The Members of
 
 KANANI INDUSTRIES LIMITED
 
 The Directors present the Twenty-Eighth Annual Report together with
 the Audited Statement of Accounts for the year ended March 31, 2011.
 
 FINANCIAL RESULTS
 
 The Financial Results for the year ended March 31, 2011 are summarized
 below:
 
                                                      (Amt. in Rs. Lacs)
 
                                        Year ended         Year ended
 Particulars                        March 31, 2011     March 31, 2010
 
 Sales                                    15166.70            8683.86
 
 Other Income                                26.13            (44.08)
 
 Increase in Stock of 
 finished Goods                             318.70             59.51
 
 Total Income                             15511.53           8699.29
 
 Expenditure [before depreciation]        13879.56           7929.71
 
 Profit before Dep. & Tax                  1631.97            769.57
 
 Less: Depreciation                          13.56             14.83
 
 Profit (Loss) before Tax                  1618.41            754.74
 
 Less: Provision for Tax                         -                 -
 
 Fringe Benefit Tax                              -                 -
 
 Profit (Loss) after Tax                   1618.41            754.74
 
 Profit/(Loss) brought forward             1881.51           1232.00
 
 Profit available for appropriation        3499.92           1986.74
 
 APPROPRIATIONS:
 
 Interim Dividend paid                           -             44.97
 
 Corporate Dividend Tax on 
 Interim Dividend                                -              7.64
 
 Proposed Dividend                               -             44.97
 
 Corporate Dividend Tax on
 Proposed Dividend                               -              7.64
 
 Surplus Carried to Balance Sheet          3499.92           1881.51
 
 DIVIDEND
 
 In order to conserve the resources for the further growth of the
 Company your directors think fit not to recommen any dividend for the
 year under review.
 
 PERFORMANCE
 
 Your company is engaged in the manufacturing activities and during the
 year under review, your Directors ar pleased to inform the Members that
 the Company has posted Total Income of Rs. 15,511.53 Lacs as agains Total
 Income of Rs. 8,699.29 lacs in the corresponding previous year. Net
 Profit after Tax for the year unde review was Rs.1,618.41 Lacs as against
 Net Profit after Tax of Rs. 754.74 Lacs in the corresponding previou
 year.
 
 AUDITORS
 
 M/s Ravi & Dev, Chartered Accountants, Auditors of the Company retire
 at the conclusion of this Annua General Meeting. The members are
 requested to appoint auditors and to fix their remuneration.
 
 AUDITORS'' REPORT
 
 The Report of the Auditors of the Company is self explanatory and do
 not call for any further explanation b the Board of Directors.
 
 DIRECTORS
 
 During the year under review, Mr. Devendra K Kikani and Mr. Nagjibhai K
 Vithani, Directors of the Compan retire by rotation and being eligible
 offer themselves for reappointment at the forthcoming Annual Genera
 Meeting.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 Pursuant to the requirement under section 217(2AA) of the Companies
 Act, 1956 with respect to the Directors Responsibilities Statement, it
 is hereby confirmed:
 
 i) That in the preparation of the annual accounts for the year 2010-11,
 the applicable accounting standard have been followed and there are no
 material departures;
 
 ii) that the directors have selected such accounting policies and
 applied them consistently and mad judgments and estimates that are
 reasonable and prudent so as to give a true and fair view of th
 statement at the end of the financial year and of the profit of the
 company for that period.
 
 iii) that the directors have taken proper and sufficient care for the
 maintenance of adequate accountin records in accordance with the
 provisions of this Act for safeguarding the assets of the company and
 fo preventing and detecting fraud and other irregularities;
 
 iv) That the directors have prepared the Annual Accounts of the company
 on a going concern basis.
 
 FIXED DEPOSITS
 
 The Company has not accepted any fixed deposits during the year ended
 March 31, 2011.
 
 DETAILS OF EMPLOYEES UNDER THE COMPANIES (PARTICULARS OF EMPLOYEES)
 RULE 1975 (AS AMENDED UPTO DATE):
 
 The Company has no employees of the specified categories under Section
 217 (2A) of the Companies Act, 1956, read with the Companies
 (Particulars of Employees) Rules, 1975, as amended upto date.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE
 EARNING AND OUTGO:
 
 The manufacturing activities carried out by the Company do not fall
 under the list of industries specified for which Section 217(1)(e) of
 the Companies Act, 1956 read with Companies (Disclosure of Particulars
 in the Report of the Board of Directors) Rules, 1988 is applicable and
 hence disclosures required therein are not applicable to the Company.
 Further, the details regarding foreign exchange earnings and outgo are
 given in Note Nos. 3 to 6 under Schedule ''K'' i.e. Significant
 Accounting Policies of the Notes to Accounts.
 
 POSTAL BALLOT CONDUCTED DURING THE YEAR
 
 The Company had conducted Postal Ballot for the following mentioned
 businesses which were approved by the Members of the Company:
 
 1 Further issue of shares under Section 81(1A) of the Companies Act,
 1956
 
 2 Amendment in the Articles of Association of the Company under Section
 31 of the Companies Act, 1956
 
 CORPORATE GOVERNANCE
 
 The Company continues to remain committed for high standards of
 corporate governance. The report of corporate governance as per the
 requirement of the listing agreement with the stock exchanges form part
 of this report as Annexure. The company has complied with all the
 requirements of the corporate governance and the same is certified by
 the Statutory Auditors.
 
 ACKNOWLEDGEMENT
 
 The Directors take this opportunity to express their gratitude and
 thanks to the esteemed clients, Members, Banks, SEBI (Securities and
 Exchange Board of India), Bombay Stock Exchange Limited, Central, State
 and Local Government for their continued support cooperation and
 guidance from time to time.
 
                            For and On behalf of the Board of Directors
 
 Place: Mumbai                                     Premjibhai D. Kanani
 
 Date: August 12, 2011                                         Chairman