Directors Report of Krishna Engineering Works Ltd.

Mar 31, 2013

Dear Shareholders,

The directors place before you the 30th Annual Report of the company along with the audited statement of accounts of your company for the financial ended March 31, 2013.

Financial Results

Financial performance of the company in brief:

(Rs. in Lacs)

Particulars 31st March, 2013 31st March, 2012

Sales/Revenue from Operations 2236.07 2748.93

Other Income 2.51 2.20

Finance Cost 1.68 2.58

Depreciation 179.79 213.61

Frofit/(Loss) Before Tax (255.72) (589.60)

Net Profit After Tax (255.72) (589.60)

Add

Brought Forward Previous Year (11354.39) (10764.79)

Add. Fringe Benefit Tax Less: Income Tax (0.65) 00

"Balance Carried Forward (11610.77) (11354.39)

Your directors are trying their level best to improve the performance of the company by constantly engaging themselves in developing ways and means to reduce cost and increase sales.

Dividends

Due to non availability of profits your directors do not recommend any dividend for the financial year 2012-13.

Directors

Sh. Varinder Pal, retires by rotation and does not offer himself for re-appointment at the forthcoming Annual General Meeting of the company. Further Sh. J.S. Maan resigned from the Board on 22nd May, 2013.

Your Directors wish to place on record their appreciation for their association during the period.

Sh. Dadda Krishna Luxmi Narayan was appointed as Additional Director by the Board of Directors in their meeting held on 7th February, 2013. Details as required under Power & fuel expenses incurred by the company during the year amounted to Rs. 37838169.50/- as compared to expenses of Rs. 51264633/- incurred during the previous year.

b) Technology absorption, Adaptation & Innovation.

The company tries to continuously involve in innovation and technology absorption.

c) Foreign exchange earning & outgo (Rs. in Lac):

No Foreign Exchange earnings and outgo were there during the year under review.

Listing

The Company's Equity Shares remain listed at National Stock Exchange of India Limited (NSE), Bombay Stock Exchange (BSE), The Delhi Stock Exchange Limited(DSE) , Calcutta Stock Exchange Association Limited (CSE), The Ludhiana Stock Exchange Limited (LSE) and The Stock Exchange, Ahmadabad.

Corporate Governance

As required under Clause 49 of the Listing Agreement, Corporate Governance Report s is given separately and forms part of this Report.

A certificate from Statutory Auditors, M/s Brij Aggarwal & Associates, Chartered Accountants, regarding compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is also attached.

Directors' Responsibility Statement

As required under Section 217 (2AA) of the companies Act, 1956, your directors confirm that:

(a) in preparation of the Annual Accounts, applicable accounting standards have been followed and there are no material departures;

(b) such accounting policies have been selected and applied consistently subject to such adjustments and estimates have been made for preparation of accounts 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 ended on 31st March 2013 and the profit of the company for the year.

(c) directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 to safeguard the assets of the company and to prevent fraud and other irregularities;

(d) statement of accounts have been prepared on a going concern basis.

BEFR Status

The company is a sick industrial company and is registered with BIFR under SICA ( Sick Industrial Companies Act, 1985). The IDBI has been appointed as Operating Agency (OA). The Company's appeal in the AAIFR is pending and the next date of hearing is 21st August, 2013.

Acknowledgement

The Directors acknowledge the invaluable support extended to the company by the financial institutions, banks, employees of the company, office staff, management and valued customers.

By the order of the Board of Directors

Place : Jalandhar Gurbachan Juneja

Dated : 10th August,2013 (Chairman Cum Managing Director)

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Mar 31, 2012

Dear Members,

The directors have pleasure in presenting the Twenty Ninth Annual Report along with the audited statement of accounts of your company for the financial ended March 31, 2012.

