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Directors Report of VTM Ltd.

Mar 31, 2016

The Directors have pleasure in presenting their 69th Annual Report along with the Audited statement of accounts for the year ended 31” March, 2016.

Operating & Financial Performance Profits, Dividends & Retention

Rs. in Lakhs

2015 - 2016

2014 - 2015

Turnover

15409

16782

Profit before Depreciation

1898

1627

(after interest)

Less; Depreciation

516

519

Profit after Depreciation

1382

1108

Less. Provision for Taxation:

Current Year

400

280

Deferred Tax

84

32

Taxation for earlier years

(34)

-

450

312

Profit after Tax

932

796

Add: Amount brought forward

264

274

Available for appropriation

1196

1070

Appropriation : -

transfer to General Reserve

500

500

Interim Dividend @ Re 0.75 per share

302

253

Income Tax on Dividend

62

53

364

306

Retained profit carried forward

to the following year

332

264

During the year under review, your company performed better than last year. Though there was a fall in. the export of the textiles for the country as a whole, your company was able to improve on its export performance. The domestic markets were seesawing all through the year with a weak undertone. The continuing drought in several parts of the country had a negative impact in the demand for textile products. There was a drop in the unit value realization as a result of lower cotton prices. This resulted in the overall turnover showing a marginal fall. Viewed in this context, your company''s performance must be considered as being satisfactory.

During the year under review the company has charted out a scheme to modernize 36 machines with ultra modem shuttleless weaving looms and necessary accessories at a total cost of Rs. 1 9.51 Crores.

Appropriation to General Reserve

Considering the profitability and the available surplus, the Board of Directors desires to appropriate a sum of Rs.500 lakhs to General Reserve.

Dividend

The Board of Directors considering the profits for the year, recommended an interim dividend of Re.0.75 per share i.e.75% on Equity Shares of Re.1]/- each in the month of March, 2016. The Interim Dividend together with dividend tax entailed a cash outflow of Rs.363.12 lakhs. This has been recommended by the Audit Committee and approved by the Board of Directors at their meeting held on 7th March, 2016 and the Interim Dividend was deposited in a separate bank within five days and dividend amount was also paid within the time prescribed to those shareholders whose name were available on the record date fixed for payment of Interim Dividend.

Since the Company has paid Interim Dividend for the year in March, 2016, no Final Dividend for the year has been proposed and recommended.

Extract of Annual Return:

The Extract of Annual Return is furnished in Form MGT-9 as per Annexure III.

Associate Company:

M/s, Colour Yams Limited ceased to be an Associate Company on and from 2 8th March, 2016. Orders by Regulators or Courts

There were no significant and material orders passed by regulators or courts or tribunals impacting the going concern status and Company''s operations in future.

Material Changes Affecting the Financials

There were no material changes and commitments affecting the financial position of the Company occurring between March 31,2016 and the date of this Report of the Directors.

Internal Control System

The Company has in place an established internal control system designed to ensure proper recording of financial and operational information and compliance of various internal controls and other regulatory and statutory compliances. Code on Internal Control which require that the Directors review the effectiveness of internal controls and compliance controls, financial and operational risks, risk assessment and management systems and related party transactions, have been complied with. Self certification exercises are also conducted by which senior management certify effectiveness of the internal control system, their adherence to Code of Conduct and Company''s policies for which they are responsible, financial or commercial transactions, if any, where they have personal interest or potential conflict of interest. Internal Audit has been conducted on periodical basis.

Company''s Policies

During the year, the Company appointed Sri T. Kaiman as Chairman and Managing Director effective from 07th May, 2015. Accordingly, the Nomination and Remuneration Committee revised the Remuneration Policy in order to include the terms of appointment for the Managing Director before the appointment takes place.

Further in terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and SEBI (Prohibition of Insider Trading) Regulations, 2015 the following policies/codes were approved by the Board and copies of the policies are available on the Company''s website www.vtmill.com:

1. Insider Trading Code

2. Insider Trading Fair Disclosure Code

3. Policy on Materiality of and dealing with Related Party Transactions.

Company’s Policies on Corporate Social Responsibility, Remuneration, Employee Concern (Whistle Blowing) and also the Code of Conduct applicable to Directors and Employees of the Company have been complied with. These Policies, the Code of Conduct and other policies/codes as referred above are available on the Company’s websitewww.vtmill.com

ISO and 5S Certification

The Company''s factory at Sulakarai, Virudhunagar, Tamil Nadu has been certified ISO for Quality Management System Standard and during the year it received a 5S Certification from AOTS Alumni 5S Forum of India. The company has also obtained GOTS certification for the manufacture of organic cotton fabrics.

Segment wise performance

The Company is primarily a manufacturer of textile products and is managed organizationally as a single unit. Accordingly, the Company is a single business segment company. Geographical (secondary) segment has been identified as domestic sales and exports.

Industry Structure & Developments, Opportunities & Threats, Outlook, Risks & Concerns

The Indian textile industry has come to occupy a predominant position on the world scene. India together with its Asian counterparts has become the clothier to the world. The Indian textile industry derives its strength from the availability of home grown raw material together with well developed indigenous technological knowhow and skilled man power.

The support the industry hitherto received in terms of interest subsidy under the TUFS Scheme has been withdrawn and in its place a new scheme called ATUFS is in place wherein the subsidy available for a company in a lifetime has been capped at Rs.20 Crores. This is not as lucrative as the earlier scheme.

The power situation prevailing in Tamil Nadu has considerably improved though the costs are high when compared with other states. The availability of competitively priced power is essential for the successful operations of your company. International trade barriers and the not so advantageously placed duty structure for Indian products in overseas market is another disincentive for exports.

The Company is taking steps for development and implementation of risk management policy. The element of risk that may threaten the company is the uncertainty in the overseas market on which the company depends for its exports.

Further, in the domestic market there is a risk of competition from a large number of textile units.

Your Directors look forward to the current year with hope and optimism as there are good indications for a normal monsoon. This will boost the rural economy and help in increasing demand. It will also help to boost the Indian cotton crop. These factors may improve your company’s business prospects and the profitability.

Board of Directors

The Board consists of 8 Directors with one Chairman and Managing Director, Four Non-Executive Independent Directors, two Non-Executive Directors and one Woman Non -Executive Director.

Section 203 of the Companies Act, 2013 requires a listed company to have a Managing Director/CEO/Whole Time Director as one of the Key Managerial Personnel. In terms of the provisions, Sri T. Kannan, the Chairman of the Company was appointed as Chairman and Managing Director duly recommended by the Nomination and Remuneration Committee and approved by the Board of Directors on and from 07th May, 2015. He is already the Chairman and Managing Director of M/s. Thiagarajar Mills Private Limited and accordingly his remuneration is fixed in such a way that the total remuneration from both companies put together does not exceed the limits as prescribed u/s. 197 of the Companies Act, 2013.

During the year, Mr. PL. Subbiah, Director of the Company, resigned from the Board and Mr.K. Vethachalam joined the Board on and from 15th October, 2015. Accordingly, the number of Directors remained same.

The details of number and dates of meetings held by the Board and its Committees, attendance of Directors and remuneration paid to them is given separately in the attached Corporate Governance Report.

The sitting fees paid to the Non-Executive Directors are within die limits prescribed under the Companies Act, 2013 and Rules thereon.

Retirement of Directors by Rotation

Mr.K. Tliiagarajan, Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible has offered himself for reappointment as a Director of the Company. Being eligible, he is proposed to be re-appointed as Director of the Company.

Non-Executive Independent Directors

The Non-Executive Independent Directors have confirmed and declared that they are not disqualified to act as an Non-Executive Independent Director in compliance with the provisions of Section 149 of the Companies Act, 2013 and the Board is also of the opinion that the Non-Executive Independent Directors fulfill all the conditions specified in the Companies Act, 2013 making them eligible to act as Non-Executive Independent Directors. The Non - Executive Independent Directors have convened a meeting on 20th January, 20 ] 6.

