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Directors Report of KGN Enterprises Ltd.

Mar 31, 2015

Dear members,

The Directors have the pleasure in presenting the 21st Annual Report together with the Audited Statement of Account for the year ending on 31st March, 2015.

Financial Results : (Amt. in Rupees)

Particulars Financial Year ended

Standalone

2014-2015 2013-2014

Revenue from operations 170,219,441 84,626,530

Other Income 6,242,542 13,837,705

Total revenue 176,461,983 98,464,236

Expenditure :

* Employee benefits expenses 668,486 2,037,802

* Other expenses 174,566,430 95,885,870

Total expenses 175,234,916 97,923,672

Profit before tax 1,227,067 540,564

Tax expense :

* current Tax 235,014 100,000

Excess Provision of I. Tax for earlier year -3,471,702 -

Net profit for the year 4,463,755 440,564

(Amt. in Rupees)

Financial Year ended

Particulars Consolidated

2014-2015 2013-2014



Revenue from operations 170,266,841 92,886,180

Other Income 7,461,448 15,988,072

Total revenue 177,728,289 108,874,252

Expenditure :

* Employee benefits expenses 1,631,554 3,161,402

* Other expenses 174,791,157 105,114,784

Total expenses 176,422,711 108,276,186

Profit before tax 1,305,578 598,066

Tax expense :

* current Tax 259,273 120,630

Excess Provision of I. Tax for earlier year -3,471,702 -

Net profit for the year 4,518,007 477,436

APPROPRIATIONS :

The Opening Balance of Surplus of Profit and Loss shown under the head Reserves and Surplus was Rs. 44,326,350/ -. During the year under the review, the profit of Rs. 4,463,755/-. was also added. The Closing Balance of Surplus of the Profit and Loss shown under the head Reserves and Surplus was Rs 48,790,105/-.

OPERATIONS :

During the year under the review there was an increase in total income of 101.14 % in comparison to the previous year. The total expenses have increased by 078.95 % and the net profit after tax has increased by 913.19%.

DIVIDEND :

As Company has inadequate Profit, your directors do not propose any dividend for the current year to conserve the resources.

DETAILS OF DIRECTORS / KEY MANAGERIAL PERSONNEL APPOINTED / RESIGNED :

i. Retirement by Rotation :

Pursuant to the provisions of Section 152(6) of the Companies Act, 2013, Mr. Ismail Memon (DIN: 00209507), retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Your directors recommend his re-appointment.

ii. Cessation :

There is no cessation of any director during the year.

iii. Appointment of Additional / Independent Women Director :

Mr. Ajazahmad Ansari and Mr. Aftabahmed Kadri were appointed as Additional Directors of the Company with effect from 14th February, 2015 and Ms. Janki Ranjitsingh Vaghela was appointed as an Additional Director (Independent Women Director) on the Board w.e.f. 31st March, 2015. Mr. Ajazahmad Ansari, Mr. Aftabahmed Kadri and Ms. Janki Ranjitsingh Vaghela, Additional Director will hold office until the date of ensuing 21st Annual General Meeting of the shareholders of the Company. The necessary resolution proposing them appointment as Independent Director has been proposed in the Notice convening the said Annual General meeting.

iv. Appointment of CFO :

During the Year under review in compliance with the provisions of Sections 197 and 203 and all other applicable provisions, if any, of the Companies Act, 2013 Mr. Mohsin Ismail Memon was appointed as Chief Finance Officer w.e.f. 14th February, 2015.

v. Key Managerial Personnel :

The following persons were designated as Key Managerial Personnel:

1. Ms. Sakina Aiyyaz Pimpalnerwala, Company Secretary

2. Mr. Babulal Hirani, Managing Director

3. Mr. Mohsin Ismailbhai Memon, Chief Financial Officer

DETAILS OF HOLDING / SUBSIDARY COMPANIES / JOINT VENTURES / ASSOCIATE COMPANIES :

Your Company has Four wholly owned Subsidiary Companies i.e. KGN Bio Tech Limited, KGN Green Limited, KGN Proteins Limited, KGN Oil & Gas Private Limited.

In terms of the Provisions contained in Section 129 (3) of the Companies Act, 2013, Read with rule 5 of the Companies (Accounts) Rules, 2014, a report on the performance and the financial of each of the subsidiaries is provided as Annexure A i.e 'AOC-1' to this Report.

