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Directors Report of Morarjee Textiles Ltd.

Mar 31, 2016

Dear Shareholders,

Your Directors have pleasure in presenting their 21st Annual Report and the Audited Accounts for the Financial Year ended March 31, 2016 together with the Auditor''s Report thereon.

1) Financial Results

(Rs. in Lacs)

Particulars

Current Year March 31, 2016

Previous Year March 31, 2015

Total Income

33,745

36,558

EBIDTA

5,615

6,101

Interest And Finance Expenses

2,259

1,905

Depreciation

996

956

Profit before tax

2,360

3,240

Provision for tax (MAT)

539

715

Deferred Tax

628

1,168

MAT of earlier period

80

-

MAT Credit Entitlement

(539)

(715)

Profit After Tax

1,652

2,072

2) Transfer to Reserve

The Company has not transferred any amount to reserves during the year.

3) Review of Operations

On a Standalone basis, the Total Income for the year ended March 31, 2016 stood at Rs. 33,745 Lacs as against Rs.36,558 Lacs for the previous year ended March 31, 2015. The Company earned a profit of Rs. 2,360 Lacs from ordinary activities before tax, for the year ended March 31, 2016 as against a profit of Rs. 3,240 Lacs, for the Financial Year ended March 31, 2015. After providing for tax, the Company reported a net profit of Rs. 1,652 Lacs for the year ended March 31, 2016 as against a profit of Rs. 2,072 Lacs for the Financial Year ended March 31, 2015.

On a Consolidated basis, the Total Income for the Financial Year ended March 31, 2016 was Rs. 33,746 Lacs as against Rs.36,571 Lacs for the previous year ended March 31, 2015. The Company has earned a profit before tax of Rs. 2,358 Lacs, from ordinary activities for the Financial Year ended March 31, 2016 as against a profit of Rs. 3,252 Lacs for the Financial Year ended March 31, 2015. After providing for tax, the Company reported a net profit of Rs. 1,649 Lacs for the Financial Year ended March 31, 2016 as against a net profit of Rs. 2,084 Lacs for the Financial Year ended March 31, 2015.

Backward integration cum expansion project

Your Company undertook a backward integration project to integrate the manufacturing processes and to reduce dependence on vendors of yarn and weaved fabric. The expansion Project is intended to replace the outsourcing of raw materials (yarn and fabric) and enable the Company to achieve higher levels of integration of Spinning, Weaving and Printing activities and thereby improve the margins. The expansion Project comprises as under:

- Enhancing the Spinning (40128 Spindles) & Weaving Capacity (112 new looms)

- Installation of "Ready for Dyeing" (RFD) Machinery

- Enhancement of Printing Capacity (by 78 Lac meter p.a.)

The cost of the project is estimated at Rs. 300 Crores, which is being funded by a combination of debt and internal accruals. The project has been approved by both the Central and Maharashtra Governments under the Technology Up gradation Fund Scheme-(TUFs) for receipt of capital subsidy and interest subsidy.

The Weaving, Printing & Processing facility had been commissioned in March 2016 and the Spinning facility is expected to be commissioned by 2nd Quarter of FY 2016-17.

4) Share Capital

The paid up Equity Share Capital of the company is '' 25.43 Crore. During the year under review, the Company has neither issued any shares nor granted any Stock Options nor any Sweat Equity Shares.

The term of 9% Redeemable Cumulative Nonconvertible Preference Shares has been extended by a further period of 5 years. i.e. up to (December 2, 2020) with an option for early repayment after 18 months from the date of the extension at the option of Preference Shareholder.

5) Dividend

Your directors are pleased to recommend a dividend on the shares of the Company, as per the details given below, for the Financial Year ended March 31, 2016.

- Preference Shares

(Amount in Rs.)

Particulars

Dividend

F.Y 2015-2016

5% Redeemable Cumulative Non-

50,00,000

Convertible Preference Share of Rs.

100/-each

9% Redeemable Cumulative Non-

1,35,00,000

Convertible Preference Share of Rs.

100/-each

- Equity Shares

A dividend of Rs. 1.40/- per Equity Share of Rs. 7/- each (@ 20%).

6) Deposits

During the year under review, the Company has neither accepted nor renewed any deposits.

7) Particulars of Loans, Guarantee or Investments

During the year under review, the company has not made any investments, advanced any loans or provided any guarantee under the provision of Section 186 of the Companies Act, 2013.

8) State of Company''s Affairs and business Review

The details of the Company''s affairs including its operations are more specifically given in the Management Discussion and Analysis Report, which is appended to this report.

9) Corporate Social Responsibility

Corporate Social Responsibility (CSR) has been an integral part of the way in which the company conducts its business. The Company has made a conscious effort to involve communities in its development journey and has received appreciation from stakeholders, which gives us a sense of pride and encouragement to continue to perform better. The Company has contributed and spent an amount of Rs.61.52/- Lacs towards the CSR activities of the Company during the Financial Year 2015-16. The Company has undertaken CSR activities as per the CSR policy of the Company read with Schedule VII of the Companies Act, 2013.

In accordance with the provisions of Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014 made there under, the Annual Report on the CSR activities of the Company along with the CSR initiatives undertaken during the Financial Year 20152016 is enclosed to this report as "Annexure 1".

The constitution of the Corporate Social Responsibility Committee and its terms of reference are more particularly stated in the Corporate Governance Report which forms a part of this Report. The Corporate Social Responsibility Policy of the Company is hosted on the website of the Company at www.morarjeetextiles.com.

10) Business Risk Management

The Company has constituted a Risk Management Committee for identifying and evaluating the risks associated with the Business of the Company and to minimize them. The details of Committee and its terms of reference are set out in the Corporate Governance Report. The Committee periodically reviews the risk management practices and actions deployed by the management with respect to the identification, impact assessment, monitoring, mitigation and reporting of key risks while trying to achieve its business objectives.

The Company has a Risk Management framework to identify and evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact of risks on business objectives and enhance the Company''s competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels, including documentation and reporting. The framework has different risk models which help in identifying the risk trends and their exposure and potential impact analysis at the Company level.

11) Internal Control System and their adequacy

The Company has an Internal Control System commensurate with the size, scale and complexity of its operations and well-documented procedures for various processes which are periodically reviewed for changes warranted due to business needs. The Internal Auditor continuously monitors the efficiency of the internal controls/compliance with the objective of providing to Audit Committee and the Board of Directors, an independent, objective and reasonable assurance of the adequacy and effectiveness of the organization’s risk management, control and governance processes. This system of internal control facilitates effective compliance of Section 138 of Companies Act, 2013 and the Listing Regulations.

To maintain its objectivity and independence, the Internal Auditor reports to the Chairman of the Audit Committee. The Internal Auditor monitors and evaluates the efficacy and adequacy of the internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal auditor, process owners undertake corrective actions in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee.

