Mar 31, 2019
The Directors have pleasure in presenting their 72nd Annual Report along with the Audited statement of accounts for the year ended 31st March, 2019.
Adoption of Financial Statements under Ind AS:
Pursuant to the notification issued by the Ministry of Corporate Affaire dated 16* February, 2015 relating to the Companies (Indian Accounting Standards) Rules, 2015 the Company has adopted "Ind AS''â with effect from 1 â April, 2017. Accordingly, the Financial Statements for the year 2018-19 have been prepared in compliance with the Companies (Indian Accounting Standards) Rules, 2015.
Operating & Financial Performance Profits, Dividends & Retention
Rs. in Lakhs.
2018-19 |
2017-18 |
||
Turnover |
15980 |
16463 |
|
Profit before Depreciation (after interest) |
2082 |
1888 |
|
Less: Depreciation |
682 |
683 |
|
Profit after Depreciation Less: Provision for Taxation: Current Year Deferred Tax |
1400 347 32 379 |
1205 432 (5) 427 |
|
Profit after Tax |
1 021 |
778 |
|
Add: Amount brought forward |
788 |
4567 |
|
Available for appropriation |
1809 |
5345 |
|
Appropriation |
|||
Transfer to General Reserve |
600 |
4500 |
|
Income Tax Refund of earlier years |
â |
(59) |
|
Dividend @ Re.0.75 per share |
302 |
302 |
|
Income Tax on Dividend Changes in Deferred Tax recognized directly in Equity Transfer from Other Comprehensive Income |
62 364 (7) |
61 363 (257) 11 |
|
Retained profit carried forward to the following year |
852 |
787 |
During the year under review, the Company''s performance has improved with a higher net profit of Rs. 1400 lakhs against Rs.1205 lakhs (16% increase) even though there is a marginal decrease in Turnover. The Company was able to register export turnover of Rs.5644.49 lakhs representing 35.32% of the total turnover. The textile industry in the country witnessed stable trading conditions during the year. Your Company was able to report better results as a result of improved working efficiencies and waste minimization.
Appropriation to General Reserve
Considering the profitability and the available surplus, the Board of Directors desires to appropriate a sum of Rs.600 lakhs to General Reserve.
Dividend
Considering the profits for the year and as recommended by the Audit Committee, the Board of Directors is pleased to recommend a dividend of Re,0.90 per share i.e.90% on Equity Shares of Re.!/- each. The dividend together with dividend tax entails a cash outflow of Rs.436.47 lakhs in the current year (previous year Rs.364 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 6th June, 2019 to 15th June, 2019 (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:
The company does not have any body corporate as its Associate.
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 31,2019 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 to 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 certifies 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 confl ict of interest. Internal Audit has been conducted on periodical basis.
Companyâs Policies
Company''s Policies on Corporate Social Responsibility, Remuneration, Employee Concern (Whistle Blowing), the Code of Conduct applicable to Directors and Employees of the Company and policies such as Insider Trading Code, Insider Trading Fair Disclosure Code and Policy on Materiality of and dealing with Related Party Transactions required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and SEBI (Prohibition of Insider Trading) Regulations, 2015 have been complied with.
These Policies, the Code of Conduct and other policies/codes as referred above are available on the Company''s website www.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 also holds a 5S Certification from AOTS Alumni 5S Forum of India and 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 as detailed below:
Particulars |
Amount (Rs. lacs) |
% of Turnover |
Export Sales |
5644.49 |
35.32% |
Domestic Sales |
10,335.51 |
64.68% |
Industry Structure & Developments, Opportunities & Threats, Outlook, Risks & Concerns
The Trade and Industry has fully tuned to the new GST regime and the initial hiccups seen during the year of implementation have all been ironed out. The GST regime has brought in much needed compliance discipline to the trade channels.
During the year under review, export of grey fabrics from the country increased by 20%.
The Government is taking number of steps to improve the export competitiveness of the textile industry. Your Company is concentrating in increasing its operational efficiency thus leading to cost savings.
