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Notes to Accounts of U G Hotels & Resorts Ltd.

Mar 31, 2013

1. COMPANY OVERVIEW

M/s U G HOTELS AND RESORTS LIMITED, a public limited company established in 1986 and has set up the first 5 Star Resort Project in Himachal Pradesh, India. It has emerged a tourist destination of reckoning and is named as "Shilon Resort-Forty acres of Switzerland". The company is engaged in the business of running and maintaining "Hotel Business" and all other related and ancillary objects.

2. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

Statement of compliance

The financial statements are prepared under the historical cost convention on an accrual basis, in accordance with the generally accepted accounting principles in India and in compliance with the applicable accounting standards as notified under the Companies (Accounting Standards) Rules, 2006, as amended and as per Revised Schedule VI to the Companies Act, 1956. All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Revised Schedule VI to the Companies Act, 1956.

Use of estimates

The presentation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amount of assets and liabilities and disclosure of contingent liabilities as on date of the financial statements and the reported amount of revenues and expenses during the reporting year. Differences between the actual results and estimates are recognized in the year in which the results are known or materialized.

3. CONTINGENT LIABILITIES

Particulars Current Year Previous year

i) Suit filed against the Company by UMAK Investment Company Rs. 12.30 Crore Rs. 12.30 Crore Private Limited

ii) Suit filed against the Promoter Directors of the Company and others Rs. 4.35 Crore Rs. 4.35 Crore in their personal capacity by UMAK Investment Company Private Limited

iii) Tax demand notice under the H.P. Tax on Luxuries ( in Hotels and Rs. 43.64 Lacs Nil Lodging Houses) Act, 1979 dated 29/03/2013''



* The Company has filed appeal against this demand of Luxury tax liability at Honorable High Court of Shimla.

4. Demand Order under Section 7A of the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952 has passed for the period of 08/ 07 to 04/2010 of Rs. 2,30,119/-, Company has paid it on vide challan No. 00718 dated 7lh May, 2013.

5. Provision for Income Tax has not been made, there being no Income tax liability as there was a loss during the year and also accumulated losses from previous year.

6. Balance standing to the debit and credit of parties are subject to confirmation from them.

7. In the opinion of the management, all current assets, loans and advances have a value of realization at least equal to the extent considered good and stated in the Balance Sheet.

8. Ministry of Company Affairs has vide its Notification No. S.O. 301 (E) dated 08 February, 2011 has exempted the Company from the requirement of disclosure of quantitative details as per Part-ll of Schedule VI of the Companies Act 1956, in the financial statements subject to fulfillment of the conditions stipulated in paragraph 2 of this notification. Company has been complied all conditions as mentioned in Notification.

9. C.I.F. Value of Imports -NIL.

10. Value of consumption of raw material components and spare parts.

11. BASIC AND DILUTED EARNING PER SHARE

Basic earnings per share are computed by dividing the net profit/ (loss) attributable to equity shareholders for the year by the weighted average number of equity shares outstanding during the year. Diluted earnings per share are computed using the weighted average number of equity shares and also the weighted average number of equity shares that could have been issued on the conversion of all dilutive potential equity shares. The dilutive potential equity shares are adjusted for the proceeds receivable, had the shares been actually issued at fair value. Dilutive potential equity shares are deemed converted as of the beginning of the year, unless they have been Issued at a later date. The number of equity shares and potential diluted equity shares are adjusted for stock split, bonus shares and the potential dilutive effect of employee stock option.plans as appropriate. Basic and diluted earning per share for the year-ended 31.03.2013 is as under:

12. RELATED PARTY TRANSACTION

Pursuant to Accounting Standard (AS-18) - "Related Party Disclosure" following parties are to be treated as Related Parties. Relationship Name of the related parties

i) Related parties where control exists

Subsidiary Company U. G. Buildcon Pvt. Ltd

ii) Other related parties

Key management personnel Mr. Umesh Phalpher

(Chairman & Managing Director) Mr. Harmit Ghai (Whole Time Director)

13. DEFERRED TAX

In compliance with Accounting Standard 22 (AS 22) - ''Accounting for taxes on income'', as notified under the Companies (Accounting Standards) Rules, 2006, as amended, the Company in the absence of a virtual certainty of future profits, has not recognized any deferred tax assets during the current year.

