Accounting Policies of Savera Industries Ltd. Company

Mar 31, 2018

Note : SIGNIFICANT ACCOUNTING POLICIES

A) Corporate Information:

Savera Industries Limited (“the Company”) incorporated in November, 1969, is engaged in the business of Hoteliering. Shares of the Company are listed in Bombay Stock Exchange Ltd (BSE). Though originally the Company’s shares are listed on Madras Stock Exchange Ltd (MSE), the said stock exchange is not in existence at present.

B) Statement of Compliance:

These financial statements of the Company for the year ended 31st March 2018 are prepared in accordance with Indian Accounting Standards (Ind AS) as notified under section 133 of the Companies Act, 2013 read with relevant rules of the Companies (Indian Accounting Standards) Rules with effect from 01st April 2017.

The Company has prepared financial statements upto 31st March 2017 in accordance with the requirements of previous Generally Accepted Accounting Principles (GAAP). For the purpose of transition the Company in accordance with Ind AS 101, First-time Adoption of Indian Accounting Standards, with April 1, 2016 as the transition date, the figures of the previous year 31st March 2017 are reworked.

C) Basis of Preparation:

The financial statements have been prepared in accordance with historical cost basis, except for certain financial instruments which are measured at fair values, as explained in the accounting policies.

The preparation of financial statements in conformity with Ind AS requires management to make judgments, estimates and assumptions that affect the application of the accounting policies and the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the year. Estimates and the underline assumptions are reviewed on ongoing basis. The revision to the accounting estimates if material is recognized in the period in which the estimates are revised.

D) Policies:

a) Inventories

Inventories of the Company comprise of food, beverages & operating supplies. Inventories are valued at lower of cost (calculated on weighted average basis) and net realizable value.

b) Revenue Recognition:

i. Revenue from operations is recognized upon rendering of services and comprises of (a) sale of rooms; (b) food and beverages; and (c) allied services relating to hotel operations. Revenue is recognized net of rebates and discounts granted to customers and Goods and Service Tax (GST) collected.

ii. Interest income is accounted using the effective interest method.

iii. Dividend income is recognized when the right to receive payment of the dividend is established.

c) Property, Plant and Equipment:

i. Property, Plant and Equipment are stated at cost net of accumulated depreciation and accumulated impairment losses, if any.

ii. The costs directly attributable including borrowing cost on qualifying asset are capitalized when the Property, Plant and Equipment are ready for use, as intended by the management.

iii. Subsequent expenditure relating to Property, Plant and Equipment including major inspection costs, spare parts, standby and servicing equipment are capitalized only when it is probable that future economic benefits associated with these will flow to the Company and the cost of the item can be measured reliably.

iv. In accordance with Ind AS 101, the Company has chosen to consider the carrying value for all its Property, Plant and Equipment as their deemed cost as on the date of transition i.e. 01st April 2016.

v. Depreciation is provided on straight line basis over estimated useful life. The estimated useful life of the assets is as follows:

d) Intangible Assets:

i. Intangible assets are initially measured at cost.

ii. Intangible assets which are separately acquired are recognized at its purchase price (including duties and taxes thereon) after deducting discounts and rebates and cost attributable for preparing the asset for its intended use.

iii. Intangible assets recognized are amortized over a period of 10 years.

e) Borrowing Costs:

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use. Other borrowing costs are recognized as an expense in the period in which they are incurred.

f) Impairment of Assets:

As at the end of each Balance Sheet date, the carrying amount of assets is assessed as to whether there is any indication of impairment by considering assets of entire one plant as Cash Generating Unit (CGU). If any such indication exists and if the estimated recoverable amount is found to be less than its carrying amount, the impairment loss is recognized and assets are written down to their recoverable amount.

g) Financial Assets and Liabilities:

The Company recognizes all Financial Assets and Liabilities at Fair Value on inception and subsequent measurements are done at amortized cost.

h) Foreign Currency Transaction:

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transactions. Monetary items denominated in foreign currency and outstanding at the Balance Sheet date are restated at the exchange rate ruling at the Balance Sheet date. Exchange differences arising on foreign currency transactions are recognized as income or expense in the period in which they arise

i) Segment Reporting:

The company’s only business is Hoteliering and hence disclosure of segment wise information is not applicable under Ind AS 108 “Operating Segments”. There is no Geographical segment to be reported since all the operations are undertaken in one geographical area.

j) Earnings Per Share:

i. Earnings Per Share is calculated by dividing the Profit after Tax /Loss for the year attributable to ordinary equity shareholders by the weighted average number of ordinary shares outstanding during the period.

