Hytone Texstyles Ltd Directors Report.

Dear Members,

The Directors of the Company are pleased to present the 30th Annual Report on the business and operations of the Company together with the Audited Financial Statements for the financial year ended March 31, 2019.

1. Financial Summary:

The Companys performance during the financial year ended March 31, 2019 as compared to the previous financial year is summarized below:

Particulars 2018-19 2017-18
Revenue from Operations 2,82,43,958 4,07,06,856
Other Income 27,78,696 15,59,923
Gross Income 3,10,22,654 4,22,66,779
Expenditure 1,64,28,335 3,54,49,621
Finance Charges 47,86,407 47,38,453
Depreciation 26,62,909 26,60,436
Total Expenditure 2,38,77,651 4,28,93,511
Net Profit before tax 71,45,003 (6,26,731)
Provision for tax - -
Net Profit after tax 71,45,003 (6,26,731)

2. State of Companys Affairs:

The Companys performance was satisfactory during the year. Your Directors are hopeful that the Company will perform better in the ensuing years. In the meantime Company has earned its income by way of rental income.

3. Dividend:

With a view to conserve the resources for current as well as future business requirements and expansion plans, your Board is of the view that the current years profit be ploughed back into the operations and hence no dividend is recommended for the financial year ended March 31, 2019.

4. Transfer to reserves:

The Company does not propose to transfer amount to the general reserve out of the amount available for appropriation and considered it appropriate to retain the same in the profit and loss account.

5. Nature of Business:

During the year under review, there was no change in the nature of business.

6. Material changes and commitments

There have been no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the financial year and the date of this Report.

7. Details of Subsidiary/Joint Ventures/Associate Companies:

As on March 31, 2019, the Company does not have any subsidiary/joint venture/associate companies. Accordingly, the requirements pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014 is not applicable.

8. Share Capital:

The paid up Equity Share Capital of the Company as at March 31 2019 stood at Rs. 5,30,00,000/- There was no public issue, rights issue, bonus issue or preferential issue etc. during the year. The Company has not issued shares with differential voting rights, sweat equity shares, nor has it granted stock options. As on March 31, 2019, none of the directors of the Company hold instruments convertible into equity shares of the Company. During the financial year 2018-19, there is no change in the Share Capital of the Company.

9. Disclosures in respect of voting rights not directly exercised by employees:

No disclosure is required under Section 67(3)(c) of the Companies Act, 2013, read with Rule 16(4) of Companies (Share Capital and Debentures) Rules, 2014, in respect of voting rights not exercised directly by the employees of the Company as the provisions of the said section are not applicable.

10. Indian Accounting Standard (IND AS):

As mandated by the Ministry of Corporate Affairs, the Company has adopted Indian Accounting Standards (‘Ind AS) from 1st April, 2017 with a transition date of 1st April, 2016. The financial results for the year 2018-19 have been prepared in accordance with IND AS, prescribed under Section 133 of the Companies Act, 2013 read with the relevant rules issued thereunder and the other recognized accounting practices and policies to the extent applicable. The Financial Results for all the periods of 2018-19 presented have been prepared in accordance with IND AS.

11. Secretarial Standards:

Pursuant to the approval given on 10th April, 2015 by the Central Government to the Secretarial Standards specified by the Institute of Company Secretaries of India, the Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) came into effect from 1st July, 2015. The said standards were further amended w.e.f. 1st October, 2017. The Company is in compliance with the same.

12. Business Responsibility Report:

The Business Responsibility Reporting as required by Regulation 34(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is not applicable to your Company for the financial year ended March 31, 2019.

13. Management Discussion and Analysis Report:

Pursuant to Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis (MDA) is required to be annexed to this report. There is nothing to mention in this report as the Company has disposed off its assets of its plant and machinery pertaining to the Textile Division. So the company has not annexed the Management Discussion and Analysis to the Boards report.

14. Corporate Governance Report:

The Company constantly endeavors to follow best Corporate Governance guidelines and best practices and disclose the same transparently. The Board is conscious of its inherent responsibility to disclose timely and accurate information on the Companys operations, performance, material corporate events as well as on the leadership and governance matters relating to the Company. The Company has put in place an effective corporate governance system which ensures that the provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 are duly complied with.

