The directors have pleasure in presenting the 58th Annual Report and
the Audited Accounts for the financial year ended March 31, 2012.
(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
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
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
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
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.
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.
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
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
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.
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
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,
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.
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,
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.
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
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.
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
d. the Directors had prepared the Annual Accounts on a going concern
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
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.
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.
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