Code of Conduct

All Directors, Key Managerial Personnel and Senior Management of the Company have confirmed compliance with the Code of Conduct applicable to the Directors and employees of the Company. The Code of Conduct is available on the Company’s website www.vtmill.com. All Directors have confirmed compliance with provisions of Section 164 of the Companies Act, 2013.

Directors'' Responsibility Statement

The Board of Directors acknowledges the responsibility for ensuring compliance with the provisions of Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013 and the provisions as referred, in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 in the preparation of the annual accounts for the year ended on 31st March, 2016 and state that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any,

ii. the Directors have selected such 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;

iii. the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. the Directors have prepared the annual accounts on a going concern basis;

v the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively and the Company has adopted proper policies and procedures for ensuring orderly and efficient conducting of the business;

a) The management designed and implemented policies with respect to adherence to accounting standards as a general requirement applied by a Company in preparing and presenting financial statements.

b) The management evolved a sound system for regular evaluation of the nature and extent of the risks to which the Company is exposed and to control risk appropriately.

c) The board ensured the effective financial controls, including the maintenance of proper accounting records and the Company is not unnecessarily exposed to avoidable financial risks. They also contribute to the safeguarding of assets, including the prevention and detection of fraud. The financial information used within the business and for publication is reliable.

vi. the Directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Key Managerial Personnel

The following persons have been appointed as Key Managerial Personnel of the Company in compliance with the provisions of Section 203 of the Companies Act, 2013:

a) Sri T. Kannan, Chairman and Managing Director

b) Sri S. Arunagiri, Chief Financial Officer (From 05.09.2015 to 05.03.2016)

e) Sri V. Sundaramoorthy, Chief Financial Officer (With effect from 01.04.2016) and

d) Sri S. Paramashivan, Company Secretary

Corporate Governance

The Company has in place the SEBI guidelines pertaining to Corporate Governance. During the year under consideration the Company had an Eight member Board of Directors consisting of one Chairman and Managing Director, Four Non-Executive independent Directors, Three Non-Executive Directors of which one is a Woman Director.

The Corporate Governance Report giving the details as required under Regulation 34(3) read with Schedule V to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is given separately as Annexure I and forms part of this Report of the Directors. The Corporate Governance Certificate for the year ended on March 31,2016 issued by M/s. Peri Thiagaraj & Co., Auditors of the Company, is also attached as part of Annexure I and forms a part of this Report of the Directors.

The Company has formulated Insider Trading Code and Insider Trading Fair Disclosure Code in terms of Regulation 9 read with Schedule B and Regulation 8 read with Schedule A off SEBI (Prohibition of Insider Trading) Regulations, 2015 respectively and provided in the company''s website at www.vtmill.corn. Mr S. Paramashivan, Company Secretary, is the Compliance Officer responsible for compliance with the Insider Trading procedures. As there was no insider trading in the securities of the company, the company has not reported any Insider Trading details to the Stock Exchange.

Sri T. Kannan, Chairman and Managing Director of the Company has given his certificate under Regulation 17(8) read with part D of Schedule II of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 regarding the annual financial statements for the year ended on 31st March, 2016 to the Board of Directors. The Chairman has given his certificate under Regulation 34(3) read with Part D of Schedule V of the above said Regulations in compliance with the Code of Conduct of the Company for the year ended March 31,2016, which is attached as Annexure VIII and forms a part of this Report of the Directors.

Audit Committee

The Audit Committee was reconstituted on 11.01.2011 and as on 31st March, 2016, the committee consists of three Independent Directors and satisfies the previsions of Section 177(2) of the Companies Act, 2013. The Committee now comprises Mr. RM. Somasundaram as Chairman and Mr A. Mariappan and Mr. L.N.V. Submnanian who are all Independent Directors. The Company Secretary is the Secretary of the Committee. The deta.ls of all related party transactions are placed periodically before the Audit Committee. Dunne the year there were no instances where the Board had not accepted the recommendations of the Audit Committee. The Company has in place a vigil mechanism details of which are available on tl,e Company''s website www.vtmill.com

The Audit Committee has also been delegated the responsibility for monitoring and reviewing risk management assessment and minimization procedures, implementing and monitoring the risk management plan and identifying, reviewing and mitigating all elements of risks which the

Company may be exposed to.

The Audit Committee is empowered with monitoring the appointment of Key Managerial Personnel and accordingly during the year the Committee recommended the appointment of CMD and CFO and resignation of CFO.

The details of terms of reference of the Audit Committee, number and dates of meetings held attendance of the Directors and remuneration paid to them are given separately m the attached Corporate Governance Report.

Evaluation of the Board of its own performance, Committees of the Board and Individual Directors;

The Board reviewed and evaluated its own performance from the following angles:

- Company Performance

- Strategy and Implementation

- Risk Management

- Corporate ethics

- Performance of the Individual Directors

- Performance of the Committees viz., Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility Committee

The Board also evaluated the performance of the above referred Committees and concluded that the Committees continued to operate effectively, with full participation tom all members and executive management of the Company.

The Board upon evaluation considered that the Board is well balanced in terms of diversity of experience. The Board noted that all Directors have understood the opportunities and risks to the Company''s strategy, and are supportive of the direction articulated by the management team towards improvement. Corporate responsibility, ethics and compliance are taken seriously, and there is a good balance between the core values of the Company and the interests of shareholders.

The Directors also expressed their satisfaction in all the above areas considering the Company''s performance in all fronts viz . New Product Development, Sales and Marketing, International business, Employee relations and compliance with statutory requirements.

Related Party Transactions:

During the year 2014-15, the company has entered into contracts or arrangements with such number of related parties with the approval by the Board of Directors in respect of the following:

1. Sale, purchase or supply of any goods or materials

2. Selling or otherwise disposing of. or buying, property of any kind

3. Leasing of property of any kind

4. Availing or rendering of any services

5. Obligations

Further, during the year, the company entered into contracts or arrangements with such concerns where Mr. K. Vethachalam, Director of the company is interested with the same terms and conditions as entered with other related parties for a period up to 31.03.2019. Likewise, the Company enhanced the contracting limits for obligations in respect of the donations for charitable purposes and fixed the limit for contribution to CSR activities with a Charitable Trust.

The details in respect of the material contracts or arrangements or transactions on arm''s length basis carried on with the related parties have been furnished in ANNEXURE V.

Corporate Social Responsibility Committee

A Corporate Social Responsibility Committee was constituted on April 24, 2014 with Sri T. Kannan as Chairman and MAs, K. Thiagarajan and RM. Somasundaram, Directors of the Company as Members.

The Committee met twice during the year, the first one on 09th December, 2015 to review and monitor CSR Policy and CSR Activities and to consider for contribution for CSR Activities and another one on 07th March, 2016 to finalize and approve contributions for CSR Activities for the amounts to be spend for the Financial Year 2015-16.

The Committee considered the social activities as referred in Schedule Vil to the Companies Act and recognizes that its operations impact a wide community of the public for eradication of hunger and poverty and imparting education for uplifting the social status of the public. In structuring its approach to the various aspects of Corporate Social Responsibility, the Company takes account of guidelines and statements issued by various regulatory'' bodies. Social, environment and ethical matters are reviewed by the Committee including the impact of such matters may have on the Company''s management of risk.

The Company finalized the manner of implementation of the CSR Policy and spent a sum of Rs.3.25 lakhs towards eradication of hunger and poverty of the public who were affected by the recent flood havoc in Tamil Nadu and contributed a sum of Rs.25.00 lakhs to a registered Charitable Trust with a direction to keep it as Corpus for CSR Activities for applying the same for promotion of education through a leading educational institution for development of infrastructure facilities in the Institution. The details of the project, amount of estimates and the contribution to the implementing agency through a Charitable Trust has been shown in Annexure VII.

The CSR policy is available on the Company’s website www.vtmill.com The terms of reference of the Corporate Social Responsibility Committee, number and dates of meetings held, attendance of the Directors and remuneration paid to them are given separately in the attached Corporate Governance Report.

