Accounting Policies of Le Waterina Resorts & Hotels Ltd. Company

Mar 31, 2015

A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

The Financial statements have been prepared under the historical cost convention in accordance with the mandatory accounting standards issued by the Institute of Chartered Accountants of India

B. INVENTORIES

The inventories are valued at the lower of Cost or Net Realizable Value. The management conducting stock taking at regular intervals. The Value of Inventories is also certified by the management.

Inventories are valued after providing for obsolescence as under:

* Stores and Operating Supplies_At lower of cost or net realisable value;

* Food and Beverage _ At lower of cost or net realisable value; and

* Goods in transit-At lower of cost or net realisable value.

C. REVENUE RECOGNITION

The Company derives revenues primarily from hospitality services. Revenue on time and material contracts are recognized as the related services are performed. Revenue yet to be billed is recognized as unbilled revenue. Sales and services are stated exclusive of taxes.

D. FIXED ASSETS

Fixed assets are stated at cost less depreciation. Cost comprise of purchase price and any directly attributable cost of bringing the assets to its working condition for the intended use. Depreciation is being charged on Written Down Value method in accordance with rates specified under The Companies Act, 2013

Pro rata basis is adopted for charging depreciation on the asset put to use during the year.

E. FOREIGN EXCHANGE TRANSCATION:

The value of Imports and Exports are Nil

F. INVESTMENTS

There are No investments.

G. RETIREMENT BENFITS

Liabilities in respect of gratuity to Employees and Leave Encashment are accounted on Cash Basis. The exact liability as on 31-03-2015 has not been ascertained.

H. EMPLOYEE BENEFITS

Contributions payable by the Company to the concerned Government authorities in respect of Provident Fund, Family Pension Fund and Employees State Insurance are charged to Profit & Loss A/c.

I. SEGMENTAL REPORTING

The company is engaged primarily only in segment of business namely Hospitality sector. So no segmental reporting is called for as per the Accounting Standard 17.

J. TAXES ON INCOME

Current Tax is determined in accordance with the provisions of the Income Tax Act 1961, as the amount of tax payable to the taxation authorities in respect of taxable income for the year.

Deferred Tax is accounted for in the books as prescribed by the Accounting Standard on the timing difference. The Net Balance of the Deferred Tax liability and Deferred Tax Assets is shown in the balance sheet. The break-up of the Deferred Tax Liability is shown below:

K. PRIOR PERIOD ADJUSTMENT, EXTRA ORDINARY ITEMS AND CHANGES IN ACCOUNTING POLICIES:

Prior Period adjustment extraordinary items and changes in accounting policies having material impact on the financial affairs of the Company are disclosed.

L. CASH FLOW STATEMENT

Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing of financing cash flows. The cash flows operating, investing and financing activities of the company are segregated. Cash and cash equivalents include cash-in-hand, balances with banks and money at call and short notice but does not include interest accrued on deposits.

M. CURRENT ASSETS

Balances of the debtors, creditors, advances and balances of deposits are subject to confirmation, reconciliation and adjustments, if any. The management does not expect any material difference affecting the current year's financial statement.

In the opinion of management, the current assets and advances have the value as stated in the balance sheet, if realized in the ordinary course of business.

N. BORROWING COSTS

As-16 "Borrowing costs" interest that are directly attributable to the acquisition, construction, or production of qualifying assets should be capitalized as part of the cost of that asset, the amount of borrowing cost should be recognized as on expenses in the period in which they are incurred (to qualify for capitalization the assets that necessarily takes a substantial period of time for its intended use) are capitalized. Other borrowing costs are recognized as expenses in the period in which same are incurred.

O. ACCOUNTING PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions are recognized in terms of accounting Standards 29-"provisions, Contingent Liabilities and Contingent Assets" notified by the Company (accounting standards) Rules, 2006, when there is a present ledger or statutory obligation as a result of past events where it is probable that there will be outflow of resources to settle the obligation and when a reliable estimate of the amount of the obligation can be made.

Contingent liabilities are recognized only when there is a possible obligation arising from past events due to occurrence of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be measured in terms of future outflow or resources or where a reliable estimate of the obligation cannot be made.

Obligations are assessed on an ongoing basis and only those having largely probable outflow of resources are provided for.

