nayagara paper products india ltd Directors report

NAYAGARA PAPER PRODUCTS (INDIA) LIMITED ANNUAL REPORT 2004-2005 DIRECTORS REPORT Dear Members, Your Directors are pleased to present the Seventeenth Annual Report together with the Audited Accounts of the company for the year ended 31st March 2005. Financial Results: The financial performance of the Company during the year is summarized below: (Rs. in Lakhs) Particulars Year Ended Year Ended March 31, 2005 March 31, 2004 Total Income 199.09 53.78 Operating Profit / (Loss) 60.07 (76.71) Less: Depreciation 59.00 59.00 Net Profit / (Loss) 1.07 (374.76) Review and Prospects: The Company has achieved a turnover of Rs.198.07 Lakhs during the year under the review and made a modest profit of Rs.1.07 lakhs as a result of consistent and strenuous efforts by the management to revitalize and turnaround the Company. In spite of various problems faced by the Company due to its sickness, lack of working capital etc., the Board is confident of the future prospects of the Company. The Company has entered into Agreements with M/s.Industrial Development Bank of India and M/s. Corporation Bank for settlement of dues. As you know your Company has appealed to AAFIR with which the case is registered vide registration No. 220/2001. The matter is under the consideration of AAFIR. Directors: Mr. I. Vinay Kumar Reddy, Director is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re- appointment. Auditors: M/s M.G.Rao & Co, Chartered Accountants, the Statutory Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for reappointment. Corporate Governance: Your Company has complied with the mandatory provisions of the Corporate Governance prescribed in the presently applicable Clause 49 of the Listing Agreement with the Stock Exchanges. A separate report detailing such compliance together with the Certificate from the Auditors in connection therewith is included as part of the Annual Report. Replies to the Auditors observations: Item No.iii (c)&(d). The Company has been taking active steps to recover the principle and interest from the parties to whom the loans are given by the company and the directors are confident of recovering all the dales. Item No.vii. The company is taking steps to appoint an internal auditor very soon. Item No.ix(a). The company is taking necessary steps to clear the undisputed statutory dues with appropriate authorities. Item No.ix(c). The Commissioner of Income Tax has to reassess the Income Tax liability as the tax liability of the Company is under dispute. The company will clear the liability once the issue is resolved. Fixed Deposits: The Company has not invited/accepted any fixed deposits from the public in terms of Section 58A of the Companies Act, 1956. Personnel: None of the employees is covered under Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975. Information as per Section 217(1)(e) of the Companies Act, 1956: Your Company has no activity relating to conservation of energy or technology absorption. During the year under review and there are no foreign exchange earnings or outflow. Directors Responsibility Statement: As required under Section 217 (2AA), which was introduced by the Companies (Amendment) Act, 2000 your Directors confirm that: i) In the preparation of the annual accounts, the applicable accounting standards have been followed. ii) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31st March 2005 and of the profit or loss of the company for the year ended 31st March 2005. iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv) The Directors have prepared the annual, accounts on a going concern basis. Stock Exchanges: The Companys Equity shares are listed in the Hyderabad Stock Exchange Ltd (Regional Stock Exchange) as well as the Mumbai Stock Exchange and Ahmedabad Stock Exchange. The arrears of the listing fees payable to the Stock Exchanges is as follows: Up to the previous 2005-06 Total Due Year 2004-05 The Stock Exchange, Mumbai - - - Hyderabad Stock Exchange Ltd 70,000/- 14,000/- 84,000/- Ahmedabad Stock Exchange 55,000/- 10,000/- 65,000/- Industrial Relations: The relations with the employees continued to be cordial during the year. The directors wish to place on record their deep appreciation of the efficient and loyal services rendered by the employees at all levels. Acknowledgement: Your Directors also thank the Financial Institutions, Bankers, and Distributors for unstinted support to the Company. Your Directors would like to thank all the shareholders who have reposed faith in the Company. Your directors also thank the various departments of the Government of India, Government of Andhra Pradesh and its Agencies for their support during the year and look forward to their continued support. On behalf of the Board Place : Nellore Sd/- Date : 10.08.2005 K V. Reddy Chairman & Managing Director Management discussion and analysis: Industry scenario: The Paper Industry covering pulp paper and paperboard is one of the 35 high priority industries in India. The industry contributes over Rs.2500 Crores. annually to the exchequer. The industries turnover is around Rs.12,000 Crores, and it provides employment to more than 3,00,000 people directly and about 10,00,000 people indirectly. The country is by and large self- sufficient in paper production and also contributes to foreign exchange byway of export. Today, India produces a wide range of Paper & Paperboards using a variety of raw materials and the Indian Paper Industry is highly fragmented and dominated by small and medium scale units. Company scenario: Nayagara Paper Products (India) Limited, having its manufacturing unit at 205 A/B, Auto Nagar, Nellore in Andhra Pradesh. This unit has been involved in the manufacture of paper products like books, writing books, work books, account books, writing pads, diaries and calendars etc, The Board of Directors of the Company is fully satisfied with the control systems in force in all areas of its operations at its unit and registered office at Nellore. Effectiveness of these systems is reviewed at periodic intervals for possible improvement. The company has well deserved and dedicated marketing network consisting of agents, distributors and dealers. The Companys marketing personnel maintain constant contact with all these entities with a view to ensure smooth flow of marketing / sales operations and realization of sale proceeds. Despite the positive factors mentioned above, the Company views with concern the impact of sickness of the Company and also necessary steps to be taken to come out from the said situation. However the Company is confident of overcoming this situation with its emphasis on quality arid cost together with aggressive marketing.