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Accounting Policies of EIH Ltd. Company

Mar 31, 2017

GENERAL INFORMATION

EIH Limited is a company limited by shares, incorporated and domiciled in India having its Registered Office at 4, Mangoe Lane, Kolkata-700 001. The company is primarily engaged in owning and managing premium luxury hotels and cruisers under the luxury ''Oberoi'' and ''Trident'' brands. The company is also engaged in flight catering, airport restaurants, project management and corporate air charters.

1 SIGNIFICANT ACCOUNTING POLICIES

This note provides a list of the significant accounting policies adopted in the preparation of these separate financial statements of EIH Limited. These policies have been consistently applied to all the periods presented, unless otherwise stated.

a) BASIS OF PREPARATION

(i) Compliance with Ind AS

The separate financial statements have been prepared in accordance with the Companies (Indian Accounting Standard) Rules, 2015 as a going concern on an accrual basis.

The financial statements up to year ended 31 March 2016 were prepared earlier in accordance with the accounting standards notified under the Companies (Accounting Standard) Rules, 2006 (as amended) and other relevant provisions of the Act.

These financial statements are the first financial statements of the company under Ind AS and the transition was carried out in accordance with Ind AS 101, "First time adoption of Indian Accounting Standards. Refer note 48 for an explanation of how the transition from previous GAAP to Ind AS has affected the company''s financial position, financial performance and cash flows.

(ii) Historical cost convention

The financial statements have been prepared on a historical cost basis, except for the following:

- equity investments in entities other than subsidiary, joint ventures and associate which are measured at fair value;

- defined benefit plans - plan assets measured at fair value

- customer loyalty programs

(iii) Use of estimates

In preparing the financial statements in conformity with accounting principles, management is required to make estimates and assumptions that may affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities as at the date of financial statements and the amounts of revenue and expenses during the reported period. Actual results could differ from those estimates. Any revision to such estimates is recognized in the period the same is determined.

b) REVENUE RECOGNITION

(i) Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are inclusive of excise duty and net of trade allowances, rebates, value added taxes and amounts collected on behalf of third parties.

(ii) Revenue from interest is recognized on accrual basis and determined by contractual rate of interest.

(iii) Dividend income is stated at gross and is recognized when right to receive payment is established

The company recognizes revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the company''s activities as described below. The company bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.

Timing of revenue recognition from major business activities

- Hospitality Services: Revenue from hospitality services is recognized when the services are rendered and the same becomes chargeable.

- Sale of printed material: Revenue from sale of printed and other materials is recognized on dispatch of materials.

- Others: Revenue from Shop License Fee, Management and Marketing Fee included under "Other Services" is recognized on accrual basis as per terms of the contract.

- Revenue in respect of customer loyalty are recognized when loyalty points are redeemed by the customers.

c) FOREIGN CURRENCY TRANSLATION

(i) Presentation Currency

These financial statements are presented in INR which is the Functional Currency of the Company.

(ii) Transactions and balances

Sales made in foreign currency are converted at the prevailing applicable exchange rate. Gain/Loss arising out of fluctuations in exchange rate is accounted for on realization or translation at the year end.

Payments made in foreign currency including for acquiring investments are converted at the applicable rate prevailing on the date of remittance. Liability on account of foreign currency is converted at the exchange rate prevailing at the end of the year. Monetary items denominated in foreign currency are converted at the exchange rate prevailing at the end of the year.

Revenue expenditure of all the overseas sales offices are converted at the average exchange rate for the year. Assets and liabilities other than Fixed Assets are converted at the exchange rate prevailing at the close of the accounting year and Fixed Assets are converted at the month-end exchange rate of the month of acquisition

Foreign currency loans covered by forward contracts are realigned at the forward contract rates, while those not covered by forward contracts are realigned at the rates ruling at the year end. The differences on realignment is accounted for in the Statement of Profit and Loss.

d) INCOME TAX

Current income tax is recognized based on the amount expected to be paid to the tax authorities, using tax rates and tax laws that have been enacted or substantially enacted on the date of balance sheet.

e) DEFERRED TAX

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the separate financial statements.

Deferred tax assets are recognized for all deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilize those temporary differences and losses.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

Current and deferred tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized in other comprehensive income or directly in equity, respectively.

f) SEGMENT REPORTING

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.

The board of directors of EIH Limited generally assesses the financial performance and position of the company, and makes strategic decisions. Refer note 44 for segment information.

g) LEASES As a lessee :

Leases of property, plant and equipment where the company, as lessee, has substantially all the risks and rewards of ownership are classified as finance leases. Assets under finance lease are capitalized at the inception, at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in borrowings or other financial liabilities as appropriate. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Leases in which a significant portion of the risks and rewards of ownership are not transferred to the company as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the less or) are charged to profit or loss on a straight-line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the less or’s expected inflationary cost increases.

As a less or :

Lease income from operating leases where the company is a less or is recognized as income on a straight-line basis over the lease term unless the receipts are structured to increase in Line with expected general inflation to compensate for the expected inflationary cost increases. The respective leased assets are included in the balance sheet based on their nature.

h) IMPAIRMENT OF ASSETS

Assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset''s carrying amount exceeds its recoverable amount. Assets that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period. In case of such reversal, the carrying amount of the asset is increased so as not to exceed the carrying amount that would have been determined had there been no impairment loss.

i) CASH AND CASH EQUIVALENTS

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash in hand, cash at bank and other deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

j) TRADE RECEIVABLES

Trade receivables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method, less provision for impairment.

k) INVENTORIES

Inventories are valued at cost which is based on Cumulative Weighted Average method or net realizable value, whichever is lower. Unserviceable/damaged/discarded stocks and shortages are charged to the statement of Profit or Loss.

l) INVESTMENTS AND OTHER FINANCIAL ASSETS (i) Classification

The company classifies its financial assets in the following measurement categories:

- those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss)

- those measured at amortized cost.

