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Sai Industries Ltd.

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Sai Industries Ltd. (SAIINDS) - Director Report

Company director report

Dear Members

Sai Industries Limited

On behalf of the Board of Directors of your Company it is my privilege to present the24th Annual Report on the business and operations of the Company together withthe Audited Statement of Accounts for the financial year ended March 312015 and Auditor'sReport thereon.

FINANCIAL HIGHLIGHTS:

The Financial results of your company for the year ended on March 31st 2015 are asfollows:

(Rs. In Lacs)

Particulars Year Ended March 312015 Year Ended March 312014
Total Income 0.49 (1.11)
Profit/Loss before Depreciation & Tax (2.22) (3.72)
Depreciation 00 0.08
Profit/Loss before Tax 0.00 0.00
Provision for Income Tax (FBT) 0.00 0.00
Net Profit /loss (2.22) (3.80)
Profit(+)/ Loss(-)brought forward (321.56) (317.77)
Accumulated Loss (324.13) (321.56)

OPERATIONAL PERFORMANCE:

The performance of your company remained stagnant during the year due to paucity ofresources. Efforts are being made to augment of the working capital of the Company.

EXTRACT OF THE ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as "Annexure A"

DIRECTORS RESPONSIBILITY STATEMENT

In terms of Section 134 (5) of the Companies Act 2013 the directors would like tostate that

i) In the preparation of the annual accounts the applicable accounting standards havebeen followed.

ii) The directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that were reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit or loss of the Company for the year under review.

iii) The directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities.

iv) The directors have prepared the annual accounts on a going concern basis.

v) The directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.

vi) The directors had devised proper system to ensure compliance with the provisions ofall applicable laws and that such system were adequate and operating effectively.

STATUTORY AUDITORS:

Your Company has proposed the resolution for appointment of M/s. Dhillon &Associates Chartered Accountants having Firm Registration No.02783N as the StatutoryAuditors of the Company from the conclusion of this ensuing Annual General Meeting subjectto the ratification of the same by the shareholders of the company in every annual generalMeeting.

AUDITORS OBSERVATIONS:

The auditor's report does not contain any qualifications reservations or adverseremarks.

SECRETARIAL AUDITOR

Pursuant to provisions of section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the company hasappointed Ms. Preeti Jain Proprietor of M/s. Jain Preeti & Co Company Secretaries toundertake the Secretarial Audit of the Company.

SECRETARIAL AUDIT REPORT

As required undersection 204 (1) of the Companies Act 2013 the Company has obtained asecretarial audit report. The Secretarial Audit report is annexed herewith as "AnnexureB"

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has put in place an adequate system of internal controls which aremonitored on a regular basis commensurate with the nature of its business. All activitiesare monitored to prevent any unauthorised transactions or misuse of any assets. The Auditcommittee of the Board oversees and reviews the adequacy of internal controls at regularintervals. The Company has put in place a whistle blower policy.

PARTICULARS OF LOANS. GUARANTEES AND INVESTMENTS

The company has not given any loans or guarantees covered under the provisions ofsection 186 of the Companies Act 2013.

PARTICULARS OF CONTRACTS OR ARRANGEMENT MADE WITH RELATED PARTIES

Particulars of contracts or arrangements with related parties referred to in section188(1) of the Companies Act 2013 in the prescribed FormAOC-2 is appended as "AnnexureC" to the Board's report. No related party.

PUBLIC DEPOSITS:

Pursuant to the provision of Chapter V of the Companies Act 2013 the Company has notaccepted any deposits from the public during the financial year 2014-15 and that there isno outstanding balance of such public deposit as at 31st March 2015.

UPDATES ON PROPOSED MERGER:

In the Board Meeting held on January 25 2014 the Board of Directors of the Companyhad approved the Scheme of Amalgamation which consists of Merger of Skyway Ventures Ltd(SVL) [Transferor Companies] with Sai Industries Ltd. (SIL) [TransfereeCompany] The Application under clause 24(f) of the listing agreement had already beensubmitted to the Designated and Regional Stock Exchange(s) where the Sai IndustriesLimited are listed. The petition under section 391-394 of the Companies Act 1956 has beensubmitted to Hon'ble High Court of Delhi New Delhi. The Meeting of Shareholders of theTransferee Company for the Scheme of Amalgamation shall be convened on September 25 2015vide order dated 18th August 2015 read with Order Dated 21st August 2015 ofHon'ble High Court of Delhi New Delhi. The necessary court proceedings are in process.

