TO THE MEMBERS
Your Directors have pleasure in presenting the 38th (Thirty Eight) Annual Report of theCompany together with the Audited Accounts for the year ended March 31 2017.
|1 FINANCIAL RESULTS ||2016-17 ||2015-16 |
| ||(Rs. In lakh) ||(Rs. In lakh) |
|Sales / Income from operations ||67752.28 ||69954.41 |
|Profit before interest Depreciation and Tax ||4528.13 ||5070.07 |
|Financial Charges ||2928.11 ||3282.66 |
|Depreciation ||1541.32 ||1457.05 |
|Provision for Income Tax / Deferred Tax ||(155.62) ||114.96 |
|Profit / Loss after Tax ||214.32 ||215.40 |
|Balance brought forward from previous year ||266.33 ||280.30 |
|TOTAL ||480.65 ||495.70 |
|Appropriation: || || |
|Dividend & Distribution Tax || ||129.37 |
|Transferred to / from General Reserve ||200.00 ||100.00 |
|Balance Carried forward ||280.65 ||266.33 |
|TOTAL ||480.65 ||495.70 |
In view of inadequacy of profit your Board is constrained to recommend any dividendfor the year under review.
3. REVIEW OF OPERATIONS
The spinning misery continued in 2016-17 with raw cotton prices in India moving up by50% in a span of 2-3 months (April to July) while international prices just moved up by10%. International demand totally dried up and most mills had to cut production and faceheavy disparity in prices which even went to a stage of cash losses. Things startsettling from October as the new cotton crop came in when another lightning struck by wayof demonetization which impacted domestic demand for 2 months and the winter season forgarments was ruined.
This year was a year of 2 major shocks which were unprecedented and unexpected. TheCompany despite best efforts and firefighting was severely impacted which lead to bothprofit and turnover loss. Further our biggest yarn buyer i.e. China has significantlyreduced its dependence on India which has put pressure on demand while new capacitiesstill come in due to State incentives.
Our Company managed to hold onto garment turnover but export of yarn were hit severelywhich lead to turnover falling from Rs.680 Crores to Rs.664 Cr.
The Company also completed its wind power capacity restructuring by selling its lastturbine in Tamil Nadu and setting up a 2.1MW wind mill in Gujarat for captive consumption.
The Company also increased its domestic turnover to reduce its dependence on exportswhich are extremely volatile due to currency and global uncertainties. The Indian rupeeperforming better than its peers impacted the last quarter when we saw other negativesstabilizing.
Interest rates also came down but a very slow pace and with a lag hence the fullimpact would be felt in the coming year.
In nutshell it's a year best forgotten.
4. FUTURE OUTLOOK
As we enter the New Year we start with guarded optimism. The demonetization impact isbygone and GST seems a reality that would improve our competitiveness against the largeunorganized garment segment. We are already seeing positive impact of the same and growthin garments has been about 25%.
In yarn and fabric segment our focus is on domestic market to reduce risk and improverealisations. We are reducing our export dependency and developing markets across India.
Company has no major expansion plans in spinning for 2017-18. It only proposes to dosome balancing and modernization to improve margins. The Company wants to consolidate andreduce its leveraging to create a strong base for picking up new growth ideas in thecoming year. It also proposes to sell old spinning machinery at Avinashi and Gajroulaunits which are no more viable. The vacated land and building will be used for growinggarments business.
The Company's main focus this year is going to be its value added garments divisionwhere many new products are being added and new markets / channels are being activated.Institutional and large retail format sales is also growing. Further garment exports arealso increasing.
The Company is seeing good response to its casual wear range. It has launched its newrange under a new brand " HiFlyers" which has helped break freefrom the perception of being an innerwear brand.
The Company has also introduced "T T BAZAR" in both online and offlinemodel to build direct connect with the consumer. Already 25 franchisee stores are runningin NCR and Company proposes to take it to 100 in next 12 months.
Another positive is the falling interest rate regime. This coupled with the repaymentof debt would reduce the Company's interest burden and improve profitability.
We therefore start with lot of hope and optimism of achieving new heights and takingthe brand and company to new levels. We are more focused on the value added segment anddomestic sales which will de-risk the business and bring in more stability to turnover andmargins. We are confident of growing our brand in the garment segment and gaining marketshare in the years to come.
We have gone through a bad phase but luckily have emerged stronger and wiser whichwill hold us in good stead in the days to come.
5. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
As part of its initiatives under "corporate social responsibility" (CSR) theCompany has contributed funds for the schemes of eradicating hunger and poverty promotionof education and medical aid. The contributions in this regard have been made to theregistered trust which is undertaking these schemes.
The Annual Report on CSR activities is annexed herewith as: Annexure B.
6. RISK MANAGEMENT
The Company has a well defined risk management framework in place. Further it hasestablished procedures to periodically place before the Board the risk assessment andmanagement measures. As such there are no risks which in the opinion of the Boardthreatens the existence of the Company.