As per Regulation 34(3) read with Schedule V(c) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a report on Corporate Governance, in accordance with Listing Regulations, along with a certificate from M/s UKG & Associates, Chartered Accountants, Statutory Auditors of the Company, are annexed hereto and forms part of the Report. The auditors certificate for the year 2018-19 does not contain any qualification, reservation, adverse remark or disclaimer.

All Board members and Senior Management personnel have affirmed compliance with the Code of Conduct for the year 2018-19. A declaration to this effect signed by the Managing Director of the Company is contained in this Annual Report.

The Managing Director and CFO have certified to the Board with regard to the financial statements and other matters as required under regulation 17(8) of the SEBI Listing Regulations, 2015.

15. Directors and Key Managerial Personnel:

The Board of Directors consists of four members, of which two are Independent Directors. The Board also comprises of one woman Director. As on March 31, 2019, the Key Managerial Personnel of the Company under Section 203 of the Companies Act, 2013 are Mr. Amrut T Shah, Chairman and Managing Director, Mr. Vijay Sagvekar, Chief Financial Officer and Ms. Riddhi Thakkar, Company Secretary and Compliance Officer.

As per the provisions of Section 152(6) of the Companies Act, 2013 and the Companys Articles of Association, Mrs. Ranjan S. Gala (DIN: 01015712) shall retire by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment as a Director of the Company.

The following policies of the Company are attached herewith:

a) Policy for selection of Directors and determining Directors independence as Annexure I; and

b) Remuneration Policy for Directors, Key Managerial Personnel and other employees as Annexure II.

16. Disclosure Relating to Remuneration of Directors and Key Managerial Personnel

The remuneration paid to the Directors is in accordance with the Remuneration Policy formulated in accordance with Section 178 of the Companies Act, 2013. The details of remuneration paid to the Directors including Executive Directors of the Company are given in Form MGT-9 forming part of the Directors Report.

17. Directors Responsibility Statement:

The Board of Director of the Company confirms that:

a) in the preparation of the annual accounts for the year ended March 31, 2019, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;

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 March 31, 2019 and of the profit of the Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts on a going concern basis;

e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

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.

18. Number of Meeting of the Board

Four meetings of the board were held during the year. The details of the number of meetings held and attended by each Director are provided in the Corporate Governance Report, which forms part of this Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

19. Independent Directors Meeting

In compliance with the requirements of Schedule IV of the Companies Act, 2013, a meeting of the Independent Directors was held on 25th March, 2019, without the participation of the Executive Directors or Management personnel.

The Independent Directors carried out performance evaluation of Non-Independent Directors and the Board of Directors as a whole, performance of Chairman of the Company, the quality, contents and timelines of flow of information between the Management and Board, based on the performance evaluation framework of the Company.

20. Declaration of Independent Directors

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 Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and there is no change in their status of independence. As required under Section 149(7) of the Companies Act, 2013, the said declaration was placed in the Board Meeting held on May 30, 2018.

21. Familiarisation Programme

The Company has put in place an induction and familiarization programme for all its Directors including the Independent Directors so as to associate themselves with the nature of the industry in which the Company operates. Directors are periodically advised about the changes effected in the Corporate Laws, Listing Regulations with regard to their roles, rights and responsibilities as Director of the Company. The familiarisation programme for Independent Directors in terms of the provisions of Regulation 46(2)(i) of Listing Regulations, is uploaded on the website of the Company.

22. Board Evaluation:

The Company has devised a Policy for performance evaluation of the Board of Directors, Board Committees and Directors including Chairman, Executive Directors, Non-executive Directors and Independent Directors. Pursuant to the provisions of the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a structured questionnaire was prepared after taking into consideration the various aspects of the Boards functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance including the procedure prescribed under SEBI Circular dated January 5, 2017 on Guidance Note on Board Evaluation.

The Board of Directors has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee and Stakeholders Relationship Committee.

The performance evaluation of the Chairman and Non-Independent Directors was carried out by Independent Directors. The reports on performance evaluation of the Individual Directors were reviewed by the Nomination and Remuneration Committee and the Chairman of the Board held discussions with each Board member and provided feedback to them on the evaluation outcome. The Board of Directors expressed their satisfaction with the evaluation process.

23. Internal Financial Controls:

The Company has an adequate internal control system commensurate with the size and scale of its business operations.

