Dear Shareholders,

The Directors have pleasure in presenting their 23^rd Annual Report and the Audited Accounts for the Financial Year ended 31^st March, 2018, together with the Auditor's Report thereon.

1) Financial Results

(Rs. in lakhs)

2) Review of operations

On Standalone basis, the total I ncome from operations of the Company was Rs. 36,751 lakhs as against Rs.38,486 lakhs in the previous year (PY). However, the EBIDTA of the Company for CY was Rs.7,505 lakhs as against Rs.6,905 lakhs in PY. The Company earned a profit of Rs.82 lakhs from ordinary activities before tax in the current year (CY) as against a profit of Rs.1,033 lakhs in the PY. After providing for tax, the Company reported a profit of Rs.22 lakhs for the year ended 31^st March, 2018 as against a profit Rs. 1,165 lakhs for the Financial Year ended 31^st March, 2017. The decline in the profits of the Company was majorly due to higher interest and depreciation in CY.

On Consolidated basis, the total Income from operations of the Company was Rs.36,751 lakhs as against Rs.38,486 lakhs for the PY. The Company has earned a profit before tax of Rs.82 lakhs, from ordinary activities before tax in the CY as against a profit of Rs.1,033 lakhs previous year. After providing for tax and after share in profit of Joint Ventures, the Company reported a profit of Rs.27 lakhs for the Financial Year ended 31^st March, 2018 as against a profit of Rs.1,188 lakhs for the Financial Year ended 31^st March, 2017.

3) Performance of Joint Venture Companies

The Company has only following two Joint Ventures:

(i) Morarjee Castiglioni (India) Private Limited (50%)

(ii) Just Textiles Limited (49%)

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

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

4) Share Capital

During the financial year 2017-18, there was no change in the Share Capital of the Company. The Company has neither issued any shares nor granted any Stock Options nor any Sweat Equity Shares during the year.

5) Dividend and Reserve

Your Directors do not recommend any dividend for the year under review. The details of reserves and surplus are provided in Note No. 15 of the notes to the standalone financial statement.

6) Deposits

The Company has neither accepted nor renewed any deposits during the year.

7) Particulars of Loans, Guarantee or Investments

During the year under review, the Company has not made any investments, advanced any loans or provided any guarantee falling under Section 186 of the Companies Act, 2013 ("the Act").

8) State of Company's Affairs and business Review

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

9) Corporate Social Responsibility ("CSR")

Company undertakes its CSR activities through Urvi Ashok Piramal Foundation which is currently executing various projects on Health and Livelihood programmes and these projects are in accordance with Schedule VII of the Companies Act, 2013 and the Company's CSR policy.

The detailed Report on CSR activities is annexed as Annexure - 2 and forms an integral part of this Report.

The constitution of the CSR Committee and its terms of reference are more particularly stated in the Corporate Governance Report which forms a part of this Annual Report. CSR Policy of the Company is available on Company's website at www.morarjee.com.

10) Business Risk Management

The Company has formulated and implemented a Risk Management policy in accordance with the provisions of the Act and Regulation 17(9) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") in order to address the business risks associated with the Company. The Company periodically reviews the risk management practices and actions deployed by the management with respect to the identification, impact assessment, monitoring, mitigation and reporting of key risks while trying to achieve its business objectives.

11) Internal Control System and their adequacy

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

To maintain its objectivity and independence, the Internal Auditor reports to the Chairman of the Audit Committee. The Internal Auditor monitors and evaluates the efficiency and adequacy of the internal control system with reference to the Financial Statement. Based on the report of internal auditor, process owners undertake corrective actions in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee.

During the year under review, no reportable material weakness in the operation was observed. Regular audit and review processes ensure that such systems are reinforced on an ongoing basis.

12) Vigil Mechanism/ Whistle Blower Policy

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

No complaints were received under whistle blower mechanism during the year under review.

13) Directors and Key Managerial Personnel

Mr. R. K. Rewari (DIN: 00619240), Managing Director of the Company is liable to retire by rotation and being eligible, has offered himself for re-appointment. The Board recommends his re-appointment to the shareholders at the ensuing AGM. On his re-appointment, he will continue as Managing Director for his remaining tenure as Managing Director and it will not be termed as break of service for all purposes.

Mr. Ranjan Sanghi, Independent Director will attain the age of 75 years on 6^th May, 2019. Board recommends for continuation of his appointment as an Independent Director for remaining term i.e. till 28^th September, 2019 in terms of Regulation 17(1A) of SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, as amended by SEBI (Listing Obligations and Disclosure Requirements) (Amendment), Regulations, 2018, notified on 9^th May, 2018 which would be effective from 1^st April, 2019 which require the approval of members by way of special resolution. Notice of AGM contains the resolution to this effect for approval of members.

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

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

14) Remuneration Policy

In compliance with Section 178(3) of the Act and Regulation 19(3) of the Listing Regulations and on the recommendation of the Nomination and Remuneration Committee, the Board framed a Policy relating to the selection and appointment of Directors, Key Managerial Personnel, Senior Management and their remuneration. The Policy includes criteria for determining qualifications, positive attributes and independence of a director and other matters. The functions of the Nomination and Remuneration Committee are disclosed in the Corporate Governance Report, which forms part of the Annual Report.

15) Performance Evaluation

Pursuant to Regulation 17 of the Listing Regulations read with Schedule IV of the Act, a formal evaluation of Board's performance and that of its Committees and individual directors had been done. The evaluation process was externally facilitated and conducted by M/s. hrcraft, a professional business consulting firm specialized in feedback exercises engaged for carrying out evaluation process in a fair and transparent manner. Directors were circulated structured performance evaluation forms on various heads and they have provided their inputs on the same. Based on feedback, an evaluation Report was prepared and forwarded to the Chairperson and the respective Director to maintain the confidentiality of the Report.

