DIRECTORS' REPORT To, THE MEMBERS MAXWELL INDUSTRIES LTD. The Directors of your Company are pleased to present, the 25thAnnual Report, on the working and the progress of the Company, along with audited financial statement of the Company for the financial year ended on 31st March, 2015 and Report of the Auditors thereon. The Directors have recommended a dividend of 15% i.e. Rs. 0.30 (Thirty) paisa per Equity Share of Rs. 2/- each and 5% i.e. Rs. 5/- (Five) per 5% Redeemable Preference Share of Rs. 100/- each for the financial year ended on 31st March, 2015. This Dividend of Rs. 208.97 Lakhs along with dividend distribution tax of Rs. 41.78 Lakhs will absorb Rs. 250.75 Lakhs. During the year under review, the Company recorded a turnover of Rs. 26,110 Lakhs as against Rs. 25,742 Lakhs in the previous year, registering marginal growth of 1.42%. The Company had reorganised its organisational structure by converting functional based working system to Strategic Business Unit (SBU) by allocating various Brands to each SBU. The Company sees an opportunity to grow by focusing on each Brand by way of a SBU. The Company had realigned its product mix so as to focus on the high margin product and curtailing the low margin product. The Net Profit Before Tax stood at Rs. 108.87 Lakhs as against Rs. 805.97 and Profit After Tax is stood at Rs. 698.87 Lakhs in the current year as against Rs. 532.66 Lakhs in the previous year. The Company benefited on account of reduction in yarn price and conservative approach on spending on advertisement. 4. TRANSFER TO RESERVE During the year under review, your Company transferred Rs. 70 Lakhs to the General Reserve Account and Rs. 789.97 Lakhs to Capital Redemption Reserve Account, out of the amount available for appropriations and an amount of Rs. 481.81 Lakhs retained in the Profit & Loss Account. 5. SUBSIDIARY Your Company does not have any Subsidiary Company. 6. FIXED DEPOSIT Your Company did not accept any fixed deposits from public during the year. 7. CORPORATE GOVERNANCE As per Clause 49 of the Listing Agreement with the Stock Exchange, a separate section on Corporate Governance practice followed by the Company, together with the certificate from Company's Auditors confirming the compliance on Corporate Governance forms an integral part of this report. 8. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in form MGT-9 as on 31st March, 2015, as required under Section 92 of the Companies Act, 2013, is included in this Report as Annexure - B. 9. NUMBER OF MEETING OF THE BOARD The Board of Directors met 8 (Eight) times in the financial year 2014-15. The maximum interval between any two meetings did not exceed 120 days. The details of the board meetings and the attendance of the Directors are provided in the Corporate Governance Report. 10. WHISTLE BLOWER POLICY The Company has a Whistle Blower Policy to report genuine concerns or grievances. The Whistle Blower Policy has been posted on the website of the Company (www.maxwell.in). The Audit Committee shall oversee the Vigil Mechanism. 11. NOMINATION AND REMUNERATION POLICY The Board of Directors has framed a policy which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. This policy also lays down criteria for selection and appointment of Board Members. The detailed of this policy is explained in Corporate Governance Report. 12. RELATED PARTY TRANSACTIONS In line with the requirements of the Companies Act, 2013 and Equity Listing Agreement, your Company has formulated a Policy on Related Party Transactions. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties. This Policy specifically deals with the review and approval of Material Related Party Transactions keeping in mind the potential or actual conflicts of interest that may arise because of entering into these transactions. All Related Party Transactions are placed before the Audit Committee for review and approval and also the Company has developed Related Party Transactions framework through Standard Operating Procedures for the purpose of identification and monitoring of such 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 provisions of Section 188 of the Companies Act, 2013 are not attracted. There are no material related party transactions during the year under review with the promoters, Directors or Key Managerial Personnel. 13. CORPORATE SOCIAL RESPONSIBILITY The Company has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Companies Act, 2013. The CSR Committee was constituted by the Board of Directors of the Company at its meeting held on 23rd July, 2014. The CSR Policy of the Company and the details about the initiatives taken by the Company on Corporate Social Responsibility during the year are as per the annexure attached to the Companies (Corporate Social Responsibility Policy) Rules, 2014 have been appended as Annexure - C to this Report. 14. RISK MANAGEMENT POLICY AND INTERNAL ADEQUACY Your Company has set up a Risk Management Committee in accordance with the requirements of Listing Agreement and framed the policy to monitor the risks and their mitigating actions. The Company's internal control systems are commensurate with the nature of its business and the size and complexity of operations. These systems are routinely tested and certified by Statutory as well as Internal Auditor and cover all offices, factories and key business areas. Significant audit observations and follow up actions thereon are reported to the Audit Committee. The Audit Committee reviews adequacy and effectiveness of the Company's internal control environment and monitors the implementation of audit recommendations, including those relating to strengthening of the Company's risk management policies and systems. 15. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 Your Company strongly believes in providing a safe and harassment free workplace for each and every individual working for the Company through various interventions and practices. It is the continuous endeavour of the Management of the Company to create and provide an environment to all its employees that is free from discrimination and harassment including sexual harassment. Your Company has constituted Internal Complaints Committee (ICC). During the year ended 31st March, 2015, no complaints pertaining to sexual harassment was received by the Committee. 16. DIRECTORS RESPONSIBILITY STATEMENT To the best of knowledge and belief and according to the information and explanation obtained by them your Directors make the following statement in term of Section 134(3)(c) of the Companies Act, 2013 that: (a) the preparation of the annual financial statement of the Company for the financial year ended on 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures; (b) the 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 31st March, 2015 and of the profit of the Company for the year ended on 31st March, 2015; (c) 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; (d) the Directors have prepared the annual financial statement on a going concern basis; and (e) the Directors have laid down Internal Financial Controls to be followed by the Company and that such Internal Financial Controls are adequate and operating effectively. (f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. 17. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS There are no significant and material orders passed by the Regulators/Courts that would impact the going concern status of the Company and its future operations. 18. AUDITORS M/s. Attar & Company, Chartered Accountants, hold office as auditor of the Company until the conclusion of the forthcoming Annual General Meeting and is eligible for re-appointment in accordance with Section 139, 142 and other applicable provisions of the Companies Act, 2013 and the Companies (Audit and Auditors) Rule, 2014. It is proposed to appoint them as Auditor of the Company from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting of the Company. The Company had submitted Cost Audit Report for the financial year 2013-14 with the Ministry of Corporate Affairs. However, there has been no notification till date, covering our industry for the purpose of Cost Audit for the financial year 2014-15. 20. SECRETARIAL AUDIT Pursuant to the provisions of Section 204 of the Companies Act, 2013, and Rule made there under, the Company has appointed Mr. Rakesh Sanghani, Practicing Company Secretary (C.P No.6302) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is included as Annexure - D and forms an integral part of this Report. 21. BOARD INDEPENDENCE Our definition of 'Independence' of Directors is derived from Clause 49 of the Listing Agreement with Stock Exchanges and Section 149(6) of the Companies Act, 2013. Based on the confirmation/disclosures received from the Directors and on evaluation of the relationships disclosed, the following Non-Executive Directors are Independent in terms of Clause 49 of the Listing Agreement and Section 149(6) of the Companies Act, 2013: 1. Mr. Robin Banerjee 2. Mr. Gopal Sehjpal 3. Mr. Chetan Sheth 4. Dr. Arvind Kulkarni 5. Mrs. Meher Castelino 22. 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 Rule 8(3) of the Companies (Account) Rules, 2014 is given in Annexure - A to this report. None of the Employees of the Company are in receipt of Rupees Sixty Lakhs per annum or Rupees Five Lakhs per month during the year under review. Accordingly, no particulars of Employees are given pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rule, 2014. The information required under Section 197(12) of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rule, 2014 and forming part of the Directors Report for the year ended 31st March, 2015 is given in a separate Annexure - B to this Report. The above Annexure is not being sent along with this Report to the members of the Company in line with the provisions of Section 136 of the Companies Act, 2013. Members interested in obtaining a copy of the annexure may write to the Company Secretary at the Company's Registered Office. The aforesaid annexure is also available for inspection by Members at the Registered Office of the Company, 21 days before the 25th Annual General Meeting and upto the date of the ensuing Annual General Meeting during business hours on working days. None of the employees listed in the said Annexure is a relative of any Director of the Company. None of the employees hold (by himself or along with his spouse and dependent children) more than two per cent of the Equity Shares of the Company. The Business Responsibility Reporting as required by Clause 55 of the Listing Agreement with the Stock Exchange is not applicable to your Company for the financial year ending 31st March, 2015. 23. REDEMPTION OF 5% REDEEMABLE PREFERENCE SHARES The Company had redeemed its 1st trench of 3,94,984 - 5% Redeemable Preference Shares of Rs.100/- each on 31st July, 2014 and 2nd trench of 3,94,984 on 31st January, 2015 and the last i.e 3rd trench will be redeemed on 31st January, 2016 as per the terms of issue and allotment of 5% Redeemable Preference Shares. 24. ACKNOWLEDGEMENT The Directors of your Company acknowledge with deep sense of appreciation the encouragement, support and co-operation received by the Company from its Bankers viz. State Bank of India, IDBi Bank Limited, HDFC Bank Limited, BSE Limited, National Stock Exchange of India Limited, Members, Suppliers and Esteemed Customers of the Company. 25. CAUTIONARY STATEMENT Statement made in the Annual Report including those stated under the caption "Management Discussion and Analysis" describing the Company's plan, projections and expectations may constitute "forward looking statement" within the meaning of applicable laws and regulations. Actual results may differ materially from those either expressed or implied. For and on behalf of the Board J. K. Pathare (Chairman) DIN: 00203211 Registered Office: Plot No.C-6, Road No.22, MIDC, Andheri (East) Mumbai 400 093 Place: Mumbai Date: 30th May, 2015 |