The classification depends on the entity''s business model for managing the financial assets and the contractual terms of the cash flows.

For assets measured at fair value, gains and losses will be recorded in profit or loss. For investments in debt instruments, this will depend on the business model in which the investment is held. For investments in equity instruments, this will depend on whether the company has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income.

(ii) Measurement

At initial recognition, the company measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit and loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.

Debt instruments

Subsequent measurement of debt instruments depends on the company''s business model for managing the asset and the cash flow characteristics of the asset. There are three measurement categories into which the company classifies its debt instruments:

Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost.

Fair value through other comprehensive income (FVOCI): Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets'' cash flows represent solely payments of principal and interest, are measured at fair value through other comprehensive income (FVOCI). Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognized in profit and loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to profit or loss and recognized in other gains/ (losses). Interest income from these financial assets is included in other income using the effective interest rate method.

Fair value through profit or loss: Assets that do not meet the criteria for amortized cost or FVOCI are measured at fair value through profit and loss

Equity instruments

The company subsequently measures all equity investments at fair value. Dividends from such investments are recognized in profit or loss as other income when the company''s right to receive payments is established.

Changes in the fair value of financial assets at fair value through profit or loss are recognized in other gain/ (losses) in the statement of profit and loss.

(iii) Impairment of financial assets

The company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortized cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk. Note 38 details how the company determines whether there has been a significant increase in credit risk.

For trade receivables only, the company applies the simplified approach permitted by Ind AS 109 Financial Instruments, which requires expected lifetime losses to be recognized from initial recognition of the receivables.

(iv) Derecognition of financial assets

A financial asset is derecognized only when

- The company has transferred the rights to receive cash flows from the financial asset or

- Retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients.

Where the entity has transferred an asset, the company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognized. Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognized.

Where the entity has neither transferred a financial asset nor retains substantially all risks and rewards of ownership of the financial asset, the financial asset is derecognized if the company has not retained control of the financial asset. Where the company retains control of the financial asset, the asset is continued to be recognized to the extent of continuing involvement in the financial asset.

(v) Income recognition

Interest income: Interest income from debt instruments is recognized using the effective interest rate method. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of a financial asset. When calculating the effective interest rate, the company estimates the expected cash flows by considering all the contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) but does not consider the expected credit losses

Dividend income: Dividends are recognized in profit or loss only when the right to receive payment is established, it is probable that the economic benefits associated with the dividend will flow to the company, and the amount of the dividend can be measured reliably.

m) PROPERTY, PLANT AND EQUIPMENT

Freehold land is carried at historical cost. All other items of property, plant and equipment are stated at historical cost less depreciation. Historical Cost represents direct expenses incurred on acquisition or construction of the assets and the share of indirect expenses relating to construction allocated in proportion to the direct cost involved.

Subsequent costs are included in the asset''s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognized when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred.

Capital work-in-progress comprises the cost of property, plant and equipment that are not yet ready for their intended use on the reporting date and materials at site.

Transition to Ind AS

On transition to Ind AS, the company has elected to continue with the carrying value of all of its property, plant and equipment recognized as at 1 April 2015 measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment.

Depreciation methods, estimated useful lives and residual value

Depreciation on property, plant and equipment other than land, the hotel buildings, certain buildings on leasehold land and leased vehicles and machinery is provided on ''Straight Line Method'' based on useful life as prescribed under Schedule II of the Companies Act 2013. Leased vehicles, and building installed on leasehold land (other than perpetual lease) are depreciated over the lives of the respective asset or over the remaining lease period from the date of installation whichever is shorter.

Long term leasehold land (other than perpetual lease) is depreciated over the balance period of the lease, commencing from the date the land is put to use for commercial purposes.

The hotel buildings are depreciated equally over the balance useful life ascertained by independent technical expert, which ranges between 30 years and 60 years with effect from March 31, 2015 and are higher than those specified by Schedule II to the Companies Act; 2013. The management believes that the balance useful lives so assessed best represent the periods over which the hotel buildings are expected to be in use. The residual values are not more than 5% of the original cost of the asset. The assets'' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in profit or loss within other gains/(losses).

n) INTANGIBLE ASSETS

Intangible assets are stated at cost less accumulated amortization and net of impairments, if any. An intangible asset is recognized if it is probable that the expected future economic benefits that are attributable to the asset will flow to the company and its cost can be measured reliably. Intangible assets are amortized on straight line basis over their estimated useful lives.

Transition to Ind AS

On transition to Ind AS, the company has elected to continue with the carrying value of all of its intangible assets recognized as at April 1, 2015 measured as per the previous GAAP and use that carrying value as the deemed cost of the intangible assets.

o) TRADE AND OTHER PAYABLES

These amounts represent liabilities for goods and services provided to the company prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognized initially at their fair value and subsequently measured at amortized cost using the effective interest method.

p) BORROWING COSTS

General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of respective assets during the period of time that is required to complete and prepare the asset for its intended use. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale. Other borrowing costs are expensed in the period in which they are incurred.

q) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions are recognized when there is a present legal or statutory obligation or constructive obligation as a result of past events and 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 nonoccurrence of one or more uncertain future events not wholly within the control of the company or where any present obligation cannot be measured in terms of future outflow of resources or where a reliable estimate of the 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 where it is probable that future economic benefits will flow to the company are not recognized but disclosed in the financial statements. However, when the realization of income is virtually certain, then the related asset is no longer a contingent asset, but it is recognized as an asset.

r) EMPLOYEE BENEFITS

(i) Short-term obligations

Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognized in respect of employees'' services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.

