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Notes to Accounts of Morarjee Textiles Ltd.

Mar 31, 2015

A) Terms / rights attached to Equity Shares

Each Equity share of Company has a par value of Rs.7/- as at 31st March, 2015 (Previous year Rs. 7/- per share). Each holder of equity share is entitled to one vote per share. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

B) Terms / rights attached to Preference Shares

1. 5% Redeemable Cumulative Non- Convertible Preference Shares of Rs. 100/- each, redeemable anytime between 15th November, 2014 and 15th November, 2019 at the option of the Company. The holders of the said Preference Shares shall not have any right to vote in any manner before the Company at any meeting except on resolutions placed before the Company at any meeting which directly affects their rights.

2. 9% Redeemable Cumulative Non- Convertible Preference Shares of Rs. 100/- each, redeemable anytime between 4th June, 2012 and 3rd December, 2015 at the option of the Company. The holders of the said Preference Shares shall not have any right to vote in any manner before the Company at any meeting except on resolutions placed before the Company at any meeting which directly affects their rights.

a) Nature of Security and Term of Repayment for Long Term Secured Borrowings of Rs. 7200 lacs (Previous year Rs. NIL lacs)

(Secured by a 1st charge on G2 plot and company''s moveable assets on G2 plot excluding assets specifically charged to other lenders and 2nd charge on G1 plot and company''s moveable assets on G1 plot at Butibori, Nagpur).

Terms of Repayment for Long Term Secured borrowings :

- Loan of Rs. 7200 lacs repayble in 20 quarterly installments (excluding current maturities)

b) Nature of Security and Term of Repayment for Long Term Secured Borrowings of Rs. 66.50 lacs (Previous year Rs. NIL lacs)

(Secured by a 1st charge on G1 plot and the company''s movable assets on G1 plot and on movable assets specifically acquired from loan in G2 plot and 2nd charge on G2 plot and company''s moveable assets on G2 plot at Butibori, Nagpur).

Terms of Repayment for Long Term Secured borrowings :

- Loan of Rs. 66.50 lacs repayble in 22 quarterly installments effective from 01.05.2017

c) Nature of Security and Term of Repayment for Long Term Secured Borrowings of Rs. NIL lacs (Previous year Rs. 375.00 lacs)

(Secured by a 1st pari passu charge on the movable assets including its movable plant & machinery , spares, tools and accessories, secured by pari passu equitable mortgage on company''s immovable properties at Butibori, Nagpur and 2nd pari passu charge by way of hypothecation of current assets of the Company viz Raw Materials, Stock-in-Process, Finished Goods, Consumable Store and Spares, Book Debts and other movable both present and future).

d) Nature of Security and Term of Repayment for Long Term Secured Borrowings of Rs. 574.29 lacs (Previous year Rs. 986.44 lacs)

(Secured by specific (exclusive) charge on the movable fixed assets and second pari passu charge on current assets viz Raw Materials, stock_in_Process, Finished Goods both present and future of company''s plant at Butibori, Nagpur).

Terms of Repayment for Long Term Secured borrowings :

- Loan of Rs. 574.28 lacs (Previous year Rs. 986.44) repaybale in 19 monthly installments (excluding current maturities)

e) Nature of Security and Term of Repayment for Long Term Secured Borrowings of Rs. 77.49 lacs (Previous year Rs. NIL lacs)

(Secured by specific (exclusive) charge on the movable fixed assets of the company.)

Terms of Repayment for Long Term Secured borrowings :

- Loan of Rs. 77.49 lacs repaybale in 44 monthly installments (excluding current maturities)

f) Terms of Repayment for Long Term Unsecured borrowings :

- Loan of Rs. Nil lacs (Previous year Rs. 5000 lacs) repaybale in 3 monthly installments.

- Loan of Rs. 1000 lacs (Previous year Rs. 2000 lacs) repaybale in 4 quarterly installments (excluding current maturities)

g) The interest rate on the above is in the range from 12.35% to 14.25 % per annum

h) Default in repayment of principal and interest - Nil

** Secured by way of hypothecation of Current Assets of the company viz.,Raw Materials, Stock- In - Process, Finished Goods, consumables , store and spares , book debts and other moveable both present and future and secured by pari passu second charge on company''s moveable assets including its moveable plant and machinery, spares, tools and accessories both present and future.

The interest rate on the above is in the range from 12.00% to 14.50 % per annum.

Default in repayment of principal & interest - Nil

2 Contingent Liability and commitments

A) Contingent Liability not provided for in respect of

31.03.2015 31.03.2014 Rs in Lacs Rs in Lacs

(i) Contingent Liability for bill discounted 237.75 981.61

(ii) The Excise & Sales Tax department has raised claims on the company The company has 2,539.97 2570.46 disputed the same with the appropriate authority.

(iii) Claim against the company not acknowledged 1,344.40 1,344.40 as debts

B) Commitments

(i) Bank Guarantees 685.48 853.05

(ii) Estimated amount of contracts remaining to be executed on capital accounts and 4,311.47 79.20 not provided

(iii) Open Letters of credit 116.81 218.17

3 There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2015. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

4 The company is engaged in manufacture of textile products which is considered as the only reportable buisness segment.

5 The Company has taken vehicles on an operating lease basis for a period of 48 months. The lease rentals are payable on monthly instalments by the Company.

Future minimum lease rentals payable as per the lease agreements:

Lease payment recognised in profit & Loss account for the year is Rs. 12.49 lacs (Previous year Rs. 10.86 lacs)

6 Employee Benefits:

(a) Short term employee benefits:

The liability towards short term employee benefits for the year ended 31st March, 2015 has been recognised in the Profit and Loss Account.