P. RELATED PARTY DISCLOSURES UNDER ACCOUNTING STANDARD 18:

a) Subsidiary Company : None

b) Parties where control exists : None

c) Key Management Personnel : Sanjay Jalan

d) Other parties being relatives of : None Key Management Personnel with whom transactions have taken place during the year

e) Other related parties with whom : Except the following transactions have taken place during the year:

The Company has taken Hospitality business under Joint Management. The Business charges payable in respect of the said business to Managing Director of the company is charged to Profit and Loss Account as Business Charges. The commitment in respect of Business charges payable by the company is at minimum of Rs.2750000/- p .m or 5% of the Turnover whichever is less in respect of Sriperumbudur and Rs. 1690000/- or 5% of the turnover whichever is less in respect of Kottivakkam.:

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Mar 31, 2014

Corporate information:

Le Waterina Resorts&Hotels Limited is a Public Limited Company, which was incorporated on 07/28/1987 in the name of Harringtons Construction and Industries Limited and later on name change. The Shares of the Company are listed on Bombay Stock Exchange. The Company is primarily engaged in the Hotel Business through its "Lewaterina Resorts and Spc" a three star Resort situated in Sriperambudur and "Lewaterina, the boutique Hotel" a two star Hotel situated in Chennai.

A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

The Financial statements have been prepared under the historical cost convention in accordance with the mandatory accounting standards issued by the Institute of Chartered Accountants of India

B. INVENTORIES

The inventories are valued at the lower of Cost or Net Realizable Value. The Management conducting Stock taking at regular intervals. The Value of Inventories is also certified by the management.

Inventories are valued after providing for obsolescence as under:

--Stores and Operating Supplies_At lower of cost or net realisable value;

--Food and Beverage _ At lower of cost or net realisable value; and

--Goods in transit-At lower of cost or net realisable value.

C. REVENUE RECOGNITION

The Company derives revenues primarily from hospitality services. Revenue on time and material contracts are recognized as the related services are performed. Revenue yet to be billed is recognized as unbilled revenue. Sales and services are stated exclusive of taxes.

D. FIXED ASSETS

Fixed assets are stated at cost less depreciation. Cost comprise of purchase price and any directly attributable cost of bringing the assets to its working condition for the intended use. Depreciation is being charged on Written down Value method in accordance with rates specified under The Companies Act 1956,

Pro rata basis is adopted for charging depreciation on the asset put to use during the year.

E. FOREIGN EXCHANGE TRANSCATION:

The value of Imports and Exports are Nil

F. INVESTMENTS

There are No investments.

G. RETIREMENT BENFITS

Liabilities in respect of gratuity to Employees and leave Encashment are accounted on cash basis. The exact liability as on 31-03-2014 has not been ascertained.

H. EMPLOYEE BENEFITS

Contributions payable by the Company to the concerned Government authorities in respect of Provident Fund, Family Pension Fund and Employees State Insurance are charged to Profit & Loss A/c.

I. SEGMENTAL REPORTING

The company is engaged primarily only in segment of business namely Hospitality sector. So no segmental reporting is called for as per the Accounting Standard 17.

J. TAXES ON INCOME

Current Tax is determined in accordance with the provisions of the Income Tax Act 1961,as the amount of tax payable to the taxation authorities in respect of taxable income for the year.

K. PRIOR PERIOD ADJUSTMENT, EXTRA ORDINARY ITEMS AND CHANGES IN ACCOUNTING POLICIES:

Prior Period adjustment extraordinary items and changes in accounting policies having material impact on the financial affairs of the Company are disclosed.

L. CASH FLOW STATEMENT

Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing of financing cash flows. The cash flows operating, investing and financing activities of the company are segregated. Cash and cash equivalents include cash-in-hand, balances with banks and money at call and short notice but does not include interest accrued on deposits.

M. CURRENT ASSETS

Balances of the debtors, creditors, advances and balances of deposits are subject to confirmation, reconciliation and adjustments, if any. The management does not expect any material difference affecting the current year''s financial statement.

In the opinion of management, the current assets and advances have the value as stated in the balance sheet, if realized in the ordinary course of business.

N. BORROWING COSTS

As-16 "Borrowing costs" interest that are directly attributable to the acquisition, construction, or production of qualifying assets should be capitalized as part of the cost of that asset, the amount of borrowing cost should be recognized as on expenses in the period in which they are incurred (to qualify for capitalization

the assets that necessarily takes a substantial period of time for its intended use) are capitalized. Other borrowing costs are recognized as expenses in the period in which same are incurred.