12) Vigil Mechanism/ Whistle Blower Policy

The Vigil Mechanism/Whistle Blower Policy has been put in place for the Directors and Employees to report their genuine concerns about unethical behavior, actual or suspected fraud or violation of the Company''s Code of Conduct. The mechanism provides for adequate safeguards against the victimization of Director(s) and Employee(s) who avail of the mechanism. Directors and Employees may make protected disclosure under the policy to the Compliance Committee constituted by the Company to administer the internal code of business conduct. In exceptional cases, Directors and Employees have direct access to the Chairman of the Audit Committee. Further no personnel have been denied access to the Compliance Committee/ Chairman of the Audit Committee, as the case may be.

No complaints were received in this regard during the year under review.

13) Subsidiary/ Joint Venture Companies

The Company does not have any subsidiary Company. However, the Company has two Joint Ventures as under

i. Morarjee Castiglioni (India) Private Limited

ii. Just Textiles Limited

A Statement containing the salient features of the Financial Statement of said Joint Ventures is annexed in the prescribed Form AOC-1 to this Report as "Annexure 2".

A policy on material subsidiaries has been formulated and hosted on the website of the Company at www. morarjeetextiles.com.

14) Directors and Key Managerial Personnel

On the recommendation of the Nomination and Remuneration Committee, Mr. R. K. Rewari (DIN: 00619240) was re-appointed as the Managing Director of the Company at the Board meeting held on February 1, 2016 for a period of 3 years with effect from February 1, 2016 pursuant to Section 196, 197 of the Act and the rules made there under read with Schedule V of the Act. The re-appointment of Mr. R. K. Rewari is subject to the approval of the shareholders of the Company at the ensuing Annual General Meeting ("AGM") as per the details given in the Notice of the AGM. The Board recommends his appointment to the shareholders at the ensuing AGM.

Mr. Mahesh S. Gupta, Director of the Company is liable to retire by rotation and being eligible, has offered himself for re-appointment. The Board recommends his re-appointment to the shareholders at the ensuing AGM.

Ms. Karina Vaz resigned as the Company Secretary with effect from April 1, 2015 and Mr. Sanjeev S. Sengar was appointed as the Company Secretary and Compliance officer of the Company with effect from September 1, 2015.

All the Independent Directors of your company have given their declarations that they meet the criteria of Independence as laid down under Section 149(6) of the Companies Act, 2013 and the Listing Regulations.

The Company has complied with the requirements of having Key Managerial Personnel as per the provisions of Section 203 of the Act.

15) Remuneration Policy

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for the selection and appointment of Directors, Key Managerial Personnel, Senior Management and their remuneration etc. The Remuneration policy of the Company is more particularly stated in the Corporate Governance Report which forms a part of this Report.

16) Board Evaluation

During the year, pursuant to Section 134, 149 and Schedule IV of the Companies Act, 2013 and Regulation 17 of the Listing Regulations, the Board had adopted a formal mechanism for evaluating its own performance and that of its Committees and individual Directors, including the Chairperson of the Board. The exercise was carried out through a structured evaluation process covering various aspects of the Board''s functioning such as composition of the Board & Committees, experience & competencies, performance of specific duties & obligations, governance issues etc. A Separate exercise was carried out to evaluate the performance of the individual Directors including the Chairperson of the Board, who were evaluated on parameters such as attendance, contribution at the meetings and otherwise, independent judgment etc.

The evaluation of all the Directors including Independent Directors was carried out by the entire Board, except for the Director being evaluated. Performance evaluation of the Board, Chairperson and the Non-Independent Directors was carried out by the Independent Directors in their meeting held on February 1, 2016.

The members of the Nomination and Remuneration Committee at their meeting held on February 1, 2016, evaluated the performance of every Director of the Company.

The Directors were satisfied with the evaluation results, which reflect the overall engagement of the Board and its Committees and on the basis of the Report of the said evaluation, the present term of appointment of the Independent Directors shall be continued with the Company.

17) Meetings of the Board

During the year under review, the Board of Directors of the Company met four times and the gap between two consecutive board meetings was within the limits prescribed by the Companies Act, 2013 and Listing Regulations.

The details of the meetings are more specifically given in the Corporate Governance Report which forms a part of this Report.

18) Committees of the Board

The details of all the Committees of the Board including the Audit and CSR Committee along with their terms of reference, composition and meetings held during the year, are provided in the Report on Corporate Governance which forms part of this Report.

19) Directors'' Responsibility Statement

Pursuant to Section 134 (5) of the Companies Act, 2013 ("the Act"), we hereby state that:

i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, in any;

ii) your 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 as at March 31, 2016 and its profit 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 the provisions of the Act, for safeguarding the 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 March 31, 2016 on a going concern basis;

v) your Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

vi) your Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

20) Related Party Transactions

The Related Party Transactions that were entered into during the Financial Year were on an arm''s length basis and in the ordinary course of business. There were no material Related Party Transactions entered into by your Company during the year. The details of Related Party Transactions are disclosed in Form AOC-2 which is enclosed as "Annexure 3"

The Related Party Transactions are placed before the Audit Committee and also before the Board for their approval, wherever required. Prior omnibus approvals of the Audit Committee were obtained for the transactions that were of repetitive nature. The transactions entered into pursuant to the omnibus approval of the Audit Committee were placed before the Audit Committee for their review on a quarterly basis. The Company has framed a policy on Related Party Transactions for the purpose of identification and monitoring of such transactions.

The policy governing related party transactions is hosted on the Company''s website at www. morarjeetextiles.com.

21) Auditors

A. Statutory Auditors and Audit Reports

The Statutory Auditors, M/s. Manubhai & Shah LLP, Chartered Accountants, retire at the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received a confirmation letter from the Auditors to the effect that their re-appointment, if made, will be within the limits prescribed under of the Companies Act, 2013 and that they are not disqualified to be appointed under the Act. As required under SEBI Listing Regulations the Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India. The Board recommends their reappointment as the Auditors of the Company for the Financial Year 2016-2017.

The Auditor''s Report on the Standalone and Consolidated Financial Statements of the Company for the Financial Year 2015-2016, did not contain any qualifications, reservations or adverse remarks and is self explanatory.

The Directors of your Company further confirm that no frauds or instances of mis-management were reported by the Statutory Auditor under Section 143(12) of the Companies Act, 2013.

B. Cost Auditors and Cost Audit Reports

Pursuant to Section 148 of the Companies Act, 2013, the Board of Directors, on the recommendation of the Audit Committee, appointed M/s. Phatak Paliwal & Co., as the Cost Auditors of the Company for the Financial Year 2016-2017. The remuneration of the Cost Auditor has also been approved by the Board of Directors on the recommendation of Audit Committee and the requisite resolution for ratification of remuneration of Cost Auditors by the members has been set out in the Notice of the 21st Annual General Meeting of your Company. The Company has received a certificate from the Cost Auditor M/s. Phatak Paliwal & Co. certifying their independence and arm''s length relationship with the Company in accordance with the provisions of the Companies Act, 2013.