The power situation continues to be comfortable.
The Company is taking steps for development and implementation of risk management policies. 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 and the uncertainty of monsoon and its consequential impact on the demand scenario.
Your Directors look forward to the current year with hope and optimism, they expect the reform process in the economy will be accelerated by the Government which in turn will prove positive for trade & industry.
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.
Mr. L.N.V. Subramanian who was appointed as an Independent Director for a period of five years from 01.04.2014 retired from the Board on and from 01.04.2019 on the expiry of his term of appointment on 31,03.2019.
Subject to the provisions of Sections 149,152 and 161 of the Companies Act, 2013 and subject to approval by the members of the company at the ensuing Annual General Meeting, the Board appointed one Mr.T.N.Ramanathan as an Additional Director and also as Independent Director of the Company as recommended by Nomination and Remuneration Committee on and from 01 â April 2019 for a period of five years as an Independent Director. He will not be liable to retire by rotation under the provision J 49( 13) of the Companies Act.
Re-appointment of Independent Directors:
The shareholders at the EGM held on 13.03.2019 had re-appointed Sri.A.Martappan, Sri.M.Murugesan and Sri.RM.Somasundaram as Independent Directors of the company for another term of five years commencing from 01.04.2019. They are not liable to retire by rotation.
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 has been appointed as Chairman and Managing Director duly recommended by the Nomination and Remuneration Committee and approved by the Board of Directors. 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.
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 the limits prescribed under the Companies Act, 2013 and Rules thereon.
Retirement of Directors by Rotation:
Sri. K. Thiagarajan, 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.
Sri K. Thiagarajan holds a Bachelor Degree in Engineering and Business Management from Warwick University, UK. He is the Executive Director of M/s. Thiagarajar Mills Private Limited, He is also the Executive Committee Member of the Cotton Textile Export Promotion Council, Mumbai. He is having experience in Textile Industry for aperiod of 8 years. As such, he possesses knowledge and experience in the field of textile industry.
Non-Executive Independent Directors
The Non-Executive Independent Directors have confirmed and declared that they are not disqualified to act as a 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 31.01.2019.
To comply with the amended regulations as provided in Regulation 17(10) of the SEBI (LODR) Regulations, the Board reviewed the evaluation process by applying the provisions of Section 149 and Schedule IV to the Companies Act and the regulations as provided under the SEBI Regulations in respect of the Independent Directors of the Company with the following criteria;
- the performance of the Independent Directors
- fulfillment of the independence criteria as specified under the Companies Act, 2013 and regulations under SEBI Regulations.
The Independent Directors who attended the meeting of the Board did not participate in the discussion in respect of the evaluation of the Independent Director. There was sufficient quorum excluding the Independent Directors during the time of evaluation.
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.
Directorsâ 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, 2019 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 cost accounts and records as specified by the Central Government under sub -section (1 )of section 148 of the Companies Act, 2013, and as required by the Company are made and maintained,
vii. 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 R. Krishnan, Chief Financial Officer (upto 31.01.2019) and
c) Sri.M.Ramanathan, Chief Financial Officer (from 01.02.2019)
d) Sri S. Paramasivam, Company Secretary
During the Financial Year, Mr.R.Knshnan, Chief Financial Officer (CFO) of the company resigned on January 31, 2019 and one Mr.M.Ramanathan has been appointed as Chief Financial Officer (CFO) of the Company and his appointment has been made as recommended by the Audit Committee and Nomination and Remuneration Committee and approved by the Board of Directors.
Corporate Governance
The Company has in place the SEBI guidelines pertaining to Corporate Governance. During the year under consideration, the Company had an Eight members 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 1 and forms part of this Report of the Directors. The Corporate Governance Certificate for the year ended on March 31, 2019 issued by M/s.CNGSN & Associates LLP, Auditors of the Company, is also attached as part of Annexure I and forms apart 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 of SEBI (Prohibition of Insider Trading) Regulations, 2015 respectively and provided in the company''s website at www.vtmill.com. Mr S. Paramasivam, 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, 2019 to the Board of Directors which is attached as Annexure IX. 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 31.2019, which is attached as Annexure VIII and forms a part of this Report of the Directors.
