MANAGEMENT DISCUSSION AND ANALYSIS REPORT
ANNEXURE- D' TO DIRECTORS REPORT
The management of Victory Paper and Boards (India) limited is pleased to present itsanalysis report covering performance and outlook. The report contains expectations of thecompany's business based on current environment. Many unforeseen and uncontrollableexternal factors could alter these expectations.
The company is dealing only in paper manufacture and sales. The Company is having aplant with an installed capacity of 7500 TPA at Elapully in Palakkad District of Kerala.
I. INDUSTRY OUTLOOK
The demand for paper is shrinking with economic recession. Paper industry is underrecession in line with the overall industrial situation in the country. However we expectbrighter years ahead for the industry as a whole.
a) Paper policy
The company shall concentrate on launching value added products to increase turnoverand profitability. According to the experts, as against the paper industry's growth rateof 8 to 9 %, the market for products in the high-end segment is growing at 25 to 30%. Thedomestic demand for paper products is now showing a gradual healthy trend across segments.However a significant growth is expected in the high-end segment.
b) Opportunities and threats
Though the pulp and waste paper prices have gone up, the domestic market is not able tosell their products at reasonable prices. Frequent power failures causes loss ofproduction due to shut down and restarting of the plant. However the company is hopeful ofachieving the targets with better realization from the high end segment.
II. OPERATIONAL AND FINANCIAL PERFORMANCE
The summarized performance of the company is as under:
| || ||(Rs in crores) |
| ||2010-2011 ||2009-2010 |
|Sales ||0.91 ||3.91 |
|Net Profit ||(2.23) ||(2.67) |
During the year 2010-11, there was no paper production due to plant lockout
Paper Sales Volume
The sale of paper during the year 2010-11 was Nil tons as against 1008.85 tons duringthe corresponding period of last year.
During the year the company was involved in trading activities to the tune of Rs. 91lakhs.
Rs.46.30 lakhs of the company's sales are distributed through its group company M/s.Victory Press Private Limited which has sales depots in all major cities of Kerala. TheBalance is distributed directly by the company. 0
III. MATERIAL DEVELOPMENT IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONTINCLUDING NUMBER OF PEOPLE EMPLOYED
The Company was in lock out during the year 2010-11 due to labor strike. The Companyhas also signed a three-year wage agreement with its employees and unions on 19-2-2011
IV. INTERNAL CONTROL SYSTEM
The Company ensures existence of adequate internal control through documented Policies& Procedures to be followed by the executives at various levels in the organization.