Hytone Texstyles Ltd.
|BSE: 514258||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE926D01012|
|BSE 05:30 | 01 Jan||Hytone Texstyles Ltd|
|NSE 05:30 | 01 Jan||Hytone Texstyles Ltd|
|BSE: 514258||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE926D01012|
|BSE 05:30 | 01 Jan||Hytone Texstyles Ltd|
|NSE 05:30 | 01 Jan||Hytone Texstyles Ltd|
The Directors of the Company are pleased to present the 30th Annual Reporton the business and operations of the Company together with the Audited FinancialStatements for the financial year ended March 31 2019.
1. Financial Summary:
The Company's performance during the financial year ended March 31 2019 as compared tothe previous financial year is summarized below:
2. State of Company's Affairs:
The Company's performance was satisfactory during the year. Your Directors are hopefulthat the Company will perform better in the ensuing years. In the meantime Company hasearned its income by way of rental income.
With a view to conserve the resources for current as well as future businessrequirements and expansion plans your Board is of the view that the current year's profitbe ploughed back into the operations and hence no dividend is recommended for thefinancial year ended March 31 2019.
4. Transfer to reserves:
The Company does not propose to transfer amount to the general reserve out of theamount available for appropriation and considered it appropriate to retain the same in theprofit 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 ofthe Company which have occurred between the end of the financial year and the date ofthis Report.
7. Details of Subsidiary/Joint Ventures/Associate Companies:
As on March 31 2019 the Company does not have any subsidiary/joint venture/associatecompanies. Accordingly the requirements pursuant to Section 129(3) of the Companies Act2013 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.53000000/- There was no public issue rights issue bonus issue or preferential issueetc. during the year. The Company has not issued shares with differential voting rightssweat equity shares nor has it granted stock options. As on March 31 2019 none of thedirectors 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 withRule 16(4) of Companies (Share Capital and Debentures) Rules 2014 in respect of votingrights not exercised directly by the employees of the Company as the provisions of thesaid section are not applicable.
10. Indian Accounting Standard (IND AS):
As mandated by the Ministry of Corporate Affairs the Company has adopted IndianAccounting Standards (Ind AS') from 1st April 2017 with a transitiondate of 1st April 2016. The financial results for the year 2018-19 have beenprepared in accordance with IND AS prescribed under Section 133 of the Companies Act2013 read with the relevant rules issued thereunder and the other recognized accountingpractices and policies to the extent applicable. The Financial Results for all the periodsof 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 Governmentto the Secretarial Standards specified by the Institute of Company Secretaries of Indiathe Secretarial Standards on Meetings of the Board of Directors (SS-1) and GeneralMeetings (SS-2) came into effect from 1st July 2015. The said standards werefurther amended w.e.f. 1st October 2017. The Company is in compliance with thesame.
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 toyour 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 (ListingObligations and Disclosure Requirements) Regulations 2015 the Management Discussion andAnalysis (MDA) is required to be annexed to this report. There is nothing to mention inthis report as the Company has disposed off its assets of its plant and machinerypertaining to the Textile Division. So the company has not annexed the ManagementDiscussion and Analysis to the Board's report.
14. Corporate Governance Report:
The Company constantly endeavors to follow best Corporate Governance guidelines andbest practices and disclose the same transparently. The Board is conscious of its inherentresponsibility to disclose timely and accurate information on the Company's operationsperformance material corporate events as well as on the leadership and governance mattersrelating to the Company. The Company has put in place an effective corporate governancesystem which ensures that the provisions of Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 are duly compliedwith.
As per Regulation 34(3) read with Schedule V(c) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a report on Corporate Governance inaccordance with Listing Regulations along with a certificate from M/s UKG &Associates Chartered Accountants Statutory Auditors of the Company are annexed heretoand forms part of the Report. The auditor's certificate for the year 2018-19 does notcontain any qualification reservation adverse remark or disclaimer.
All Board members and Senior Management personnel have affirmed compliance with theCode of Conduct for the year 2018-19. A declaration to this effect signed by the ManagingDirector of the Company is contained in this Annual Report.
