mtl ar 09 - final-report

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14th

A ual Report2008-2009



orarjee Textiles Ltd. | Annual Report | 2008-09

BOARD OF DIRECTORS

Ms. Urvi A. Piramal ChairpersonMr. Harshvardha A. Piramal Executive Vice ChairmanMr. Mahesh S. GuptaMr. Aditya Ma galdasMr. Pradipta MohapatraMr. Ra ja Sa ghiMr. S o a T a oreMr. Takao YajimaMr. Shailesh Haribhakti Alternate Director

to Mr. Takao YajimaMAnAGInG DIRECTORMr. P. K. Gothi

HEAD - FInAnCE & ACCOUnTS& COMPAnY SECRETARYMr. S. C. Kashimpuria

AUDITORSM/s. Shah & Co.Chartered Accountants

BAnKERS

Allahabad BankExport - Import Bank of IndiaAXIS Bank

REGISTERED OFFICEPeninsula SpentaMathuradas Mills CompoundSenapati Bapat MargLower Parel, Mumbai - 400 013

SHARE TRAnSFER AGEnFreedom Registry LimitedAdmi istrative U it005, Ground FloorPeninsula CentreDr. S. S. Rao RoadParel, Mumbai 400 012

Processi g U itPlot No. 101/102, 19 th Street, MIDC AreaSatpur, Nashik - 422 007Email : [email protected]

CO EnTSPage Nos.

Notice..................................................................... 2 - 4

Directors’ Report ................................................ 5 - 10

Management Discussion & Analysis 11 - 13

Corporate Governance .................................... 14 - 34

Secretarial Compliance Certi cate 35 - 36

Auditor’s Report 37 - 39

Balance Sheet ...........................................................40

Pro t & Loss Account 41

Schedules to the Accounts .............................. 42 - 61

Cash Flow Statement ....................................... 62 - 63

Balance Sheet Abstract 64

Annexure to Balance Sheet.....................................65

Consolidated Results 66 - 88

A ual Ge eral Meeti g of the Company willbe held on Wed esday, 16 th September, 2009 at3.00 p.m. at Walchand Hirachand Hall, IndianMerchants’ Chamber Building, Churchgate,Mumbai 400 020



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Notice

Notice is hereby given that the 14 th Annual GeneralMeeting of the members of Morarjee Textiles Limitedwill be held on Wednesday, the 16 th day of September,2009 at 3.00 p.m. at Walchand Hirachand Hall, IndianMerchants’ Chamber Building, Churchgate, Mumbai400 020 to transact the following business :

Ordi ary Busi ess:

1. To receive, consider and adopt the Audited BalanceSheet as at 31 st March, 2009 and the Pro t and LossAccount for the year ended on that date and theReports of the Directors and Auditors thereon.

2. To appoint a Director in place of Mr. Shobhan

Thakore, who retires by rotation and is eligible forre-appointment.

3. To appoint a Director in place of Mr. PradiptaMohapatra, who retires by rotation and is eligiblefor re-appointment.

4. To appoint Auditors to hold office from theconclusion of this Annual General Meeting untilthe conclusion of the next Annual General Meetingand to x their remuneration.

nOTES :

1. A MEMBER ENTITLED TO ATTEND AND VOTEIS ENTITLED TO APPOINT ONE OR MOREPROXIES TO ATTEND AND VOTE INSTEADOF HIMSELF AND A PROXY NEED NOT BE AMEMBER OF THE COMPANY. Proxies, in orderto be effective, should be duly stamped, completed,signed and deposited at the Registered Of ce ofthe Company not less than 48 hours before themeeting.

2. The Register of Beneficial Owners, Register ofMembers and Share Transfer Books of the Companywill remain closed from Tuesday, 15 th September,2009 to Wednesday, 16 th September, 2009 (both daysinclusive).

3. Section 109A of the Companies Act, 1956 permitsnomination by shareholders of the Company inprescribed Form No. 2B. Shareholders are requestedto avail this facility. The duly lled in and signedForm No. 2B should be sent to the Share TransferAgent of the Company at their Nashik address.

4. In order to render better and ef cient services,we request you to consolidate the multiple folioswhich are in the same names and in identical order.Consolidation of folios does not amount to transferof shares and therefore no stamp duty or otherexpenses are payable by you. In case you decideto consolidate your folios, you are requested toforward your share certi cates to the Share TransferAgent of the Company at their Nashik address.

5. Members holding shares in physical form arerequested to immediately intimate to the Company/ Share Transfer Agent, changes, if any, in theirregistered address alongwith the pin code number.

Members holding shares in dematerialized modeare requested to forward intimation for changeof address, if any, to their respective DepositoryParticipants.

6. Trading in the Company’s securities through StockExchanges is permitted only in dematerialized /electronic form. The equity shares of the Companyhave been inducted in both National SecuritiesDepository Limited and Central Depository Services(India) Limited to enable shareholders to hold andtrade the securities in dematerialized / electronicform. In view of the numerous advantages offered by

the Depository System, members holding securitiesof the Company in physical form are requested toavail of the facility of dematerialization.

7. Brief resume of the Directors seeking re-appointmentand other details as stipulated under Clause 49 of theListing Agreement, are provided in the Annexureto the Notice.

By Order of the Board

S. C. KashimpuriaHead-Finance & Accounts

& Company Secretary

Registered Of ce :Peninsula SpentaMathuradas Mills CompoundSenapati Bapat MargLower ParelMumbai 400 013Mumbai : 1 st June, 2009




Details of the Directors seeki g re-appoi tme t at the forthcomi g A ual Ge eral Meeti g (in pursuance of Clause 49 of the Listing Agreement)

Mr. Shobha Thakore

Date of Birth3rd July, 1947

Date of Appoi tme t19th January, 2006

Professional and Educational Quali cation

Bachelor of Arts (Politics)

Bachelor of Law from the Bombay University andEnrolled as an Advocate with Bar Council of Maharashtraand Goa

Enrolled as Solicitor of the High Court and admitted asember of the Bombay Incorporated Law Society

Admitted as a member of the Law Society of Englandand Wales

Pro le and Expertise

Mr. Shobhan Thakore, Independent Director of theompany is 61 years of age.

He is presently the Senior Partner of M/s. Talwarhakore & Associates, a leading solicitor firm. Mr.hobhan Thakore is an advisor to several leading

Indian Companies on corporate law matters andsecurities related legislations. He has also acted onbehalf of leading investment banks and issuers forIndian IPO offerings and several international equityand equity linked debt issuances by Indian corporates.He has advised in the establishment and operationsof various India dedicated equity funds and domestic

utual funds. Being a solicitor for over 30 years, he hasinstructed leading Indian Counsel before various courts

and forums including High Courts around India as wellas Supreme Court of India in various matters involvingindirect tax, commercial and corporate law.

Shareholdi g i the Compa y

Mr. Shobhan Thakore does not hold any equity sharesof the Company.

Directorship and committee memberships (excluding Morarjee Textiles Limited)

• Alkyl Amines Chemicals Limited

• Bharat Forge Limited

• arborundum Universal Limited

• arraro India Limited (Alternate Director)

arraro PNH Components (India) Private Limited

• DSP Merrill Lynch Fund Managers (MemberAdvisory Board)

• Uni Deritend Limited

• Uni Klinger Limited

Chairma of Board Committees

Alkyl Amines Chemicals Limited - Share Transferand Investor Grievance Committee

Member of Board Committees

• Alkyl Amines Chemicals Limited - Auditommittee

• Bharat Forge Limited - Audit Committee



4 4

Mr. Pradipta Mohapatra

Date of Birth1st February, 1950

Date of Appoi tme t8th June, 2006

Professional and Educational Quali cation

Engineer from NIT, RourkelaManagement Graduate from Jamnalal Bajaj and HarvardBusiness School

Graduate of Behavioral Coaching Institute, U. K.Invited to be Fellow of Chartered Management Institute,U. K.

Pro le and Expertise

Mr. Pradipta Mohapatra, Independent Director of theCompany is 59 years of age.

Mr. Mohapatra supervises management of Companiesin the Technology Sector of RPG Group. During hiscareer, he has signi cant experience in incubation ofnew businesses as well as nursing sick businesses backto health. He has had 35 years of experience in generalmanagement.

Mr. Mohapatra’s work has been documented inseveral case studies by IMD, Laussanne, INSEAD,Paris and IIM, Ahmedabad. He is the Past Chairman ofConfederation of Indian Industries – Southern Region,Past President, Madras Management Association andMember, Executive Council of AIMA. As a co-founder

of Executive Business Coaching Foundation, India. Mr.

Mohapatra is involved with the promotion of ExecutiveCoaching as a new profession in India.

Shareholdi g i the Compa y

Mr. Pradipta Mohapatra does not hold any equityshares of the Company.

Directorship and committee memberships (excluding Morarjee Textiles Limited)

• Chennai Business School Limited

• Executive & Business Coaching Foundation IndiaLimited

• RPG Life Sciences Limited

• Saregama India Limited

• Spencer International Hotels Limited

• Totus Consulting Services Private Limited

• Zensar OBT Technologies Limited

• Zensar Technologies Limited

Chairma of Board CommitteesNone

Member of Board Committees

• Saregama India Limited - Shareholders’ GrievanceCommittee

• Zensar Techologies Limited - Audit Committee




Dear Shareholders

The Directors present their 14 th Annual Report on thebusiness and operations of the Company together withthe Audited Accounts for the year ended 31 st March, 2009.

Fi a cial Results

Rs. in lacs

Particulars Year e ded Year e ded31 t March, 31 st March,

2009 2008

Total Income 19938.44 17765.96

PBIDTA (95.69) 246.82Interest 2045.18 1490.34

Depreciation 1050.96 1009.69

Pro t/(Loss) before Tax& Exceptional Items (3191.83) (2253.21)

Exceptional Items(Provision for diminutionin Investment – ReferNote 13 of Schedule 15) 587.25 --

Pro t/(Loss) afterExceptional Itemsbut before Tax (3779.08) (2253.21)

Provision for Tax (FBT) 28.10 20.90

Pro t/(Loss) after Tax (3807.18) (2274.12)

Pro t /(Loss) broughtforward from previousyear (901.49) 1372.63

Pro t/(Loss) carried tothe Balance Sheet (4708.67) (901.49)

Divide dIn view of the losses incurred by the Company, yourDirectors do not recommend any dividend on the Sharesof the Company.

Operatio s Highlights – Sta dalo eDuring the year, the total income increased by Rs.2172.48lacs to Rs.19938.44 lacs from Rs.17765.96 lacs in theprevious year. The year ended at a loss of Rs.3807.18 lacs

as against the loss of Rs.2274.12 lacs in the previous year.This was mainly due to the following reasons :• Foreign Exchange loss of Rs.1786.83 lacs.

Increase in the power costs from Rs.3.85 per unitin the previous year to Rs.4.05 per unit during thecurren year.

• Increase in the cost of procurement of coal therebyleading to increased cost of coal consumption.

• Increase in the interest rates compounded with theincrease in the borrowings by the Company forfunding the losses.

Awards

The Company was awarded the prestigious TexprocilSilver Trophy for “Top Exporters-Fabrics” in thecategory of Bleached / Dyed / Yarn Dyed / Printed forthe year 2007-2008.

Subsidiary Compa ies / Co solidated Accou tsThe Central Government has granted exemption underSection 212(8) of the Companies Act, 1956, from attachingto the Balance Sheet of the Company, the Accountsand other documents of its Subsidiary Companies.However, the Consolidated Financial Statements ofthe Company, which include the results of the said

Subsidiary Companies, are included in this AnnualReport. Further, a statement containing the particularsprescribed under the terms of the said exemption foreach of the Company’s Subsidiary Companies beingIntegra Apparels and Textiles Limited, MorarjeeInternational s.r.l., Men’s Club s.p.a., Pranit ConsultantsPrivate Limited and Fabritex Exports Private Limitedare also enclosed. Copies of the Audited AnnualAccounts and the related detailed information of theCompany’s Subsidiary Companies can also be soughtby any investor of the Company or its subsidiaries onmaking a written request to the Company Secretary atthe Registered Of ce of the Company in this regard.The Annual Accounts of the Subsidiary Companiesare also available for inspection by any investor atthe Company’s and / or the concerned Subsidiaries’Registered Of ce.

Details of various Subsidiary Compa ies are as u der:Integra Apparels and Textiles Limited (“Integra”)During the year, Integra has achieved a turnover ofRs.9242.50 lacs as against Rs.7573.32 lacs in the previous

D r rs’ R p r



6 6

year, i.e increase of 23% over previous year. Pro t /(Loss) before Tax is Rs.(695.97) lacs as against Rs.182.46lacs in the previous year. Inspite of higher turnover,margins were under tremendous pressure, mainly onaccount of foreign exchange loss, economic slowdownand consequent pricing pressure, which has nallyresulted in losses.

Integra is a material unlisted subsidiary of the Companyand as per the provision of the Listing Agreement,the Company has nominated Mr. Ranjan Sanghi,Independent Director of the Company on the Boardof Integra.

Pranit Consultants Private Limited and FabritexExports Private LimitedDuring the previous year, the Company’s subsidiary,Integra Apparels and Textiles Limited (Integra) acquired100% holding in Pranit Consultants Private Limited,which is the holding company of Fabritex ExportsPrivate Limited. During the year, Fabritex ExportsPrivate Limited has achieved a turnover of Rs.215.43 lacsand Pro t / (Loss) before Tax is Rs.(527.10) lacs.

Morarjee I ter atio al s.r.l.The Company’s 100% subsidiary, Morarjee Internationals.r.l., continues to make inroads into the highlydemanding European premium fabric market. Ourdesign collections are being appreciated more highlyevery year as having a world class, international avour,comparable with the best in the world.

Me ’s Club s.p.a.During the year, Men’s Club s.p.a has achieved aturnover of Rs.1317.38 lacs as against Rs.1401.81 lacsin the previous year, i.e. a decrease of 6% over theprevious year. Pro t/(Loss) before Tax is Rs.(342.87)lacs as against Rs.(32.24) lacs in the previous year.After a careful consideration of the current state of

affairs of the Company, the given economic situationin the European markets, and continually increasinglosses of this subsidiary, the Company has providedfor a diminution in the value of its investment in thissubsidiary.

Joi t Ve tures Just Textiles Limited (“Just”)During the year, Just has achieved a turnover of

Rs.3989.91 lacs as against Rs.4095.69 lacs in the previousyear, and Pro t / (Loss) before Tax is Rs.6.88 lacs asagainst Rs.95.75 lacs in the previous year.

Co servatio of e ergy a d tech ology absorptioA statement showing particulars required under theCompanies (Disclosure of Particulars in the Report ofthe Board of Directors) Rules, 1988, read with Section217(1)(e) of the Companies Act, 1956, in the prescribedforms (Form A and Form B) is attached herewith andmarked as Annexure A.

EmployeesThe Directors acknowledge with thanks the contribution

made by the employees towards the growth of theCompany and appreciate their hard-work, co-operationand support to the Management.

Any shareholder interested in obtaining a copy of thestatement of particulars of employees referred to inSection 217(2A) of the Companies Act, 1956 may writeto the Company Secretary at the Registered Of ce ofthe Company.

Employee Stock Optio SchemeDuring the year under review, the Company has notgranted any stock options. Disclosures as required bySecurities and Exchange Board of India (Employee StockOption Scheme and Employee Stock Purchase Scheme)Guidelines – 1999 are attached herewith and marked asAnnexure B.

DirectorsIn 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 thisAnnual General Meeting and being eligible, offerthemselves for re-appointment.

Directors’ Respo sibility Stateme tPursuant to Section 217(2AA) of the Companies Act,1956 (“the Act”), we hereby state that :

a. in the preparation of the annual accounts, theapplicable accounting standards have been followedwith proper explanation relating to materialdepartures, if any;




b. your Directors have selected such accountingpolicies and applied them consistently and made judgments and estimates that are reasonable andprudent so as to give a true and fair view of the stateof affairs of the Company as at 31 t March, 2009 andits loss for the year ended on that date;

c. your Directors have taken proper and suf cientcare for the maintenance of adequate accountingrecords in accordance with the provisions of theAct for safeguarding the assets of the Companyand for preventing and detecting fraud and otherirregularities;

d. your Directors have prepared the Annual Accountsfor the year ended 31 st March, 2009 on a goingconcern basis.

Foreign Exchange earnings and outgoDuring the year, foreign exchange earnings wereRs.12495.46 lacs and outgoings were Rs.2645.11 lacs

aking the Company a net foreign exchange earnerwith a net in ow of Rs.9850.35 lacs.

Fixed DepositsDuring the year under review, the Company neitheraccepted any fixed deposits nor does it have any

unclaimed / unpaid xed deposits.Rights IssueThe Board of Directors at its meeting held on 23 rd

ebruary, 2009 has approved issue of shares on rightsbasis in the ratio of 1 equity share for every 1 equity shareheld. A draft Letter of Offer was led with Securities andExchange Board of India and the Company is awaitingits nal clearance.

However, the Company has received the in-principleapproval dated 11 th May, 2009 from Bombay StockExchange Limited and 14 th May, 2009 from National

Stock Exchange of India Limited, pertaining to theRights Issue.

Ma ageme t Discussio a d A alysisAs required by Clause 49 of the Listing Agreement withthe Stock Exchanges, a Management Discussion andAnalysis Report is appended to this Report.

Corporate Gover a ce

The Company has complied with the mandatoryprovisions of the Corporate Governance as prescribedin the Listing Agreement with the Stock Exchanges. Aseparate report on Corporate Governance compliance isincluded as a part of this Annual Report alongwith therequisite certi cate from the Statutory Auditors. As apart of good Corporate Governance, we have obtaineda Secretarial Compliance Certi cate from a PractisingCompany Secretary, M/s. V. Sundaram & Co., in respectof compliance of all rules, regulations under the variousapplicable provisions of the Companies Act, 1956, SEBIregulations and the applicable regulations under theListing Agreement entered with the Stock Exchanges. Acopy of the said certi cate is appended to this Report.

AuditorsThe Auditors, M/s. Shah & Co., retire at the ensuingAnnual General Meeting and are eligible for re-appointment. The Board recommends their re-appointment as Auditors to audit the accounts of theCompany for the nancial year 2009-2010.

Group for I terse Tra sfer of SharesAs required under Clause 3(1)(e)(i) of the Securitiesand Exchange Board of India (Substantial Acquisition

of Shares and Takeovers) Regulations, 1997, personsconstituting group (within the meaning as de ned inthe Monopolies and Restrictive Trade Practices Act,1969) for the purpose of availing exemption fromapplicability of the provisions of Regulations 10 to 12 ofthe aforesaid SEBI Regulations are given in AnnexureC attached herewith and said Annexure C forms partof this Annual Report.

Ack owledgeme tsWe owe all our employees, customers, bankers andvendors our gratitude for their co-operation andcontinued support.

By Order of the Board

Urvi A. Piramalhairperson

Mumbai : 1 st June, 2009



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ANNeXURe ‘A’

FORM - “A”

Form of disclosure of particulars with respect to conservation of energyU its Curre t Year

31.03.2009Previous Year

31.03.2008A) Power & Fuel Co sumptio

1 Electricitya) Purchased Units Lacs Kwhs 397.95 401.64

Total Cost Rs. Lacs 1610.17 1546.21Rate / Unit Rupees 4.05 3.85

b) Own GenerationThrough Diesel Generator Units Lacs Kwhs 0.55 1.22

Unit per litre of Diesel Oil Kwhs 3.25 3.35Cost / Unit (Diesel Oil Only) Rupees 11.99 10.16Total Cost of Diesel Rs. Lacs 6.58 12.39

2 Coal (slack coal for Boiler)Quantity M. T. 18525.43 16121.00Total Cost Rs. Lacs 587.29 386.51Average rate per M. T. Rupees 3170.18 2397.56

3 Furnace OilQuantity K. Ltrs 160.99 115.04Total Amount Rs. Lacs 25.66 20.29Average rate per K. Ltr Rupees 15939 17637

B) Co sumptio per u it of ProductioIn view of composite nature of its Textile Business, it is not possible to express the consumption of power& fuel per unit of production.

FORM - “B”

RESEARCH AND DEVELOPMENT (R&D)The addition of CST Engraving System gives us accuracy and sharpness of the design plotted on the screen throughthe system.

Expenditure on R&D

a. Capital expenditure Rs.14.17 lacsb. Recurring Rs.31.05 lacsc. Total Rs.45.22 lacsd. Total R&D expenditure as a percentage of total turnover 0.22 %

TECHnOLOGY ABSORPTIOn, ADAPTIOn AnD InnOVATIOnWith the installation of Spectrophotometer we have adopted the latest technology available to improve the colourmatching skill with multiple options available for best result at lowest cost.




ANNeXURe – “B”

DISCLOSURES REGARDInG STOCK OPTIOnS

Pursuant to the applicable requirements of the Securities and Exchange Board of India (Employee Stock OptionScheme and Employee Stock Purchase Scheme) Guidelines, 1999 (“the SEBI Guidelines”), the following disclosuresare made in connection with the “Morarjee Textiles Limited – Employee Stock Option Scheme 2006.”

2006Options granted 1,85,000The pricing formula The options were granted at a consideration of Rs.75/-

per option.Options vested 54,600Options exercised and the total number of shares arisingas a result of exercise of options

Nil

Options Lapsed 94,000Variation of terms of options NilMoney realized by exercise of options NilTotal number of options in force 91,000Details of options granted to(i) Senior managerial personnel; All options have been granted by the Company as

aforesaid, to Senior Management Personnel.

(ii) Any other employee who receives a grant in any oneyear of option amounting to 5% or more of optiongranted during that year;

None

(iii) Identified employees who were granted option,

during any one year, equal to or exceeding 1% of theissued capital (excluding outstanding warrants andconversions) of the Company at the time of grant

None

Diluted Earnings Per Share (EPS) pursuant to issue ofshares on exercise of option calculated in accordance withAccounting Standard (AS) 20 Earnings Per Share

Rs. (-) 21.28

Where the Company has calculated the employeecompensation cost using the intrinsic value of thestock options, the difference between the employeecompensation cost so computed and the employeecompensation cost that shall have been recognized if ithad used the fair value of the options, shall be disclosed.The impact of this difference on pro ts and on EPS of the

ompany shall also be disclosed.