The Risk Management Policy may be accessed on the Company's website at the linkhttp://www.tttextiles.com/investor/corporate-news-announcements.
7. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The internal Audit functions reports to the Chairman of theAudit Committee and to Chairman and Managing Director of the Company.
The Internal Audit monitors and evaluates the efficiency and adequacy of Internalcontrol systems in the company. It's compliances with operating systems accountingprocedure and policies at all locations of the Company.
8. INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no reportablematerial weakness in the design or operation was observed.
9. RELATED PARTIES TRANSACTIONS
All related party transactions that were entered into during the financial year were onarm's length basis and were in the ordinary course of the business. There are nomaterially significant related party transactions made by the Company with Promoters KeyManagement Personnel or other designated persons which may have potential conflict withinterest of the Company at large.
10. DIRECTORS AND KEY MANAGERIAL PERSONNEL
Sh. Sunil Mahnot (holding DIN No. 06819974) retire by rotation at the ensuing AnnualGeneral Meeting and being eligible offer himself for reappointment.
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under section 149 (6) of the Companies Act 2013 and Regulationof the Listing Agreement.
During year under review Miss Sheenu Jain has resigned from the post of CompanySecretaryship and Mrs. Reetika Mahendra Rathore (ACS No. 48493) has been appointed asCompany Secretary of the Company.
11. BOARD OF DIRECTORS MEETING
During the year four Board Meetings and four Audit Committee Meetings were convened andheld. The details of which are given in the Corporate Governance Report. The interveninggap between the Meetings was within the period prescribed under the Companies Act 2013.
12. DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 134 (3C) of the Companies Act 2013 your Directors report asunder:
a) That in the preparation of the annual accounts the applicable accounting standardshave been followed.
b) That the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit or loss of the company for that period.
c) That the directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities.
d) That the Directors have prepared the annual accounts on a going concern basis.
e) That the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and operating effectively.
f) That the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
13. BOARD EVALUATION
Pursuant to the provisions of the Company's Act. 2013 and Regulation 17(10) of theListing Agreement 2015 the Board has carried out an evaluation of its own performanceand the performance of the directors individually for the financial year 2016-17 in themeeting held on 29th May 2017. The performance of the Executive Directors Chairman andBoard as a whole was evaluatad in narrative format. The manner in which the evaluation ofthe performance of Non-Independent Director has been carried out has been explained in theCorporate Governance Report.
14. REMUNERATION POLICY
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The Remuneration Policy is stated in the Corporate Governance Report.
15. PUBLIC DEPOSITS
The Company has neither accepted nor renewed any fixed deposit from public during theyear. Entire outstanding fixed deposit as on 31.03.2016 was repaid during F.Y. 2016-17.
16. PARTICULARS OF LOANS GUARANTEES OR INVESTMENT
The Company has not given any loan or guarantees covered under the provisions ofsection 186 of the Companies Act 2013.
17. CODE OF CONDUCT
The Board of Directors has approved a Code of Conduct which is applicable to theMembers of the Board and all employees in the course of day to day business operations ofthe Company. The Company believes in "Zero Tolerance" against briberycorruption and unethical dealings / behaviours of any form and the Board has laid down thedirectives to counter such acts. The code laid down by the Board is known as "code ofbusiness conduct" which forms an Appendix to the Code. The Code has been posted onthe Company's website www.ttlimited.co.in
18. AUDIT COMMITTEE DISCLOSURES
The Audit Committee consists of Shri Navratan Dugar Independent Director Shri V. R.Mehta Independent Director Dr. (Prof.) V. K. Kothari Independent Director and ShriSanjay Kumar Jain Managing Director. Shri Navratan Dugar is the Chairman of the Committeeand Mrs. Reetika Mahendra Rathore is Secretary of the Committee. All the recommendationsmade by the Audit committee were accepted by the Board.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Vigil Mechanism of the Company which also incorporates a Whistle Blower Policy interms of the Listing Agreement aims to provide a channel to the employees and Directors toreport to the management concerns about unethical behavior actual or suspected fraud orviolation of the Codes of conduct or policy. The mechanism provides for adequatesafeguards against victimization of employees and Directors to avail of the mechanism andalso provide for direct access to the Chairman / Chairman of the Audit Committee inexceptional cases.
The policy of Vigil Mechanism and Whistle Blower Policy as approved by the Board may beaccessed on the Company's website at the link:http://www.tttextiles.com/investor/corporate-news-announcements
19. PREVENTION OF INSIDER TRADING
The Company has adopted a Code of Conduct for Prevention of Insider Trading with a viewto regulate in securities by the Directors and designated employees of the Company. TheCode requires pre-clearance for dealing in the Company's shares and prohibits the purchaseor sale of Company shares by the Directors and the designated employees while inpossession of unpublished price sensitive information in relation to the Company andduring the period when the Trading Window is closed. The Board is responsible forimplementation of the Code.
