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Sky Industries Ltd.

BSE: 526479 Sector: Industrials
NSE: N.A. ISIN Code: INE765B01018
BSE 00:00 | 22 Oct 85.60 0.95
(1.12%)
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NSE 05:30 | 01 Jan Sky Industries Ltd
OPEN 85.00
PREVIOUS CLOSE 84.65
VOLUME 2162
52-Week high 103.50
52-Week low 19.90
P/E 18.17
Mkt Cap.(Rs cr) 58
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 85.00
CLOSE 84.65
VOLUME 2162
52-Week high 103.50
52-Week low 19.90
P/E 18.17
Mkt Cap.(Rs cr) 58
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Sky Industries Ltd. (SKYINDUSTRIES) - Director Report

Company director report

Dear Members

Your Directors are pleased to present the Thirty Second Annual Reporton the business and operations of the Company together with the Audited FinancialStatements for the year ended March 31 2021.

1. CORPORATE OVERVIEW

Sky Industries Limited incorporated in the year 1989 is one of India'sleading players in Narrow Woven Fabrics. The Company has grown to become one of India'sleading suppliers and dominant players in Narrow Woven Fabrics especially Hook and Looptape fasteners. The Company's stronghold is its local manufacturing capabilityundertaken at its facilities located at Bhiwandi & Navi Mumbai. The Company has itsfootprint not just in India but also caters to global demand originating from USAGermany Italy Australia Turkey Bangladesh and Sri Lanka.

2. FINANCIAL SUMMARY AND HIGHLIGHTS

The highlights of the Company's financial results for the FinancialYear 2020-21 are as under:

(Rs. in Lakhs)
PARTICULARS FY 2020-21 FY 2019-20
Gross Total Revenue 5383.06 5935.77
Profit before Tax & Exceptional items 232.35 117.87
Profit before Tax after Exceptional items 140.30 31.97
Profit for the period after tax 79.91 28.76
Total Comprehensive income 87.96 31.97
APPROPRIATIONS
Dividend 55.49 24.18

Mainly Company's Hook and Loop Tape fasteners is a major divisioncontributes to approximately 70% of the overall revenue. The Company registered Profitafter tax of Rs. 79.91 Lakhs during the year under review as against Rs. 28.76 Lakhs forthe previous financial year.

The Financial Statements for the year ended March 31 2021 have beenprepared in accordance with Indian Accounting Standards (Ind-AS) notified under theCompanies (Indian Accounting Standards) Rules 2015 read with Section 133 of CompaniesAct 2013 (the Act') and other relevant provisions of the Act. There are no materialdepartures from the prescribed norms stipulated by the accounting standards in preparationof the annual accounts.

Management evaluates all recently issued or revised accountingstandards on an on-going concern basis. The Company discloses Financial Results on aquarterly basis which are subject to Limited Review and publishes Audited FinancialResults on an annual basis.

3. IMPACT OF GLOBAL CRISIS: COVID-19

Year 2020 was an unprecedented year with the Covid-19 pandemicaffecting countries businesses and individuals across the world. The World HealthOrganisation (WHO) declared COVID-19 a global pandemic on March 2020 and the Ministry ofHome Affairs Government of India on March 24 2020 notified the first ever nationwidelockdown in India to contain the outbreak of COVID-19. Consequently on March 26 2020 theoperations were shut down completely.

Company followed the same keeping a people-first approach. Proactivework from home was initiated for all employees by end of March 2020. Employees wereequipped with a number of resources and support which enabled them to work from a remoteenvironment efficiently and effectively.

In the course of time the Company received approval from the concernedauthorities of the State of Maharashtra to resume its operation from April 17 2020 &May 03 2020 for Bhiwandi & Navi Mumbai factory respectively and with complying toCOVID-19 guidelines resumed operations with a limited workforce.

The health of our employees is of paramount importance. With theoutbreak of COVID-19 virus Company has taken extra precautions at workplaces to ensurethat all its employees are protected well against the virus. These measures includeconducting regular sanitization drives across our offices & factories and regularcommunication with employees to ensure their physical and mental wellbeing. These arechallenging times and the Company has taken several steps to stay connected with ourworkforce and customers and to support them during these uncertain times.

The Company has a strong business framework which enabled us to respondto the COVID-19 crisis with swiftness. Although there are uncertainties due to thepandemic the Company had a strong cash position as of March 31 2021 and expects to meetits on-going cash obligations as relates to its lease rentals debt repayments and otherfinancial obligations.

