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VTX Industries
BSE: 532824|NSE: VTXIND|ISIN: INE119G01025|SECTOR: Textiles - Spinning - Cotton Blended
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Download Annual Report PDF Format 2013 | 2012 | 2011 | 2010
Directors Report Year End : Mar '13    Mar 12
To The Members,
 
 The directors are pleased to present the 59lh Annual Report and the
 Audited Accounts for the financial year ended March 31, 2013.
 
 Financial Results:
 
 
                                                (Rs. in lakhs) 
 
 Particulars                            2012-13              2011-12
 
 Profit before Interest, 
 Depreciation and Tax
 (before extraordinary item)           6,067.11             4,185.21
 
 Extraordinary item                           -            (2,233.81)
 
 Profit before Interest, 
 Depreciation and Tax 
 (after extraordinary item)            6,067.11             1,951.40
 
 Less: Interest              4,205.54            3,480.02
 
 Depreciation                1,670.64  5,876.18  1,840.29   5,320.31
 
                                         190.93            (3,368.91)
 
 Tax expense:
 
 a) Current tax expense 
 for current year
 
 b) (Less): MAT credit 
 (where applicable)
 
 c) Current tax expense 
 relating to prior years            -                0.09
 
 d) Net current tax expense
 
 e) Deferred tax               107.91    107.91   (745.92)   (745.83)
 
 Profit / (Loss) for 
 the year                                 83.02             (2623.08)
 
 
 Dividend
 
 Considering the fund requirement for future growth of the Company, the
 Board of Directors is not in a position to recommend any dividend for
 the year 2012-13.
 
 Review of Operations
 
 The turnover of the company during the financial year under review has
 slightly reduced to Rs. 17,630 lakhs from Rs. 18,901 lakhs in the
 corresponding previous financial year, mainly due to working capital
 shortage and liquidity issue. However, the company has posted a net
 profit of Rs. 83 lakhs for the financial vear ended 3T'' March, 2013 as
 against loss of Rs. 2,623 Lakhs for the corresponding previous year.
 
 During the vear under review, your company has continued to broad base
 the existing customer relationships in US and UK markets and these
 relationships spread over many long years showcase our ability in
 customer satisfaction and reliability. The company expands its export
 horizon bv exploring the markets of developing countries like South
 Africa, Brazil, Argentina etc. for enlarging its customer base beyond
 US and European Union and it could secure good international orders and
 enquires from customers, when participated in the International textile
 fairs. The Company also emphasizes to create a network of buying
 houses, major retail outlets and commission agents and also develops
 the brand building exercise both internationally and domestically.
 
 Your Company was unable to run spinning and weaving units in its full
 capacity mainly due to frequent power cuts / load shedding, which
 forced the company to use alternative mode.  Since there was overall
 control improvements and cost cutting efficiency, the company was able
 to make a marginal profit for the year under review as compared to last
 year''s loss. The increase in the finance cost to Term Loan and Working
 Capital facilities availed from the Banks is also making hardship to
 the company.  The proposal for debt-restructuring with the support of
 lending banks is under progress and once the process is completed, the
 liquidity issues being faced by the company shall get resolved.
 
 Despite the reigning challenges, the textile industry which otherwise
 was seen seeking to overcome the depressing blues of reduced demand in
 overseas market, is witnessing an incipient turn around in the
 financial year 2012-13. The global market situation is seen stabilizing
 hence the demand may also be expected to recover and this shall
 translate into higher capacity utilization across the textile value
 chain leading to achievement of the targets.
 
 Future
 
 The growth and future of Indian textile industry depends upon various
 factors such as availability of quality raw-materials at reasonable
 price, uninterrupted power supply, low- priced manpower, favourable
 Government policies, foreign exchange fluctuation, economic conditions
 etc. However, the level of exports in textiles from developing
 countries is increasing even if in the presence of high tariffs and
 quantitative restrictions by economically developed countries.
 
 The future of your Company''s performance looks promising as it has
 taken effective measures in the production which would help to reduce
 cost of production and therebv increase profit margin. The company
 could secure good international orders and it has adequate
 infrastructure to execute the international as well as domestic orders
 in time.
 
