Your Directors have pleasure in presenting their Twenty Fifth Annual Report and theAudited Financial Statement for the Financial Year ended 31st March 2020.
1) Financial Results
(Rs in lakh)
|Particulars || |
| ||Current || |
Previous Year 31st March 2019
|Current || |
Previous Year 31st March 2019
|Total Income ||38416 ||35025 ||38416 ||35025 |
|EBIDTA ||4428 ||4276 ||4428 ||4276 |
|Interest and Finance Expenses ||5720 ||5394 ||5720 ||5394 |
|Depreciation ||2372 ||2321 ||2372 ||2321 |
|(Loss) before tax and Exceptional item ||(3664) ||(3439) ||(3664) ||(3439) |
|Exceptional Item - Loss on Sale of Investment ||24 || ||49 || |
|(Loss) before tax ||(3688) ||(3439) ||(3713) ||(3439) |
|Current tax (MAT) ||- ||- ||- ||- |
|Deferred Tax (Net of MAT credit Entitlement) ||(1079) ||(985) ||(1079) ||(985) |
|MAT of earlier Period ||- ||(6) ||- ||(6) |
|(Loss) After Tax ||(2609) ||(2448) ||(2634) ||(2448) |
|Share in Profit/ (Loss) of Joint Venture || || ||(11) ||(7) |
|(Loss) for the year ||(2609) ||(2448) ||(2645) ||(2455) |
|Other Comprehensive Income (Net of Tax) ||2 ||15 ||2 ||15 |
|Total Comprehensive Income ||(2607) ||(2433) ||(2643) ||(2440) |
Review of operations:
On Standalone basis the total Income from operations of the Company was Rs 38416 lakhas against Rs 35025 lakh in the previous year. The EBIDTA for Financial Year (FY) was Rs4428 lakh as against Rs 4276 lakh in previous year. The Company incurred a loss of Rs3688 lakh from ordinary activities before tax in the FY 2019-20 as against a loss of Rs3439 lakh in the previous year. After providing for tax the Company reported a TotalComprehensive Income of Rs (2607) lakh for the FY 2019-20 as against Rs (2433) lakh forthe previous year.
On Consolidated basis for the FY 2019-20 total income from operations of the Companywas Rs 38416 lakh as against Rs 35025 lakh for the previous year. The Company hasincurred a loss before tax of Rs 3713 lakh from ordinary activities before tax in the FY2019-20 as against a loss of Rs 3439 lakh previous year. After providing for tax andshare in loss of Joint Ventures the Company reported a Total Comprehensive Income of Rs(2643) lakh for the FY 2019-20 as against that of Rs (2440) lakh for the previous year.
2) Performance of Joint Venture Companies
The Company has only one Joint Venture Company viz. Morarjee Castiglioni (India)Private Limited (50%). During the financial year Just Textiles Limited ceased to be JointVenture w.e.f. 30th September 2019.
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.
3) Share Capital
During the financial year 2019-20 there was no change in the Share Capital of theCompany. The Company has neither issued any shares nor has granted any Stock Options norany Sweat Equity Shares during the year.
4) Dividend and Reserve
In view of losses incurred your Directors do not recommend any dividend for the yearunder review. The details of reserves and surplus are provided in Note No. 15 of the notesto the standalone financial statements
5) Deposits / Loans from Directors
The Company has neither accepted nor has renewed any deposits during the year. YourCompany has not accepted any deposit or any loan from the directors during the year underreview.
6) Particulars of Loans Guarantee or Investments
During the FY 2019-20 the Company has not made any investments advanced any loans orprovided any
guarantee falling under Section 186 of the Companies Act 2013 ("the Act").
7) 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 forms part of this Report.
8) Corporate Social Responsibility ("CSR")
During the FY 2019-20 the Company was not under any statutory obligation to make anycontribution towards the Corporate Social Responsibility activities.