ii. Diluted Earnings Per Share is calculated by dividing the Profit after Tax/Loss for the period after adjusting dividends, interest and other charges (net of taxes) relating to dilutive potential ordinary shares by the weighted average number of shares outstanding during the period as adjusted for the effects of all dilutive potential equity shares.

k) Income Taxes:

i. Current Tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of Income Tax Act,1961 (the “Act”).

ii. Deferred Tax is recognized using the Balance Sheet method, providing for temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred Tax Assets in excess of Deferred Tax Liability are recognized to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilized. Deferred Tax Assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

l) Employee Benefits:

i. The Company’s Provident Fund scheme is a defined contribution plan. The contribution paid/payable is recognized during the period in which the employee renders the related service.

ii. The Company’s Employee State Insurance scheme is a defined contribution plan. The contribution paid/payable is recognized during the period in which the employee renders the related service.

iii. The Company has an arrangement with LIC for managing the Gratuity fund. Gratuity is defined benefit plan and the liability is provided on the basis of actuarial valuation report provided by the LIC in respect of eligible employees. The demand raised by the LIC based on the actuarial report is paid by the Company towards discharge of the liability.

m) Long-term Investment:

i. In accordance with Ind AS 101, provision relating to first time adoption, the Company has chosen to consider the fair value, with unrealized gain or loss on account of changes in fair value being recognized in Other Comprehensive Income as their deemed cost as at 01st April, 2016.

ii. Investments are initially recognized at cost. Cost of Investment includes cost of acquisition (including charges such as brokerage, fees and duties).

iii. Investments are individually measured at fair value and the gain or loss is recognized in Other Comprehensive Income.

n) Leases:

i. The Company recognizes finance leases as assets and liabilities in the balance sheet at amount equal to the fair value of leased property. Such arrangements are such that the entire risks and rewards incidental to ownership of an asset is transferred whether or not title is transferred.

ii. Operating lease is recognized as an expense through statement of profit and loss on a straight line basis over the period of lease.

o) Provisions and Contingent Liabilities :

i. A provision is recognized, when the Company has the present obligation as result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which reliable estimate can be made.

ii. Where no reliable estimate can be made or when there is a possible obligation or present obligations that may, but probably will not, require an outflow of resources, disclosure is made as Contingent Liability.

iii. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

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Mar 31, 2017

A) Corporate Information:

Savera Industries Limited is incorporated in India in November, 1969, and is engaged in the business of Hoteliering. Shares of the Company are listed in Bombay Stock Exchange Ltd (BSE) and Madras Stock Exchange Ltd. (MSE)

B) Accounting Policies

The financial statements are prepared under historical cost convention on accrual basis and comply with the Accounting standards (AS) referred to in Section 133 of the Companies Act, 2013.Significant accounting policies adopted in the presentation of the accounts are as under:

a) Inventories

Stocks of food, beverages & Operating supplies inventories are valued at lower of cost and net realizable value

b) Cash and cash equivalents

Cash and cash equivalents for the purpose of cash flow statement comprises cash at bank, cash in hand and short-term investments with an original maturity of three months or less

c) Revenue recognition :

Revenue is recognized upon rendering of the service, provided pervasive evidence of an arrangement exists, tariff / rates are fixed or are determinable and collectability is reasonably certain. Revenue comprises sale of rooms, food and beverages and allied services relating to hotel operations. Rebates and discounts granted to customers are reduced from revenue.

Interest: Interest income is accrued on a time proportion basis having regard to the amount outstanding and the rate applicable.

Dividend: Dividend income is recognized when the Company''s right to receive the amount is established

d) Fixed Assets :

Tangible Fixed Assets : Fixed Assets are carried at historical cost or other amount substituted for historical cost less depreciation and amortization and impairment loss if any. Land, Building and Plant & Machinery were revalued on 31.03.1993

Intangible Fixed Assets: Intangible assets include acquired software and trademarks. Intangible assets are initially measured at acquisition cost including any directly attributable costs of preparing the asset for its intended use.

e) Depreciation

Depreciation is provided on straight-line basis over the estimated useful life of the asset. Depreciation on revalued assets to the extent of revaluation is debited to revaluation reserve. The estimated useful life of the assets are as follows:

f) Transactions in Foreign Exchange

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transactions. Monetary items denominated in foreign currency and outstanding at the Balance Sheet date are restated at the exchange rate ruling at the Balance Sheet date.