Prevention of Sexual Harassment;

In compliance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has constituted an Internal Complaints Committee with three employees and a NGO representative and Smt. Uma Kannan, Director of the Company is the Adviser to the Committee. The Board also has approved the prevention of Sexual Harassment Policy and all employees specially women employees were made aware of the Policy and the manner in which complaints could be lodged. The Committee has submitted its Annual Report and the same has been approved by the Board.

The following is reported pursuant to Section 22 of the Sexual Harassment of Women at Workplace (prevention, Prohibition and Redressal) Act, 2013:

1.

No, of Complaints of sexual harassment received

NIL

2.

No. of Complaints disposed off during the year

NIL

3.

No. of cases pending for more than ninety days

NIL

4.

No. of awareness programme conducted

1

5,

Nature of action taken by the employer

Not Applicable

Nomination and Remuneration Committee

A Nomination and Remuneration Committee was constituted on April 24,2014 and as on 31 s March, 2016 Sri RM. Somasundaram is the Chairman and M/s. T. Kannan and A. Mariappan are Members of the Committee, This constitution satisfies the provisions of Section 178 of the Companies Act, 2013. The Company Secretary is the Secretary of this Committee,

During the year, the Committee met three times for reviewing the Policy for the appointment of Managing Director and for the appointment and removal of Chief Financial Officer. After reviewing the policy, the NRC recommended the appointment of Sri T. Kannan as Managing Director of the Company.

The Company''s Remuneration Policy is available on the Company''s website www.vtnull.com and annexed as forming part of this report as ANNEXURE X.

The details of terms of reference of the Nomination and Remuneration Committee, number and dates of meetings held, attendance of the Directors and remuneration paid to them are given separately m the attached Corporate Governance Report.

Stakeholders Relationship Committee

The Shareholders and Investors Grievance Committee was constituted earlier on 26.06.2004. To comply with the requirements of the Companies Act, 2013 and the listing agreements with Stock Exchanges, the name of the Committee was changed to Stakeholders Relationship Committee effective from April 25, 2014, As on 31st March, 2016, the Members of the Committee are Sri L.N.V. Subramanian as Chairman and Sri T, Kannan as Member. The Company Secretary is the Secretary of the Committee. The Committee has delegated the responsibility for share transfers and other routine share maintenance work to the Company Secretary and to M/s. Karvy Computer Share Private Limited, the Registrars and Share Transfer Agents of the Company. All requests for dematerialization and rematerialisation of shares, transfer or transmission of shares and other share maintenance matters are completed within 30 days of receipt of valid and complete documents. The Committee approved all activities through Circular Resolutions and all those Circular Resolutions were placed and discussed at the Board meetings. The Committee also reports to the Board on matters relating to the shareholding pattern, shareholding of major shareholders, insider trading compliances, movement of share prices, redressal of complaints. Reports on SCORES of SEBI and all compliances under the Companies Act, 2013 and the listing agreement with Stock Exchanges. The shares of the Company are listed on the Bombay Stock Exchange. The Company''s shares are compulsorily traded in the dematerialized form. The ISIN number allotted is INE222F01O29. The details of shareholding pattern, distribution of shareholding and share prices are mentioned separately in the attached Corporate Governance Report.

Auditors

M/s Peri Thiagaraj & Co., Chartered Accountants, hold office as Auditors of the Company till the conclusion of the ensuing Annual General Meeting, and being eligible, offer themselves for reappointment. Pursuant to the provisions of Section 139 of the Companies Act, 201a, the Auditors are proposed to be reappointed for a term of one year, subject to ratification by the Members at the ensuing Annual General Meeting. There are no qualifications or observations or remarks made by the Auditors in their Report

Secretarial Audit

A Secretarial Audit was conducted during the year by the Secretarial Auditor, Mr.M.k. Bashyara, Practicing Company Secretary, in accordance with the provisions of Section 204 of the Companies Act, 2013. The Secretarial Auditor''s Report is attached as Annexure II ant) forms a part of this Report of the Directors. There are no qualifications or observations or remarks made by the Secretarial Auditor in his Report.

Fixed Deposits

The Company has not accepted any deposits from the public, and as such, there are no outstanding deposits in terms of the Companies (Acceptance of Deposits) Rules, 2014. The company does not have any deposit which are not in compliance with the Companies Act, 2013.

Loans, guarantees and investments

The Company has not granted any inter-corporate loan, given guarantee or provided security for availing loan by any other company. However the company has invested its funds in such number of companies and in such number of shares in other bodies corporate as referred to in Notes No. 12and 14 of the Balance Sheet.

In compliance with section 186 of the Companies Act, 2013, loans to employees bear interest at applicable rates.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The prescribed particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo required under section 134(3)(m) read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is attached as Annexure IV and forms a part of this Report of the Directors.

Particulars of Employees

The prescribed particulars of Employees required under Section 134(3)(q) read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure VI and forms a part of this Report of the Directors,

Annexures forming a part of this Report of the Directors

The Annexures referred to in this Report and other information which are required to be disclosed are annexed herewith and form a part of this Report of the Directors:

I. Corporate Governance Report along with Certificate on Corporate Governance by the Auditor of the Company.

II. Secretarial Audit Report

III. Extract of the Annual Return in Form MGT-9

IV. Particulars on Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

V. FormAOC-2 for material contracts with Related Parties

VI. Ratio of remuneration and Particulars of Employees

VII. Annual Report on CSR spending

VIII. Chairman & Managing Director''s Certificate under Regulation 34(3) read with Part D of Schedule V to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 20) 5 on compliance of Code of Conduct.

IX. Certificate by Chairman and Managing Director and Chief Financial Officer under Regulation 17(8), of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 on Financial Statements.

X. Remuneration Policy

Appreciation

Your Directors record their sincere appreciation of the dedication and commitment of all employees in achieving and sustaining excellence in all areas of the business. Your Directors thank the Shareholders, customers, suppliers and bankers and other stakeholders for their continuous support to the Company.

Kappalur, Madurai. For and on behalf of the Board of Di rectors

May 09,2016. T.KANNAN

Chairman and Managing Director


Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting their 68th Annual Report along with the Audited statement of accounts for the year ended 31stMarch, 2015.

OPERATING & FINANCIAL PERFORMANCE

PROFITS, DIVIDENDS & RETENTION Rs. in Lakhs. 2014-2015 2013-2014

Turnover:- 16782 16915

Profit before Depreciation 1627 2475 (after interest)

Less: Depreciation 519 895

Profit after Depreciation 1108 1580

Less: Provision for Taxation: Current Year 280 579 Deferred Tax 32 (-) 97 Taxation for earlier years - (-) 33

312 449

Profit after Tax 796 1131

Add: Amount brought forward 274 283

Available for appropriation 1070 1414

Appropriation

Transfer to General Reserve 500 810

Dividend @ Rs.0.63 (0.70) per share 253 282

Income Tax on Dividend 53 48

306 330

Retained profit carried forward 264 274 to the following year

The year under review witnessed a fall in profits on account of drop in demand for textile products. Textile exports witnessed a fall especially to China as a result of a serious slowdown in their economy. Indian markets continue to be sluggish as growth in the rural segment of the economy seems quite low. The year under review also witnessed a fall in cotton prices and consequently the unit value realisation of company''s products were impacted negatively. Against this backdrop your company''s performance must be considered as satisfactory.

Appropriation to General Reserve:

Considering the profitability and the available surplus, the Board of Directors desires to appropriate a sum of Rs.500 lakhs to General Reserve.

Dividend:

The Board of Directors are pleased to recommend a dividend of Re.0.63/- per share i.e. 63% on Equity Shares of Re. 1/- each. The dividend together with dividend tax will entail a cash outflow of Rs.306 lakhs (previous year Rs.330 lakhs). If this is approved at the forthcoming Annual General Meeting, dividend will be deposited with the bank within the time prescribed and dividend will be paid to those who are Members of the Company as on record date specified in this regard. The Book Closure period being 5th June, 2015 to 17th June 2015 (Both days inclusive) in respect of shares held electronically, dividend will be paid on the basis of beneficial ownership as per details furnished by the depositories.

