Your Directors have pleasure in presenting the 45th (Forty Fifth) Annual Report of the Company together with the Audited Accounts for the year ended March 31, 2024.
1. FINANCIAL RESULTS
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Particulars
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2023-24
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2022-23
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(Rs. In Lakh)
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(Rs. In Lakh)
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Revenue from operations (Net)
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21102.89
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20302.72
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Other Income
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108.52
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161.54
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Profit before interest, Depreciation and Tax
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1962.77
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1136.87
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Interest &Financial Charges
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1609.20
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1720.02
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Depreciation
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316.18
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312.71
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Profit / Loss before Tax (PBT)
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37.39
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(895.86)
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Exceptional Items
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-
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Provision for Income Tax / Deferred Tax
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(425.80)
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371.38
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Profit / Loss after Tax (PAT)
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463.19
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(1267.24)
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Other comprehensive Income
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17.87
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7.37
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Total comprehensive Income for the period
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480.91
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(1259.86)
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2. DIVIDEND
No dividend has been recommended by the Board for the year under review.
3. REVIEW OF OPERATIONS
The year 2023-24, the global disturbances grew with the Israel-Palestine conflict leading to spurt in export freight rates and continued global slowdown. Cotton prices further went down and touch the MSP levels in the beginning of the season due to slow demand across the globe. The Company turnover was just maintained with a lot of struggle to maintain market share. Greenshoots in demand were seen in Q4, however nothing sustained despite pipeline inventory reducing as every player tried to keep inventory in tight control due to still falling prices and muted demand. The fall in Indian textile exports that touched USD 44 billion in 2021-22 to USD 34 billion in 2023-24 reflects the poor state of global demand.
Domestic demand continued to be flat and there has been a hit in winter demand, as winter season has shortened and starts only from mid December. The changing climatic cycles of late winter and hence late summers is something the trade is yet to adjust its buying cycles. This is overall impacting demand, as buying confidence is very low.
The company turnover was Rs. 212 crores and profit after tax at Rs 4.63 crores in 2023-24 and despite severe global headwinds the Company managed to turnaround and book a profit.
The important event has been the 3 year restructuring process being completed finally in May 2023 with the hiving off of the Gajroula unit that was setup for spinning but later converted to garments. However due to being away from the garment cluster the unit could not be run to full capacity and hence the Company
need to hive off to release capital, reduce debt and make funds available for brand growth.
Further construction of new factory in West Bengal has started from January 2024 and part operations are expected to start from December 2024 though full completion would commence by July 2025. Howrah in West Bengal is one of the largest knitting clusters of the country.
The hiving off of Gajroula, would not impact running operations at all. It would however lead to substantial savings of interest, overheads and managerial time. Alternate warehousing and production arrangements have been planned from its Avinashi unit (in Tirupur cluster) that would ensure that due to Gajroula, the Company does not suffer from any supply concerns. The process of unwinding of operations in Gajroula started from July 2023 to ensure the impact is minimal when the unit is handed over to the new buyers. This lead to extra overhead burden on Company for 9 months as utilization of Gajroula was minimized over time while fixed costs remained the same.
It is pertinent to note that Company debt reduction exercise since post COVID continued and in 2023-24 the debt levels came down by Rs 17.48 crores however the interest burden could not reduce due to higher interest rates.
The Company has also reworked its dependence on cotton fiber and has shifted more of its fabric and garments to cotton/manmade fiber blends to reduce the risk of its business due to cotton volatility. All new product development is around blends and performance fibers/yarns. The recent surge in cotton prices and consumer resistance to paying a higher price has sent a clear signal that India is still a price-conscious market especially in tier 2 and tier 3 towns and the budget for clothing is constrained due to lifestyle changes. The Company established its sourcing office in Surat, and has started sourcing manmade fibre based fabric.
The continuous use of digitalization in life is also an important signal that the Company needs to connect more digitally with its distributors, retailers, and customers. The Company is continuously working on the same and recognises the importance to embrace technological changes sooner than later.