We will remain resolute in our goals of employee safety businesscontinuity and of being a trusted partner to our customers.

4. DIVIDEND

In spite of difficult year the Board of Directors considering theCompany's financial performance and the availability of distributable profit have pleasedto recommend a dividend of Re. 1 per equity share of Rs. 10/- each (i.e. 10%) for theFinancial Year ended on March 31 2021 subject to the approval of Members in the ensuingAnnual General Meeting of the Company.

The Company continues with its task to build businesses with long-termgoals based on its intrinsic strengths in terms of its powerful brands qualitymanufacturing prowess distribution strengths and customer relationships.

5. INCREASE IN ISSUED SUBSCRIBED AND PAID-UP EQUITY SHARE CAPITAL

During the year under review the Company issued and allotted 72345Equity Shares to eligible employees on exercise of options granted under the SkyIndustries Employee Stock Option Plan 2018 (hereinafter "ESOP 2018") of theCompany.

The Company on November 12 2020 has issued & allotted 240000Equity Shares upon the Conversion of Warrants into Equity Shares of face value of Rs. 10each at a price of Rs. 29.25/- to Mr. Shailesh S. Shah Promoter & Managing Directorof the Company.

Further pursuant to Shareholders Resolution passed on January 09 2021and In-principle approval received from the BSE Limited on February 01 2021 the Board onFebruary 12 2021 has issued and allotted 400000 Equity Shares of face value of Rs. 10each at a price of Rs. 30 per Equity Share aggregating to an amount of Rs. 12000000 toNon-Promoter Group of Company on Preferential basis and 2000000 Convertible Warrantsinto Equity Shares of having face value of Rs. 10 each at a price of Rs. 30 eachaggregating to an amount of Rs. 60000000 to both Promoter & Non-Promoter group onpreferential basis.

At the end of year Companies issued subscribed and paid-up capitalwas 5548745 Equity Shares of Rs 10 each.

The change in paid-up share capital during the year was as under:

Particulars No. of Securities Allotted Cumulative Paid- up Share Capital
Capital at the beginning of the year i.e. as on April 01 2020 - 4836400
Allotment of Equity Shares on July 08 2020 pursuant to exercise of options granted under ESOP 2108 to eligible employees. 31569 Equity Shares 4867969
Allotment of 240000 Equity Shares at a price of Rs 29.25 each on November 12 2020 upon Conversion of Warrants to Mr. Shailesh S. Shah Managing Director & Promoter of Company. 240000 Equity Shares 5107969
Allotment of 400000 Equity Shares at a price of Rs. 30 each on February 12 2021 to Non-Promoter group of Company on preferential basis. 400000 Equity Shares 5507969
Allotment of 2000000 Convertible Warrants into Equity Shares at a price of Rs. 30 each on February 12 2021 to both Promoter& Non-Promoter group on preferential basis. 2000000 Warrants 5507969
Allotment of Equity Shares on March 08 2021 pursuant to exercise of options granted under ESOP 2108 to eligible employees. 40776 Equity Shares 5548745
Capital at the end of the year i.e. as on March 31 2021 - 5548745

Note: Allotment of 250000 Equity Shares was made pursuant toconversion of Warrants into Equity Shares (Last Tranche) on April 27 2021 There were noinstances where the Company failed to implement any corporate action within the specifiedtime limit.

6. CREDIT RATING

As on the report date CRISIL's assigned ratings with respect to thebank / credit facilities availed by the Company is as follows:

SN PARTICULARS RATING ASSIGNED
1. Long Term Rating CRISIL BB+/Stable (Reaffirmed)
2. Short Term Rating CRISIL A4+ (Reaffirmed)

7. PERFORMANCE OF SUBSIDIARY COMPANIES

The Company has no subsidiaries therefore not required to providedetail of performance of subsidiary Company. Hence AOC -1 is not required to be attachedto the said report.

8. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report on the operations of theCompany as required under the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 (hereinafter referred to as "Listing Regulations") is providedin a separate section and forms an integral part of the Annual Report.

