Maris Spinners Ltd

Maris Spinners Limited (Your Company) is a leading spinning mill manufacturing high quality yarn for the domestic market with interests in Wind and Solar Energy Generation for captive use. The Gross Revenue from operations stood at Rs. 16,699.44 lakhs compared with 14,995.12 lakhs during the Previous Year. The Operating Profit/(loss) before tax stood at (1,326.58) lakhs as against (Rs.1,569.09) lakhs during the Previous Year. The Net Profit/(Loss) for the year stood at (Rs. 899.05 lakhs) against (Rs.1,120.09) lakhs reported during the Previous Year.

No dividend were declared for the current financial year (2023-24) due to loss incurred by the company.

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.

Industry conditions and Review of operations

In India, the manufacturing sector, contributing 16% of GDP, has been hit by rising raw material costs and weak demand, despite bright growth elsewhere.

The Textile Industry is facing exceptional and unprecedented challenging conditions. Due to considerable volatility in cotton prices and low demand for fabrics, yarn prices fell substantially. There is a rise of demand for low-cost products having sustainable and environment - friendly production processes. Consumers are seeking products that are made from renewable materials and from sustainable manufacturing processes.

Economic uncertainties, supply chain disruption and increased operational costs have collectively contributed to the distress faced by the spinning mills. The adverse impact of these challenges has been further exacerbated by a decline in demand both domestically and internationally.

The biggest threat to cotton products is competition from other low-cost man made fibres. Consumers are shifting their focus to low-cost products which has led to intense competition and pricing pressure in the global textile industry.

There is a high cost to comply with environmental, social and labour regulations which can be costly and time consuming.

Further the textile industry is highly sensitive to global economic conditions and can be significantly impacted by global demand and pricing.

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 coming year will be challenging with respect to cotton pricing. The Company expects the cotton prices to remain less volatile .We must navigate the challenging period by differentiating ourselves The overall global economic outlook is not encouraging due to numerous factors viz., overall increase in commodity prices) 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 has also made adjustments to ensure we are in position to produce counts of yarn that are in demand and able to switch counts at short notice to meet demand as oppose to produce and store. The Company is also continually exploring ways to introduce value added products to help expand margins.

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. Power shortage and Labour shortage (migration of labour) 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.

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 auditor's qualification in the financial statements for the year under review.

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.

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 Company's Auditors confirming compliance forms an integral part of this Reports Annexure 1 (Page No. 33).

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 2023 ), 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.

10. SHARE CAPITAL

The company's paid-up capital as on 31-3-2024 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.

11. DIRECTORS

During the year Mrs. Dhamayanthi Ananthakumar (DIN: 08461584] who is retiring by rotation at the forthcoming Annual General Meeting, being eligible offer herself for re-appointment.

During the year, the tenure of Mr Adithya Raghuraman, wholetime director expiring on 29-06-2024 and he is being reappointed for a further period of three years with effect from 30-06-2024 to 29-06-2027, and the company has received a notice from a shareholder proposing his appointment as wholetime director.

During the year Mr. Anandkumar Rengaswamy (DIN 00075375) has resigned from the office of Managing Director with effect from 22-09-2023 due to other business commitments and Mr T Raghuraman (DIN 01722570) whole time Director was appointed as Managing Director with effect from 23-09-2023.

The Board conveys its appreciation to Mr Anandkumar Rengaswamy for the excellent and dedicated services done to the company during his tenure as Managing Director.

The tenure of independent directors namely Mr. Parag Udani and Mr. S Kalyanaraman are expiring on 29-5-2024 and tenure of Mr S Swaminathan independent director is expiring on 20-06-2024. The Company has received notice from the shareholders proposing their appointment as independent directors. The Board recommends the reappointment of three independent directors for further period 5 years from the expiry date by way of special resolution.

12. BOARD EVALUATION

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.

13. KEY MANAGERIAL PERSONNEL

The following are the key managerial personnel of the Company:

14. NUMBER OF MEETINGS OF THE BOARD

During the year six meetings of the Board of Directors were held on 15th May 2023, 11th August 2023, 26th August 2023, 7th November 2023, 12th February 2024 & 29th March 2024.

15. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY COMPANY

Details of Loans (nil) Guarantees (nil) and Investments covered under the provisions of Section 186 of the Companies Act, 2013 during the year 2023-24 are given in the notes to Financial Statements.

16. WHISTLE BLOWER POLICY

The Company has a whistle blower policy to report genuine concerns or grievances.

17. 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.

18. 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, 2024, 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, 2024 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.

19. REMUNERATION POLICY

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 Company's 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 (Page No. 39).

20. AUDITORS

a. STATUTORY AUDITORS

M/s Raghavan, Chaudhuri & Narayanan Chartered Accountants, Bengaluru (Firm Registration No: 007761S) were appointed as Statutory Auditor of the Company 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.

b. COST AUDITOR

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 2024-25. 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. The Board recommends their appointment as an ordinary resolution.

c. 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 (Page No. 44) and forms an integral part of this Report.

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

21. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has an effective internal control and risk-mitigation system, which is constantly assessed and strengthened with new/revised standard operating procedures. The Company's 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 and Ms. B Romi Vincy, Trichy, 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.

22. 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.

23. CORPORATE SOCIAL RESPONSIBILITY (CSR)

As the company incurred losses for the financial year 2022-23, the compliance under CSR is not applicable for the year under review.

24. 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.

25. PROCEEDING UNDER INSOLVENCY AND BANKRUPTCY CODE 2016

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 2024.

26. PUBLIC DEPOSITS

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

27. 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.

28. COMPOSITION OF AUDIT COMMITTEE

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. Swaminathan - Chairman

Sri. S. Kalyanaraman

Sri. Parag H Udani

Sri. A. Harigovind

Sri. Adithya Raghuraman

29. COMPOSITION OF NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee is re-constituted with effect from 29.03.2024 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. T Jayaraman

Smt. Ananthakumar Dhamayanthi

30. COMPOSITION OF STAKE HOLDERS RELATIONSHIP COMMITTEE

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. S. Swaminathan - Chairman

Sri. Parag H Udani

Sri. S. Kalyanaraman

Sri. A. Harigovind

Sri. Adithya Raghuraman

31. PREVENTION OF INSIDER TRADING

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 company's shares and prohibits the purchase or sale company's shares by the Directors and designated employees while in possession of unpublished price sensitive information in relation to the Company.

32. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS

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.

33. 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 Director's Report for the year ended March 31, 2024 is given in a separate Annexure to this Report. (Annexure 4) 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. The annual Report 2023-24 is being sent to the shareholders through email. Any shareholder interested in obtaining the hard copy of the same 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 2023-24;

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.