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Directors Report of Kanani Industries Ltd.

Mar 31, 2016

To

The Members of

KANANI INDUSTRIES LIMITED

The Directors have pleasure in presenting their 33rd Annual Report on the Standalone and Consolidated Audited Statement of Accounts of Kanani Industries Limited [“Company”] for the Financial Year ended March 31, 2016.

FINANCIAL RESULTS

The summarized financial performance of the Company for the FY 2015-16 and FY 2014-15 is given below:

(Rs. in Lacs)

Particulars

Standalone

Consolidated

2015-2016

2014-2015

2015-2016

2014-2015

Gross Income

8525.61

6967.83

49637.38

44433.03

Profit Before Tax, Interest and Depreciation

51.74

87.29

248.89

264.50

Finance Charges

14.88

65.16

44.42

86.29

Provision for Depreciation

8.87

9.91

8.87

9.91

Net Profit Before Tax

42.87

20.52

210.49

176.61

Provision for Tax

8.18

3.97

19.08

10.33

Net Profit After Tax

34.69

16.55

191.41

166.27

Balance of Profit brought forward

2940.98

2938.94

3500.20

3348.45

Balance available for appropriation

2952.04

2940.98

3667.98

3500.20

Proposed Dividend on Equity Shares

-

-

-

-

Tax on proposed Dividend

-

-

-

-

Transfer to General Reserve

-

-

-

-

Surplus carried to Balance Sheet

34.69

16.55

191.41

166.27

REVIEW OF OPERATIONS

During the year under review, the Company has posted total Income of Rs. 8,52,561,063/- as against Rs. 6,96,782,891/- for the corresponding previous year.

Net Profit after Tax for the year under review was Rs. 3,468,624/- as against Net Profit after Tax of Rs. 1,655,012/- in the corresponding previous year.

FUTURE OUTLOOK

The Jewellery business will continue its growth path through various initiatives, including launching of new collections & Designs, increasing share of studded jewellery and achieving design leadership. Overall, the year 2016-17 will be a year where the Company would drive for strong and profitable growth in all its consumer businesses.

DIVIDEND AND RESERVES

In order to conserve the resources for the further growth of the Company, your Directors think fit not to recommend any dividend for the year under review.

SHARE CAPITAL

The Paid-up Equity Share Capital of the Company as on 31st March, 2016 is Rs. 98,934,000/-, comprising of Rs. 98,934,000 shares of Rs. 1/- each. During the year under review, the Company has not issued any equity shares.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

At the 32nd Annual General Meeting held on September 28, 2015, Mr. Harshil Kanani was re-appointed as the Director of the Company, liable to retire by rotation.

Further, the Board of Directors of the Company at their meeting held on March 31, 2015 appointed Mrs. Ami Jariwala as an Additional (Woman) Director of the Company and subsequently, she was appointed as an Independent Director to hold office for a period of 5 (five) consecutive years at the 32nd Annual General Meeting.

Further, Mr. Shailesh Patel was appointed as an Independent Director to hold office for a period of 5 (five) consecutive years at the 32nd Annual General Meeting. Thereafter, Mr. Shailesh Patel resigned as Director of the Company w.e.f. 1st July, 2016.

The said Independent Directors fulfils the conditions specified in the Companies Act, 2013 and the Rules made there under and they are independent of the management and have submitted the Declarations as prescribed under Section 149(6) of the Companies Act, 2013.

In accordance with section 152(6) of the Companies Act, 2013 and in terms of Articles of Association of the Company Mr. Premjibhai Kanani (DIN: 01567443), Director of the Company, retires by rotation and being eligible; offers himself for re-appointment at the forthcoming 33rd Annual General Meeting. The Board recommends the said reappointment for shareholders’ approval.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) & 134(5) of the Companies Act, 2013, the Board of Directors of the Company hereby confirm that:

(a) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) the directors have selected such accounting policies and applied 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 at the end of the financial year and of the profit and loss of the company for that period;

(c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors have prepared the annual accounts on a going concern basis; and

(e) the directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

(f) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016 in respect of employees of the Company, is enclosed as Annexure I and forms part of this Report.

Further, as per the provisions specified in Chapter XIII of Companies (Appointment & Remuneration of Managerial Personnel) Amendment Rules, 2016 none of the employees of the Company are in receipt of remuneration exceeding 1,02,00,000/- per annum, if employed for whole of the year or 8,50,000/- per month if employed for part of the year.

Further, the names of top ten employees in terms of remuneration drawn are disclosed in Annexure II and forms part of this Report.

EXTRACT OF ANNUAL RETURN

The details forming part of the Extract of the Annual Return in Form MGT-9, as required under Section 92 of the Companies Act, 2013 is included in this Report as Annexure III and forms part of this Report.

NUMBER OF BOARD MEETINGS

The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and the Listing Agreement.

During the year 06 (Six) Board Meetings were held during the year ended March, 2016, the dates which are 10th April. 2015. 30th May. 2015. 06th August. 2015. 10th October. 2015. 31st October. 2015. and 5th February. 2016

Name of the Directors

No. of Board Meetings attended

Mr. Premjibhai Devjibhai Kanani

6

Mr. Harshil Premjibhai Kanani

6

Mr. Devendrakumar Karshanbhai Kikani

6

Ms. Ami Dhaval Jariwala

6

Mr. Shailesh Patel

6

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and the Listing Agreement, SEBI (LODR) Regulations,

2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Committees. The Directors expressed satisfaction with the evaluation process.

INDEPENDENT DIRECTORS

The Independent Directors have submitted their disclosure to the Board that they fulfill all the requirements as to qualify for their appointment as Independent Director, under the provisions of section 149 of the Companies Act, 2013 as well as Regulation 17 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

DETAILS OF SUBSIDIARY/JOINT VENTURES / ASSOCIATE COMPANIES

The Statement AOC-1 pursuant to the provisions of Section 129 (3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014 regarding Subsidiary Company is enclosed as Annexure IV to this Report.

STATUTORY AUDITORS’ AND AUDITORS’ REPORT

M/s. Rajpara & Co., Chartered Accountants, Surat, [Firm Regd. No.114232W] do not seek re election due to their unwillingness to act as Auditors’ of the Company for the financial year 2016-2017.