C. Secretarial Audit and Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Company has appointed Ms. Kala Agarwal, Company Secretary in practice to undertake the Secretarial Audit of the Company. The Secretarial Audit report issued by Ms. Kala Agarwal is annexed herewith and marked as "Annexure 4" to this report, which is self explanatory.

22) Corporate Governance Report and Management Discussion Analysis

The Corporate Governance Report and the Management Discussion & Analysis Report, together with the Certificate received from the Statutory Auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated in the Listing Regulations, form an integral part of this report.

23) Extract of Annual Return

The extract of the Annual Return in form MGT-9 is annexed herewith as "Annexure 5" to this report.

24) Particulars of Employees

The information required pursuant to Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, is annexed to this report. In terms of Section 136 of the Act, the reports and accounts are being sent to the members and others entitled thereto, excluding the said information which will be made available for inspection by the members at the Registered Office of the company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any member is interested in inspecting the same, such a member may write to the Company Secretary in advance.

25) Energy Conservation and Technology Absorption

The information on Conservation of Energy and Technology absorption under Section 134(3)(m) of the Act read with the Companies (Accounts) Rules, 2014 is Annexed herewith as "Annexure 6".

26) Foreign Exchange Earnings and Outgo

During the year under review, foreign exchange earnings were Rs. 14,584.82 Lacs and outgoings were Rs. 9,700.76 Lacs making the Company a net foreign exchange earner with net inflow of Rs. 4884.06 Lacs.

27) Significant and Material Orders

There were no significant and material orders passed by any Regulators or Courts or Tribunals during the year ended March 31, 2016 impacting the going concern status and Company''s operations in future.

28) Prevention of Sexual Harassment of Women at Workplace

The Company has zero tolerance towards sexual harassment at workplace and has adopted a policy in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under. The Company has constituted an Internal Complaints Committee (ICC) to redress the complaints received regarding sexual harassment. During the Financial Year under review, the Company has not received any complaints of sexual harassment.

29) Acknowledgements

The Directors take this opportunity to express their deep sense of gratitude to the banks, Central and State Governments and their departments and the local authorities for their continued guidance and support.

We would also like to place on record our sincere appreciation for the commitment, dedication and hard work put in by every member of the Company and for the continuous cooperation and support of Customers, Suppliers, Executives, Staff and workers at all levels.

On behalf of the Board

For Morarjee Textiles Limited

Urvi A. Piramal

Chairperson

Place : Mumbai

Date : May 3, 2016


Mar 31, 2014

Dear Shareholders,

1. The Directors present their 19th Annual Report on the business and operations of the Company together with the Audited Accounts for the year ended 31st March, 2014.

2. Financial Results

Rs. in lacs

Particulars Year ended Year ended 31st March, 31st March, 2014 2013

Total Income 39,197.86 36,411.59

PBIDTA 7,581.99 6,535.79

Interest and Finance 2,548.91 2,725.66 Expenses

Depreciation 1,593.58 1,416.05

Profit Before Tax 3,439.50 2,394.08

Provision for Tax (MAT) 760.77 512.23

Deferred Tax 620.58 —

MAT Credit Entitlement 760.77 (512.23)

Profit After Tax 2,818.92 2,394.08

3. Operations Highlights - Standalone

During the year under review, the total income of the Company was Rs. 39,197.86 lacs as against Rs. 36,411.59 lacs in the previous year, an increase of 7.65%. The year ended at a profit of Rs. 2,818.92 lacs as against profit of Rs. 2,394.08 lacs in the previous year, an increase of 17.74%

Your Company could achieve a rise in overall profitability through a judicious mix of strategies and cost control measures.

4. Dividend

In view of the improved performance, your directors are pleased to recommend dividend on the shares of the Company, as per the details given below, for the financial year ended 31st March, 2014.

Preference Shares

Particulars Dividend for F.Y 2013-2014

5% Redeemable Cumulative 50,00,000 Non-Convertible Preference Share

9% Redeemable Cumulative 1,35,00,000 Non-Convertible Preference Share

Equity Shares

The Board of Directors have recommended dividend of Rs. 2.45 per Equity Share of Rs. 7/- each for the year ended 31st March, 2014.

The dividend will be free of tax in the hands of the shareholders.

5. Management Discussion and Analysis Report

As required by Clause 49 of the Listing Agreement with the Stock Exchanges, a Management Discussion and Analysis Report is appended to this report.

6. Corporate Governance

As required by Clause 49 of the Listing Agreement, a Report on Corporate Governance is appended together with a Certificate on Corporate Governance from M/s. Shah & Co., Chartered Accounts, and confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49.

As a part of good Corporate Governance, the Board of Directors of the Company has appointed M/s. Kavita Shah, Practising Company Secretary to conduct Secretarial Audit of the Company. The Secretarial Compliance Certificate Certifying the compliance of all rules, regulations under the various applicable provisions of the Companies Act, 1956, Companies Act, 2013, SEBI Regulations and the applicable regulations under the Listing Agreement entered with the Stock Exchanges has been enclosed in the Annual Report.

7. Directors

The Board of Directors at its meeting held on 1st August, 2014 appointed Mr. Ranjan Pant as an Additional and Independent Director of the Company. He will hold office upto the date of ensuing Annual General Meeting. In accordance with the provisions of Section 149 of the Companies Act, 2013 and clause 49 of the Listing Agreement it is proposed to appoint the Mr. Ranjan Pant (holding DIN 00005410), Mr. Aditya Mangaldas (holding DIN 00032233), Mr. Shobhan Thakore (holding DIN 00031788), Mr. Ranjan Sanghi (holding DIN 00275842) as Independent Directors of the Company for a period of 5 (five) consecutive years w.e.f. conclusion of 19th Annual General Meeting of the Company. The Independent Directors will not be liable to retire by rotation. The Company has received notices in writing from members proposing the appointment of the Independent Directors of the Company for the office of Director, subject to shareholders'' approval to be obtained at the ensuing 19th Annual General Meeting of the Company.

Mr. Mahesh S. Gupta, Director of the Company, who is retiring by rotation at this Annual General Meeting and being eligible offer himself for re-appointment.

8. Auditors

The Statutory Auditors, M/s. Shah & Co., retires at this Annual General Meeting and are eligible for re-appointment. The Board recommends their re- appointment as Auditors to audit the accounts of the Company for the financial year 2014-2015.

The Company has received a confirmation letter from the Auditors to the effect that their re-appointment, if made, will be within the prescribed limits under of the Companies Act, 2013 and that they are not disqualified for re-appointment within the meaning of the said Act.

The Company has re-appointed M/s. Phatak Paliwal & Co as Cost Auditor for conducting the cost audit for the financial year 2014-2015.

9. Corporate Social Responsibilities

For details on Corporate Social Responsibility, please refer to Point No. 8.7 of the Corporate Governance Report Section of the Annual Report.

