Mar 31, 2023
1 Corporate Information
Mahindra Holidays & Resorts India Limited (''the Company'') was incorporated on September 20, 1996, and is in the business of selling vacation ownership and providing holiday facilities.
2(a) Significant accounting policies
(i) Statement of compliance
The standalone financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) prescribed under section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time.
(ii) Basis of preparation and presentation
The standalone financial statements of the Company have been prepared on the historical cost basis except for certain financial instruments that are measured at fair value at the end of each reporting period, as explained in the accounting policies below.
All amounts have been rounded off to the nearest lakhs, unless stated otherwise.
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/ or disclosure purposes in these standalone financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of Ind AS 102 and measurements that have some similarities to fair value but are not fair value, such as net realizable value in Ind AS 2 or value in use in Ind AS 36.
In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
⢠Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
⢠Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
⢠Level 3 inputs are unobservable inputs for the asset or liability.
The financial statements have been prepared on accrual and going concern basis. The accounting policies are applied consistently to all the periods presented in the financial statements.
The significant accounting policies are set out below.
(iii) Revenue recognition
a. Revenue from sale of vacation ownership
The Company''s business is to sell vacation ownership and provide holiday facilities to members for a specified period each year, over a number of years, for which membership fee is collected either in full upfront, or on a deferred payment basis.
Revenue towards satisfaction of a performance obligation is measured at the amount of transaction price allocated to that performance obligation.
Revenue from Membership fees
The Company recognises the membership fees over the tenure of membership as the performance obligation is fulfilled over the tenure of membership (33 years / 25 years / 10 years or any other tenure applicable to the respective member). The Company will recognise revenue on a straight line basis over the tenure of membership after considering the expected customer unexercised rights from date of admission of each member. The revenue which will be recognised in future periods are disclosed under other liabilities - contract liability - deferred revenue-vacation ownership. Revenue from consumer offers and other benefits provided on membership are recognized as and when such benefits are provided to members at its respective fair value.
Discounts and other incentives provided to the customer''s are reduced from the overall contract value.
Deferred acquisition cost
Incremental costs of acquisition of the members are deferred over the period of effective membership in line with revenue deferral. Incremental costs are those that would not have been incurred if the contract was not obtained. Such cost which will be amortised in the future period are disclosed under deferred acquisition cost.
Revenue from annual subscription fees
Annual subscription fee dues from members are recognized as income on accrual basis and fees pertaining to the period beyond the date of the Balance Sheet is grouped under Other liabilities -Deferred revenue - Annual subscription fee.
Interest income on deferred payment plans
Interest revenue is recognised only to the extent that a contract asset (or receivable) or a contract liability is recognised in accounting for a contract with the customer. Also refer accounting policy for financial instruments (note no xv).
Revenue is recognized only when it is probable that the economic benefits associated with the transaction will flow to the Company. Revenue with respect to instalments/contracts where there is an uncertainty about collectability, is deferred (even though the membership is not cancelled). The estimation of such revenues where there is uncertainity in collection has been made by the Company based on past trends of year-wise cancellation of memberships and considering factors impacting future collections.
b. Income from resorts include income from room rentals, food and beverages, etc. and is recognized when services are rendered.
(iv) Leases
The Company''s lease asset classes primarily consist of leases for land and buildings. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.
At the date of commencement of the lease, the Company recognizes a right-of-use asset (âROU") and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short-term and low value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.
The right-of-use assets are initially recognized at cost, which comprises the present value of future lease liability. They are subsequently measured at cost less accumulated depreciation and impairment losses. Right-of-use assets are depreciated from the commencement date on a straight-line basis over the period of lease term. Right of use assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable.
The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using
the incremental borrowing rates in the country of domicile of these leases.
The Company has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low-value assets. The Company recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
(v) Foreign currencies
The standalone financial statements of the Company are presented in Indian Rupees (INR), which is the Company''s functional currency. In preparing the standalone financial statements of the Company, transactions in currencies other than the Company''s functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are translated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not translated.
(vi) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.
All other borrowing costs are recognized in the statement of profit or loss in the period in which they are incurred.
