Notes to Accounts of Hampton Sky Realty Ltd.

Mar 31, 2021

34. AMALGMATION OF RITESH SPINNING MILLS LIMITED. RITESH IMPEX PRIVATE LIMITED AND H.B. FIBRES LIMITED

(a) Pursuant to Scheme of Amalgamation (Scheme) amongst Ritesh Spinning Mills Limited, Ritesh Impex Private Limited and H. B. Fibres Limited with the company under section 230 to 232 of the Companies Act, 2013 sanctioned by National Company Law Tribunal, New Delhi Bench on 16th August, 2021 all assets and liabilities are transferred and vested in the company with appointed date of 1st April, 2018.

(b) The amalgamation has been accounted in the books of account of the Company following pooling of interest method and in accordance with Ind AS 103 ''Business Combination'' read with Appendix C to Ind AS 103 specified under Section 133 of the Act, read with the Companies (Accounting Standards) Amendment Rules, 2016. Accordingly, the accounting treatment has been given as follows:

i. The assets, liabilities and reserves of Ritesh Spinning Mills Limited, Ritesh Impex Private Limited and H. B. Fibres Limited have been incorporated in the financial statements at the carrying values.

ii. Authorized Share Capital of Rs. 210 Lacs of Ritesh Spinning Mills Ltd., Rs. 5 Lacs of Ritesh Impex Pvt. Ltd. and Rs.500 Lacs H B Fibre Ltd. stand transferred as authorised share capital of the company.

iii. Suspense Share Capital is created for issue of share capital to Shareholders and Debenture-holders of Ritesh Spinning Mills Ltd., Ritesh Impex Private Limited and H. B. Fibres Ltd. for Rs. 746.89 Lacs, Rs. 189.65 Lacs and Rs. 140 Lacs respectively.

iv. The difference between book value of shares and debentures of Ritesh Spinning Mills Ltd., Ritesh Impex Private Limited and H. B. Fibres Ltd. and face value of Suspense Share Capital to be issued amounting to Rs 1853.56 Lacs has been adjusted to capital reserve of the Company as Gain on Bargain Purchase.

v. Inter-Company balances and transactions have been eliminated.

vi. The balance of the retained earnings, general reserve and revaluation reserve appearing in the financial statements of Ritesh Spinning Mills Ltd., Ritesh Impex Private Limited and H. B. Fibres Ltd. have been aggregated with corresponding balance appearing in the financial statements of the Company.

vii. The financial information in the financial statements in respect of prior period have been restated as if business combination had occurred from the beginning of the preceding period in the financial statements irrespective

of actual date of combination in accordance with Ind AS 103.

35. Critical Accounting Estimates and Judgments

The estimates and judgments used in the preparation of the said financial statements are continuously evaluated by the Company, and are based on historical experience and various other assumptions and factors (including expectations of future events), that the Company believes to be reasonable under the existing circumstances. The said estimates and judgments are based on the facts and events, that existed as at the reporting date, or that occurred after that date but provide additional evidence about conditions existing as at the reporting date.

Although the Company regularly assesses these estimates, actual results could differ materially from these estimates-even if the assumptions under-lying such estimates were reasonable when made, if these results differ from historical experience or other assumptions do not turn out to be substantially accurate. The changes in estimates are recognized in the financial statements in the period in which they become known.

The areas involving critical estimates, assumptions or judgments are:

1. Useful lives of property, plant and equipment''s Note 4

2. Measurement defined benefit obligation Note 19 & 25

3. Estimation of provisions & contingent liabilities refer Note 23 & 37

4. Estimation of fair value of unlisted securities Note 5 Estimates and judgments are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.

36. During the year, Company has recognized the following amounts in the financial statements as per Ind AS19 "Employees Benefits" issued by the ICAI:

Defined Benefit Plan

The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation and the obligation for leave encashment is recognized in the same manner as gratuity.

The Company has reviewed all its pending litigations and proceedings and has made adequate provisions, wherever required and disclosed the contingent liabilities, wherever applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a material impact on its financial position.

The Company Periodically Review all its long term contracts to assess for any material foreseeable losses, Based on such review wherever applicable, the Company has adequate provisions for these long term contracts in the books of accounts as required under any applicable law/accounting standards

As at March31,2021 the Company did not have any outstanding long term derivative Contracts.

Fair Value measurement

Fair Value Hierarchy and valuation technique used to determine fair value:

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and are categorized into Level 1, Level 2 and Level 3 inputs.

Significant estimates

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The Company uses its judgment to select a variety of methods and make assumptions that are mainly based on market conditions existing at the end of each reporting period.

43. Financial risk management objectives and policies

The Company''s principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables, and financial guarantee contracts. The main purpose of these financial liabilities is to finance the Company''s operations and to provide guarantees to support its operations. The Company''s principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations.

