To the Members,
 
 KGN INDUSTRIES LIMITED,
 
 Maharashtra, Mumbai.
 
 The Directors are pleased to present the 17th Annual Report of the
 Company, along with Audited Accounts for the financial year ended 31st
 March, 2011.
 
 FINANCIAL PERFORMANCE:
 
                                                          (Rs. in Lacs)
 
 PARTICULARS                            FOR THE YEAR       FOR THE
                                        ENDED              YEAR ENDED
                                        31.03.2011         31.03.2010
 
 Gross Income                            579.89              6349.71
 
 Expenditure                             480.80              6186.78
 
 Profit/Loss before Taxation and 
 Depreciation                             99.09               162.94
 
 Depreciation                              6.14                 3.74
 
 Profit before Taxation                   92.94               159.19
 
 Provision for Taxation                   35.00                56.66
 
 Profit for the year                      56.17               102.53
 
 Profit brought forward                  291.78               215.63
 
 Profit available for appreciation       347.95               317.81
 
 Deferred Tax                              1.78                 0.35
 
 Transfer to General Reserves              Nil                  Nil
 
 Proposed Dividend on Equity Shares        Nil                 22.25
 
 Dividend Distribution Tax                 Nil                  3.78
 
 Balance carried to Balance Sheet        347.95               291.78
 
 Basic Earnings per Share                  0.03                 0.05
 
 *DIVIDEND:
 
 Your Directors are pleased to recommend a final dividend of Rs. 0.01
 per Equity share for the year ended 31st March, 2011.
 
 The final dividend, subject to approval at the AGM on 29th September,
 2011 will be paid to those shareholders, whose names appear in the
 Register of Members as on the date of book closure i.e.  23rd
 September, 2011.
 
 The Proposed dividend for the financial year will absorb Rs. 22,25,000
 including Dividend Distribution Tax of Rs. 3,78,139
 
 * Dividend: The shareholders dissented to the payment of dividend in
 Annual General Meeting and therefore it was decided that no dividend be
 declared for the year ended 31/03/2011.
 
 PRESENT OPERATIONS:
 
 The Company''s Operation was satisfactory during the Year under review.
 The sales of the company ended to Rs. 3073.64 Lacs in Comparison to the
 previous year of Rs.6219.74 Lacs.
 
 FUTURE PROSPECTS:
 
 - KGN Industries Limited has a vision in oil & gas sector of having
 strong technical partnerships and looking for tie ups with
 International companies in the area once it acquires the blocks during
 this bid. The company also prospects to acquire overseas subsidiaries &
 new blocks in domestic as well as international market.
 
 - For Cement Sector the company is in the process of research
 identifying the areas allocated. It is also looking at prospects of
 entering into the cement Industry in International Markets apart from
 India. There are offers for taking over existing cement plants also
 which the company is analyzing.
 
 - For growing into the sector of Power and Energy the company is
 looking at alternative sources of renewable energy projects using solar
 energy, Biomass, Bio-fuels and geothermal energy and bringing in the
 latest technology for the same.
 
 SHIFTING OF REGISTERED OFFICE:
 
 During the year under review, Registered Office of the Company was
 shifted to 23, Vaswani Mansion, 4th Floor, Dinshaw Vachha Road,
 Churchgate, Mumbai – 400 020, with effect from 8th October, 2010.
 
 CORPORATE GOVERNANCE:
 
 A separate section on Corporate Governance is included in this Report
 along with a Certificate from the Auditors of the Company confirming
 compliance with conditions on Corporate Governance, as stipulated under
 Clause 49 of the Listing Agreement with the Stock Exchanges.  A
 certificate from the Managing Director of the Company in terms of
 sub-clause (v) of Clause 49 of the Listing Agreement is also annexed.
 
 MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
 
 A separate section on Management Discussion and Analysis (MD&A) forms
 part of this Annual Report as required under Clause 49 of the Listing
 Agreements with the stock exchanges. All matters pertaining to industry
 structure and developments, opportunities and threats, risks and
 concerns, internal control and systems, etc. are discussed in this
 Report.
 
 SUBSIDIARY COMPANIES:
 
 Your Company has 1 wholly-owned subsidiary, viz. KGN Projects Limited.
 
