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Directors Report of Karma Industries Ltd.

Mar 31, 2012

The Directors have great pleasure in presenting the 35th Annual Report together with the Audited Accounts for the year ended on March31, 2012.

CONSOLIDATED FINANCIAL RESULTS

Year Ended Year Ended Particular 31.03.2012 31.03.2011 Amt in Rs. Amt in Rs.

Sales & Other Income 7,469,964,698 6,591,044,638

Less: Expenditure 7,444,264,823 6,556,446,580

Depreciation 1,256,190 2,311,656

Profit/(Loss) before tax and appropriations 25,429,875 32,286,402

Profit/(Loss) after tax 16,556,119 20,449,411

Add: Balance brought forward from Previous year 19,342,999 10,431,656

Surplus carried to Balance Sheet 35,899,118 19,342,999

DIVIDEND

With a view to conserve the resources of the company the Board of Director's have not recommended any dividend for the year ended 31st March, 2012.

OPERATIONS

The Company is presently trading in broad range of steel products, including C.R. Coils & Sheets, C.T.D. Bars, H.R. Sheets & Plates and Hot Rolled Steel Plates, In got irons M.S.Plates, Angles, Channels, Chequered Plates, Wires, T.M.T Bars, Rebars and Tor Steel, Stainless Steel and other Alloy Steels and had a good year in terms of turnover and performance. The Company has already established factory at valsad and would be starting manufacturing activity shortly.

The turnover of the Company rose from Rs. 6,587,997,822/- in the previous year to Rs. 7,465,034,795/

- in the year under review. However the Profit after tax substantially decreased from Rs. 20,449,411/

- in the previous year to Rs.16,556,119/- for the year ended March31, 2012.

CAPITAL

The Company's present paid up capital stands at Rs.33,00,00,000/- comprising 3,30,00,000 equity shares of Rs. 10/- which is listed on Bombay, Ahmedabad and Hyderabad Stock Exchange.

BOARD OF DIRECTORS

The Board of Director's of the Company is duly constituted and has a combination of Executive and Non- executive directors.

Mrs. Bhavna Mehta, Director of the Company retires by rotation at the ensuing Annual General Meeting and being eligible offer herself for re-appointment.

SUBSIDIARIES

Your company has the following two wholly-owned subsidiaries namely M/s.Karma Commodities Ltd., M/ s.KIL Infrastructure Ltd. And a Associate Group Concern M/s. Karma Stock Trade Limited where company holds 44% of Paid up share capital of the company.

1. KIL Infrastructure Limited which was incorporated to carry out the business of construction, development, repairing, roads, path, streets, bridge etc.

2. Karma Commodities Limited was incorporated to do the business of commodity trading with the Commodity Exchanges. The Company in is the process of starting its operations shortly. The Company has taken membership of MCX /NMCE /ICEX /Reliance Spot Exchange. The Company has also applied for the Membership of NCDEX & NCDEX Spot.

3. Karma Stock Trade Limited which was incorporated to carry out the business as share and stock broker, sub-broker, finance broker, dealer, jobber, market maker, portfolio manager, underwriter, sub-underwriter, dealers or broker or agent in any shares, securities, financial instruments, capital market money market instruments of all kinds. However the company has not started its operations yet and is in the process of starting its operations. The Company has applied for Deposit Base Trading Membership of BSE and also Membership of NSE.

The Consolidated financial Statements of the subsidiaries are attached with the Annual Report.

CORPORATE GOVERNANCE

The Company has taken proactive steps to ensure that the conditions of Corporate Governance stipulated in Clause 49 of the Listing Agreement with the Stock Exchange are complied with. A separate report on Corporate Governance together with Auditor's Certificate on its compliance is included in the Annual Report.

DIRECTORS RESPONSIBILITYSTA TEMENT

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

1] In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures.

2] Appropriate accounting policies have been selected and applied, reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at the March 31, 2012.

3] Proper and sufficient care has been taken 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] The Annual Accounts have been prepared on a going concern basis.

AUDITORS

M/s. AMD & Co., Chartered Accountants, the retiring Auditors have expressed their willingness to be re- appointed. It has been proposed to reappoint M/s. AMD & Co., Chartered Accountants as Auditors of the Company. The Company has received a Certificate from them that they are qualified under Section 224 (1) of the Companies Act, 1956 for appointment as Auditors of the Company. Members are requested to consider their appointment at a remuneration to be decided by the Board of Directors for the financial year ending March 31, 2012 as set out in the Notice convening the Meeting.

