SKS Textiles Ltd Directors Report.

Dear Shareholder,

The Directors of your Company are pleased to present 22nd Annual Report together with the Audited Financial Statement for the financial year ended on 31st March 2019.

1. Financial Result

Particulars 31.03.2019 31.03.2018
Revenue from Operations 1,73,68,81,079 1,62,64,27,75
0
Other Income 77,77,930 92,31,112
Less: Expenditure 1,71,36,36,461 1,60,56,33,18
8
Profit before exceptional and extraordinary items and tax 3,10,22,548 3,00,25,675
Less: Deferred Revenue Income 9,63,800 9,63,800
Profit before Taxation 3,19,86,348 3,09,89,474
Less: Provisions for Taxation 98,09,863 1,02,46,050
Deferred Tax Liability 10,68,931 11,44,267
Net Profit 2,32,45,416 1,95,99,157

2. Financial Performance

The Company has earned revenue from operation of Rs. 1,73,68,81,079/- during the year ended 31st March, 2019 as against Rs. 1,62,64,27,750/- during the year ended 31st March, 2018. The Company has also earned other income of Rs. 77,77,930/- during the year under review as against Rs. 92,31,112/- earned during the previous year.

The Net profit of the Company during the year under review has increased to Rs. 2,32,45,416/- as compared to net profit of Rs. 1,95,99,157/- in the previous year.

3. Dividend

The Board of Directors of the Company has not recommended any dividend during the year under review.

4. Transfer to Reserves

During the financial year, the Company was not statutorily required to transfer any amount to any reserves. The description of reserves and surplus are given in Note No. 4, forming part of financial statements.

5. Change in Capital Structure of the Company

During the year under review, the authorized share capital of the Company is Rs. 3,30,00,000 (Rupees Three Crores Thirty Lakhs Only) divided into 3,300,000 (Thirty Three Lacs) Equity shares of Rs. 10/-

6. Changes in nature of Business

There is no significant change made in the nature of the company during the financial year.

7. Listing of shares

The Company has been listed on EMERGE platform of National Stock Exchange (NSE) on January 19th January, 2018.

8. Classes of Shares

As on date, the Company has only one class of share capital i.e. Equity Shares of Rs. 10/- each.

9. Details of Subsidiary/Joint Ventures/Associate Companies

Your Company is neither having any subsidiary or associate Company nor has entered into any joint ventures with any other Company.

10. Deposits

During the financial year 2018-2019, your Company has not accepted any deposits within the meaning of section 73 & 74 of the Companies Act, 2013 read together with the Companies (Acceptance of Deposits) Rules, 2014.

11. Particulars of Loans, Guarantees or Investments

Particulars of loans & Investment as required under section 186 of the Companies Act 2013 read with Companies (Meeting of Board and its Powers) Rules, 2014 are given in Note No. 17, forming part of financial statements. There is no Guarantee given during the year under review.

12. Conservation Of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars as required under the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 in respect of conservation of energy, technology absorption, foreign exchange earnings and outgo etc. are furnished in Annexure I which forms part of this Report.

13. Dematerialization of Shares

During the period under review, the Company has entered into Tripartite Agreements with the depositories, National Securities Depository Limited dated 16th October, 2017 and with Central Depository Service (India) Limited dated 26th September, 2017 for providing Demat facility to its shareholders. For the purpose, the Company has appointed Sharex Dynamic India (PVT) Ltd as the Registrar and Share Transfer Agent.

14. Industrial Relations

During the year under review, your Company enjoyed cordial relationship with the workers and employees at all levels.

15. Directors And Key Managerial Personnel

1. Appointment:

In compliance with the provisions of Sections 196, 197 & 203 read with Rule 8 of companies (Appointment and remuneration) Rules, 2014 and other applicable provisions, if any, of the Companies Act, Mr. Vicky Sukanraj Shah, Managing Director of your Company was re-appointed for a period of five years i.e. from 1st April, 2019 to 31st March, 2024.

2. (a) Declaration by Independent Director:

All the Directors of the Company have confirmed that they are not disqualified from being appointed as Director in terms of Section 164 (2) of the Companies Act, 2013.

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 as per Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

At the time of appointment of an Independent Director, the Company issued a formal letter of appointment outlining his / her role, function, duties and responsibilities as a director. The formal letter of appointment is hosted on the website of the Company.