The Managing Director and CFO have certified to the Board with regard to the financialstatements and other matters as required under regulation 17(8) of the SEBI ListingRegulations 2015.
15. Directors and Key Managerial Personnel:
The Board of Directors consists of four members of which two are IndependentDirectors. The Board also comprises of one woman Director. As on March 31 2019 the KeyManagerial 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 Officerand Ms. Riddhi Thakkar Company Secretary and Compliance Officer.
As per the provisions of Section 152(6) of the Companies Act 2013 and the Company'sArticles of Association Mrs. Ranjan S. Gala (DIN: 01015712) shall retire by rotation atthe ensuing Annual General Meeting and being eligible has offered himself forre-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 AnnexureI; and
b) Remuneration Policy for Directors Key Managerial Personnel and other employees asAnnexure II.
16. Disclosure Relating to Remuneration of Directors and Key Managerial Personnel
The remuneration paid to the Directors is in accordance with the Remuneration Policyformulated in accordance with Section 178 of the Companies Act 2013. The details ofremuneration paid to the Directors including Executive Directors of the Company are givenin 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 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departures from the same;
b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2019 and of the profit ofthe Company for the year ended on that date;
c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets 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 theCompany and that such internal financial controls are adequate and are operatingeffectively; and
f) the Directors have devised proper systems to ensure compliance with the provisionsof 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 ofmeetings held and attended by each Director are provided in the Corporate GovernanceReport which forms part of this Report. The intervening gap between the meetings waswithin the period prescribed under the Companies Act 2013 and the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
19. Independent Directors' Meeting
In compliance with the requirements of Schedule IV of the Companies Act 2013 ameeting of the Independent Directors was held on 25th March 2019 without theparticipation of the Executive Directors or Management personnel.
The Independent Directors carried out performance evaluation of Non-IndependentDirectors and the Board of Directors as a whole performance of Chairman of the Companythe quality contents and timelines of flow of information between the Management andBoard 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 ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Regulation16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015and 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 onMay 30 2018.
21. Familiarisation Programme
The Company has put in place an induction and familiarization programme for all itsDirectors including the Independent Directors so as to associate themselves with thenature of the industry in which the Company operates. Directors are periodically advisedabout the changes effected in the Corporate Laws Listing Regulations with regard to theirroles rights and responsibilities as Director of the Company. The familiarisationprogramme for Independent Directors in terms of the provisions of Regulation 46(2)(i) ofListing 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 DirectorsBoard Committees and Directors including Chairman Executive Directors Non-executiveDirectors and Independent Directors. Pursuant to the provisions of the Companies Act 2013and the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 a structured questionnaire was prepared after taking intoconsideration the various aspects of the Board's functioning composition of the Board andits Committees culture execution and performance of specific duties obligations andgovernance including the procedure prescribed under SEBI Circular dated January 5 2017 onGuidance Note on Board Evaluation.
The Board of Directors has carried out an annual performance evaluation of its ownperformance the Directors individually as well as the evaluation of the working of itsAudit Committee Nomination and Remuneration Committee Corporate Social ResponsibilityCommittee and Stakeholders Relationship Committee.
The performance evaluation of the Chairman and Non-Independent Directors was carriedout by Independent Directors. The reports on performance evaluation of the IndividualDirectors were reviewed by the Nomination and Remuneration Committee and the Chairman ofthe Board held discussions with each Board member and provided feedback to them on theevaluation outcome. The Board of Directors expressed their satisfaction with theevaluation process.
23. Internal Financial Controls:
The Company has an adequate internal control system commensurate with the size andscale of its business operations.
The Company has appointed Internal Auditors who periodically audit the adequacy andeffectiveness of the internal controls laid down by the management and suggestimprovements. The Audit Committee of the Board of Directors approves the annual internalaudit plan periodically reviews the progress of audits as per approved audit planscritical internal audit findings presented by internal auditors status of implementationof audit recommendations if any and adequacy of internal controls.
