DIRECTORS REPORT & MANAGEMENT DISCUSSION AND ANALYSIS Dear Members, Your Directors are pleased to present the Thirty Sixth Report together with the Audited Financial Statements for the year ended March 31, 2015. The Management Discussion and Analysis is also included in this Report. 1. CORPORATE OVERVIEW Maris Spinners Limited (Your Company) is a leading spinning mill manufacturing high quality yarn for the domestic market, with interests in Wind Energy Generation for captive use. The company has its headquarters at Chennai. 2. FINANCIAL PERFORMANCE Amid optimism and rising business sentiments, your Company reported a top line growth over the previous year. The Gross Revenue from operations stood at Rs. 12274.49 lakh compared with Rs. 11970.06 lakh during the Previous Year. The Operating Profit before tax stood at Rs. 496.66 lakh as against Rs. 780.00 lakh during the Previous Year. The Net Profit for the year stood at Rs. 331.25 lakh against Rs. 404.14 lakh reported during the Previous Year. 3. DIVIDEND AND RESERVES Your Directors recommending a dividend of 10%, subject to approval of the members at the ensuing Annual General Meeting. 4. ANALYSIS AND REVIEW Industry conditions and Review of operations The Indian textile industry witnessed reasonable improvement during the course of the year. During the year under review your company was able to maintain its performance due to stable cotton prices, remunerative yarn price through dedicated efforts aimed at improving operational efficiency, focus rjn optimal product mix and effective cost saving practices. Power situation was cause of concern for most part of the financial year. Company Outlook The Company expect the cotton price to remain stable as this is evident from the trend during the last quarter of the financial year 2014-15. Demand for yarn has also seen an increase and indicates a good year ahead as so the prices for yarn and the overall global economic outlook is good. The Company is making all efforts to reduce costs and rationalize operations to have a positive effect. The Company expects to make profit during the current year. Opportunities and Risks The cotton price is subject to climatic conditions and market volatility. The probable impact of climatic conditions in current year is expected to have a bearing on the cotton prices. Exports may partly get affected since European Markets are yet to improve. Power shortage and Labour shortage are major concerns, which could have impact on operations of the Company. Higher inflation and increase in interest rates would have adverse impact on profit margins of the company Raw Material The cost of raw material viz. cotton was stable during the year. 5. FINANCE AND ACCOUNTS Your Company prepares its financial statements in compliance with the requirements of the Companies Act, 2013 and the Generally Accepted Accounting Principles (GAAP) in India. The financial statements have been prepared on historical cost basis. The estimates and judgments relating to the financial statements are made on a prudent basis, so as to reflect in a true and fair manner, the form and substance of transactions and reasonably present the Company's state of affairs, profits and cash flows for the year ended March 31, 2015. There is no auditor's qualification in the financial statements for the year under review. 6. CORPORATE GOVERNANCE As per Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on corporate governance practices followed by the company, together"with a certificate from the Company's Auditors confirming compliance forms an integral part of this Report. 7. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in form MGT-9, as required under Section 92 of the Companies Act, 2013, is included in this Report as Annexure - A and forms an integral part of this Report. 8. DIRECTORS During the year under review, the Company appointed Smt. T. Kamala W/o. Late. M. Thangavelu as Director of the Company with effect from March 31, 2015 and is being appointed as additional director at the ensuing Annual General Meeting. All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Company's Articles of Association, Mr. T. Jayarman (DIN:01402853) and Mr.S. Srivatsan (DIN 02405108) retires by rotation at the forthcoming Annual General Meeting and being eligible offers themselves for re-appointment. 9. KEY MANAGERIAL PERSONNEL During the year under review, the company has appointed following persons as Key Managerial Personnel. 10. NUMBER OF MEETINGS OF THE BOARD The details of the number of meetings of the Board held during the Financial Year 2014-15 forms part of the Corporate Governance Report. 11. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY COMPANY Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to Financial Statements. 12. WHISTLE BLOWER POLICY The Company has a whistle blower policy to report genuine concerns or grievances 13. RELATED PARTY TRANSACTIONS All transactions entered with Related Parties for the year under review were on arm's length basis and in the ordinary course of business and that the provisions of Section 188 of the Companies Act, 2013 are not attracted. Thus disclosure in form AOC - 2 is not required. Further, there are no material related party transactions during the year under review with the promoters, Directors or Key Managerial Personnel. The Company has developed a Related Party Transactions framework through Standard Operating Procedures for the purpose of identification and monitoring of such transactions. All Related Party Transactions are placed before the Audit Committee as also to the Board for approval. Omnibus approval was obtained on a quarterly basis for transactions which are of repetitive nature. Transactions entered into pursuant to omnibus approval are audited by the Risk Assurance Department and a statement giving details of all Related Party Transactions are placed before the Audit Committee and Board for review and approval on a quarterly basis. 14. DIRECTOR'S RESPONSIBILITY STATEMENT To the best of knowledge and belief and according to the information and explanations obtained 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 March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any and applied them consistently and made judgements 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 March 31, 2015 and of the profit of the Company for the year ended on that date; (ii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other 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 the Company and that such internal financial controls are adequate and were operating effectively; and (v) that the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. 