 Your company is making all efforts to explore new international markets
 to expand its customer base and it has progressively entered into
 hospitality segment comprising hotels and hospitals both in India and
 aboard. The responses and enquires received in various domestic textile
 fairs participated by Company from hospital and hospitality customers,
 are positive and gives a boost to increase its foothold in the domestic
 market and it is expected to make consistent growth of the business in
 the coming years.
 
 The proposals announced in the Union budget 2013-14 to address the
 issues being faced bv textile industry, such as continuation of
 Technology Upgradation Fund Scheme (TUFs) in 12th five year plan
 allocating '' 2400 Crores for 2013-14, reduction of customs duty from
 7.5% to 5% on imported textile machinery, introduction of schemes for
 Integrated Textile Park, Apparel Park and Integrated Processing
 Development park, extension of 2% interest subvention scheme on rupee
 export credit upto March 31, 2014, introduction of 15% Investment
 Allowance to particular manufacturing companies etc. would go a long
 way for expanding textile sector and improving the exports. Also, the
 government has addressed the slowdown in the textile industry by
 proposing a debt restructuring package for textile industry.
 
 Globally, India''s presence as a significant player in the textile
 industry has garnered positive feedback as the country is fast gaining
 the respect and influence of many countries, worldwide. Currently,
 India is the second biggest manufacturer of textiles and garments, next
 to China.
 
 Internal Control System and their adequacy
 
 The Company has an adequate system of internal controls commensurate
 with its size and nature of business to ensure adequate protection for
 the Company''s resources, provision of accurate and speedy financial
 reports and compliance with the company''s policies, procedures and
 legal obligations. The audit Committee meets periodically with the
 Management, Internal Auditors and Statutory Auditors to review the
 internal audit and internal control systems.
 
 Subsidiaries
 
 Your company has two subsidiaries viz.  Vijaveswari UK Ltd and
 Vijayeswari USA LLC.  The accounts of the subsidiaries are consolidated
 with the accounts of Company in accordance with Accounting Standard
 AS-21 on consolidated financial statements and Listing Agreement
 prescribed by Securities Exchange Board of India. The Consolidated
 accounts duly audited by the statutory auditors form part of the Annual
 Report.
 
 Dematerialization
 
 Out of the 181,69,240 shares, 172,63,093 equity shares stands
 dematerialized as on 31st March 2013. M/s. Link Intime India Private
 Limited, Mumbai, having its branch office at Coimbatore has been
 retained as the Registrar and Transfer Agents of the Company for all
 shares both in electronic and physical form.
 
 Listing of Shares
 
 The shares of your Company have been listed on M/s. Bombay Stock
 Exchange Limited, Mumbai and M/s. Madras Stock Exchange Limited,
 Chennai.
 
 Directors
 
 The Board of Directors at its meeting held on 13.08.2012 appointed Sri.
 SBP. Pattabi Ramarao as new Director, to fill the casual vacancy in the
 Board. He is a Post Graduate in Business Administration & Marketing and
 has been serving as President of M/s. Australian Foods India Pvt. Ltd.
 where he became instrumental to build the famous brand-''Cookie Man''.
 Also, he had served in senior management level for other corporate.
 
 Sri. K. Selvaraj who was independent director of the company, vacated
 his office effective 13.08.2012, due to personal reasons. He has
 immensely contributed for growth of the company and the Board places on
 record its appreciation for the valuable services and support rendered
 by him during his tenure in the company.
 
 Sri. V. Dharmaraj and Sri. S. Shreenivasa Rao, Directors of the Company
 retire by rotation at the ensuing Annual General Meeting and being
 eligible, offer themselves for re-appointment.
 
 Fixed Deposits
 
 In terms of the provisions of Sec.58A, the company has not accepted any
 deposits from the public during the financial year under review. There
 was no refund claim of the Fixed Deposits during the year and the
 unclaimed matured fixed deposits as on 31.03.2013 was Rs. 11.27 Lakhs.
 
 Auditors
 
 The term of Auditors M/s. Suri & Co., Chartered Accountants,
 Coimbatore, expires at the end of the ensuing Annual General Meeting
 and they are eligible for re-appointment. The Audit Committee has
 recommended their re- appointment. The requisite certificate from
 Auditors, pursuant to Section 224(1B) of the Companies Act, 1956 has
 been received by the Company.
 