The Company has appointed Internal Auditors who periodically audit the adequacy and effectiveness of the internal controls laid down by the management and suggest improvements. The Audit Committee of the Board of Directors approves the annual internal audit plan, periodically reviews the progress of audits as per approved audit plans, critical internal audit findings presented by internal auditors, status of implementation of audit recommendations, if any, and adequacy of internal controls.

The Audit Committee takes due cognizance of the observations made by the auditors and gives their suggestions for improvement. The suggestions of the Audit Committee are also taken into account for further strengthening of the control systems.

24. Risk Management Policy:

Your Company recognizes that the risk is an integral part of business and is committed to managing the risks in proactive and efficient manner. Your Company periodically assesses the risks in the internal and external environment along with treating the risks and incorporates risk management plans in its strategy, business and operational plans.

The business plan for the future are devised and approved by the Board keeping in mind the risk factors which can significantly impact the performance of the particular business. All major capital expenditures commitments are subject to scrutiny by the Board and investments are permitted only on being satisfied about its returns or utility to the Company. There are no risks which in the opinion of the Board threaten the existence of the Company.

The Company has formulated and implemented a Risk Management Policy that outlines the framework and procedures to assess and mitigate the impact of risks. Under the guidance of the Board of Directors of the Company and Key Managerial Personnel who are conversant with risk management systems and procedures have been entrusted with the risk management of the Company in accordance with the formulated policy. The Audit Committee has additional oversight in the area of financial risks and controls. All risks are systematically addressed through mitigating actions on a continuing basis.

25. Audit Committee:

The details pertaining to composition of audit committee are included in the Corporate Governance Report, which forms the part of this report.

26. Audit Committee Recommendations:

During the financial year 2018-19, there were no instances of non-acceptance of any recommendation of the Audit Committee by the Board of Directors.

27. Establishment Of Vigil Mechanism / Whistle Blower Policy:

As per the provisions of Section 177 of the Companies Act, 2013, the Company has adopted the Vigil Mechanism/Whistle Blower Policy to provide appropriate avenues to the employees to bring to the attention of the management any issues which is perceived to be in violation of or in conflict with the fundamental business principals of the Company. The policy is also posted on the website of the Company.

The employees are free to report to the management concerns about unethical behavior, actual or suspected fraud or violation of the codes of conduct or corporate governance policy or any improper activity to the Audit Committee of the Company or Chairman of the Company.

The Whistle Blower Policy has been appropriately communicated within the Company. The policy empowers the Chairman of the Audit Committee/Chairman of the Company to investigate any protected disclosure including matters concerning financials/accounting, etc. received from the employees under this policy.

During the financial year 2018-19 the Company has not received any complaint through Vigil Mechanism. The Whistle Blower Policy is available on the Companys website.

28. Nomination And Remuneration Policy:

The Board has, on the recommendation of the Nomination & Remuneration Committee formulated Nomination and Remuneration Policy for determining the criteria for determining qualifications, positive attributes and independence of a director and also criteria for determining the remuneration of directors, key managerial personnel and other employees.

The key objectives of the Policy are to lay down the criteria for appointment and remuneration of Directors, Key Managerial Personnel and Executives at Senior Management level and recommend to the Board their appointment, and also to formulate criteria for evaluation of performance of Independent Directors and the Board and to devise a policy on Board diversity.

The Policy, inter-alia, includes criteria for determining qualifications, positive attributes, independence of a director, and expertise and experience required for appointment of Directors, KMP and Senior Management.

As per the Policy, the remuneration / compensation to the Wholetime Directors shall be recommended by the Nomination and Remuneration Committee to the Board for its approval. However, the remuneration compensation to Whole-time Directors shall be subject to the approval of the shareholders of the Company and Central Government, wherever required. The policy is available on the Companys website.

29. Corporate Social Responsibility Committee

Since the Net Profit, Net worth and the Turnover of the Company for the year under review is less than Rupees Five Crore, Rupees Five Hundred Crore and Rupees One Thousand Crore respectively, the constitution of Corporate Social Responsibility (CSR) Committee is not applicable as per the provisions of Section 135 of the Companies Act, 2013 read with Rule 3 of Companies (Corporate Social Responsibility Policy) Rules, 2014.

30. Statutory Auditors:

Pursuant to the provisions of section 139 of the Companies Act, 2013, the members of the Company at the 28th Annual General Meeting held on 30th September, 2017 appointed M/s. UKG & Associates, Chartered Accountants, (Firm Registration No.123393W) as Statutory Auditors of the Company from the conclusion of 28th Annual General Meeting till the conclusion of 33rd Annual General Meeting, covering one term of five consecutive years, subject to ratification by the members at each intervening Annual General Meeting.