Exchange differences arising on foreign currency transactions are recognized as income or expense in the period in which they arise.

g) Investments

Long Term Investments are carried at cost. Provision for decline in the value, other than temporary, has been made wherever necessary. Current Investments are carried at lower of cost or fair value.

h) Employee Benefits

Gratuity: The contribution to the Gratuity is determined using the projected unit credit method based on the statement / certificate furnished by LIC at each Balance Sheet date. The company has an arrangement with LIC for managing the Gratuity Fund. The demand raised from LIC is paid by the company towards discharge of the gratuity liability.

The said amount of Rs. 27,38,999/-will be paid before the due date for filing the Return of Income.

Provident Fund: The Company''s Provident Fund scheme is a defined contribution plan. The contribution paid/payable is recognized during the period in which the employee renders the related service

ESI: The Company''s Employee State Insurance scheme is a defined contribution plan. The contribution paid/payable is recognized during the period in which the employee renders the related service

Bonus: Bonus is provided in the books and the payment shall be made before the due date of filling of the Income Tax Return i.e.30.09.2017.

i) Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use. Other borrowing costs are recognized as an expense in the period in which they are incurred.

j) Segment Reporting

The company''s only business is Hoteliering and hence disclosure of segment wise information is not applicable under Accounting Standard (AS) 17 “Segment Information notified by the Company''s (Accounting Standards) Rules, 2006. There is no Geographical segment to be reported since all the operations are undertaken in one geographical area.

k) Leases

Lease arrangements where the risk and rewards are incidental to ownership of an asset substantially vest with the lessee which are recognized as finance lease.

l) Earnings per share (EPS):

Earnings Per Share is calculated by dividing the Net Profit after Tax /Loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted Earning Per Share, the Net Profit /Loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

m) Taxes on Income:

Deferred Tax is computed in accordance with Accounting Standard 22 (AS-22) “Accounting for Taxes on Income''. Tax expenses are accounted in the same period to which the revenue and expenses relate. Provision for current income tax is made on the tax liability payable on taxable income after considering tax allowances; deductions and exemptions determined in accordance with the prevailing tax laws. The differences between taxable income and the net profit before tax for the year as per the financial statements are identified and the tax effect of the deferred tax asset or deferred tax liability is recorded for timing differences, i.e. differences that originate in one accounting period and reversed in another. The tax effect is calculated on accumulated timing differences at the end of the accounting year based on applicable tax rates. Deferred tax assets/liabilities are reviewed as at each Balance Sheet date.

n) Impairment of Assets

Impairment is ascertained at each balance sheet date in respect of the Company''s fixed assets. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value based on appropriate discount factor.

o) Accounting for Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognized in terms of Accounting Standard (AS) 29 ''Provisions, Contingent liabilities and Contingent Assets'' when there is a present legal 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 or non-occurrence of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be made. Obligations are assessed on an ongoing basis and only those having a largely probable outflow of resources are provided for.

Contingent Assets are not recognized in the financial statements.

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Mar 31, 2016

A) Corporate Information:

SaveraIndustriesLimitedisincorporatedinIndiainNovember,1969, and is engaged in the business of Hoteliering. Shares of the Company are listed in Bombay Stock Exchange Ltd (BSE) and Madras Stock Exchange Ltd. (MSE)

B) Accounting Policies

The financial statements are prepared under historical cost convention on accrual basis and comply with the Accounting standards (AS) referred to in Section 133 of the Companies Act, 2013. Significant accounting policies adopted in the presentation of the accounts are as under:

a) Fixed Assets

Fixed Assets are carried at cost less depreciation. Land, Building and Plant & Machinery were revalued on 31.03.1993.

b) Depreciation

Depreciation is provided on straight-line basis, at rates prescribed in Schedule II of the Companies Act, 2013. Depreciation on revalued assets to the extent of revaluation is debited to revaluation reserve.

c) Impairment of Assets

Impairment is ascertained at each balance sheet date in respect of the Company’s fixed assets. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use .In assessing the value in use ,the estimated future cash flows are discounted to their present value based on appropriate discount factor.

d) Inventories

Stocks of food, beverages & Operating supplies inventories are valued at lower of cost or net realizable value.

e) Investments

Long Term Investments are carried at cost. Provision for decline in the value, other than temporary ,has been made wherever necessary. Current Investments are carried at lower of cost, market value or net asset value. The Investments in the shares of the subsidiary company were written off in view of closure of the said subsidiary company under Exit Scheme under the Companies Act, 2013.

f) Transactions in Foreign Exchange

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transactions. Monetary items denominated in foreign currency and outstanding at the Balance Sheet date are restated at the exchange rate ruling at the Balance Sheet date.

