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The objectives of studying the Annual Report of VIJAY TEXTILES are the following a) To study and understand the Balance sheet, outflow and inflow of cash for two accounting periods. b) To develop a detailed report after analysis. c) To understand different frame works. d) To study different concepts involved in preparation of Annual Report

VTL was incorporated on 02 February 1990 and subsequently converted into a Public Limited Company for which it obtained a fresh certificate of incorporation on 17 June 1994. In fact, the Promoters of the Company chiefly Mr. Vijay Kumar Gupta after inheriting the family business of over four decades old have been able to transform it in to its present size and stature. Initially the family firms were in the business of trading in textiles and they gradually developed in to manufacturing outfit by obtaining the grey & processing of the fabric. The major activity consisted of purchase of Polyester Yarn from large Mumbai market, conversion of Yarn into Grey Cloth on job contracts with the Weaving Contractors at Bhiwandi in Maharashtra and then getting the Grey Cloth processed in to finished fabrics from Textile Processors at Hyderabad. The Finished Fabric thus manufactured was marketed under the brand name of VIJAY throughout India. VTL established its brand name in the major domestic market and created a strong sales network for its brand of products. With this strong backdrop it then ventured into full-fledged manufacturing of Processed Textiles by setting up its own facilities in June 1993 and commenced the operations from September 1993 onwards. The Process House of the Company was setup at APIIC Developed Industrial Estate in Kattedan, Hyderabad in a land admeasuring 2 Acres fully owned by the company. The manufacturing facility at Kattedan was in operation up to June 2006, after which it has converted the premises by using the infrastructure available for its all India wholesale trade operations, facilitating dispatching of goods to the dealers across the country. As consequent to Government directives the Company decided to set a new manufacturing facility at Rajapoor Village, Balanagar Mandal Mahaboobnagar District. The new project site was chosen for variety of reasons like proximity to twin cities and its location along the national highway, whereby all infrastructural facilities are within easy reach. There are other textile units including a spinning unit coming-up in this belt. The new unit is conceived to keep pace with technological advancements and with a commitment to ecology for locating the unit in the back drop of green belt in an extremely environment friendly ambience. This new facility gives the Company an edge to expand it manufacturing facilities and add many more value added

products. The Company has also set up additional facilities for production of wider width of cloth at the Rajapoor factory site. And bring more value addition to its wide range of exclusive products the company has also added fully automatic Embroidery Unit within the premises of its manufacturing unit by importing world class machinery from Japan. The Company has its Corporate Office at Secunderabad and besides it has a very exclusive factory retail outlet in the sub-ground floor of the same premises with a total area of around 30000 SFT fully owned by the company.

Accounting policy:Accounting policies are the Principles, rules and procedures selected, and consistently followed, by the management of an organization (the accounting entity) in preparing and reporting the financial statements are called as accounting policies. Accounting policies deal specifically with matters such as consolidation of accounts, depreciation methods, goodwill, inventory pricing, and research and development costs. These policies must be disclosed in the annual financial statements

1) Accounting Convention
The financial statements are prepared under the historical cost convention, on the accrual basis of accounting, in accordance with the Generally accepted accounting principles in India, the Accounting Standards prescribed in the Companies (Accounting Standard) Rules, 2006 and the relevant provisions of the Companies Act, 1956.

2) Use of Estimates
The preparation of financial statements in conformity with generally Accepted accounting principles requires the management to make Estimates and assumptions that affect the reported balances of assets And liabilities as of the date of the financial statements and reported Amounts of income and expenses during the period. Management believes That the estimates used in the preparation of financial statements are Prudent and reasonable. Actual results could differ from the estimates.

3) Revenue RecognitionSales are recognized when goods are supplied and are recorded net of trade discounts, rebates, sales taxes and excise duties (on goods manufactured and outsourced) but include, where applicable, export incentives such as duty drawbacks and premiums on sale of import licenses. It does not include inter-divisional transfers. Income from Property Development Activity is recognized in terms of arrangements with developers, where applicable. Incomes from services rendered are booked based on agreements/arrangements with the concerned parties. Interests on investments are booked on a time proportion basis taking into account the amounts invested and

he rate of interest. Dividend incomes on investments are accounted for when the right to receive the payment is established.