(ii) Post-employment obligations

The company operates the following post-employment schemes:

Gratuity obligations -

Maintained as a defined benefit retirement plan and contribution is made to the Life Insurance Corporation of India. The liability or asset recognized in the balance sheet in respect of defined benefit gratuity plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by actuaries using the projected unit credit method.

The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the statement of profit and loss.

Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.

Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognized immediately in profit or loss as past service cost.

Leave encashment on termination of service -

The liabilities for earned leave are expected to be settled after the retirement of employee. They are therefore measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. The benefits are discounted using the market yields at the end of the reporting period that have terms approximating to the terms of the related obligation. Re-measurements as a result of experience adjustments and changes in actuarial assumptions are recognized in other comprehensive income.

The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.

Provident Fund -

The company pays provident fund contributions to a fund administered by Government Provident Fund Authority. The Company has no further payment obligations once the contributions have been paid. The contributions are accounted for as defined contribution plans and the contributions are recognized as employee benefit expense when they are due. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in the future payments is available.

s) DIVIDENDS

Liability is created for the amount of any dividend declared, being appropriately authorized and no longer at the discretion of the entity.

t) EARNINGS PER SHARE

(i) Basic earnings per share

Basic earnings per share is calculated by dividing:

- the profit attributable to equity shareholders of the company

- by the weighted average number of equity shares outstanding during the financial year,

(ii) Diluted earnings per share

Diluted earnings per share adjusts the number of equity shares used in the determination of basic earnings per share to take into account:

- the after income tax effect of interest and other financing costs associated with dilutive potential equity shares, and

- the weighted average number of equity shares including additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares happened.

u) GOVERNMENT GRANTS/INCENTIVES

Government grants / incentives that the Company is entitled to on fulfillment of certain conditions, but are available to the company only on completion of some other conditions, are recognized as income at fair value on completion of such other conditions

Grants/incentives that the company is entitled to unconditionally on fulfillment of certain conditions, such grants/incentives are recognized at fair value as income when there is reasonable assurance that the grant/incentives will be received.

v) INVESTMENT IN SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES

(i) Investment in Subsidiaries: A subsidiary is an entity controlled by the Company. Control exists when the Company has power over the entity, is exposed, or has rights to variable returns from its involvement with the entity and has the ability to affect those returns by using its power over entity.

Power is demonstrated through existing rights that give the ability to direct relevant activities, those which significantly affect the entity''s returns.

Investments in subsidiaries are carried at cost. The cost comprises price paid to acquire investment and directly attributable cost.

Transition to Ind AS

On transition to Ind AS, the company has elected to continue with the carrying value of all of its Investment in subsidiaries recognized as at 1 April 2015 measured as per the previous GAAP and use that carrying value as the deemed cost of the Investment in subsidiaries.

ii) Investment in joint ventures and associates: A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.

The investment in joint ventures and associates are carried at cost. The cost comprises price paid to acquire investment and directly attributable cost.

Transition to Ind AS

On transition to Ind AS, the company has elected to continue with the carrying value of all of its Investment in joint ventures and associates recognized as at 1 April 2015 measured as per the previous GAAP and use that carrying value as the deemed cost of the Investment in joint ventures and associates.

w) ROUNDING OF AMOUNTS

All amounts disclosed in the financial statements and notes have been rounded off to the nearest million with two decimals as per the requirement of Schedule III, unless otherwise stated.

2 NEW STANDARDS/AMENDMENTS THAT ARE NOT YET EFFECTIVE AND HAVE NOT BEEN EARLY ADOPTED:

As set out below, amendments to standards are effective for annual periods beginning on or after April 1, 2017, and have not been applied in preparing these financial statements. None of these is expected to have a significant effect on the financial statements of the Company:

Amendments to Ind AS 102, Share-based Payment

The amendment to Ind AS 102 clarifies the measurement basis for cash-settled share-based payments and the accounting for modifications that change an award from cash-settled to equity-settled.

Since the Company does not have any share based plan outstanding at the reporting date, the abovementioned amendment will not have any impact on the financial statements of the Company. The amendment is effective for accounting periods beginning on or after April 1, 2017 and early adoption of the same is not permitted.

Amendments to Ind AS 7, Cash Flow Statements

The amendment to Ind AS 7 introduces an additional disclosure that will enable users of financial statements to evaluate changes in liabilities arising from financing activities.

The said amendment will not have any impact on the Company''s cash flow. The amendment is effective for accounting periods beginning on or after April 1, 2017 and early adoption of the same is not permitted.


Mar 31, 2013

BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The Financial Statements are prepared on accrual basis under the historical cost convention (except where impairment is made and revaluation is carried out) on the basis of going concern and is in accordance with Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 pursuant to section 211 (3C) of the Companies Act, 1956.

USE OF ESTIMATES

In preparing the Financial Statements in conformity with accounting principles generally accepted in India, Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities as at the date of Financial Statements and the amounts of revenue and expenses during the reported period. Actual results could differ from those estimates. Any revision to such estimates is recognised in the period the same is determined.

PRIOR PERIOD ADJUSTMENTS, EXCEPTIONAL ITEMS, EXTRAORDINARY ITEMS AND CHANGES IN ACCOUNTING POLICIES

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

FIXED ASSETS

Tangible Assets are stated at cost of acquisition or construction and in case of revaluation of assets at revalued amounts net of impairment loss if any, less depreciation/amortisation. Cost represents direct expenses incured on acquisition or construction of the assets and the share of indirect expenses relating to construction allocated in proportion to the direct cost involved.

Assets acquired under lease are capitalised at the present value of minimum lease payments and are stated at the capitalised value net of accumulated depreciation.

Capital work-in-progress comprises the cost of fixed assets that are not yet ready for their intended use on the reporting date and materials at site.

