The directors have pleasure in presenting the 58th Annual Report and
 the Audited Accounts for the financial year ended March 31, 2012.
 
 Financial Results:
 
                                                  (Rs. in lakhs)
 
 Particulars                               2011-12              2010-11
 
 Profit before Interest, 
 Depreciation and Tax
 (before extraordinary item)               4185.21              4296.04
 
 Extraordinary item                      (2,233.81)                   -
 
 Profit before Interest, 
 Depreciation and Tax
 (after extraordinary item)               1,951.40              4296.04
 
 Less: Interest                 3,480.02            2,034.26
 
 Depreciation                   1,840.29  5,320.31  1,416.68   3,450.94
 
                                         (3,368.91)              845.10
 
 Tax expense:
 
 a) Current tax expense for 
 current year                                         168.43
 
 b) Less : MAT credit                                (152.12)
 
 c) Current tax expense 
 relating to prior years            0.09               16.31
 
 d) Net current tax expense
 
 e) Deferred tax                 (745.92)  (745.83)   114.85     131.16 
 
 Profit / (Loss) for the year            (2,623.08)              713.94
 
 Add: brought from previous year            587.24                    -
 
 Dividend                                        -               109.02
 
 Corporate Tax on dividend                       -                17.68
 
 Balance carried to Balance Sheet        (2,035.84)              587.24
 
 Dividend
 
 Considering the loss incurred during the year under review and the
 requirement of funds for future growth of the Company, the Board of
 Directors is not in a position to recommend any dividend for the year
 2011-12.
 
 Review of Operations
 
 During the financial year under review, the turnover of the company has
 increased to Rs. 18900 Lakhs from Rs. 16497 Lakhs in the corresponding
 previous financial year, registering a growth rate of 14.56%. The
 company has posted a net loss of Rs. 2623.08 Lakhs for the financial year
 ended 31st March, 2012, which was mainly incurred on account of sales
 of redundant export stocks in the domestic market at discounted price.
 Your Company has been catering the international markets for the
 made-ups and the final products manufactured for international markets
 were never disposed in the domestic market as those products were based
 on the specific order and approved design of the customers. The
 rejection of the approved design, excess production against the order
 etc.  were kept in the stocks and the same was not converted to cash
 awaiting better realization price.  During the year, these stocks were
 disposed in the domestic market at price lower than international rate
 for bringing the cash flow.
 
 Your Company has taken various cost effective methods resulting in
 better economies of production and purchases throughout the financial
 year.
 
 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 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. The
 Indian economy showed a remarkable resilience in the aftermath of
 global economic slowdown in previous years. Your Company could secure
 good orders from international as well as domestic markets.
 
 In the external scenario, the textile market witnessed unprecedented
 increase in cotton prices which had cascading effect on the entire
 supply chain, resulting instability in the price of the final products
 of the Company. The cost of production was high due to lower
 utilisation, increase in the interest rate of the term loan and working
 capital facilities availed from the Banks. Your Company was unable to
 run spinning and weaving units in its full capacity due to frequent
 power cuts. In order to execute the orders in time, some portion of the
 yarn and fabric were outsourced during the year.
 
 During the year under review, the design division of the Company was
 hived off by incorporating a new entity viz. M/s. VTX Design Services
 Pvt. Ltd. for providing exclusive design services to parent and other
 textile companies.  This entity shall develop new creative designs &
 patterns which meet the latest trends of the customers worldwide.
 
 Mile Stones
 
 Your Company has achieved another milestone by winning the Five Star
 Supplier Award awarded by Macy''s Merchandising Group for 13th
 consecutive year, in recognition of its continued outstanding service
 to Macy''s Merchandising Group. Your Company is the only Company
 achieves this mammoth feet in the entire Asian region.
 
 Future
 
 The growth and future of Indian textile industry depends upon various
 factors such as availability of raw material at reasonable rate,
 uninterrupted power supply, availability of manpower at competitive
 cost, foreign exchange fluctuation 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 Company has planned to enter into the domestic
 market to increase the utilisation of the various multi-location
 plants.
 