14. EMPLOYEE BENEFITS

As per Accounting Standard 15" Employee Benefits" (Revised 2005), the disclosures of employee benefits as defined in Accounting Standard are given below:

The Company has classified the various benefits provided to employees as under:

I. Defined Contribution Plans

a. Provident Fund

b. Employer''s Contribution to Employees'' Pension Scheme 1995

During the year, the Company has recognized the following amounts in the Profit and Loss Account for the above Plans: Rs.0.57Lacs (P.Y.Rs.1.43 Lacs).

II. Defined Benefit Plans

Contribution to Gratuity Fund (Non- Funded Scheme)

In accordance with Accounting Standard 15 (Revised 2005), Actuarial Valuation was performed in respect of the aforesaid defined benefit plan based on the following assumptions:

15. The Company has a subsidiary company hence the requirements of Accounting Standard-21 relating to consolidate Financial Statements is applicable to the Company.

16. Previous year figures have been regrouped, rearranged & reclassified where ever considered necessary to confirm current year figures.


Mar 31, 2012

1. COMPANY OVERVIEW

M/s U G Hotels & Resorts Ltd, a public limited company established in 1986 and has set up the first 5 Star Resort Project in Himachal Pradesh, India. It has emerged a tourist destination of reckoning and is named as "Shilon Resort-Forty acres of Switzerland". The company is engaged in the business of running and maintaining "Hotel Business" and all other related and ancillary objects.

2. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

Statement of compliance

The financial statements are prepared under the historical cost convention on an accrual basis, in accordance with the generally accepted accounting principles in India and in compliance with the applicable accounting standards as notified under the Companies (Accounting Standards) Rules, 2006, as amended and as per Revised Schedule VI to the Companies Act, 1956. All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Revised Schedule VI to the Companies Act, 1956.

Use of estimates

The presentation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amount of assets and liabilities and disclosure of contingent liabilities as on date of the financial statements and the reported amount of revenues and expenses during the reporting year. Differences between the actual results and estimates are recognized in the year in which the results are known or materialized.

3. During the year, the assets of the company have been insured at realisable / replacement values, wherever so applicable.

4. Provision for Income Ta x has not been made, there being no Income tax liability as there was a loss during the year and also accumulated losses from previous year.

5. Balance standing to the debit and credit of parties are subject to confirmation from them.

6. In the opinion of the management, all current assets, loans and advances have a value of realization at least equal to the extent to which these are stated in the Balance Sheet.

7. Ministry of Corporate Affairs has vide its Notification No. S.O. 301 (E) dated 08 February, 2011 has exempted the Company from the requirement of disclosure of quantitative details as per Part-II of Schedule VI of the Companies Act 1956, in the financial statements subject to fulfillment of the conditions stipulated in paragraph 2 of this notification. Company has been complied all conditions as mentioned in Notification.

8. C.I.F. Value of Imports – NIL.

9. Value of consumption of raw material components and spare parts.

10. BASIC AND DILUTED EARNING PER SHARE

Basic earnings per share are computed by dividing the net profit/ (loss) attributable to equity shareholders for the year by the weighted average number of equity shares outstanding during the year. Diluted earnings per share are computed using the weighted average number of equity shares and also the weighted average number of equity shares that could have been issued on the conversion of all dilutive potential equity shares. The dilutive potential equity shares are adjusted for the proceeds receivable, had the shares been actually issued at fair value. Dilutive potential equity shares are deemed converted as of the beginning of the year, unless they have been Issued at a later date. The number of equity shares and potential diluted equity shares are adjusted for stock split, bonus shares and the potential dilutive effect of employee stock option plans as appropriate.

