Sky Industries Ltd Management Discussions.
Industry Structure & Development:
SKY INDUSTRIES LIMITED is one of pioneers in the country in the fields of technical textiles and a dominant player in the Narrow Woven Fabric industry, particularly Hook & Loop Tape Fasteners catering to various product categories viz. Footwear, Orthopedics, Textiles, Leather, Infant wear, Sports, Defence, Medical Accessories, Hygiene, Aviation, Automobiles, Home furnishings etc.
Opportunity and Threats:
The US-China trade war has thrown ample opportunities for exports from India and the Company has the opportunity of capturing steadily growing markets by undertaking capacity expansion. The Company is in process of evaluating various options for the same and plan to grow internationally keeping in view the new opportunities created.
On the domestic front, the Company looks to cement its position as leading fastening solutions provider with capabilities to satisfy niche requirements.
The Company still faces threats from imports and other new emerging players with access to Asian markets that are creating intense competition for the companys products. Though in last couple of decades no new fastening application has been able to dislodge Hook and Loop Tape fasteners, the threat of new applications coming in cannot be entirely ruled out. The Company is thus looking to de risk itself by going in for related diversification, leveraging on its present robust domestic customer base.
Risks and Concerns:
The Company faces various risks which are incidental to the Companys operations in the various product lines viz. Hook and Loop Tape Fasteners and Velvet tapes like new competitor setting up business or expanding of the existing players owing to the market available.
The key concerns for the Company, amongst others, are rising input costs, inability of the Company to pass on the increase in costs to its customers, and increase in foreign exchange rates.
RISK MANAGEMENT POLICY:
In accordance with the requirements of the Act, the Company has adopted and implemented a Risk Management Policy for identifying risks to the Company, procedures to inform Board members about the risk assessment and minimization procedures, monitoring the risk management plan, etc.
The Company has one segment of activity namely Fastening solutions under the broader category of Narrow Woven Fabrics. Hence, Accounting Standard on Segment Reporting (AS - 17) issued by the Institute of Chartered Accountant of India does not apply.
The turnover during the year was about Rs. 58 Crores as compared to previous years Rs. 52 Crores, a 10% growth over the last year.
As in earlier years, the Company focused on increasing the share of the Value Added products.
During the year under review the Exports were at Rs. 254 lacs, a jump of nearly 2.5 times as compared to the previous year. The Company further expects to consolidate the growth in export and is looking forward to grow manifold in export segment.
The Companys working capital management is based on a well-organized process of continuous monitoring and controls on Receivables, Inventories and other parameters.
Internal Control systems and their adequacy
The Company has commensurate internal audit systems in relation to the size of the Company. The Company has also appointed Internal Auditors M/s Sitendu Sharma, who have been conducting internal audit of the systems that are being strengthened.
Indian Accounting standards (IND AS)
The Company has adopted Ind AS w.e.f. 1st April, 2017 with a transition date of 1st April, 2016. Accordingly, results for the year ended 31st March, 2019 have been prepared in accordance with Ind AS prescribed under Section 133 of the Companies Act, 2013 and other accounting principles generally accepted in India. Previous periods figures have been restated as per Ind AS to make them comparable.
Human Resources & Industrial Relations:
We strongly believe that engaged, enthusiastic, and loyal employees are pivotal drivers of growth and health in any organization, which is why we place a lot of emphasis on taking care of our employees, their dreams and aspirations.
Your Company has a team of able and experienced industry professionals in various ranks, who make us what we are today. As of 31stMarch, 2019, the total number of employees on the rolls of the Company was 53.
The Boards Report and Management Discussion & Analysis may contain certain statements describing the Companys objectives, expectations or forecasts that appear to be forward-looking within the meaning of applicable securities laws and regulations while actual outcomes may differ materially from what is expressed herein. The Company is not obliged to update any such forward-looking statements. Some important factors that could influence the Companys operations comprise economic developments, pricing and demand and supply conditions in global and domestic markets, changes in government regulations, tax laws, litigation and industrial relations.
Managing Director & Chief Financial Officer Certification
The Board of Directors
Sky Industries Limited
We, Mr. Shailesh Shah, Managing Director and Mr. Maikal Raorani, Chief Financial Officer of the Company, do hereby certify as follows:
A. We have reviewed financial statements and the cash flow statement for the year and that to the best of our knowledge and belief:
1. these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;
2. these statements together present a true and fair view of the companys affairs and are in compliance with existing accounting standards, applicable laws and regulations.
B. To the best of our knowledge and belief, there are no transactions entered into by the company during the year which are fraudulent, illegal or volatile of the companys code of conduct.
C. We accept responsibility for establishing and maintaining internal controls for financial reporting and that we have evaluated the effectiveness of internal control systems of the company pertaining to financial reporting and we have disclosed to the Auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies.
D. We have indicated to the Auditors and the Audit Committee:
1. Significant changes in internal control over financial reporting during the year;
2. Significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial statements; and
3. Instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or an employee having a significant role in the companys internal control system over financial reporting.
|For and on behalf of the Board of||For and on behalf of the Board of|
|Maikal Raorani||Shailesh Shah|
|Place : MUMBAI||Whole-time Director||Managing Director|
|Date : April 30, 2019||00037831||00006154|