DEPOSITS :

The Company has not invited/ accepted any deposit, other than the exempted deposit as prescribed under the provision of the Companies Act, 2013 and the rules framed there under, as amended from time to time. Hence there are no particulars to report about the deposit falling under Rule 8 ( 5 ) ( v ) and ( vi ) of Companies ( Accounts ) Rules, 2014.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNALS:

During the year under review there were no significant and material orders passed by any Regulators or Court or Tribunals which may have impact on the going concern status. Neither there are any orders passed which may have impact on the Company's operation in future.

INTERNAL FINANCIAL CONTROLS :

The internal financial controls with reference to the Financial Statements are commensurate with the size and nature of business of the Company. The Company has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to Company's policies, safeguarding of its assets, prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

Pursuant to Rule 8 (3) of Companies (Accounts) Rules, 2014, the Board of Directors hereby declares that there are no particulars to report for the Conservation of Energy & Technology Absorption. There is no foreign exchange earnings and outgo during the year under the review.

ENVIRONMENTAL PROTECTION :

Your Company is engaged in the manufacturing activities for which Company has taken approval of Gujarat Pollution Control Board and the directors inform with regret that there were no manufacturing activities during the financial year 2014-15.

PERSONNEL :

There was no employee drawing remuneration requiring disclosure under the Rule 5 (2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

DISCLOSURE UNDER SECTION 197(12) AND RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

There was no employee drawing remuneration requiring disclosure under section 197(12) and Rule 5 (1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Required details are annexed to this Report as Annexure B.

VIGIL MECHANISM :

Pursuant to Section 177(9) of the Companies Act, 2013, the company has adopted Whistle Blower Policy to deal with any instance of fraud and mismanagement. The employees of the company are free to report violations of any laws, rules, regulations and concerns about unethical conduct to the Audit Committee under this policy. The policy ensures that strict confidentiality is maintained whilst dealing with concerns and also that no discrimination with any person for a genuinely raised concern.

AUDIT COMMITTEE :

The Audit Committee of the Board of Directors of the Company was re-constituted and presently consists of three Directors viz. Mr. Aftabahmed Kadri, Mr.Ajazahmed Ansari and Ms.Janki Vaghela. All members of the Audit Committee are non-executive Directors. Mr. Aftabahmed Kadri, is the Chairman of the Audit Committee.

During the Year under review, total four Meetings of the Board of Directors of the Company were held.

The Composition and the Terms of Reference of the Audit Committee is as mentioned in the provisions of Section 177 of the Companies Act, 2013 and clause 49 of the Listing Agreement with the Stock exchanges as amended from time to time. The Statutory Auditor, Internal Auditor and Chief Finance Officer usually attend the Meeting of the Audit Committee. The Company Secretary of the Company Ms. Sakina Aiyyaz Pimpalnerwala acts as Secretary of the Committee.

AUDITORS :

i. Statutory Auditor and their Report :

In the last AGM held on 29th September, 2014, M/s. Kirit & Company, Chartered Accountants, (having Registration No. 132282W) Chartered Accountants, have been appointed Statutory Auditors of the Company for a period of 2 (Two) years. Ratification of appointment of Statutory Auditors is being sought from the members of the Company at the ensuing AGM. They have confirmed their eligibility and willingness to accept office, if re- appointed.

The observations made in their report and dealt with in the notes forming part of the Accounts at appropriate places are self-explanatory.

ii. INTERNAL AUDITOR :

M/s. A.Y. Pathan & Associates, Chartered Accountant, are Internal Auditors of the Company. The Audit Committee of the Board of Directors in consultation with the Internal Auditors, formulate the scope, functioning periodicity and methodology for conducting the internal audit.

iii. SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT :

The Board of Directors of the Company has, in compliance with the provisions of Section 304(1) of the Companies Act, 2013 and rules made in this behalf, appointed M/S. Umesh Ved & Associates, Company Secretaries to carry out Secretarial Audit of the Company for the financial year 2014-15. The Report of the Secretarial Auditor is annexed to this Report as Annexure C which is self explanatory and give complete information.

EXPLANATION TO THE QUALIFICATIONS IN AUDITOR'S REPORT AND SECRETARIAL AUDIT REPORT :

There are no qualifications or adverse remarks in the Auditor's Report. Explanation on qualification adverse remark made in Secretarial Audit Report is as under.

Qualification/ Adverse Remark Explanation :

The Form MR-1is yet to be filed by The company is in process of the Company with the Registrar of filing the requisite forms and Company as specified under the the compliance of the same will provisions of Section 203 under be made soon. the Companies Act, 2013 in respect of the return of appointment of a Chief Financial Officer.

