Accounting Policies of Sagar Tourist Resorts Ltd. Company

Mar 31, 2014

A) System of Accounting

The Financial Statement have been prepared and presented under the historical cost convention on accrual basis of accounting in accordance with the accounting principles generally accepted in India and in compliance with provisions of the Companies Act, 1956 and comply with the mandatory Accounting Standards (AS) specified in the Companies (Accounting Standard) Rules,2006, prescribed by the Central Government.

The accounting policies have been consistently applied by the company.

b) Fixed Assets:-

Fixed Assets are stated at cost less depreciation. Cost includes cost of acquisition and subsequent improvement thereto inclusive of taxes, duties, freight and other incidental expenses related to acquisition, improvement and installation.

c) Depreciation

Depreciation on fixed assets sold or scrapped during the year is provided up to the month in which such fixed assets are sold or scrapped. Depreciation on additions to fixed assets is calculated on pro-rata basis from the month of addition.

d) impairment of Assets;

In accordance with Accounting Standard 28 (AS 28) on "Impairment of Assets", where there is an indication of impairment of the Company''s assets, the carrying amounts of the Company''s assets are reviewed at each balance sheet date to determine whether there is any impairment based on internal/external factors. An impairment loss, if any, is recognized in the Profit & Loss account, wherever the carrying amount of an asset exceeds its estimated recoverable amount The recoverable amount of the assets is estimated at the higher of its net selling price and its value in use. In assessing the value in use, the estimated future cash flows are discounted to the present value at the weighted average cost of capital. After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful life. Previously recognized impairment loss is further provided or reversed depending on changes in circumstances.

d) Inventories -

Inventories are valued at cost or realisable value on first in first out basis.

e) Revenue Recognition

Income from guest accommodation is recognised on day to day basis after the guest checks into Hotel. Food & Beverage sales and other income like Telephone receipts, Laundry receipts are recognised at the point of service to the guest Guest Accommodation Income and Food and Beverage sales are net of Luxury Tax and Value Added Tax respectively.

f) Deferred Taxes

Deferred Income Tax is provided using the liability method on all temporary difference at the Balance Sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purpose.

Deferred Tax assets are recognised for all deductible temporary differences, carry forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available in the future against which these items can be utilised.

Deferred Tax Assets and Liabilities are measured at the tax rates that are expected to apply to the period when the assets is realised or the liability is settled, based on tax rates (and the tax laws) that have been enacted or enacted subsequent to the Balance Sheet date.

In view of declining sales and rising cost of operation and also brought forward lossess the amount of Deferred Tax Asset as on 31.03.2014 has not been reflected.

g) Retirement Benefit

i] Contributions to provident fund are charged to Profit & Loss Account and are deposited with the office of Provident Fund Commissioner.

ii) Provision for gratuity liability has been made on accrual basis.

h) Prior period adjustments, extra Ordinary items and changes in Accounting Policies,

Prior period adjustments, extra ordinary items and changes in accounting policies having material impact on financial affairs of the Company are disclosed.

i) Contingent liabilities:-

Contingent liabilities are not provided in the accounts but are disclosed by way of note in Notes on Accounts.

Contingent Liability in respect of dividend on Rs.200/- Lakhs 12.5% Optionally Cumulative Redeemable Preference Shares is Rs.25,00,000/- (Previous Year Rs.25,00,000/-). Further there may be liability on account of interest, penalty for delay in depositing Value Added Tax, Tax Ddeducted at Source, Service Tax,Luxury Tax and Employees Provident Fund.

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Mar 31, 2013

A) System of Accounting :-

The Financial Statement have been prepared and presented under the historical cost convention on accrual basts of accounting in accordance with the accounting principles generally accepted in India and in compliance with provisions of the Companies Act, 1956 and comply with the mandatory Accounting Standards (AS) specified in the Companies (Accounting Standard) Rules,2006, prescribed by the Central Government.