Had the Company followed fair value method foraccounting the stock option, employee compensationexpense would have been higher by Rs. 0.84lacs.Consequently, loss after tax would have been higher byRs 0.84 lacs and the basic & diluted EPS would have beenRs (-) 21.28 per share . The assumptions used to estimatefair value options include the following :Risk free interest rate - 7.1%, expected life - 3 years,Volatility - 7%, Dividend yield - 2.7%, Market price ofshare at the time of grant of options - Rs. 68.55

Weighted-average exercise prices and weighted-averagefair values of options shall be disclosed separately foroptions whose exercise price either equals or exceeds oris less than the market price of the stock.

Weighted average exercise price of options is Rs. 75

Weighted average fair value of options is Rs. 4.20



1010

GROUP COMPAnIES

The following are the list of persons constituting group coming within the de nition of ‘group’ as de ned in theMonopolies and Restrictive Trade Practices Act, 1969 (‘MRTP’) for the purpose of availing exemption from theapplicability of the provisions of Regulations 10 to 12 of the Securities and Exchange Board of India (SubstantialAcquisition of Shares and Takeovers) Regulations, 1997 (‘the Regulations’), as provided in Clause 3(1)(e)(i) of theRegulations :

Ms. Urvi A. Piramal

Mr. Harshvardhan A. Piramal

Mr. Rajeev A. Piramal

Mr. Nandan A. Piramal

Topstar Mercantile Private LimitedOmega Multitrade Private Limited

Supertime Trading Private Limited

Onestar Mercantile Company Private Limited

Ashok Piramal Group Real Estate Trust

Ashok Piramal Group Textiles Trust

ANNeXURe – “c”




MANAGeMeNt DiScUSSioN & ANALYSi Re oRt

1. Indian textiles : Testing times

In the last 25 years, the textile industry has not beenhit as badly as it was in 2008-09. A drastic demandcontraction in major markets like USA, EU & Japanhas slowed down textile exports from India. Withthe deepening recession in these countries and ashift to lower cost producers like Bangladesh, thereare clear signs that in the coming months the exportsof textile and clothing products from India mightwitness further fall.

The global cotton textiles trade in 2008 marginallydeclined to US$ 96.70 billion from US$ 96.98 billionin 2007. The demand in cotton textile productsrecorded a substantial decline in major marketslike the US (-2.8%), Hong Kong (-12.9%) and China(-4.3%). Other major markets, such as Germany,France and Italy also had little or no growth incotton textiles imports.

However, despite all these dif culties, the textileindustry remains crucial as far as India is concerned.The industry is forecast to contribute 12 million new jobs in India by the end of 2010. Its size is US$52billion (US$32 billion domestic and US$20 billion

exports), making it one of the largest sectors of theIndian economy. The fundamental strength of theindustry ows from India’s strong production baseof bres and yarns, from natural bres like cotton, jute, silk and wool to synthetic and man-made

bres.

India has to build on these strengths quickly.According to a recent report by Textile Intelligence,China is under pressure in textiles and clothingproduction. Costs are mounting rapidly, the Chinesecurrency is appreciating against the US Dollar andnew sources of supply in Bangladesh, Cambodiaand Vietnam are threatening its global dominanceof the textiles market. In the rst quarter of 2008, USapparel imports from China declined by nearly 10%compared with the corresponding period of 2007.India has the capability to compete successfullyon its strengths in textile production, such as anabundant and skilled labour force, suf cient rawmaterial supplies and increasing design expertiseto make the most of this window of opportunity.

2. Morarjee Textiles

It has been a year of strong challenges faced by theompany, primarily the global economic slowdown

coupled with rapid rupee appreciation.

On a consolidated basis, the year ended with a lossof Rs. 4766 lacs as against a loss of Rs. 2402 lacs in2007-08. Total sales increased by 11.5%, from Rs.29394 lacs to Rs. 32779 lacs.

On a standalone basis, Morarjee Textiles Limitedended the year with a net loss of Rs. 3807 lacs asagainst a loss of Rs. 2274 lacs in 2007-08. Total salesincreased by 12.2%, from Rs. 17766 lacs to Rs. 19938lacs.

The past year has been tough and challenging for Morarjee Textiles . The global slowdown coupledwith the forex loss has impacted both sales andpro tability. All our major export markets, namelythe US, Europe and Japan, experienced de-growth.On the other hand, focus towards the domestic

arket has resulted in sales going up by a healthy13%.

Despite the tough market conditions, the quality ofMorarjee shirting and print fabric, our design anddevelopment capability and past record of promptcustomer service means that the Company still

aintains its premium position in the market.

We undertook several initiatives last year to counterthe slowdown and sow the early seeds of futuregrowth. Firstly, we entered several new marketssuch as Australia, the UK, Colombia and Turkeyfor both the print and yarn dyed businesses. Wealso upgraded our product range by introducingour super premium shirting fabric collection. Theseefforts have begun to pay off: during the year, we

ade an entry into several prestigious customerssuch as Hugo Boss, Zara, Talbotts, Next and Marksand Spencer.

Morarjee Textiles’ garment business, ntegra Apparels , grew by 17% despite dif cult conditionsin the global market. However, despite the highersales, Integra Apparels suffered a net loss due to



1212

forex loss and pricing pressure. However, we arecon dent that with the rupee depreciation andwith lower operational costs, Integra Apparels will continue to be a key engine of growth for theCompany.

During the year, Just Textiles Limited recorded asales marginally lower than previous year. Just Textiles Limited is contributing to Morarjee’sconsolidated sales and pro tability, and we expectthis trend to continue in the future.

3. Outlook

Demand (both domestic as well as international)for cotton textiles, especially from India, is sluggish.Several industry experts expect the market torecover by end of this nancial year at the earliest.Morarjee Textiles’ positioning as a premium playerin most of our businesses puts us in a strong positionto succeed in the current economic downturn.We are con dent that focusing on high-quality,world class products, prompt customer serviceand cutting-edge design capability will propel theCompany back to the growth path in the comingyears.

4. Risks a d Co cer s

The impact of US slowdown and its recessionarytendencies and global rise in in ation has slowedthe growth of textile exports.

International and Indian cotton prices have beenon an increasing trend during the year. This hasimpacted pro tability in the short term.

Government support in terms of nancing, policiesand growth incentives may not continue in thefuture.

5. I ter al co trol system a d their adequacy

The Company has proper and adequate systemof Internal Control to ensure that all the assets aresafeguarded from loss, damage or disposition.Checks and balances are in place to ensure thattransactions are adequately authorised and

recorded, and that they are reported correctly. Theinternal control system is further supplemented bya rigorous programme of internal audit conductedby an independent rm of chartered accountants.

The Board of Directors considers internal controlsas adequate.

6. Fi a cial performa ce

Co solidated Rs. in lacs

Year e ded31.03.2009

Year ended31.03.2008

Income 32779 29394

EBIDTA (505) 786

% to Income (1.54)% 2.7%

Interest 2693 1749

Depreciation 1562 1362

Pro t/(Loss) before tax (4760) (2325)

Pro t/(Loss) after tax (4766) (2402)

Sta dalo e Rs. in lacs

Year e ded31.03.2009

Year ended31.03.2008

Income 19938 17766

EBIDTA (96) 247

% to Income (0.48)% 1.4%

Interest 2045 1490

Depreciation 1051 1010

Pro t/(Loss) before tax

and exceptional item(3192) (2253)

Profit/(Loss) after taxand exceptional item (3807) (2274)

7. Cautio ary Stateme t

Statements in this report on Management Discussionand Analysis describing the Company’s objectives,




projections, estimates, expectations or predictionsmay be forward looking statements within themeaning of applicable laws or regulations. Thesestatements are based on certain assumptions andreasonable expectation of future events. Actualresults could however differ materially from thoseexpressed or implied. Important factors that couldmake a difference to the Company’s operationsinclude global and domestic demand – supplyconditions, nished goods prices, raw materials cost

and availability, changes in Government regulationsand tax structure, economic developments withinIndia and the countries with which the Companyhas business contacts and other factors such aslitigation and industrial relations.

The Company assumes no responsibility in respectof the forward looking statements herein which

ay undergo changes in future on the basis ofsubsequent developments, information or events.



1414

I troductio

Your Company has complied in all material respects with the requirements of Corporate Governance Code as perClause 49 of the Listing Agreement with the Stock Exchanges.

A report on the implementation of the Corporate Governance Code of the Listing Agreement by the Company isfurnished below :

1. Compa y’s philosophy o Corporate Gover a ce

Corporate Governance is the combination of voluntary practices and compliance with laws and regulationsleading to effective control and management of the organization. Good Corporate Governance leads to longterm shareholder value and enhances interest of other stake holders. It brings into focus the duciary and thetrusteeship role of the Board to align and direct the actions of the organization towards creating wealth and

shareholder value.2. Board of Directors (“Board”)

2.1 Compositio a d size of the Board

The Company has an optimum combination of Executive Directors and Non Executive Directors. The Boardconsists of 9 Directors of which 5 are Independent Directors. The Board is headed by Ms. Urvi A. Piramalas the Non Executive Chairperson and consists of personalities with expertise and experience in diversi ed

elds of specialization. Except for Mr. Harshvardhan A. Piramal, Executive Vice Chairman and Mr. P. K.Gothi, Managing Director, all the other directors are Non Executive Directors.

Mr. Shailesh Haribhakti, Non Executive Independent Director is also on the Board as an Alternate Directorto Mr. Takao Yajima.

The composition of the Board and category of Directors are given below :

Category name of the Director Desig atio number of sharesheld as o 31 st

March, 2009

Promoter Directors Ms. Urvi A. Piramal Chairperson 24,783Mr. Harshvardhan A. Piramal Executive Vice Chairman 8,261

Non ExecutiveNon Independent Director Mr. Mahesh S. Gupta Director Nil

Independent Directors Mr. Aditya Mangaldas Director NilMr. Pradipta Mohapatra Director NilMr. Ranjan Sanghi Director 1,692Mr. Shobhan Thakore Director NilMr. Takao Yajima Director NilMr. Shailesh Haribhakti Alternate Director to

Mr. Takao Yajima Nil

Executive Director Mr. P. K. Gothi Managing Director 4,214

c rp ra G v rnan



orarjee Textiles td. | Annual Report | 2008-09

2.2 Directors Pro le

Brief Resume of the present Directors, nature of their expertise in speci c functional areas is given below :

Ms. Urvi A. PiramalMs. Urvi A. Piramal, Chairperson of the Company is 56 years of age. As Chairperson of AshokPiramal Group, Ms. Urvi A. Piramal oversees a professionally managed business group inIndia. She is the guiding force behind the Group’s sustained and pro table growth and inbringing the group companies closer to realizing her vision of touching the lives of one in vepeople around the globe. She has a Bachelor of Science degree and has attended the AdvanceManagement Program at Harvard Business School.

he joined the group’s textile division in 1984 and modernized the operations while focusingon higher levels of quality and productivity. Ms. Piramal plays a leading role in envisioningand formulating the Group’s strategies in real estate, textiles, engineering and entertainment

businesses. The Group’s real estate foray has been driven by her foresight and her sharp business acumen has playedan immeasurable role in placing Peninsula Land Limited as one of the top real estate companies in India. She hasbeen a member of Technology and Quality Improvement Committee of IMC since its inception in 1994, and also the

hairperson of Supply Chain & Retail business (Internal Trade) Committee (04-05).

Ms. Piramal has received a number of awards for her contribution to business. She was awarded the Qimpro GoldStandard Award for excellence in managing Quality Improvement programmes across the Group. She has won theOutstanding Woman Industrialist Award presented by the Marinelines Junior Chamber and the Yami Woman Awardfor her outstanding contribution to business by The ITC Grand Central. She also has to her credit the CheminorAward from the India Institute of Materials Management.

She is a Trustee of the Piramal Education Trust and Ashok G. Piramal Trust, which has been set up for theunderprivileged. The Piramal Education Trust runs a childrens’ School at Bagar in Rajasthan.

Mr. Harshvardha A. PiramalMr. Harshvardhan A. Piramal, Executive Vice Chairman of the Company is 35 years of age. Mr.Piramal has completed his Bachelor of Science with specialisation in Physics from the Kings

ollege London, U.K. followed by MBA with specialization in Finance and Strategy from theLondon Business School, U.K. He began his professional career as an Analyst at Indocean VentureAdvisors (now JP Morgan Chase). He has been actively involved in the Ashok Piramal Groupventures since 1996. He went on to serve as the Chief Operating Of cer (Allied PharmaceuticalBusinesses) at Piramal Healthcare Limited (formerly known as Nicholas Piramal India Limited),where he oversaw a successful growth in the Company’s Vitamins, Diagnostics and Pathology

Lab businesses. Mr. Harshvardhan A. Piramal has keen interest in sports activities and has won several accolades insports such as polo, soccer and equestrian sports. He is a co-founder of the Wildlife Conservation Trust.

Mr. Mahesh S. GuptaMr. Mahesh S. Gupta, Non Executive Non Independent Director of the Company is 52 years ofage. Mr. Gupta has an Honours Degree in B.Com and is also an L.L.B (Gen.), Fellow Memberof The Institute of Chartered Accountants of India and also of The Institute of Company

ecretaries of India. He has an outstanding academic record and is a rank holder and a silveredialist in Company Secretaries Final Examination. As Group Managing Director of the

Ashok Piramal Group, he oversees all the businesses of the Ashok Piramal Group whichcomprises mainly of Real Estate (Peninsula Land Limited), Textiles (Morarjee Textiles Limited,Integra Apparels & Textiles Limited), Engineering (Miranda Tools Private Limited, PMP



1616

Components Private Limited, PMP Bakony Wiper Systems Limited and PAL International s. r. o.). Mr. Gupta hasover 3 decades of professional experience in business management and in all aspects of Corporate Finance such astreasury management, mergers and acquisitions, strategic planning, direct taxation, company law matters, etc.

Mr. Gupta was awarded the CFO of the Year Award (2001), Special Commendation for Financial Excellence (Mergersand Acquisitions Category) by IMA (formerly known as EIU), New Delhi. Mr. Gupta is on the Board of several listedcompanies.

Mr. Aditya Ma galdas

Mr. Aditya Mangaldas, Independent Director of the Company is 45 years of age. Mr. Mangaldasis a Mechanical Engineer from L.D.College of Engineering, Ahmedabad. He also completedhis MBA from Babson College, USA. He has been the Chairman and Managing Directorof The Victoria Mills Limited since October, 1999. He has wide experience and has spentapproximately 20 years in the textile industry.

Mr. Mangaldas is also actively involved in organizations involved in housing and caring forchildren with serious chronic diseases.

Mr. Pradipta Mohapatra

Mr. Pradipta Mohapatra, Independent Director of the Company is 59 years of age. Mr. PradiptaMohapatra is an Engineer from NIT, Rourkela and studied Management from Jamnalal Bajajand Harvard Business School. He is also a graduate of Behavioral Coaching Institute, U. K.and was invited to be a Fellow of Chartered Management Institute, U. K.

Mr. Mohapatra supervises management of Companies in the Technology Sector of RPG Group.During his career, he has signi cant experience in incubation of new businesses as well as nursingsick businesses back to health. He has had 35 years of experience in general management.

Mr. Mohapatra’s work has been documented in several case studies by IMD, Laussanne,INSEAD, Paris and IIM, Ahmedabad. He is the Past Chairman of Confederation of Indian Industries – SouthernRegion, Past President, Madras Management Association and Member, Executive Council of AIMA. As a co-founderof Executive Business Coaching Foundation, India, Mr. Mohapatra is involved with the promotion of ExecutiveCoaching as a new profession in India.

Mr. Ra ja Sa ghi

Mr. Ranjan Sanghi, Independent Director of the Company is 64 years of age. Mr. Sanghi hasa Honours Degree in B. Com and is also a Law Graduate and has been associated with theautomobile industry since over 25 years. Mr. Sanghi has been trained in the Automobile

eld at the Vauxhall Motors, Luton, England, U. K., which is a subsidiary of General MotorsLimited, U. S. A. in 1970. He was the President of the Western India Automobile Association,Mumbai in 1990-91. He is the Director of Sah & Sanghi Group of Companies and managesthe trading, manufacturing and investment operations of the entire Sah & Sanghi Group. Hewas the President of Bombay Gymkhana Limited between 1995 – 1997.

Mr. Shobha Thakore

Mr. Shobhan Thakore, Independent Director of the Company is 61 years of age. Mr. Thakorehas completed his B.A. (Politics) and Bachelor of Law from the Bombay University. He is aSolicitor of High Court, Bombay and Supreme Court of England and Wales. He is presentlythe Senior Partner of M/s. Talwar Thakore & Associates, a leading solicitor rm. Mr. ShobhanThakore is an advisor to several leading Indian Companies on corporate law matters andsecurities related legislations. He has also acted on behalf of leading investment banks andissuers for Indian IPO offerings and several international equity and equity linked debt




issuances by Indian corporates. He has advised in the establishment and operations of various India dedicated equityfunds and domestic mutual funds. Being a solicitor for over 30 years, he has instructed leading Indian Counsel beforevarious courts and forums including High Courts around India as well as Supreme Court of India in various mattersinvolving indirect tax, commercial and corporate law.

Mr. Takao Yajima

Mr. Takao Yajima, Independent Director of the Company is 49 years of age. Mr. Yajima isan engineering graduate (Aerospace division) from University of Tokyo. Mr. Yajima is anIndustrialist and owns garment manufacturing units in Japan, China and Indonesia. He isthe President of Flex Company Limited, Japan. He has wide experience in the internationaltextile market. He has had 20 years of experience in the apparels business.

Mr. Shailesh Haribhakti – Alter ate Director to Mr. Takao Yajima

Mr. Shailesh Haribhakti, Independent (Alternate) Director of the Company is 53 years of age.Mr. Haribhakti is a Fellow Chartered Accountant. His professional interest spreads acrossseveral industries, governance issues, risk management and standard setting. Mr. Haribhaktiis a Director on the board of twenty-two highly acclaimed public and private companiesholding the position of Chairman or Member of Audit Committee in ten of them. In addition,he is committee member of Futures & Options Segment of National Stock Exchange of IndiaLimited and a member of SEBI Committee on Disclosures and Accounting Standards. Heserves as member of managing committee of ASSOCHAM and IMC, Corporate Governance

ommittees of ASSOCHAM and CII and is Chairman of the Global Warming Committee ofIMC. He was a member of the ICAI’s Group on Implementation of Convergence with IFRS. He was Member of theStandards Advisory Council of the International Accounting Standards Board. Mr. Haribhakti has in the past servedas Chairman of the India af liate of the Certi ed Financial Planner M Board of Standards (CFP TM Board) – FPSB(India). He has been awarded “The Best Non Executive Independent Director Award – 2007” by the Asian Centrefor Corporate Governance & IMC. His present associations also include Membership of Rotary Club of Mumbai.

Mr. P.K. Gothi

Mr. P. K. Gothi, Managing Director of the Company is 59 years of age. Mr. Gothi is a graduatein engineering with a Gold Medal from the IIT Roorkee. He possesses more than 38 years ofexperience in diversi ed industries and has worked for reputed companies. He joined thePiramal Group in 1985 where he rst headed Delta Magnets Limited (formerly known as G.P. Electronics Limited ) as Executive Director and pioneered the successful Green eld Project.

ubsequently, he moved to Miranda Tools as Executive Director and helped turn around theompany. Later, he moved to Corporate of ce as President of the Piramal Group wherein he

undertook the assignment of long term strategic planning for the Textile Division alongwithMcKinsey & Co. He played a very important role in the partner search and the signing of

joint ventures with Italian textile companies.

Mr. Gothi is the Chairman of the Governing Council of the Bombay Textile Research Association (BTRA) and thehairman of Mill Owner’s Association (MOA) besides being a member of various other professional organisations.



