Your Directors have pleasure in presenting their 23rd Annual Report and theAudited Accounts for the Financial Year ended 31st March 2018 together withthe Auditor's Report thereon.
1) Financial Results
| || || |
(Rs. in lakhs)
|Particulars ||Standalone ||Consolidated |
| ||Current Year ||Previous Year ||Current Year ||Previous Year |
| ||31st March 2018 ||31st March 2017 ||31st March 2018 ||31st March 2017 |
|Total Income ||36751 ||38486 ||36751 ||38486 |
|EBIDTA ||7505 ||6905 ||7505 ||6905 |
|Interest and ||5139 ||3949 ||5139 ||3949 |
|Finance Expenses || || || || |
|Depreciation ||2284 ||1923 ||2284 ||1923 |
|Profit before tax ||82 ||1033 ||82 ||1033 |
|Current tax (MAT) ||123 ||379 ||123 ||379 |
|Deferred Tax (Net of MAT Credit Entitlement) ||(82) ||(632) ||(82) ||(632) |
|MAT of earlier period ||- ||106 ||- ||106 |
|Profit After Tax ||41 ||1180 ||41 ||1180 |
|Share in Profit/ (Loss) of Joint ||- ||- ||5 ||23 |
|Ventures || || || || |
|Profit for the year ||41 ||1180 ||46 ||1203 |
|Other Comprehensive Income (Net of Tax) ||(19) ||(15) ||(19) ||(15) |
|Total Comprehensive Income ||22 ||1165 ||27 ||1188 |
2) Review of operations
On Standalone basis the total Income from operations of the Company was Rs. 36751lakhs as against Rs. 38486 lakhs in the previous year (PY). However the EBIDTA of theCompany for CY was Rs. 7505 lakhs as against Rs. 6905 lakhs in PY. The Company earned aprofit of Rs. 82 lakhs from ordinary activities before tax in the current year (CY) asagainst a profit of Rs. 1033 lakhs in the PY. After providing for tax the Companyreported a profit of Rs. 22 lakhs for the year ended 31st March 2018 asagainst a profit of Rs. 1165 lakhs for the Financial Year ended 31st March2017. The decline in the profits of the Company was majorly due to higher interest anddepreciation in CY.
On Consolidated basis the total Income from operations of the Company was Rs. 36751lakhs as against Rs. 38486 lakhs for the PY. The Company has earned a profit before taxof Rs. 82 lakhs from ordinary activities before tax in the CY as against a profit of Rs.1033 lakhs previous year. After providing for tax and after share in profit of JointVentures the Company reported a profit of Rs. 27 lakhs for the Financial Year ended 31stMarch 2018 as against a profit of Rs. 1188 lakhs for the Financial Year ended 31stMarch 2017.
3) Performance of Joint Venture Companies
The Company has only following two Joint Ventures:
(i) Morarjee Castiglioni (India) Private Limited (50%)
(ii) Just Textiles Limited (49%)
A Statement containing the salient features of the Financial Statements of said JointVentures is annexed in the prescribed Form AOC-1 to this Report as "Annexure -1".
A policy on material subsidiaries has been formulated and hosted on the website of theCompany at www. morarjee.com.
4) Share Capital
During the financial year 2017-18 there was no change in the Share Capital of theCompany. The Company has neither issued any shares nor granted any Stock Options nor anySweat Equity Shares during the year.
5) Dividend and Reserve
Your Directors do not recommend any dividend for the year under review. The details ofreserves and surplus are provided in Note No. 15 of the notes to the standalone financialstatement.
The Company has neither accepted nor renewed any deposits during the year.
7) Particulars of Loans Guarantee or Investments
During the year under review the Company has not made any investments advanced anyloans or provided any guarantee falling under Section 186 of the Companies Act 2013("the Act").
8) State of Company's Affairs and business Review
The details of the Company's affairs including its operations are more specificallygiven in the Management Discussion and Analysis Report which is given in this AnnualReport.
