Notes to Accounts of Sky Industries Ltd.

Mar 31, 2015

1. Rights and restrictions attached to the shares

The Company has one class of quitu shares. Each holder of equity shares is called to one vote per share. Ther Company abd pays of divided in indan rupees. In the eventsof liquidation of the company holders of quity shares will be entitled to receive the remaining assess of the company after distributes of all prefiential amounts . The discributes will be in propose to the number of equity shares held by the shareholder.

2. Term loam fmim banks arc secured by way pF part passu Fust charge on land & hail dines including all movable and ninety nery,stones and spates, furniture and tintiirt, both present and FatiJe, excluding vehicles. and a second ehaTgc on all the current assets of the Company, both picBcnt and future, and personal grantee directors.

3. The vehicle laaus from banks and oilier parties ate secured by the hypothecation of vehicles purchased under the scheme.

4. Contingent liabilities not provided in respect of :

a) Guarantees goiven by the company's banker against counter guarantee given by the company 5,83,700 5,83,700

b) Gurantees given by the Company's 1,26,00,000 1,26,00,000 Banker on behalf of subsidiary , aganist counter gurantee given by the company

c) Income tax demand disputed 1,14,896 1,14,896 by the company

d) Cess Demand from Deputy Commissioner - 36,83,521 of Navi Mumbai Muncipal Corporation

e) sales lax demands pending with commissionerate and disputed by 33.33.901 33.33.901 the company

5.Defined Benefit Plans:

Contribution to Gratuity Fund

The Company makes annual contributions to the Explooyee's Group Gratuity-cum Life assurance scheme of life insuramce corporation of india, a funded defined bebefit plan for qualifyingemployees/Gratuity is payable to all eligble employees on superannuation, death or on seperationvemination in terms of the provisions of the payment of gratuity act or as per the company policy whichever is beneficial to the employees.

6. SEGMENT REPORTING

As the company has only one primary business nativity. Segment Reporting is not applicable.

7. RELATED PARTY DISCLOSURE

i.Key management personnel/persons exercising significant influence & their relatives;

Mr. Mill* K. Motani Mr. Shailcsh. S. Shah Mr. Siunbh X. Motani Mr. Shantl S Shah Mr. vaibbat Dchc Mr. Mobil N Mdani

ii. Enterprises over which key management personnel exercise significant influence,

S.k. Exparts S.K SilkF

Shamots ImumaLioral SK Overseas SK. W indlroiucs Private Lid.

Jask Invogue Private Ltd Stay Frnveal Private Ltd Novieas India Private Ltd SMI Label LLP

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Mar 31, 2014

1. Share Capital

Rights and restrictions attached to the shares

Hie Company has only one class of equity shares. Each holder of equity shares is entitled to one vote per share.The Company declares and pays dividend in Indian rupees. In (he event of liquidation of the Company,the holde-s of equity shares will be entitled to receive the remaining assets of the Company,after distribution of all preftential amounts.The distribution will be in proportion to the number of equity shares heldby the shareholders.

2. Long-Term Borrowings

2.1 Term loans from banks are secured by way of pari passu first charge on land & buildings including all movable assets,plant and machinery,stores and spares, furniture and fixture, both present and future, excluding vehicles, and a second charge on all the

3. Trade Payables

3.1 The Company has not compiled the relevant information from its suppliers under the Micro, Small, Medium Enterprises Development Act, 2006. As the relevant information is not readily available, no dislcosures have been made in the accounts. However, in the opinion of the management, the impact of interest, if any, that may be payable in accordance with the provision of this Act is not expected to be material.