9. CORPORATE GOVERNANCE

The Company's Paid-up Equity Share Capital and Net Worth on last dayof the previous year i.e. on March 31 2021 was Rs. 554.87 Lakhs and Rs. 2568.07 Lakhsrespectively which does not meets the criteria of applicability as per threshold limitmentioned in the Regulation 15(2) of the Listing Regulations. Hence Pursuant toRegulation 27 of the Listing Regulations the requirement of furnishing report onCorporate Governance is not applicable to the Company for the Financial Year under review.

10. DIRECTORS

In accordance with the provisions of Section 152 of the Act and theCompany's Articles of Association Mr. Sharad S. Shah Whole Time Director and Mr.Maikal Raorani Whole Time Director & CFO retires by rotation at the forthcomingAnnual General Meeting ("AGM") and being eligible offers themselves forre-appointment. The Board recommends their re-appointment for the consideration of theMembers of the Company at the forthcoming AGM on the terms and conditions mentioned in theNotice convening the AGM. A brief profile of Mr. Sharad S. Shah and Mr. Maikal Raorani hasalso been provided therein.

During the year under review the Board of Directors on recommendationof the Nomination and Remuneration Committee appointed Mr. Lokanath Suryanarayan Mishra(DIN: 03364948) as Non-Executive Independent Director on the Board of Directors of theCompany in accordance with Section 149(4) of the Act with effect from July 08 2020 tohold office for a term of 5 (five) consecutive years.

Further the Board of Directors on recommendation of the Nomination andRemuneration Committee re-appointed Mr. Vaibhav Desai (DIN: 06673723) as Whole TimeDirector for a period of 3 (three) consecutive years with effect from October 01 2020 onthe terms and conditions including remuneration approved by the Board.

All Independent Directors of the Company have given declarations thatthey meet the conditions of independence as laid down under Section 149(6) of the Act andRegulation 16(1)(b) of the Listing Regulations. In the opinion of the Board theIndependent Directors fulfil the said conditions of independence. The IndependentDirectors have also confirmed that they have complied with the Company's Code of BusinessConduct & Ethics.

The Ministry of Corporate Affairs ("MCA") vide NotificationNumber G.S.R. 804(E) dated October 22 2019 and effective from December 01 2019 hasintroduced the provision relating to inclusion of names of Independent Directors in theData Bank maintained by Indian Institute of Corporate Affairs (IICA). All IndependentDirectors of the Company are registered with IICA.

In the opinion of the Board the Independent Directors possess therequisite integrity experience expertise proficiency and qualifications.

11. KEY MANAGERIAL PERSONNEL

In accordance with the provisions of Section 203 of the Act thefollowing are the Key Managerial Personnel ("KMP") of the Company:

SN NAME DESIGNATION
1 Mr. Shailesh S. Shah Managing Director
2 Mr. Maikal Raorani Whole Time Director & Chief Financial Officer
3 Mr. Swapnil Soni* Company Secretary & Compliance Officer

* Subsequent to the cessation of Ms. Gauri Rane as Company Secretary& Compliance Officer of the Company with effect from September 112020 Mr. SwapnilSoni was appointed as Company Secretary & Compliance Officer of the Company alsodesignated as KMP with effect from February 122021.

12. NUMBER OF MEETINGS OF THE BOARD

During the Financial Year 2020-21 Five Meetings of the Board ofDirector were held i.e. on July 08 2020 September 11 2020 November 12 2020 December03 2020 & February 12 2021.

The requisite quorum was present at all the Meetings. The table belowprovides the attendance of the Board of Directors of Company:

SN NAME OF DIRECTOR CATEGORY NO. OF BOARD MEETING
1 Mr. Shailesh S. Shah Managing Director 5 of 5
2 Mr. Sharad S. Shah Whole Time Director 5 of 5
3 Mr. Maikal Raorani Whole Time Director & CFO 5 of 5
4 Mr. Vaibhav Desai Whole Time Director 5 of 5
5 Mr. Amarendra Mohapatra Independent Director 5 of 5
6 Ms. Sanghamitra Sarangi Independent Director 5 of 5
7 Mr. Lokanath Suryanarayan Mishra* Independent Director 5 of 5

* Mr. Lokanath Suryanarayan Mishra was appointed as an IndependentDirector on the Board of Company w.e.f. July 08 2020.

13. COMMITTEES OF THE BOARD

The Committees of the Board of Directors of the Company plays vitalrole in the governance and focus on specific areas and make informed decisions within thedelegated authority. Each Committee is governed by their respective terms of referencewhich exhibit their composition scope powers duties and responsibilities.