The Audit Committee takes due cognizance of the observations made by the auditors andgives their suggestions for improvement. The suggestions of the Audit Committee are alsotaken 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 committedto managing the risks in proactive and efficient manner. Your Company periodicallyassesses the risks in the internal and external environment along with treating the risksand 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 mindthe risk factors which can significantly impact the performance of the particularbusiness. All major capital expenditures commitments are subject to scrutiny by the Boardand investments are permitted only on being satisfied about its returns or utility to theCompany. There are no risks which in the opinion of the Board threaten the existence ofthe Company.
The Company has formulated and implemented a Risk Management Policy that outlines theframework and procedures to assess and mitigate the impact of risks. Under the guidance ofthe Board of Directors of the Company and Key Managerial Personnel who are conversant withrisk management systems and procedures have been entrusted with the risk management of theCompany in accordance with the formulated policy. The Audit Committee has additionaloversight in the area of financial risks and controls. All risks are systematicallyaddressed through mitigating actions on a continuing basis.
25. Audit Committee:
The details pertaining to composition of audit committee are included in the CorporateGovernance 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 anyrecommendation 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 hasadopted the Vigil Mechanism/Whistle Blower Policy to provide appropriate avenues to theemployees to bring to the attention of the management any issues which is perceived to bein 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 behavioractual or suspected fraud or violation of the codes of conduct or corporate governancepolicy or any improper activity to the Audit Committee of the Company or Chairman of theCompany.
The Whistle Blower Policy has been appropriately communicated within the Company. Thepolicy empowers the Chairman of the Audit Committee/Chairman of the Company to investigateany protected disclosure including matters concerning financials/accounting etc. receivedfrom the employees under this policy.
During the financial year 2018-19 the Company has not received any complaint throughVigil Mechanism. The Whistle Blower Policy is available on the Company's website.
28. Nomination And Remuneration Policy:
The Board has on the recommendation of the Nomination & Remuneration Committeeformulated Nomination and Remuneration Policy for determining the criteria for determiningqualifications positive attributes and independence of a director and also criteria fordetermining the remuneration of directors key managerial personnel and other employees.
The key objectives of the Policy are to lay down the criteria for appointment andremuneration of Directors Key Managerial Personnel and Executives at Senior Managementlevel and recommend to the Board their appointment and also to formulate criteria forevaluation of performance of Independent Directors and the Board and to devise a policy onBoard diversity.
The Policy inter-alia includes criteria for determining qualifications positiveattributes independence of a director and expertise and experience required forappointment of Directors KMP and Senior Management.
As per the Policy the remuneration / compensation to the Wholetime Directors shall berecommended by the Nomination and Remuneration Committee to the Board for its approval.However the remuneration compensation to Whole-time Directors shall be subject to theapproval of the shareholders of the Company and Central Government wherever required. Thepolicy is available on the Company's website.
29. Corporate Social Responsibility Committee
Since the Net Profit Net worth and the Turnover of the Company for the year underreview is less than Rupees Five Crore Rupees Five Hundred Crore and Rupees One ThousandCrore respectively the constitution of Corporate Social Responsibility (CSR) Committee isnot applicable as per the provisions of Section 135 of the Companies Act 2013 read withRule 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 ofthe Company at the 28th Annual General Meeting held on 30th September 2017appointed M/s. UKG & Associates Chartered Accountants (Firm Registration No.123393W)as Statutory Auditors of the Company from the conclusion of 28th Annual GeneralMeeting till the conclusion of 33rd Annual General Meeting covering one termof five consecutive years subject to ratification by the members at each interveningAnnual General Meeting.
According to the Companies (Amendment) Act 2017 notified by the Ministry of CorporateAffairs on May 7 2018 the requirement of ratification of Statutory Auditors by themembers of the company at every Annual General Meeting has been done away with. Thereforeno resolution has been proposed for their ratification at the ensuing AGM. They haveconfirmed that they are not disqualified from continuing as Statutory Auditors of theCompany.