1818

2.3 The details of directorship of the Compa y’s Directors i other Public Limited Compa ies a d subsidiariesof Public Limited Compa ies as o 31 st March, 2009 are give below:

name of the Director Other Directorships held

1. Ms. Urvi A. Piramal Ashok Piramal Management Corporation LimitedDelta Magnets Limited (formerly known as G.P. Electronics Limited)Just Textiles LimitedPeninsula Land LimitedPeninsula Trustee Limited

2. Mr. Harshvardhan A. Piramal Arrow Textiles LimitedAshok Piramal Management Corporation LimitedCamphor and Allied Products LimitedFabritex Exports Private LimitedIntegra Apparels and Textiles LimitedJust Textiles LimitedMorarjee Holdings Private LimitedPeninsula Facility Management Services Private LimitedPeninsula Mega Properties Private LimitedPranit Consultants Private Limited

3. Mr. Mahesh S. Gupta Ashok Piramal Management Corporation LimitedBoom Realty Private LimitedCeat Limited

Champs Elysee Enterprises Private LimitedCity Parks Private LimitedDelta Corp Limited (formerly known as Arrow Webtex Limited)Delta Magnets Limited (formerly known as G.P. Electronics Limited)Peninsula Investment Management Company LimitedPeninsula Land LimitedPeninsula Pharma Research Centre Private LimitedRenato Finance and Investments Private LimitedRPG Life Sciences Limited

4. Mr. Aditya Mangaldas Arrow Textiles Limited

The Victoria Mills Limited5. Mr. Pradipta Mohapatra Chennai Business School Limited

Executive & Business Coaching Foundation India LimitedRPG Life Sciences LimitedSaregama India LimitedSpencer International Hotels LimitedZensar OBT Technologies LimitedZensar Technologies Limited




6. Mr. Ranjan Sanghi Amzel Automotive LimitedBagalkot Cement & Industries LimitedBajaj Auto Finance LimitedBorax Morarjee LimitedHDFC Trustee Company LimitedKemp & Company LimitedSuraj Sanghi Finance Limited

7. Mr. Shobhan Thakore Alkyl Amines Chemicals LimitedBharat Forge Limited

arraro India Limited

arborundum Universal LimitedDSP Merrill Lynch Fund Managers (Advisory Board)Uni Deritend LimitedUni Klinger Limited

8. Mr. Takao Yajima Nil

9. Mr. Shailesh Haribhakti ACC LimitedAkruti City LimitedAmbuja Cements LimitedBlue Star LimitedEverest Kanto Cylinder Limited

ortune Financial Services (India) Limited (Alternate Director)uture Capital Holdings Limited

Great Offshore LimitedHercules Hoists LimitedHexaware Technologies LimitedJ K Paper LimitedKotak Mahindra Trusteeship Services LimitedLIC Pension Fund LimitedMahindra Lifespace Developers LimitedPantaloon Retail (India) Limited

he Dhanlakshmi Bank Limited

10. Mr. P. K. Gothi otton Association of Indiaabritex Exports Private Limited

Integra Apparels and Textiles LimitedJust Textiles LimitedKamal Realty LimitedMorarjee Holdings Private LimitedPranit Consultants Private Limited

name of the Director Other Directorships held



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2.4 Atte da ce of Directors at Board Meeti gs a d A ual Ge eral Meeti g

Attendance of each Directors at the Board Meetings and last Annual General Meeting (AGM) and the numberof Companies and Committees where she/he is a Director / Member.name Category Relatio ship

with otherDirectors

Atte da ceParticulars

Membership of Board / Other Board Committees

BoardMeeti gs

AGMheld o

11.08.2008

no of otherDirectorships

held as at31.03.2009

Chairperso / Chairma

Member

Ms. Urvi A.Piramal

Chairperson Mother of Mr.HarshvardhanA. Piramal

6 Yes 5 _ 1

Mr. HarshvardhanA. Piramal

ExecutiveViceChairman

Son ofMs. Urvi A.Piramal

6 Yes 10 2 _

Mr. Mahesh S.Gupta

Non ExecutiveNonIndependentDirector

None 6 Yes 12 3 4

Mr. AdityaMangaldas

IndependentDirector

None 5 No 2 1 _

Mr. PradiptaMohapatra

IndependentDirector

None 5 No 7 _ 2

Mr. Ranjan Sanghi IndependentDirector

None 6 Yes 7 _ 4

Mr. ShobhanThakore

IndependentDirector

None 4 No 7 1 2

Mr. Takao Yajima IndependentDirector None None No _ _ _Mr. ShaileshHaribhakti

IndependentAlternateDirector

None 4 Yes 15 5 5

Mr. P. K. Gothi ManagingDirector

None 4 Yes 7 _ 1

None of the Directors is a member in more than 10 committees nor is a Chairperson / Chairman of more than 5committees across all companies in which she/he is a Director. The Committees considered for the above purposeare those speci ed in existing Clause 49 of the Standard Listing Agreement i.e. Audit Committee and Shareholders’/ Investors’ Grievance Committee.

2.5 Meeti gs of the Board of DirectorsSix Board Meetings were held during the nancial year 2008 – 2009 and the gap between two Board Meetingsdid not exceed four calendar months.The dates on which the meetings were held are as follows :

Sr. no. Date of Meeti g Board Stre gth no. of Directors Prese t1. 30.04.2008 9 82. 05.06.2008 9 83. 30.07.2008 9 64. 20.10.2008 9 95. 29.01.2009 9 96. 23.02.2009 9 6




2.6 Board Procedures

The Company Secretary prepares the Agenda in consultation with the Chairperson of the Board of Directors, theChairperson / Chairman of various Committees and the Vice Chairman and Managing Director. The informationas required under Annexure 1A to Clause 49 of the Listing Agreement is made available to the Board. TheAgenda for the Meetings of the Board and its Committees, together with the appropriate supporting documentsand papers are circulated well in advance of the meetings to enable the Board to take informed decisions.The meetings are generally held in Mumbai.

2.7 Details of Directors bei g re-appoi tedAs per the statute, two thirds of the Directors should be retiring Directors. One third of these retiring directorsare required to retire every year, and if eligible, these directors qualify for re-appointment.• A detailed pro le of Directors eligible for re-appointment alongwith additional information required under

Clause 49 of the Listing Agreement is provided separately by way of an Annexure to the Notice for the

Annual General Meeting.• Mr. Shobhan Thakore and Mr. Pradipta Mohapatra, retire by rotation at the ensuing Annual General Meeting,and being eligible, offer themselves for re-appointment.

2.8 Directors with materially signi cant related party transactions, pecuniary or business relationship with theCompa yThere have been no materially signi cant related party transactions, pecuniary transactions or relationships betweenthe Company and its Directors that may have potential con ict with the interests of the Company at large.

. Audit Committee3.1. Details of the Compositio of the Audit Committee a d atte da ce of the members are as follows :

The Audit Committee of the Company presently comprises of three Directors all of whom are IndependentDirectors namely Mr. Ranjan Sanghi (Chairman), Mr. Aditya Mangaldas and Mr. Shobhan Thakore. Mr.Shailesh Haribhakti is a permanent invitee to the Audit Committee Meetings. Mr. Ranjan Sanghi and Mr.Aditya Mangaldas have expert knowledge of Finance and Accounting. Mr. Shobhan Thakore is an eminentSolicitor. Mr. Ranjan Sanghi (Chairman) was present at the last Annual General Meeting held on 11 th August,2008. The Executive Vice Chairman, Managing Director, Group CFO, Head Finance & Accounts & CompanySecretary and General Manager – Group Legal & Company Secretary are permanent invitees for the meetings.The Statutory Auditors and the Internal Auditors are also invited to the meetings. The Company Secretaryfunctions as Secretary to the Committee. The Committee oversees the work carried out by the management,internal auditors on the nancial reporting process and the safeguards employed by them.During the nancial year 2008 – 2009, the Audit Committee met six times on :30 h April, 2008, 5 h June, 2008, 30th July, 2008, 20th October, 2008, 29 h January, 2009 and 23 rd ebruary, 2009.The attendance details are given below :

name of the Director Desig atio no. of meeti gs duri g the yearHeld Atte ded

Mr. Ranjan Sanghi Chairman 6 6Mr. Aditya Mangaldas Member 6 5Mr. Shobhan Thakore Member 6 4Mr. Shailesh Haribhakti Permanent Invitee 6 3



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3.2 Terms of Refere ce

The terms of reference of this Committee are wide enough to cover the matters speci ed for Audit Committeeunder Clause 49 of the Listing Agreement, as well as in Section 292A of the Companies Act, 1956 and are asfollows :1. oversight of the Company’s nancial reporting process and the disclosure of its nancial information to

ensure that the nancial statement is correct, suf cient and credible;2. to review with the management, the nancial statements at the end of the quarter, half year and the annual

nancial statements before submission to the Board for approval, focusing particularly on:a. Matters required to be included in the Directors’ Responsibility Statement to be included in the Board’s

report in terms of sub-section (2AA) of Section 217 of the Companies Act, 1956;b. Changes, if any, in accounting policies and practices and reasons for the same;c. Major accounting entries involving estimates based on the exercise of judgment by management;

d. Signi cant adjustments made in the nancial statements arising out of audit ndings;e. Compliance with listing and other legal requirements relating to nancial statements;f. Disclosure of any related party transactions;g. Quali cations in the draft audit report.

3. to recommend to the Board the appointment, re-appointment, replacement, removal of the statutory auditors,the audit fee, any question of resignation or dismissal and payment to statutory auditors for any other servicesrendered by them;

4. to discuss with statutory auditors before the audit commences, about the nature and scope of the audit as wellas post-audit discussion to ascertain any area of concern (in absence of management, wherever necessary);

5. reviewing, with the management, the statement of uses / application of funds raised through an issue (public

issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those statedin the offer document / prospectus / notice and the report submitted by the monitoring agency monitoringthe utilization of proceeds of a public or rights issue and making appropriate recommendations to the Boardto take up steps in this matter;

6. reviewing, with the management, performance of statutory and internal auditors, adequacy of the internalcontrol systems and discuss the same periodically with the statutory auditors prior to the Board making itsstatement thereon;

7. reviewing the adequacy of internal audit function, if any, including the structure of the internal auditdepartment, staf ng and seniority of the of cial heading the department, reporting structure coverage andfrequency of internal audit;

8. discussion with internal auditors any signi cant ndings and follow up there on;9. reviewing the ndings of any internal investigation by the internal auditors into matters where there is

suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting thematter to the Board;

10. to look into the reasons for substantial defaults in the payment to the depositors, debenture holders,shareholders (in case of non payment of declared dividends) and creditors;

11. to review the functioning of the Whistle Blower mechanism, in case the same is existing;12. to consider other topics, as de ned by the Board;




13. to review the following information:

a. Management discussion and analysis of nancial condition and results of operations;b. Statement of signi cant related party transactions, submitted by the management;c. Management letters / letters of internal control weakness issued by the Statutory Auditors;d. Internal audit reports relating to internal control weakness; ande. The appointment, removal and terms of remuneration of the Internal Auditor.

4. Remu eratio Committee4.1. Compositio , Meeti g a d Atte da ce

The Remuneration Committee presently comprises of four Directors of which three are Non ExecutiveIndependent Directors, Mr. Ranjan Sanghi (Chairman), Mr. Aditya Mangaldas and Mr. Shobhan Thakoreand one Non Executive Director, Ms. Urvi A. Piramal.

The Committee met once on 5th

June, 2008 during the year 2008 – 2009 for recommending the minimumremuneration to be paid to the Executive Directors. The details are given below :

name of the Director Desig atio no. of meeti gs duri g the yearHeld Atte ded

Mr. Ranjan Sanghi Chairman 1 1Mr. Aditya Mangaldas Member 1 1Mr. Shobhan Thakore Member 1 1Ms. Urvi A. Piramal Member 1 1

4.2. Terms of Refere ce

The Committee decides the remuneration of the Executive Directors and commission to Non ExecutiveIndependent Directors. The broad terms of reference of the Remuneration Committee are to recommendto the Board, salary (including annual increments), perquisites and commission to be paid to the ExecutiveDirectors and to suggest the package of perquisites within the overall ceiling xed by the Board and also toformulate and administer the Employee Stock Option Scheme including the review and grant of options toeligible employees under this Scheme.

5. I vestors’ Grieva ce Committee5.1. Compositio , Meeti g a d Atte da ce

The Investors’ Grievance Committee comprises of one Non Executive Director and one Executive Director,i.e. Ms. Urvi A. Piramal and Mr. P. K. Gothi.The Committee met four times on 5 th June, 2008, 28th July, 2008, 20th October, 2008 and 29 th January, 2009.

The details are given below:name of the Director Desig atio no. of meeti gs duri g the year

Held Atte dedMs. Urvi A. Piramal Chairperson 4 4Mr. P. K. Gothi Member 4 4



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5.2. Terms of Refere ce

The Investors’ Grievance Committee speci cally looks into the redressal of investors’ complaints such astransfer of shares, non-receipt of annual reports, non-receipt of declared dividends, non-receipt of interest/redemption of debentures. In addition, the Committee also looks into matters which can facilitate investors’services and relations.

5.3. Details of Shareholders’ Complai tsThe Company had received 2 complaints during the year ended 31 st March, 2009 which were replied to thesatisfaction of the shareholders. There are no outstanding complaints as on 31 st March, 2009.

5.4. Company Secretary and Compliance Of cer

Name of the Company Secretary and the Compliance Of cer Mr. S. C. KashimpuriaAddress Peninsula Spenta

Mathuradas Mills CompoundSenapati Bapat MargLower Parel, Mumbai 400 013

Telephone Numbers +91-22-6615 4651 – 53Fax Number +91-22-6615 4593E-mail ID [email protected]

6. Remu eratio of Directors6.1 Remuneration paid to Non Executive Directors and Non Executive Independent Directors of the

Compa yThe Non Executive Directors and Non Executive Independent Directors of the Company are paid sitting

fees for attending each meeting of the Board of Directors and Committees thereof.The details of sitting fees paid during the year 2008-2009 are given below:

name of the Director Desig atio Sitting Fees (Rs)Ms. Urvi A. Piramal* Chairperson 30,000*Mr. Mahesh S. Gupta Director 60,000Mr. Aditya Mangaldas Director 1,00,000Mr. Pradipta Mohapatra Director 50,000Mr. Ranjan Sanghi Director 1,20,000Mr. Shobhan Thakore Director 80,000Mr. Takao Yajima Director NilMr. Shailesh Haribhakti Alternate Director 40,000

* Ms. Urvi A. Piramal has not been receiving sitting fees from 20 th October 2008 as desired by her.

6.2 Remuneration paid to Executive Directors of the CompanyThe remuneration of Promoter Director and Whole-Time Director are decided on the recommendationof the Remuneration Committee and approved by the Board of Directors and shareholders. Any changein remuneration is also effected in the same manner and / or in the line with the applicable statutoryapprovals.




The remuneration package of Executive Vice Chairman and Managing Director comprises of salary, perquisitesand allowances, contribution to provident fund and superannuation fund. No bonus, pension or incentiveis paid to any of the Directors.The details are summarized as under :

name of the Director Desig atio Salary, Perquisitesand Allowances (Rs.)

Compa y’s co tributioto Provide t Fu d a dSuperannuation Fund (Rs.)

Mr. Harshvardhan A. Piramal Executive Vice Chairman 40,90,000 9,60,000Mr. P. K. Gothi Managing Director 41,25,000 6,30,000

The tenure of of ce of the Executive Vice Chairman is for a period of 5 years from his date of appointmenti.e. upto 31 st May, 2012 and of the Managing Director is for the period upto 27 th December, 2009. The services

of these Executive Directors can be terminated by either party by giving three months’ notice in writing.There is no separate provision for payment of severance fees.6.3. Employee Stock Optio Scheme

During the year, the Company has not granted any fresh Stock Options.

. Ge eral Body Meeti gs a d Postal Ballot

7.1. Locatio a d time, where A ual Ge eral Meeti g for the last 3 years were held is give below :

Fi a cialYear

A ual Ge eralMeeting (AGM)

Date Time Locatio

2005 – 2006 11th AGM 23rd August

2006

3.00 p.m. Walchand Hirachand Hall, Indian Merchants’ Chamber

Building, Churchgate, Mumbai 400 0202006 – 2007 12th AGM 26th July

20073.00 p.m. M. C. Ghia Hall, Bhogilal Hargovindas Building, 8/20,

Kaikhushru Dubhash Marg, Mumbai 400 001

2007 – 2008 13th AGM 11th August,2008

3.00 p.m. Walchand Hirachand Hall, Indian Merchants’ ChamberBuilding, Churchgate, Mumbai 400 020

All the resolutions set out in the respective notice were passed by majority of the shareholders.

7.2 Special Resolutio passed i the previous A ual Ge eral Meeti g

Annual General Meeting (AGM) Date of AGM Special Resolutio

12th AGM 26th July, 2007 Resolution No. 9 – Payment of Commission to Non WholeTime Directors.

13th AGM 11th August, 2008 Resolution No. 5 – Payment of Minimum Remunerationto Mr. P.K. Gothi, Managing DirectorResolution No. 6 – Payment of Minimum Remunerationto Mr. Harshvardhan A. Piramal, Executive ViceChairmanResolution No. 7 – Alteration of Articles of Associationof the Company



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7.3 Postal Ballot

No postal ballot was conducted during the year under review. At present, there is no proposal for passingany Special Resolution through Postal Ballot.

8. Disclosures8.1. Statutory Complia ce, Pe alties a d Strictures

There were no instances of non-compliance nor have any penalties, strictures been imposed by Stock Exchangesor Securities and Exchange Board of India or any other statutory authority during the last three years onany matter related to the capital markets.

8.2. Materially signi cant related party transactionsThe transactions between the Company and the Directors and Companies in which the directors are interestedare disclosed in Note No. 17 to Schedule 15 to Notes to the Accounts in the Annual Report in compliance withthe Accounting Standard relating to “Related Party Disclosures”. There is no materially signi cant RelatedParty Transaction that may have potential con ict with the interest of the Company at large.

8.3. Code of Co ductAll the members of the Board and the Senior Management Personnel of the Company have af rmed complianceto the Code of Conduct of the Company as on 31 st March, 2009. The Code of Conduct has been posted on theCompany’s website (www.morarjeetextiles.com).A declaration to this effect signed by the Managing Director is appended to this Report.

8.4. Listi g Agreeme t Complia ceThe Company complies with all the requirements of the Listing Agreement including the mandatoryrequirements of Clause 49 of the Agreement.

8.5. Risk Ma ageme t

The Audit Committee and the Board of Directors regularly review the risk management strategy of theCompany to ensure the effectiveness of the risk management policy and procedures. The Company hasset up a system to appraise the Board of Directors of the Company on the key risk assessment areas andsuggestive risk mitigation mechanism.

8.6. CEO and CFO Certi cationThe CEO and the CFO of the Company have given the certi cation on nancial reporting and internal controlsto the Board of Directors in terms of Clause 49 of the Listing Agreement with the Stock Exchanges.

8.7. Corporate Social Respo sibility PolicyThe Company has undertaken the Corporate Social Responsibility for enriching the lives of communitiesby empowering them to develop and execute sustainable livelihood models. At Nagpur, the Companyhas started Pathshala for technician’s children. At present the strength of Pathshala is 35. Apart from the

regular studies, computer training is also provided. Every Saturday dance, yoga and games sessions are alsoconducted for entertainment. The Company has also organized for sessions for overall development of thechildren such as health and nutrition program for their mothers, health check up camp for children, dentistand child specialist check up of the children. Psychologist for discussion with the children’s parents abouttheir child’s development is also undertaken.

9. Mea s of Commu icatioThe quarterly results and annual results are published in Free Press Journal and Navshakti and simultaneouslyposted on the Company’s website (www.morarjeetextiles.com). The Management Discussion and Analysis Reporthas been included in the Annual Report.




10. Ge eral Shareholder I formatio

10.1. 14th A ual Ge eral Meeti g Date Time Ve ue16th September, 2009 3.00 p.m. Walchand Hirachand Hall, Indian

Merchants’ Chamber Building,hurchgate, Mumbai 400 020

10.2. Fi a cial Cale dar for the Year 2009 -2010

Financial year 1 st April, 2009 to 31 st March, 2010Book Closure Dates Tuesday, 15 th September, 2009 to Wednesday, 16 th

September, 2009 (both days inclusive)

Financial reporting for the quarter ending (tentative and subject to change)30th June, 2009 : By 31 t July, 200930th September, 2009 : By 31 t October, 200931st December, 2009 : By 31 t January, 2010Year ending 31 st March, 2010 : By 30 h June, 2010Annual General Meeting for the year ending 31 t March, 2010 : By September, 2010

10.3. Divide d History

Sr.no.

Fi a cial year Equity Divide der share (Rs.)

Date of Declaratio(Annual General Meeting)

Date of payme t(Date of Dividend Warrant)

1 2004 – 2005 1.50 5h

September, 2005 6h

September, 20052 2005 – 2006 2.50 23rd August, 2006 28 th August, 20063 2006 – 2007 1.50 26h July, 2007 2nd August, 20074 2007 – 2008 NIL NA NA

10.4. U claimed divide dsAll the shareholders whose dividend is unclaimed are requested to claim their dividend. Under theTransfer of Unclaimed Dividend Rules, it would not be possible to claim the dividend amount oncedeposited in Investor Education and Protection Fund.

10.5. Tra sfer to I vestor Educatio a d Protectio Fu dPursuant to Section 205C of the Companies Act, 1956, dividends that are unclaimed for a period of sevenyears are to be transferred to the Investor Education and Protection Fund (IEPF) administered by the

entral Government. At present, there are no dividends due for transfer to IEPF.

10.6. Registered Of ceThe Registered Of ce of the Company is situated at :Peninsula SpentaMathuradas Mills CompoundSenapati Bapat MargLower Parel, Mumbai 400 013



2828

10.7. Script I formatio

Listing on Stock Exchanges Bombay Stock Exchange LimitedPhiroze Jeejeebhoy TowersDalal Street, Mumbai 400 023National Stock Exchange of India LimitedExchange PlazaBandra Kurla ComplexMumbai 400 051

Name of the Exchange Stock Code

Equity Warra ts

Bombay Stock Exchange Limited 532621 961661

National Stock Exchange of India Limited MORARJETEX (Series EQ) MORARJETEX (Series W1)

ISIN Demat INE161G01019 INE161G13014

The Company has been regular in paying the Annual Listing Fees to the Stock Exchanges. Listing fees for the year2009 -2010 have also been paid within the date.

10.8 Stock Market Data

The high / low of the market price of the shares of the Company is given below :

Bombay Stoc Exchange Limited (BSE) National Stoc Exchange of India Limited (NSE)

Mo th High(Rs.)

Low(Rs.)

Mo thlyvolume

Sensex(closing)

High(Rs.)

Low(Rs.)