Audit Committee
The Audit 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.M.Murugesan as Members.
Sri L.N. V. Subramanian who was a member of Audit Committee ceased to be a Director from the Board on and from 01.04.2019.
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 websitewww.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.
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 Companyâs 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 2018-19, the company has entered into contracts or arrangements for a period of five years from 01,04.2019 to 31.03.2024 with such number of related parties with the approval by the Board of Directors and the members of the company at the Annual General Meeting wherever necessary 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 twice during the year on 19.10.2018 and 31.01.2019, to review the CSR policies, recommend for contributions for CSR Activities carried out during the year and recommend for accumulation of balance amount to be spent in subsequent years in view of the larger projects to be undertaken by the educational institution to which the company is contributing for CSR activities.
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 promoting health care including preventive health care and imparting education for uplifting the social status of the public. In structuring its approach to 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 that 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. 1.18 lakhs towards conducting eye camp for the public nearby the mills as a preventive health care activity and accumulated a sum of Rs. 28.27 lakhs as unspent in view of undertaking infrastructure enhancement projects by the educational institution to which the company is contributing for CSR activities. The details of the project, amount of estimates and the amount spent for the projects undertaken and the unspent amounts 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 especially 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 |
n JL. |
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 st March, 2019, Sri RM. Somasundaram is the Chairman, an Independent Director and M/s. T. Kannan, K. Thiagarajan and A. Mariappan are Members of the Committee. The constitution satisfies the provisions of Section 178 of the Companies Act, 2013 as well as the SEBI Regulations. The Company Secretary is the Secretary of this Committee.
During the year, the Committee met twice on 27.04.2018 and 31.01.2019, the first one for reviewing the Nomination and Remuneration Policy and the second one for considering and accepting the resignation of Mr.R.Krishnan as Chief Financial Officer and appointment of Mr.M. Ramanathan as Chief Financial Officer of the Company.
The Company''s Remuneration Policy is available on the Company''s website www.vtmill.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 in the attached Corporate Governance Report.
Stakeholders Relationship Committee
The Stakeholders Relationship Committee was constituted on 25,04.2014 consisting of Sri L.N.V. Subramanian as Chairman and Sri T. Kannan as Member. The Company Secretary is the Secretary of the Committee.
Sri L.N.V. Subramanian ceased to be a Director of the company on and from 01.04.2019.
The Regulation 20 of the SEBI (LODR) Regulations, 2015 has been amended to have three Directors as Members of the Committee with one Independent Director Member. Accordingly, the Committee has been reconstituted consisting of Sri.T.N. Ramanathan as Chairman and Sri.T.Kannan and Sri K. Vethachalam as members 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 Fintech 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 ail 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 wiith 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 1S1N number allotted is FNE222F01029. The details of shareholding pattern, distribution of shareholding and share prices are mentioned separately in the attached Corporate Governance Report.
Auditors
In terms of Section 139 of the Companies Act and the rules made thereon, M/s CNGSN & Associates LLP, Chartered Accountants, Chennai (Firm Regn. No. 004915S/S200036) have been appointed as Auditors of the Company by the members at their meeting held on 23rd June, 2017 and the Auditors have been appointed for a period of five years from the conclusion of 701*1 Annual General Meeting till the conclusion of the 75''b Annual General Meeting. The Auditors have already submitted certification u/s. 141 of the Companies Act and Peer Review Certificate in respect of their appointment as Auditors of the Company.
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 along with Secretarial Compliance Report (as required under the amended SEBI Regulations) 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 is 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 and securities in other bodies corporate as referred to in Notes No. 06 and 11 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 I34(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. There are no employees drawing remuneration more than Rs.102 Lakhs per annum or Rs.8,50,000/- per month.
