Your Directors are pleased to present the Fortieth Report together with the AuditedFinancial Statements for the year ended 31st March 2019. The Management Discussion andAnalysis is also included in this Report.
1. COMPANY PERFORMANCE
Maris Spinners Limited (Your Company) is a leading spinning mill manufacturing highquality yarn for the domestic market with interests in Wind Energy Generation for captiveuse. The company has its headquarters at Chennai. Amid optimism and rising businesssentiments your Company reported a top line growth over the previous year. The GrossRevenue from operations stood at Rs. 13251.97 lakh compared with Rs. 12492.07 lakh duringthe Previous Year. The Operating Profit before tax stood at Rs. 181.56 lakh as against Rs.74.09 lakh during the Previous Year. The Net Profit for the year stood at Rs. 247.55 lakhagainst Rs. 103.18 lakh reported during the Previous Year.
|2. FINANCIAL HIGHLIGHTS || || |
| || ||Rs. in lakh |
|PARTICULARS ||2018-19 ||2017-18 |
|i Revenue from operations ||13251.97 ||12492.07 |
|ii Profit before exceptional items/extraordinary items and tax ||181.56 ||74.09 |
|iii Exceptional and extraordinary items || || |
|iv Profit/Loss before tax ||181.56 ||74.09 |
|v Tax adjustments || || |
|For Current year ||41.25 ||15.95 |
|Relating to previous year || || |
|Deferred Tax ||-83.21 ||-56.69 |
|MAT credit entitlement ||-12.62 ||15.81 |
|vi Other comprehensive income ||11.41 ||4.16 |
|Profit after tax ||247.55 ||103.18 |
|vii Earnings per share ||3.03 ||1.26 |
3. DIVIDEND AND RESERVES
The Board of Directors of your Company has recommend a dividend of Rs.1.00 per equityshare of the face value of Rs. 10 each (@10%) for the financial year 2018-19 payable tothose shareholders whose names appear in the Register of Members as on the Book closuredate. The payout is expected to be Rs.96.00 Lakh (inclusive of dividend distribution taxof Rs.15.55 lakh. The dividend payment is subject to the approval of members at theensuing Annual General Meeting. The dividend payout is in accordance with the Company'sdividend distribution policy.
4. INDIAN ACCOUNTING STANDARD (IND AS) IFRS CONVERGED STANDARDS
Pursuant to the notification of the Companies (Indian Accounting Standard) Rules 2015by the Ministry of Corporate Affairs (MCA) on 16 February 2015 the company has adoptedIND AS (Indian Accounting standards) from the financial year 2017-18.
5. ANALYSIS AND REVIEW
Industry conditions and Review of operations
The Indian textile industry witnessed moderate improvement during the course of theyear. During the year under review your company was able to maintain its performance dueto stable cotton prices remunerative yarn price through dedicated efforts aimed atimproving operational efficiency focus on optimal product mix and effective cost savingpractices.
The Company expects the cotton price to raise as this is evident from the trend duringthe last quarter of the financial year 2018-19.
Demand for yarn has remained stable and indicates average year ahead as the prices foryarn are not raising as fast as cotton prices. The overall global economic outlook isgood which the company hopes to provide a boost.
The Company is making all efforts to reduce costs and rationalize operations to have apositive effect. The Company expects to make higher profit during the current year.
Opportunities and Risks
The cotton price is subject to climatic conditions and market volatility. The probableimpact of climatic conditions in current year is expected to have a bearing on the cottonprices.
Exports may partly get affected due to global sentiments. Power shortage and Labourshortage are major concerns which could have an impact on operations of the Company.Higher inflation and increase in interest rates would have adverse impact on profit marginof the company.
The cost of raw material viz. cotton was stable for most part of the year and there wasa raise in prices during the last quarter of the year.
6. FINANCE AND ACCOUNTS
The financial statements have been prepared in accordance with Indian AccountingStandards (Ind AS) as per the Companies (Indian Accounting Standards) Rules 2015 notifiedunder section 133 of the Companies Act 2013 (the "Act") and other relevantprovisions of the Act.
There is no auditor's qualification in the financial statements for the year underreview.
The Equity Shares of your Company are listed at The Bomaby Stock Exchange Limited(BSE) Mumbai. The listing fees to the Stock Exchange and custodian fees to depositoriesviz. NDSL and CDSL have been paid by the Company.
