maris spinners ltd share price Directors report


Dear Members,

Your Directors are pleased to present the Forty Fourth Annual Report together with the Audited Financial Statements for the year ended March 31, 2023. The Management Discussion and Analysis is also included in this Report.

    1. COMPANY PERFORMANCE
    2. 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 Gross Revenue from operations stood at Rs. 14995.12 lakh compared with 17197.18 lakh during the Previous Year. The Operating Profit/(loss) before tax stood at (1569.09) lakh as against Rs.2332.95 lakh during the Previous Year. The Net Profit/(Loss) for the year stood at Rs. (1120.09) lakh against Rs. 1546.25 lakh reported during the Previous Year. Due to market condition and cotton price the company incurred loss during the year under review.

      The Company is navigating through these unprecedented times by building stronger and deeper relationships with consumers and its partners. The Company is supporting various Government Initiatives and helping communities around to fight the pandemic.

    3. FINANCIAL HIGHLIGHTSRs. in lakh
    4. S.NO.

      PARTICULARS

      2022-23

      2021-22

      i Revenue from operations 14995.12 17197.18
      ii Profit before exceptional items/extraordinary items and tax (1569.09) 2332.96
      iii Exceptional and extraordinary items
      iv Profit/Loss before tax (1569.09) 2332.96
      v Tax adjustments
      For Current year 656.44
      Relating to previous year
      Deferred Tax (482.69) 87.28
      MAT credit entitlement 46.35
      vi Other comprehensive income (33.69) 3.36
      Profit (Loss) after tax 1120.09 1546.25

      vii

      Earnings per share (14.13) 19.51
    5. DIVIDEND AND RESERVES
    6. No dividend were declared for the current financial year (2022-23) due to loss incurred by the company.

    7. INDIAN ACCOUNTING STANDARD (IND AS) IFRS CONVERGED STANDARDS
    8. Pursuant to the notification of the Companies (Indian Accounting Standard) Rules, 2015 by the Ministry of Corporate Affairs (MCA) on 16 February 2015, the company has adopted IND AS (Indian Accounting standards) from the financial year 2017-18.

    9. ANALYSIS AND REVIEW
    10. Industry conditions and Review of operations

      Indias $200 billion textile and apparel industry is facing a crisis as consumers in the United States, Europe and other big markets have cut spending on clothing following a surge in inflation after the war in Ukraine.

      While the overall economy is relatively strong and is outperforming major economies, the textile sector is a notable exception and orders suggest the downturn will continue well into 2023, raising the risk of layoffs in an industry that employs more than 45 million people.

      Exports, which constitute about 22% of the industry, have fallen for five months in a row - declining over 15% year-on-year in November to $3.1 billion. Domestic sales are sluggish despite strong growth in the overall economy because of high costs and cheap imported garments.

      After bumper sales earlier this year, local textile factories are now cutting production - contributing to a 4.3% contraction in manufacturing output in July-September quarter that has raised concerns among policy makers.

      After 18 months of robust growth through mid-2022, global retail sales of clothing have been dragged down by high inflation and depressed consumer sentiment, and prospects for 2023 look gloomy,

      In India, the manufacturing sector, contributing 16% of GDP, has been hit by rising raw material costs and weak demand, despite bright growth elsewhere. Manufacturing showed no signs of growth in the first half of the current April-March fiscal year while the overall economy, helped by agriculture and services, expanded 6.3%.

      Textile manufacturers, along with makers of footwear, furniture, electronic and electricals, have been hit as companies battle to pass on rising input costs, while consumers have cut expenditure on these products as they spend more on food and fuel.

      In the textile industry, higher domestic cotton prices and other costs have hit profit margins, while overseas orders for next summer are down by about one-third and domestic demand remains weak.

      "We see difficult times at least for the next six months as orders from major markets including the EU and the USA have come down substantially, as per the estimates of Apparel Export Promotion Council, citing inflation and global headwinds hitting domestic sales as well despite a fall in cotton prices by about 40% from record highs hit in 2022, profit margins were down due to lower sales in the domestic market.