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 forms 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 and Secretarial Compliance Report
III. Extract of the Annual Return in FormMGT-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. 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, 2015 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 Directors,
April 22, 2019. T. KANNAN
CHAIRMAN AND MANAGING DIRECTOR
Mar 31, 2018
To the Members of VTM Limited
The Directors have pleasure in presenting their 71st Annual Report along with the Audited statement of accounts for the year ended 31st March, 2018.
Adoption of Financial Statements under Ind AS:
Pursuant to the notification issued by the Ministry of Corporate Affairs dated February, 2015 relating to the Companies (Indian Accounting Standards) Rules, 2015 the Company has adopted âInd ASâ with effect from Isâ April, 20] 7, Accordingly, the Financial. Statements for the year 2017-18 have been prepared in compliance with the Companies (Indian Accounting Standards) Rules, 2015.
Operating & Financial Performance Profits, Dividends & Retention
2017-18 |
2016-17 |
|||||
Turnover:- |
16463 |
15043 |
||||
Profit before Depreciation (after interest) |
1888 |
2654 |
||||
Less: Depreciation |
683 |
729 |
||||
Profit after Depreciation |
1205 |
1925 |
||||
Less: Exceptional item |
0 |
680 |
||||
Profit after exceptional item |
1205 |
1245 |
||||
Less: Provision for Taxation: |
|
|
||||
Current. Year |
432 |
|
146 |
|
||
Deferred Tax |
(5) |
427 |
278 |
424 |
||
Profit after Tax |
778 |
821 |
||||
Add: Amount brought forward |
4567 |
3747 |
||||
Available for appropriation |
5345 |
4568 |
||||
Appropriation |
|
|
||||
Transfer to General Reserve |
4500 |
|
||||
Income Tax Refund of earlier years |
(59) |
|
||||
Dividend @ Re.0,75 per share |
302 |
|
|
|||
Income Tax on Dividend |
61 |
|
|
|||
Transfer from Other |
363 |
|
||||
Comprehensive Income |
11 |
1 |
||||
Retained profit carried forward to the following year |
530 |
4567 |
||||
During the year under review, the Companyâs performance improved at the operational level and the Company recorded a higher profit from the manufacturing activities of Rs,773.92 lakhs (against Rs.397.52 lakhs last year). The turnover has also increased by about 10%. Daring the year, exports were at Rs.3,824.51 lakhs representing 23.41% of the total turnover. Trading conditions were volatile throughout the year. Textile exports out of India registered a negative trend, however the domestic consumption is showing some positive trends.
Appropriation to General Reserve
Considering the profitability and the available surplus, the Board of Directors desires to appropriate a sum of Rs.4500 lakhs to General Reserve.
Dividend
Considering the profits for the year and as recommended by the Audit Committee, the Board of Directors are pleased to recommend a dividend of Re.0.75 per share i.e.75% on Equity Shares of Re. 1/- each. The dividend together with dividend tax entails a cash outflow of Rs.363.71 lakhs in the current year (previous year Rs.363.â42 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 onrecord date specified in this regard. The Book Closure period being 13!t June, 2018 to 22â June, 2018 (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.
Ext r a cl o f A n n u a I Ret u rn:
The Extract of Annual Return, is furnished in Form MGT-9 as per Annexure III.
A ss o e i at e C ora pa n y:
The company does not have any body corporate as its Associate.
Change in theâNature of Business
There is no change in the nature of the business ofthe Company.
Orders by Reguiators or Courts
There were no significant and material orders passed by regulators or courts or tribunals impacting the going concern status and Companyâs operations in future.
Materia! Changes Affecting flic FinaniciaSs
There were no material changes and commitments affecting the financial position of the Company occurring between March 31,2018 and the date of this Report ofthe Directors.
Infernal Control System
The Company has in place an established internal control system designed to ensure proper recording of financial and operational information and compl iance of various internal controls and other regulatory and statutory compliances. Code on Internal Control which require that the Directors to review the effectiveness of internal controls and compliance controls, financial and operational risks, risk assessment and management systems and related partyâ transactions, have been complied with. Self certification exercises are also conducted by which senior management certifies effectiveness of the internal control system, their adherence to Code of Conduct and Companyâs 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.