CODE OF CONDUCT:

The Board of Directors has laid down Code of Conduct for all Board Members and SeniorManagement of the Company. The details of which are given under Corporate GovernanceReport.

NUMBER OF BOARD MEETING:

Four (4) Board meeting were held during the year. The details of which are given underCorporate Governance Report.

TRANSFER TO RESERVES:

Due to accumulated loss the company did not transfer any amount to reserves.

DIVIDEND

In view of the accumulated loss your Directors do not recommend any Dividend for theFinancial Year ended on 3181 March 2015.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANYBETWEEN THE END OF THE FINANCIAL YEARAND THE DATE OF THE REPORT

During the year there are no material changes required to disclosed according tosection 134(3)(1) of Companies Act 2013.

CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION. FOREIGN EXCHANGE EARNINGS &OUTGO:

Pursuant to Section 134 (3) (m) of the Companies Act 2013 read with the Companies(Accounts) Rules 2014

BUSINESS RISK MANAGEMENT

Pursuant to section 134 (3) (n) of the Companies Act 2013 & Clause 49 of thelisting agreement The Company has in place a mechanism to identify

Particulars Current Year 2014-15 Previous Year 2013-14
A. Conservation of Energy Nil Nil
B. Technology Absorption Nil Nil
C. Foreign Exchange Earnings & Outgo Nil Nil

assess monitor and mitigate various risks to key business objectives. Major risksidentified by the businesses and functions are systematically addressed through mitigatingactions on a continuing basis. These are discussed at the meetings of the Audit Committeeand the Board of Directors of the Company.

BOARD EVALUATION

Clause 49 of Listing Agreement mandates that the Board shall review and monitor theBoard evaluation framework. The Companies Act 2013 states that a formal annual evaluationneeds to be made by the Board of its own performance and that of its committees and theindividual directors. Schedule IV of the Companies Act 2013 states that the performanceevaluation of independent directors shall be done by the entire Board of Directorsexcluding the director being evaluated.

The evaluation of Board of Directors and the Board as a whole was conducted based onthe criteria and framework adopted by the Board.

DIRECTORS

Articles of Association of the Company provide that at least two-third of our Directorsshall be subject to retirement by rotation. One-third of these retiring Directors mustretire from office at each Annual General Meeting of the Shareholders. The RetiringDirectors are eligible for re-election.

Mrs. Juhi Singh Director who retires by rotation and being eligible offer herself forre-appointment at the ensuing Annual General Meeting.

The Company has received necessary declaration from each independent Director u/s149(7) of the Companies Act 2013 that he/she meets the criteria of independence laid downin u/s 149(6) of the Companies Act 2013 and Clause 49 of the Listing Agreement.

COMPANYSECRETARY

Mr. Rakesh Bisht an associate member of the Institute of Company Secretaries of India(ICSI) Delhi has been appointed by the Board of Directors of the Company as the CompanySecretary of the Company with effect from 14th August 2015.

MATERIAL DEVELOPMENT IN HUMAN RESOURCES/ INDUSTRIAL RELATION FRONT. INCLUDING NUMBER OFPEOPLE EMPLOYED:

The employees are satisfied and have good relationship with the Management.

PARTICULARS OF EMPLOYEES:

The information required pursuant to Section 197 read with rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company will be provided upon request. In terms of Section 136 of the Act thereports and accounts are being sent to the members and others entitled thereto excludingthe information on employees' particulars which is available for inspection by the membersat the Registered office of the company during business hours on working days of thecompany up to the date of ensuing Annual General Meeting. If any member is interested ininspecting the same such member may write to the company secretary in advance.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS:

The Corporate Governance and Management Discussion & Analysis Report which form anintegral part of this Report are set out as separate Annexures together with theCertificate from the auditors of the Company regarding compliance with the requirements ofCorporate Governance as stipulated in Clause 49 of the Listing Agreement.