 A statement pursuant to Section 212 of the Companies Act, 1956 relating
 to Subsidiary Companies is attached to the accounts.
 
 In terms of General Exemption under Section 212(8) of the Companies
 Act, 1956 granted by the Ministry of Corporate Affairs, vide its
 Circular No. 02/2011 dated 08.02.2011 and in compliance with the
 conditions enlisted therein, the Audited Statement of Accounts and the
 Auditors'' Report thereon for the financial year ended 31st March, 2011,
 along with the Reports of Board of Directors of the Company''s
 Subsidiaries have not been annexed. The Annual Accounts and related
 documents of the Subsidiary Companies shall be kept for inspection at
 the Registered Office of the Company. Further, pursuant to Accounting
 Standard AS-21 issued by the Institute of Chartered Accountants of
 India, Consolidated Financial Statements presented by the Company in
 this Annual Report includes the financial information of its
 subsidiaries.
 
 ENVIRONMENT PROTECTION:
 
 Your Company is not engaged in any type of manufacturing activities. It
 is not generating any type of pollution. Hence, Pollution Control
 regulations and norms are not applicable to the Company.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT:
 
 Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors
 confirm in respect of the audited annual accounts for the year ended
 March 31, 2011 that:
 
 1.  in the preparation of the annual accounts, the applicable
 accounting standards had been followed and that there were no material
 departures;
 
 2.  they had, in consultation with the Statutory Auditors, selected
 such accounting policies and them consistently and made judgments and
 estimates that are reasonable and prudent, so as to give a true and
 fair view of the state of affairs of the Company for the year ended
 March 31, 2011 and profit of the Company for that period;
 
 3.  they had taken proper and sufficient care, to the best of their
 knowledge and ability, for the maintenance of adequate accounting
 records in accordance with the provisions of the Companies Act, 1956,
 for safeguarding the assets of the Company and for preventing and
 detecting fraud and other irregularities;
 
 4.  they had prepared the annual accounts on a going concern basis.
 
 DIRECTORS:
 
 Ms. Janki Vaghela is liable to retire by rotation at the ensuing Annual
 General Meeting, and being eligible, offers herself for re-appointment.
 Your Directors recommend her re-appointment.
 
 AUDITORS:
 
 The Auditors M/s Kirit & Co., Chartered Accountants, Ahmedabad, retire
 at the ensuing Annual General Meeting and being eligible, offer
 themselves for re-appointment. You are requested to consider their
 re-appointment and authorize the Board of Directors to fix their
 remuneration.
 
 OBSERVATIONS IN AUDITORS'' REPORT:
 
 The observations made by the Auditors in their Report read with
 relevant notes given in the Notes on Accounts are self explanatory and
 therefore, do not require any comments from your Directors pursuant to
 Section 217(3) of the Companies Act, 1956.
 
 Directors hope to recover receivables from the Motorol (I) Limited and
 Sahara Packaging Private Limited in the near future.
 
 FIXED DEPOSITS:
 
 During the year under review your Company has neither accepted nor
 invited any deposits from the public in terms of Section 58A and 58AA
 of the Companies Act, 1956.
 
 PARTICULARS OF EMPLOYEES:
 
 During the year under review, as there were no employees on the payroll
 of the Company, drawing salary/remuneration of Rs.2,00,000/- or more
 per month, information pertaining to Section 217(2A) of the Companies
 Act, 1956, is not applicable.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
 EARNINGS AND OUTGO:
 
 The statement of particulars with respect to conservation of energy,
 technology absorption and Foreign Exchange earnings and outgo pursuant
 to section 217(1)(e) of the Companies Act, 1956 read with The Companies
 (Disclosure of Particulars in the Report of Board of Directors) Rules,
 1988 is not applicable to the company and hence not given.
 
 ACKNOWLEDGEMENTS:
 
 The Board wishes to place on record their sincere appreciation for the
 continued support received from its customers, suppliers, shareholders,
 promoters, bankers and employees.
 
                                   By order of the Board of Directors 
                                               KGN INDUSTRIES LIMITED
 
                                                             Sd/-
 Date: 2nd September, 2011                                 ARIF MEMON
 Place: Mumbai                                      Managing Director