The requisite Form DIR-12 are yet However, Board assures that it to be filed by the Company with the will be complied with now Registrar of Company as onwards. specified under the provisions of Section 170 under the Companies Act, 2013 in respect of the particulars of appointment of a Chief Financial Officer and Two Directors.

The requisite Form MGT-14 are yet to be filed by the Company with the Registrar of Company as specified under the provisions of Section 179 under the Companies Act,2013 in respect of Disclosure of Interest, appointment of Secretarial Auditor, Internal Auditor, Chief Financial Officer, approval of Quarterly Results of Financial Year 2014-15 and Annual Financial Statements and the Board's Report of Financial Year 2013-14.

The Form ADT-1is yet to be filed by the Company with the Registrar of Company as specified under the provisions of Section 139 under the Companies Act, 2013 in respect of Information to the Registrar for appointment of Auditor for Financial Year 2014-15.

Company has not complied and/or made All qualifications are relating late submission of the to late filing of some of the documents as required under quarterly compliances with various clauses of listing agreement. the stock Exchanges. However, Board assures that it will be complied with now onwards



The Company did not provide the Since, the E- voting introduced e-voting facility in the Annual for the first time, the company General Meeting held on 26th could not do it on September, 2014 as specified time and skip the compliance. under Clause 35B However, Board assures to comply of the Listing Agreement. with the same soon as possible.

LISTING :

The shares of the company are listed at BSE Limited and Metropolitan Stock Exchange of India Limited. Listing fees of BSE Limited and Metropolitan Stock Exchange is paid for the year 2015 - 2016.

The Company proposes to get the shares delisted from Metropolitan Stock Exchange of India Limited since there is no trading being made at the Stock Exchange.

DIRECTORS RESPONSIBITLY STATEMENT :

As required under the provisions of Section 134 of the Act, your Directors report 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 profits 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 the 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.

(e) The Directors have laid down internal financial controls as required by Explanation to Section 134(5)(e) of the Act) to be followed by the Company and such internal financial controls are adequate and are operating effectively.

(f) The Directors have devised proper systems to ensure compliance with the provisions of applicable laws and such systems are adequate and operating effectively.

RELATED PARTY TRANSACTIONS :

During the year under review the Company has entered into the transactions with the related parties, the details of each are provided in point No. 27 under the head notes on Financial Statements.

PARTICULARS OF LOANS / GUARANTEES / INVESTMENT :

The Particulars of loans, guarantee or investment made under Section 186 of the Companies Act, 2013 are furnished in the Notes to the Financial Statements for the year ended 31st March 2015.

INVESTMENT IN UNQUOTED SHARES :

The Company has made investment in unquoted shares.

1. KGN Bio- Tech Ltd. 50000 Shares

2. KGN Greens Ltd. 50000 Shares

3. KGN Oil & Gas Pvt. Ltd. 10000 Shares

4. KGN Proteins Ltd. 50000 Shares

RISK MANAGEMENT POLICY :

The Company has a structured risk management policy. The Risk management process is designed to safeguard the organisation from various risks through adequate and timely actions. It is designed to anticipate, evaluate and mitigate risks in order to minimize its impact on the business. The potential risks are inventorised and integrated with the management process such that they receive the necessary consideration during decision making. It is dealt with in greater details in the management discussion and analysis section.

STATEMENT OF INDEPENDENT DIRECTORS :

The following Directors are independent in terms of Section 149(6) of the Act:

a) Mr. Ajazahmed Ansari

b) Mr. Aftabahmed Kadri

c Mrs. Janki Ranjitsingh Vaghela

The Company has received requisite declarations/ confirmations from all the above Directors confirming their independence.

EXTRACT OF THE ANNUAL RETURN :

Pursuant to provision of Section 92 and 134 and other applicable provision of the Companies Act, 2013 and of Rule 12 ( 1 ) of Companies ( Management and Administration ) Rules, 2014 the extract of the annual return in form MGT 9 for the Financial Year ended on 31st March, 2015 is annexed as Annexure D to this Report.

NUMBER OF BOARD MEETINGS :

The calendar of meetings to be held in a year is decided in advance by the Board and circulated to the Directors. During the year, Four Board meetings were convened and held. The gap between two consecutive meetings was not more than one hundred and twenty days as provided in section 173 of the Act.

CORPORATE SOCIAL RESPONSIBILITY :

The Provision of Section 135 of the Companies Act, 2013 regarding Corporate Social Responsibility is not applicable to the company.