9) Corporate Social Responsibility ("CSR")
Company undertakes its CSR activities through Urvi Ashok Piramal Foundation which iscurrently executing various projects on Health and Livelihood programmes and theseprojects are in accordance with Schedule VII of the Companies Act 2013 and the Company'sCSR policy.
The detailed Report on CSR activities is annexed as Annexure 2 and formsan integral part of this Report.
The constitution of the CSR Committee and its terms of reference are more particularlystated in the Corporate Governance Report which forms a part of this Annual Report. CSRPolicy of the Company is available on Company's website at www.morarjee.com.
10) Business Risk Management
The Company has formulated and implemented a Risk Management policy in accordance withthe provisions of the Act and Regulation 17(9) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 ("Listing Regulations") in order toaddress the business risks associated with the Company. The Company periodically reviewsthe risk management practices and actions deployed by the management with respect to theidentification impact assessment monitoring mitigation and reporting of key risks whiletrying to achieve its business objectives.
11) Internal Control System and their adequacy
Your Company has an Internal Control System commensurate with the size scale andcomplexity of its operations and well-documented procedures for various processes whichare periodically reviewed for changes warranted due to business needs. The InternalAuditor continuously monitors the efficiency of the internal controls/ compliance with theobjective of providing to Audit Committee and the Board of Directors an independentobjective and reasonable assurance of the adequacy and effectiveness of the organisation'srisk management control and governance processes. This system of internal controlfacilitates effective compliance of Section 138 of the Act and the Listing Regulations.
To maintain its objectivity and independence the Internal Auditor reports to theChairman of the Audit Committee. The Internal Auditor monitors and evaluates theefficiency and adequacy of the internal control system with reference to the FinancialStatement. Based on the report of internal auditor process owners undertake correctiveactions in their respective areas and thereby strengthen the controls. Significant auditobservations and corrective actions thereon are presented to the Audit Committee.
During the year under review no reportable material weakness in the operation wasobserved. Regular audit and review processes ensure that such systems are reinforced on anongoing basis.
12) Vigil Mechanism/ Whistle Blower Policy
The Vigil Mechanism/Whistle Blower Policy has been put in place for the Directors andEmployees to report their genuine concerns about unethical behaviour actual or suspectedfraud or violation of the Company's Code of Conduct. The mechanism provides for adequatesafeguards against the victimization of Director(s) and Employee(s) who avail of themechanism. Directors and Employees may make protected disclosure under the policy to theCompliance Committee constituted by the Company to administer the internal code ofbusiness conduct. In exceptional cases Directors and Employees have direct access to theChairman of the Audit Committee. Further no personnel have been denied access to theCompliance Committee/ Chairman of the Audit Committee as the case may be.
No complaints were received under whistle blower mechanism during the year underreview.
13) Directors and Key Managerial Personnel
Mr. R. K. Rewari (DIN: 00619240) Managing Director of the Company is liable to retireby rotation and being eligible has offered himself for re-appointment. The Boardrecommends his re-appointment to the shareholders at the ensuing AGM. On hisre-appointment he will continue as Managing Director for his remaining tenure as ManagingDirector and it will not be termed as break of service for all purposes.
Mr. Ranjan Sanghi Independent Director will attain the age of 75 years on 6thMay 2019. Board recommends for continuation of his appointment as an Independent Directorfor remaining term i.e. till 28th September 2019 in terms of Regulation 17(1A)of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 as amendedby SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations 2018notified on 9th May 2018 which would be effective from 1st April2019 which require the approval of members by way of special resolution. Notice of AGMcontains the resolution to this effect for approval of members.
All the Independent Directors of your company have given declarations that they meetthe criteria of Independence laid down under Section 149(6) of the Act and the ListingRegulations.
The Company has complied with the requirements of having Key Managerial Personnel asper the provisions of Section 203 of the Act.