(vii) Employee benefits
Employee benefits include provident fund, superannuation fund, employee state insurance scheme, gratuity fund and compensated absences.
Defined contribution plans
The Company''s contribution to provident fund, superannuation fund and employee state insurance scheme are considered as defined contribution plans and are recognized as an expense when employees have rendered service entitling them to the contributions.
Defined benefit plans
For defined benefit plans in the form of gratuity fund, the cost of providing benefits is determined using the
projected unit credit method, with actuarial valuations being carried out by an independent actuary at the end of each reporting period. Defined benefit costs are categorised as follows:
⢠Service cost (including current service cost, past service cost, as well as gains and losses on curtailments; settlements);
⢠Net interest expense or income; and
⢠Re-measurement
The Company presents the first two components of defined benefit costs in the statement of profit and loss in the line item ''Employee benefits expense''. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Re-measurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding net interest), is reflected immediately in the balance sheet with a charge or credit recognized in other comprehensive income in the period in which they occur. Re-measurement recognized in other comprehensive income is reflected immediately in retained earnings and is not reclassified to profit or loss. Curtailment gains and losses are accounted for as past service costs. Past service cost is recognized in profit or loss in the period of a plan amendment.
The obligation recognized in the balance sheet represents the actual deficit or surplus in the Company''s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.
Short-term and other long-term employee benefits
A liability is recognized for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.
Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.
Liabilities recognized in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflow expected to be made by the Company in respect of services provided by employees upto the reporting date.
(viii) Share based payment arrangements
Equity-settled share based payments to employees are measured at the fair value of the equity instruments at the grant date.
Details regarding the determination of the fair value of equity-settled share-based transactions are set out in Note 24.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Company''s estimate of equity instruments that will eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Company revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognized in the statement of profit and loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to share options outstanding account in Reserves & Surplus.
(ix) Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from ''profit before tax'' as reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company''s current tax is calculated using tax rates that have been enacted by the end of the reporting period.
Deferred tax
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the standalone financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such deferred tax assets and liabilities are not recognized if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognized if the temporary difference arises from the initial recognition of goodwill.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred taxes are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realized, based on the tax rates and the tax laws enacted or substantively enacted as at the reporting date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period,
to recover or settle the carrying amount of its assets and liabilities.
Current and deferred tax are recognized in the statement of profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively.
(x) Property, plant and equipment (PPE)
Buildings held for use in the supply or production of goods or services, or for administrative purposes, are stated in the balance sheet at cost less accumulated depreciation and accumulated impairment losses.
Freehold land is valued at Fair value based on valuations by external independent valuers at sufficient regularity between 3-5 years.
Any revaluation surplus is recognised in other comprehensive income and accumulated in equity under revaluation reserve, except to the extent that it reverses a revaluation decrease of the same asset previously recognised in the statement of profit and loss, in which case the increase is recognised in profit or loss. A revaluation deficit is recognised in the statement of profit and loss, except to the extent that it offsets an existing surplus on the same asset carried in the revaluation reserve.
Furniture and fixtures and office equipment are stated at cost less accumulated depreciation and accumulated impairment losses.
Plant and Equipment in the course of construction for supply, production or administrative purposes are carried at cost, less any recognized impairment loss. Cost includes professional fees, other directly attributable expenses and, for qualifying assets, borrowing costs capitalized in accordance with the Company''s accounting policy. Such properties are classified to the appropriate categories of property, plant and equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.
Category of Asset |
Estimated useful lives |
Leasehold Building |
Period of lease |
Buildings (other than those mentioned below) |
30 - 60 years |
Floating cottages (grouped under buildings) |
25 years |
Plant & equipment |
5 - 15 years |
Furniture and Fixtures (other than those mentioned below) |
5 - 10 years |
Furniture and Fixtures (in Club Mahindra Holiday World) |
3 years |
Vehicles (other than those mentioned below) |
8 years |
Motor vehicles/other assets provided to employees |
4 - 5 years |
Office equipment |
5 years |
Depreciation is recognized so as to write off the cost of assets (other than freehold land and properties under construction) less their residual values over their useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
Items of property, plant and equipment are derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in the statement of profit and loss.
