may also be deemed to be interested to the extent of: 

• The shares, if any, held by them or by the relatives or by firms or companies of which any of 

them is a partner and a Director/ Member as the case may be. 

• The shares if any, out of the present Issue that may be subscribed for and allotted to them or 

their relatives or any Company in which they are Directors / members of firms in which they are 

partners. 

Other than the above, the directors do not have any other interest in the Company. 

CHANGE IN BOARD OF DIRECTORS 

The changes in the Board of Directors in the past three years are as follows: 

Name of the Director Date of Appointment Date of Resignation Reason 

Mr. A.U. Katra 19.02.2004 -- Nominee Director 

Mrs. B.K. Mandal 31.01.2000 19.2.2004 Nominee Director 

Mr.Y.Nara 30.07.1990 16.07.2004 Due to preoccupation 

Mr. Amritanshu 

Khaitan 

27.05.2005 -- To broad base 

Mr. S. R. Dasgupta 01.11.2004 -- To broad base 

Mr. P. K. Mogal 30.04.2002 -- To broad base 

Mr. Deepak Khaitan 16.07.2004 -- To broad base 

Mr. S. Mukherjee 16.07.2004 -- To broad base 

Mr. P. K. Khaitan 01.11.2004 -- To broad base 

56

KEY MANAGERIAL PERSONNEL 

The total strength of the organization is 82. 

Name Designation Educational 

Qualification 

MARKETING & HRD DEPARTMENT 

Mr. A. D. Korgaonkar Vice President 

- Marketing 

Mr. S. H. Palkar 

General BE (Mech. 

Manager – Engg.) 

Marketing and 

Proposals 

Experience 

(in years) 

Present Responsibilities 

B. Sc. 40 Heading HR Department, 

Overall 

Administration, Commercial 

aspects of Transportation of 

Finished Goods. 

24 Heading Proposals Department 

for Projects, Coordinating 

Purchase functions related with 

Procurement of Project items. 

Criterion of 

Qualification 

Graduate and 

experience 

in Marketing & General 

Management. 

Experience 

in HRD functions. 

Graduate in Engineering 

& Experience in Design 

& 

Estimation. 

Mr. D. Banerjee 

General 

Manager – 

Marketing 

(VFBD) & 

Head ( ERO ) 

B. Ch. E., 

AMIE 

20 Overall marketing & VFBD 

marketing in India and 

abroad. Supervision of 

activities of Service 

Engineers. 

Experience in 

Marketing 

& Service Management 

PROJECTS & ENGINEERING DEPARTMENT 

Mr. M. L. Munvar Sr. General B.Chem.(Engg. 26 Process Design of various 

Manager 

(Project & 

Engineering) 

) 

DBM 

Drying Systems 

& Offshore Plants. Head of the 

Department 

Experience in 

Designing of various 

Process 

Systems & 

Commissioning of 

Plants 

QAC DEPARTMENT 

Mr. V. K. Srivastava Dy. Gen. 

Manager – 

QAC 

B. Tech. 

(Mech. 

Engg.) 

25 Heading QAC Department Experience in QA / QC 

PRODUCTION DEPARTMENT 

Mr. D. P. 

Sarbadhikari 

Mr. R. K. Damle 

Vice 

President 

- 

Manufacturing 

General 

Manager 

-Production 

B. Sc. Dip. 

(E&M) 

33 Head of Department Experience in QAC / 

Production / Planning & 

Sub-contracting 

activities. Coordination 

with 

all Departments. 

DBM 31 Supervision of overall 

Production activities 

Experience in 

Production 

/ Planning & Subcontracting 

activities. 

Coordination with 

all Departments. 

R&D DEPARTMENT 

Mr. P. K. Arora Sr. General 

Manager 

(R&D) 

M.Tech 26 Head of Department Experience in 

Designing of various 

Drying, 

Pneumatic Systems, 

57

Fans, etc. 

ACCOUNTS DEPARTMENT 

Mr. A. Suresh General 

Manager – 

Finance 

ACA, ICWA 26 Head of Finance & 

Accounts Department 

Experience in Finance 

& Account activities 

SECRETARIAL DEPARTMENT 

Mr. B.N. Shah Company 

Secretary 

A.C.S., 

I.C.W.A. 

30 Heading the Secretarial Dept., & 

responsible for all compliances. 

Experience in Costing, 

Banking and Secretarial 

activities. 

There has been no major change in the Key Managerial Personnel during the past three years. 

Changes in Key Managerial Personnel : 

Name Designation Date of Joining Date of Leaving Reason 

Mr. Rajesh S. Company 16.8.2004 12.09.2005 Resignation 

Mittal 

Secretary 

Mr. Bhupendra 

Shah 

Company 

Secretary 

12.09.2005 ---- Appointment 

Employees : 

Summary of manpower strength as on date is as under : 

Division Managerial Executives Suprs. & 

Clerical 

Skilled Un-skilled Total 

Total 78 17 None None None None 

The Company has not issued any Employee Stock Option Scheme to its employees till date. 

58

X. PROMOTERS 

Kilburn Engineering Limited belongs to the Williamson Magor Group and has been promoted by 

Williamson Magor & Co. Ltd. 

WILLIAMSON MAGOR & CO. LTD. 

Date of Incorporation: 10 th March, 1949 

Registered Office: Four Mangoe Lane, Surendra Mohan Ghosh Sarani, Kolkata – 700 001 

Board of Directors: 

Shri B.M. Khaitan 

Shri D. Khaitan 

Shri A. Khaitan 

Shri R.S. Jhawar 

Shri T.R. Swaminathan 

Shri Padam Kr. Khaitan 

Shri D.K. Pal 

Dr. R. Srinivasan 

Shri G. Momen 

Chairman 

Vice-Chairman 

Managing Director 

Whole Time Director 

Director 

Director 

Director ( nominee-ICICI Bank Ltd.) 

Director 

Director 

Permanent Account Number 

AAACW2369P 

Registration Number 21-17715 

Registrar of Company 

West Bengal, Kolkata 

(The above details have been submitted to the stock exchanges where the equity shares of Kilburn are 

listed) 

Williamson Magor & Co. Ltd. was incorporated as Macneill & Barry Limited on 10 th March, 1949 under 

the Companies Act, 1913. The name of the company was changed to Macneill & Magor Ltd. on 19 th 

April, 1975 and further changed to its present name w.e.f. 7 th May, 1992. The Company has been 

promoted by Mr. B. M. Khaitan. 

The Company is registered as a Non Banking Finance Company and received registration no. N- 

05.05534, dated 31.03.2003 from the RBI. The Company is engaged in financial services likeinvestment 

& lending. 

The equity shares of the company are listed on the BSE, The National Stock Exchange (NSE), The 

Calcutta Stock Exchange Association Limited and the Gauhati Stock Exchange Limited. The equity 

shares are frequently traded on the BSE and the NSE. The Highest and lowest market price of the equity 

shares on the BSE and NSE during the past six months is given below: 

On BSE 

Month Highest ( Rs.) Lowest ( Rs.) 

May, 2005 38.65 26.00 

June, 2005 47.75 32.15 

July, 2005 56.80 38.00 

August, 2005 59.00 47.40 

September, 2005 66.80 48.50 

October, 2005 53.55 35.00 

On NSE 


May, 2005 38.35 26.55 

June, 2005 47.80 31.95 

July, 2005 56.95 38.40 

August, 2005 59.00 46.75 

September, 2005 66.55 48.65 

October, 2005 53.40 35.35 

59

The Shareholding Pattern of the Company is as detailed below: 

S. 

No. 

Category 

No. of Shares 

Held 

% 

Shareholding 

A. Promoters Holding 

Indian Promoters 8067629 73.63 

B. Non Promoter Holding 

Institutional Investors 

a. Mutual Funds and UTI - - 

b. Banks, Financial 

938380 8.57 

Institutions, Insurance 

Companies 

c. FIIs - - 

Sub Total 938380 8.57 

Others 



c. NRIs/OCBs 66775 0.61 

d. Foreign Nationals 32120 0.29 

Sub Total 1950351 17.80 

Total 10956360 100.00 

Brief audited financials of the Company for the past three years are as follows: 

(Rs. in Lacs) 

Particulars as on 31 st March 2003 2004 2005 

Total Income 953.75 1792.03 9334.04 

Profit/(Loss) after Tax (PAT) (8469.77) (2018.90) 4861.53 

Equity Capital 1095.64 1095.64 1095.64 

Reserves excluding Revaluation Reserve 2510.45 491.55 5353.08 

Book value per Share (Rs.) 32.91 13.77 58.86 

Earning per Share (Rs.) (47.64) (18.43) 44.37 

Dividend ( %) - - - 

The company is not a sick company within the meaning of the Sick Industrial Companies (Special 

Provisions) Act, 1995. 

There has been no change in the capital structure and the Company has not made an issue of equity 

shares during the past three years. 

For details on litigations and disputes pending against the Company and defaults made by the Company 

please refer to the paragraph under “Litigations and Disputes” on page no. ______ of this Letter of Offer. 

COMMON PURSUITS 

There are no common pursuits between the promoter and Kilburn. 

INTEREST OF PROMOTER 

Please refer to para under “ Interest of Promoters/ Directors” on page no. ____ of this Letter of Offer. 

RELATED PARTY TRANSACTIONS 

Please refer to para under “ Related Party Transactions” on page no. ____ of this Letter of Offer. 

CURRENCY OF PRESENTATION 

All financial figures have been disclosed in Rupees in Lacs. 

DIVIDEND POLICY 

The Company has not declared dividend during the past five years. 

60

FINANCIAL INFORMATION 

AUDITOR’S REPORT 

Ref: 633 / 2005-06 

To 

The Board of Directors 

Kilburn Engineering Limited 

Subhash Nagar, Bhandup, 

MUMBAI – 400 078 

Dear Sirs 

We have examined the attached “Statement of Assets and Liabilities, as restated” as at September 30, 

2001, 2002, 2003, 2004 and 2005, and the “Statement of Profits and Losses, as restated” for each of the 

years ended on those dates (collectively “the Summary Statements”) of Kilburn Engineering Limited 

(“the Company”) for the purpose of proposed rights issue of its equity shares as approved at the Extra 

Ordinary General Meeting held on 12 th September, 2005. 

The Summary Statements are prepared by the Company and are based on the financial statements for the 

respective years audited by us. 

In accordance with the requirements of Paragraph B (1) of Part II of Schedule II to the Companies Act, 

1956 (“the Act”), the Securities and Exchange Board of India (Disclosure and Investor Protection) 

Guidelines, 2000 and amendments thereto (“SEBI Guidelines”) and based on our examination of the 

Summary Statements, we report that: 

a. The restated profits/(losses) of the Company for the respective years are as set out in Annexure I to 

this report. This profits/(losses) have been arrived at after charging all expenses including 

depreciation and after making such adjustments and regroupings as in our opinion are appropriate 

and more fully described in the notes appearing in Annexure III to this report. 

b. The restated assets and liabilities of the Company as at the end of respective years are as set out in 

Annexure II to this report after making such adjustments and regroupings as in our opinion are 

appropriate and more fully described in the notes appearing in Annexure III to this report. 

c. The aforesaid Summary Statements read with the significant accounting policies and notes thereto 

(Annexure III), have been prepared in conformity with the accounting principles generally accepted 

in India and in accordance with Part II of Schedule II of the Act and the SEBI Guidelines. 

Other financial information 

d. We have examined the following financial information relating to the Company as approved by the 

Board of Directors for the purpose of inclusion in the offer document for the Rights Issue of equity 

shares: 

i. Accounting Ratios as appearing in Annexure A to this report. 

ii. 

iii. 

iv. 

Capitalisation Statement as appearing in Annexure B to this report. 

Details of Other Income as appearing in Annexure C to this report. 

Statement of Sundry Debtors as appearing in Annexure D to this report. 

v. Statement of Loans & Advances as appearing in Annexure E to this report. 

vi. 

vii. 

Market value of Quoted Investments as appearing in Annexure F to this report. 

Recasted Cash Flow Statement as appearing in Annexure G to this report. 

61

In our opinion, the other financial information mentioned above has been prepared in accordance with 

Part II of Schedule II of the Act and SEBI Guidelines. 

This report is intended solely for your information and for inclusion in the offer document for the 

proposed public offer for equity shares of the Company and is not to be used, referred to or distributed 

for any other purpose without our written consent. 

Yours faithfully 

For Deloitte Haskins & Sells. 

Chartered Accountants 

Sd/- 

R. D. Kamat 

Partner 

Membership No. 36822 

Place: Baroda 

Dated: 01/11/2005 

62

ANNEXURE 1 

STATEMENT OF PROFITS & LOSSES AS RESTATED 

Financial Year ended 30th September 

(Rs.in lacs) 

Year ended on 

30 th September 

Particulars 2001 2002 2003 2004 2005 

Income 

Sales : 


Company 1,219.67 1,586.73 2,048.80 2,473.70 4,440.82 

Of products traded in by the Company - - - - - 

Total 1,219.67 1,586.73 2,048.80 2,473.70 4,440.82 

Other Income 514.06 369.37 118.58 84.52 66.45 

Increase / (Decrease) in inventories (95.29) 219.06 (104.22) 193.16 (81.50) 

1,638.44 2,175.16 2,063.16 2,751.38 4,425.77 

Expenditure 

Raw Materials Consumed 606.20 879.83 873.35 1,422.42 2,402.36 

Staff Costs 432.76 335.38 210.23 188.82 272.35 

Other manufacturing Expenses 143.38 143.71 225.16 359.04 489.81 

Administration Expenses 408.43 360.14 312.45 318.35 397.28 

Selling & Distribution Expenses 83.67 45.33 44.51 106.07 183.98 

Other Expenses 76.25 46.50 - 15.60 10.74 

Interest 995.90 1,159.26 1,494.38 241.49 198.76 

Depreciation 199.34 161.31 141.93 41.48 26.42 


value of Investment 24.00 (34.20) (25.50) 142.13 (87.43) 


extraordinary Items (1,331.49) (956.30) (1,213.35) (84.02) 531.50 


Income/(Expenses) (31.68) (58.59) (103.68) 4,178.05 - 

Less: Tax Provision/( Refund) - - (25.77) - 8.79 


statements of accounts (1,363.17) (1,014.89) (1,291.26) 4,094.03 522.71 




Annexure III) 

717.42 947.54 911.87 (4,147.36) - 

Restated Profit & Loss (645.75) (67.35) (379.39) (53.33) 522.71 

Balance brought forward (4,095.07) (4,740.82) (4,808.17) (5,187.56) (5,219.22) 

Adjustment prior to 1999-2000 - - - - - 

Restated Profit /(Loss) for the year (645.75) (67.35) (379.39) (53.33) 522.71 

Less: Transfer from General Reserve/ 

DRR - - - 21.67 99.21 

Balance carried forward (4,740.82) (4,808.17) (5,187.56) (5,219.22) (4,597.30) 

63

Particulars 

STATEMENT OF ASSETS AND LIABILITIES, AS RESTATED 

As at September' 30 

(Rs.in lacs) 

2001 2002 2003 2004 2005 

A Fixed Assets 

Gross Block 3198.76 3185.89 3188.89 677.16 718.05 

Less: Depreciation 1273.58 1422.80 1564.73 468.91 495.32 

Net Block 1925.18 1763.09 1624.16 208.25 222.73 

Capital Work in progress - - - - 0.73 

Less: Revaluation Adjustment [Refer 

Note 2 (A)(v) of Annexure III] - - - - - 

Net Block after adjustment of 

Revaluation Reserve 

1925.18 1763.09 1246.76 208.25 

223.46 

B Investments 43.38 77.2 109.6 37.37 124.80 

C 

Current Assets, Loans & 

Advances: 

Inventories 256.73 489.79 424.33 509.27 455.26 

Sundry Debtors 203.47 197.71 369.08 508.97 607.64 

Cash & Bank Balances 175.02 219.6 248.95 192.54 138.09 

Loans & Advances 221.85 143.60 157.88 157.24 199.42 

Other Current Assets - - - - - 

D Liabilities and Provisions: 

Secured Loans 2706.58 2662.78 2719.24 1159.95 804.78 

Unsecured Loans 1060.82 1009.22 1052.39 1283.60 1328.63 

Current Liabilities and Provisions 1795.11 1797.04 1588.48 1890.07 1812.54 

E Networth 

F Represented by 

1. a. Share Capital 674.79 674.79 674.79 674.79 674.79 

b. Advance against Share Capital 825.00 825.00 825.00 825.00 825.00 

2. Reserves 1021.11 1021.11 1021.11 999.44 900.23 

3. Profit & Loss Account (4740.82) (4808.17) (5187.56) (5219.22) (4597.30) 

Less: Revaluation Reserves - - - - - 

Reserves (Net of Revaluation 

Reserves) (3719.71) (3787.06) (4166.45) (4219.78) (3697.07) 

Less: Misc. Expenditure 516.96 290.78 136.87 - - 

Networth (2736.88) (2578.05) (2803.53) (2719.99) (2197.28) 

64

ANNEXURE III 

SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON SUMMARY STATEMENTS 

1. SIGNIFICANT ACCOUNTING POLICIES 

A) Fixed Assets 

Fixed Assets are recorded at cost as increased or reduced due to exchange fluctuations arising 

from foreign currency liabilities relating to their acquisition. The cost of fixed assets include all 

costs incidental to acquisition, commissioning and related internal costs and interest paid on 

funds borrowed to finance the fixed assets until the assets are ready for commercial use. 

B) Depreciation 

Depreciation is calculated on the assets on straight-line method at the rates in the manner 

specified in schedule XIV of Companies Act, 1956. Assets costing Rs.5, 000/- or less are fully 

depreciated in the year of acquisition. The cost of leasehold land is amortised over lease period. 

Depreciation on addition to the assets on account of exchange fluctuations is provided on 

balance life of assets. 

C) Inventories 

Raw Materials/ Components are valued at cost on weighted average cost basis. Stores and spare 

parts are valued at cost on FIFO basis. Finished goods and semi-finished goods are valued at 

lower of cost or net realizable value. Finished goods value includes excise duty. Provision is 

made for obsolete, slow moving and defective stocks, wherever necessary. 

D) 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. 

E) 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 converted at the exchange rates prevailing on that date. Exchange differences other than 

those relating to acquisition of fixed assets are recognized in the profit and loss account. 

Exchange differences relating to acquisition of fixed assets are adjusted to the carrying value of 

such fixed assets. 

F) Revenue Recognition 

i) Sales are net of returns, discount and sales tax/ service tax. 

ii) In the case of major site execution contracts undertaken by the Company, the revenue is 

accounted on percentage of completion basis. 

G) Retirement Benefits 

i) Contribution towards gratuity and superannuation liability (defined contribution plans) are 

funded with Life Insurance Corporation of India. Premium paid/ payable towards the same 

determined on actuarial basis is charged to the profit and loss account. 

ii) Provision for Leave Encashment on retirement is determined and accrued on the basis of 

actuarial valuation. 

H) Provision, Contingent Liabilities and Contingent Assets: 

Provisions involving substantial degree of estimation in measurement are recognized when there 

is a present obligation as a result of past events and it is probable that there will be an outflow of 

resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent 

assets are neither recognised nor disclosed in the financial statements. 

65

Notes to Summary Statements 

2. Impact on account of changes in accounting policies and prior period Adjustments 

Particulars 

Financial 

Year ended 

30th 

September 

2001 

Financial 

Year ended 

30th 

September 

2002 

Financial 

Year ended 

30th 

September 

2003 

Financial 

Year ended 

30th 

September 

2004 

Rs. in lacs 

Financial 

Year ended 

30th 

September 

2005 

Profit/ ( Loss) after tax (1363.17) (1014.89) (1291.26) 4094.03 522.71 

Adjustments on account of 

changes in Accounting 

Policies and Prior Period 

Items 

Diminution in value of 

Investments (10.15) (0.38) 6.90 174.90 

(Refer Note A i) 

Refund of Sales 

Tax/Income Tax - (27.28) (25.77) (12.63) - 

(Refer Note A ii) 

Prior Period Items 38.58 41.84 (40.08) 25.20 - 

(Refer Note A(iii)(a)) 

Other Prior Period items (258.73) (190.26) 220.00 

(Refer Note A(iii)(b)) 

Waiver of Interest 947.72 1,123.62 1,348.22 (4,932.23) - 

(Refer Note A iv) 

Reduction in reserves- 

Assets at Net 

Realisable Value (377.40) 377.40 

(Refer Note A v) 

Total of Adjustments 717.42 947.54 911.87 (4,147.36) - 

Adjusted Profit & Loss (645.75) (67.35) (379.39) (53.33) 522.71 

A. Notes on Adjustments: 

i. Provision for diminution in the value of investments in equity shares, which in the opinion of 

the management was, in the relevant years considered as temporary and had been a matter of 

audit qualification then, has been restated in respective years. 

ii. Income Tax /Sales Tax Refunds and interest thereon have been reallocated to respective years, 

to which it pertains to. 

iii. Prior Period Adjustments as per SEBI guidelines: 

a. Income and Expenses reported as Prior Period items/adjustments in each year have been 

reallocated to respective years (except for non-adjustments as referred at Note No. B (iii)) 

66

. Significant write backs/provisions have been reallocated to respective years to which they 

pertain. 

iv. In the year 2003-2004, the company obtained a waiver of interest on various loans, amounting 

to Rs. 4971.11 Lacs, under the BIFR scheme. While the reversal of interest provided in the 

books was accounted as extra-ordinary income in that year, the waiver of interest, pertaining to 

years prior to 2003-04 has now been given effect in the respective years for the purpose of 

restated accounts. 

v. Accounts for the year 2002-2003 carried an audit qualification for non-compliance of AS-10, in 

respect of assets retired (Baroda unit) from active use and held for disposal not being shown as 

such, at Net Realizable value. These assets are now restated at Net Realizable value considering 

the actual sales proceeds realized in the year 2003-04. 

vi. The Company has brought forward losses and unabsorbed depreciation under Income Tax Law 

estimated at Rs. 3319 lacs as at 30th September 2005. No Deferred Tax Asset has been 

recognised in the accounts in view of the requirement of virtual certainty supported by 

convincing evidence as stipulated by the Accounting Standard AS 22 on Accounting for Taxes 

on Income. As no tax was payable in any of these years no Tax Shelter Statement has been 

given as a part of these accounts. 

vii. The company did not declare dividend in any of the reported years and therefore no separate 

statement/Annexure has been given as a part of these Accounts. 

B. Notes on Non Adjustments/Others: 

i. Audit report for the years 1999-2000 and 2000-2001 included qualifications for 

advances/sundry creditors being subject to confirmation and reconciliation. Necessary 

adjustments had been made in the accounts between the years 2000-01 and 2002-03 based on 

the management’s reviews. Of these, only significant adjustments have been considered for 

restatement [Refer note A (3) (b)]. No adjustments have been made for other amounts in the 

absence of definite and verifiable trail. 

ii. Over due/unconfirmed/unreconciled debts was a matter of audit qualification in the years 2000- 

2001 to 2002-2003. The recoverability of these debts had been reviewed by the management 

from time to time and adequate provision for debts considered doubtful has been made in the 

books by the year 2003-04. Therefore, no restatement is considered necessary in respect of these 

qualifications. 

iii. During the year ended 30th September 2004, arrears of Rs. 33.56 lacs towards Notified Area 

Tax was accounted as Prior Period Expenses. However, due to non availability of definite and 

verifiable trail, as to the year(s) to which such expenses pertains, no adjustment for the said 

amount is made in the restated accounts. 

iv. The Company was declared a Sick Company under the meaning of Section 3(1)(o) of the Sick 

Industrial Companies (Special Provisions) Act, 1985 by the Board of Industrial and Financial 

Reconstruction(BIFR) vide order dated 10th November 2000. The audit reports upto 2002-03 

carried a qualification on account of financial statements being presented on “going concern” 

basis despite the erosion in the net worth. 

The rehabilitation scheme sanctioned by BIFR on 14th May 2004 involved inter-alia: 

• Appointment of IDBI as the Monitoring Agency 

• Release of Funds from Sale of Baroda Plant and disposal of Investments to repay secured 

lenders. 

• Induction of Funds by Promoters. 

• Reschedulement of Dues to Banks/Institutions 

• Waiver of Interest Payable to Lenders in arrears up to 31st March 2003/2004. 

Pursuant to the consent of BIFR and the shareholders (Under section 293 (1) (a) of the 

Companies Act 1956 at the Extraordinary General Meeting held on 27th October, 2003), the 

67

Company sold off its Baroda Plant vide sale deed dated 23rd February, 2004. A Sale proceeds 

of Rs.1100 Lacs is being utilized for repayment of the Secured Lenders. 

In view of the substantial reliefs/concessions in the sanctioned scheme and buoyancy in the 

demand for the company’s products, the management is positive about the company’s 

continuance as a “Going Concern” in the foreseeable future and hence, despite accumulated 

losses and the disposal of Baroda Plant, the Financial Statements continue to be prepared on a 

going concern basis. 

3. CONTINGENT LIABILITIES 

Particulars 

As at Sept. 30 

2001 2002 2003 2004 2005 

Contingent Liabilities not provided 

for : 

a) Demand raised by ESIC 0.80 0.80 0.80 0.80 0.80 

b) Demand raised by 

14.74 16.74 23.74 23.74 0.00 

Sales Tax Authorities 

c) Liability in respect of Sales Tax 191.09 190.06 125.78 121.14 138.80 

loans/C Form 

d) Guarantees issued by 

- 220.17 42.80 111.52 681.07 

Banks to Customers 

e) Other claims against the 80.00 68.49 86.38 86.38 86.38 

company not accepted as debts 

f) Claims towards Excise Duty/ 

- 82.52 82.52 130.66 - 

Service Tax for the period 

1996-97 to 2000-2001 

g) Demand notice from DGFT 

- - - 137.00 137.00 

for non-fulfilling of export 

obligations 

h) Back wages to Baroda 

- - - 109.04 - 

Workers 

i) Liquidated damages for delay 

in execution of contracts 

18.50 

Additional Provision towards Superannuation Fund assets, if any, is unascertainable. 

4. RELATED PARTY TRANSACTIONS 

Name of Party: Mr. V. R. Sinha 

Nature of Relationship: Managing Director 

Nature of Transaction: Managerial Remuneration 

2001-02 2002-03 2003-04 2004-05 

Volume of 

Transaction 

Amount 

Payable/ 

(Receivable) 

as on 30-09- 

2002 


Transaction 

Amount 

Payable/ 

(Receivable) 

as on 30-09- 

2003 


Transaction 

Amount 

Payable/ 

(Receivable) 

as on 30-09- 

2004 


Transaction 

12.16 1.80 12.65 - 25.08 - 52.92 

Notes: 

1. Remuneration for the year 2004-05 includes one time reward of Rs. 10 lacs for achieving turnaround 

of the company. 

2. While certain transactions with group companies were disclosed in the Annual Financial 

Statements under the Related Party Transactions, on a review of the direct/indirect interests of 

these companies, it is established that they are not under common control and do not have 

significant influence on the Company, and vice-versa, as stipulated under AS 18. 