ANNUAL PERFORMANCE EVALUATION :

In compliance with the provisions of the Act and voluntarily under Clause 49 of the Listing Agreement, the performance evaluation was carried out as under:

Board :

In accordance with the criteria suggested by The Nomination and Remuneration Committee, the Board of Directors evaluated the performance of the Board, having regard to various criteria such as Board composition, Board processes, Board dynamics etc. The Independent Directors, at their separate meetings, also evaluated the performance of the Board as a whole based on various criteria. The Board and the Independent Directors were of the unanimous view that performance of the Board of Directors as a whole was satisfactory.

Committees of the Board :

The performance of the Audit Committee, the Nomination and Remuneration Committee was evaluated by the Board having regard to various criteria such as committee composition, committee, processes, committee dynamics etc. The Board was of the unanimous view that all the committees were performing their functions satisfactorily and according to the mandate prescribed by the Board under the regulatory requirements including the provisions of the Act, the Rules framed thereunder and the Listing Agreement.

Individual Directors :

(a) Independent Directors : In accordance with the criteria suggested by The Nomination and Remuneration Committee, the performance of each independent director was evaluated by the entire Board of Directors (excluding the director being evaluated) on various parameters like engagement, leadership, analysis, decision making, communication, governance and interest of stakeholders. The Board was of the unanimous view that each independent director was a reputed professional and brought his/her rich experience to the deliberations of the Board. The Board also appreciated the contribution made by all the independent directors in guiding the management in achieving higher growth and concluded that continuance of each independent director on the Board will be in the interest of the Company.

(b) Non-Independent Directors : The performance of each of the non-independent directors (including the chair person) was evaluated by the Independent Directors at their separate meeting. Further, their performance was also evaluated by the Board of Directors. The various criteria considered for the purpose of evaluation included leadership, engagement, transparency, analysis, decision making, functional knowledge, governance and interest of stakeholders. The Independent Directors and the Board were of the unanimous view that each of the non- independent directors was providing good business and people leadership.

SEXUAL HARASSMENT :

The Company has constituted an Internal Complaint Committee as required under Section 4 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder. During the year under review, no complaints were reported.

APPRECIATION :

Your Directors wish to convey their thanks to all the bankers, suppliers, customers and other persons for their continued support to the company.

For and on behalf of Board of Directors of KGN ENTERPRISES LIMITED

BABULAL HIRANI ISMAIL MEMON Date : Mumbai MANAGING DIRECTOR CHAIRMAN Place : 14.08.2015 DIN: 02362983 DIN: 00209507


Mar 31, 2014

Dear members,

The Directors have pleasure in presenting their 20th Annual Report of the Company, along with Audited Accounts for the financial year ended 31st March, 2014.

FINANCIAL RESULTS:

(Rs. In Lacs)

PARTICULAR 31st March 2014 31st March 2013

Profit before Depreciation and Amortization Expenses, 5.71 288.49 Finance Cost and Tax Expenses

Less: Finance Cost 0.31 1.31

Depreciation and Amortization Expenses NIL 210.61

Profit before Tax 5.40 76.57

Less : Current Tax 1.00 14.59

Deferred Tax NIL -10.99

Profit for the year 4.40 72.97

Add : Balance in Profit & Loss Account 431.12 411.12

436.12 484.09

Less: Appropriation

Transfer to Capital Redemption Reserve NIL 50.00

Proposed Dividend on Equity Shares Nil 6 .14

Tax on Dividend NIL 0.99

Add : Undeclared Dividend for F.Y. 2011-12

Dividend Undeclared NIL 4.09

Tax on Dividend Undeclared NIL 0.66

Add : Undeclared Dividend for F.Y. 2012-13

Dividend Undeclared 6.14 NIL

Tax on Dividend Undeclared 0.99 NIL

Closing Balance 443.26 431.72

DIVIDEND:

During the year Company earned a little Profit. Board of Directors want to retain the profit for the future projects and do not recommend any dividend for the year.

Last year Board of Director proposed a dividend of Rs. 0.03 per Equity Shares but shareholder''s in AGM held on 28th September, 2013 cancelled the proposed dividend. Company has written back the dividend amount which was not declared by Shareholder in the last AGM in its Profit & Loss Account. The total amount of dividend undeclared with dividend distribution tax is Rs. 7,13,738.

RESULTS OF OPERATIONS:

The highlights of the performance are as under :

* Revenue from operations decreased by 85.58% to Rs. 846.27 Lacs.

