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Directors Report of KGN Industries Ltd.

Mar 31, 2016

To,

The members,

The Directors have the pleasure in presenting the 22nd Annual Report together with the Audited Statement of Accounts for the year ending on 31st March, 2016.

Financial Results: (Amt. in Rupees)

Particulars

Financial Year ended

Standalone

Consolidated

2015-16

2014 - 2015

2015-16

2014 - 2015

Revenue from operations

5,437,900

6,555,345

5,456,935

6,555,345

Other Income

--

2,552,868

--

2,072,501

Total revenue

5,437,900

9,108,213

5,456,935

8,627,846

Expenditure

Employee benefits expenses

381,988

1,342,564

381,988

1,342,564

Other expenses

2,764,537

4,924,447

2,775,925

6,587,591

Total expenses

4,882,164

7,903,246

4,893,170

7,930,155

Profit before tax

555,736

1,204,967

563,765

6,97,691

Tax expense :

current Tax

186,675

249,704

188,925

251,772

Deferred Tax

-

67,760

-

67,760

Excess provision of income tax

-

-

-

-513,967

Net profit for the year

369,061

887,503

374,840

892,126

APPROPRIATIONS:

The Opening Balance of Surplus of Profit and Loss shown under the head Reserves and Surplus was Rs. 46,139,681/-. During the year under the review, the profit of Rs. 369,061/-. was also added. The Closing Balance of Surplus of the Profit and Loss shown under the head Reserves and Surplus was Rs. 46,508,742/

OPERATIONS:

During the year under the review there was a decrease in total income of 40.30% in comparison to the previous year. The total expenses have decreased by 38.23 % and the net profit after tax has decreased by 58.42%.

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. Babulal Jethalal Hirani (DIN: 02362983), retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment. 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:

There is no appointment of any director during the year under review.

iv. Key Managerial Personnel:

The following persons are designated as Key Managerial Personnel:

1. Mr. Arifbhai Ismailbhai Memon, Managing Director

2. Mr. Jignesh Babulal Hirani, Chief Financial Officer

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

Your Company has One wholly owned Subsidiary Company i.e. KGN PROJECTS 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 order passed which may have impact on the Company''s operation in future.

The Company has shifted its registered office “23, Vaswani Mansion, 4th Floor, Dinshaw Vaccha Road, Opp. K.C. College, Churchgate Mumbai MH 400020 ” to “B- 15, Hirnen Shopping Centre co. op. hsg. Society Limited, Near City Centre, S.V Road, Goregaon (West), Mumbai - 400062” in its board meeting held on 13th August, 2016”.

INTERNAL FINANCIAL CONTROLS:

Your Company has well laid out policies on financial reporting, adherence to Management policies and also on promoting compliance of ethical and well defined standards. Moreover, the management team regularly meets to monitor goals and results and scrutinizes reasons for deviations in order to take necessary corrective steps. The Audit Committee which meets at regular intervals also reviews the internal control systems with the Management and the internal auditors. All audit observations and follow up actions are discussed with the Management as also the Statutory Auditors and the Audit Committee reviews them regularly.

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 not engaged in any type of manufacturing activities. It is not generating any type of pollution. Hence, Pollution Control regulations and norms are not applicable to Company.

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 a 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. Ajazahmed Abulgani Ansari, Ms. Janki Vaghela and Mr. Aftabahmed Kadri.

Mr. Ajazahmed Abulgani Ansari, 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 SEBI Listing Regulations with the Stock exchange as amended from time to time. The Statutory Auditor, Internal Auditor and Chief Financial Officer usually attend the Meeting of the Audit Committee.

AUDITORS:

i. Statutory Auditor and their Report

In the last AGM held on 29th September, 2015, M/s. Kirit & Company, Chartered Accountants, (having Registration No. 132282W) have been appointed as 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 Jatin H. Kapadia, Practicing Company Secretary to carry out Secretarial Audit of the Company for the financial year 2015-16. The Report of the Secretarial Auditor is annexed to this Report as Annexure C which is self explanatory and gives 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 Company is yet to appoint the Company Secretary as specified under the provisions of Section 203 under the Companies Act, 2013.