The Company''s business activities expose it to a variety of financial risks, namely liquidity risk, market risks and credit risk. The Company''s senior management has the overall responsibility for the establishment and oversight of the Company''s risk management framework. The Company''s risk management policies are established to identify and analyses the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company''s activities.

MANAGEMENT OF LIQUIDITY RISK

Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities. The Company''s approach to managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses. In doing this, management considers both normal and stressed conditions.

The following table shows the maturity analysis of the Company''s financial liabilities based on contractually agreed undiscounted cash flows as at the Balance Sheet date.

Credit Risk

Credit risk is the risk that counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions and other financial instruments.

Trade Receivables

Customer credit risk is managed by each business unit subject to the Company established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored. At 31 March 2021, the Company had top 5 customers that owed the Company more than Rs. 10,61,83,062/- (31 March 2020: Rs. 11,98,42,102/- ) and accounted for approximately 88.79% (31 March 2020: 67.38%) of all the receivables outstanding.

An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 14. The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.

Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the management in accordance with the Company''s policy. Counterparty credit limits are reviewed by the management on an annual basis, and may be updated throughout the year. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments.

The Company''s maximum exposure to credit risk for the components of the balance sheet at 31 March, 2021 and 31 March, 2020 is the carrying amounts as illustrated in Note 11.

Capital management

Capital includes issued equity capital and share premium and all other equity reserves attributable to the equity holders. The primary objective of the Company''s capital management is to maximize the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants.

44. During the year, the Company increased the Authorized Share capital of the Company in conformity with the provisions of the Act. Clause V, The Authorized Share Capital of the Company is Rs. 28,15,00,000 (Rupees Twenty eight Crores Fifteen Lacs) divided into 2,81,50,000 (Two crores Eighty-one Lacs Fifty thousands) Equity shares of the face value of Rs. 10/- (Rupees Ten only) each. The corresponding form for increase in authorized share capital has been duly filed.

45. During the year, the issuance of Optionally Fully Convertible Debentures by way of preferential issue on private placement basis in accordance with provisions ascribed in the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2019 was approved in Board Meeting dated 15th February, 2021. After the Balance Sheet Date i.e 31.03.2021, the Board of Directors in their meeting held on April 08, 2021 allotted 42,00,000 (Forty Two Lakh) Optionally Fully Convertible Debentures (OFCD) of the face value of 10/- (Rupees Ten Only) each on private placement basis at an issue price of 22/- (Rupees Twenty Two Only) each i.e. at a premium of 12/- (Rupees Twelve Only) per OFCD.

46. During the year, an Open Offer for the Acquisition of Up to 41,05,650 Equity Shares of Face Value of Rs. 10/- each Constituting 26% of the expanded equity share capital of Ritesh Properties And Industries Limited from the public shareholders of the Company by Findoc Finvest Private Limited (“Acquirer”) has been made.

After the period under review, the letter of offer was duly updated on the Stock Exchange as on 03rd June, 2021 and currently the Tendering period which commenced from 10th June, 2021 has ended dated 24th June, 2021. On 07th July, 2021, Post offer Advertisement under Regulation 18(12) in terms of SEBI(SAST) Regulations, 2011 was given to Stock Exchange.

48. The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. The Ministry of Labour and Employment (''Ministry'') has released draft rules for the Code on November 13, 2020 and has invited suggestions from stakeholders which are under active consideration by the Ministry. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period in which the Code becomes effective.

49. Corresponding figures of previous year have been regrouped / reclassified wherever deemed necessary and the figures have been rounded off to the nearest rupee.

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Mar 31, 2015

1. Contingent Liabilities

Bank Guarantee Rs. Nil (Previous Year Rs.183.66 Lacs)

2. Debit & Credit balances of the parties are subject to confirmation & reconciliation.

3. Insurance claims of Rs. NIL (Previous Year Rs. 21675/-) are being accounted for on receipt basis.

4. In the opinion of the Board, all the Current Assets, Loans & Advances have a value on realization in the ordinary course of business equivalent to the amount at which they are stated except as expressly stated otherwise.

5. Segment Reporting

Segment reporting is not given as the company deals mainly in one segment and the disclosure requirements of Accounting Standards (AS)-17 on "Segment Reporting", issued by The Institute of Chartered Accountants of India are not applicable.

6. Related Parties Disclosure

A) Related parties where control exists or with whom transactions have taken place during the year.

SUBSIDIARY COMPANIES

* Femella Fashions Private Limited

* Catalina Bay USA Inc.