The Notes on financial statement referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Statutory Auditors' Reportfor the year 2018-19 does not contain any qualification reservation adverse remark ordisclaimer made by Statutory Auditor. There is no incident of fraud requiring reporting bythe 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 relatingto property tax and water tax as below and there are no other reservation or adverseremarks in report.
The board had discussed the same qualification in their meeting and get decide toresolve the qualification as soon as possible.
32. Internal Auditors
Pursuant to the provisions of Section 138 of the Companies Act 2013 the Board ofDirectors of the Company have appointed M/s DSSM & Co. LLP Chartered Accountant asInternal Auditors of the Company. The Audit Committee of the Board of Directors inconsultation with the Internal Auditor formulates the scope functioning periodicity andmethodology for conducting the internal audit.
33. Cost Auditors
During the year under review the Company has not carried on any manufacturingactivities. 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 Directorsof the Company have re-appointed Teena Dedhia & Associates Practising CompanySecretary to conduct the Secretarial Audit for the financial year 2018-19. TheSecretarial Audit Report for the year 2018-19 issued by her in the prescribed form MR-3 isattached as Annexure III to this Report.
Secretarial auditor's remarks and Management explanation to auditor's remarks:
The Directors refers to the auditor's observations in the secretarial audit report andas required under section 204(1) of the Companies Act 2013 the company has obtained asecretarial 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 doesnot allow Board to incur such expenditure keeping in mind that the results are madeavailable 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 dematform.
35. Reporting of Fraud
During the year under review the Statutory Auditors and Secretarial Auditors have notreported any instances of frauds committed in the Company by its Officers or Employees tothe Audit Committee under Section 143(12) of the Companies Act 2013 details of whichneeds to be mentioned in this Report.
36. Transaction with related Parties:
All contracts / arrangements / transactions entered by the Company during the financialyear with Related Parties were in its ordinary course of business and on arms' lengthbasis. Pursuant to section 177 of the Companies Act 2013 and regulation 23 of SEBIListing Regulations 2015 all Related Party Transactions were placed before the AuditCommittee for its approval. There are no materially significant related party transactionsmade by the Company with Promoters Key Managerial Personnel or other designated personswhich 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 theCompany's website. The Company's management ensures total adherence to the approved Policyon Related Party Transactions to establish Arm's Length Basis without any compromise.
Your Directors draw attention of the members to Note 36 to the financial statementwhich 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 isgiven in Annexure IV in the prescribed Form MGT-9 which forms part of this report.The weblink for the Annual Return placed on the Company's website ishttp://www.hytonetextiles.com.aspx.
38. Particulars of employee:
The information required under section 197 of the companies Act 2013 read with rule5(1) of the companies (Appointment and remuneration of managerial personnel) Rules 2014are given below:
A. Ratio of remuneration of each Director to the median employee's remuneration for thefinancial year.
B. Percentage increase in remuneration of each director and Key Managerial personnel:
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 keymanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in managerial remuneration:
Average increase in made in the salaries of employees other than the key managerialpersonnel during the year is 16.72%
There are no other exceptional circumstances to increase in the remuneration of keymanagerial personnel and increase in the remuneration has been in accordance with theCompany's policy. The increment given to each individual employee is based on theemployees' potential experience as also their performance and contribution to theCompany's progress over a period of time.
F. The company affirms that the remuneration is as per the remuneration policy of theCompany.
Disclosure under Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is not applicable to any of employees of the company.
39. Conservation of Energy Technology Absorption and Foreign Exchange Earnings andOutgo:
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 notcontinued with any manufacturing or processing activity. Considering the nature ofCompany's business there is no reporting to be made on conservation of energy in itsoperations.
(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 developmentor import substitution NIL
(iii) in case of imported technology (imported during the last three years reckonedfrom 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 reasonsthereof; and
(iv) the expenditure incurred on Research and Development NIL
(C) Foreign Exchange Earnings And Outgo:
40. Particulars of Loans Guarantees or Investments:
There were no loans guarantees given by the company under section 186 of the CompaniesAct 2013 during the year under review and hence the said provision is not applicable. Thedetails 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 Depositwithin 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 interms of the Companies (Acceptance of Deposits) Rules 2014. Hence the requirement offurnishing details of deposits which are not in compliance of Chapter V of the Act is notapplicable.
