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VTX Industries Ltd.

BSE: 532824 Sector: Industrials
NSE: VTXIND ISIN Code: INE119G01025
BSE LIVE 14:43 | 25 Apr Stock Is Not Traded.
NSE 00:00 | 28 Jan Stock Is Not Traded.
OPEN 1.43
PREVIOUS CLOSE 1.37
VOLUME 5000
52-Week high 1.43
52-Week low 0.00
P/E
Mkt Cap.(Rs cr) 3
Buy Price 1.43
Buy Qty 5000.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1.43
CLOSE 1.37
VOLUME 5000
52-Week high 1.43
52-Week low 0.00
P/E
Mkt Cap.(Rs cr) 3
Buy Price 1.43
Buy Qty 5000.00
Sell Price 0.00
Sell Qty 0.00

VTX Industries Ltd. (VTXIND) - Director Report

Company director report

DIRECTORS

The Members

Your directors are pleased to present the 60"1 Annual Report and theAudited Accounts for the financial year ended March 31 2014.

Financial Results:

(Rs in lakhs)
Particulars 2013 - 14 2012- 13
Profit before Interest Depreciation and Tax
(before extraordinary item) (17092.52) 6067.11
Extraordinary item - -
Profit before Interest Depreciation and Tax
(after extraordinary item) (17092.52) 6067.11
Less: Interest 4655.08 4205.54
Depreciation 1313.63 1670.64
5968.71 5876.18
(23061.23) 190.93
Tax expense:
a) Current tax expense for current year
b) (Less): MAT credit (where applicable)
c) Current tax expense relating to prior years - -
d) Net current tax expense
e) Deferred tax 635.28 635.28 107.91 107.91
Profit / (Loss) for the year (23696.51) 83.02

Review of Operations

During the year under review The turnover of the company has reduced to Rs 4593 lakhsfrom Rs 17630 lakhs in the corresponding previous financial year and incurred a loss ofRs236.96 lakhs as against profit of Rs 83.02 lakhs which is- mainly due to working capitalshortage and liquidity issue and also due to severe power shortage and suspension ofactivity in Tamilnadu. M/s. Indian Overseas Bank as lead bankers for Term Load lender hasinitialed SARFAESI proceedings against the Company for secured debt repayment.

The reason lor losses were mainly due to increase in finance costs since there wereincreased rate of tnteres! and other borrowing costs.

The deteriorating working capital situation resultant delayed delivery at higher costand consequential orders cancellation. The past few years inventory accumulated becauseof exports that reduced critically. There was volatility in cotton price and due togeneral sluggishness of the economy in the Country as well as in the World over there wasno pick up in demand. Consequently much progress could not take place in the performanceof the company. However the prospects for textile industry looks promising provided afavourable condition prevails in the Country due to Governments initiatives.

Status of manufacturing:

The units i.e. weaving /processing / madeups units are running on very low capacitymainly on job works and marginal exports which has been further aggravated due to frequentpower cuts / load shedding which forced the company to use alternative mode. The increasein the finance cost to Term Loan and Working Capital facilities availed from the Banks isalso making hardship to the company.

Future

Your Company is confident that the persistent and committed efforts of the managementto bring in fresh infusion of funds will be successful provided that the Lenders showinterest and commitment in reviving the operations of your Company instead of the currenthostile and negative approach that is proving a major cause of concern to investors.

The Management is in close working with the bankers to arrive at a beneficial one timesettlement.

The management is confident of reviving the business thought prudently reworking thestrategy of high value products to improve business of value addition and profitability.They have brought in advisors in business turnaround around the world.

The future of your Company's performance looks promising as it has taken effectivemeasures in the production which would help to reduce cost of production and therebyincrease profit margin.

The company could secure good international orders and it has adequate infrastructureto execute and a good brand in the international as well as domestic markets soon.

Your company is making all efforts to explore international markets to expand itscustomer base and it has progressively entered into hospitality segment comprising hotelsand hospitals both in India and aboard.