(xi) Intangible assets
Intangible assets with finite useful lives are carried at cost less accumulated amortisation and accumulated impairment losses. Amortization is recognized on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.
Category of Asset |
Estimated useful lives |
Computer software and website development cost |
3 years |
An intangible asset is derecognized on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognized in statement of profit and loss when the asset is derecognized.
(xii) Impairment of tangible and intangible assets
At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates
the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cashgenerating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cashgenerating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cashgenerating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in statement of profit and loss.
When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in statement of profit and loss.
(xiii) Inventories
Inventories are carried at the lower of cost and net realizable value. Costs of inventories are determined on moving weighted average basis. Cost includes the purchase price, non-refundable taxes and delivery handling cost. Net realizable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale.
(xiv) Provisions
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
(xv) Financial instruments
Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in statement of profit and loss.
All financial assets are recognized initially at fair value, plus in the case of financial assets not recorded at fair value through the statement of profit or loss (FVTPL), transaction costs that are attributable to the acquisition of the financial asset. However, trade receivables that do not contain a significant financing component are measured at transaction price.
Interest income from other financial assets is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset''s net carrying amount on initial recognition.
Dividend income from investments is recognized when the shareholder''s right to receive payment has been established, provided that it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably.
Effective interest method
The effective interest method is a method of calculating the amortized cost of a financial instrument and of allocating interest over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts/payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.
A financial asset is any asset that is:
(a) cash;
(b) an equity instrument of another entity;
(c) a contractual right:
(i) to receive cash or another financial asset from another entity; or
(ii) to exchange financial assets or financial liabilities with another entity under conditions that are potentially favorable to the Company; or
(d) a contract that will or may be settled in the Company''s own equity instruments and is:
(i) a non-derivative for which the Company is or may be obliged to receive a variable number of the entity''s own equity instruments; or
(ii) a derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the Company''s own equity instruments.
All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.
All recognized financial assets are subsequently measured in their entirety at either amortized cost or fair value, depending on the classification of the financial assets.
Classification of financial assets Debt
Debt instruments that meet the following conditions are subsequently measured at amortised cost (except for debt instruments that are designated as at âfair value through profit or loss (FVTPL)" on initial recognition):
the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and
the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Debt instruments (except for debt instruments that are designated as at FVTPL on initial recognition) that meet the following conditions are subsequently measured at âfair value through other comprehensive income (FVTOCI)":
the asset is held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets; and
the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Income is recognized on an effective interest basis for debt instruments other than those financial assets classified as at FVTPL.
Interest income is recognized in profit or loss for FVTOCI debt instruments. For the purposes of recognising foreign exchange gains and losses, FVTOCI debt instruments are treated as financial assets measured at amortised cost. Thus, the exchange differences on the amortized cost are recognized in the statement of profit and loss and other changes in the fair value of FVTOCI financial assets are recognized in other comprehensive income and accumulated under the heading of ''Reserve for debt instruments through other comprehensive income''. When the investment is disposed of, the cumulative gain or loss previously accumulated in this reserve is reclassified to the statement of profit and loss.
A debt instrument that meets the amortised cost criteria or the FVTOCI criteria may be designated as at FVTPL upon initial recognition if such designation eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets or liabilities or recognising the gains and losses on them on different bases.
Debt instruments classified as FVTPL are measured at fair value at the end of each reporting period, with any gains or losses arising on re-measurement recognized in profit or loss. The Company has not designated any debt instrument as at FVTPL.
Equity
Investments in equity instruments are classified as at FVTPL, unless the Company irrevocably elects on initial recognition to present subsequent changes in fair value in other comprehensive income for investments in equity instruments which are not held for trading.
Equity instruments at FVTPL are measured at fair value at the end of each reporting period, with any gains or losses arising on re-measurement recognized in profit and loss. The net gain or loss recognized in profit and loss incorporates any dividend earned on the financial asset and is included under ''Other income''. Dividend on financial assets at FVTPL is recognized when the Company''s right to receive the dividends is established and the dividend does not represent a recovery of part of cost of the investment and the amount of dividend can be measured reliably.