10. Particulars of Employees

The particulars of employees as required under Section 217 (2A) of the Companies Act, 1956 (''''said Act") read with the Companies (Particulars of Employees) Rules, 1975, and Companies (Particulars of Employees) Amendment Rules, 2011 are required to be annexed to the Directors'' Report. Having regard to the provisions of Section 219 (1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Dy. Company Secretary at the Registered Office of the Company.

11. Subsidiary Company

Morarjee International s.r.1.

Morarjee International s.r.1., the Company''s 100% subsidiary continue to perform well in the highly demanding European premium fabric market.

In accordance with the General Circular No. 2/2011 dated 8th February, 2011 issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary Company are not being attached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the Subsidiary Company and the related detailed information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary company will also be kept open for inspection at the Registered Office of the Company and that of the respective subsidiary Company. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary Company.

The Annual Report will also be displayed on our website, www.morarjeetextiles.com.

12. Directors'' Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956 ("the Act"), we hereby state that :

a. in the preparation of the annual accounts, the applicable accounting standards have been followed with proper explanation relating to material departures, if any;

b. your 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 as at 31st March, 2014 and its profit for that year;

c. your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. your Directors have prepared the Annual Accounts for the year ended 31st March, 2014 on a going concern basis.

13. Employee Stock Option Scheme

Pursuant to the Shareholders resolution on 14th June, 2006, your company had launched "Morarjee Textiles Limited - Stock Option Plan 2006" (Scheme) and granted options to its employees as per the terms and conditions mentioned therein.

As on 31.03.2014 none of the employees have exercised their options and there are no options outstanding for conversion. The company does not intend to grant any more options under the said scheme. In the present scenario, the Board of Directors feels that the Scheme is ineffective and hence your board has recommended to terminate the "Morarjee Textiles Limited - Stock Option Plan 2006".

14. Conservation of energy and technology absorption

A statement showing particulars required under the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, read with Section 217(1)(e) of the Companies Act, 1956, in the prescribed forms (Form A and Form B) is attached herewith and marked as Annexure A.

16. Fixed Deposits

During the year under review, the Company has not accepted any fixed deposits neither does it have any unclaimed / unpaid fixed deposits.

17. Acknowledgements

The Directors express their deep gratitude and thank the Central & State Governments as well as their respective departments connected with the business of the Company, contractors & consultants and also Banks, Financial Institutions, shareholders and employees of the Company for their continued support and encouragement

By Order of the Board Urvi A. Piramal

Mumbai, 1st August, 2014 Chairperson


Mar 31, 2013

Dear Shareholders,

1. The Directors present their 18th Annual Report on the business and operations of the Company together with the Audited Accounts for the year ended 31st March, 2013.

2. Financial Results

Rs.in lacs

Particulars year ended Year ended 31st March, 31st March, 2013 2012

Total Income 36,411.59 29,076.50

PBIDTA 6,535.79 4,396.57

Interest and Finance 2,725.66 2,758.30

Expenses

Depreciation 1,416.05 1,326.90

Proft before tax 2,394.08 311.37

Provision for Tax (MAT) 512.23 32.48

MAT Credit Entitlement (512.23) (32.48)

Proft after Tax 2,394.08 311.37

3. Operations Highlights – Standalone

During the year under review, the total income of the Company was Rs. 36,411.59 lacs as against Rs. 29,076.50 lacs in the previous year, an increase of 25.23 %. The year ended at a proft of Rs. 2,394.08 lacs as against proft of Rs. 311.37 lacs in the previous year.

Your Company could achieve a rise in overall proftability through a judicious mix of strategies and cost control measures.

4. Dividend

In view of the improved performance, your directors are pleased to recommend dividend on the shares of the Company, as per the details given below, for the fnancial year ended 31st March, 2013.

Preference Shares

Particulars Dividend Cumulative for dividend F.y 2012- up to F. y. 2013 2011-2012

5% Redeemable 50,00,000 2,50,00,000 Cumulative Non-Convertible Preference Share

9% Redeemable 1,35,00,000 1,78,64,000 Cumulative Non-Convertible Preference Share (allotment date 4th December, 2010) Equity Shares

The Board of Directors have recommended dividend of Rs. 1.75/- per Equity Share of Rs. 7/- each for the year ended 31st March, 2013.

The dividend will be free of tax in the hands of the shareholders.

5. Management Discussion and Analysis Report

As required by Clause 49 of the Listing Agreement with the Stock Exchanges, a Management Discussion and Analysis Report is appended to this report.

6. Corporate Governance

As required by Clause 49 of the Listing Agreement, a Report on Corporate Governance is appended together with a Certifcate on Corporate Governance from M/s. Shah & Co., Chartered Accounts, and confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49.

As a part of good Corporate Governance, the Board of Directors of the Company has appointed M/s. Nilesh G. Shah, Practising Company Secretary to conduct Secretarial Audit of the Company. The Secretarial Compliance Certifcate which entitles the compliance of all rules, regulations under the various applicable provisions of the Companies Act, 1956, SEBI Regulations and the applicable regulations under the Listing Agreement entered with the Stock Exchanges has been enclosed in the Annual Report.

7. Directors

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Ms. Urvi A. Piramal and Mr. Ranjan Sanghi, Directors of the Company retire by rotation at this Annual General Meeting and being eligible offer themselves for re-appointment.

The Board of Directors has appointed Mr. Harshvardhan A. Piramal, as Executive Vice Chairman of the Company w.e.f. 1st April, 2013. As per the provisions of Section 269 read with Schedule XIII of the Companies Act, 1956 the said appointment is subject to the approval of shareholders in general meeting.

Your directors recommended the above appointment/ reappointment for your approval in the ensuing Annual General Meeting.

8. Auditors

The Auditors, M/s. Shah & Co., retire at the ensuing Annual General Meeting and are eligible for re- appointment. The Board recommends their re- appointment as the Auditors to audit the accounts of the Company for the fnancial year 2013-2014.

The Company has received a confrmation from M/s. Shah & Co. to the effect that their re-appointment, if made, will be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and that they are not disqualifed within the meaning of Section 226 of the said Act.

The qualifcations and observations given by the Auditor''s in their report read together with notes to accounts are self-explanatory and hence do not call for any further comments under section 217 of the Companies Act, 1956.

The Company has re-appointed Ms. Phatak Paliwal & Co as Cost Auditor for conducting the cost audit for the fnancial year 2013-2014.

9. Particulars of Employees

The particulars of employees as required under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, and Companies (Particulars of Employees) Amendment Rules, 2011 are required to be annexed to the Directors'' Report. Having regard to the provisions of Section 219 (1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Dy. Company Secretary at the Registered Offce of the Company.

10. Subsidiary Company

Morarjee International s.r.l.

Morarjee International s.r.l., the Company''s 100% subsidiary continue to performs well in the highly demanding European premium fabric market.