Intangible Assets are stated at cost less accumulated amortisation and net of impairments, if any. An intangible asset is recognised if it is probable that the expected future economic benefits that are attributable to the asset will flow to the Company and its cost can be measured reliably. Intangible assets having finite useful lives are amortised on straight line basis over their estimated useful lives.

DEPRECIATION

Depreciation on fixed assets other than land, certain buildings on leasehold lands and leased vehicles and machinery is provided on "Straight Line Method" at the rates prescribed under Schedule XIV of the Companies Act, 1956. Certain fixed assets including leased vehicles and leased machinery, building installed on leasehold land (other than on perpetual lease) are depreciated over the lives of the respective leases or over the remaining lease period from the date of installation whichever is shorter. Vehicles acquired on lease are depreciated over their respective lease period or sixty months from the date of acquisition whichever is earlier. Long term Leasehold land (other than on perpetual lease) are depreciated over the balance period of lease, commencing from the date the land is put to use for commercial purposes. The additional depreciation on the increase in the value of assets due to revaluation is adjusted against Revaluation Reserve.

REVENUE RECOGNITION

- Revenue from hospitality services is recognised when the services are rendered and the same becomes chargeable. Revenue from sale of printed and other materials is recognised on despatch of materials. Revenue from Shop Licence Fee, Management and Marketing Fee included under "Other Services" is recognised on accrual basis as per terms of contract.

- Revenue from interest is accrued and recognised on time basis and determined by contractual rate of interest.

- Dividend income is stated at gross and is recognised when right to receive payment is established.

IMPAIRMENT OF ASSETS

Impairment is ascertained at each Balance Sheet date in respect of the Company''s fixed assets. An impairment loss is recognised whenever the carrying amount of an asset or cash generating unit exceeds its recoverable amount.

LEASES

In respect of assets acquired on or after 1st April, 2001, the same are capitalized at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term. Lease payments are apportioned between the interest charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Interest component is charged to the Statement of Profit and Loss under Finance costs.

Operating lease payments are recognized as expenditure in the Statement of Profit and Loss on straight line basis, over the lease period.

INVESTMENTS

Investments held by the Company which are long term in nature are stated at cost unless there is any permanent diminution in value where provision for diminution is made on individual investment basis. Current investments are valued at cost or market price or fair value, whichever is lower. Earnings on investments are accounted for on accrual basis.

INVENTORIES

Inventories are valued at cost which is based on First-In-First-out method or net realisable value, whichever is lower. unserviceable/ damaged/discarded stocks and shortages are charged to the profit and Loss Account.

TRANSACTIONS IN FOREIGN CURRENCY

sales made in foreign currency are converted at the prevailing applicable exchange rate. Gain/Loss arising out of fluctuations in exchange rate is accounted for on realisation.

payments made in foreign currency including for acquiring investments are converted at the applicable rate prevailing on the date of remittance. Liability on account of foreign currency is converted at the exchange rate prevailing at the end of the year. Monetary items denominated in foreign currency are converted at the exchange rate prevailing at the end of the year.

revenue expenditure of all the overseas sales offices are converted at the average exchange rate for the year. Assets and liabilities other than Fixed Assets are converted at the exchange rate prevailing at the close of the accounting year and Fixed Assets are converted at the month-end exchange rate of the month of acquisition.

Foreign currency loans covered by forward contracts are realigned at the forward contract rates, while those not covered by forward contracts are realigned at the rates ruling at the year end. the differences on realignment is accounted for in the statement of profit and Loss.

EMPLOYEE BENEFITS

short term Employee Benefit is recognized as expense in the statement of profit and Loss of the year in which related service is rendered.

post employment and other Long term employee Benefits are provided in the Accounts in the following manner:

(i) Gratuity - Maintained as a defined benefit retirement plan and contribution is made to the Life Insurance Corporation of India, as per Company''s scheme. provision/ write back, if any, is made on the basis of the present value of the liability as at the Balance sheet date determined by actuarial valuation following projected unit Credit Method and is treated as liability under other Current Liability.

(ii) Leave encashment on termination of service - As per actuarial valuation as at the Balance sheet date following projected unit Credit Method.

(iii) provident Fund - provident Fund for most of the employees is a defined Contribution scheme, where the contribution is made to a Fund administered by the Government provident Fund Authority.

For a few employees, provident Fund, administered by a recognised trust, is a defined Benefit plan wherein the employee and the Company make monthly contributions. pending the issuance of Guidance Note from the Actuarial society of India, actuarial valuation is not carried out and the Company provides for required liability at year end, in respect of the shortfall, if any, upon confirmation from the trustees of such Fund.

BORROWING COST

Borrowing cost that is attributable to the acquisition / construction of fixed assets are capitalised as part of the cost of the respective assets. other borrowing costs are recognised as expenses in the year in which they arise.

SHARE ISSUE EXPENSES

share issue expenses are written off against the securities premium Account in accordance with section 78 of the Companies Act, 1956.

TAXES ON INCOME

Income-tax is accounted for in accordance with Accounting standard on ''Accounting for taxes on income'' notified under the Companies (Accounting standards) Rules, 2006.

Minimum Alternate tax (Mat) is accounted for in accordance with tax laws which give rise to future economic benefits in the form of tax credit against which future income tax liability is adjusted and is recognized as an asset in the balance sheet.

Deferred tax is provided and recognized on timing differences between taxable income and accounting income subject to prudential consideration. Deferred tax assets on unabsorbed depreciation and carry forward of losses are not recognized unless there is virtual certainity about availability of future taxable income to realize such assets.

PROPOSED DIVIDEND

Dividend recommended by the Board of Directors is provided for in the Accounts pending shareholders'' approval.

PROVISIONS CONTINGENT LIABILITES AND CONTINGENT ASSETS

provisions are recognized when there is a present legal or statutory obligation as a result of past events and 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 measured in terms of future outflow of resources or where a reliable estimate of the obligation cannot be made. obligations are assessed on an on going basis and only those having a largely probable outflow of resources are provided for.