      Interest rates on bank loans have gone up along with labour costs, but sales are down and domestic cotton prices remained high compared to global prices, and manufacturers are unable to compete with cheap imports from Bangladesh.

      Local cotton is at least 10% more expensive than global benchmarks, as per the reports of the Cotton Association of India (CAI).

      The industry has sought duty free imports of cotton, an interest subsidy on bank loans and expansion of production linked incentives to face the crisis.

      Company Outlook

      The Company expects the cotton prices to remain less volatile.

      The overall global economic outlook is not encouraging due to numerous factors viz., the ongoing Ukraine - Russia war, overall increase in commodity prices (cotton being no exception) and an un-

      precedented double digit inflation as being experienced in western countries for the very first time in decades, The domestic demand for cotton products including apparels will take a huge hit due to high inflationary trend as currently being experienced in India.

      The Company is making all efforts to reduce costs and rationalize operations to have a positive effect and give better operational results.

      Opportunities and Risks

      The Indian textile and apparel industry has been adversely impacted in the short to medium -term due the ongoing Ukraine-Russia war, overall increase in commodity prices and un-precedented double digit inflation as being experienced in western countries, resulting in lower consumer spends on apparels and made ups. The sector is reeling under liquidity crisis due to cost pressure and related factors.

      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 and yarn rates too.

      Exports may get affected due to global sentiments, inflationary pressure and continued threat of COVID. Power shortage and Labour shortage (migration of labour force due to un-relenting threat of COVID) are major concerns, which could have major impact on operations of the industry.

      Higher inflation, increase in borrowing cost, cost of Raw Material viz. cotton and price of finished product viz. yarn would have adverse impact on profit margin of the company.

    11. FINANCE AND ACCOUNTS
    12. The financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 notified under section 133 of the Companies Act, 2013, (the "Act") and other relevant provisions of the Act.

      There is no auditors qualification in the financial statements for the year under review.

    13. EXPANSION OF PLANT CAPACITY AND INSTALLATION OF SOLAR POWER PLANT
    14. Your Company added production capacity at their Unit I at Hunsur, Mysore District, Karnataka by 7488 spindles and the installed capacity has increased 28704 spindles to 36192 spindles (an increase of about 26.08%) at the cost of about Rs. 35.00 crores. New machinery was installed, and commercial production commenced from 1st October 2022.

      Your company had installed 2.80 MW of Solar Power Plant at their Unit II at Manaparai, Trichy Dt., Tamilnadu. The Solar plant was commissioned on 23rd March 2023.

    15. LISTING
    16. The Equity Shares of your Company are listed at BSE Limited, Mumbai (BSE). The listing fees to the Stock Exchange and custodian fees to depositories viz. NDSL and CDSL have been paid within time by the Company.

    17. CORPORATE GOVERNANCE
    18. As per Regulation 17 of the Listing Regulation with the Stock Exchanges, a separate section on Corporate Governance practices followed by the Company, together with a certificate from the Companys Auditors confirming compliance forms an integral part of this Report. (Annexure 1).

    19. EXTRACT OF ANNUAL RETURN
    20. The copy of MGT 7- Annual Return as required under Section 92 of the Companies Act, 2013, is placed in the web site of the Company (relating to financial year 2022 ), the web link is www.maris.co.in. The current year MGT 7 will be displayed in the web site after the form has been filed with MCA.

    21. SHARE CAPITAL
    22. The companys paid-up capital as on 31-3-2023 was 7924760 Equity Shares of Rs. 10 each amounting to Rs. 7,92,47,600/- after taking into account forfeiture of 247600 Equity Shares of Rs. 10 each made on 9th June 2021.

    23. DIRECTORS
    24. During the year Mr. Raghuraman [DIN: DIN 01722570] and Mr. Adithya Raghuraman [DIN 08172745] retire by rotation at the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment.

    25. BOARD EVALUATION
    26. During the year, a formal process for annual evaluation of performance of Board, its committees and directors was carried out as per the criteria laid down by the Nomination and Remuneration Committee, pursuant to the provisions of the Companies Act, 2013 (C A 2013) 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 structure, composition, Board Management relationship, effectiveness in terms of roles and responsibilities and processes encompassing the information flow and functioning. The guiding standards for the assessment of performance of Directors (including the independent Directors) their attendance and participation at Board Meetings, sharing of their relevant domain expertise and networkings in other forums, the strategic inputs and demonstration towards governance compliances.