4) ExpenditureExpenses are accounted for on accrual basis and provision is made for all known losses and liabilities. Advertising expenses are charged against the profit of the year to which the activities relate. Revenue expenditure on research and development is charged against the profit of the year in which it is incurred. Capital expenditure on research and development is shown as an addition to fixed assets.

5) Goodwill and other Intangible AssetsIntangible assets are stated at cost of acquisition less accumulated amortization. Goodwill and other intangible assets (except computer software) are amortized over the assets useful life not exceeding 10 Years. Computer software is amortized over a period of 5 years on the straight line method. Goodwill arising on consolidation in accordance with AS-21 is amortized over 4 years at quarterly rests commencing from the quarter of recognition of goodwill.

6) Impairment of AssetsImpairment loss, if any, is provided to the extent, the carrying amount of assets exceeds their recoverable amount. Recoverable amount is higher of an assets net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life.

6) Fixed AssetsFixed Assets are stated at cost or as revalued as the case may be, less Accumulated depreciation. Cost includes expenses related to acquisition And any directly attributable cost of bringing the assets to its Intended working condition. Fixed assets are stated at cost less depreciation. Depreciation is provided (except in the case of leasehold land which is being amortized over the period of the lease) on the Straight Line Method (SLM) and at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956. However, Certain employee perquisite-related assets are depreciated over four to six years, the period of the perquisite scheme. Computers and related assets are depreciated over four years. Certain assets of the cold chain are depreciated over four / seven years. Motor vehicles are depreciated over six years and assets of certain subsidiaries are depreciated on the Written down Value Method (WDV). The difference between the SLM basis and WDV basis is not significant.

Assets identified and evaluated technically as obsolete and held for disposal are stated at their estimated net realizable values Fixed Assets acquired under finance lease are capitalized at the lower Of their face value and present value of the minimum lease payments. These assets help in earning revenue and cannot be easily converted into cash. Fixed assets can be of two types: 1. Tangible assets. 2. Intangible assets. Assets having physical existence like land, building, machinery, etc. are called tangible assets. Intangible assets do not have physical existence like goodwill, patents, etc.

In this company we can find that in the year 2010-11 Vijay Textiles has increased his fixed assets by 21 crores & the percentage growth is 4.57%.and in year 2009-10 growth % was 2.31%. and year 2008-09 the growth of fixed assets was 6.98% but in the year 2007-08 the fixed assets was decrease by 2.75 %.

2010-11 379.89 2009-10 234.90 2008-09 288.71 2007-08 293.42 2006-07 278.04 2005-06 205.94


Company is maintaining the full record of all particulars including quantitative details and situation of fixed assets. The company has a program for physical verification of fixed assets.

7) Investments
Investments are classified into long-term and current investments. Long Term investments are carried at cost. Provision for diminution, if Any, in the value of each long term investment is made to recognize a Decline, other than of a temporary nature. The fair value of a long Term investment is ascertained with reference to its market value, the Investees assets and results and the expected cash flows from the Investment.

8) Sundry Debtors and Loans and AdvancesSundry debtors and Loans and Advances are stated after making adequate provisions for doubtful balances.

9) ProvisionsA provision is recognized when there is a present obligation as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation and in respect of

which reliable estimate can be made. Provision is not discounted to its present value and is determined based on the best estimate required to settle the obligation at the year-end date. These are reviewed at each year end date and adjusted to reflect the best current estimate.

10) Retirement / Post Retirement BenefitsContributions to Defined Contribution schemes such as Provident Fund, etc. are charged to the Profit and Loss account as incurred. In respect of certain employees, Provident Fund contributions are made to a Trust administered by the Company. The interest rate payable to the members of the Trust shall not be lower than the statutory rate of interest declared by the Central Government under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall, if any, shall be made good by the Company. The remaining contributions are made to a government administered Provident Fund towards which the Company has no further obligations beyond its monthly contributions. The Company also provides for retirement / post-retirement benefits in the form of gratuity, pensions, leave encashment and medical. Such benefits are provided for based on valuations, as at the balance sheet date, made by independent actuaries. Termination benefits are recognized as an expense as and when incurred.