Companyâs Policies
Companyâs Policies on Corporate Social Responsibility, Remuneration, Employee Concern (Whistle Blowing), the Code of Conduct applicable to Directors and Employees of the Company and policies such as insider Trading Code, Insider Trading Fair Disclosure Code and Policy on Materiality of and dealing with Related Party Transactions required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and SEBI (Prohibition of Insider Trading) Regulations, 2015 have been complied with.
These Policies, the Code of Conduct and other policies/codes as referred above are available on the Companyâs website www:vtmill.com
ISO and 5S Certification
The Companyâs factory at Sulakarai. Virudhunagar, Tamil Nadu has been certified ISO for Quality Management System Standard and also holds a 5S Certification from AOTS Alumni 5S F orum of India and GOTS Certification for the manufacture of organic cotton fabrics.
Segruentovise 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 as detailed below:
Particulars |
Amount (Rs. lacs) |
% of Turnover |
Export Sales |
3,824.51 |
23.41% |
Domestic Sales |
12,509.78 |
76.59% |
Industry Structure & Developments, Opportunities «& Threats, Outlook, Risks & Concerns
The introduction of GST was a major reform. But the markets took a longer time than expected to adjust to this changc. The small traders and manufacturers have just come on line. :
The advent of GST has enabled the Company to take Input Tax Credit [ITC] a feature which was hitherto not available to your Company. Tax evasion is expected to vanish and as a result bring in more compliance across the chain.
During the year under review, export of clothing and textile from India showed a dismal growth. Indian manufacturers are faced with higher cost as compared to the neighbouring countries and other competing countries.
While Government is taking a number of steps to address these concerns, your Company is also concentrating on eliminating inefficiencies and saving cost.
The power situation continues to be comfortable on a Pan India basis and we are able to source competitively priced power.
The Company is taking steps for development and implementation of risk management policies. 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 and the uncertainty of monsoon and its consequential impact on the demand scenario.
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 companyâs 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 ofthe Key Managerial Personnel. In terms ofthe provisions, Sri 1â. Kannan. the Chairman ofthe Company has been appointed as Chairman and Managing Director duly recommended by the Nomination and Remuneration Committee and approved by the Board of Directors. 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 Compan ies Act, 2013.
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 the limits prescribed under the Companies Act. 2013 and Rules thereon.
Retirement of Directors by Rotation
Sri. K. Vethachalam, 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.
Noii-Executive Independent Directors
The Non-Executive Independent Directors have confirmed and declared that they are not disqualified to act as a 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 28thFebruary, 2018.
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 Companyâs website www.vtmill.com. All Directors have confirmed compliance with provisions of Section 164 of the Companies Act, 2013.
Directorsâ 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, 2018 and state that:
i in the preparation of the annual accounts, the applicable accounting standardshave beers followed along with proper explanation relating to materia! departures,
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 interna! 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 M an age ria 1 Pe rson neS
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 V. Sundaramoorthy, Chief Financial. Officer (upto 03.06.2017) and
c) Sri R. Krishnan, Chief Financial Officer (from 01.04.2018)
d) Sri S. Paramasivam, Company Secretary
CorpfH-afeCioveriiarsce
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. 2018 issued by M/s.CNGSN & Associates LLP, Auditors of the Company, is also attached as part of Annexure I and forms apart of this Report of the Directors.
The Company lias 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 of SEBI (Prohibition of Insider Trading) Regulations, 2015 respectively and provided in the companyâs website at www.vtmill.com. Mr S. Paramasivam, 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 1 /(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, 2018 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. 2018. which is attached as Annexure VI11 and forms a part of this Report of the Directors.
Asjclitiâsirnrriitfee
The Audit 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 ot the Audit Committee. The Company has in place a vigil mechanism, details of which are available on the Companyâs website www.vtmil! .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.