      For evaluation of performance of the Chairman additional aspects like Institutional image buildings, proving guidance on strategy and performance, maintaining an effective and healthy relationship between the Board and the Management were taken into consideration. The evaluation was carried out through a structured methodology approved by the Nomination and Remuneration Committee after ensuring that the aspects under each of the laid down criteria are comprehensive and commensurate with the size of the Board and the Committee.

    27. KEY MANAGERIAL PERSONNEL
    28. The following are the key managerial personnel of the Company:

      Sr No. Name of the person DIN

      Designation

      Remuneration paid during the FY 2022-23 (Rs. In lakh)
      1 Mr. Anandkumar Rengaswamy 00075375

      Managing Director

      39.00

      2. Mr. T Raghuraman 01722570

      Wholetime Director

      12.00

      3. Mr. A.Harigovind 06428975 Wholetime Director and Chief Financial Officer

      NIL

      4. Mr. Adithya Raghuraman 08172745

      Wholetime Director

      9.00

      5. Mr. N Sridharan

      Company Secretary and Compliance Officer

      2.70

    29. NUMBER OF MEETINGS OF THE BOARD
    30. During the year six meetings of the Board of Directors were held on 14th May 2022, 12th August 2022, 7th November 2022, 14th November 2022, 6th February 2023 and 29th March 2023.

    31. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY COMPANY
    32. 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.

    33. WHISTLE BLOWER POLICY
    34. The Company has a whistle blower policy to report genuine concerns or grievances.

    35. RELATED PARTY TRANSACTIONS
    36. All transactions entered with Related Parties for the year under review were on arms 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.

    37. DIRECTORS RESPONSIBILITY STATEMENT
    38. 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.

      1. that in the preparation of the Annual Accounts for the year ended March 31, 2023, 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, 2023 and of the profit of the Company for the year ended on that date.
      2. 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;
      3. the annual accounts have been prepared on a going concern basis;
      4. 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
      5. 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.
    39. REMUNERATION POLICY
    40. The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Companys policy on appointment and remuneration including criteria for determining qualifications, positive attributes and independence are provided in the Corporate Governance Report forming part of this Report. The policy is given as (Annexure 2).

    41. AUDITORS
  1. STATUTORY AUDITORS
  2. M/s Raghavan, Chaudhuri & Narayanan Chartered Accountants, Bengaluru (Firm Registration No: 007761S) were appointed as Statutory Auditor of the Company in the casual vacancy caused by the resignation of previous Statutory Auditors M/s. N C S Raghavan and Co Statutory Auditors by the Shareholders at the Extraordinary General Meeting of the Company held on 17-12-2022 who shall hold office until the conclusion of the Annual General Meeting to be held in the year September 2023.

    As per the provisions of Section 139 of the Companies Act 2013 a statutory auditor who was appointed in the casual vacancy shall hold office in the upcoming annual general meeting and are appointed as Statutory Auditors of the Company to hold office for a period of 4 (Four) consecutive financial years, from the conclusion of the 44th Annual General Meeting of the Company in the year 2023 until the conclusion of the 48th Annual General Meeting of the Company in the year 2027 at a remuneration to be fixed by the Board of Directors. The Company has obtained written confirmation that the appointment, if made, would be in conformity with the limits specified in the said Section. The Board recommends their appointment as an ordinary resolution.

  3. COST AUDITOR
  4. 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 2023-24. As required under the Companies Act, 2013, a resolution seeking members approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting. The Board recommends their appointment as an ordinary resolution.

  5. SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made there under, the Company has appointed Mr. V.K. Shankararamann, Company Secretary in Practice (PCS.No. 5255) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is included as (Annexure 3) and forms an integral part of this Report.

There is no secretarial audit qualification for the year under review.

    1. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
    2. Your Company has an effective internal control and risk-mitigation system, which is constantly assessed and strengthened with new/revised standard operating procedures. The Companys internal control system is commensurate with its size, scale and complexity of its operations. The internal and operational audit

      is entrusted to M/s S.N.S. Associates, Chennai, 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 them. 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.