AUDITORS' OBSERVA TIONS

The observations of the Auditors contained in their Report regarding the non-payment of dividend of 99,00,000 till date which was approved by the shareholders in Annual General Meeting for F.Y 2010-11. The Company is taking necessary steps during the current year to pay the dividend to those shareholders who has not received.

AUDITCOMMITTEE

In accordance with the provisions of the Section 292A of the Companies Act, 1956 and the Corporate Governance requirements as per the Listing Agreement of the Company, the Audit Committee comprises of the following Directors viz., Mr. Hemang Sampat, as Chairman, Mr. Rajesh Mehta and Mr. Mahesh Jethva as members. The Audit Committee acts in accordance with the terms of reference specified from time to time by the Board.

PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The Company has taken effective steps to conserve and minimize power and fuel consumption and has also installed capacitor for minimizing the power consumption. No Technology was imported during the year by the Company. The Company has not exported or imported any goods during the year. Therefore Foreign Exchange Earning and Outgoing is NIL.

PARTICULARS OF EMPLOYEES

None of the employees of the Company come within the purview of the information required u/s 217[2A] of the Companies Act, 1956 read with the Companies [particulars of Employees] Rules,1975 as amended from time to time.

RESEARCH & DEVELOPMENT

The Company has been arduously working to improve the R&D so as to provide quality and value for money to the customers in keeping with market trends.

FIXED DEPOSITS

Your Company has not accepted any deposit within the meaning of Section 58A of the Companies Act, 1956 from Public and the rules made there under.

SAFETY, ENVIRONMENTAL CONTROL AND PROTECTION

The Company has taken all the necessary steps for safety and environmental control and protection. ACKNOWLEDGMENT

The Directors wish to convey their appreciation to the Company's Shareholders, Customers, Suppliers, Bankers, and Distributors for their support they have given to the Company over the past years and the confidence, which they have reposed in its management and the employees for the commitment and dedication shown by them.

For and behalf of the Board of Directors Karma Industries Limited

Sd/-

Rajesh Mehta Managing Director

Registered Office

KARMA INDUSTRIES LIMITED

H Wing, Office No. 131,

Raj Arcade, Mahavir Nagar,

Kandivali West,

Mumbai -400067


Mar 31, 2011

TO THE SHAREHOLDERS

The Directors have great pleasure in presenting the 34th Annual Report together with the Audited Accounts for the year ended on March 31, 2011.

CONSOLIDATED FINANCIAL RESULTS

Year Ended Year Ended Particular 31.03.2011 31.03.2010 Amt in Rs. Amt in Rs.

Sales & Other Income 6,591,044,638 4,289,142,596

Less : Expenditure 6,556,446,580 4,272,676,684

Depreciation 2,867,781 4,007,664

Profit / (Loss) before tax and appropriations 31,730,277 12,458,248

Profit / (Loss) after tax and Minority Interest 20,252,677 9,957,623

Add: Balance brought forward from previous year 10,454,170 496,547

Surplus carried to Balance Sheet 30,713,045 10,454,170

DIVIDEND

The Board of Directors are overwhelmed to declare the dividend of 3%, i.e. 0.30 paise per Equity Shares to the Shareholders whose names are present in the Register of Members as on the date of Annual General Meeting.

OPERATIONS

The Company is presently trading in broad range of steel products, including C.R. Coils & Sheets, C.T.D. Bars, H.R. Sheets & Plates and Hot Rolled Steel Plates, Ingot irons M.S. Plates, Angles, Channels, Chequered Plates, Wires, T.M.T Bars, Rebars and Tor Steel, Stainless Steel and other Alloy Steels and had a good year in terms of turnover and performance. The Company has already established factory at valsad and would be starting manufacturing activity shortly.

The turnover of the Company rose from Rs. 4,284,089,632/- in the previous year to Rs.6,587,997,822/ - in the year under review. However the Profit after tax substantially increased from Rs. 9,958,331/- in the previous year to Rs. 20,264,196/- for the year ended March 31, 2011.