Your Directors recommend that M/s. Deepak Mehta & Associates., Chartered Accountants, Mumbai, [Firm Regd. No. 102239W] be appointed as the Statutory Auditors of the Company to hold office for the term of 5 years from the conclusion of 33rd Annual General Meeting held for Financial Year ended 2016 till the conclusion of the 38th Annual General Meeting to be held for the Financial Year 2021.

As required under the provision of section 139 of the Companies Act, 2013, the company has obtained a written consent and eligibility certificate from M/s. Deepak Mehta &Associates., Chartered Accountants, Mumbai to the effect that appointment, if made, would be in conformity with the limits specified in the said section.

Auditors Report as issued by M/s. Rajpara & Co., Chartered Accountants, Auditors of the Company is self explanatory and need not call for any explanation by your Board.

SECRETARIAL AUDIT

In terms of Section 204 of the Act and Rules made there under, M/s. Deep Shukla & Associates, Practicing Company Secretaries, have been appointed Secretarial Auditors of the Company. The Secretarial Audit Report is enclosed as Annexure VI to this report.

EXPLANATION(S)/COMMENT(S) PURSUANT TO SECTION 134(3)(f)(ii) OF THE COMPANIES ACT, 2013

1. The Company has faced technical difficulties in filing eforms on MCA portal and hence the same were pending.

2. The Company has appointed Whole time Company Secretary in employment w.e.f. 21st March 2016.

3. Due to some technical reasons, the website of the Company faced some difficulties in proper functioning; however they said issues were sorted out and the website is working effectively.

INTERNAL AUDIT & CONTROLS

The Company has in place adequate internal financial controls with reference to the financial statement. The Audit Committee of the Board periodically reviews the internal control systems with the management, Internal Auditors and Statutory Auditors. Significant internal audit findings are discussed and follow-ups are taken thereon.

Further, M/s. Gosar Associates, Chartered Accountants, M.No. 045010 were appointed as Internal Auditors of the Company w.e.f. 05/02/2016 pursuant to Section 138 of the Companies Act, 2013.

COMPOSITION OF AUDIT COMMITTEE

Your Company has formed an Audit Committee as per the Companies Act, 2013 and the listing agreement. All members of the Audit Committee possess strong knowledge of accounting and financial management.

COMPOSITION OF NOMINATION & REMUNERATION COMMITTEE

Your Company has formed a Nomination & Remuneration Committee to lay down norms for determination of remuneration of the executive as well as non-executive directors and executives at all levels of the Company. The Nomination & Remuneration committee has been assigned to approve and settle the remuneration package with optimum blending of monetary and non-monetary outlay.

NOMINATION AND REMUNERATION POLICY

The Board of Directors has framed a policy which lays down a framework in relation to remuneration of Directors. This policy also lays down criteria for selection and appointment of Board Members. The Board of Directors is authorized to decide Remuneration to Executive Directors. The Remuneration structure comprises of Salary and Perquisites. Salary is paid to Executive Directors within the Salary grade approved by the Members. The Nomination & Remuneration committee has been assigned to approve and settle the remuneration package with optimum blending of monetary and non-monetary outlay.

EMPLOYEES’ STOCK OPTION PLAN

The Company has not provided stock options to any employee.

VIGIL MECHANISM

In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy has been uploaded on the website of the Company at http://www.kananiindustries.com employees of the Company are made aware of the said policy at the time of joining the Company.

RISK MANAGEMENT POLICY

The Company has laid down the procedure to inform the Board about the risk assessment and minimization procedures. These procedures are reviewed by the Board annually to ensure that there is timely identification and assessment of risks, measures to mitigate them, and mechanisms for their proper and timely monitoring and reporting.

The Company does not fall under the ambit of top 100 listed entities, determined on the basis of market capitalization as at the end of the immediately preceding financial year. Hence, compliance under Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is not applicable.

CORPORATE GOVERNANCE REPORT

In compliance with Regulation 34(3) read with Schedule V(C) of the Listing Regulations, a Report on Corporate Governance forms part of this Annual Report. The Auditors’ certificate certifying compliance with the conditions of corporate governance as prescribed under Schedule V(E) of the Listing Regulations is annexed to the Corporate Governance Report.

DEPOSITS

The Company has neither accepted nor renewed any fixed deposits during the year under review under Section 76 of the Companies Act, 2013. There are no unclaimed deposits, unclaimed / unpaid interest, refunds due to the deposit holders or to be deposited to the Investor Education and Protection Fund as on March 31, 2016.

LOANS & GUARANTEES

During the year under review, the Company has not provided any loan, guarantee, security or made any investment covered under the provisions of Section 186 of the Companies Act, 2013 to any person or other body corporate.

INSURANCE

The properties/assets of the Company are adequately insured.

RELATED PARTY TRANSACTIONS

As no related party transaction was entered into by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons pursuant the provisions of Section 188(1) of the Companies Act, 2013 during the financial year 2015-16 the particulars as required in form AOC-2 have not been furnished.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report, which gives a detailed state of affairs of the Company’s operations, form a part of this Annual Report.

CONSERVATION OF ENERGY. RESEARCH AND DEVELOPMENT. TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

The details of conservation of energy, technology absorption, foreign exchange earnings and outgo are as follows:

(a) Conservation of Energy:

Even though its operations are not energy-intensive, significant measures are taken to reduce energy consumption by using energy-efficient equipment. The Company regularly reviews power consumption patterns across all locations and implement requisite improvements/changes in the process in order to optimize energy/ power consumption and thereby achieve cost savings. Energy costs comprise a very small part of the Company’s total cost of operations. However, as a part of the Company’s conservation of energy programme, the management has appealed to all the employees/workers to conserve energy.

(b) Absorption of Technology:

I. The efforts made towards technology absorption:

The Company values innovation and applies it to every facet of its business. This drives development of distinctive new products, ever improving quality standards and more efficient processes.

The Company has augmented its revenues and per unit price realization by deploying innovative marketing strategies and offering exciting new products. The depth of designing capabilities was the core to our success over the years.

The Company uses the service of in-house designers as well as those of free-lancers in developing product designs as per the emerging market trends. The Company uses innovation in design as well as in technology to develop new products.

II. Benefits derived as a result of the above efforts:

As a result of the above, the following benefits have been achieved:

a) Better efficiency in operations,

b) Reduced dependence on external sources for technology for developing new products and upgrading existing products,

c) Expansion of product range and cost reduction,

d) Greater precision,

e) Retention of existing customers and expansion of customer base,

f) Lower inventory stocks resulting in low carrying costs.