11) Taxes on IncomeCurrent tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax is recognized, subject to the consideration of prudence, on timing differences, being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are not recognized on unabsorbed depreciation and carry forward of losses unless there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

12) Foreign Currency TranslationsForeign currency transactions are accounted at the exchange rates prevailing at the date of the transaction. Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognized in the profit and loss account. Forward exchange contracts outstanding as at the period end on account of firm commitment/highly probable forecast transactions are marked to market and the resultant gain/loss is dealt in the profit and loss account.

13) Segment ReportingThe accounting policies adopted for segment reporting are in line with the accounting policies adopted in consolidated financial statements with the following additional policies being considered for segment reporting: A) Inter segment revenue has been accounted for based on the transaction price agreed to between segments which is primarily market led. B) Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment.

14) LiabilitiesLiabilities are debts or obligations of a company. Liabilities are of two types 1. Long term liabilities 2. Current liabilities Long term liabilities: Long term liabilities are those liabilities that are carried over a number of years or at least more than one accounting cycle. Examples: bank loan, bonds payable, mortgage payable etc. Current liabilities: Current liabilities are those liabilities that are due to others in a short period of time. Examples: bills payable, outstanding expenses, incomes received in advance etc.

2010-11 6.28 2009-10 17.97

15) Depreciation
Depreciation is a non-cash expense that reduces the value of an asset as a result of wear and tear, age or obsolescence. Most assets lose their value over time and this loss in value is called

depreciation. Since it is a non-cash expenditure it reduces the reported earnings of a firm and increases the free cash flow in a firm. The following are the various methods used to value depreciation : 1. Straight line method 2. Written down value method 3. Production units method 4. Sum of digits method
Observation: Depreciation on fixed assets is provided on straight line method based on useful lives of assets as estimated by the management. Depreciation for the assets purchased or sold during the period is proportionately charged. Intangible assets are amortized over the respective estimated useful lives on straight line basis. Depreciation in 2010 is 14,35,78,045 crores which includes depreciation on plant & machinery, land, building, electrical fittings, furniture fittings, office equipment, vehicles and it is 18,65,43,607 crores in 2011.

Inventories include raw materials, work in progress goods and completely finished goods which are a part of a businesss assets that are ready or will be ready for sale. Turnover of inventory is one of the primary sources of revenue generation and subsequent earnings for the company. Possessing too high inventory or too little inventory isnt good because high inventory poses a risk of storage, obsolescence, and spoilage costs and too little inventory poses a risk of losing out on potential sales and potential market share.

Inventories RAW-material Work in progress Finished goods Stores and consumables Total 2011(in Rs) 9,13,30,647 1,44,10,176 75,15,12,151 2,70,25,924 88,42,78,898 2010(in Rs) 2,37,68,809 66,53,792 57,36,34,300 62,81,59,731 62,81,59,731

Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business (called retained earnings), or it can be paid to the shareholders as a dividend. Many corporations retain a portion of their earnings and pay the remainder as a dividend. For a joint stock company, a dividend is allocated as a fixed amount per share. Therefore, a shareholder receives a dividend in proportion to their shareholding. For the joint stock company, paying dividends is not an expense; rather, it is the division of an asset among shareholders. Public companies usually pay dividends on a fixed schedule, but may declare a dividend at any time, sometimes called a special dividend to distinguish it from a regular one. Cooperatives, on the other hand, allocate dividends according to members' activity, so their dividends are often considered to be a pre-tax expense. Dividends are usually settled on a cash basis, as a payment from the company to the shareholder. They can take other forms, such as store credits (common among retail consumers' cooperatives) and shares in the company (either newly-created shares or existing shares bought in the market.) Further, many public companies offer dividend reinvestment plans, which automatically use the cash dividend to purchase additional shares for the shareholder. Dividends Proposed dividends Corporation tax on dividend Un claimed dividends Dividend paid 2010(Rs) 11500000 1865588 1422953 10713540 2011(Rs) 9200000 1563540 1269287 13454425

RESERVE AND SURPLUS: Reserves represent retained profit. These reserves are created for different purposes; they are appropriations to net profit. Some examples of reserves are general reserve, capital reserve, debenture redemption reserve etc. These reserves are maintained to meet some future losses. Surplus is defined as the profit which is set aside after paying expenses and other necessary deductions such as rents paid, interest paid, dividends paid.