The Company was not able to get a fit and proper candidate at remuneration commensurate with the size of the Company. The Company did make sufficient attempts to appoint full time Company Secretary, however, was unable to find / appoint any suitable candidate.

However, the company is in process to appoint a full time Company Secretary.

Certain forms are yet to be filed by the Company with the Registrar of Company as specified under the Companies Act, 2013.

The company is in process of filing the requisite form and the compliance of the same will be made soon. However, Board assures that it will be complied with now onwards.

LISTING:

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

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. 25 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 2016.

INVESTMENT IN UNQUOTED SHARES:

The Company has made investment in unquoted shares. i.e. 99994 Shares in KGN Projects Limited.

RISK MANAGEMENT POLICY:

The Company has a structured risk management policy. The Risk management process is designed to safeguard the organization 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 inventoried and integrated with the management process such that they receive the necessary consideration during decision making.

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) Ms. 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, 2016 is annexed as Annexure D to this Report.

NUMBER OF BOARD MEETINGS:

Total 4 Board Meetings were held during the Financial Year 2015-16 on 30th May, 2015, 14th August, 2015, 9th November, 2015 and 13th February, 2016 and the gap between two meetings did not exceed one hundred and twenty days. The details of attendance of Directors at the Board Meetings are as under:

Name of Director

Number of Board Meetings held and attended FY 2015-16

Held during the tenure

Attended

Mr. Babulal J. Hirani (Chaiman)

4

4

Mr. Arifbhai Memon

4

3

Mr. Jignesh Hirani

4

4

Mr. Aftab Ahmed Kadri

4

3

Mr. Ajazahmed Ansari

4

3

Mrs. Janki Ranjitsingh Vaghela

4

3

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 SEBI Listing Regulations, 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 and Stakeholders Relationship 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 there under and SEBI Listing Regulations.

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 no independent directors was providing good business and people leadership.

SEXUAL HARASSMENT:

The Company has 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 there under. During the year under review, no complaints were reported.

POLICIES:

The Company has adopted the following policies pursuant to the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 during the year under review:

a. Policy on preservation of the Documents

b. Policy on criteria for determining Materiality of Events

c. Whistle Blower Policy

d. Policy on dealing with related party transactions

e. Policy for determining material subsidiaries

The details of the above mentioned policies are provided in the website of the Company i.e. www.kgnindustries.com.

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 the Directors of the

KGN INDUSTIRES LIMITED

BABULAL JETHALAL HIRANI

Date : 13th August, 2016 CHAIRMAN

Place : Mumbai DIN: 02362983


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 6,555,345 54,286,365

Other Income 2,552,868 2,783

Total revenue 9,108,213 54,289,148

Expenditure

Employee benefits expenses 1,342,564 3,972,791

Other expenses 4,924,447 5,891,756

Total expenses 7,903,246 53,724,015

Profit before tax 1,204,967 565,133

Tax expense :

- Current Tax 249,704 300,000

- Deferred Tax 67,760 64,471

Excess provision of income tax - -

Net profit for the year 887,503 200,662

Particulars Financial Year ended

Consolidated

2014-2015 2013-2014

Revenue from operations 6,555,345 54,314,865

Other Income 2,072,501 46,131

Total revenue 8,627,846 54,360,996

Expenditure

Employee benefits expenses 1,342,564 3,972,791

Other expenses 6,587,591 49,819,753

Total expenses 7,930,155 53,792,544

Profit before tax 6,97,691 53,792,544

Tax expense :

- Current Tax 251,772 301,100

- Deferred Tax 67,760 64,471

Excess provision of income tax -513,967 -

Net profit for the year 892,126 202,881

APPROPRIATIONS :

The Opening Balance of Surplus of Profit and Loss shown under the head Reserves and Surplus was Rs. 45,475,715/ -. During the year under the review, the profit of Rs. 887,503/-. was also added. The Closing Balance of Surplus of the Profit and Loss shown under the head Reserves and Surplus was Rs. 46,139,681/-

OPERATIONS :

During the year under the review there was a decrease in total income of 83.22% in comparison to the previous year. The total expenses have decreased by 85.30 % and the net profit after tax has increased by 442.29%.