8. CORPORATE GOVERNANCE
As per Regulation 17 of the Listing Regulation with the Stock Exchanges a separatesection on Corporate Governance practices followed by the Company together with acertificate from the Company's Auditors confirming compliance forms an integral part ofthis Report.
9. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 as requiredunder Section 92 of the Companies Act 2013 is included in this Report as Annexure - Aand forms an integral part of this Report.
(i) DIRECTORS RE-APPOINTMENT / CESSATION
In accordance with the provisions of Section 152 of the Companies Act 2013 and theCompany's Articles of Association Mr. T. Jayaraman [DIN: 01402853] retires by rotation atthe forthcoming Annual General Meeting and being eligible offers himself forre-appointment.
Mrs. Kamala Thangavelu [ DIN:07145031] Woman Director resigned with effect from 1stApril 2019 and Mrs. Ananthakumar Dhamayanthi [DIN: 08461584] was appointed as WomanDirector with effect from 30th May 2019 in her place. The Board conveys its appreciationfor the services rendered by Mrs. Kamala Thangavelu.
(ii) INDEPENDENT DIRECTORS
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Securitiesand Exchange Board of India (Listing obligations and disclosure regulation) 2015 of theListing Regulation.
|1. Shri S. Venkataramani ||[DIN: 00053043] |
|2. Shri S. Srivatsan and ||[DIN: 02405108] |
|3. Shri Premal H Udani ||[DIN: 00075391] |
The tenure of three independent directors who were appointed for a period of 5 yearseffective from 12th September 2014 will be expiring on 11th September 2019.
The Board at their meeting held on 30th May 2019 appointed two independent directorsviz;
|1. Shri S.Kalyanaraman ||[DIN: 02652113] |
|2. Shri Parag Harkishon Udani ||[DIN: 01491901] |
As additional directors with effect from 30.05.2019 for a period of 5 years and theirappointment have to be confirmed at the ensuing Annual General Meeting of the Company.
The Board at their meeting held on 21st June 2019 appointed Shri Swaminathan [DIN:08474746] independent director as additional director with effect from 21.06.2019 for aperiod of 5 years and his appointment have to be confirmed at the ensuing Annual GeneralMeeting of the Company. The above independent directors are appointed in lieu of existingdirectors viz. Shri.S. Venkataramani Shri.S. Srivatsan and Shri Premal H Udani whoseterm is set to expire on 11th September 2019.
In accordance with Section 149(7) of the Companies Act 2013 all the independentdirectors have declared that they meet the criteria of independence as provided underSection 149 (6) of the Companies Act 2013 and Regulation 25 of the Listing Regulations.
The detailed terms of appointment of IDS are disclosed on the Companies website in thefollowing link www.maris.co.in.
11. BOARD EVALUATION
During the year a formal process for annual evaluation of performance of Board itscommittees and directors was carried out as per the criteria laid down by the Nominationand Remuneration Committee pursuant to the provisions of the Companies Act 2013 (C A2013) and Clause 49 of the Listing Agreement as applicable at that time.
The criteria of evaluation of Board and its Committees were founded on the structurecomposition Board Management relationship effectiveness in terms of roles andresponsibilities and processes encompassing the information flow and functioning. Theguiding standards for the assessment of performance of Directors (including theindependent Directors) their attendance and participation at Board Meetings sharing oftheir relevant domain expertise and networkings in other forums the strategic inputs anddemonstration towards governance compliances.
For evaluation of performance of the Chairman additional aspects like Institutionalimage buildings proving guidance on strategy and performance maintaining an effectiveand healthy relationship between the Board and the Management were taken intoconsideration. The evaluation was carried out through a structured methodology approved bythe Nomination and Remuneration Committee after ensuring that the aspects under each ofthe laid down criteria are comprehensive and commensurate with the size of the Board andthe Committee.
12. KEY MANAGERIAL PERSONNEL
The following are the key managerial personnel of the Company:
|Sr No. ||Name of the person ||Designation |
|1 ||Mr. A.Harigovind ||Wholetime Director and Chief Financial Officer |
|2 ||Mr. K.V.S. Raghavan ||Company Secretary |
13. NUMBER OF MEETINGS OF THE BOARD
During the year seven meetings of the Board of Directors were held on 23rd April 201830th May 2018 29th June 2018 31st July 2018 30th August 2018 14th November 2018 and4th February 2019.
14. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS BY COMPANY
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to Financial Statements.
15. WHISTLE BLOWER POLICY
The Company has a whistle blower policy to report genuine concerns or grievances.