11. RELATED PARTY TRANSACTION

Pursuant to Accounting Standard (AS-18) – "Related Party Disclosure" following parties are to be treated as Related Parties.

Relationship Name of the related parties

i) Related parties where control exists

Subsidiary Company U. G. Buildcon Pvt. Ltd

ii) Other related parties

Key management personnel Mr. Umesh Phalpher

(Chairman & Managing Director)

Mr. Harmit Ghai

(Whole Time Director)

12. DEFERRED TAX

In compliance with Accounting Standard 22 (AS 22) – ''Accounting for taxes on income'', as notified under the Companies (Accounting Standards) Rules, 2006, as amended, the Company in the absence of a virtual certainty of future profits, has not recognized any deferred tax assets during the current year.

13. EMPLOYEE BENEFITS

As per Accounting Standard 15" Employee Benefits" (Revised 2005), the disclosures of employee benefits as defined in Accounting Standard are given below: The Company has classified the various benefits provided to employees as under:

I. Defined Contribution Plans

a. Provident Fund

b. Employer''s Contribution to Employees'' Pension Scheme 1995 During the year, the Company has recognized the following amounts in the Profit and Loss Account for the above Plans: Rs.3.13 Lacs (P.Y.Rs.2.55 Lacs).

II. Defined Benefit Plans Contribution to Gratuity Fund (Non- Funded Scheme)

In accordance with Accounting Standard 15 (Revised 2005), Actuarial Valuation was performed in respect of the aforesaid defined benefit plan based on the following assumptions:

14. The Company has a subsidiary company hence the requirements of Accounting Standard–21 relating to consolidate Financial Statements is applicable to the Company.

15. The Revised Schedule VI has become effective from April 1, 2011 for the preparation and presentation of financial statements. This has significantly impacted the disclosures and presentations made in the financial statements. Previous Year''s figures have been regrouped /reclassified wherever necessary to correspond with the current year''s classification/disclosures.


Mar 31, 2010

1. CONTINGENT LIABILITIES

Current Year Previous year

a), i) Suit filed against the company by Rs.12.30 Cr. Rs.12.60 Cr. M/s UMAK Investment Company Private Limited

ii) Suit filed against the Promoter Rs. 4.35 Cr. Rs. 4.40 Cr. directors of the company & others in their personal capacity by

M/s UMAK Investment Company

Private Limited

2. During the year, the assets of the company have been insured at realisable / replacement values, wherever so applicable.

3. Provision for Income Tax has not been made, being no Income tax liability as there was a loss during the year and also accumulated losses from previous year.

4. Balance standing to the debit and credit of parties are subject to confirmation from them.

5. In the opinion of the management, all current assets, loans and advances have a value of realization at least equal to the extent to which these are stated in the Balance Sheet.

6. The term loans taken from IFCI, TFCI & upfront advance of ICICI were secured against mortgage of all the immovable property both present and future of Hotel / Resort at Shilon Bagh, Shimla and by way of hypothecation of all movable except book debts and stocks present and future of the said resort/ hotel subject to first charges created and / or to be created in favour of the companys bankers for working capital facilities. The mortgage and hypothecation charges referred to above rank pari passu amongst all lending financial institutions on which companys bankers have first charge. The Company had entered into a one time settlement with IFCI & TFCI in the earlier years. In terms of one time settlement, the Company has cleared the entire dues of IFCI & TFCI in the earlier years. Though these loans have been repaid with full & final settlement, the charge in favour of Financial Institutions is yet to be vacated. An adjustment of Rs.10 Lacs is done every year for upfront advance of ICICI.