ASSOCIATED/ALLIED COMPANIES

* Ritesh International Limited- up to 25.07.2013

* Ritesh Spinning Mills Limited

* Kamal Oil & Allied Industries (P) Ltd- w.e.f 04.05.2013

* Ritesh Impex Private Ltd

* H.B. Fibres Limited

* KP Advisors(Realty) Pvt Ltd

KEY MANAGERIAL PERSONNEL (KM P) REPRESENTED ON THE BOARD

* Sh. Sanjeev Arora Chairman-cum-Managing Director

* Sh. Rajiv Arora Director*

* Sh. Roop Kishore Executive Director

Fathepuriya

* Sh. Kavya Arora Director

* Sh. Surendar K Sood Director

* Sh. Gurpreet Singh Brar Director * Up to 25.07.2013

OTHERS

* Mrs. Guneet Arora Wife of Sh. Kavya Arora, Director and Daughter in Law of Sh. Sanjeev Arora, Chairman-cum-Managing Director.

7. The Udyog Sahayak, Chandigarh has allotted 40 Acres of Land vide Letter No. US/337-U Dt. 22/04/94 in the name of the company. The sale deeds & possession of the above said land is with the company and its associate companies. Collector Land Acquisition, Department of Industries and Commerce, Punjab, Chandigarh had issued various demand notices being the enhanced compensation to be paid to the Land Owners. The farmers had filed the petition for price enhancement before the Hon'ble High Court of Punjab and Haryana, which had fixed the basic compensation of Rs.6.70 Lacs per Acre vide order dated 25.08.2005 instead of Rs.4.50 Lacs per Acre as awarded by reference court.

The farmers and Collector Land Acquisition, Punjab contested the above order of the Hon'ble High Court of Punjab and Haryana before the Hon'ble Supreme Court. The Hon'ble Supreme Court vide its order dated 25.03.2015 has decided the above matter and had affirmed the order of the Hon'ble High Court of Punjab and Haryana.

As soon as the demand will be raised against the company by the Collector Land Acquisition, Punjab, it shall be accounted for in the Books of Accounts.

8. Expenditure in Foreign Currency on Travelling is Rs. 83,189/- (P.Y Rs. 3,58,977/-).

9. Corresponding figures of previous year have been regrouped / rearranged wherever deemed necessary.

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Mar 31, 2014

1. CONTINGENT LIABILITIES

Bank GuaranteeRs.183.66 Lacs (Previous Year Rs.183.66 Lacs) (Refer Note No.37)

2. Debit & Credit balances of the parties are subject to confirmation & reconciliation.

3. Insurance claims of Rs. 21675/-(Previous Year Rs.484240/-) are being accounted for on receipt basis.

32. In the opinion of the Board, all the Current Assets, Loans & Advances have a value on realization in the ordinary course of business equivalent to the amount at which they are stated except as expressly stated otherwise.

4. Segment Reporting

Segment reporting is not given as the company deals mainly in one segment and the disclosure requirements of Accounting Standards (AS)-17 on "Segment Reporting", issued by The Institute of Chartered Accountants of India are not applicable.

5. RELATED PARTIES DISCLOSURE

A) Related parties where control exists or with whom transactions have taken place during the year.

SUBSIDIARY COMPANIES

* Femella Fashions Limited.

* Catalina Bay USA Inc.

ASSOCIATED/ALLIED COMPANIES

* Ritesh International Ltd.- up to 25.07.2013

* Ritesh Spinning Mills Ltd.

* Kishan Chand & Co Oil Industries Ltd.-up to 25.07.2013

* Kamal Oil & Allied Industries (P) Ltd-w.e.f. 04.05.2013

* Ritesh Impex Private Ltd.

* H.B. Fibres Ltd.

6. The Udyog Shahik, Chandigarh has allotted 40 Acres of Land vide Letter No. US/337-U Dt. 22/04/94 in the name of the company. The sale deeds & possession of the above said land is with the company and its associate companies. However, there are pending cases against the company and its associate companies for increase in acquisition cost. If any payment has to be made by the company on this account, the same shall be accounted for on payment basis.

Collector Land Acquisition, Department of Industries and Commerce, Punjab, Chandigarh had issued various demand notices being the enhanced compensation to be paid to the Land Owners. The company had already made an appeal against this order and the matter has been decided by the arbitrator in favour of the company but the State Government has filed an appeal against the Arbitrator decision. However, if any liability arises on this account and payment has to be made by the company, the same will be accounted for on cash basis. However, the company has already given bank guarantee of Rs.181.66 Lacs (Previous year Rs.181.66 lacs) in favour of the Government of Punjab on this account.

The charges, if any for the conversion of land into mega project scheme will be accounted for on cash basis.