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. Babulal Jethalal Hirani (DIN: 02362983), 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 were 2 Cessation took place during the year.

A) Mr. Deepak Raval 23rd June, 2014

B) Mr. Mohmoad Yaqub Khan 28th May, 2014

iii. Appointment of Additional / Independent Women Director :

Mr. Aftabahmed Kadri (DIN : 01738367) was appointed as an Additional Director on the Board w.e.f. 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. Aftabahmed Kadri and Ms. Janki Ranjitsingh Vaghela Additional Directors will hold office until the date of ensuing 21st Annual General Meeting of the shareholders of the Company. The necessary resolution proposing their 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. Jignesh Babulal Hirani 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. Mr. Arifbhai Ismailbhai Memon, Managing Director

2. Mr. Jignesh Babulal Hirani, Chief Financial Officer

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

Your Company has One wholly owned Subsidiary Companies i.e. KGN PROJECTS 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 order 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 not engaged in any type of manufacturing activities. It is not generating any type of pollution. Hence, Pollution Control regulations and norms are not applicable to Company.

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. Ajazahmad Abulgani Ansari, Mr. Jignesh Babulal Hirani and Mr. Aftabahmed Kadri.

Mr. Ajazahmad Abulgani Ansari, 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.

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

The Company is yet to appoint the Company Secretary as specified under the provisions of Section 203 under the Companies Act, 2013.

Explanation :

The Company was not able to get a fit and proper candidate at remuneration commensurate with the size of the Company. The Company did make sufficient attempts to appoint full time Company Secretary, however, was unable to find / appoint any suitable candidate.

Qualification/ Adverse Remark

The requisite Form MR-1are yet to be filed by the Company with the Registrar of Company as specified under the provisions of Section 203 under the Companies Act, 2013 in respect of the return of appointment of a Chief Financial Officer.

Explanation :

The company is in process of filing the requisite forms and the compliance of the same will be made soon.

Qualification/ Adverse Remark

The Form DIR-12 is yet to be filed by the Company with the Registrar of Company as specified under the provisions of Section 170 under the Companies Act, 2013 in respect of the return of appointment of a Chief Financial Officer, appointment of Two Directors and Change in designation of additional Directors.

Explanation :

However, Board assures that it will be complied with now onwards.

Qualification/ Adverse Remark

The 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 appointment of Secretarial Auditor, Internal Auditor and 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 late submission of the documents as required under various clauses of listing agreement.

Explanation :

All qualifications are relating to late filing of some of the quarterly compliances with the stock Exchanges.

However, Board assures that it will be complied with now onwards

Qualification/ Adverse Remark

The Company did not provide the e-voting facility in the Annual General Meeting held on 28th September, 2014 as specified under Clause 35B of the Listing Agreement.

Explanation :

Since, the E- voting introduced for the first time, the company could not do it on time and skip the compliance.

However, Board assures to comply with the same soon as possible.

Qualification/ Adverse Remark

The dispatch proofs of notice of Annual General Meeting to the shareholders are not available with the Company as specified under the provisions of Section 101 under the Companies Act, 2013 and rules made thereof.

Explanation :

The Company assure to maintain the record, hence fortieth.

LISTING :

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

DIRECTORS RESPONSIBLY 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. i.e. 99994 Shares in KGN Projects Limited.