Investments in equity instruments of subsidiaries, joint ventures and associates are measured at cost.
Impairment of financial assets
The Company applies the expected credit loss model for recognising impairment loss on financial assets
measured at amortised cost, trade receivables, and other contractual rights to receive cash or other financial asset not designated as at FVTPL.
Expected credit losses are the weighted average of credit losses with the respective risks of default occurring as the weights. Credit loss is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the Company expects to receive (i.e. all cash shortfalls). The Company estimates cash flows by considering all contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) through the expected life of that financial instrument.
The Company measures the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses considering the nature of industry and the deferred payment schemes operated.
When making the assessment of whether there has been a significant increase in credit risk since initial recognition, the Company uses the change in the risk of a default occurring over the expected life of the financial instrument instead of the change in the amount of expected credit losses. To make that assessment, the Company compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition and considers reasonable and supportable information, that is available without undue cost or effort, that is indicative of significant increases in credit risk since initial recognition.
For trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 115, the Company always measures the loss allowance at an amount equal to lifetime expected credit losses.
Further, for the purpose of measuring lifetime expected credit loss allowance for trade receivables, the Company has used a practical expedient as permitted under Ind AS 109. This expected credit loss allowance is computed based on a provision matrix which takes into account historical credit loss experience and adjusted for forward-looking information.
Derecognition of financial assets
The Company derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Company retains
substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognise the financial asset and also recognizes a collateralized borrowing for the proceeds received.
On derecognition of a financial asset in its entirety, the difference between the asset''s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income and accumulated in equity is recognized in profit or loss if such gain or loss would have otherwise been recognized in the statement of profit and loss on disposal of that financial asset.
On derecognition of a financial asset other than in its entirety (e.g. when the Company retains an option to repurchase part of a transferred asset), the Company allocates the previous carrying amount of the financial asset between the part it continues to recognise under continuing involvement, and the part it no longer recognises on the basis of the relative fair values of those parts on the date of the transfer. The difference between the carrying amount allocated to the part that is no longer recognized and the sum of the consideration received for the part no longer recognized and any cumulative gain or loss allocated to it that had been recognized in other comprehensive income is recognized in profit or loss if such gain or loss would have otherwise been recognized in profit or loss on disposal of that financial asset. A cumulative gain or loss that had been recognized in other comprehensive income is allocated between the part that continues to be recognized and the part that is no longer recognized on the basis of the relative fair values of those parts.
Foreign exchange gains and losses on financial assets
The fair value of financial assets denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of each reporting period.
For foreign currency denominated financial assets measured at amortised cost and FVTPL, the exchange differences are recognized in statement of profit and loss.
Changes in the carrying amount of investments in equity instruments at FVTOCI relating to changes in foreign currency rates are recognized in other comprehensive income.
For the purposes of recognising foreign exchange gains and losses, FVTOCI debt instruments are treated as financial assets measured at amortised cost. Thus, the exchange differences on the amortized cost are recognized in the statement of profit and loss and other changes in the fair value of FVTOCI financial assets are recognized in other comprehensive income.
(xvii) Financial liabilities and equity instruments Classification as debt or equity
Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognized at the proceeds received, net of direct issue costs.
Repurchase of the Company''s own equity instruments is recognized and deducted directly in equity. No gain or loss is recognized in profit or loss on the purchase, sale, issue or cancellation of the Company''s own equity instruments.
Financial liabilities
A financial liability is any liability that is:
(a) a contractual obligation :
(i) to deliver cash or another financial asset to another entity; or
(ii) to exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavorable to the Company; or
(b) a contract that will or may be settled in the
Company''s own equity instruments and is:
(i) a non-derivative for which the Company is or may be obliged to deliver a variable number of the Company''s own equity instruments; or
(ii) a derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the Company''s own equity instruments. For this purpose, rights, options or warrants to acquire a fixed number of the entity''s own equity instruments for a fixed amount of any currency are equity instruments if the Company offers the rights, options or warrants pro rata to all of its existing owners of the same class of its own non-derivative equity instruments. Apart from the aforesaid, the equity conversion option embedded in a convertible bond denominated in foreign currency to acquire a fixed number of the Company''s own equity instruments is an equity instrument if the exercise price is fixed in any currency.