7. The Company had taken loan from M/S UMAK Investment Company Private Limited for the purpose of repayment of amount of one time settlement to IFCI & TFCI. The Loan from M/S UMAK Investment Company Private Limited was to be secured (of all original title deeds of assets, Share certificates etc, after release from the IFCI) by way of mortgage of all the immovable properties and movable assets except book debts and stocks and pledge of share certificates in respect of equity shares held by Guarantors in their own name or in the names of their friends, relatives and associates. Till the date of these Financial Statements, this Loan has not been secured by the Company as no documentation has been done by the Company in favour of M/s UMAK Investment Company Private Limited. However, the contention of the company was that the entire loan along with interest due on it aggregating Rs.12.29 crores has been adjusted into books against transfer of 8,14,930 number of equity shares of the promoters @ Rs.151/- per share, as M/S UMAK Investment Company Private Limited was interested in buying shares of M/S. UG Hotels & Resorts Ltd. The above settlement / adjustment have been done as per the Memorandum of Understanding dated 15th March, 2007 in the books of the company for the financial year 2007-2008 but M/s UMAK Investment Company Private Limited has disputed the same at various forums.

In lieu of settlement or adjustment of loans, two documents dated 18/05/2007 & 28/06/2007 were executed between UG Hotels & Resorts Ltd. & Umak Investment Company Pvt. Ltd. and confirmed by Umak Investment Company Pvt. Ltd. In these documents, it was stated that 4,54,350 shares & 3,60,580 shares in original of M/s UG Hotels & Resorts Ltd. have been duly transferred in the name of Umak Investment Company Pvt. Ltd. along with CDSL depositing slips in favour of Umak Investment Company Pvt. Ltd., has been forwarded in compliance with obligation under and in lieu of the agreements mentioned in those documents.

On 18/05/2007 & 28/06/2007 UG Hotels & Resorts Ltd. has passed the adjustment entry of transfer of 3,94,000 equity shares by Mr.Umesh Phalpher @ Rs.151/- each to Umak Investment Company Pvt. Ltd. Accordingly, the Company has debited the Umak Investment Company Pvt. Ltd A/c with Rs.5,94,94,000/- (3,94,000 equity shares @ Rs.151/-) and credited the amount to Mr. Umesh Phalpher Loan A/c (Creating a loan of Umesh Phalpher to such amount) in the books of UG Hotels & Resorts Ltd as per the Memorandum of Understanding dated 15 th March, 2007 between U G Hotels & Resorts Ltd and its promoters. Also on 18/05/2007 & 28/06/2007 UG Hotels & Resorts Ltd. has passed the adjustment entry of transfer of 4,20,930 equity shares by Harmeet Ghai @ Rs.151/- each to Umak Investment Company Pvt. Ltd. Accordingly, the Company has debited the Umak Investment Company Pvt. Ltd A/c with Rs.6,35,60,430/- (4,20,930 equity shares @ Rs.151/-) and credited the amount to Mr. Harmeet Ghai Loan A/c (Creating a loan of Harmeet Ghai to such amount) in the books of UG Hotels & Resorts Ltd as per the Memorandum of Understanding dated 15 th March, 2007 between U G Hotels & Resorts Ltd and its promoters.

Hence the loan given by Umak Investment Company Pvt. Ltd to UG Hotels & Resorts Ltd was claimed to be adjusted by way of transfer of shares belonging to Promoters, as they have transferred these shares as per agreed price of Rs.151/- per share and hence have relinquished their rights in these shares at an agreed consideration as per MOU dated 15 th March, 2007 between U G Hotels & Resorts Ltd and its promoters, so that such amount, in books of the Company is payable to them and accordingly loans from Directors were shown to such extent as on 31.03.2008. After these adjustment entries, the Company has claimed to have settled the loan of M/s Umak Investment Company Pvt. Ltd and have shown the corresponding loans from the Director namely Mr. Umesh Phalpher & Harmeet Ghai to the extent of shares transferred by them at an agreed consideration which is disputed by UMAK Investment Company Private Limited. As on 31st March 2008, Rs.92332/- was shown recoverable from Umak Investment Company Pvt. Ltd. in the books of the Company for the Financial Year 2007-08.