15. STATUTORY AUDIT M/s. N.C.S. Raghavan & Co, Chartered Accountants, (Firm Registration No. 007335S) who are Statutory Auditors of the Company hold office up to the forthcoming Annual General Meeting and are recommended for re-appointment to audit the accounts of the Company for the financial year 2015-16. As required under the provisions of Section 139 of the Companies Act, 2013, the Company has obtained written confirmation from M/s. N.C.S. Raghavan & Co that their appointment, if made, would be in conformity with the limits specified in the said Section. 16. COST AUDIT As per the requirement of Central Government and pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company has been carrying out audit of cost records relating to textile mill every year. The Board of Directors, on the recommendation of Audit Committee, has appointed M/s. A. Gopala Iyengar, Cost Accountants as Cost Auditor to audit the cost accounts of the Company for the financial year 2015-16. As required under the Companies Act, 2013, a resolution seeking member's approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting. 17. SECRETARIAL AUDIT Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made thereunder, the Company has'appointed M/s. N. Sridharan and Associates, Company Secretary 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 of this Report. There is no secretarial audit qualification for the year under review. 18. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY Your Company has an effective internal control and risk-mitigation system, which are constantly assessed and strengthened with new/revised standard operating procedures. The Company's internal control system is commensurate with its size, scale and complexities of its operations. The internal and operational audit is entrusted to M/s. S.N.S. Associates, a reputed firm of Chartered Accountants. The main thrust of internal audit is to test and review controls, appraisal of risks and business processes, besides benchmarking controls with best practices in the industry. The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same. The Company has a robust Management Information System, which is an integral part of the control mechanism. The Audit Committee of the Board of Directors, Statutory Auditors and the Business Heads are periodically apprised of the internal audit findings and corrective actions taken. Audit plays a key role in providing assurance to the Board of Directors. Significant audit observations and corrective actions taken by the management are presented to the Audit Committee of the Board. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee. 19. RISK MANAGEMENT The risk management framework defines the risk management approach of the Company and includes periodic review of such risks and also documentation, mitigating controls and reporting mechanism of such risks. Some of the risks that the Company is exposed to are; Financial Risks Given the interest rate fluctuations, the Company has adopted a prudent and conservative 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 as finished goods. The Company proactively manages these risks through inventory management and proactive vendor development practices. The Company's reputation for quality, product differentiation and service, coupled with existence of powerful brand image with robust marketing network mitigates the impact of price risk on finished goods. Regulatory Risks The Company is exposed to risks attached to various statutes and regulations including the Competition Act. The company is mitigating these risks through regular review of legal compliances. Human Resource Risks Retaining the existing talent pool and attracting new talent are major risks. The Company has initiated various measures including rolling out strategic talent management system, training and integration of learning and development activities. 20. CORPORATE SOCIAL RESPONSIBILITY (CSR) The compliance under CSR is not applicable for the year under review. 21. ENVIRONMENT AND SAFETY The Company is conscious of the importance of environmentally clean and safe operations. The Company's policy requires conduct of operations in such a manner, so as to ensure safety of all concerned, compliances environmental regulations and preservation of natural resources. 22. HUMAN RESOURCES AND INDUSTRIAL RELATIONS The Company takes pride in the commitment, competence and dedication shown by its employees in all areas of business. The Company has a structured induction process at all locations and management development programs to upgrade skills of managers. Objective appraisal systems based on Key Result Areas (KRAs) are in place for senior management staff. The Company is committed to nurturing, enhancing and retaining top talent through Superior Learning & Organizational Development. This is a part of Corporate HR function and is a critical pillar to support the organization's growth and its sustainability in the long run. 23. STATUTORY INFORMATION The information on conservation of energy, technology absorption and foreign exchange earnings and outgo pursuant to Section 134 (3) (m) of the Companies Act, 2013, read with the Rule 8 (3) of the Companies (Accounts) Rules, 2014 is given as Annexure to this Report. The information required under Section 197 (12) of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and forming part of the Director's Report for the year ended March 31, 2015 is given in a separate Annexure to this Report. The above Annexure is not being sent along with this Report to the Members of the Company in line with the provision of Section 136 of the Companies Act, 2013. Members who are interested in obtaining these particulars may write to the Company Secretary at the Registered Office of the Company. The aforesaid Annexure is also available for inspection by Members at the Registered Office of the Company, 21 days before the 36th Annual General Meeting and upto the date of the ensuing Annual General Meeting during the business on working days. The Company has not accepted any deposits, within the meaning of Section 73 of the Companies Act, 2013, read with the Companies (Acceptance of Deposits) Rules, 2014. Acknowledgement Your Directors thank the Banks, Customers, Government Authorities, Suppliers and Shareholders for their support. Your directors also place on record their appreciation for the committed services by the employees of the Company. By Order of the Board ANANDKUMAR RENGASWAMY Managing Director M. RENGASWAMY Director Place: Chennai Date : 30.05.2015 |