velvette international pharma products ltd Directors report

VELVETTE INTERNATIONAL PHARMA PRODUCTS LIMITED ANNUAL REPORT 2004-2005 DIRECTORS REPORT Your Directors herewith present the Twentieth Annual Report on the operations of the Company together with the Audited Accounts for the financial year ended 31st March, 2005. 1. FINANCIAL RESULTS: The Audited Financial results of the Company for the Financial Year under review are summarized below for your consideration: 2004-2005 2003-2004 Rs. in Lakhs Rs. in Lakhs Sales 92.05 512.14 Operating Profit before interest (60.20) (12.11) & Depreciation LESS : Interest 4.19 3.64 Loss before Depreciation (64.39) (15.75) Depreciation 11.37 13.01 Net Profit before tax for the ear (75.76) (28.76) Provision for tax - - ADD: Wealth Tax Provision - - written back Balance carried to Balance Sheet (75.76) (28.76) 2. MANAGEMENT DISCUSSION &ANALYSIS: A. Industry Structure and Developments: Your Company is in the business of Cosmetics, Herbal Cough Syrup And Ayurvedic Medicine. During the year the company has manufactured and also marketed Cosmetic Products. The Company has also marketed Herbal Cough Syrup and Ayurvedic Medicine. B. Performance: The company achieved a turnover of Rs. 92.05 Lacs as against Rs. 512.14 Lacs of previous year. C. Opportunities & Threats: Opportunities exist in the form of increase in sales in domestic markets for Pharma and FMCG products. The products of the company are of a high quality and this shall enable us to take advantage of the market conditions in the times to come. D. Risk Management: The company is exposed to risks from market fluctuations. E. Commodity Price Risk: The company is managing to get price increases from customers though this exercise is exposed to time lag. F. Foreign Exchange Risk: As there are no Foreign Exchange dealings, at present, either earnings or outgo this does not affect the company in any significant manner. G. Internal Control Systems and there adequacy: The company is strengthening the internal control systems commensurate with its size and nature of operation, to provide reasonable assurance that all assets are safeguarded, transactions are authorized , recorded and stated properly and applicable statutes and corporate policies are complied with. H. Manufacturing capacity and expansion programme: At present, the company is marketing the Cosmetic products, Cough syrup & Ayurvedic products. There is a proposal to take over the manufacture of these products and also increase the No. of products, by introducing new products, scientifically formulated through research and development and modification of the existing products. I. Human Resources: The company had to experience high staff turnover in the recent past. The causes have been analysed and remedial steps have been taken to check this high staff turn over. We are confident that the necessary steps taken at the right moment will go a long way in obtaining the fullest cooperation from our employees. The human Resources practices at your company empowers the employees through greater knowledge, opportunity, responsibility, accountability and reward. Emphasis is laid on identifying and nurturing talent. Sufficient opportunities are created for the betterment of the skills in the organization. There exists an excellent system for assessing the employees performance based on the principles and practices of Sound Personnel Management. J. Outlook: We believe that the global opportunities will definitely help us to grow in the near future. We are aware of the risks, and are also confident that by improving our performance through appropriately planned expansion and marketing programmes we can scale new peaks. K. Cautionary Statement: The information and opinion expressed in this Report may contain certain forward looking statements, which the management believes are true to the best of its knowledge at the time of its preparation. The management shall not be liable for any loss, which may arise as a result of any action taken on the basis of the information contained herein. Prior written permission of the company may be obtained for furnishing this information to any person. 