To, The Members of KGN INDUSTRIES LIMITED, Mumbai, Maharashtra.
 
 The Directors have great pleasure in presenting their 18th Annual
 Report of the Company, along with Audited Accounts for the financial
 year ended 31st March, 2012.
 
 FINANCIAL RESULTS:
 
                                          (Rs.in Lacs)
 
                                    FOR THE           FOR THE 
 PARTICULAR                      YEAR ENDED        YEAR ENDED 
 
                                 31.03.2012        31.03.2011
 
 Profit before Depreciation 
 and Amortization Expenses,          119.47 
 
 Finance Cost and Tax Expenses
 
 Less : Finance Cost                   0.17            1.23
 
 Depreciation and 
 Amortization Expenses                11.55            9.40
 
 Profit before Tax                   107.76           92.94
 
 Less : Current Tax                   36.71           35.00
 
 Deferred Tax                          0.79            1.78
 
 Profit for the year                  70.26           56.17
 
 Add : Balance in Profit 
 & Loss Account                      347.95          291.78
 
                                     418.20          347.95 
 
 Less : Appropriation
 Proposed Dividend on Equity Shares   22.25             NIL
 
 Tax on Dividend                       3.61             NIL
 
 Balance Carried to Balance Sheet    392.34          347.95
 
 DIVIDEND:
 
 Your Directors are pleased to recommend a final dividend of Rs. 0.01 per
 Equity Share for the year ended 31st March, 2012.
 
 The Final dividend subject to approval at the AGM on 29th September,
 2012 will be paid to those shareholders, whose names appear in the
 Register of Members as on the date of book closure i.e. 22nd September,
 2012.
 
 The Proposed Dividend for the financial year will absorb Rs. 25,86,117.50
 including Dividend Distribution Tax ofRs. 3,61,117.50.
 
 RESULTS OF OPERATIONS:
 
 The Company performed reasonably well and the highlights of the
 performance are as under
 
 - Revenue from operations decreased by 17.74% to Rs. 252.85 Lacs.
 
 - Total Income decreased by 54.91% to Rs. 261.47 Lacs.
 
 - Net Profit after Tax increased by 25.08% to Rs. 70.26 Lacs.
 
 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.
 
 AUDITORS:
 
 The Auditors M/s Kirit & Co. Chartered Accountants, Ahmedabad, retire
 at the ensuing Annual General Meeting and are being eligible for
 re-appointment. The retiring Auditors have furnished a certificate of
 their eligibility for re-appointment under section 224 (IB) of the
 Companies Act 1956 and that he is not disqualified for reappointment
 within the meaning of Section 226 of the said Act.
 
 OBSERVATION IN AUDITORS REPORT:
 
 The observation made by the Auditors in the Auditor''s Report read
 with relevant notes given in the notes on Accounts are self explanatory
 and therefore do not call for any further comments under section 217(3)
 of the Companies Act, 1956.
 
 SUBSIDIARY COMPANY:
 
 Your Company has One wholly-owned subsidiary, viz. KGN Projects
 Limited.
 
 In accordance with the general exemption granted by Ministry of
 Corporate Affairs, Government of India, vide its Circular No. 2/2011
 dated February 8, 2011 and in compliance with the conditions enlisted
 therein, the report and annual accounts of the subsidiary company for
 the financial year ended March 31, 2012 have not been attached to the
 Company''s Accounts. The Company will make available the Annual
 Accounts of the Subsidiary Company and the related detailed information
 to any member of the Company who may be interested in obtaining the
 same. The annual accounts of the Subsidiary Company will also be kept
 open for inspection at the Registered Office of the Company and that of
 respective Subsidiary Company. The Consolidated Financial Statements
 presented by the Company include the financial results of its
 Subsidiary Company.
 
 ENVIRONMENTAL 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:
 
 Mr. Babulal Jethalal Hirani is liable to retire by rotation at the
 ensuing Annual General Meeting, being eligible, offers himself for
 re-appointment. Your Directors recommend his re-appointment.
 
 During the year Mr. Deepak Raval, Mr. Vijay Vora, Mr. Kasshee Mayun,
 Mr. Siva Ravindran, Mr. R.M Dhar, and Mr. S.R. Das have been appointed
 as Additional Directors of the Company w.e.f 14th August, 2012. The
 Company has received notice from members pursuant to Section 257 of the
 Companies Act, 1956, signifying their intention to propose the
 candidature of Mr.  Deepak Raval, Mr. Vijay Vora, Mr. Kasshee Mayun,
 Mr. Siva Ravindran, Mr. R.M Dhar, and Mr. S.R. Das for the office of
 Directors. The Board recommends their appointment.
 
 DIRECTORS RESPONSIBILITY STATEMENTS:
 
 Pursuant to Section 217(2AA) of the Companies Act, 1956, with respect
 to Director''s Responsibility Statement, it is hereby confirmed that:
 
 i) in preparation of the Annual Accounts for the year ended March 31,
 2012, the applicable accounting standards read with requirements set
 out under Schedule VI to the Companies Act, 1956, had been followed and
 there are no material departures from the same;
 
 ii) the Directors have selected such accounting policies and applied
 them consistently and made judgements and estimates that are reasonable
 and prudent so as to give a true and fair view of the state of affairs
 of the Company as at March 31, 2012 and of the profit of the Company
 for the year ended on that date;
 
 iii) the directors have taken proper and sufficient care 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; and
 
 iv) the directors have prepared the annual accounts of the Company on a
 ''going concern'' basis.  FIXED DEPOSITS:
 
 During the year under review your Company has neither accepted nor
 invited any deposits in terms of Section 58A and 58AA of the Companies
 Act, 1956.
 
 PARTICULARS OF EMPLOYEES:
 
 During the year under review, as there was no employee on the payroll
 of the Company, drawing salary/remuneration of Rs. 5,00,000/- or more per
 month, information pertaining to Section 217(2A) of the Companies Act,
 1956 is not applicable.
 
 ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
 EARNINGS AND OUTGO:
 
 (a) The Additional information required under Sec 217 (1) (e) of the
 Companies Act, 1956 relating to the conservation of energy and
 technology absorption need not apply to the company.
 
 (b) Total Foreign Exchange Used and Earned:
 
 (i) CIF Value of Imports NIL
 
 (ii) Foreign Exchange Earned NIL
 
 (iii) Expenditure in Foreign Currency NIL ACKNOWLEDGEMENTS:
 
 Your Directors would like to express their appreciation for the
 assistance and co-operation received from the Government Authorities,
 Banks, Customers, Vendors and Members during the year under review. The
 Board wishes to place on record its sincere appreciation for the
 continued support received from Executives, Staff and Workers of the
 Company.
 
                                  By order of the Board of Directors 
 
 Date: 14th August, 2012              KGN INDUSTRIES LIMITED 
 
 Place: Mumbai                                Sd/- 
 
                                     ARIF MEMON CHAIRMAN & 
                                     MANAGING DIRECTOR