Exchange differences arising on foreign currency transactions are recognized as income or expense in the period in which they arise.

g) Employee Benefits

As per the requirements of Accounting Standard15 “Employee Benefits” (Revised2005) issued by the Institute of Chartered Accountants of India, the contribution to the Gratuity is determined using the projected unit credit method with actuarial valuation being carried out at each Balance Sheet date. The company has an arrangement with LIC for managing the Gratuity Fund. The demand raised from LIC based on Actuarial Report is paid by the company towards discharge of the gratuity liability.

Regarding Gratuity Fund being maintained with LIC, the details are furnished hereunder.

h) Borrowing Costs

Interest and other borrowing cost on specific borrowings are capitalized.

i) Segment Reporting

The company’s only business is Hoteliering and hence disclosure of segment wise information is not applicable under Accounting Standard (AS) - 17" Segment Information notified by the Company’s (Accounting Standards) Rules. There is no Geographical segment to be reported since al l the operations are undertaken in one geographical area.

j) Taxes on Income:

Deferred Tax is computed in accordance with Accounting Standard 22(AS-22) “Accounting for Taxes on Income’. Tax expenses are accounted in the same period to which the revenue and expenses relate. Provision for current income tax is made on the tax liability payable on taxable income after considering tax allowances; deductions and exemptions determined in accordance with the prevailing tax laws. The differences between taxable income and the net profit before tax for the year as per the financial statements are identified and the tax effect of the deferred tax asset or deferred tax liability is recorded for timing differences, i.e. differences that originate in one accounting period and reversed in another. The tax effect is calculated on accumulated timing differences at the end of the accounting year based on applicable tax rates. Deferred tax assets/liabilities are reviewed as at each Balance Sheet date.

k) Accounting for Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognized in terms of Accounting Standard (AS) 29 - ‘Provisions, Contingent Liabilities and Contingent Assets’ when there is a present legal 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 or non-occurrence of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be made. Obligations are assessed on an ongoing basis and only those having a largely probable outflow of resources are provided for.

Contingent Assets are not recognized in the financial statements.

l) Leases

Lease arrangements where the risk and rewards are incidental to ownership of an asset substantially vest with the lessee which are recognized as finance lease.

m) Bonus

Bonus is provided in the books and the payment shall be made before the due date of filling of the Income Tax Return i.e.30.09.2016.

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Mar 31, 2014

The financial statements are prepared under historical cost convention on accrual basis and comply with Accounting standards (AS) referred to in Section 211 (3C) of the Companies Act, 1956. Significant accounting policies adopted in the presentation of the accounts are as under:

a) Fixed Assets

Fixed Assets are carried at cost less depreciation. Land, Building and Plant & Machinery were revalued on 31.03.1993.

b) Depreciation

Depreciation is provided on straight-line basis, at rates prescribed in Schedule XIV of the Companies Act, 1956. Depreciation on revalued assets to the extent of revaluation is debited to revaluation reserve.

c) Impairment of Assets

Impairment is ascertained at each balance sheet date in respect of the Company''s fixed assets. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

d) Inventories

Stocks of food, beverages & Operating supplies inventories are valued at average cost or market value whichever is lower. Crockeries and Cutleries are written off over a period of three years.

e) Investments

Long Term Investments are carried at cost. Provision for decline in the value, other than temporary, has been made wherever necessary. Current Investments are carried at lower of cost, market value or net asset value. Investment in subsidiary company is treated as Long Term Investment, (Considering the nature of business and based on the independent expert opinion, the decline in value of investment is temporary.)

f) Transactions in Foreign Exchange

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transactions. Monetary items denominated in foreign currency and outstanding at the Balance Sheet date are restated at the exchange rate ruling at the Balance Sheet date.

Exchange differences arising on foreign currency transactions are recognized as income or expense in the period in which they arise.

g) Employee Benefits

As per the requirements of Accounting Standard 15 "Employee Benefits" (Revised 2005) issued by the Institute of Chartered Accountants of India, the contribution to the Gratuity is determined using the projected unit credit method with actuarial valuation being carried out at each balance sheet date. The company has an arrangement with LIC for managing the Gratuity Fund. The demand raised from LIC based on Actuarial Report is paid by the company towards discharge of the gratuity liability.

Regarding Gratuity Fund being maintained with LIC, the details are furnished hereunder.

