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Directors Report of Morarjee Textiles Ltd.

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

 
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