The accounting policies have been consistently applied by the company.

b) Fixed Assets :-

Fixed Assets are stated at cost less depreciation. Cost includes cost of acquisition and subsequent improvement thereto inclusive of taxes, duties, freight and other incidental expenses related to acquisition, improvement and installation.

c) Depreciation :-

The method of charging for Depreciation has been changed from Straight Line Method to Written Down Value method retrospectively. The method has been changed to ensure better presentation of accounts. Depreciation on fixed assets sold or.scrapped during the year is provided up to the month in which such fixed assets are sold or scrapped. Depreciation on additions to fixed assets is calculated on pro-rata basis from the month of addition.

d) Impairment of Assets :

In accordance with Accounting Standard 28 (AS 28) on "Impairment of Assets", where there is an indication of impairment of the Company''s assets, the carrying amounts of the Company''s assets are reviewed at each balance sheet date to determine whether there is any impairment based on internal/external factors. An impairment loss, if any, is recognized in the Profit & Loss account, wherever the carrying amount of an asset exceeds its estimated recoverable amount. The recoverable amount of the assets is estimated at the higher of its net selling price and its value in use. In assessing the value in use, the estimated future cash flows are discounted to the present value at the weighted average cost of capital. After impairment, depreciation is provided on the revised carrying amount of the assets over its remaininguseful life. Previously recognized impairment loss is further provided or reversed depending on changes in circumstances.

d) Inventories >

Inventories are valued at cost or realisable value on first in first out basis.

e) Revenue Recognition

income from guest accommodation is recognised on day to day basis after the guest checks into Hotel. Food & Beverage sales and other income like Telephone receipts, Laundry receipts are recognised at the point of service to the guest. Guest Accommodation Income and Food and Beverage sales are net of Luxury Tax and Value Added Tax respectively.

f) Deferred Taxes

Deferred Income Tax is provided using the liability method on all temporary difference at the Balance Sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purpose.

Deferred Tax assets are recognised for all deductible temporary differences, carry forward of unused tax assets and unused tax losses, to the extent that itis probable that taxable profit will be available in the future against which these items can be utilised.

Deferred Tax Assets and Liabilities are measured at the tax rates that are expected to apply to the period when the assets is realised or the liability is settled, based on tax rates (and the tax laws) that have been enacted or enacted subsequent to the Balance Sheet date.

In view of stagnant sales and rising cost of operation the amount of Deferred Tax Asset as on 31.03.2012 has not been reflected.

g) Retirement Benefit

i) Contributions to provident fund are charged to Profit & Loss Account and are deposited with the office of Provident Fund Commissioner,

ii) Provision for gratuity liability has been made on accrual basis.

h) Prior period adjustments, extra Ordinary items and changes in Accounting Policies.

Prior period adjustments, extra ordinary items and changes in accounting policies having material impact on financial affairs of the Company are disclosed.

i) Contingent liabilities :-

Contingent liabilities are not provided in the accounts but are disclosed by way of note in Notes on Accounts. i Contingent Liability in respect of dividend on fts.200/- Lakhs 12.5% Optionally Cumulative Redeemable Preference Shares is Rs.25,00,000/- (Previous Year Rs.25,00,000/-). Further there may be nominal liability on account of interest, penalty for delay in depositing VAT, Luxury Tax and Employees Provident Fund.

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Mar 31, 2012

A) System of Accounting :-

The Financial Statement have been prepared and presented under the historical cost convention on accrual basis of accounting in accordance with the accounting principles generally accepted in India and in compliance with provisions of the Companies Act, 1956 and comply with the mandatory Accounting Standards (AS) specified in the Companies (Accounting Standard) Rules, 2006, prescribed by the Central The accounting policies have been consistently applied by the company.

b) Fixed Assets:-

Fixed Assets are stated at cost less depreciation. Cost includes cost of acquisition and subsequent improvement thereto inclusive of taxes, duties, freight and other incidental expenses related to acquisition, improvement and installation.

c) Depreciation :-

Depreciation on Fixed Assets other than Land has been provided on straight line method and it has been charged at rates which are in conformity with the requirements of Companies Act, 1956. Depreciation on fixed assets sold or scrapped during the year is provided up to the month in which such fixed assets are sold or scrapped. Depreciation on additions to fixed assets is calculated on pro-rata basis from the month of addition.