The Board of Directors has the following Committees:

A. Audit Committee

B. Nomination and Remuneration Committee

C. Stakeholders Relationship Committee

The details of the Committees of the Board along with theircomposition number of meetings and attendance at the meetings are as follows:

A. AUDIT COMMITTEE

Audit Committee of the Board of Directors is entrusted with theresponsibility to supervise the Company's financial reporting process and internalcontrols. The composition quorum powers role and scope are in accordance with Section177 of the Act and the provisions of Regulation 18 of the Listing Regulations.

All members of the Audit Committee are financially literate and bringin expertise in the fields of Finance Taxation Economics Risk and InternationalFinance. It functions in accordance with its terms of reference that defines itsauthority responsibility and reporting function.

During the Financial Year 2020-21 Five Audit Committee Meetings of theBoard of Directors of Company held i.e. on July 08 2020 September 11 2020 November 122020 December 03 2020 & February 12 2021.

The table below provides the attendance of the Audit Committee Members:

SN NAME OF DIRECTOR POSITION CATEGORY NO. OF MEETINGS
1 Mr. Lokanath Suryanarayan Mishra* Chairman Independent Director 5 of 5
2 Mr. Amarendra Mohapatra Member Independent Director 5 of 5
3 Ms. Sanghamitra Sarangi Member Independent Director 5 of 5
4 Mr. Maikal Raorani Member Whole Time Director & CFO 5 of 5

* Mr. Lokanath Suryanarayan Mishra was appointed as an IndependentDirector on the Board of Company w.e.f. July 08 2020.

The Company follows best practices in financial reporting. The Companyhas been reporting on quarterly basis the Unaudited Financial Statements and on annualbasis Audited Financial Statement as required under Regulation 33 of the ListingRegulations. The Company's Financial Statements are made available on the websitewww.skycorp.in and are also sent to the Stock Exchange where the Company's Equity Sharesare listed for display at their websites.

The Audit Committee also oversees and reviews the functioning of avigil mechanism and reviews the findings of investigation into cases of material natureand the actions taken in respect thereof. The Audit Committee also provides for adequatesafeguards against victimization of whistle blowers who avail of the mechanism. The VigilMechanism/ Whistle Blower Policy has been hosted on Company's website www.skycorp.in.

The Company continued to strengthen its commitment towards goodgovernance. The Company has a Code of Conduct for Prevention of Insider Trading ('InsiderTrading Code') pursuant to the SEBI (Prohibition of Insider Trading) Regulations 2015.The Audit Committee also oversees Insider Trading Policy and supervises in implementationof the Insider Trading Code.

B. NOMINATION & REMUNERATION COMMITTEE

The Nomination and Remuneration Committee duly constituted by the Boardof Directors has a well-defined composition of members and terms of reference inaccordance with Section 178 of the Act and applicable Rules thereto and in accordance withRegulation 19 of the Listing Regulation.

During the Financial Year 2020-21 Three Nomination and RemunerationCommittee Meetings of the Board of Directors of Company held i.e. on July 08 2020February 12 2021 & March 08 2021.

The table below highlights the composition and attendance of theMembers of the Committee. The requisite quorum was present at all the Meetings.

SN NAME OF DIRECTOR POSITION CATEGORY NO. OF MEETINGS
1 Mr. Lokanath Suryanarayan Mishra* Chairman Independent Director 3 of 3
2 Mr. Amarendra Mohapatra Member Independent Director 3 of 3
3 Ms. Sanghamitra Sarangi Member Independent Director 3 of 3
4 Mr. Maikal Raorani Member Whole Time Director & CFO 1 of 1

* Mr. Lokanath Suryanarayan Mishra was appointed as an IndependentDirector on the Board of Company w.e.f. July 082020.

The Nomination & Remuneration Committee also overseesImplementation administration and superintendence and for formulation of the detailedterms and conditions of the Sky Industries Employee Stock Option Plan 2018.

C. STAKEHOLDERS' RELATIONSHIP COMMITTEE

Pursuant to provisions of Section 178(5) of the Act read withRegulation 20 of the Listing Regulations Stakeholders Relationship Committee of the Boardhas been constituted.

The Secretarial Department of the Company and the Registrar and ShareTransfer Agent Link Intime India Private Limited attends to all grievances of theshareholders received directly or through SEBI Stock Exchanges Ministry of CorporateAffairs Registrar of Companies etc.