Opening Balance as on 1 -04-2013 Rs.1,75,74,211

Add: Contribution to the Fund during the year under review Rs. 30,58,894

Add: Interest to the Fund Rs. 14,42,299

Total Rs.2,20,75,404

Less: Disbursements Rs. 28,66,078

Balance Fund as on 31 -03-2014 Rs.1,92,09,326

Actuarial value of accrued gratuity liability as on 31 -03-2014 Rs.2,10,08,110

The Fund with LIC Rs.1,92,09,326

The Provision for Contribution towards the Fund Rs. 17,98,784

The said amount of Rs. 17,98,784/- will be paid before the due date for filing the Return of Income.

h) Borrowing Costs

Interest and other borrowing cost on specific borrowings are capitalised.

i) Segment Reporting

The company''s only business is Hoteliering and hence disclosure of segmentwise information is not applicable under Accounting Standard (AS) - 17 "Segment Information notified by the Company''s (Accounting Standards) Rules, 2006. There is no Geographical segment to be reported since all the operations are undertaken in one geographical area.

j) Taxes on Income:

Deferred Tax is computed in accordance with Accounting Standard 22 (AS-22) "Accounting for Taxes on Income''. Tax expenses are accrued in the same period to which the revenue and expenses relate. Provision for current income tax is made on the tax liability payable on taxable income after considering tax allowances; deductions and exemptions determined in accordance with the prevailing tax laws. The differences between taxable income and the net profit before tax for the year as per the financial statements are identified and the tax effect of the deferred tax asset or deferred tax liability is recorded for timing differences, i.e. differences that originate in one accounting period and reversed in another. The tax effect is calculated on accumulated timing differences at the end of the accounting year based on applicable tax rates. Deferred tax assets/liabilities are reviewed as at each Balance Sheet date.

k) Accounting for Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognized in terms of Accounting Standard (AS) 29 - ''Provisions, Contingent Liabilities and Contingent Assets'' when there is a present legal 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 or non-occurrence of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be made. Obligations are assessed on an ongoing basis and only those having a largely probable outflow of resources are provided for. Contingent assets are not recognised in the financial statements.

l) Leases

Lease arrangements where the risk and rewards are incidental to ownership of an asset substantially vest with the lessee which are recognized as finance lease.

m) Bonus

Bonus is provided in the books and the payment shall be made before the due date of filling of the Income Tax Return ie. 30.09.2014.

C) Other Information

Deferred Tax liability includes A 3.68 crs relating to earlier years.

(i) The company has only one class of equity shares having a par value of Rs.10/- per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in the case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding.

(ii) During the year ended March 31, 2014, the amount of per share dividend recognized as distribution to equity shareholder was Rs.1.20/- (Previous year Rs.1.20/-)

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Mar 31, 2013

A) Corporate Information:

Savera Industries Limited is incorporated in India in November, 1969, and is engaged in the business of Hoteliering. Shares of the Company are listed in Bombay Stock Exchange Ltd (BSE) and Madras Stock Exchange Ltd. (MSE)

B) Accounting Policies

The financial statements are prepared under historical cost convention on accrual basis and comply with the Accounting standards (AS) referred to in Section 211 (3C) of the Companies-Act, 1956. Significant accounting policies adopted in the presentation of the accounts are as under:

a) Fixed Assets

Fixed Assets are carried at cost less depreciation. Land, Building and Plant & Machinery were revalued on 31.03.1993.

b) Depreciation

Depreciation is provided on straight-line basis, at rates prescribed in Schedule XIV of the Companies Act, 1956. Depreciation on revalued assets to the extent of revaluation is debited to revaluation reserve.

c) Impairment of Assets

Impairment is ascertained at each balance sheet date in respect of the Company''s fixed assets. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value based on appropriate discount factor.

d) Inventories

Stocks of food, beverages & Operating supplies inventories are valued at average cost or market value whichever is lower. Crockeries and Cutleries are written off over a period of three years.

e) Investments

Long Term Investments are carried at cost. Provision for decline in the value, other than temporary, has been made wherever necessary. Current Investments are carried at lower of cost, market value or net asset value. Investment in subsidiary company is treated as Long Term Investment, (Considering the nature of business and based on the independent expert opinion, the decline in value of investment is temporary.)

f) Transactions in Foreign Exchange

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transactions. Monetary items denominated in foreign currency and outstanding at the Balance Sheet date are restated at the exchange rate ruling at the Balance Sheet date.