(b) Familiarization programme for Independent Director:

The Company proactively keeps its Directors informed of the activities of the Company, it Management and operations and provides an overall industry perspective as well as issues being faced by the industry.

3. Retirement by rotation:

In accordance with the provisions of Section 152(6) of the Companies Act 2013 and in terms of Articles of Association Mrs. Sapna Vicky Shah (DIN: 07799058) will retire by rotation at the ensuing Annual General Meeting and being eligible, offers herself for re-appointment. The Board recommends his re-appointment.

4. Composition of the Board

The Board of Directors of S K S Textiles Limited is a balanced composition and optimum mix of executive and Non-Executive Directors. They show active participation at the Board, which enhances the transparency and adds value to their decision making. The board of the Company is headed by an executive Chairman and a Managing Director.

The chairman takes the strategic decisions, frames the policy guidelines and extends wholehearted support to Executive Directors, Business Heads and associates.

As at 31st March 2019, the Directors and Key Managerial Personnel of the Company consisted of the following:

Sr. No Particulars DIN/PAN Designation
1. Mr. Sukanraj Bhabutmal Shah 00034157 Promoter, Chairman & Whole time Director
2. Mr. Vicky Sukanraj Shah 00033963 Promoter, Managing Director & Chief Financial Officer
3. Mr. Sahil Sukanraj Shah 05144943 Promoter & Whole time Director
4. Mr. Mihir M Manek 07254045 Non- executive Independent Director
5. Mr. Satish Anand Sharma 00897584 Non-Executive Independent Director
6. Mrs. Sapna Vicky Shah 07799058 Non Executive Director
7. Mrs. Naveena Singh EIRPS3504Q Company Secretary & Compliance officer (resigned w.e.f 31st May, 2019)

5. Auditors

a) Statutory Auditors

Pursuant to Section 139(2) of the Companies Act, 2013 read with rule 6 of Companies (Audit and Auditors) Rules, 2014, M/s. Bhatter & Co., Chartered Accountants, (FRN13109W) were appointed for period of 5 years subject to ratification at every subsequent AGM.

Pursuant to Section 40 of Companies (Amendment) Act 2017, the requirement of ratification of the appointment of the Auditors by the Members at every AGM is not required and hence in the ensuing AGM, ratification of appointment of Statutory Auditors is not seeked.

b) Secretarial Auditor

Pursuant to provisions of section 204 of the Companies Act, 2013 and Rules made thereunder, M/s Sherlyn Rebello & Associates, Company Secretaries has been appointed as Secretarial Auditor of the Company for the Financial Years 2017-2018 and 2018-2019 in the meeting of Board of Directors held on 29th May, 2018. A Secretarial Audit Report in Form MR-3 given by M/s Sherlyn Rebello & Associates for the Financial Year ended on 31st March, 2019 has been provided in Annexure II which forms parts of this Directors Report.

c) Cost Auditor

As per the requirement of Central Government and pursuant to section 148 of the Companies Act, 2013, read with Companies (Cost Records and Audit) Rules, 2014 as amended from time to time your Company has appointed M/s. Satish Kumar Gupta, Cost Accountants to carry cost Audit for the financial year 2018-2019.

d) Internal Auditor

The provisions of section 138 of Companies Act, 2013 is now applicable to Company and Company has appointed M/s NNK & Co., Chartered Accountants, to carry out Internal Audit for the Financial Year 2018-2019 based on the recommendation of the Audit Committee.

6. Explanation on any adverse remark and comment by the Auditors

No adverse remark and comments are given by the auditors of the Company including the Statutory, Secretarial and Internal Auditor of the Company. The Statutory Auditor has not reported any incident of fraud of the Company during the financial year 2018-2019.

7. Significant and Material Orders passed by Regulators or Courts or Tribunals

There were no significant and material orders passed by any Regulators or Court or Tribunal which would impact the going concern status of the Company and its future operations.

8. Particulars of employees

During the year under report, none of the employees of the Company was in receipt of remuneration for any part of the year, in excess of the amount of remuneration prescribed in section 197 of the Companies Act 2013 read with Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended up to date.

The information required under section 197 of the act read with Rule 5(1) of the companies (Appointment and Remuneration) Rules, 2014 is annexed as Annexure III and forms a part of this report.

9. Extract of Annual return

Extract of Annual Return in form MGT-9 containing details as on the financial year ended 31st March 2019 as required under section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, is annexed herewith as Annexure IV which forms part of this report.