7. Expenditure in Foreign Currency on Travelling is Rs. 3,58,977/- (P.Y Rs. 4,89,751/-).

8. Corresponding figures of previous year have been regrouped / rearranged wherever deemed necessary.

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Mar 31, 2013

1. CONTINGENT LIABILITIES

Bank Guarantee Rs. 181.66 Lacs (Previous Year Rs. 181.66 Lacs)

2. Debit & Credit balances of the parties are subject to confirmation & reconciliation.

3. Insurance claims of Rs. 484240/- (Previous Year Rs.NIL) are being accounted for on receipt basis.

4. During the previous year, the company had written off Rs. 6494815/- as "expenses amortization" being the deferred revenue expenditure as carried over from previous year.

5. The payment of remuneration made to the Mg. Director, Executive Director and other Directors are as under:

6. The Udyog Shahik, Chandigarh has allotted 40 Acres of Land vide Letter No. US/337-U Dt. 22/04/94 in the name of the company. The sale deeds & possession of the above said land is with the company and its associate companies. However, there are pending cases against the company and its associate companies for increase in acquisition cost. If any payment has to be made by the company on this account, the same shall be accounted for on payment basis.

Collector Land Acquisition, Department of Industries and Commerce, Punjab, Chandigarh had issued various demand notices being the enhanced compensation to be paid to the Land Owners. The company had already made an appeal against this order and the matter has been decided by the arbitrator in favour of the company but the State Government has filed an appeal against the Arbitrator decision. However, if any liability arises on this account and payment has to be made by the company, the same will be accounted for on cash basis. However, the company has already given bank guarantee of Rs.181.66 Lacs (Previous year Rs. 181.66 lacs) in favour of the Government of Punjab on this account.

The charges, if any for the conversion of land into mega project scheme will be accounted for on cash basis.

7. RELATED PARTIES DISCLOSURE

A) Related parties where control exists or with whom transactions have taken place during the year.

SUBSIDIARY COMPANIES

Femella Fashions Private Ltd. CatalinaBayUSAInc.

ASSOCIATED/ALLIED COMPANIES

o Ritesh International Ltd.

o Ritesh Spinning Mills Ltd.

o Kishan Chand & Co Oil Industries Ltd.

o Ritesh Impex Private Ltd.

o H.B. Fibres Ltd.

KEY MANAGERIAL PERSONNEL REPRESENTED ON THE BOARD

o Mr. Pran Arora Ex-Chairman*

o Mr. Sanjeev Arora Chairman cum

Managing Director o Mr. Rajiv Arora Director

o Mr. Roop Kishor Fathepuria Executive Director o Mr. Kavya Arora Director

o Mr. Surinder K Sood Director

*upto 09-10-2011 OTHERS

o Anita Arora Maximum Prop.-Mrs. Anita

Discount Retail Medical Arora, Wife of

Store Mr. Rajiv Arora,

Director

8. SEGMENT REPORTING

Segment reporting is not given as the company deals mainly in one segment and the disclosure requirements of Accounting Standards (AS)-17 on "Segment Reporting", issued by The Institute of Chartered Accountants of India are not applicable.

9. As per Collaboration Agreement dated 14.07.2006 read along with the addendum dated 11.01.2010 entered into with Ansal Properties & Infrstructure Ltd (herein after referred to as API L for joint development of land on Chandigarh Ludhiana Road. The company in lieu of various obligations under agreement entitled to agreed share of the built up area and of the plotted area. Under the agreement, the entire development and marketing expenses of the project was the responsibility of APIL Accordingly, expenses incurred in discharge of the obligation under the agreement and agreed share of revenue was, hitherto, recognised as expense/income. As per agreement dated 11.04.2012 read with the memorandum of understanding dated 28.01.2012 entered into between the company and APIL, the entire project with effect from 01.02.2012, Viz "Cut-off date" has been taken over by the company for agreed consideration comprising of reimburssement of expenses incurred by APIL on the development of project and the compensation amount. Accordingly from the "Cut-off date" entire revenue/ expenses from the project, including amount paid to APIL has been recognised in the books of accounts by the company as per percentage completion method.

10. In the opinion of the Board, all the Current Assets, Loans & Advances have a value on realization in the ordinary course of business equivalent to the amount at which they are stated except as expressly stated otherwise.

11. Expenditure in Foreign Currency on Travelling is Rs. 4,89,751/-(P.YRs. 5,72,167/-).

12. Corresponding figures of previous year have been regrouped / rearranged wherever deemed necessary.

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Mar 31, 2012

1. CONTINGENT LIABILITIES

Bank Gurantee Rs.181.66 Lacs (Previous year Rs. 181.66 Lacs)

2. Debit & Credit balances of the parties are subject to confirmation & reconciliation.

3. Insurance claims of NIL (Previous Year Rs.24,998/-) are being accounted for on receipt basis.

4. During the year, the company had written off Rs. 6,494,815/- as "expenses amortization" being the deferred revenue expenditure as carried over from previous year.

