The Directors have pleasure in presenting the 33rd (Thirty Third)
Annual Report of the Company together with the Audited Accounts for the
year ended March 31, 2012.
FINANCIAL RESULTS 2011-12 2010-11
(Rs. In lakh) (Rs. In lakh)
Sales / Income from operations 39575.37 48793.83
Profit before interest, Depreciation and Tax 2708.67 5865.93
Financial Charges 2692.78 2340.76
Depreciation 1113.40 1128.14
Provision for Income Tax / Deferred Tax (880.44) 817.58
Profit / Loss after Tax (-) 217.07 1579.45
Balance brought forward from previous year 374.18 (-) 254.59
TOTAL 157.11 1324.86
Dividend & Distribution Tax (-) 0.83 250.68
Transferred to / from General Reserve NIL 700.00
Balance Carried forward 157.11 374.18
TOTAL 157.94 1324.86
Your Board could not recommend dividend due to loss during the year.
REVIEW OF OPERATIONS
The year 2011-12 was one of the most difficult year not only for the
Company but worldwide textile industry and in many ways even worse than
2008-09. Cotton and yarn prices after touching an all time high in
March 2011, suddenly crashed worldwide by over 35% in a short period of
two months leaving the whole industry dazed.
This followed by uncertainty in the global market due to European
crisis and the imposition of excise duty on garments lead to
exceptionally difficult year for all segments of the textile business.
The extreme volatility in the currency in the second half of the year
further worsened matters. Last but not the least Policies changes
regarding exports of raw cotton and yarn, and reduction of export
incentives remained the biggest culprit for the extreme volatility in
global textile market.
The year saw the turnover of the Company plunge from Rs.485 Crores to
Rs. 382 Crores i.e. a 21% fall due to poor demand and basic selling
prices coming down. Due to the reasons mentioned above, the Company
booked a loss of Rs.2.17 crores after taxes.
Over the last 2 years, your company has been paying more emphasis on
its branded knitwear business. The contribution of this segment
increased to 20% of turnover compared to 17% last year. This was
despite the fact that due to excise, we lost almost 3 months sales. The
turnover of all other divisions reduced due to both lower volumes and
As a part of its strategy to slowly exit the cotton fibre business, the
Company sold its ginning factory at Gondal, Gujarat for Rs.18.75
crores. The Company also plans to sell its ginning factory at Rajula,
Gujarat and exit the volatile cotton commodity business fully and focus
on the stable value added business. This crop year, Rajula Ginning
Factory was not operated, otherwise it would have further worsened the
The Company has almost completed its Rs 20 crore garment expansion
project in Avinashi. Further it has introduced many new products in its
casual wear segment.
This year has broadly been a year of caution and fire fighting. It was
difficult to implement new initiatives and push for growth.
Losses during the year has occurred mainly due to worldwide fall in
cotton value chain since April, 2011, currency volatilities, increase
in interest rates, Power rates and withdrawal of export subsidies and
increase in taxes.
The worst is almost over and the company is expected to cover up the
set back in the first half of the current year itself. The depreciating
rupee, falling cotton prices with low production of yarn across the
country due to labour & power issues has created a favourable situation
for cotton yarn. However with the global uncertainty so high, non
clarity of Government policies - its difficult to predict precisely. We
hope for the best.
The Government TUF scheme for textiles has expired in March 2012, and
all are waiting for the new policy announcement. However the Company
has no major expansion plans for this year, though the Rs 100 crore
spinning expansion project at Rajula (Gujarat) is going on and is
expected to be completed by March 2013. TUF sanctions for this project
had already been confirmed in time.
The Company during the preceding year, due to slow demand and excise
issues, had to go slow on its knitwear business. However this year once
again the Company is looking for 50% growth in this segment. It is
planning to go for a totally new ad campaign and put extra thrust on
electronic and press media. The Company is also planning to focus on
setting up exclusive shops in a big way, e-commerce and digital
marketing through social media.
The Company plans to leverage its strong brand equity and expand over
markets and products with strong designing, advertisement and
The yarn and fabric segments are expected to grow at 20% per annum,
however margins are expected to be much better than last year.
We are confident that your Company will be back on the growth path
after a watershed year. Our emphasis on high margin business and focus
on stable business portfolio can be expected to show positive results
for the Company and its stake holders.
Your Company intends to install Solar Power Plants offline for
localized captive consumption within each Spinning Mills. We hope by
2016 all our mills and manufacturing units will be running 100% on
clean Solar / Wind Power. This move is to promote eco-sustainability
and will certainly be our bit of efforts to save earth and to save
AWARDS AND RECOGNITION
During the year Brand T.T. has been awarded with MASTER BRAND STATUS
BY CMO ASIA (AFFILIATED OF CMO COUNCIL, USA).
Shri Sanjay Kumar Jain and Dr. (Prof.) V. K. Kothari retire by rotation
at the ensuing Annual General Meeting and being eligible offer
themselves for reappointment.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 217 (2AA) of the Companies Act, 1956, your
Directors report as under:
i) that in the preparation of the annual accounts, the applicable
accounting standards have been followed.
ii) that the Directors have selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the company at the end of the financial year and of the
profit or loss of the company for that period.
iii) 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.
iv) that the Directors have prepared the annual accounts on a going
The Company is committed to maintain the highest standards of Corporate
Governance and adhere to the Corporate Governance requirements set out
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
AUDITORS AND THEIR OBSERVATIONS
M/s Doogar & Associates, Chartered Accountants, who have been the
Statutory Auditors of the Company retire at the conclusion of this
Annual General Meeting and being eligible offer themselves for
Auditors observation in Clause (f) of Audit Report is explained in note
no-33 to Financial Statements.
Fixed Deposits received from Shareholders, Employees and Public in
general as at the close of the Financial Year amounted to Rs.666.38
Lacs. Deposits of Rs.2.40 Lacs which fell due for repayment before the
close of the financial year, remain unclaimed by the depositors at the
close of the Financial Year. There were no overdue deposits other than
those unclaimed at the year end.
Information as per Section 217 (2A) of the Companies Act, 1956 read
with Companies (Particulars of Employees) Rules, 1975 are given in the
statement which form a part of this report. However as per the
provisions of section 219(1) (b) (iv) of the Companies Act, 1956, 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
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
The information required to be furnished under section 217 (1) (e) of
the Companies Act, 1956 read with the Companies (Disclosure of
particulars in the Report of the Board of Directors) Rules, 1988
relating to Conservation of Energy, Technology absorption and Foreign
Exchange earnings and outgo is annexed herewith and forming part of
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 with confidence.
For and on behalf of the Board
Place: New Delhi (Dr. RIKHAB C. JAIN)
Date: 31.05.2012 CHAIRMAN