CAPITAL

The Company''s present paid up capital stands at Rs. 33,00,00,000/- comprising 3,30,00,000 equity shares of Rs. 10/- which is listed on Bombay, Ahmedabad and Hyderabad Stock Exchange.

BOARD OF DIRECTORS

The Board of Director''s of the Company is duly constituted and has a combination of Executive and Non-executive directors.

Mrs. Bhavna Mehta, Director of the Company retires by rotation at the ensuing Annual General Meeting and being eligible offer herself for re-appointment.

Mr. Mahesh Jethva and Mr. Bhavesh Vora were appointed as Additional Directors by the board on October 01, 2010 and July 01, 2011 respectively and their appointment as director liable to retire by rotation is being sought in the ensuing Annual General Meeting, on being demanded by members for which necessary notice have been received by the Company.

Mr. Narendra Sampat resigned from the Board of Directors of the Company on October 01, 2010. The Board wishes to place on record his appreciation for the services rendered by him during his tenure with the Company.

CHANGE OF NAME & OBJECTS OF THE COMPANY

The Company has changed its name from Karma Ispat Limited to Karma Industries Limited during the year and also changed its objects in order to reflect its true business activities and expand its business.

SUBSIDIARIES

Your company has the following two wholly-owned subsidiaries namely M/s. Karma Commodities Ltd., M/s.KIL Infrastructure Ltd. and a an Associate Company M/s. Karma Stock Trade Limited (Was a Subsidiary till 16.08.2011) where company holds 44.10% of Paid up share capital of the company.

1. KIL Infrastructure Limited which was incorporated to carry out the business of construction, development, repairing, roads, path, streets, bridge etc.

2. Karma Commodities Limited was incorporated to do the business of commodity trading with the Commodity Exchanges. The Company in is the process of starting its operations shortly. The Company has taken membership of mCx /NMCE /ICEX /Reliance Spot Exchange / NCDEX & NCDEX Spot / ACE.

3. Karma Stock Trade Limited which was incorporated to carry out the business as share and stock broker, sub-broker, finance broker, dealer, jobber, market maker, portfolio manager, underwriter, sub-underwriter, dealers or broker or agent in any shares, securities, financial instruments, capital market money market instruments of all kinds. However the company has not started its operations yet and is in the process of starting its operations. The Company has taken for Deposit Base Trading Membership of BSE and also Membership of NSE/USE.

The Consolidated financial Statements of the subsidiaries are attached with the Annual Report.

Pursuant to the general circular No. 2/2011 and 3/2011 dated 8th February, 2011 and 21st February, 2011 respectively issued by Ministry of Corporate Affairs ("MCA") and in terms of the general exemption granted by MCA copies of balance sheet, the profit and loss account, report of the Board of Directors and that of the Auditors in respect of the subsidiaries as on 31st March, 2011 have not been attached to the Balance Sheet of your Company. The aforesaid documents in respect of the respective subsidiary companies will be made available upon a request made by any Shareholder of the Company interested in obtaining the same. These documents in respect of aforesaid subsidiary companies are also available for inspection at the registered Office of the Company and that of the respective subsidiaries. However, as directed by MCA, the financial data of subsidiaries has been furnished under ''Financial Information on Subsidiary Companies'' forming part of the Annual Report. The Audited Consolidated Financial Statements made in accordance to the applicable Accounting Standards forms part of this Annual Report.

CORPORATE GOVERNANCE

The Company has taken proactive steps to ensure that the conditions of Corporate Governance stipulated in Clause 49 of the Listing Agreement with the Stock Exchange are complied with. A separate report on Corporate Governance together with Auditor''s Certificate on its compliance is included in the Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT

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

1] In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures.

2] Appropriate accounting policies have been selected and applied, reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at the March 31, 2011.

3] Proper and sufficient care has been taken 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] The Annual Accounts have been prepared on a going concern basis.

AUDITORS

M/s. AMD & Co., Chartered Accountants, the retiring Auditors have expressed their willingness to be re-appointed. It has been proposed to reappoint M/s. AMD & Co., Chartered Accountants as Auditors of the Company. The Company has received a Certificate from them that they are qualified under Section 224 (1) of the Companies Act, 1956 for appointment as Auditors of the Company. Members are requested to consider their appointment at a remuneration to be decided by the Board of Directors for the financial year ending March 31, 2011 as set out in the Notice convening the Meeting.