 The future of your Company''s performance looks very promising since the
 project expansion programme of the company successfully completed
 during last year and with increased production capacity, the company is
 in a position to meet its international as well as domestic orders in
 time.
 
 Your Company 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. Your
 company enters into new international markets like South Africa,
 Brazil, Argentina, Australia, Japan, France etc.  and it is expected to
 make consistent growth of the business in the coming years.
 
 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.  Vijayeswari 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, 172,55,053 equity shares stands
 dematerialized as on 31st March, 2012. 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 in M/s. Bombay Stock
 Exchange Limited, Mumbai and M/s. Madras Stock Exchange Limited,
 Chennai.
 
 Directors
 
 Keeping in mind the changing scenario of the business being done by our
 Company and the changes in the Board of Directors of the Company during
 the financial year under review, the Board felt the significance to
 broad base the Board of Directors of the company by inducting more
 Directors with professional skills and expertise in order to bring
 diversified proficiency and focused independence to the Board, which
 would help to shape the strategies for forthcoming growth of the
 Company.  Accordingly, the Board of Directors appointed 3 new Directors
 to the Board of the Company, a brief profile of them is given under.
 
 New Directors:
 
 The Board of Directors appointed Sri. S. Shreenivasa Rao, Sri. Mohan
 Rao and Sri. J. Balamurugan as new Directors of the Company to fill the
 causal vacancies in the Board of Directors.
 
 Sri. S. Shreenivasa Rao is a Post Graduate in Indl.  Engg. & Management
 from NITIE, Mumbai with B.  Tech (Elect.) Graduation from 1IT, Delhi.
 He is having over 38 years vast industrial experience and had served in
 senior management positions for big Groups viz. Forbes Group Co.
 (art of TATAs) and TVS, for a period of around 22 years.  At
 present, he is running own Textile business at Hyderabad.
 
 Sri. Mohan Rao is a B. Tech (Textile Technology) Graduate of IIT Delhi
 with 37 years of multifaceted consulting and operational experience. He
 had served as President-Group Operations for M/s. Himatsingka Seide
 Ltd., Bangalore where he joined as General Manager in 1988, for a
 period of 20 years. He had also served as General Manager-Management
 Services for M/s. Gherzi Textile Orgnisation, Bangalore, a premier
 consulting organization to the textile industry. Presently, he is
 engaged as a Management Consultant to the Corporates.
 
 Sri. L. Balamurugan is a Bachelor of Engineering (Electronics &
 Communication) from Regional Engineering College, Trichv and has done
 Management program for Entrepreneurial Firms (''MPEF'') from IIM
 Bangalore. He is an Entrepreneur and having managing experience in the
 businesses of Cotton Yam Spinning, Sheet Metal products, IT
 infrastructure, On-line services and aftermarket automotive
 enhancements. He was past Chairman of Confederation of Indian Industry,
 Coimbatore Zone.
 
 Outgoing Directors:
 
 During the year under review, Sri. N. Balakrishnan, Sri. Vijay
 Raghunath and Sri. Durai Ramaswamy who were Directors of the Company,
 vacated their offices of the Directors due to personal and health
 reasons.  Capt. K.V. Narayanan vacated his office of the Director
 effective 10.05.2012 due to health reasons. All these Directors
 contributed immensely for the growth of the company and the Board
 places on record its appreciation for the valuable services rendered by
 them and for the wholehearted support & advice given to the company
 during their tenure in the Company.
 
 Directors retire by rotation:
 
 Sri. K. Selvaraj and Sri. Mohan 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 under
 review and the unclaimed Fixed Deposits as on 31.03.2012 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 2011-12. 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 judgment''s 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.
 
 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, your 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, 2012.
 Accordingly, the Audited accounts and reports 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 of 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 : 29.05.2012                                  A.L. Ramachandra
 
 Place : Coimbatore                     Chairman & Managing Director