In addition to above loan to the Company, M/s UMAK Investment Company Private Limited has also advanced Rs 3.256 Crore loan to Directors of the Company in their personal capacity. This loan was adjusted by way of transfer of 2,17,470 equity shares belonging to promoters, relatives, friends and associates to M/s UMAK Investment Company Private Limited as per agreed price of Rs.151/- per share. The above settlement / adjustment had been done as per the Memorandum of Understanding dated 15th March, 2007, as M/s Umak Investment Company Pvt Limited was interested to purchase the shares @ Rs.151/- per share from its promoters, relatives, friends and associates but disputed by UMAK Investment Company Private Limited. With regard to repayment of above loans and related cases, a dispute had arisen between the Company and M/s UMAK Investment Company Private Limited and both parties have filed various suits/complaints against each other at various levels. M/s UMAK Investment Company Private Limited has lodged complaints to Ministry of Corporate Affairs and various Statutory and other authorities with regard to act of cheating, misappropriation, breach of trust, forgery etc. committed by the Directors of M/s U.G Hotels & Resorts Ltd. in relation to loans of Rs 12.144 Crores to Company and Rs 3 Crore loan to Directors. Further, M/S UMAK

Investment Company Private Limited has also filed a suit for recovery of Rs 12.46 Crores and mandatory and permanent injunction in respect of movable and immovable properties including shares of the Company in the Honble High Court of Delhi against the Company and suit for recovery of Rs 2.33 Crores and mandatory and permanent injunction against its promoters Directors Mr. Umesh Phalpher and Mr. Harmeet Ghai. The Company had also filed a criminal complaint against Dr. Ramesh Kapur, Chairman of M/s UMAK Investment Company Private Limited for illegally appointing himself as a Director on the Companys Board. On 24th September 2007, the Honble High Court of Delhi, inter-alia, passed the ex parte interim orders directing the Company to maintain status quo in respect of immovable properties and shares either in their own names or in the names of their friends, relatives and associates till further orders.

With regard to complaints lodged by M/s UMAK Investment Company Private Limited with Ministry of Corporate Affairs, notice/ letter of inspection U/S 209A of the Companies Act, 1956 was received by M/S. UG Hotels & Resorts Ltd. and inspection was conducted by the official of the Office of the Regional Director (NR) of Ministry of Corporate Affair, Government of India. After conducting the inspection U/S 209A of the Companies Act, 1956, a letter No. 1351/JDI/lnspn/2008/10155 dated 11/11/2008 was issued by the Office of Regional Director (NR), asking the Company to give information on violation of various Sections of Companies Act 1956 & explanation on other matters. Subsequent to such inspection, Show Cause Notices have been issued by the office of Registrar of Companies, Punjab, H P and Chandigarh, Ministry of Corporate Affairs, Government of India for violation of various Sections as mentioned below:

a) Under Section 211(7) for violation of Section 211 read with schedule VI - Part 1 of the Companies Act, 1956.

b) Under Section 211(7) for violation of Section 211 of the Companies Act, 1956.

c) Under Section 217(5) for violation of the Section 217(1) (e) of the Act read with Companies (Disclosure of Particulars in the Board of Directors) Rule 1988.

d) Under Section 292A(11) for violation of the Section 292A of the Companies Act, 1956 read with Clause 49 of the Listing Agreement.

e) Under Section 629A for violation of the Section 297(1) read with Section 299/300/301 of the Companies Act, 1956.

f) For violation of Section 127/140 of the Companies Act, 1956.