AMOUNT in Rupees (2011)

AMOUNT in Rupees (2010)

Share premium General reserve Profit and loss Total

19,43,12,510 31,27,61,541 610,70,553 5681,44,604

19,43,12510 26,27,61,541 573,87,528 51,44,61,579

Surplus generally means any excess amount, but in finance it is the remainder of a fund appropriated for a particular purpose. In a corporation, surplus means assets left after liabilities and debt, including capital stock, has been subtracted.

y Share premium: As at march 31st 2010, capital reserve amounted to Rs 19,43,12,510 cr which is the same as the previous year. Profit and Loss account: The surplus transferred to reserves and surplus has also increased from Rs 531.66cr in 2009 to Rs 802.19cr in 2010 . The companies reserve and surplus of 2009 is 1843.52 and of 2010 is 2365.38cores

y y


A secured loan is a loan in which the borrower pledges some asset as collateral for the loan, which then becomes a secured debt owed to the creditor who gives the loan. Loans under different categories are available against certain assets, property, equipment and other immovable property, inventories and receivable of the parent company or concerned subsidiary. The secured loans are the loans taken from the bank by the company. The securities kept by the firm for getting loan are reduced as the secured loans are decreased. Unsecured loans are those which are to be paid back within one year and are mostly the short term loans which do not require any security. These appear on the liability side of the balance sheet. This increases the liability of the firm but is better than the secured loans. The increase in loans is however a bad sign for the company.

PARTICULARS Working capital loans from bank Term loan from bank Vehicle loans AMOUNT in Rupees (2011) 79,93,36,361 64,16,47,638 25,58,246 AMOUNT in Rupees (2010) 61,56,25,383 99,79,81,288 77,71,723




UNSECURED LOAN PARTICULARS From Director From Bank From Bodies corporate Total AMOUNT in Rupees 69,42,15,600 0 100,00,000 70,42,15,600 AMOUNT in Rupees 30,95,76,665 104,89,876 0 32,00,66,541

Secured loan taken by company is Rs 161,43,83,943 is more compare to 2010 which is 144,35,42,245 In case of unsecured loan the company have taken loan from in 2010 company have taken loan from director and bodies whereas in 2011 from director and bank.

Income and expenditure: financial statement that summarizes the revenues, costs and expenses incurred during a specific period of time - usually a fiscal quarter or year. These records provide information that shows the ability of a company to generate profit by increasing revenue and reducing costs. This statement is also known as a "statement of profit and loss", or "income statement" or an "income and expense statement". This statement includes both operating and non-operating items. This includes selling and distribution expenses, administrative expenses, operating expenses, operating incomes. Every loss or profit made is shown in this account. This is very useful for payment of taxes and dividends, so there is a need for calculation of profit as the tax has to be paid on that and the dividends are declared only if profit is made. Net Income is the amount of revenue that was not spent on operations; it represents the amount of the increase in overall value. Particulars Other income Operating income Depreciation Raw material consumed 2011 1,81,91,514 130,03,34,543 497,82,993 93,02,12,666 2010 1,98,38,995 120,02,69,084 440,14,756 71,17,07,971

Other expenses Profit before tax Profit after tax

751,10,823 9,25,59,299 12,44,36,141

696,17,289 5,28,65,314 1181,51,068

Observation-other income for 2010 is 198,38,995 whereas Rs 18,191,514 for 2011,operating income for 2010 is 120,02,69,084 and for 2011 it is 18,191,514. In case of depreciation 2010 440, 14,756 and 2011 49782993. The profit of the company before tax is 1181, 51,068 in 2010 and 12,44,36,141 in 2011.