In accordance with the General Circular No. 2/2011 dated 8th February, 2011 issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Proft and Loss Account and other documents of the subsidiary Company are not being attached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the Subsidiary Company and the related detailed information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary company will also be kept open for inspection at the Registered Offce of the Company and that of the respective subsidiary Company. The Consolidated Financial Statements presented by the Company include the fnancial results of its subsidiary Company.

The Annual Report will also be displayed on our website, www.morarjeetextiles.com.

11. Directors'' Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956 ("the Act"), we hereby state that :

a. in the preparation of the annual accounts, the applicable accounting standards have been followed with proper explanation relating to material departures, if any;

b. your 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 as at 31st March, 2013 and its proft for that year;

c. your Directors have taken proper and suffcient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. your Directors have prepared the Annual Accounts for the year ended 31st March, 2013 on a going concern basis.

12. Employee Stock Option Scheme

During the year under review, the Company has not granted any stock options.

13. Conservation of energy and technology absorption

A statement showing particulars required under the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, read with Section 217(1)(e) of the Companies Act, 1956, in the prescribed forms (Form A and Form B) is attached herewith and marked as Annexure A.

14. Foreign Exchange earnings and outgo

During the year under review, foreign exchange earnings were Rs. 21,442.18 lacs and outgoings were Rs. 2,548.67 lacs making the Company a net foreign exchange earner with a net infow of Rs. 18,893.51 lacs.

15. Fixed Deposits

During the year under review, the Company has not accepted any fxed deposits neither does it have any unclaimed / unpaid fxed deposits.

16. Acknowledgements

We owe all our employees, customers, bankers and vendors our gratitude for their co-operation and continued support.

By Order of the Board

Urvi A. Piramal

Chairperson

Mumbai : 28th May, 2013


Mar 31, 2012

The Directors present their 17th Annual Report on the business and operations of the Company together with the Audited Accounts for the year ended 31st March, 2012.

Financial Results Rs. in lacs

Particulars Year ended Year ended 31st March, 31st March, 2012 2011

Total Income 29076.50 33027.27

PBIDTA 4396.57 4798.28

Interest and Finance 2758.30 2813.32 Expenses

Depreciation 1326.90 1521.85

Profit/(Loss) before tax 311.37 463.11

Provision for Tax (MAT) 32.48 -

MAT Credit Entitlement (32.48) -

Profit after Tax 311.37 463.11

Profit after Tax from 311.37 1340.75 continuing operations

Profit /(Loss) after Tax - (877.64) from discontinuing operations

Profit after Tax carried to 311.37 463.11 the Balance Sheet

Dividend

In order to conserve resources for expansion, your Directors do not recommend any dividend on the Shares of the Company.

Operations Highlights - Standalone

During the year under review, the total income of the Company was Rs. 29,076.50 lacs as against Rs. 33,027.27 lacs in the previous year, an decrease of 11.96%. The year ended at a profit of Rs. 311.37 lacs as against profit of Rs. 463.11 lacs in the previous year. Profit is lower mainly because of the following reasons:

1. Increase in the power cost from Rs. 4.85 per unit in the previous year to Rs. 5.38 per unit during the current year.

2. Increase in the cost of procurement of coal thereby leading to increased cost of coal consumption.

3. Increase in interest rates.

The figures for the current financial year are not strictly comparable with the previous financial year because the previous year includes financial of Integra, a division of the Company as Integra division got demerged from the Company, Appointed Date being 1st April, 2011 and Effective Date being 17th July, 2012

Composite Scheme of Amalgamation and Arrangement between the Company and Five Star Mercantile Limited and Morarjee Holdings Private Limited

During the year, the Company received the approval from the Hon'ble High Court of Judicature at Bombay sanctioning the Scheme of Amalgamation and Arrangement between the Company and Five Star Mercantile Limited (FSML) and Morarjee Holdings Private Limited (MHPL). The said Scheme became effective on 17th July, 2012, Salient features of the Said Scheme are as follows:

A. The Composite Scheme of Arrangement and Amalgamation ('Scheme') is as per Sections 391 to 394 read with Sections 100 to 103 and other applicable provisions of the Companies Act, 1956.

B. In accordance with the scheme :

a) Integra Division pertaining to Garment Manufacturing Undertaking has been transferred by the Company to FSML on a going concern basis.

b) As a consideration:

- One fully paid Equity Share of Rs. 3 each of FSML shall be issued and allotted for every one fully paid Equity Share of Rs. 10 each held in the Company;

- One fully paid 5% Redeemable Cumulative Non-Convertible Preference Shares of Rs. 1 each of FSML shall be issued and allotted for every 10 fully paid 5% Redeemable Cumulative Non-Convertible Preference Shares of Rs. 100 each held in the Company; and -

- One fully paid 9% Redeemable Cumulative Non-Convertible Preference Shares of Rs. 1 each of FSML shall be issued and allotted for every 10 fully paid 9% Redeemable Cumulative Non-Convertible Preference Shares of Rs. 100 each held in the Company.

c) Further, pursuant to the scheme, the face value and the paid up value per equity share of the Company shall, without any application or deed, stand reduced by Rs. 3.

Subsidiary Companies / Consolidated Accounts

In accordance with general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit & Loss Account and other documents of the subsidiary company are not being attached with the Balance Sheet of the Company will make available the Annual Account of the subsidiary companies and the related details information to any members of the Company who may be interested in obtaining the same. The Annual Accounts of the Subsidiary Companies will also be kept open for inspection at the registered office of the company and that of the respective subsidiary company. The consolidated financial statement presented by the company includes the financial result of the subsidiary companies.

The Annual Report will also be displayed on our website, www.morarjeetextiles.com.

Details of various Subsidiary Companies are as under: Morarjee International s.r.l.

Morarjee International s.r.l., the Company's 100% subsidiary continue to perform well in the highly demanding European premium fabric market.

Men's Club s.p.a.

During the year Company has disinvested its subsiadiry

Men's Club s.p.a., Italy which was under voluntary liquidation.

Joint Ventures

Just Textiles Limited ("JTL")

During the year, JTL has achieved a turnover of Rs. 4,322.54 lacs as against Rs. 4,473.23 lacs in the previous year, an decrease of 3.4%. Company has incurred loss of Rs. 169.46 lacs as against a profit of Rs. 129.24 lacs in the previous year.

Conservation of energy and technology absorption

A statement showing particulars required under the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, read with Section 217(1) (e) of the Companies Act, 1956, in the prescribed forms (Form A and Form B) is attached herewith and marked as Annexure A.

Employees

The Directors acknowledge with thanks the contribution made by the employees towards the growth of the Company and appreciate their unstinted, co-operation and support to the Management.

Any member interested in obtaining a copy of the statement of particulars of employees referred to in Section 217(2A) of the Companies Act, 1956 may write to the Dy. Company Secretary at the Registered Office of the Company.

Employee Stock Option Scheme

During the year under review, the Company has not granted any stock options.