According to the Companies (Amendment) Act, 2017 notified by the Ministry of Corporate Affairs on May 7, 2018, the requirement of ratification of Statutory Auditors by the members of the company at every Annual General Meeting has been done away with. Therefore, no resolution has been proposed for their ratification at the ensuing AGM. They have confirmed that they are not disqualified from continuing as Statutory Auditors of the Company.

The Notes on financial statement referred to in the Auditors Report are self-explanatory and do not call for any further comments. The Statutory Auditors Report for the year 2018-19 does not contain any qualification, reservation, adverse remark or disclaimer made by Statutory Auditor. There is no incident of fraud requiring reporting by the auditors under Section 143(12) of the Companies Act, 2013.

31. Auditors Report:

The report contain the remark regarding the statutory dues which are payable relating to property tax and water tax as below and there are no other reservation or adverse remarks in report.

Name of the Statute Nature of the Dues Amount (Rs.) Period to which the amount relates
Navi Mumbai Municipal Corporation Property Tax 1,59,19,702/- From 2005 to 2012
M.I.D.C. Water Tax 1,46,484/- From 2005 to 2011

 

Name of the Statute Nature of the Dues Amount (Rs.) Period to which the amount relates Forum where dispute is pending
Maharashtra Municipal Corporation Act, 1949 Property Tax 2,09,06,332/- From 2005 to 2012 Assessor and Collector, Navi Mumbai Municipal Corporation

The board had discussed the same qualification in their meeting and get decide to resolve the qualification as soon as possible.

32. Internal Auditors

Pursuant to the provisions of Section 138 of the Companies Act, 2013, the Board of Directors of the Company have appointed M/s DSSM & Co. LLP, Chartered Accountant as Internal Auditors of the Company. The Audit Committee of the Board of Directors in consultation with the Internal Auditor formulates the scope, functioning, periodicity and methodology for conducting the internal audit.

33. Cost Auditors

During the year under review, the Company has not carried on any manufacturing activities. Hence no cost audit was required to be conducted.

34. Secretarial Auditor and Secretarial report:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company have re-appointed, Teena Dedhia & Associates, Practising Company Secretary, to conduct the Secretarial Audit for the financial year 2018-19. The Secretarial Audit Report for the year 2018-19 issued by her in the prescribed form MR-3 is attached as Annexure III to this Report.

Secretarial auditors remarks and Management explanation to auditors remarks:

The Directors refers to the auditors observations in the secretarial audit report and as required under section 204(1) of the Companies Act, 2013 the company has obtained a secretarial audit report.

1. Publication of results audited and unaudited in newspaper:

The Company has not been doing that since the financial position of the company does not allow Board to incur such expenditure keeping in mind that the results are made available for investors and market through stock exchange.

2. Demat of promoters shareholding:

Promoters of the Company are in the process of getting their shareholding in demat form.

35. Reporting of Fraud

During the year under review, the Statutory Auditors and Secretarial Auditors have not reported any instances of frauds committed in the Company by its Officers or Employees, to the Audit Committee under Section 143(12) of the Companies Act, 2013 details of which needs to be mentioned in this Report.

36. Transaction with related Parties:

All contracts / arrangements / transactions entered by the Company during the financial year with Related Parties were in its ordinary course of business and on arms length basis. Pursuant to section 177 of the Companies Act, 2013 and regulation 23 of SEBI Listing Regulations, 2015, all Related Party Transactions were placed before the Audit Committee for its approval. There are no materially significant related party transactions made by the Company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the Company at large.

The policy on related party transactions as approved by the Board is uploaded on the Companys website. The Companys management ensures total adherence to the approved Policy on Related Party Transactions to establish Arms Length Basis without any compromise.

Your Directors draw attention of the members to Note 36 to the financial statement which sets out related party disclosures.

37. Extract of Annual Return:

As provided under section 92(3) of companies Act, 2013 the extract of annual return is given in Annexure IV in the prescribed Form MGT-9, which forms part of this report. The weblink for the Annual Return placed on the Companys website is http://www.hytonetextiles.com.aspx.