4. FUTURE OUTLOOK
As shared above, the headwinds still remain for the Textile Industry despite India as a country doing well in terms of GDP and GST growth. However as hardly any scope for raw material prices to go southwards, hence we expect that there will stability in prices.
The global conflicts would be a critical thing in export demand on which the entire industry is banking on. Definitely exports are expected to be better as pipeline inventory is surely at a very low level though trade confidence to buy and stock still has not returned either doemstically or globally.
The UK FTA is expected within this year and that would be a big push to export demand of apparels. EU FTA is still seems 18-24 months away.
The most critical changes that we shall see, would be more inward in the Company. Debt levels in April & May have reduced by 40% and would reduce the interest bill by an estimated Rs 6 crores per annum due to selling of the Company's Gajroula unit and shifting all manufacturing operations to Tamil Nadu and West Bengal.
Further the overheads of the Company would reduce as operations would run normally without Gajroula where huge cost was borne by way of operational overheads and interest. Production would be consolidated in Tamil Nadu and West Bengal.
The Company also plans to strengthen it's Surat operations recognising the strong changing importance of blends and 100% Manmade fibers in the domestic casual wear market and slowly expected to perpetuate to the export market.
New product development is all based on MMF performance fibers, better processing finishes, and enhanced consumer experience. However, all products would be keeping the basic principle of delivering value for money to the consumer and will not be reaching out to a small percentage of premium / elite consumers. Dependence on cotton fiber is being slowly but steadily reduced especially in its casual wear range by using alternative fibers and finishes to ensure the consumer experience is not compromised in any fashion.
The good news is that raw material prices are stable and company capacity utilisation is expected to pick up with consolidation of operations. The company's clear focus is on its branded garment sales of TT & HiFlyer apart from the value-added fabric segment. A lot of emphasis is being put on new value-added products. Things have been extremely slow over the last 2 years, however, the Company is fully confident that things are going to pick up and will see a sharp uptick in demand in the 2nd half of the year and the Indian consumption story is intact. Textiles has seen the longest ever sustained slowdown in global demand, and with pipeline inventory at abysmal levels.
The Company would be using B2C and B2B E-commerce channels to foray into the weaker markets, by leveraging the existing network of these channels to ensure quicker and deeper penetration at a lower cost.
Advertisement policy is very clear and would focus only on its strong markets by doing Point of Sales publicity and using social media for targeting strong markets.
The Company in the last few years has gone through a bad phase due to various headwinds but luckily it is emerging with a stronger character and poise to build its growing knitted casual and active wear portfolio for all genders that have seen very good traction and demand. It sees a strong story of consumption and exports unfolding.
The most important change is the improved risk profile of the business, hence less volatility in earnings will be there and a more consistent growth trajectory can be expected. The restructuring exercise to reduce debt and business risk profile is complete and the Company starts again to revive its old glory, turnover and profits.
5. MANAGEMENT DISCUSSION AND ANALYSIS
Management discussion and Analysis Report for the year under review, as stipulated under Regulation 34 of the Listing Agreement, 2015 is presented as a separate section forming part of the Annual report.
6. 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. (Annexure D)
7. DIRECTORS AND KEY MANAGERIAL PERSONNEL
Smt. Jyoti Jain, Jt. Managing Director (DIN:01736336) retires by rotation at the ensuing Annual General Meeting and being eligible offer himself for reappointment.
On the recommendation of Nomination & Remuneration Committee, the Board of Directors, subject to the shareholder approval, has re-appointed Shri Sunil Mahnot as Whole Time Director cum CFO of the Company, liable to retire by rotation w.e.f.1st April, 2024 for another period of 5 years. Company is taking approval of shareholders through postal ballot for his re-appointment, notice of which has already been sent to Shareholders.