* Total Income decreased by 83.66% to Rs. 984.64 Lacs.

* Net Profit before depreciation & Tax decreased by 98.12% to Rs. 5.41 Lacs.

* Net Profit after Tax decreased by 93.96% to Rs. 4.41 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 AND AUDITORS'' REPORT :

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 141(3) (g) of the Companies Act 2013 and that they are not disqualified for re-appointment.

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.

COST AUDITORS:

The Company has appointed the Shilpa Parikh & Associates for conducting the audit of cost records of the Company for the Financial Year 2013-14.

CONSOLIDATED FINANCIAL STATEMENT:

In accordance with the Accounting Standard (AS) - 21 on Consolidated Financial Statements read with AS - 23on Accounting for Investment in Associates and As - 27 on Financial Reporting of Interest in Joint Ventures,, the audited Consolidated Financial Statement is provided in the Annual Report.

SUBSIDIARY COMPANIES:

Your Company has Four wholly-owned Subsidiary Companies i.e. KGN Bio-Tech Limited, KGN Green Limited, KGN Proteins Limited & KGN Oil & Gas Private Limited.

In accordance with the General circular issued by Ministry of Corporate Affairs, Government of India, the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary Companies are not being attached with the Balance Sheet of the Company. However the financial information of the subsidiary companies is disclosed in the Annual Report in compliance with the said circular. The Company will provide a copy of separate annual accounts in respect of each of its subsidiary to any shareholder of the Company who asks for it and the said annual accounts will be kept open for inspection at the Registered Office of the Company and that of respective Subsidiary Companies.

ENVIRONMENTAL PROTECTION:

Your Company is engaged in manufacturing activities for which Company has taken approval of Gujarat Pollution Control Board.

DIRECTORS:

Mr Mohsin Memon 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.

Mr. Aftab Ahmed Kadri & Mr. Dhaval Bhatt have resigned from the Company and your Board of Director has accepted the same in Board Meeting. Board of Director has expressed their appreciation for the assistance and cooperation received from them.

The Company has received declarations from all the Independent Directors of the Company Confirming that they meet the criteria of Independence 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.

DIRECTORS'' RESPONSIBILITY STATEMENTS:

Pursuant to Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

i) that in preparation of the annual accounts for the year ended March 31, 2014, the applicable accounting standards read with requirements set out under Schedule VI to the Companies Act, 1956, have 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 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 at March 31, 2014 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, 2013.

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, 2013 is not applicable.

ENERGY CONSERVATION, 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:

Your Directors would like to express their gratitude for the continuous support of Financial Institutions, Banks, Central and State Government, Office of the Industries Commissioner, Valued Customers and devoted workers for their continuous contribution to the growth and progress of Company. The Directors also take this opportunity to thank the shareholders for the confidence reposed in the management.

For and on behalf of the Board of Directors KGN ENTERPRISES LIMITED Sd/-

DATE : 11th August, 2014 BABULAL J HIRANI Place : Mumbai MANAGING DIRECTOR


Mar 31, 2011

Dear Shareholders,

The Directors are pleased to present the 17th Annual Report together with Audited Financial Accounts for the year ended 31st March, 2011.

FINANCIAL HIGHLIGHTS:

During the year under review the Financial performance of the Company is as under:- (Amount Rs In Lacs)

Particulars For the Year For the Year ended on ended on 31/03/2011 31/03/2010

Total Income 963.55 17501.20

Total Expenses 810.17 16999.82

Profit before depreciation & tax 153.37 501.37

Provision for Depreciation 0.00 225.79

Profit before tax 153.37 275.58

Provision for Tax 26.00 52.13

Net profit for the Year 127.37 223.45

Add : Balance B/F from previous year 441.68 206.69

Deferred tax liabilities 0.00 (23.48)

Proposed dividend on Equity Shares 0. 00 10.24 Dividend Tax 0.00 1.74

Balance carried to Balance sheet 569.06 441.65

Basic Earnings per share (in Rupees) 0.75 1.21

DIVIDEND:

Your Directors do not recommend payment of dividend for the year under review.

MANAGEMENT DISCUSSION & ANALYSIS REPORT:

A detailed analysis of the Company's performance is mentioned in the Management Discussion and Analysis Report, which forms part of this Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of Companies Act, 1956, it is hereby confirmed:

a) That in the preparation of the annual accounts financial year ended 31st March, 2011, the applicable accounting standards have been followed and there is no material departures from the same;

b) 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 true and fair view of the state of affairs of the Company at the end of the financial year 31st March 2011 and of the profit/loss of the Company for that year;

c) That 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

d) That the Directors have prepared the annual accounts for the financial year ended 31st March, 2011 on a going concern' basis.