10. Committees Of The Board

There are currently three committees of the Board, as follows:

1. Audit Committee

2. Nomination & Remuneration Committee

3. Stakeholder s Relationship Committee

The Composition of the committees and relative compliances, are in line with the applicable provisions of the Companies Act, 2013 read with Rules and Listing Regulations. Details of term of reference of the Committees, Committees Membership and attendance at Meetings of the Committees are provided as follows:

1. Audit Committee:

The Company has constituted an Audit Committee in accordance with Section 177(1) of the Companies Act, 2013. During the financial year 2018-2019, four meeting of the Audit Committee were held on 29th May, 2018, 30th August, 2018, 14th November, 2018 and 29th March, 2019 the details of the composition of the committee and attendance at its meeting are set out in the following table:

S. No. Name Designation

Meeting Held during the tenure

Meeting attended
1. Mr. Satish Anand Sharma Chairman 4 2
2. Mr. Mihir M Manek Member 4 3
3. Mr. Vicky Sukanraj Shah Member 4 4
4. *Ms. Naveena Singh Company 4 4
Secretary

* Resigned w.e.f. 31st May, 2019

All the members of the Audit Committee are financially literate and have relevant accounting financial management expertise as required under the companies Act, 2013 and Regulation 18 of the listing Regulations. Mrs. Naveena Singh, Company Secretary of the Company, is the Secretary of the Audit Committee.

The primary objective of the Committee is to monitor and provide an effective supervision of the Management s financial reporting process, to ensure accurate and timely disclosures, with the highest level of transparency, integrity and quality of financial reporting and its Compliances with the legal and regulatory requirements. The committee oversees the work carried out in the financial reporting process by the Management and the Statutory Auditors and, note the process and safeguards employed by each of them.

Term of reference:

The term of reference, role, powers, rights, authority and obligations of the Audit Committee are in conformity with the applicable provisions of the Companies Act, 2013 and Listing Obligation Requirements (including any statutory modification(s) or re-enactment or amendment thereof.

2. Nomination and remuneration Committee:

The Company has formed Nomination and Remuneration Committee in line with provisions of Section 178 of the Companies Act 2013. The composition of the committee is given below:

Sr. no. Name Designation
1. Mr. Satish Anand Sharma Chairman
2. Mr. Mihir M Manek Member
3. Ms. Sapna Vicky Shah Member

The Company has duly formulated and has in place the Nomination and remuneration Policy for appointment and remuneration of Directors, Key Managerial Personnel and Employees of the Company and as required under section 134 the same is available at the Company website http://www.groupsks.com/images/Nomination%20&%20Remuneration%20Policy.pdf.

The policy formulated by Nomination and Remuneration Committee includes Director s appointment and remuneration including qualifications, positive attributes, independence of a director and other matters as specified under section 178(3) of the Companies act, 2013 and same was approved by the Board of Directors of the Company. All statutorily policies of the Company are available on the website of the Company for investor s reference.

3. Stakeholders Relationship Committee:

The Company has constituted Stakeholder s Grievance & Relationship Committee mainly to focus on the redressal of shareholders /Investors Grievance, if any, like Transfer/Transmission/Demat of shares, Loss of Certificates; Non-Receipt of Annual Report; Dividend Warrants etc. The composition of the committee is given below

Sr. no. Name Designation
1. Mr. Mihir M Manek Chairman
2. Mr. Satish Anand Sharma Member
3. Ms. Vicky Sukanraj Shah Member

Details of Shareholders Complaints Received, Solved and Pending as on March 31, 2019

The Company expresses satisfaction with the Company s performance in dealing with investor grievance. The Company has not received any complaints during the year under review. Hence, there were no complaints outstanding as on March 31, 2019.

11. Board Evaluation:

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, the performance evaluation of the chairman and Non-Independent Directors was carried out by the Independent Directors in their separate Meeting who also reviewed the performance of the Board as whole.

The Nomination and Remuneration Committee has defined the evaluation criteria, procedure for the performance evaluation of the Board of Directors.

The Board s functioning was evaluated on various aspects, including inter alia degree of fulfillment of key responsibilities, Board structure and Composition, effectiveness of Board process, information and functioning.

The Directors were evaluated on aspects such as attendance and contribution at Board/ Committee Meeting and guidance /support to the Management outside Board/Committee Meetings. In addition, the Chairman was also evaluated on key aspects of his role, including setting the strategic agenda of the Board, encouraging active engagement of all Board Members.

