Your Directors have pleasure in presenting their 24th Annual Report and theAudited Financial Statement for the Financial Year ended 31st March 2019.
1) Financial Results
(Rs in lakhs)
|Particulars || |
| || || || || |
| ||Current Year ||Previous Year ||Current Year ||Previous Year |
| || || || || |
| ||31st March 2019 ||31st March 2018 ||31st March 2019 ||31st March 2018 |
|Total Income ||35025 ||36751 ||35025 ||36751 |
|EBIDTA ||4276 ||7505 ||4276 ||7505 |
|Interest and || || || || |
|Finance Expenses ||5394 ||5139 ||5394 ||5139 |
|Depreciation ||2321 ||2284 ||2321 ||2284 |
|Profit/ (Loss) before tax ||(3439) ||82 ||(3439) ||82 |
|Current tax (MAT) ||- ||123 ||- ||123 |
|Deferred Tax (Net of MAT credit Entitlement) ||(985) ||(82) ||(985) ||(82) |
|MAT of earlier period ||(6) ||- ||(6) ||- |
|Profit/ (Loss) After Tax ||(2448) ||41 ||(2448) ||41 |
|Share in Profit/ (Loss) of Joint Venture ||- ||- ||(7) ||9 |
|Profit/ (Loss) for the year ||(2448) ||41 ||(2455) ||50 |
|Other Comprehensive Income (Net of Tax) ||15 ||(19) ||15 ||(19) |
|Total Comprehensive Income ||(2433) ||22 ||2440 ||31 |
2) Review of operations
On Standalone basis the total Income from operations of the Company was Rs 35025lakhs as against Rs 36751 lakhs in the previous year. The EBIDTA of the Company forcurrent year was Rs 4276 lakhs as against Rs 7505 lakhs in previous year. The Companyincurred a loss of Rs 3439 lakhs from ordinary activities before tax in the current yearas against a Profit of Rs 82 lakhs in the previous year. After providing for tax theCompany reported a Total Comprehensive Income of Rs (2433) lakhs for the year ended 31stMarch 2019 as against that of Rs 22 lakhs for the Financial Year ended 31stMarch 2018. On Consolidated basis the total Income from operations of the Company was Rs35025 lakhs as against Rs 36751 lakhs for the previous year. The Company has incurred aloss before tax of Rs 3439 lakhs from ordinary activities before tax in the current yearas against a Profit of Rs 82 lakhs previous year. After providing for tax and after sharein loss of Joint Ventures the Company reported a Total Comprehensive Income of Rs (2440)lakhs for the Financial Year ended 31st March 2019 as against that of Rs 31lakhs for the Financial Year ended 31st March 2018.
3) Performance of Joint Venture Companies
The Company has following Joint Ventures:
(i) Morarjee Castiglioni (India) Private Limited (50%)
(ii) Just Textiles Limited (49%) A Statement containing the salient features of theFinancial Statements of said Joint Ventures is annexed in the prescribed Form AOC-1 tothis 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 2018-19 the authorized share capital of the company wasre-classified and increased from Rs 565000000/- (Rupees Fifty Six Crores and FiftyLakhs only) divided into 45000000 Equity Shares of Rs 7/- each and 2500000Preference Shares of Rs 100/- each to Rs 605500000/- (Rupees Sixty Crores and FiftyFive Lakhs only) divided into 36500000 Equity Shares of Rs 7/- each and 3500000Preference Shares of Rs 100/- each.
5) 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.
6) Deposits / Loans from Directors
The Company has neither accepted nor renewed any deposits during the year. Your Companyhas not accepted any deposit from the directors during the year under review.
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.
The Board is pleased to informed that the Company has been awarded the "BestFabric Partner" by Laguna Clothing. This award is given considering aspects such asquality delivery and overall service.
9) Corporate Social Responsibility ("CSR")
Company undertakes its CSR activities through Urvi Ashok Piramal Foundation which iscurrently executing various projects on Health and Environment programmes and theseprojects are in accordance with Schedule VII of the Act and the Company's CSR policy. Thedetailed Report on CSR activities is annexed as Annexure 2 and forms anintegral part of this Report. The constitution of the CSR Committee and its terms ofreference are more particularly stated in the Corporate Governance Report which forms apart of this Annual Report. CSR Policy of the Company is available on Company's website atwww.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. 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.
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 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 complaintswere received under whistle blower mechanism during the year under review.