(b) Post - employment benefits:

The following disclosures are made in accordance with AS 15 (Revised) pertaining to Defined Benefit Plans:

7 A) In the financial year 2012-13, the Board of Directors have passed a resolution to divest from Just Textiles Ltd, a joint venture in which the Company holds 49% stake. Accordingly, Just Textiles Ltd financial statements are not consolidated with the financial statements of the Company.

Pursuant to Accounting Standard (AS-27) - Financial Reporting of interest in Joint Venture, the disclosures relating to the joint Venture viz. Just Textiles Ltd. (hereinafter referred to as JV) are as follows:

(a) The proportion of interest of the Company in the JV is by way of 49% equity participation. The balance 51% held by Mr. Pradeep Modi and others.

(b) The Company''s share of capital commitments of the JV as at 31st, March, 2015 is Rs. Nil (Previous year Rs..Nil)

(c) The Company''s share of contingent liabilities of the JV as at 31st, March, 2015 is Rs. 74 lacs. (Previous year Rs.74 lacs)

(d) No contingent liabilities and capital commitments have been incurred as at 31st March, 2015 in relation to the Company''s interest in the JV alongwith the other venture. (Previous year Rs. Nil)

(e) The aggregate amount of assets, liabilities, income and expenses related to the Company''s interest in the JV as at 31st March, 2015.

B) Pursuant to Accounting Standard (AS-27) - Financial Reporting of interest in Joint Venture, the disclosures relating to the joint Venture viz. Morarjee Castiglioni (India) Private Limited (hereinafter referred to as JV) are as follows:

(a) The Propotion of interest of the Company in the JV is by way of equal equity participation with Manifattura Castiglioni S.P.A.

(b) The aggregate amount of assets, liabilities, income and expenses related to the Company''s interest in the JV as at 31st March, 2015

(c) The Company''s share of capital commitments of the JV as at 31st, March, 2015 is Rs. Nil .(Previous year Rs. Nil)

(d) The Company''s share of contingent liabilities of the JV as at 31st, March, 2015 is Rs. Nil. (Previous year Rs. Nil)

(e) No contingent liabilities and capital commitments have been incurred as at 31st March, 2015 in relation to the Company''s interest in the JV alongwith the other venture. (Previous year Rs. Nil)

8 As required by Accounting Standard - AS 18 "Related Parties Disclosure" issued by The Institute of Chartered Accountants of India are as follows:

List of Related Parties with whom transactions have taken place during the year:

A. Enterprises over which Directors/Key Management personal excercise significant influence

Peninsula Land Ltd.

Ashok Piramal Management Corporation Ltd.

Morarjee Goculdas Spg. & Wvg. Co. Pvt. Ltd.

(Formerly Morarjee Legler Pvt. Ltd.)

Ashok G. Piramal Trust

Urvi Ashok Piramal Foundation

PMP Components Pvt Ltd.

Integra Garment & Textiles Ltd. (Formerly Five Star Mercantile Ltd.)

Argento Home Products LLP

B. Subsidary Company

Morarjee International s.r.l. (Refer note no. 39)

C. Joint Ventures

Morarjee Castiglioni (I) Pvt.Ltd.

Just Textiles Ltd.

D. Key Management Personnel

Shri Harsh A. Piramal

Shri R. K. Rewari

Shri S. C. Kashimpuria

Ms. Karina Vaz (Resigned w.e.f. 01.04.15)

E. Directors having significant influence over the Enterprise

Smt. Urvi A. Piramal Shri Mahesh S. Gupta

9 Interest includes Rs. 6.13 lacs on payment of advance tax for the financial year 2013-2014 & 2014-15. (Previous year Rs. 24.07 lacs)

10 During the current year, Morarjee International s.r.l, registered in Italy and wholly owned subsidiary (hereinafter referred to as subsidiary company) of the Company was liquidated on 23.02.2015 as per local jurisdiction. As per the liquidation order, the Company is not entitled to receive any amount against its investment in the subsidiary company. Thus, investment of the Company amounting to Rs. 5.61 lac and liability (payable to subsidiary company) amounting to Rs. 6.72 lac as on 23.02.2015 is knocked off and net gain of Rs. 1.11 lac is shown as other income in the statement of Profit & Loss for the current year.

11 During the current year, the Company has started to receive interest subsidy under the TUF Scheme from the Maharashtra State Government, in view of this the Company has accrued interest subsidy of Rs. 263.90 lacs by crediting to interest account. (Includes Rs. 190.71 lacs for earlier year)

12 Previous year''s figures have been regrouped / reclassified wherever necessary.


Mar 31, 2014

A) Terms / rights attached to Equity Shares

Each Equity shares of Company has a par value of Rs. 7/- as at 31st March, 2014 (Previous year Rs. 7/- per share). Each holder of equity shares is entitled to one vote per share. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

B) Terms / rights attached to Preference Shares

1. 5% Redeemable Cumulative Non- Convertible Preference Shares of Rs. 100/- each, Redeemable anytime between 15th Nov. 2014 and 15th November, 2019 at the option of the Company. The holders of the said Preference Shares shall not have any right to vote in any manner before the Company at any meeting except on resolutions placed before the Company at any meeting which directly affects their rights.