Contingent Assets are not recognised in the Financial statements.


Mar 31, 2012

BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The Financial statements are prepared on accrual basis under the historical cost convention (except where impairment is made and revaluation is carried out) on the basis of going concern and is in accordance with Accounting standards notified by the Companies (Accounting standards) rules, 2006 issued by the Central Government in consultation with the National Advisory Committee on Accounting standards and relevant provisions of the Companies Act, 1956.

USE OF ESTIMATES

In preparing the Financial statements in conformity with accounting principles generally accepted in India, Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities as at the date of Financial statements and the amounts of revenue and expenses during the reported period. Actual results could differ from those estimates. Any revision to such estimates is recognised in the period the same is determined.

PRIOR PERIOD ADJUSTMENTS, EXCEPTIONAL ITEMS, EXTRAORDINARY ITEMS AND CHANGES IN ACCOUNTING POLICIES

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

FIXED ASSETS

Fixed Assets are stated at cost of acquisition or construction and in case of revaluation of assets at revalued amounts net of impairment loss if any, less depreciation/amortisation. Cost represents direct expenses incurred on acquisition or construction of the assets and the share of indirect expenses relating to construction allocated in proportion to the direct cost involved.

Assets acquired under lease are capitalised at the present value of minimum lease payments and are stated at the capitalised value net of accumulated depreciation.

Capital work-in-progress comprises the cost of fixed assets that are not yet ready for their intended use on the reporting date and materials at site.

DEPRECIATION

Depreciation on fixed assets other than land, certain buildings on leasehold lands and leased vehicles and machinery is provided on "straight Line Method" at the rates prescribed under schedule XIV of the Companies Act, 1956. Certain fixed assets including leased vehicles and leased machinery, building installed on leasehold land (other than on perpetual lease) are depreciated over the lives of the respective leases or over the remaining lease period from the date of installation whichever is shorter. Vehicles acquired on lease are depreciated over their respective lease period or sixty months from the date of acquisition whichever is earlier. Long term Leasehold land (other than on perpetual lease) are depreciated over the balance period of lease, commencing from the date the land is put to use for commercial purposes. the additional depreciation on the increase in the value of assets due to revaluation is adjusted against revaluation reserve.

REVENUE RECOGNITION

- Revenue from hospitality services is recognised when the services are rendered and the same becomes chargeable. revenue from sale of printing and other materials is recognised on despatch of materials. revenue from shop Licence Fee, Management and Marketing Fee included under "other services" is recognised on accrual basis as per terms of contract.

- Revenue from interest is accrued and recognised on time basis and determined by contractual rate of interest.

- Dividend income is stated at gross and is recognised when right to receive payment is established.

IMPAIRMENT OF ASSETS

Impairment is ascertained at each Balance sheet date in respect of the Company's fixed assets. An impairment loss is recognised whenever the carrying amount of an asset or cash generating unit exceeds its recoverable amount.

LEASES

In respect of assets acquired on or after 1st April, 2001, the same are capitalised at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term. Lease payments are apportioned between the interest charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. interest component is charged to the profit and Loss account under interest and Finance charges.

Operating lease payments are recognised as expenditure in the statement of profit and Loss on straight line basis, over the lease period.

INVESTMENTS

Investments held by the Company which are long term in nature are stated at cost unless there is any permanent diminution in value where provision for diminution is made on individual investment basis. Current investments are valued at cost or market price or fair value, whichever is lower. Earnings on investments are accounted for on accrual basis.

INVENTORIES

inventories are valued at cost which is based on First-in-First-out method or net realisable value, whichever is lower. unserviceable/ damaged/discarded stocks and shortages are charged to the profit and Loss Account.

TRANSACTIONS IN FOREIGN CURRENCY

Sales made in foreign currency are converted at the prevailing applicable exchange rate. Gain/Loss arising out of fluctuations in exchange rate is accounted for on realisation.

Payments made in foreign currency including for acquiring investments are converted at the applicable rate prevailing on the date of remittance. Liability on account of foreign currency is converted at the exchange rate prevailing at the end of the year. Monetary items denominated in foreign currency are converted at the exchange rate prevailing at the end of the year.

Revenue expenditure of all the overseas sales offices are converted at the average exchange rate for the year. Assets and liabilities other than Fixed Assets are converted at the exchange rate prevailing at the close of the accounting year and Fixed Assets are converted at the month-end exchange rate of the month of acquisition.

Foreign currency loans covered by forward contracts are realigned at the forward contract rates, while those not covered by forward contracts are realigned at the rates ruling at the year end. the differences on realignment is accounted for in the statement of profit and Loss.

EMPLOYEE BENEFITS

Short term employee Benefit is recognised as expense in the statement of profit and Loss of the year in which related service is rendered.

Post employment and other Long term employee Benefits are provided in the Accounts in the following manner:

(i) Gratuity - Maintained as a defend benefit retirement plan and contribution is made to the Life insurance Corporation of India, as per Company's scheme. provision/ write back, if any, is made on the basis of the present value of the liability as at the Balance sheet date determined by actuarial valuation following projected unit Credit Method and is treated as liability under other Current Liability.

(ii) Leave encashment on termination of service - As per actuarial valuation as at the Balance sheet date following projected unit Credit Method.

(iii) Provident Fund - provident Fund for most of the employees is a defend Contribution scheme, where the contribution is made to a Fund administered by the Government provident Fund Authority.

For a few employees, provident Fund, administered by a recognised trust, is a defend Benefit plan wherein the employee and the Company make monthly contributions. Pending the issuance of Guidance Note from the Actuarial society of India, actuarial valuation is not carried out and the Company provides for required liability at year end, in respect of the shortfall, if any, upon confirmation from the trustees of such Fund.

