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Premier Vinyl Flooring Ltd.

BSE: 500334 Sector: Industrials
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Premier Vinyl Flooring Ltd. (PREMVINYL) - Director Report

Company director report

1997 PREMIER VINYL FLOORING LTD DIRECTORS' REPORT Your Directors have pleasure of presenting the Sixteenth Annual Report and Audited Accounts for the year ended 31st March, 1997. FINANCIAL RESULTS The financial results of the Company for the year ended 31st March, 1997 are as follows : Year ended Year ended 31st March 31st March 1997 1996 (Rs.) (Rs.) Turnover 1,29,51,06,318 86,90,01,847 Operating Profit 20,08,01,345 15,48,76,585 Less: Interest 9,25,28,843 6,13,00,406 Depreciation 2,53,28,849 2,23,60,680 Misc Expenditure written off 4,40,504 6,89,999 11,82,98,196 8,43,51,085 Profit before Tax 8,25,03,149 7,05,25,500 Provision for Tax 77,43,000 Net Profit 7,47,60,149 7,05,25,500 Appropriations: - Proposed Dividend On Equity Shares 53,30,300 1,59,90,900 On Preference Shares 7,33,562 - General Reserve 1,40,00,000 2,50,00,000 - Debenture Redemption Reserve 62,50,000 2,62,50,000 - Preference Shares Redemption Reserve 50,00,000 Balance carried to Balance Sheet 4,34,46,287 32,84,600 DIVIDEND The Board of Directors in its meeting held on 29th March, 1997 declared Interim Dividend @ 17.5% p.a. on 1,00,000 Preference Shares of Rs. 100/- each held by LIC Housing Finance Limited for the period from 30th October, 1996 to 31st March, 1997 as per terms and conditions of the issue of Preference Shares. With a view to plough back major part of the profits into operations to overcome cash flow constraints, the Directors recommend payment of dividend on equity shares @ 5% (previous year 15%) subject to approval of financial institutions and bankers of the Company. SALES AND GENERAL Your Company has maintained a sustained thrust towards alround growth and the operating results for the year adequately reflect the achievements. During the year under review your Company has achieved higher turnover and profits. The turnover of the Company has increased to Rs. 12951.06 lakhs (Rs.1295.10 million) for the year as compared to Rs. 8690.02 lakhs (Rs. 869.00 million) during the previous year registering an increase of Rs. 4261.04 lakhs (Rs. 426.10 million), i.e. 49.02%. The net profit after providing for depreciation has gone up to Rs. 747.60 lakhs (Rs. 74.76 million) as compared to previous year's figure of Rs. 705.26 lakhs (Rs. 70.53 million) - an increase of Rs. 42.34 lakhs (Rs. 4.23 million), i.e. 6.00%. On the exports front, your Company performed exceptionally well and achieved an export turnover of Rs. 8505.74 lakhs (Rs. 850.57 million) against last year's figure of Rs. 1962.85 lakhs (Rs. 196.29 million) - an increase of 333.33%. There was a minor fire in Company's factory godown at Sikandrabad on 8th February, 1997 resulting in partial loss of godown building, electric wiring & fittings and other materials of about Rs. 49.00 lakhs. The building and other materials are insured and the matter is pending with the insurance company. PROJECT Your Company has under consideration major diversification plans. The proposed project will be financed by term loans/ECB/issue of new shares. The proposal has been kept under wraps due to continued sluggish capital market. FINANCE Your Directors express their gratitude to the consortium of Bankers comprising of Canara Bank, State Bank of India, The Sanwa Bank Ltd. and the Benares State Bank Ltd. The Directors also place on record their gratitude to The Federal Bank Ltd., for sanctioning to the Company working capital facilities to avail of full assessed working capital facilities. The Company does not envisage any constraint for working capital funds. DEPOSITS The Company accepted deposits during the year pursuant to provisions of Section 58A of the Companies Act, 1956. The total amount of Fixed Deposits held as on 31st March, 1997 was Rs. 1,00,00,000. There is no overdue or unclaimed deposit. CONSERVATION OF ENERGY Your Company continues to give high priority to conservation of energy on an on-going basis and as a result of these