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Karnavati Alfa International Ltd.

BSE: 526451 Sector: Industrials
NSE: N.A. ISIN Code: INE901D01015
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Karnavati Alfa International Ltd. (KARNAVATIALFA) - Director Report

Company director report

KARNAVATI ALFA INTERNATIONAL LIMITED ANNUAL REPORT 2006-2007 DIRECTOR'S REPORT TO THE MEMBER OF KARNAVATI ALFA INTERNATIONAL LIMITED, Your Directors have pleasure ire presenting the 15th Annual Report together with the Audited Accounts of the Company for the Financial Year ended on 31st March, 2007. FINANCIAL RESULTS: 2006-2007. 2005-2006. (Rs. In Lacs) Sales and Other Income 1144.52 7012.59 Profit/(Loss) before interest and depreciation 146.03 115.94 Less interest & Financial 30.31 22.39 Depreciation 36.32 35.68 Profit/(Loss) before Tax. 79.40 57.67 Less: Provision for taxation 7.93 0.55 Profit/(Loss) after Tax 71.47 57.12 Add: Loss brought forward from last year (67.39) (124.51) Total accumulated losses Nil (67.39) Balance Profit/(Loss)carried forward to Balance Sheet 4.06 (67.39) DIVIDEND The Directors are unable to recommend any Dividend for the year due to carry forward losses of previous years and non availability of enough reserves. REVIEW OF BUSINESS OPERATIONS During the year under review the turnover of the Company has decreased to Rs. 1144.52 lacs as against Rs. 7012.59 lacs of the previous year due to the reduction in the trading activities. Your company has earned net profit of Rs. 71.47 lacs as compared to Rs. 57.12 lacs of previous financial year. The Company is concentrating on operating activities and for increase and expansion of the manufacturing activities, the Company has already started the construction of the Big Factory Shed wherein we can install our new machineries and shifting of the some departments. Due to the expansion, directors of the Company are hopeful to achieve better results in years to come. FIXED DEPOSITS During the year under review, the company has not accepted any deposit within the meaning of section 58A of the companies Act, 1965 and the Rules made there-under. DIRECTORS The Board of Directors had appointed Shri Pravin Halvadia and Shri Jayesh Jagtap as additional Directors of the Company with effect from 21.08.06 and 03.09.07 respectively to hold the office up to the date of Annual General Meeting. Your Directors recommended their appointment. Shri Kirit Mehta and Shri Kushal Shah, Directors of the company have resigned from the office of the directors w.e.f. 21.08.06 and Shri Biren Nanavati, Directors of company w.e.f. 03.09.07. Board express gratitude towards for their services rendered during the tenure. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to the requirements under Section 217(2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, It is hereby confirmed: 1. That in the preparation of the annual accounts for the financial year ended 31st March, 2007, all applicable accounting standards have been followed along with proper explanation relating to material departures if any have been furnished 2. That the Directors have selected appropriate accounting polices and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the company for the under review. 3. That the Directors have taken proper and sufficient care to the best of their knowledge and ability, 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. 4. That the Directors have prepared the annual accounts for financial year ended 31st March,2007 on a `Going concern' basis. AUDITORS AND AUDITORS' REPORT M/s P.K Modi & Co., Chartered Accountants, Statutory Auditors of the Company, has expressed their unwillingness to be re-appointed as auditors on their retirement at forthcoming Annual General Meeting. The Board therefore recommends the appointment of M/s Shah Kantilal & Co., Chartered Accountants as auditors of the company from the conclusion of the forthcoming Annual General Meeting until the conclusion of the next Annual General Meeting of the company on such remuneration as may be decided by M/s. Shah Kantilal & Go and Board of Directors. M/s Shah Kantilal & Co. have also confirmed to the company that, if appointed as an auditors of the company, their appointment will be in accordance with the provisions of the Company. PARTICULARS OF EMPLOYEES There are no employees whose particulars are required to be shown in terms of provisions of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended. CORPORATE GOVERNANCE: A report on Corporate Governance as stipulated in amended Clause 49 of the listing Agreement with the stock exchange for the year ended 31st March, 2007 and certificate issued by the statutory auditors of the company are attached herewith and forming part of the Annual Report of the company. Management discussion and analysis report are also appended herewith and forming part of the Annual Report of the Company. CFO CERTIFICATION: The Managing Director and Chief Financial Officer has submitted a certificate to the Board of Directors of the Company regarding the financial statements and other matters as required under clause 49(v) of the Listing Agreement. DEMATERIALISATION: Your company's shares are traded in compulsory in electronic form and your company has got connectivity with both the