The shareholders of the Volga pulp-and-paper mill in Balakhna, Nizhny Novgorod region, one of Russia's biggest producers of newsprint, decided at their annual meeting to waive dividends for 2002 and use net profits to cover losses from previous years and create a reserve fund, company general director Alexander Buyevich told reporters. The company has not paid dividends since 1995. It used profits initially to service investment loans, and then to cover losses from previous years and create a reserve fund. According to the annual report approved by shareholders, the company closed 2002 with net profits up to 674.111 million rubles from 480.782 million rubles in 2001. Pretax profits dropped to 891.561 million rubles from 1.175 billion rubles and sales were down to 5.787 billion rubles from 6.762 billion rubles. Payables shrank from 834.935 million to 232.551 million rubles in 2002, while receivables rose from 794.206 million to 894.789 million rubles. Shareholders elected a board that includes four representatives of Alfa Eko: general director Alexander Fain, corporate financing chief Aleksei Degtyarev, vice president for economics and finance Vadim Kucharin and economic planning head Natalya Tretyakova. The board also includes four representatives of Ost-West Group: general director Yuly Kaloyev, deputy general director Aleksei Akhuba, department head Andrei Kuzmin and corporate finances director Mikhail Kim. Shareholders approved PricewaterhouseCoopers Audit (Moscow) as auditor for 2003. Buyevich said the mill plans to produce about 550,000 tonnes of paper this year, up from 515,000 tonnes in 2002. This figure will be achieved if production is sustained at the level of the first quarter, he said. The mill produced 48,000 tonnes of paper in March instead of the planned 45,000 tonnes. The initial production target for 2003 was 524,000 tonnes. Productivity increased following the overhaul of the mill's No. 5 and No. 8 paper-making machines at a cost of $2 million. With the upgrade, average monthly paper output rose from 43,300 to 46,500 tonnes. The mill expects to increase the proportion of domestic sales to 35% this year from 32% in 2002 and no more than 25% in previous years, Buyevich said. Exports will drop due to the general economic slump in Europe and the United States, which has reduced print runs and the size of newspaper publications, he said. Domestic demand, meanwhile, has grown. OAO Volga has charter capital of 1.122 billion rubles, split into 11,808,827 common shares with par value of 95 rubles. Nizhny Newsprint Holding, which is equally owned by Alfa Eko and Ost-West Group, owns 93% of the mill's stock. Other corporate shareholders have 3.73% of shares, private individuals hold 3.06% and the Russian Federal Property Fund 0.24%.