SEXUAL HARASSMENT POLICY

The Company has in place a Prevention of Sexual Harassment policy in line with therequirements of the Sexual Harassment of Women at the Workplace (Prevention Prohibitionand Redressal) Act 2013. An Internal Complaints Committee has been set up to redresscomplaints received regarding sexual harassment.

During the year 2014-2015 no complaints were received by the Company related to sexualharassment

VIGIL MECHANISM/WHISTLE BLOWER POLICY:

The Board has approved the Whistle Blower Policy a mechanism for employees to reportto the management concerns about unethical behaviour actual orsuspected fraud orviolationof the Company's code of conduct. The mechanism also provide foradequate safeguardsagainst victimization of employees who avail of the mechanism and also provide for directaccess to the Chairman of the Audit Committee in exceptional cases.

During the year under review no personnel has been denied access to the auditcommittee.

The Company has adopted a formal Vigil Mechanism/ Whistle-blower policy. The approvedpolicy is available on the Company's website www.shrisaiindustries.com

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS

To provide insights into the Company to enable the Independent Directors to understandthe Company's business in depth the Company has initiated the programme. Details of thefamiliarization programme of the independent directors are available on Company'swebsitewww.shrisaiindustries.com.

NOMINATION & REMUNERATION COMMITTEE

The Company has reconstituted a Nomination and Remuneration Committee for Nominatingand determining the remuneration of Directors. Details of the familiarization programme ofthe independent directors is available on Company's website www.shrisaiindustries.com

INSIDER TRADING POLICY

In accordance with SEBI (Prohibition of Insider Trading) Regulation 2015 the Board ofDirectors has adopted the Insider policy for prevention of insider trading to be followedby Directors Employees and other connected persons. The approved policy is available onthe Company's website www.shrisaiindustries.com

ACKNOWLEDGEMENT

The Directors are thankful to the Bankers Customers Dealers and Vendors fortheirvaluable support and assistance.

The Directors wish to place on record their appreciation of the commendable work donededication and sincerity by all the employees of the Company at all levels during the yearunder review.

The Company will make every effort to meet the aspirations of its shareholders and wishto sincerely thank them for their whole hearted co-operation and support at all times.

On behalf of the Board
ForSai Industries Limited
sd/-
Managing Director
Date: 25th August 2015 Niraj Kumar Singh
Place: New Delhi DIN-00233396

Company Secretaries

Annexure B

Form No. MR-3

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED 31s' March 2015

[Pursuant to section 204(1) of the Companies Act 2013 and rule No.9 of the Companies(Appointment and Remuneration Personnel) Rules 2014]

To

The Members

SAI INDUSTRIES LIMITED

I have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by SAI INDUSTRIES LIMITED (hereinaftercalled the company). Secretarial Audit was conducted in a manner that provided me areasonable basis for evaluating the corporate conducts/statutory compliances andexpressing my opinion thereon.

Based on my verification of the SAI INDUSTRIES LIMITED's books papers minutebooks forms and returns filed and other records maintained by the company and also theinformation provided by the Company its officers agents and authorized representativesduring the conduct of secretarial audit and as per the explanation given to me and therepresentations made by the Management I hereby report that in my opinion the companyhas during the audit period covering the financial year ended on 31st March2015 complied with the statutory provisions listed hereunder and also that the Company hasproper Board-processes and compliance-mechanism in place to the extent in the manner andsubject to the reporting made hereinafter:

I have examined the books papers minute books forms and returns filed and otherrecords and maintained by SAI INDUSTRIES LIMITED ("the Company") for thefinancial year ended on 31st March 2015 according to the applicable provisionsof:

(i) The Companies Act 2013 (the Act) and the rules made there under as applicable;

(ii) The Securities Contracts (Regulation) Act 1956 ('SCRA') and the rules made thereunder;

(iii) The Depositories Act 1996 and the Regulations and Bye-laws framed there under;

(iv) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 ('SEBI Act'):-

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011;

(b) The Securities and Exchange Board of India (Prohibition of InsiderTrading)Regulations 1992;

(c) The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client;

(d) The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009: (Not applicable to the company during the AuditPeriod)

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008; (Not applicable to the company during the Audit Period)

(f) The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines 1999; (Not applicable to the Company duringthe Audit period)

(g) The Securities and Exchange Board of India (Delisting of Equity Shares)Regulations 2009; (Not applicable to the Company during the Audit period) and

(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations1998. (Not applicable to the Company during the Audit period).

