Accounting Policies of U G Hotels & Resorts Ltd. Company

Mar 31, 2012

A. Revenue Recognition

(i) Income from sale of rooms is recognized as and when booking is received, less cancellation, if any.

(ii) Income from cancellation fees from customers is recognized, as per revenue recognition principles laid down in Accounting Standard - 9 on "Revenue Recognition", when certainty of its collection is established.

(iii) Income from sale of food & beverages and other services related to hotel/ Resort operations revenue is recognized upon rendering of the services.

(iv) Interest income from deposits is recognized on accrual basis.

(v) Profit/ Loss on sale of investments is recognized on the date of the transaction of sale and is computed with reference to the carrying amount of investments.

b. FIXED ASSETS

Tangible fixed assets (other than land) are stated at cost, net of tax or duty credits availed, less accumulated depreciation and accumulated impairment losses, if any. Cost includes original cost of acquisition, including incidental expenses related to such acquisition and installation. However, Land has been stated at a revalued figure and no depreciation is charged.

c. DEPRECIATION AND AMORTIZATION

Depreciation on fixed assets is provided on the straight-line method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956, on a pro-rata basis from the date the asset is ready to put to use till the end of its useful life or till the asset is discarded, whichever is earlier. Temporary structures are depreciated over a period of twelve months, on a pro-rata basis, from the date it is ready to put to use. Individual assets costing up to Rs. 5,000 per item are fully depreciated in the year of purchase. Fixed assets are depreciated up to 95 percent of its historical cost.

d. IMPAIRMENT OF ASSETS

At each reporting date, the Company assesses whether there is any indication that an asset may be impaired, based on internal or external factors. If any such indication exists, the Company estimates the recoverable amount of the asset or the cash generating unit. If such recoverable amount of the asset or cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the profit and loss account. If, at the reporting date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount. Impairment losses previously recognized are accordingly reversed.

e. INVENTORIES

Inventories have been valued at lower of cost or net realizable. Cost includes cost of acquisition and development costs including freight & other related incidental expenses.

f. EMPLOYEE BENEFITS

(i) Defined Contribution Plan

Company''s contributions for the year to Provident Fund & Employees Pension scheme are recognized in the Profit & Loss Account.

(ii) Defined Benefit Plan

Provision for gratuity has been made on the basis of actuarial valuation

(iii) Short term employee benefits Leave encashment are recognized as an expense at the undiscounted amount in the Profit & Loss Account of the year in which the related benefits are paid.

g. INVESTMENTS

Investments are classified as long term or current investments. Long term investments are stated at cost. Provision for diminution in value of long term investments is made only if such a decline is other than temporary in the opinion of the management.

h. PROVISION FOR CURRENT TAX AND DEFERRED TAX: Current tax

Current tax is determined as the tax payable in respect of taxable income for the year and is computed in accordance with relevant tax regulations.

Deferred tax

Deferred tax resulting from timing differences between taxable income and accounting income is accounted for at the current rate of tax or substantively enacted tax rates as at reporting date, to the extent that the timing differences are expected to crystallize. Deferred tax assets are recognized where realization is reasonably certain whereas in case of carried forward losses or unabsorbed depreciation, deferred tax assets are recognized only if there is a virtual certainty supported by convincing evidence that such deferred tax assets will be realized .Deferred tax assets are reviewed for the appropriateness of their respective carrying values at each reporting date.

i. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions are recognized only when there is a present obligation, as a result of past events, and when a reliable estimate of the amount of obligation can be made. Contingent liability is disclosed for:

- Possible obligations which will be confirmed only by future events not wholly within the control of the Company or,

- Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.

Contingent assets are not recognized in the financial statements since this may result in the recognition of income that may never be realized.

j. EARNINGS PER EQUITY SHARE

Basic earnings per equity share is computed using the weighted average number of equity shares outstanding during the year. Diluted earnings per equity share is computed using the weighted average number of equity and dilutive potential equity shares outstanding during the year.

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Mar 31, 2010

1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS & ACCOUNTING

Financial statements have been prepared in accordance with the historical cost convention, mercantile basis, generally accepted accounting principles, Accounting Standards and requirements of the Companies Act, 1956.

2. FIXED ASSETS

Fixed assets (except land) have been stated at cost of acquisition inclusive of inward freight, duties and taxes and interest during construction period and incidental expenses related to acquisition. In respect of items involving construction, installation, erection, fabrication, etc, all related pre- operational expenses & interest during construction period has form part of the value of the assets capitalized. However, Land has been stated at a revalued figure.

3. DEPRECIATION

Depreciation has been provided on straight-line method as per ¦ Schedule XIV of the Companies Act, 1956. However in respect of assets purchased/constructed at site at different times, depreciation is provided on pro-rata basis.

4. INVENTORIES

Inventories have been valued at cost or market price, whichever is less. Cost includes freight & other related incidental expenses.

5. EMPLOYEE BENEFITS

(i) Defined Contribution Plan Companys contributions for the year to Provident FunEmployees Pension scheme are recognized in the Profit & Loss Account.

(ii) Defined Benefit Plan Provision for gratuity has been made on the basis of actuarial valuation

(iii) Short term employee benefits are recognized as an expense at the undiscounted amount in the Profit & Loss Account of the year in which the related service is rendered.

6. REVENUE RECOGNITION

Income Comprise of room rent, sale of food & beverages and other services related to hotel/ Resort operations revenue is recognized upon rendering of the services.

7. IMPAIRMENT OF ASSETS

The company assesses at balance sheet, date whether there is any indication of any asset being impaired. An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the profit and loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed, if there has been a change in the estimate of recoverable amount.

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Mar 31, 2009

1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS & ACCOUNTING

Financial statements have been prepared in accordance with the historical cost convention, mercantile basis, generally accepted accounting principles, Accounting Standards and requirements of the Companies Act, 1956.

2. FIXED ASSETS

Fixed assets (except land) have been stated at cost of acquisition inclusive of inward freight, duties and taxes and interest during construction period and incidental expenses related to acquisition. In respect of items involving construction, installation, erection, fabrication, etc, all related pre- operational expenses & interest during construction period has form part of the value of the assets capitalized. However, Land has been stated at a revalued figure.

3. DEPRECIATION

Depreciation has been provided on straight-line method as per Schedule XIV of the Companies Act, 1956. However in respect of assets purchased/constructed at site at different times, deprecia- tion is provided on pro-rata basis.

4. INVENTORIES

Inventories have been valued at cost or market price, whichever is less. Cost includes freight & other related incidental expenses.

5. EMPLOYEE BENEFITS

(i) Defined Contribution Plan

Companys contributions for the year to Provident Fund & Employees Pension scheme are recognized in the Profit & Loss Account.

(ii) Defined Benefit Plan

Provision for gratuity has been made on the basis of actu- arial valuation

(iii) Short term employee benefits are recognized as an expense at the undiscounted amount in the Profit & Loss Account of the year in which the related service is rendered.

6. REVENUE RECOGNITION

Income Comprise of room rent, sale of food & beverages and other services related to hotel/ Resort operations revenue is recognized upon rendering of the services.

7. IMPAIRMENT OF ASSETS

The company assesses at balance sheet, date whether there is any indication of any asset being impaired. An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the profit and loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed, if there has been a change in the estimate of recoverable amount.