14) Remuneration Policy
In compliance with Section 178(3) of the Act and Regulation 19(3) of the ListingRegulations and on the recommendation of the Nomination and Remuneration Committee theBoard framed a Policy relating to the selection and appointment of Directors KeyManagerial Personnel Senior Management and their remuneration. The Policy includescriteria for determining qualifications positive attributes and independence of adirector and other matters. The functions of the Nomination and Remuneration Committee aredisclosed in the Corporate Governance Report which forms part of the Annual Report.
15) Performance Evaluation
Pursuant to Regulation 17 of the Listing Regulations read with Schedule IV of the Acta formal evaluation of Board's performance and that of its Committees and individualdirectors had been done. The evaluation process was externally facilitated and conductedby M/s. hrcraft a professional business consulting firm specialized in feedback exercisesengaged for carrying out evaluation process in a fair and transparent manner. Directorswere circulated structured performance evaluation forms on various heads and they haveprovided their inputs on the same. Based on feedback an evaluation Report was preparedand forwarded to the Chairperson and the respective Director to maintain theconfidentiality of the Report.
The Independent Directors at their meeting held on 7th March 2018evaluated performance of the Chairperson non-independent directors of the Company and theperformance of the Board as a whole based on the evaluation report provided by the M/s.hrcraft.
The Directors expressed their satisfaction to the outcome of the aforesaid evaluationsand consented for continuation of present term of appointment of each of the IndependentDirectors.
16) Meetings of the Board
Four meetings of the Board of Directors were held during the financial year 2017-18 andthe gap between two consecutive board meetings was within the statutory limit. The detailsof the number of meetings held and attended by each Director are provided in the CorporateGovernance Report which forms part of this Report.
17) Committees of the Board
The details of all the Committees of the Board including the Audit and CSR Committeealong with their terms of reference composition and meetings held during the year areprovided in the Report on Corporate Governance which forms part of this Annual Report.
18) Directors' Responsibility Statement
Pursuant to Section 134(5) of the Act ("the Act") we hereby state that:
i) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures in any;
ii) your Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31st March 2018 and itsprofit for the year ended on that date;
iii) your Directors have taken proper and sufficient care towards the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
iv) your Directors have prepared the annual accounts for the year ended 31stMarch 2018 on a going concern basis;
v) your Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively;
vi) your Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
19) Related Party Transactions ("RPTs")
The RPTs entered into by the Company during the Financial Year 2017-18 were on an arm'slength basis and in the ordinary course of business and none of them was material. TheForm AOC-2 for RPTs is enclosed as "Annexure - 3".
All the RPTs were placed before the Audit Committee for its approval and the Committeehad granted its prior approval/omnibus approvals as the case may be for all relatedparty transactions considering their nature. The Audit Committee reviewed on a quarterlybasis related party transactions entered into by the Company to which omnibus approvalwas granted by the Committee. The Company has framed a policy on RPTs for the purpose ofidentification approval and monitoring of such transactions.
The policy on related party transaction is hosted on the Company's website atwww.morarjee.com.
20) Auditors and their reports
A. Statutory Auditors & Auditors Report
In terms of Section 139 of the Act Members of the Company at the 22nd AGMheld on 22nd August 2017 had appointed M/s. Haribhakti & Co. LLPChartered Accountants (Firm Registration No. 103523W/ W100048) as the Statutory Auditorsfor a term of 5 years commencing from the conclusion of 22nd AGM till theconclusion of the 27th AGM to be held in year 2022 subject to the ratificationby shareholders at every AGM. Since the provision of ratification by the members has beendone away by the Companies Amendment Act 2017 Board has recommended the ratification oftheir appointment for their remaining tenure and the notice of AGM contains the resolutionfor ratification of their appointment to the members.
The Auditor's Report on the Standalone and Consolidated Financial Statements of theCompany for the Financial Year 2017-18 as submitted by M/s. Haribhakti & Co. LLP didnot contain any qualifications reservations or adverse remarks and are self-explanatory.
There have been no instances of fraud reported by the Auditors under Section 143(12) ofthe Act and Rules framed thereunder either to the Company or to the Central Government.