5. The payment of remuneration made to the Mg. Director, Executive Director and other Directors are as under:-

6. The Udyog Shahik, Chandigarh has allotted 40 Acres of Land vide Letter No. US/337-U Dt. 22/04/94 in the name of the company and its associate companies. The sale deeds & possession of the above said land is with the company and its associate companies. However, there are pending cases against the company and its associate companies for increase in acquisition cost. If any payment has to be made by the company on this account, the same shall be accounted for on payment basis.

Collector Land Acquisition, Department of Industries and Commerce, Punjab, Chandigarh had issued various demand notices being the enhanced compensation to be paid to the Land Owners. The company had already made an appeal against this order and the matter has been decided by the arbitrator in favour of the company but the State Government has filed an appeal against the Arbitrator decision. However, if any liability arises on this account and payment has to be made by the company, the same will be accounted for on cash basis. However, the company has already given bank guarantee of Rs. 181.66 Lacs (Previous year Rs.181.66 lacs) in favour of the Government of Punjab on this account.

The charges, if any for the conversion of land into mega project scheme will be accounted for on cash basis.

7. RELATED PARTIES DISCLOSURE

A) Related parties where control exists or with whom transactions have taken place during the year.

SUBSIDIARY COMPANIES

Femella Fashions Private Ltd. Catalina Bay USA Inc.

ASSOCIATED/ALLIED COMPANIES

o Ritesh International Ltd.

o Ritesh Spinning Mills Ltd.

o Kishan Chand & Co Oil Industries Ltd.

o Ritesh Impex Private Ltd.

o H.B. Fibres Ltd.

KEY MANAGERIAL PERSONNEL REPRESENTED ON THE BOARD

o Sh. Pran Arora Ex.-Chairman*

o Sh. Sanjeev Arora Chairman-Cum-

Managing Director

o Sh. Rajiv Arora Director

o Sh. Roop Kishor Fathepuria Executive Director

o Sh. Surinder K Sood Director

o Sh. Kavya Arora Director

*Up to 09.10.2011

OTHERS

o Anita Arora Maximum Prop.-Mrs. Anita

Discount Retail Arora, Wife of

Medical Store Sh. Rajiv Arora,

Director

8. SEGMENT REPORTING

Segment reporting is not given as the company deals mainly in one segment and the disclosure requirements of Accounting Standards (AS)-17 on "Segment Reporting", issued by The Institute of Chartered Accountants of India are not applicable.

9. As per collaboration agreement dated 14.07.2006 read along with the addendum dated 11.01.2010 entered into with Ansal Properties & Infrastructure Ltd (hereinafter referred to as APIL for joint development of land on Chandigarh Ludhiana Road. The company in lieu of various obligations under agreement entitled to agreed share of the built up area and of the plotted area. Under the agreement, the entire development and marketing expenses of the project was the responsibility of APIL. Accordingly, expenses incurred in discharge of the obligation under the agreement and agreed share of revenue was, hitherto, recognized as expense/income. As per agreement dated 11.04.2012 read with the memorandum of understanding dated 28.01.2012 entered into between the company and APIL, the entire project with effect from 01.02.2012, Viz "Cut-off date" has been taken over by the company for agreed consideration comprising of reimbursement of expenses incurred by APIL on the development of project and the compensation amount. Accordingly from the "Cut-off date" entire revenue/ expenses from the project, including amount paid to APIL has been recognized in the books of accounts by the company as per percentage completion method.

10. In the opinion of the Board, all the Current Assets, Loans & Advances have a value on realization in the ordinary course of business equivalent to the amount at which they are stated except as expressly stated otherwise.

11. Expenditure in Foreign Currency on Traveling is Rs.5,72,167/-(Previous Year Rs.2,97,140/-).

12. Corresponding figures of previous year have been regrouped / rearranged wherever deemed necessary.

13. Till the year ended 31.03.2011, the company was using pre-revised Schedule VI to the Companies Act, 1956 for the preparation and presentation of its financial statements. During the year ended 31.03.2012, the revised Schedule

I notified under Companies Act, 1956, has become applicable to Company. The company has reclassified previous year figures to confirm to this year's classification. The adoption of revised Schedule VI does not impact recognition and measurement principles followed by preparation of financial statements. However, it significantly impacts presentation and disclosures made in the financial statements, particularly presentation of balance Sheet.

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Mar 31, 2011

1. Insurance claims of Rs.24,998/- are being accounted for on receipt basis.

2. Debit & Credit balances of the parties are subject to confirmation & reconciliation.

3. During the previous year, the company had written off Personnel and Administrative Expenses related to ongoing Real Estate Project over a period of three years which in aggregate comes to Rs.1,29,89,630/- out of which 50% have been written off during the year as "expenses amortization" and balance carried forward.