2. 9% Redeemable Cumulative Non- Convertible Preference Shares of Rs. 100/- each, Redeemable anytime between 4th June, 2012 and 3rd December, 2015 at the option of the Company. The holders of the said Preference Shares shall not have any right to vote in any manner before the Company at any meeting except on resolutions placed before the Company at any meeting which directly affects their rights.

a) Nature of Security and Term of Repayment for Long Term Secured Borrowings of Rs. 375.00 lacs (Previous year Rs. 2,925 lacs)

(Secured by a 1st pari passu charge on the movable assets including its movable plant & machinery, spares, tools and accessories, secured by pari passu equitable mortgage on company''s immovable properties at Butibori, Nagpur and 2nd pari passu charge by way of hypothecation of current assets of the Company viz Raw Materials, Stock-in-Process, Finished Goods, Consumable Store and Spares, Book Debts and other movable both present and future in respect of Rs. 375.00 lacs (Previous year Rs. 2,925 lacs)

Terms of Repayment for Long Term Secured borrowings :

* Loan of Rs. 375 lacs repayble in 1 quarterly installment (excluding current maturities)

b) Nature of Security and Term of Repayment for Long Term Secured Borrowings of Rs. 986.44 lacs (Previous year Rs. 1,262.21 lacs)

(Secured by specific (exclusive) charge on the movable fixed assets and second pari passu charge on current assets viz Raw Materials, stock-in-Process, Finished Goods both present and future of company''s plant at Butibori, Nagpur in respect of Rs. 986.44 lacs) (Previous year Rs. 1,262.21 lacs)

Terms of Repayment for Long Term Secured borrowings :

* Loan of Rs. 986.44 lacs repaybale in 32 monthly installments (excluding current maturities)

c) Terms of Repayment for Long Term Unsecured borrowings :

* Loan of Rs. 5,000 lacs repaybale in 3 monthly installments w.e.f. April 2015

* Loan of Rs. 2,000 lacs repaybale in 8 quarterly installments w.e.f. June 2015

d) The interest rate on the above is in the range from 11% to 14.75% per annum.

e) Default in repayment of principal and interest - Nil

1. Contingent Liability and commitments

A) Contingent Liability not provided for in respect of

31.03.2014 31.03.2013 Rs. in Lacs Rs. in Lacs

i Contingent Liability for bill discounted 981.61 1,657.62

ii The Excise department has raised 2,570.46 2,477.80 claims on the company The company has disputed the same with the appropriate authority.

iii Claim against the company not acknowledged as debts 1,344.40 1,344.40

B) Commitments

i Bank Guarantees 853.05 626.03

ii Estimated amount of contracts remaining to be executed on capital 79.20 91.37 accounts and not provided

iii Open Letters of credit 218.17 348.45

2. The company is engaged in manufacture of textile products which is considered as the only reportable business segment.

3. A) In the previous year The Board of Directors have passed a resolution to divest from Just Textiles Ltd, a joint venture in which the Company holds 49% stake. Accordingly, Just Textiles Ltd financial statements are not consolidated with the financial statements of the Company.

Pursuant to Accounting Standard (AS-27) - Financial Reporting of interest in Joint Venture, the disclosures relating to the joint Venture viz. Just Textiles Limited (hereinafter referred to as JV) are as follows:

(a) The proportion of interest of the Company in the JV is by way of 49% equity participation. The balance 51% held by Mr. Pradeep Modi and others.

(b) The Company''s share of capital commitments of the JV as at 31st, March, 2014 is Rs. Nil (Previous year Rs. Nil)

(c) The Company''s share of contingent liabilities of the JV as at 31st, March, 2014 is Nil. (Previous year Rs. Nil)

(d) No contingent liabilities and capital commitments have been incurred as at 31st March, 2014 in relation to the Company''s interest in the JV alongwith the other venture. (Previous year Nil )

(e) The aggregate amount of assets, liabilities, income & expenses related to the company''s interest in the JV as at 31st March, 2014.

4. As required by Accounting Standard - AS 18 "Related Parties Disclosure" issued by The Institute of Chartered Accountants of India are as follows:

List of Related Parties with whom transactions have taken place during the year:

A. Enterprises over which Directors/Key Management personnel excercise significant influence

Penninsula Land Limited Ashok Piramal Management Corporation Limited Morarjee Goculdas Spg. & Wvg. Co. Private Limited (Formerly Morarjee Legler Private Limited) Peninsula Facility Management Services Limited Ashok G. Piramal Trust Urvi Ashok Piramal Foundation PMP Components Private Limited Integra Garments & Textiles Limited (Formerly Five Star Mercantile Limited)

B. Subsidary Companies

Morarjee International s.r.1.

C. Joint Ventures

Morarjee Castiglioni (I) Private Limited Just Textiles Limited

D. Key Management Personnel

Mr. Harsh A. Piramal Mr. R. K. Rewari

5. Includes Interest of Rs. 24.07 lacs on payment of advance tax for the financial year 2012-2013. (Previous year Rs. 1.79 lacs)

6. Previous year’s figures have been regrouped / reclassified wherever necessary.


Mar 31, 2013

1 A) Contingent Liability not provided for in respect of

31.03.2013 31.03.2012 Rs. in Lacs Rs. in Lacs

i Contingent Liability for bill discounted 1,657.62 1,757.86

ii Dividend on Redeemable Cumulative Non Convertible Preference 498.18

shares together with dividend Tax

iii The Excise department has raised claims on the company 2477.80 2477.70

The company has disputed the same with the appropriate authority.

iv Claim against the company not acknowledged as debts 1344.40 —

B) Commitments

i Bank Guarantees 626.03 436.58

ii Estimated amount of contracts remaining to be executed on capital 91.37 446.86 accounts and not provided

iii Open Letters of credit 348.45 276.94

2 Demerger of Garment Undertaking of the Company

A. During the previous year (F.Y. 2011-12), The Composite Scheme of Arrangement and Amalgamation (''Scheme'') under Sections 391 to 394 read with Sections 100 to 103 and other applicable provisions of the Companies Act, 1956 between the Company, Five Star Mercantile Limited (''FSML'') and Morarjee Holding Private Limited (''MHPL'') and their respective shareholders, has been sanctioned by the Honorable High Court of Judicature at Bombay vide its Order dated 29th June 2012 and has been made effective on fling of the certifed copies of the Order of the court on 17th July, 2012 (''Effective date'')

B In accordance with the scheme :

The difference between the book value of assets and the book value of liabilities transferred of the Integra Division, after adjusting the amount of investments held by the Company in FSML shall, be adjusted to the General Reserve Account of the company.