Amount 

Payable/ 

(Receivable) 

as on 30-09- 

2005 

68

5. BREAK UP OF SECURED LOANS 

(Rs. lacs) 

Particulars 2000-01 2001-02 2002-03 2003-04 2004-05 

Debentures 784.88 797.84 810.80 174.29 65.39 

Term Loans 869.83 874.37 869.49 298.41 110.95 

Bank Facilities 1051.87 990.57 1038.95 687.25 628.44 

Total 2706.58 2662.78 2719.24 1159.95 804.78 

Notes: 

A) Debentures 

i) 200,000, 18.50% non-convertible debentures of Rs.100/- each, aggregating Rs.200.00 lacs 

(Privately placed with IDBI Mutual Fund), rolled over with effect from 25th February’1997, 

were fully redeemable at par on 8th August, 1998. As per the BIFR Scheme and OTS arrived at 

with the debenture holder an amount of Rs.175.34 lacs was repayable by 30-09-2005 leaving a 

balance of Rs.24.66 lacs repayable by September 2007 in half yearly instalment along with 

interest @ 12.50% (Previous Year Rs. 64.33 Lacs). 

ii) 

iii) 

500,000, 18.50% non-convertible debentures of Rs.100/- each, aggregating Rs.500.00 lacs 

(Privately placed with certain Financial Institutions) were redeemable at par in three equal 

annual instalments commencing on 21st November’ 1999. As per the BIFR Scheme and OTS 

arrived at with the debenture holder an amount of Rs.463.04. lacs was repayable by 30-09-2005 

leaving a balance of Rs. 36.96 lacs repayable by September 2007 in half yearly instalment along 

with interest @ 12.50% (Previous Year Rs.96.50 Lacs) 

The debentures together with all interests and remuneration payable to the trustees to the 

debenture holders have been secured in favour of trustees by: - 

a. English mortgage of all the company’s immovable properties both present and future 

situated at Bhandup on pari passu first charge basis. 

b. Hypothecations of company’s movable assets (save and except book debts) including 

movable machinery, machinery spares, tools and accessories, present and future on a 

paripassu basis, subject to prior charges created and / or to be created in favour of the 

company’s bankers on the company’s stock of raw materials, semi-finished goods, finished 

goods and exclusive charge on certain specific items of machinery as agreed upon. 

B) Banks 

The credit facilities are secured by: 

i) English mortgage of all the company’s immovable properties both present and future situated at 

Bhandup on pari passu second charge basis. 

ii) 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 second charge. 

C) Term Loans from Industrial Development Bank of India Limited 

The term loan of Rs.107.99 lacs (Previous Year Rs.289.48 lacs) from IDBI are secured by: 

i) English mortgage of all the company’s immovable properties both present and future situated at 

Bhandup on pari-passu first charge basis. 

ii) Hypothecation of company’s movable assets (save and except book debts) including movable 

machinery, machinery spares, tools and accessories, present and future on a pari-passu basis, 

subject to prior charges created and/or to be created in favour of the company’s bankers on the 

company’s stock of raw materials, semi-finished goods, finished goods and exclusive charge on 

certain specific items of machinery as agreed upon. 

69

D) Out of total secured loan of Rs.804.78 lacs confirmation of balances have been received in respect of 

secured loans of Rs.739.38 lacs. 

6. BREAK UP OF UNSECURED LOANS 

2000-01 2001-02 2002-03 2003-04 2004-05 

Sales Tax Loan (Short 

term loan) 542.57 560.83 596.04 644.45 700.03 

Deferred Liability 232.32 162.46 170.42 158.22 147.67 

ICDs & Loans from 

Group Company 285.93 285.93 285.93 480.93 480.93 

Total 1060.82 1009.22 1052.39 1283.6 1328.63 

NOTES : 

a. Interest payable on Sales Tax loan carry an interest of 12 % p.a. 

b. All short term loans outstanding on each balance sheet date are repayable within one year from 

the respective balance sheet date 

c. In respect of the sales tax loan, the company has sought relief./concessions available to a sick 

industrial company under the government of Gujarat Scheme. Accordingly interest has been 

reworked and accounted as per the aforesaid scheme. 

d. Deferred Liability 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. 

7. The Company, in the year 2000, received application money to the extent of Rs.825 lacs from 

promoter group companies towards the cumulative redeemable preference shares of Rs.100/- each. 

The shares were not allotted to them. Further the company utilized the said application money in the 

year 2000 for repayment of borrowing from HDFC amounting to Rs.800 lacs along with accrued 

interest on it amounting to Rs.26 lacs. The said application money remains pending for allotment. 

Pursuant to an inter se arrangement involving Willaimson Magor & Co. Ltd., Metal Centre Limited 

(earlier Natex Investment & Marketing Ltd) and Dufflagur Investments Ltd the money is held by the 

company as unsecured interest free loan to be utilized as application money towards allotment of 

shares as pe BIFR Order. 

8. For the purpose of Summary Profit and Loss Account, as restated and Summary of Assets and 

Liabilities, items of Profit and Loss and Balance Sheet have been regrouped wherever necessary 

considering the requirement of SEBI guidelines. 

ANNEXURE A 

SUMMARY OF ACCOUNTING RATIOS 

KEY RATIOS 

Financial 

Year 

Financial 

Year 

Financial 

Year 

Financial 

Year Year 

Ended Ended Ended Ended Ended 

Sept 2001 Sept 2002 Sept 2003 Sept 2004 Sept 2005 

Adjusted Profit/(Loss) A (645.75) (67.35) (379.39) (53.33) 522.71 

Rs. in Lacs 

Weighted average Number of equity 

shares outstanding at the end of the 

year 

B 

6747900 6747900 6747900 6747900 6747900 

70

Net Worth (Rs. in lacs) C (2,736.88) (2,578.05) (2,803.53) (2,719.99) (2,197.28) 

Earning Per Share (Rs.) A/B (9.57) (1.00) (5.62) (0.79) 7.75 

Net Asset Value Per Share (Rs.) C/B (40.56) (38.21) (41.55) (40.31) (32.56) 

Return On Net Worth 

Refer Note 2 below 

Note: 

1. Ratios have been computed on the basis of adjusted profit/(loss) after tax for the respective years. 

2. Return on Net worth ratio has not been computed since the Earnings/Net worth are negative. 

Formulae : 

Earning Per Share (Rs.) 

Net Asset Value Per Share (Rs.) 

Return on Net Worth (%) 

Net Profit After Tax 

Average No. of Equity Shares outstanding during the year 

Net worth excluding revaluation reserve 

No. of Equity Shares outstanding at the end of the year 

Net Profit After Tax 

Net worth excluding revaluation Reserve 

ANNEXURE B 

CAPITALISATION STATEMENT 

Pre - issue Post Issue# 

as at 30.09.05 

(Rs. in lacs) 

Short Term Debt 942.84 942.84 

Long Term Debt 1190.57 1190.57 

Shareholders Funds 

Share Capital 674.79 1349.58 

Advance against Share Capital 825.00 0.00 

Reserves (3,697.06) (2,684.88) 

Total Shareholders Funds (2,197.27) (1,335.30) 

Long Term Debt/Equity (0.54) (0.89) 

# Post Issue figures are based on the presumption that the proposed right issue will be fully subscribed, 

but without considering repayment of loans. 

ANNEXURE C 

DETAILS OF OTHER INCOME 

Particulars 2000-01 2001-02 2002-03 2003-04 2004-05 Nature 

As per Original Audited Profit & 

Loss Account 

(Recurring/Non 

Recurring) 

Dividend from Trade Investments - 8.54 7.88 - - Recurring 

Interest 29.13 17.38 8.93 20.18 3.83 Recurring 

71

Refund of Sales Tax - 39.91 - 12.63 - Non recurring 

Sundry Balances & Excess Provision 

Written Back 424.37 252.95 59.74 17.88 - Non recurring 

Profit on sale of Investments - - - 4.41 - Non recurring 

Profit on Sale of Flats - - - - - Non recurring 

Miscellaneous Income(Including 

Selling Expenses recovered) 60.56 16.39 42.03 29.42 62.62 Non recurring 

Total 514.06 335.17 118.58 84.52 66.45 

Restatement on account of 

Adjustments 

Period Adjustments for write backs (258.73) (190.26) 

Refund of Sales Tax (27.28) (12.63) 

Total Adjustments (258.73) (217.54) - (12.63) - 

Restated Other Income 255.33 117.63 118.58 71.89 66.45 

72

ANNEXURE D 

BREAK UP OF SUNDRY DEBTORS 

SUNDRY DEBTORS - Unsecured 

As at 

September, 30 

2005 

Debts Outstanding For a Period Exceeding Six Months 938.70 

Other Debts 486.55 

1,425.25 

Less : Provision for Doubtful Debts 817.61 

607.64 

Considered Good 607.64 

Considered Doubtful 817.61 

1,425.25 

No amount was outstanding as on September 30, 2005 from Promoters, Promoter Group of Group 

Companies. 

ANNEXURE E 

BREAK OF LOAN & ADVANCES 

LOANS AND ADVANCES 

As at 

September, 30 

2005 

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

Considered Good 168.45 

Considered Doubtful 11.07 

179.52 

Less : Provision for Doubtful Advances to Suppliers / Employees 11.07 

168.45 

Balances with Government Authorities 5.49 

Other Deposits 17.00 

Tax Deducted at Source 8.48 

199.42 

No amount was outstanding as on September 30, 2005 from Promoters, Promoter Group or Group 

Companies 

ANNEXURE F - MARKET VALUE OF QUOTED INVESTMENTS AS AT 30 TH SEPTEMBER 

2005 

Shares (Quoted) No. of Shares Face Value per Rs. in lacs 

share (Rs.) 

Equity Shares of Rs.5 each of Eveready 66666 5 116.85 

Industries (India) Limited 

Equity Shares of Rs.5 each of Mcleod 

Russel India Limited 

66666 5 70.35 

Notes: 

1. Consequent to a demerger scheme, the original shareholding in Eveready Industries (I) Ltd 

(Rs.190 lacs) has been split into Eveready Industries (I) Ltd and Mcleod Russel (I) Ltd. The cost 

has been apportioned between the two scrips based on the respective market values. 

73

2. Under simplified exit scheme introduced by the Department of Company Affairs, Ministry of 

Finance and Company Affairs, Government of India, the Company’s subsidiary M/s Pristine 

investments Ltd filed an application for striking off the name of the Company under Section 560 

of the Companies Act, 1956 with the Registrar of Companies, Maharashtra and provision for 

diminution for full value of this investment is already made in the books of the Company 

Annexure –G : Recasted Cash Flow Statement 

Financial Year ended 30th September 

Rs. in lacs 

Year 

ended 

30th 

Septembe 

r 

CASH FLOW FROM OPERATING 

ACTIVITIES 

2001 2002 2003 2004 2005 

Profit/( Loss) before taxation, as restated (645.75) (67.35) (405.16) (53.33) 531.50 

Adjustment for : 

Depreciation 199.34 161.31 141.93 41.48 26.42 

Know how fees written off 107.73 107.73 53.86 - - 

Extraordinary/Exceptioonal items 

Loss on Sale of Vadodara Plant - - 377.40 - - 

Unrealised Foreign Exchange - - - - - 

Profit on sale of Fixed Assets - 

Compensation under Voluntary Retirement 

Scheme 118.45 118.45 123.06 136.87 - 

Provision for Dimunition in value of 

investments 34.15 (33.82) (32.40) (32.77) (87.43) 

Waiver of Interest (947.72) (1,123.62) (1,348.22) (38.88) - 

- - 

Interest Expense 1,005.07 1,148.91 1,503.56 241.49 198.76 

Closure Compensation to Baroda Workmen (23.02) - - 

Dividend Income (8.54) (7.88) - - 

Interest Income (39.26) (17.38) (8.93) (20.18) (3.83) 

Assets Written off 5.32 - - - 

Capital Work in Progress Written off 

Payment towards voluntary retirement 

scheme 

Profit on Sale of Investment. - - (4.41) - 

Operating profit/(loss) before working 

capital changes (167.99) 291.01 374.20 270.27 665.42 

Adjustments for : 

Trade and Other Receivables 318.67 87.42 (180.66) (139.25) (140.87) 

74

Inventories 173.38 (233.06) 65.45 (84.94) 54.01 

Trade and Other Payables (162.65) 49.86 (208.49) 174.45 (81.96) 

Cash Generated from Operations 161.41 195.23 50.50 220.53 496.60 

Direct Taxes(paid)/Refund 16.91 - 20.76 - (3.09) 

Net Cash from Operating Activities 178.32 195.23 71.26 220.53 493.51 

CASH FLOW FROM INVESTING 

ACTIVITIES 

Purchase of Fixed Assets (0.39) - (7.88) (25.82) (41.62) 

Sale of Vadodara Plant ( Net) - - - 1,019.22 - 

Sale of Fixed Assets 

Sale of Investment 6.87 - - 109.41 - 

Interest received 12.22 13.97 8.93 20.18 3.83 

Dividend Received - 8.54 7.88 - - 

Net Cash from Investing Activities 18.70 22.51 8.93 1,122.99 (37.79) 

CASH FLOW FROM FINANCING 

ACTIVITIES 

Proceeds from : Short Term Borrowings - - - 95.00 - 

Long Term Borrowings - - - 100.00 - 

Repayment of Borrowings (211.86) (107.97) (8.67) (1,507.87) (270.27) 

VRS Interest paid (33.32) (32.69) (31.08) (25.21) (20.06) 

Interest paid to Banks/Debentures (19.92) (32.46) - (60.67) (218.57) 

Other Interest paid - - (11.05) (1.18) - 

Advance against share capital received 

Dividend Paid ( Unclaimed) - (0.03) (0.04) - (1.27) 

Net Cash used in Financing Activities (265.10) (173.15) (50.84) (1,399.93) (510.17) 

Net Increase/(decrease) in cash & cash 

equivalents (68.08) 44.59 29.35 (56.41) (54.45) 

Cash & Cash Equivalents - Opening 

Balance 243.09 175.01 219.60 248.95 192.54 

Cash & Cash Equivalents - Closing Balance 175.01 219.60 248.95 192.54 138.09 

75

SUBSIDIARY COMPANY 

Pristine Investments Limited 

The Company has made an application dated 29 th December, 2003, to the Registrar of Companies, 

Maharashtra, Mumbai, for striking off the name of the Company u/s 560 of the Companies Act, 1956 

under the simplified exit scheme. 

FINANCIAL INFORMATION OF GROUP COMPANIES 

Metals Center Limited 

Date of Incorporation: 20 th December, 1983 

Board of Director : Mr R.S. Jhawar,, Mr.K.K Baheti, Mr. A. Guha sarkar and Mr. B.K. Newar 

Nature of Business: Investment in Shares and Securities. The Company has made an application to RBI 

for grant of license to operate as an Non Banking Financial Company. The approval is awaited. 

Shareholding Pattern of the company is as given below: 

Shareholder Category No. of equity shares % shareholding 

United Machine Co. Ltd. 1,00,000 50.00 

Ichamati Investments Pvt. Ltd. 99994 50.00 

Others 6 Negligible 

The equity shares of the company are not listed on any stock exchange. 

Brief audited financials of Metals Centre Limited for the past three years are as follows: 

(Rs. in Lacs) 


Sales and Other Income 194.18 176.36 251.67 

Profit/(Loss) after Tax (PAT) (376.15) (470.36) (873.38) 


Reserves excluding Revaluation Reserve (3444.72) (3915.08) (4788.46) 

Book value per Share (Rs.) (1712.36) (1947.54) (2318.05) 

Earning per Share (Rs.) (188.07) (238.18) (436.69) 

The accumulated losses as at 31 st march, 2004 have exceeded the paid up capital of the Company. The 

accumulated losses of the Company are more than 50% of its networth and the Company has incurred 

cash losses in the past three years. 

The company was amalgamated with five of its subsidiary companies namely, Natex Investment and 

Marketing Ltd., Salasar Industrial Services Limited, McNama Consultants Limited, Macneill Housing 

Finance Limited and Kilburn Company Limited w.e.f. 01/04/2001 vide an order of the Hon’ble High 

Court at Calcutta dated 10/03/2003. Other than this there has been no change in the capital structure and 

the Company has not made an issue of equity shares during the past three years. 

The Company has made an application to the RBI for grant of registration for operating as a Non 

Banking Financial Company. The application is pending. 

There is no pending litigation/ disputes/ defaults by the company /promoters /directors of the Company 

as on the date of filing this Letter of Offer. 

EVEREADY INDUSTRIES INDIA LIMITED 

Date of Incorporation: 20 th June 1934 

Board of Directors: Mr. B. M. Khaitan, Mr. Deepak Khaitan, Mr. P. K. Paul, Mr. Bhasker Mitter, Mr. 

Aditya Khaitan, Mr. P. H. Ravikumar (Nominee of ICICI Bank Ltd.), Mr. D. A. Nanda, Mr. Sanjiv 

Goenka, Mr. S. Saha, Mr. A. Roy, Mr. A. Chakravarti 

76

Nature of Business: The Company is engaged in the manufacture and sale of dry cell batteries and allied 

products, flashlight cases and parts, Zinc alloys, strips and plates, stellite super alloys and electrolyte 

manganese dioxide. 



A. Promoter Holding 

Indian Promoters 2,40,29,119 43.08 

Foreign Promoters 53,98,316 9.68 

Persons acting in Concert 22,89,336 4.10 

Sub Total 3,17,16,771 56.86 



a. Mutual Funds and UTI 5,21,887 0.93 

b. Banks, Financial Institutions, Insurance 

47,34,315 8.49 

Companies 

c. FIIs 17,26,951 3.10 

Sub Total 69,83,153 12.52 

Others 

a. Private Corporate Bodies 41,89,373 7.51 

b. Indian Public 1,20,60,571 21.62 

c. NRIs/OCBs 2,68,320 0.48 

d. Other Foreign Companies 5,60,824 1.01 

Sub Total 1,70,79,078 30.62 

Grand Total 5,57,79,002 100.00 

The equity shares of the company are listed on the BSE, NSE and the Calcutta Stock Exchange 

Association Limited. The Highest and lowest market price of the equity shares on the BSE and NSE 

during the past six months is given below: 

On BSE 


May, 2005 105.75 83.00 

June, 2005 107.45 93.65 

July, 2005 111.00 90.65 

August, 2005 112.00 85.00 

September, 2005 143.40 99.60 

October, 2005 126.00 95.00 

On NSE 


May, 2005 105.90 83.00 

June, 2005 107.75 95.10 

July, 2005 102.75 91.10 

August, 2005 110.00 84.80 

September, 2005 130.00 99.50 

October, 2005 124.85 94.90 

Note:In accordance with the Scheme of arrangement approved by the Hon’ble High Court at Calcutta 

vide its order dated 17/01/2005 and consequent to the demerger of Bulk Tea Division from the Company 

the paid-up value per share has been reduced from Rs. 10/- per share to Rs. 5/- per share. Trading in the 

shares of the Company having a nominal value of Rs. 5/- per share commenced on the exchange w.e.f. 

27/04/2005. 

Brief audited financials of Eveready Industries India Limited for the past three years are as follows: 

(Rs. in Lacs) 


77

Sales and Other Income 87896.03 89315.00 68,083.07 

Profit/(Loss) after Tax (PAT) 1113.1 (38.27) 4631.09 

Equity Capital 5577.91 5577.91 2788.95* 



Earning per Share (Rs.) 2 (0.07) 8.30 

* Pursuant to the scheme of arrangement between the company and Eveready Company India Limited 

(now known as McLeod Russel India Limited (‘MRIL’)) and the respective shareholders, which was 

sanctioned by the High Court at Calcutta by its order dated 17/01/2005, the assets and liabilities of the 

Bulk Tea Division of the company were transferred to and vested in MRIL w.e.f 01/04/2004. Pursuant to 

the Scheme the paid up share capital of the company stand reduced from Rs. 55,77,90,020 divided into 

5,57,79,002 equity shares of Rs. 10/- each to Rs. 27,88,95,010 divided into 55779002 equity shares of 

Rs. 5/- each. 

The company is not a sick company within the meaning of the Sick Industrial Companies (Special 


There has been no change in the capital structure and the Company has not made an issue of equity 

shares during the past three years. 


please refer to the paragraph under “Litigations and Disputes” on page no. ______ of this Letter of Offer. 

McLEOD RUSSEL INDIA LIMITED (Formerly Known As Eveready Company India Limited) 

Date of Incorporation: 5 th May, 1998 

Board of Directors : Shri B.M. Khaitan, Shri D. Khaitan, Shri A. Khaitan, Dr. R. Srinivasan, Shri B. 

Bajoria, Shri R. Sen, Shri R.S. Jhawar, Shri R. Takru, Shri A. Momen, Shri K.K. Baheti & Shri U. 

Parekh. 

Nature of Business: The Company is engaged in the business of growing, manufacturing & selling tea 

and has operations primarily in the states of Karnataka, Andhra Pradesh, Tamil Nadu and Maharashtra. 




Indian Promoters 2,41,91,052 43.27 


Persons acting in Concert 22,89,336 4.10 

Sub Total 3,18,78,704 57.03 



a. Mutual Funds and UTI 5,21,887 0.93 


47,34,315 8.47 

Companies 

c. FIIs 17,26,951 3.09 

Sub Total 69,83,153 12.49 

Others 


b. Indian Public 1,20,25,038 21.51 

c. NRIs/OCBs 2,68,320 0.48 

d. Other Foreign Companies 5,60,814 1.00 

Sub Total 1,70,43,545 30.48 

Grand Total 5,59,05,402 100.00 

Pursuant to the demerger of the Bulk Tea Division of Eveready Industries Limited into Eveready 

Company India Limited (name changed to McLeod Russel India Limited) an application was made to the 

78

stock exchanges i.e. BSE, NSE and CSE for listing of the equity shares of MRIL under clause 8.3.5 of 

the SEBI (DIP) Guidelines, 2000. The equity shares are listed on these aforesaid Exchanges. 

The equity shares are listed on the BSE, NSE & Calcutta Stock Exchange. The Highest and lowest 

market price of the equity shares on the BSE during the past six months is given below: 

On BSE 


May, 2005 --- --- 

June, 2005 --- --- 

July, 2005 75.00 45.50 

August, 2005 68.30 47.70 

September, 2005 92.50 62.80 

October, 2005 82.80 51.30 

Brief audited financials of the company for the past three years are as follows: 

(Rs. in Lacs) 

Particulars as on 31 st March 2003 2004 2005* 

Sales and Other Income 0 0 34105.92 

Profit/(Loss) after Tax (PAT) (0.06) (198.07) (1974.78) 

Equity Capital 200 200 2795.27 

Reserves excluding Revaluation Reserve 4.39 (193.68) 34897.54 


Earning per Share (Rs.) (0.00) (9.90) (3.53) 

Dividend ( %) - - - 

* The Company’s accumulated losses at the end of the FY 2004 were more than 50% of its networth. 

The company is a potentially sick company within the meaning of the Sick Industrial Companies 

(Special Provisions) Act, 1985. Pursuant ot the Scheme of Arrangement approved by the shareholders 

and sanctioned by the Hon’ble High Court at Calcutta vide its order of 17 th January, 2005, the assets 

(including investments, loans and Advances and other current assets) and liabilities of the bulk tea 

division of Eveready Industries Limited (EIL) were transferred to and vested in the Company w.e.f. 1 st 

April, 2004 (appointed date). In accordance with the Scheme, the paid-up share capital of the Company 

stand reduced effective from 1 st April, 2004 to Rs. 6.32 Lakhs comprising of 63,200 equity shares of 

Rs. 10/- each. Also, the face value of the shares has been subdivided and one share of Rs. 10/- each has 

been subdivided into two shares of Rs. 5/- each. Further, the Company has issued to the shareholders of 

EIL 1 (one) equity shares of Rs. 5/- each of the company credited as fully paid up for every 1 (one) 

equity shares of Rs. 10/- each held by them in EIL. 

Other than those stated above the Company has not issued any equity shares during the past three years. 


please refer to the paragraph under “ Litigations and Disputes” on page no. ______ of this Letter of 


SHREE DURGA AGENCIES LIMITED 

Date of Incorporation: 26 th November, 1973 

Board of Directors: Smt. Alaka Jalan, Shri S.K. Jalan, Shri R.D. Dujari, Shri R.S. Nethwewala & Shri 

R.K. Bagla. 

Nature of Business: The Company is engaged in real estate, investments, financing & leasing. The 

Company has made an application to the RBI for grant of registration for operating as a Non Banking 

Financial Company. The application is pending. 



Promoter Holding 235350 94.18 

Non Promoter Holding 14550 5.82 

79

Total 249900 100.00 

The equity shares of the company are listed on the Calcutta Stock Exchange Association Ltd. The 

company has made an application to the exchange for voluntary delisting of the equity shares pursuant to 

a special resolution passed by the shareholders on 15/09/2004. However the company has not followed 

the provisions of the SEBI (Delisting of Securities) Guidelines, 2003 for delisting. The application is still 

pending with the exchange. The Company has not been complying with the provisions of the listing 

agreement entered into with the CSE. 

The equity shares of the company have not been traded of the CSE during the past three years. 


(Rs. In Lacs) 



Profit/(Loss) after Tax (PAT) 9.49* 39.66 51.38 




Earning per Share (Rs.) 3.80 15.87 20.56 

* Profitability low due to payment of corporation tax amounting to Rs. 48 Lacs. 

The company is not sick company within the meaning of the Sick Industrial Companies (Special 


The Company has not issued any equity shares during the past three years. 




NIRVAN COMMERCIAL COMPANY LIMITED 

Date of Incorporation: 13 th July, 1981 

Board of Directors : Smt Divya Jalan, Shri V. Vanchi, Shri V.K. Dujari, Shri N.F. Tankariwala & Shri 

B.P. Jalan. 

Nature of Business: The Company is engaged in the business of general trading, leasing, financing, 

investments & leasing and has operations primarily in the states of Karnataka, Andhra Pradesh, Tamil 

Nadu and Maharashtra.The Company has made an application to the RBI for grant of registration for 

operating as a Non Banking Financial Company. The application is pending. 

Nirvan Commercial Co. Ltd. is mainly into the business of general trading, leasing, financing, 

investments & leasing. 



Promoter Holding 304270 92.20 

Non Promoter Holding 25730 7.80 

Total 330000 100.00 

The equity shares of the company are listed on the Calcutta Stock Exchange Association Ltd. The 

company has made an application to the exchange for voluntary delisting of the equity shares pursuant to 

a special resolution passed by the shareholders on 15/09/2004. However the company has not followed 

the provisions of the SEBI (Delisting of Securities) Guidelines, 2003. The application is still pending 

with the exchange. The Company has not been complying with the provisions of the listing agreement 

entered into with the CSE. 

The equity shares of the company have not been traded of the CSE during the past three years. 

80


(Rs. in Lacs) 



Profit/(Loss) after Tax (PAT) 11.16 30.62 13.83 







The Company has not issued any equity shares during the past three years. 




ICHAMATI INVESTMENTS PRIVATE LIMITED 

Date of Incorporation: 14 th April, 1977. 

