DIRECTOR'S REPORT Your Directors have pleasure in presenting the 36th (Thirty Sixth) Annual Report of the Company together with the Audited Accounts for the year ended March 31, 2015. DIVIDENDS Your Board recommend dividend @10%( Rs.1/-per share of the face value of Rs. 10/-each ) on the paid up Share Capital of the Company for the year ended 31st March, 2015. REVIEW OF OPERATIONS The year 2014-15 was a year of ups and down. We started the year on a low note with poor demand due to Chinese Cotton policy changing which lead to a bearish tone in global market for cotton and its products. This resulted in a mark down in inventory cost and the slide continued nonstop till the 3rd quarter of the year. The market found no support from any end till the new crop came in which was another bumper crop. This relentless fall in price of cotton based products lead to a curtailment of demand also as buyers postponed purchases and kept inventory levels at bare minimum. This hence impacted turnover and despite best efforts and a good run in the end of the year, turnover was only Rs.679 Crores which was 8.6% less than the last year. The keypreasons being lower unit price and global reduction in pipelines inventory due to falling prices. Further last year there was a 2% incentive on incremental exports, which was withdrawn by the government this year. Further despite a new government coming and lot of optimism , no kick start in consumer demand was seen. Even lower prices didn't bring the consumers in the market. The only silver lining for the Company has been the full operations of Gujarat new unit at Rajula which due to incentives and locational advantages contributed to the bottom line. The Company had identified assets for disposal to improve liquidity and reduce its leverage. However due to the poor business environment it could not meet with success. FUTURE OUTLOOK As we enter the New Year we start with a lot of optimism. Global Growth is picking up and India has most probably seen its bottom. Textile and clothing demand is expected to pick up and the Company is well poised to take advantages of it. It has no expansion plans for 2015-16. The Company wants to consolidate and reduce its leveraging to create a strong base for picking up new growth ideas for 2016-17. With growth picking up domestically and inflation settling down, we expect consumers demand to grow at a globe pace. Last year the value added garments division did not grow much, however this year we look to growth at 25% to 30%. Green shoots are already clearly visible. The Company's main focus this year is going to be its value added garments division, where many new products are being added and new markets / channels are being activated. The Company has also increased its advertisement budget last year and hence expects results of the same in this year. Its campaign- " acheLage , ache dikhe" has made a buzz in the market and has created a direct contact with consumer. Online sales and sales to institutional and large retail format customers is also growing. Another big thrust area is going to be opening of exclusive T T brands shops. We have already piloted and worked on the concept and have 25 shops running well. We plan to take this figure to 200 in the coming 2 years, with main focus on NCR and UP. All these shops would be franchisee shops hence no fixed burden on the company, It would however create strong dedicated channels for the Company. Another positive is the falling interest rate regime. This coupled with the repayment of 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 taking the brand and company to new levels. The much talked about consumption boom is expected to kick off very soon and we are well poised to take advantage of it. This would also reduce the dependence on exports and de-risk the company. The Company has framed a CSR policy in line with the newly introduced Companies Act, 2013. We have a robust CSR policy and in fact spent more than the mandated amount. Also all other changes as required by the Act have been in place and we re-affirm our commitment to the highest level of Governance. MAJOR IMPLICATIONS UNDER COMPANIES ACT, 2013 As required by the Companies Act, 2013, your Company has adopted new policies and constituted following committees, namely: • Corporate Social Responsibility Policy and Committee • Nomination and Remuneration Committee • Reconstituted Stakeholder Relationship Committee • Sexual Harassment of Employees at Workplace Policy and Committee • Risk Management Policy& Committee • Vigil Mechanism Policy. • Insider Trading Policy. The Company is also adopting new set of Articles of Association in line with new Company law and regulations. All other changes as required by the Act have been put in place and we re-affirm our commitment to the highest level of Corporate Governance. AWARDS AND RECOGNITIONS It is a matter of great pride that Company's Director Shri V. R. Mehta has been awarded "PadamShri" Award by President of India for his exceptional services in the social sector. During Financial Year 2014-15, Company has got many accolades and recognition: • Company has been awarded "India's Small Giant" award by Hon'ble Cabinet Minister Shri Kalraj Mishra (award constituted by India SME Forum / NDTV Profit). • Company has been awarded "TOP 100 SME" award of India out of 70000 nominations. • In the Yarn Segment, Company has been awarded Silver Trophy Award by Hon'ble Textile Minister Shri Santosh Kumar Gangwar for the Second Highest Exports of Yarn. • Recently "T T" Brand has also been nominated as "India's Most Promising Brand" 2015 by World Consulting & Research Corporation Ltd.(WCRC). The citation will be awarded in London on July 15th, 2015. SHARE CAPITAL The paid up Equity Share Capital as on 31stMarch, 2015 was Rs.2,149.81 Lakhs. During the year under review, the Company has neither issued any shares with differential voting rights nor granted stock options or sweat equity. PUBLIC DEPOSITS Keeping in view amended provisions under the Companies Act, 2013 and rules made thereunder, Company has discontinued acceptance of Fixed Deposit w.e.f. 01.04.2014. Outstanding Fixed Deposits as on 31.03.2015 amounting to Rs.241.36 Lakhs are being repaid as and when due and the entire amount will be repaid before 31st March, 2017. PARTICULARS OF LOANS , GUARANTEES OR INVESTMENT The Company has not given any loans or guarantees covered under the provisions of section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) rules, 2014. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY The Company has an Internal Control System, commensurate with the size , scale and complexity of its operations . The internal Audit functions reports to the Chairman of the Audit Committee and to Chairman and Managing Director of the Company. The Internal Audit monitors and evaluates the efficiency and adequacy of Internal control systems in the company it's compliances with operating systems, accounting procedures and policies at all locations of the Company. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The information required to be furnished under section 134 (3)(m) of the Companies Act, 2013 read with the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 2014 relating to Conservation of Energy, Technology absorption and Foreign Exchange earnings and outgo is annexed " A" herewith and forming part of this report. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES As part of its initiatives under "corporate social responsibility" (CSR), the Company has contributed funds for the schemes of eradicating hunger and poverty, promotion of education and medical aid. The contributions in this regard have been made to the registered trusts which are undertaking these schemes. The Annual Report on CSR activities is annexed herewith as: Annexure B. INDUSTRIAL RELATIONS During the year under review, your Company enjoyed cordial relationship with workers and employees at all level. DIRECTORS: Shri Sanjay Kumar Jain ( DIN:01736303 ), retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for reappointment. All Independent Directors have given declarations that they meet the criteria of independence as laid down under section 149 (6) of the Companies Act, 2013 and clause 49 of the Listing Agreement. Board Evaluation Pursuant to the provisions of the Company's Act. 2013 and clause 49 of the Listing Agreement, the Board has carried out an evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Appointment & Remuneration committees. Remuneration Policy The Board has, on the recommendation of the Appointment & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report. Board of Directors Meetings During the year four Board Meetings and four Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. DIRECTORS RESPONSIBILITY STATEMENT Pursuant to Section 134 (3C) of the Companies Act, 2013, your Directors report as under: a) That in the preparation of the annual accounts, the applicable accounting standards have been followed. b) That the Directors have selected such accounting policies and applied them consistently and madejudgement 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 or loss of the company for that period. c) That 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. 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 the Company and that such internal financial controls are adequate and operating effectively. f) That the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. RELATED PARTIES TRANSACTIONS All related party transactions that were entered into during the financial year were on arm's length basis and were in the ordinary course of the business. There are no materially significant related party transactions made by the Company with Promoters, Key Management Personnel or other designated persons which may have potential conflict with interest of the Company at large. SUBSIDIARY COMPANIES The Company does not have any Subsidiary. CODE OF CONDUCT The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the Company. The Company believes in "Zero Tolerance" against bribery, corruption and unethical dealings / behaviour of any form and the Board has laid down the directives to counter such acts. The code laid down by the Board is known as "code of business conduct" which forms an Appendix to the Code. The Code has been posted on the Company's website www.tttextiles.com VIGIL MECHANISM / WHISTLE BLOWER POLICY The Company has a vigil mechanism Policy to deal with instances of unethical conduct, fraud and mismanagement, if any in the Company. This Policy ensures that strict confidentiality is maintained whilst dealing with concerns and also that no discrimination will be meted out to any person for a genuinely raised concern. In staying true to our values of integrity, transparency and ethical dealings and in line with our vision of being one of the most respected companies in India, the Company is committed to the high standards of Corporate governance and stakeholder responsibility. The Company has a Fraud Risk and Management (FRM) Policy to deal with instances of fraud and mismanagement, if any. A high level Committee has been constituted which looks into the complaints raised. The Committee reports to the Audit Committee and the Board. PREVENTION OF INSIDER TRADING The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company's shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All Board Directors and the designated employees have confirmed compliance with the code. AUDITORS REPORTS/ SECRETARIAL AUDIT REPORTS: M/s Doogar & Associates , Chartered Accountant, have been the Statutory Auditors of the Company and retire at the conclusion of this Annual General Meeting and being eligible offer themselves for re-appointment . Pursuant to provisions of Section 204 of the Companies Act, 2013 and the Companies ( Appointment and Remunerations of Managerial Personnel ) Rules , 2014 the Company has appointed M/S Deepak Kukerja& Associates Company Secretary in Practice, to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as "Annexure C". There are no qualification, reservations or adverse remarks or disclaimers made by Statutory Auditors & Secretarial Auditors in their reports. EXTRACT OF ANNUAL RETURN AS ON THE FINANCIAL YEAR ENDED ON 31st March, 2015 The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as "Annexure "D". RISK MANAGEMENT Your Company is engaged in manufacture / trading of the textiles goods many, Cotton Yarn, Knitted Fabric and Garments in domestic as well at International Market. Your company is working in an open environment and hence faces various types of risks. The Company has analyzed all the possible types of risks and has taken steps to cover mitigate and minimize the risks as much as possible if the tools of risk management are reasonably priced and available. The Company has a clear policy and management to cover the following risks:- a) Operating Cost/ Raw Material Risk b) Operating Technical Risk c) Market Risk d) Labour Risk e) Foreign Currency Risk Management Risk f) Interest Rate Risk g) Debtors Management Risk h) Legal risk etc. PARTICULARS OF EMPLOYEES Information as per Section 134 of the Companies Act, 2013 read with Companies (Particulars of Employees) Rules, 1975 are given in the statement which from a part of this report. However as per the provisions of section 136 of the Companies Act, 2013, the report and accounts are being sent to all shareholders of the Company excluding the aforesaid information. Any shareholder interested in obtaining a copy of the particulars may write to the Company's Registered Office. CORPORATE GOVERNANCE The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. A separate report on Corporate Governance along with Auditor's Certificate on its compliance is annexed to this report. MANAGEMENT DISCUSSION AND ANALYSIS Management discussion and Analysis Report for the year under review, as stipulated under clause 49 of the Listing Agreement with the stock exchanges is presented as a separate section forming part of this report. ACKNOWLEDGMENT Your Directors place on record their sincere appreciation of the services rendered by the employees of the Company. They are also grateful to shareholders, bankers, depositors, customers and vendors of the company for their continued valued support. The Directors look forward to a bright future for the Company with confidence. For and on behalf of the Board Sd/- (Dr. RIKHAB C. JAIN) CHAIRMAN Date: 13.05.2015 Place: New Delhi |