Directors

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Shobhan Thakore and Mr. Pradipta Mohapatra, Directors of the Company retire by rotation at this Annual General Meeting and being eligible offer themselves for re- appointment.

Mr. R. K. Rewari is being re-appointed as the CEO & Executive Director for a period of 3 (three) years with effect from 1st February, 2013.

Directors' Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956 ("the Act"), we hereby state that :

a. in the preparation of the annual accounts, the applicable accounting standards have been followed with proper explanation relating to material departures, if any;

b. your 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 as at 31st March, 2012 and its profit for that year;

c. your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. your Directors have prepared the Annual Accounts for the year ended 31st March, 2012 on a going concern basis.

Foreign Exchange earnings and outgo

During the year under review, foreign exchange earnings were Rs. 17,677.97 lacs and outgoings were Rs. 2,721.09 lacs making the Company a net foreign exchange earner with a net inflow of Rs. 14,956.88 lacs.

Fixed Deposits

During the year under review, the Company has not accepted any fixed deposits neither does it have any unclaimed / unpaid fixed deposits.

Management Discussion and Analysis Report

As required by Clause 49 of the Listing Agreement with the Stock Exchanges, a Management Discussion and Analysis Report is appended to this report.

Corporate Governance

The Company has complied with the mandatory provisions of the Corporate Governance as prescribed in the Listing Agreement with the Stock Exchanges. A separate report on Corporate Governance compliance is included as a part of this Annual Report alongwith requisite certificate from the Statutory Auditors.

As a part of good Corporate Governance, the Board of Directors of the Company has appointed Mr. Nilesh G. Shah, Practising Company Secretary to conduct the Secretarial Audit of the Company. The Secretarial Compliance Certificate in respect of compliance of all rules, regulations under the various applicable provisions of the Companies Act, 1956, SEBI Regulations and the applicable regulations under the Listing Agreement entered with the Stock Exchanges is provided in the Annual Report.

Auditors' Report

Qualification regarding non provision of interest on loan given to a company under same management has been accepted as a prudent measure, considering the financials of the said company.

Auditors

The Auditors, M/s. Shah & Co., retire at the ensuing Annual General Meeting and are eligible for re- appointment. The Board recommends their re- appointment as the Auditors to audit the accounts of the Company for the financial year 2012-2013.

The Company has received letter from M/s. Shah & Co. to the effect that their re-appointment, if made, will be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified within the meaning of Section 226 of the said Act.

Acknowledgements

We owe all our employees, customers, bankers and vendors our gratitude for their co-operation and continued support.

By Order of the Board

Urvi A. Piramal

Chairperson

Mumbai : 1st August, 2012


Mar 31, 2011

The Directors present their 16th Annual Report on the business and operations of the Company together with the Audited Accounts for the year ended 31st March, 2011.

Financial Results

Rs. in lacs

Particulars Year ended Year ended 31st March, 31st March, 2011 2010

Total Income 34,078.23 26,192.22

PBIDTA 4,564.64 3,163.14

Interest 2,579.68 2,297.61

Depreciation 1,521.85 1,233.97

Profit/(Loss) before tax 463.11 (368.44)

Fringe Benefit Tax & - 6.64 Income Tax – Prior Period

Profit/(Loss) afiter Tax 463.11 (375.08)

Profit / (Loss) brought (5,083.75) (4,708.67) forward from previous year

Less: Set off against Share 4,158.73 - Premium Account

Profit/(Loss) carried to the (461.91) (5,083.75) Balance Sheet

Dividend

In order to conserve resources for expansion, your Directors do not recommend any dividend on the Shares of the Company.

Operations Highlights – Standalone

During the year under review, the total income of the Company was Rs. 34,078.23 lacs as against Rs. 26,192.22 in the previous year, an increase of 30.11%. The year ended at a profit of Rs. 463.11 lacs as against the loss of Rs. 375.08 lacs in the previous year.

The figures for the current financial year are not strictly comparable with the previous financial year because the previous year includes financials of Integra, a division of the Company for only three months i.e., from 1st January

2010 to 31st March 2010 as Integra Apparels and Textiles Limited got amalgamated with the Company with effect from 1st January 2010.

Subsidiary Companies / Consolidated Accounts

In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection at the Registered Office of the Company and that of the respective subsidiary companies. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies.

The Annual Report will also be displayed on our website, www. morarjeetextiles.com

Details of various Subsidiary Companies are as under:

Morarjee International s.r.l.

Morarjee International s.r.l., the Companys 100% subsidiary continued to perform well in the highly demanding European premium fabric market.

Mens Club s.p.a.

Mens Club s.p.a. is under Voluntary Liquidation and a Liquidator has been appointed to oversee its affairs.

Joint Ventures

Just Textiles Limited ("JTL")

During the year, JTL has achieved a turnover of Rs. 4,473.23 lacs as against Rs.4,298.02 lacs in the previous year, an increase of 4.08%. Profit before tax is Rs.129.24 lacs as against Rs.56.88 lacs the previous year.

Conservation of energy and technology absorption

A statement showing particulars required under the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, read with Section 217(1) (e) of the Companies Act, 1956, in the prescribed forms (Form A and Form B) is attached herewith and marked as Annexure A.

Reduction of Capital (Securities Premium Account) of the Company

The Petition for confirming Reduction of Capital (Securities Premium Account) was approved by the High Court of Judicature at Bombay on 28th January, 2011 for utilizing the sum of Rs. 41,58,73,807/- standing to the credit of the Securities Premium Account against the debit balance in the Profit and Loss Account.

The Company has filed the certified copy of the Court Order with the Ministry of Corporate Affairs (MCA) on 4th March, 2011 and as mandated as per the provisions of Section 103 of the Companies Act, 1956, has registered the same with the MCA on 10th March, 2011, which has been taken as the effective date of the Reduction of Capital (Securities Premium Account) of the Company.

Employees

The Directors acknowledge with thanks the contribution made by the employees towards the growth of the Company and appreciate their unstinted co-operation and support to the Management.

Any member interested in obtaining a copy of the statement of particulars of employees referred to in Section 217(2A) of the Companies Act, 1956 may write to the Dy. Company Secretary at the Registered Office of the Company.

Employee Stock Option Scheme

During the year under review, the Company has not granted any stock options. Disclosures as required by Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines – 1999 are attached herewith and marked as Annexure B.

Directors

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Mahesh S. Gupta and Mr. Aditya Mangaldas, Directors of the Company retire by rotation at this Annual General

Meeting and being eligible offer themselves for re- appointment.

The Ministry of Corporate Affairs, has, vide its letter dated 22nd December, 2010 approved the appointment and payment of remuneration to Mr. R. K. Rewari, CEO & Executive Director of the Company for a period of 3 years with effect from 1st February, 2010.