21)Balance Sheet
A balance sheet is a snapshot of a business financial condition at a specific moment in time, usually at the close of an accounting period. A balance sheet comprises assets, liabilities, and owners or stockholders equity. Assets and liabilities are divided into short- and long-term obligations including cash accounts such as checking, money market, or government securities. At any given time, assets must equal liabilities plus owners equity. An asset is anything the business owns that has monetary value. Liabilities are the claims of creditors against the assets of the business. The balance sheet shows: Assets = Liabilities + Shareholders Equity


Schedule Number

Figures as at the end of current financial year (31/3/11)

Figures as at the end of previous financial year (31/3/10)

I. Source of Funds: 1. Shareholders Funds: (a) Share Capital (b) Share warrants (c) Reserves and Surplus 2. Loan Funds: (a) Secured loans (b) Unsecured loans Net Deferred Tax Liability II. Application of Funds 1. Fixed Assets: (a) Gross block

(b) Less : depreciation (c) Net block 2.Capital work-in-progress Investments: 3. Current Assets, Loans and Advances: (a) Inventories (b) Sundry Debtors (c) Cash and Bank Balances (d) Other Current Assets (e) Loans and Advances Less: Current Liabilities and Provisions: (a) Current liabilities (b) Provisions Net Current Assets 4. (a) Miscellaneous expenditure to the extent not Written-off or adjusted.


Observation: Vijay Textiles prepares its balance sheet in the vertical format. It comprises of sources and application of funds. Sources of funds include shareholders funds (share capital, share warrants and reserves & surplus) and Loan funds (secured loans and unsecured loans). Application of funds includes fixed assets (both tangible and intangible), investments, deferred tax assets and net current assets (current assets - current liabilities). The balance sheet tallies at Rs 294, 50, 14,848. SOURCES OF FUNDS SHARE HOLDERS FUNDS: The authorized share capital is Rs 2cr divided into 2cr equity shares of Rs 1/- each. The issued, subscribed and fully paid up capital Rs 11, 50, 00,000 as at March 31st 2011. RESERVES AND SURPLUS: Reserves and surplus has increased to Rs 31, 27, 61, 541 from Rs 26,27,61,541 in 2011.

APPLICATION OF FUNDS FIXED ASSETS: The block in tangible assets increased from Rs 65,90,39,687 to Rs 87,40,57,585. INVESTMENTS: Investments was Rs 1,35,90,000 in 2010 and it is Rs 0 in 2011. Thereby decreasing cash balance to Rs 1,00,06,834 from Rs 1,01,91,229. DEFERRED TAX ASSET: Deferred tax asset has increased from Rs 9,01,65,973 9,71,09,710. to Rs

NET CURRENT ASSETS: Net currents assets are the difference between current assets and current liabilities. Debtors have increased from Rs 42,00,46,151 to Rs 47,34,81,081 implying an increase in credit sales. Cash balances have also decreased due to increase in Dues. There is an overall increase in both current assets and current liabilities ( Rs 8,22,55231 to Rs16,56,49,902) resulting in the increase in net current assets (Rs 101,00,03179 in 2010 to Rs 123,52,68,158 in 2010)

22)Cash flow statement

A revenue or expense stream that changes a cash account over a given period. Cash inflows usually arise from one of three activities - financing, operations or investing. Cash flow statement is one of the main financial statements that show actual cash inflows and cash outflows from operating activities, investing activities and financing activities. This statement does not include non-cash incomes and expenses and outstanding expenses and accrued incomes. As the name suggests it includes only those transactions which result in cash inflow or cash outflow. The cash flow statement organizes and reports the cash generated and used in the following categories: 1. Operating activities - Converts the items reported on the income statement from the accrual basis of accounting to cash. 2. Investing activities- Reports the purchase and sale of long-term investments and property, plant and equipment. 3. Financing activities - Reports the issuance and repurchase of the company's own bonds and stock and the payment of dividends.

4. Supplemental information- Reports the exchange of significant items that did not involve cash and reports the amount of income taxes paid and interest paid. Observation: The net cash flows from operating activities is increased from Rs 7,34,32,876 in 2010 to Rs 10,59,21,271 in 2011. The net cash used in investing activities in 2010 is Rs 24,13,63,332 and in 2011 it is Rs.9,53,72,957 and the net cash used in financing activities in 2010 was Rs. 25,22,13,885 and decreased to Rs.20,11,09,753. The cash and cash equivalent at the end of the period is Rs 1, 00, 06,824 The cash flow from operating activities increase and it is a good sign as Investors tend to prefer companies that produce a net positive cash flow from operating activities and thus this positive cash can also be used for further investments for the growth of the company.