13) Directors and Key Managerial Personnel
Mr. Ranjan Sanghi has resigned as a Non-Executive Independent Director with effect from8th April 2019. The Board places on records its appreciation towards valuablecontribution made by him during his tenure as director of the Company.
Mr. Mahesh S. Gupta (DIN: 00046810) non-executive Director of the Company is liable toretire by rotation and being eligible has offered himself for re-appointment. The Boardrecommends his re-appointment to the shareholders at the ensuing AGM.
Pursuant to Section 196 197 and 203 of the Act and the rules made thereunder read withSchedule V of the Act and on the recommendation of the Nomination and RemunerationCommittee Mr. R. K. Rewari (DIN: 00619240) was re-appointed as the Managing Director ofthe Company at the Board meeting held on 3rd November 2018 for a period of 3years with effect from 1st February 2019. The re-appointment of Mr. R. K.Rewari is subject to the approval of the shareholders of the Company at the ensuing AnnualGeneral Meeting ("AGM"). The Board recommends his appointment to theshareholders at the ensuing AGM.
Mr. Shobhan Thakore (DIN: 00031788) and Mr. Ranjan Pant (DIN: 00005410) IndependentDirectors will complete their first term of 5 consecutive years as the IndependentDirectors of the Company on 28th September 2019. Board recommends theirreappointment for a second term of 5 consecutive years in terms of section 149(10) ofCompanies Act 2013 and regulation 25(2) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 which requires the approval of members by way of specialresolution.
Mr. Sanjeev Singh Sengar has resigned as the Company Secretary and Compliance Officerwith effect from 20th March 2019 and Mr. Tanmay Bhat was appointed as theCompany Secretary and Compliance Officer with effect from 8th May 2019. Allthe Independent Directors of your company have given declarations that they meet thecriteria of Independence laid down under Section 149(6) of the Act and the ListingRegulations. The Company has complied with the requirements of having Key ManagerialPersonnel as per 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. Thepolicy on the appointment of person as Director and evaluation of Director and SeniorManagement Personnel of the Company is available on Company's website at www.morarjee.com.
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 5thMarch 2019 evaluated performance of the Chairperson non-independent directors of theCompany and the performance of the Board as a whole based on the evaluation reportprovided by the M/s. Hrcraft. The Directors expressed their satisfaction with theevaluation process.
16) Meetings of the Board
Four meetings of the Board of Directors were held during the financial year 2018-19 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 Annual Report.
17) 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 Annual Report.
18) 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 2019 and itsloss 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 2019 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 2018-19 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 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 atwww.morarjee.com.
20) Auditors and their reports
A. Statutory Auditors & Auditors 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. The Auditor's Report on the Standalone and ConsolidatedFinancial Statements of the Company for the Financial Year 2018-19 as submitted by M/s.Haribhakti & Co. LLP did not contain any qualifications reservations or adverseremarks and is self-explanatory. There have been no instances of fraud reported by theAuditors under Section 143(12) of the Act and Rules framed thereunder either to theCompany 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 2019-20at a remuneration of Rs 150000/- (Rupees One Lakh Fifty Thousand only) exclusive ofapplicable taxes subject to rati_cation by the members at the AGM. The requisiteresolution for rati_cation of remuneration of Cost Auditors by the shareholders has beenset out in the Notice of AGM. M/s. Phatak Paliwal & Co. provided a certificate to theCompany certifying their independence and arm's length relationship with the Company inaccordance 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 2019 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 qualificationreservations or adverse remarks.
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 forms an integral part of this annual report.
22) 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.
23) Compliance of Secretarial Standards
The Company has complied with the applicable Secretarial Standards during the year.
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 upto 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.
Members who are interested in obtaining these particulars may write to the CompanySecretary at the registered Office of the Company.
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 - 5 " to thisreport. The total Foreign Exchange Inflow was Rs 11842.30 lakhs and Outflow was Rs1030.31 lakhs 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 2019 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.
Disclosures in relation to the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013: number of complaints filed during the financial Nilyear number of complaints disposed of during the Nil financial year number of complaintspending as on end of Nil the financial year
28) 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.
29) 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 March2019 to the date of this Report. There has been no change in the nature of business of theCompany.
30) 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 2019 in prescribed Form No. MGT-9 is given in Annexure6' 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 |
| ||Sd/- |
| ||Urvi A. Piramal |
| ||Chairperson |
| ||DIN 00044954 |
|Date: 8th May 2019 || |
|Place: Mumbai || |