4. Non-current Investments

4.1 The Conipany''s equiy investment in Sksy The. USA is tarried at cost. The dimunution in the value of the investment is cotsidered to be Company in nature, in view of the Company''s long term finarcial invovement in that Company. No Provision is therefore considered necessary in the amounts for diminution in the value of this

5. Contingent liabilities not provided in respect of: Year Ended Year Ended March 31, 2014 March 31, 2013

a) Guarantees gjven by the Company''s bunker against counter guarantee given by the Company 583,700 583,700

b) Guarantees given by the Company''s banker on behalf of subsidiary against Counter guarantee given by the Company. 12,600,000 25,000,000

C) Income tax demand disputed by the Company 114,896 114,896

d) Cess Demand from Deputy Commissioner of Navi Mumbai Municipal Curporjation 3,683,521 3,683,521

e) Bills Discounted with Banks - 1,6I8,509

f) Sales tax demands pending with Commissionerate and disputed by the Company 3,333,901 3,333,901

Year Ended Year Ended

March 31, 2014 March 31,2013

vii) Employee benefits

6. Defined Benefit Plans:

Contribution to Gratuity fund

The company makes annual contributions to the Employee''s Group Gratuity-cum-Life scheme of Life insurance Corporation of India assurance schprovisions of civ Payment of Gratuity AcL or a.s per ik Company''s policy whichever is beneficial 10 the employees.

7. SEGGMENT REPORTING

As the Company has only one primary business activity, Segment Reporting is not applicable.

8. RELATED PARTY DISCLOSURE :

(a) Relationships

i. Subsidiaries:

SKAY Inc., USA (wholly owned subsidiary)

Sky Hemmay Private Limited

SK Stabel Industries Private Limited (wholly owned subsidiary)

ii. Key management personnel/persons exercising significant influence & their relatives:

Mr. Nitin K. Motani

Mr. Shailesh S. Shah

Mr. SaurabhK. Motani

Mr. Sharad S Shah

Mr. Vaibhav Desai

Mr. Mohit N Motani

iii. Enterprises over which Key management personnel exercise significant influence.

S.K. Exports

S.K. Silks

Shamots International

S.K. Overseas

SK Windtronics Private Ltd

Jask Invogue Private Ltd.

Skay Finvest Private Ltd

Novitas India Private Ltd

SMJ Labels LLP

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Mar 31, 2013

(i)EMPLOYEEBENEFITS

I. Defined Benefit Plans:

Contributionto Gratuity Fund

The Company makes annual contributions to the Employee''s Group Gratuity-cum-Life assurance scheme of Life Insurance Corporation of India, a funded defined benefit plan for qualifying employees. Gratuity is payable to all eligible employees on superannuation, death or on separation/termination in terms of the provisions of the Payment of Gratuity Actoras per the Company''s policy whichever is beneficialtothe employees.

The following table sets out the funded status of the gratuity plan and the amounts recognised in the Company''s financial statementsasat 31March 2013

(ii) SEGMENT REPORTING

As the Company has only one primarybusiness activity, Segment Reportingisnot applicable.

(iii) RELATED PARTY DISCLOSURE:

(a) Relationships

i. Subsidiaries:

SKAY Inc., USA (wholly owned subsidiary)

Sky Hemmay Private Limited

SK Stabel Industries Private Limited (wholly owned subsidiary)

ii. Key management personnel/persons exercising significant influence & their relatives:

Mr. Nitin K. Motani Mr. Shailesh S. Shah Mr. Saurabh K. Motani Mr. Sharad S Shah Mr. Maikal Raorani Mr. Mohit N Motani

iii.Enterprises over which Keymanagement personnel exercise significant influence.

S.K. Exports

S.K. Silks

Shamots International

S.K.Overseas

SK Windtronics Private Ltd.

Jask Invogue Private Ltd.

Skay Finvest Private Ltd.

Novitas India Private Ltd.