However in order to ensure the continuity of the CSR activities initiated in the pastthe Company has made voluntary contribution to be spent on the CSR activities. Thedetailed Report on CSR activities is annexed as "Annexure - 2" and formspart of this Report.
During the financial year the Company has undertaken its CSR activities throughConservation Wildlands Trust which is currently executing various projects on LivelihoodHealth Education Wildlife Conservation programmes and these projects are in accordancewith Schedule VII of the Act and the Company's CSR policy.
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 Report. CSR Policy isavailable on Company's website at www. morarjee.com.
9) 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.
10) Internal Financial 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. Duringthe year under review no reportable material weakness in the operation was observed.Regular audit and review processes ensure that such systems are reinforced on an ongoingbasis.
11) 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 directors and employees 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.
12) Directors and Key Managerial Personnel
During the year under review Mr. Aditya Mangaldas ceased to be a Non-ExecutiveIndependent Director of the Company with effect from 29th September 2019. TheBoard places on records its appreciation towards valuable contribution made by him duringhis tenure as the director of the Company.
Mr. Ranjan Pant and Mr. Shobhan Thakore resigned as a Non-Executive IndependentDirector of the Company with effect from 11th November 2019 and 16thJanuary 2020 respectively. The Board places on records its appreciation towards valuablecontribution made by Mr. Ranjan Pant and Mr. Shobhan Thakore during their tenure as thedirectors of the Company.
On the recommendation of the Nomination and Remuneration Committee Ms. Aplana Chinai(DIN: 00136144) Mr. Archit Jayakar (DIN: 01904013) and Mr. Devesh Dadheech (DIN:01656629) were appointed as an Additional Directors (Independent) of the Company effectfrom 19th December 2019 29th January 2020 and 26thJune 2020 respectively for a period of 5 consecutive years pursuant to Sections 149150 152 and 161 of the Act and the rules made thereunder. The appointment of Ms. AplanaChinai Mr. Archit Jayakar and Mr. Devesh Dadheech is subject to the approval of theshareholders of the Company at the ensuing AGM. In the opinion of the Board Ms. AplanaChinai Mr. Archit Jayakar and Mr. Devesh Dadheech possess the relevant expertise andexperience (including the proficiency) and integrity.
A statement regarding opinion of the Board with regard to integrity expertise andexperience (including the proficiency) of the independent directors appointed during theyear is provided in the Report on Corporate Governance which forms part of this AnnualReport.
Ms. Urvi A. Piramal (DIN: 00044954) non-executive Director of the Company is liable toretire by rotation and being eligible has offered herself for re-appointment. The Boardrecommends her re-appointment to the shareholders at the ensuing AGM.
Mr. Tanmay Bhat has resigned as the Company Secretary and Compliance Officer witheffect from 29th November 2019 and Ms. Nishthi H. Dharmani was appointed asthe Company Secretary and Compliance Officer with effect from 2nd March 2020.
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.
13) 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 includes criteria for determining qualifications positive attributes andindependence of a director and other matters. The functions of the Nomination &Remuneration Committee are disclosed in the Corporate Governance Report which forms partof this Report.
The policy on the appointment of a person as Director and evaluation of Director andSenior Management Personnel of the Company is available on Company's website atwww.morarjee.com.
14) 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. Directors were circulated structured performance evaluation formson various heads and they have provided their inputs on the same. Based on feedback anevaluation Report was prepared and forwarded to the Chairperson and the respectiveDirector to maintain the confidentiality of the Report.
The Independent Directors at their meeting held on 29th January 2020evaluated performance of the Chairperson non-independent directors of the Company.
The Directors expressed their satisfaction with the evaluation process.
15) Meetings of the Board
Five meetings of the Board of Directors were held during the FY 2019-20 and the gapbetween two consecutive board meetings was within the statutory limit. The details of thenumber of meetings held and attended by each Director are provided in the CorporateGovernance Report which forms part of this Report.
16) Committees of the Board
The details of all the Committees of the Board along with their terms of referencecomposition and meetings held during the year are provided in the Report on CorporateGovernance which forms part of this Report.