III. The Company has not imported any technology during the year under review;

IV. The Company has not expended any expenditure towards Research and Development during the year under review.

[Amt. in Rs. ]

Particulars

FY 2015-2016

FY 2014-2015

C.I.F. Value of Imports

8,33,116,436

68,00,57,640

F.O.B. Value of Exports

8,48,791,496

69,48,68,495

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

The Company did not have any funds lying unpaid or unclaimed for a period of seven years. Therefore there were no funds which were required to be transferred to Investor Education and Protection Fund (IEPF).

-Unclaimed Dividend

Amount (Rs. )

Unclaimed Dividend F.Y. 2008-09 - Interim

590

Unclaimed Dividend F.Y. 2008-09 - Final

899

Unclaimed Dividend F.Y. 2009-10 - Interim

1,807

Unclaimed Dividend F.Y. 2009-10 - Final

2,308

Members are requested to note that after completion of seven years, no claims shall lie against the said fund or company for the amounts of dividend so transferred, nor shall any payment be made in respect of such claims.

CORPORATE SOCIAL RESPONSIBILITY

The Company is committed to discharging its social responsibility as a good corporate citizen.

The Board of Directors has framed a policy which lays down a framework in relation to Corporate Social Responsibility of the Company. This policy also lays down to lay down guidelines for the company to make CSR a key business process for sustainable development for the Society. The details of this policy are explained by way of Annexure V.

During the year under review, the Company has not expended any amount towards CSR activities as the same is not applicable to the Company pursuant to section 135 of the Companies Act, 2013.

COST AUDIT

As per the Cost Audit Orders and in terms of the provisions of Section 148 and all other applicable provisions of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, Cost Audit is not applicable to our Company.

OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

In order to prevent sexual harassment of women at work place a new act The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been notified on 9th December, 2013. Under the said Act every company is required to set up an Internal Complaints Committee to look into complaints relating to sexual harassment at work place of any women employee.

Company has adopted a policy for prevention of Sexual Harassment of Women at workplace and has set up Committee for implementation of said policy. During the year Company has not received any complaint of harassment.

LISTING WITH STOCK EXCHANGES

The Company confirms that it has paid the Annual Listing Fees for the year 2016-2017 to BSE and NSE where the Company’s Shares are listed.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS:

There are no significant and material orders passed by the Regulators / Courts / T ribunals which would impact the going concern status of the Company and its future operations.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

There have been no material changes and commitments, affecting the financial position of the Company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report.

ACKNOWLEDGEMENT

The Directors would like to thank all shareholders, customers, bankers, suppliers and everybody else with whose help, cooperation and hard work the Company is able to achieve the results. The Directors would also like to place on record their appreciation of the dedicated efforts put in by the employees of the Company.

For and On behalf of the Board of Directors

PREMJIBHAI KANANI

Place: Mumbai Chairman

Date: 10th August, 2016 DIN : 01567443


Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting their 32nd Annual Report on the Audited Statement of Accounts of Kanani Industries Limited ["Company"]for the Financial Year ended March 31,2015.

1. FINANCIAL RESULTS:

The Financial Results for the year ended March 31,2014 are summarized below:

(Amt. in Lacs)

Standalone Particulars 2014-2015 2013-2014

Gross Income 6967.83 7154.51

Profit Before Interest and Depreciation 87.29 134.76

Finance Charges 65.16 124.08

Provision for Depreciation 9.91 10.05

Net Profit Before Tax 20.52 17.33

Provision for Tax 3.97 3.35

Net Profit After Tax 16.55 13.98

Balance of Profit brought forward 3009.63 2995.66

Balance available for appropriation 3024.32 3009.63

Proposed Dividend on Equity Shares - -

Tax on proposed Dividend - -

Transfer to General Reserve - -

Surplus carried to Balance Sheet 16.55 13.98



Consolidated Particulars 2014-2015 2013-2014

Gross Income 44433.03 33875.59

Profit Before Interest and Depreciation 264.50 426.40

Finance Charges 86.29 124.08

Provision for Depreciation 9.91 10.05

Net Profit Before Tax 176.61 308.96

Provision for Tax 10.33 9.76

Net Profit After Tax 166.27 299.20

Balance of Profit brought forward 3419.14 3119.94

Balance available for appropriation 3583.55 3419.14

Proposed Dividend on Equity Shares - -

Tax on proposed Dividend - -

Transfer to General Reserve - -

Surplus carried to Balance Sheet 166.27 299.20

2. REVIEW OF OPERATIONS

Your company is engaged in the manufacturing activities and during the year under review, the Company has posted total Income of Rs. 696,782,891/- as against total Income of Rs. 715,450,763/- in the corresponding previous year.

Net Profit after Tax for the year under review was Rs. 1,655,012/- as against Net Profit after Tax of Rs. 1,397,518/- in the corresponding previous year.

3. DIVIDEND AND RESERVES

In order to conserve the resources for the further growth of the Company, your Directors think fit not to recommend any dividend for the year under review.

4. SHARE CAPITAL

The Paid-up Equity Share Capital of the Company as on 31st March, 2015 is Rs. 9,89,34,000, comprising of 9,89,34,000 shares of Re. 1/- each. During the year under review, the Company has not issued any equity shares.

5. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. Harshil Kanani, Managing Director, retires by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for reappointment.

Further, Mrs. Ami D. Jariwala has been appointed as an Independent Director of the Company with effect from 31st March, 2015, for a term of 5 years.

The Companies Act, 2013 (the Act) provides for appointment of independent Directors. sub section (10) of Section 149 of the Companies Act, 2013 (effective from April 1, 2014) provides that independent directors shall hold office for a term of up to five consecutive years on the Board of a Company, but shall be eligible for re-appointment on passing of a special resolution by the company in the Annual General Meeting and disclosure of such appointment in the Board's report. Accordingly, the Board of Directors proposes to appoint the existing Independent Director i.e. Mr. Shailesh Patel as an Independent Director of the Company under Section 149 of the Companies Act, 2013 for term up to 5 (five) years, in ensuing Annual General Meeting.

Sub-section (11) states that no independent director shall be eligible to hold office for more than two consecutive terms of five years. Sub- section (13) states that the provisions of retirement by rotation as defined in sub-section (6) and (7) of Section 152 of the Act shall not apply to such independent director.