NOTES ON ACCOUNTS: Notes on accounts contain the information about all the matters which are disputed or need further disclosure. It is very important to go through the notes on accounts while using any of the financial statements. 1) The contingent Liability is not provided for in respect of claims against the company is not acknowledged as debts: -Counter Guarantee given towards bank Guarantee Rs 33.80 lakhs(previous year Rs 19.05 lakhs) -Estimated amount of liability on account of capital Commitments Rs 38.80 Lakhs includes Rs 3787.50 Lakhs towards Software park. -Export Obligation is Rs 9,39,30,216 over a period of 8 years ending on 07/04/2016 for concessional duty availed for import of machinery. -Export Obligation is Rs 97,85,513 over a period of 6 years ending on 09/08/2016 for concessional duty for import of machinery. -Income Tax Assessment year 2007-08 of Rs 279.88 Lakhs for which company has filed appeal before the concerned authorities. 2) The Company has raised funds by issue of Convertible Share Warrants on preferential basis and allotted 50,00,000 Warrants to Promoters at the meeting of the Board of Directors held on 08.10.2010.These Share Warrants are priced at ` 4/- per instrument. Promoters paid 25% of the value of warrants and the balance will be paid upon conversion in to Equity Shares of ` 1/- each within a period of 18 months from the date of allotment of warrant.

3) Vehicle loan is secured by way of hypothecation of specific vehicle financed.Capital work in progress includes Rs 75.52 Crores (Previous year Rs 75.52 Crores) towards Software Park.Loans and advances include advances for Capital Assets - Nil. (Previous Year Rs 12.00 Lakhs).The Company received Capital Subsidy of Rs119.98 Lakhs (Previous year Nil). 4) Defined Benefit Plan : The employees gratuity fund scheme managed by a Trust is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognized each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit to build up the final obligation. 5) The Company's Lease Agreement is in respect of Building at Ameerpet, Kukatpally, Dilsukhnagar, and A.S. Rao Nagar show rooms. The lease rentals payable are charged as "Lease Rental charges" under " Other Expenses " in Schedule -19.This Leasing arrangement are for longer period and renewable by mutual consent on mutually agreeable terms. 6) In accordance with the Accounting Standard (AS-28) on "Impairment of Assets" the management during the year carried out exercise of identifying the assets that may have been impaired in respect of each cash generating unit. On the basis of this review carried out by the management there was no impairment loss on the fixed assets during the year ended 31st March, 2011. 7) The Company has not provided for cess u/s 441A of the Companies Act, 1956 as the Central Government has not specified the rules and manner of depositing the same. The previous year's figures have been regrouped and rearranged wherever necessary so as to make them comparable with the current year.

23)Director s Report Financial Performance

Turnover for the year 2010-2011 is 13185.26 lakhs and in 2009-2010 it is 1221.08 lakhs. The net profit for the year 2010-2011 is 925.59 lakhs and in 2009-2010 is 528.65. The profit after tax is 670.48 in 2010-11 and 371.07 in 2009-10. The dividends in the year 2010-2011 are 115.00 lakhs and 92.00 lakhs in 2009-10. The transfer to General Reserve is 500.00 crores in 2010-11and in the year 2009-1010 is 250.00 crores. The Profit and Loss Account Balance carried forward for the year 2010-2011 is 610.70 lakhs and for the year 2009-2010 is573.88 lakhs.

Profit and Loss Account

The sales and other income for the 2010-2011 year is 13185.26 Lakhs and net profit of 670.48 Lakhs as compared to 12201.08 Lakhs of sales and other income and net profit of 371.07 Lakhs achieved in the last financial year respectively. The total profit made in the year 2010-11is 925.59 and it is 528.65 lakhs for the year 2009-2010.