Board of Directors : Mr. Amritanshu Khaitan, Mr. Survamoy Saha, Mr. Kamal Kishore Baheti, Mr. 

Kavita Khaitan & Mrs. Shanti Khaitan. 

Nature of Business: The Company is engaged in investment in shares and securities. The Company is 

registered as a Non Banking Financial Company. 



Shri Deepak Khaitan 10000 3.33 

Shri Ganesh Chandra Jha 100 0.03 

Smt. Yashodhara Khaitan 23400 7.80 

Shri Vishwanath Agarwal 1200 0.40 

Metal Centre Ltd. 5200 1.73 

Smt. Shanti Khaitan 15000 5.00 

Shri Aditya Khaitan 42100 14.03 

Smt. Premlata Agarwal 3000 1.00 

Shri B M Khaitan 90000 30.00 

M/s. Deepak Khaitan (HUF) 110000 36.77 

Total 300000 100.00 


(Rs. In Lacs) 






Book value per Share (Rs.) 81 83.97 76.24 




There has been no change in the capital structure of the company during the past three years. The 

Company has not issued any equity shares during the past three years. 

81



UNITED MACHINE COMPANY LIMITED 

Date of Incorporation: 28 th March, 1949. 

Board of Directors : Mr. Amritanshu Khaitan, Mr. Anirudhya Sarkar, Mr. Kamal Kishore Baheti, Mr. 

Kavita Khaitan & Mrs. Yashodhara Khaitan. 

Nature of Business: The Company is engaged in general trading, leasing, financing, investments & 

leasing .The Company is registered as a Non Banking Financial Company and the registration number 

allotted is 05.01348. 



Shri Brij Mohan Khaitan 43015 57.74 

Ganesh Ch. Jha 50 0.07 

Maganiram Pasari 50 0.07 

Smt. Shanti Khaitan 1575 2.11 

T.R. Swaminathan 1 Negligible 

Deepak Khaitan 12510 16.79 

Yashodhara Khaitan 3500 4.70 

Soom Stud Farm Pvt. Ltd. 300 Negligible 

Ichamati Investmnts (P) Ltd. 758 1.02 

M/s. Metal Centre Ltd. 5300 7.11 

Amritanshu Khaitan 735 0.99 

Smt. Divya Jalan 630 0.85 

Shri Deepak Khaitan & Smt. Yashodhara 

1826 2.45 

Khaitan 

Shri Aditya Khaitan 4250 3.17 

Total 74500 100.00 


(Rs. In Lacs) 






Book value per Share (Rs.)( Face Value: Rs. 100/-) 611.39 291.557 320.88 

Earning per Share (Rs.) .)( Face Value: Rs. 100/-) 305.04 23.40 29.33 



There has been no change in the capital structure of the company during the past three years. The 

Company issued 50,000 equity shares of Rs. 100/- each at par on a rights basis during the FY 2004. 

Other than this the company has not issued equity shares during the past three years. 



WILLIAMSON FINANCIAL SERVICES LIMITED 

Date of Incorporation: 17 th December 1971 

Board of Directors: Mr. A. Khaitan, Mr. D. Khaitan, Mr. T. R. Swaminathan, Mr. R. S. Jhawar, Mr. K. 

K. Baheti. 

82

Nature of Business: The Company is engaged in Lease Financing, Financial Advisory and Consultancy 

services and Capital Market operations .The Company is registered as a Non Banking Financial 

Company and the registration number allotted is 08.00053. 




Indian Promoters 32,85,701 39.31 


Sub Total 56,32,201 67.38 





3,23,099 3.87 

Companies 

c. FIIs - - 

Sub Total 3,26,249 3.90 

Others 


b. Indian Public 19,74,775 23.62 

c. NRIs/OCBs 61,033 0.73 

Sub Total 24,00,686 28.72 

Grand Total 83,59,136 100.00 

The equity shares are listed on the BSE, CSE and the Gauhati Stock Exchange.The Highest and lowest 

market price of the equity shares on the BSE during the past six months is given below: 

On BSE 


May, 2005 16.99 9.17 

June, 2005 24.27 13.90 

July, 2005 22.35 17.75 

August, 2005 55.15 18.10 

September, 2005 50.00 30.65 

October, 2005 34.55 20.80 


(Rs. In Lacs) 



Profit/(Loss) after Tax (PAT) (2208.63)* (186.64) (145.78) 



Book value per Share (Rs.)( Face Value: Rs. 100/-) 88.17 85.94 85.01 

Earning per Share (Rs.) .)( Face Value: Rs. 100/-) (26.42) (2.23) (1.74) 

* diminution in value of long term investments to the extent of Rs. 2069.18 Lacs provided for during the 

year. 

** Loss on sale of long term investments to the extent of Rs. 3309.48 Lacs 



There has been no change in the capital structure of the company during the past three years. Other than 

this the company has not issued equity shares during the past three years. 




83

WPIL LIMITED ( Formerly Worthington Pump Limited) 

Date of Incorporation: 26 th February , 1952 

Board of Directors : Mr. Deepak Khaitan, Mr. Prakash Agarwal, Mr. V.N. Agarwal, Mr. Supriya 

Mukherjee, Mr. K.K. Ganeriwala, Mr. Subir Dasgupta, Mr. C.K. Pasari, Mr. S.N. Roy 

Nature of Business: The Company is engaged in the manufacture of, dealing in, export and import of 

vertical, submersible turbine pumps and all other kind of pumps, related products and iron castings. 





Foreign Promoters - - 

Persons acting in Concert - - 

Sub Total 3,17,16,771 56.86 





566 0.00 

Companies 

c. FIIs 0.00 0.00 

Sub Total 1066 0.00 

Others 



c. NRIs/OCBs 3,700 0.05 

d. Other Foreign Companies 0.00 0.00 

Sub Total 9,85,307 12.37 


The equity shares of the company are listed on the BSE, and the Calcutta Stock Exchange Association 

Limited. The Highest and lowest market price of the equity shares on the BSE during the past six 

months is given below: 

On BSE 


May, 2005 48.10 29.05 

June, 2005 58.65 42.50 

July, 2005 58.00 40.25 

August, 2005 57.30 45.00 

September, 2005 75.50 51.15 

October, 2005 60.00 30.05 

Brief audited financials of WPIL Limited for the past three years are as follows: 

(Rs. In Lacs) 

Particulars as on 31 st March 2003(18mts.) 2004 2005 





Accumulated Losses 61.58 20.92 ---- 

Book value per Share (Face Value Rs.10.00) 8.28 9.17 11.61 


84








KILBURN OFFICE AUTOMATION LTD. 

Date of Incorporation: 25/11/1980 

Board of Directors: Mr. Sandeep Kumar Jalan, Mr. Varadarajan Vanchi, Mr. A. Khaitan, Mr. A.D. 

Nanaiya, Mr. C.R. Paul, Mr. M.Singh, Mr. M.Sen, Mr. A.Guha Sarkar 

Nature of Business: Manufacturing and trading of Office Equipment. 









7,94,300 11.76 

Companies 

c. FIIs - - 

Sub Total 8,01,700 11.8768 

Others 



c. NRIs/OCBs 3800 0.0563 

d. Other Foreign Companies - - 

Sub Total 20,90,547 30.9709 



Limited. The Highest and lowest market price of the equity shares on the BSE during the past six 

months is given below: 

On BSE 


May, 2005 12.65 7.26 

June, 2005 18.10 10.10 

July, 2005 17.00 10.30 

August, 2005 21.20 14.85 

September, 2005 18.25 11.55 

October, 2005 12.48 7.25 

Brief audited financials of Kilburn Office Automation Limited for the past three years are as follows: 

(Rs. in lacs) 





Profit/(Loss) after Tax (PAT) 6.23* 35.41 57.98 

Book value per Share (Face Value Rs.10.00) 6.48 8.14 9.99 


85

* Deferred tax debit of Rs. 19.14 Lacs. The Company has shown a deferred tax credit in other years. 








KILBURN CHEMICALS LTD. 

Date of Incorporation: 31 August 1990 

Board of Directors : Mr. Deepak Khaitan , Mr. Sandeep Kumar Jalan, Mr. Varadarajan Vanchi, Mr. 

Supriyo Mukherjee ,Mr.A.D. Nanaiya, Mr. Padam Kumar Khaitan,Mr. Ranjit Chaudhri. 

Nature of Business: Manufacturing and trading of Office Equipment. 







a. Mutual Funds and UTI 17,850 0.2404 


8450 0.1138 

Companies 

c. FIIs - - 

Sub Total 26,300 0.3542 

Others 



c. NRIs/OCBs 3913 0.0527 

d. Other Foreign Companies - - 

Sub Total 29,56,962 39.8244 



Limited, Madras Stock Exchange .The Highest and lowest market price of the equity shares on the BSE 

during the past six months is given below: 

On BSE 


May, 2005 60.00 38.00 

June, 2005 51.80 42.70 

July, 2005 57.10 43.60 

August, 2005 60.90 45.00 

September, 2005 73.65 51.00 

October, 2005 59.00 45.00 

Brief audited financials of Kilburn Chemicals Limited for the past three years are as follows: 

(Rs. in lacs) 





86


Book value per Share 20.19 20.72 22.03 









STANDARD BATTERIES LIMITED 

Date of incorporation : 20 th June, 1945 

Board of Directors : Mr. T.R. Swaminathan, Mr. R.S. Jhawar, Mr. B.C. Das & Mr. F.J. Guzdar 

Nature of Business ; Lead acid battery and battery accessories. Since 1999 involved in trading in 

engineering goods/ bulk tea. 

Shareholding Pattern of the company is as given below : 

Shareholder Category 

No. of equity shares 


Indian Promoters 4651045 

Foreign Promoters - 

Persons acting in concert 1600 


Institutional investors 

a. Mutual Funds and UTI 18900 


2984040 

Companies 

c. FIIs 

Others 1982155 

a. Private Corporate Bodies 539300 

b. Indian Public 

c. NRIs/ OCBs 165210 

d. Other Foreign Companies 

Grand Total 10342250 

The equity shares of the company are listed on the Bombay Stock Exchange (BSE), Calcutta Stock 

Exchange Association Limited and Chennai Stock Exchange. 

The equity shares of the company have been suspended from trading on the BSE since February 2002. 

The Company shares have not been traded during the past six months. The Company has made an 

application for voluntary delisting of its equity share from the Stock Exchanges at Kolkata and Chennai 

pursuant to a special resolution passed by the shareholders on date: 29.09.2003. 

Brief audited financials of the company for the past three years are as follows : 

(Rs. in Lacs) 



Profit /(Loss) after Tax (PAT) (20.09) 31.26 13.29 


Reserves excluding Revaluation 1237.93 1237.93 1237.93 

87

Reserve 

Book Value per Share (Rs.) 79.07 85.77 87.78 

Earning per Share (Rs.) (3.89) 6.05 2.57 

The accumulated losses of the company at the end of the financial year are exceeding fifty per cent of its 

net worth. 

According to the Auditors Report the Company is regular in depositing undisputed statutory dues 

including Provident Fund, Income Tax, Sales Tax, Excise Duty, cess and any other statutory dues 

applicable to it with appropriate authorities. 

NITYA HOLDINGS & PROPERTIES (P) LIMITED 

Date of incorporation : 5 th November, 1992 

Board of Directors : Mr. Amritanshu Khaitan, Mr. Suvamoy Saha, Mr. Yashodhara Khaitan & Ms. 

Shanti Khaitan 

Nature of Business ; The Company is engaged in trading investment, properties lease & Rental. 



Mr. Ganesh Chandra Jha 100 0.04 

Mr. Surendra Kumar Khaitan 100 0.04 

Mr. B.M. Khaitan 1,60,000 57.10 

Mr. Deepak Khaitan 40,000 14.27 

Metal Centre Ltd. 22,000 7.85 

Ichamati Investments Pvt. Ltd. 18,000 6.42 

Nitya Bangur 20,000 7.14 

United Machine co. Ltd. 20,000 7.14 


This being a private limited company the shares are not quoted on any of the stock exchanges. 


(Rs. in Lacs) 



Profit /(Loss) after Tax (PAT) (0.35) (0.76) 5.82 


Reserves excluding Revaluation 

0.05 0.05 0.05 

Reserve 


Earning per Share (Rs.) (0.12) (0.27) 2.08 

There is no litigation/ disputes/ defaults by the company /promoters /directors of the Company as on the 

date of filing this Letter of Offer. 

DUFFLAGHUR INVESTMENTS LTD. 

Date of incorporation : 04/08/1992 

Board of Directors : Mr. Deepak Khaitan, Mr. S.P. Singhi, Mr. V.K. Verma, Mr. A. Sankara Narayanan, 

Mr. U.Parekh, Mr. C.K. Pasari, Mr. U.S. Chaturvedi and Mr. Srinivash Singh 

Nature of Business ; The Company is engaged in. 

88



Metal Centre Ltd. 1,24,994 50.00 

Calcutta Teachest & Fibre Ltd. 1,25,000 50.00 

Others 6 negligible 


The equity shares of the company are listed on the Calcutta Stock Exchange Association Limited, 

Bangalore Stock Exchange and Magadh Stock Exchange. The Highest and Lowest market price of the 

equity shares on the BSE during the past six months is given below : 


(Rs. in Lacs) 



Profit /(Loss) after Tax (PAT) -528.63 -338.68 -14.61 

Equity Capital 25 25 25 

Reserves excluding Revaluation 

-1514.12 

Reserve -1163.89 -1499.51 

Book Value per Share (Rs.) -455.56 -589.80 -595.65 

Earning per Share (Rs.) -211.452 -135.472 -5.844 

The accumulated losses of the company as at the end of the financial year are more than fifty per cent of 

its net worth and the Company has incurred cash losses during the financial year and in the immediately 

preceding financial year. 

According to the Auditors Report the Company is regular in depositing undisputed statutory dues 

including Provident Fund, Investor education and Protection Fund, Empoyees State Insurance, Income 

Tax, Sales Tax, Wealth Tax, Servcie Tax, Custome-duty, Excise Duty, cess and other statutory dues 

applicable to it with appropriate authorities. 

There is no litigation/ disputes/ defaults by the company /promoters /directors of the Company as on the 

date of filing this Letter of Offer. 

McNALLY BHARAT ENGINEERING COMPANY LIMITED 

Date of incorporation : 10 th July, 1961 

Board of Directors : Mr. Deepak Khaitan, Mr. S.P. Singhi, Mr. V.K. Verma, Mr. A. Sankara Narayanan, 

Mr. U.Parekh, Mr. C.K. Pasari, Mr. U.S. Chaturvedi and Mr. Srinivash Singh 

Nature of Business ; The Company is engaged in execution of turnkey engineering projects in various 

sectors of infrastructure development and manufacture of equipment and spares related to such activity. 

Major Events : Entire business takenover by Exide Industries Ltd. w.e.f February 1998 (scheme of 

amalgation ) pursuant to the Hon’ble High Court of Mumbai order dated 21 st December, 2001 there was 

a reduction of paid up equity share capital of Rs. 9.50 per share was effected by setting off and adjusted 

against carried forward losses of the Company. Thus, the authorized equity share capital was sub-divided 

from 1,47,50,000 equity shares of Rs. 10/- each to 29,50,00,000 equity shares of Rs. 0.50 each. 




Indian Promoters 9115352 46.0813 

Foreign Promoters -- --- 

Persons acting in concert 1000 --- 

Sub-total 9116352 46.0813 

89


Institutional investors 



3199519 16.1729 

Companies 

c. FIIs 14000 0.0708 

Sub-total 6023777 30.449 

Others 



c. NRIs/ OCBs 8290 0.0419 

d. Other Foreign Companies --- --- 

Sub-total 4643067 23.4697 

Grand Total 19783196 100.00 

The equity shares of the company are listed on the Bombay Stock Exchange (BSE), Calcutta Stock 

Exchange Association Limited, Bangalore Stock Exchange and Magadh Stock Exchange. The Highest 

and Lowest market price of the equity shares on the BSE during the past six months is given below : 

On BSE 

Month Highest (Rs.) Lowest (Rs.) 

May, 2005 81.90 64.00 

June, 2005 71.00 55.50 

July, 2005 84.00 57.75 

August, 2005 97.00 71.00 

September, 2005 104.70 80.00 

October, 2005 85.70 63.00 


(Rs. in Lacs) 



Profit /(Loss) after Tax (PAT) 0.10 0.15 0.33 


Reserves excluding Revaluation 1.71 1.65 1.70 

Reserve 



The Company has no accumulated losses as at 31 st March, 2005 and it has not incurred any cash losses in 

the financial year ended on that date or in the immediately preceding financial year. 

KHAITAN INVESTMENT COMPANY 

Date of Formation: 29/06/1984 

Partners: Mr. Deepak Khiatan, Mrs Shanti Khaitan 

Nature of Business : Investment in shares and securities. 

Brief audited financials of the partnership firm for the past three years are as follows : 

(Rs. in Lacs) 



Profit /(Loss) after Tax (PAT) 0.02 0.07 0.08 

Partners Capital 0.60 0.60 0.60 

90

RECENT CHANGES IN THE GROUP 

McLeod Russel India Ltd. has entered into a Share Purchase Agreemennt on June 16, 2005 with 

Williamson Tea Holdings plc (‘Promoter Group of Williamson Tea’) to acquire 100% of the fully paidup 

equity share capital of Borelli Tea Holdings Limited, a company incorporated in U.K. in March 19, 

1976 along with its control, subject to fulfillment of certain terms and conditions as per the Share 

Purchase Agreement. Borelli Tea Holdings Limited in turn holds 70% of the fully paid up equity share 

capital of Williamson Tea Assam Ltd., a company incorporated under the Indian Companies Act, 1956 

and listed on the BSE. Thus, McLeod Russel India Ltd. has indirectly acquired control of Williamson 

Tea Assam Ltd. 

As a result of this McLeod Russel India Ltd. alongwith Williamson Magor & Co. Ltd., United Machine 

Co. Ltd., Ichamati Investments Pvt. Ltd., Nitya Holdings & Properties Pvt. Ltd. (collectively referred to 

as ‘the Acquirers’) made an open offer to acquire 20% of the equity share capital of Williamson Tea 

Assam Ltd. from its shareholders as per the provisions of the SEBI (SAST) Regulations, 1997. The said 

offer has closed on 10 th October, 2005. Mcleod Russel further proposes to amalgamate Williamson Tea 

Assam Ltd. with itself. 

DISASSOCIATION WITH CERTAIN COMPANIES 

Companies listed below have been shown as Enterprises under common control as a part of the Related 

Party Disclosure made in the Annual Report of KEL upto the FY 2004. However, on a review of the 

direct/indirect interests of these companies, it has been established that they are not under common 

control and do not have significant influence on the Company, and vice-versa, as stipulated under AS 18. 

The same has been disclosed by Deloitte Haskins & Sells, statutory auditors of the Company as a part of 

the audited financials for the 12 months period ended on 30 th September, 2005 under Note No. 4 in 

respect of Related Party Transaction disclosure. The promoter, Williamson Magor & Co. Ltd., does not 

hold any equity shares of these companies and does not have control over their operations. A list of these 

companies is given below: 

• Salsar Industrial Services Ltd. 

• The Moran Tea Co. ( India) Ltd. 

• Lathika Financers Pvt. Ltd. 

91

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 

RESULTS OF OPERATIONS AS REFLECTED IN THE FINANCIAL STATEMENTS 

(Rs.in lacs) 

Financial Year ended 30th September Year ended 30 th 

Particulars 2002 2003 2004 September 2005 

Income 

Sales: 


Company 1,586.73 2,048.80 2,473.70 4,440.82 

Of products traded in by the Company - - - - 

Total 1,586.73 2,048.80 2,473.70 4,440.82 

Other Income 369.37 118.58 84.52 66.45 

Increase / (Decrease) in inventories 219.06 (104.22) 193.16 (81.50) 

2,175.16 2,063.16 2,751.38 4,425.77 

Expenditure 

Raw Materials Consumed 879.83 873.35 1,422.42 2,402.36 

Staff Costs 335.38 210.23 188.82 272.35 

Other manufacturing Expenses 143.71 225.16 359.04 489.81 

Administration Expenses 360.14 312.45 318.35 397.28 

Selling & Distribution Expenses 45.33 44.51 106.07 183.98 

Other Expenses 46.50 - 15.60 10.74 

Interest 1,159.26 1,494.38 241.49 198.76 

Depreciation 161.31 141.93 41.48 26.42 


value of Investment (34.20) (25.50) 142.13 (87.43) 


extraordinary Items (956.30) (1,213.35) (84.02) 531.50 


Income/(Expenses) (58.59) (103.68) 4,178.05 - 

Less: Tax Provision/( Refund) - (25.77) - 8.79 


statements of accounts (1,014.89) (1,291.26) 4,094.03 522.71 




Annexure III) 

947.54 911.87 (4,147.36) - 

Restated Profit & Loss (67.35) (379.39) (53.33) 522.71 

Balance brought forward (4,740.82) (4,808.17) (5,187.56) (5,219.22) 

Adjustment prior to 1999-2000 - - - - 

Restated Profit /(Loss) for the year (67.35) (379.39) (53.33) 522.71 

2002 

92

Operating performance of the Company improved with sales registering a growth of nearly 30% as 

compared to the previous year. Profit Before Interest Depreciation , Extraordinary Items and Taxation 

(PBIDT) amounted to Rs. 364 Lacs as compared to a loss in the previous year amounting to Rs. 234 

Lacs. As manufacturing operations were suspended at the Vadodara Plant, the Bhandup Plant 

successfully implemented the pending orders. 

2003 

Operating performance of the Company improved with sales registering a growth of 29 % as compared 

to the previous year. PBIDT amounted to Rs. 397 Lacs as compared to Rs. 364 Lacs for the previous 

year. The Company witnesses an increase in the raw material costs owing to the increase in the cost of 

steel, the main raw material. The Company successfully executed orders from reputed customers 

including Nuclear Power Corporation of India Ltd., J. Ray McDermott Middle East Inc., Abu Dhabi, 

Continental Carbon Ltd. and Nirma Ltd. 

2004 

Sales and Services registered a growth of 21% as compared to the previous year. The BIFR 

Rehabilitation Scheme has been implemented from the FY 2004. Various equipment were designed and 

manufactured for important domestic customers including Larsen & Tubro, GNFC, Navin Flourine and 

IPCL. 

During the twelve Months ended on 30 th September, 2005 

The Company has witnessed a turnaround. KEL has reported a turnover of Rs. 4440 Lacs and a Profit 

Aftre Tax of Rs. 523 Lacs. 

The Company has vide its lette dated 12 th September, 2005 applied to the Registrar of Companies, West 

Bengal seeking permission to : 

(a) extend the Financial Year to a period of 18 months(from October 01, ’04 to March 31, ’06) ending 

on March 31, 2006 and 

(b) extend the time for holding the next Annual general Meeting of the Company until 23 rd September, 

2006 

1. Unusual or infrequent events or transactions 

The Company sold off the Baroda Unit pursuant to the consent of BIFR and the shareholders vide sale 

deed dated 23 rd February, 2004. 

2. Significant economic/regulatory changes 

There have been no significant economic/ regulatory changes. 

3. Known trends or uncertainties 

There are no known trends or uncertainties likely to have a material adverse impact on revenue or 

income of our Company from continuing operations. 

4. Future relationship between costs and income 

To our knowledge, there are no known factors, which will affect the future relationship between the costs 

and income, or which will have a material impact on the operations and finances of our Company. 

5. Total turnover of each major industry segment 

We operate in only one industrial segment being Industrial Capital Goods. No data is available on the 

turnover of companies operating in this specific sector. 

6. New Products or business segments. 

93

New products developed by the Company are described under the head ‘Innovations’ on page no. ____ 

of this Letter of Offer. 

7. Seasonality of business 

Companys business is not seasonal. However, the engineering industry is cyclical and its performance 

depends on the performance of sectors like power, cement, chemicals, metals, oil and gas, fertilizers and 

other industrial plants 

8. Dependence on single or few suppliers or customers 

The Company does not depend on few suppliers or customers. 

9. Competitive Conditions 

KEL manufactures equipment for diverse industries being chemical/ petrochemical and food processing. 

Kilburn’s range of products is diverse and authentic published data for existing and projected growth is 

not available. As per the management, the Company is among the leading manufacturers of Tea Dryers 

worldwide and is a significant player for Rotary Dryers in the Carbon Black industry. Domestically the 

company is one of the major suppliers of dryers of various kinds. KEL faces competition from smaller 

players in the business and few of the competitors have the wide range of products that KEL 

manufactures. However these competitors are able to offer better prices. In the overseas market KEL 

faces competition from Eastern Europe and China. 

Significant developments after fiscal 2004 that may affect our future operations 

Save as stated elsewhere in this Draft Letter of Offer, to our knowledge, no circumstances have arisen 

since the date of the last financial statement as disclosed in the Draft Letter of Offer which materially and 

adversely affect or is likely to affect the trading or our profitability or the value of our assets or our 

ability to pay our liability within the next twelve months. Save as stated elsewhere in this Draft Letter of 

Offer, there is no subsequent development after the date of the auditors’ report, which will have a 

material impact on reserves, profits, earnings per share and book value of our company. 

WORKING RESULTS 

Information relating to the Company sales, gross profit etc. as required by the Ministry of Finance 

Circular No. F2/5/SE/76 dated February 5, 1977 read with the amendments of No. dated March 8, 1977 

as under: 

The unaudited working results of the Company for the period from 1 st October, 2004 upto 31 st October, 

2005 are as given as under: 

Particulars 

Rs. in 

Lacs 

Sales 4441 

Other Income 67 

Total Expenditure 4091 

Gross Profit 776 

Interest 110 

Depreciation 29 

Profit Before Tax and Extraordinary Items 637 

Extraordinary/Exceptional/Prior Period Item - 

Tax Provision 9 

Profit After Tax 628 

Paid-up Equity Capital 675 

EPS 9.3 

94

LEGAL AND OTHER INFORMATION 

Except as described below, there are no outstanding litigations, suits or criminal or civil prosecutions, 

proceedings or tax liabilities against us, our directors, our promoters or companies/firms promoted by 

our promoters that would have a material adverse effect on our business and there are no defaults, non 

payment or over dues of statutory dues, Institutional/bank dues and dues payable to holders of any 

debentures, bonds and fixed deposits that would have a material adverse effect on our business. 

OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENTS 

Litigation against the issuer Company : 

S.No 

. 

Party Details Suit Details Nature of suit Amount 

/Claims 

1. M/s. Fine Folds, Summary Suit No. Non-payment Rs. 76,000 

Mumbai 

1688/ 2000 of outstanding and interest 

Bombay High amount 

Court 

pertaining to 

2. M/s. Keld Ellentoft 

India Pvt. Ltd. 

Calcutta 

3. M/s. Gocool 

Insulations Pvt. Ltd. 

Mumbai 

4. M/s. Tefseal 

Industries 

Mumbai 

5. M/s. Tefseal 

Industries 

Mumbai 

6. M/s. IIT Capital 

Services Ltd. 