17) Directors' Responsibility Statement
Pursuant to Section 134(5) of 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 2020 and itsloss for the year ended on that date;
iii) your Directors have taken proper and sufficient care
towards the maintenance of adequate accounting records in accordance with theprovisions of the Act for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;
iv) your Directors have prepared the annual accounts for the year ended 31stMarch 2020 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.
18) Related Party Transactions ("RPTs")
The RPTs entered into by the Company during the FY 2019-20 were on an arm's lengthbasis and in the ordinary course of business and none of them was material. The Form AOC-2for 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 RPTsconsidering their nature. The Audit Committee reviewed on a quarterly basis RPTs enteredinto by the Company to which omnibus approval was granted by the Committee. The Companyhas framed a policy on RPTs for the purpose of identification approval and monitoring ofsuch transactions.
The policy on RPTs is hosted on the Company's website at www.morarjee.com.
19) Auditors and their reports
A. Statutory Auditors & Auditor's Report
The members of the Company have appointed M/s. Haribhakti & Co. LLP as statutoryauditors of the Company for a period of 5 years and they will remain in office until theconclusion of 27th AGM to be held in the calendar year 2022. The Auditor'sReport on the Standalone and Consolidated Financial Statements of the Company for theFinancial Year 2019-20 as submitted by M/s. Haribhakti & Co. LLP did not contain anyqualifications and reservations. Other remarks 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) wereappointed by the Board as the Cost Auditors of the Company for the financial year 2020-21at a remuneration of Rs 150000/- (Rupees One Lakh Fifty Thousand only) exclusive ofapplicable taxes and out of pocket expenses if any subject to ratification by themembers at the AGM. The requisite resolution for ratification of remuneration of CostAuditors by the shareholders has been set out in the Notice of AGM. M/s. Phatak Paliwal& Co. provided a certificate to the Company certifying their independence and arm'slength relationship with 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 2020 from Ms.Kala Agarwal Practicing Company Secretary and same is annexed as "Annexure-4" to this Report. The Secretarial Audit Report does not contain anyqualification reservations or adverse remarks.
20) 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 forms an integral part of this annual report.
21) Corporate Governance details as required under Schedule V of the Companies Act2013
The disclosures to be mentioned in pursuance of Section II of Part II of Schedule V ofthe Act have been mentioned in the Corporate Governance Report.
22) Compliance of Secretarial Standards
The Company has complied with the applicable Secretarial Standards during the FY2019-20.
23) 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 of employees of theCompany will be provided on request. In terms of Section 136 of the Act the reports andaccounts are being sent to the shareholders and others entitled thereto excluding thesaid information which will be made available for inspection by the shareholders inelectronic mode up to the date of AGM. Members can inspect the same by sending an emailto the Company Secretary in advance at email@example.com.
24) 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 theAct is furnished in "Annexure - 5" to this report.
The total Foreign Exchange Inflow was Rs 10748 lakh and Outflow was Rs 678 lakh duringthe year under review.
25) Significant and Material Orders
There were no significant and material orders passed by any Regulators or Courts orTribunals during the year ended 31st March 2020 impacting the going concernstatus and Company's operations in future.
26) 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.
Disclosures in relation to the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013:
|number of complaints filed during the financial year ||Nil |
|number of complaints disposed of during the financial year ||Nil |
|number of complaints pending as on end of the financial year ||Nil |
27) Maintenance of Cost Records
The provisions of sub-section (1) of Section 148 of the Companies Act 2013 pertainingto the maintenance of cost records are applicable to the Company and accordingly suchaccounts and records are made and maintained by the Company.
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 March2020 to the date of this Report. There has been no change in the nature of business of theCompany.
29) 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 31st March 2020 in prescribed Form No. MGT-9 is given in "Annexure-6"to this Report.
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 andcontribution.
On behalf of the Board
For Morarjee Textiles Limited
Urvi A. Piramal
Chairperson DIN: 00044954
Date: 26th June 2020