38. Particulars of employee:

The information required under section 197 of the companies Act, 2013 read with rule 5(1) of the companies (Appointment and remuneration of managerial personnel) Rules, 2014 are given below:

A. Ratio of remuneration of each Director to the median employees remuneration for the financial year.

Name of director Designation Ratio
Mr. Amrut T. Shah Chairman & Managing Director

B. Percentage increase in remuneration of each director and Key Managerial personnel:

Name Designation % increase
Mr. Amrut T. Shah Chairman & Managing Director 0.19
Mr. Vijay Sagvekar Chief Financial Officer 7.69
Ms. Riddhi Thakkar* Company Secretary -

C. The Percentage increase in the median remuneration of the employee: 1.39%

D. Total number of permanent employees : 9

E. Average percentile increase made in the salaries of employees other than key managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in managerial remuneration:

Average increase in made in the salaries of employees other than the key managerial personnel during the year is 16.72%

There are no other exceptional circumstances to increase in the remuneration of key managerial personnel and increase in the remuneration has been in accordance with the Companys policy. The increment given to each individual employee is based on the employees potential, experience as also their performance and contribution to the Companys progress over a period of time.

F. The company affirms that the remuneration is as per the remuneration policy of the Company.

Disclosure under Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not applicable to any of employees of the company.

39. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo:

The information under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 (3) of the Companies (Accounts) Rules, 2014 for the year ended March 31, 2019 is given below:

(A) Conservation of Energy:

(i) the steps taken or impact on conservation of energy –The Company has not continued with any manufacturing or processing activity. Considering the nature of Companys business there is no reporting to be made on conservation of energy in its operations.

(ii) the steps taken by the Company for utilising alternate sources of energy – NIL

(iii) the capital investment on energy conservation equipments – NIL

(B) Technology Absorption:

(i) the efforts made towards technology absorption – NIL

(ii) the benefits derived like product improvement, cost reduction, product development or import substitution – NIL

(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)- Not applicable

(a) the details of technology imported;

(b) the year of import;

(c) whether the technology been fully absorbed;

(d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof; and

(iv) the expenditure incurred on Research and Development – NIL

(C) Foreign Exchange Earnings And Outgo:

Current Year Previous year
Foreign Exchange Outgo Nil Nil
Foreign Exchange Earnings Nil Nil

40. Particulars of Loans, Guarantees, or Investments:

There were no loans, guarantees given by the company under section 186 of the Companies Act, 2013 during the year under review and hence the said provision is not applicable. The details of investment made are enumerated in the Notes to Accounts.

41. Deposits from public:

During the year under review, your Company has not accepted or renewed any Deposit, within the meaning of Section 73 of the Companies Act, 2013, read with the Companies (Acceptance of Deposits) Rules, 2014 and as such, there are no outstanding deposits in terms of the Companies (Acceptance of Deposits) Rules, 2014. Hence, the requirement of furnishing details of deposits which are not in compliance of Chapter V of the Act, is not applicable.

42. Prevention of Sexual Harassment of women at workplace

As per the requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 (‘Act) and rules made there under, your Company has adopted a Sexual Harassment Policy for women to ensure healthy working environment without fear of prejudice, gender bias and sexual harassment. The Board of Directors of the Company state that the Company has also complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The Board states that during the year under review there were no cases or complaints filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Also there were no cases of child labour, forced labour, involuntary labour and discriminatory employment.

43. Green Initiative

Electronic copy of the Annual Report 2018-19 and the Notice of the 30th Annual General Meeting are sent to all members whose email addresses are registered with the Company / depository participant(s). For members who have not registered their email addresses, physical copies are sent in the permitted mode.

Your Directors would like to draw your attention to Section 20 of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, as may be amended from time to time which permits paperless compliances and also service of notice / documents (including annual report) through electronic mode to its members.

To support this green initiative, we hereby once again appeal to all those members who have not registered their e-mail addresses so far are requested to register their e-mail address in respect of electronic holding with their concerned Depository Participants and/or with the Company.

44. General:

Your Directors state that no disclosures or reporting is required in respect of the following items:

1. Issue of shares including sweat equity shares and ESOS to employees of the Company under any scheme including ESOS.

2. Issue of equity shares with differential rights as to dividend, voting or otherwise.

3. Reporting requirements under Rules 5,6 and 8(1) of the Companies (Accounts) Rules, 2014, since the Company did not have any subsidiary during the year.