Directors Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956 ("the Act"), we hereby state that :

a. in the preparation of the annual accounts, the applicable accounting standards have been followed with proper explanation relating to material departures, if any;

b. your 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 as at 31st March, 2011 and its profit for the year ended on that date;

c. your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. your Directors have prepared the Annual Accounts for the year ended 31st March, 2011 on a going concern basis.

Foreign Exchange earnings and outgo

During the year under review, foreign exchange earnings were Rs. 17,934.99 lacs and outgoings were Rs.1,527.93 lacs making the Company a net foreign exchange earner with a net inflow of Rs. 16,407.06 lacs.

Fixed Deposits

During the year under review, the Company has not accepted any fixed deposits neither does it have any unclaimed / unpaid fixed deposits.

Management Discussion and Analysis

As required by Clause 49 of the Listing Agreement with the Stock Exchanges, a Management Discussion and Analysis Report is appended to this report.

Corporate Governance

The Company has complied with the mandatory provisions of the Corporate Governance as prescribed in the Listing Agreement with the Stock Exchanges. A separate report on Corporate Governance compliance is included as a part of this Annual Report alongwith requisite certificate from the Statutory Auditors.

As a part of good Corporate Governance, the Board of Directors of the Company has appointed Mr. Nilesh G. Shah, Practising Company Secretary to conduct the Secretarial Audit of the Company. The Secretarial Compliance Certificate in respect of compliance of all rules, regulations under the various applicable provisions of the Companies Act, 1956, SEBI Regulations and the applicable regulations under the Listing Agreement entered with the Stock Exchanges is provided in the Annual Report.

Auditors & Branch Auditors

The Auditors, M/s. Shah & Co., retire at the ensuing Annual General Meeting and are eligible for re- appointment. The Board recommends their re- appointment as the Auditors to audit the accounts of the Company for the financial year 2011-2012.

The Branch Auditors, M/s. D. Dadheech & Co., retire at the ensuing Annual General Meeting and are eligible for re-appointment. The Board recommends their re-

appointment as the Branch Auditors to audit the accounts of Integra, a division of Morarjee Textiles Limited for the financial year 2011-2012.

The Company has received letters from M/s. Shah & Co. and M/s. D. Dadheech & Co. respectively to the effect that their re-appointment, if made, will be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified within the meaning of Section 226 of the said Act.

Group for Interse Transfer of Shares

As required under Clause 3(1)(e)(i) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, persons constituting group (within the meaning as defned in the Monopolies and Restrictive Trade Practices Act, 1969) for the purpose of availing exemption from applicability of the provisions of Regulations 10 to 12 of the aforesaid SEBI Regulations are attached herewith and marked as Annexure C and the said Annexure C forms part of this Annual Report.

Acknowledgements

We owe all our employees, customers, bankers and vendors our gratitude for their co-operation and continued support.

By Order of the Board

Urvi A. Piramal Chairperson

Mumbai : 11th May, 2011


Mar 31, 2010

The Directors present their 15th Annual Report on the business and operations of the Company together with the Audited Accounts for the year ended 31st March, 2010.

Financial Results

Rs. in lacs

Particulars Year ended Year ended 31st March, 31st March, 2010 2009

Total Income 26,192.22 19,938.44

PBIDTA 3,163.14 (95.69)

Interest 2,297.61 2,045.18

Depreciation 1,233.97 1,050.96

profit/(Loss) before tax & (368.44) (3,191.83)

Exceptional Items

Exceptional Items -- 587.25

(Provision for diminution in Investment)

profit / (Loss) afiter (368.44) (3,779.08)

Exceptional Item but before Tax

Provision for Tax (FBT) -- 28.10

Fringe Benefit Tax & Income 6.64 --

Tax - Prior Period

profit /(Loss) afiter Tax (375.08) (3,807.18)

Profit / (Loss) brought (4,708.67) (901.49)

forward from previous year

profit / (Loss) carried to the (5,083.75) (4,708.67) Balance Sheet

Dividend

In view of the losses incurred by the Company, your Directors do not recommend any dividend on the Shares of the Company.

Operations Highlights – Standalone

During the year under review, the total income increased 31.3% by Rs. 6,253.78 lacs to Rs. 26,192.22 lacs from Rs. 19,938.44 lacs in the previous year. The year ended at a loss of Rs. 375.08 lacs as against the loss of Rs. 3,807.18 lacs in the previous year. There is a considerable reduction in the loss as compared to the previous year.

The fnancials of the Company for the year ended 31st March, 2010 includes 3 months fnancials of Integra Apparels and Textiles Limited which has merged with the Company with effect from 1st January, 2010.

Rights Issue

During the year, the Company raised Rs. 2,724.43 lacs by issue of 1,81,62,886 fully paid equity shares of Rs. 10/- each at a premium of Rs. 5/- per equity share to the existing equity shareholders on a rights basis in the ratio of 1 fully paid equity share for every 1 existing equity share held by them. Post rights issue, the equity share capital of the Company has increased to Rs. 3,633.24 lacs.

The net proceeds from the Rights issue of equity shares of the company afiter meeting issue expenses, have been used for repayment of debt.

The promoters applied for 1,37,49,822 equity shares aggregating to Rs. 20,62,47,330/- and public appied for 44,13,064 equity shares aggregating to Rs. 6,61,95,960/-. Consequent to the Rights Issue, the promoter stake in the Company has increased from 52.05% to 63.88%.

Awards

The Company has been awarded the prestigious Texprocil Silver Trophy for the second highest export of Fabrics – Category Bleached / Dyed / Yarn Dyed / Printed for the year 2009-2010.

Amalgamation of Integra Apparels and Textiles Limited with the Company

The Company received the approval from the Honble High Court of Karnataka at Bangalore sanctioning the Scheme of Amalgamation of Integra Apparels and Textiles Limited ("Integra") with the Company. The Appointed Date of amalgamation is 1st January, 2010. Integra being a wholly owned subsidiary of the Company, the Company is not required to issue any shares as a consideration of the amalgamation.

Consequent to the amalgamation of Integra with the Company, Integra has ceased to exist. The operations of Integra will now be known as "Integra, a division of Morarjee Textiles Limited."

Extension of Annual General Meeting

As per the provisions of Section 166 of the Companies Act, 1956, the 15th Annual General Meeting of the Company was required to be convened on or before 30th September, 2010. In view of the amalgamation of Integra Apparels and Textiles Limited with the Company, the Company had sought extension of time for holding the Annual General Meeting for adoption of the accounts for the year ended 31st March, 2010. The Registrar of Companies, Maharashtra, Mumbai has granted the extension of time of three months (i.e. upto 31st December, 2010) for holding the Annual General Meeting.

