SANSCO SERVICES - Annual Reports Library Services - www.sansco.net www.reportjunction.com SANSCO SERVICES - Annual Reports Library Services - www.sansco.net VICTORY PAPER AND BOARDS (INDIA) LIMITED Board of Sri.K.T.PAVUNNY Chairman Directors Sri. K.P.SAXON Managing Director Sri. K.P. DAVIS Joint Managing Director SmtACHAMMAPAVUNNY Director Smt. NBSI SAXON Director SmLUSHA DAVIS Director THE FEDERAL BANK LIMITED Bankers Kunnamkulam Auditors M/s. ABRAHAM & JOSE Chartered Accountants Rice bazaar, Thrissur- 1. Company Sri. T.R. SANGAMESWARAN, B.Com., L.L.B., ACS Secretary (Consultant) Regd. Office VICTORY PAPER AND BOARDS (INDIA) LIMITED P.B. No.: 36, Victory Press Building Kunnamkulam - 680 503 Kerala, S. India. Phone: 522342,522434,525585,523775 Fax: 0488-522494 Gram: WEPAPER. E-mail: [email protected] Factory IV/120-A, Mannukadu, P.O. Vengodi, Elappully, Palghat - 678 622 Phone: 583409,583493. Fax: 0491-583285 www.reportjunction.com SANSCO SERVICES - Annual Reports Library Services - www.sansco.net VICTORY PAPER AND BOARDS (INDIA) LIMITED 8TH ANNUAL GENERAL MEETING - AT 10 A.M. ON 16TH SEPT. 2002. NOTICE NOTICE is hereby given that the 8th Annual General Meeting of the Company will be held at 10 a.m. on Monday, the 16th September, 2002 at Victory Inn, Parempadam, Kunnamkulam, Thrissur-680 503, Kerala to transact the following business. ORDINARY BUSINESS 1. To receive, consider and adopt the Balance Sheet as at 31st March, 2002 and Profit and Loss account for the year enaea on that date and the report of Directors and Auditors thereon. 2. To appoint a Director in place of Mrs. Nini Saxon who retires by rotation and being eligible, offers herself for reappointment as Director. 3. To appoint Statutory Auditors for the period up to the conclusion of the next Annual General Meeting of the company and to fix their remuneration. M/s. Abraham and Jose, Chartered Accountants, the retiring auditors are eligible for reappointment. By Order of the Board, Sd/- Kunnamkulam K.P. Saxon 5-08-2002 (Mg. Director) Note:l A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote in his stead. A proxy need not be a member of the company. For validity of proxy, the duly filled proxy form should be submitted at the Registered office of the Company, atleast 48 hours before the meeting 2. Members are requested to intimate the company any change of address well in time. 3. The Register of members will be closed from 10th September to 16th September, 2002'(Both days inclusive) 4. Members are requested to quote their Folio No. in all the correspondence with the company. www.reportjunction.com SANSCO SERVICES - Annual Reports Library Services - www.sansco.net VICTORY PAPER AND BOARDS (INDIA) LIMITED DIRECTORS REPORT TO THE SHARE HOLDERS Dear Shareholder, Your Directors have great pleasure in presenting the 8th Annual Report of the Company with the Audited statement of accounts for the year ended 31st March, 2002. 1. OPERATIONAL. PERFORMANCE " The Directors would like to inform you that the company was able to achieve a production of only 3733 tons against the production of 5645 during the previous year. Production in the months of September and October 2001 were totally disrupted as the Company remained under complete lock-out due to labour unrest following retrenchment of 50 casual labourers who were engaged in sorting of waste paper. These labourers were engaged on purely temporary basis and the Management could not entertain their claim for permanency in employment, as the Company did not have the capacity to absorb them. Because of the firm stand taken by the Management, the workers had no alternative but to come forward to a negotiated settlement and the casual labourers were terminated with reasonable compensation, which is beneficial as these workers will not be a liability to the company in the long run. Lock-out was lifted in November 2001 and the Company was able to run only one shift in November and December 2001 as only partial workers resumed work. Production in full swing could resume only from the month of January 2002. The company is hopeful of recouping production losses caused due to internal disturbances. The company had performed well in the first quarter of 2001 and the results were encouraging which shows that it is running in the right direction. The company has invested Rs. 29.15 lakhs towards modernization of Pulp Mill where we are manufacturing value- added surface sized papers such as Super Print, Maplitho Paper etc. The company also produced water marked Azurelaid which is widely accepted in the market. .The company has introduced alkaline sizing instead of the prevailing acid sizing. This modern technology is good for imported raw material and also reduces corrosion in the system, improves life of machinery and brightness and permanency of paper. As envisaged in last year's report, necessary formalities for opening