Mumbai 

7. M/s. Keld Ellentoft 

India Pvt. Ltd. 

8. Bank of madura 

Mumbai 

Labour Matters : 

W.P. No. 

C.P. No. 357/2000 

Calcutta High 

Court 

Winding up 

petition 

Summary Suit No. 

4540 of 2000 

Bombay City Civil 

Court 



Bombay City Civil 

Court 



Bombay High 

Court 

Winding up 

petition 

C.P. No. 357/00 

High Court 

Calcutta 

Legal notice to 

M/s. IIT capital 

services (KEL 

party) 

supplies made 

Non-payment 

against 

supplies made 

non-payment 

of disputed 

outstanding 

amount 

pertaining to 

site work 

carried out at 

IPCL 

non-payment 

of outstanding 

amount 

pertaining to 

supplies made 

non-payment 

of outstanding 

amount 

pertaining to 

supplies made. 

recovery of 

dues against 

lease/ hire 

purchase 

agreements 

Rs. 2.66 Lacs 

+ interest Rs. 

0.68 Lacs 

Rs. 16.10 

Lacs + 

interest 

@21%. 

Rs. 0.47 Lacs 

+ interest @ 

20%. 

Rs. 0.49 Lacs 

+ interest @ 

20%. 

Rs. 

1,25,85,000 

+ interest @ 

26% p.a. 

Since June 

2001 

Recovery suit 3.34 Lacs + 

interest 

Lease/ hire 

purchase 

Present Status 

No further 

developments 

No further 

developments 

No further 

developments 

No further 

developments 

No further 

developments 

Awating date for 

hearing. 

Pending –filed 

supplementary 

affidavit in April, 

2002 

0.16 No further 

developments. 

S.No. Party Details Suit Details Nature of suit Amount 

/Claims 


95

1. Mr. Dinkar N Complaint No. 

Bhosale 

(ULP) No. 36/95 

Thane Labour 

Mr. Ramesh 

Court & 

Complaint No. 

Gaikwad 

(ULP) No. 37/95 

Thane Labour 

Court 

2. Mr. S.A. Thakur ULP 339 of 1996 

I Labour Court 

Thane, Mumbai 

3. N.B. Jadhav Complaint No. 

(ULP) No. 591/94 

Thane Labour 

Court 

4. S.R. Keni Writ Petition in 

Bombay High 

Court, Mumbai 

Reinstatement 

Criminal case 

for assault of 

officer in duty 

(Mr. Natu) 

Misbehaviour 

on premises 

Appeal against 

order of XI 

Labour Court 

of Bandra 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Written statement to 

be filed. 

Evidence of the 

workman. 

For further evidence 

by the Company. 

Writ Petition filed 

against the order of 

the Labour Court of 

Bandra wherein 

termination held 

illegal. 

Pending Labour matters at Baroda : 


/Claims 

1. Mr. M.R. Satwara Labour Tribunal Dismissal of Not 

Baroda 

services ascertained 

2. Members of Industrial Tribunal Claim for Not 

Mahagujarat Baroda 

wages during ascertained 

Workers Union 

closed period 

22.11.2001 to 

3. Mr. Omprakash 

Saxsena 

4. Mr. Govindbhai J. 

Vasava 

Ref. 629/99 

Labour Court 

Baroda 

Ref. 942/96 

Labour Court 

Baroda 

5. Mr. I.S. Khokhar Ref. 1015/2000 

Labour Court 

Baroda 

6. Mr. Mohanlal S. 

Vasava 

Ref. 1578/98 

Labour Court 

Baroda 

7. Mr. Bharat Rohit Ref. 1112/99 

Labour Court 

Baroda 

8. Mr. Abhay S Chavan Ref. 1388/99 

Labour Court 

Baroda 

9. Mr. Balkrishna 

Sumbhe 

Ref. 1205/99 

Labour Court 

Baroda 

15.07.2003 

Dismissal 

services 

Dismissal 

services 

Dismissal 

services 

Dismissal 

services 

Dismissal 

services 

Dismissal 

services 

Dismissal 

services 








Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 


Next date of hearing 

not fixed. 


10.11.2005 for reply 

by the company. 


26.12.2005 for 

evidence by the 

workers. 


26.12.2005 for 


workers. 


22.12.2005 for 


workers. 


22.12.2005 for 


workers. 


26.12.2005 for 


workers. 


27.12.2005 for 


workers. 


26.12.2005 for 


96

10 Mr. Mahesh K Rohit Ref. 1390/99 

Labour Court 

Baroda 

11 Workers V/s 

Insurance Co. & 

Kilburn Engineering 

Ltd. 

Baroda 

W.C. No. 63/97 

Industrial Tribunal 

Dismissal 

services 

Dismissal 

service 


pf 

Not 

ascertained 

Not 

ascertained 

workers. 


27.12.2005 for 


workers. 


27.12.2005 for 

insurance reply. 

Pending Sales Tax (Gujarat) Appeals matters : 


/Claims 

1. Asst. Commissioner Appeal with the Against the 

of Sales Tax, Baroda Deputy 

central sales 

Commissioner of tax assessment 

Sales Tax, Baroda for the period 

1.4.2000 to 

31.3.2001 

2. Asst. Commissioner 

of Sales Tax, Baroda 





Appeal with the 

Deputy 

Commissioner of 

Sales Tax, Baroda 


Deputy 




Deputy 



Against the 

central sales 

tax assessment 

for the period 

1.4.2000 to 

31.3.2001 

Against the 

central sales 



1.4.2003 to 

31.3.2004 

Against the 

central sales 



1.4.2003 to 

31.3.2004 

Rs. 

1,79,61,746.00 

Rs. 

63,35,428.00 

Rs. 

14,71,699.00 

Rs. 

2,93,919.00 


Appeal filed in June 

2003 against the 

Order of 31.3.2003. 

Yet to come for 

hearing. 

Appeal filed in June 

2003 against the 

Order 


25.03.2003. Yet to 

come for hearing 

Appeal filed against 

the Order of 

31.1.2005. Yet to 


Appeal filed against 

the Order of 

31.1.2005. Yet to 


Pending Customs, Excise & Service Tax matters : 


/Claims 

1. Commissioner of Appeal No. Waiver of predeposti 

Rs. 13,12,190 

Central Excise ST/71/05 & 

of & penalty Rs. 

Vadodara –II ST/75/05, Service Tax & 500 

ST/S/821/05 & penalty 

ST/S/891/05 

Customs, Excise & 

Service Tax 

Appellate Tribunal, 

Mumbai 


Waived by order dt. 

16.06.2005 

Litigation against the Directors (violation of statutory regulations or alleging criminal offence) : 

S.No Party Details Suit Details Nature of suit Amount Present Status 

. 

/Claims 


Services Ltd. 

Case No. 

3220/SS/2005 

Cheque 

dishonour 

417663 Next date of hearing 

28.11.2005 

97

Mumbai 


Services Ltd. 

Mumbai 


Services Ltd. 

Mumbai 


Services Ltd. 

Mumbai 


Services Ltd. 

Mumbai 


Services Ltd. 

Mumbai 


Services Ltd. 

Mumbai 


Services Ltd. 

Mumbai 

Small Causes 

Magistrate's Court 

Mumbai 

Case No. 

974/S/2000 

Small Causes 

Magistrate’s Court 

Mumbai 

Case No. 

975/S/2000 

Small Causes 


Mumbai 

Case No. 

1010/S/2000 

Small Causes 


Mumbai 

Case No. 

1008/S/2001 

Small Causes 


Mumbai 

Case No. 

2464/SS/2005 

Small Causes 


Mumbai 

Case No. 

481/S/2002 

Small Causes 


Mumbai 

Case No. 

635/S/2002 

Small Causes 


Mumbai 

cases U/S 482 

against the 

Directors D. 

Khaitan, V.R. 

Sinha, P.K. 

Khaitan 

Cheque 

dishonour 

cases U/S 482 

against the 

Directors D. 

Khaitan, V.R. 

Sinha, P.K. 

Khaitan 

Cheque 

dishonour 

cases U/S 482 

against the 

Directors D. 

Khaitan, V.R. 

Sinha, P.K. 

Khaitan 

Cheque 

dishonour 

cases U/S 482 

against the 

Directors D. 

Khaitan, V.R. 

Sinha, P.K. 

Khaitan 

Cheque 

dishonour 

cases U/S 482 

against the 

Directors D. 

Khaitan, V.R. 

Sinha, P.K. 

Khaitan 

Cheque 

dishonour 

cases U/S 482 

against the 

Directors D. 

Khaitan, V.R. 

Sinha, P.K. 

Khaitan 

Cheque 

dishonour 

cases U/S 482 

against the 

Directors D. 

Khaitan, V.R. 

Sinha, P.K. 

Khaitan 

Cheque 

dishonour 

cases U/S 482 

against the 

Directors D. 

Khaitan, V.R. 

Sinha, P.K. 

Khaitan 


28.11.2005 

946674 Not known as papers 

are not traceable. 


28.11.2005 


28.11.2005 

773450 Not known as papers 

are not traceable. 


10.11.2005. 


28.11.2005. 

98

3. There are no economic offences against the issuer company or its directors. 

4. Litigations in the past wherein penalty has been imposed against the company and its directors : 

5. There are no Small Scale Undertakings to whom the Company owes a sum exceeding Rs. 1 Lac 

which is outstanding. 

Litigation against /by Metal Centre Ltd. 

There are no pending litigations and demands/ show cause notices against the company. 

Litigations against/ by Eveready Industries India Limited (EIIL) 

S.No 

. 

Party Details Suit Details Nature of suit Amount 

/Claims 

1 Food 

Suit no. 2321 of Claim of damages for alleged failure of 20.41 

Corporation of 

India 

1987 before the 

Delhi High Court 

the company to supply contracted 

quantity of block polythene film. 

2 West Bengal 

Stare Fisheries 

Development 

Corpn Act 

Arbitration before 

sole Arbitrator 

Dispute relating to operation of 4 trawlers 

for harvesting shrimps during 1980-84. 

WFSFDCL claimed Rs. 11.17 lakhs. The 

company has a counter claim of Rs. 4.70 

11.17 

3 Kolkata Port 

Trust (KPT) 

4 Kolkata Port 

Trust (KPT) 

5 Navana Printing 

Works 

6 Sarawgi Brothers 

Gorakhpur 

WP no. 2425 of 


Calcutta High 

Court. 

WP no. 2137 of 


Calcutta High 

Court. 

MS 215 of 2000 

before City Civil 

Court, Kolkata 

2 nd Appeal no. 929 

of 1973 before the 

Allahabad High 

Court 

7 Gopeswar Pal MS 8 of 1999 8 th 

Court Civil Judge, 

Alipore 

8 J.P. Pandey Case No. 259/1997 

Senior Civil Judge, 

Azamgarh, U.P. 

9 Saxena Traders Case No. 315/2002 

Civil Court, 

Badaun, U.P. 

10 Jindal Mareting 

Co. 

Case No. 18/2001 

District consumer 

Forum, J.P. Nagar, 

lakhs 

Claim of damage for alleged unauthorized 

use and occupation of 11046.65 sq.m. of 

land at beyond expiry of lease. Claim 

stayed by interim order of court. 

Demand for compactor for alleged 

unauthorized use and occupation of 

18,381.60 sq.m. land at Taratala Road on 

which one if the Company’s factory is 

situated petition admitted. 

Claim of alleged receivable against 

supply of polythene laminated bags to 

Chuapara Tea Estate. Company’s 

Affidavit-in-opposition field. 

The party’s distributorship was 

terminated in 1965. claiming to be sold 

distributor, it filed a suit for 

reinstatement. Suit dismissed in 1972, 

dismissal reversed by District Court in 

1973. The company filed the present 

appeal which is yet to be disposed of. 

District Court order remains stayed. 

Party claims compensation for 

termination of car hire contract. Case to 

come up for hearing. 

Party being a terminated employee of the 

Company’s Distributor, claims 

compensation from the Company on the 

plan that he was an employee of the 

Company. Yet to be heard. 

Claims back amount paid on the 

allegation of non-receipt of goods. Case is 

at argument stage. 

Claims compensation for termination of 

distributorship. No progress in case as the 

Bench is vacant. 

79.53 

94.08 

1.85 

Not 

ascertainab 

le 

2.00 

0.81 

0.82 

1.65 

99

U.P. 

11 Anoop Agncies Case No. 125/98 

Civil Court, 

Azamgarh, U.P. 

12 Ratan General 

Stores 

13 Laxminarayan 

Tewari 

14 J.K. Trade & 

Marketing 

15 Navneet Singh 

Malhotra 

Proprietor of 

Satkar Agencies 

16 Goulabchand 

Jain 

Case No. 286/03 

Civil Court, 

Sultanpur, U.P. 

Case No. 1733 

/2003 Civil Court, 

Unnao, U.P. 

MS 5/2003 Civil 

Court, Naogan, 

Assam 

Case 43/2002 

Gadarwara Dist. 

Court M.P. 

Suit No. 10/B/03 

Civil Court Class 

1, Sagar, M.P. 

17 Ram Udyog Case No. 7/2004 

Civil Judge, Sr. 

Division, 

Amravati, 

Maharashtra 

18 Yaswante 

Nalwade 

19 Federal Bank 

Ltd. 

20 Vidur Impex & 

Traders Pvt. Ltd. 

& 5 Others 

Case No. 380/2002 

District Consumer 

Redressal Forum, 

Nagpur, 

Maharashtra. 

OS No. 7 of 2004 

Debt Recovery 

Tribunal – III 

CS No. 106/2002 

Senior Civil Court, 

Delhi. 

21 M.C. Das TS 168 of 1989. 2 nd 

Munsiff, Alipore, 

W.B. 

22 Gita Mookerjee TS 189 of 2004 

before 2 nd Civil 

Judge (Jr. Divn.) 

and Misc. Appeal 

No. 217 of 2004 

before district 

Judge Alipore. 

23 C.S. Chowdhury TS No. 152 of 

2004 before 2 nd 

Civil Judge (Jr. 

Divn.) and C.O. 

No. 3389 of 2004 

before the High 

Court at Kolkata 

24 Madhusudan 

Dutta 

TS No. 170 of 

2003 2 nd Civil 

Judge (Junior 

Claims compensation per termination of 

distributorship. Hearing to commence. 

Claim of various amounts by a 

distributor. Written statement of 

opposition by Company to be filed. 

Claims compensation for termination of 

distributorship and value of demand draft 

although same returned by Company 

Matter to be heard. 

Claim of refund of interest recovered for 

delayed payment. Matter to be heard. 

Claims of various amounts by a stockist. 

Written statement filled. 

Claim of various amounts by a 

Distributor. Yet to be heard. 

Claim on account of returned stocks of 

Tea. Yet to be heard. 

Compensation claimed for alleged nonperformance 

of rechargeable torch. 

Written statement filed. 

Claim against corporate guarantee given 

for loan granted to Macneill Engineering 

Ltd. For its alleged default. The company 

has petitioned for dismissal of suit. Matter 

to be heard. 

Prayer for permanent injunction on 

Company for alleged encroachment upon 

1 acre of the Company’s own property at 

23 Aurangzeb Road, New Delhi. Written 

statement filed. 

Suit for eviction of Company from rented 

flat. Matter yet to be heard. 

Claims possession of flat rented to the 

company, which has filed a suit for 

delivery of possession status quo by 

interim order. 

Transferee landlord claims possession of 

flat rented to the company. Status quo 

directed by interim order of High Court. 

Yet to be finally heard. 

One of the joint landlord of a flat rented 

to the company seeks restraint on the 

Company from surrendering the tenancy 

0.72 

5.54 

0.40 

0.20 

0.93 

0.39 

0.10 

0.03 

457.74 

No money 

claim 

Not 

ascertainab 

le 

Not 

ascertainab 

le 

Not 

ascertainab 

le 

Not 

ascertainab 

le 

100

25 Vishwanath 

Podder 

26 Central 

Government 

27 State of M.P. 

through the 

Central Bureau 

of Investigation 

28 Inspector of 

Factories, Govt. 

of M.P. 

29 Inspector of 

Factories, Govt. 

of U.P. 

Division) Sealdah, 

Kolkata 

C.P. No. 03/2001 

Company Law 

Board, Eastern 

Region Bench 

C.P. No. 57 of 

2002 company 

Law Board 

Principal Bench 

Case No. 8460/96 

Chief Jidicial 

Magistrate, Bhopal. 

Case No. 1/85 FA, 

Laour Court, 

Bhopal 

Case No. 4850/98, 

chief Judicial 

Magistrate, 

Lucknow 

30 Chottey Lal Case No. 52/92 

Chief Judicial 

Magistrate, 

Lucknow 

31 State of Bihar Case No. 2244/04 

Session Judge, 

Patna 

32 Registrar of 

Companies, 

West Bengal 

33 Registrar of 

Companies, 

West Bengal 

34 Employee’s 

State Insurance 

Corpn (ESIC) 

Case Nos. 

C/3908/01, 

3909/01, 3910/01 

3963/01, 3964/01 

4064/01, 4065/01 

& 4060/01 before 

10 th Metropolitan 

Magistrate, 

Kolkata. 

Case No. 

C/1707/01 before 

the Chief Judicial 

magistrate Alipore 

SLP Nos. 19447- 


before the Supreme 

Court of India 

to the other landlord. Written statement 

filed. Yet to be heard. 

Petition u/s 397 & 398 of the Companies 

Act, 1956 for alleged oppression and 

mismanagement. Pleadings completed 

and arguments done. The bench by its 

order of 15/01/04 consigned the petition 

to records as the petitioner did not want 

any order. 

Reference application u/s 408 of the 

Companies Act, 1956 for the appointment 

of 12 Govt. directors on the Board of the 

Company. By order dated 20/12/04, the 

CLB allowed appointment of 3 Directors. 

The company has challendged this order 

before the Calcutta High Court, which has 

granted an interim stay. 

Offences relating to the escape of MIC 

Gas at the Company’s erstwhile factory at 

Bhopal on December 2/3, 1984, u/s 304- 

A, 336, 337 & 338 of IPC. Leading of 

evidence by prosecution is continuing. 

Complaint u/s 105 of the Factories Act 

for causing escape of MIC Gas from 

Bhopal Factory. Prosecution leading 

evidence. 

Complaint for alleged violation of 

Sections 63 & 79 of the Factories Act. 

Prosecution yet to start evidence. 

Complaint u/s 232, 504, 506, 352 and 

120B of IPC. Prosecuytion yet to start 

evidence. 

Case filed by State Bank of India relating 

to a forged demand draft lodged by a 

distributor. Prosecution case yet to start. 

Complaint cases filed for alleged 

violation of Sections 211(2), 370, 

217(2A), 269, 205(2)(b) & 295 of the 

Companies Act 1956. Prosecution yet to 

lead evidence. 

Complaint case filed for alleged violation 

of Sections 58A of the Companies Act 

1956 for non-publication of 

advertisement for deposits accepted on 

private placement basis. Prosecution yet 

to lead evidence. 

ESIC has challenged the order of 

Division Bench of Calcutta High Court 

by which ESIC was restrained from 

recovery of contribution for back periods 

from companies which suffered 

injunction order of the single-Judge 

Bench relating to raising of ceiling limit. 

The company has filed its Affidavit – in – 

Not 

ascertainab 

le 

Not 

ascertainab 

le 

Not 

ascertainab 

le 

Not 

ascertainab 

le 

Not 

ascertainab 

le 

Not 

ascertainab 

le 

0.20 (value 

of the 

Demand 

draft) 

Not 

ascertainab 

le 

Not 

ascertainab 

le 

22.00 

101

35 Basheerullah 187/83 MPIR, 

Labour Court, 

Bhopal 

36 Shankar Lal 186/83 MPIR, 

Labour Court, 

Bhopal 

37 Achey Khan 2/95 MPIR, Labour 

Court, Bhopal 

38 S.K. Pareekh 68A/97 before 

ADJ, Bhopal 

39 J.P. Gupta & 

Ors. 

40 UCIL Staff 

Association 

41 Sumit 

Bhattacharjee 

WP No. 262/2003, 

before High Court 

at Jabalpore 

Case No. 255/87 

MPIR, Labour 

Court, Bhopal 

O.S. No. 365 of 

1986 Calcutta High 

Court 

42 Durga Banerjee TS 1852/1992 City 

Civil Court, 

Calcutta 

43 Sk. Tasuddin TS 1107/98 City 

Civil Court, 

Calcutta 

44 P.Dalvi & Ors. Reference case 

IDA No. 891 of 

1986. 6 th Labour 

court Bandra, 

Maharashtra. 

45 Sm. K 

Vasudevan 

WCA No. 742/B- 

147/2000. 6 th 

Labour court, 

Mumbai. 

46 B.P. Panigrahi Case No. 6033(3) 

of 2004. district 

Labour Office, 

Bhubaneswar. 

47 Eveready 

Mazdoor Sangh 

Conciliation before 

Deputy Labour 

Commissioner, 

Noida, U.P. 

48 Devram Thorat C (ULP) No. 55 of 

2003, IInd Labour 

Court, Thane. 

49 Dyes & 

Chemicals 

Worker’s Union 

C (ULP) No. 199 

of 2003, Industrial 

Court, Thane. 

opposition. 

Dismissed employee of Bhopal factory 

claims reinstatement. Hearing yet to be 

concluded. 



concluded. 



concluded. 

The employee has been discharged from 

service. He earlier refused to accept 

transfer, and filled this suit for posting at 

Bhopal and also claiming compensation. 

Case dismissed for non-appearance but 

restoration petition is pending. 

Ex-employees challenged the closing of 

the Bhopal facotory and claimed 

reinstatement with back wages. The 

industrial Court upheld the closure, 

against which order the ex-employees 

have moved the High Court. The matter is 

yet to be heard. 

The association has challenged the 

closure of Bhopal factory. The case is at 

evidence stage. 

The ex-employee has challenged certain 

amendments of the Rules of the 

Company’s Pension Fund. The matter is 

yet to be taken up for hearing. 

Dismissed employee claims 

reinstatement. Yet to be taken up for 

hearing. 

Retired employee disputing date of birth 

recorded with company suit for 

declaration and injunction. Yet to be 

taken up for hearing. 

11 Temporary workers of erstwhile 

Chembur factory claims permanency of 

job. Arguments concluded. Award 

awaited. 

Widow of deceased employee of 

contractor claims compensation under 

Workmens’ Compensation Act. Order 

awaited. 

Petitioner used to work with the 

Company from time to time on casual 

basis. He claims permanent job. Matter 

yet to be taken up for hering. 

Dispute raised by contractor’s employees 

for ESI, PF and minimum wages benefits 

from contractor. Conciliation in progress. 

Dismissed employee (now deceased) 

claimed reinstatement. Company’s 

application for dismissal of complaint is 

pending. 

Demand for taking canteen contractor’s 

employees directly on the Company’s 

rolls. Hearing yet to start. 

Not 

crystalised 

Not 

crystalised 

Not 

crystalised 

0.33 

Not 

crystalised 

Not 

crystalised 

Not 

crystalised 

Not 

crystalised 

Not 

crystalised 

Not 

crystalised 

Not 

crystalised 

Not 

crystalised 

Not 

crystalised 

Not 

crystalised 

Not 

crystalised 

102

50 Eveready 

Industries 

Employees’ 

Union 

C (ULP) No. 43 of 

2004, Industrial 

Court, Thane. 

51 I. John Bosco WP 13291/93 

Madras High Court 

52 D. Venkatadri ID 91/2000. 

Labour Court, 

Hyderabad 

53 B. Shankar ID 91/2002, 

Labour Court 

Hyderabad 

54 Ravi Kumar ID 268/1997, 

Labour Court 

Hyderabad 

55 Shaik Babu OS 362/2003, Civil 

Court RR District, 

A.P. 

56 Canteen 

Contractors’ 

Workers’ Union, 

Hyderabad. 

57 NCC KS 

Sangam 

(Workmens’ 

Union at 

Hyderabad 

ID 28/2004, 

Labour Court 

Hyderabad 

Conciliation before 

Dy. Labour 

Commissioner 

factory) 

58 Saeduddin C.R.No. 31 of 

1994, High Court 

Lucknow 

59 Ramraj WP 275/99, High 

Court, Lucknow 

60 Hafeez Ahmed WP 1864/96, High 


61 Hausala Prasad WP 4939/81, High 


62 Malkhan Singh WP 5901/82, High 


63 J.P. Sharma WP 100/90, High 


Demand of wages for the temporary 

stoppage of Thane factory in January / 

February 2004. Hearing yet to start. 

Dismissed employee filed case before the 

Labour Court which passed reinstatement 

order. The company has challenged the 

order and Labour Court;s Order stayed. 

Hearing yet to start. 

Dismissed employee claims reinstatement 

at evidence stage. Meanwhile petitioner’s 

writ petition to High Court dismissed. He 

has filed an appeal which is pending. 

Dismissed employee of Canteen 

contractor 

Dismissed employee of canteen 

contractor claims reinstatement. The 

labour court has dismissed the petition as 

against the Company. Petitioner has filed 

a writ petition against the Labour Courts 

Order to High Court,which is pending. 

Ex-employee filed suit for perpetual 

injunction and continuation of service. No 

interim order granted. Companys Written 

Statement filed 

Claim of absorption of Contractors’ 30 

employees in companys roll. Evidence 

stage. 

Claim is for incentive payment for 39 

non-working days during 2003-04. 

Conciliation in progress. 

Retired employee disputes date of birth as 

recorded with Company. The company 

has provided bank guarantee for claimed 

amount. Hearing awaited. 

Retired employee disputes date of birth 

recorded with Company. As per Courts 

Order 60% of demanded amount 

deposited. 

Employee claimed higher grade which 

was allowed Labour Court. The 

Company challenged the Labour Courts 

Order by Writ Petition. Final hearing 

awaited. 

Dismissed employee has filed this writ 

petition challenging the Labour Courts 

order upholding his dismissal. Final 

hearing awaited. 

Dismissed employee has filed this writ 

petition challenging Industrial Tribunals 

order upholding the dismissal. Final 


Ex-employee disputed his grade. Claim 

turned down by Tribunal. He then filed 

this writ. Final hearing awaited. 

64 Kalyan Singh Case No. 03/01 Disputes his transfer outside the location. Not 

Not 

crystalised 

16.00 

Not 

crystalised 

Not 

crystallised 

Not 

crystallized 

Not 

crystallized 

5.00 

2.06 

2.50 

0.69 

1.62 

1.62 

0.09 

103

65. A.K. Srivastava Case No. 45/02 

Labour Court 

Lucknow 

66. A.K. Srivastava Case No. 249/02 

Consumer Forum 

67. Eveready 

Flashlight 

Karmachari 

Sangha & State 


68. Eveready 

Flashlight 

Karmachari 

Sangha 

69. Eveready 

Flashlight 

Karmachari 

Sangha 

70. Eveready 

Flashlight 

Karmachari 

Sangha & State 


71. Employees State 

Insurance 

corporation 


Insurance 

corporation 


Insurance 

corporation 


Insurance 

corporation 

75. Tiruvittyur 

Municipality 

Labour Court. Final order awaited. crystallized 

Contractors ex-employee claims bonus Not 

from company. At evidence stage crystallised 

Lucknow 

WP No. 3280/91 

High Court 

Lucknow 

WP No. 5120/81 

High Court 

Lucknow 

WP No. 6176/83 

High Court 

Lucknow 

WP No. 6173/83 

WP No. 3202/87 

High Court 

Lucknow 

Case No. 49/1980 

ESI Court 

Lucknow 

ESI Court 

Lucknow Recovery 

proceeding 

Show cause notice 

ESI Court 

Chennai 

CMA No. 13/2002 

Chingleput dist. 