d) Impairment of Assets :-

In accordance with Accounting Standard 28 (AS 28) on "Impairment of Assets", where there is an indication of impairment of the Company's assets, the carrying amounts of the Company's assets are reviewed at each balance sheet date to determine whether there is any impairment based on internal/external factors. An impairment loss, if any, is recognized in the Profit & Loss account, wherever the carrying amount of an asset exceeds its estimated recoverable amount. The recoverable amount of the assets is estimated at the higher of its net selling price and its value in use. In assessing the value in use, the estimated future cash flows are discounted to the present value at the weighted average cost of capital. After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful life. Previously recognized impairment loss is further provided or reversed depending on changes in circumstances.

d) Inventories :-

Inventories are valued at cost or realisable value on first in first out basis.

e) Revenue Recognition

Income from guest accommodation is recognised on day to day basis after the guest checks into Hotel. Food & Beverage sales and other income like Telephone receipts, Laundry receipts are recognised at the point of service to the guest. Guest Accommodation Income and Food and Beverage sales are net of Luxury Tax and Value Added Tax respectively.

f) Deferred Taxes

Deferred Income Tax is provided using the liability method on all temporary difference at the Balance Sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purpose. Deferred Tax assets are recognised for all deductible temporary differences, carry forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available in the future against which these items can be utilised.

Deferred Tax Assets and Liabilities are measured at the tax rates that are expected to apply to the period when the assets is realised or the liability is settled, based on tax rates (and the tax laws) that have been enacted or enacted subsequent to the Balance Sheet date.

In view of stagnant sales, rising cost of operation and losses every year the amount of Deferred Tax Asset as on 31.03.2012 has not been reflected.

g) Retirement Benefit

i) Contributions to provident fund are charged to Profit & Loss Account and are deposited with the office of Provident Fund Commissioner.

ii) Provision for gratuity liability has been made on accrual basis.

h) Prior period adjustments, extra Ordinary items and changes in Accounting Policies.

Prior period adjustments, extra ordinary items and changes in accounting policies having material impact on financial affairs of the Company are disclosed.

i) Contingent liabilities :-

Contingent liabilities are not provided in the accounts but are disclosed by way of note in Notes on Accounts.

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Mar 31, 2010

A) System of Accounting :-

The Financial Statement are prepared under the historical cost convention on an accrual basis and comply in all material respects with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI) and relevant provisions of the Companies Act, 1956.

b) Fixed Assets :-

Fixed Assets are stated at cost less depreciation. Cost includes cost of acquisition and subsequent improvement thereto inclusive of taxes, duties, freight and other incidental expenses related to acquisition, improvement and installation.

c) Depreciation :-

Depreciation on Fixed Assets other than Land has been provided on straight line method and it has been charged at rates which are in conformity with the requirements of Companies Act, 1956. Depreciation on additions made to any assets is provided on pro-rata basis from the day of addition/or the asset is put to use, which ever is later.

d) Inventories :-

Inventories are valued at cost or realisable value on first in first out basis.

e) Revenue Recognition

Income from guest accommodation is recognised on day to day basis after the guest checks into Hotel. Food & Beverage sales and other income like Telephone receipts, Laundry receipts are recognised at the point of service to the guest. Guest Accommodation Income and Food and Beverage sales are net of Luxury Tax and Sales Tax respectively.

f) Deferred Taxes

Deferred Income Tax is provided using the liability method on all temporary difference at the Balance Sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purpose.

Deferred Tax assets are recognised for all deductible temporary differences, carry forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available in the future against which these items can be utilised.

Deferred tax assets are not recognized unless there is virtual certainty that sufficient future taxable income will be available against which such deferred tax asset will be realized.

Deferred Tax Assets and Liabilities are measured at the tax rates that are expected to apply to the period when the assets is realised or the liability is settled, based on tax rates (and the tax laws) that have been enacted or enacted subsequent to the Balance Sheet date.

g) Retirement Benefit

i) Contributions to provident fund are charged to Profit & Loss Account and are deposited with the office of Provident Fund Commissioner.

ii) Provision for gratuity liability has been made on accrual basis.

h) Prior period adjustments, extra Ordinary items and changes in Accounting Policies.

Prior period adjustments, extra ordinary items and changes in accounting policies having material impact on financial affairs of the Company are disclosed.

i) Contingent liabilities :-

Contingent liabilities are not provided in the accounts but are disclosed by way of note in Notes on Accounts.