Mo thlyvolume

S&P CnXnIFTY

(Closing)April, 2008 41.30 27.55 94621 17287.31 41.45 28.50 32141 5165.9May, 2008 36.00 29.10 67598 16415.57 36.90 29.15 16137 4870.1 June, 2008 31.40 24.50 51038 13461.60 31.40 23.30 19155 4040.55 July, 2008 26.95 21.00 35596 14355.75 26.70 20.25 19268 4332.9August, 2008 25.85 21.60 26502 14564.53 26.40 22.00 4121 4360.0September, 2008 25.85 17.40 33943 12860.43 26.85 19.00 4588 3921.2

October, 2008 18.95 11.10 49870 9788.06 18.95 11.40 16496 2885.6November, 2008 13.75 9.46 13788 9092.72 13.20 10.00 3274 2755.10December, 2008 12.39 9.28 27705 9647.31 13.25 9.30 3233 2959.1 January, 2009 13.94 10.60 25545 9424.24 14.10 11.20 2960 2874.80February, 2009 13.77 10.50 69462 8891.61 11.70 10.00 984 2763.6March, 2009 13.10 10.30 67830 9708.50 12.90 9.35 9635 3020.9

Sources : BSE, NSE, Sensex and S&P CNX Nifty websites




10.9 Distributio of shareholdi g as o 31 st March, 2009

Slab ofShareholdi g

no. ofShareholders

% ofShareholders no. of Shares held % of Shares held

1 to 5000 19063 99.32 2845326 15.665001 to 10000 66 0.34 474406 2.6110001 to 20000 30 0.16 399741 2.20

20001 to 30000 13 0.07 308359 1.7030001 to 40000 5 0.03 171760 0.9540001 to 50000 0 0.00 0 0.0050001 to 100000 4 0.02 306707 1.68100001 & above 12 0.06 13663164 75.20

19193 100.00 18169463 100.00

onth

High (Rs) Low (Rs) Sensex (Closing)

Price v/s BSE Sensex45.0040.005.000.005.000.005.000.005.000.00

20000

15000

10000

5000

0

P r i c e

B S E S e n s e x

Apr- ay- June- Jul- Aug- Sep- Oct- ov- ec- Jan- Feb- Mar-8 8 08 08 08 08 8 8 8 09 09 09

onth

High (Rs) Low (Rs) S & P CNX Nifty (Closing)

Price v/s S&P Cn nifty

P r i c e

S & P C N X N i f t

6000

5000

4000

3000

2000

1000

0

45.0040.005.000.005.000.005.000.005.000.00

Apr- ay- June- Jul- Aug- Sep- Oct- ov- Dec- Jan- Feb- Mar-8 8 08 08 08 08 8 8 08 09 09 09



3030

10.10 Shareholdi g Patter as o 31 st March, 2009

Category no ofShares held

% ofShares held

A Promoters Holdi g

1 Indian promoters 9457813 52.05

oreign promoters -- --

2 Persons acting in concert -- --

Sub total (1 + 2) 9457813 52.05

B no Promoters Holdi g

3 Institutional InvestorsA Mutual Funds and UTI 2711 0.01B Banks, Financial Institutions, Insurance Companies

(Central / State Govt., Institutions / Non Govt.Institutions)

2023032 11.13

Foreign Institutional Investors 1135 0.01

Sub-total (3) 2026878 11.15

4 Others

A Private Corporate Bodies 1360938 7.49

B Indian Public 5192564 28.58

Non Resident Indians 91939 0.51

D Non Domestic Companies 39331 0.22

Sub total (4) 6684772 36.80

Grand total (1 + 2 + 3 + 4) 8169463 100.00

Promoters 52.05%

Mutual Funds and UTI 0.01%

Banks, Financial Institutions,Insurance Companies 11.13%

Foreign Institutional Investors 0.01%

Private Corporate Bo ies 7.49%

Indian Public 28.58%

Non Resi ent In ians 0.51%

Non Domestic Companies 0.22%

% of Shareholding




10.11 Share Tra sfers System

The Board has delegated the authority for approving transfer, transmission, etc of the Company’sequity shares and warrants to a Share Transfer Committee comprising of Ms. Urvi A. Piramal, Mr.Harshvardhan A. Piramal, Mr. P. K. Gothi and Mr. Mahesh S. Gupta. The share certi cates in physicalform are generally processed and returned within 30 days from the date of receipt, if the documents areclear in all respects.

or administrative convenience and to facilitate speedy approvals, authority has also been delegated toSenior Executives to approve share transfers upto speci ed limits.

A summary of the transfer / transmission so approved by the Committee and the authorized Executivesis placed at every Board Meeting.

The Company obtains from a Company Secretary in practice half yearly certi cate of compliance with the

share transfer formalities as required under Clause 47 (c) of the Listing Agreement with Stock Exchanges,and les a copy of the certi cate with the Stock Exchanges.

The Company conducts a Secretarial Audit on a quarterly basis in accordance with Securities andExchange Board of India requirements. M/s. Nilesh Shah & Co., Practising Company Secretary has beenappointed by the Company to conduct such audit. The Secretarial Audit Reports of M/s. Nilesh Shah &

o., which have been submitted to the Stock Exchanges within the stipulated period, interalia con rmsthat the equity shares of the Company held in dematerialized form and in physical form tally with theissued and paid-up equity share capital of the Company.

10.12 Dematerialisatio of shares

As on 31 st March, 2009, 1,77,07,595 number of equity shares (representing 97.46% of the Company’sPaid-Up Equity Share Capital) have been dematerialized.

Trading in Equity Shares of the Company is permitted only in dematerialized form as per noti cationissued by Securities and Exchange Board of India .

Shareholders seeking demat / remat of their shares need to approach their Depository Participants(DP) with whom they maintain a demat account. The DP will generate an electronic request and willsend the physical share certi cates to the Share Transfer Agent of the Company. Upon receipt of therequest and share certi cates, the Share Transfer Agent will verify the same. Upon veri cation, the ShareTransfer Agent will request National Securities Depository Limited (NSDL) / Central Depository Services(India) Limited (CDSL) to con rm the demat request. The demat account of the respective shareholderwill be credited with equivalent number of shares. In case of rejection of the request, the same shall becommunicated to the shareholder.

In respect of remat, upon receipt of the request from the shareholder, the DP generates a request andveri cation of the same is done by the Share Transfer Agent. The Share Transfer Agent then requestsNSDL and CDSL to con rm the same. Approval of the Company is sought and equivalent number ofshares are issued in physical form to the shareholder. The share certi cates are dispatched within 1

onth from the date of issue of shares.



3232

No of shares inDemat Mode 97.46%

No of shares inPhysical Mode 2.54%

no. of shares i Demat & Physical Mode

10.13. Share Tra sfer Age t

reedom Registry Limited (formerly known as Amtrac Management Services Limited) has been appointedas one point agency for dealing with shareholders. Shareholders’ correspondence should be addressedto the Company’s Share Transfer Agent at the address mentioned hereinbelow:

nashik Processi g U it reedom Registry LimitedPlot No 101/102, 19 th treet, MIDC AreaSatpur, Nashik 422 007Tel (0253) - 2354032 / 2363372

ax (0253) - 2351126(From Mumbai, the dialing code is 95253 instead of 0253)E-mail : [email protected]

Mumbai Administrative Of ce reedom Registry Limited005, Ground Floor, Peninsula CentreDr. S. S. Rao Road, ParelMumbai 400 012Tel (022) - 2410 5685

ax (022) - 6661 8788

10.14. I vestor Helpdesk

Share transfers, dividend payments and all other investor related activities are attended to and processed at

the of ce of the Share Transfer Agent, Freedom Registry Limited (formerly known as Amtrac ManagementServices Limited).

or lodgement of transfer deeds and other documents or for any grievance / complaints, shareholders /investors may contact Share Transfer Agent, Freedom Registry Limited at the address mentioned above.

Any queries relating to share transfers, dividend payments, annual report, etc may be mailed at [email protected].




10.15. I vestor Correspo de ce

Investors can contact the following Of cial for Secretarial matters of the Company :

name E-mail ID elepho e no Fax NoMs. R. D. Desai [email protected] +91-22-66154651-53 91-22-66154593

Investors can contact the following Of cial for Financial matters of the Company :

name E-mail ID Telepho e no Fax NoMr. S.C. Kashimpuria [email protected] 91-22-66154651-53 91-22-66154593

Correspo de ce address :Morarjee Textiles Limited

Peninsula SpentaMathuradas Mills CompoundSenapati Bapat MargLower Parel, Mumbai 400 013

10.16. Outsta di g GDRs / ADRs / Co vertible Warra ts or I strume ts

The Company has 51,91,275 warrants.

The holders of the warrants may exercise their rights to convert the warrant into equity shares of theompany at a price of Rs 100/- per share at any time after 12 months from the date of allotment (i.e. 3 rd

November, 2006) but not later than 36 months from the date of allotment as decided by the Company.

10.17. Pla t Locatio

Plot No.G2- M.I.D.C. Industrial EstatePost : Salai Dhaba, ButiboriNagpur – 441 108

10.18. Status of Complia ce with no Ma datory Requireme ts

or Remuneration Committee, please refer No. 4 above.

• Since the nancial results are published in newspapers having wide circulation, only the annual accountsare sent to each of the shareholders.

• The provisions relating to postal ballot shall be complied with on matters as may be applicable.

11. Code for Preve tio of I sider Tradi g

The Company has adopted a Code for Prevention of Insider Trading in the shares of the Company which is inline with the Model Code as prescribed by the Securities and Exchange Board of India (Prohibition of InsiderTrading) Regulations, 1992, as amended. The said Code interalia prohibits purchase / sale of shares of the Companyby Directors and Employees while in possession of unpublished price sensitive information in relation to theCompany.



3434

Declaratio regardi g Complia ce by Board Members a d Se ior Ma ageme t Perso el with the Compa y’s

Code of Co duct.To,

The Members of Morarjee Textiles Limited

Declaration by the Managing Director under Clause 49 of the Listing Agreement

I, P. K. Gothi, Managing Director of Morarjee Textiles Limited hereby declare that all the members of the Board ofDirectors and Senior Management Personnel have af rmed compliance with the Code of Conduct for the year ended31st March, 2009.

P. K. GothiManaging Director

Mumbai13th May, 2009

AUDitoRS’ ceRtiFicAte oN coRPoRAte GoVeRNANce totHe MeMBeRS oF MoRARJee teXtiLeS LiMiteD

We have examined the compliance of conditions ofCorporate Governance by Morarjee Textiles Limited forthe year ended March 31, 2009 as stipulated in clause49 of the Listing Agreement of the said Company withthe Stock Exchanges in Mumbai.

The compliance of conditions of Corporate Governance isthe responsibility of the management. Our examinationwas limited to procedures and implementation thereof,adopted by the Company for ensuring the complianceof the conditions of Corporate Governance. It is neitheran audit nor an expression of opinion on the nancialstatements of the Company.

In our opinion and to the best of our informationand according to the explanations given to us, and

the representations made by the Directors andthe Management, we certify that the Companyhas complied with the conditions of CorporateGovernance as stipulated in the abovementioned

Listing Agreement.

As required by the Guidance Note issued by the Institute

of Chartered Accountants of India, we have to state thatas per the records maintained by the Company, therewere no investor’s grievances remaining unattended /pending for more than 30 days as at March 31, 2009.

We further state that such compliance is neither anassurance as to the future viability of the Company nor theef ciency or effectiveness with which the managementhas conducted the affairs of the Company.

For SHAH & CO.,Chartered Accountants

H. n. SHAHPartnerM. No. 8152

Mumbai: 1 st June 2009




CIN: L52322MH1995PLC090643

Nominal Capital: Rs. 53 Crores

The Board of DirectorsMorarjee Textiles LimitedPeninsula SpentaMathuradas Mills CompoundSenapati Bapat MargLower ParelMumbai- 400 013

Sirs,

We have examined the registers, records, books andpapers of Morarjee Textiles Limited (“the Company”),as required to be maintained under the CompaniesAct, 1956 (“the Act”) and the rules made thereunder,Listing Agreements, SEBI Regulations and also theprovisions contained in the Memorandum and Articlesof Association of the Company (“the requirements”) forthe nancial year ended on 31 st March, 2009. Based onour examination as well as information and explanationfurnished by the Company to us and the records madeavailable to us, we hereby report that:

1. The requisite statutory registers and other recordsrequired under the Act and the rules madethereunder have been maintained in accordancewith the Act either in physical and electronic modeas applicable.

2. The requisite forms, returns and documents requiredunder the Act and the rules made thereunder to be

led with the Registrar of Companies and otherauthorities were duly led.

3. The Board of Directors was constituted by theompany which consists of 9 Directors and 1

Alternate Director. The Board had met 6 timesduring the year under review and the minuteshave been recorded properly in the Minutes Bookmaintained for the purpose.

During the year under review, Dr. G. Callegarihad resigned w.e.f. 1 st April, 2008 and Mr. ShaileshHaribhakti was appointed as an Alternate Directorto Mr. Takao Yajima w.e.f. 30 th April, 2008.

ecRet Ri L coMPLiANce ce tiFicAte

4. The Annual General Meeting for the nancial year

2007-08 was held on 11th

August, 2008 and SpecialResolutions were passed for payment of minimumremuneration to Mr. Harshvardhan A. Piramal,Executive Vice Chairman and Mr. P. K. Gothi,Managing Director and for alteration of Articlesof Association of the Company. The resolutionspassed thereat were duly recorded in minutes books

aintained for the purpose. The Company has notpassed any resolution under Postal Ballot.

5. As required under the Listing Agreement and theAct the Company has the following Committees:

Audit Committee: The Committee had met 6times during the year under review.

Investors’ Grievance Committee: The Committeehad held 4 meetings during the year underreview.

Remuneration Committee: The Committee hadheld 1 meeting during the year under review.The Committee Meeting held on 5 h June, 2008had considered the payment of minimumremuneration to Executive Directors due to loss

incurred during the year 2007-08.

Share Transfer Committee: The Committeehad held 12 meetings during the year underreview.

Besides the above, the Company has alsonon-mandatory committees like Committeeof Directors (Bank), Committee of Directors(Borrowings), Committee of Directors (RightsIssue 2009) and Management Committee.

Minutes of the above committee meetingswere properly recorded and placed before theBoard.

6. The Company has complied with the requirementsof the Depositories Act, 1996 pertaining todematerialization of shares and wherever required,share certi cates have been issued and delivered toshareholders within the statutory period and thetransfers/ transmissions thereof have been carried



3636

out and registered as per the requirements.

7. The Company had not declared any dividendduring the year under review.

8. Charges created, modified or satisfied by theCompany were duly led and noted and entered inthe Register maintained for the purpose during the

nancial year ended 31 st March, 2009. The Companyhad obtained condonation of delay for a charge ledlate and Company Law Board had passed an ordercondoning the delay and the same was led withthe Registrar of Companies and the charge standsapproved.

9. The Company has complied with the provisionsof Section 372A and other provisions of the Actin respect of guarantees given, loans granted tocompanies including subsidiaries and investmentsby way of equity shares made in subsidiaries andother companies during the nancial year ended31st March, 2009. The Company had, whereverrequired, obtained the necessary approvals as perthe requirements of the Act.

10. The Company has not accepted any Fixed Deposits

nor has issued any debentures. The Annual Returnand Annual Report has been led as required underthe Act. The Company has, therefore not defaultedin any of the provisions of Section 274(1) (g) of theAct, which may otherwise disqualify the Directorsof the Company from acting as a Director of anyother Company.

11. Due disclosures under the requirements of thestatutes have been made by the Company. TheCompany has complied with the requirements inpursuance of the Listing Agreements with the StockExchanges. The Company has complied with SEBI

(Substantial Acquisition of Shares and Takeovers)

Regulations, 1997 as amended from time to time.The Company has led statements with the StockExchanges under the Regulation 8 (3) of the saidRegulations within 30 days from 31 st March, 2008.

12. During the year under review, no fresh stock optionswere granted.

13. The Company had complied with the ListingAgreement of the Stock Exchanges pertainingto submissions of the statements, documents,disclosure requirements, publication in newspapers,press releases, Corporate Governance standards asprescribed in Clause 49, within time limit speci edin the Listing Agreement.

14. The Company had complied with the provisions ofSEBI (Prohibition of Insider Trading) Regulations,1992 as amended from time to time and has withinthe time limit speci ed submitted the informationreceived from the shareholders with regard to anypurchase or sale in excess of requisite percentageof the paid up share capital to the respective StockExchanges.

15. The Company has instituted the Code of Conductfor Directors and Senior Executives of the Companyand has complied with said Code as required underClause 49 of the Listing Agreement.

For V. Sundaram & Co.

V. Su daramCompany Secretary

C.P. No. 3373Place: MumbaiDated: 1 st June, 2009




AUDito S’ RePo t

TO THE MEMBERS OF MORARJEE TEXTILESLIMITED

We have audited the attached Balance Sheet of MorarjeeTextiles Limited as at 31 st March 2009, and also the Pro tand Loss Account and the Cash Flow Statement of the

ompany for the year ended on that date, annexedthereto. These nancial statements are the responsibilityof the Company’s management. Our responsibility is toexpress an opinion on these nancial statements basedon our audit.

We conducted our audit in accordance with auditingstandards generally accepted in India. Those Standardsrequire that we plan and perform the audit to obtainreasonable assurance about whether the financialstatements are free of material misstatement. An auditincludes examining, on a test basis, evidence supportingthe amounts and disclosures in the nancial statements.An audit also includes assessing the accountingprinciples used and significant estimates made by

anagement, as well as evaluating the overall nancialstatement presentation. We believe that our auditprovides a reasonable basis of our opinion.

As required by the Companies (Auditor’s Report) Order,

2003, issued by the Central Government of India in termsof sub-section (4A) of Section 227 of the Companies Act,1956, we enclose in the Annexure a statement on the

atters speci ed in paragraph 4 and 5 of the said orderto the extent applicable.

urther to our comments in the Annexure referred to inparagraph 3 above, we state that:

(a) We have obtained all the information andexplanations, which to the best of our knowledgeand belief were necessary for the purpose of ouraudit.

(b) In our opinion proper books of account as requiredby law have been kept by the Company so far asappears from our examination of those books.

(c) The Balance Sheet, the Pro t and Loss Account and

the Cash Flow Statement referred to in this reportare in agreement with the books of account.

(d) In our opinion, the Balance Sheet, the Pro t and LossAccount and the Cash Flow Statement dealt with bythis report comply with the Accounting Standardsreferred to in Section 211(3C) of Companies Act,1956.

(e) On the basis of the written representations receivedfrom the directors, and taken on record by the Boardof Directors, we report that none of the directorsis disquali ed as on 31 t March 2009 from beingappointed as a director in terms of clause (g) ofsub-section (1) of Section 274 of the Companies Act,1956.

(f) In our opinion and as per the information andaccording to the explanations given to us, the saidBalance Sheet and the Pro t and Loss Account,read together with the notes thereon, give theinformation required by the Companies Act, 1956,in the manner so required and give a true and fairview in conformity with the accounting principlesgenerally accepted in India:

(i) in the case of the Balance Sheet, of the state ofaffairs of the Company as on 31 st March 2009;

(ii) in the case of the Pro t and Loss Account, ofthe loss of the Company for the year ended onthat date;

and

(iii) in the case of the Cash Flow Statement, of thecash ows for the year ended on that date.

or SHAH & CO.Chartered Accountants

H. N. SHAHPartner

M. No. 8152Mumbai: 1 t June 2009



3838

ANNEXURE REFERRED TO IN PARAGRAPH 3 OFTHE AUDITORS’ REPORT TO THE MEMBERS OFMORARJEE TEXTILES LIMITED FOR THE YEARENDED 31ST MARCH 2009

1 (a) The Company has maintained proper recordsshowing full particulars including quantitativedetails and location of the Fixed Assets.

(b) There is a regular program of physicalveri cation, which in our opinion is reasonable,having regard to the size of the Companyand the nature of xed assets. No materialdiscrepancies have been noticed in respect of

the assets physically veri ed during the year.(c) The Company has not disposed of substantial

part of xed assets during the year.

2 (a) Inventories have been physically veri ed duringthe year by the management. In our opinion, thefrequency of veri cation is reasonable.

(b) The procedures of physical veri cation of stocksfollowed by the management are adequate inrelation to the size of the Company and thenature of its business.

(c) The Company is maintaining proper recordsof inventory. The discrepancies noticed onveri cation between the physical stocks andbook records were not material and have beenproperly dealt with in the books of account.

3 (a) The Company has not granted any loans duringthe year to the parties covered in the registermaintained under Section 301 of the CompaniesAct, 1956.

In view of clause 4 (iii)(a) of the Companies(Auditor’s Report) Order, 2003, clause 4 (iii)(b,c & d) are not applicable to the Company.

(b) The Company has not accepted any loansduring the year from the parties covered in theregister maintained under section 301 of theCompanies Act, 1956.

In view of clause 4 (iii)(e) of the Companies(Auditor’s Report) Order, 2003, clauses 4 (iii)

(f & g) are not applicable to the Company.

4 In our opinion, and according to the informationand explanations given to us, there is adequateinternal control system commensurate with thesize of the Company and the nature of its businesswith regard to purchase of stores, raw materialsincluding components, packing materials, plantand machinery, equipment and other assets andwith regard to sale of goods and services. Thereis no major weakness in the internal controlprocedures.

5 (a) The particulars of all contracts and arrangements

referred to in section 301 of the Companies Act,1956 have been properly entered in the registermaintained under Section 301 of the Act.

(b) In our opinion, and according to the informationand explanations given to us, the contractsand arrangements entered in the registermaintained under Section 301 of the CompaniesAct, 1956 have been made at prices which arereasonable having regard to the prevailingmarket price.

6 The Company has not accepted any deposits from

public and hence provisions of clause 4 (vi) are notapplicable to the Company.

7 In our opinion, the Company has an internal auditsystem commensurate with the size and nature ofits business.

8 We are informed that the cost records are requiredto be maintained by the Company under Section209(1) (d) of the Companies Act, 1956 for textileproducts of the Company. We have not reviewedthe cost records maintained by the Company, butwe are informed that the Company maintained the

prescribed cost records.9 (a) The Compan y is regular in depositi ng

undisputed statutory dues including ProvidentFund, Investor Education and Protection Fund,Employees’ State Insurance, Income Tax,Sales Tax, Wealth Tax, Custom Duty, ExciseDuty, cess and other statutory dues with theappropriate authorities.




(b) Following dues are not deposited on account of disputes pending at various forums.

nature of Statute nature of Dues Fi a cial Year Amou t(Rs. in Lacs)

Forum wheredispute is pe di g

Central Excise Act, 1944 Interpretation of Act F.Y. 1979-80 to 1985-86 8.07 irst Appeal(CommissionerLevel)F.Y. 1990-91 to 1995-96 147.11

F.Y. 1999-00 to 2008-09 434.54

Central Excise Act, 1944 Interpretation of Act F.Y. 1976-77 and F.Y.1990-91 to 1991-92

2.54 econd AppealCESTAT)

F.Y. 1995-96 to 2004-05 352.68Central Excise Act, 1944 Interpretation of Act F.Y. 1997-98 to 2001-02 3.19 High Court

Central Excise Act, 1944 Interpretation of Act F.Y. 1998-99 to 2000-01 715.11 upreme Court

Total Rs. 1,663.24

10 The Company has incurred cash loss in the currentyear and also in the immediately preceding nancialyear and there are accumulated losses in the balancesheet as on 31 st March, 2009.