0. ACCOUNTING PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions are recognized in terms of accounting Standards 29-"provisions,Contingent Liabilities and Contingent Assets" notified by the Company (accounting standards) Rules, 2006, when there is a present ledger or statutory obligation as a result of past events where it is probable that there will be outflow of resources to settle the obligation and when a reliable estimate of the amount of the obligation can be made.

Contingent liabilities are recognized only when there is a possible obligation arising from past events due to occurrence of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be measured in terms of future outflow or resources or where a reliable estimate of the obligation cannot be made.

Obligations are assessed on an ongoing basis and only those having largely probable outflow of resources are provided for.

The Company has taken Hospitality business under Joint Management. The Business charges payable in respect of the said business to Managing Director of the company is charged to Profit and Loss Account as Business Charges. The commitment in respect of Business charges payable by the company is at minimum of Rs.2750000/- p .m or 5% of the Turnover whichever is less in respect of Sriperumbudur and Rs. 1690000/- or 5% of the turnover whichever is less in respect of Kottivakkam.:

Business charges payable in respect of Star hotel at Kottivakkam is chargeable only after 1st January 2014 as per the agreement with Mr Sanjay Jalan.

However, during the current year, the company has sought reduction in the business charges payable in view of large capital expenditure planned by the company. By mutual consent, the business charges have been re-fixed 25% of the business chargeable payable under the earlier agreement for the current year.

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Mar 31, 2013

A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

The Financial statements have been prepared under the historical cost convention in accordance with the mandatory accounting standards issued by the Institute of Chartered Accountants of India

B. INVENTORIES

The inventories are valued at the lower of Cost or Net Realizable Value. The Management conducting Stock taking at regular intervals. The Value of Inventories is also certified by the management.

Inventories are valued after providing for obsolescence as under:

Stores and Operating Supplies At lower of cost or net realisable value;

Food and Beverage At lower of cost or net realisable value; and

Goods in transit At lower of cost or net realisable value.

C. REVENUE RECOGNITION

The Company derives revenues primarily from hospitality services. Revenue on time and material contracts are recognized as the related services are performed. Revenue yet to be billed is recognized as unbilled revenue. Sales and services are stated exclusive of taxes.

D. FIXED ASSETS

Fixed assets are stated at cost less depreciation. Cost comprise of purchase price and any directly attributable cost of bringing the assets to its working condition for the intended use. Depreciation is being charged on Written down Value method in accordance with rates specified under The Companies Act 1956,

Pro rata basis is adopted for charging depreciation on the asset put to use during the year.

E. FOREIGN EXCHANGE TRANSCATION:

The value of Imports and Exports are Nil

F. INVESTMENTS

There are No investments.

G. RETIREMENT BENFITS

Liabilities in respect of gratuity to Employees and leave Encashment are accounted on cash basis. The exact liability as on 31-03-2013 has not been ascertained.

H. EMPLOYEE BENEFITS

Contributions payable by the Company to the concerned Government authorities in respect of Provident Fund, Family Pension Fund and Employees State Insurance are charged to Profit & Loss A/c.

I. SEGMENTAL REPORTING

The company is engaged primarily only in segment of business namely Hospitality sector. So no segmental reporting is called for as per the Accounting Standard 17.

J. TAXES ON INCOME

Current Tax is determined in accordance with the provisions of the Income Tax Act 1961,as the amount of tax payable to the taxation authorities in respect of taxable income for the year.

Deferred Tax is accounted for in the books as prescribed by the Accounting Standard on the timing difference. The Net Balance of the Deferred Tax liability and Deferred Tax Assets is shown in the balance sheet. The breakup of the Deferred Tax Liability is shown below:

PARTICULARS Amount in Rs.

Opening Deferred Tax Liability Rs.339065 (240403)

Deferred Ta x liability arising during the year Rs.(238532) (98662)

Closing Deferred Tax Liability Rs. 100533 (339065) Figures in bracket reflects previous year figures.

K. PRIOR PERIOD ADJUSTMENT, EXTRA ORDINARY ITEMS AND CHANGES IN ACCOUNTING POLICIES:

Prior Period adjustment extraordinary items and changes in accounting policies having material impact on the financial affairs of the Company are disclosed.