Continuous efforts are made to ensure that grievances are moreexpeditiously redressed to the complete satisfaction of the investors. Shareholders arerequested to furnish their updated telephone numbers and e-mail addresses to facilitateprompt action.

During the Financial Year 2020-21 Four Stakeholders RelationshipCommittee Meetings of the Board of Directors of Company held i.e. on July 08 2020September 11 2020 November 12 2020 & February 12 2021.

The table below highlights the composition and attendance of theMembers of the Committee. The requisite quorum was present at all the Meetings.

SN NAME OF DIRECTOR POSITION CATEGORY NO. OF MEETINGS
1 Mr. Lokanath Suryanarayan Mishra* Chairman Independent Director 4 of 4
2 Mr. Amarendra Mohapatra Member Independent Director 4 of 4
3 Ms. Sanghamitra Sarangi Member Independent Director 4 of 4
4 Mr. Maikal Raorani Member Whole Time Director & CFO 4 of 4

* Mr. Lokanath Suryanarayan Mishra was appointed as an IndependentDirector on the Board of Company w.e.f. July 08 2020.

14. BOARD EVALUATION

Pursuant to the provisions of the Act and the Listing Regulations astructured questionnaire was prepared after taking into consideration the various aspectsof the Board's functioning composition of the Board and its Committees cultureexecution and performance of specific duties obligations and governance.

The performance evaluation of the Directors was completed during theyear under review. The Independent Directors of the Company have held one meeting duringthe year on March 30 2021 without the presence of Non-Independent Directors and membersof the management to review the performance of Non-Independent Directors and the Board ofDirectors as a whole.

The Board of Directors expressed their satisfaction with the evaluationprocess.

15. NOMINATION AND REMUNERATION POLICY

The Board of Directors has framed a policy which lays down a frameworkin relation to remuneration of Executive & NonExecutive Directors Key ManagerialPersonnel Senior Management and other employees of the Company.

The policy outlines the criteria for determining qualificationspositive attributes relevant experience and Independence of Director and criteria forappointment of Key Managerial Personnel / Senior Management and performance evaluationwhich are considered by the Nomination and Remuneration Committee and the Board ofDirectors while making selection of the candidates.

The Policy also lays down the guiding principles philosophy and thebasis for payment of remuneration to Executive and Non-executive Directors (by way ofsitting fees and commission) Key Managerial Personnel Senior Management and otheremployees.

The weblink for Nomination and Remuneration Policy of the Company areavailable on the website of the Company and can be accessed through the web link atwww.skycorp.in.

16. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a Whistle Blower Policy to report genuine concerns orgrievances and to provide adequate safeguards against victimization of persons who may usesuch mechanism. The Whistle Blower Policy has been posted on the website of the Company atwww.skycorp.in.

During the financial year under review no complaints were receivedunder the Whistle Blower Policy / Vigil mechanism.

17. SKY INDUSTRIES EMPLOYEE STOCK OPTION PLAN - 2018 ("ESOP2018")

The Company at its Nomination & Remuneration Committee Meeting heldon July 08 2020 & March 08 2021 has issued and allotted 31569 & 40776 EquityShares respectively to the employees against exercise of equal number of stock optionspursuant to ESOP 2018.

A certificate from the Statutory Auditors certifying that the schemeviz. ESOP 2018 has been implemented in accordance with SEBI (Share Based EmployeeBenefits) Regulations 2014 and in accordance with the Resolution(s) passed by the Membershas been obtained and would be available for inspection by the Members of the Company

The disclosure with respect to ESOP 2018 as required by the SEBI (ShareBased Employee Benefits) Regulations 2014 has been annexed as Annexure ‘A' to theBoards' Report.

18. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS BY THE COMPANY

Details of Loans Guarantees and Investments covered under theprovisions of Section 186 of the Act are given in the notes to Financial Statementsforming part of the Annual Report.

19. RELATED PARTY TRANSACTIONS

All transactions entered with Related Parties for the year under reviewwere on arm's length basis and thus a disclosure in Form AOC-2 in terms of Section 134 ofthe Act is not required. Further there are no material related party transactions duringthe year under review with the Promoters Directors or Key Managerial Personnel. Allrelated party transactions are mentioned in the notes to the accounts.