g) Under Section 629A for violation of the Section 292 read with Section 286/287 of the Companies Act, 1956

h) Under Section 209(5) for violation of the Section 209 read with

Section 211 of the Companies Act, 1956 i) For violation of the Section 303(2) of the Companies Act, 1956 Company has filed compounding application under section 621A before the Honble Company Law Board and the matters are still pending. The Matter before Company Law Board New Delhi Branch, New Delhi GP No. 06/ND/2009 CA No. 360/09 was decided by Honble Board on 20/07/2009 at 4:30 PM by the Chairman of the Board. This Decision was pronounced as a result of joint compromise filed by M/s UG Hotels & Resorts Ltd., M/s Umak Investment Company, Pvt. Ltd and their respective Promotors and all related parties before the Honble Board. Salient features of the above mentioned order are as below:

a) Rs. 12.60 Crores to be paid by UG Hotels & Resorts Ltd. and Mr. Harmeet Ghai & Umesh Phalpher jointly or severally 12.144 Crores towards principal and Rs. 45.60 Lacs towards interest.

b) Rs. 3.40 Crores to be paid by Mr. Umesh Phalpher and Mr. Harmeet Ghai jointly or severally, Rs. 3.256 Crores towards principal amount and Rs. 14.40 Lacs towards interest.

c) Rs. 1 Crores to be paid by Mr. Layak Ram in respect of advance given for purchase of adjourning Land by Umak Investment Company Pvt. Ltd.

d) The repayment to be completed on or before 30.09.2010. Any remaining amount shall carry an interest @12% p.a. from 01.10.2010 till the date of payment of the entire amount.

e) The Company UG Hotels & Resorts Ltd. shall be entitled to locate another buyer/lender and shall seek permission of Honble Board and enter into a tripartite agreement between the Company UG Hotels Resorts Ltd. and M/s Umak Investment Company Pvt. Ltd. and the Buyer/Lender and the sale/mortgage/encumbrance etc. shall only be effected after the permission from Honble Board and on payment of the balance sum to M/s Umak Investment Company Pvt. Ltd.

f) The Company U G Hotels & Resorts Ltd and its Promotors Mr. Harmeet Ghai & Mr. Umesh Phalpher and M/s Umak Investment Company Pvt. Ltd. shall jointly file the settlement and the orders passed by Honble Company Law Board before the Honble High Court of Delhi & they would obtain consent decrees in Civil Suit No. 1749/2007 & 1750/2007 which shall have the binding effect on the Company as well as its promotors.

g) After the Order is obtained from the Honble Board, the parties shall withdraw all other cases/litigation pending amongst them.

h) If the payments are not made entirely by the company and its promotors on or before 31.10.2010 or there is any breach of any of terms agreed the order passed by the Honble Company Law Board and / consent decrees passed by the honorable High Court can be executed by M/s Umak investment Company Pvt. Ltd.

i) The Company as well as its promotors undertakes not to allot, transfer any shares to the promoters group (except inter se transfer of shares within the promoter group of the Company) or change the Board of directors (except appointment and removal of independent directors) without prior permission of the Honble Company Law Board.

Subsequent to the Order of Honble Company Law Board, the accounting entries passed in Financial year 2007-2008 with regard to adjustment of loan of M/s Umak Investment Company Pvt. Limited have been reversed in financial year 2009-10 on 27* July, 2009, but have been accounted for as on 31st March, 2009 as an accounting prudence in preparation of these accounts. However till date of signing these accounts only a payment of Rs. 30 lacs has been made.

8. The Company had applied for Exemption from the requirement of disclosure of quantitative details as per Part - II of Schedule - VI to the Companies Act, 1956, in the financial statements for the year ended as on 31st March 2010.

Subsequently, Ministry of Company Affairs has vide its Order No. 46/159/2010-CL-lll dafed 09 June 2010 has exempted the Company from the requirement of disclosure of quantitative details as per Part-ll of Schedule VI of the Companies Act 1956, in the financial statements for the year ended 31.03.2010.