16. RELATED PARTY TRANSACTIONS
All transactions entered with Related Parties for the year under review were on arm'slength basis and in the ordinary course of business and that the provisions of Section 188of the Companies Act 2013 are not attracted. Thus disclosure in form AOC - 2 is notrequired. Further there are no material related party transactions during the year underreview with the promoters Directors or Key Managerial Personnel.
The Company has developed a Related Party Transactions framework through StandardOperating Procedures for the purpose of identification and monitoring of suchtransactions.
All Related Party Transactions are placed before the Audit Committee as also to theBoard for approval. Omnibus approval was obtained on a quarterly basis for transactionswhich are of repetitive nature. Transactions entered into pursuant to omnibus approval areaudited by the Risk Assurance Department and a statement giving details of all RelatedParty Transactions are placed before the Audit Committee and Board for review and approvalon a quarterly basis.
17. DIRECTOR'S RESPONSIBILITY STATEMENT
To the best of knowledge and belief and according to the information and explanationsobtained by them your Directors make the following statements in terms of Section 134 (3)(c) of the Companies Act 2013.
(i) that in the preparation of the Annual Accounts for the year ended 31st March 2019the applicable accounting standards have been followed along with proper explanationrelating to material departures if any and applied them consistently and made judgementsand estimates that are reasonable and prudent so as to give a true and fair view of thestate of affairs of the Company as at 31st March 2019 and of the profit of the Company forthe year ended on that date;
(ii) that the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
(iii) the annual accounts have been prepared on a going concern basis;
(iv) that the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
(v) that the Directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
18. REMUNERATION POLICY
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The Company's policy on appointment and remuneration including criteria fordetermining qualifications positive attributes and independence are provided in theCorporate Governance Report forming part of this Report. The policy is given as AnnexureD.
a. STATUTORY AUDITORS
Mr. Vijayakumar Janadri Chartered Accountant Bangalore (Membership No. 222127) isbeing appointed as Statutory Auditors of the Company to hold office for remaining periodfor 4 years until the conclusion of Annual General Meeting for the year 2022 is eligibleto be appointed as statutory auditor of the Company for a period of 5 years and he hascompleted one year at the ensuing AGM. As required under the provisions of Section 139 ofthe Companies Act 2013 the Company has obtained written confirmation that theappointment if made would be in conformity with the limits specified in the saidSection.
b. COST AUDITOR
As per the requirement of Central Government and pursuant to Section 148 of theCompanies Act 2013 read with the Companies (Cost Records and Audit) Rules 2014 asamended from time to time your Company has been carrying out audit of cost recordsrelating to textile mill every year.
The Board of Directors on the recommendation of Audit Committee has appointed M/s A.Gopala Iyengar Bangalore Cost Accountants as Cost Auditor to audit the cost accounts ofthe Company for the financial year 2019-20. As required under the Companies Act 2013 aresolution seeking member's approval for the remuneration payable to the Cost Auditorforms part of the Notice convening the Annual General Meeting.
c. SECRETARIAL AUDITOR
Pursuant to the provisions of Section 204 of the Companies Act 2013 and rules madethere under the Company has appointed M/s N. Sridharan & Associates CompanySecretary in Practice (PCS.No. 7469) to undertake the Secretarial Audit of the Company.The Secretarial Audit Report is included as Annexure - B and forms an integral part ofthis Report.
There is no secretarial audit qualification for the year under review.
20. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
Your Company has an effective internal control and risk-mitigation system which areconstantly assessed and strengthened with new/revised standard operating procedures. TheCompany's internal control system is commensurate with its size scale and complexities ofits operations. The internal and operational audit is entrusted to M/s S.N.S. AssociatesChennai a reputed firm of Chartered Accountants. The main thrust of internal audit is totest and review controls appraisal of risks and business processes besides benchmarkingcontrols with best practices in the industry.
The Audit Committee of the Board of Directors actively reviews the adequacy andeffectiveness of the internal control systems and suggests improvements to strengthen thesame. The Company has a robust Management Information System which is an integral part ofthe control mechanism.
The Audit Committee of the Board of Directors Statutory Auditors and the BusinessHeads are periodically apprised of the internal audit findings and corrective actionstaken. Audit plays a key role in providing assurance to the Board of Directors.Significant audit observations and corrective actions taken by the management arepresented to the Audit Committee of the Board. To maintain its objectivity andindependence the Internal Auditor or reports to the Chairman of the Audit Committee.