Extract of Annual Return:

The Extract of Annual Return is furnished in Form MGT-9 as per Annexure III.

Associate Company:

M/s. Colour Yams Limited is an Associate Company and the investments are held only for investment purposes.

Change in the Nature of Business:

There is no change in the nature of the business of the Company.

Orders by Regulators or Courts:

There were no significant and material orders passed by regulators or courts or tribunals impacting the going concern status and Company''s operations in future.

Material Changes Affecting the Financials:

There were no material changes and commitments affecting the financial position of the Company occurring between March 31, 2015 and the date of this Report of the Directors.

Internal Control System:

The Company has in place an established internal control system designed to ensure proper recording of financial and operational information and compliance of various internal controls and other regulatory and statutory compliances. Code on Internal Control which require that the Directors review the effectiveness of internal controls and compliance controls, financial and operational risks, risk assessment and management systems and related party transactions, have been complied with. Self certification exercises are also conducted by which senior management certify effectiveness of the internal control system, their adherence to Code of Conduct and Company''s policies for which they are responsible, financial or commercial transactions, if any, where they have personal interest or potential conflict of interest. Internal Audit has been conducted on periodical basis.

Company''s Policies:

Company''s Policies on Corporate Social Responsibility, Remuneration, Employee Concern (Whistle Blowing) and also the Code of Conduct applicable to Directors and Employees of the Company have been complied with. These Policies and the Code of Conduct are available on the Company''s website www.vtmill.com

ISO Certification:

The Company''s factory at Sulakarai, Virudhunagar, Tamil Nadu has been certified ISO for Quality Management Systems Standards.

Segment wise performance:

The Company is primarily a manufacturer of textile products and is managed organizationally as a single unit. Accordingly, the Company is a single business segment company. Geographical (secondary) segment has been identified as domestic sales and exports.

Industry Structure & Developments, Opportunities & Threats, Outlook, Risks & Concerns:

The Indian textile industry has come to occupy a predominant position on the world scene. India together with its Asian counterparts has become the clothier to the world. The Indian textile industry derives its strength from the availability of home grown raw material together with well developed indigenous technological knowhow and skilled man power. The industry receives support from the Government in terms of Technology Upgradation Fund Scheme interest subsidy and export incentive of about 2%. The industry is anxiously waiting for the new Government to unveil its textile policy. These represent the opportunities that lie ahead of the Indian textile industry and your Company.

The threats to these opportunities come from an unstable economic outlook in the importing countries, trade barriers imposed by them and inflationary pressures on our inputs. Power is a main ingredient, it has doubled in the last eight years. Availability of competitively priced uninterrupted power is essential for the stable operations of your Company''s business. The power situation as it prevailed in Tamil Nadu a few years ago was extremely precarious. It has now shown improvement though the cost of the power is higher when compared to other States of India.

The Company is taking steps for development and implementation of risk management policy. The element of risk that may threaten the company is the uncertainty in the overseas market on which the company depends for its exports. Further, in the domestic market there is a risk of competition from a large number of textile units.

Your Directors look forward to the current year with hope and optimism. We expect the export markets to stabilise and a large crop of Indian cotton is expected to stabilise cotton prices. This will help your Company to improve its business and operate in a profitable manner.

Board of Directors:

The Board consists of Eight Directors of whom four are independent Directors, three non-executive Directors and one Woman Director.

The Companies Act, 2013 requires that a Woman Director should be a member of the Board of Directors for a listed company. Dr.(Smt.) Uma Kannan, Wife of Sri T.Kannan, Promoter of the Company has been recommended both by the Nomination and Remuneration Committee and by the Board of Directors to be the Woman Director of the Company. Approval for her appointment has been sought from the Members of the Company through electronic voting for which Agenda is included in the Annual General Meeting. If approved, Dr.(Smt.) Uma Kannan will join the Board of Directors as a Woman Director effective from 17th June, 2015 and she will be liable to retire by rotation.

Dr.(Smt.) Uma Kannan, aged 53 years is a Director in two Public Limited companies. She is Vice President & Secretary of Thiagarajar College, a leading educational institution in Madurai. She is Convenor of INTACH (Indian National Trust for Art, Culture and Heritage) in Madurai. She is a Senate Member in Madurai Kamaraj University.

The details of number and dates of meetings held by the Board and its Committees, attendance of Directors and remuneration paid to them is given separately in the attached Corporate Governance Report.

The sitting fees paid to the Directors are within the limits prescribed under the Companies Act, 2013 and Rules thereon.

Retirement of Directors by Rotation:

Mr.PL. Subbiah, Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible has offered himself for reappointment as a Director of the Company. Being eligible, he is proposed to be re-appointed as Director of the Company.

Independent Directors:

The Independent Directors have confirmed and declared that they are not disqualified to act as an independent Director in compliance with the provisions of section 149 of the Companies Act, 2013 and the Board is also of the opinion that the Independent Directors fulfill all the conditions specified in the Companies Act, 2013 making them eligible to act as Independent Directors. The Independent Directors have convened a meeting on 14th January, 2015.

Code of Conduct:

All Directors, Key Managerial Personnel and Senior Management of the Company have confirmed compliance with the Code of Conduct applicable to the Directors and employees of the Company. The Code of Conduct is available on the Company''s website www.vtmill.com All Directors have confirmed compliance with provisions of section 164 of the Companies Act, 2013.

Directors'' Responsibility Statement:

The Board of Directors acknowledges the responsibility for ensuring compliance with the provisions of section 134(3)c read with section 134(5) of the Companies Act, 2013 and Clause 49(III)(D)(4)(a) of the listing agreement with Stock Exchanges in the preparation of the annual accounts for the year ended on 31st March, 2015 and state that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii. the Directors have selected such 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;

iii. the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. the Directors have prepared the annual accounts on a going concern basis;

v. the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively and the Company has adopted proper policies and procedures for ensuring orderly and efficient conducting of the business:

a) the adherence of company''s policies have been disclosed in the Annual Report.

b) the Company has carried on physical verification of fixed assets periodically and regularly.

c) the compliance in respect of prevention of frauds and errors has been ensured by the Internal and Statutory Audit.

d) the accuracy and completeness of accounting records have been certified by the Statutory Auditor.

e) the financial information have been prepared and circulated within a reasonable time.

vi. the directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Key Managerial Personnel:

The following person was formally appointed as Key Managerial Personnel of the Company effective from April 1, 2014 in compliance with the provisions of section 203 of the Companies Act, 2013:

a) Mr. S. Paramashivan, Company Secretary

b) The Company is in the process of appointing the Managing Director/Whole Time Director and Chief Financial Officer in the ensuing financial year.

Corporate Governance:

The Company has in place the SEBI guidelines pertaining to Corporate Governance. During the year under consideration the Company had an Eight member Board of Directors consisting of One Chairman and Director, Four non-executive independent directors, Three non-executive directors of which one is a Woman Director.

The Corporate Governance Report giving the details as required under Clause 49 of the listing agreement with the Stock Exchanges is given separately as Annexure I and forms part of this Report of the Directors. The Corporate Governance Certificate for the year ended on March 31, 2015 issued by M/s. Peri Thiagaraj & Co., Auditors of the Company, is also attached as Annexure I and forms a part of this Report of the Directors.

The Company has in place an Insider Trading Code for compliance with the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992. Mr S. Paramashivan, Company Secretary, is the Compliance Officer responsible for compliance with the Insider Trading procedures. Details of securities transaction by insiders are placed before the Board of Directors of the Company and also notified to the Stock Exchanges.