L. CASH FLOW STATEMENT

Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing of financing cash flows. The cash flows operating investing and financing activities of the company are segregated. Cash and cash equivalents include cash-in-hand, balances with banks and money at call and short notice but does not include interest accrued on deposits.

M. CURRENT ASSETS

Balances of the debtors, creditors, advances and balances of deposits are subject to confirmation, reconciliation and adjustments, if any. The management does not expect any material difference affecting the current year''s financial statement.

In the opinion of management, the current assets and advances have the value as stated in the balance sheet, if realized in the ordinary course of business

N. BORROWING COSTS

Borrowing costs that are directly attributable to and incurred on acquiring qualifying assets (assets that necessarily takes a substantial period of time for its intended use) are capitalized. Other borrowing costs are recognized as expenses in the period in which same are incurred.

O. ACCOUNTING PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions are recognized in terms of accounting Standards 29-"provisions,Contingent Liabilities and Contingent Assets" notified by the Company (accounting standards) Rules, 2006, when there is a present ledger or statutory obligation as a result of past events where it is probable that there will be outflow of resources to settle the obligation and when a reliable estimate of the amount of the obligation can be made.

Contingent liabilities are recognized only when there is a possible obligation arising from past events due to occurrence of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be measured in terms of future outflow or resources or where a reliable estimate of the obligation cannot be made.

Obligations are assessed on an ongoing basis and only those having largely probable outflow of resources are provided for.

P. RELATED PARTY DISCLOSURES UNDER ACCOUNTING STANDARD 18:

a) Subsidiary Company None

b) Parties where control exists None

c) Key Management Personnel Sanjay Jalan

d) Other parties being relatives of None Key Management Personnel with

whom transactions have taken place during the year:

e) Other related parties with whom : None transactions have taken place during the year:

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Mar 31, 2012

A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

The Financial statements have been prepared under the historical cost convention in accordance with the mandatory accounting standards issued by the Institute of Chartered Accountants of India

B. INVENTORIES

The inventories are valued at the lower of Cost or Net Realizable Value.The Management conducting Stock taking at regular intervals. The Value of Inventories is also certified by the management. Inventories are valued after providing for obsolescence as under:

- Stores and Operating SuppliesAt lower of cost or net realisable value;

- Food and Beverage _ At lower of cost or net realisable value; and

- Goods in transit-At lower of cost or net realisable value.

C. REVENUE RECOGNITION:

The Income and Expenditure are accounted on Mercantile Basis.

D. FIXED ASSETS:

Fixed assets are stated at cost less depreciation. Cost comprise of purchase price and any directly attributable cost of bringing the assets to its working condition for the intended use. Depreciation is being charged on Written down Value method in accordance with rates specified under The Companies Act 1956, Pro rata basis is adopted for charging depreciation on the asset put to use during the year.

E. FOREIGN EXCHANGE TRANSCATION:

The value of Imports and Exports are Nil

F. INVESTMENTS

There are No investments.

G. RETIREMENT BENFITS

Liabilities in respect of gratuity to Employees and leave Encashment are accounted on cash basis. The exact liability as on 31-03-2012 has not'been ascertained.

H. SEGMENTAL REPORTING

The company is engaged primarily only in segment of business namely Hospitality sector. So no segmental reporting is called for as per the Accounting Standard 17.

I. RELATED PARTY DISCLOSURE:

Required disclosure is given as an annexure to this note.

J. TAXES ON INCOME

Current Tax is determined in accordance with the provisions of the Income Tax Act 1961,as the amount of tax payable to the taxation authorities in respect of taxable income for the year.

Deferred Tax is accounted for in the books as prescribed by the Accounting Standard on the timing difference. The Net Balance of the Deferred Tax liability and Deferred Tax Assets is shown in the balance sheet. The Break up of the Deferred Tax Liability is shown below:

K. Sale of Agricultural lands at Theni

During the year the company has not disposed off any agricultural lands.(Previous year Rs.8010697/-)

L. PRIOR PERIOD ADJUSTMENT, EXTRA ORDINARY ITEMS AND CHANGES IN ACCOUNTING POLICIES:

Prior Period adjustment extraordinary items and changes in accounting policies having material impact on the financial affairs of the Company are disclosed.

M. LEASES:

Lease payment under an operating lease is recognised as an expense in the profit and loss account on a straight line basis over the lease period. Assets taken on finance lease are capitalized and finance charges are charged to profit and loss account on accrual basis.