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. Ajazahmad 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 there under 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 there under. 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 INDUSTIRES LIMITED

Date : Mumbai ARIFBHAI ISMAILBHAI MEMON Place : 14th August, 2015 MANAGING DIRECTOR DIN: 00209693

BABULAL JETHALAL HIRANI CHAIRMAN DIN: 02362983


Mar 31, 2014

Dear members,

The Directors have great 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)

PARTIUCLAR FOR THE YEAR FOR THE YEAR ENDED ENDED 31.03.2014 31.03.2013

Profit before Depreciation and 14.25 104.12 Amortization Expenses,

Finance Cost and Tax Expenses 0.79 0.05

Less: Finance Cost 7.81 11.68 Depreciation and Amortization Expenses

5.65 92.39

Profit before Tax 3.00 27.39

Less : Current Tax 0.64 4.58

Deferred Tax 2.01 60.41

Profit for the year 437.23 392.34

Add : Balance in Profit & Loss Account 439 24 452 75

Less : Appropriation

Proposed Dividend on Equity Shares NIL 13.35

Tax on Dividend NIL 2.17

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

Undeclared Dividend 13.35 NIL

Tax on Dividend 2.17 NIL

Balance Carried to Balance Sheet

454.76 437.23

DIVIDEND:

During the year Company earned a little Profit. Board of Director 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. 0.006 Per Equity Share 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. 15,51,604.

RESULTS OF OPERATIONS:

The Company''s highlights of the performance are as under :

* Revenue from operations increased by 349.31% to Rs. 542.86 Lacs.

* Total Income increased by 349.27% to Rs. 542.89 Lacs.

* Net Profit before Tax decreased by 93.88% to Rs. 5.65 Lacs.

* Net Profit after Tax decreased by 96.68% to Rs. 2.01 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 Agreement 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.

AUDITOR 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.

CONSOLIDATED FINANCIAL STATEMENT:

In accordance with the Accounting Standard (AS) - 21 on Consolidated Financial Statements read with AS-23 on 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 one wholly-owned subsidiary, viz. KGN Projects 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 not engaged in any type of manufacturing activities. It is not generating any type of pollution. Hence, Pollution Control regulations and norms are not applicable to the Company.

DIRECTORS:

Mr. Babulal J Hirani is liable to retire by rotation at the ensuing Annual General Meeting, being eligible, offers himself for re-appointment. Your Directors recommend his re-appointment.

Mr. Aftab Ahmed Kadri, Mr. M.Y. Khan & Mr. Deepak Raval, directors of the Company have resigned from the Board 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.

Mr. Deepak Raval has also resigned from the post of Company Secretary & Chief Executive Officer.

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, 1956.

PARTICULARS OF EMPLOYEES:

During the year under review, as there was no employee on the payroll of the Company, drawing salary/remuneration of Rs. 5,00,000/- or more per month, information pertaining to Section 217(2A) of the Companies Act, 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, 2013 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 appreciation for the assistance and co- operation received from the Government Authorities, Banks, Customers, Vendors and Members during the year under review. The Board wishes to place on record their sincere appreciation for the continued support received from its Executives, Staff and Workers of the Company.

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

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


Mar 31, 2013

To, The Members of KGN INDUSTRIES LIMITED,

Mumbai, Maharashtra.

The Directors have great pleasure in presenting their 19th Annual Report of the Company, along with Audited Accounts for the financial year ended 31st March, 2013.

FINANCIAL RESULTS:

(Rs.in Lacs )

FOR THE FOR THE PARTIUCLAR YEAR YEAR ENDED ENDED 31.03.2013 31.03.2012

Profit before Depreciation and Amortization Expenses,

Finance Cost and Tax Expenses 104.12 119.47

Less : Finance Cost 0.05 0.17

Depreciation and Amortization Expenses 11.68 11.55

Profit before Tax 92.39 107.76

Less : Current Tax 27.39 36.71

Deferred Tax 4.58 0.79

Profit for the year 60.41 70.26

Add : Balance in Profit & Loss Account 392 34 347 95

Less : Appropriation 452 75 418.20

Proposed Dividend on Equity Shares 13 35 22 25

Tax on Dividend 2 17 3 61

Balance Carried to Balance Sheet 437.23 392.34

DIVIDEND:

Your Directors are pleased to recommend a final dividend of ?0.006 per Equity Share for the year ended 31st March, 2013.