Financial Results

A snapshot of financial performance of the company is as under:

(Rs. in Lacs)

Particulars 31st March, 2012 31st March, 2011

Riles /Revenue from On pratinns 9091 80 6006.13

Other Income 2.20 663.57

Finance Cost 2.58 20.45

Depreciation 213.61 251.49

Profit/(Loss) Before Tax (589.60) (150.44)

Provision For Tax NIL NIL

Net Profit After Tax (589.60) (150.44)

Add

Brought Forward Previous Year (10764.79) (10614.35)

Add. Fringe Benefit Tax 00 00

Balance Carried Forward (11354.39) (10764.79)

Dividends

Your directors regret their inability to recommend any dividend for the financial year ended March 31, 2012 due to non availability of cash and keeping in view financial position of the company.

Directors

In accordance with Sections 255 and 256 of the Companies Act, 1956 Sh. Ashok Vinayak, retires by rotation and being eligible, offers himself for re-appointment at the ensuing Annual General Meeting of the company.

The proposal for re-appointment of Sh. Ashok Vinayak as Director of the company is recommended for shareholders' approval.

Sh. Jagtar Singh Maan has been appointed as additional director by the Board of Directors in their meeting held on 9th November, 2012. Er. Darshan Singh has also been appointed as additional director by the Board of Directors in their meeting held on 9th November, 2012. Details as required under Clause 49 of the listing agreement regarding directors to be appointed/re-appointed is published in notice of Annual General Meeting.

Further Major. Gen T V Manoharan submitted his resignation to the Board on 2nd August, 2012 which was accepted by the Board of Directors on 14th August, 2012 and Sh. Sunil Kumar Sharma submitted his resignation which was accepted by the board of directors in its meeting held on 9th November, 2012.

Statutory Auditors

M/s Brij Aggarwal & Associates, Chartered Accountants, retire at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. M/S Brij Aggarwal & Associates have sought re-appointment and confirmed that their re-appointment shall be within the limits of Section 224 (IB) of the Companies Act, 1956. The necessary eligibility certificate under Section 224(1B) of the Companies Act, 1956 was received from them. The Audit Committee and Board of Directors recommend the re-appointment of M/s Brij Aggarwal & Associates, Chartered Accountants as the Auditors of the company.

Comments on Auditors' Report

Point wise reply of Auditors' Observation in Auditors Report:

4(iv) The company has adopted the policy to pay leave encashment and gratuity on cash basis. Thus no provision has been made in the Accounts on said date.

4(vii) (a) Non provision of interest has been there, in the Draft Rehabilitation Scheme itself which is pending with operating agency for finalization with the agency.

4(vii)(b) Number of items used in respect of trading and material consumed for manufacturing process can not be distinguished precisely. Due to peculiar nature of business, specific record can not be presented accurately. Otherwise the company is maintaining all the requisite records.

Point No. 5 of Annexure: The company is maintaining register u/s 301 of the Companies Act, 1956. However there were no entries-to be recorded as applicable during the year.

Point No. 9 of Annexure: Statutory due payments have been taken in to account in the Draft Rehabilitation Scheme.

Point No. 11 of Annexure: Due payments to Banks, FIs and Debenture Holders have been incorporated in the Draft Rehabilitation Scheme submitted to the Operating Agency and copy of which was also shown to the auditors.

Auditors' Qualification on Research and Development Section.

The Draft Rehabilitation Scheme is under the consideration of operating Agency which shall take into account the settlement, waiver of interest, liquidated damages, penalties and other expenses/ contingent liabilities. Accordingly, confirmation balances of lenders has not been possible till the Rehabilitation Scheme is sanctioned.

Particulars of Employees

In terms of provisions of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules 1975 the particulars of employees may be treated as NIL.

Fixed Deposits

No depQsit has been invited/accepted from the public in terms of the provisions of Section 58A of the Companies Act, 1956 by the company during the year ended March 31, 2012.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

Particulars in respect of conservation of energy and technology absorption and foregn exchange earings and out go as required under section 217(1) (e) of the Companies Act. 1956 are provided as under:

a) Conservation of Energy.