B. Cost Auditors
Pursuant to Section 148 of the Act and on the recommendation of the Audit CommitteeM/s. Phatak Paliwal & Co. Cost Accountants (Firm Registration Number 000105) wasappointed by the Board as the Cost Auditors of the Company for the financial year 2018-19at a remuneration of Rs.150000 subject to ratification by the members at the AGM. Therequisite resolution for ratification of remuneration of Cost Auditors by the shareholdershas been set out in the Notice of AGM. M/s. Phatak Paliwal & Co. provided acertificate to the Company certifying their independence and arm's length relationshipwith the Company in accordance with the provisions of the Act.
C. Secretarial Audit
Pursuant to Section 204 of the Act read with the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Company has obtained theSecretarial Audit Report for the financial year ended 31st March 2018 fromM/s. Kala Agarwal Company Secretary in practice and same is annexed as Annexure - 4to this Report. The Secretarial Audit Report does not contain any qualificationreservation or adverse remark and details mentioned in the Secretarial Audit Report areself explanatory.
21) Corporate Governance Report and Management Discussion and Analysis Report
The Corporate Governance Report on compliance of the conditions of Corporate Governanceas stipulated in the Listing Regulations and the Management Discussion & AnalysisReport form an integral part of this annual report.
22) Compliance of Secretarial Standards
The Company has complied with the applicable Secretarial Standards during the year.
23) Extract of Annual Return
Pursuant to the provisions of Sections 134(3)(a) and 92(3) of the Act read with Rule12(1) of the Companies (Management and Administration) Rules 2014 an extract of theAnnual Return as on March 31 2018 in prescribed Form No. MGT-9 is given in Annexure -5 to this Report.
24) Particulars of Employees
The information required pursuant to Section 197 of the Act read with Rule 5 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect ofemployees of the Company will be provided on request. In terms of Section 136 of the Actthe reports and accounts are being sent to the shareholders and others entitled theretoexcluding the said information which will be made available for inspection by theshareholders at the Registered Office of the company during business hours on any workingdays of the Company up to the date of the ensuing Annual General Meeting. If anyshareholder is interested in inspecting the same such shareholders may write to theCompany Secretary in advance.
25) Energy Conservation and Technology absorption Foreign Exchange Earnings and Outgo
The information pertaining to conservation of energy and technology absorption asrequired under Section 134 (3)(m) of the Companies Act 2013 read with Rule 8(3) of theCompanies (Accounts) Rules 2014 is furnished in "Annexure - 6" to thisreport.
The total Foreign Exchange Inflow was Rs. 9850.45 lakhs and Outflow was Rs. 1413.99lakhs during the year under review.
26) Significant and Material Orders
There were no significant and material orders passed by any Regulators or Courts orTribunals during the year ended 31st March 2018 impacting the going concernstatus and Company's operations in future.
27) Prevention of Sexual Harassment of Women at workplace
The Company has zero tolerance towards sexual harassment at workplace and has adopted apolicy to abide by letter and spirit requirements of the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 and the Rules made thereunder.The Company has Internal Complaints Committee (ICC) at Group level to redress thecomplaints of sexual harassment. During the year Company has not received any complaintof sexual harassment.
28) Material Changes and Commitments affecting the financial position of the company
There has been no material change/commitment affecting the financial position of theCompany during the period from the end of the financial year on 31st March2018 to the date of this Report. There has been no change in the nature of business of theCompany.
Your Directors gratefully acknowledge the support and cooperation received from variousdepartments of the Central and State governments members business associates analystsbanks financial institutions customers distributors and suppliers Business Partnersand other stakeholders of the Company and also convey a sense of high appreciation to allthe employees of the Company for their hard work dedication continued commitment andcontributions.
| ||On behalf of the Board |
| ||For Morarjee Textiles Limited |
| ||Urvi A. Piramal |
| ||Chairperson |
| ||DIN 00044954 |
|Date: 24th May 2018 || |
|Place: Mumbai || |