Evaluation of Independent Directors was done by the entire Board, excluding the director being evaluated.

12. Whistle Blower Policy/Vigil Mechanism

The Company promotes ethical behaviors in all its business activities and has put in place a mechanism of reporting illegal or unethical behavior. The Company has a whistle blower policy wherein the directors and employees are free to report violations of law, rules, regulations or unethical conduct, actual or suspected fraud to their immediate supervisor and also have been provided direct access to the chairman of the Audit Committee in exceptional cases or such other persons as may be notified by the Board. The confidentiality of those reporting violations is maintained and they are not subjected to any discriminatory practice.

The Whistle Blower Policy of the Company is also available on the website of the Company at the link http://www.groupsks.com/images/Vigil-Mechanism.pdf

13. Prevention of Insider Trading

The board of Directors has adopted the Insider Trading Policy in accordance with the requirement of the Securities & Exchange Board of India (Prohibition of Insider Trading) Regulation, 2015. The Insider Trading Policy of the Company lays down guidelines and procedures to be followed, and disclosures to be made while dealing with shares of the Company as well as consequences of violation. The Policy has been formulated to regulate, monitor and ensure reporting of deals by employees and to maintain the highest ethical standard of dealing in the Company s Shares.

The insider trading Policy of the Company covering the code of practices and procedures for fair disclosures of unpublished price sensitive information and code of conduct for the prevention of Insider Trading is available on the website http://groupsks.com/admin/content/reports/reports_1532328454_policy_for_insider_trading.pdf

14. Risk Management Policy

In line with regulatory requirements, the Company has framed risk management policy to identify and access with the regulatory risk areas and a risk mitigation process. A detailed exercise is being carried out at regular interval to identify, evaluate, manage and monitor all business risks. The Board periodically reviews the risks and suggests steps to be taken to control and mitigate the same through a properly defined frame work.

15. Disclosure under the Sexual Harassment of women at a Workplace (Prevention, Prohibition and Redressal), Act 2013

The Company is committed to provide a healthy environment to all the employees and thus does not tolerate any sexual harassment at workplace. The Company has in place, "Policy on Prevention, Prohibition and Redressal of Sexual Harassment." The policy aims to provide protection to employees at the workplace and preventing and redressing complaints of sexual harassment and it covers matters connected or incidental thereto. The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The Company has not received any compliant of sexual harassment during the financial year 2018-2019.

16. Corporate Governance

As per regulation 15(2) of the Listing Regulations, the compliance with the Corporate Governance provision shall not applicable in respect of the following cases of companies:

a. Listed Entity having paid- up equity share capital not exceeding Rs. 10 crore and net worth not exceeding Rs. 25 crore, as on the last day of the previous financial year;

b. Listed entity which has listed its specified securities on the SME Exchange.

Since, our Company falls in the ambit of aforesaid (b); hence compliance with the provisions of Corporate Governance shall not to apply to the Company and it also does not form part of the Annual Report for the financial year 2018-2019.

17. Corporate Social Responsibility

As per Section 135 and applicable Rules of the Companies Act 2013, every company having Net Worth of Rs. 500 Crores or more or Turnover of Rs.1000 Crores or Net Profit of Rs. 5 Crores or more during any FY will be required to constitute CSR Committee of Board consisting 3 or more directors and at least 1 out these shall be Independent Director.

Since, our Company does not falls in the ambit of aforesaid; hence compliance with the provisions of Corporate Social Responsibility does not to apply to the Company and thus disclosure related to CSR does not form part of Annual Report for the financial year 2018-2019.

18. Code of Conduct

The board of director of the Company has laid down a code of Conduct for all the Board Members and senior Management Personnel of the Company. The Board Members and the Senior Management personnel have to affirm compliance with the code for the year 2018-2019.The said code of conduct has been posted on the website of the Company. A declaration to this effect, is annexed and forms part of this report.

19. Meeting of the Board

During the year, eight meetings of the Board of Directors were convened and held on the following dates as mentioned in the table given below:

Sr. no. Date of Meeting No. of Director s Present
1. 29.05.2018 6
2. 30.08.2018 4
3. 06.09.2018 4
4. 23.10.2018 4
5. 14.11.2018 5
6. 20.12.2018 4
7. 07.01.2019 4
8. 29.03.2019 5

20. Particulars of contracts or arrangements with related parties

The Company does not have any contract or arrangement or transaction with related party in terms of Section 188 of the Companies Act, 2013. Hence, the disclosure required to be provided under Section 134(3) (h) of the Companies Act, 2013, in Form AOC 2 is not applicable and need not be furnished.