Sri T. Kannan, Chairman of the Company has given his certificate under Clause 49(IX) of the listing agreement with Stock Exchanges regarding the annual financial statements for the year ended on 31st March, 2015 to the Board of Directors. The Chairman has given his certificate under Clause 49(II)(E) of the listing agreement with Stock Exchanges regarding compliance with the Code of Conduct of the Company for the year ended March 31, 2015, which is attached as Annexure IX and forms a part of this Report of the Directors.

Audit Committee:

The Audit Committee was reconstituted on 11.01.2011. The existing committee consists of three independent Directors and satisfies the provisions of Section 177(2) of the Companies Act, 2013. The Committee now comprises Mr. RM. Somasundaram as Chairman and Mr A. Mariappan and Mr. L.N.V. Subramanian who are all Independent Directors. The Company Secretary is the Secretary of the Committee. The details of all related party transactions are placed periodically before the Audit Committee. During the year there were no instances where the Board had not accepted the recommendations of the Audit Committee. The Company has in place a vigil mechanism details of which are available on the Company''s website www.vtmill.com

The Audit Committee has also been delegated the responsibility for monitoring and reviewing risk management assessment and minimization procedures, implementing and monitoring the risk management plan and identifying, reviewing and mitigating all elements of risks which the Company may be exposed to.

The details of terms of reference of the Audit Committee, number and dates of meetings held, attendance of the Directors and remuneration paid to them are given separately in the attached Corporate Governance Report.

Evaluation of the Board of its own performance. Committees of the Board and Individual Directors:

The Board reviewed and evaluated its own performance from the following angles:

* Company Performance

* Strategy and Implementation

* Risk Management

* Corporate ethics

* Performance of the Individual Directors

* Performance of the Committees viz., Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility Committee.

The Board also evaluated the performance of the above referred Committees and concluded that the Committees continued to operate effectively, with full participation from all members and executive management of the Company. The Board upon evaluation considered that the Board is well balanced in terms of diversity of experience. The Board noted that all Directors have understood the opportunities and risks to the Company''s strategy, and are supportive of the direction articulated by the management team towards improvement. Corporate responsibility, ethics and compliance are taken seriously, and there is a good balance between the core values of the Company and the interests of shareholders.

The Directors also expressed their satisfaction in all the above areas considering the Company''s performance in all fronts viz., New Product Development, Sales and Marketing, International business, Employee relations and compliance with statutory requirements.

Related Party Transactions:

During the year, the company has entered into contracts or arrangements with such number of related parties with the approval by the Board of Directors in respect of the following:

1. Sale, purchase or supply of any goods or materials

2. Selling or otherwise disposing of, or buying, property of any kind

3. Leasing of property of any kind

4. Availing or rendering of any services

5. Obligations

The details in respect of the material contracts or arrangements or transactions on arm''s length basis carried on with the related parties have been furnished in ANNEXURE V.

Corporate Social Responsibility Committee:

A Corporate Social Responsibility Committee was constituted on April 24, 2014 with Sri T. Kannan as Chairman and M/s. K. Thiagarajan and RM. Somasundaram, Directors of the Company as Members.

The Committee met once during the year on 25th March, 2015 to finalise the Corporate Social Responsibility Policy. The Policy was approved by the Board on the same day at its meeting. The CSR policy is available on the Company''s website www.vtmill.com.

The terms of reference of the Corporate Social Responsibility Committee, number and dates of meetings held, attendance of the Directors and remuneration paid to them are given separately in the attached Corporate Governance Report.

The Committee considered the social activities as referred in Schedule VII to the Companies Act and recognizes that its operations impact a wide community of the public for imparting education for uplifting the social status of the public. In structuring its approach to the various aspects of Corporate Social Responsibility, the Company takes account of guidelines and statements issued by various regulatory bodies. Social, environment and ethical matters are reviewed by the Board including the impact such matters may have on the Company''s management of risk.

The Company has finalized the manner of implementation of the CSR Policy and contributed a sum of Rs.27.00 Lakhs to a leading educational institution for development of infrastructure facilities in the Institution. The details of the project, amount of estimates and the contribution to the implementing agency has been shown in Annexure VII.

Nomination and Remuneration Committee:

A Nomination and Remuneration Committee was constituted on April 24, 2014 with Sri RM. Somasundaram as Chairman and M/s. T. Kannan and A. Mariappan as Members. This constitution satisfies the provisions of Section 178 of the Companies Act, 2013. The Company Secretary is the Secretary of this Committee.

The Company''s Remuneration Policy is available on the Company''s website www.vtmill.com and is attached as Annexure VIII and forms a part of this Report of the Directors. The details of terms of reference of the Nomination and Remuneration Committee, number and dates of meetings held, attendance of the Directors and remuneration paid to them are given separately in the attached Corporate Governance Report.

Stakeholders Relationship Committee:

The Shareholders and Investors Grievance Committee was constituted earlier on 26.06.2004. To comply with the requirements of the Companies Act, 2013 and the listing agreements with Stock Exchanges, the name of the Committee was changed to Stakeholders Relationship Committee effective from April 25, 2014. The Members of the Committee are Sri T. Kannan as Chairman and Sri L.N.V. Subramanian as Member. The Company Secretary is the Secretary of the Committee. The Committee has delegated the responsibility for share transfers and other routine share maintenance work to the Company Secretary and to M/s. Karvy Computer Share Private Limited, the Registrars and Share Transfer Agents of the Company. All requests for dematerialisation and rematerialisation of shares, transfer or transmission of shares and other share maintenance matters are completed within 30 days of receipt of valid and complete documents. The Committee approved all activities through Circular Resolutions and all those Circular Resolutions were placed and discussed at the Board meetings. The Committee also reports to the Board on matters relating to the shareholding pattern, shareholding of major shareholders, insider trading compliances, movement of share prices, redressal of complaints, Reports on SCORES of SEBI and all compliances under the Companies Act, 2013 and the listing agreement with Stock Exchanges. The shares of the Company are listed on the Bombay Stock Exchange. The Company''s shares are compulsorily traded in the dematerialized form. The ISIN number allotted is INE222F01029. The details of shareholding pattern, distribution of shareholding and share prices are mentioned separately in the attached Corporate Governance Report.

Auditors:

M/s Peri Thiagaraj & Co., Chartered Accountants, hold office as Auditors of the Company till the conclusion of the ensuing Annual General Meeting, and being eligible, offer themselves for reappointment. Pursuant to the provisions of section 139 of the Companies Act, 2013, the Auditors are proposed to be reappointed for a term of one year, subject to ratification by the Members at the ensuing Annual General Meeting. There are no qualifications or observations or remarks made by the Auditors in their Report.

Secretarial Audit:

A Secretarial Audit was conducted during the year by the Secretarial Auditor, Mr.M.K. Bashyam, Practicing Company Secretary, in accordance with the provisions of section 204 of the Companies Act, 2013. The Secretarial Auditor''s Report is attached as Annexure II and forms a part of this Report of the Directors. There are no qualifications or observations or remarks made by the Secretarial Auditor in his Report.

Fixed Deposits:

The Company has not accepted any deposits from the public, and as such, there are no outstanding deposits in terms of the Companies (Acceptance of Deposits) Rules, 2014.

The company does not have any deposit which are not in compliance with the Companies Act, 2013.

Loans, Guarantees and Investments:

The Company has not granted any inter-corporate loan, given guarantee or provided security for availing loan by any other company. However the company has invested its funds in such number of companies in such no. of shares in other bodies corporate as referred to in Notes No. 12 and 14 of the Balance Sheet.

In compliance with section 186 of the Companies Act, 2013, loans to employees bear interest at applicable rates.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo:

The prescribed particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo required under section 134(3)(m) read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is attached as Annexure IV and forms a part of this Report of the Directors.

Particulars of Employees:

The prescribed particulars of Employees required under section 134(3)(q) read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure VI and forms a part of this Report of the Directors.