The Final dividend subject to approval at the AGM on 28th September, 2013 will be paid to those shareholders, whose names appear in the Register of Members as on the date of book closure i.e. 22nd September, 2013.

The Proposed Dividend for the financial year will absorb ? 15,51,604/- including Dividend Distribution Tax of ?2,16,604/-.

RESULTS OF OPERATIONS:

The Company''s highlights of the performance are as under :

- Revenue from operations decreased by 52.22% to ?120.82 Lacs.

- Total Income decreased by 53.79% to * 120.84 Lacs.

- Net Profit after Tax decreased by 14.01% to ? 60.41Lacs.

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 Agreement with the Stock Exchanges. All matters pertaining to industry structure and developments, opportunities and threats, risks and concerns, internal control and systems etc. are discussed in this report.

AUDITORS :

The Auditors M/s Kirit & Co. Chartered Accountants, Ahmadabad, retire at the ensuing Annual General Meeting and are being eligible for re-appointment. The retiring Auditors have furnished a certificate of their eligibility for re-appointment under section 224 (IB) of the Companies Act 1956 and that he is not disqualified for reappointment within the meaning of Section 226 of the said Act.

OBSERVATION IN AUDITORS REPORT:

The observation made by the Auditors in the Auditor''s Report read with relevant notes given in the notes on Accounts are self explanatory and therefore do not call for any further comments under section 217(3) of the Companies Act, 1956.

SUBSIDIARY COMPANIES:

Your Company has One wholly-owned subsidiary, viz. KGN Projects Limited.

In accordance with the general exemption granted by Ministry of Corporate Affairs, Government of India, vide its Circular No. 2/2011 dated February 8, 2011 and in compliance with the conditions enlisted therein, the report and annual accounts of the subsidiary company for the financial year ended March 31, 2013 have been not attached to the Company''s Accounts. The Company will make available the Annual Accounts of the Subsidiary Company and the related detailed information to any member of the Company who may be interested in obtaining the same. The annual accounts of the Subsidiary Company will also be kept open for inspection at the Registered Office of the Company and that of respective Subsidiary Company. The Consolidated Financial Statements presented by the Company include the financial results of its Subsidiary Company.

ENVIRONMENTAL PROTECTION:

Your Company is not engaged in any type of manufacturing activities. It is not generating any type of pollution. Hence, Pollution Control regulations and norms are not applicable to the Company.

DIRECTORS:

Mr. Aftab Ahmed Kadri 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.

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) in preparation of the annual accounts for the year ended March 31, 2013, the applicable accounting standards read with requirements set out under Schedule VI to the Companies Act, 1956, had been followed and there are no material departures from the same;

ii) the Directors have selected such accounting policies and applied them consistently and made 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, 2013 and of the profit of the Company for the year ended on that date;

iii) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv) the directors have prepared the annual accounts of the Company on a ‘going concern'' basis.

FIXED DEPOSITS:

During the year under review your Company has neither accepted nor invited any deposits in terms of Section 58A and 58AA of the Companies Act, 1956.

PARTICULARS OF EMPLOYEES:

During the year under review, as there was no employee on the payroll of the Company, drawing salary/remuneration of ?5,00,000/- or more per month, information pertaining to Section 217(2A) of the Companies Act, 1956 is not applicable.

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

(a) The Additional information required under Sec 217 (1) (e) of the Companies Act, 1956 relating to the conservation of energy and technology absorption need not apply to the company.