The Independent Directors at their meeting held on 7^th March, 2018, evaluated performance of the Chairperson, non-independent directors of the Company and the performance of the Board as a whole based on the evaluation report provided by the M/s. hrcraft.

The Directors expressed their satisfaction to the outcome of the aforesaid evaluations and consented for continuation of present term of appointment of each of the Independent Directors.

16) Meetings of the Board

Four meetings of the Board of Directors were held during the financial year 2017-18 and the gap between two consecutive board meetings was within the statutory limit. The details of the number of meetings held and attended by each Director are provided in the Corporate Governance Report, which forms part of this Report.

17) Committees of the Board

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

18) Directors' Responsibility Statement

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

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

ii) your Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March, 2018 and its profit for the year ended on that date;

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

iv) your Directors have prepared the annual accounts for the year ended 31^st March, 2018 on a going concern basis;

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

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

19) Related Party Transactions ("RPTs")

The RPTs entered into by the Company during the Financial Year 2017-18 were on an arm's length basis and in the ordinary course of business and none of them was material. The Form AOC-2 for RPTs is enclosed as "Annexure - 3".

All the RPTs were placed before the Audit Committee for its approval and the Committee had granted its prior approval/omnibus approvals, as the case may be, for all related party transactions considering their nature. The Audit Committee reviewed, on a quarterly basis, related party transactions entered into by the Company to which omnibus approval was granted by the Committee. The Company has framed a policy on RPTs for the purpose of identification, approval and monitoring of such transactions.

The policy on related party transaction is hosted on the Company's website at www.morarjee.com.

20) Auditors and their reports

A. Statutory Auditors & Auditors Report

In terms of Section 139 of the Act, Members of the Company at the 22^nd AGM held on 22^nd August, 2017 had appointed M/s. Haribhakti & Co. LLP, Chartered Accountants (Firm Registration No. 103523W/ W100048) as the Statutory Auditors for a term of 5 years commencing from the conclusion of 22^nd AGM till the conclusion of the 27^th AGM to be held in year 2022, subject to the ratification by shareholders at every AGM. Since the provision of ratification by the members has been done away by the Companies Amendment Act, 2017, Board has recommended the ratification of their appointment for their remaining tenure and the notice of AGM contains the resolution for ratification of their appointment to the members.

The Auditor's Report on the Standalone and Consolidated Financial Statements of the Company for the Financial Year 2017-18 as submitted by M/s. Haribhakti & Co. LLP, did not contain any qualifications, reservations or adverse remarks and are self-explanatory.

There have been no instances of fraud reported by the Auditors under Section 143(12) of the Act and Rules framed thereunder either to the Company or to the Central Government.

B. Cost Auditors

Pursuant to Section 148 of the Act and on the recommendation of the Audit Committee, M/s. Phatak Paliwal & Co., Cost Accountants (Firm Registration Number 000105), was appointed by the Board as the Cost Auditors of the Company for the financial year 2018-19 at a remuneration of Rs.1,50,000 subject to ratification by the members at the AGM. The requisite resolution for ratification of remuneration of Cost Auditors by the shareholders has been set out in the Notice of AGM. M/s. Phatak Paliwal & Co. provided a certificate to the Company certifying their independence and arm's length relationship with the Company in accordance with the provisions of the Act.

C. Secretarial Audit

Pursuant to Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has obtained the Secretarial Audit Report for the financial year ended 31^st March, 2018 from M/s. Kala Agarwal, Company Secretary in practice and same is annexed as Annexure - 4 to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark and details mentioned in the Secretarial Audit Report are self explanatory.

21) Corporate Governance Report and Management Discussion and Analysis Report

The Corporate Governance Report on compliance of the conditions of Corporate Governance as stipulated in the Listing Regulations and the Management Discussion & Analysis Report form an integral part of this annual report.

22) Compliance of Secretarial Standards

The Company has complied with the applicable Secretarial Standards during the year.

23) Extract of Annual Return

Pursuant to the provisions of Sections 134(3)(a) and 92(3) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return as on March 31, 2018, in prescribed Form No. MGT-9 is given in Annexure - 5 to this Report.

24) Particulars of Employees

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

25) Energy Conservation and Technology absorption, Foreign Exchange Earnings and Outgo

The information pertaining to conservation of energy and technology absorption as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in "Annexure - 6" to this report.

The total Foreign Exchange Inflow was Rs.9,850.45 lakhs and Outflow was Rs.1,413.99 lakhs during the year under review.

26) Significant and Material Orders

There were no significant and material orders passed by any Regulators or Courts or Tribunals during the year ended 31^st March, 2018 impacting the going concern status and Company's operations in future.

27) Prevention of Sexual Harassment of Women at workplace

The Company has zero tolerance towards sexual harassment at workplace and has adopted a policy to abide by letter and spirit requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder. The Company has Internal Complaints Committee (ICC) at Group level to redress the complaints of sexual harassment. During the year, Company has not received any complaint of sexual harassment.

28) Material Changes and Commitments affecting the financial position of the company

There has been no material change/commitment affecting the financial position of the Company during the period from the end of the financial year on 31^st March, 2018 to the date of this Report. There has been no change in the nature of business of the Company.

29) Acknowledgements

Your Directors gratefully acknowledge the support and cooperation received from various departments of the Central and State governments, members, business associates, analysts, banks, financial institutions, customers, distributors and suppliers, Business Partners and other stakeholders of the Company and also convey a sense of high appreciation to all the employees of the Company for their hard work, dedication, continued commitment and contributions.

On behalf of the Board

For Morarjee Textiles Limited

Urvi A. Piramal

Chairperson

DIN 00044954

Date: 24^th May, 2018

Place: Mumbai