Exchange differences arising on foreign currency transactions are recognized as income or expense in the period in which they arise.

g) Employee Benefits

As per the requirements of Accounting Standard 15 "Employee Benefits" (Revised 2005) issued by the Institute of Chartered Accountants of India, the contribution to the Gratuity is determined using the projected unit credit method with actuarial valuation being carried out at each Balance Sheet date. The company has an arrangement with LIC for managing the Gratuity Fund. The demand raised from LIC based on Actuarial Report is paid by the company towards discharge of the gratuity liability.

Regarding Gratuity Fund being maintained with LIC, the details are furnished hereunder.

Opening Balance as on 1-04-2012 Rs. 1,70,27,036

Add: Contribution to the Fund during the year under review Rs. 20,05,036

Add: Interest to the Fund ^ 14,86,125

Total Rs. 2,05,18,197

Less: Disbursements Rs. 29,43,986

Balance Fund as on 31-03-2013 Rs. 1,75,74,211

Actuarial value of accrued gratuity liability as on 31 -03-2013 X 1,88,65,599

The Fund with LIC f 1,75,74,211

The Provision for Contribution towards the Fund X 12,91,388

The said amount of ^ 12,91,388/- will be paid before the due date for filing the Return of Income.

h) Borrowing Costs

Interest and other borrowing cost on specific borrowings are capitalized.

i) Segment Reporting

The company''s only business is Hoteliering and hence disclosure of segmentwise information is not applicable under Accounting Standard (AS) - 17 "Segment Information notified by the Company''s (Accounting Standards) Rules, 2006. There is no Geographical segment to be reported since all the operations are undertaken in one geographical area.

j) Taxes on Income:

Deferred Tax is computed in accordance with Accounting Standard 22 (AS-22) "Accounting for Taxes on Income''. Tax expenses are accounted in the same period to which the revenue and expenses relate. Provision for current income tax is made on the tax liability payable on taxable income after considering tax allowances; deductions and exemptions determined in accordance with the prevailing tax laws. The differences between taxable income and the net profit before tax for the year as per the financial statements are identified and the tax effect of the deferred tax asset or deferred tax liability is recorded for timing differences, i.e. differences that originate in one accounting period and reversed in another. The tax effect is calculated on accumulated timing differences at the end of the accounting year based on applicable tax rates. Deferred tax assets/liabilities are reviewed as at each Balance Sheet date.

k) Accounting for Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognized in terms of Accounting Standard (AS) 29 - ''Provisions, Contingent Liabilities and Contingent Assets'' when there is a present legal 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 or non-occurrence of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be made. Obligations are assessed on an ongoing basis and only those having a largely probable outflow of resources are provided for.

Contingent Assets are not recognized in the financial statements.

I) Leases

Lease arrangements where the risk and rewards are incidental to ownership of an asset substantially vest with the lessee which are recognized as finance lease.

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Mar 31, 2012

A) Corporate Information:

Savera Industries Limited is incorporated in India in November, 1969, and is engaged in the business of Hoteliering. Shares of the Company are listed in Bombay Stock Exchange Ltd (BSE) and Madras Stock Exchange Ltd. (MSE)

B) Accounting Policies

The financial statements are prepared under historical cost convention on accrual basis and comply with the Accounting standards (AS) referred to in Section 211 (3C) of the Companies Act, 1956. Significant accounting policies adopted in the presentation of the accounts are as under:

a) Fixed Assets

Fixed Assets are carried at cost less depreciation. Land, Building and Plant & Machinery were revalued on 31.03.1993.

b) Depreciation

Depreciation is provided on straight-line basis, at rates prescribed in Schedule XIV of the Companies Act, 1956. Depreciation on revalued assets to the extent of revaluation is debited to revaluation reserve.

c) Impairment of Assets

Impairment is ascertained at each balance sheet date in respect of the Company's fixed assets. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value based on appropriate discount factor.

d) Inventories

Stocks of food, beverages & Operating supplies inventories are valued at average cost or market value whichever is lower. Crockeries and Cutleries are written off over a period of three years.

e) Investments

Long Term Investments are carried at cost. Provision for decline in the value, other than temporary, has been made wherever necessary. Current Investments are carried at lower of cost, market value or net asset value. Investment in subsidiary company is treated as Long Term Investment, (Considering the nature of business and based on the independent expert opinion, the decline in value of investment is temporary.)

f) Transactions in Foreign Exchange

Transactions is foreign currencies are recorded at the exchange rate prevailing on the date of the transactions. Monetary items denominated in foreign currency and outstanding at the Balance Sheet date are restated at the exchange rate ruling at the Balance Sheet date.