Litigations pertaining to McLeod Russel India Limited 

Contractors ex-employee claims 

Provident Fund from company. At 

evidence stage 

Industrial Tribunals Award in Adj. Case 

No. 89/95 holding that the lock out from 

7.5.85 to 15.7.85 illegal, challenged by 

Company by this Writ. Final hearing 

awaited. 

Union demand that canteen contractors 

employees should get the same rate of 

bonus as paid to permanent employees for 

1974, 1975 & 1976 rejected by Industrial 

Tribunal. The union challenged the 

Tribunals award by this writ. Final 


Industrial Tribunal Award holding that 

canteen contractors employees should get 

20% bonus i.e., the same as Companys 

employees for 1977-78 employees, 

challenged by the company in this writ. 

Final hearing awaited. 

Proceeding in Industrial tribunal for 

bonus claims of Canteen contractors 

employees for 1979, 1980,1981 and 1983 

have been stayed by order in these writ 

petitions filed by the company. 

Damage claim by ESIC. Final disposal 

awaited. Bank Guarantee for the claimed 

amount provided. 

Recovery of ESI contribution on account 

of a vendor of the Lucknow Factory. 

Final disposal awaited. 

Deman for ESI contribution on total 

payment made to various job work 

vendors during 2001-02 & 2002-03 in the 

Lucknow factory. Explanation and 

particulars provided by the Company are 

under examination by ESIC 

The company has appealed against a 

ademand for contribution for contract 

jobs done by vendors at Tiruvittiyur 

factory. Final order awaited 

The company has challenged the increase 

in property tax from Rs. 1,40,350 to Rs 

3,50,875 per half year from 1998-99 for 

the Tiruvittiyur factory land. Final 

hearing is awaited 

Not 

crystallised 

0.24 

0.30 

0.30 

Not 

crystallized 

0.86 

0.34 

53.88 


/Claims 

1. Shwar & Others 8/2001 in the 

Labour Court, 

Mangaldai 

Dismissed employee of 

Bhooteachang Tea Estate, 

Reinstatement claim 

Not 

ascertained 

2. Preshab Saikia (Exemployee) 

Guwahati High 

court 

Dismissed employee (June 1999) of 

Dekorai Tea Estate, claims 

0.17 

4.21 

Not 

ascertained 

104

3. Pabon Sona (Exemployee) 

4. Pabon Sona (Exemployee) 

5. Sri D Kalita (Exemployee) 

6. Budhu Baraik (Exworker) 

W/C/ No.9/95 

pending at Assam 

Labour Court, 

Tezpur 

Labour Tribunal 

Guwahati 

GLR 170/1993/23 

in the Labour 

Court, Guwahati 

16 of 1998 Labour 

Court 

Guwahati 

7. 5 Ex-workers 15/2002 Labour 

Court 

8. Budhu Baraik (Exworker) 

Misc. Case No. 

224/87 

Local Court, 

9. Smt. Maya Rani 

Routh (w/o. Exemployee) 

10. Assam Cha Karmi 

Sangha 

11. Assam Cha Mazdur 

Sangha 

Tezpur 

Case No. 19/98 in 

the Guwahati High 

Court 

WP© No. 

413/2003 in the 

Guwahati High 

Court 

WP© No. 

6901/2001 

Guwahati High 

Court 

12. S N Barua WP© No. 5385/ 

2002 

Industrial Court 

13. Assan Cha Mazdur Labour Court 

Sangha 

Dibrugarh 

14. S.K. Daguprta 2729/95 in the 

Guwahati High 

Court 

15. Smt. S Chaklraborty Guwahati High 

Court 

16. Jasoda Bharati MACT No. 

330/2000 

Motor accident 

claim Tribunal 

Tezpur 

17. Factory inspector 

Govt. of Assam 

Chief Judicial 

Magistrate, 

Tinsukia 

18. Govt. of Assam Eviction case No. 6 

of 96/97 

19. Dy. Commissioner 9/95 & 10/95 

Sonitpur 

before Board of 

20. Circle office 

Charduar 

Revenue 

CDC-4/95- 

2002/1560 of 

23.9.02, 4/95- 


reinstatement 

Claim for compensation for accident. 

Case related to Taraulie Tea Estate 

Dismissed employee of Rarajulie Tea 

Estate claims reinstatement 

Dismissed employee of Mijicajan 

Tea Estate claims reinstatement 

Termination case related to Tezpur & 

Gogra Tea estates. Order infavour of 

the company employee appealed for 

review 

Dismissed employee of Halem Tea 

Estate claims reinstatement 

Alleged encroachment of land 

Claim for compensation in respect of 

termination of service of deceased 

husband. Case relates to Monabarie 

T.E. 

Dismissed employee of Bukhial Tea 

Estate, claim reinstatement 

Dispute on date of retirement by exworker 

of Bukhial Tea Estate, 

company appeal against labour court 

order pending in High Court 

Ex-employee of Hunwal T.E. 

claiming reinstatement 

Termination of 4 workers of 

Bogapani T.E. on disciplinary ground 

Ex-employee of Bogapani T.E. 

claiming compensation for loss of 

service 

Dismissed employee of Namdang 

T.E. claims reinstatement. Rejected 

by Labour Court Ex-employee 

moved the High Court 

Claim for motor accident injury by 

employee of Dejoai T.E. 

Charge in connection with an 

accident of an employee of Namdang 

T.E. 

Alleged land encroachement in 

Addabarie T.E. eviction order stayed 

Alleged land encroachemntin 

Tarajulie T.E. matter referred to D.C. 

Sonitpur 

Settlement petition of alleged 

encroachement of land at Tarajulie 

T.E. 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Rs. 

1,31,265/- 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

105

21. Sub-divisional officer 

(Civil) Bishnauth 

Charali 

22. Sub-divisional Office 

(Civil) Bishnauth 

Charali 

23. Govt. of Assam 

23.9.02 & CDR- 

61/2004/760 Dt. 

21.5.04 


05.01.1993 

EC/12/2003 

of20.04.2003 

Tezpur Court 

Circle Officer 

24. Govt. of assam EB/95 of 26.10.95 

& 7/96/97 of 

13.11.96 

25. Govt. of Assam Dy. Commissioner 

Sonitpur, Tezpur 

26. Revenue Dept. Govt. 

of Assam 

EC 14/95 before 

Addl. Dist. 

Commissioner 

Tezpur 

27. Govt. of Asssam Deputy 

Commissioner 

Tinsukia 

28. Govt. of Assam 

Revenue Reforms 

Dept. 

29. Director Land 

Acquisition (Govt. of 

Assam) 

30. Assam State 

Electricity Board 

31. Area Manager 

I.R.C.A. Tezpur 


Electricity board 


Electricity board 

34. Superintendent of 

Sales Taxx, Gauhati 

35. Assam Agriculture 

I.T.O. Guwahati 

36. Duars Engg. Corp. 

Jalpaiguri 

37. Nikhil Chandra 

Ghosh 

38. Hasim Ali Ansari 

Alupurduar 

RRT/47/2001/89 of 

4/5/2001 

Gauhati High 

Court 

922/28 in the 

Gauhati High 

Court 

ASEB Bill No. 

AM/IRCA/ASEB/ 

TEZPUR/04/T-IR- 

TE 

29/2001 in 

Dibrugarh Court 

Chief engineer 

commercial assam 

state electricity 


Sales Tax, Gauhati 

Assam agriculture 

income tax officer, 

Gauhati 

Money Suite No. 

17/98, MEX-4/04, 

pending MA 1/03 

Jalpaiguir Court 

Money Suit No. 

1/2001 (1/98) 

Jalpaiguri Court 

Money Suit No. 

16/99 

Alleged land encroachement at 

Pertabghur T.E. 

Alleged land encroachement at 

Mijicajan T.E. 

Alleged land encroachment at Halem 

T.E. 

Alleged occupation of Govt. land at 

Tezpore and Gogra T.E. 

Alleged land encroachment of 

Monabari T.E. 

Alleged land encroachement of 

Behali T.E. 

Alleged land encroachment at Dirok 

T.E. 

Alleged land encroachmentat 

Hunwal T.E. 

Alleged land encroachment at 

Namdang T.E. 

Alleged unauthorized electricityt 

connection at Tarajulie T.E. 

Disputed electicity bill at Mijicajan 

T.E. pending resolution by 

ombudsman 

Claim of additional amount on 

amount of energy consumption at 

Dirai T.E. 

Additional demand of electricity bill 

at Dirai T.E. appeal pending with 

C.E. 

Sales tax demand for 99-00 at Halem 

T.E. 

Claim of arrears agriculture tax for 

the year 91-92 A/c. Dirok T.E. 

Judgement given by the lower court 

for non payment of bills by the pre 

vious owner of Mathura T.E. under 

appeal before the District court 


for non-payment o hbills by the 

previous owner of Mathura T.E. 

under appeal before the District 

Court 


for non-payment o hbills by the 

previous owner of Mathura T.E. 

under appeal before the District 

Court 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Rs. 

5,91,525/- 

R. 

82,11,581/- 

Rs. 

29,27,124 

Rs. 

13,11,005 

Rs. 5,72,476 

Rs. 

70,17,108 

Rs. 1,66,127 

R. 36,590 

Rs. 1,51,824 

106

39. Income Tax 

authorities 

40. Income tax 

authorities 

41. Director General of 

Foreign Trade 

Kolkata 



Kolkata 



Kolkata 



Kolkata 



Kolkata 



Kolkata 



Kolkata 



Kolkata 

Income tax 

appellate tribunal 

High Court of 

Kolkata 

ALS/F2/80/040/10 

15/AM96 

ALS-G- 

007379/Ralc/am93 

18/338/03- 

04/ECA/CAL/ALS 

-H 

ALS- 

H/02/81/40/0002/A 

M’92 

ALS- 

H/02/77/40/01845/ 

AM95 

ALS- 

H/02/81/040/00009 

/AM93 

18/467/03- 


-H 9092 

18/382/03- 


-H 

49. Federal Bank Ltd. Case No. 

RP/04/2005 at 

DRT –Kolkata 

Litigation against /by Shree Durga Agencies Ltd. 

Dispute on various disallowancs 

relating to Tea Division for the Ay 

1989-90 to 99-00 pending for 

disposal 

Dispute on various disallowances 

relating to the Tea division for the 

Ay 1989-90 to 1995-96 

Show cause notice for alleged nonfulfillment 

of export obligation and 

/or non-submission of documents in 

respect of advance license No. 

P/W/2143726/C dt. 25.03.96 





P/W/3257672 dt.20.04.90 





P/W/3264551/c dt. 11.06.91 





P/W/3264527 dt. 29.09.91 





P/W/2283506/C dt. 19.1.95 





P/W/3321991/C dt. 22.05.92 





P/W/3321992/C dt. 22.5.92 





P/W/3321994/C dt. 22.05.92 

Against Macneill Engineering Ltd. 

for recovery of outstanding loan. 

McLeod Russel India Ltd. and 

Eveready Industries India Ltd. 

Named as respondents as guarantors 

Rs. 404 Lacs 

Rs. 313 Lacs 

Rs. 48 Lacs 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Rs. 20 Lacs 

Rs. 20 Lacs 

Rs. 4.19 

Lacs 

S.No. Party Details Suit Details Nature of suit 

1. C IT Appeal Commissioner of 

Income Tax 

Calcutta 

2. Calcutta Municipal 

Corporation 

Writ Petition in the 

Calucutta High 

Appeal against the Assessment Years 1996-97 and 

2002-03 

For grant of mutation in facvour of the company for 

the area owned by the Company from erstwhile 

107

Court 

Vasundhara Properties as also for correction of 

annual valuation 

Litigation against /by Nirvan Commercial Co. Ltd. 


/Claims 

1. C IT Appeal Assesment year Appeal against the Assessment Years 3,33,100 

1997-98 with 1997-98 

Income Tax 

Appellate Tribunal 

Litigation against /by Ichamati Investments Pvt. Ltd. 

There are no pending litigations/ disputes by/ against the Company/ its Directors/ its promoters. 

Litigation against /by United Machine Co. Ltd. 


Litigation against /by Williamson Financial Services Ltd. 


/Claims 

1. Dept. of Company 

Affairs 

Litigations against/ by WPIL Limited : 

Sub-Divisional 

Judicial Magistrat 

Guwhati Assam 

Against a director and former 

Company Secretary of the Co. u/s. 

209, 147, 629A of the Companies 

Act, 1956 


1. A.K. Palit C.S. 69 of 2005 Dispute over alleged S.A.F. dues 

2. P. Dutta W.P. 613 of 2005 Dispute over alleged S.A.F. dues 

3. N.C. Banerjee W.P. of 2005 Dispute over alleged S.A.F. dues 

Litigations against Kilburn Office Automation : 


/Claims 

1 Export Credit GuaranteeDistrict Consumer Excise duty 

Not ascertainable 

Corporation of India 

Ltd. 

Forum 

Jaipur 

Jaipur 

Litigations against/ by Kilburn Chemicals Limited : 


1. P.Alagiri W.P. No. 

20849/2003 

High Court (???) 

2. P. Ganesan W.C. 358 of 2001 

Chennai High 

Court 

3. D. Magesh Domestic Enquiry 

Asst. Labour 

Commissioner 

4. G. Subramanian Domestic Enquiry 

Asst. Labour 

Commissioner 

Misuse & misrepresenting and attempting to forge 

signature of manager 

Fatal Accident by slipping from ceiling in ETP filter 

press area 

Negligence in duty 

False statement against management staff 

108

5. 

Income Tax : 

CIT (A) Appeal Funded interest 

CIT (A) Appeal ICD interest –KOAL 

Litigations against/ by Standard Batteries Limited : 


/Claims 

1. Provident fund 

penalty under 

Section 14B 

Regional Provident Fund 

Commissioner 

Chennai 

Penalty u/s. 14B 14.57 

2. Sales Tax matters 

under dispute - 

Cuttack 

(1996/97) 

3. Excise matters 

under dispute 

4. Income Tax 

matters under 

appeal 

(a) By Income 

Tax authorities 

(b) By the 

company for the 

years 1998/99 to 

2002/03 

5. By the Labours 

against the 

company 

Asst. Commisioner of Sales 

Tax 

Cuttack 1 Range 

Commissioner Central 

Excise 

Mumbai 

Commisioner Income Tax 

Mumbai 

Income Tax Commissioner 

Mumbai 

Income Tax Commissioner 

Mumbai 

Sales tax demand for the 

year 1996-97 

Penalty interest & excess 

availed Modvat credit 

Amount disputed by the 

Income Tax authority 

0.73 

58.10 

14.97 

Disputed by the Company 530.57 

Settlement has been reached Complaint for dismissal of 

with the dismissed/ suspended workers 

workmen, the cases in courts / 

Tribunals filed earlier have not 

yet been withdrawn. 

Litigation against /by Nitya Holdings & Properties Pvt. Ltd. 


Litigation against /by Dufflaghur Investments Ltd. 

There are no pending litigations/ disputes by/ against the Company/ its Directors/ its promoters 

Litigations against/ by McNally Bharat Engineering Co. Ltd. 

Cases filed against the company : 

116.99 


/Claims 

1. Sales Tax Tribunal 14342/94-95 Assessment completed by 19.39 

Hyderabad 

CTO, Nandigama & 

2. Sales Tax Tribunal 

Hyderabad 

3. Sales Tax Tribunal 

Hyderabad 

4. Labour court 

Dhanbad 

5. N. Muniraj 

Labour Court 

reopened by DC (CT) 

14349/96-97 Assessment completed byu 

CTO, Nandigama & appeal 

for refund 

14359/97-98 Assessment completed byu 

CTO, Nandigama & 

reopened by DC (CT) 

3/92 Contract labour –case for 

being absorbed permanently 

in company 

43/99 Termination of service --- 

8.86 

10.53 

Nil 

109

6. C.V. 

Venkataramanappa 

Labour Court 

7. Dominic Verghese 

Labour Court 

8. Chief Judicial 

Magistrate 

9. Session District 

Judicial Magistrate 

Asansol 

10 Jabalpur High 

Court 

11 CEGAT 

Kolkata 

12 Commissioner 

(Appeal) Patna 

















21 Asst. Comm 

Dhanbad 

22 Asst. Comm 

Dhanbad 

23 Asst. Comm 

Dhanbad 

24 Asst. Comm 

Dhanbad 

186/01 Termination of probationery 

service 

23/2003 Dismissal from service 

GR/3668/1991 Land dispute with KMCEL Nil 

193/2001 Accident Nil 

Criminal Revision No. 785 of 

1998 

V(84) (15) 33/91/ 

3107 dt. 14/6/91 

MP/13/04/KDBII/MBE/95/62 

dt. 7/12/1995 

MP/13/09/KDBII/MBE/95/117 

dt.3/3/1995 

MP/13/23/KDBII/MBE/95/435 

dt. 24/5/1995 

MP/13/23/KDBII/MBE/95/435 

dt. 7/12/1995 

MP/13/29/KDBII/MBE/95/645 

dt. 30/8/1995 

MP/13/32/KDBII/MBE/95/809 

dt. 31/10/1995 

MP/13/35/KDBII/MBE/95/815 

dt. 31/10/1995 

MP/13/37/KDBII/MBE/95/955 

dt. 28/11/1995 

MP/13/02/KDBII/MBE/96/24 

dt. 11/1/1996 

MP/13/02/KDBII/MBE/96/111 

Dt. 11/1/1996 

MP/13/02/SCN/99/KDB/1398 

Dt. 13/8/99 

MP/13/02/SCN/99/KDB/479 

Dt. 30/3/2000 

MP/13/02/SCN/99/KDB/478A 

Dt. 3/4/2000 

--- 

Crl. Case 2.54 

Appeal 6.70 

Appeal allowed 2.39 









CEGAT classification 28.32 

CEGAT classification 6.74 

CEGAT classification & 

notional interest 

CEGAT classification & 

notional interest 

18.80 

3.56 

Cases Filed by the Company : 


/Claims 

1 Asst. Comm. Dhanbad V(18)(94)29/ 

REFU ND/87/5420 

dt. 19/06/87 

Refund claim for site fabrication 8.65 

2 --do-- V(18)(94)26/ 

REFUND/87/6779 

dt. 18/08/87 

3 --do-- V(18)(94)29/ 


dt. 10/06/88 



110

4 CEGAT, KOLKATA FIN/346/RKC Refund claim for 

excess duty paid 

for BHEL 

2.48 

5 Asst. Comm. Dhanbad V(18)(94)29/ 


dt. 11/11/89 

Refund claim for duty 

paid on bought out 

castings FCI Talcher 

0.68 

6 --do-- V(84)(16)29/ 


dt. 27/04/95 

7 CEGAT, KOLKATA Nil. 

Dt. 02/02/2001 

Refund claim for 

classification dispute 

Refund for excess 

excise duty paid 

0.34 

0.08 

7a --do-- 5107-37/99/ARS Refund of Special Addl. 

Duty of B/E No. 1-1817 

dtd. 29/12/98 

0.51 

7b 

Custom House 

Drawback Dept 

834-M-255/2000 

Refund for excess duty paid – Refund 

of spares for Motor Grader 

0.8 

8 Commercial Tax 

Tribunal, Ranchi 

DN-16/2001 

SST- Tax charged on cement supplied 

by principal contractor and credit note 

not allowed. 

10.67 


Tribunal Ranchi 


Tribunal Ranchi 

11 DCCT, Chirkunda 

Circle 

DN-17/2001 --do-- 0.48 

DN-18/2001 --do-- 21.35 

CKCST-21/9899 

SST- Tax charged on cement supplied 

by principal contractor. CST-Refund for 

NTPC Import Sale Taxed 

0.62 

12 --do-- CKCST-59/9899 SST- Tax charged on cement supplied 

by principal contractor. Wrong tax 

charges on crane supplied by us. 

18.86 

13 --do-- CKCST-52/9899 CST -6% differential tax charged due to 

non production of C Form which is 

produced later. 

1.45 

111

14 --do-- CKST-17/0001 SST-wrong determination of TTO by 

AG Audit. One Form IX supplied by 

ECL rejected. 

46.37 

15 --do-- CKCST-12/0001 CST-NTPC import sale taxed wrongly 5.46 

16 --do-- CKST-29/9900 SST- Tax charged on cement supplied 

by principal contractor 

19.74 

17 --do-- CKCST-18/0001 CST –Tax charged under objection of 

AG audit due to heavy difference in 

sale and purchase price sold U/S 6(2) of 

CST Act. 

48.11 

18 --do-- Under Rule-34 of 

BST Rules 1957 

TDS deducted and deposited by 

Principal Contractor refundable 

12.39 

19 --do-- --do-- --do-- 3.04 

20 --do-- --do-- Refund of CST 0.73 

21 JCCT Appeals Dhanbad CKST-5/0405 CST-disallowance of credit not issued 

by us for sale refund from BGML, 

Kolar. 

0.96 

22 --do-- CKCST-3/0405 TDS in Form A-1 disallowed. 3.43 

23 High Court, Calcutta C.S. No. 236 of 2004 Non-payment of dues arising our of 

goods sold and delivered by the 

Company to one N.I. Energo 

Engineering Projects Ltd. 

11.13 

24 14 th Metropolitan 

Magistrate Court 

C.S. No. 4756 of 

2004 

Dishonour of a cheque amounting to 

Rs. 10,42,701/- issued by one Energo 

Engineering Projects Pvt. Ltd. In 

respect of goods sold and delivered by 

the Company to it 

10.43 

Litigations pending against/ by Williamson Magor & Co. Ltd.: 


/Claims 

1. Ex-employees of Co. 

(Dishergarh branch) 

MAT No. 803 

/1998 

Calcutta High 

Dispute relating to payment of 

gratuity 

Not 

ascertained 

2. Ex-employees of Co. 

(Dishergarh Branch) 

Court 

Pending before 

Calcutta High 

Court 

112 

Dispute relating to computation of 

compensation 

3. Satish Chandra Roy F.A. Case No. 74 Eviction suit relating to tenanted Not 

Not 

ascertained

of 1985 City Civil 

Court 

4. PrasantaMitra Suit No. 169 of 

1983 in City Civil 

Court 

5. Delta International Suit No. 90 of 

1997 in City Civil 

Court 

6. Bhusan Das (EXemployee) 

tribunal Calcutta 

1 st industrial 

7. Chowdhury Estate Pending before 

Pvt. Ltd. 

Calcutta High 

8. Williamson Magor & 

Co. Ltd. & 

Associated concern 

officers association 

Court 

Case No. CA 448 

of 2002 in Calcutta 

High Court 

show room 

Eviction suit in relation to residential 

premises at Kolkata 

Eviction wuit & title of lease in 

relation to Warehouse at Kolkata 

Dismissed employee claims 

reinstatement 

Eviction suit relating to residential 

premises at Kolkatta 

Alleged shortfall in the pension fund 

of Macneill engineering Ltd. 

9. ESI Corp. Kolkata ESI Court Kolkata Suit filed by co. against ESI demand 

and its computation. As per co.s 

calculation, amount payable has been 

deposited 

10 Commissioner of 

Central Excise 

Chennai 

11 Commissioner of 

central excise 

chennai 

12 Dy. Commissioner 

commercial taxes of 

chennai 


Commercial Taxes of 

Chennai 


Commercial Taxes 

Chennai 

15 Kilburn Electricals 

Ltd. 

16 42, Individual 

workers of Kilburn 

Electricals Ltd. 

Madras (WM 

Respondent No.2) 

17 Sanjay Mukandas 

Munat & Shriniwas 

B Bangad 

18 Golak Lal Seal Vs 

Banshi Binod 

Banbdhopadhayay 

W.P. No. 29368 of 

2003 

Madras High Court 

EOCC No. 82 of 

1994 in the Addl. 

Metropolitan 

Magistrate Chennai 

STA/499 of 2002 

sales Tax Appellate 

Tribunal Chennai 


Sales Tax 


Chennai 


Sales Tax 


Chennai 

CS/338/92 High 

Court at Chennai 

Labour Court 

Chennai 

RCS No. 555/03 in 

the Court of Civil 

Judge, Pune 

Title Suit No. 15 of 

2002 in the Civil 

Judge Alipore 

(WM Respondent 

No.2) 

19 Miss Devki Kalwani Suit No. 61/73 of 

1994 Vs. WM Mr. 

A K Sharma 

Mumbai 

Payment of interest on delyed 

payment of disputed duty 

Removal of goods allegedly without 

payment of excise duty 

Relating to classification dispute on 

sale of Tarpaulins in 98-99 





Claiming rightsof Kilburn brand 

name and prfit on sale of electrical 

goods sold with Kilburn name. 

Claiming injunction on company on 

the use of Kilburn name 

Alleged claim petition for 

reinstatement & back wages 

Dispute relating to registration of 

1080 shares of WTA 

Terminationo f lease of 35 D H 

Road, Kolkata 

Eviction suit by landlord for vacant 

possession of the flat 

ascertained 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Rs. 

7,11,104.25 

Not 

ascertained 

Rs. 7,450 

Rs. 62776 

Rs. 296269 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

113

20 Mr. A.K. Sharma 

(Ex-employee) 

RAD Suit No. 


Bandra Court 

Mumbai 

21 Kolkata Port Trust In the Estate Office 

Kolkata Port Trust 

22 Miss Devki Kalwani Suit No. 61/73 of 

1994 Vs. WM Mr. 

A.K. Sharma 

23 SP Vijay Prasad Vs 

RPFC Chennai 

Application No. 

933/2002 in the 

Madras Court 

24 Kolkata Port Trust In the Estate Office 

Kolkata Port Trust 

25 ITP Limited & 

Others 

Title Suit No. 1716 

of 2000 

(Chowdhury Estate 

& WM) 

26 Delta International APL No. 5 of 2004 

in the High Court 

Kolkata 

27 ITP Limited & 

Others 

28 Amar Nath Dutta & 

Others 

29 Aruna Chakraborty 

Vs Parul 

Chakraborty 

30 Director General of 

Foreign Trade, 

Kolkata 

31 Dy. Registrar of 

Companies 

Department of 

Company Affaris, 

Kolkata 


Companies 



Kolkata 

Misc. Case No. 

367 of 2004 in The 

City Civil Court, 

Kolkata 

COMP. 51 of 2001 

in the Labour 

Court 

Pending before 

Court of Civil 

Judge (WM 

Respodent No.2) 

02/82/40/0022/AM 

94 

Show cause notices 

No. 