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Mar 31, 2010

1. Contingent Liabilities

i) Guarantees given by the Companys banker against counter guarantee given by the company Rs. 163,500/- (Previous year Rs. 365,400/-)

ii) Guarantees given by the Companys banker on behalf of subsidiary, against counter guarantee given by the Company Rs. 12,000,000/- (Previous year Rs. Nil)

iii) Income tax demands disputed by the Company: Rs.90,000/-(Previous Year Rs. 90,000/-)

S.No. Assessment Year Demand Notice from Amount

1 2002-2003 Asst CIT -Cir 4(3) 90,000/-



iv) Cess Demand from Deputy Commissioner of Navi Mumbai Municipal Corporation amounting to Rs. 3,683,521/- (Previous Year Rs.3,683,521/-)

v) Bills Discounted with Banks Rs.30,313,445/- (Previous year Rs.8,614,337/-)

2. Segment Reporting:

As the Company has only one primary business activity, Segment Reporting is not applicable.

3. Investments

The Company has withdrawn its entire capital in Shamots International, a partnership firm in the financial year 2007-08. However, the Company continued to be a partner in the same till 30th September 2008 with profit sharing of 5%. The Share in the loss for the period ended 30thSeptember, 2008, amounting to Rs.102,782/- ( Previous Year Profit of Rs. 401,711/- ) has been charged to the Profit & Loss Account during the year.

4. Current Liabilities

(a) The Company has not compiled the relevant information from its suppliers under the Micro, Small, Medium Enterprises Development Act, 2006, As the relevant information is not readily available; no disclosures have been made in the accounts. However, in the opinion of the management, the impact of interest, if any, that may be payable in accordance with the provision of this Act is not expected to be material.

(b) There are no amounts due and outstanding to be credited to Investor Education and Protection Fund.

5. Related Party Disclosures:

Related party disclosures as required by AS-18, "Related Party Disclosures", are given below:

(a) Relationships

i. Shareholder with a substantial interest in voting power: SKAY Finvest Private Limited

ii. Subsidiaries:

SKAY Inc., USA (wholly owned subsidiary) Sky Hemmay Private Limited

iii. Key management personnel/persons exercising significant influence & their relatives: Mr. Nitin K. Motani ; Mr. Shailesh S. Shah

Mr. Saurabh K. Motani Mr. Sharad S Shah Mr. Maikal Raorani

iv. Enterprises over which Key management personnel exercise significant influence.

S.K. Exports

S.K. Silks

Shamots International

S.K.Overseas

SK Stabel Industries Pvt Ltd.

SK Ultratech Private Limited

Jask Invogue Private Ltd.

6. The Company has not given loans to subsidiary. Hence, there are no disclosures required to be given under Clause 32 of the Listing Agreement.

7. The Companys significant leasing arrangements are in respect of operating leases for premises occupied by the Company. The aggregate lease rentals payable by the Company are charged to Profit and Loss Account as Rent under Rent Rates and Taxes in Schedule 11.

8. Interest reimbursement as per Technology Upgradation Fund Scheme amounting to Rs. Nil/- (Previous year Rs. 2,766,627/ -) has been credited to Interest Expense account.

9. EMPLOYEE BENEFITS : I. Defined Benefit Plans:

Contribution to Gratuity Fund

The Company during the current year has funded its contributions to LIC Gratuity for eligible employees.Gratuity is payable to all eligible employees on superannuation, death or on separation/termination in terms of the provisions of the Payment of Gratuity Act.

Change in Fair Value of assets

Opening Fair value of plan assets as at 1st April 2009

10. Discontinuance of Ribbon Division a) The Company had during the previous year discontinued the operations of Ribbon Division in view of its future non viability. During the year, the Ribbon Division has disposed assets of book value Rs. 26.21 million on account of which, there is a pre tax profit of Rs. 31.15 million. The assets of Rs.10.01 million (Previous year Rs.99.99 million/-) and liabilities of Rs. Nil (Previous year Rs.31.27 million) are to be disposed/settled respectively.

b) Of the above pre-tax profit, recognized gain of Rs.28.67 million is on the account of sale of land & Building which is pending approval, from Maharashtra Industrial Development Corporation Limited and Labour Authorities for its transfer.

11. Previous years figures have been recast and rearranged wherever necessary