Annexures forming a part of this Report of the Directors:

The Annexures referred to in this Report and other information which are required to be disclosed are annexed herewith and form a part of this Report of the Directors:

I. Corporate Governance Report along with Certificate on Corporate Governance by the Auditor of the Company.

II. Secretarial Audit Report

III. Extract of the Annual Return in Form MGT-9

IV. Particulars on Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

V. Form AOC-2 for material contracts with Related Parties

VI. Ratio of remuneration and Particulars of Employees

VII. CSR Policy and Annual Report on CSR spending

VIII. Remuneration Policy of the Company

IX. Chairman Certificate under Clause 49(II)(E) of Listing Agreement on compliance of Code of Conduct.

Appreciation:

Your Directors record their sincere appreciation of the dedication and commitment of all employees in achieving and sustaining excellence in all areas of the business. Your Directors thank the Shareholders, customers, suppliers and bankers and other stakeholders for their continuous support to the Company.

For and on behalf of the Board of Directors

Kappalur, Madurai. T.KANNAN April 30, 2015. Chairman


Mar 31, 2014

The Directors have pleasure in preserving their 67th Annual Report along with the audited statements of accounts for the year ended. 31st March, 2014,

PROFITS, DIVIDENDS & RETENTION :

(Rs. in Lakhs) 2013 - 2014 2012-2013

Turnover: l69l5 14318

Profit before Depreciation
Less Depreciation 895 866

Profit after Depreciation 1580 1606

Less ; Provision for Taxation:

Current year 579 405

Deferred Tax (-)97 (-)90

Taxation for earlier years (-)33 59

449 374 Profit after tax 1131 1232

Add Amount brought forward 283 188

Available for appropriation 1414 1420

Appropriation :

Transfer to General Reserve 810 810 interim Dividend @ Rs0.O70 per Share 282

Income Tax cm Interim Dividend 45

327

Dividend & Rs.0.70 per Share 282 -

Income tax on Dividend 48 -

330 -

Retained profit carried forward to the following year 274 283

DIVIDEND:

The Board propose a Dividend of Rs.0.70 per Share (i.e.. 70%) on Equity Share Capital for the year 2013-14.

PERFORMANCE OF THE YEAR AND FUTURE FROSTED TS:

The Slowdown in the Indian economy continued during the year under review too. Your Company''s Sales Turnover for the year 2013-14 increased from Rs.U3.lH Crores to Rs.169.15 Crores However the Grow Profit before depreciation was stagnant at Rs.24.75 Crores. The textile markets witnessed strong demand during the first two quarters of the year under review, There was a marked slowdown in demand thereafter The Year''s performance must he considered satisfactory under these circumstances.

Though the power shortage continues, the Company has been able lo mitigate the same with a "mix of Wind energy and purchase of power from third parties

Your Directors hope that the new Government at the centre will usher the council into a new era of stability arid economic growth. Therefore we look forward to the year with optimism,

FUTURE PLANS:

Your Company continues to he debt free and has adequate resources to embark on new projects. Your Directors are evaluating a plan to invest in a spinning plain as it appears commercially attractive.

AUDITORS:

The present Auditors or the Company M/s. Pert Thiagraj & Co., retire at the ensuing Annual General Meeting and are eligible for re-appointment.

COST AUDITOR:

In conform it v with the directives of the Central Government, the Company has appointed Shri M.Kannan, Cost Accountant. IV-B. Akshaya Homes. 9-B-20/ Tagore Nagar. Bharathiyar 4th Street, S-S Colony. Madurai - 625016 as the Cost Auditor of the Company u/s. 233B of the Companies Act, 195n for the audit of cost accounts for the cloth manufactured by the Company for the year ended 31.03.2014

For the year ended 31.03,2013. the due date of filing the Cost Audit Report was 30,09.2013 and the actual date of filing the Coat Audit Report was 21.09.2013.

DIRECTORS'' RESPONSIBILITY STATEMENT:

In terms of Section 217 <2AA} of the Companies Act, 1936, the Directors would like TO state that:

(i) in the preparation of Annual Accounts For the year ended 31st March 2014 the applicable accounting standards had been followed along with proper explanation relating to material departures:

(ii) the Directors had selected such accounting policies and applied them consistent and made judgments and estimates that are reasonable and prudent so as to give a true and Fair view of the stale of affairs of the Company at the end of the Financial year ended 31st March,2014 and of the profit of the Company For that year,

(iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the pro visions of the Companies Act For safe guarding the assets of the Company and For preventing and detecting fraud and other irregularities;

(iv) the Directors had prepared the annual accounts ongoing concern basis

CORPORATE GOVERNANCE:

The report on Corporate Governance is attached as Annexure-I.

The Company has obtained a Certificate from the Statutory Auditors of the Company Hoarding the compliance of conditions of Corporate Governance as stipulated in the Clause 49 of the Listing Agreement and a copy of the same is annexed.

GENERAL:

The additional particulars required to he given in the Directors'' Report pursuant to the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, I988 are given in the Annexure-II which Forms part of this report. With regard to particulars of Employees under Section 217(2A) there is no employee drawing salary of more than Rs.5.00.000/ per month or Rs-60,00,000/ per annum,

LISTING;

The Company''s shares are listed with the following two Stock" Exchanges:

1) Bombay Stock Exchange Ltd., Regd. Office: Floor 25. PJ. Towers. Dalai Street. Mumbai-400001.

2) Madras Stock Exchange Ltd.. Exchange Buildings. 11, Second Lint Beach, Chennai -600 001.

The Company has paid listing fee to both stock exchanges tor the Financial Year 2014-2015.

The Directors place on record their appreciation of the continued co-operation received from its Staff. Employees aim the Bankers.



For and tin behalf of the Board of Directors,

Kappalur. Madurai T.KANNAN

April 25. 2014. Chairman


Mar 31, 2013

To the Members of VTM Limited

The Directors present their 66th Annual Report along with the audited statements of accounts for the year ended 31st March, 2013.

PROFITS, DIVIDENDS & RETENTION :

(Rs. in Lakhs) 2012 - 2013 2011 - 2012

Turnover: 14318 11665

Profit before Depreciation (after interest) 2472 1603

Less : Depreciation 866 846

Profit after Depreciation 1606 757

Less : Provision for Taxation:

Current year 405 300

Deferred Tax (-)90 (-)178

Taxation for earlier years 59 8

374 130

Profit after tax 1232 627

Add : Amount brought forward 188 238

Available for appropriation 1420 865

Appropriation :

Transfer to General Reserve 810 490

Interim Dividend @ Rs.0.70 per Share 282

Income Tax on Interim Dividend 45

327

Final Dividend 161

Income Tax on Final Dividend 26

187



DIVIDEND:

The Company paid a Dividend of Rs.0.70 per Share (i.e., 70%) on Equity Equity Share Capital for the year 2012-13. This is to be considered as Final Dividend.

PERFORMANCE OF THE YEAR AND FUTURE PROSPECTS:

There was a perceptible slowdown in India''s economic growth during the year under review. This has set in motion a decelerating trend in demand for various products. However your Company''s Sales Turnover for the year 2012-13 increased to Rs.14,318 Lakhs as against Rs.l 1,665 Lakhs year-on-year. The Gross Profit before depreciation for 2012-13 grew to Rs.2,472 Lakhs from Rs.1,603 Lakhs registering an increase of 54% over the last year. This was possible because of an optimal product mix and installation of additional 30 Airjet looms with ancillary equipments estimated at a cost of Rs.1,014 Lakhs.

The industry continues to face severe power shortage and the cost of generated power out of H.S. Diesel is very prohibitive. Your Company mitigated this high cost with a mix of Wind energy and purchase of power from third parties. As a long term solution we have secured a direct feeder line from TANGEDCO sub station.

The offtake of fabric in the domestic market is encouraging and your Directors hope to obtain better working results in the ensuing year.

FUTURE PLANS:

Your Directors have a proposal to add additional looms to augment production capacity. They are planning to revisit the project on fabric dyeing plant.

AUDITORS:

The present Auditors of the Company M/s.Peri Thiagaraj & Co., retire at the ensuing Annual General Meeting and are eligible for re-appointment.