TS1/STA/17715/In 

spn 

(Suppl)/147(1)(a), 

TS- 

1/STA/17715/Insp 

n 

(suppl)/290(3)(b)/2 

11, TS- 


n(suppl)/211(1), 


spn/(suppl)/217(3) 

and Ts- 


n(Suppl)/209(1) all 

dated 24/06/2004 


No. 


spn (Suppl)/49(7), 

TS- 

A K Sharma claimed that he is a 

Contractual tenant and not a licensee 

Eviction suit in respect of P6 

Transport Depot Road, Kolkata 

For handling over vacant possession 

of the flat compensation 

Contempt application 

Eviction from Transport Depot Road, 

Kolkata on alleged unauthorized 

occupation 

Eviction suit relating to residential 

flat at Kolkata 

Eviction suit relating to warehouse at 

Kolkata 

Eviction suit related to residential flat 

at Kolkata 

Compensation case 

Payment of dues of Ex-employee 

since deceased leaving 2 claimanants 



/or non-submissiono f documents in 


P/W/1525501/C dt. 30.06.93 

Alleged violation of sections 

147(1)(a), 209(3)(b)/ 211, 211(1), 

217(3) and 209(1) of the companies 

Act, 1956 

Alleged violation of sections 49(7), 

286(1), 219(1), 264(2), 293(1)(e), 

301(1), 303(1) and 307(1) of the 

companies Act, 1956 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

Rs. 2,65,000 

Not 

ascertained 

Not 

ascertained 

Not 

ascertained 

114


Companies 



Kolkata 

34 Asst. Registrar of 

Companies 



Kolkata 


n (suppl)/209(1), 

TS- 


n(suppl)/264(2), 


spn/(suppl)/286(1) 

and TS- 


n(Suppl)/293(1)(e), 

TS- 


n(Suppl)/301(1), 

TS- 


n(Suppl)/303(1) 



n(Suppl)/307(1)all 

dated 25/06/2004 


No. TS- 


n(Suppl)/224(8)(b) 



n (Suppl)/17/291 

both dated 

18.2.2005 


No. TS- 


n(Suppl)/205A(3) 



n 

(Suppl)/17/205(2A 

) both dated 

30.10.2003 


224(8)(b) and 17/291 of the 

Companies Act, 1956 


205A(3) and 205(2A) of the 


Not 

ascertained 

Not 

ascertained 

115

GOVERNMENT APPROVALS AND LICENSING 

Various approvals and licenses obtained by the Company are listed below. It must, however, be 

distinctly understood that in granting the above consents/ licenses/ permissions/ approvals, the 

Government does not take any responsibility for the financial soundness of the company or for the 

correctness of any of the statements or any commitments made or opinions expressed. 

Investment Approvals (FIPB/ RBI, etc.) 

As per Notification No. FEMA 20 / 2000 - RB dated 3rd May 2000, as amended from time to time, under 

automatic route of Reserve Bank, the Company is not required to make an application for Issue of Equity 

Shares to NRIs/FIIs with repatriation benefits. However, the allotment / transfer of the Equity Shares to 

NRIs/ FIIs shall be subject to prevailing RBI Guidelines. Sale proceeds of such investments in Equity 

Shares will be allowed to be repatriated along with the income thereon subject to the permission of the 

RBI and subject to the Indian tax laws and regulations and any other applicable laws. 

Approvals required for manufacturing 

Industry License 

KEL has obtained a Industrial Licence No. IL:55(79) dated : 31.10.1979, which was originally granted to 

M/s. Macneill & Magor Limited, Calcutta for the manufacture of Chemical and Pharmaceutical 

Machinery falling under Scheduled Industry No. 8-A. The Ministry of Industry, New Delhi has vide its 

letter dated: 15.05.1990 has re-endorsed the said license in favour of KEL. Further following are the 

various approvals obtained by KEL from the Ministry : 

Re-endorsement of license enhancing annual capacity of 781 tonnes of 16.03.1983 

drying systems and 500 numbers of water stills 

Regularisation of excess capacity under Ministry of Industries Note dt. 31.03.1983 

29.08.1980 

Amendment of Industrial Licence for manufacture of water still, drying 9.08.1985 

system, pressure vessels, heat exchangers, mixers and agitators. 

Proposal for manufacture of pressure vessles 7.01.1986 

Broad categorization for the manufacture of chemical, pharmaceutical petrochemical 

and fertilizer machinery 

8.8.1986 

Amendment to Broad categorization for the manufacture of chemical, 30.10.1986 

pharmaceutical machinery 

Endorsement of licence for manufacture of additional item – centrifugal fans 19.3.1987 

for industrial use 

Endorsement of licence for manufacture of chemical, pharmaceutical 20.4.1990 

machinery 

Endorsement of industrial licence in favour of KEL 15.5.1990 

Factory License 

KEL has obtained a license No. 50947 (Originally No. 62335), dated 13/02/2002 to run a factory under 

the Factories Act, 1948 from the Government of Maharashtra 

The Company is in possession of a Factory Permission No. Sub-39-s of 1981-82, dated : 15 th September, 

1992, from the Municipal Corporation of Greater Bombay to establish the industry. The said permission 

is renewed further for the period ending 31 st March, 2006 (vide permit stamp of Municipal Corporation 

of Greater Bombay No. AEBF/1808/B-1200 of 5 th May, 2004). 

Statutory approvals 

Registration under Export – Import 

The Company is registered as a manufacturer exporter vide IEC No. 0289015324, dated: 28 th February, 

1990 with the Engineering Export Promotion Council, Kolkatta and the registration is valid upto 31 st 

March, 2007. 

116

Registration under Central Excise 

The Company is in possession of Central Excise Registration Certificate bearing Registration number 

AABCK3123E XM 002. 

Registration under Labour Laws 

Registration Code No. 31-8246-90 granted by Employees’ State Insurance Corporation. 

While the other employees are covered under the Mediclaim Policy of National Insurance co. and 

Personal Accident Policy of United Insurance India Co. 

Professional Tax Registration No. PT/R/1/1/32/9246 

Registration No. MH-2485 granted by the Office of the Regional Provident Fund Commissioner. 

Approvals not received or renewed: 

License under Shops and Establishment Act for Kolkata office 

The Company has not obtained a license under the Shops and Establishment Act in respect of the 

registered office of the Company located at Kolkata. 

Pollution Control 

The Company had received consent from Maharashtra Pollution Control Board ( MPCB) for carrying on 

its business activities and the same was valid up 31/07/1998.The same has not been renewed by the 

Company upto the year 2004. However, the Company has made an application to MPCB, vide its letter 

no. KEL/HRD/07/2004-05 dated 28 th July, 2005, for renewal of the consent w.e.f. 01/08/1998 upto 

31/07/2007. An approval of the same is still awaited. 

OTHER INCIDENTAL LICENSES 

The Company is in possession of the necessary permission from the Municipal Corporation of Greater 

Mumbai vide its letter CE/998/BPES/AS, dated : 7 th July, 2005 granted for a period of six months from 

the aforementioned date. 

Other than those stated above no further major approval from any government authority/RBI is required 

to continue the business activities. 

117

IMPORTANT INFORMATION 

OTHER REGULATORY AND STATUTORY DISCLOSURES 

• Under no circumstances should any request be sent to the Lead Manager to the Offer. 

• The Company undertakes to provide adequate Funds to the Registrars to the Offer for posting of 

the Refund Orders/ Letters of Allotment/ Share Certificates by registered post wherever 

applicable. 

AUTHORITY FOR THE PRESENT ISSUE 

The Board of Directors of the Company (hereinafter referred to as “The Board”) in pursuance to a 

special resolution passed at the Extra-ordinary General Meeting held on September 12, 2005 have 

decided to offer 67,47,900 equity shares of Rs. 10/- each at premium of Rs.15/- per share aggregating to 

Rs.16,86,97,500 to the existing equity shareholders of the Company on rights basis in the ratio of 1 

(one) equity share for every 1 (one) equity shares (i.e.1:1) held as on __________ (hereinafter referred 

to as “Record Date”). 

PROHIBITION BY SEBI 

The Company, its Promoters, Directors or any of the Company’s associates or group companies with 

which the Directors of the Company are associated as Directors or Promoters have not been prohibited 

from accessing the capital market under any order or direction passed by SEBI. 

The promoters, their relatives, KEL, group companies are not detained as willful defaulters by RBI/ 

Government authorities and there are no violations of securities laws committed by them in the past or 

pending against them. 

ELIGIBILITY 

Kilburn Engineering Limited is an existing listed Company. It is eligible to offer this Rights Issue in 

terms of Clause 2.4 (iv) of the SEBI (DIP) Guidelines, 2000. 

DISCLAIMER CLAUSE 

AS REQUIRED A COPY OF THIS LETTER OF OFFER HAS BEEN SUBMITTED TO 

SEBI. IT IS TO BE DISTINCTLY UNDERSTOOD THAT THE SUBMISSION OF THIS 

LETTER OF OFFER TO SEBI SHOULD NOT, IN ANY WAY, BE DEEMED OR 

CONSTRUED THAT THE SAME HAS BEEN CLEARED OR APPROVED BY SEBI. 

SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR THE FINANCIAL 

SOUNDNESS OF ANY SCHEME OR THE PROJECT FOR WHICH THE ISSUE IS 

PROPOSED TO BE MADE, OR FOR THE CORRECTNESS OF THE STATEMENTS 

MADE OR OPINIONS EXPRESSED IN THE OFFER DOCUMENT. LEAD MERCHANT 

BANKER, IDBI CAPITAL MARKET SERVICES LIMITED, HAS CERTIFIED THAT 

THE DISCLOSURES MADE IN THE LETTER OF OFFER ARE GENERALLY 

ADEQUATE AND ARE IN CONFORMITY WITH SEBI GUIDELINES FOR 

DISCLOSURES AND INVESTOR PROTECTION IN FORCE FOR THE TIME BEING. 

THIS REQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN INFORMED 

DECISION FOR MAKING INVESTMENT IN THE PROPOSED ISSUE. 

IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE ISSUER 

COMPANY IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY 

AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THE LETTER OF 

OFFER, THE LEAD MANAGER IS EXPECTED TO EXERCISE DUE DILIGENCE 

TO ENSURE THAT THE COMPANY DISCHARGES ITS RESPONSIBILITY 

ADEQUATELY IN THIS BEHALF AND TOWARDS THIS PURPOSE, THE LEAD 

MANAGER, IDBI CAPITAL MARKET SERVICES LIMITED HAS FURNISHED TO 

SEBI A DUE DILIGENCE CERTIFICATE DATED 11 TH NOVEMBER, 2005 IN 

ACCORDANCE WITH SEBI (MERCHANT BANKERS) REGULATION 1992 WHICH 

READS AS FOLLOWS: 

118

(I) WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING 

TO LITIGATION LIKE COMMERCIAL DISPUTES, PATENT DISPUTES, DISPUTES 

WITH COLLABORATORS ETC. AND OTHER MATERIALS IN CONNECTION 

WITH THE FINALISATION OF THE LETTER OF OFFER PERTAINING TO THE 

SAID ISSUE. 

(II) ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE 

COMPANY, ITS DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES, 

INDEPENDENT VERIFICATION OF THE STATEMENTS CONCERNING THE 

OBJECTS OF THE ISSUE, PROJECTED PROFITABILITY, PRICE 

JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS MENTIONED IN 

THE ANNEXURE AND OTHER PAPERS FURNISHED BY THE COMPANY. 

WE CONFIRM THAT: 

(A) THE LETTER OF OFFER FORWARDED TO SEBI IS IN CONFORMITY WITH 

THE DOCUMENTS, MATERIALS AND PAPERS RELEVANT TO THE ISSUE; 

(B) ALL THE LEGAL REQUIREMENTS CONNECTED WITH THE SAID ISSUE, AS 

ALSO THE GUIDELINES, INSTRUCTIONS, ETC. ISSUED BY SEBI, THE 

GOVERNMENT AND ANOTHER COMPETENT AUTHORITY IN THIS BEHALF 

HAVE BEEN DULY COMPLIED WITH; AND 

(C) THE DISCLOSURES MADE IN THE LETTER OF OFFER ARE TRUE, FAIR 

AND ADEQUATE TO ENABLE THE INVESTORS TO MAKE A WELL 

INFORMED DECISION AS TO THE INVESTMENT IN THE PROPOSED ISSUE. 

(D) WE CONFIRM THAT BESIDES OURSELVES, ALL THE INTERMEDIARIES 

NAMED IN THE LETTER OF OFFER ARE REGISTERED WITH SEBI AND 

THAT TILL DATE SUCH REGISTRATION IS VALID. 

THE FILING OF THE LETTER OF OFFER DOES NOT, HOWEVER ABSOLVE THE 

COMPANY FROM ANY LIABILITIES UNDER SECTION 63 OF THE COMPANIES ACT, 

1956, OR FROM THE REQUIREMENT OF OBTAINING SUCH STATUTORY OR OTHER 

CLEARANCES AS MAY BE REQUIRED FOR THE PURPOSE OF THE PROPOSED ISSUE. 

SEBI FURTHER RESERVES THE RIGHT TO TAKE UP AT ANY POINT OF TIME, WITH 

THE LEAD MANAGER FOR ANY IRREGULARITIES OR LAPSES IN THE LETTER OF 

OFFER. 

THE PROMOTERS / DIRECTORS OF KEL VIZ. MR. DEEPAK KHAITAN, MR. V. R. SINHA, 

MR. S. MUKHERJEE, MR. P. K. MOGAL, MR. A. U. KATRA, MR. P. K. KHAITAN, MR. S. R. 

DASGUPTA AND MR. AMRITANSHU KHAITAN DECLARE AND CONFIRM THAT NO 

INFORMATION/MATERIAL LIKELY TO HAVE A BEARING ON THE DECISION OF 

INVESTORS IN RESPECT OF THE SHARES OFFERED IN TERMS OF THIS LETTER OF 

OFFER HAS BEEN SUPPRESSED / WITHHELD AND / OR INCORPORATED IN THE 

MANNER THAT WOULD AMOUNT TO MIS-STATEMENT/ MISREPRESENTATION AND 

IN THE EVENT OF ITS TRANSPIRING AT ANY POINT IN TIME TILL 

ALLOTMENT/REFUND, AS THE CASE MAY BE, THAT ANY INFORMATION/MATERIAL 

HAS BEEN SUPPRESSED/WITHHELD AND/ OR AMOUNTS TO A MIS-STATEMENT/MIS- 

REPRESENTATION, THE PROMOTERS/DIRECTORS UNDERTAKE TO REFUND THE 

ENTIRE APPLICATION MONIES TO ALL SUBSCRIBERS WITHIN 7 DAYS THEREAFTER 

WITHOUT PREJUDICE TO THE PROVISIONS OF SECTION 63 OF THE COMPANIES ACT. 

CAUTION / DISCLAIMER CLAUSE OF THE ISSUER AND THE LEAD MANAGER 

The Company and the Lead Manager accept no responsibility for the statements made otherwise than in 

the Letter of Offer or in the advertisement or any other material issued by or at the instance of the issuer 

and that anyone placing reliance on any other source of information would be doing so at their own risk. 

DISCLAIMER IN RESPECT OF JURISDICTION 

This Offer is being made in India to persons resident in India (including Indian nationals resident in India 

who are majors, Hindu Undivided Families, companies, corporate bodies and societies registered under 

the applicable laws in India and authorised to invest in shares, Indian mutual funds registered with SEBI, 

Indian financial institutions, commercial banks, regional rural banks, co-operative banks (subject to RBI 

119

permission), Trusts registered under the Societies Registration Act, 1860, or any other Trust law and who 

are authorised under their constitution to hold and invest in shares) and to NRIs, OCBs and FIIs as 

defined under the Indian laws. This Offer Document does not, however, constitute an offer to sell or an 

invitation to subscribe to securities issued hereby in any other jurisdiction. Any person into whose 

possession this Offer Document comes is required to inform himself about and to observe any such 

restrictions. Any dispute arising out of this Offer will be subject to the jurisdiction of appropriate 

court(s) in India only. 

No action has been or will be taken to permit a public offering in any jurisdiction where action would be 

required for that purpose, except that this Offer Document has been submitted to the SEBI. Accordingly, 

the equity shares represented thereby may not be offered or sold, directly or indirectly, and this Offer 

Document may not be distributed, in any jurisdiction, except in accordance with the legal requirements 

applicable in such jurisdiction. Neither the delivery of Offer Document nor any sale hereunder shall, 

under any circumstances, create any implication that there has been no change in the affairs of Kilburn 

Engineering Limited since the date hereof or that the information contained herein is correct as of any 

time subsequent to this date. 

LISTING 

The existing equity shares of the Company are listed on BSE (Designated Stock Exchange) and the CSE. 

Applications will be made to the BSE and the CSE for permission to deal in and for an official quotation 

in respect of the equity shares of the Company being offered in terms of this Letter of Offer. The 

Company has received ‘in-principle’ approval from BSE and CSE for listing of the equity shares issued 

pursuant to the Rights Issue vide their letters dated _____ and ____ respectively. 

The equity shares of the company were earlier listed on the Vadodara Stock Exchange (‘VSE’). The 

equity shares have since been voluntarily delisted from the VSE w.e.f. 24 th March, 2005 pursuant to the 

Special Resolution passed by the shareholders at their meeting held on 31/03/2004. 

DISCLAIMER CLAUSE OF THE BOMBAY STOCK EXCHANGE LIMITED (BSE) 

As required a copy of this Draft Letter of Offer has been submitted to BSE. The BSE has given the 

permission to the Company vide its letter dated __________ to use their name in this Draft Letter of 

Offer as one of the stock exchanges on which Equity Shares of the Company being issued in terms of this 

Draft Letter of Offer are proposed to be listed. The BSE has scrutinized this Draft Letter of Offer for 

their limited internal purpose of deciding on the matter of granting the aforesaid permission to the 

Company. It is to be distinctly understood that the aforesaid permission given by the BSE should not in 

any way be deemed or construed that the Draft Letter of Offer has been cleared or approved by BSE nor 

does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents 

of this Letter of Offer; nor does it warrant that the Company’s securities will be listed or will continue to 

be listed on the BSE nor does it take any responsibility for the financial or other soundness of the 

Company, its Promoters, its management or any scheme or project of this Company. 

Every person who desires to apply for or otherwise acquires any securities of this Company may do so 

pursuant to an independent inquiry or any investigation and analysis and shall not have any claim against 

the BSE whatsoever by reason of any loss which may be suffered by such person consequent to or in 

connection with such subscription/ acquisition whether by reason of anything stated or omitted to be 

stated herein or for any other reason whatsoever. 

DISCLAIMER CLAUSE OF THE CALCUTTA STOCK EXCHANGE ASSOCIATION 

LIMITED (CSE) 

As required a copy of this Draft Letter of Offer has been submitted to CSE. The CSE has given the 

permission to the Company vide its letter dated __________ to use their name in this Draft Letter of 

Offer as one of the stock exchanges on which Equity Shares of the Company being issued in terms of this 

Draft Letter of Offer are proposed to be listed. The CSE has scrutinized this Draft Letter of Offer for 

their limited internal purpose of deciding on the matter of granting the aforesaid permission to the 

Company. It is to be distinctly understood that the aforesaid permission given by the CSE should not in 

any way be deemed or construed that the Draft Letter of Offer has been cleared or approved by CSE nor 

does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents 

of this Letter of Offer; nor does it warrant that the Company’s securities will be listed or will continue to 

120

e listed on the CSE nor does it take any responsibility for the financial or other soundness of the 

Company, its Promoters, its management or any scheme or project of this Company. 

Every person who desires to apply for or otherwise acquires any securities of this Company may do so 

pursuant to an independent inquiry or any investigation and analysis and shall not have any claim against 

the CSE whatsoever by reason of any loss which may be suffered by such person consequent to or in 

connection with such subscription/ acquisition whether by reason of anything stated or omitted to be 

stated herein or for any other reason whatsoever. 

FILING 

A copy of this Letter of Offer dated _________ has been filed with SEBI, Kolkata, The Bombay Stock 

Exchange Limited (BSE) (Designated Stock Exchange), and the Calcutta Stock Exchange Association 

Limited ( CSE). 

IMPERSONATION 

Attention of the applicants is specifically drawn to the provisions of Sub-Section (1) of section 68A 

of the Companies Act, 1956 which is reproduced below: 

“ Any person who – 

(a) makes in a fictitious name an application to a Company for acquiring, or subscribing for, 

any shares therein, or 

(b) otherwise induces a Company to allot or register any transfer of shares therein to him, or 

any other person in a fictitious name, 

shall be punishable with imprisonment for a term which may extend to five years.” 

CONSENTS 

Consents in writing of : (a) the Directors, the Company Secretary and Compliance Officers, the Auditors, 

Lead Manager to the Issue and Registrar to the Issue, to act in their respective capacities, have been 

obtained and shall be filed along with a copy of the Letter of Offer with SEBI and such consents have 

not been withdrawn up to the time of delivery of this draft Letter of Offer for registration with SEBI. 

Deloitte Haskins & Sells, Stautory Auditors, have given their written consent to the inclusion of their 

report in the form and context in which it appears in this draft Letter of Offer and such consent and 

report has not been withdrawn up to the time of delivery of this Letter of Offer for filing with the SEBI. 

EXPERT OPINION 

No expert opinion has been obtained in respect of the present Rights Issue. 

EXPENSES OF THE ISSUE 

Please refer to para under ‘ Issue Expenses’ on page no. _____ of this Draft Letter of Offer. 

PREVIOUS PUBLIC ISSUES OR RIGHTS ISSUES 

The Company has not made a public or rights issue during the past five years. 

PREVIOUS ISSUE OF SHARES OTHERWISE THAN FOR CASH 

The Company has issued 5,28,000 equity shares of Rs. 10/- each to Williamson Magor & Co. Ltd. 

without payment being received in cash on 4 th June, 1990 for acquisition of its Kilburn Division 

pursuant to the scheme of arrangement approved by the Calcutta High Court. 

COMMISSION OR BROKERAGE ON PREVIOUS ISSUES 

The Company made one public issue since inception and no underwriting commission was paid, as the 

issue was not underwritten. The Company has paid the brokerage @ 1.5% to the members of any 

recognized stock exchange in India on the issue price of Equity Shares on the basis of allotment made 

121

against applications bearing their respective stamps in the Broker’s column. Brokerage at the same rate 

was also paid to the Bankers to the Issue in respect of allotments made against applications procured by 

them provided the relative forms off application bear their respective stamps in the Broker’s column. 

PARTICULARS IN REGARD TO CAPITAL ISSUE DURING THE LAST THREE YEARS 

By The Company 

The Company has not made any capital Issue during the last three years. 

Listed companies under the same management within the meaning section 370 (1)(B) of the 


None of the listed group companies of KEL have made preferential allotment of shares or issued 

debentures or made any public or rights issue in the past three years. 

PROMISE VERSUS PERFORMANCE 

For KEL 

Public Issue 

The Company’s Public Issue of 18,00,000 equity shares of Rs. 10/- each for cash at par aggregating to 

Rs. 1.80 Crores through its Prospectus dated 16 th March, 1990 and which were allotted on 4 th June, 1990. 

There were no forecast made in the prospectus. 

Rights Issue 

The Company’s’ Rights Issue of 34,59,000 equity shares of Rs. 10/- each at a premium of Rs. 25/- for 

cash per share aggregating to Rs. 12.11 Crores in the ration of one equity share for every one equity 

share held on 24 th February, 1993 (referred to as the record date) through the Letter of Offer dated 10 th 

March, 1993 and which were allotted on 21 st May,1993. The performance of the company vis-à-vis the 

projection made in the prospectus is given below: 

(Rs. In lacs) 

Particulars for the year ending 31 st March 

1993 

Proj. 

1993 

Actual 

1994 

Proj. 

1994 

Actual 

1995 

Proj. 

1995 

Actual 

1996 

Proj. 

1996 

Actual 

Income from 2621 2364 3822 3174 5460 3140 8281 4443 

operations 

(net of excise) 

Profit before 204 184 191 270 236 254 845 257 

Tax 

Profit after Tax 143 104 161 195 198 231 473 217 

Equity Share 337 337 683 675 683 675 683 675 

Capital 

Networth 475 472 1716 1713 1783 1817 2125 1897 

NAV (Rs.) 14.09 14.00 25.12 25.37 26.10 26.91 31.11 28.09 

EPS (Rs.) 4.24 3.08 2.36 2.88 2.90 3.42 6.93 3.21 

Reasons for Variation in Promises V/s. Performance 

The performance has been significantly lower in the FY 1993 and FY 1996 owing to Lower Order 

Booking and high fixed expenses. 

For Listed Companies in the Group 

None of the listed companies in the group have issued equity shares pursuant to a public/ rights issue 

during the past five years. 

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STOCK MARKET DATA 

The equity shares of the Company are listed on the Stock Exchange, Mumbai. The stock market data for 

the equity shares on the BSE are as follows: 

High 

Date (Rs) 

Low 

Date (Rs) 

Average 

Price (Rs.) 

High 

Volume Low 

Volume on 

Particulars 

(Rs) 

on date (Rs) 

date of 

of high 

Low 

(no. of 

(no of 

shares) 

shares) 

2002 4 9/7/2002 1800 0.90 23/8/2002 200 2.45 

2003 9 29/12/2003 3400 0.85 22/5/2003 100 4.93 

2004 28.52 31/12/2004 23700 1.97 21/4/2004 4100 15.25 

March, 2005 57 4/3/2005 39300 38.30 1/3/2005 22600 47.65 

April, 2005 61 26/4/2005 93700 41.80 5/4/2005 3400 51.40 

May, 2004 78.25 23/5/2005 43500 46 3/6/2005 9000 62.13 

June, 2005 68 1/6/2005 8000 53 23/6/2005 6200 60.50 

July, 2005 72 26/7/2005 54400 52.25 13/7/2005 32100 62.13 

Aug, 2005 95 17/8/2005 46300 60.10 1/8/2005 11100 77.55 

Sep.,2005 83.75 01/09/2005 8200 59.65 30/09/2005 48100 71.70 

Oct., 2005 64.45 06/10/2005 4100 44.05 31/10/2005 1200 54.25 

Week end price of equity Shares of KEL on the BSE 

Week ended 

Price (Rs) 

21 st October, 2005 47.25 

28 th October, 2005 45.10 

2 nd November, 2005 44.90 

11 th November, 2005 49.40 

The market price of KEL as on 30/05/2005 (next working day) immediately after the date on which 

the resolution of the Board of Directors approving the issue was passed 27/05/2005 is Rs. 63.05 /-. 

The market price of KEL as on 13/09/2005 immediately after the date of the EGM (12/09/2005) 

was Rs. 73.45 /-. 

• The Cum-Rights Closing price of the shares of the Company as on ____ was ______ 

• The Ex-Rights closing price of the shares of the Company as on ___ was _____ 

THE CALCUTTA STOCK EXCHANGE 

The equity shares of the company are not traded on the Calcutta Stock Exchange. 

Mechanism for redressal of investor grievances 

The company has a Registrar and Share Transfer Agent. The investor grievances are redressed within a 

period of one week from the date of receipt of the complaint. 