C) Further, pursuant to the scheme, the equity share capital of the Company shall stand reduced by 30%. Accordingly, 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/- without any payments to the holders of such equity shares of the Company. Simultaneously with the reduction of the paid up value of the equity shares of the company, an equivalent amount to capital reduction shall be credited to General Reserve Account of the Company.

D) The carrying amounts of the total assets and liabilities of Integra division transferred to FSML and the amount adjusted in General reserve account is as under:

3 There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2013. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identifed on the basis of information available with the Company.

4 The accumulated deferred tax assets of the company has not provided in the books of accounts due to virtual uncertainty of realisation of such assets.

5 The company is engaged in manufacture of textile products which is considered as the only reportable business segment.

6 Employee Benefts:

(a) Short term employee benefts:

The liability towards short term employee benefts for the year ended 31st March, 2013 has been recognised in the Proft and Loss Account.

(b) Post - employment benefts:

The following disclosures are made in accordance with AS 15 (Revised) pertaining to Defnd Beneft Plans:

Summary of the Acturial Assumptions :- Discount Rate 8.10% Note :

The estimates of future salary increases, considered in acturial valuation, takes into account the infation,seniority , promotion and other relevant factors.

7 During the previous year the company has sold 10,20,000 Equity Share of one of it''s subsidiary, Mens Club s.p.a., Italy, which was under voluntary liquidation.

8 Pending fnal settlement of insurance claim, the loss caused in the fre incurred in May, 2011 in a portion of one of its manufacturing unit at Nagpur, has been shown as claim receivable, net of adhoc payment receipt. On fnal settlement the difference in loss and actual claim received will be accounted for.

9 The Company has taken vehicles on an operating lease basis for a period of 48 & 60 months. The lease rentals are payable on monthly instalments by the Company.

10 A) The Board of Directors have passed a resolution to divest from Just Textiles Limited, a joint venture in which the Company holds 49% stake.

Accordingly, Just Textiles Limited fnancial statements are not consolidated with the fnancial statements of the Company, and accordingly for opening balance of Reserves , inventory etc have been adjusted in the consolidated fnancial statements of current year.

Pursuant to Accounting Standard (AS-27) - Financial Reporting of interest in Joint Venture, the disclosures relating to the joint Venture viz. Just Textiles Limited (hereinafter referred to as JV) are as follows:

(a) The proportion of interest of the Company in the JV is by way of 49% equity participation. The balance 51% held by Mr. Pradeep Modi and others.

(b) The aggregate amount of assets, liabilities, income and expenses related to the Company''s interest in the JV as at 31st March, 2013

(c) The Company''s share of capital commitments of the JV as at 31st, March, 2013 is Rs. Nil (Previous year Rs.Nil)

(d) The Company''s share of contingent liabilities of the JV as at 31st, March, 2013 is Nil. (Previous year Rs.Nil)

(e) No contingent liabilities and capital commitments have been incurred as at 31st March, 2013 in relation to the Company''s interest in the JV alongwith the other venture. (Previous year Nil )

B) Pursuant to Accounting Standard (AS-27) - Financial Reporting of interest in Joint Venture, the disclosures relating to the joint Venture viz. Morarjee Castiglioni (India) Private Limited (hereinafter referred to as JV) are as follows:

(a) The Proportion of interest of the Company in the JV is by way of equal equity participation with Manifattura Castiglioni S.P.A.

(b) The aggregate amount of assets, liabilities, income and expenses related to the Company''s interest in the JV as at 31st March, 2013

(c) The Company''s share of capital commitments of the JV as at 31st, March, 2013 is Rs. Nil .(Previous year Nil)

(d) The Company''s share of contingent liabilities of the JV as at 31st, March, 2013 is Nil. (Previous year Nil)

(e) No contingent liabilities and capital commitments have been incurred as at 31st March, 2013 in relation to the Company''s interest in the JV alongwith the other venture. (Previous year Nil)

11 As required by Accounting Standard - AS 18 "Related Parties Disclosure" issued by The Institute of Chartered Accountants of India are as follows:

List of Related Parties with whom transactions have taken place during the year:

A. Enterprises over which Directors/Key Management personnel excercise signifcant infuence

Penninsula Land Limited

Ashok Piramal Management Corporation Limited

Morarjee Goculdas Spg. & Wvg. Co.PrivateLimited (Formerly Morarjee Legler Private Limited)

Peninsula Facility Management Services Limited

Ashok G. Piramal Trust

Urvi Ashok Piramal Foundation

PMP Components Private Limited

Integra Garments & Textiles Limited (Formerly Five Star Mercantile Limited)

B. Subsidary Companies Morarjee International s.r.l.

C. Joint Ventures

Morarjee Castiglioni (I) Private Limited Just Textiles Limited

D. Key Management Personnel Mr.Harshvardhan A. Piramal Mr. R. K. Rewari

12 During the fnancial year, the company has entered into an agreement with M/s. Integra Garments and Textiles Limited (previously known as Five star Mercantile Limited) to recover it''s old outstanding amount of Rs. 3749.51 lacs. As per the terms of the agreement; considering the current fnancial constraints, and liquidity position of the borrower, interest amount of Rs. 422 lacs has not been charged to them and the principle amount of Rs. 3749.51 lacs has been recovered in full.