11 The Company has not defaulted during the year inrepayment of dues to any nancial institutions, banks.

12 The Company has not granted any loans andadvances on the basis of security by way of pledgeof shares, debentures and other securities.

13 As the Company is not a chit fund, nidhi, mutualbene t fund or society the provision of clause 4(xiii)of the Companies (Auditor’s Report) Order, 2003 isnot applicable to the Company.

14 As the Company is not dealing or trading in shares,securities, debentures and other investments,

the provision of clause 4(xiv) of the Companies(Auditor’s Report) Order, 2003 is not applicable tothe Company.

15 The Company has given guarantees on behalfof its subsidiary during the year under review.In our opinion based on the information andexplanations received, the terms and conditions ofthese guarantees are not prejudicial to the interest

of the company.

16 The term loans taken during the year are utilisedfor the purpose for which it was taken.

17 According to the information and explanationsreceived the Company has not applied short-termborrowings for long-term use.

18 The Company has not made any preferentialallotment of shares during the year.

19 The Company has not issued any debentures duringthe year.

20 The Company has not raised money by way ofpublic issue during the year.

21. As per the information and explanation given to usno material fraud on or by the Company has been

noticed during the year.or SHAH & CO.

Chartered Accountants

H. n SHAHPartner

M. No. 8152Mumbai: 1 t June 2009



4040

Schedule 31.03.2009 31.03.2008

nos Rs.i Lacs Rs.i Lacs Rs.in LacsI. SOURCES OF FUnDS

1. Shareholders’ Fu ds 1a) Capital 2,816.95 2,816.95b) Reserves and Surplus 3,353.80 3,958.73

6,170.75 6,775.682. Loa Fu ds 2

a) Secured 13,210.65 13,841.45b) Unsecured 7,844.07 5,972.71

21,054.72 19,814.16TOTAL

27,225.47

26,589.84II. APPLICATIOn OF FUnDS1. Fixed Assets 3

a) Gross Block 22,118.52 21,509.47Less : Depreciation 7,295.05 6,244.09Net Block 14,823.47 15,265.38

b) Capital Work In Progress 67.50 282.5114,890.97 15,547.89

2. I vestme ts 4 2,553.56 3,123.173. Curre t Assets, Loa s a d Adva ces 5

a) Inventories 4,718.90 5,232.31

b) Sundry Debtors 4,263.88 3,139.94c) Cash and Bank Balances 138.24 767.38d) Loans and Advances 2,884.85 2,983.54

12,005.87 12,123.17Less : Current Liabilities and Provisions 6 5,427.18 4,204.39net Curre t Assets 6,578.69 7,918.78

4. Pro t & Loss Account Debit Balance 3,202.25 –(Net of General Reserve Adjustment)

TOTAL 27,225.47 26,589.84

BALANce SHeet AS At 31 St MARcH, 2009

As per our report of even date.For and on behalf of Ms. Urvi A. Piramal Chairperson SHAH & CO Mr. Harshvardhan A. Piramal Executive Vice Chairman Chartered Accountants Mr. P.K. Gothi Managing Director

Mr. Mahesh S. Gupta Director H.N. SHAH Mr. Ranjan Sanghi Director Partner Mr. Shobhan Thakore Director Membership No. 8152 Mr. Shailesh Haribhakti Alternate Director to Mr. Takao Yajima

Mr. S.C. Kashimpuria Head - Finance & Accounts & Company SecretaryMumbai : 1 st June, 2009




Schedule 31.03.2009 31.03.2008

nos Rs.i Lacs Rs.i Lacs Rs.in LacsInCOMEIncome from Operations 20,573.11 17,396.06Less : Excise Duty 14.67 266.72Net Income from Operations 20,358.44 17,129.34Other Income 3.71 1.00Increase / (Decrease) in WIP & Finished Goods (423.71) 635.62Total I come 19,938.44 17,765.96EXPEnDITUREMaterials Consumed ,001.24 6,689.33Manufacturing & Other Expenses 10 7,233.83 6,416.68Employment Cost 11 1,818.34 1,732.23Administrative, Selling & Other Expenses 12 3,193.89 2,844.59

orex Loss / (Gain) 1,786.83 (163.69)Interest 13 2,045.18 1,490.34Total Expenditure 22,079.31 19,009.48Pro t / (Loss) Before Depreciation & Tax (2,140.87) (1,243.52)Less: Depreciatio 1,050.96 1,009.69Pro t / (Loss) Before Tax & Exceptional item (3,191.83) (2,253.21)Exceptional Item 587.25 —(Provision for Diminution in Investment)(Refer Note 13 of Schedule 15)Pro t / (Loss) after Exceptional item but Before Tax (3,779.08) (2,253.21)

Less: Fringe Bene t Tax 28.10 20.91Pro t / (Loss) After Tax (3,807.18) (2,274.12)Pro t / (Loss) brought forward from previous year (901.49) 1,372.63Pro t / (Loss) carried to the Balance Sheet (4,708.67) (901.49)Earning Per Equity Share (Rs.) (Face value Rs.10/-each)(After Exceptional item) (21.28) (12.84)Earning Per Equity Share (Rs.) (Face value Rs.10/-each)(Before Exceptional item) (18.04) (12.84)(Refer sr.no.18 of Schedule 15)Accounting Policies 14 Notes to the Accounts 15

PRoFit & LoSS Acco Nt FoR tHe Y AR eNDeD 31 t MARcH, 2009

As per our report of even date.For and on behalf of Ms. Urvi A. Piramal Chairperson SHAH & CO Mr. Harshvardhan A. Piramal Executive Vice ChairmanChartered Accountants Mr. P.K. Gothi anaging Director





4242

31.03.2009 31.03.2008

Rs. i Lacs Rs. i Lacs Rs. in LacsSCHEDULE - 1 :

A) Share Capital

Authorised :

4,30,00,000 (Previous Year 4,30,00,000)Equity Shares of Rs. 10/- each 4,300.00 4,300.00

10,00,000 (Previous year 10,00,000) 5% RedeemableCumulative Non Convertible PreferenceShares of Rs. 100/- each 1,000.00 1,000.00

5,300.00 5,300.00Issued , Subscribed a d Paid- up:

1,81,69,463 (Previous Year 1,81,69,463)Equity Shares of Rs. 10/- each Fully Paid up(Includes 77,86,913 fully paid Equity Shares ofRs.10/- each issued on Rights basis in 2006-07 1,816.95 1,816.95- see note 12 in Schedule 15)

10,00,000 5% (Previous year 5%) Redeemable CumulativeNon Convertible preference Shares of Rs. 100/-each (Redeemable anytime between15th November, 2014 and 15 th November,2019at the Company’s option) 1,000.00 1,000.00

2,816.95 2,816.95

B) Reserves and Surplus

1. Ge eral Reserve

- Opening balance 1,506.42 1,506.42

Less : Deducted from Pro t & Loss Account per contra 1,506.42 901.49

— 604.93

2. Share Premium Accou t

- Opening balance 3,353.80 3,353.80

3,353.80 3,958.73

TOTAL 6,170.75 6,775.68

ScHeDULeS FoRMiNG PARt oF tHe BALANce SHeet AS At 31 St MARcH, 2009




31.03.2009 31.03.2008

Rs. i Lacs Rs. i Lacs Rs. in LacsSCHEDULE - 2 : LOAn FUnDS

A) Secured Loans

Term Loa from Ba k 6,644.14 6,925.50

(Repayable within one year Rs.970.98 lacs-Previous year Rs.1200 lacs)

(Secured by a paripassu charge on the movable assetsincluding its moveable plant and machinery, spare, tools andaccessories secured by a paripassu equitable mortgage oncompany’s immovable properties at Butibori, Nagpur)

Term Loa from Fi a cial I stitutio 125.00 187.50

(Repayable within one year Rs.62.50 lacs-Previous year Rs.62.50 lacs)

(Secured by way of Equitable Mortgage on Company’sImmovable Properties at Butibori, Nagpur and by a chargecreated on Co’s moveable assets including its moveable plantand machinery spares ,tools and accessories, both present andfuture, subject to prior charge of Company’s Bankers)

Cash Credit/Packi g Credit from Ba ks 6,441.51 6,728.45

(Secured by way of hypothecation of Current Assets ofthe Company viz., Raw Materials, Stock- In - Process, Fin-ished Goods, consuambles store and spares , book debts andother moveable both present and future and secured by paripassu second charge created on Company’s moveable assetsincluding its moveable plant and machinery, spares, tools andaccessories both present and future

TOTAL 13,210.65 13,841.45

B) Unsecured Loans

Bodies Corporate 7,737.13 4,269.18

Banks (Repayable within one year) 106.94 1,703.53

TOTAL 7,844.07 5,972.71

S HeDULeS FoRMiNG PARt oF tHe BALANce SHeet AS At 31 St M R H, 2009



4444

S c H e D U L e S F o R M i N G P A R t o F t H e B A L A N c e S H e e t A S A t 3 1 S t

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4 1 7 2 . 6 0

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1 6 8 3 7 . 5 9

4 8 2 4 . 6 4

8 7 2 . 0 8

—

5 6 9 6 . 7 2

1 1 1 4 0 . 8 7

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—

2 9 2 . 5 5

2 3 0 . 4 4

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V e h i c l e s

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—

—

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2 0 . 6 4

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i b l e A s s e t s

D e s i g n s & A r c h i v e s

2 7 7 . 4 2

—

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2 7 7 . 4 2

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—

9 0 . 3 7

1 8 7 . 0 5

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2 4 . 2 5

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2 1 5 0 9 . 4 7

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2 2 1 1 8 . 5 2

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1 0 5 0 . 9 6

—

7 2 9 5 . 0 5

1 4 8 2 3 . 4 7

1 5 2 6 5 . 3 8

P r e v i o u s Y e a r

1 9 7 3 7 . 0 8

1 9 0 3 . 5 8

1 3 1 . 1 9 2 1 5 0 9 . 4 7

5 3 1 0 . 5 3

1 0 0 9 . 6 9

7 6 . 1 3

6 2 4 4 . 0 9

1 5 2 6 5 . 3 8

C a p i t a l W . I . P .

6 7 . 5 0

2 8 2 . 5 1

G r a n d

T o t a l

1 4 8 9 0 . 9 7

1 5 5 4 7 . 8 9




31.03.2009 31.03.2008

Rs. i Lacs Rs. i Lacs Rs. in LacsSCHEDULE - 4 : InVESTMEnTS

LOnG TERM In ESTMEnTS

Government securties (Unquoted) 0.64 0.64

Trade Investments (Unquoted)

Wholly ow ed Subsidiary

Morarjee International srl (Euro 10000) 5.61 5.61

(10000 Equity Shares of Euro 1 each fully paid up)

SubsidiaryIntegra Apparels and Textiles Limited 1,687.64 1,670.00(77,98,000 (Previous year 77,00,000)Equity Shares of Rs.10 each fully paid up)

Men’s Club s.p.a. 587.25(10,20,000 Equity Shares of EURO 1 each fully paid up)(Previous year 10,20,000 Equiy shares of EURO 1 each)

Less : Provision for Diminution in Investment 587.25 — 587.25(Refer Note 13 in Schedule 15)

Joi t Ve ture

Morarjee Castiglioni (I) Private Limited 64.10 64.10

(10,00,000 Equity Shares of Rs.10 each fully paid up )

Just Textiles Limited 795.56 795.56(7,95,560 Equity Shares of Rs.100 each fully paid up)

Others

Morarjee Goculdas Spinning & Weaving Private Limited 0.01 0.01(Formerly known as Morarjee Legler Private Limtied)(2000 Equity Shares of Rs.10 each fully paid up)

TOTAL 2,553.56 3,123.17




4646

SCHEDULE - 5 : CURREnT ASSETS, LOAnS AnD ADVAnCES

a) Inventories

Raw materials 1,012.95 957.08

Work-In- Progress 1,998.80 2,723.09

Finished Goods 1,445.88 1,179.39

Consumable, Stores, spares..etc 261.27 372.75

4,718.90 5,232.31

b) Sundry Debtors (Unsecured, considered good)Outstanding for more than Six months 415.08 351.21

Others 3,848.80 2,788.73

4,263.88 3,139.94

c) Cash and Ban Balances

Cash in hand 6.88 4.88

Bank Balances

-- in current account 25.35 41.99

-- in Fixed Deposits 106.01 720.51

138.24 767.38

d) Loans and Advances (Unsecured and considered good)

i) Advances recoverable in cash or kind or forvalue to be received 1,133.04 1,256.83

ii) Deposit and other advances 245.07 192.30

iii) Loans to Subsidaries 355.91 322.24

iv) Advances to Staff 30.91 27.44

v) Deposit with excise / Sales Tax authorities 931.68 995.76

vi) Loans to Company in which Directors are interested — 0.73(Morarjee Goculdas Spinning & Weaving Private Limited -Formerly Morarjee Legler Private Limited )

vii) MAT Credit Entitlement 188.24 188.24

2,884.85 2,983.54TOTAL 12,005.87 12,123.17

31.03.2009 31.03.2008 Rs. i Lacs Rs. i Lacs Rs. in Lacs

ScHeDULeS FoRMiNG PARt oF tHe BALANce SHeet AS At 31 St MARcH, 2009




SCHEDULE - 6 : CURREnT LIABILITIES AnD PROVISIOnS

Curre t Liabilities

I) Acceptances 1,328.12 1,054.21

II) Sundry Creditors

i. Dues of Micro and small Enterprises 91.05 32.81(See Note No.7 in Schedule 15)

ii. Others 3639.26 2,764.80

3,730.31 2,797.61

III) Interest Accrued but not due 45.66 86.99

IV) Investor Education and Protection Fund *

- Unclaimed Dividend 8.91 9.45

V) Trade Deposits 117.91 118.42

5,230.91 4,033.87

Provisio s

Provision for MAT & Fringe Bene t Tax (net) .56 2.90

Employees Retirement Bene ts 189.71 167.62

196.27 170.52TOTAL 5,427.18 4,204.39

There is no amount due and outstanding to be paid to the InvestorEducation and Protection Fund as at 31 t March, 2009. Theseamounts shall be paid to the fund as and when they become due.

31.03.2009 31.03.2008Rs. i Lacs Rs. i Lacs Rs. in Lacs




4848

31.03.2009 31.03.2008

Rs. i Lacs Rs. i Lacs Rs. in LacsSCHEDULE - 7 : OTHER InCOMEInsurance Claim Received 3.63 —Pro t on Sale of Assets — 1.00Miscellaneous Receipt 0.08 —

TOTAL 3.71 1.00SCHEDULE - 8 : INCREASE /(DECREASE ) IN WORk

In PROGRESS AnD FInISHED GOODSOpe i g StockWork in Progress 2,723.09 2,300.77

Finished Goods & Stock in Trade 1,179.39 965.103,902.48 3,265.87Closi g StockWork in Progress 1,998.80 2,723.09Finished Goods & Stock in Trade 1,445.88 1,179.39

3,444.68 3,902.48Excise Duty (Increase) / Decrease on Finished Goods 34.09 (0.99)Increase / (Decrease ) (423.71) 635.62

SCHEDULE - 9 : MATERIAL COnSUMEDOpening Stock 957.08 802.26Add: Purchases 6057.11 6,844.15Less: Closing Stock 1012.95 957.08Material Consumed TOTAL 6,001.24 6,689.33

SCHEDULE -10 : MAnUFACTURInG EXPEnSES& OTHER EXPEnSES

Processing Charges 1,773.28 1,410.23Dyes & Chemicals 1,961.30 1,904.62Packing Material 184.88 140.67Stores & Spares 337.56 347.19

Other Consumables 220.57 187.62Repairs & Maintenance -Building 24.10 19.87Repairs & Maintenance -Plant & Machinery 213.11 210.21Repairs & Maintenance -Others 23.22 15.24Power & Fuel 2,319.39 2,041.77Rates, Taxes & Water charges 165.27 132.36Other Expenses 11.15 6.90

TOTAL 7,233.83 6,416.68

ScHeDULeS FoRMiNG PARt oF tHe PRoFit & LoSS AccoUNtFoR tHe YeAR eNDeD 31 St MARcH, 2009



5050

SCHEDULE - 14 : ACCOUnTInG POLICIES

1. Basis of preparation of nancial statement(a) Basis of Accounting

The nancial statements have been prepared and presented under the historical cost convention on accrualbasis of accounting to comply with the accounting standards prescribed in the Companies (AccountingStandards) Rules, 2006 and with the relevant provisions of the Companies Act, 1956.

(b) Use of EstimatesThe preparation of nancial statements in conformity with generally accepted accounting principles (GAAP)in India requires Management to make estimates and assumptions that affect the reported amounts of assetsand liabilities and the disclosures of contingent liabilities on the date of nancial statements.

2. Fixed AssetsAll the xed assets are stated at historical cost. In respect of Assets acquired under new project/ expansion/restructuring, interest cost on borrowings and other related expenses during trial runs and upto satisfactorycommencement of commercial production have been capitalised to Plant & Machinery and any subsidy givenfor a speci c asset is reduced from cost. The Accounting Standard -10 of the Institute of Chartered Accountantsof India has been compiled with in this respect.

3. DepreciatioDepreciation has been provided net of reversal of excess provision if any on straight line method on all xedassets except Leasehold land at the rates speci ed in Schedule XIV to the Companies Act, 1956. Premium onlease hold land is amortised over the period of lease. Intangible assets are amortised over their estimated usefullife.

4. Lease Accou ti g Lease rentals on assets taken on lease are recognized as expense in the statement of pro t and loss account onan accrual basis over the lease term.

5. I ve torya) Raw materials, work in progress, nished goods, packing materials, stores, spares, traded goods and

consumables are carried at the lower of cost and net realisable value. The comparison of cost and net realisablevalue is made on an item-by-item basis. Damaged, unserviceable and inert stocks are suitably depreciated.

b) In determining cost of raw materials, packing materials, traded goods, stores, spares and consumables,weighted average cost method is used. Cost of inventory comprises all costs of purchase, duties, taxes(other than those subsequently recoverable from tax authorities) and all other costs incurred in bringing theinventory to their present location and condition.

c) Cost of nished goods and work-in-process includes the cost of raw materials, packing materials, anappropriate share of xed and variable production overheads, excise duty as applicable and other costs

incurred in bringing the inventories to their present location and condition. Fixed production overheads areallocated on the basis of normal capacity of production facilities.

6. I vestme tsLong term investments are carried at cost. Provision for diminution in the value of long term investments is madeonly if such a decline is not temporary in the opinion of the management. Short term investments are carried atlower of cost and fair value. The comparison of cost and fair value is done separately in respect of each categoryof investments.Pro t and loss on sale of investments is determined on a rst in rst out (FIFO) basis.




. Reve ue Recog itio

Revenue is recognized only when there is no signi cant uncertainty as to the measurability / collectability ofamoun .. Transactions in Foreign Exchange

Transactions in foreign currency are recorded at the exchange rate prevailing on the date of the transaction.Exchange differences arising on foreign exchange transactions settled during the year are recognized in the Pro tand loss account of the year.Monetary assets and liabilities denominated in foreign currencies, which are outstanding as at the year end aretranslated at the closing exchange rate and the resultant exchange differences are recognized in the Pro t andloss account.The premium or discount on forward exchange contracts is recognized over the period of the contracts in thepro t and loss account.

. Employee Bene ts(i) Short Term Employee Bene ts:

All employee bene ts payable wholly within twelve months of rendering the service are classi ed as shortterm employee bene ts and they are recognized in the period in which the employee renders the relatedservice. The Company recognises the undiscounted amount of short term employee bene ts expected to bepaid in exchange for services rendered as a liability (accrued expense) after deducting any amount alreadypaid.

(ii) Post-Employment Bene ts:(a) De ned contribution plans

De ned contribution plans are, Government administered Provident Fund Scheme and Governmentadministered Pension Fund Scheme for all employees and Superannuation scheme for eligible employees.The Company’s contribution to de ned contribution plans are recognized in the pro t and loss accountin the nancial year to which they relate.The interest to the bene ciaries every year is being noti ed by the Government.

(b) De ned bene t plans(i) De ned bene t gratuity plan

The Company operates a de ned bene t gratuity plan for employees.The cost of providing de ned bene ts is determined using the Projected Unit Credit Method withactuarial valuations being carried out at each balance sheet date. Past service cost is recognizedimmediately to the extent that the bene ts are already vested, else is amortised on a straight-linebasis over the average period until the amended bene ts become vested.The de ned bene t obligations recognized in the balance sheet represents the present value of thede ned bene t obligation as adjusted for unrecognized actuarial gains and losses and unrecognizedpast service costs, and as reduced by the fair value of plan assets, if applicable. Any de ned bene tasset (negative de ned bene t obligations resulting from this calculation) is recognized representingthe unrecognized past service cost plus the present value of available refunds and reductions infuture contributions to the plan.



5252

(iii) Other long term employee bene ts

Entitlements to annual leave and sick leave are recognized when they accrue to employees. Sick leave canonly be availed while annual leave can either be availed or encashed subject to a restriction on the maximumnumber of accumulation of leaves. The Company determines the liability for such accumulated leaves usingthe Projected Accrued Bene t Method with actuarial valuations being carried out at each balance sheetdate.

10. Provision for TaxationIncome tax expense comprises of current tax (i.e. amount of tax for the period determined in accordance withthe Income Tax Act, 1961), deferred tax charge or credit (re ecting the tax effects of timing differences betweenaccounting income and taxable income for the period) and fringe bene t tax (computed in accordance with therelevant provisions of the Income tax Act, 1961).The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized usingthe tax rates that have been enacted or substantively enacted by the balance sheet date.Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realisedin future; however, where there is unabsorbed depreciation or carry forward loss under taxation laws, deferredtax assets are recognized only if there is a virtual certainty of realisation of such assets. Deferred tax assets arereviewed as at each balance sheet date to reassess realisation.