The terms and conditions of appointment of Independent Directors are as per Schedule IV of the Act. Declaration for meeting the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement entered into with Stock Exchanges, has been received.

6. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) & 134(5) of the Companies Act, 2013, the Board of Directors of the Company hereby confirm that:

a. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b. the directors have selected such accounting policies and applied 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 at the end of the financial year and of the profit and loss of the company for that period;

c. the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d. the directors have prepared the annual accounts on a going concern basis; and

e. the directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

f. the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

7. PARTICULARS OF MANAGERIAL REMUNERATION

The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, is enclosed as Annexure I and forms part of this Report.

8. PARTICULARS OF EMPLOYEES PURSUANT TO THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

As per the provisions specified in Chapter XIII of Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 none of the employees of the Company are in receipt of remuneration exceeding Rs. 60,00,000/- per annum, if employed for whole of the year or Rs. 5,00,000/- per month, if employed for part of the year.

9. NUMBER OF BOARD MEETINGS

A calendar of meetings is prepared and circulated in advance to the Directors. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and the Listing Agreement.

During the year, 06 (Six) Board Meetings were convened and held, the details of which are given in the Corporate Governance Report.

10. BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Committees. The Directors expressed satisfaction with the evaluation process. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

11. INDEPENDENT DIRECTORS

The Independent Directors have submitted their disclosure to the Board that they fulfill all the requirements as to qualify for their appointment as Independent Director, under the provisions of section 149 of the Companies Act, 2013 as well as Clause 49 of the Listing Agreement.

12. NOMINATION AND REMUNERATION POLICY

The Board of Directors has framed a policy which lays down a framework in relation to remuneration of Directors. This policy also lays down criteria for selection and appointment of Board Members. The Nomination and Remuneration policy has been uploaded on the website of the Company at http:// www.kananiindustries.com/pdf/Nominationand RemunerationPolicy.pdf.

13. DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES

The Statement AOC-1 pursuant to the provisions of Section 129 (3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014 regarding Subsidiary Company is enclosed as Annexure IV to this Report.

14. STATUTORY AUDITORS' AND AUDITORS' REPORT

M/s. Ravi & Dev, Chartered Accountants, retires at the conclusion of the forthcoming Annual General Meeting and do not seek re election due to their unwillingness to act as Auditors' of the Company.

Your Directors recommend that M/s. Rajpara & Co, Chartered Accountants, Surat [Firm Regd. No.114232W] be appointed as the Statutory Auditors of the Company to hold office for the term of 1 year from the conclusion 32nd Annual General Meeting held for Financial Year ended 2015 till the conclusion of the 33rd Annual General Meeting to be held for the Financial Year 2016.

As required under the provision of section 139 of the Companies Act, 2013, the company has obtained a written consent and eligibility certificate from M/s. Rajpara & Co, Chartered Accountants, to the effect that appointment, if made, would be in conformity with the limits specified in the said section

Auditors Report as issued by M/s. Ravi & Dev, Chartered Accountants, Auditors of the Company is self explanatory and need not call for any explanation by your Board.

15. COST AUDIT

Pursuant to the Companies (Cost records and Audit) Rules, 2014, maintaining the cost records, and Appointment of Cost Auditor is not applicable to our Company.

16. APPOINTMENT OF COMPANY SECRETARY AND CHIEF FINANCIAL OFFICER

The Company is in process of appointing Company Secretary in whole time employment and pursuant to Section 203 of the Companies Act, 2013 read with Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Further, the Company has appointed Mr. Darshak Pandya as the Chief Financial Officer of the Company w.e.f. 06/08/2015.

17. SECRETARIAL AUDIT

In terms of Section 204 of the Act and Rules made there under, M/s. Deep Shukla & Associates, Practicing Company Secretary, have been appointed Secretarial Auditor of the Company. The Secretarial Audit Report is enclosed as Annexure V to this report.

18. INTERNAL AUDIT & CONTROLS

The Company has in place adequate internal financial controls with reference to the financial statement.

The Audit Committee of the Board periodically reviews the internal control systems with the management, Internal Auditors and Statutory Auditors. Significant internal audit findings are discussed and follow-ups are taken thereon.

The Company has appointed M/s. Deepak Mehta & Associates, Chartered Accountant as the Internal Auditor of the Company w.e.f. 27/01/2015 pursuant to Section 138 of the Companies Act, 2013.

19. COMPOSITION OF AUDIT COMMITTEE

All members of the Audit Committee possess strong knowledge of accounting and financial management. The Key Managerial Personnel are regularly invited to attend the Audit Committee meetings. The other details of the Audit Committee are given in the Corporate Governance Report, appearing as a separate section in this Annual Report.

S.N. Name of Directors Designation Designation in Committee

1 Mr. Devendra Kumar Independent Director Chairman Kikani

2 Mr. Shailesh Patel Independent Director Member

3 Mr. Harshil Kanani Executive Director Member

20. RE-CONSTITUTION OF NOMINATION AND REMUNERATION COMMITTEE

During the financial year, Mrs. Ami D. Jariwala, was appointed as Independent Director of the company w.e.f. 31st March, 2015. She was introduced as a Member in the Nomination and Remuneration Committee in place of Mr. Harshil Kanani who, being an Executive Director cannot be the Member of the Committee. Pursuant to Clause 49 IV A of the Listing Agreement the Nomination and Remuneration Committee shall consist of Non- Executive Members only. The Board of Directors of the Company has re-constituted the Nomination and Remuneration Committee w.e.f. 31st March, 2015. The other details of the Committee are given in the Corporate Governance Report, appearing as a separate section in this Annual Report.

S.N. Name of Directors Designation Designation in Committee

1 Mr. Devendra Kumar Independent Director Chairman Kikani

2 Mr. Shailesh Patel Independent Director Member

3 Mrs. Ami D. Jariwala Independent Director Member

21. EMPLOYEES' STOCK OPTION PLAN

The Company has not provided stock options to any employee.

22. WHISTLE BLOWER POLICY

In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a Whistle Blower Policy for directors and employees to report genuine concerns has been established. The Whistle Blower Policy has been uploaded on the website of the Company at http://www.kananiindustries.com/pdf/ Whistle%20Blower%20Policy.pdf. The employees of the Company are made aware of the said policy at the time of joining the Company.