N. CASH FLOW STATEMENT

Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature, any defrrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing of financing cash flows. The cash flows operating investing and finance in gactivities of the company are segregated. Cash and cash equivalents include cash in hand, balances with banks and money at call and short notice but does not include interest accrued on deposits.

O. CURRENT ASSETS

Balances of the debtors, creditors, advances and balances of deposits are subject to confirmation, reconciliation and adjustments, if any . The management does not expect any material difference affecting the current year's financial statement.

In the opinion of management,the current assets and advances have the value as stated in the balance sheet, if realized in the ordinary course of business

P. BORROWING COSTS:

Borrowing costs that are directly attributable to and incurred on acquiring qualifying assets (assets that necessarily takes a substantial period of time for its intended use) are capitalized. Other borrowing costs are recognized as expenses in the period in which same are incurred.

Q. ACCOUNTING PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

Provisions are recognized in terms of accounting Standards 29-"provisions,Contingent Liabilities and Contingent Assets" notified by the Companion (accounting standards) Rules, 2006, when there is a present ledger or statutory obligation as a result of past events where it is probable that there will be outflow of resources to settle the obligation and when a reliable estimate of the amount of the obligation can be made contingent liabilities are recognized only when there is a possible obligation arising from past events due to occurrence of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be measured in terms of future outflow or resources or where a reliable estimate of the obligation cannot be made. Obligations are assessed on an ongoing basis and only those'having largely probable outflow of resources are provided for.

R. RELATED PARTY DISCLOSURES UNDER ACCOUNTING STANDARD 18:

The Company has taken Hospitality business under Joint Management. The Business charges payable in respect of the said business to Managing Director of the company is charged to Profit and Loss Account as Business Charges. The commitment in respect of Business charges payable by the company is at minimum of Rs.2750000/- p .m or 5% of the Turnover whichever is less in respect of Sriperumbudur and Rs. 1690000/- or 5% of the turnover whichever is less in respect of Kottivakkam. :

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Mar 31, 2011

A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

The Financial statements have been prepared under the historical cost convention in accordance with the mandatory accounting standards issued by the Institute of Chartered Accountants of India

B. INVENTORIES

The inventories are valued at the lower of Cost or Net Realizable Value. The Management conducting Stock taking at regular intervals. The Value of Inventories is also certified by the management. Inventories are valued after providing for obsolescence as under:

__Stores and Operating Supplies_At lower of cost or realisable value;

__Food and Beverage _ At lower of cost realisable value; and

__Goods in transit-At lower of cost or realisable value.

C. REVENUE RECOGNITION:

The Income and Expenditure are accounted on Mercantile Basis.

D. FIXED ASSETS:

Fixed assets are stated at cost less depreciation. Cost comprise of purchase price and any directly attributable cost of bringing the assets to its working condition for the intended use. Depreciation is being charged on Written down Value method in accordance with rates specified under The Companies Act 1956, Pro rata basis is adopted for charging depreciation on the asset put to use during the year.

E. FOREIGN EXCHANGE TRANSCATION:

The value of Imports and Exports are Nil

F. INVESTMENTS

There are No investments.

G. RETIREMENT BENFITS

Liabilities in respect of gratuity to Employees and leave Encashment are accounted on cash basis.The exact liability as on 31-03-2011 has not been ascertained.

H. SEGMENTAL REPORTING

Agricultural Income of the company arises out of leasing and sale of agricultural lands. According to the management that income arising from such agricultural activities are not subject to any risk and return that are different from those of other business segments. So no segmental reporting is called for as per the Accounting Standard 17.

I. RELATED PARTY DISCLOSURE:

Required disclosure is given as an annexure to this note.

K. Sale of Agricultural lands at Theni

The company has sold its agricultural lands at Theni retaining only a small portion of lands.

The Company has made a profit of Rs.80,10,697/-(Previous year Nil) on the sale of agricultural lands

L. PRIOR PERIOD ADJUSTMENT, EXTRA ORDINARY ITEMS AND CHANGES IN ACCOUNTING POLICIES:

Prior Period adjustment, extraordinary items and changes in accounting policies having material impact on the financial affairs of the Company are disclosed.