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 tlie Board of its own puribrmunce. 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 Coiporate 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 ail Directors have understood the opportunities and risks to the Companyâs strategy, and are supportive of the direction articulated by the management team towards improvement. Corporate responsibility, ethics and compliance aie taken seriouslv. 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 Companyâs performance in all fronts viz.. New Product Development, Sales and Marketing, International business, Employee relations and compliance with statutory requirements.
tieiated Party âI ransacfions;
During the year 2014-15 and in 2015-16, 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 sendees
5. Obligations
The details in respect of the material contracts or arrangements or transactions on armâs length basis carried on with the related parties have been furnished in ANNEXURE V.
As the contracts or agreements entered into with the related parties are expiring on 31.03.20 i 9, the Board proposes to consider renewal of the contracts to be entered into with related parties for the consent of the Board of Directors and the approval of the Members of the Company at the ensuing Annual General Meeting wherever necessary.
Corporate Soda! Rwpormbiiitv Committee
A Corporate Social Responsibility Committee was constituted on April 24, 2014 with Sri l.Kannan as Chairman and M/s. K. fhiagarajan and RM. Somasundaram, Directors of the Company as Members.
The Committee met once during the year on 28!h February, 2018, to review the CSR policies, recommend for contributions tor CSR Activities carried out during the year and recommend for balance amounts to be spent for the Financial Year 2017-18.
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 promoting health care including preventive health care and imparting education for uplifting the social status of the public. In structuring its approach to 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 that may have on the Companyâs management of risk.
The Company finalized the manner of implementation of the CSR Policy and spent a sum of Rs.0.66 lakh towards conducting eye camp for the public nearby the mills as a preventive health care activity and contributed a sum of Rs.27.86 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.
The CSR policy is available on the Companyâs 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 Suit. Uma Kannan, Director of the Company is the Adviser to the Committee. The Board also has approved the prevention ol Sexual Harassment Policy and all employees especially 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, |
N ature of action taken by the employer |
Not Applicable |
N omination and Rern 11 »eration Comrni tfee
A Nomination and Remuneration Committee was constituted on April 24, 2014 and as on 31st March, 20] 8 Sri RM, Somasundaram is the Chairman and M/s. T. Kannan, K. Thiagarajan and A. Mariappan are Members of the Committee, The 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 twice on 30,04.2017 and 02.08.2017, the first one for reviewing the Nomination and Remuneration Policy and the second one for considering and accepting the resignation of Mr, V. Sundaramoorthy as Chief Financial Officer.
The Companyâs Remuneration Policy is available on the Companyâs website www.vtmill.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 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. 20 i 3 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, 2017, 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 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 Companyâs shares are compulsorily traded in the dematerialized form. The IS1N number allotted is 1NE222F01029. The details of shareholding pattern, distribution of shareholding and share prices are mentioned separately in the attached Corporate Governance Report .
Auditors
In terms of Section 139 of the Companies Act and the rules made thereon, M/s CNGSN & Associates LLP, Chartered Accountants, Chennai (Firm Regn. No. 004915S/S200036) have been appointed as Auditors of the Company by the members at their meeting held on 23rd June, 2017 and the Auditors have been appointed for aperiod of five years from the conclusion of 70th Annual General Meeting till the conclusion of the 75,h Annual General Meeting, The Auditors have already submitted certification u/s. 141 of the Companies Act and Peer Review Certificate in respect of their appointment as Auditors of the Company.
Secretarial Atidit
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 Auditorâs 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 is 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. 11 and 13 of the Balance Sheet.
In compliance with Section 186 of the Companies Act. 2013, loans to employees bear interest at applicable rates.
Conservation «f Energy. TeehuoJo&y Abf^>iâption and âforeign tAcIiange Earamgs ami Oiitgn
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) ol 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. There are no employees drawing remuneration more than Rs.102 Lakhs per annum or Rs.8,50,000/- per month.
A n nexures forming a part erf 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.