COST AUDITOR:

In conformity with the directives of the Central Government, the Company has appointed Shri M.Kannan, Cost Accountant, IV-B, Akshaya Homes, 9-B-20/Tagore Nagar, Bharathiyar 4th Street, S.S. Colony, Madurai- 625 016 as the Cost Auditor of the Company u/s. 233B of the Companies Act, 1956 for the audit of cost accounts for the cloth manufactured by the Company for the year ending 31.03.2013.

For the year ended 31.03.2012, the due date of filing the Cost Audit Report was 28.02.2013 and the actual date of filing the Cost Audit Report was 27.12.2012.

DIRECTORS'' RESPONSIBILITY STATEMENT:

In terms of Section 217 (2AA) of the Companies Act, 1956, the Directors would like to state that:-

i) in the preparation of Annual Accounts for the year ended 3 P March 2013 the applicable accounting standards had been followed along with proper explanation relating to material departures;

ii) the Directors had selected such 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 affair bof the Company at the end of the financial year ended 3l''March, 2013 and of the profit of the Company for that year;

iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the Directors had prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE:

The report on Corporate Governance is attached as Annexure-I.

The Company has obtained a Certificate from the Statutory Auditors of the Company regarding the compliance of conditions of Corporate Governance as stipulated in the Clause 49 of the listing agreement and a copy of the same is annexed.

GENERAL:

The additional particulars required to be given in the Directors'' Report pursuant to the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 are given in the Annexure-II which forms part of this report. With regard to particulars of Employees under Section 217(2A) there is no employee drawing salary of more than Rs.5,00,000/- per month or Rs.60,00,000/- per annum.

LISTING:

The Company''s shares are listed with the following three Stock Exchanges:

1) Bombay Stock Exchange Ltd., Regd. Office: Floor 25, P.J. Towers, Dalai Street,

Mumbai-400 001.

2) Coimbatore Stock Exchange Ltd., CSX Towers,

683-686, Trichy Road, Singanallur, Coimbatore - 641 008.

3) Madras Stock Exchange Ltd., Exchange Buildings,

11, Second Line Beach, Chennai-600 001.

The Company has paid listing fee to all the three stock exchanges for the Financial Year 2013-2014.

The Directors place on record their appreciation of the continued co-operation received from its Staff, Employees and the Bankers. For and on behalf of the Board of Directors,

Kappalur, Madurai. T.KANNAN

April 24, 2013. Chairman


Mar 31, 2012

To the Members of VTM Limited

The Directors present their 65th Annual Report along with the audited statements of accounts for the year ended 31st March, 2012.

PROFITS, DIVIDENDS & RETENTION:

(Rs,in Lakhs)

2011 - 2012 2010 - 2011

Turnover:

Exports (13%) 1574 (14%) 1902

Domestic (37%) 10091 (86%) 11274

Total 11665 13176

Profit before Depreciation (after interest) 1603 2820

Less : Depreciation 846 912

Profit after Depreciation 757 1908

Less: Provision for Taxation:

Current year 300 390

Deferred Tax (178) 228

Taxation for earlier years 8 103

130 721 Profit after tax 627 1187

Add : Amount brought forward 238 114

Available for appropriation 865 1301

Appropriation :

Transfer to Genera] Reserve 490 810

Interim Dividend @ Rs.2,70 per Share - 109

Income Tax on Interim Dividend - 18 - 127

Proposed Dividend 161 109

@ Rs.1.4.00 per Share

Income Tax on Dividend 26 17

- 187 - 126

Retained profit carried/forward to the following year 188 238

DIVIDEND:

Your Directors recommend Dividend at Rs.4.00 per Share (i,e..40%) on Fruity Share Capital for the year 2011-12.

PERFORMANCE OF THE YEAR AND FUTURE PROSPECTS:

The year under review was quite challenging for the textile industry. After having reached record highs in early 2011. cotton prices registered a steep fall of about 40% during the first quarter of the year This in turn set off a chain reaction in the textile markets and prices of fabrics declined by about 30% These were the result of inconsistent policies followed by the Government with regard to raw cotton exports and they did not allow free market frees to have their play and kept on tinkering with policies so as to influence pricing Hopefully this syndrome is behind us and a sense to balance has returned to the markets.

The year under review witnessed erratic power supply position and as we write this report, the power cut in Tamil Nadu is as high as 70% Your Company had to generate in own power and/or procure from 3rd parties at prices 3 times over and above the TANGEDCO prices. These factors had impacted the sales as well as margins adversely.

Your Directors have initiated number of measures to mitigate rising Alost of power and they hope that the power supply situation will get better in the editing year The textile market is showing positive signs and your Directors look forward to better results in the ensuing year.

FUTURE PLANS:

Your Company has turned totally debt free and has each reserves to the tune of Rs.20.00 Crores and your Directors are considering investment avenues so as to maximize returns.

DIRECTOR RESPONSIBILITY STATEMENT:

In terms of Section 217 (2AA) of the Companies Act. I956, the Directors would like to state that:-

i) in the preparation of Annual Accounts for the year ended 31st March 2012 the applicable accounting standards had been followed along with proper explanation relating to material departures:

ii) the Directors had selected such 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 ended 31st March, 2012 and of the profit of the Company for that year.

iii) the Directors had taken proper and sufficient cars for the maintenance of adequate accounting records in accordance with the provisions of the Companies And for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the Directors had prepared the annual accounts on a going concern.

CORPORATE GOVERNANCE:

The report on corporate Governance is attached as Annexure-1

The Company has obtained a Certificate from the Statutory Auditors of the bee company regarding the compliance of conditions of Corporate Governance as stipulated in the Clause 49 of the listing agreement and a copy of the same is annexed.

GENERAL:

The additional particulars required to be given in the Directors' report pursuant to the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 given in the Annexure-II which regard to particulars Employees under Section 2l7[2A) there is no employee drawing salary of more than Rs.5,00,000/- per month or Rs,60,000.000/- per annum.

LISTING:

The Company's shares are Listed with the following three Stock Exchanges:

1) Bombay Stock Exchange Ltd .

Regd Officer : Floor 25, P-J, Towers,

Dalal Street,

Mumbai - 400001.

2) Coimbatore Stock Exchange Ltd..

CSX Towers.

683-686 Trichy Road,

Singanallur, Coimbatore 641008.

3) Madras Stock Exchange Ltd,.

Exchange Buildings. .

11 Second Line Hegch,

Chennai 600 001

The Company has paid listing fee to all the three stock exchanges for the Financial Year 2012-2013.

The Directors wish to place on record the valuable services rendered by Late Shri M.Ananthakrishnan who served on the Board from 17.1.1975 to 2.4.2012.

The Directors place on record their appreciation of the continued co-operation received from its Staff. Employees and the Bankers.

For and on behalf of the Board ol Directors.

Kappalur, Madurai. T.KANNAN

April 25. 2012. Chairman


Mar 31, 2011

The Directors present their 64th Annual Report along with the audited statements of accounts for the year ended 31st March, 2011.

PROFITS, DIVIDENDS & RETENTION :

(Rs. in Lakhs)

2010 - 2011 2009 - 2010

Turnover:

Exports (14%) 1902 (25%) 1965

Domestic (86%) 11274 (75%) 5924

Total 13176 7889

Profit before Depreciation (after interest) 2820 1220

Less : Depreciation 912 766

Profit after Depreciation 1908 454

Less : Provision for Taxation:

Current year 390 190

Deferred Tax 228 (127)

Taxation for earlier years 103 3

721 66

Profit after tax 1187 388

Add : Amount brought forward 114 56

Available for appropriation 1301 444

Appropriation:

Transfer to General Reserve 810 180

Interim Dividend @ Rs.2.70 per Share 109 129

Income Tax on Interim Dividend 18

127

Proposed Final Dividend 109 129 @ Rs.2.70 per Share

Income Tax on Final Dividend 17 21

126 150

Retained profit carried/forward to the following year 238 114

DIVIDEND:

The Company paid an Interim Dividend of Rs.2.70 per Share of Equity Share Capital on 20.01.2011. Your Directors recommend a Final Dividend at Rs.2.70 per Share (i.e., 27%) on Equity Share Capital making a total of Rs.5.40 per Share (i.e., 54%) for the year.