BORROWING COST

Borrowing cost that is attributable to the acquisition / construction of fixed assets are capitalised as part of the cost of the respective assets. other borrowing costs are recognised as expenses in the year in which they arise.

SHARE ISSUE EXPENSES

Share issue expenses are written off against the securities premium Account in accordance with section 78 of the Companies Act, 1956.

TAXES ON INCOME

Income-tax is accounted for in accordance with Accounting standard on 'Accounting for taxes on income' notified pursuant to the Companies (Accounting standards) rules, 2006.

Minimum Alternate tax (MAT) is accounted for in accordance with tax laws which give rise to future economic benefits in the form of tax credit against which future income tax liability is adjusted and is recognised as an asset in the balance sheet.

deferred tax is provided and recognised on timing differences between taxable income and accounting income subject to prudential consideration. deferred tax assets on unabsorbed depreciation and carry forward of losses are not recognised unless there is virtual certainty about availability of future taxable income to realise such assets.

PROPOSED DIVIDEND

Dividend recommended by the Board of directors is provided for in the Accounts pending shareholders' approval.

PROVISIONS CONTINGENT LIABILITIES AND CONTINGENT ASSETS

provisions are recognised when there is a present legal or statutory obligation as a result of past events and 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 measured in terms of future outflow of resources or where a reliable estimate of the obligation cannot be made. obligations are assessed on an on going basis and only those having a largely probable outflow of resources are provided for.

Contingent Assets are not recognised in the financial statements.

b) The Company has one class of equity shares having a par value of Rs. 2 per share. each share holder is eligible for one vote per share held and such dividend as proposed by the Board of directors, subject to the approval of the shareholders in the ensuing Annual General Meeting.

d) Out of the above shares of the company, 130,984,657 shares were issued as fully paid up Bonus shares by Capitalisation of securities premium Account in 2006-07.

e) 178,615,442 shares of face value Rs. 2 each have been alloted as fully paid up shares at a premium of Rs. 64 per share to the shareholders on rights basis during 2010-11.

Dividend of Rs. 1.10 per share (2011 - Rs. 0.90 per share) amounting to Rs.628.73 Million (2011 - Rs. 514.41 Million) has been recommended by the Board of directors. this dividend will be paid to the shareholders if approved at the forthcoming Annual General Meeting.

PARTICULARS OF TERM LOANS :

(i) Term Loan from ICICI Bank Limited carries interest at bank's base rate 2.5% repayable in 7 quarterly installments of Rs. 200 million each. repayment will be complete in December 2014.

(ii) The Finance Lease obligations are secured by hypothecation of vehicles taken under Lease. Repayments are done by equated monthly installment over 36 to 60 months.

PARTICULARS OF SECURITIES :

Term loan from ICICI Bank Limited is secured by way of equitable mortgage by deposit of title deeds in respect of the Company's hotel in delhi known as Maidens Hotel, ranking pari passu.

PARTICULARS OF SHORT TERM BORROWINGS :

Cash credit facilities are secured by way of hypothecation of all stock of inventories, book debts and other current assets of the company, both present and future, ranking pari passu. Cash Credit with united Bank of India is additionally secured by way of second charge in respect of the company's hotel in Kolkata known as the oberoi Grand. Cash Credit is repayable on demand and carries interest at floating rate linked to the base rates of the respective banks.

* others includes withholding and other taxes payable Rs. 177.64 Million (2011 - Rs. 227.35 Million)

* National savings Certifcates have been lodged with Government Authorities as security deposit.

* Inventories are valued at cost which is based on First-in-First-out method or net realisable value, whichever is lower.

EXCEPTIONAL ITEMS

Shortfall arising on final settlement of insurance claim for loss due to business interruption surplus arising on final settlement of insurance claim for damage profit on sale of property and Apartment


Mar 31, 2011

BASIS OF PREPARATION OF FINANCIAl STATEMENTS

the Financial statements are prepared under the historical cost convention (except where impairment is made and revaluation is carried out) on the basis of going concern and is in accordance with Accounting standards notifed by the Companies (Accounting standards) rules, 2006 issued by the Central Government in consultation with the National Advisory Committee on Accounting standards and relevant provisions of the Companies Act, 1956 and on accrual basis.

USE OF ESTIMATES

in preparing the Financial statements in conformity with accounting principles generally accepted in india, Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities as at the date of Financial statements and the amounts of revenue and expenses during the reported period. Actual results could differ from those estimates. Any revision to such estimates is recognised in the period the same is determined.

PRIOR PERIOD ADJUSTMENTS, EXCEPTIONAL ITEMS, EXTRAORDINARY ITEMS AND CHANGES IN ACCOUNTING POLICIES

prior period adjustments, exceptional items, extraordinary items and changes in accounting policies having material impact on the financial affairs of the Company are disclosed.

FIXED ASSETS

Fixed Assets are stated at cost of acquisition or construction and in case of revaluation of assets at revalued amounts net of impairment loss, if any, less depreciation/amortisation. Cost represents direct expenses incurred on acquisition or construction of the assets and the share of indirect expenses relating to construction allocated in proportion to the direct cost involved.

Assets acquired on lease basis are stated at their cash values less depreciation/amortisation.

Capital work-in-progress comprises outstanding advances paid/payable to acquire fixed assets and the cost of fixed assets that are not yet ready for their intended use in the reporting date.

DEPRECIATION

depreciation on fixed assets other than land, certain buildings on leasehold lands and leased vehicles is provided on "straight Line Method” at the rates which are in conformity with the requirements of the Companies Act, 1956. Certain fixed assets including leased vehicles, building installed on leasehold land (other than on perpetual lease) are depreciated over the lives of the respective leases or over the remaining lease period from the date of installation whichever is shorter. vehicles acquired on lease are depreciated over their respective lease period or sixty months from the date of acquisition, whichever is earlier. Long term Leasehold land (other than on perpetual lease) are depreciated over the balance period of lease, commencing from the date the land is put to use for commercial purposes. the additional depreciation on the increase in the value of assets due to revaluation is adjusted against revaluation reserve.