4. The Company does not have any Employees Stock Option Scheme.

5. The Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees.

6. No significant or material orders were passed by the regulators or Courts or Tribunals which impact the going concern status and Companys operation in future.

7. There is no Corporate Insolvency Resolution Process initiated under the Insolvency and Bankruptcy Code, 2016.

45. Acknowledgement:

Your Directors place on record their deep sense of appreciation of the dedication of the Companys employees at all levels and are confident they will maintain their commitment to excellence in the coming years.

Your Directors also express their deep appreciation of the support received from the Government and other Regulatory authorities.

Your Directors also thank you, our valued shareholders, the Financial Institution, Banks, Dealers, Agents and customers for their continued trust in the Company and its management.

For and on behalf of the Board
Amrut T. Shah
Chairman & Managing Director
DIN: 00259420
Place: Navi Mumbai
Date: May 30, 2019

Annexure I to Boards Report:

Policy for selection of Directors and determining Directors independence

INTRODUCTION:

1.1 Hytone Texstyles Limited ("the Company") believes that an enlightened Board consciously creates a culture of leadership to provide a long-term policy approach to improve the quality of governance. Towards this, the Company ensures constitution of a Board of Directors with an appropriate composition, size, diversified expertise and experience and commitment to discharge their responsibilities and duties effectively.

1.2 The Company recognizes the importance of Independent Directors in achieving the effectiveness of the Board and aims to have an optimum combination of Non-Independent and Independent Directors.

SCOPE AND PURPOSE:

This Policy sets out the guiding principles for the Nomination and Remuneration Committee for identifying persons who are qualified to become Directors and to determine the independence of Directors, in case of their appointment as independent directors of the Company.

TERMS AND REFERENCES:

In this Policy, the following terms shall have the following meanings:

3.1. "Director" means a director appointed to the Board of the Company.

3.2. "Nomination and Remuneration Committee" means the committee constituted by the Board of Directors of the Company in accordance with the provisions of Section 178 of the Companies Act, 2013.

3.3. "Independent Director" means a director referred to in sub-section (6) of Section 149 of the Companies Act, 2013.

ACCOUNTABILITIES:

4.1 The Board is ultimately responsible for the appointment of directors.

4.2 In terms of Section 178 of the Companies Act, 2013, the Nomination and Remuneration Committee makes assessment and selection of candidates for appointment as directors and recommends to the Board appointment of directors on the Board. (can we mention about removal also as given in the section)

ROLE OF THE NOMINATION AND REMUNERATION COMMITTEE ("NRC"):

The NRC is responsible for:

5.1 identifying individuals suitably qualified to become Board members and who may be appointed in Senior Management and making recommendations to the Board on the appointment, re-appointment or removal of directors, key managerial personnel and senior management personnel;

5.2 formulation of criteria for evaluation of performance of every director including independent directors;

5.3 recommending remuneration payable to Independent and Non-Independent directors including sitting fee;

POLICY:

6.1 Qualifications and Criteria

1. The Policy is aimed to engage directors (including non-executive directors and independent non-executive directors) who are highly skilled, competent and experienced persons within one or more fields of business, finance, accounting law, management, sales, marketing, administration, research, corporate governance, technical operations or other disciplines related to the business of the Company and who shall be able to positively carry out their supervisory role over the policies of the management of the Company and the general affairs of the Company.

2. The NRC and the Board, shall review on an annual basis, appropriate skills, knowledge and experience required of the Board as a whole and its individual members. The objective is to have a Board with experience that are relevant for the Companys operations.

3. In evaluating the suitability of individual Board members, the NRC shall take into account many factors, including the following:

a) General understanding of the Companys business dynamics, business and social perspective,

b) Educational and professional background;

c) Personal achievements;

d) Personal and professional ethics, integrity and values;

e) Every director should ensure that he can give sufficient time and attention to the Companys affairs and attend the Board meetings and other committee meetings in which he is a member regularly..