The other laws as informed and certified by the management of the Company which arespecifically applicable to the Company based on their sector/ industry are:

1. The Reserve Bank of India Act 1934;

2. Prevention of Money Laundering Act 2002;

3. Income Tax Act 1961;

4. Equal Remuneration Act 1976;

5. The Sexual Harassment of Women at Workplace (Prevention Prohibition And Redressal)Act 2013;

6. Indian Stamp Act 1899 and the State Stamp Acts.

I have also examined compliance with the applicable clauses of the following:

i) Secretarial Standards issued by The Institute of Company Secretaries of India. (NotApplicable for financial year 2014-15)

(ii) The Listing Agreements entered into by the Company with Bombay Stock ExchangeMadras Stock Exchange and Delhi Stock Exchange; During the period under review the Companyhas generally complied with the provisions of the Act Rules Regulations GuidelinesStandards etc. mentioned above.

(1) I further report that:

The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors. The changes in thecomposition of the Board of Directors that took place during the period under review werecarried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent at least seven days in advance and a system exists forseeking and obtaining further information and clarifications on the agenda items beforethe meeting and for meaningful participation at the meeting.

As per the minutes of the meeting duly recorded and signed by the chairman thedecisions of the board were unanimous and no dissenting views have been recorded.

(2) I further report that as per the explanations given to me and therepresentations made by the Management and relied upon by us there are adequate systemsand processes in the company commensurate with the size and operations of the company tomonitor and ensure compliance with applicable laws rules regulations and guidelines.

(3) I further report that during the audit period the company reported that apetition has been filed under section 391-394 of the Companies Act 1956 in connectionwith the scheme of arrangement and amalgamation between Sai Industries Limited (TransfereeCompany) and Skyway Ventures Limited (Transferor Company) and the Hon'ble High Court ofDelhi has given order for Convening Meeting of Shareholders of Sai Industries Limited(Transferee company) and Skyway Ventures Limited (Transfer or company) to be held on25.09.2015.

sd /-
Preeti Jain
Jain Preeti & Co.
Company Secretaries
Place: Delhi M.No.:ACS 29541
Date: 22.08.2015 CP No. 14964

Note:

This report is to be read with my letter of even date which is annexed as Annexure (i)and forms an integral part of this report.

Annexure (i) to the Secretarial Audit Report

To

The Members

Sai Industries Limited

My report of even date to be read along with this letter.

1. Maintenance of secretarial record is the responsibility of the management of thecompany. My responsibility is to express an opinion on these secretarial records based onmy audit.

2. I have followed the audit practices and processes as were appropriate to obtainreasonable assurance about the correctness of the contents of the secretarial records. Theverification was done on test basis to ensure that correct facts are reflected insecretarial records. I believe that the processes and practices followed provide areasonable basis on my opinion.

3. I have not verified the correctness and appropriateness of financial records andBooks of Accounts of the company.

4. Wherever required I have obtained the Management representation about thecompliance of laws rules and regulations and happening of events etc.

5. The compliance of the provisions of Corporate and other applicable laws rulesregulations standards is the responsibility of management. My examination was limited tothe verification of procedures on test basis.

6. The secretarial audit report is neither an assurance as to the future viability ofthe company nor of the efficacy or effectiveness with which the management has conductedthe affairs of the company.

sd //-
Preeti Jain
Place: Delhi Jain Preeti & Co.
Date: 22.08.2015 Company Secretaries
M.No.: ACS 29541
CP No. 14964