THE NARANG INDUSTRIES LIMITED
ANNUAL REPORT 2004-2005
Your Directors have pleasure in presenting 62nd Annual Report on business
and operations of your Company together with the Audited Statement of
Accounts for the year ended 31st March, 2005.
Particulars Current Year Previous
Profit/(Loss)before Depreciation and Income tax (29,75,758) 95,19,678
Less: Provision for depreciation 3,17,904 5,33,581
Add: Provision for earlier years Written Back 15,47,178 -
Less: Provision for Income Tax - 16,54,000
Profit/(Loss) for the period (17,46,484) 73,32,097
During the year under review, the Company has suffered a net loss of
Rs.17.46 lacs. Inspite of the persistent efforts, no new business has been
identified. Efforts are still being made to re-activate the Company's non-
molasses based alcohol manufacturing unit at Aurangabad.
After reviewing the financial position of the Company, your Directors do
not recommend any dividend on Equity Shares for the year ended 31st March,
During the year under report, Mc Killigan Distillery Limited continues to
be a wholly owned subsidiary of your Company.
A statement pursuant to Section 212 of the Companies Act, 1956 relating to
the subsidiary company is attached to the accounts. The audited statement
of accounts and the Auditors' Report thereon along with Directors' Report
of your Company's subsidiary is annexed.
The Board of Directors at its meeting held on 30th August, 2005 and at the
recommendation of the Remuneration Committee at its meeting held on 5th
August, 2005 has to appointed P.A. Devinder Raj Narang as Managing Director
w.e.f. 1st October, 2005 for a period of one year. The details of the terms
of re-appointment are given in the notice convening the Annual General
During the year under review, Mr. Sudarshan Goyal resigned mid, in that
casual vacancy, the Board appointed Mr. Surender Kumar Sharma as a Director
of your Company. He holds office as a Director upto the date of the ensuing
Annual General Meeting. Your Company has received a notice u/s. 257 of the
Companies Act, 1956 from a member proposing the appointment of Mr. Surender
Kumar Sharma as Director and the said appointment is proposed in the notice
for the ensuring Annual General Meeting for your approval. The Board
expresses its thanks for the valuable contributions made by Mr. Sudarshan
Goyal during his tenure as director of your Company.
During the current year, Mr. Tulsi Dass Sethi has been appointed as
Additional Director of your Company. He holds office as Additional Director
upto the date of the ensuing Annual General Meeting. A notice u/s. 257 of
the Companies Act, 1956 has been received from a member proposing the
appointment of Mr. Tulsi Dass Sethi as Director and the said appointment is
proposed in the notice for the ensuing Annual General Meeting for your
Mr. Avdesh Maheshwari, who is retiring by rotation at the ensuing Annual
General Meeting and being eligible offers himself for re-appointment. The
Board recommends his re-appointment.
M/s. S.P. Nagrath & Co., New Delhi, hold office till the conclusion of the
ensuing Annual General Meeting and are eligible for re-appointment. They
have expressed their willingness to serve, if appointed. They have also
confirmed that if reappointed their appointment will be within the limits
prescribed under the Companies Act, 1956.
The observations of the Auditors are explained, wherever necessary in
appropriate notes to the accounts.
PARTICULARS OF EMPLOYEES:
The Company has not paid any remuneration attracting the provisions of
Section 217(2A) of the Companies Act, 1956 read with the Companies
(Particulars of Employees) Rules, 1975. Hence no particulars are furnished
in this regard.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the requirement under Section 217(2AA) of the Companies Act,
1956 with regard to Directors' Responsibility Statement, it is hereby
1. That in the preparation of the accounts for the financial year ended
31st March, 2005, the applicable accounting standards have been followed
and there are no material departures;
2. That the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that were reasonable and
prudent so as to give true and fair view of the state of affairs of the
Company at the end of the financial year and of the profit or loss of the
Company for the year under review;
3. That the Directors have taken proper and sufficient care 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 accounts for the financial year
ended 31st March, 2005 on a going concern basis.
During the year, your Company has not accepted any Fixed Deposits. As
reported last year, the Company had repaid all the fixed deposits and there
were no overdue deposits other than unclaimed deposits.
The Equity Shares of your Company continue to be listed during the year
under review at the following Stock Exchanges:
1. The Uttar Pradesh Stock Exchange Association Limited
2. The Stock Exchange, Mumbai
3. The Delhi Stock Exchange Association Limited
The Audit Committee has reviewed the financial statements for the period
ending 31st March, 2005 and has not given any adverse remarks. It has
recommended the re-appointment of M/s. S.P. Nagrath & Co. as Statutory
Auditors of the Company for another term.
The Company has been proactive in following the principles and practices of
good corporate governance. The Company has taken adequate steps to ensure
that the conditions of Corporate Governance as stipulated in clause 49 of
the Listing Agreements of the Stock Exchange are complied with. A report on
the Corporate Governance duly certified by Statutory Auditors is enclosed
and forms part of the Director's Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS
In view of the nature of activities which are being carried on by the
Company, Rules 2A and 2B of the Companies (Disclosure of Particulars in the
Report of Directors) Rules, 1988, concerning conservation of energy and
technology absorption respectively, are not applicable to the Company.
During the year under review, foreign exchange earnings and outgo were nil.
The Directors wish to thank the Government authorities, bankers, other
business associates and shareholders for their unstinted support,
assistance and valuable guidance.
For & on behalf of the Board of
The Narang Industries Limited
(Devinder Raj Narang) (Masina Ram)
New Delhi, 30th August, 2005 Managing Director Director
MANAGEMENT DISCUSSION & ANALYSIS
Industry Structure and Developments:
At present, the Company is not doing any business. It is still exploring
the possibilities of re-activating its non-molasses based alcohol
manufacturing unit at Aurangabad.
Opportunities and Threats:
The company had received unsolicited requests from property developers to
commercially develop it, property at Aurangabad. The Company does not
envisage any threats if the property at Aurangabd is commercially
Risks and Concerns:
During the year under review, the Company was dealing in trading of shares.
An investment in shares involves a high degree of risk, as the revenues and
profitability of the Company are dependent on a number of factors.
The overall performance of the Company during the financial year 2004-05
has not been satisfactory.
The Company has plans either to re-activate its non-molasses based alcohol
manufacturing unit at Aurangabad or to commercially develop its property at
The Company has no business segment and as stated above, it is still
exploring the possibility of re-activating its non-molasses based alcohol
manufacturing project at Aurangabad.
Internal Control System:
The Company had adequate system of internal control and procedures to
ensure efficient conduct of business and security of its assets.
Though the Company was not doing any business, its continued cost control
efforts have been able to bring down the fixed financial costs to some
extent during the year.
As on 31st March, 2005 your Company had only five employees on its muster