Based on the performance and considering the skills, expertise and competencies required for the Board in the context of the business and sectors of the Company, the Nomination and remuneration committee
recommended the re-appointment of Shri Ankit Gulgulia as an Independent Director to the Board for second term of 5 years w.e.f. 1st April, 2024. Company is taking approval of shareholders through postal ballot for his re-appointment, notice of which has already been sent to Shareholders
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 Regulation of the Listing Agreement. The Independent Directors have also confirmed compliance with the provisions of Rule 6 of the Companies (Appointment and Qualifications of Directors) Rules, 2014, as amended, relating to inclusion of their name in the databank of independent directors.
The Board took on record the declaration and confirmation submitted by the Independent Directors regarding meeting the prescribed criteria of independence, after undertaking due assessment of the veracity of the same in terms of the requirements of regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
8. KEY MANAGERIAL PERSONNEL
Following are the Key Managerial personnel of the Company as on 31st March, 2024:
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Mr. Sanjay Kumar Jain
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Managing Director
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Mrs. Jyoti Jain
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Jt. Managing Director
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Mr. Sunil Mahnot
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Director (Finance) & Chief Financial Officer
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Mr. Pankaj Mishra
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Company Secretary & Compliance Officer.
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9. PARTICULARS OF REMUNERATION OF DIRECTORS AND KMPs
A statement containing the details of the Remuneration of Directors and KMPs as required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel Rules, 2014) is mentioned in the Corporate Governance Report.
10. POLICY ON REMUNERATION OF DIRECTORS, KMPs SENIOR MANAGEMENT PERSONNEL AND OTHER EMPLOYEES INCLUDING CRITERIA ’S AS DETERMINED BY NOMINATION AND REMUNERATION COMMITTEE
The remuneration paid to Directors is in accordance with the Nomination and Remuneration Policy of the Company formulated in accordance with Section 178 of Companies Act, 2013 read with Regulation 19 of SEBI Listing Regulations (including any statutory modification(s) or re-enactment(s) for the time being in force.
Nomination and Remuneration Committee has formulated the criteria for determining the qualifications, positive attributes and independence of directors in accordance with Section 178 of Companies Act 2013 and recommendedthe same to the Board.
The Nomination and Remuneration Policy may be accessed on the Company's website at the link https:// tttextiles.com/investor/company-policies/
11. BOARD OF DIRECTORS MEETING
During the year 5 Board Meetings and five Audit Committee Meetings were convened and held. Details of the same are noted in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed limit under the Companies Act, 2013.
12. DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 134 (5) 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 made judgments and estimates that are reasonable and prudent 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 inaccordance 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.
g) No fraud has been reported by the auditors under Section 143(12) of Companies Act 2013 for the F.Y. 2023-24.
13. EVALUATION OF BOARD AND COMMITTEES AND DIRECTORS' PERFORMANCE
Pursuant to the provisions of the Company's Act. 2013 and Regulation 17(10) of the SEBI (LODR), 2015,the Board of Directors have carried out an evaluation of its own performance, the performance of the directors individually and its committees for the financial year 2023-24.
Your Directors feel pleasure in informing the members that the performance of the Board as a whole and its member individually was adjudged satisfactory. Your Company has framed policy and criteria for evaluation of Executive Directors, Chairperson, and Independent Directors and has also devised criteria for Board of Directors as a whole and individual Committees of the board.
14. 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 during day-to-day business operations of the Company. The Company believes in "Zero Tolerance" against bribery, corruption and unethical dealings / behavior 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.ttlimited.co.in
15. AUDIT COMMITTEE DISCLOSURES A. Composition
During the year, the Audit Committee met four times in compliance with the provisions of SEBI (Listing Obligationsand Disclosure Requirements) Regulations, 2015 and Companies Act, 2013. At present, the Committee comprises Shri Ankit Gulgulia, Independent Director, Shri Rahul Jain, Independent Director, Shri Puneet Vijay Bothra, Independent Director and Shri Sanjay Kumar Jain, Managing Director.
Mr. Pankaj Mishra is Secretary of the Committee. All the recommendations made by the Audit committee were accepted by the Board.