All financial liabilities are subsequently measured at amortised cost using the effective interest method or at FVTPL.
However, financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing involvement approach applies, financial guarantee contracts issued by the Company, and commitments issued by the Company to provide a loan at below-market interest rate are measured in accordance with the specific accounting policies set out below.
Financial liabilities at FVTPL
Financial liabilities are classified as at FVTPL when the financial liability is either contingent consideration recognized by the Company as an acquirer in a business combination to which Ind AS 103 applies or is held for trading or it is designated as at FVTPL.
A financial liability is classified as held for trading if:
a) it has been incurred principally for the purpose of repurchasing it in the near term; or
b) on initial recognition it is part of a portfolio of identified financial instruments that the Company manages together and has a recent actual pattern of short-term profit-taking; or
c) it is a derivative that is not designated and effective as a hedging instrument.
A financial liability other than a financial liability held for trading or contingent consideration recognized by the Company as an acquirer in a business combination to which Ind AS 103 applies, may be designated as at FVTPL upon initial recognition if:
a) such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise;
b) the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Company''s documented risk management or investment strategy, and information about the Company is provided internally on that basis; or
c) it forms part of a contract containing one or more embedded derivatives, and Ind AS 109 permits the entire combined contract to be designated as at FVTPL in accordance with Ind AS 109.
Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on re-measurement recognized in profit and loss. The net gain or loss recognized in profit and loss incorporates any interest paid on the financial liability and is included in the ''Other income'' / ''Other expenses'' line item as appropriate.
Gains or losses on financial guarantee contracts and loan commitments issued by the Company that are designated by the Company as at fair value through profit or loss are recognized in the statement of profit and loss.
Financial liabilities subsequently measured at amortised cost
Financial liabilities that are not held-for-trading and are not designated as at FVTPL are measured at amortised cost at the end of subsequent accounting periods. The carrying amounts of financial liabilities that are subsequently measured at amortised cost are determined based on the effective interest method. Interest expense that is not capitalized as part of costs of an asset is included under ''Finance costs''.
Financial guarantee contracts
A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of a debt instrument.
Financial guarantee contracts issued by the Company are initially measured at their fair values and, if not designated as at FVTPL, are subsequently measured at the higher of:
- the amount of loss allowance determined in accordance with impairment requirements of Ind AS 109; and
- the amount initially recognized less, when appropriate, the cumulative amount of income recognized.
Foreign exchange gains and losses on financial liabilities
For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains are determined based on the amortised cost of the instruments and are recognized in âOther income" and losses are recognised in âFinance Cost" to the extent it is related to borrowings.
The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. For financial liabilities that are measured as at FVTPL, the foreign exchange component forms part of the fair value gains or losses and is recognized in statement of profit and loss.
Derecognition of financial liabilities
The Company derecognizes financial liabilities when, and only when, the Company''s obligations are discharged, cancelled or have expired. An exchange with a lender of debt instruments with substantially different terms is accounted for as an
extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability (whether or not attributable to the financial difficulty of the debtor) is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in statement of profit and loss.
(xviii) Cash flow statements
Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.
Cash flows from operating activities are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of noncash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flow from operating, investing and financing activities of the Company are segregated based on the available information.
(xix) Earnings per share
Basic earnings per share is computed by dividing the profit after tax by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate.
(xx) Insurance Claims
Insurance claims are accounted for on the basis of claims admitted / expected to be admitted and to the extent that the amount recoverable can be measured reliably and it is reasonable to expect ultimate collection.
Based on the nature of services / activities of the Company and the normal time between acquisition of assets and their realization in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.
2(b)Critical accounting judgements and key sources of estimation uncertainty
In the application of the Company''s accounting policies, which are described above, the management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only the period of the revision and future periods if the revision affects both current and future periods.