Corporate Office and Research Centre

The Corporate Office is in Secunderabad. The Process House of the Company was setup at APIIC Developed Industrial Estate in Kattedan, Hyderabad in a land admeasuring 2 Acres fully owned by the company. The manufacturing facility at Kattedan was in operation up to June 2006, after which it has converted the premises by using the infrastructure available for its all India wholesale trade operations, facilitating dispatching of goods to the dealers across the country. The manufacturing facility at Kattedan was in operation up to June 2006, after which it has converted the premises by using the infrastructure available for its all India wholesale trade operations, facilitating dispatching of goods to the dealers across the country. As consequent to Government directives the Company decided to set a new manufacturing facility at Rajapoor Village, Balanagar Mandal Mahaboobnagar District. The new project site was chosen for variety of reasons like proximity to twin cities and its location along the national highway, whereby all infrastructural facilities are within easy reach. There are other textile units including a spinning unit coming-up in this belt. The new unit is conceived to keep pace with technological advancements and with a commitment to ecology for locating the unit in the back drop of green belt in an extremely environment friendly ambience. This new facility gives the Company an edge to expand it manufacturing facilities and add many more value added products. The Company has also set up additional facilities for production of wider width of cloth at the Rajapoor factory site. And bring more value addition to its wide range of exclusive products the company has also added fully automatic Embroidery Unit within the premises of its manufacturing unit by importing world class machinery from Japan.

24) Corporate Governance

Company's Philosophy on Code of Governance: Vijay Textiles Limited (VTL) is committed to the highest standards of Corporate Governance in all its activities and processes. The Company always believes that good corporate governance practices enable the management to direct and control the affairs of the Company in an efficient manner and to achieve the Company's goal of maximizing value for its shareholders. The Company will continue to focus its resources, strengths and strategies to achieve its vision of becoming a truly global Company.Key elements of corporate governance are transparency, disclosure, supervision & internal controls, risk management, internal & external communications, high standards of safety, health, environment, accounting fidelity product and service quality. The Board has empowered responsible persons to implement its broad policies and guidelines and has setup adequate review process. The following is a report on the corporate governance.

Board of Directors The composition of Board of Directors consists of two Promoter Whole-time Director(s) and four Independent Non-Executive Directors up to 31st December 2010. Consequent upon the demise of one Independent Non-Executive Director, the strength stands reduced to three. The number of Independent Directors is more than one third of the total number of Directors. The number of Non Executive Directors (NEDs) more than 50% of the total number of Directors. None of the Directors on the Board is a member on more than ten committees or Chairman of more than five committees as specified in Clause 49. The Directors have made necessary disclosures regarding committee positions. Code of Conduct The Company has evolved a Code of Conduct for the Directors and Senior Management Personnel of the Company, which has been affirmed for adherence. Financial Calendar: 1st April to 31st March First Quarter Results - 15th of August, 11 * Half yearly Results - 15th of November, 11 * Third Quarter Results - 15th of February, 12* Results for the year ending 31.03.2012 End of May 2012. * Provisional

25)Auditors Report
Balance Sheet of Vijay Textiles Limited as at 31.03.2011 is being audited and the Profit &Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit. 1- The auditing was done in accordance with the auditing standards generally accepted in India. Those Standards require proper planning and perform the audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. The main aim was that the audit provides a reasonable basis. 2- Further to the comments in the Annexure referred it is reported that:

y y y y y

All the information and explanations, which to the best of knowledge and belief are necessary for the purposes of the audit. Proper books of account as required by law have been kept by the Company so far as appears from our examination of those books. The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of accounts. The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards. On the basis of written representations received from the directors, as on 31st March, 2011, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2011from being appointed as a director.

Further based on the annexure to the auditors report the following conclusions are drawn: 1 The company has no accumulated losses as at March 31, 2010 and has not incurred any cash losses in the financial year ended on the date or in the immediately preceding financial year. The company has not defaulted in repayment of dues to any financial institutions or bank or debenture holders. The company did not any loans and advances on the basis of security by way of pledge of shares debentures and other securities. The company is not a dealer or trader in shares, debentures, securities and other investments. The company did not give any guarantee for loans taken by others from banks or financial institutions. No short term funds are taken which have been used for long term investment. The company has not raised any money by public issue during this financial year The company did not issue any debentures during this financial year. During the course of examinations by the auditors the books and records are in accordance with the generally accepted auditing practices in India, and there is no instance of material fraud on or by the company noticed or reported during the year .

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