23. RISK MANAGEMENT POLICY

The Company has laid down the procedure to inform the Board about the risk assessment and minimization procedures. These procedures are reviewed by the Board annually to ensure that there is timely identification and assessment of risks, measures to mitigate them, and mechanisms for their proper and timely monitoring and reporting.

24. EXTRACT OF ANNUAL RETURN

The details forming part of the Extract of the Annual Return in Form MGT-9, as required under Section 92 of the Companies Act, 2013 is included in this Report as Annexure II and forms part of this Report.

25. DEPOSITS

The Company has not accepted nor renewed any fixed deposits during the FY 2014-15.

26. LOANS & GUARANTEES

During the year under review, the Company has not provided any loan, guarantee, security or made any investment covered under the provisions of Section 186 of the Companies Act, 2013 to any person or other body corporate.

27. INSURANCE

The properties/assets of the Company are adequately insured.

28. RELATED PARTY TRANSACTIONS

During FY 2014-15, the Company entered into certain Related Party Transactions which are in the ordinary course of business and at arm's length basis, with approval of the Audit Committee. The Audit Committee grants omnibus approval for the transactions which are of foreseen and repetitive nature. A detailed summary of Related Party Transactions is placed before the Audit Committee & the Board of Directors for their review every quarter.

There are no materially significant Related Party Transactions executed between the Company and its Promoters, Directors, key Managerial Personnel or other designated persons, that may have a potential conflict with the interest of the Company at large.

As there are no Related Party Transactions entered into by the Company Form AOC-2 is not applicable to the Company.

29. CORPORATE GOVERNANCE CERTIFICATE

A Report on Corporate Governance along with a certificate from the Auditors of the Company regarding the compliance of conditions of corporate governance as stipulated under Clause 49 of the Listing Agreement forms a part of this Annual Report.

30. MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report, which gives a detailed state of affairs of the Company's operations forms a part of this Annual Report.

31. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company is committed to discharging its social responsibility as a good corporate citizen.

The Board of Directors has framed a policy which lays down a framework in relation to Corporate Social Responsibility of the Company. This policy also lays down to lay down guidelines for the company to make CSR a key business process for sustainable development for the Society. The details of this policy are explained by way of Annexure III.

During the year under review, the Company has not expended any amount towards CSR activities as the same is not applicable to the Company pursuant to section 135 of the Companies Act, 2013.

32. CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

A) Conservation of energy-

Even though its operations are not energy-intensive, significant measures are taken to reduce energy consumption by using energy-efficient equipment. The Company regularly reviews power consumption patterns across all locations and implement requisite improvements/changes in the process in order to optimize energy/ power consumption and thereby achieve cost savings. Energy costs comprise a very small part of the Company's total cost of operations. However, as a part of the Company's conservation of energy programme, the management has appealed to all the employees / workers to conserve energy.

B) Technology absorption-

i. The efforts made towards technology absorption:

The Company values innovation and applies it to every facet of its business. This drives development of distinctive new products, ever improving quality standards and more efficient processes.

The Company has augmented its revenues and per unit price realization by deploying innovative marketing strategies and offering exciting new products. The depth of designing capabilities was the core to our success over the years.

The Company uses the service of in-house designers as well as those of free-lancers in developing product designs as per the emerging market trends. The Company uses innovation in design as well as in technology to develop new products.

ii. Benefits derived as a result of the above efforts :

As a result of the above, the following benefits have been achieved:

a. Better efficiency in operations,

b. Reduced dependence on external sources for technology for developing new products and upgrading existing products,

c. Expansion of product range and cost reduction,

d. Greater precision,

e. Retention of existing customers and expansion of customer base,

f. Lower inventory stocks resulting in low carrying costs,

iii. The Company has not imported any technology during the year under review

iv. The Company has not expended any expenditure towards Research and Development during the year under review.

[Amt. in Rs.]

Particulars FY 2014-2015 FY 2013-2014

Value of Imports of Raw Materials 68,00,57,640 51,67,84,932

F.O.B. Value of Exports 69,48,68,495 70,60,02,384

33. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

The Company did not have any funds lying unpaid or unclaimed for a period of seven years. Therefore there were no funds which were required to be transferred to Investor Education and Protection Fund (IEPF).

Unclaimed Dividend Amount (Rs.)

Unclaimed Dividend F.Y. 2008-09 - Interim 590

Unclaimed Dividend F.Y. 2008-09 - Final 899

Unclaimed Dividend F.Y. 2009-10 - Interim 1,807

Unclaimed Dividend F.Y. 2009-10 - Final 2,308

34. GENERAL

During the year ended 31st March, 2015, there were no cases filed /reported pursuant to the Sexual Harassment of women at workplace (Prevention, Prohibition and Redressal) Act, 2013.

The Company confirms that it has paid the Annual Listing Fees for the year 2015-2016 to BSE and NSE where the Company's Shares are listed.

During the year under review, no significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and Company's operations.

35. HUMAN RESOURCES

Your Company treats its "human resources" as one of its most important assets.

Your Company continuously invests in attraction, retention and development of talent on an ongoing basis. A number of programs that provide focused people attention are currently underway. Your Company thrust is on the promotion of talent internally through job rotation and job enlargement.

36. ACKNOWLEDGEMENT

The Directors would like to thank all shareholders, customers, bankers, suppliers and everybody else with whose help, cooperation and hard work the Company is able to achieve the results. The Directors would also like to place on record their appreciation of the dedicated efforts put in by the employees of the Company.

For and On behalf of the Board of Directors

PREMJIBHAI KANANI Place: Mumbai Chairman Date: 6th August, 2015 DIN : 01567443


Mar 31, 2014

The Members of

KANANI INDUSTRIES LIMITED

The Directors present the 31st Annual Report together with the Audited financial Statement for the financial year ended March 31, 2014.

