integral knit company ltd Management discussions

INTEGRAL KNIT COMPANY LIMITED ANNUAL REPORT 2007-2008 MANAGEMENT DISCUSSION AND ANALYSIS FINANCIAL RESULTS (Rs. In Lacs) Year Ended Year Ended 31.03.2008 31.03.2007 Net Sales 152.80 198.00 Other Income 2.92 17.18 Total Expenditure 192.53 188.09 Interest: Gross Profit/Loss after -36.81 27.10 Interest but before Depreciation and Taxation Depreciation 52.08 55.89 Provision for Taxation - - Net Profit/Loss -88.89 -28.79 Paid up Equity Share Capital 454.67 454.67 Reserves OPERATIONS: KNITTING DIVISION: The knitting division took a hit due to a general recession in the garment export industry due to the falling dollar value last year, This,was,a factor total beyond the companyS control. We were successful in getting. permission to shift the machines. from Lower parel to Silvassa, This has helped in getting greater production efficiencies. In order to mitigate the effect of loss of sale. the company, took timely action & implemented several cost cutting measures. The situation this financial year looks more stable in terms of business: The company is also confident that the effect of all the cost control exercises implemented last season year will have a positive bearing this year. The Loss has increased substantially by Rs. 37,51,558/- due to implementation of Accounting Standard 11 on Foriegn Currency Translation in the current year as a result of which the difference in Foriegn Exchange Rate pertaining to the Fixed Assets has been debited to the Profit & Loss Account instead of debiting Fixed Asset Account. This adjustment is carried out right from the date of Acqisition of Imported Fixed Assets as suggested by the Statutory Auditors of the Company.