 Cost Auditors
 
 The Board of Directors has appointed M/s. P. Mohan Kumar & Co., Cost
 Accountants, Coimbatore as Cost Auditors of the Company for the
 financial year 2012-13. The Cost Auditing for the said financial year
 is under process and the Cost Audit report along with Auditor''s
 observations and suggestions, and Annexure shall be filed to the
 Central Government before its due date i.e. within 180 days from the
 close of the Company''s financial year to which the report relates.
 
 Directors'' Responsibility Statement
 
 Pursuant to section 217(2AA) of the Companies Act, 1956, the Directors
 do hereby confirm that:
 
 a.  in the preparation of the Annual Accounts, the applicable
 accounting standards had been followed along with proper explanation
 relating to material departures;
 
 b.  the Directors had selected suitable accounting policies and applied
 them consistently and made judgments and estimates that are reasonable
 and prudent so as to give a true and fair view of the state of affairs
 of the company at the end of the financial year and of the profit of
 the company for that period;
 
 c.  the Directors had taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Companies Act, 1956 for safeguarding the assets of
 the company and for preventing and detecting fraud and other
 irregularities, and
 
 d.  the Directors had prepared the Annual Accounts on a going concern
 basis.
 
 The particulars required by Section 217 (l)(e) of the Companies Act,
 1956 relating, to Conservation of Energy, Technology Absorption and
 Foreign Exchange Earnings and Outgo, are provided as the annexure to
 this report.
 
 In terms of Section 217 (2A) of the Companies Act, 1956 read with Rule
 1A of Companies (Particulars of Employees) Amendment Rules, 2011, the
 Company has no employee drawing salary exceeding Rs. 60 lakhs per annum
 or Rs. 5 lakhs per month during the year under review.
 
 Corporate Governance
 
 Your company has complied with Corporate Governance norms as stipulated
 under clause 49 of Listing Agreement entered into with Stock Exchanges.
 A detailed report on Corporate Governance forms part of this report. A
 certificate from statutory Auditors confirming the compliance of
 governance is attached to corporate governance report.
 
 Management Discussion and Analysis Report
 
 A review of Textile industry, its opportunities and threats, future
 outlook of the company etc. are covered under the Management Discussion
 and Analysis Report, which is attached to this report.
 
 Human Resource Management / Industrial Relations
 
 Your company had always been committed to maintain healthy, cordial and
 harmonious industrial relations at all levels. The work environment of
 the company is constantly being upgraded. The labor relations continued
 to be cordial throughout the year and industrial relations were
 excellent and harmonious.
 
 General exemption U/s. 212(8) of the Companies Act, 1956.
 
 In pursuance of the General Circular vide No.2/ 2011 dated 08.02.2011,
 issued by the Ministry of Corporate Affairs, New Delhi, read with
 Section 212(8) of the Companies Act, 1956, the company is exempted from
 attaching the Balance Sheet and Profit & Loss Account of the
 Subsidiaries viz. Vijayeswari UK Ltd and Vijayeswari USA LLC along with
 the report of Board of Directors and report of Auditors'' thereon, with
 the company''s accounts for the year ended 31st March, 2013.
 Accordingly, the Audited accounts and report of Directors and Auditors
 of the said subsidiary companies are not attached to the Balance Sheet
 of the Company. However, the accounts of the subsidiaries are
 consolidated with the accounts of Company in accordance with Accounting
 Standard AS-21 prescribed by the Institute of Chartered Accountants of
 India and Listing Agreement prescribed by Securities Exchange Board of
 India. The Consolidated accounts duly audited by the statutory
 auditors'' forms part of the annual report.
 
 The annual accounts of the subsidiary companies and the related
 detailed information shall be made available to the shareholders of the
 holding and subsidiary companies seeking such information at any point
 of time. The annual accounts of the subsidiary companies will be
 available at the registered office of the Company and at the respective
 subsidiary companies and any shareholders can inspect the same during
 the business hours of any working day.
 
 Acknowledgement
 
 Your Directors place on record their appreciation for co-operation and
 support extended by shareholders, customers, bankers and all
 governmental and statutory agencies. Your Directors also thank the
 employees for their valuable contribution during the year and look
 forward to their continued support in the years to come.
 
 
 
                                             By the Order of the Board
 
                                            For VTX Industries Limited
 
 Date : 24.05.2013                                     AL. Ramachandra
 
 Place : Coimbatore                       Chairman & Managing Director
Source : Dion Global Solutions Limited
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