FINANCIAL RESULTS:

The Financial Results for the year ended March 31, 2014 are summarized below:

(Amt. in Rs.) Year ended Year ended Particulars March 31, 2014 March 31, 2013

Revenue from operation 706,002,384 77,63,04,269

Other Income 9,448,380 1,19,18,236

Total Income 715,450,763 78,82,22,505

Expenditure (before depreciation) 712,712,976 78,53,14,532

Profit/(Loss) before Depreciation and Taxes 2,737,787 29,07,973

Less: Depreciation 1,005,269 11,03,212

Profit/(Loss) before Taxation 1,732,518 18,04,761

Less: Provision for Tax

- Current Taxes 3,35,000 3,60,000

- Previous year taxes - -

Profit/(Loss) after Taxation 1,397,518 14,44,761

Balance brought forward 299,565,532 30,82,65,297

Add: Net Profit/(Net Loss) for the year 1,397,518 14,44,761

Amount available for the appropriation 300,963,050 309,710,058

Less: Capitalised by way of issue of fully paid up Bonus Shares - (89,94,000)

Less: Transferred to Special Economic Zone re-investment reserve - (11,50,526)

Balance Carried to Balance Sheet 300,963,050 29,95,65,532

Earnings per equity share (Rs. per share)

- Basic 0.01 0.01

- Diluted 0.01 0.01

DIVIDEND:

In order to conserve the resources for the further growth of the Company, your Directors think fit not to recommend any dividend for the year under review.

PERFORMANCE:

Your company is engaged in the manufacturing activities and during the year under review, the Company has posted total Income of Rs. 715,450,763/- as against total Income of Rs. 78,82,22,505/- in the corresponding previous year. Net Profit after Tax for the year under review was Rs. 1,397,518/- as against Net Profit after Tax of Rs. 14, 44,761/- in the corresponding previous year.

AUDITORS:

M/s. Ravi & Dev, Chartered Accountants, Auditors of the Company retire at the conclusion of this Annual 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 by the Board of Directors.

DIRECTORS:

In accordance with section 152(6) of the Companies Act, 2013 and in terms of Articles of Association of the Company, Mr. Premjibhai Devjibhai Kanani, Whole-time Director of the Company are liable to retire by rotation at the ensuing Annual General meeting and being eligible, offered himself for re-appointment. Board of Directors recommends the above re-appointment.

In accordance with Section 149(4) and other applicable provisions, if any, read with Schedule IV of the Companies Act, 2013, the Company has to appoint 1/3rd of the total Directors as Independent Directors, for a maximum period of 5 years and who are not liable to retire by rotation.

Accordingly, the Board of Directors proposes to appoint the existing Independent Director i.e. Mr. Devendra kumar Kikani as an Independent Directors of the Company under Section 149 of the Companies Act, 2013 for term up to 5 (five) years, respectively, in ensuing Annual General Meeting.

The Company has received declarations from the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges.

During the year under review, Mr. Gautam Parekh resigned from Directorship of the company w.e.f. 01st December, 2013.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to the requirement under section 217(2AA) of the erstwhile 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 2013-14, the applicable accounting standards have been followed and there are no material departures;

ii) that the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the statement at the end of the financial year and of the profit or loss of the Company for that period;

iii) that the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for 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, 2014.

DETAILS OF EMPLOYESS UNDER THE COMPANIES (PARTICULARS OF EMPLOYEES) RULE 1975 (AS AMENDED UPTO DATE):

The information required under sub-section (2A) of Section 217 of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 duly amended by the Companies (Particulars of Employees) Rule, 2011 for the year ended 31st March, 2014 is not applicable to the Company as none of the employee is drawing remuneration more than the limits presently specified under the said rules.

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 erstwhile 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 Point Nos. 3 to 5 of Significant Accounting Policies under Note No. 21 of the Notes to Financial Statements.

CONSOLIDATED FINANCIAL STATEMENTS:

Your Directors have pleasure in attaching the Consolidated Financial Statements pursuant to Clause 32 of the Listing Agreement entered into with the Stock Exchange and prepared in accordance with the Accounting Standards prescribed by the Institute of Chartered Accountants of India, in this regard.

MANAGEMENT DISCUSSION AND ANALYSIS:

The Report on Management Discussion and Analysis as required under the Listing Agreement with The Stock Exchanges is enclosed to this Report. Certain statements in this section may be forward looking. Many factors may affect the actual results, which could be different from what the Directors envisage in terms of the future performance and outlook.

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.

CONSTITUTION / RE CONSTITUTION OF COMMITTEE:

During the financial year, Mr. Gautam Parekh, non-executive Independent Directors, resigned from Directorship of the company w.e.f. 01st December, 2013. The Board of Directors of the Company has re-constituted the Audit Committee and Share Transfer/Investor Grievance Committee w.e.f. 01st December, 2013.

The constitution of the Audit Committee is as follows:

Mr. Devendrakumar Kikani - Chairman, Non Executive Independent Mr. Shailesh Patel - Member, Non-Executive Independent

Mr. Harshil Kanani - Member, Executive

The constitution of the Share Transfer/Investor Grievance Committee is as follows:

Mr. Shailesh Patel - Chairman, Non Executive Independent

Mr. Devendrakumar Kikani - Member, Non-Executive Independent Mr. Harshil Kanani - Member, Executive

Further, the Board of Directors of the Company has constituted Remuneration committee, the following are the members of the said committee are as table below:

Mr. Shailesh Patel - Chairman, Non Executive Independent

Mr. Devendrakumar Kikani - Member, Non-Executive Independent Mr. Harshil Kanani - Member, Executive

Terms of reference

- Fix the remuneration payable to the Executive Directors;

- Review the performance of employees and their compensation; and

- Review the performance of employees against specific key result areas identified as yardsticks for measuring performance.

In accordance with provision of Companies Act, 2013, the Board of Directors of the Company has re-named the all existing committees w.e.f. 20th August, 2014.

STATEMENT U/S. 212 REGARDING SUBSIDIARY COMPANY:

The Statement pursuant to the provisions of Section 212 of the erstwhile Companies Act, 1956 regarding Subsidiary Company is annexed to this Report.

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), National Stock Exchange of India Ltd. (NSE), Bombay Stock Exchange Limited, Central, State and Local Government for their continued support and cooperation.

For and On behalf of the Board of Directors PREMJIBHAI KANANI Place: Mumbai Chairman Date: 20th August, 2014 DIN : 01567443


Mar 31, 2013

To, The Members of KANANI INDUSTRIES LIMITED

The Directors present the 30th Annual Report together with the Audited Statement of Accounts for the financial year ended March 31, 2013.