42. Prevention of Sexual Harassment of women at workplace
As per the requirement of The Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 (Act') and rules made there under yourCompany has adopted a Sexual Harassment Policy for women to ensure healthy workingenvironment without fear of prejudice gender bias and sexual harassment. The Board ofDirectors of the Company state that the Company has also complied with provisions relatingto the constitution of Internal Complaints Committee under the Sexual Harassment of Womenat Workplace (Prevention Prohibition and Redressal) Act 2013.
The Board states that during the year under review there were no cases or complaintsfiled pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. Also there were no cases of child labour forced labour involuntarylabour and discriminatory employment.
43. Green Initiative
Electronic copy of the Annual Report 2018-19 and the Notice of the 30thAnnual General Meeting are sent to all members whose email addresses are registered withthe Company / depository participant(s). For members who have not registered their emailaddresses physical copies are sent in the permitted mode.
Your Directors would like to draw your attention to Section 20 of the Companies Act2013 read with the Companies (Management and Administration) Rules 2014 as may beamended 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 whohave not registered their e-mail addresses so far are requested to register their e-mailaddress in respect of electronic holding with their concerned Depository Participantsand/or with the Company.
Your Directors state that no disclosures or reporting is required in respect of thefollowing items:
1. Issue of shares including sweat equity shares and ESOS to employees of the Companyunder any scheme including ESOS.
2. Issue of equity shares with differential rights as to dividend voting or otherwise.
3. Reporting requirements under Rules 56 and 8(1) of the Companies (Accounts) Rules2014 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 itsown shares by employees or by trustees for the benefit of employees.
6. No significant or material orders were passed by the regulators or Courts orTribunals which impact the going concern status and Company's operation in future.
7. There is no Corporate Insolvency Resolution Process initiated under the Insolvencyand Bankruptcy Code 2016.
Your Directors place on record their deep sense of appreciation of the dedication ofthe Company's employees at all levels and are confident they will maintain theircommitment to excellence in the coming years.
Your Directors also express their deep appreciation of the support received from theGovernment and other Regulatory authorities.
Your Directors also thank you our valued shareholders the Financial InstitutionBanks Dealers Agents and customers for their continued trust in the Company and itsmanagement.
Annexure I to Board's Report:
Policy for selection of Directors and determining Directors independence
1.1 Hytone Texstyles Limited ("the Company") believes that an enlightenedBoard consciously creates a culture of leadership to provide a long-term policy approachto improve the quality of governance. Towards this the Company ensures constitution of aBoard of Directors with an appropriate composition size diversified expertise andexperience and commitment to discharge their responsibilities and duties effectively.
1.2 The Company recognizes the importance of Independent Directors in achieving theeffectiveness of the Board and aims to have an optimum combination of Non-Independent andIndependent Directors.
SCOPE AND PURPOSE:
This Policy sets out the guiding principles for the Nomination and RemunerationCommittee for identifying persons who are qualified to become Directors and to determinethe independence of Directors in case of their appointment as independent directors ofthe 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 theCompany.
3.2. "Nomination and Remuneration Committee" means the committeeconstituted by the Board of Directors of the Company in accordance with the provisions ofSection 178 of the Companies Act 2013.
3.3. "Independent Director" means a director referred to insub-section (6) of Section 149 of the Companies Act 2013.
