Notes to Accounts of Surya Funcity Ltd.

Mar 31, 2010

1. Contingent Liabilities

The management has informed that there is no contingent liability (not provided for in the books of account). However, the Department of Tourism (Punjab) has notified that, w.e.f. 01st April, 2003, there will be no entertainment tax on amusement parks; the said exemption has not been implemented by the concerned authority, therefore the accrued liability in regard thereto has not been determined.

2. In the opinion of the Directors, "Current Assets" and "Loans & Advances" are approximately of the value stated in the Balance sheet, if realised in the ordinary course of business and to the best of their knowledge provisions for all the known liabilities have been made and, as certified, all the contractual and statutory obligations have been duly complied with.

3. The management has informed that party balances, in certain cases, are under reconciliation & subject to confirmation; however the same have been incorporated in the financial statements at the value as per the books of account & are considered hopeful of recovery/good for payment therefore provision for bad & doubtful debts / unclaimed balances is not required.

4. Issued, Subscribed & Paid up Capital include:

-Calls in arrears (Rs. 7,633,545/-) on account of amount due from public at large including associates; -steps are being taken to regularize and appropriately adjust the account in the ensuing year.

5. Reserves & Surplus:

Revaluation Reserve (Rs. 101,181,168/-) represent revaluation of Land, in earlier years. Land is not subject to depreciation, therefore AS-10 is not applicable.

6. The management has informed that: "A" Employee Benefits

-Contribution as required under the Statute/Rule is made to Employees State Insurance & Provident Fund and charged to the Profit & Loss Account of the year when the contribution to the respective funds are due.

-Leave Encashment, on the basis of actual computation, is accounted for on accrual basis, during the tenure of employment, the payment in respect thereof is made by the Company from its own funds as per the past practise consistently followed by the Company.

-Gratuity is accounted for at the time of actual payment - the Company has not taken any Group Gratuity Policy with L.I.C.

"B" Taxes

-Provision for Current Year Tax (MAT) has been made, at specified rates, in accordance with the applicable provisions of the Income Tax Act, 1961.

-The exact liability of CST/VAT, Income Tax and other statutory dues are indeterminate pending finalisation of assessments and no undisputed amounts (except Entertainment Tax Rs. 5.86 lacs)/disputed dues were outstanding or remained unpaid as at 31st March, 2010.

"C" Others

-Amount Recoverable (Rs. 407,318/-) include the following amounts due & recoverable from Government Departments & other agencies : From : Income Tax Department -refund of taxes (Rs. 1,460/-) for earlier years Form : Other Agencies - Kandhari Beverages Pvt. Ltd & Hindustan Times Ltd. - relating to earlier years, for sponsorship etc. (Rs. 206,273/-) & hoarding & banners charges (Rs.79,785/-), respectively and Sanjay - pop-corn shop (Rs. 120,000/-).

-Loans & Advances

Advances (Rs 8,885,958/-) include trade advance (Rs. 8,787,000/-) given to Bonzo Resorts Ltd. (a company in which directors/their relatives are interested); in pursuance of memorandum of understanding signed with said Company; on the understanding that Bonzo Resorts Ltd. will provide free stay to the permanent members of the Company and the Company shall not charge any interest on sum advanced to the said Company for construction /maintenance of resort.

Deposits with Government Department and Other Agencies (Rs. 1,818,969/-) include (Rs. 187,500/-) deposited, during the year, with Ludhiana Stock Exchange Ltd. for public issue; the amount is good for recovery, therefore provision for doubtful asset is not required.

7. Prior Period Items (AS - 5)

Prior period items (Rs. 187,500/-) represent deposit for public issue paid to Ludhiana Stock Exchange Ltd., in the previous year; the amount was shown as deposit with Government Departments and Other Agencies; the amount is irrecoverable hence written off.

8. Borrowing Costs (AS - 16)

Interest on term loan (Rs. 473,162/-) directly attributable to construction of Building has been shown under the head Capital Work-in-Progress to be capitalised on completion of Building.

9. Segment Reporting (AS-17)

Since the Company primarily operates in one segment - (i.e. running and managing -Amusement Parks and Cottages etc.), therefore, segment reporting as required under Accounting Standard -17 is not applicable - there is no reportable geographical segment either.

10. Related Party Disclosures (AS-18)

-Related parties & their relationship and Related parties transactions - As per Annexure - (A).

11. Impairment of assets

During the year, the Company has undertaken a review of all the fixed assets in line with the requirement of AS-28 on "Impairment of Assets" issued by the Institute of Chartered Accountants of India; based on such review, no provision for impairment is required to be recognized for the year.

12. The Company has not received any communication from any of its suppliers/service providers confirming that they are registered under the Micro, Small and Medium Enterprises Development Act, 2006. In the absence of any positive confirmation the information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 could not be determined.

13. General:-

Statutory books, as required under the Companies Act, 1956, are being updated.

14. Turnover of the Company representing Income from rides, cottage rent, membership fee do not attract the provisions of Paragraphs 3,4-C and 4-D of Part-II of Schedule VI of the Companies Act, 1956.

15. Figures for previous year have been regrouped/rearranged, where considered necessary.

16. Figures have been rounded off to nearest rupees.