Dividend

In view of operating losses incurred during the year your Directors do not recommendpayment of any dividend for the financial year 2013-14.

Internal Control System and their adequacy

The Company has an adequate system of internal controls commensurate with its size andnature of business to ensure adequate protection for the Company's resources provision ofaccurate and speedy financial reports and compliance with the company's policiesprocedures and legal obligations. The audit Committee meets periodically with theManagement Internal Auditors and Statutory Auditors to review the internal audit andinternal control systems.

Subsidiaries

Your company has two subsidiaries viz. Vijayeswari UK Ltd and Vijayeswari USA LLC. Theaccounts of the subsidiaries are consolidated with the accounts of Company in accordancewith Accounting Standard AS-21 on consolidated financial statements and Listing Agreementprescribed by Securities Exchange Board of India. The Consolidated accounts duly auditedby the statutory auditors form part of the Annual Report.

Dematerialization

Out of the 18169240 shares 17267843 equity shares stands dematerialized as on 31s'March 2014. M/s. Link Intime India Private Limited Mumbai having its branch office atCoimbatore has been retained as the Registrar and Transfer Agents of the Company for allshares both in electronic and physical form.

Listing of Shares

The shares of your Company have been listed on BSE Limited Mumbai and Madras StockExchange Limited Chennai.

Directors

Sri. Shreenivasa Rao and Sri. Mohan Rao Directors of the Company retire by rotation atthe ensuing Annual General Meeting and being eligible offer themselves forre-appointment.

The term of Smt. Jayanthi Ramachandra as Managing Director expired on September 112013 and is eligible herself for re-appointment and it is proposed to re-appoint her for afurther period of 3 years as the Board considers that her continued association would beof immense benefit to the company and it is desirable to continue to avail the services ofSmt. Jayanthi Ramachandra as Managing Director. Necessary resolution for herre-appointment is included in the Agenda of the Annual General Meeting.

Independent Directors

In compliance of the provisions of the Companies Act 2013 and the Listing Agreemententered into with the Stock Exchanges in which the Companies shares are listedIndependent Directors are required to be appointed for a term not exceeding 5 years at atime besides the other requirements. Accordingly the Board of Directors have proposed toappoint Sri. J. Balmurugan and Sri. Pattabhi Ramarao Directors who are retiring byrotation at the ensuing Annual General Meeting as Independent Directors for a Term of 5consecutive years i.e. upto 31.03.2019. Your Directors recommend their appointment.

Details of the proposal for appointment of the above Directors are mentioned in theExplanatory Statement under Section 102 of the Companies Act 2013 annexed to the Noticeof the ensuing Annual General Meeting.

Fixed Deposits

In terms of the provisions of Sec.58A the company has not accepted any deposits fromthe public during the financial year under review. There was no refund claim of the FixedDeposits during the year and the unclaimed Fixed Deposits as on 31.03.2014 was Rs 11.27lakhs.

Auditors

The term of Auditors M/s. Suri & Co. Chartered Accountants Coimbatore expires atthe end of the ensuing Annual General Meeting and they are eligible for re-appointment.The Audit Committee has recommended their reappointment. The requisite certificate fromAuditors pursuant to Section 139(1) of the Companies Act 2013 has been received by theCompany.

Cost Auditors

The Board of Directors has appointed M/s. P. Mohan Kumar & Co. Cost AccountantsCoimbatore as Cost Auditors of the Company for the financial year 2013-14. The CostAuditing for the said financial year is under process and the Cost Audit report along withAuditor's observations and suggestions and Annexure shall be filed to the CentralGovernment before its due date i.e. within 180 days from the close of the Company'sfinancial year to which the report relates.

Directors' Responsibility Statement

Pursuant to section 217(2 A A) of the Companies Act 1956 the Directors do herebyconfirm that:

a. in the preparation of the Annual Accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

b. the Directors had selected suitable accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit of the company for that period;

c. the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 1956 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities and

d. the Directors had prepared the Annual Accounts on a going concern basis.