CORPORATE GOVERNANCE:

Your Company is committed to follow the best of the corporate governance practices and follows the same while conducting the affairs of the company. The Compliance Report on Corporate Governance along with Chartered Accountant Certificate thereon forms part of the Annual Report.

SUBSIDIARY COMPANIES:

Your company has four subsidiary companies i.e. KGN Bio- Tech Limited, KGN Green Limited, KGN Proteins Limited, and KGN Oil & Gas Private Limited.

As required under the provisions of Section 212 of the Companies Act, 1956, a statement of the holding company's interest in the subsidiary companies is appended to the Balance Sheet.

The Ministry of Corporate Affairs, Government of India has vide Circular no. 2/2011 dated 21st February 2011 granted general exemption subject to fulfillment of certain conditions from attaching the Balance Sheet of the Subsidiaries to the Balance Sheet of the Company without making an application for exemption. Accordingly, the Balance Sheet, Profit & Loss Account & other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. Financial information of the subsidiary companies is disclosed in the Annual Report. The Annual Accounts of these subsidiaries and related detailed information will be made available to any member of the Company/ its subsidiaries seeking such information at any point of time and are also available for inspection by any member of the Company/ its Subsidiaries at Registered Office of the Company. The Annual Accounts of the said Subsidiaries will also be available for inspection, as above, at the Head office of the respective subsidiary companies.

CONSOLIDATED FINANCIAL STATEMENTS:

The Consolidated Financial Statements of subsidiaries have been prepared in accordance with Accounting Standards 21 of the Institute of Chartered Accountants of India which forms part of the Annual Report and are reflected in Consolidated Accounts of the Company.

DEPOSITS:

During the year under review your company has neither invited nor accepted any public deposit or deposits from the public as defined under Section 58A of the Companies Act, 1956. The Deposits any accepted from the Directors are exempt as per the provisions of Section 58A of the Companies Act, 1956.

DIRECTORS:

During the period under review, following changes took place in the Board of Directors:

Shri Ismail Memon, Director of the Company is liable to retire by rotation at the ensuing Annual General Meeting and being eligible offers himself for reappointment. Your Directors recommend his reappointment.

During the year Shri Dhaval Bhanushankar Bhatt has been appointed as Additional Director of the Company w.e.f.13th May, 2011. The Company has received notice from Members pursuant to section 257 of the Companies Act, 1956, signifying their intention to propose the candidature of Shri Dhaval Bhanushankar Bhatt for the office of Directors. The Board recommends their appointment.

Shri Arif Memon was appointed as director of the Company w.e.f. 28th September, 2010 and then he resigned from the office of the Board of Directors of the Company w.e.f.13th January, 2011. The Board places on record its appreciation for the services rendered by them during their tenure.

ISSUE & ALLOTMENT OF 5, 00,000 PREFERENCE SHARES:

The Company had issued and allotted 500,000 Redeemable Non-cumulative Preference Shares of Rs.10/- each during the year under review.

AUDITORS:

M/s Kirit & Co., Chartered Accountants, Ahmadabad, retires at the ensuing Annual General Meting and is eligible for reappointment. The Company has received a certificate from them that their appointment if approved by the shareholders would be within the ceiling prescribed under section 224(1B) of the Companies Act, 1956. The members are requested to appoint auditors to hold office until the conclusion of the next Annual General Meeting of the Company.

AUDITORS OBSERVATIONS:

The observations, if any, made by the Auditors in Audit Report have been duly clarified and explained either in their Report or in the relevant notes forming part of the Annual Accounts, which are self explanatory and do not need any further clarification.

EMPLOYEES:

Provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 are not applicable to the Company, and hence the information is not given.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS/OUTGO:

The information relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo required under section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988, are not applicable to the Company and hence not given.

APPRECIATION :

Your Directors express their gratitude to the continuous support of the Financial Institutions, Banks, Central and State Governments, Office of the Industries Commissioner, valued Customers and devoted workers for their continuous contribution to the growth and progress of Company. The Directors also take this opportunity to thank the shareholders for the confidence reposed in the management.

BY ORDER OF THE BOARD OF DIRECTORS KGN ENTERPRISE LIMITED

Sd/- (Ismail Memon)

Chairman

Date : 25/08/2011

Place : Mumbai