11. Provisio s a d Co ti ge ciesThe company creates a provision when there exists a present obligation as a result of a past event that probablyrequires an out ow of resources and a reliable estimate can be made of the amount of the obligation. A disclosurefor a contingent liability is made when there is a possible obligation or a present obligation that may, but probablywill not require an out ow of resources. When there is a possible obligation or a present obligation in respect ofwhich likelihood of out ow of resources is remote, no provision or disclosure is made.

12. Ear i gs per shareThe basic and diluted earnings per share (“EPS”) is computed by dividing the net pro t after tax for the year byweighted average number of equity shares outstanding during the year.

13. Proposed Divide dDividend if any recommended by the Board of Directors is provided for in the accounts, pending approval atthe Annual General Meeting.




ScHeDULe FoRMiNG PARt oF tHe BALANce SHeet AS At 31 St M RcH, 2009

SCHEDULE - 15 : nOTES FORMInG PART OF THE ACCOUnTS

1 a) Contingent Liability not provided for in respect of31.03.2009 31.03.2008

Rs. i Lacs Rs. in Lacs

Bank Guarantees 440.99 216.76

Corporate Guarantee 5,450.00 3,750.00

b) Contingent Liability for bill discounted Rs.433.72 lacs. (Previous year Rs.354.55 lacs) and dividend onPreference shares together with dividend Tax Rs.117.00 lacs (Previous year Rs.58.50 lacs)

c) Estimated amount of contracts remaining to be executed on capital accounts and not provided for Rs.Nil(Previous year Rs.25.49 lacs)

d) The Excise department and Income Tax department has raised claims on the Company for Rs.1663.24 lacsand Rs.Nil (previous year Rs.1497.61 lacs and Rs. 1455.59 lacs ) respectively. The Company has disputedthe same with the appropriate authority.

31.03.2009 31.03.2008Rs. i Lacs Rs. in Lacs

2 Open Letters of credit 98.21 824.01

Year E ded 31.03.2009 Year Ended 31.03.2008U it Qua tity Value U it Quantity Value

3 a) Consumption of Raw Material (Rs. in Lacs) Rs. in Lacs)Cotton ons 1260.59 176.16 ons 1264.56 1630.69Yarn ons 1009.44 050.82 ons 1,083.01 3612.52Cloth Lac Mtrs 41.14 774.26 Lac Mtrs 30.55 1446.12

001.24 6689.33

b) Value of Imported and Indigenous Raw Value Value %Materials, Stores, Spares parts, (Rs. Lacs) Rs. Lacs)Components, dyes & chemicals.i) Raw Material

i) Imported 1,137.94 18.96 1,591.75 23.80

ii) Indigenous 4,863.30 81.04 5,097.58 76.20 6,001.24 100.00 6,689.33 100.00

ii) Stores & Spares components,Dyes & Chemicalsi) Imported 287.47 12.50 225.97 10.04ii) Indigenous (including imported

items purchased locally) 2,011.39 87.50 2,025.84 89.96 2,298.86 100.00 2,251.81 100.00



5454

31.03.2009 31.03.2008

(Rs. in Lacs) (Rs. in Lacs)c) i) Value of Imports calculated on C.I.F. basis

i) Raw Materials 1,308.86 1,568.20ii) Consumables 253.48 184.80iii) Capital Goods 109.36 61.60

ii) Expenditure in Foreign Currencyi) Professional Fees 178.55 79.84ii) Marketing Service fee and Sales

Commission 623.09 545.13iii) Foreign Travel 47.30 47.60

iv) Others 124.47 86.69iii) Earning in Foreign Currency

FOB Value of Exports 12,495.46 10,222.59

4 Turnover/Production Year E ded 31.03.2009 Year Ended 31.03.2008 U it Productio Tur over Unit Production Turnover

(Quantity) Quantity Value (Quantity) Quantity ValueRs. i Lacs (Rs. in Lacs)

Manufactured Goods

Lac LacFinished Fabric Mtrs 171.16 169.54 19,790.50 Mtrs 148.09 147.46 16,586.34

Yarn To s 938.59 48.26 41.45 Tons 928.72 109.60 89.42Others * 741.16 720.30

Total 20,573.11 Total 17,396.06

* Consists of sale/ use of DEPB licence, waste etc.

Lice sed I stalled Licensed InstalledCapacity Capacity Capacity Capacity

LOOMS NOS not Applicable 248 Not Applicable 248SPINDLES NOS not Applicable 31,568 Not Applicable 31,568

Inventory Stock as o 31.03.2009 Stock as on 31.03.2008

Qua tity Value Quantity Value(Lac Mtrs) Rs. in Lacs (Lac Mtrs) Rs. in Lacs

Finished Fabric 9.80 1,445.88 8.18 1,179.39




5 Auditor’s Remuneration 31.03.2009 31.03.2008

(Rs. in Lacs) (Rs. in Lacs)Audit Fees 6.50 5.50Tax Audit Fees 1.50 1.50Certi cation fees 2.75 3.25Out of Pocket Expenses 0.15 0.50

0.90 10.756 (a) Computation of Pro t under section 349 of the

Companies Act, 1956.Net Pro t / (Loss) as per Pro t and Loss Account (3,807.18) (2,274.12)Add : Exceptional items 587.25

Add: Fringe Bene t Tax 28.10 20.91Less: Pro t on sale of assets 1.00Pro t / (Loss) as per Section 349 of the Companies Act, 1956 (3,191.83) (2,254.21)Add: Managerial Remuneration 102.85 101.85Pro t / (Loss) as per Section 198 of the Companies Act, 1956 (3,088.98) (2,152.36)

(b) Remuneration to Whole Time DirectorsSubject to Ceiling of 10% of the Pro ts Calculated aboveTotal remuneration actually paid is minimum under Schedule XIII 8.05 98.05

(c) Managerial Remuneration paidRemuneration 3.60 63.60Contribution to provident fund & Other 5.90 15.90Perks 8.55 18.55

98.05 98.05Directors sitting fees 4.80 3.80Commission to non executive directors

102.85 101.85The above remuneration does not include gratuity provision based on acturial valuation.7 There are no Micro and Small Enterprises , to whom the Company owes dues, which are outstanding for more

than 45 days as at 31 st March, 2009. 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 identi ed on thebasis of information available with the Company. The names are as follows:Suresh Polymers Private Limited, Bindal Packagings, RSA Industries Private Limited, Shirish PolychemPrivate Limited, AGS Infotech Private Limited, Bajrang Spiropack Private Limited, Bluecoat Private Limited,Mtex Machines Private Limited, Nova Transfers Private Limited, Paresh Chemicals Private Limited, ThakerEngineering Company Private Limited & Valkal Concepts Private Limited

8 The accumulated deferred tax assets of the Company has not provided in the books of accounts due to virtualuncertainty of realisation of such assets.

9 The Company is engaged in manufacture of textile products which is considered as the only reportable businesssegmen .



5656

10 Employee Bene ts:(a) Short term employee bene ts:

The liability towards short term employee bene ts for the year ended 31 st March, 2009 has been recognisedin the Pro t and Loss Account.

(b) Post - employment bene ts:The following disclosures are made in accordance with AS 15 (Revised) pertaining to De ned Bene t Plans:

U fu ded 31.03.2009 Unfunded 31.03.2008Gratuity Leave Gratuity Leave

E cashme t EncashmentAmount Recognised in Balance sheet Rs. i Lacs Rs. i Lacs Rs. in Lacs Rs. in LacsPresent Value of Unfunded Obligation 137.91 51.80 117.72 49.90Unrecognised Past Service Cost - - - -Amount not recognised as on Asset,because of the limit in Para 59(b) - - - -Amount in Balance SheetLiability 137.91 51.80 117.72 49.90Assets - - - -Net Liability 137.91 51.80 117.72 49.90Expense Recognised in the Statement of Pro t & Loss Opening De ned Bene t Obligation less bene ts Paid - - - -Current Service Cost 13.68 12.41 16.44 20.96

Interest Cost on De ned Bene t Obligation 9.42 3.99 6.68 3.84Expected Return on Plan Assets - - - -Net Acturial Losses / (Gains) Recognised in Year 6.11 0.73 25.84 4.39Past Service Cost - - - -Effect of the limit in Para 59(a) - - - -Losses / (Gains) on “Curtailments and Settlements” - - - -Total Included in “Employee Bene t Expense” 29.21 17.13 48.96 29.19Change in De ne Bene t Obligation Opening De ned Bene t Obligation as at 01.04.2008 117.72 49.90 83.48 47.99Current Service Cost 13.68 12.41 16.44 20.96Interest Cost 9.42 3.99 6.68 3.84

Acturial Losses / (Gain) 6.11 0.73 25.84 4.39Liabilities Extinguished on Curtailment - - - -Liabilities Extinguished on Settlements - - - -Liabilities Assumed on Acquisation - - - -Exchange Difference on Foreign Plans - - - -Bene ts Paid (9.02) (15.23) (14.72) (27.28Closing De ned Bene t Obligation as at 31.03.2009 137.91 51.80 117.72 49.90




Summary of the Acturial Assumptions :

Note :1. The estimates of future salary increases, considered in acturial valuation, takes into account thein ation,seniority, promotion and other relevant factors.

2 . Comparative values of de ned bene t plans for the past four nancial years as required by AS-15 (Revised)are not provided, being March 2008 rst year of adoption of the standard.

11 Till date no options under the Employees Stock Option Plan has been exercised by any of the eligibleemployees. Considering the present market price of the Equity Share of the company it is unlikely that theoptions will be exercised in future also and accordingly the options granted under the Plan are not treatedas potential equity shares as de ned in Accounting Standard -20 “Earning Per Share” and thus no impact ofdilution on EPS is considered.

12 During the year ended 31.03.2007, the Company raised Rs.4282.80 lacs by issue of 77,86,913 fully paid equityshares of Rs.10/- each at a premium of Rs.45/- per equity share to the existing equity shareholders on rightsbasis. Post this issue the Company’s share capital has increased to Rs.1816.95 lacs.The Company has also allotted 51,91,275 detachable warrants in the ratio of 2 warrants for every 3 equity sharesallotted pursuant to the aforesaid rights issue. The holders of warrants can exercise their right to convert thewarrant at Rs.100/- per warrant into equity share at any time after 12 months from the date of allotment but notlater than 36 months from the date of allotment or as decided by the Company.

13 Considering the continued losses incurred by Mens’ Club. s.p.a., subsidiary of the Company and taking intoaccount its future prospects the Company has provided for diminution of the entire value of investment in Men’sClub s.p.a.

14 The Company has taken vehicles on an operating lease basis for a period of 48 & 60 months. The lease rentalsare payable on monthly instalements by the Company.Future minimum lease rentals payable as per the lease agreements:

Rs.i lacs Rs.in lacs 31.03.2009 31.03.2008

a) Not later than one year 27.01 33.19b) Later than one year but not later than ve years 31.06 49.15c) Later than ve years — —

Total 58.07 82.34Lease payment recognised in Pro t & Loss account for the year is Rs.35.97 lacs (Previous year Rs.26.95 lacs)

15 A) Pursuant to Accounting Standard (AS-27) - Financial Reporting of interest in Joint Venture, the disclosuresrelating 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 31 t March, 2009Rs.i lacs Rs.in lacs

Particulars 31.03.2009 31.03.2008i Assets 2740.42 2810.98ii Liabilities 1715.10 1829.35iii Income 2233.46 2049.07iv Expenses 2227.37 2015.59



5858

c) The Company’s share of capital commitments of the JV as at 31 st, March, 2009 is Rs.Nil (Previous yearRs.Nil)

d) The Company’s share of contingent liabilities of the JV as at 31 st, March, 2009 is Nil. (Previous yearRs.Nil)

e) No contingent liabilities and capital commitments have been incurred as at 31 st March, 2009 in relationto the Company’s interest in the JV alongwith the other venture.

B) Pursuant to Accounting Standard (AS-27) - Financial Reporting of interest in Joint Venture, the disclosuresrelating to the joint Ventureviz. 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 31 st March, 2009Rs. i Lacs Rs. in Lacs

Particulars 31.03.2009 31.03.2008i Assets 84.44 84.27ii Liabilities 4.97 4.88iii Income 0.60 0.75iv Expenses 0.89 0.12

c) The Company’s share of capital commitments of the JV as at 31 st, March, 2009 is Rs.Nil .(Previous yearNil)

d) The Company’s share of contingent liabilities of the JV as at 31 st, March, 2009 is Nil. (Previous year

Nil)e) No contingent liabilities and capital commitments have been incurred as at 31 st March, 2009 in relation

to the Company’s interest in the JV alongwith the other venture. (Previous year Nil)16 The Sundry Debtors include Rs 196.79 lacs (Previous year Rs. 114.67 lacs) due from subsidiary companies.17 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. Associate Compa ies

Peninsula Land LimitedAshok Piramal Management Corporation Limited

Morarjee Goculdas Spinning & Weaving Private Limited(Formerly Morarjee Legler Private Limited)Peninsula Facility Management Services Private Limited

B. Subsidary Compa iesMorarjee International s.r.l.Integra Apparels & Textiles LimitedMen’s Club s.p.a.




Subsidary of Integra Apparels & Textiles Limited

Pranit Consultants Private LimitedSubsidary of Pra it Co sulta ts Private LimitedFabritex Exports Private Limited

C. Joi t Ve turesMorarjee Castiglioni (I) Private Limited Just Textiles Limited

D. Key Ma ageme t Perso elMr.Harshvardhan A. PiramalMr.P.K.GothiDetails of Transactions are as follows:

31.03.2009 31.03.2008 Rs. i Lacs Rs. in LacsA Sales to a d recoveries from related parties

Subsidary Companies

Integra Apparels & Textiles Limited 174.51 203.27Men’s Club s.p.a. 20.45 158.88

Joint Ventures

Just Textiles Limited - 148.94B Purchase a d other Services from related parties

Subsidary CompaniesMorarjee International srl 311.57 364.04Associate Companies

Ashok Piramal Management Corporation Limited 68.69 103.96Peninsula Land Limited - 38.28

Peninsula Facility Management Services Private Limited 44.16 -

Joint Ventures Just Textiles Limited 15.33 283.81

C Purchase and other Services from related parties (capital items

Joint Ventures Just Textiles Limited 8.93

D Loa / Adva ce paid to related parties

Subsidary CompaniesMorarjee International srl 8.95 -



6060

E I vestme ts

Subsidary Companies

Men’s Club s.p.a. - 10.96Integra Apparels & Textiles Limited 17.64 -

F I terest recevied from related parties

Subsidary CompaniesIntegra Apparels & Textiles Limited 6.46 4.78

G Remu eratio / Sitti g FeesKey Management Personel

Mr. Harshvardhan A. Piramal 50.50 50.50

Mr. P. K. Gothi 47.55 47.55Sitting Fees & Commission 4.80 3.30

H Re t paid

Associate CompaniesPeninsula Land Limited 111.67 111.67

I Outsta di g bala ce

Due to Associate CompaniesAshok Piramal Management Corporation Limited 10.42 -

Peninsula Land Limited 218.25 143.41

Peninsula Facility Management Services Private Limited 49.14 0.00Due to Joint Venture Companies

Morarjee Castiglioni (I) Private Limited 145.16 146.34Just Textiles Limited 34.56 14.32

Due from Subsidary Companies

Morarjee International srl 306.23 277.68

Integra Apparels & Textiles Limited 169.96 83.58Men’s Club s.p.a. 76.50 75.66

Due from Associate CompaniesMorarjee Goculdas Spinning & Weaving Private Limited - 0.73

(Previously Morarjee Legler Private Limited)





18 Earnings Per Share (Basic / Diluted)

31.03.2009 31.03.2008(After Prior Period and Exceptional items) Rs. i Lacs Rs. i Lacs Rs. in Lacs Rs. in Lacs

a. Pro t / (Loss) after Tax (3,807.18) (2,274.12)Less: Preference Share Dividend & Taxes 8.50 (3,865.68) 58.50 (2,332.62)

b. Number of Shares (weighted average) 18169463 18169463c. Earnings Per Share (Rs) (21.28) (12.84)

Earnings Per Share (Basic / Diluted) 31.03.2009 31.03.2008

(Before Prior Period and Exceptional items) Rs. i Lacs Rs. i Lacs Rs. in Lacs Rs. in Lacs

a. Pro t / (Loss) after Tax (3,807.18) (2,274.12)Less : Exceptional items 587.25 -Less: Preference Share Dividend & Taxes 8.50 (3,278.43) 58.50 (2,332.62)

b. Number of Shares (weighted average) 18169463 18169463c. Earnings Per Share (Rs) (18.04) (12.84)

19 Previous year’s gures have been regrouped / reclassi ed wherever necessary.

Signature to Schedules 1 to 15As per our report of even date.For and on behalf of Ms. Urvi A. Piramal Chairperson SHAH & CO Mr. Harshvardhan A. Piramal Executive Vice ChairmanChartered Accountants Mr. P.K. Gothi anaging Director


Mr. S.C. Kashimpuria Head - Finance & Accounts & Company SecretaryMumbai : 1 t June, 2009



6262

31st March, 2009 31st March, 2008

Rs. i Lacs Rs. i Lacs Rs. in Lacs Rs. in Lacs

A. CASH FLOW FROM OPERATInG ACTIVITIES

Net Pro t/(Loss) (3807.18) (2274.12)

Provison for Tax - FBT 28.10 20.91

Exceptional Item 587.25 —

Depreciation 1050.96 1009.69

Interest Expense 2078.04 1568.77

Interest Income(32.86)

(78.43)Pro t on Sale of Assets — (1.00)

3711.49 2519.94

Operating Pro t Before Wor ing Capital Changes (95.69) 245.82

Adjustments for Changes in Working Capital

(Increase)/Decrease in Trade andOther Receivables (991.58) 789.02

(Increase) /Decrease in Inventories 513.41 (811.07)

Increase/(Decrease) in Trade Payables 1260.46 (2.79)

782.29 (24.84)

Cash From Operating Activities 686.60 220.98

Less: Income Tax Paid (FBT) 24.44 19.24

Net Cash From Operating Activities (A) 662.16 201.74

B. CASH FLOW FROM InVESTInG ACTIVITIES

Purchase of Fixed Assets (394.04) (1480.66)

Sale of Fixed Assets 0.00 56.06

Loans (to) / from subsidiaries (33.67) (10.24)Interest Income 32.86 78.43

Purchase of Investments (17.64) (10.96)

Net Cash Used in Investing Activities (B) (412.49) (1367.37)

cASH FLoW StAteMeNt FoR tHe YeAR eNDeD 31 St MARcH, 2009




As per our report of even date.For and on behalf of Ms. Urvi A. Piramal Chairperson SHAH & CO Mr. Harshvardhan A. Piramal Executive Vice ChairmanChartered Accountants Mr. P.K. Gothi Managing Director



C. CASH FLOW FROM FInAnCInG ACTIVITIES

Proceeds from Long Term Borrowings —Repayment of Long Term Borrowings (343.86) 1062.50)

Dividend and Distribution Tax thereon (374.05)

Increase/ (Decrease) in Short term Borrowings 1584.42 3722.48

Interest Paid (2119.37) 1567.84)

Net Cash Used in Financing Activities (C) (878.81) 718.09

Net Increase in Cash and Cash Equivalents (A)+(B)+(C) (629.14) (447.54)

ash and Cash Equivalents at the beginning of the year 67.38 1214.92

ash and Cash Equivalents at the end of the year 138.24 767.38



6464

BALANce SHeet ABStRAct AND coMPANY’S GeNeRAL BUSiNeSS PRoFiLe

I Registration Details

Registration No. State CodeBalance Sheet Date

II Capital raised during the year (Amount Rs. in Lacs)Public Issue Right Issue

Bonus Issue Private Placement

III Position of Mobilisation and Deployment of Funds (Amount Rs. in Lacs)Total Liabilities Total Assets

5 5 5

Sources of FundsPaid-up Capital Reserve & Surplus8 5 5 8

Secured Loans Unsecured Loans5 78 7

Application of FundsNet Fixed Assets Investments

8 7 55 5

Net Current Assets Misc. Expenditure578

Accumulated Losses5

IV Performance of Company (Amount Rs. in Lacs)Turnover Total Expenditure

57 7

Exceptional Item (Provision for Diminution in Investment)(Refer Note 13 of Schedule 15)

587 5

Pro t/(Loss) Before Tax Pro t/(Loss) After Tax( 77 8) ( 8 7 8)

Earning Per Share in Rs. (After Exceptional Item) Dividend Rate %( 8)

V Generic Name of Three Principal Products/Service of Company (As per Monetary Terms)Item Code No. 5 88

Product Description




STATEMEn PURSUAnT TO SECTIOn 212 OF THE COMPAnIES ACT,1956

1. NAME OF THE SUBSIDIARY NTEGRA MORARJEE MENS’ CLUB RANIT FABRITEXOMPANY APPARELS INTERNATIONAL s.p.a. ONSULTANTS XPORTS

AND .r.l. ** PRIVATE LIMITED PRIVATE LIMITEEXTILES

LIMITED2. FINANCIAL YEAR OF THE

SUBSIDIARY COMPANY 31.03.2009 31.03.2009 31.12.2008 31.03.2009 31.03.20093. DATE FROM WHICH IT

BECAME SUBSIDIARY 30.03.2005 27.01.2005 25.01.2007 1.10.2007 1.10.2007

4. EXTENT OF THE HOLDING 7798000 0000 340000 4809720 659000OMPANY’S INTEREST QUITY EQUITY QUITY EQUITY EQUITY

IN THE SUBSIDIARY COMPANY HARES SHARES HARES SHARES SHARESAT THE END OF THE OF RS. 10/- OF 1 EURO OF 1 EURO OF Rs.10/- OF Rs.10/-FINANCIAL YEAR OF THE EACH EACH EACH EACH EACHSUBSIDIARY COMPANY (89.12%) 100%) 67%) 100%) 100%)

5. NET AGGREGATE AMOUNT OFTHE PROFIT/(LOSS) OF THESUBSIDIARY COMPANY NOTDEALT WITH IN THE HOLDING

OMPANY’S ACCOUNTSCONCERNING THE MEMBERS

OF THE HOLDING COMPANY):A) OR THE CURRENT YEAR

Rs in lacs) 659.18) 206.29) 342.47) 0.28) 527.10)

B) OR THE PREVIOUS YEARS

INCE IT BECAME AUBSIDIARY (Rs in lacs) 225.89 90.60) 32.24) 5.28) 257.81)6. NET AGGREGATE AMOUNT OF

THE PROFIT OF THE SUBSIDIARYOMPANY DEALT WITH IN THE

HOLDING COMPANY’S ACCOUNTS:A) OR THE CURRENT YEAR NIL NIL NIL NIL NIL

B) OR THE PREVIOUS YEARSINCE IT BECAME ASUBSIDIARY NIL NIL NIL NIL NIL

** Including 16% held by Morarjee International srl.

ANNeXURe to tHe BALANce SHeet AS At 31 St M R H,2009

Ms. Urvi A. Piramal Chairperson Mr. Harshvardhan A. Piramal Executive Vice ChairmanMr. P.K. Gothi anaging Director Mr. Mahesh S. Gupta Director Mr. Ranjan Sanghi Director Mr. Shobhan Thakore Director Mr. Shailesh Haribhakti Alternate Director to Mr. Takao YajimaMr. S.C. Kashimpuria Head - Finance & Accounts & Company Secretary

Mumbai : 1 t June, 2009



6666

AUDITORS’ REPORT TO THE BOARD OF DIRECTORS OF MORARJEE TEXTILES LIMITED GROUPOn THE COnSOLIDATED FInAnCIAL STATEMEnTS OF MORARJEE TEXTILES LIMITED AnD ITSSUBSIDIARIES

We have audited the attached consolidated Balance Sheet of Morarjee Textiles Limited group as at 31 st March 2009and also the Consolidated Pro t and Loss Account and the Cash Flow Statement for the year ended on that dateannexed thereto. These nancial statements are the responsibility of the Morarjee Textiles Limited’s managementand have been prepared by the management on the basis of the separate nancial statements and other nancialinformation regarding its subsidiaries. Our responsibility is to express an opinion on these nancial statements basedon our audit.