AUDITORS'' OBSERVATIONS

The observations of the Auditors contained in their Report are self explanatory and does not require any clarification.

AUDIT COMMITTEE

In accordance with the provisions of the Section 292A of the Companies Act, 1956 and the Corporate Governance requirements as per the Listing Agreement of the Company, the Audit Committee comprises of the following Directors viz., Mr. Hemang Sampat, as Chairman, Mr. Rajesh Mehta and Mr. Mahesh Jethva as members. The Audit Committee acts in accordance with the terms of reference specified from time to time by the Board.

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

The Company has taken effective steps to conserve and minimize power and fuel consumption and has also installed capacitor for minimizing the power consumption. No Technology was imported during the year by the Company. The Company has not exported or imported any goods during the year. Therefore Foreign Exchange Earning and Outgoing was NIL.

PARTICULARS OF EMPLOYEES

None of the employees of the Company come within the purview of the information required u/s 217[2A] of the Companies Act, 1956 read with the Companies [particulars of Employees] Rules, 1975 as amended from time to time.

RESEARCH & DEVELOPMENT

The Company has been arduously working to improve the R & D so as to provide quality and value for money to the customers in keeping with market trends.

FIXED DEPOSITS

Your Company has not accepted any deposit within the meaning of Section 58A of the Companies Act, 1956 from Public and the rules made there under.

SAFETY, ENVIRONMENTAL CONTROL AND PROTECTION

The Company has taken all the necessary steps for safety and environmental control and protection.

ACKNOWLEDGMENT

The Directors wish to convey their appreciation to the Company''s Shareholders, Customers, Suppliers, Bankers, and Distributors for their support they have given to the Company over the past years and the confidence, which they have reposed in its management and the employees for the commitment and dedication shown by them.

For and behalf of the Board of Directors

Karma Industries Limited

Sd/-

Rajesh Mehta

Managing Director

Registered Office

KARMA INDUSTRIES LIMITED

H Wing, Office No. 131,

Raj Arcade, Mahavir Nagar,

Kandivali West,

Mumbai -400067

Date: 25th July, 2011


Mar 31, 2010

The Directors have great pleasure in presenting the 33rd Annual Report together with the Audited Accounts for the year ended on March 31, 2010.

FINANCIAL RESULTS

Year Ended Year Ended 31.03.2010 31.03.2009 Amt in Rs. Amt in Rs.

Sales & Other Income 4,288,510,321 2,773,557,443

Less : Expenditure 4,272,124,111 2,757,793,683

Depreciation. 3,806,832 3,377,396

Profit / (Loss) before tax and appropriations 12,579,378 12,386,353

Profit / (Loss) after tax 9,935,109 7,505,187

Add: Balance brought forward from previous year 496,547 (7,008,640)

Surplus carried to Balance Sheet 10,431,656 496,547

DIVIDEND

With a view to conserve the resources of the company the Board of Directors have not recommended any dividend for the year ended 3ist March, 2010.

OPERATIONS

The Company is presently trading in broad range of steel products, including C.R. Coils &. Sheets, C.T.D. Bars, H.R. Sheets & Plates and Hot Rolled Steel Plates, Ingot irons M.S. Plates, Angles, Channels, Chequered Plates, Wires, T.M.T Bars, Rebars and Tor Steel, Stainless Steel and other Alloy Steels and had a good year in terms of turnover and performance. The Company would be starting manufacturing activity shortly, the land for manufacturing facility is already purchase by the company.

The turnover of the Company rose from Rs. 2,773,557,443/- in the previous year to Rs. 4,288,510,321/ - in the year under review. However the Profit aftertax marginally increased from Rs. 7,505,187/- in the previous year to Rs. 9,935,109/- for the year ended March 31, 2010, due to high material cost and tight margins arising out of the global recession.

CAPITAL

The Companys present paid up capital stands at Rs.33,00,00,000/- comprising 3,30,00,000 equity shares of Rs. 10/- which is listed on Bombay, Ahmedabad and Hyderabad Stock Exchange..

BOARD OF DIRECTORS

The Board of Directors of the company is duly constituted and has a combination of Executive and Non-executive directors.

Mr. Narendra Sampat, Director of the Company retires by rotation at the ensuing Annual General Meeting and being eligible offer himself for re- appointment.