All Board Directors and the designated employees have confirmed compliance with thecode.
20. EXTRACT OF ANNUAL RETURN AS ON THE FINANCIAL YEAR ENDED ON 31st March 2017
The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule12 of companies (Management and Administration) Rules 2014 for the financial year 2016-17in Form No. MGT-9 is annexed hereto and form part of this report as Annexure V.
21. AUDITORS AND AUDITORS' REPORTS:
a. Statutory Auditor:
M/s Doogar & Associates Statutory Auditors of the Company will retire at theensuing Annual General Meeting scheduled to be held on 13th September 2017. Board ofDirectors at their meeting held on 29th May 2017 has proposed to appoint M/s R. S Modi& Co Chartered Accountants(Firm registration no.007921N) New Delhi as StatutoryAuditors of the Company to hold office for a tenure of five years starting from theconclusion of 38th Annual General Meeting of the Company till conclusion of 43rd AnnualGeneral Meeting. In terms of provisions of Sector 139 (1) of the Companies Act 2013 theappointment of Statutory Auditors shall be placed for ratification at every Annual GeneralMeeting.
Further current Statutory Auditors of the Company M/s Doogar & Associates havesubmitted their Report on the Accounts of the Company for the accounting year ended 31stMarch 2017. Auditors' Report is self-explanatory and requires no comments.
b. Secretarial Auditor
M/s DMK Associates Company Secretary in Practice has been appointed as SecretarialAuditors of the Company by the Board of Directors of the Company in their meeting held on29th May 2017 for the financial year 2017-18.
The Secretarial Auditors of the Company have submitted their Report in form No. MR- 3as required under Section 204 of the Companies Act 2013 for the financial year ended 31stMarch 2017. This Report is self explanatory and requires no comments. The Report formspart of this report as Annexure III.
c. Cost Auditor
The Board of Directors has appointed M/s K. L. Jaisingh & Co. Cost AccountantsNew Delhi as the Cost Auditors of the Company to conduct Cost Audit of the Accounts forthe financial year ended 2017-18 However as per provisions of Section 148 of theCompanies Act 2013 read with Companies (Cost Record and Audit) rules 2014 theremuneration to be paid to the Cost Auditors is subject to ratification by members at theAnnual General Meeting. Accordingly the remuneration to be paid to K. L. Jaisingh &Co. Cost Accountants New Delhi for the Financial Year 2017-18 is placed for ratificationby the members.
22. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO
Energy Conservation continues to be an area of major emphasis in our Company. Effortsmade to optimize the energy cost while carrying out manufacturing operations.
The information required to be furnished under section 134 (3)(m) of the Companies Act2013 read with the Companies (Disclosure of particulars in the Report of the Board ofDirectors) Rules 2014 relating to Conservation of Energy Technology absorption andForeign Exchange earnings and outgo is annexed as Annexure " A" herewith andforming part of this report.
23. PARTICULARS OF EMPLOYEES
Information as per Section 134 of the Companies Act 2013 read with Companies(Particulars of Employees) Amendment Rules 2011 are given in the statement which from apart of this report. However as per the provisions of section 136 of the Companies Act2013 the report and accounts are being sent to all shareholders of the Company excludingthe aforesaid information. Any shareholder interested in obtaining a copy of theparticulars may write to the Company's Registered Office.
24. INDUSTRIAL RELATIONS
During the year under review your Company enjoyed cordial relationship with workersand employees at all level.
25. CORPORATE GOVERNANCE
The Company is committed to maintain the highest standards of Corporate Governance andadhere to the Corporate Governance requirements set out by SEBI.
A separate report on Corporate Governance along with Auditor's Certificate on itscompliance is annexed to this report.
26. MANAGEMENT DISCUSSION AND ANALYSIS
Management discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 of the Listing Agreement 2015 with the stock exchanges is presentedas a separate section forming part of this report.
27. GENERAL DISCLOSURES
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year underreview:-
a. Details relating to deposits covered under Chapter V of the Act.
b. Issue of equity shares and differential rights as to dividend voting or otherwise.
c. Issue of Shares (including sweat equity shares) to employees of the Company underany scheme.
d. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
e. Company does not have any subsidiary.
Your Directors further state that during the year under review there were no casesfiled pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
Your Directors place on record their sincere appreciation of the services rendered bythe employees of the Company. They are grateful to shareholders bankers depositorscustomers and vendors of the company for their continued valued support. The Directorslook forward to a bright future with confidence.
| ||For and on behalf of the Board |
| ||Sd/- |
|Place: New Delhi ||(Dr. RIKHAB C. JAIN) |
|Date: 29.05.2017 ||CHAIRMAN |