FINANCIAL RESULTS:

The Financial Results for the year ended March 31, 2013 are summarized below:

(Amt. in Rs.) Year ended Year ended Particulars March 31, 2013 March 31, 2012

Revenue from operation 77,63,04,269 140,26,88,573

Other Income 1,19,18,236 (5,076,578)

Total Income 78,82,22,505 139,76,11,995

Expenditure (before depreciation) 78,53,14,532 139,39,44,576

Profit/(Loss) before Depreciation and Taxes 29,07,973 36,67,419

Less: Depreciation 11,03,212 12,19,078

Profit/(Loss) before Taxation 18,04,761 24,48,341

Less: Provision for Tax

- Current Taxes 3,60,000 4,75,000

- Previous year taxes 150

Profit/(Loss) after Taxation 14,44,761 19,73,191

Balance brought forward 30,82,65,297 30,62,91,806

Less: Capitalised by way of issue of fully paid up

Bonus Shares (89,94,000)

Add: Net Profit/(Net Loss) for the year 14,44,761 19,73,491

Less: Transferred to Special Economic Zone re-investment reserve (11,50,526)

Balance Carried to Balance Sheet 29,95,65,532 30,82,65,297

Earnings per equity share (Rs. per share)

- Basic 0.01 0.02

- Diluted 0.01 0.02



DIVIDEND

In order to conserve the resources for the further growth of the Company, your Directors think fit not to recommend any dividend for the year under review.

PERFORMANCE

Your company is engaged in the manufacturing of diamond studded jewellery during the year under review, the Company has posted Total Income of Rs. 78,82,22,505/- as against Total Income of Rs. 139,76,11,995/- in the corresponding previous year. Net Profit after Tax for the year under review was Rs. 14,44,761/- as against Net Profit after Tax of Rs. 19,73,191/- in the corresponding previous year.

AUDITORS

M/s Ravi & Dev, Chartered Accountants, Auditors of the Company retire at the conclusion of this Annual 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 by the Board of Directors.

DIRECTORS:

During the year under review, Mr. Devendrakumar Kikani Director of the Company retires by rotation and being eligible offers himself for reappointment at the forthcoming Annual General Meeting.

During the year under review, Mr. Nagjibhai Vithani, Director of the Company is liable to retire by rotation at the conclusion of the ensuing Annual General Meeting, but has shown his unwillingness to get re-appointed at the said Annual General Meeting due to unfavorable health factor,. Consequently, in order to comply with the applicable provisions of the Companies Act, 1956, Mr. Shailesh. R. Patel is considered for re-appointment as his tenure will end due to retirement by rotation, being next longest in office and being eligible offers himself for reappointment at the ensuing Annual General 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 2012-13, the applicable accounting standards have been followed and there are no material departures;

ii) that the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the 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 accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for 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, 2013.

DETAILS OF EMPLOYESS UNDER THE COMPANIES (PARTICULARS OF EMPLOYEES) RULE 1975 (AS AMENDED UPTO DATE)

The information required under sub-section (2A) of Section 217 of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 duly amended by the Companies (Particulars of Employees) Rule, 2011 for the year ended 31st March, 2013 is not applicable to the Company as none of the employee is drawing remuneration more than the limits presently specified under the said rules.

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 Point Nos. 3 to 5 of Significant Accounting Policies under Note No. 20 of the Notes to Financial Statements.

CONSOLIDATED FINANCIAL STATEMENTS

Your Directors have pleasure in attaching the Consolidated Financial Statements pursuant to Clause 32 of the Listing Agreement entered into with the Stock Exchange and prepared in accordance with the Accounting Standards prescribed by the Institute of Chartered Accountants of India, in this regard.

MANAGEMENT DISCUSSION AND ANALYSIS

The Report on Management Discussion and Analysis as required under the Listing Agreement with The Stock Exchanges is enclosed to this Report. Certain statements in this section may be forward looking. Many factors may affect the actual results, which could be different from what the Directors envisage in terms of the future performance and outlook

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.

STATEMENT U/S. 212 REGARDING SUBSIDIARY COMPANY

The Statement pursuant to the provisions of Section 212 of the Companies Act, 1956 regarding Subsidiary Company is annexed to this Report.

ISSUE OF BONUS SHARES BY THE COMPANY

As the Members are aware, the Company came out with bonus issue in the ratio 10:1 [One share for every Ten shares held] which got listed on National Stock Exchange of India Limited and Bombay Stock Exchange Limited on February 08, 2013.

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), National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Central, State and Local Government for their continued support and cooperation. For and On behalf of the Board of Directors

Place: Mumbai PREMJIBHAI KANANI

Date: August 14th, 2013 Chairman


Mar 31, 2012

The Members of

KANANI INDUSTRIES LIMITED

The Directors present the Twenty-Ninth Annual Report together with the Audited Statement of Accounts for the year ended March 31, 2012.

Financial Results

The Financial Results for the year ended March 31, 2012 are summarized below:

(Amt. in Rs.)

Year ended Year ended Particulars March 31, 2012 March 31, 2011

Sales 1,402,688,573 1,516,669,978

Other Income (5,076,578) 2,613,413

Total Income 139,76,11,995 151,92,83,391

Expenditure [before depreciation 139,39,44,576 135,60,86,486

Profit before Dep. & Tax 36,67,419 16,31,96,905

Less: Depreciation 12,19,078 13,56,120

Profit(Loss) before Tax 24,48,341 16,18,40,785

Less: Provision for Tax 4,75,000 -

Previous year tax 150 -

Profit(Loss) after Tax 19,73,191 16,18,40,785

Dividend

In order to conserve the resources for the further growth of the Company your Directors think fit not to recommend any dividend for the year under review.

Performance

Your company is engaged in the manufacturing activities and during the year under review, the Company has posted Total Income of Rs. 139,76,11,995/- as against Total Income of Rs. 151,92,83,391/- in the corresponding previous year. Net Profit after Tax for the year under review was Rs. 19,73,191/-as against Net Profit after Tax of Rs. 16,18,401785/- in the corresponding previous year.

Auditors

M/s Ravi & Dev, Chartered Accountants, Auditors of the Company retire at the conclusion of this Annual 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 by the Board of Directors.

Directors

During the year under review, Mr. Shailesh Patel and Mr. Gautam Parekh, Directors of the Company retire by rotation and being eligible offer themselves for reappointment at the forthcoming Annual General Meeting.