The Disclosures as required under Accounting Standard 18 (AS-18) Related Party Disclosures notified under Rule 7 of the Companies (Accounts) Rules, 2014 have been provided in Note No. 35 of the Notes forming part of the Financial Statements

21. Material Changes and commitments, if any, affecting the financial Position of the

Company which have occurred between the end of the Financial Year of the Company to which the Financial Statements Relate and the date of Report

During the year under review The Company was originally incorporated as a private company. Subsequently after its conversion from private to public company vides MCA Approval the name of the company was changed to S K S Textiles Limited.

22. Internal Finance Control

The Company has in place adequate internal financial controls with reference to the Financial Statements. The Audit Committee of the Board reviews the internal control systems, the adequacy of internal audit function and significant internal audit findings with the management, Internal Auditors and Statutory Auditors

23. Management Discussion Analysis Report

The operations of the Company are reviewed in a detailed report on the Management Discussions and Analysis Report is provided as a separate section in the Annual Report which forms the part of the Board Report as Annexure V.

24. Certification from Chief Financial Officer /Chief Executive Officer of the Company

The Company has obtained a compliance certificate in accordance with Regulation 17(8) of listing Regulations from Mr. Vicky Sukanraj Shah, Chief Financial Officer and Managing Director of the Company. The same forms a part of this Annual Report.

25. Insurance

All assets of the Company including inventories, building plant and machineries are adequately insured.

26. Directors Responsibility Statement

Pursuant to Section 134(5) of the Companies Act, 2013, the Directors, based on the representations received from the operating management and after due enquiry, confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) they had 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 at the end of the financial year 31st March, 2019 and of the profit and loss of the Company for that period;

(c) they had 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) they had prepared the annual accounts on a going concern basis;

(e) they had 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) they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

27. Share Transfer System

All share transfer, dematerialization and related work is managed by Universal Capital Securities Pvt. Ltd , 21, Shakil Niwas, Opp. Satya Saibaba Temple, Mahakali Caves Road, Andheri (East), Mahakali Caves Road, Andheri (East),. Shareholders are requested to send all share transfer requests, demat/remat requests, correspondence relating to shares i.e. change of address, Power of Attorney, etc. to the registrar and transfer agents.

28. Share Capital Audit

As stipulated by Securities and Exchange Board of India (SEBI), Ms. Sherlyn Rebello, Proprietor of M/s. Sherlyn Rebello & Associates, Practicing Company Secretaries carried out the Share Capital Audit to reconcile the total admitted capital with National Securities Depository Limited (NSDL), Central Depository Services (India) Limited (CDSL) and shares held physically as per the register of members and the total issued and listed capital as on March 31, 2019.

29. Investors Correspondence

Sharex Dynamic (India) Pvt. Ltd

C 101, 247 Park, L B S Marg,

Vikhroli West, Mumbai-400083

Tel No: +91 (22) 28515644 / 5606

Fax No: +91 22 8512885

Email-id: support@sharexindia.com

Website: www.sharexindia.com

30. Goods & Service Tax Registration

Goods & Service Tax ("GST"), which is a comprehensive indirect tax reform is introduced in India w.e.f. 1st July, 2017 and was applicable throughout India which replaced multiple cascading taxes levied by the Central and State Governments. GST registration number of the Company and primary address are as under:

LOCATION OF PRIMARY PLACE OF BUSINESS GSTIN ALLOTTED
Mumbai 27AAHCS5197C1Z5

31. Secretarial Standards

During the Financial Year 2018-19, the company is in compliance with the applicable Secretarial Standards issued by the Institute of Companies of India with respect to Board and General meetings.

32. Appreciation and Acknowledgement

Your Directors would like to express their appreciation for the assistance and co-operation received from the Banks, customers, business associates and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the executives, employees, staff and workers of the Company.

For and on behalf of the Board
sd/- sd/-
Vicky Sukanraj Shah Sukanraj Bhabutaml Shah
Managing Director Whole time Director
DIN: 00033963 DIN: 00034157
Date: 28.08.2019
Place: Mumbai