VALSON INDUSTRIES LIMITED ANNUAL REPORT 2003-2004 CHAIRMAN'S REPORT CHAIRMAN SPEECH Dear Members, It gives me great pleasure to welcome you all to the 20TH Annual General Meeting of Valson Industries Limited. During the year 2003-2004, Your Company has achieved its targeted turnover and overall performance has been satisfactory. At the backdrop of tough market conditions, transport strike during the month of May 2003 and anomaly in excise duty structure, your Directors are pleased to report that the cash earnings per share has increased from Rs. 6.48 to Rs. 6.58. Earnings per share (EPS - Diluted) has been maintained at Rs. 2.92 as compared to previous year's Rs. 2.96 despite the critical business environment for the entire industry. The Board of Directors confidently feels that with suitable changes in the excise structure and supportive demand from the domestic and export market, the overall performance will improve. The recent Budget seems to have accorded textiles the attention it deserves in view of its dominant role in the Indian economy. We are confident that your Company will be able to capitalise the opportunities available and will ensure sustained growth in the years to come. Your Company has endeavored to make its presence felt in the export market and we are happy to inform you that in order to get the feel of export market the Company has taken the first step by selling goods to a merchant exporter. Your Management is very confident that the small step will go a long way in raising the export to a substantial level. Indian textile sector contributes significantly to the industrial output, in the excise revenue to the Government, in the GDP growth, in employment and in the foreign, exchange earnings. We believe that our efforts and progress achieved through this efforts would make us a responsible organisation in the textile world. Your Company's efforts and actions have been towards increasing the shareholders wealth. The Board of Directors of the Company is pleased to recommend payment of dividend for the 10" consecutive year. The Board recommended to maintain the dividend to its equity shareholders at 25%. On behalf of the Board and on my behalf I thank every shareholder and customer of the Company for their co-operation and support. I also appreciate the valuable services rendered by the staff at all levels. Mr. Nanakchand D. Mutreja Chairman