REVENUE RECOGNITION

- revenue from hospitality services is recognised when the services are rendered and the same becomes chargeable. revenue from sale of printing and other materials is recognised on despatch of materials.

- revenue from interest is accrued and recognised on time basis and determined by contractual rate of interest.

- dividend income is stated at gross and is recognised when right to receive payment is established.

- revenue from shop Licence Fee, Management and Marketing Fee included under "other services” is recognised on accrual basis as per terms of contract.

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 or cash generating unit exceeds its recoverable amount.

LEASES

in respect of assets acquired on or after 1st April, 2001, the same are capitalised at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term. Lease payments are apportioned between the interest charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. interest component is charged to the Profit and Loss Account under interest and Finance charges.

operating lease payments are recognised as expenditure in the Profit and Loss Account on straight line basis, over the lease period.

INVESTMENTS

investments held by the Company which are long term in nature are stated at cost unless there is any permanent diminution in value where provision for diminution is made on individual investment basis. Current investments are valued at cost or market price or fair value, whichever is lower. earnings on investments are accounted for on accrual basis.

INVENTORIES

inventories are valued at cost which is based on First-in-First-out method or net realisable value, whichever is lower. unserviceable/damaged/discarded stocks and shortages are charged to the Profit and Loss Account.

TRANSACTIONS IN FOREIGN CURRENCY

sales made in foreign currency are converted at the prevailing applicable exchange rate. Gain/Loss arising out of fuctuations in exchange rate is accounted for on realisation.

payments made in foreign currency including for acquiring investments are converted at the applicable rate prevailing on the date of remittance. Liability on account of foreign currency is converted at the exchange rate prevailing at the end of the year. Monetary items denominated in foreign currency are converted at the exchange rate prevailing at the end of the year.

revenue expenditure of all the overseas sales offces are converted at the average exchange rate for the year. Assets and Liabilities other than Fixed Assets are converted at the exchange rate prevailing at the close of the accounting year and Fixed Assets are converted at the month-end exchange rate of the month of acquisition.

Foreign currency loans covered by forward contracts are realigned at the forward contract rates, while those not covered by forward contracts are realigned at the rates ruling at the year end. the differences on realignment is accounted for in the Profit and Loss Account.

EMPLOYEE BENEFITS

short term employee Beneft is recognised as expense in the Profit and Loss Account of the year in which related service is rendered.

post employment and other Long term employee Benefits are provided in the Accounts in the following manner:

(i) Gratuity – Maintained as a defned beneft retirement plan and contribution is made to the Life insurance Corporation of india, as per Companys scheme. provision/ write back, if any, is made on the basis of the present value of the liability as at the Balance sheet date determined by actuarial valuation following projected unit Credit Method and is treated as liability.

(ii) Leave encashment on termination of service - As per actuarial valuation as at the Balance sheet date following projected unit Credit Method.

(iii) provident Fund : provident Fund for most of the employees is a defned Contribution scheme, where the contribution is made to a Fund administered by the Government provident Fund Authority.

For a few employees, provident Fund, administered by a recognised trust, is a defned Beneft plan wherein the employee and the Company make monthly contributions. pending the issuance of Guidance Note from the Actuarial society of india, actuarial valuation is not carried out and the Company provides for required liability at year end, in respect of the shortfall, if any, upon confrmation from the trustees of such Fund.

BORROWING COST

Borrowing cost that is attributable to the acquisition / construction of fixed assets are capitalised as part of the cost of the respective assets. other borrowing costs are recognised as expenses in the year in which they arise.

SHARE ISSUE EXPENSES

share issue expenses are written off against the securities premium Account in accordance with section 78 of the Companies Act, 1956.

TAXES ON INCOME

income-tax is accounted for in accordance with Accounting standard on ‘Accounting for taxes on income notifed pursuant to the Companies (Accounting standards) rules, 2006.

Minimum Alternate tax (MAt) is accounted for in accordance with tax laws which give rise to future economic Benefits in the form of tax credit against which future income tax liability is adjusted and is recognised as an asset in the Balance sheet.

deferred tax is provided and recognised on timing differences between taxable income and accounting income subject to prudential consideration. deferred tax assets on unabsorbed depreciation and carry forward of losses are not recognised unless there is virtual certainty about availability of future taxable income to realise such assets.

PROPOSED DIVIDEND

dividend recommended by the Board of directors is provided for in the Accounts pending shareholders approval.

PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

provisions are recognised when there is a present legal or statutory obligation as a result of past events and where it is probable that there will be outfow 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 measured in terms of future outfow of resources or where a reliable estimate of the obligation cannot be made. obligations are assessed on an on going basis and only those having a largely probable outfow of resources are provided for.

Contingent Assets are not recognised in the Financial statements.


Mar 31, 2010

BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The Financial statements are prepared under the historical cost convention (except where impairment is made and revaluation is carried out) on the basis of going concern and is in accordance with Accounting standards notifed by the Companies (Accounting standards) rules, 2006 issued by the Central Government in consultation with the National Advisory Committee on Accounting standards and relevant provisions of the Companies Act, 1956 and on accrual basis.

USE OF ESTIMATES

In preparing the Financial statements in conformity with accounting principles generally accepted in india, Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities as at the date of Financial statements and the amounts of revenue and expenses during the reported period. Actual results could differ from those estimates. Any revision to such estimates is recognised in the period the same is determined.