3. DIRECTORATE: During the year under review Smt. S. Usha and Shri. N. Senthur Vasan were appointed as Additional Directors on 02.08.2004. Their term concluded at the, conclusion of the 19th Annual General Meeting and being eligible offered themselves for re-appointment. With the members approval they were appointed as Directors of the company. Mr. D. Vimal Kumar, Mr. K. Sivanesan and Miss. R. Rati were appointed as additional Directors on 21.09.2005. Their term of office concluded at the 20th Annual General Meeting on 30.09.2005. With the members approval they were re-appointed as Directors of the company. 4. DIRECTORS RESPONSIBILITY STATEMENT: (a) In preparing the Annual Accounts, the applicable accounting standards have been followed and necessary explanations have been provided relating to material departures, wherever required. (b) The Accounting Policies followed by the Company are consistent and in Accordance with Law. The judgments and estimates made are reasonable and prudent so as to give true and fair view of the state of affairs at the end of the financial year and of the loss of the company for the year ended 31st March, 2005. (c) Proper and sufficient care had been taken 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 accounts have been prepared on a going concern basis. 5. FIXED DEPOSITS: The Company has not accepted deposits from the Public. 6. AUDITORS: The Statutory Auditors M/s. Lakshminiwas & Jain, Chartered Accountants retired at the conclusion of this Annual General Meeting held on 30.09.2005 and were re-appointed. 7. CORPORATE GOVERNANCE REPORT: The Corporate Governance Report is annexed to the Directors Report. 8. CONSERVATION OF ENERGY,TECHNOLOGY,ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO: Pursuant to section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 the required particulars are furnished below: A. Conservation of Energy : Not Applicable B. Technology Absorption : Please see Annexure. C. Foreign Exchange Earnings and Outgo: Year Ended Year Ended 1st March, 2005 31st March, 2004 (Rs. in 000) Earnings in Foreign Exchange Nil Nil Expenditure incurred in Foreign Currency Nil Nil 9. PARTICULARS OF EMPLOYEES: There is no employee whose particulars are to be given pursuant to section 217(2A) of the Companies Act 1956, read with the Companies (Particulars of Employees) Rules 1975. 10. COMMENTS ON AUDITORS REPORT & NOTES ON ACCOUNTS: i. Point Number 4(i) of Auditors Report Due to corruption of data in our system, the draft accounts could not be provided to the auditors in time. ii. Point Number 4(vi)(a) of Auditors Report As explaind in the notes on accounts, the liability is yet to be quantified as the cases are lying before DRT and applied for one time settlement. Hence, the company is unable to provided either Interest or Penal interest also. iii. Point Number 4(vi)(b) of Auditors Report: The Note is self-explanatory. iv. Point Number 4(vi)(c) of Auditors Report: The Note is self-explanatory. v. Point Number 4(vi)(d) of Auditors Report: Due to high staff turnover, the details could not be provided immediately. This difficulty has since been rectified. vi. Point Number 4(vi)(e) of Auditors Report: The Note is self-explanatory. vii. Point Number 4(vi)(f) of Auditors Report: The Note is self-explanatory. viii. Point Number 1 of Annexure to Auditors Report: The Directors have taken Steps to update the Fixed Assets Register. ix. Point Number 2(a) of Annexure to Auditors sport: The Directors have taken Steps to make procedures towards physical verification of Stocks lying with C & F and Consignee agents. x. Point Number 6 of Annexure to Auditors Report: Due to acute financial crunch, the company had to resort to short term borrowings from private parties. xi. Point Number 9(b) of Annexure to Auditors Report: The Note is self-explanatory. xii. Point Number 10 of Annexure to Auditors Report: Since the Bad Debts were written off in the year ended 31.03.2002, the figure of accumulated loss got enhanced. xiii. Point Number 11 of Annexure to Auditors Report: The Note is self-explanatory. ACKNOWLEDGEMENT: The directors express their sincere appreciation for the much needed co- operation extended by the Bankers and Financial Institutions , Distributors and Customers and pay special tributes to the employees who have put in their best efforts in this difficult period. Registered Office: On behalf of the Board 23, Dr. Ambedkar Road, Kodambakkam, Chennai-600 024. Place: Chennai Dr. C.K. RAJKUMAR Dated: 03.10.2005 Managing Director