We conducted our audit in accordance with generally accepted auditing standards in India. These standards requirethat we plan and perform the audit to obtain reasonable assurance whether the nancial statements are prepared,in all material respects, in accordance with and identi ed nancial reporting framework and are free of materialmisstatements. An audit includes examining on a test basis, evidence supporting the amounts and disclosures inthe nancial statements. An audit also includes assessing the accounting principles used and signi cant estimatesmade by management, as well as evaluating the overall nancial statements. We believe that our audit provides areasonable basis for our opinion.

We did not audit the nancial statements of subsidiaries mentioned in Annexure to this report whose total assetsand total revenues are mentioned in the annexure to this report whose nancial statements have been audited byother auditors and whose reports have been furnished to us, and our opinion, in so far as it relates to the amountsincluded in respect of subsidiaries, is based solely on the reports of the other auditors. The nancial statementsof other subsidiaries and joint venture companies have been audited by us and have been considered in aboveconsolidation.

We report that the consolidated nancial statements have been prepared by the Company in accordance with therequirements of Accounting Standard (AS-21) - Consolidated Financial Statements, (AS-23) Accounting for Investmentsin Associates in Consolidated Financial Statements and (AS-27) Financial reporting of interests in Joint Venturesissued by the Institute of Chartered Accountants of India.

Based on our audit of nancial statements of Morarjee Textiles Limited and on consideration of reports of otherauditors of subsidiaries, included in the consolidated nancial statements read with Notes 9 and 10 of Schedule 15,and to the best of our information and according to explanations given to us, we are of the opinion that the attachedconsolidated nancial statements give a true and fair view in conformity with the accounting principles generallyaccepted in India:

In the case of consolidated Balance Sheet, of the state of affairs of Morarjee Textiles Limited group as at 31 st March 2009

In the case of consolidated Pro t and Loss Account, of the loss for the year ended on that date;

and

in the case of the consolidated cash ow statement, of the cash ows for the year ended on that date.

For SHAH & CO.,Chartered Accountants

H. n. SHAHPartner

M. No. 8152Mumbai: 1 st June 2009

AUDitoRS’ RePoRt




The subsidiary companies considered in the consolidated nancial statements and audited by other Auditors are:

Rs. in Lacs

name of the Compa y Fi a cial Year Total Assets otal Reve ues

Morarjee International srl April to March 2009 81.94 393.13

Men’s Club s.p.a. January to December 2008 1507.88 1317.38

The subsidiary companies considered in the consolidated nancial statements as audited by us are:

name of the Compa y Fi a cial Year

Integra Apparels & Textiles Limited April to March 2009

Pranit Consultants Private Limited April to March 2009

Fabritex Exports Private Limited April to March 2009

Joi t Ve ture:

The Joint Venture units considered in the consolidated nancial statements as audited by us are:

I. Morarjee Castiglioni (I) Private Limited, a Joint Venture between the parent company and the ManifatturaCastiglioni s.p.a. Where in the parent Company has equal equity participation.

II. Just Textiles Limited, a Joint Venture Company where in the parent company has 49% equity participation.

or SHAH & CO.,Chartered Accountants

H. n SHAHPartner

M. No. 8152Mumbai: 1 st June 2009



6868

Schedule 31.03.2009 31.03.2008Nos Rs. i Lacs Rs. i Lacs Rs. in Lacs

I. SOURCES OF FUnDS1. Shareholders’ Fu ds 1

a) Capital 2,816.95 2,816.95b) Reserves and Surplus 4,701.13 5,392.83c) Capital Reserve on Consolidation 139.30 139.30

7,657.38 8,349.082. Loa Fu ds 2

a) Secured 17,823.92 18,629.81b) Unsecured 9,826.55 6,700.04

27,650.47 25,329.853. Mi ority I terest 306.23 569.884. Deferred Tax Liability 170.50 226.51

(Includes amount acquired on acquisition)TOTAL 35,784.58 34,475.32

II. APPLICATIOn OF FUnDS 1. Fixed Assets 3

a) Gross Block 31,177.69 30,293.00Less : Depreciation 9,251.21 7,788.12Net Block 21,926.48 22,504.88

b) Capital Work In Progress 381.89 507.0922,308.37 23,011.97

2. I vestme ts 4 1.72 1.723. Curre t Assets, Loa s a d Adva ces 5

a) Inventories 7,339.34 7,677.24b) Sundry Debtors 6,317.44 5,321.29c) Cash and Bank Balances 369.82 901.52d) Loans and Advances 3,906.79 4,285.48

17,933.39 18,185.53Less : Current Liabilities and Provisions 6 8,250.36 6,723.90

Net Current Assets 9,683.03 11,461.634. Debit Balance of Pro t & Loss Account 3,791.46 —

(Net of General Reserve Adjustment)TOTAL 35,784.58 34,475.32

Accounting Policies 14Notes to the Accounts 15

coNSoLiDAteD BALANce SHeet AS At 31 St MARcH, 2009







As per our report of even date.or and on behalf of Ms. Urvi A. Piramal Chairperson

SHAH & CO Mr. Harshvardhan A. Piramal Executive Vice ChairmanChartered Accountants Mr. P.K. Gothi anaging Director

Mr. Mahesh S. Gupta Director H.N. SHAH Mr. Ranjan Sanghi Director Partner Mr. Shobhan Thakore

Director

Membership No. 8152 Mr. Shailesh Haribhakti Alternate Director to Mr. Takao YajimaMr. S.C. Kashimpuria Head - Finance & Accounts & Company Secretary

Mumbai : 1 st June, 2009

chedule 31.03.2009 31.03.2008

Nos Rs. i Lacs Rs. i Lacs Rs. in LacsInCOMEIncome from Operations 32,992.06 28,436.70Less : Excise Duty 214.67 266.72Net Income from Operations (net) 32,777.39 28,169.98Other Income 7 36.89 22.14Increase / (Decrease) in WIP & Finished Goods 8 (35.62) 1,201.64Total I come 32,778.66 29,393.76EXPEnDITUREMaterials Consumed 9 11,743.22 12,073.56Manufacturing & Other Expenses 10 8,961.92 8,365.78Employment Cost 11 5,033.64 4,307.17Administrative, Selling & Other Expenses 12 4,713.33 4,025.10Forex Loss / (Gain) 2,831.17 (163.69)Interest 13 2,693.38 1,748.94Total Expenditure 35,976.66 30,356.86Pro t / (Loss) Before Depreciation & Tax (3,198.00) (963.10)Less: Depreciatio 1,562.46 1,362.49Pro t / (Loss) Before Tax (4,760.46) (2,325.59)Less: Provision for Tax (Including MAT) 16.28 46.48Less: Fringe Bene t Tax 41.80 35.71Less: Fringe Bene t Tax- Earlier Years .31 -Less: Deferred Tax Adjustment (56.01) 9.73

Add: MAT Credit Entitlement (0.35) (25.45)Less : Provision for Tax for Earlier years .25 9.79Pro t / (Loss) After Tax (4,765.74) (2,401.85)Prior Period items .44 0.50Add / (Less ): Share of Minority Ineterest 242.25 23.68Consolidated Pro t/(Loss) after Prior Period items & Minority Interest (4,523.93) (2,378.67)Pro t brought forward from previous year (773.95) 1,604.72Pro t / (Loss) carried to the Balance Sheet (5,297.88) (773.95)Earning Per Equity Share (Rs.) (Face value Rs.10/-each) (25.22) (13.41)(Refer Sr.No. 16 of Schedule 15)Accounting Policies 14Notes to the Accounts 15

coNSo iDAteD PRoFit & LoSS A/c FoR tHe eAR eNDeD 31 t MARcH, 2009



7070

ScHeDULeS FoRMiNG PARt oF tHe coNSoLiDAteD BALANce SHeet AS At 31 St MARcH, 2009

31.03.2009 31.03.2008

Rs. i Lacs Rs. i Lacs Rs. in LacsSCHEDULE 1 :A) Share Capital

Authorised :4,30,00,000 (Previous Year 4,30,00,000)

Equity Shares of Rs. 10/- each 4,300.00 4,300.0010,00,000 5% Redeemable Cumulative Non- Convertible

Preference Shares of Rs. 100/- each 1,000.00 1,000.005,300.00 5,300.00

Issued, Subscribed a d Paid- up:

1,81,69,463 (Previous Year 1,81,69,463)Equity Shares of Rs. 10/- each Fully Paid up 1,816.95 1,816.95(Includes 77,86,913 fully paid equity shares ofRs.10/- each issued on Right basis in 2006-07.- see note 13 in schedule 15)

10,00,000 5% (Previous Year 5%) Redeemable CumulativeNon-Convertible Preference Shares of Rs. 100/-each (Reedeemable anytime between 15 th

November, 2014 to 15 th November, 2019 atCompany’s option 1,000.00 1,000.00

2,816.95 2,816.95B) Reserves and Surplus

1. Ge eral Reserve- Opening balance 1,506.42 1,506.42Less : Deducted from Pro t & Loss Account per contra 1,506.42 773.95

— 732.47

2. Share Premium Accou t Opening Balance 4,662.80 4,662.80

4,662.80 4,662.80

3. Foreign Exchange Reserve Opening Balance (2.44) 3.38Adjustment for the year 40.77 (5.82)

38.33 (2.44)TOTAL 4,701.13 5,392.83




1.03.2009 31.03.2008

Rs. i Lacs Rs. i Lacs Rs. in LacsSCHEDULE 2 : LOAn FUnDSA) Secured Loans

Term Loan from Bank 9,299.45 9,574.58(Repayable within one year Rs.1454.26 lacsPrevious year Rs.1600.47 lacs)- Secured by a pari passu charge on the movable assets

including its moveable plant and machinery, spare, toolsand accessories secured by a pari passu equitable mortgageon company’s immovable properties at Butibori, Nagpur inrespect of Rs.6644.14 lacs. (Previous year Rs.6925.50 lacs)

- Secured by rst and exclusive charge on the presentand future movable and immovable xed assets of theCompany in respect of Rs.2246.26 lacs (Previous yearRs.2135.47 lacs)

- Secured against hypothecation of assets, stocks, bookdebts, vehicles and personal guarantee by directors inrespect of Rs.409.05 lacs - Previous year 513.61 lacs)

Term Loa from I stitutio 125.00 187.50(Repayable within one year Rs.62.50 lacs - Previous yearRs.62.50 lacs)(Secured by way of Equitable Mortgage on Company’sImmovable Properties at Butibori, Nagpur and by a chargecreated on Co’s moveable assets including its moveableplant and Machinery spares, tools and accessories and othermovables, both present and future, subject to prior charge ofCompany’s Bankers )Cash Credit/Packi g Credit from Ba ks 8,399.47 8,867.73(Secured by way of hypothecation of Current Assets of theCo. viz.,Raw Materials, Stock- In - Process, Finished Goods,consumables stock and spares, book debts and other moveableboth present and future and secured by pari passu secondcharge created on Company’s moveable assets including itsmoveable plant and machinery, spares, tools and accessoriesand other moveable, both present and future)

TOTAL 17,823.92 18,629.81B) Unsecured Loans

Bodies Corporate 9,495.88 4,922.42Director 27.00 22.83Banks 106.94 1,722.14Others 196.73 32.65

TOTAL 9,826.55 6,700.04

ScHeDULeS FoRMiNG PARt oF tHe coNSo iDAteD BALANce SHeet AS At 31 t M RcH, 2009



7272

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ScHeDULeS FoRMiNG PARt oF tHe coNSoLiDAteD BALANce SHeet AS At 31 t M RcH, 2009

31.03.2009 31.03.2008

Rs. i Lacs Rs. i Lacs Rs. in LacsSCHEDULE 4 : InVESTMEnTS

Lo g Term I vestme ts:Government securties (Unquoted) 0.64 0.64Trade Investments (Unquoted)Morarjee Goculdas Spinning & Weaving Private Limited 0.01 0.01(Formerly - Morarjee Legler Private Limited)(2000 Equity Shares of Rs.10 each fully paid up ) Just Exports Private Limited 0.98 0.98(2000 Equity Shares of Rs.100/- each)

OthersDevelopment Credit Bank Limited 0.09 0.09(1800 Equity Shares of Rs.10/- each - Market value asof 31.03.2009 Rs.0.34 lacs)

1.72 1.72SCHEDULE 5 : CURREnT ASSETS, LOAnS AnD ADVAnCES

a) InventoriesRaw materials & Accessories 1,868.92 2,023.74Work-In- Progress ,057.46 3,143.72Finished Goods 2,082.17 2,065.62

Consumables, Stores, Spares etc. 330.79 444.16 ,339.34 7,677.24

b) Sundry Debtors (Unsecured, considered good)Outstanding for more than Six months 460.97 360.49Others 5,856.47 4,960.80

,317.44 5,321.29c) Cash and Ban Balances

Cash in hand 64.92 14.13Bank Balances- In Current Account 184.48 166.88- In Fixed Deposit with Banks 20.42 720.51

369.82 901.52




31.03.2009 31.03.2008Rs. i Lacs Rs. i Lacs Rs. in Lacs

SCHEDULE - 7 : OTHER InCOMEInsurance Claim Received .63 15.11Pro t on Sale of Assets .95 1.00Miscellaneous Receipt 29.31 6.03

TOTAL 36.89 22.14SCHEDULE - 8 : INCREASE / (DECREASE ) IN WORk IN

PROGRESS AnD FInISHED GOODSOpe i g StockWork in Progress 3,143.72 2,395.61Finished Goods & Stock in Trade 2,065.62 1,405.49

5,209.34 3,801.10Stock acquired o acquisitioWork in Progress — 14.88Finished Goods — 190.73

— 205.61Closi g StockWork in Progress 3,057.46 3,143.72Finished Goods & Stock in Trade 2,082.17 2,065.62

5,139.63 5,209.34Excise Duty (Increase) / Decrease on Finished Goods 34.09 (0.99)Increase / (Decrease ) (35.62) 1,201.64

SCHEDULE - 9 : MATERIAL COnSUMEDOpening Stock 2,023.74 1,299.30Add: Stock acquired on acquisition — 306.90Add: Purchases 11,588.40 12,491.10Less: Closing Stock 1,868.92 2,023.74Material Consumed TOTAL 11,743.22 12,073.56

ScHeDULeS FoRMiNG PARt oF tHe coNSoLiDAteD PRoFit & LoSS AccoUNtFoR tHe YeAR eNDeD 31 t MARcH, 2009



7676

ScHeDULeS FoRMiNG PARt oF tHe coNSoLiDAteD PRoFit & LoSS AccoUNt FoRtHe YeAR eNDeD 31 St MARcH, 2009

SCHEDULE - 10 : MAnUFACTURInG & OTHER EXPEnSESProcessing Charges 2,508.61 2,379.46Dyes & Chemicals 2,228.16 2,155.97Packing Material 211.86 169.84Stores & Spares 380.73 388.84Other Consumables 242.16 240.43Repairs & Maintenance -Building 25.13 21.64Repairs & Maintenance -Plant & Machinery 246.56 221.89Repairs & Maintenance -Others 73.96 55.35

Power & Fuel 2,788.04 2,455.67Rates, Taxes & Water charges 229.29 213.19Other Expenses 27.42 63.50

TOTAL 8,961.92 8,365.78SCHEDULE - 11 : EMPLOYEE COSTSalaries & Wages 4,509.96 3,823.70Provident Fund- Employers Contribution 388.89 366.06Staff Welfare Expenses 134.79 117.41

TOTAL 5,033.64 4,307.17SCHEDULE - 12 : ADMInISTRATIVE,

SELLInG & OTHER EXPEnSES

Freight Out 958.81 718.39Insurance Charges 55.04 77.17Legal & Professional Expenses 631.97 646.82Rent 715.32 475.41Telephone Expenses 91.65 86.68Travelling 330.48 287.79Marketing Services Fee 468.71 331.45Directors Remuneration 92.77 89.87Audit Fees 25.83 22.60Loss on Sale of Assets 5.79 -Miscellaneous Expenses 1,336.96 1,288.92

TOTAL 4,713.33 4,025.10SCHEDULE - 13 : InTERESTInterest on Term Loan 777.50 724.95Others 1,951.02 1,102.59

2,728.52 1,827.54less: Interest Income 35.14 78.60

TOTAL 2,693.38 1,748.94

31.03.2009 31.03.2008 Rs. i Lacs Rs. i Lacs Rs. in Lacs




SCHEDULE - 14 : ACCOUn InG POLICIES

1. Basis of preparation of nancial statement(a) Basis of Accounting

The nancial statements have been prepared and presented under the historical cost convention on accrualbasis of accounting to comply with the accounting standards prescribed in the Companies (AccountingStandards) Rules, 2006 and with the relevant provisions of the Companies Act, 1956.

(b) Use of EstimatesThe preparation of nancial statements in conformity with generally accepted accounting principles (GAAP)in India requires Management to make estimates and assumptions that affect the reported amounts of assetsand liabilities and the disclosures of contingent liabilities on the date of nancial statements.

2. Fixed AssetsAll the xed assets are stated at historical cost. In respect of Assets acquired under new project/ expansion/restructuring, interest cost on borrowings and other related expenses during trial runs and upto satisfactorycommencement of commercial production have been capitalised to Plant & Machinery and any subsidy givenfor a speci c asset is reduced from cost. The Accounting Standard -10 of the Institute of Chartered Accountantsof India has been compiled with in this respect.

. DepreciatioDepreciation has been provided on straight line method on all xed assets except Leasehold land at the ratesspeci ed in Schedule XIV to the Companies Act, 1956. Premium on lease hold land is amortised over the periodof lease. Intangible assets are amortised over their estimated useful life.

4. Lease Accou ti g Lease rentals on assets taken on lease are recognized as expense in the statement of pro t and loss account onan accrual basis over the lease term.

5. I ve torya) Raw materials, work in progress, nished goods, packing materials, stores, spares, traded goods and

consumables are carried at the lower of cost and net realisable value. The comparison of cost and net realisablevalue is made on an item-by-item basis. Damaged, unserviceable and inert stocks are suitably depreciated.

b) In determining cost of raw materials, packing materials, traded goods, stores, spares and consumables,weighted average cost method is used. Cost of inventory comprises all costs of purchase, duties, taxes(other than those subsequently recoverable from tax authorities) and all other costs incurred in bringing theinventory to their present location and condition.

c) Cost of nished goods and work-in-process includes the cost of raw materials, packing materials, anappropriate share of xed and variable production overheads, excise duty as applicable and other costsincurred in bringing the inventories to their present location and condition. Fixed production overheads are

allocated on the basis of normal capacity of production facilities.. I vestme ts

Long term investments are carried at cost. Provision for diminution in the value of long term investments is madeonly if such a decline is not temporary in the opinion of the management. Short term investments are carried atlower of cost and fair value. The comparison of cost and fair value is done separately in respect of each categoryof investments.Pro t and loss on sale of investments is determined on a rst in rst out (FIFO) basis.

ScHeDULe FoRMiNG P Rt oF tHe oNSoLiDAteD BALANce SHeet AS At 31 t

MAR H, 2009



7878

7. Reve ue Recog itio

Revenue is recognized only when there is no signi cant uncertainty as to the measurability / collectability ofamount.8. Transactions in Foreign Exchange

Transactions in foreign currency are recorded at the exchange rate prevailing on the date of the transaction.Exchange differences arising on foreign exchange transactions settled during the year are recognized in the Pro tand loss account of the year.Monetary assets and liabilities denominated in foreign currencies, which are outstanding as at the year end aretranslated at the closing exchange rate and the resultant exchange differences are recognized in the Pro t andloss account.The premium or discount on forward exchange contracts is recognized over the period of the contracts in thepro t and loss account.

9. Tra slatio of foreig Curre cy Stateme tsIn translation the nancial statements of foreign entities for incorporation in the consolidated nancial statements,the assets and liabilities are translated at the exchange rate prevailing at the balance sheet date of respectivesubsidiaries and income and expense items are translated at the average rates of exchange for the year. Theresulting exchange differences are classi ed as foreign currency translation reserve.