Power & fuel expenses incurred by the company during the year amounted to Rs. 37838169.50/- as compared to expenses of Rs. 51264633/- incurred during the previous year.

b) Technology absorption, Adoptation & Innovation.

The company tries to continuously involve in innovation and technology absorption.

c) Foreign exchange earning & outgo (Rs. in Lac):

There was no Foreign Exchange earnings and outgo during the year under review.

Listing

The Company's Equity Shares are listed with National Stock Exchange of India Limited (NSE), Bombay Stock Exchange (BSE), The Delhi Stock Exchange Limited(DSE), Calcutta Stock Exchange Association Limited (CSE), The Ludhiana Stock Exchange Limited (LSE) and The Stock Exchange, Ahmadabad.

Corporate Governance

The Corporate Governance Report giving the details as required under Clause 49 of the Listing Agreement with the Stock Exchanges is given separately and forms part of this Report.

A certificate from Statutory Auditors, M/s Brij Aggarwal & Associates, Chartered Accountants, regarding compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is also attached.

Directors' Responsibility Statement

As required under Section 217 (2AA) of the companies Act, 1956, your directors confirm that:

(a) in preparation of the Annual Accounts, applicable accounting standards have been followed and there are no material departures;

(b) such accounting policies have been selected and applied consistently subject to such adjustments and-estimates have; been-made forpreparation t)faccounts-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 ended on 31st March 2012 and the profit of the company for the year.

(c) directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 to safeguard the assets of the company and to prevent fraud and other irregularities;

(d) statement of accounts have been prepared on a going concern basis.

BIFR Status -

The company is a sick industrial company and is registered with BIFR under SICA ( Sick Industrial Companies Act, 1985). The Company has filed the appeal before AAIFR against the BIFR order for change of management and has obtained stay against the said order and the next date of hearing is 7th December, 2012. Further the company has submitted Draft Rehabilitation Scheme which is pending with the Operating Agency.

Acknowledgement

Your Directors wish to place on record their sincere appreciation of the efforts and dedicated service of all employees. Your Directors also wish to place on record their gratitude for the valuable assistance and co-operation extended to the Company by the banks, suppliers , customers and all other business constituents. They also want to take this opportunity to place on record continued support extended bv shareholders of the company.

Place : Jalandhar For and on behalf of the Board of directors

Dated :9th November, 2012 Gurbachan Juneja

(Chairman cum Managing Director)

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Mar 31, 2010

The directors have pleasure to present the 27th Annual Report on the affairs of the company for the year ended 31 st March, 2010

FINANCIAL RESULTS

The financial results for the year are as under:

Sr.No. Particulars 31.03.2010 31.03.2009 (Rs. in Lac) (Rs. in Lac)

Sales 2334.07 2737.07

Other Income 190.78 187.92

Total Expenses Before Depreciation, 3150.89 3333.61

Taxes & Financial Expenses

Profit Before Interest & Depreciation (626.04) (408.61)

Depreciation 315.30 420.94

Financial Expenses 3.68 119.60

Net Profit Before Tax (945.02) (949.16)

Provision For Tax NIL NIL

Net Profit After Tax (945.02) (949.16)

Add

Brought Forward Previous Year (9669.33) (8719.97)

Add. Fringe Benefit Tax 00 0.19

Balance Carried Forward (10614.35) (9669.33)

Your directors report that during the year under review the sales have declined from 2737.07 Lac to Rs. 2334.07 Lac. However, there is nominal change in the fosses suffered by the company during the current year and previous year. The main reason of losses is due to company being a sick industrial unit. Details of expenses incurred by the company during the year have been given in schedule to annual accounts.

Your directors are trying their best to improve the performance of company in the future.

1. DIVIDENDS

In view of non availability of profits, your directors regret their inability to distribute any dividend on shares.