VIL Annual Report on CSR spending.
VIII. Chairman & Managing Directorâs Certificate under Regulation 34(3) read with Part D of Schedule V to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 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 Pol icy.
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 ,7,2018 CHAIRMAN AND MANAGING DIRECTOR
Mar 31, 2017
DIRECTORS'' REPORT
FOR THE YEAR ENDED ON 3 lST MARCH, 2017.
To the Members of VTM Limited
The Directors have pleasure in presenting their 70"''Annual Report along with the Audited statement of accounts for the year ended 31â March, 2017.
Operating & Financial Performance Profits, Dividends & Retention
2016- 2017 |
2015-2016 |
|
Turnover |
14770 |
15409 |
Profit before Depreciation |
2606 |
1898 |
(after interest) |
||
Less: Depreciation |
729 |
516 |
Profit after Depreciation |
1877 |
1382 |
Less: Exceptional item |
680 |
- |
Profit after exceptional item |
1197 |
1382 |
Less: Provision for Taxation: |
||
Current Year |
115 |
400 |
Deferred Tax |
48 |
84 |
Taxation for earlier years |
31 |
(34) |
194 |
---- 450 |
|
Profit after Tax |
1003 |
932 |
Add: Amount brought forward |
332 |
264 |
Available for appropriation |
1335 |
1196 |
Annronriatinn |
||
Transfer to General Reserve |
500 |
|
Interim Dividend @ Re .0. 75 per share |
302 |
|
Income Tax on Dividend |
62 |
|
âââ |
. 364 |
|
Retained profit carried forward |
___ |
V ___ |
to the following year |
1335 |
332 |
-- |
During the year under review your Company improved its performance and clocked a Net Profit after tax of Rs. 10.03 Crores. Challenging market conditions prevailed during the first half of the year. Exports were at Rs.35.38 Crores against Rs.29.29 Crores thus showing a healthy uptick. Cotton yam prices witnessed a strong upsurge during the last quarter and fabric prices are yet to adjust to those levels.
During the year under review, your Company has carried out a modernization programme and has replaced 40 Nos. of wide width weaving machine with new generation state-of-the-art machines at a cost of about Rs. 15.92 Crores. This will result in better quality and realization in the current year.
Appropriation to General Reserve
During the year, the company has not appropriated any profits to General Reserve.
Dividend
Considering the profits for the year and as recommended by the Audit Committee, the Board of Directors are pleased to recommend a dividend of Re.0.75 per share i.e.75% on Equity Shares of Re. 1/- each. The dividend together with dividend tax will entail a cash outflow of Rs.364 Lakhs in the current year (previous year Rs.364 Lakhs as interim dividend and dividend tax thereon). 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 12th June, 2017 to 23rd June 2017 (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:
The company does not have any body corporate as its Associate.
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 Companyâs 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 31,2017 and the date of this Report of the Directors.
Internal Control System
The Company has in Pace 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 to 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 certifies 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 Phonics on Corporate Social Responsibility, Remuneration, Employee Concern (Whistle Blowing), the Code of Conduct applicable to Directors and Employees of the Company and polices such as Insider Trading Code, Insider Trading Fair Disclosure Code and policy on Materiality of and dealing with Related Party Transactions required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and SEBI (Prohibition of Insider Trading) Regulations, 2015 have been complied with.
These Policies, the Code of Conduct and other policies/codes as referred above are available on the Company''s website www.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 also holds a 5S Certification from AOTS Alumni 5S Forum of India and 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 passage of GST legislation is viewed as a major enabler towards ease of doing business. Wc expect that this will iron out the inefficiencies in the tax chain and result in a more positive business environment. The supply chains are expected to become more efficient.
The power situation continues to be comfortable on a Pan India basis and we are able to source competitively priced power.
During the year under review, textiles and clothing exports from India showed dismal growth rates and remained at stagnation levels. We hope that the global economic recovery which is now being witnessed will boost the export prospects for Indian Textiles.