Exchange differences arising on foreign currency transactions are recognized as income or expense in the period in which they arise.

g) Employee Benefits

As per the requirements of Accounting Standard 15 "Employee Benefits" (Revised 2005) issued by the Institute of Chartered Accountants of India, the contribution to the Gratuity is determined using the projected unit credit method with actuarial valuation being carried out at each Balance Sheet date. The company has an arrangement with LIC for managing the Gratuity Fund. The demand raised from LIC based on Acturial Report is paid by the company towards discharge of the gratuity liability.

h) Borrowing Costs

Interest and other borrowing cost on specific borrowings are capitalized.

i) Segment Reporting

The company's only business is Hoteliering and hence disclosure of segmentwise information is not applicable under Accounting Standard (AS) - 17 "Segment Information notified by the Company's (Accounting Standards) Rules, 2006. There is no Geographical segment to be reported since all the operations are undertaken in one geographical area.

j) Taxes on Income:

Deferred Tax is computed in accordance with Accounting Standard 22 (AS-22) "Accounting for Taxes on Income'. Tax expenses are accounted in the same period to which the revenue and expenses relate. Provision for current income tax is made on the tax liability payable on taxable income after considering tax allowances; deductions and exemptions determined in accordance with the prevailing tax laws. The differences between taxable income and the net profit before tax for the year as per the financial statements are identified and the tax effect of the deferred tax asset or deferred tax liability is recorded for timing differences, i.e. differences that originate in one accounting period and reversed in another. The tax effect is calculated on accumulated timing differences at the end of the accounting year based on applicable tax rates. Deferred tax assets/liabilities are reviewed as at each Balance Sheet date.

k) Accounting for Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognized in terms of Accounting Standard (AS) 29 - 'Provisions, Contingent Liabilities and Contingent Assets' when there is a present legal 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 or non-occurrence of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be made. Obligations are assessed on an ongoing basis and only those having a largely probable outflow of resources are provided for.

Contingent Assets are not recognized in the financial statements.

l) Leases

Lease arrangements where the risk and rewards are incidental to ownership of an asset substantially vest with the lessee which are recognized as finance lease.

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Mar 31, 2011

The financial statements are prepared under historical cost convention on accrual basis and comply with the Accounting Standards (AS) referred to in Section 211 (3C) of the Companies Act, 1956. Significant accounting policies adopted in the presentation of the accounts are as under:

a) Inventories

Stocks of food, beverages & operating supply inventories are valued at average cost or market value whichever is lower.

b) Depreciation

Depreciation is provided on straight-line basis, at rates prescribed in Schedule XIV of the Companies Act, 1956. Depreciation on revalued assets to the extent of revaluation is debited to revaluation reserve.

c) Fixed Assets

Fixed Assets are carried at cost less depreciation. Land, Building and Plant & Machinery were revalued on 31.03.1993.

d) Transactions in Foreign Exchange

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transactions. Monetary items denominated in foreign currency and outstanding at the Balance Sheet date are restated at the exchange rate ruling at the Balance sheet date.

Exchange differences arising on foreign currency transactions are recognized as income or expense in the period in which they arise.

e) Investments

Long Term Investments are carried at cost. Provision for decline in the value, other than temporary, has been made wherever necessary. Current Investments are carried at lower of cost, market value or net asset value. Investment in subsidiary company is treated as Long j Term Investment (Considering the nature of business and based on the independent expert opinion, the decline in value of investment is temporary).

f) Employee Benefits

As per the requirements of Accounting Standard 15 "Employee Benefits" (Revised 2005) issued the Institute of Chartered Accountants of India, the contribution to the Gratuity is determined ; using the projected unit credit method with accrual valuation being carried out on each balance sheet date. Only the additional provision required is charged to the Profit & Loss Account for the relevant year is Nil (Previous Year Rs.73 lakhs).

g) Borrowing Costs

Interest and other borrowing cost on specific borrowings are capitalised.

h) Segment Reporting

The company's only business is Hoteliering and hence disclosure of segmentwise information is not applicable under Accounting Standard (AS) - 17 "Segment Information notified by the Company's (Accounting Standards) Rules, 2006. There is no Geographical segment to be reported since all the operations are undertaken in one geographical area.

i) Leases

Lease arrangements where the risk and rewards are incidental to ownership of an asset substantially vest with the lessee which are recognized as finance lease.