B. Vigil Mechanism / Whistle Blower Policy
The Vigil Mechanism of the Company, which also incorporates a Whistle Blower Policy in terms of the Listing Agreement, aims to provide a channel to the employees and Directors to report to the management concerns about unethical behavior, actual or suspected fraud or violation of the Codes of conduct or policy. The mechanism provides for adequate safeguards against victimization of employees and Directors to avail of the mechanism and provide for direct access to the Chairman / Chairman of the Audit Committee in exceptional cases.
The policy of Vigil Mechanism and Whistle Blower Policy as approved by the Board may be accessed on the Company's website at the link: https://tttextiles.com/investor/company-policies/
16. 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 of conduct stipulates such formats as are deemed necessary for making applications for pre-clearance, reporting of trades executed, reporting of decisions not to trade after securing pre-clearance, recording of reasons for such decisions and for reporting levelof holdings in securities at specified intervals determined as necessary to monitor compliance with these regulations.The Board is responsible for implementation of the Code.
All Board of Directors and the designated employees have confirmed compliance with the code.
Further the Board of Directors of the Company has adopted revised Code of practices & procedures for fair disclosure of unpublished price sensitive information, in compliance with the SEBI (Prohibition of Insider Trading) (Amendment)Regulations, 2018.
17. CORPORATE SOCIAL RESPONSIBILITY
As part of its initiatives under "Corporate Social Responsibility" (CSR), the Company has been contributing funds for the schemes of eradicating hunger and poverty, promotion of education and medical aid. However, during the FY 2023-24 Company was not required to Spend any amount towards CSR expenditure due to losses in last Financial Years.
The policy of Corporate Social Responsibility as approved by the Board may be accessed on the Company's website at the link: https://tttextiles.com/investor/company-policies/
The Annual Report on CSR activities is annexed herewith as Annexure B.
18. RISK MANAGEMENT
The Risk Management Policy required to be formulated under the Companies Act, 2013 and SEBI (Listing Obligationsand Disclosure Requirements) Regulations, 2015 has been duly formulated and approved by the Board of Directors of the Company. The aim of Risk Management Policy is to maximize opportunities in all activities and to minimize adversity.
Effective risk management allows the Company to:
S Embed the management of risk as an integral part of its business processes;
S Establish an effective system of risk identification, analysis and treatment S Make informed decisions.
S Avoid exposure to significant reputational or financial loss;
S Assess the benefits and costs of implementation of available options and controls to manage risk.
S Strengthen corporate governance procedures.
TTL adopts a systematic approach to mitigate various types of risks viz. Environmental, Business, Operational, Financial and others associated with accomplishment of objectives, operations, revenues and regulations.
The Risk Management Policy may be accessed on the Company's website at the link https://tttextiles.com/ wp-content/uploads/2023/12/Risk-Management-policy-T-T-Ltd.pdf
19. 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 and Its compliances with operating systems, accounting procedure and policies at all locations of the Company.
20. TRANSFER OF DIVIDEND AND SHARES TO INVESTORS EDUCATION AND PROTECTION FUND flEPF)
During the year under review unclaimed Dividend for the F.Y. 2015-16 amounting to Rs.796103/- was transferred to Investor Education and Protection Fund (IEPF) account.
21. INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.
22. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENT
The Company has not given any loan or guarantees covered under the provisions of section 186 of the Companies Act, 2013.
23. WEBLINK OF ANNUAL RETURN AS ON THE FINANCIAL YEAR ENDED ON 31St~ MARCH, 2023
In accordance with the provisions of Sections 92 and 134(3)(a) of the Act read with the Companies (Management and Administration) Rules, 2014, Annual Return in Form No. MGT - 7, is uploaded on the website at : https://tttextiles.com/investor/results-reports/
24. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Energy Conservation continues to be an area of major emphasis in our Company. Efforts have been made to optimize the energy cost while carrying out manufacturing operations.
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 as. Annexure "A” herewith and forming part of this report.
25. RELATED PARTIES TRANSACTIONS
During the financial year 2023-24, the Company has entered into financial transactions, in the ordinary course of business and on an arm's length basis. During the year, the Company had not entered into any contract/arrangement/transaction with related parties which could be considered material in accordance with the provisions of Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is not applicable.