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 RemunerationCommittee makes assessment and selection of candidates for appointment as directors andrecommends to the Board appointment of directors on the Board. (can we mention aboutremoval 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 beappointed in Senior Management and making recommendations to the Board on the appointmentre-appointment or removal of directors key managerial personnel and senior managementpersonnel;
5.2 formulation of criteria for evaluation of performance of every director includingindependent directors;
5.3 recommending remuneration payable to Independent and Non-Independent directorsincluding sitting fee;
6.1 Qualifications and Criteria
1. The Policy is aimed to engage directors (including non-executive directors andindependent non-executive directors) who are highly skilled competent and experiencedpersons within one or more fields of business finance accounting law management salesmarketing administration research corporate governance technical operations or otherdisciplines related to the business of the Company and who shall be able to positivelycarry out their supervisory role over the policies of the management of the Company andthe general affairs of the Company.
2. The NRC and the Board shall review on an annual basis appropriate skillsknowledge and experience required of the Board as a whole and its individual members. Theobjective is to have a Board with experience that are relevant for the Company'soperations.
3. In evaluating the suitability of individual Board members the NRC shall take intoaccount many factors including the following:
a) General understanding of the Company's business dynamics business and socialperspective
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 theCompany's affairs and attend the Board meetings and other committee meetings in which heis 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 aCommittee Member the Committee meetings;
e) Shall abide by the Code of Conduct established by the Company for Directors andSenior Management Personnel;
f) Shall disclose his concern or interest in any company or companies or bodiescorporate firms or other association of individuals including his shareholding at thefirst meeting of the Board in every financial year and thereafter whenever there is achange in the disclosures already made;
g) Shall abide by the provisions of Section 166 of the Companies Act 2013 which laysdown the duties of directors as under:
i. Subject to the provisions of Companies Act 2013 a director of a company shall actin accordance with the articles of the company.
ii. A director of a company shall act in good faith in order to promote the objects ofthe company for the benefit of its members as a whole and in the best interests of thecompany its employees the shareholders the community and for the protection ofenvironment.
iii. A director of a company shall exercise his duties with due and reasonable careskill and diligence and shall exercise independent judgment.
iv. A director of a company shall not involve in a situation in which he may have adirect or indirect interest that conflicts or possibly may conflict with the interest ofthe company.
v. A director of a company shall not achieve or attempt to achieve any undue gain oradvantage either to himself or to his relatives partners or associates and if suchdirector is found guilty of making any undue gain he shall be liable to pay an amountequal to that gain to the company.
vi. A director of a company shall not assign his office and any assignment so madeshall be void.
h) Such other requirements as may be prescribed from time to time under the CompaniesAct 2013 and other relevant laws.
5. The NRC shall evaluate each individual with the objective of having a group thatbest enables the success of the Company's 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 theworkplace.
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-assessdetermination of independence when any new interests or relationships are disclosed by adirector.
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 amanaging 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 relevantexpertise and experience;
b. (i) who is or was not a promoter of the company or its holding subsidiary orassociate company; (ii) who is not related to promoters or directors in the company itsholding subsidiary or associate company;
c. who has or had no pecuniary relationship with the company its holding subsidiaryor associate company or their promoters or directors during the two immediatelypreceding financial years or during the current financial year;
d. none of whose relatives has or had pecuniary relationship or transaction with thecompany its holding subsidiary or associate company or their promoters or directorsamounting to two per cent or more of its gross turnover or total income or fifty lakhrupees or such higher amount as may be prescribed whichever is lower during the twoimmediately 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 beenemployee of the company or its holding subsidiary or associate company in any of thethree financial years immediately preceding the financial year in which he is proposed tobe appointed;
(ii) is or has been an employee or proprietor or a partner in any of the threefinancial years immediately preceding the financial year in which he is proposed to beappointed of
(A) a firm of auditors or company secretaries in practice or cost auditors of thecompany or its holding subsidiary or associate company; or
(B) any legal or a consulting firm that has or had any transaction with the companyits holding subsidiary or associate company amounting to ten per cent or more of thegross turnover of such firm;
(iii) holds together with his relatives two per cent or more of the total voting powerof the company; or
(iv) is a Chief Executive or director by whatever name called of any non-profitorganization that receives twenty-five per cent or more of its receipts from the companyany of its promoters directors or its holding subsidiary or associate company or thatholds 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 thecompany.