21. RISK MANAGEMENT
The risk management framework defines the risk management approach of the Company andincludes periodic review of such risks and also documentation mitigating controls andreporting mechanism of such risks.
Some of the risks that the Company is exposed to are:
Given the interest rate fluctuations the Company has adopted a prudent andconservative risk mitigation strategy to minimize interest costs.
Commodity Price Risks
The Company is exposed to the risk of price fluctuation of raw materials as well asfinished goods. The Company proactively manages these risks through inventory managementand proactive vendor development practices. The Company's reputation for quality productdifferentiation and service coupled with existence of powerful brand image with robustmarketing network mitigates the impact of price risk on finished goods.
The Company is exposed to risks attached to various statutes and regulations includingthe Competition Act. The company is mitigating these risks through regular review of legalcompliances.
Human Resource Risks
Retaining the existing talent pool and attracting new talent are major risks. TheCompany has initiated various measures including rolling out strategic talent managementsystem training and integration of learning and development activities.
22. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The compliance under CSR is not applicable for the year under review.
23. ENVIRONMENT AND SAFETY
The Company is conscious of the importance of environmentally clean and safeoperations. The Company's policy requires conduct of operations in such a manner so as toensure safety of all concerned compliances environmental regulations and preservation ofnatural resources.
24. HUMAN RESOURCES AND INDUSTRIAL RELATIONS
The Company takes pride in the commitment competence and dedication shown by itsemployees in all areas of business.
The Company has a structured induction process at all locations and managementdevelopment programs to upgrade skills of managers. Objective appraisal systems based onKey Result Areas (KRAs) are in place for senior management staff.
The Company is committed to nurturing enhancing and retaining top talent throughSuperior Learning & Organizational Development. This is a part of Corporate HRfunction and is a critical pillar to support the organization's growth and itssustainability in the long run.
25. COMPOSITION OF AUDIT COMMITTEE
The details pertaining to the composition of the Audit Committee is as under and isalso included in the Corporate Governance Report. The present Director / Member are givenbelow:
NAME OF DIRECTOR/MEMBER
Sri.S.Venkataramani Sri.S.Srivatsan Sri. Premal H.Udani
26. PREVENTION OF INSIDER TRADING
The Company has adopted a code for prevention of Insider Trading with a view toregulate the trading in securities by the Directors and designated employees of theCompany. The code requires pre-clearance of for dealing in the company's shares andprohibits the purchase or sale of company's shares by the Directors and designatedemployees while in possession of unpublished price sensitive in relation to the Company.
27. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS
During the year under review no significant and material orders were passed by theregulators or courts or tribunals impacting the going concern status and future operationsof the Company.
28. STATUTORY INFORMATION
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo pursuant to Section 134 (3) (m) of the Companies Act 2013 read withthe Rule 8 (3) of the Companies (Accounts) Rules 2014 is given as Annexure to thisReport.
The information required under Section 197 (12) of the Companies Act 2013 read withRule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014and forming part of the Director's Report for the year ended 31st March 2019 is given in aseparate Annexure to this Report.
The statement containing information as required under Rule 5(2) and (3) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 forms part ofthis Annual Report. In terms of the first proviso to Section 136 of the Act the Reportand accounts are being sent to the shareholders excluding the aforesaid statement which isopen for inspection at the Registered Office of the Company. Any shareholder interested inobtaining the same may write to the Company Secretary at the Registered Office of theCompany
Disclosures as per the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013
The Company has zero tolerance for sexual harassment at its work place and has adopteda Policy on prevention prohibition and redressal of sexual harassment at the work placein line with the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the Rules there under for prevention andredressal of complaints of sexual harassment as workplace. The following is a summary ofsexual harassment complaints received and disposed off during the year 2018-19;
|1. Number of complaints received during the year || ||Nil |
|2. No of complaints disposed off || ||Nil |
The Company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 read with the Companies (Acceptance of Deposits) Rules 2014.
Your Directors thank the Banks Customers Government Authorities Suppliers andShareholders for their support. Your directors also place on record their appreciation forthe committed services by the employees of the Company.
| ||By Order of the Board || |
| ||ANANDKUMAR RENGASWAMY ||T. JAYARAMAN |
| ||Managing Director ||Director |
|Place : Chennai ||A. HARIGOVIND ||K.V.S. RAGHAVAN |
|Date : 21.06.2019 ||Chief Financial Officer ||Company Secretary |