13 Previous year''s fgures have been regrouped / reclassifed wherever necessary.


Mar 31, 2012

Note 2 : Share Capital

a) Terms / rights attached to Equity Shares

Each Equity shares of Company has a par value of Rs. 7/- as at 31st March, 2012 (Previous year Rs. 10/- per share). Each holder of equity shares is entitled to one vote per share. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

b) Terms / rights attached to Preference Shares

1) 5% Redeemable Cumulative Non- Convertible Preference Shares of Rs. 100/- each , Redeemable anytime between 15th November, 2014 and 15th November, 2019 at the option of the Company. The holders of the said Preference Shares shall not have any right to vote in any manner before the Company at any meeting except on resolutions placed before the Company at any meeting which directly affects their rights.

2) 9% Redeemable Cumulative Non- Convertible preference Shares of Rs. 100/- each (Redeemable anytime between 4th June 2012 and 3rd December, 2015 at the option of the Company. The holders of the said Preference Shares shall not have any right to vote in any manner before the Company at any meeting except on resolutions placed before the Company at any meeting which directly affects their rights.

a) Nature of Security and Term of Repayment for Long Term Secured Borrowings of Rs. 6019.90 lacs (Previous year Rs. 8981.07 lacs)

Nature of Security

(Secured by a 1st pari passu charge on the movable assets including its movable plant & machinery , spares, tools and accessories, secured by pari passu equitable mortgage on company's immovable properties at Butibori, Nagpur and 2nd pari passu charge by way of hypothecation of current assets of the Company viz Raw Materials, Stock-in-Process, Finished Goods, Consumable Store and Spares, Book Debts and other movable both present and future in respect of Rs. 6019.90 lacs (Previous year Rs. 8981.07 lacs)

Terms of Repayment for Long Term Secured borrowings :

- Loan of Rs. 700 lacs repaybale in balance 7 quarterly instalments (excluding current maturities)

- Loan of Rs. 444.90 lacs repayable in balance 2 quarterly instalments (excluding current maturities)

- Loan of Rs. 3375 lacs repaybale in 9 quarterly instalments (excluding current maturities)

- Loan of Rs. 1500 lacs repaybale in 6 quarterly instalment (excluding current maturities)

b) Nature of Security and Terms of Repayment for Long Term Secured Borrowings of Rs.696.17 lacs (Previous year Rs. Nil lacs)

Nature of Security

(Secured by specific (exclusive) charge on the movable fixed assets and second pari passu charge on current assets viz Raw Materials, stock_in_Process, Finished Goods both present and future of compnay's plant at Butibori, Nagpur in respect of Rs. 696.17 lacs) (Previous year Rs. NIL lacs)

Terms of Repayment for Long Term Secured borrowings :

- Loan of Rs. 696.17 lacs repaybale in 60 monthly instalments.

c) Nature of Security for Long Term Secured Borrowings of Rs. Nil lacs (Previous year Rs. 1285.67 lacs)

(Secured by a 1st charge on the present and future movable and immovable fixed assets at Bangalore, Karnataka of the Company in respect of Rs. Nil lacs (Previous year Rs. 1285.67 lacs)

d) Terms of Repayment for Long Term Unsecured borrowings :

- Loan of Rs. 5000 lacs repaybale in 3 monthly instalments w.e.f. April, 2013.

1 (a) Contingent Liability not provided for in respect of

31.03.2012 31.03.2011 Rs. In Lacs Rs. In Lacs

i Bank Guarantees 436.58 203.92

ii Contingent Liability for bill discounted 1,757.86 998.82

iii Dividend on Redeemable Cumulative Non Convertible 498.18 283.17 Preference shares together with dividend Tax

(b) Estimated amount of contracts remaining to be executed on capital accounts and not provided for Rs. 446.86 lacs (Previous year (Rs.373.54 lacs)

(c) The Excise department has raised claims on the company for Rs.2477.70 lacs (previous year Rs.2547.19 lacs). The company has disputed the same with the appropriate authority.

2 Demerger of Garment Undertaking of the Company

A The Composite Scheme of Arrangement and Amalgamation ('Scheme') under Sections 391 to 394 read with Sections 100 to 103 and other applicable provisions of the Companies Act, 1956 between the Company, Five Star Mercantile Ltd ('FSML') and Morarjee Holding Private Limited ('MHPL') and their respective shareholders, has been sanctioned by the Honorable High Court of Judicature at Bombay vide its Order dated 29th June 2012 and has been made effective on filing of the certified copies of the Order of the court on 17th July, 2012 ('Effective date')

B The Scheme, inter alia, provides for the demerger of Integra Division of the Company pertaining to garment manufacturing business alongwith its investments in MHPL into FSML with Appointed Date as April 01, 2011. Under the same composite scheme, MHPL would be merged with FSML with Appointed Date as January 01, 2012.

C 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) The difference between the book value of assets and the book value of liabilities transferred of the Integra Division, after adjusting the amount of investments held by the Company in FSML shall, be adjusted to the General Reserve Account of the company.

d) Further, pursuant to the scheme, the equity share capital of the Company shall stand reduced by 30%. Accordingly, 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/- without any payments to the holders of such equity shares of the Company. Simultaneously with the reduction of the paid up value of the equity shares of the company, an equivalent amount to capital reduction shall be credited to General Reserve Account of the Company.

E Since the treatment of the aforesaid scheme is given effect in the current year, the figures for the current year to that extent are not comparable with those of the previous year.

3 Discontinuing operations

The Company has transferred the Garment Manufacturing Division/Unit having its Manufacturing Facility at Bangalore by way of Demerger as per high court order dated 29th June, 2012.

The following statement shows the revenue and expenses of the discontinued operation -

4 There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2012. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

5 The accumulated deferred tax assets of the company has not provided in the books of accounts due to virtual uncertainty of realisation of such assets.