Subsidiary Companies / Consolidated Accounts

The Central Government has granted exemption under Section 212(8) of the Companies Act, 1956, from attaching to the Balance Sheet of the Company, the Accounts and other documents of its Subsidiary Companies. However, the Consolidated Financial Statements of the Company, which include the results of the said Subsidiary Companies, are included in this Annual Report. Further, a statement containing the particulars prescribed under the terms of the said exemption for each of the Companys subsidiaries being Morarjee International s.r.l. and Mens Club s.p.a. are also enclosed. Copies of the audited annual accounts of the Companys subsidiaries can also be sought by any investor of the Company or its subsidiaries on making a written request to the Company Secretary at the Registered office of the Company in this regard. The annual accounts of the Subsidiary Companies are also available for inspection by any investor at the Companys and / or the concerned subsidiaries registered office.

Details of various Subsidiary Companies are as under:

Integra Apparels and Textiles Limited ("Integra") (upto 31st December, 2009)

During the nine months ended 31st December, 2009, Integra had achieved a total income of Rs. 5,413.50 lacs as against Rs. 9,457.41 lacs in the previous year ended 31st March, 2009. Loss before Tax was Rs. 226.68 lacs as against Rs. 1,186.56 lacs in the previous year.

With effect from the Appointed Date i.e. 1st January, 2010, the accounts of Integra have merged with those of the Company.

Morarjee International s.r.l.

Morarjee International s.r.l., the Companys 100% subsidiary made inroads into the highly demanding European premium fabric market.

Mens Club s.p.a.

During the year under review, the shareholders of Mens Club s.p.a. have resolved to place it under voluntary liquidation due to continuous losses. Consequently, the Board of Directors of Mens Club s.p.a. has ceased to exist and a liquidator has been appointed to oversee its affairs.

Joint Ventures

Just Textiles Limited ("JTL")

During the year, JTL has achieved a turnover of Rs. 4,298.02 lacs as against Rs. 3,989.91 lacs in the previous year, an increase of 7.7%. profit before tax is Rs. 56.88 lacs as against Rs. 6.88 lacs the previous year.

Conservation of energy and technology absorption

A statement showing particulars required under the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, read with Section 217(1) (e) of the Companies Act, 1956, in the prescribed forms (Form A and Form B) is attached herewith and marked as Annexure A.

Employees

The Directors acknowledge with thanks the contribution made by the employees towards the growth of the Company and appreciate their unstinted, co-operation and support to the Management.

Any member interested in obtaining a copy of the statement of particulars of employees referred to in Section 217(2A) of the Companies Act, 1956 may write to the Company Secretary at the Registered office of the Company.

Employee Stock Option Scheme

During the year under review, the Company has not granted any stock options. Disclosures as required by Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are attached herewith and marked as Annexure B.

Directors

Mr. R. K. Rewari was appointed as an Additional Director and CEO & Executive Director of the Company with effect from 1st February, 2010. The appointment of Mr. R. K. Rewari as the CEO & Executive Director was approved by the members of the Company by way of a Postal Ballot on 25th March, 2010.

Pursuant to the provisions of Section 260 of the Companies Act, 1956, Mr. R. K. Rewari vacates his office at the ensuing Annual General Meeting and is eligible for re-appointment. Your Directors recommend his appointment at the ensuing Annual General Meeting. The Company has received a notice in writing under Section 257 of the Companies Act, 1956 from a member proposing the candidature of Mr. R. K. Rewari for the office of Director.

During the year under review, Mr. P. K. Gothi retired as the Managing Director of the Company with effect from 27th December, 2009. Subsequently, Mr. P. K. Gothi was appointed as an Additional Non Executive Director with effect from 28th January, 2010. Mr. P. K. Gothi, thereafiter, resigned as a Director of the Company with effect from 5th March, 2010. Mr. Takao Yajima ceased to be the Director of the Company with effect from 25th December, 2009. With the resignation of Mr. Takao Yajima as a Director of the Company, Mr. Shailesh Haribhakti, Alternate Director to Mr. Takao Yajima automatically vacated the office of an Alternate Director. The Board wishes to place on record its sincere appreciation and gratitude for the contribution made by them during their tenure as Directors of the Company.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Ms. Urvi A. Piramal and Mr. Ranjan Sanghi, Directors of the Company retire by rotation at this Annual General Meeting and being eligible offer themselves for re- appointment.

Directors Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956 ("the Act"), we hereby state that :

a. in the preparation of the annual accounts, the applicable accounting standards have been followed with proper explanation relating to material departures, if any;

b. your 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 as at 31st March, 2010 and its loss for the year ended on that date;

c. your Directors have taken proper and suffcient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. your Directors have prepared the Annual Accounts for the year ended 31st March, 2010 on a going concern basis.

Foreign Exchange earnings and outgo

During the year under review, foreign exchange earnings were Rs. 14,359.01 lacs and outgoings were Rs. 2,517.49 lacs making the Company a net foreign exchange earner with a net infow of Rs. 11,841.52 lacs.

Fixed Deposits

During the year under review, the Company has not accepted any fixed deposits neither does it have any unclaimed / unpaid fixed deposits.

Management Discussion and Analysis

As required by Clause 49 of the Listing Agreement with the Stock Exchanges, a Management Discussion and Analysis Report is appended to this report.

Corporate Governance

The Company has complied with the mandatory provisions of the Corporate Governance as prescribed in the Listing Agreement with the Stock Exchanges. A separate report on Corporate Governance compliance is included as a part of this Annual Report alongwith requisite certifcate from the Statutory Auditors.

As a part of good Corporate Governance, the Board of

Directors of the Company has appointed Mr. Nilesh G. Shah, Practising Company Secretary to conduct the Secretarial Audit of the Company. The Secretarial Compliance Certifcate in respect of compliance of all rules, regulations under the various applicable provisions of the Companies Act, 1956, SEBI Regulations and the applicable regulations under the Listing Agreement entered with the Stock Exchanges is provided in the Annual Report.

Auditors & Branch Auditors

The Auditors, M/s. Shah & Co., retire at the ensuing Annual General Meeting and are eligible for re- appointment. The Board recommends their re- appointment as the Auditors to audit the accounts of the Company for the fnancial year 2010-2011.

The Board of Directors has also recommended appointing M/s. D. Dadheech & Co., Chartered Accountants, Mumbai as the Branch Auditors of Integra, a division of Morarjee Textiles Limited.

The Company has received letters from M/s. Shah & Co. and M/s. D. Dadheech & Co. to the effect that their appointment and re-appointment, if made, will be within the prescribed limits under Section 224(1B) of the

Companies Act, 1956 and that they are not disqualifed within the meaning of Section 226 of the said Act.

Group for Interse Transfer of Shares

As required under Clause 3(1)(e)(i) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, persons constituting group (within the meaning as defned in the Monopolies and Restrictive Trade Practices Act, 1969) for the purpose of availing exemption from applicability of the provisions of Regulations 10 to 12 of the aforesaid SEBI Regulations are attached herewith and marked as Annexure C and the said Annexure C forms part of this Annual Report.

Acknowledgements

We owe all our employees, customers, bankers and vendors our gratitude for their co-operation and continued support.

By Order of the Board

Urvi A. Piramal

Mumbai : 22nd September, 2010 Chairperson

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