Conservation of Energy Technology absorption Foreign Exchange Earnings and Outgo:

The particulars required by Section 217 (l)(e) of the Companies Act 1956 relating toConservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo areprovided as the annexure to this report.

Statement of Particulars of Employees:

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 drawingsalary exceeding Rs 60 lakhs per annum or Rs 5 lakhs per month during the year underreview.

Corporate Governance

Your company has complied with Corporate Governance norms as stipulated under clause 49of Listing Agreement entered into with Stock Exchanges. A detailed report on CorporateGovernance forms part of this report. A certificate from statutory Auditors confirming thecompliance 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 thecompany etc. are covered under the Management Discussion and Analysis Report which isattached to this report.

Human Resource Management / Industrial Relations

Your company had always been committed to maintain healthy cordial and harmoniousindustrial relations at all levels. The work environment of the company is constantlybeing upgraded. The labor relations continued to be cordial throughout the year andindustrial 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 theMinistry of Corporate Affairs New Delhi read with Section 212(8) of the Companies Act1956 the company is exempted from attaching the Balance Sheet and Profit & LossAccount of the Subsidiaries viz. Vijayeswari UK Ltd and Vijayeswari USA LLC along with thereport of

Board of Directors and report of Auditors' thereon with the company's accounts for theyear ended 31st March 2014. Accordingly the audited accounts and report ofDirectors and Auditors of the said subsidiary companies are not attached to the BalanceSheet of the Company. However the accounts of the subsidiaries are consolidated with theaccounts of Company in accordance with Accounting Standard AS-21 prescribed by theInstitute of Chartered Accountants of India and Listing Agreement prescribed by SecuritiesExchange 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 informationshall be made available to the shareholders of the holding and subsidiary companiesseeking such information at any point of time. The annual accounts of the subsidiarycompanies will be available at the registered office of the Company and at the respectivesubsidiary companies and any shareholders can inspect the same during the business hoursof any working day.

Industrial Relation

The relationship with employees continued to remain cordial throughout the year underreview.

Acknowledgement

Your Directors place on record their appreciation for co-operation and support extendedby shareholders customers bankers and all governmental and statutory agencies. YourDirectors also thank the employees for their valuable contribution during the year andlook forward to their continued support in the years to come.

By the Order of the Board
For VTX Industries Limited
Date : 28.06.2014 A.L. Ramachandra
Place : Coimbatore Chairman & Managing Director

FORM A

[As per Rule 2 of the Companies (Disclosure of particulars in the Report of the Boardof Directors) Rules 1988]

A. Power and Fuel Consumption

2013-14 2012-13
1. ELECTRICITY
a) Purchased
Units 189036 6579296
Total Amount (in Rs ) 1814787 50985249
Rate per unit (in Rs ) 9.60 7.75
b) Own Generation
i) Through Diesel Generator
Units 553860 1903679
Units per Litre of Diesel Oil 7.20 3.35
Cost per Unit (in Rs ) 9.62 19.16
ii) Through Steam Turbine/Generator/Wind Mill
Units (Windmill energy produced) - 3352265
Units per litre of Fuel Oil/Gas - -
Cost per unit
2. COAL
Quantity (Tonnes) - -
Total Cost - -
Average rate - -
3. FURNACE OIL
Quantity (K. Litres) - L
Total Amount (in Rs ) - -
Average rate (in Rs ) - -
4. OTHERS/INTERNAL GENERATION
Quantity - -
Total Cost - -
Rate per unit - -
B. Consumption per unit of production
Units consumed/product (with details)
Electricity/Furnace oil/Coal/others - 7.40
1. Electricity
2. Furnace oil

C. Research & Development Expenditure :

Our Company is a member of South India Textile Research Association & SIMA CottonDevelopment and Research Association. Apart from this Company has not taken up separateresearch and development work.

D. Foreign Exchange Earnings

The details of Foreign Exchange Earnings are furnished in Note No. 31 forming part ofthe Financial Statements.

By the Order of the Board
For VTX Industries Limited
Date : 28.06.2014 A.L. Ramachandra
Place : Coimbatore Chairman & Managing Director