M. LEASES:

Lease payment under an operating lease is recognised as an expense in the profit and loss account on a straight line basis over the lease period. Assets taken on finance lease are capitalized and finance charges are charged to profit and loss account on accrual basis.

N. CASH FLOW STATEMENT

Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cas receipts or payments and item of income or expenses associated with investing of financing cas flows. The cash flows operating, investing and financing activities of the company are segregate Cash and cash equivalents include cash in hand, balances with banks and money at call and sho notice but does not include interest accrued on deposits.

O. CURRENT ASSETS

Balances of the debtors, creditors, advances and balances of deposits are subject to confirmation, reconciliation and adjustments, if any . The management does not expect any material difference affecting the current year's financial statement. In the opinion of management, the current assets an advances have the value as stated in the balance sheet, if realized in the ordinary course of business

P. BORROWING COSTS:

Borrowing costs that are directly attributable to and incurred on acquiring qualifying assets (asset that necessarily takes a substantial period of time for its intended use)are capitalized. Other borrowing costs are recognized as expenses in the period in which same are incurred.

Q. ACCOUNTING PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

Provisions are recognized in terms of accounting Standards 29-"provisions, Contingent Liabilities and Contingent Assets" notified by the Companion (accounting standards) Rules, 2006, when there a present legal or statutory obligation as a result of past events where it is probable that their will be outflow of resources to settle the obligation and when a reliable estimate of the amount of the obligation can be made, contingent liabilities are recognized only when there is a possible obligatic arising from past events due to occurrence of one or more uncertain future events not wholly within tr control of the Company or where any present obligation cannot be measured in terms of future outflo or resources or where a reliable estimate of the obligation cannot be made. Obligations are assesse on an ongoing basis and only those having a largely probable outflow of resources are provided for.

R. RELATED PARTY DISCLOSURES UNDER ACCOUNTING STANDARD 18:

RELATED PARTY : The Key Management Personnel are :

Mr. Sanjay Jalan Managing Director

Mr. Jaqanath Jothi Director

RELATED PARTY TRANSACTIONS : Twenty months licence fees is credited as Advance for Boutique hotel, Kottivakkam in which the managing director is interested as owner Rs.338,00,000 (Previous year : 20 months rental advance for three star hotel in which managing director is interested as owner of Rs.55000000/-)

Charges paid for three star hotel to M/s. Lewaterina Residency Rs.33000000/- (Rs. 8250000) Charges paid for Boutique hotel at Kottivakkam is Nil (Nil) Licence fees for the Boutique hotel is waived for a period of one year up to 30m September 2011.

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Mar 31, 2010

A. BASIS OP PREPARATION OF FINANCIAL STATEMENTS:

The Financial statements have been prepared under the historical cost convention in accordance with the mandatory accounting standards issued by the Institute of Chartered Accountants of India The significant accounting policies followed by the company are as Stated:

B. INVENTORIES

The inventories are valued at the lower of Cost or Net Realizable Value. The Management conducting Stock taking at regular intervals. The Value of Inventories is also certified by the management.

C. REVENUE RECOGNITION:

The Income and Expenditure are accounted on Mercantile Basis.

D. FIXED ASSETS:

Fixed assets are stated at cost less depreciation. Cost comprise of purchase price and any directly attributable cost of bringing the assets to its working condition for the intended use.

Depreciation is being charged on Written down Value method in accordance with rates specified under The Companies Act 1956, Pro rata basis is adopted for charging depreciation on the asset put to use during the year.

E. FOREIGN EXCHANGE TRANSCATION: The value of Imports and Exports are Nil

F. INVESTMENTS

During the year, Ms GRAFEX MACHINERY COMPANY got dissolved and full investment realized. So there are no investments at the end of the year.

G. RETIREMENT BENFITS

Liabilities in respect of gratuity to Employees and leave Encashment are accounted on cash basis. The exact liability as on 31-03-2010 has not been ascertained.

H. SEGMENTAL REPORTING

Agricultural Income of the company arises out of leasing of agricultural lands. According to the management that income arising from such agricultural activities are not subject to any risk and return that are different from those of other business segments. So no segmental reporting is called for as per the Accounting Standard 17.

I. RELATED PARTY DISCLOSURE:

Required disclosure is given as an annexure to this note.

J. TAXES ON INCOME

Current Tax is determined in accordance with the provisions of the Income Tax Act 1961,as the amount of tax payable to the taxation authorities in respect of taxable income for the year.