The Policy on dealing with related party transactions as approved by the Board may be accessed on the Company's website at the link: https://tttextiles.com/investor/company-policies/
Further as required under Para A of Schedule V of the SEBI(LODR) Regulations following promoters are holding more than 10% of Shareholding as on 31st March, 2024 with whom transactions were held by the Company
1. T T Brands Ltd
Your Directors draw attention of the members to Note 34 of the standalone financial statement which sets out related party disclosures.
26. AUDITORS AND AUDITORS' REPORTS:
a. Statutory Auditor:
Pursuant to the provisions of Section 139 of the Companies Act, 2013 ('the Act'), read with the Companies (Audit and Auditors) Rules, 2014, and other applicable provisions, if any (including any statutory modification(s) or re-enactment (s) thereof for the time being in force) the Members of the Company at their 44th Annual General Meeting held in the year 2023, approved the appointment of M/s Doogar & Associates, Chartered Accountants, New Delhi (Firm Reg. No. 000561N), as the Statutory Auditors of the Company from the conclusion of 44th Annual General Meeting till the conclusion of ensuing 49th Annual General Meeting of the Company
Further, Statutory Auditor of the Company h^s submitted Auditor's Report on the Accounts of the Companyfor the Financial year ended on 31 March 2024. The Auditor's report is self-explanatory and requires no comments.
. b. Secretarial Auditor
M/s DMK Associates, Company Secretary in Practice, were appointed as Secretarial Auditors of the Company bythe Board of Directors of the Company in their meeting held on 17th May, 2023 for the financial year 2023-24.
The Secretarial Auditors of the Company have submitted their Report in the Form No. MR-3 as required under Section 204 of the Companies Act, 2013 for the financial year ended 31st March 2024 which is annexed herewith as Annexure-C to this Report.
Further, Secretarial Auditor of the Company has submitted Secretarial Auditor's Report of the Companyfor the Financial year ended on 31st March 2024. The Auditor's report is self-explanatory and requires no comments.
27. PARTICULARS OF EMPLOYEES
In terms of the first proviso to Section 136(1) of the Companies Act, 2013, the report and accounts are being sent to the members and others entitled thereto, excluding the information on Employees' remuneration particulars mentioned under Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The said information is available for inspection by the Members during business hours on all days except Sunday and Holidays. Any Member interested in inspecting the same may write to the Company Secretary at the Registered Office of the Company.
28. INDUSTRIAL RELATIONS
During the year under review, your Company enjoyed cordial relationship with workers and employees at all levels.
29. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
The Company is committed to provide a protective environment at workplace for all its women employees. To ensure that every women employee is treated with dignity and respect the company has in place a formal policyfor prevention of sexual harassment at workplace and the Company has also constituted the Internal Complaint Committee in Compliance with the requirement of Sexual Harassment of Women at Work Place (Prevention, Prohibition & Redressal) Act, 2013.
30. SECRETARIAL STANDARDS
The Directors state that applicable secretarial standards have been duly followed by the Company.
31. GENERAL DISCLOSURES
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review: -
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 under any scheme.
d. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future.
e. Company does not have any subsidiary, Joint Venture and Associates, however during the year, Company has became the Associate Company of T T Brands Ltd.
f. There have been no material change(s) and commitment(s) affecting the financial position of the Companybetween the end of the financial year of the Company i.e., March 31, 2024, and the date of this Report. There has been no change in the nature of business of the Company during the financial year ended on March 31, 2024.
g. During the year under review no corporate insolvency resolution process was initiated under the Insolvency and Bankruptcy Code, 2016(IBC).
32. ACKNOWLEDGEMENT
Your Directors place on record their sincere appreciation of the services rendered by the employees of the Company.They are 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 your Company with confidence.
For and on behalf of the Board Sanjay Kumar Jain Sunil Mahnot
Place: New Delhi Managing Director Director(Finance)
Date: 23rd May, 2024 DIN:01736303 DIN:06819974
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