6 The company is engaged in manufacture of textile products which is considered as the only reportable business segment.

7 Employee Benefits:

(a) Short term employee benefits:

The liability towards short term employee benefits for the year ended 31st March, 2012 has been recognised in the Profit and Loss Account.

(b) Post - employment benefits:

The following disclosures are made in accordance with AS 15 (Revised) pertaining to Defind Benefit Plans:

The estimates of future salary increases, considered in acturial valuation, takes into account the inflation, seniority, promotion and other relevant factors.

8 During the year company has sold 10,20,000 Equity Share of one of it's subsidiary, Mens Club s.p.a., Italy, which was under voluntary liquidation.

9 Looking into the financial strength of Fivestar Mercantile Ltd, the Company has not accounted for an interest income of Rs. 220.76 lacs on the advances receivable from them.

10 Pending final settlement of insurance claim, the loss caused in the fire incurred in May,2011 in a portion of one of its manufacturing unit at Nagpur, has been shown as claim receivable, net of adhoc payment receipt. On final settlement the difference in loss and actual claim received will be accounted for.

11 During the previous year, the Company issued 15,00,000 9% Redeemable Non Cumulative Non Convertible Preferance Shares of Rs. 100/- each

12 The Company has taken vehicles on an operating lease basis for a period of 48 & 60 months. The lease rentals are payable on monthly instalments by the Company.

13 A) Pursuant to Accounting Standard (AS-27) - Financial Reporting of interest in Joint Venture, the disclosures relating to the joint Venture viz. Just Textiles Ltd. (hereinafter referred to as JV) are as follows:

(a) The proportion of interest of the Company in the JV is by way of 49% equity participation. The balance 51% held by Mr. Pradeep Modi and others.

(b) The aggregate amount of assets, liabilities, income and expenses related to the Company's interest in the JV as at 31st March, 2012

(c) The Company's share of capital commitments of the JV as at 31st, March, 2012 is Rs. Nil (Previous year Rs. Nil)

(d) The Company's share of contingent liabilities of the JV as at 31st, March, 2012 is Nil. (Previous year Rs. Nil)

(e) No contingent liabilities and capital commitments have been incurred as at 31st March, 2012 in relation to the Company's interest in the JV alongwith the other venture. (Previous year Nil)

B) Pursuant to Accounting Standard (AS-27) - Financial Reporting of interest in Joint Venture, the disclosures relating to the joint Venture viz. Morarjee Castiglioni (India) Private Limited (hereinafter referred to as JV) are as follows:

(a) The Propotion of interest of the Company in the JV is by way of equal equity participation with Manifattura Castiglioni S.P.A.

(b) The aggregate amount of assets, liabilities, income and expenses related to the Company's interest in the JV as at 31st March, 2012

(d) The Company's share of contingent liabilities of the JV as at 31st, March, 2012 is Nil. (Previous year Nil)

(e) No contingent liabilities and capital commitments have been incurred as at 31st March, 2012 in relation to the Company's interest in the JV alongwith the other venture. (Previous year Nil)

14 The Trade receivable include Rs. Nil lacs (Previous year Rs. 12.89 lacs) due from subsidiary companies.

15 During the previous year, securities Premium amount has been adjusted pursuant to the order from the Hon'ble Bombay High Court of the Capital Reduction Scheme under Section 100 -103 read with Section 78 of the Companies Act, 1956 for setting off the debit balance of the Profit & Loss Account to the extent and against the balance of Rs. 4158.73 lacs lying to the credit of Securities Premium Account. The Reduction of the Capital has been registered by Registrar of Companies, Maharashtra on 10th March, 2011

16 As required by Accounting Standard - AS 18 "Related Parties Disclosure" issued by The Institute of Chartered Accountants of India are as follows:

List of Related Parties with whom transactions have taken place during the year:

A. Enterprises over which Directors/Key Management personal excercise significant influence

Penninsula Land Ltd.

Ashok Piramal Management Corporation Ltd.

Morarjee Goculdas Spg. & Wvg. Co. Pvt.Ltd.

(Formerly Morarjee Legler Pvt. Ltd.)

Peninsula Facility Management Services Ltd.

Ashok G. Piramal Trust

Urvi Ashok Piramal Foundation

PMP Auto Component Pvt. Ltd.

Five Star Mercantile Ltd

B. Subsidary Companies

Morarjee International s.r.l.

Mens Club s.p.a. (sold during the year)

C. Joint Ventures

Morarjee Castiglioni (I) Pvt.Ltd.

Just Textiles Ltd.

D. Key Management Personnel

Mr.Harshvardhan Piramal

Mr. R. K. Rewari

17 Previous year's figures have been regrouped / reclassified wherever necessary.


Mar 31, 2011

1. a) Contingent Liability not provided for in respect of 31.03.2011 31.03.2010 Rs. In Lacs Rs. In Lacs

i. Bank Guarantees 203.92 357.94

ii. Contingent Liability for bill discounted 998.82 183.46

iii. Dividend on Redeemable Cumulative Non Convertible Preference 283.17 175.50 shares together with dividend Tax

b) Estimated amount of contracts remaining to be executed on capital accounts and not provided for Rs.373.54 lacs (Previous year (Rs.Nil lacs)

c) The Excise department and Income Tax department has raised claims on the Company for Rs.2547.19 lacs and Rs.Nil lacs (previous year Rs.2511.82 & 167.75 lacs) respectively. The Company has disputed the same with the appropriate authority.

3. The figures for the current financial year are not comparable with the previous financial year because the previous year includes financials of Integra division for only three months i.e., from 1st January 2010 to 31st March 2010 as Integra division got amalgamated with the Company with effect from 1st January 2010.