Further, Mr. Premjibhai Kanani be is hereby proposed to be reappointed as the Chairman and Mr. Harshil Kanani be and is hereby proposed to be reappointed as the Managing Director of the Company w.e.f. August 1, 2012 respectively for a period of five years each.

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 2011-12, the applicable accounting standards have been followed and there are no material departures;

ii. that the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the statement at the end of the financial year and of the loss of the

iii. that the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for 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, 2012.

Details of Employees under the Companies (Particulars of Employees) Rule, 1975 (as Amended Upto Date)

The information required under sub-section (2A) of Section 217 of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 duly amended by the Companies (Particulars of Employees) Rule, 2011 for the year ended 31st March, 2012 is not applicable to the Company as none of the employee is drawing remuneration more than the limits presently specified under the said rules.

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 '21' i.e. Significant Accounting Policies of the Notes to Accounts.

Consolidated Financial Statements

Your Directors have pleasure in attaching the Consolidated Financial Statements pursuant to Clause 32 of the Listing Agreement entered into with the Stock Exchange and prepared in accordance with the Accounting Standards prescribed by the Institute of Chartered Accountants of India, in this regard.

Management Discussion and Analysis

The Report on Management Discussion and Analysis as required under the Listing Agreement with the Stock Exchanges is enclosed to this Report. Certain statements in this section may be forward looking. Many factors may affect the actual results, which could be different from what the Directors envisage in terms of the future performance and outlook.

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.

Subsidiary Company

Your Company formed its subsidiary in Special Administrative Region of Hong Kong under the name & style 'KIL INTERNATIONAL LIMITED' w.e.f. 4th July 2011.

Statement U/S. 212 Regarding Subsidiary Company

The Statement pursuant to the provisions of Section 212 of the Companies Act, 1956 regarding Subsidiary Company is annexed to this Report.

Listing of Shares of the Company on National Stock Exchange of India Limited (NSE)

Your Directors are pleased to inform that on an application made by the Company, National Stock Exchange of India Limited (NSE) approved the listing of 1,79,88,000 equity shares of the Company on its exchange and admitted to its dealings w.e.f. December 14, 2011.

Acknowledgment

Your Directors would like to express their appreciation for the assistance and co-operation received from Bankers, Govt authorities, customers, and vendors during the year.

Your Directors also wish to place on record their deep sense of appreciation for the committed services of Executives, Staff and workers of the company.

For and On behalf of the Board of Directors

Place: Mumbai PREMJIBHAI KANANI

Date: August 9th, 2012 Chairman


Mar 31, 2011

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


Mar 31, 2010

The the Audited Statement of Accounts for the year ended March 31, 2010.

FINANCIAL RESULTS:

The Financial Results for the year ended March 31, 2010 are summarized below: (Amt. in Rs. Lacs)

year ended Year ended Particulars March 31, 2010 March 31, 2009

Sales 8683.86 5426.58

Other Income (4,4.08) 24.88

Increase in Stock of finished Goods 59.51 NIL

Total Income 8699.29 5451.46

Expenditure [before depreciation] 7929.71 4609.85

Profit before Pep. & Tax 739.90 841.62

Less: Depreciation 14.83 09.13

Profit(Loss) before Tax 754.74 832.49

Less: Provision for Tax - -

Fringe Benefit Tax - 0.035

Profit(Loss) after Tax 754.74 832.46

Profit/(Loss) brought forward[ 1232.00 433.16

Profit available for appropriation1 986.74 1265.62

Proposed Dividend of previous year reversed - 1.24

Prov. For Corporate Dividend Tax reversed - 0.21

Profit available for appropriation - 1267.07

APPROPRIATIONS:

Interim Dividend paid 44.97 14.99

Corporate Dividend Tax on Interim Dividend 7.64 02.55

Proposed Dividend 44.97 14.99

Corporate Dividend Tax on Proposed Dividend 7.64 02.55

Surplus Carried to Balance Sheet | 1881.51 1231.99

DIVIDEND:

The company has paid interim dividend @5% i.e. Re.0.25 per equity share of Rs. 51- each.

The Directors are pleased to recommend a dividend @ 5% i.e. Re.0.25 per equity share of Rs.5/- each for the financial year 2009-2010.

PERFORMANCE:

Your Directors are pleased to inform the Members that the Company has posted Total Income of Rs.8699.29 Lacs as against Total Income of Rs. 5451.47 Lacs in the corresponding previous year. Net Profit after Tax for the year under review was Rs.754.74 Lacs as against Net Profit after Tax of Rs.832.46 Lacs in the corresponding previous year.

During the year 2009-2010, the Company has successfully come out with bonus issue in the ratio of Two Equity Shares for every One Equity Shares (2:1)held aggregating to 17988000 equity shares of Rs. 10/- each, which were listed on Bombay Stock Exchange Limited on 08/09/2009.

CORPORATE GOVERNANCE:

In terms of Clause 49 of Listing Agreement with Stock Exchanges, a compliance report on Corporate Governance is annexed with this Report.

AUDITORS:

M/s. Ravi & Dev, Chartered Accountants, Mumbai, the Statutory Auditors of the Company retire at the ensuing Annual General Meeting. The members are requested to appoint auditors and to fix their remuneration.

DIRECTORS:

Mr. Shailesh Patel and Mr. Gautam Parekh, Directors are liable to retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

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 2009-10, the applicable accounting standards have been followed and there are no material departures;

ii) That the directors have selected such accounting policies and applied 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 as on 31st March 2010.

iii)that the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for 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 loans or deposits from public in contravention of Section 58A of the Companies Act, 1956, and rules framed under the Companies (Acceptance of Deposits) Rules, 1975.

THE COMPANIES (PARTICULARS OF EMPLOYEES) RULE 1975 AS AMENDED:

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:

As the Company does not have any manufacturing activities, particulars required in term to be disclosed with respect to the conservation of energy and technology in term of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosures of Particulars in the Report of the Board of Directors) Rules, 1998 are not applicable. 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.

ACKNOWLEDGEMENT:

Your Directors records their appreciation for the full co-operation received from the Financial Institutions, Banks, other agencies and departments.

For and On behalf of the Board of Directors

Place: Mumbai PREMJIBHAI D. KANANI

Date: 29/06/2010 CHAIRMAN.

REGISTERED OFFICE: G/6, PRASAD CHAMBERS, TATA ROAD NO.2, OPERA HOUSE, MUMBAI: 400004.

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