I he Company is taking steps for development and implementation of risk management policies. 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 and the uncertainly of monsoon and its consequential impact on the demand scenario.
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
File 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 has been appointed as Chairman and Managing Director duly recommended by the Nomination and Remuneration Committee and approved by the Board of Directors. 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.
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 the limits prescribed under the Companies Act, 2013 and Rules thereon.
Retirement of Directors by Rotation
Smt Uma Kannan, Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible has offered herself for reappointment as a Director of the Company. Being eligible, she 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 27th January, 2017.
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 31 st March, 2017 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 arc 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 I\ Kannan, Chairman and Managing Director
b) Sri V. Sundaramoorthy, Chief Financial Officer and
c) Sri S. Paramasivam, 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 ol 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, 2017 issued by M/s.Peri I hiagaraj & Co., Auditors of the Company, is also attached as part of Annexure I and forms a part of this Report of the Directors.
I he 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 of of SEBI (Prohibition of Insider Trading) Regulations, 2015 respectively and provided in the company''s website at www.vtmill.com. Mr S. Paramasivam, 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 31 st March, 2017 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, 2017, 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, 2017, the 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 Audit Committee is empowered with monitoring the appointment of Key Managerial Personnel.
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. d |
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 arc 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 and in 2015-16, 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 22"1 March, 2017, to review the CSR policies, approve contributions for CSR Activities carried out during the year and approve for balance amounts to be spent for the Financial Year 2016-17.
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 promoting health care including preventive health care 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 maimed of implementation of the CSR Policy and spent a sum of Rs. 1.32 lakhs towards conducting eye camp for the public nearby the mills as a preventive health care activity and contributed a sum of Rs.25.21 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.
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 especially 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 st March 2017, Sri RM. Somasundaram is the Chairman and M/s.T. Kannan and A Mariappan are Members of the Committee. During the year, Sri K. Thiagarajan, Non-Executive Director of the company was nominated as member of the committee. Including him, the 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 once for reviewing the Nomination and Remuneration Policy and for recommending the appointment of Chief Financial Officer. The NRC recommended the appointment of Sri V. Sundaramoorthy as Chief Financial Officer of the Company.
The Company''s Remuneration Policy is available on the Companyâs website www.vtmill.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 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. As on 31st March, 2017, 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 dematerialization 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, holds office as Auditors of the Company till the conclusion of the ensuing Annual General Meeting and they are not eligible for reappointment. There are no qualifications or observations or remarks made by the Auditors in their Report.
In terms of Section 139 of the Companies Act and rules made thereon and subject to approval by the members of the Company at the ensuing Annual General Meeting, the Board proposes to appoint M/s. CNGSN & Associates LLP, Chartered Accountants, Madurai (Firm Regn. No. 004915S/S200036) as recommended by the Audit Committee for a term of five years from the conclusion of the ensuing Annual General Meeting till the conclusion of the IS* Annual General Meeting subject to ratification by the members of the company every year. The proposed Auditors have submitted certification u/s. 141 of the Companies Act and Peer Review Certificate in respect of their appointment as Auditors of the company.
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 Auditorâs 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 is 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. 11 and 13 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. There are no employees drawing remuneration more than Rs.102 Lakhs per annum or Rs.8,50,000/- per month.
Disclosure of details of Specified Bank Notes:
The company has provided necessary disclosure as to holdings and dealings in respect of Specified Bank Notes (SBN) and other notes for the period from 8,b November, 2016 to SO* December, 2016 in Note No.4 to Notes on Accounts.
Annexure forming a part of this Report of the Directors
The Annexure 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 Eatingâs and Outgo
V. Form AOC-2 for material contracts with Related Parties
A
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,
, 2015 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 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 2017 CHAIRMAN AND MANAGING DIRECTOR
Mar 31, 2016
The Directors have pleasure in presenting their 69th Annual Report along with the Audited statement of accounts for the year ended 31â 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.
Companyâs 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 Companyâs 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 companyâs 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 Companyâs 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 Companyâs 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