Disposal of Investor Grievance 

The Company has appointed Intime Spectrum Registry Limited, Registrar and Share Transfer Agents, as 

a common agency to expedite the process of share transfer. The share transfers lodged are being 

processed on a day-to day basis and memorandum of transfers is generated on a fortnightly basis. 

Investor Grievance received during the period from September, 2004 to August, 2005 have been resolved 

and there are no pending investor grievances as on date. Details of the investor complaints received are 

given below: 

Sr. Nature of the Complaint No. of Time Taken 

No 

Complaints 

1. Non Receipt of Share Certificates 39 Within 30 days 

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2. Non Receipt of Annual Report 13 Within 7 days 

3. Others 29 Within 10 days 

Total 81 

The Company has appointed Mr. B. N. Shah, Company Secretary, as Compliance Officer. The investors 

may contact the Compliance Officer in case of any pre issue/post issue related problems such as nonreceipt 

of allotment advise, refund orders, demat credits etc. The Compliance Officer will be available at 

the following address: Subhash Nagar, Bhandup, Mumbai - 400 078, Tel.: (022) 2566 3101/0210 Fax: ( 

022) 2566 8436, Email : kilburn@bom3.vsnl.net.in 

Change in Auditors 

There has been no change in the auditors during last three years. 

Capitalization of reserves or profit 

We have not capitalized our reserves or profits during the last five years. 

Revaluation of Assets 

We have not revalued our assets in the past five years. 

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TERMS OF THE ISSUE 

The Equity Shares now being offered are subject to the provisions of the Act and the terms and 

conditions of this Letter of Offer, the CAF, the MoA and AoA of the Company, the approvals from the 

Government of India, FIPB and RBI, if applicable, FEMA, guidelines issued by SEBI, laws, guidelines, 

notifications and regulations for issue of capital and for listing of Equity shares issued by SEBI, 

Government of India, RBI and/or other statutory authorities and bodies from time to time, listing 

agreements entered into by the Company with Stock Exchanges, terms and conditions as stipulated in the 

allotment advise or letters of allotment, rules as may be applicable and introduced from time to time. 

RANKING OF EQUITY SHARES 

The Equity Shares allotted pursuant to this Letter of Offer shall rank pari-passu in all respects with the 

existing Equity Shares of the Company including in respect of dividend, if any, declared by the 

Company, for the financial year, in which these Equity Shares are allotted. 

RIGHTS OF SHAREHOLDERS 

Subject to applicable laws, the equity shareholders shall have the following rights : 

• Right to receive dividend, if declared; 

• Right to attend general meetings and exercise voting powers, unless prohibited by law; 

• Right to vote on a poll either in person or by proxy; 

• Right to receive offers for rights shares and be allotted bonus shares, if announced; 

• Right to receive surplus on liquidation; 

• Right to free transferability; and 

• Such other rights, as may be available to a shareholder of a listed public company under the 

Companies Act and our Memorandum and Articles. 

MARKET LOT 

Since trading of our equity shares is in dematerialized form, the tradable lot is one equity share. 

In case of physical certificates the company would issue one certificate for the Equity shares allotted to 

one person (Consolidated Certificate). In respect of the consolidated certificate, the company will only 

upon receipt of a request from the Equity shareholders, split such consolidated certificate into smaller 

denomination with in week’s time from the date of the request from the Equity shareholders. No fee 

would be charged by the company for splitting the consolidated certificate. 

NOMINATION FACILITY TO THE INVESTOR 

In accordance with Section 109A of the Companies Act, the sole or first bidder, along with other joint 

bidder, may nominate any one person in whom, in the event of the death of sole bidder or in case of joint 

bidders, death of all the bidders, as the case may be, the Equity Shares allotted, if any, shall vest. A 

person, being a nominee, entitled to the Equity Shares by reason of the death of the original holder(s), 

shall in accordance with Section 109A of the Companies Act, be entitled to the same advantages to 

which he or she would be entitled if he or she were the registered holder of the equity share(s). Where the 

nominee is a minor, the holder(s) may make a nomination to appoint, in the prescribed manner, any 

person to become entitled to equity share(s) in the event of his or her death during the minority. A 

nomination shall stand rescinded upon a sale/ transfer/ alienation of equity share(s) by the person 

nominating. A buyer will be entitled to make a fresh nomination in the manner prescribed. Fresh 

nomination can be made only on the prescribed form available on request at our Registered / Corporate 

Office or to our Registrar and Transfer Agents. 

MINIMUM SUBSCRIPTION 

The minimum subscription which must be raised by this issue of equity shares is 90% of the total issue 

of Rs 16,86,97,500/- being the aggregate issue size of 67,47,900 equity shares of Rs. 10/- each at a price 

of Rs.15/- per share offered in terms of this Letter of Offer. The Board of Directors will proceed to allot 

the shares on receipt of the application money payable on 90% of the 67,47,900 equity shares. 

125

If the Company does not receive the minimum subscription of 90% of the issued amount upto the date of 

closure of the issue, or if the subscription level falls below 90% after the closure of issue on account of 

cheques having been returned unpaid or withdrawal of applications, the Company shall forthwith refund 

the entire subscription amount received within 42 days from the date of closure of the issue. If there is a 

delay beyond 8 days after the Company becomes liable to pay the amount, the Company shall pay 

interest for the delayed period as per Section 73 of the Companies Act, 1956. 

In case this Rights Issue is undersubscribed after considering the number of Equity Shares applied as per 

entitlement/ renouncement and additional Equity Shares, the undersubscribed portion shall be applied for 

by the persons in the promoter group (as disclosed on page no. ____ of this Letter of Offer )only after the 

close of the Issue. 

BASIS OF THE OFFER 

The Equity Shares are being offered for subscription for cash to those existing Equity Shareholders 

whose names appear as beneficial owners as per the list furnished by the depositories in respect of the 

Equity Shares held in the electronic form and on the Register of Members of the Company in respect of 

Equity Shares held in the physical form at the close of business hours on the Record Date. The Company 

has in consultation with the Designated Stock Exchange fixed the Record Date for determining the 

shareholders who are entitled to receive this offer for Equity shares on a rights basis. The Equity Shares 

are being offered for subscription in the ratio of Four Equity Share for every five Equity Shares held by 

the Equity Shareholders. The shareholders whose names appear as beneficial owners as per the list 

furnished by the depositories in respect of the Equity Shares held in electronic form and on the register of 

members of the Company in respect of the shares held in physical form on 26/08/2005 at the close of 

business hours shall be entitled to the equity shares on the Rights basis in the ratio of four equity share 

for every five equity shares held by them. 

DISPOSAL OF ODD LOTS 

The equity shares are being issued in the ratio of one equity shares for every equity share held as on 

record date. As such the rights issue will not lead to any odd lots. 

OPTION TO SUBSCRIBE 

Applicants to the Equity Shares of the Company issued through this Rights Issue shall be allotted the 

securities in dematerialized (electronic) form at the option of the applicant. 

RIGHTS ENTITLEMENT 

As your name appears as beneficial owner in respect of the shares held in the electronic form or appears 

in the register of members as an equity shareholder of the Company on the Record Date, you are entitled 

to this Rights Offer. The number of Equity Shares to which you are entitled is shown in Block I of Part A 

of the enclosed CAF and as shown in part A of the enclosed CAF. 

FRACTIONAL ENTITLEMENT 

The present rights issue being in the ratio of 1:1 will not lead to any fractional entitlement. 

JOINT-HOLDERS 

Where two or more persons are registered as the holders of any Equity Shares, they shall be deemed (so 

far as the company is concerned) to hold the same as joint-tenants with benefits of survivorship subject to 

provisions contained in the Articles. 

OFFER TO NON-RESIDENT EQUITY SHAREHOLDERS/ APPLICANTS 

Presently 8000 equity shares aggregating to 0.12 % of the present issued capital are held by 

NRIs/FIIs/OCBs on repatriation basis. Applications received from NRIs and other NR shareholders for 

allotment of Equity Shares shall be, inter alia, subject to the conditions imposed from time to time by the 

RBI under the FEMA in the matter of refund of application moneys, allotment of Equity Shares, issue of 

Letter of Allotment / share certificates, payment of interest, dividends, etc. General permission has been 

granted to any person resident outside India to apply shares offered on rights basis by an Indian 

126

Company in terms of FEMA and the rules and regulations thereunder. Vide notification dated June 18, 

2003, bearing number FEMA 94/2003, RBI has granted general permission to Indian companies to issue 

rights/bonus shares to existing non-resident shareholders. The existing non-resident shareholders may 

apply for issue of additional shares and the Company may allot the same subject to the condition that the 

overall issue of shares to non-residents in the total paid up capital does not exceed the sectoral cap. In 

other words, non-residents may subscribe for additional shares over and above shares offered on rights 

basis by the company and renounce the shares offered in full or part thereof in favour of a person named 

by them. Residents may subscribe for additional shares over and above the shares offered on rights basis 

by the Company and also renounce the shares offered either in full or part thereof in favour of a person 

named by them. The Equity Shares issued under the Rights Issue and purchased by NR shall be subject 

to the same conditions including restrictions in regard to the repatriability as are applicable to the 

previously held Equity Shares against which Equity Shares under the Rights Issue are issued. 

However, as per the provisions of AP (DIR) circular No. 14 dated September 16, 2003 (issued by the 

RBI), such shareholders who have been allotted the Equity Shares as OCBs would not be permitted to 

participate in the Rights Issue. Accordingly, shareholders/ applicants who are OCBs and wishing to 

participate in the Rights Issue would be required to submit approvals in relation thereto from the FIPB 

and the RBI. The Board of Directors may at its absolute discretion, agree to such terms and conditions as 

may be stipulated by RBI while approving the allotment of Equity Shares, payment of dividend etc. to 

the Equity Shareholders who are NR. 

NOTICES 

All notices to the Equity shareholder(s) required to be given by the Company in connection with the 

Issue shall be published in one English national daily with wide circulation, one Hindi national daily with 

wide circulation, one regional language daily in Kolkata being the place where the registered of the 

Company is situated and/or will be sent by ordinary post to the registered holders of the Equity Share(s) 

from time to time. 

ISSUE OF DUPLICATE EQUITY SHARE CERTIFICATE 

If any Equity Share certificate(s) is/are mutilated or defaced or the cages for recording transfers of Equity 

Shares are fully utilized, the Company against the surrender of such certificate(s) may replace the same, 

provided that the same will be replaced as aforesaid only if the certificate numbers and the distinctive 

numbers are legible. 

If any Equity Share certificate(s) is/are destroyed, stolen, lost or misplaced, then upon production of 

proof thereof to the satisfaction of the Company and upon furnishing such indemnity/surety and/or such 

other documents as the Company may deem adequate, duplicate Equity Share certificate(s) shall be 

issued. 

PRINTING OF BANK PARTICULARS ON REFUND ORDERS 

As a matter of precaution against possible fraudulent encashment of refund orders due to loss or 

misplacement, 

the particulars of the applicant’s bank account are mandatorily required to be given for printing on refund 

orders. Bank account particulars will be printed on the refund orders / refund warrants, which can then be 

deposited only in the account specified. The Company will in no way be responsible if any loss occurs 

through these instruments falling into improper hands either through forgery or fraud. 

OPTIONS AVAILABLE TO THE EQUITY SHAREHOLDER 

The CAF clearly indicates the number of Equity Shares, which the Equity shareholder is entitled to. If 

the Equity shareholder applies for an investment in Equity Shares, then he/she can: 

• Apply for his/her entitlement in full 

• Apply for his/her entitlement in full and apply for additional Equity Shares 

• Apply for his/her entitlement in part 

• Apply for his/her entitlement in part and renounce the other part 

• Renounce the entire entitlement (or part of entitlement). 

• Renouncee for the Equity Share can apply for the Equity Shares renounced to them and also 

apply for additional Equity Shares. 

127

GROUNDS FOR TECHNICAL REJECTIONS 

Applicants are advised to note that applications are liable to be rejected on technical grounds, including 

the following: 

• Amount paid does not tally with the amount payable for; 

• Bank account details (for refund) are not given; 

• Age of First Applicant not given; 

• PAN photocopy/ PAN Communication/ Form 60 / Form 61 declaration not given if Application 

is for Rs.50,000 or more; 

• In case of Application under power of attorney or by limited companies, corporate, trust, etc., 

relevant documents are not submitted; 

• If the signature of the existing shareholder does not match with the one given on the Application 

Form and for renouncees if the signature does not match with the records available with their 

depositories; 

• If the Applicant desires to have shares in electronic form, but the Application Form does not 

have the Applicant’s depository account details; 

• Application Forms are not submitted by the Applicants within the time prescribed as per the 

Application Form and the Letter of Offer; 

• Applications not duly signed by the sole/joint Applicants; 

• Applications by OCBs unless accompanied by specific approval from the RBI permitting the 

OCBs to invest in the Issue; 

• Applications accompanied by Stockinvest; 

• In case no corresponding record is available with the Depositories that matches three 

parameters, namely, names of the Applicants (including the order of names of joint holders), the 

Depositary Participant’s identity (DP ID) and the beneficiary’s identity; 

• Applications by ineligible Non-residents (including on account of restriction or prohibition 

under applicable local laws) and where last available address in India has not been provided. 

HOW TO APPLY 

For Resident Indian Shareholders 

Application should be made only on the enclosed CAF provided by the Company. The enclosed CAF 

should be completed in all respects, as explained in the instructions indicated in the CAF. Applications 

will not be accepted by the Lead Managers or by the Registrar to the Issue or by the Company at any 

offices except in the case of postal applications as per instructions given in the Letter of Offer. Payment 

should be made in cash (not more than Rs.20,000) or by cheque/bank draft/ drawn on any bank 

(including a co-operative bank) which is situated at and is a member or a sub-member of the bankers 

clearing house located at the centre where the CAF is submitted and which is participating in the clearing 

at the time of submission of the application. Outstation cheques/money orders/postal orders will not be 

accepted and CAFs accompanied by such cheques/money orders/postal orders are liable to be rejected. 

For Non-Resident Shareholders on Non-Repatriation basis 

Applications received from the Non-Resident Equity Shareholders for the allotment of Equity Shares 

shall, inter alia, be subject to the conditions as may be imposed from time to time by the Reserve Bank of 

India, in the matter of Refund of application moneys, allotment of Equity Shares, issue of Letters of 

Allotment/ certificates/ payment of dividends etc. For NRIs holding shares on non-repatriation basis, 

payment may also be made by way of cheque drawn on Non-Resident Ordinary (NRO) Account 

maintained in Mumbai or Rupee Draft purchased out of NRO Account maintained elsewhere in India but 

payable at Mumbai. In such cases, the allotment of shares will be on non-repatriation basis. If the 

payment is made by a draft purchased from an NRO account, an Account Debit Certificate from the bank 

issuing the draft, confirming that the draft has been issued by debiting the NRO account, should be 

enclosed with the CAF. In the absence of the above, the application shall be considered incomplete and is 

liable to be rejected. All cheques/bank drafts accompanying the CAFs should be crossed. A/c Payee 

Only. And made payable to “(Name of The Bank) A/c –Kilburn Engineering Ltd. - Rights Issue - 

NRI” The CAF duly completed together with the amount payable on application must be deposited with 

the collecting bank/collection centres indicated on the reverse of the CAF, on or before the close of 

banking hours on or before the Issue closing date. A separate cheque or bank draft must accompany each 

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CAF. Reference number of CAF should be mentioned on the reverse of the Cheque/Draft. New Demat 

account shall be opened for holders who have had a change of status from Resident Indian to NRI. 

The CAF consists of four parts: 

Part A : Form for accepting the Equity Shares offered and for applying for additional Equity Shares 

Part B : Form for renunciation 

Part C : Form for application for renouncees 

Part D : Form for request for split application forms 

ACCEPTANCE OF OFFER 

The Equity shareholder may accept and apply for the Equity Share(s) offered in whole or in part, by 

filling in Part "A" of the enclosed CAF and submitting the same along with payment of the application 

money to the Bankers to the Issue and its collection centers specified on the reverse of the CAF on or 

before the close of banking hours on____________, 2005. Applicants at centers not covered by the 

branches of collecting banks can send their CAF together with the demand draft, net of demand draft and 

postal charges, payable at Mumbai to the Registrar to the Issue by registered post. Such applications sent 

to anyone other than the Registrar to the Issue are liable to be rejected. 

You may apply for the equity shares offered wholly or in part by filling in the enclosed CAF and 

submitting the same along with the application money to the Bankers to the Issue or its designated 

branches on or before the closure of the subscription list. The CAF should be complete in all respects, as 

explained in the INSTRUCTIONS indicated in the CAF. The CAF should not be detached under any 

circumstances, otherwise the application(s) will be rejected forthwith. 

ADDITIONAL EQUITY SHARES 

The Equity shareholder is eligible to apply for additional Equity Shares over and above the number of 

Equity Shares entitled to, provided he/she applies for all the Equity Shares, to which he/she is entitled to, 

without renouncing them, in whole or in part, in favor of any other person(s). 

If you desire to apply for additional equity shares, you may fill in the number of additional equity shares 

in Part A of the CAF. The allotment of additional equity shares will be at the sole discretion of the board 

on an equitable designated stock exchange. In the case of request for additional equity shares by nonresidents, 

the allotment will be subject to approval of Reserve Bank of India. The board may reject any 

application for additional equity shares without assigning any reasons thereof. 

RENUNCIATION 

A shareholder to whom the equity shares are offered as rights entitlement may renounce the equity shares 

offered to him, either in full or in part, in favour of any other person or persons. Such renounces can 

only be Indian Nationals, limited companies incorporated in India and governed by the Act, statutory 

corporations/ institutions, societies (registered under the Societies Registration Act, 1860 or any other 

applicable laws) provided that such corporation/ institutions/ society is authorized under its constitution/ 

bye laws to hold equity shares in a company. The rights renunciation cannot be renounced jointly in 

favour of more than three persons, a minor, a partnership firm, trust (unless the same is registered under 

the applicable Trusts laws and is authorized under its constitution to hold equity shares of a company), 

HUF, foreign national or his nominee (unless approved by RBI or other relevant authorities) or to any 

person situated within the jurisdiction where the offering in terms of this LoF could be illegal or require 

compliance with securities laws of such jurisdiction or to any other persons not approved by the Board. 

Any renunciation from Resident Indian Shareholder(s) to Non-Resident Indian(s) or from Non-Resident 

Indian Shareholder(s) to other Non-Resident Indian(s) or from Non-Resident Indian Shareholder(s) to 

Resident Indian(s) is subject to the renouncer(s)/ renouncee(s) obtaining the approval of the FIPB/ SIA 

and /or necessary permission of the RBI under the Foreign Exchange Management Act, 1999 (FEMA) 

and other applicable laws and such permissions should be attached to the CAF. Applications not 

accompanied by the aforesaid approval are liable to be rejected. 

The Board reserves the right to reject the request for allotment to renounces in its sole and absolute 

discretion without assigning any reason thereof. 

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Any person(s) other than those in whose favor this offer has been made must not use part A of the CAF. 

Submission of the enclosed CAF to the Banker to the Issue at its collecting centers specified on the 

reverse of the CAF with the Form of Renunciation (Part B of the CAF) duly filled in shall be conclusive 

evidence in favor of the Company of the person(s) applying for Equity Shares in Part C to receive 

allotment of such Equity Shares. Part ‘A’ must not be used by the renouncee(s) as this will render the 

application invalid. 

By virtue of the Circular No. 14 dated September 16, 2003 issued by the RBI, Overseas Corporate 

Bodies (“OCB”) have been derecognized as an eligible class of investors and the RBI has subsequently 

issued the Foreign exchange Management (withdrawal of General Permission to Overseas Corporate 

Bodies (OCBs)) Regulations, 2003. Accordingly, the existing equity shareholders of the company who 

do not wish to subscribe to the equity shares being offered but wish to renounce the same in favour of 

renounces shall not renounce the same (whether for consideration or otherwise) in favour of OCB(s). 

Renouncee(s) will have no further right to renounce any Equity Shares in favor of any other person. 

Further Renouncee(s) cannot apply for additional equity shares. 

PROCEDURE FOR RENUNCIATION 

(a) To renounce the offer in whole in favor of one renouncee : 

If the Equity shareholder wishes to renounce this offer in whole, then he/she has to complete Part B of 

the CAF. In case of joint holders, all joint holders must sign this part of the CAF. The person in whose 

favour renunciation has been made should complete and sign Part C of the CAF. In case of joint 

renouncees, all joint renouncees must sign this part of the CAF. 

(b) To renounce the offer in part: 

If the Equity shareholder wishes to either accept this offer in part and renounce the balance or renounce 

the entire offer in favour of two or more renouncees, separately, the CAF must be first split by applying 

to the Registrars to the Issue. The Equity shareholder should indicate his/her requirement for split forms 

in the space provided for this purpose in Part D of the CAF and return the entire CAF to the Registrars to 

the Issue so as to reach them latest by the close of business hours on _________ 2005. On receipt of the 

required number of split forms from the Registrars, the procedure as mentioned in the above Para (a) 

shall have to be followed. 

(c) Change and/or introduction of additional holders: 

If the Equity shareholder wishes to apply for Equity Shares jointly with any other person, or persons, not 

more than three, who is/are not already joint holders, it shall amount to renunciation and the procedure as 

stated above shall have to be followed. Even a change in the sequence of the joint holders shall amount 

to renunciation and the procedure for renunciation, as stated above shall have to be followed. 

However, any right of renunciation is subject to the express condition that the Board of the Company 

shall be entitled in its absolute discretion to reject the request for allotment from the renouncees without 

assigning any reasons there for. 

SPLITTING OF COMPOSITE APPLICATION FORMS 

Requests for split CAF should be sent to the Registrars to the Issue, namely Intime Spectrum Registry 

Limited before the closure of business hours on or before _____________________ by filling in Part D 

of the CAF along with entire CAF. Split CAF cannot be re-split. The renouncee(s) shall be entitled to 

obtain split CAF. 

HOW TO APPLY FOR SHARES 

The Equity shareholder may exercise any of the following options with regard to the Equity Shares 

offered to him/her, using the enclosed CAF: 

S. NO. OPTIONS AVAILABLE ACTION REQUIRED 

A. Accept your entitlement to all the equity Fill in and sign ‘Part A’ of the CAF. 

shares offered to you 

B. Accept your entitlement to all the equity Fill in and sign ‘Part A’ of the CAF after 

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shares offered to you and apply fro 

additional shares 

C. Accept only a part of your entitlement of the 

equity shares offered to you (without 

renouncing the balance) 

D. Renounce your full entitlement of the equity 

shares offered to you to one person 

(Renouncee)(Joint Renouncees not 

exceeding three are considered as one 

Renouncee) 

E. Accept a part of your entitlement of the 

equity shares offered to you and then 

renounce the balance to one renouncee or 

more renounces 

F. Renounce your entitlement of the equity 

shares offered to you, to more than one 

Renouncee 

G. Introduce a joint holder or change the 

sequence of joint holders 

indicating in Block IV the number of 

additional Equity Shares applied for. 

Fill and sign Part A of the CAF 

Fill and sign Part B of the CAF indicating the 

number of equity shares renounced and hand 

over the entire CAF to the renouncee. The 

renouncee must fill and sign Part C of the CAF 

Fill and sign Part D of the CAF for Split Forms 

after indicating the required number of Spilt 

Application Forms and send the entire CAF to 

the registrars to the Issue so as to reach them 

on or before the last date for receiving request 

for Split Forms indicated in the CAF i.e., 

_______. On receipt of the Split Forms take 

action as indicated below : 

(i) For the equity shares, if any, which you 

want to accept, fill in and sign Part A of one 

Split Composite Application Form. 

(ii) For the equity shares you want to renounce, 

fill in and sign Part B in the required number 

of Split Composite Application Forms 

indicating the number of Equity Shares 

renounced to each renounceee. 

(iii) each of the renouncee should then fill in 

and sign Part C of the respective split 

composite application form for the equity 

shares accepted by the renouncee. 

Follow the procedures stated in (E) above for 

obtaining the required number of Split 

Composite Application Forms and on receipt 

of Split Composite Application Forms follow 

the procedure as stated in (E) (ii) and (iii) 

above. 

This will be treated as a renunciation. Fill in 

and sign Part B and the renouncees must fill in 

and sign Part C. 

Application for Equity Shares should be made only on the CAFs, which are provided by the Company. 

The CAF should be completed in all respects as explained under the head “INSTRUCTIONS” indicated 

on the reverse of the CAF before submission to the Bankers to the Issue at its collecting centres on the 

reverse of the CAF on or before the last day of the closure of the Issue. Non resident 

shareholders/renouncee(s) should forward their applications to the Bankers to the Issue at the specified 

collection centers indicated on the reverse of the CAF for non-resident applicants. No part of the CAF 

should be detached under any circumstances. 

Availability of duplicate CAF 

In case the original CAF is not received, or is misplaced by the applicant, the Registrar to the Issue will 

issue a 

duplicate CAF on the request of the applicant who should furnish the registered folio number/ DP and 

Client ID number and his/ her full name and address to the Registrar to the Issue. Please note that the 

request for duplicate CAF should reach the Registrar to the Issue within 15 days from the Issue Opening 

Date. Please note that those who are making the application in the duplicate form should not utilize the 

original CAF for any purpose including renunciation, even if it is received/ found subsequently. If the 

applicant violates any of these requirements, he / she shall face the risk of rejection of both the 

applications as well as forfeiture of amounts remitted along with the applications. 

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Application on Plain Paper 

An Equity Shareholder who has neither received the original CAF nor is in a position to obtain the 

duplicate CAF may make an application to subscribe to the Rights Issue on plain paper, along with a 

Demand Draft payable at Mumbai which should be drawn in favour of the Company and send the same 

by registered post directly to the Registrar to the Issue. 

The application on plain paper, duly signed by the applicants including joint holders, in the same order as 

per specimen recorded with the Company, must reach the office of the Registrar to the Issue before the 

Issue Closing Date (i.e _______) and should contain the following particulars: 

• Name of Issuer, 

• Name and address of the Equity Shareholder including joint holders 

• Registered Folio Number/ DP and Client ID no. 

• Number of shares held as on Record Date i.e (•). 

• Certificate numbers and distinctive numbers, if held in physical form 

• Number of Rights Equity Shares entitled 

• Number of Rights Equity Shares applied for out of entitlement 

• Number of additional Equity Shares applied for, if any 

• Total number of Equity Shares applied for 

• Total amount paid at the rate of Rs. 25/- per Equity Share 

• Particulars of cheque/draft 

• Savings/Current Account Number and name and address of the Bank where the Equity 

Shareholder will be depositing the refund order 

• Applications for a total value of Rs, 50,000 or more, i.e. where the total number of securities 

applied for multiplied by the Issue price, is Rs. 50,000 or more the applicant or in the case of 

application in joint names, each of the applicants, should mention his/her PAN number allotted 

under the Income-Tax Act, 1961 and also submit a photocopy of the PAN card(s) or a 

communication from the Income Tax authority indicating allotment of PAN (“PAN 

Communication”) along with the application for the purpose of verification of the number. 