4. The Earning per Share (EPS) in accordance with Accounting Standards (AS)-20 on "Earning per Share" issued by The Institute of Chartered Accountants of India is as under:

5. The Udyog Shahik, Chandigarh has allotted 40 Acres of Land vide Letter No. US/337-U Dt. 22/04/94 in the name of the company and its associate companies. The sale deeds & possession of the above said land is with the company and its associate companies. However, there are pending cases against the company and its associate companies for increase in acquisition cost. If any payment has to be made by the company on this account, the same shall be accounted for on payment basis.

Collector Land Acquisition, Department of Industries and Commerce, Punjab, Chandigarh had issued various demand notices being the enhanced compensation to be paid to the Land Owners. The company had already made an appeal against this order and the matter has been decided by the arbitrator in favor of the company but the State Government has filed an appeal against the Arbitrator decision. However, if any liability arises on this account and payment has to be made by the company, the same will be accounted for on cash basis. However, the company has already given bank guarantee of Rs.181.66 Lacs (Previous year Rs.181.66 lacs) in favor of the Government of Punjab on this account.

The charges, if any for the conversion of land into mega project scheme will be accounted for on cash basis.

6. Related Parties Disclosure

A) Related parties where control exists or with whom transactions have taken place during the year.

SUBSIDIARIES COMPANIES

· Femella Fashions Private Ltd.

· Catalina Bay USA Inc.

ASSOCIATED/ALLIED COMPANIES

o Ritesh International Limited

o Ritesh Spinning Mills Limited

o Kishan Chand & Co Oil Industries Limited

o Ritesh Impex Private Ltd

o H.B. Fibres Limited

7. Segment Reporting

Segment reporting is not given as the company deals mainly in one segment and the disclosure requirements of Accounting Standards (AS)-17 on "Segment Reporting", issued by The Institute of Chartered Accountants of India are not applicable.

8. In the opinion of the Board, all the Current Assets, Loans & Advances have valued on realization in the ordinary course of business equivalent to the amount at which they are stated except as expressly stated other wise.

9. The company has not received information from suppliers regarding their status under the Micro, Small and Medium Enterprises Development

Act, 2006 and hence disclosure relating to amounts unpaid as at the year end together with interest paid / payable under this Act have not been given.

10. Corresponding figures of previous year have been regrouped / rearranged wherever deemed necessary.

11. Additional information pursuant to Para 3 & 4 of part II of Schedule VI of the Companies Act, 1956.

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Mar 31, 2010

1. Contingent Liabilities-

a) Bank guarantee of Rs.181.66 Lacs (P.Y. Rs. 170 Lacs)

b) Capital contract (net of Advance) Rs. NIL (P.Y. Rs. 3.32 Crore)

2. During the year under review, the company had forfeited a sum of Rs. 136.07 Lacs being the share application money received on convertible warrants and transfers the same to the Capital Reserve, being the option for conversion of warrants into equity shares of the company had not exercised by the warrant holders on the due date.

3. Insurance claims are being accounted for on receipt basis, if any.

4. Debit & Credit balances are subject to confirmation & reconciliation, if any.

5. During the year under review, the company has decided to write off the Personnel and Administrative Expenses related to ongoing Real Estate Project over a period of three years and transfer a sum of Rs. 1,29,89,630/- to Deferred Revenue Expenditure, effecting the profitability accordingly.

6. The Udyog Shahik, Chandigarh has allotted 40 Acres of Land vide Letter No. US/337-U Dt. 22/04/94. The sale deeds & possession of the above said land is with the company and its associate companies. However, there are pending cases against the company for increase in acquisition cost. If any payment has to be made by the company on this account, the same will be accounted for on cash basis.

Collector Land Acquisition, Department of Industries and Commerce, Punjab, Chandigarh had issued various demand notices being the enhanced compensation to be paid to the Land Owners. The company had already made an appeal against this order and the matter has been decided by the arbitrator in favour of the company but the State Government has filed an appeal against the Arbitrator decision. However, if any payment has to be made by the company on this account, the same will be accounted for on cash basis. However, the company has already given bank guarantee of Rs.181.66 Lacs (Previous year Rs.170.00 lacs).

The charges, if any for the conversion of land into mega project scheme will be accounted for on cash basis.

7. Related Parties Disclosure

A) Related parties where control exists or with whom transactions have taken place during the year.

SUBSIDIARIES COMPANIES

Femella Fashions Private Ltd. Catalina Bay USA Inc. ASSOCIATED/ALLIED COMPANIES

o Ritesh International Limited

o Ritesh Spinning Mills Limited

o Pentagon Finance Limited

o Kishan Chand & Co Oil Industries Limited

o Ritesh Impex Private Ltd

KEY MANAGERIAL PERSONNEL REPRESENTED ON THE BOARD

o Sh. Pran Arora Chairman

o Sh. Sanjeev Arora Managing Director

o Sh. Rajiv Arora Director

o Sh. Roop Kishor Fathepuria Director

o Sh. Surinder K Sood Director

8. Segment Reporting

Segment reporting is not given as the company deals mainly in one segment and the disclosure requirements of Accounting Standards (AS)-17 on "Segment Reporting", issued by The Institute of Chartered Accountants of India are not applicable.