of Company's depot in Coimbatore, Tamil Nadu, have been completed. The company has also added various equipments to the Pulp Mill. Staff quarters with twelve apartments have been fully constructed which are occupied by staff members. This will ensure full-time presence of key personnel in the factory compound for their instant service. An amount of Rs.16.64 lakhs has been spent on staff quarters during the year. In addition to the above, Rs.15.39 lakhs were spent on tarring of internal roads. Thus, a total of Rs. 61.18 lakhs were invested in plant modernization, construction and land development. Victory Paper has to compete with the products of those Companies from Northern and neighboring States of Kerala who have established their reputation in the market over the years. Government tenders were also at lower level due to the strict economy measures imposed by the new Government. The year under review showed a downward trend and being quite new to the market, the company could not alone market its products in a sizeable manner. The experience and expertise of M/s. Victory Press (P) Ltd. were of immense help to the Company to boost their sales through their retail outlets spread in the important cities of Kerala. The Company continues to concentrate its maximum sales in Kerala to avail of the tax exemption. www.reportjunction.com SANSCO SERVICES - Annual Reports Library Services - www.sansco.net VICTORY PAPER AND BOARDS (INDIA) LIMITED 2. FUTURE PLAN OF ACTION i) In addition to the present Pulping Equipment, the Company has decided to go for High Density Pulper with coarse screening system which will help to remove plastic material and ink particles from the pulp to produce speck-free material. ii) In addition to the present Effluent Treatment Plant, erection of Primary Clarifier in the Effluent Treatment Plant is in progress for better and effective treatment of water. iii) No effort is being spared to further improve quality of our existing products at par with our competitors. The company is also adding more sophisticated equipment in Pulp Section for the product improvement. 3. FINANCIAL HIGHLIGHTS: Year ended Year ended 31.3.2002 31.03.2001 Income from operations 86582675 134896586 Other Income 1204965 448117 Total Income 87787640 135344703 Less: Cost of goods sold 72605124 112914983 Operating expenses 6995306 7960909 Interest 8481653 8843632 Profit / (Loss) before depreciation and tax (294443) 5625179 Less: Depreciation 5732313 5423969 Profit / (Loss) before tax (6026756) 2U1210 Profit / (Loss) aftertax (6026756) 201210 Add: Opening balance of Profit & Loss Account (16789795) (16991005) Transferred to Balance Sheet (22816551) (16789795) 4. STATE OF AFFAIRS The Company has widened source of supply of imported waste paper cuttings. Apart from Sri Lanka, U.A.E., the Company has established contacts with waste paper suppliers in Japan and have placed initial trial order for 300 tons with a company in Japan at better rates. Even after taking into account customs duty and other handling expenses, imported waste paper has proved to be cheaper than the indigenously available waste paper. The quality also is much better. There has been no reduction in Excise duty which is still being charged at 16% which will certainly continue to adversely affect the profitability of the Company. In spite of this, we were struggling hard to maintain better result during this year. We would like to inform you that frequent load-shedding and power failure is causing production losses. In a recently held Global Industrial Meet, your Managing Director had an opportunity to present this matter before the Hon. Ministers of Kerala for Electricity and Industry. He also drew the Ministers' attention to the higher power tariff in the State and stressed the need for power subsidy. www.reportjunction.com SANSCO SERVICES - Annual Reports Library Services - www.sansco.net 6 VICTORY PAPER AND BOARDS (INDIA) LIMITED 5. HIGHLIGHTS OF THE YEAR i) The company has repaid a sum of Rs.100.05 lakhs towards Term Loan Installments and interest, as per schedule, without any default. ii) Sales effected to The Controller of Stationery, Government of Kerala, and The Kerala State Electricity Board were for Rs.40 laKhs and Rs.10.17 lakhs respectively. The company did not concentrate much on government orders due to delay in realising funds towards supply to government departments. More emphasis was laid on developing and exploring non-government sectors. The company has made marketing arrangements in Chennai, Coimbatore, Salem and Sivakasi in Tamil Nadu. This is in addition to the existing marketing tie-up in Andhra Pradesh. Moreover, our paper is widely accepted in Kerala. 6. MARKET TRENDS IN THE YEAR There has been recession in the demand for printing and writing paper since April 2001 which was a reflection of decline in demand in the international-market.