9. C.I.F. Value of Imoorts - NIL

10. Earning in Foreign Exchange Nil Nil

11. Expenditure in Foreign Exchange Nil Nil

12. The Luxury Tax pertaining to year 1999-2000 amounts to Rs.18.67 Lacs which include Luxury tax of Rs 8.67 Lacs, interest of Rs 9.13 lacs and penality of 0.87 lacs. Out of which Rs. 14.00 lacs has been paid upto 31s1 March, 2009 & Rs.2.60 lacs has been paid during the year and the balance of Rs 2.07 lacs is still outstanding.

13. TDS amounting to Rs. 0.55 lacs deducted during the year on account of payment to leasing and hire-purchase companies has not been. paid.

14. As per the information available with the Company, no amount is payable to Micro, S nail & Medium Scale Enterprises.

15. Amount received in the earlier years under Time Share Agreement has now been shown under the head unsecured loans, as per the direction/ instruction of Registrar of Companies vide their letter no. TS/209A/6678/641 dated 09/07/2009.

16. BASIC AND DILUTED EARNING PER SHARE

Basic and diluted earning per share for the year-ended 31.03.2010 are as under:

17. DEFERRED TAX

As a measure of prudence the deferred tax assets (Net) in terms of Accounting Standard No.22 have not been recognized in the absence of their being virtual certainty supported by convincing evidence that sufficient future taxable income would not be available against which such deferred tax assets could be realized.

18. EMPLOYEE BENEFITS

As per Accounting Standard 15" Employee Benefits" (Revised 2005), the disclosures of employee benefits as defined in Accounting Standard are given below:

The Company has classified the various benefits provided to employees as under:

I) Defined Contribution Plans

a. Provident Fund

b. Employers Contribution to Employees Pension Scheme 1995

During the year, the Company has recognized the following amounts in the Profit and Loss Account for the above Plans: Rs.1.84 Lacs (Rs.1.39 Lacs).

II) Defined Benefit Plans

Contribution to Gratuity Fund (Non- Funded Scheme)

In accordance with Accounting Standard 15 (Revised 2005), Actuarial Valuation was performed in respect of the aforesaid defined benefit plan based on the following assumptions:

19. RELATED PARTY TRANSACTION

Pursuant to Accounting Standard (AS-18) - "Related Party Disclosure" following parties are to be treated as Related Parties.

S. NO. NAME RELATIONSHIP

1. Mr. Umesh Phalpher Key Management Personnel (Chairman & Managing Director)

2. Mr. Harmit Ghai Key Management Personnel (Whole Time Director)

3. Delegation Tour Management Services Entity of Relatives of the key Management Personnel (Prop. Bhalinder Ghai) (Bhalinder Ghai, son of Mr. Harmeet Ghai)

4. U G Buildcon Private Limited Subsidiary Company

20. The Board of Directors of the Company considers and maintains "Hotel Business" as the only business segment of the company.

21. The Company has formed a subsidiary company (U G Buildcon Private Limited) on January 22, 2010 but the accounts are not being consolidated in this year keeping in view the first proviso to Sec. 166(1) of Companies Act, 1956 hence the requirements of Accounting Standard-21 relating to consolidate Financial Statements is not adhered by the Company.

22. The Company does not have any investments in Associates; hence Accounting Standard - 23 on "Accounting for Investments in Associates" in Consolidated Financial Statements is not applicable to the Company.

23. Accounting Standard- 27 on "Interim Financial Reporting on Joint Ventures" is also not applicable to the Company.

24. Provision for Rs. 46.67 lacs has not been made for debts considered as doubtful.

25. The Time Share membership/subscription amount is treated as revenue for the year on the basis of Receipts, net of sale Commission paid / payable divided by Number of years (16 or 33, as the case may be) for which Time Sharing is sold, & 1/16 of the net amount has been recognized as income for each next 16 year subscription and 1/16 of the net amount every alternative year for 33 years subscription.

26. Previous year figures have been regrouped and reclassified wherever necessary to make them comparable with the current years figure.

 
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