9. The Company is not complying with the provisions of Section 383A of the Companies Act, 1956 regarding the appointment of Company Secretary.

10. The company has revised/modified the Income tax returns for the financial year 2006-07 and 2007-08. The tax already deposited by the company on the basis of revised income tax returns will be treated as advance tax deposited by the company.

11. In the opinion of the Board, all the Current Assets, Loans & Advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated except as expressly stated other wise.

12. The company has not received information from suppliers "regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amounts unpaid as at the year end together with interest paid / payable under this Act has not been given.

13. Corresponding figures of previous year have been regrouped / rearranged wherever deemed necessary.

14. Additional information pursuant to Para 3 & 4 of part II of Schedule VI of the Companies Act, 1956.

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Mar 31, 2009

1. Contingent Liabilities-

a) Bank guarantee of Rs. 170 Lacs

b) Capital contract (net of Advance) Rs. 3.32 Crore

2. Revision of Financial Statements

a) The global economy in general and the real estate industry in particular is passing through recession, which has resulted into financial meltdown. During the year under review and also in the earlier financial years ended 31.03.2007 and 31.03.2008, the Company had entered into various agreements to sell on pre launch basis, subject to necessary approvals from Punjab State Government and development by the Developer (viz. Ansal Township & Projects Ltd., since merged with Ansal Properties & Infrastructure Limited) of its real estate project to be constructed/developed on Companys land situated on Ludhiana- Chandigarh Road at Ludhiana for the development of Industrial and Residential Township Project titled as Mega Project/ Hampton Court as Industrial township consisting of Industrial and residential. This was to be developed by the developer and the Company was entitled to its share of the sale proceeds of the area to be developed and sold as per the agreement with the Developer. In accordance with the consistently followed accounting practice of the Company, sales revenue and profit thereon were recognized at the time of entering into such agreement to sell on mercantile basis. As is the practice in real estate industry and as per the Guidelines for Mega Projects by Punjab State Government, the payments could not have been collected till such time the Company signs the agreement with Punjab State Government. Due to delay in signing of the agreement with Punjab State Government, resulting in non commencement of the development of the project, slowdown in demand, liquidity crunch in real estate and fall in prices, the parties with whom sales had been affected were pressing hard the management of the Company to cancel the agreement to sell as the proposed project had become redundant/non-operational for the time being and other force majeure circumstances beyond the control of the Management. Considering the peculiarity of business and the overall interest of the Company, the management decided to reacquire the properties by mutually terminating the agreements to sell entered into in the year under review and in the earlier financial years ended 31.03.2007 and 31.03.2008. On the doctrine of Real Income and Relation Back basis, the cancellation effect should be affected in the year in which the sales and profits were originally recognized and not in the year in which the actual cancellation has taken place (that is the financial year under review). Accordingly, the Company has revised and recasted its financial statements for financial years ended 31.03.2007 and 31.03.2008, on the above mentioned principle. Consequently during the year under review, the sales return and reversal of profits are not reflected, though the cancellation of sales occurred during the year under review. The aggregate value of gross sales/revenue returns and profit reversal as mentioned above are Rs. 900.00 lacs and Rs. 833.55 lacs respectively for the financial year ended 31.03.2007 and Rs.8524.00 lacs and Rs.1687.81 lacs respectively for the financial year ended 31.03.2008.

However, for the purposes of publication under the Listing Agreement entered with the Stock Exchanges where the equity shares of the Company are listed, financial figures for the nine months period ended 31.12.2008, duly approved by the Board of Directors in their meeting held on 30.01.2009, have already been submitted showing the gross sales/ revenue of Rs.3770.52 Lacs (out of this sales of Rs.3699.00 Lacs on the basis of agreement to sell, which was cancelled along with the sales for the previous financial year 2006- 07 and 2007-08) and profit after tax of Rs.358.63 Lacs.