PERFORMANCE OF THE YEAR AND FUTURE PROSPECTS:

The Sales turnover for the current year has increased to Rs. 131.76 Crores from Rs.78.89 Crores during the last year registering an increase of 67%. This is due to improved working efficiency and additional production because of implementation of expansion scheme by installation of 30 looms at a cost of Rs.7.83 Crores during the year.

The Gross Profit before depreciation for the current year 2010-11 has surged to Rs.28.20 Crores i.e., an increase of Rs. 16.00 Crores compared to the last year Gross Profit of Rs. 12.20 Crores. This constitues an all time record.

During the year the textile industry faced challenges and opportunities. The cotton prices have reached an all time high resulting in pushing up yarn prices by over 32%. The power cost has also gone up due to revision in power tariff by 17.5% from 1.8.2010 onwards and the power supply deficit. The Indian Rupee has again appreciated by 4.2% compared to the last year affecting our competitiveness in the global market. The local market exhibited good demand growth and this is a reflection of the growing Indian economy. In spite of certain adverse factors, the Company has been able to increase its profitability because of higher productivity, product positioning and better offtake; which is to be considered as good.

In the Budget for 2011-12, the Government has levied Excise Duty on ready made garments and made-ups which was an unwelcome move to the fabric market. Your Directors feel the market will absorb this levy and the situation will improve before long.

In order to contain the ever increasing cost of power and as a green energy effort your Company during this year has added one Windmill of 2.1 MW at a cost of Rs.11.12 Crores. With this the Company has so far installed Windmills with a capacity of 4.55 MW.

Your Directors have a proposal to install additional looms to augment production capacity. The investment in Windmills is also being contemplated.

FABRIC DYEING PLANT:

The implementation of the project on Fabric Dyeing Plant is getting delayed due to various unavoidable factors that lie outside our control.

DIRECTORS RESPONSIBILITY STATEMENT:

In terms of Section 217 (2AA) of the Companies Act, 1956, the Directors would like to state that:-

i) in the preparation of Annual Accounts for the year ended 31st March 2011 the applicable accounting standards had been followed along with proper explanation relating to material departures;

ii) the Directors had selected such 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 ended 31st March, 2011 and of the profit of the Company for that year;

iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the Directors had prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE:

The report on Corporate Governance is attached as Annexure-I.

The Company has obtained a Certificate from the Statutory Auditors of the Company regarding the compliance of conditions of Corporate Governance as stipulated in the Clause 49 of the listing agreement and a copy of the same is annexed.

GENERAL:

The additional particulars required to be given in the Directors Report pursuant to the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 are given in the Annexure-II which forms part of this report. With regard to particulars of Employees under Section 217(2A) there is no employee drawing salary of more than Rs.5,00,000/- per month or Rs.60,00,000/- per annum.

LISTING:

The Companys shares are listed with the following three Stock Exchanges:

1) Bombay Stock Exchange Ltd., Regd. Office: Floor 25, P.J. Towers, Dalai Street, Mumbai - 400 001.

2) Madras Stock Exchange Ltd., Exchange Buildings, 11, Second Line Beach, Chennai - 600 001.

3) Coimbatore Stock Exchange Ltd., CSX Towers, 683-686, Trichy Road, Singanallur, Coimbatore - 641 008.

The Company has paid listing fee to all the three stock exchanges for the Financial Year 2011-2012.

The Directors place on record their appreciation of the continued co-operation received from its Staff, Employees and the Bankers.

For and on behalf of the Board of Directors,

T. KANNAN Chairman

Kappalur, Madurai. April 18,2011.


Mar 31, 2010

The Directors present their 63rd Annual Report along with the audited statements of accounts for the year ended 31st March, 2010.

PROFITS, DIVIDENDS & RETENTION :

(Rs. in Lakhs) 2009 - 2010 2008 - 2009 Turnover: Exports (25%) 1965 (52%) 4786 Domestic (75%) 5924 (48%) 4428 Total 7889 9214 Profit before Depreciation (after interest) 1220 1083 Less : Depreciation 766 830 Profit after Depreciation 454 253 Less : Provision for Taxation 190 120 Short Provision for Taxation for earlier year 3 - Deferred Tax Liability/Asset (127) (116) 66 4 Profit after tax 388 249 Add : Excess provision for Taxation - 6 MAT Credit Entitlement - 62 Amount brought forward 56 60 Available for appropriation 444 377 Appropriation: Transfer to General Reserve 180 227 Dividend @ Rs.3.20 per Share 129 80 Income Tax on Dividend 21 14 Retained profit carried/forward to the following year 114 56

DIVIDEND:

Your Directors recommend a dividend at Rs.3.20 per Share (i.e., 32%) on Equity Share Capital for the year.

PERFORMANCE OF THE YEAR AND FUTURE PROSPECTS:

The Sales turnover for the current year 2009-10 has declined to Rs.7889 Lakhs from Rs.9214 Lakhs during the last year 2008-09. This is partly due to undertaking job work and partly because of fall in capacity utilisation following imposition of power cut and labour absenteeism. The Gross Profit before depreciation for the current year 2009-10 has marginally gone up to Rs.1220 Lakhs, i.e., an increase of Rs.137 Lakhs compared to the last years Gross Profit of Rs.1083 Lakhs.

This year the textile trade has picked up because of rapid recovery in global market. Exports have remained a challenge owing to steep Rupee appreciation over 12%.

The yarn prices have gone up by nearly 50% without commensurate increase in fabric prices in the domestic market.

The power situation continued to be critical throughout the year.

Despite the above adverse factors, the years working result is, by and large, to be considered satisfactory.

The recovery that has set in fhe last quarter seems, sustainable. Your Directors hope the working results for the year 2010-11 will be better than 2009-10.

FABRIC DYEING PLANT:

Of late, there is an increasing demand for processed fabric as well. Hence your Directors are reviewing the feasibility of implementation of the project on Fabric Dyeing Plant kept in abeyance last year.

Your Directors are planning addition of looms to augment production capacity. Further investment in wind energy is also planned.

DIRECTORS RESPONSIBILITY STATEMENT:

In terms of Section 217 (2AA) of the Companies Act, 1956, the Directors would like to state that:-

i) in the preparation of Annual Accounts for the year ended 3 lsl March 2010 the applicable accounting standards had been followed along with proper explanation relating to material departures;

ii) the Directors had selected such 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 ended 31s March, 2010 and of the profit of the Company for that year;

iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the Directors had prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE:

The report on Corporate Governance is attached as Annexure-I.

The Company has obtained a certificate from the Statutory Auditors of the Company regarding the compliance of conditions of Corporate Governance as stipulated in the Clause 49 of the listing agreement and a copy of the same is annexed.

GENERAL:

The additional particulars required to be given in the Directors Report pursuant to the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 are given in the Annexure-11 which forms part of this report. With regard to particulars of Employees under Section 217(2A) there is no employee drawing salary of more than Rs.2,00,000/- per month or Rs.24,00,000/- per annum.

LISTING:

The Companys shares are listed with the following three Stock Exchanges:

1) Bombay Stock Exchange Ltd., Regd. Office: Floor 25, P.J. Towers, Dalai Street, Mumbai - 400 001.

2) Madras Stock Exchange Ltd., Exchange Buildings, 11, Second Line Beach, Chennai - 600 001.

3) Coimbatore Stock Exchange Ltd., CSX Towers, 683-686, Trichy Road, Singanallur, Coimbatore - 641 008.

The Company has paid listing fee to all the three stock exchanges for the Financial Year 2010-2011.

The Directors place on record their appreciation of the continued co-operation received from its Staff, Employees and the Bankers.

For and on behalf of the Board of Directors. Kappalur, Madurai. T. KANNAN April 30, 2010. Chairman

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