Applicants who do not have PAN are required to provide a declaration in Form 60/ Form 61 

prescribed under the I.T.Act along with the application. Applications without this photocopy/ 

PAN Communication/declaration will be considered incomplete and are liable to be rejected. 

• In case of Non-Resident shareholders, NRE/FCNR/NRO Account No., name and address of the 

bank and branch. 

• Signature of Equity Shareholders to appear in the same sequence and order as they appear in the 

records of the Company 

• Payment in such cases, should be through a demand draft, net of demand draft and postal 

charges, payable at Mumbai be drawn in favour of “Kilburn Engineering Ltd. - Rights Issue” 

crossed “A/c Payee only”. Please note that those who are making the application on plain paper 

shall not be entitled to renounce their rights and should not utilize the original CAF for any 

purpose including renunciation even if it is received subsequently. If the applicant violates any 

of these requirements, he/she shall face the risk of rejection of both the applications as well as 

forfeiture of amounts remitted along with the applications. The Company shall refund such 

application amount to the applicant without any interest thereon. 

QUOTING OF UNIQUE IDENTIFICATION NUMBER (UIN) ISSUED UNDER SEBI 

(CENTRAL DATABASE OF MARKET PARTICIPANTS) REGULATION, 2003 

In terms of SEBI (Central Database of Market Participants) Regulation, 2003 as amended from time 

to time and SEBI Notification dated November 25, 2003 and July 30, 2004, circular dated August 

16, 2004 and press release dated December 31, 2004, no specified investor being a body corporate 

shall subscribe to securities which are proposed to be listed in any recognized stock exchange unless 

such specified investor, its promoters and directors have been allotted unique identification number 

(UIN). However SEBI vide its circular no. MAPIN/Cir- 13 /2005 dated July 01, 2005 has 

suspended all fresh registrations for obtaining UIN and the requirement to obtain/quote UIN under 

the MAPIN Regulations/Circulars with effect from July 01, 2005. 

QUOTING OF PAN/GIR NO. IN THE APPLICATION FORMS 

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Where an application is for allotment of securities in response to a rights issue, for a total value of Rs. 

50,000/- or more i.e. the total number of securities applied for multiplied by the issue price, is Rs. 

50,000/- or more the applicant or in the case of applications in joint names, each of the applicants, should 

mention his/her permanent account number (PAN) allotted under the Income-Tax Act, 1961 or where the 

same has not been allotted, the GIR number and the Income-Tax Circle/Ward/District. In case neither 

the permanent account number nor the GIR number has been allotted, the fact of non-allotment should be 

mentioned in the application forms. Application forms without this information will be considered 

incomplete and are liable to be rejected. 

NOTE ON CASH PAYMENT (SECTION 269 SS) 

Having regard to the provisions of Section 269 (SS) of the Income Tax Act, 1961, subscriptions against 

applications for securities should not be effected in cash and must be effected only by ‘Account Payee’ 

cheques or ‘Account Payee’ bank drafts, if the amount payable is Rs. 20,000/- or more. In case payment 

is effected in contravention of this provision, the application is liable to be rejected. 

APPLICATION NUMBER ON THE CHEQUE/DEMAND DRAFT 

To avoid any misuse of instruments, the applicants are advised to write the application number and name 

of the first applicant on the reverse of the cheque / demand draft. 

GENERAL 

(a) All applications should be made on the printed CAF provided by the Company and should be 

complete in all respects. Applications which are not complete in all respects or are made otherwise 

than as herein provided or not accompanied by proper application money in respect thereof will be 

refunded without interest. 

(b) Please read the instructions in the enclosed CAF carefully. 

(c) ALL COMMUNICATIONS IN CONNECTION WITH YOUR APPLICATION FOR THE 

EQUITY SHARES INCLUDING ANY CHANGE IN YOUR REGISTERED ADDRESS SHOULD 

BE ADDRESSED TO THE REGISTRAR TO THE ISSUE. 

(d) Application Forms must be filled in ENGLISH in BLOCK LETTERS. 

(e) Signatures should be either in English or Hindi or the languages specified in the Eighth Schedule to 

the constitution of India. Signatures other than in the aforementioned languages or thumb 

impressions must be attested by a Notary Public or a Special Executive Magistrate under his/her 

official seal. 

(f) In case of Joint Holders, all joint holders must sign the relevant parts of the Application Form in the 

same order and as per the specimen signatures recorded with the Company. 

(g) In case of joint applicants, refunds and all payments will be made to the person whose name 

appears first on the application form and all communications will be addressed to him/her. To 

prevent any fraudulent encashment of refund orders by third parties, the Sole/First Applicant must 

indicate Saving / Current Account number and the name of the bank and its branch with whom such 

account is held in the space provided in the CAF for the purpose so that Refund Orders are printed 

with these details after the name. Applications without this information are liable to be rejected. 

(h) The Application Form should be presented to the Bank in its entirety. If any of the Part(s) A, B, C 

and D of the Application Form(s) is /are detached or separated, such application will forthwith be 

rejected. 

(i) All shareholders must submit the CAF along with remittance only to the Bankers to the Issue 

mentioned elsewhere in this Letter of Offer and not to the Company, the Registrar or the Lead 

Manager. 

(j) Any dispute or suit action or proceedings arising out of or in relation to this Letter of Offer or in 

respect of any matter or thing herein contained and claimed by either party against the other shall be 

133

instituted or adjudicated upon or decided solely by the appropriate Court where Registered Office of 

the Company is situated. 

(k) The last date for receipt of CAF along with the amount payable is ______________. However, the 

Board will have the right to extend the same for such period as it may determine from time to time, 

but not exceeding 60 days from the date of opening of the subscription list. If the CAF together with 

the amount payable there under is not received by the bankers to the issue on or before the closure of 

the banking hours on the aforesaid date, or such date as may be extended by the Board, the offer 

contained in this Letter of Offer shall be deemed to have been declined and the Board shall be at 

liberty to dispose the Rights hereby offered. 

For further instructions please read CAF carefully. 

DEMATERIALISATION 

As per the provisions of the Depositories Act, 1996, the shares of a body corporate may be held in 

dematerialized form i.e. not in the form of physical certificates but be fungible and be represented by the 

statement issued through electronic mode. The equity shares of Kilburn Engineering Limited are traded 

in the demat segment The Company has also entered into a tripartite agreement dated 8 th April , 2002 

with the National Securities Depository Limited(NSDL) and Intime Spectrum Registry Ltd for 

dematerialization of the equity shares of the Company. The ISIN No. granted to the equity shares of the 

Company is INE 338F01015. The Company has also entered into a tri partite agreement dated 18 th 

October, 2005 with Central Depository ( India) Limited and Intime Spectrum Registry Ltd. for 

dematerialisation of equity shares of the Company. 

An applicant has the option to seek allotment in physical or demat mode. An applicant who seeks 

allotment in demat mode must have atleast one Beneficiary Account with any of the Depository 

Participants (DP) of NSDL registered with SEBI, prior to the application. Such applicants must 

necessarily fill in the details (including the Beneficiary Account Number and Depository Participant’s ID 

Number) appearing under the head “Request for shares in electronic form” in the CAF. 

Applicant must indicate in the CAF, the number of shares they wish to receive in electronic form 

out of the total number of equity shares applied for. In case of partial allotment, shares will first be 

allotted in electronic form and the balance, if any, will be allotted in physical form. 

Names in the CAF should be identical to those appearing in the account details in the Depository. In 

case of joint holders, the name should necessarily be in the same sequence as they appear in the account 

details in the Depository. 

No separate application for demat and physical shares is to be made. If such applications are made the 

application for physical shares will be treated as multiple applications and rejected accordingly. It may 

be noted that electronic shares can be traded only on the stock exchanges having electronic connectivity 

with NSDL. 

Non transferable allotment letters/ refund orders will be directly sent to the applicant by the Registrar to 

the Issue 

The applicant is responsible for the correctness of the applicants demographic details given in the share 

application form vis-à-vis those with his/her DP. Equity shares allotted in demat mode will be credited 

directly to the respective Beneficiary Account. 

MODE OF PAYMENT 

For Resident Applicants 

Payment(s) must be made by cash or by cheque/demand draft and drawn on any bank (including a cooperative 

bank) which is situated at and is a member or a sub-member of the Bankers' Clearing House 

located at the centre where the CAF is submitted. A separate cheque/draft must accompany each CAF. 

Only one mode of payment should be used. Money orders, postal orders and outstation cheques will not 

be accepted and applications accompanied by any such instruments will be rejected. 

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Shareholders/Applicants residing at places other than those mentioned in the CAF and applicants who 

wish to send their applications but not having collection centres should send their application by 

Registered Post, ONLY to the Registrar to the Issue, Intime Spectrum Registry Limited, enclosing a 

demand draft drawn on a clearing Bank and payable at Mumbai ONLY net of bank charges and postal 

charges, before the closure of the issue. 

Such cheque/drafts should be payable to "(Name of The Bank)-A/c – KILBURN ENGINEERING 

LTD. - RIGHTS ISSUE". All cheques/ drafts must be crossed 'A/c Payee only’. No receipt will be 

issued for the application money received. However, the Collection Centre receiving the application will 

acknowledge receipt of the application by stamping and returning the acknowledgement slip at the 

bottom of each CAF. The Company is not responsible for any postal delay/ loss in transit on this 

account. 

Application will not be accepted by the Lead Manager or by the Company 

For Non-Resident Applicants/ FIIs 

Payments by Non-Resident Shareholders will be accepted by Indian Rupee Drafts purchased abroad or 

cheques/drafts drawn on Non-Resident External Account (NRE Account) or Foreign Currency Non- 

Resident Account (FCNR Account) maintained anywhere in India but payable at Mumbai or by 

Telegraphic Transfer in favour of the collecting Bankers by the concerned shareholders. 

However, in case shares are held on a non-repatriable basis, payment may also be made by cheque /draft 

drawn on Non-Resident Ordinary Account (NRO A/c.) maintained anywhere in India but payable at 

Mumbai. Such cheques/drafts should be drawn in favour of " KILBURN ENGINEERING LTD - 

RIGHTS ISSUE - NRI” payable at Mumbai, India and shall be crossed A/c. Payee Only, Banker’s 

Certificate regarding source of payment must be submitted with the CAFs wherever necessary. 

The CAF along with cheques/drafts should be deposited with any of the branches of the Bankers to the 

Issue nominated for this purpose. The certificate of inward remittance, if any, must be sent only to the 

Registrar to the Issue, Intime Spectrum Registry Limited, quoting the details of folio no. and the name 

and address of the branch of the Bankers to the Issue where CAF has been deposited before the closure 

of the issue. 

DISPOSAL OF APPLICATIONS AND APPLICATION MONIES 

The Board, reserves its full, unqualified and absolute right to accept or reject any application in whole or 

in part in consultation with the Designated Stock Exchange without assigning any reason thereof, in case 

the application is not made in terms of this Letter of Offer. In case an application is rejected in full, the 

application money received will be refunded to the first named applicant within six week from the date 

of closure of the Issue in accordance with Section 73 of the Act. If there is delay of refund of application 

money by more than 8 days after the Company becomes liable to pay (i.e. forty two days after the closure 

of Issue), the Company will pay interest for the delayed period at the rate prescribed under sub-section 

(2) and (2A) of Section 73 of the Act. 

ALLOTMENT / REFUND 

A) For applications made by Cheques/Drafts 

The Company will issue and dispatch letter of allotment/securities certificate and/or letter of regret along 

with the refund orders or credit the allotted securities to the respective beneficiaries account, if any, 

within a period of six weeks from the date of closure of issue. If such money is not repaid with 8 days 

from the day the company becomes liable to pay it, the company shall pay that money with interest as 

stipulated under Section 73 of the Companies Act, 1956. Refunds, if any, will be made along with 

Allotment Letters and /or Regret Letters by refund order / pay order drawn on the Bankers to the 

Company and will be dispatched within 6 weeks from the date of closure of Issue, by Registered Post if 

the amount of such refund exceeds Rs.1500/-. Such cheque refund order / pay order will be payable at 

par during their validity period at all centres where the applications are received. In case of joint 

applications, Refund Orders, if any, will be made out in the First applicant's name and all communication 

will be addressed to the person whose name appears on the CAF. 

135

B) For application by Non-Resident Indians / Foreign Institutional Investors (FIIs) 

In case of Non-Resident Indians/FIIs who remit their application money from funds held in 

NRE/FCNR/NRO 

Accounts, refund/payment of interest and other disbursements, if any, shall be credited to such account, 

details of which should be furnished in the column provided for that purpose in the CAF. In case of nonresidents 

who remit their application money through Indian Rupee drafts purchased from abroad, 

refunds/payments of interest and other disbursements, if any, will be made in US dollars at the exchange 

rate prevailing at such time, subject to the permission of the RBI. The Company will not be responsible 

for any loss on account of exchange fluctuations for converting the Indian Rupees amount into US 

Dollars. 

LETTERS OF ALLOTMENT / SHARE CERTIFICATES 

Share certificate, letter of allotment or letter of regret as the case may be will be despatched to the 

registered address of the first named applicant and/or the respective beneficiary accounts will be credited 

within six weeks, from the date of closure of the Issue. In case the allotment is made in physical form, 

and if letter of allotment is issued, the relevant share certificate will be dispatched within three months 

from the date of allotment in exchange for the letter of allotment. Allottees are requested to preserve such 

letter of allotment (if any) to be exchanged later for share certificates. 

DISPOSAL OF APPLICATIONS AND APPLICATION MONEY 

(a) The Board of the Company or Committee of Directors authorised in this behalf by the Board of the 

Company reserves its full, unqualified and absolute right to accept or reject any application in whole or 

in part in consultation with BSE without assigning any reason thereof. If any application is rejected in 

full the entire application money will be refunded to the applicant in accordance with the provisions of 

Section 73 of the Companies Act, 1956. Where the applicant is allotted in part, the balance of the 

application money will be refunded to the applicant in accordance with the provisions of Section 73 of 

the Companies Act, 1956. 

(b)Refund will be made by cheques/ pay orders drawn on refund bankers and bank charges, if any, for 

encashing such cheques or pay orders will be payable by the applicant. Such cheques or pay orders will 

however, be payable at par at the branches of the refund bankers located at all places where applications 

are accepted or such places as may be approved by BSE. 

( c )Allotment of Equity Shares and export of Letters of Allotment/share certificate(s) to NRI/OCB/Non- 

Residents would be subject to the approval of the Reserve Bank of India under the FEMA, if required. 

(d)The Company shall provide adequate funds to the Registrar to the Issue for complying with 

requirement of despatch of refund cheques/Letter(s) of Allotment / share certificate(s) by registered 

post/under postal certificate. 

BASIS OF ALLOTMENT 

The basis of allotment shall be finalised by the Board of the Company or Committee of Directors of the 

Company authorised in this behalf by the Board of the Company. The Board of the Company or the 

Committee of Directors as the case may be, will proceed to allot the Equity Share in consultation with 

BSE in the following order of priority. 

i. Full allotment to the equity shareholders who have applied for their Rights entitlement either in full or 

in part and also to the renouncees who have applied for Equity Shares renounced in their favour either in 

full or in part (subject to other provisions contained under the paragraph titled "Renunciation"). 

ii. Allotment to the equity shareholders who having applied for their full Rights entitlement of Equity 

Share offered to them and have applied for additional Equity Shares, provided there is surplus available 

after full allotment under (i) above and shall be at the absolute discretion of the Board of the Company or 

the Committee of the Directors authorised in this behalf by the Board of the Company and the decision 

of the Board of the Company or the Committee of the Directors shall be final and binding. The allotment 

of such additional Equity Shares will be made as far as possible on an equitable basis with reference to 

the number of Equity Shares held by them on the Record Date in consultation with BSE. 

136

iii. Allotment to any other shareholder(s)/beneficial shareholder(s) as the Board of the Company or 

Committee of Directors of the Company authorised in this behalf by the Board of the Company may, in 

their absolute discretion, deem fit, provided there is surplus available after making full allotment under 

(i) and (ii) above. 

iv. The Equity Shares remaining unsubscribed after making full allotments under i, ii and iii above, shall 

be disposed off by the Board in any manner as it in its sole discretion deems fit and the decision of the 

Board in this regard shall be final and binding 

The allotment to the renouncee(s) in whose favour the renunciation has been exercised shall be subject to 

the condition that the Board of the Company or Committee of Directors shall have the discretion to reject 

such request without assigning any reasons thereof. In the event of over subscription, allotment will be 

made only within the overall size of the Rights Issue. 

DISPATCH OF SHARE CERTIFICATES/LETTERS OF ALLOTMENT/REFUND ORDER 

All the pay orders / refund orders and Letter(s) of Allotment / Share Certificates will be despatched to the 

first named / sole applicant at his / her own risk. The Refund Orders will be payable at par in India at all 

the centres where the applications were originally accepted. The instruments will be marked “Account 

Payee Only” and in 

the name of the sole/first applicant. Bank charges, if any, for encashing such refund orders / pay orders 

will be payable by the applicants. 

The Company has given an undertaking that the requisite funds will be made available to the Registrar 

for complying with the requirement of despatch of refund orders / allotment letters. The Company shall 

ensure despatch of refund orders of value over Rs.1,500/- by Registered Post only and adequate funds 

will be made available to the Registrar. 

INTEREST IN CASE OF DELAY ON ALLOTMENT/DESPATCH 

The Company agrees that as far as possible allotment of securities offered to the existing shareholders on 

Rights basis shall be made within 30 days of the closure of the issue. 

The Company agrees that it shall pay interest at the rate of 15% per annum if the allotment has not been 

made and/or the equity share allotment letters/refund orders have not been despatched and relevant 

equity shares have not been credited to the beneficiary account of the investors within 30 days from the 

date of closure of the issue. 

LAST DATE FOR SUBMISSION OF CAF 

The last date for receipt of CAF by the Bankers to the Issue together with the amount payable on 

application is _____________. If the relevant CAF together with amount payable there under is not 

received by the Bankers/Registrar to the Issue on or before the close of banking hours on the aforesaid 

last date the offer contained in this Letter of Offer shall be deemed to have been declined and the Board 

shall be at liberty to dispose of the equity shares hereby offered as provided under "Basis of Allotment". 

UNDERTAKING BY THE COMPANY 

The Company undertakes that: 

a) The complaints received in respect of the Issue shall be attended to by the Company expeditiously and 

satisfactorily; 

b) All steps for completion of the necessary formalities for listing and commencement of trading at all 

stock exchanges where the securities are to be listed are taken within seven working days of finalisation 

of basis of allotment; 

c) Funds required for despatch of refund orders/allotment letters/certificates by registered post shall be 

made available to the Registrar to the Issue by the Company. 

d) Certificates of securities/refund orders of the Non-Resident/Non Resident Indians shall be dispatched 

within the specified time subject to receipt of approval from RBI/FIPB, if required. 

e) No further issue of shares shall be made till the shares offered through this Letter of Offer are listed or 

till the application moneys are refunded on account of non-listing, under-subscription, etc. 

137

UTILIZATION OF ISSUE PROCEEDS 

a) All monies received out of the issue of shares to the investors shall be transferred to a separate bank 

account other than the bank account referred to in sub-section (3) of Section 73 of the Act; 

b) Details of all monies utilised out of the Issue shall be disclosed under an appropriate separate head in 

the balance sheet of the Company indicating the purpose for which such monies has been utilised and 

c) Details of all unutilized monies out of the Issue of shares, if any, shall be disclosed under an 

appropriate separate head in the Balance Sheet of the Company indicating the form in which such 

unutilized monies have been invested. 

The funds received against this rights issue to be kept in a separate bank account and the Company will 

not have any access to such funds unless it satisfies BSE (Designated Stock Exchange) with suitable 

documentary evidence that the minimum subscription of 90% of the issue has been received by the 

Company. 

138

OTHER INFORMATION 

The following contracts mentioned below (not being contracts entered into in the ordinary course of 

business carried on by the Company) are or may be deemed to be material contracts. Copies of these 

contracts along with documents referred below may be inspected at the Registered Office of the 

Company between 10.00 a.m. and 1.00 p.m. on any working day until the closing of the subscription list. 

MATERIAL CONTRACTS AND DOCUMENTS 

The Contracts referred to in para (A) below (not being contracts entered into in the ordinary course of the 

business carried on by the Company or entered into more than two years before the date of this Letter of 

Offer) which are or may be deemed material, have been entered into by the Company. 

The contracts together with the documents referred to in paragraph (B) below, copies of all of which 

have been attached to the copy of this Letter of Offer may be inspected at the Registered Office of the 

Company between _11.00 a.m. to 1.00 p.m. on any working day from the date of this Letter of Offer 

until the closing of the subscription list. 

A. MATERIAL CONTRACTS 

1. Copy of MOU dated 13 th October, 2005 between Kilburn Engineering Limited and IDBI 

Capital Market Services Limited, Lead Manager to the Issue. 

2. Copy of MOU dated 27 th October, 2005 between Kilburn Engineering Limited and Intime 

Spectrum Registry Ltd., Registrar to the Issue. 

3. Copy of Tri- Partite Agreement dated 8 th April, 2002 between Kilburn Engineering Limited, 

Intime Spectrum Registry Ltd. and National Securities Depository Limited. 

4. Copy of Tri-Partite Agreement dated 18 th October, 2005 between Kilburn Engineering Limited 

Intime Spectrum Registry Ltd. and Central Depository Services (India) Limited. 

5. Copy of the Collaboration Agreements with Nara Machinery Co. Ltd. & Carrier Vibrating 

Equipment Ltd. 

B. DOCUMENTS FOR INSPECTION 

6. Copy of Memorandum and Articles of Association of the Company. 

7. Copy of Certification of Incorporation of the Company 

8. Copies of Annual Report for the FY 2000, 2001, 2002 ,2003, 2004 & 2005. 

9. Copy of Notice for EGM dated 10/08/2005 and extract of minutes of EGM passing resolution under 

Sec. 81(1A) of Companies Act, 1956. 

10. Copy of resolution dated 27 th May, 2005 passed by the Board of Directors regarding present rights 

issue. 

11. Copies of Prospectus dated 16/03/1990 issued in respect of the Initial Public Offer by the Company. 

12. Copy of the Letter of Offer dated 10/03/1993 issued in respect of the Rights Issue. 

13. Copy of Scheme of Rehabilitation dated 14/05/2004 approved by BIFR. 

14. Copy of Progress Report of the Sanction Scheme as on 30 th June, 2005. 

15. Copy of certificate 633/2005-06 dated 01/11/2005issued by Deloitte Haskins & Sells Chartered 

Accountants and Statutory Auditors of the Company in terms of Part II Schedule II of The 

Companies Act 1956 including capitalization statement, taxation statement and accounting ratios 

16. Copy of Letter 631/2005-06 dated 01/11/2005 received from Deloitte Haskins & Sells Chartered 

Accountants and Statutory Auditors of the Company advising the Company on the Tax Benefits 

available to the Company and its shareholders. 

17. Copy of certificate no. 530/200-06 dated 30 th September, 2005 received from Deloitte Haskins & 

Sells Chartered Accountants and Statutory Auditors of the Company regarding the deployment of 

funds received from Dufflaghur Investments Limited and Metals Centre Limited. 

18. Copy of quotation received from Godrej Infotech Limited in respect of the ERP Package to be 

implemented 

19. Copy of quotation received from Mukand Ltd. in respect of the EOT Crane to be installed. 

20. Copy of the letter dated 12 th September, 2005 to the Registrar of Companies, Kolkata for extension 

of the financial year to a period of 18 months ending March 31, 2006. 

21. e-mail from ICRA being the source of the Heavy Engineering Sector Report for May 2005 

consenting to publish the report/ extracts of the reports. 

22. Copy of Letter dated 01/07/2005 received from Metals Centre Limited regarding withdrawal of 

share application money and conversion of the same into interest free loan. 

139

23. Copy of Letter dated 01/07/2005 received from Dufflaghur Investments Limited regarding 

withdrawal of share application money and conversion of the same into interest free loan. 

24. Copy of Letter dated 01/07/2005 received from Williamson Magor & Co. Ltd. regarding transfer of 

the loan amount due to Dufflaghur Investments Limited from KEL in its name and agreeing to 

allotment of equity shares in lieu of the said amount in respect of its rights entitlement. 

25. Copies of following letters received in respect of renunciation of rights entitlement: 

Date of the Letter Name of entity renouncing its 

entitlement 






26. Copies of audited financials for the FY 2003, 2004, 2005 of the following companies: 

Mcleod Russel India Limited, Shree Durga Agencies Limited, Nirvan Commercial Co. Ltd., 

Ichamati Investments Pvt. Ltd., United Machine Co. Ltd., Standard Batteries Ltd., Wlliamson Magor 

& co. Ltd., Kilburn Office Automation Ltd., Kilburn Chemicals Ltd., McNally Bharat Engineeing 

Co. Ltd., Eveready Industries India Ltd., WPIL, Metal Centre Ltd., Williamson Financial services 

Ltd., Dufflaghur Investments Ltd., Khaitan Investments Ltd. 

27. Copy of Letter of Offer issued under SEBI (SAST) Regulations, 1997 issued in respect of indirect 

acquisition of Williamson Tea Assam Ltd. 

28. Export Import License vide IEC No. 0289015324, dated: 28 th February, 1990 

29. Factory License license No. 50947 (Originally No. 62335), dated 13/02/2002 

30. Industry Licence No. IL:55(79) dated : 31.10.1979 

31. Endorsement of industrial licence in favour of KEL dated : 15.5.1990 

32. Copies of Acknowledgement received from Department of Industrial Development, Entrepreneur 

Assistance Unit. 

33. Central Excise Registration Certificate bearing Registration number AABCK3123E XM 002 

34. Application to MPCB, vide its letter no. KEL/HRD/07/2004-05 dated 28 th July, 2005, for renewal 

of the consent w.e.f. 01/08/1998 upto 31/07/2007. 

35. Copies of various Undertakings received from the Company. 

36. List of pending litigations/disputes against the Company, Group Companies and filed by the 

Company. 

37. Copy of in-principle approval received from BSE vide their letter no. ______________ 

38. Copy of in-principle approval received from CSE vide their letter no. ______________ 

39. Copy of SEBI observation letter No. _______________. 

140

DECLARATION 

No statement made in this Draft Letter of Offer shall contravene any of the provisions of the Companies 

Act, 1956 and the rules made thereunder. All the legal requirements connected with the said issue as also 

the guidelines, instructions etc. issued by SEBI, Government and any other competent authority in this 

behalf have been duly complied with. 

Signed by the Directors of the Company 

Shri Deepak Khaitan 

Shri V.R. Sinha 

Shri S. Mukherjee 

Shri P.K. Khaitan 

Shri S.R. Dasgupta 

Shri. P.K. Mogal 

Shri A.U. Katra 

Shri Amritanshu Khaitan 

Sd/- 

Shri A. Suresh 

General Manager (Finance) 

Place: Kolkata 

Date: 11/11/2005 

141

i Draft Letter of Offer - Kilburn (Private and Confidential) For equity ...

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