All Related Party Transactions are placed before the Audit Committeefor approval. Omnibus approval was obtained on a yearly basis for transactions which areof repetitive nature. Transactions entered into pursuant to omnibus approval are verifiedby the Risk Assurance Department and a statement giving details of all Related PartyTransactions are placed before the Audit Committee and the Board for review and approvalon a quarterly basis.

The Policy on Related Party Transactions as approved by the Board ofDirectors has been uploaded on the website of the Company and can be seen at the linkwww.skycorp.in. None of the Directors has any pecuniary relationship or transactionsvis-a-vis the Company except remuneration ESOP and sitting fees.

20. ANNUAL RETURN

Pursuant to Section 92(3) read with section 134(3)(a) of the CompaniesAct 2013 copies of the Annual Returns of the Company prepared in accordance with Section92(1) of the Act read with Rule 11 of the Companies (Management and Administration) Rules2014 are placed on the website of the Company and is accessible at the web-link:www.skycorp.in.

21. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

No significant and material order has been passed by the regulatorscourts tribunals impacting the going concern status and Company's operations in future.

22. DIRECTORS' RESPONSIBILITY STATEMENT

To the best of knowledge and belief and according to the informationand explanations obtained by them your Directors make the following statement in terms ofSection 134(3)(c) of the Act:

a) that in the preparation of the Annual Accounts for the year endedMarch 31 2021 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;

b) the directors had selected such accounting policies and applied themconsistently and made judgements and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at March 31 2021 andof the profit of the Company for the year ended on that date;

c) that the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;

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

e) that the Directors had laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively; and

f) that the Directors had devised proper systems to ensure compliancewith the provisions of all applicable laws and that such systems were adequate andoperating effectively.

23. AUDITORS

A. Statutory Auditor

Messrs CGCA & Associates Chartered Accountants (Firm RegistrationNo. 123393W) (Earlier known as UKG & Associates) were appointed as Statutory Auditorsof the Company for a period of five consecutive years at the Annual General Meeting (AGM)of the Members held on September 07 2018 on a remuneration mutually agreed upon by theBoard of Directors and the Statutory Auditors. Their appointment was subject toratification by the Members at every subsequent AGM held after the AGM held on June 052017. Pursuant to the amendments made to Section 139 of the Act by the Companies(Amendment) Act 2017 effective from May 07 2018 the requirement of seeking ratificationof the Members for the appointment of the Statutory Auditors has been withdrawn from theStatute. Hence the resolution seeking ratification of the Members for continuance of theirappointment at this AGM is not being sought.

There is no audit qualification reservation or adverse remark for theyear under review.

B. Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act and rules madethereunder the Company has appointed Messrs Ramesh Chandra Mishra & AssociatesPracticing Company Secretary to undertake the Secretarial Audit of the Company. TheSecretarial Audit Report is annexed as Annexure ‘B' and forms an integral part ofthis Report. There is no secretarial audit qualification for the year under review.

The Company's Paid-up Equity Share Capital and Net Worth on last dayof the previous year i.e. on March 31 2021 was Rs. 554.87 Lakhs and Rs. 2568.07 Lakhsrespectively which does not meets the criteria of applicability as per threshold limitmentioned in the Regulation 15(2) of the Listing Regulations. Hence pursuant toRegulation 24A of Listing Regulations read with SEBI Circular No. CIR/CFD/CMD1/27/2019dated February 08 2019 the Annual Secretarial Compliance Report is not applicable toCompany for the Financial Year under review.

24. INTERNAL FINANCIAL CONTROL SYSTEMS THEIR ADEQUACY AND RISKMANAGEMENT

The establishment of an effective corporate governance and internalcontrol system is essential for sustainable growth and long-term improvements in corporatevalue and accordingly Sky Industries Limited works to strengthen such structures. Webelieve that a strong internal control framework is an important pillar of CorporateGovernance.

The Company has an effective internal control and risk-mitigationsystem which is constantly assessed and strengthened with new/revised standard operatingprocedures. These controls ensure safeguarding of assets reduction and detection of fraudand error adequacy and completeness of the accounting records and timely preparation ofreliable financial information. Critical functions are rigorously reviewed and the reportsare shared with the Management for timely corrective actions if any. Business risks andmitigation plans are reviewed and the internal audit processes include evaluation of allcritical and high-risk areas.