10. Research a d Developme tThe Revenue Expenditure on Research and Development is charged to Pro t & Loss account.

11. Volu tary Retireme t SchemeIn case of subsidiary compensation paid on voluntary retirement scheme has been deferred and one half hasbeen charged to Pro t and Loss account.

12. Employee Bene ts(i) Short Term Employee Bene ts:

All employee bene ts payable wholly within twelve months of rendering the service are classi ed as shortterm employee bene ts and they are recognized in the period in which the employee renders the relatedservice The Company recognises the undiscounted amount of short term employee bene ts expected to bepaid in exchange for services rendered as a liability (accrued expense) after deducting any amount alreadypaid.

(ii) Post-Employment Bene ts:(a) De ned contribution plans

De ned contribution plans are, Government administered Provident Fund Scheme and Governmentadministered Pension Fund Scheme for all employees and Superannuation scheme for eligible employees.The Company’s contribution to de ned contribution plans are recognized in the pro t and loss accountin the nancial year to which they relate.The interest to the bene ciaries every year is being noti ed by the Government.

(b) De ned bene t plans(i) De ned bene t gratuity plan

The Company operates a de ned bene t gratuity plan for employees.The cost of providing de ned bene ts is determined using the Projected Unit Credit Method with actuarialvaluations being carried out at each balance sheet date. Past service cost is recognized immediately to




the extent that the bene ts are already vested, else is amortised on a straight-line basis over the averageperiod until the amended bene ts become vested.The de ned bene t obligations recognized in the balance sheet represents the present value of the de nedbene t obligation as adjusted for unrecognized actuarial gains and losses and unrecognized past servicecosts, and as reduced by the fair value of plan assets, if applicable. Any de ned bene t asset (negativede ned bene t obligations resulting from this calculation) is recognized representing the unrecognizedpast service cost plus the present value of available refunds and reductions in future contributions tothe plan.

(iii) Other long term employee bene tsEntitlements to annual leave and sick leave are recognized when they accrue to employees. Sick leave canonly be availed while annual leave can either be availed or encashed subject to a restriction on the maximumnumber of accumulation of leaves. The Company determines the liability for such accumulated leaves usingthe Projected Accrued Bene t Method with actuarial valuations being carried out at each balance sheetdate.

13. GoodwillGoodwill is written off over a period of ten years.

14. Provision for TaxationIncome tax expense comprises of current tax (i.e. amount of tax for the period determined in accordance withthe Income Tax Act, 1961), deferred tax charge or credit (re ecting the tax effects of timing differences betweenaccounting income and taxable income for the period) and fringe bene t tax (computed in accordance with therelevant provisions of the Income tax Act, 1961).The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized usingthe tax rates that have been enacted or substantively enacted by the balance sheet date.Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realisedin future; however, where there is unabsorbed depreciation or carry forward loss under taxation laws, deferredtax assets are recognized only if there is a virtual certainty of realisation of such assets. Deferred tax assets arereviewed as at each balance sheet date to reassess realisation.

15. Provisio s a d Co ti ge ciesThe company creates a provision when there exists a present obligation as a result of a past event that probablyrequires an out ow of resources and a reliable estimate can be made of the amount of the obligation. A disclosurefor a contingent liability is made when there is a possible obligation or a present obligation that may, but probablywill not require an out ow of resources. When there is a possible obligation or a present obligation in respect ofwhich likelihood of out ow of resources is remote, no provision or disclosure is made.

16. Ear i gs per shareThe basic and diluted earnings per share (“EPS”) is computed by dividing the net pro t after tax for the year byweighted average number of equity shares outstanding during the year.

17. Proposed Divide dDividend if any recommended by the Board of Directors is provided for in the accounts, pending approval atthe Annual General Meeting



8080

SCHEDULE : 15 nOTES FORMInG PART OF THE ACCOUnTS

1 a) Contingent Liability not provided for 31.03.2009 31.03.2008in respect of Rs. i Lacs Rs. in LacsBank Guarantees 447.30 223.07Corporate Guarantee 5,450.00 3,750.00

b) Contingent Liability for bill discounted Rs. 433.72 lacs.(Previous year Rs.354.55 lacs) and for Preferenceshares together with dividend tax is Rs. 117.00 lacs (Previous year Rs. 58.50 lacs )

c) Estimated amount of contracts remaining to be executed on capital accounts and not provided for Rs.159.95lacs. (Previous year Rs. 56.86 lacs)

d) The Excise department and Income Tax department has raised a claim on the Company for Rs.1663.24 lacsand Rs.Nil (Previous year Rs.1497.61 lacs and Rs. 1455.19 lacs) respectively. The Company has disputed thesame with the appropriate authority.


2 Open Letters of Credit 578.27 1,458.88

3 Auditor’s Remuneration31.03.2009 31.03.2008

Rs. i Lacs Rs. in LacsAudit Fees 19.77 16.00Tax Audit Fees 3.16 2.76

Certi cation fees 2.75 3.34Out of Pocket Expenses 0.15 0.50Total 25.83 22.60

4 The Parent Company and one of the Subsidiary Company has taken vehicles on an operating lease basis for aperiod of 48 & 60 months. The lease rentals are payable on monthly installments by the Company.

Future minimum lease rentals payable as per the lease agreements:


a) Not later than one year 61.45 57.12b) Later than one year but not later than ve years 63.86 97.22c) Later than ve years — —

Total 125.31 154.34

Lease payment recognised in Pro t & Loss Account for the year is Rs. 70.36 lacs.(Previous year Rs.37.10 lacs)

ScHeDULe FoRMiNG PARt oF tHe coNSoLiDAteD BALANce SHeet AS At 31 St MARcH, 2008




5 One of the subsidiary company has commenced commercial production in respect of additional 6 lines duringthe year and has capitalised following expenses to plant & machinery as pre-operative expenses. As requiredby Accounting standard 16 on borrowing cost as issued by Institute of Chartered Accountant of India interestamounting to Nil (previous year Rs. 38.94 lacs) also has been capitalised.

31.03.2009 31.03.2008 Rs. i Lacs Rs. in Lacs

Salary & wages 79.68 223.94Legal & Professional — 43.72Other Expenses 41.79 25.28Rent — 90.81Interest — 38.94

consumables — 12.22Power & Fuel 12.39 11.46Entry Tax — 10.72Trial Production — 21.09

133.86 478.18

6 The group recognises deferred tax arising on account of timing differences being the difference between thetaxable income and accounting income, that originates in one period and is capable of reversal in one or moresubsequent periods in compliance with the applicable accounting standards. The major components of deferredtax assets / (liabilities) arising on account of timing differences as at 31 t March, 2009 are as follows except incase of parent company and one of the joint venture and subsidary company where deferred tax assets has not

been provided in the books of accounts due to virtual uncertainty of realisation of such assets. As at 31.03.2009 Rs. i Lacs

Deferred Tax Assets/(Liabilities) (275.91)Accumulated losses as per IT Act 1961 134.14Less : Deferred Tax Assets not provided in books 28.73Liability as on 31.03.2009 (170.50)

7 A) As required under Accounting Standard (AS 27) - Financial Reporting of interest in Joint Venture, the auditednancial statement of Just Textiles Ltd, (hereinafter referrred to as JV), is between the parent company and

Mr.Pradeep Modi and others have been consolidated using proportionate consolidation method.- The nancial year of the JV is April 08 to March 09 for the consolidation purpose. The parent company

share of each of the assets, liabilities, income and expenses of JV have been included in the consolidatednancial statement.

- the parent company’s share of capital commitments in the JV as at 31 t March 2009 is Rs Nil.- The parent company’s share of contingent liabilities of the JV as at 31 st March 2009 is Rs Nil.- No contingent liabilities and capital commitments have been incurred as at 31 st March 2009 in relation

to the parent company’s interest in the JV along with the other venturer.



8282

B) As required under Accounting Standard (AS 27) - Financial Reporting of interest in Joint Venture, theaudited nancial statement of Morarjee Castiglioni (India) Private Limited, (hereinafter referred to as JV), isbetween the parent company and Manifattura Castiglioni s.p.a.have been consolidated using proportionateconsolidation method.- The nancial year of the JV is April 08 to March 09 for the consolidation purpose. The parent company

share of each of the assets, liabilities, income and expenses of JV have been included in the consolidatednancial statement.

- the parent company’s share of capital commitments in the JV as at 31 st March 2009 is Rs Nil (Previousyear Nil)

- The parent company’s share of contingent liabilities of the JV as at 31 st March 2009 is Rs Nil (Previousyear Nil)

- No contingent liabilities and capital commitments have been incurred as at 31 st March 2009 in relationto the parent company’s interests in the JV along with the other venturer. (Previous year Nil)

8 The company is engaged in manufacture of textile products which is considered as the only reportable businesssegment.

9 Details of Subsidiary, Joint Venture Nature Country ofIncorporation

% of VotingPower

Integra Apparels & Textiles Limited Subsidairy India 89.12%Pranit Consultants Private Limited Sub- Subsidairy India 100%Febritex Exports Private Limited Sub- Subsidairy India 100%Morarjee International s.r.l. Subsidairy Italy 100%Men’s Club s.p.a. Subsidairy Italy 67% Just Textiles Limited Joint Venture India 49%Morarjee Castiglioni (I) Private Limited Joint Venture India 50%

10 Principles of Consolidation:-a) The Consolidated Financial statements are based on the audited nancial statements of the subsidiary for

the year ended 31 st March, 2009 except for Men’s Club s.p.a. which is for the period Jan 2008 to December,2008 . No signi cant transactions have occurred after the Balance Sheet date of subsidiaries.

b) The Financial statements of the company and its subsidiary have been combined to the extent possible ona line by line basis by adding together like items of assets, liabilities, income and expenses. All signi cantintra group balances and transactions have been eliminated on consolidation.

c) The consolidated nancial statements have been prepared using uniform accounting policies for liketransactions and other events in similar circumstances and are presented to the extent possible, in the same

manner as the Company’s nancial statements.d) The goodwill/capital reserve on consolidation has been recognised in the consolidated nancial statement.e) Minority interest in the net income and net assets of the consolidated nancial statements are computed

and shown separately.11 Employee Bene ts:

a Short term employee bene ts:The liability towards short term employee bene ts for the year ended 31 st March, 2009 has been recognisedin the Pro t and Loss Account.




b Post - employment bene ts:The following disclosures are made in accordance with AS 15 (Revised) pertaining to De nd Bene tPlans.

U fu ded 31.03.2009 Unfunded 31.03.2008 Gratuity Leave Gratuity Leave E cashme t Encashment

Amou t Recog ised i Bala ce sheet Rs. i Lacs Rs. i Lacs Rs. in Lacs Rs. in LacsPresent Value of Unfunded Obligation 169.00 87.03 160.10 97.39Unrecognised Past Service Cost - - - -Amount not recognised as an Asset - -because of the limit in Para 59(b) - - - -Amou t i Bala ce Sheet - - Liability 169.00 87.03 160.10 97.39Assets - - - -Net Liability 169.00 87.03 160.10 97.39Expense Recognised in the Statement of Pro t & Loss Opening De ned Bene t Obligation less bene ts Paid - - - -Current Service Cost 33.45 27.78 38.69 53.70Interest Cost on De ned Bene t Obligation 13.41 7.19 10.09 7.39Expected Return on Plan Assets - - - -Net Acturial Losses / (Gains) Recognised in Year (27.74) (0.34) 23.02 5.77Past Service Cost - - - -

Effect of the limit in Para 59(a) - - - -Losses / (Gains) on “Curtailments and Settlements” - - (11.27) -Total Included in “Employee Bene t Expense” 19 12 34.63 60.53 66.86Change in De ne Bene t Obligation Opening De ned Bene t Obligation as at 01.04.2008 160.10 97.39 119.95 76.79Current Service Cost 33.45 27.78 38.69 53.70Interest Cost 13.41 7.19 10.09 7.39Acturial Losses / (Gain) (27.74) (0.34) 23.02 5.77Liabilities Extinguised on Curtailment - - (11.27) -Liabilities Extinguised on Settlements - - -

Liabilities Assumed on Acquisation - - - -Exchange Difference on Foreign Plans - - - -Bene ts Paid (10.22) (44.99) (20.38) (46.26Closing De ned Bene t Obligation as at 31.03.2009 169.00 87.03 160.10 97.39

Note:1. The estimates of future salary increases, considered in acturial valuation, takes into account the in ation,seniority,

promotion and other relevant factors.2. Comparative values of de ned bene t plans for the past four nancial years as required by AS-15 (Revised) are

not provided, being the March, 2008 rst year of adoption of the standard.



8484

12 Till date no options under the Employees Stock Option Plan has been exercised by any of the eligibleemployees. Considering the present market price of the Equity Share of the company it is unlikely that theoptions will be exercised in future also and accordingly the options granted under the Plan are not treatedas potential equity shares as de ned in Accounting Standard -20 “Earning Per Share” and thus no impact ofdilution on EPS is considered.

13 During the year ended 31 st March, 2007, the Company raised Rs.4282.80 lacs by issue of 77,86,913 fully paidequity shares of Rs.10/- each at a premium of Rs.45/- per equity share to the existing equity shareholders onrights basis. Post this issue the Company’s share capital has increased to Rs.1816.95 lacs.The Company has also allotted 51,91,275 detachable warrants in the ratio of 2 warrants for every 3 equity sharesallotted pursuant to the aforesaid rights issue. The holders of warrants can exercise their right to convert thewarrant at Rs.100/- per warrant into equity share at any time after 12 months from the date of allotment but notlater than 36 months from the date of allotment or as decided by the Company.

14 Amalgamation between Integra Apparels & Textiles Ltd, Pranit Consultants Private Limited and Fabritex ExportsPrivate Limited.During the year, under review the Board of Directors of Pranit Consultants Private Limited (Pranit), FabritexExports Private Limited (Fabritex) and Integra Apparels & Textiles Limited (Integra) subsidiary companies ofMorarjee Textiles Limited have approved a Scheme of Amalgamation of Pranit and Fabritex with Integra. Theappointed date of the said Scheme of Amalgamation is 1 st April, 2008.The petition of Pranit for the said Scheme of Amalgamation has been admitted by the Hon’ble High Courtof Delhi and it has issued directions for issue of notice to the Regional Director, Department of CompanyAffairs and to the Of cial Liquidator.In respect of Fabritex and Integra, the companies are in the process of ling the petitions for approving the saidScheme of Amalgamation with the Hon,ble High Court of Karnataka.

15 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 and oustanding as on31.03.2009A. Associate Compa ies

Peninsula Land LimitedJust Exports Private LimitedMorarjee Goculdas Spinning & Weaving Private Limited(Formerly - Morarjee Legler Private Limited)Ashok Piramal Management Corporation LimitedPeninsula Facility Management Services Private Limited

B. Key Ma ageme t Perso elMr. Harshvardhan A. PiramalMr. P. K. GothiMr. R. KrishnakumarMr. Pradeep Modi

C. Relatives of Key Ma ageme t Perso elMs. Jayashree Krishnakumar




Details of Transactions are as follows:

1.03.2009 31.03.2008

Rs. i Lacs Rs. in LacsA Purchase a d other Services from related parties

Associate CompaniesAshok Piramal Management Corporation Limited 8.69 103.96Peninsula Land Limited — 38.28Peninsula Facility Management Services PrivateLimited 44.16

B Remu eratio / Sitti g FeesKey Management Personnel

Mr. Harshvardhan A. Piramal 50.50 50.50Mr. P. K. Gothi 47.55 48.05Mr. R. Krishnakumar 33.68 18.09Mr. Pradeep Modi 8.82- Sitting Fees & Commission 4.80 3.30

C Re t PaidAssociate CompaniesPeninsula Land Limited 111.67 111.67Relatives of Key Management Personnel Ms. Jayashree Krishnakumar 15.00 12.00

D Outsta di g bala ceDue to Associate Companies Peninsula Land Limited 218.25 143.41Ashok Piramal Management Corporation Limited 10.42 Just Exports Private Limited 36.67 26.38Peninsula Facility Management Services Private Limited 49.14 Others 0.35Due from Associate Companies Morarjee Goculdas Spinning & Weaving Private Limited

(Formerly Morarjee Ledger Private Limited) 0.73



8686

16 Earnings Per Share (Basic / Diluted)

(After Prior Period and Exceptional items)

a. Pro t / (Loss) after Tax (4,765.73) (2,401.85)

Add : Share of Minority interest adjusted 242.25 23.68

Less : Prior Period Expenses 0.44 0.50

Less : Preference Share dividend & tax thereon 58.50 (4,582.42) 58.50 (2,437.17)

b. Number of Shares (weighted average basis) 18169463 18169463

c. Earnings Per Share (Rs) (25.22) (13.41)

Earnings Per Share (Basic / Diluted)

(Before Prior Period and Exceptional items)a. Pro t / (Loss) after Tax (Rs in lacs) (4,765.73) (2,401.85)

Add : Share of Minority interest adjusted 242.25 23.68

Less : Preference Share dividend & taxes thereon 58.50 (4,581.98) 58.50 (2,436.67)

b. Number of Shares (weighted average basis) 18169463 18169463

c. Earnings Per Share (Rs) (25.22) (13.41)

17 Previous year’s gures have been regrouped wherever necessary.

31.03.2009 31.03.2008

Rs. i Lacs Rs. i Lacs Rs. i Lacs Rs. i Lacs

Signature to Schedules 1 to 15







Integra Morarjee Pranit FabritexApparels & International Mens Consultants Exports

Textiles s.r.l. Club Private PrivateParticulars Limited s.p.a. Limited Limited

apital 875.00 5.61 1,162.40 480.97 265.90

Reserve & Surplus 376.71 (296.89) (344.29) 47.63 (1,459.85)

Total Assets 8,288.02 81.94 1,507.87 533.50 509.58

Total Liabilities 7,036.31 373.22 689.76 4.91 1,703.53

Investment - - - 132.95 -

Turnover 9,242.50 387.92 1,317.38 215.43

Pro t / (Loss) Before Taxation (695.97) (190.36) (342.87) (0.28) (526.35)

Provision For Taxation (36.79) 15.93 - - 0.75

Pro t / (Loss) After Taxation (659.18) (206.29) (342.87) (0.28) (527.10)

Proposed Dividend - - - - -

Rs. in Lacs

iNFoRMA ioN WitH ReGARD to SUBSiDiARY coMPANie AS oN / FoR tHe Y AR eNDeD 31 t M RcH, 2009



8888

31st March, 2009 31st March,2008

Rs. i Lacs Rs. i Lacs Rs. in Lacs Rs. in LacsA. CASH FLOW FROM OPERATInG ACTIVITIESNet Pro t / (Loss) for the year (4,765.74) (2,401.85)Provision for Tax (MAT/FBT) 5.28 76.26Depreciation 1,562.46 1,362.49Interest Paid 2,728.52 1,827.54Foreign Exchange Reserve on consolidation 40.77 (5.82)Interest Income (35.14) (78.60)Capital Reserve on consolidation — 124.47Adjustment on consolidation (21.40) 1,155.45Prior Period Expenses (0.44) (0.50)Pro t / Loss on Sale of Assets (net) 1.84 (1.00)

4,281.89 4,460.29Operating Pro t Before Working Capital Changes (483.85) 2,058.44Adjustments for Changes in Working Capital(Increase)/ Decrease in Trade and Other Receivables (617.46) (345.34)(Increase) /Decrease in Inventories 337.90 (2,145.88)Increase/(Decrease) in Trade Payables 1,531.90 1,064.53

1,252.34 (1,426.69)Cash From Operating Activities 768.49 631.75Less: Income Tax Paid (MAT/FBT/) 25.39 104.73Net Cash From Operating Activities (A) 743.10 527.02

B. CASH FLOW FROM InVESTInG ACTIVITIESPurchase of Fixed Assets (960.02) (4,176.74)Sale of Fixed Assets 99.31 75.43Interest Income 35.14 78.60Net Cash Used in Investing Activities (B) (825.57) (4,022.71)

C. CASH FLOW FROM FInAnCInG ACTIVITIESProceeds from Long Term Borrowings 95.80 1,391.76Repayment of Long Term Borrowings (433.43) (1,473.32)Dividend Payment & Taxes — (374.05)Increase/ (Decrease) in Short term Borrowings 2,658.25 5,424.90Interest Paid (2,769.85) (1,826.60)Net Cash Used in Financing Activities (C) (449.23) 3,142.69Net Increase in Cash and Cash Equivalents (A)+(B)+(C) (531.70) (353.00)Cash and Cash Equivalents at the beginning of the year 901.52 1,254.52Cash and Cash Equivalents at the end of the year 369.82 901.52

coNSoLiDAteD cASH FLoW StAteMeNt FoR tHe YeAR eNDeD 31 St MARcH, 2009







FInAnCIAL HIGHLIGHTS

Rs. in Lacs

Particulars 008-09 2007-08 2006-07 005-06 2004-05

PROFIT & LOSS ACCOUn

Total Income 19938.44 17765.96 22004.41 17400.43 14877.32

Pro t / (Loss) BeforeDepreciation, Interest & Tax (95.69) 246.82 2762.01 2507.40 1944.2

Interest 2045.18 1490.34 968.19 619.29 563.69

Cash Pro t / (Loss) (2,140.87) (1,243.52) 1,793.82 1,888.11 1,380.5

Depreciation 1050.96 1009.69 926.74 807.33 716.3

Pro t / (Loss) Before Tax &Exceptional items (3,191.83) (2,253.21) 867.08 1,080.78 664.2

Exceptional item 587.25 - - - -

Pro t / (Loss) Before Tax (3,779.08) (2,253.21) 867.08 1,080.78 664.2

Provision for Tax 28.10 20.91 25.07 35.74 -

Pro t / (Loss) after Tax (3,807.18) (2,274.12) 842.01 1,045.04 664.2

Earnings per share (Rs.) (21.28) (12.84) 5.78 9.52 2.32

Equity Dividend (%) - - 15% 25% 15%

Book Value per share (Rs.) 16.34 37.29 49.81 43.32 36.65

mtl ar 09 - final-report

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