4. The proposed appointee shall also fulfill the following requirements:

a) Shall possess a Director Identification Number;

b) Shall not be disqualified under the Companies Act, 2013;

c) Shall give his written consent to act as a Director;

d) Shall endeavor to attend all Board meetings and wherever he is appointed as a Committee Member, the Committee meetings;

e) Shall abide by the Code of Conduct established by the Company for Directors and Senior Management Personnel;

f) Shall disclose his concern or interest in any company or companies or bodies corporate, firms, or other association of individuals including his shareholding at the first meeting of the Board in every financial year and thereafter whenever there is a change in the disclosures already made;

g) Shall abide by the provisions of Section 166 of the Companies Act, 2013 which lays down the duties of directors as under:

i. Subject to the provisions of Companies Act, 2013, a director of a company shall act in accordance with the articles of the company.

ii. A director of a company shall act in good faith in order to promote the objects of the company for the benefit of its members as a whole, and in the best interests of the company, its employees, the shareholders, the community and for the protection of environment.

iii. A director of a company shall exercise his duties with due and reasonable care, skill and diligence and shall exercise independent judgment.

iv. A director of a company shall not involve in a situation in which he may have a direct or indirect interest that conflicts, or possibly may conflict, with the interest of the company.

v. A director of a company shall not achieve or attempt to achieve any undue gain or advantage either to himself or to his relatives, partners, or associates and if such director is found guilty of making any undue gain, he shall be liable to pay an amount equal to that gain to the company.

vi. A director of a company shall not assign his office and any assignment so made shall be void.

h) Such other requirements as may be prescribed, from time to time, under the Companies Act, 2013 and other relevant laws.

5. The NRC shall evaluate each individual with the objective of having a group that best enables the success of the Companys business.

6.2 Positive Attributes:

a) Experience of management in a diverse organization;

b) Excellent interpersonal and communication skills;

c) Leadership skills;

d) Having continuous professional development to refresh knowledge and skills.

e) Commitment to high standards of ethics, personal integrity and probity;

f) Commitment to the promotion of equal opportunities and health and safety in the workplace.

6.3 Criteria of Independence:

The NRC shall assess the independence of director at the time of appointment / re-appointment and the Board shall assess the same annually. The Board shall re-assess determination of independence when any new interests or relationships are disclosed by a director.

The criteria of independence, as laid down in Companies Act, 2013, is as below:

An independent director in relation to a company, means a director other than a managing director or a whole-time director or a nominee director—

a. who, in the opinion of the Board, is a person of integrity and possesses relevant expertise and experience;

b. (i) who is or was not a promoter of the company or its holding, subsidiary or associate company; (ii) who is not related to promoters or directors in the company, its holding, subsidiary or associate company;

c. who has or had no pecuniary relationship with the company, its holding, subsidiary or associate company, or their promoters, or directors, during the two immediately preceding financial years or during the current financial year;

d. none of whose relatives has or had pecuniary relationship or transaction with the company, its holding, subsidiary or associate company, or their promoters, or directors, amounting to two per cent or more of its gross turnover or total income or fifty lakh rupees or such higher amount as may be prescribed, whichever is lower, during the two immediately preceding financial years or during the current financial year;

e. who, neither himself nor any of his relatives—

(i) holds or has held the position of a key managerial personnel or is or has been employee of the company or its holding, subsidiary or associate company in any of the three financial years immediately preceding the financial year in which he is proposed to be appointed;

(ii) is or has been an employee or proprietor or a partner, in any of the three financial years immediately preceding the financial year in which he is proposed to be appointed, of—

(A) a firm of auditors or company secretaries in practice or cost auditors of the company or its holding, subsidiary or associate company; or

(B) any legal or a consulting firm that has or had any transaction with the company, its holding, subsidiary or associate company amounting to ten per cent or more of the gross turnover of such firm;

(iii) holds together with his relatives two per cent or more of the total voting power of the company; or

(iv) is a Chief Executive or director, by whatever name called, of any non-profit organization that receives twenty-five per cent or more of its receipts from the company, any of its promoters, directors or its holding, subsidiary or associate company or that holds two per cent or more of the total voting power of the company; or

(v) is a material supplier, service provider or customer or a lessor or lessee of the company.

f. shall possess appropriate skills, experience and knowledge in one or more fields of finance, law, management, sales, marketing, administration, research, corporate governance, technical operations, corporate social responsibility or other disciplines related to the Companys business.

g. shall possess such other qualifications as may be prescribed, from time to time, under the Companies Act, 2013.

h. who is not less than 21 years of age.

i. The Independent Directors shall abide by the "Code for Independent Directors" as specified in Schedule IV to the Companies Act, 2013.