PRIOR PERIOD ADJUSTMENTS, EXcEPTIONAL ITEMS, EXTRAORDINARY ITEMS AND cHANGES IN AccOUNTING POLICIES

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

FIXED ASSETS

Fixed Assets are stated at cost of acquisition or construction and in case of revaluation of assets at revalued amounts net of impairment loss if any, less depreciation/amortisation. Cost represents direct expenses incurred on acquisition or construction of the assets and the share of indirect expenses relating to construction allocated in proportion to the direct cost involved.

Assets acquired on lease basis are stated at their cash values less depreciation/amortisation.

Capital Work-in-progress comprises outstanding advances paid/payable to acquire fxed assets and the cost of fxed assets that are not yet ready for their intended use at the reporting date.

DEPREcIATION

Depreciation on fxed assets other than land, certain buildings on leasehold lands and leased vehicles is provided on “straight Line Method" at the rates which are in conformity with the requirements of the Companies Act, 1956. Certain fixed assets including leased vehicles, building installed on leasehold land (other than on perpetual lease) are depreciated over the lives of the respective leases or over the remaining lease period from the date of installation, whichever is shorter. vehicles acquired on lease are depreciated over their respective lease period or sixty months from the date of acquisition, whichever is earlier. Long term leasehold land (other than on perpetual lease) are depreciated over the balance period of lease, commencing from the date the land is put to use for commercial purposes. the additional depreciation on the increase in the value of assets due to revaluation is adjusted against revaluation reserve.

REVENUE RECOGNITION

- Revenue from hospitality services is recognised when the services are rendered and the same becomes chargeable. revenue from sale of printing and other materials is recognised on despatch of materials.

- Revenue from interest is accrued and recognised on time basis and determined by contractual rate of interest.

- Dividend income is stated at gross and is recognised when rights to receive payment is established.

- Revenue from shop Licence Fee, Management and Marketing Fee included under “other income" is recognised on accrual basis as per terms of contract.

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 or cash generating unit exceeds its recoverable amount.

FINANcE lEASES

In respect of assets acquired on or after 1st April, 2001, the same are capitalised at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term. Lease payments are apportioned between the interest charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. interest component is charged to the profit and Loss Account under interest and Finance charges.

INVESTMENTS

Investments held by the Company which are long term in nature are stated at cost unless there is any permanent diminution in value where provision for diminution is made on individual investment basis. Current investments are valued at cost or market price or fair value, whichever is lower. earnings on investments are accounted for on accrual basis.

INVENTORIES

Inventories are valued at cost which is based on First-in-First-out method or net realisable value, whichever is lower. unserviceable/ damaged/discarded stocks and shortages are charged to the profit and Loss Account.

TRANSACTIONS IN FOREIGN CURRENCY

sales made in foreign currency are converted at the prevailing applicable exchange rate. Gain/Loss arising out of fluctuations in exchange rate is accounted for on realisation.

payments made in foreign currency including for acquiring investments are converted at the applicable rate prevailing on the date of remittance. Liability on account of foreign currency is converted at the exchange rate prevailing at the end of the year. Monetary items denominated in foreign currency are converted at the exchange rate prevailing at the end of the year.

Revenue expenditure of all the overseas sales offices are converted at the average exchange rate for the year. Assets and Liabilities other than Fixed Assets are converted at the exchange rate prevailing at the close of the accounting year and Fixed Assets are converted at the month-end exchange rate of the month of acquisition.

Foreign currency loans covered by forward contracts are realigned at the forward contract rates, while those not covered by forward contracts are realigned at the rates ruling at the year end. the differences on realignment are accounted for in the profit and Loss Account.

EMPLOYEE BENEFITS

short term employee Beneft is recognised as an expense in the profit and Loss Account of the year in which related service is rendered. post employment and other Long term employee Benefits are provided for in the Accounts in the following manner : (i) Gratuity - Maintained as a defined benefit retirement plan and contribution is made to the Life insurance Corporation of india, as per Companys scheme. provision/write back, if any, is made on the basis of the present value of the liability as at the Balance sheet date determined by actuarial valuation following projected unit Credit Method and is treated as liability.

(ii) Leave encashment on termination of service - As per actuarial valuation as at the Balance sheet date following projected unit Credit Method.

(iii) provident Fund : provident Fund for most of the employees is a defined Contribution scheme, where the contribution is made to a Fund administered by the Government provident Fund Authority.

For a few employees, provident Fund, administered by a recognised trust, is a defined Benefit plan wherein the employee and the Company make monthly contributions. pending the issuance of Guidance Note from the Actuarial society of india, actuarial valuation is not carried out and the Company provides for required liability at year end, in respect of the shortfall, if any, upon confirmation from the trustees of such Fund.

BORROWING COST

Borrowing cost that is attributable to the acquisition/construction of fixed assets are capitalised as part of the cost of the respective assets. other borrowing costs are recognised as expenses in the year in which they arise.

SHARE ISSUE EXPENSES

share issue expenses are charged to the profit and Loss Account.

TAXES ON INCOME

Income-tax is accounted for in accordance with Accounting standard on ‘Accounting for taxes on income notified pursuant to the Companies (Accounting standards) rules, 2006.

Deferred tax is provided and recognised on timing differences between taxable income and accounting income subject to prudential considerations. deferred tax assets on unabsorbed depreciation and carry forward of losses are not recognised unless there is virtual certainty about availability of future taxable income to realise such assets.

PROPOSED DIVIDEND

Dividend recommended by the Board of directors is provided for in the Accounts pending shareholders approval.

PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions are recognised when there is a present legal or statutory obligation as a result of past events and where it is probable that there will be outfow 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 measured in terms of future outfow of resources or where a reliable estimate of the obligation cannot be made. obligations are assessed on an on going basis and only those having a largely probable outfow of resources are provided for. Contingent Assets are not recognised in the Financial statements.

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