f. shall possess appropriate skills experience and knowledge in one or more fields offinance law management sales marketing administration research corporategovernance technical operations corporate social responsibility or other disciplinesrelated to the Company's business.
g. shall possess such other qualifications as may be prescribed from time to timeunder the Companies Act 2013.
h. who is not less than 21 years of age.
i. The Independent Directors shall abide by the "Code for IndependentDirectors" 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 experienceto contribute to effective Board performance. Accordingly members should voluntarilylimit their directorships in other listed public limited companies in such a way that itdoes not interfere with their role as directors of the Company. The NRC shall take intoaccount the nature of and the time involved in a Director's service on other Boards inevaluating the suitability of the individual Director and making its recommendations tothe Board.
6.4.2 A Director shall not serve as Director in more than 20 companies of which notmore than 10 shall be Public Limited Companies.
6.4.3 A Director shall not serve as an Independent Director in more than 7 ListedCompanies and not more than 3 Listed Companies in case he is serving as a Whole-timeDirector in any Listed Company.
6.4.4 A Director who is also a Director of a Listed Company shall not be a member inmore than 10 Committees or act as Chairman of more than 5 Committees across all companiesin which he holds directorships.
For the purpose of considering the limit of the Committees Audit Committee andStakeholders' Relationship Committee of all Public Limited Companies whether listed ornot shall be included and all other companies including Private Limited CompaniesForeign Companies and Companies under Section 8 of the Companies Act 2013 shall beexcluded.
Annexure II to Board's Report:
Remuneration Policy for directors key managerial personnel senior management andother employees
1. Statement of Purpose:
This Remuneration Policy (Policy) of Hytone Texstyles Limited has been prepared toensure the following:
1.1 The Policy is in compliance with Section 178(3) and Section 178(4) of the CompaniesAct 2013 read with applicable Rules thereto.
1.2 Remuneration of directors key managerial personnel senior management and otheremployees is aligned to the interests of the Company and its shareholders within anappropriate governance framework.
1.3 The level and composition of remuneration is reasonable and sufficient to attractretain and motivate directors key managerial personnel senior management and otheremployees of the quality required to run the company successfully.
2. Scope of policy:
The Policy applies to all directors key managerial personnel senior management andother 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 aremembers of its core management team excluding Board of Directors comprising all members ofmanagement one level below the executive directors including the functional heads.
3. Remuneration Philosophy:
The Company believes in paying competitive remuneration to its executives. Theremuneration philosophy aims at following outcomes:
3.1 Remuneration is structured to align with the Company's interests taking account ofthe Company's strategies and risks.
3.2 Drive performance- Executive compensation is linked to individual and Companyperformance which in turn impacts the quantum of payout.
3.3 External Equity Executive compensation is designed to be competitively benchmarked with the industry compensation or general industry compensation for applicableroles.
3.4 Internal Equity Executives performing similar role complexity of job arepaid at similar compensation levels.
3.5 The Company complies with applicable legal requirements and appropriate standardsof governance.
4. Remuneration guidelines:
4.1 The remuneration paid by the Company to its Directors key managerial personnelsenior management and other employees is classified under following major heads:
4.1.1 Total Fixed Cost: This includes base salary other cash allowances perquisitesand retirement benefits.
4.1.2 Variable Cost: This includes variable pay linked to Company and individualperformance. Variable pay for senior executives constitutes a significant weightage oftotal remuneration.
4.1.3 The sum total of the Total Fixed Cost and Variable Cost is called the Cost toCompany in the relevant executive's remuneration package.
4.2 The Cost to Company being offered to a new hire for a replacement position or newposition with reference to scope of this policy is governed by the remuneration philosophyas mentioned in clause no. 3. The endeavour is to ensure internal equity in compensationis 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 forcompensation review in accordance with the remuneration philosophy.
4.4 The Nomination and Remuneration Committee shall ensure that the remunerationpayable 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 feeincidentals travel and other costs to non-executive directors as may be prescribed underthe Companies Act 2013 read with the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014.