9. There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2011. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

10. The accumulated deferred tax assets of the Company has not provided in the books of accounts due to virtual uncertainty of realisation of such assets.

11. The Company is engaged in manufacture of textile products which is considered as the only reportable business segment.

12. Employee Benefits:

a) Short term employee benefits:

The liability towards short term employee benefits for the year ended 31st March, 2011 has been recognised in the Profit and Loss Account.

b) Post - employment benefits:

The following disclosures are made in accordance with AS 15 (Revised) pertaining to Defind Benefit Plans:

Note :

1. The estimates of future salary increases, considered in acturial valuation, takes into account the inflation,seniority, promotion and other relevant factors.

2 . Comparative values of defned benefit plans for the past four financial years as required by AS-15 (Revised) are not provided, being March 2008 first year of adoption of the standard.

13. Till date no options under the Employees Stock Option Plan has been exercised by any of the eligible employees. Considering the present market price of the Equity Share of the Company it is unlikely that the options will be exercised in future also and accordingly the options granted under the Plan are not treated as potential equity shares as defned in Accounting Standard -20 "Earning Per Share" and thus no impact of dilution on EPS is considered.

14. During the year, the Company issued 15,00,000 9% Redeemable Cumulative Non Convertible Preferance Shares of 100/- each.

15. In the previous year, the Company raised Rs.2724.43 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 rights basis. Post this issue the Companys share capital has increased to Rs.3633.24 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.

16. The Company has taken vehicles on an operating lease basis for a period of 48 & 60 months. The lease rentals are payable on monthly installments by the Company.

17. A) Pursuant to Accounting Standard (AS-27) - Financial Reporting of interest in Joint Venture, the disclosures relating to the joint Venture viz. Just Textiles Ltd. (hereinafiter referred to as JV) are as follows:

a) The proportion of interest of the Company in the JV is by way of 49% equity participation. The balance 51% held by Mr. Pradeep Modi and others.

b) The aggregate amount of assets, liabilities, income and expenses related to the Companys interest in the JV as at 31st March, 2011

c) The Companys share of capital commitments of the JV as at 31st March, 2011 is Rs.Nil (Previous year Rs.Nil)

d) The Companys share of contingent liabilities of the JV as at 31st March, 2011 is Nil. (Previous year Rs.Nil)

e) No contingent liabilities and capital commitments have been incurred as at 31st March, 2011 in relation to the Companys interest in the JV alongwith the other venture.

B) Pursuant to Accounting Standard (AS-27) - Financial Reporting of interest in Joint Venture, the disclosures relating to the joint Venture viz. Morarjee Castiglioni (India) Private Limited (hereinafiter referred to as JV) are as follows:

a) The Proportion of interest of the Company in the JV is by way of equal equity participation with Manifattura Castiglioni S.P.A.

b) The aggregate amount of assets, liabilities, income and expenses related to the Companys interest in the JV as at 31st March, 2011

c) The Companys share of capital commitments of the JV as at 31st, March, 2011 is Rs.Nil .(Previous year Nil)

d) The Companys share of contingent liabilities of the JV as at 31st, March, 2011 is Nil. (Previous year Nil)

e) No contingent liabilities and capital commitments have been incurred as at 31st March, 2011 in relation to the Companys interest in the JV alongwith the other venture. (Previous year Nil)

18. The Sundry Debtors include Rs. 12.89 lacs (Previous year Rs. 34.43 lacs) due from subsidiary companies.

19. Securities Premium amount has been adjusted pursuant to the order from the Honble Bombay High Court of the Capital Reduction Scheme under Section 100 -103 read with Section 78 of the Companies Act, 1956 for setting off the debit balance of the Profit & Loss Account to the extent and against the balance of Rs.4158.73 lacs lying to the credit of Securities Premium Account. The Reduction of the Capital has been registered by Registrar of Companies , Maharashtra on 10th March, 2011.

20. As required by Accounting Standard - AS 18 "Related Parties Disclosure" issued by The Institute of Chartered Accountants of India are as follows:

List of Related Parties with whom transactions have taken place during the year:

A. Enterprises over which Directors/Key Management Personnel excercise significant influence

Peninsula Land Ltd.

Ashok Piramal Management Corporation Ltd.

Morarjee Goculdas Spg. & Wvg. Co.Pvt.Ltd. (Formerly Morarjee Legler Pvt.Ltd.)

Peninsula Facility Management Services Ltd.

Ashok G. Piramal Trust

B. Subsidary Companies

Morarjee International s.r.l.

Integra Apparels & Textiles Limited (previous year upto 31.12.2009)

Mens Club s.p.a.

C. Joint Ventures

Morarjee Castiglioni (I) Private Limited

Just Textiles Limited

D. Key Management Personnel

Mr. Harshvardhan Piramal

Mr. P.K.Gothi (previous year up to 31.12.2009)

Mr. R. K. Rewari

Mr. R Krishna Kumar (previous year up to 26.02.2010)

E Relatives of Key Management Personnel

Mrs.Jayashree Krishnakumar (previous year up to 26.02.2010)

22. Previous years figures have been regrouped / reclassified wherever necessary.


Mar 31, 2010

1. a) Contingent Liability not provided for in respect of 31.03.2010 31.03.2009 Rs. In Lacs Rs. In Lacs

i. Bank Guarantees 357.94 440.99

ii. Corporate Guarantee -- 5,450.00

iii.Contingent Liability for bill discounted 183.46 433.72

iv. Dividend on Redeemable Cumulative Non Convertible Preference 175.50 117.00 shares together with dividend Tax

b) The Excise department and Income Tax department have raised claims on the Company for Rs. 2,511.82 lacs and Rs. 167.75 lacs (Previous Year Rs. 1,663.24 & Nil lacs) respectively. The Company has disputed the same with the appropriate authorities.