The Auditors of the Company do not concur with the above view of revising the financial statements of earlier years for the financial years ended 31.03.2007 and 31.03.2008 on the principle of Relation Back and Real Income, instead are of the opinion that the sales return and its consequence on the profit and loss account should be reflected in the financial year in which such sales return takes place (cancellation of agreements to sell) and not in the earlier years as done by the Company, and treated as a separate item in the year under review and disclosed as per the requirement of AS5 (Net profit or loss for the period, Separate Items and Changes in Accounting Policies). Accordingly in the opinion of the Auditors the sales return and reversal of profit thereon should be accounted/ reflected during the year under review and not in the earlier years as done by the Company.

b) The revised financial statements for the years ended 31-03.2007 and 31.03.2008 have already been approved by the Board of Directors at its meeting held on 30th September 2009. However, the revised financial statements for financial years 2006-07 & 2007-08 are yet to be adopted and approved by the shareholders. It is proposed to get the said revised financial statements for financial years 2006-07 & 2007-08 considered and adopted at the forthcoming Annual General Meeting, in substitution for the financial statements already adopted by the shareholders in the earlier Annual General Meeting held on 29.09.2007 and 26.09.2008 respectively, along with the financial statements for March 31, 2009. The act of revision of the Financial Statements for financial years 2006-07 and 2007-08 is in accordance with the General Circular No. 1/2003 (No. 17/75/ 2002-CI.V) dated 13-1-2003 issued by the Ministry of Finance and Company Affairs permitting revision of financial statements. The management had relied on the interpretation of the said circular that the proposed revision of the financial statements is in accordance with the letter and spirit of the said circular, thereby the revision of financial statement is in accordance with the provisions of the Companies Act, 1956.

The auditors do not concur with the above view of revising the financial statements of the earlier financial years 2006-07 and 2007-08, that a company cannot reopen and revise the accounts once adopted by the shareholders at Annual General Meeting, which opinion is also supported by the Institute of Chartered Accountants of India.

3. Insurance claims are being accounted for on receipt basis, if any.

4. Debit & Credit balances are subject to confirmation & reconciliation, if any.

5. During the year under review, the company has changed the method of accounting from mercantile to mixed regarding the providing of interest on unsecured loan resulting in the loss has been understated to the extent of Rs. 1,10,66,776/-.

6. The Udyog Shahik, Chandigarh has allotted 40 Acres of Land vide Letter No. US/337-U Dt. 22/04/94. The sale deeds & possession of the above said land is with the company and its associate companies. However, there are pending cases against the company for increase in acquisition cost. If any payment has to be made by the company on this account, the same will be accounted for on cash basis.

Collector Land Acquisition, Department of Industries and Commerce, Punjab, Chandigarh had issued various demand notices amounting to Rs.23,414,828/- being the enhanced compensation to be paid to the Land Owners. The company had already made an appeal against this order and the matter has been decidedbythe arbitrator in favour of the company but the State Government has filed an appeal against the Arbitrator decision. However, if any payment has to be made by the company on this account, the same will be accounted for on cash basis. However, the company has already given bank guarantee of Rs.170 Lacs.

7. Related Parties Disclosure

A) Related parties where control exists or with whom transactions have taken place during the year.

SUBSIDIARIES COMPANIES

Femella Fashions Private Ltd. Catalina Bay USA Inc.

ASSOCIATED/ALLIED COMPANIES

o Ritesh International Limited

o Ritesh Spinning Mills Limited

o Pentagon Finance Limited

o Kishan Chand & Co Oil Industries Limited

o Ritesh Impex Private Ltd

o H B Fibres Ltd

KEY MANAGERIAL PERSONNEL REPRESENTED ON THE BOARD

o Sh. Pran Arora Chairman

o Sh. Sanjeev Arora Managing Director

o Sh. Rajiv Arora Director

o Sh. Roop Kishor Fathepuria Director

o Sh. Surinder K Sood Director

8. Segment Reporting

Segment reporting is not given as the company deals mainly in one segment and the disclosure requirements of Accounting Standards (AS)-17 on "Segment Reporting", issued by The Institute of Chartered Accountants of India are not applicable.

9. The Company is not complying with the provisions of Section 383A of the Companies Act, 1956 regarding the appointment of Company Secretary.

10. Unsecured loan from Corporate includes a sum of Rs. 125.00 Lacs raised against the DLF apartment allotted in the magnolias DLF Golf Link Project and also guaranteed by the Managing Director of the Company.

11. The company has yet to revise/modify the Income tax returns for the financial year 2006- 07 and 2007-08. However, the tax yet to deposit on the basis of original returns will be null and void on the filing of revised returns. The tax already deposited by the company on the basis of revised income tax returns will be treated as advance tax deposited by the company.

12. In the opinion of the Board, all the Current Assets, Loans & Advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated except as expressly stated other wise.

13. The company has not received information from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amounts unpaid as at the year end together with interest paid / payable under this Act has not been given.

14. During the previous year the Company has issued partly paid Convertible Warrants, which will be converted into equity within the period of 18 months from the date of its allotment.

15. Corresponding figures of previous year have been regrouped / rearranged wherever deemed necessary.

16. Additional information pursuant to Para 3 & 4 of part II of Schedule VI of the Companies Act, 1956.