depositories i,e National Security Depository Limited (NSDL) and Central Depository Services(India) Limited (CDSL). M/s In-time Spectrum Registry limited is the Registrar and Share transfer Agent of the company. CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO: The additional information required to be disclosed pursuant to Section 217(1)(e) of the Companies Act read with the companies (Disclosures of Particulars in the Report of Board of Directors) Rules 1988 is given in the Annexure-I forming part of this Report. ACKNOWLEDGEMENT: Your directors would like to place on record their appreciation for the dedication and whole hearted support and commitment of all the employees across the company as well as the Bankers, its valued customers, various Government, Semi-Government and Local Authorities, suppliers and other business Associates. The Board of Directors also wish to than the shareholders for the confidence reposed in the Management. For and on behalf of Board of Directors Place : Sanand (Hemang A. Shah) Date : 20th November, 2007 Chairman & Managing Director Annexure to the Directors' Report Annexure - I Information under section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 forming part of the Directors' Report for the year ended on 31st March, 2007. A. Conservation of Energy Energy conservation remains one of the most important areas of plants performance and is being continuously monitored. Some of the majors taken are: (i) We have installed necessary equipments for reducing the energy consumption. (ii) We have replaced the obsolete equipments by new one. Total Energy Consumption and Energy Consumption per unit of Production is as under: a) Power and Fuel Consumption 2006-2007 2005-2006 1. Electricity Purchased Units 10,57,456 13,55,612 Total Cost (Rs.) 50,64,368 60,27,880 Rate per unit (Rs.) 4.80 4.45 2. Own Generation Through Diesel Generator Purchased Units NIL 6,410 Total Cost (Rs.) NIL 2,15,459 Rate per unit (Rs.) NIL 33.61 B. Technology absorption, adaptation and innovation: The Company has not maintained any separate R& D cell. It has a quality assurance department to check and constantly adopt measures to enhance the quality. As there is no imported/ foreign technology involved, question of its adoption/ absorption dose not arise. C. Foreign Exchange Earning and Outgo: (Rs. In Lacs) 2006-2007 2005-2006 i) Foreign Exchange Earning Nil Nil ii) Foreign Exchange Outgo Nil Nil For and on behalf of Board of Directors Place : Sanand (Hemang A. Shah) Date : 20th November, 2007 Chairman & Managing Director MANAGEMENT DISCUSSION AND ANALYSIS (i) Industry structure and developments The Company's business can broadly be defined as manufacturing/production and sale of packaging products, like HDPE/PP Sags, HDPE/PP woven fabric, HDPE/PP cut-pieces for various Industries like Salts, paper, Tarpauline, special customer made fabric. There is significant and consistent demand with good growth of these products in above industries. (ii) Opportunities; Threats, Risk and Concern: Opportunities: - There is growing demand of HDPE Fabric for covering the goods, and in Transport Industry for covering of the goods being transported. Threats, Risk and Concern - Competition from domestic players - competitive pricing due to huge production. - Squeeze on Margins due to competition - Frequent changes in raw materials rates (iii) Segment wise- Product wise performance Segment Wise - product wise performance have been included in the Note No.6 of Schedule-Q to the accounts of the Company for the year ended 31st March, 2007. (iv) Outlook Every efforts are being made to look after the customers requirements and the company is expected to develop the better products and to provide better customer services to face the severe competition in domestic market. (v) Risk and Concerns: See 'Threats above' (vi) Internal Control systems,the adequacy The company has internal control systems, the adequacy of which has been reported by its auditors in their report as required under the Companies (Auditor's Report) Order 2003 as amended from time to time. (vii) Financial Performance of the Company: The company's turnover for the financial year-2006-2007 is Rs.1144.52 Lacs. The net profit for the current financial year is Rs. 71.47 Lacs as compared to Rs. 57.12 Lacs that of financial year 2005-2006. (viii) Material Developments in Human resources/industrial relations: There has been no material development on the human resources. Industrial relations have been remained congenial during the year. (ix) Cautionary Statement This report contains forward- looking statements based on the perceptions of the Company and the data and information available with the company. The company cannot guarantee the accuracy of various assumptions underlying such statements and they reflect company's current views of the future events and are subject to risks and un ertainties. Actual results could differ materially from those expressed or implied due to change in general economic scenario, Indian market conditions, changes in the governments regulations, tax regimes etc. The Company assumes no responsibility to public for any amendments, modifications or revision of any of these statements on the basis of any subsequent developments, information's and events.