    3. RISK MANAGEMENT
    4. 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 Companys 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.

    5. CORPORATE SOCIAL RESPONSIBILITY (CSR)
    6. The compliance under CSR is applicable for the year under review. Your Company has spent Rs.20,28,568/- towards CSR during the year. Since the amount spent / to be spent is less than Rs. 50 lakhs, the Company is not required to constitute CSR Committee and Board is monitoring the CSR Expenditure. The relevant information required to be given under Section 135 of the Companies Act 2013 is attached in the Directors Report. (Annexure 4).

    7. ENVIRONMENT AND SAFETY
    8. The Company is conscious of the importance of environmentally clean and safe operations. The Companys 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.

    9. PROCEEDING UNDER INSOLVENCY AND BANKRUPTCY CODE 2016
    10. There are no proceedings either filed by the Company or against the Company pending under the Insolvency and Bankruptcy Code 2016 as amended before the National Company Law Tribunal or other Courts as on 31 March 2023.

    11. PUBLIC DEPOSITS
    12. During the year under review your company has not accepted any public deposits under Chapter V of the Companies Act, 2013.

    13. HUMAN RESOURCES AND INDUSTRIAL RELATIONS
    14. 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 organizations growth and its sustainability in the long run.

    15. COMPOSITION OF AUDIT COMMITTEE
    16. The details pertaining to the composition of the Audit Committee is as under and is also included in the Corporate Governance Report. The present Director / Member are given below:

      The Audit Committee is re-constituted with effect from 14.05.2022 and the details are as under and also included in the Corporate Governance Report. The present Director / Member are given below:

      NAME OF DIRECTOR/MEMBER

      Sri. S. Kalyanaraman - Chairman Sri. S. Swaminathan

      Sri. Parag H Udani

    17. COMPOSITION OF NOMINATION AND REMUNERATION COMMITTEE
    18. The Nomination and Remuneration Committee is re-constituted with effect from 14.05.2022 and the details are as under and also included in the Corporate Governance Report. The present Director / Member are given below:

      NAME OF DIRECTOR/MEMBER

      Sri. S. Swaminathan - Chairman Sri. Parag H Udani

      Sri. S. Kalyanaraman

    19. COMPOSITION OF STAKE HOLDERS RELATIONSHIP COMMITTEE
    20. The Stake Holders Relationship Committee was reconstituted with effect from 14..05.2022 and the details are as under and also included in the Corporate Governance Report. The present Director / Member are given below:

      NAME OF DIRECTOR/MEMBER

      Sri. Parag H Udani - Chairman Sri. S. Swaminathan

      Sri. S. Kalyanaraman Sri. A. Harigovind

    21. PREVENTION OF INSIDER TRADING
    22. The Company is having a code for prevention of Insider Trading with a view to regulate the trading in securities by the Directors and designated employees of the Company. The code requires pre-clearance of for dealing in the companys shares and prohibits the purchase or sale companys shares by the Directors and designated employees while in possession of unpublished price sensitive information in relation to the Company.

    23. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS
    24. During the year under review, no significant material orders were passed by the regulators or courts or tribunals impacting the going concern status and future operations of the Company.

    25. 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 in Annexure to this Report.

The information required under Section 197 (12) of the Companies Act, 2013 read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and forming part of the Directors Report for the year ended March 31, 2023 is given in a separate Annexure to this Report.

The statement containing information as required under Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Annual Report. In terms of the first proviso to Section 136 of the Act, the Report and accounts are being sent to the shareholders excluding the aforesaid statement which is open for inspection at the Registered Office of the Company. Any shareholder interested in obtaining the same may write to the Company Secretary at the Registered Office of the Company.

Disclosures as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has zero tolerance for sexual harassment at its workplace and has adopted a Policy on prevention, prohibition and redressal of sexual harassment at the work place in line with the Provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, and the Rules there under for prevention and redressal of complaints of sexual harassment at workplace. The following is a summary of sexual harassment complaints received and disposed off during the year 2022-23;

  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 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.