j) Taxes on Income

Deferred Tax is computed in accordance with the Accounting Standard 22 (AS-22) "Accounting for Taxes on Income'. Tax expenses which are accrued in the same period are the revenue and expenses to which they relate. Provision for current income tax is made on the tax liability payable on taxable income after considering tax allowances; deductions and exemptions determined in accordance with the prevailing tax laws. The differences between taxable income and the net profit before tax for the year as per the financial statements are identified and the tax effect of the deferred tax asset or deferred tax liability is recorded for timing differences, differences that originate in one accounting period and reversed in another. The tax effect is calculated on accumulated timing differences at the end of the accounting year based on applicable tax rated. Deferred tax assets/liabilities are reviewed as at each Balance Sheet date.

k) Impairment of Assets

Impairment is ascertained at each balance sheet date in respect of the Company's fixed assets. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

l) Accounting for Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognized in terms of Accounting Standard (AS) 29 - 'Provisions, Contingent Liabilities and Contingent Assets' when there is a present legal 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 or non-occurrence of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be made. Obligations are assessed on an ongoing basis and only those having a largely probable outflow of resources are provided for. Contingent Assets are not recognized in the financial statements.

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Mar 31, 2010

The financial statements are prepared under historical cost convention on accrual basis and comply with Accounting Standards (AS) referred to in Section 211 (3C) of the Companies Act, 1956. Significant accounting policies adopted in the presentation of the accounts are as under:

a) Fixed Assets

Fixed Assets are carried at cost less depreciation. Land, Building and Plant & Machinery were revalued on 31.3.1993

b) Depreciation

Depreciation is provided on straight-line basis, at rates prescribed in Schedule XIV of the Companies Act, 1956.

c) Investments

Long Term Investments are carried at cost. Provision for decline in the value, other than temporary, has been made wherever necessary. Current Investments are carried at lower of cost, market value or net asset value. Investment in subsidiary company is treated as Long Term Investment, (Considering the nature of business and based on the independent expert opinion, the decline in value of investment is temporary. )

d) Inventories

Stocks of food, beverages & Operating supplies inventories are valued at average cost or market value whichever is lower.

e) Transactions in Foreign Exchange

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transactions. Monetary items denominated in foreign currency and outstanding at the Balance Sheet date are restated at the exchange rate ruling at the Balance sheet date.

Exchange differences arising on foreign currency transactions are recognized as income or expense in the period in which they arise.

f) Employee Benefits

As per the requirements of Accounting Standard 15 "Employee Benefits" (Revised 2005) issued by the Institute of Chartered Accountants of India, the contribution to the Gratuity is determined using the projected unit credit method with accrual valuation being carried out at each balance sheet date. Only the additional provision as required is charged to the

g) Borrowing Costs

Interest and other borrowing cost on specific borrowings are capitalised.

h) Segment Reporting

The companys only business is Hoteleering and hence disclosure of segment wise information is not applicable under Accounting Standard (AS) - 17 "Segment Information notified by the Companys (Accounting Standards) Rules,2006. There is no geographical segment to be reported since all the operations are undertaken in one geographical area.

i) Taxes on Income:

Deferred Tax is computed in accordance with Accounting Standard 22 (AS-22) Accounting for Taxes on Income. Tax expenses are accrued in the same period as the revenue and expenses to which they relate. Provision for current income tax is made on the tax liability payable on taxable income after considering tax allowances; deductions and exemptions determined in accordance with the prevailing tax laws. The differences between taxable income and the net profit before tax for the year as per the financial statements are identified and the tax effect of the deferred tax asset or deferred tax liability is recorded for timing differences, i.e. differences that originate in one accounting period and reversed in another. The tax effect is calculated on accumulated timing differences at the end of the accounting year based on applicable tax rates. Deferred tax assets/liabilities are reviewed as at each Balance Sheet date.

j) Impairment of Assets:

Impairment is ascertained at each balance sheet date in respect of the Companys fixed assets. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

k) Accounting for Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognised in terms of Accounting Standard (AS) 29 - Provisions, Contingent Liabilities and Contingent Assets when there is a present legal 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 recognised only when there is a possible obligation arising from past events due to occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be made. Obligations are assessed on an ongoing basis and only those having a largely probable outflow of resources are provided for.

Contingent Liabilities

Contingent Assets are not recognised in the financial statements.

f) Pre-operative expenses represent the start up cost in setting up the units and has been amortised over a period of 5 years

g) Renovation expenditure has been treated as deferred revenue expenditure and amortised over a period of three (3) years.

i) Micro and Small Enterprises:

(a) There is no interest paid/payable during the year by the Company to the suppliers covered under Micro, Small, Medium Enterprises Development Act, 2006

(b) The above information takes into account only those suppliers who have responded to the enquiries made by the Company for the purpose.