(b) Total Foreign Exchange Used and Earned:

(i) CIF Value of Imports NIL

(ii) Foreign Exchange Earned NIL

(iii) Expenditure in Foreign Currency NIL

ACKNOWLEDGEMENTS:

Your Directors would like to express their appreciation for the assistance and co- operation received from the Government Authorities, Banks, Customers, Vendors and Members during the year under review. The Board wishes to place on record their sincere appreciation for the continued support received from its Executives, Staff and Workers of the Company.

By order of the Board of Directors

KGN INDUSTRIES LIMITED

Sd/-

BABULAL HIRANI

Date : 13th August, 2013 DIRECTOR

Place : Mumbai


Mar 31, 2010

The Directors have pleasure in presenting herewith their 16th Annual Report and together with the Audited Statements of Accounts of the Company for the year ended 31st March, 2010.

FINANCIAL RESULTS : (Rs. in Lacs)

PARTICULARS For the For the Year ended on Year ended on 31.03.2010 31.03.2009

Gross Income 6349.71 8213.71

Expenditure 6186.78 8080.09

Profit / Loss before taxation and depreciation 162.94 133.62

Depreciation 3.74 2.17

Profit Before Tax 159.19 131.45

Provision for taxation 56.66 45.43

Profit for the year 102.53 86.02

Profit Brought Forward 215.63 155.64

Profit available for appreciation 317.81 241.66

Deferred Tax 0.35 Nil

Transfer to General Reserves Nil Nil

Proposed Dividend on Equity Shares 22.25 22.25

Dividend Tax 3.78 3.78

Balance carried to Balance Sheet 291.78 215.63

Basic Earning Per Share 0.05 0.39

DIVIDEND :

Your directors have recommended to maintain the payment of dividend @ Re.0.01 per share for the financial year 2009-2010. On its approval and payment, aggregate cash out flow would be Rs. 26,03,139/-including dividend tax of Rs. 3,78,139/- you are requested to approve

PRESENT OPERATIONS :

The Company‘s operations were satisfactory during the year under review. The sales of the company ended to Rs. 6,349.71 Lacs in comparison to the previous year of Rs. 8213.71 Lacs. Due to recession in the economy, there was less volume of sales in the agro commodities.

SHIFTING OF REGISTERED OFFICE :

During the year under review the registered office of the Company has been shifted from the state of Gujarat to the state of Maharashtra w.e.f. 10th July, 2010.

FUTURE PROSPECTS :

Looking at the present economic scenario all over the world the company is proposing to inject the funds for its day to day operation. The injection of funds can be done through the ADRs/GDRs in the nearby future.

The quantum of funds require is from the overseas market. The necessary approvals required for the completion of this entire process shall be taken after fulfilling the requirements thereof by the Company.

The Company plans to take the business on international level and trade the commodities and other products in the international market. At the domestic front, the company will increase the volume of its trading business.

There are tie-ups in pipeline with big business associates in the related commodities and the company will enter into long term agreements for continuous flow of business with these companies.

The Board has pleasure in informing that the Company has formed a subsidiary company KGN Projects Limited w.e. from 26.03.2010 for entering into the housing and infrastructure sector in the near future. Other activity relating to implementation of Project is under process.

The Board has also pleasure in forming that the Company is also proposing to form its foreign subsidiary company for entering into the oil and gas exploration activities in USA/other countries in international market in the near future.

The Company aims to make a mark for itself and grow extensively in the existing and proposed business with its new business development plans.

COMPLIANCE TO CODE OF CORPORATE GOVERNANCE :

The Company is a listed company and is complying with the conditions specified in Clause 49 of the Listing Agreement. A separate section on Code of Corporate Governance is annexed with this report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT :

A separate report on Management Discussion and Analysis Report is attached herewith and form part of the Directors Report.

ENVIRONMENT PROTECTION :

Your company is not engaged in any type of manufacturing activities. It is not generating any type of pollution. Hence the regulations on Pollution Control are not applicable to the company.