6.4 Other Directorships / Committee Memberships:

6.4.1 The Board members are expected to have adequate time and expertise and experience to contribute to effective Board performance. Accordingly, members should voluntarily limit their directorships in other listed public limited companies in such a way that it does not interfere with their role as directors of the Company. The NRC shall take into account the nature of, and the time involved in a Directors service on other Boards, in evaluating the suitability of the individual Director and making its recommendations to the Board.

6.4.2 A Director shall not serve as Director in more than 20 companies of which not more than 10 shall be Public Limited Companies.

6.4.3 A Director shall not serve as an Independent Director in more than 7 Listed Companies and not more than 3 Listed Companies in case he is serving as a Whole-time Director in any Listed Company.

6.4.4 A Director who is also a Director of a Listed Company, shall not be a member in more than 10 Committees or act as Chairman of more than 5 Committees across all companies in which he holds directorships.

For the purpose of considering the limit of the Committees, Audit Committee and Stakeholders Relationship Committee of all Public Limited Companies, whether listed or not, shall be included and all other companies including Private Limited Companies, Foreign Companies and Companies under Section 8 of the Companies Act, 2013 shall be excluded.

For and on behalf of the Board
Amrut T. Shah
Chairman & Managing Director
DIN: 00259420
Place: Navi Mumbai
Date: May 30, 2019

Annexure II to Boards Report:

Remuneration Policy for directors, key managerial personnel, senior management and other employees

1. Statement of Purpose:

This Remuneration Policy (Policy) of Hytone Texstyles Limited has been prepared to ensure the following:

1.1 The Policy is in compliance with Section 178(3) and Section 178(4) of the Companies Act, 2013 read with applicable Rules thereto.

1.2 Remuneration of directors, key managerial personnel, senior management and other employees is aligned to the interests of the Company and its shareholders within an appropriate governance framework.

1.3 The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors, key managerial personnel, senior management and other employees of the quality required to run the company successfully.

2. Scope of policy:

The Policy applies to all directors, key managerial personnel, senior management and other employees.

2.1 The expression "key managerial personnel" means:

(i) Chief Executive Officer, Managing Director, Manager and Whole-time Director;

(ii) Company Secretary; (iii) Chief Financial Officer; and

(iv) such other executive as may be prescribed.

2.2 The expression "senior management" means personnel of the Company who are members of its core management team excluding Board of Directors comprising all members of management one level below the executive directors, including the functional heads.

3. Remuneration Philosophy:

The Company believes in paying competitive remuneration to its executives. The remuneration philosophy aims at following outcomes:

3.1 Remuneration is structured to align with the Companys interests, taking account of the Companys strategies and risks.

3.2 Drive performance- Executive compensation is linked to individual and Company performance, which, in turn, impacts the quantum of payout.

3.3 External Equity – Executive compensation is designed to be competitively bench marked with the industry compensation or general industry compensation for applicable roles.

3.4 Internal Equity – Executives performing similar role, complexity of job are paid at similar compensation levels.

3.5 The Company complies with applicable legal requirements and appropriate standards of governance.

4. Remuneration guidelines:

4.1 The remuneration paid by the Company to its Directors, key managerial personnel, senior management and other employees is classified under following major heads:

4.1.1 Total Fixed Cost: This includes base salary, other cash allowances, perquisites and retirement benefits.

4.1.2 Variable Cost: This includes variable pay linked to Company and individual performance. Variable pay for senior executives constitutes a significant weightage of total remuneration.

4.1.3 The sum total of the Total Fixed Cost and Variable Cost is called the Cost to Company in the relevant executives remuneration package.

4.2 The Cost to Company being offered to a new hire for a replacement position or new position with reference to scope of this policy is governed by the remuneration philosophy as mentioned in clause no. 3. The endeavour is to ensure internal equity in compensation is maintained, however at the same time compensation is competitive to attract a new hire.

4.3 Remuneration is annually reviewed for all the executives who are eligible for compensation review in accordance with the remuneration philosophy.

4.4 The Nomination and Remuneration Committee shall ensure that the remuneration payable to managerial personnel is in accordance with the provisions of Chapter XIII (Sections 196 to 203) read with Schedule V to the Companies Act, 2013 and Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

4.5 The Nomination and Remuneration Committee may recommend a suitable sitting fee, incidentals, travel and other costs to non-executive directors as may be prescribed under the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

For and on behalf of the Board
Amrut T. Shah
Place: Navi Mumbai Chairman & Managing Director
Date: May 30, 2019 DIN: 00259420