measures the consumption of energy per unit of production has come down. The Company continues to give priority to conservation of energy on a continuous basis. TECHNOLOGY ABSORPTION As per Annexure - A' FOREIGN EXCHANGE EARNINGS AND OUT-GO The foreign exchange earnings and out-go during the year have been as under:- Earnings : Rs. 85,05,74,292 Out-go : Rs. 5,20,02,217 FUTURE PROSPECTS Your Company continues to be market leaders in Flexible PVC Flooring and enjoys a formidable position in other products. The demand for the Company's products has been increasing in domestic as well as international markets. Your Company has been sourcing the importers abroad more particularly in hard currency areas and the response has been encouraging. Your Company's products are favourably competitive in the international market. Continued export orders and excellent domestic market response to the Company's products are all indications for still better performance during the current and future years, unforeseen circumstances apart. BOARD OF DIRECTORS IDBI has changed its Nominee Director on the Board of the Company and accordingly Shri R.C. Razdan has been nominated in place of Shri P.K. Ramadasan with effect from 06th March, 1997. The Board records its sincere appreciation of the contributions made by Shri P.K. Ramadasan during his tenure as a Director of the Company. Shri M.K. Vig and Shri Ashok Goenka are due for retirement by rotation at the ensuing Annual General Meeting. They being eligible, offer themselves for re-appointment. Shri O.N. Goenka is also being appointed as a non- retiring Director and the Managing Director of the Company at the ensuing Annual General Meeting. AUDITORS Messrs De & Bose, Chartered Accountants, Auditors of the Company, retire at the ensuing Annual General Meeting and are eligible for re-appointment. PARTICULARS OF EMPLOYEES None of the employees of the Company is covered under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended. ACKNOWLEDGEMENT The Board expresses and places on record its deep and sincere appreciation for the continued support and whole-hearted co-operation received by the Company from the Central and State Governments, Industrial Development Bank of India, The Industrial Finance Corporation of India Ltd., The Industrial Credit and Investment Corporation of India Ltd., Canara Bank, Punjab National Bank, State Bank of India, The Sanwa Bank, The Benares State Bank Ltd., The Federal Bank Ltd., Canbank Mutual Fund, UTI, PNB Mutual Fund, The Pradeshiya Industrial & Investment Corporation of U.P. Limited and LIC Housing Finance Ltd., for all the help extended to the Company. The Directors sincerely acknowledge the continued trust and confidence that they have placed in the Company. The Directors also wish to place on record their appreciation of the devoted services of all the employees of the Company which have in great way contributed to the Company's progress and without which these results would not have been possible. ANNEXURE 'A' RESEARCH AND DEVELOPMENT (R & D) 1. Specific areas in which R & D carried out by the Company : Development of new types of floorings, new shades and designs of flooring and sheetings. 2. Benefits derived as a result of the above R & D : Developed new floorings, shades, designs of flooring and sheeting. 3. Future Plan of action : To continue develop new floorings, range/shades of Flooring, Sheeting during the year. 4. Expenditure on R & D (a) Capital Nil (b) Recurring Around Rs. 6,00,000 (c) Total Around Rs. 6,00,000 (d) Total R & D expenditure as a percentage of turnover : 0.05 per cent TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION 1. Efforts, in brief, made towards absorption, adaptation and innovation : By training our man-power and by inviting foreign technicians from abroad adopted and absorbed the technology fully. 2. Benefits derived as a result of the above efforts e.g. product development, import substitution etc. : Saved money by continuous improvement of technology. For and on Behalf of the Board of Directors M. K. Vig O. N. Goenka Director Managing Director Place : New Delhi, Date : 28th June, 1997.