SUBSIDIARIES

Your company has the following Two wholly-owned subsidiaries namely M/s. Karma Commodities Ltd., M/s. KIL Infrastructure Ltd. and a subsidiary M/s. Karma Stock Trade Limited where company hold 60% of Paid up share capital of the company.

1. KIL Infrastructure Limited which was incorporated to carry out the business of construction, development, repairing, roads, path, streets, bridge etc.

2. Karma Commodities Limited was incorporated to do the business of commodity trading with the Commodity Exchanges. The Company in is the process of starting its operations shortly. The Company has taken membership of MCX/NMCE/ICEX/Reliance Spot Exchange. The Company has also applied for the Membership of NCDEX & NCDEX Spot.

3. Karma Stock Trade Limited which was incorporated to carry out the business as share and stock broker, sub-broker, finance broker, dealer, jobber, market maker,portfolio manager, underwriter, sub-underwriter, dealers or broker or agent in any shares, securities, financial instruments, capital market money market instruments of all kinds. However the company has not started its operations yet and is in the process of starting its operations. The Company has taken membership of Deposit Base Trading Membership of BSE and also Membership of NSE.

The consolidated financial Statements of the subsidiaries are attached with the Annual Report.

CORPORATE GOVERNANCE

The Company has taken proactive steps to ensure that the conditions of Corporate Governance stipulated in Clause 49 of the Listing Agreement with the Stock Exchange are complied with. A separate report on Corporate Governance together with Auditors Certificate on its compliance are included in the Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT

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

1] In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures.

2] Appropriate accounting policies have been selected and applied reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at the March 31, 2010.

3] Proper and sufficient care has been taken 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] The Annual Accounts have been prepared on a going concern basis.

AUDITORS

Messrs. Arvind Darji Associates, Chartered Accountants, the retiring Auditors have not sought re- appointment. It has been proposed to appoint Messrs. AMD & Company, Chartered Accountants as Auditors of the Company. The Company has received a Certificate from them that they are qualified under Section 224 (1) of the Companies Act, 1956 for appointment as Auditors of the Company. Members are requested to consider their appointment at a remuneration to be decided by the Board of Directors for the financial year ending March 31, 2010 as set out in the Notice convening the Meeting.

AUDITORS OBSERVATIONS

The observations of the Auditors contained in their Report are self explanatory and does not require any clarification.

AUDIT COMMITTEE

In accordance with the provisions of the Section 292A of the Companies Act, 1956 and the Corporate Governance requirements as per the Listing Agreement of the Company, the Audit Committee comprises of the following Directors viz., Mr. Hemang Sampat, as Chairman, Mr. Rajesh Mehta and Mr. Narendra Sampat as members. The Audit Committee acts in accordance with the terms of reference specified from time to time by the Board.

PARTICULARS REGARDING CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The Company has taken effective steps to conserve and minimize power and fuel consumption and has aTsTr-vastalled capacitor for minimizing the power consumption. No Technology was imported during the year by the Company. Foreign Exchange Earning and Outgoing was NIL.

PARTICULARS OF EMPLOYEES

None of the employees of the Company come within the purview of the information required u/s 217[2A] of the Companies Act, 1956 read with the Companies [particulars of Employees] Rules, 1975 as amended.

RESEARCH & DEVELOPMENT

The Company has been arduously working to improve the R & D so as to provide quality and value for money to the customers in keeping with market trends.

FIXED DEPOSITS

Your Company has not accepted any deposit within the meaning of Section 58A of the Companies Act, 1956 from Public and the rules made there under.

SAFETY, ENVIRONMENTAL CONTROL AND PROTECTION

The Company has taken all the necessary steps for safety and environmental control and protection.

ACKNOWLEDGMENT

The Directors wish to convey their appreciation to the Companys Shareholders, Customers, Suppliers, Bankers, and Distributors for their support they have given to the Company over the past years and the confidence, which they have reposed in its management and the employees for the commitment and dedication shown by them.

For and behalf of the Board of Directors For Karma Ispat Limited

Sd/-

Director

Registered Office

KARMA ISPAT LIMITED H Wing, Office No. 131, Raj Arcade, Mahavir Nagar, Kandivali West, Mumbai -400067

Date: 31st May, 2010

 
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