2. The Honble High Court of Karnataka at Bangalore vide its order dated 27th August, 2010 sanctioned the Scheme of Amalgamation of Integra Apparels & Textiles Ltd (Integra) a 100% subsidiary of the Company engaged in the business of manufacturing of garments, with the Company as per the provisions of Sections 391 to 394 of the Companies Act, 1956. Since Integra was a 100% subsidiary company, no shares were issued pursuant to the Scheme of Amalgamation.

The Appointed Date of Scheme of Amalgamation was 1st January 2010, being the date on which the entire business including all assets and liabilities of Integra has been transferred to the Company.

The amalgamation has been accounted under purchase method of accounting. Consequently, the assets and liabilities of Integra taken over by the company are recorded at the fair values of Rs. 47.11 crores and Rs. 70.09 crores respectively. Investments of Rs. 25.97 crores made by the company in Integra would stand extinguished as a result of the amalgamation. Further, as per the Scheme of the Amalgamation and in the opinion of the Board, revision in the assets of the Transferee Company would be Rs. 54.94 crores.

Net amount arrived afiter adjusting the above is Rs. 5.99 crores which has been transferred to the General Reserve in terms of the Scheme of Amalgamation approved by the Honble High Court.

Consequently, the fgures for the previous fnancial year are not comparable with the current year.

3. There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2010. This information as required to be disclosed under Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identifed on the basis of information available with the Company. The names are as follows :

Suresh Polymers Pvt. Limited, Bindal Packagings, RSA Industries Pvt. Ltd., Shirish Polychem Pvt. Limited, AGS Infotech Pvt. Ltd., Bajrang Spiropack Pvt. Ltd., Nova Transfers Pvt. Ltd., Valkal Concepts Pvt. Ltd., Giriraj Packing, Bharat Packing, New Tech Packing, Afson Packing Co., Cardboard & Packing Co. (Mysore) Pvt. Ltd. & Krishna Packing.

4. The accumulated deferred tax assets of the Company has not provided in the books of accounts due to virtual uncertainty of realisation of such assets.

5. The Company is engaged in manufacture of textile products which is considered as the only reportable business segment.

6. Employee Benefits:

a) Short term employee benefits:

The liability towards short term employee benefits for the year ended 31st March, 2010 has been recognised in the profit and Loss Account.

7. Till date no options under the Employees Stock Option Plan has been exercised by any of the eligible employees. Considering the present market price of the Equity Share of the Company, it is unlikely that the options will be exercised in future also and accordingly the options granted under the Plan are not treated as potential equity shares as defned in Accounting Standard -20 "Earning Per Share" and thus no impact of dilution on EPS is considered.

8. During the year ended 31st March, 2010, 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 rights basis. Post this issue the Companys share capital 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.

9. The Company has taken vehicles on an operating lease basis for a period of 48 & 60 months. The lease rentals are payable on monthly instalments by the Company.

10. A) Pursuant to Accounting Standard (AS-27) - Financial Reporting of interest in Joint Venture, the disclosures relating to the joint Venture viz. Just Textiles Limited (hereinafiter referred to as JV) are as follows:

a) The proportion of interest of the Company in the JV is by way of 49% equity participation. The balance 51% held by Mr. Pradeep Modi and others.

c) The Companys share of capital commitments of the JV as at 31st March, 2010 is Rs. Nil (Previous year Rs. Nil)

d) The Companys share of contingent liabilities of the JV as at 31st March, 2010 is Nil. (Previous year Rs.Nil)

e) No contingent liabilities and capital commitments have been incurred as at 31st March, 2010 in relation to the Companys interest in the JV alongwith the other venture.

B) Pursuant to Accounting Standard (AS-27) - Financial Reporting of interest in Joint Venture, the disclosures relating to the joint Venture viz. Morarjee Castiglioni (India) Private Limited (hereinafiter referred to as JV) are as follows:

a) The Proportion of interest of the Company in the JV is by way of equal equity participation with Manifattura Castiglioni s.p.a.

c) The Companys share of capital commitments of the JV as at 31st March, 2010 is Rs. Nil. (Previous year Nil)

d) The Companys share of contingent liabilities of the JV as at 31st March, 2010 is Nil. (Previous year Nil)

e) No contingent liabilities and capital commitments have been incurred as at 31st March, 2010 in relation to the Companys interest in the JV alongwith the other venture. (Previous year Nil)

12. The Sundry Debtors include Rs. 34.43 lacs (Previous year Rs. 196.79 lacs) due from subsidiary companies.

13. As required by Accounting Standard - AS 18 "Related Parties Disclosure" issued by The Institute of Chartered Accountants of India are as follows:

List of Related Parties with whom transactions have taken place during the year:

A. Enterprises over which Directors/key Management personnel excercise signifcant infuence

Peninsula Land Limited

Ashok Piramal Management Corporation Limited Morarjee Goculdas Spg. & Wvg. Private Limited (Formerly Morarjee Legler Private Limited) Peninsula Facility Management Services Limited

B. Subsidary Companies

Morarjee International s.r.l.

Integra Apparels & Textiles Limited (up to 31.12.2009)

Mens Club s.p.a.

C. Joint Ventures

Morarjee Castiglioni (I) Private Limited Just Textiles Limited

D. Key Management Personnel

Mr. Harshvardhan A. Piramal Mr. P. K. Gothi (upto 31.12.2009) Mr. R. K. Rewari (from 02.02.2010) Mr. R Krishna Kumar (upto 26.02.2010)

E Relatives of Key Management Personnel

Mrs. Jayashree Krishnakumar (upto 26.02.2010)

14. Previous years figures have been regrouped / reclassified wherever necessary.

 
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