The internal and operational audit is entrusted to Messrs SitenduSharma & Co. Chartered Accountant. The main focus of internal audit is to reviewbusiness risks test and review controls assess business processes besides benchmarkingcontrols with best practices in the industry. Significant audit observations and follow-upactions thereon are reported to the Audit Committee. For ensuring independence of auditsinternal auditors report directly to the Audit Committee.

25. REPORTING OF FRAUDS

There was no instance of fraud during the year under review whichrequired the Statutory Auditors to report to the Audit Committee and / or Board underSection 143(12) of Act and Rules framed thereunder.

26. CORPORATE SOCIAL RESPONSIBILITY (CSR)

During the financial year under review the provisions of Section 135of the Act relating to the Corporate Social Responsibility are not applicable to yourCompany

27. ENVIRONMENT HEALTH AND SAFETY

The Company is conscious of the importance of environmentally clean andsafe operations. The Company's policy requires conduct of operations in such a mannerso as to ensure safety of all concerned compliances of environmental regulations andpreservation of natural resources.

28. DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION& REDRESSAL) ACT 2013

In order to comply with provisions of the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 and Rules framed thereunderthe Company has formulated and implemented a policy on prevention prohibition andredressal of complaints related to sexual harassment of women at the workplace. All womenemployees whether permanent temporary or contractual are covered under the above policy.The said policy has been uploaded on the internal portal of the Company for information ofall employees. An Internal Complaint Committee (ICC) has been set up in compliance withthe said Act.

During the year under review no complaints were reported to the Board.

29. STATUTORY INFORMATION AND OTHER DISCLOSURES

The information on conservation of energy technology absorption andforeign exchange earnings and outgo pursuant to Section 134(3)(m) of the Act read withthe Rule 8(3) of the Companies (Accounts) Rules 2014 is annexed as Annexure ‘C' andforms an integral part of this Report.

The Disclosure required under Section 197(12) of the Act read with theRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is annexed as Annexure ‘D' and forms an integral part of this Report.

A statement comprising the names of top 10 employees in terms ofremuneration drawn and every person employed throughout the year who were in receipt ofremuneration in terms of Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is annexed as Annexure ‘E' and forms an integralpart of this annual report. The said Annexure is not being sent alongwith this annualreport to the members of the Company in line with the provisions of Section 136 of theAct. Members who are interested in obtaining these particulars may write to the CompanySecretary at the Registered Office of the Company. The aforesaid Annexure is alsoavailable for inspection by Members at the Registered Office of the Company 21 daysbefore and up to the date of the ensuing Annual General Meeting during the business hourson working days.

The Company has not accepted any deposits within the meaning ofSection 73 of the Act read with the Companies (Acceptance of Deposits) Rules 2014.

The Company has complied with the applicable Secretarial Standardsissued by the Institute of Company Secretaries of India.

30. MANAGING DIRECTOR & CHIEF FINANCIAL OFFICER CERTIFICATE

In terms of the SEBI LODR Regulations the certificate as prescribedin Part B of Schedule II of the Listing Regulations has been obtained from Mr. ShaileshShah Managing Director and Mr. Maikal Raorani Whole Time Director & Chief FinancialOfficer for the Financial Year 2020-21 with regard to the Financial Statements and othermatters. The said Certificate forms part of this Report.

31. GREEN INITIATIVES

In commitment to keep in line with the Green Initiatives and goingbeyond it electronic copy of the Notice of 32nd Annual General Meeting of the Companyincluding the Annual Report for Financial Year 2020-21 are being sent to all Members whosee-mail addresses are registered with the Company / Depository Participant(s).

32. CAUTIONARY STATEMENT

Statements in this Directors' Report and Management Discussion andAnalysis Report describing the Company's objectives projections estimatesexpectations or predictions may be "forward-looking statements" within themeaning of applicable securities laws and regulations. Actual results could differmaterially from those expressed or implied. Important factors that could make differenceto the Company's operations include raw material availability and its pricescyclical demand and pricing in the Company's principal markets changes in Governmentregulations Tax regimes economic developments within India and the countries in whichthe Company conducts business and other ancillary factors.

33. APPRECIATION

Your Directors wish to place on record their appreciation for thecontribution made by the employees at all levels but for whose hard work and supportyour Company's achievements would not have been possible. Your Directors also wish tothank its customers dealers agents suppliers investors and bankers for their continuedsupport and faith reposed in the Company.

.