INSURANCE AND PROTECTION OF ASSETS :

Your Companys all fixed, movable and tangible assets are properly insured against all available commercial, natural and human hazardous risks from approved insurance companies. During the year under review your company has not made any insurance claim and no such claims are still pending for settlement / payment.

FIXED DEPOSITS :

During the year under review, the Company has not accepted any deposits from the public in terms of section 58A & 58AA of the Companies Act, 1956.

PARTICULARS OF CONSERVATION OF ENERGY ETC. :

The statement of particulars with respect to conservation of energy, technology absorption and Foreign Exchange earning 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.

PARTICULARS OF 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, since none of the employees of the Company was in receipt of total remuneration of Rs. 24,00,000/- p.a. or Rs. 2,00,000/- p.m. during the financial year under review.

DIRECTORS :

In accordance with the provisions of the Companies Act, 1956 (the Act) and the Companys Articles of Association, Shri Babulal J. Hirani, Director of the Company, retires from the Board by rotation and being eligible offers himself for re election.

The Board of Directors had appointed, Miss Janki R. Vaghela as Additional Director of the Company with effect from 26th July, 2010 to hold the office upto the date of ensuing Annual General Meeting. Notice under Section 257 of the Companies Act,1956 has been received from the Members of the Company proposing the appointment of Miss Janki R. Vaghela as Director of the Company at the ensuing 16th Annual General Meeting of the Company.

The Board of Directors offers gratitude to Shri Kashyap S. Jethva being former director who served this company and made tremendous efforts for the smooth running of business. He has tendered his resignation to the Board at its meeting held on 30/09/2009.

DIRECTORS RESPONSIBILITY STATEMENT :

Pursuant to Section 217(2AA) of Companies Act, 1956 the Directors confirm:- a) that in the preparation of the annual accounts, the applicable accounting standards have been followed and there is no material departures from the same;

b) that they 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 and of the profit or loss of the Company for that year;

c) that they 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;

d) that they have prepared the annual accounts on a going concern basis.

AUDIT COMMITTEE :

In terms of provisions of section 292A of the Companies Act, 1956 & Clause 49 of the Listing Agreement executed with the Exchanges, your Company has constituted the Audit Committee of the Board of Directors. Details of the Committee is given in Annual Report as Report on Corporate Governance.

LISTING :

The shares of the Company are listed at Bombay Stock Exchange Ltd. The Company has paid Listing fees to the Stock Exchange for the year 2009-10.

AUDITORS :

M/s. Kirit Kumar & Co, Chartered Accountants Auditors of the Company hold office upto the date of Annual General Meeting. M/s. Kirit Kumar & Co, have also confirmed to the company that the appointment if made at the ensuing Annual General Meeting, will be in accordance with the provisions of the Companies Act, 1956.

INDUSTRIAL RELATIONS :

The industrial relations with employees remained cordial through out the year. Your Directors wish to place on record their appreciation of the devoted services rendered by the workers, staff and employees of the Company.

INTERNAL AUDIT :

Mr. Aftabahmed I Kadri, Independent Director is a Chairman of Audit Committee. The company has established internal audit system within the organization which is directly reporting to him. An Internal Audit Report is regularly placed before the Audit Committee for their approval, comments and expert guidance.

AUDITORS OBSERVATIONS :

There are no observations made by auditors in their report. Notes to the Accounts are itself self explanatory in nature.

APPRECIATION :

Your Directors wish to thank the Companys valued customers and various department of Central & State Government, Local Authorities, Banks, devoted staff and other business associates for continued support to the Companys growth and looking to their continued support in the future.

The Directors also express their gratitude to the members for the confidence reposed in the management.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS KGN INDUSTRIES LIMITED

Sd/-

Date: 27.08.2010 Arif Ismail Memon

Place : Mumbai Chairman & Managing Director

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