2. FIXED DEPOSITS

During the year under report, your Company did not accept any deposits from the public in terms of the provisions of Section 58A of the Companies Act, 1956.

3. DIRECTORS

No changes occurred in the constitution of the Board of Directors during the year ended 31st March, 2010.

Mr.Ashok Vinayek, Director will retire by rotation and being eligible, offers himself for reappointment.

Mr.Varinder Paul was appointed as Additional Directors by the Board of Directors in its Meeting held on 15th May 2010.

Brief Resume of Mr. Varinder Paul, director and details of the directorship and membership of Board committees held by him is given in notice of the Annual General Meeting.

Sh. Sunil Kumar Sharma submitted his resignation letteron 2nd August, 2010 which was accepted by the Board of Directors in its meeting held on 13th August, 2010.The Board places on record its appreciation of the valuable contributions made by Mr. Sunil Kumar Sharma during his association with the company.

Directors recommend the resolutions pertaining to re-appointment & appointment of Directors, for approval of the members.

4. AUDITORS

M/s Brij Aggarwal & Associates, Chartered Accountants, Auditors of the Company will retire at the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. The Company has received a certificate from the Auditors to the effect that their appointment, if made, would be in accordance with Section 224(1-B) of the Companies Act, 1956. The Board recommends their re-appointment.

5. COMMENTS ON AUDITORSREPORT

The Company is a sick industrial unit and registered with BIFR. The Draft Rehabilitation Scheme is under consideration with Operating Agency. The indebtedness to L.I.C, G.I.C, L & T Finance, P.S.I.D.C and all other statutory dues will be addressed appropriately in the Rehabilitation Scehme upon its finalization.

6. PARTICULARS OF EMPLOYEES

During the financial year under review, none of the Companys employee was in receipt of remuneration as prescribed under section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, and hence no particulars are required to be disclosed in this Report.

7. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Conservation of energy and technology absorption and foreign exchange earnings and out go as required under section 217(1) (e) of the Companies Act. 1956 have been as under:

a) Conservation of Energy.

Power & fuel expenses incurred by the company during the year amounted to Rs. 39309382/- as compared to expenses of Rs. 39989394/- incurred during the previous year.

b) Technology absorption, Adaptation & Innovation.

The company is committed to the process involving industry knowledge, training and adoption.

c) Foreign exchange earning & outgo (Rs. in Lac):

There was no Foreign Exchange earnings and outgo during the year under review.

8. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, your directors confirm that:

(i) In preparation of the Annual Accounts, applicable accounting standards have been followed and there are no material departures;

(ii) Such accounting policies have been selected and applied consistently subject to such adjustments and estimates have been made for preparation of accounts 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 ended on 31 st March 2010 and the profit of the company for the year.

(iii) Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 to safeguard the assets of the company and to prevent fraud and other irregularities;

(iv) Statement of accounts have been prepared on a going concern basis.

9. CORPORATE GOVERNANCE

Your company continues to follow the principles of good Corporate Governance. The company has already constituted certain committees of directors to assist the Board of Directors on various important issues. The report on the status of the compliance of Corporate Governance Guidelines of SEBI, is enclosed with this report.

10. BIFR STATUS

The company is a sick industrial company and is registered with BIFR under SICA (Sick Industrial Companies Act, 1985). The company is preparing a Draft Rehabilitation Scheme for its reconstruction. The management is very positive on an early revival.

11. ACKNOWLEDGEMENT

The Board of Directors of the Company wish to place on record their thanks and appreciation to all workers and staff members for their contribution to the operations of the company. The directors are thankful to the Bankers for their continued support to the company. The Directors also place on record their sincere thanks to the shareholders for their continued support, co operation and confidence in the management of the company.



For and on behalf of

the Board of directors

Place: Jalandhar Gurbachan Juneja

Dated : 1 st September, 2010 (Managing Director)