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below :
a. Share based payments
The entity initially measures the cost of equity settled transactions with employees using the Black Scholes model to determine the fair value of the options granted. Estimating the fair value of the share options granted require determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. The assumptions and models used for estimating the fair value for the share based payment transactions are disclosed in Note 24.
b. Defined benefit plans (gratuity)
The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities
involved in the valuation and its long term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. Further details about the gratuity obligation are disclosed in Note 44.
c. Intangible assets under development
The Company capitalizes intangibles under development in accordance with the accounting policy. Initial capitalization of costs is based on management''s judgement that technological and economic feasibility is confirmed.
d. Estimation towards revenue deferred due to uncertainity of collection
The quantum of revenue deferred due to uncertainity of collection is computed based on past trends of year-wise cancellation of memberships and considering factors impacting future collections.
e. Significant financing component
Given the nature of vacation ownership business, the Company has determined that membership fee does not include a significant financing component. Where the payment is received in installments, the Company charges appropriate interest to the members.
f. Customer unexercised rights
The Company considers the expected customers unexercised rights, while determining the effective membership period over which the membership fee needs to be recognised. This customer unexercised right is computed based on past trend of utilisation of membership by the customer.
g. Litigation for taxation matters
The Company is subject to tax litigation, the outcome of which is subject to many uncertainities inherent in litigation such as interpretation of legislation, outcome of appeals etc. Litigation provisions are reviewed at each accounting period and revisions made for the change in facts and circumstances.
h. Fair valuation of Freehold land
Freehold land is measured at Fair value based on valuations by external independent valuers using the market approach at sufficient regularity between 3-5 years.
i. Leases
The Company makes an assessment on the expected lease term on a lease-by-lease basis as per the contract period. Further, discount rate is based on the incremental borrowing rate of the Company at the time of commencement of lease.
3 Recent pronouncements:
Ministry of Corporate Affairs (âMCA") notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On March 31, 2023, MCA amended the Companies (Indian Accounting Standards) Rules, 2015 by issuing the Companies (Indian Accounting Standards) Amendment Rules, 2023, applicable from April 1, 2023, as below:
(i) Ind AS 1 - Presentation of Financial Statements
The amendments require companies to disclose their material accounting policies rather than their significant accounting policies. Accounting policy information, together with other information, is material when it can reasonably be expected to influence decisions of primary users of general purpose financial statements. The Group does not expect this amendment to have any significant impact in its financial statements.
(ii) IND AS 12 - Income Taxes
The amendments clarify how companies account for deferred tax on transactions such as leases and decommissioning obligations. The amendments
narrowed the scope of the recognition exemption in paragraphs 15 and 24 of Ind AS 12 (recognition exemption) so that it no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences. The Group is evaluating the impact, if any, in its financial statements.
(iii) Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors
The amendments will help entities to distinguish between accounting policies and accounting estimates. The definition of a change in accounting estimates has been replaced with a definition of accounting estimates. Under the new definition, accounting estimates are âmonetary amounts in financial statements that are subject to measurement uncertainty". Entities develop accounting estimates if accounting policies require items in financial statements to be measured in a way that involves measurement uncertainty. The Group does not expect this amendment to have any significant impact in its financial statements.
Mar 31, 2022
1 Corporate Information
The Company was incorporated on September 20, 1996, and is in the business of selling vacation ownership and providing holiday facilities.
2(a) Significant accounting policies
(i) Statement of compliance
The standalone financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) prescribed under section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time.
(ii) Basis of preparation and presentation
The financial statements of the Company have been prepared on the historical cost basis except for certain financial instruments that are measured at fair value at the end of each reporting period, as explained in the accounting policies below.
All amounts have been rounded off to the nearest lakhs, unless stated otherwise.
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/ or disclosure purposes in these financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of Ind AS 102 and measurements that have some similarities to fair value but are not fair value, such as net realizable value in Ind AS 2 or value in use in Ind AS 36.
In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
⢠Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
⢠Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
⢠Level 3 inputs are unobservable inputs for the asset or liability.
The principal accounting policies are set out below.
(iii) Revenue recognition
a. Revenue from sale of Vacation Ownership
The Company''s business is to sell vacation ownership and provide holiday facilities to members for a specified period each year, over a number of years, for which membership fee is collected either in full upfront, or on a deferred payment basis.
Revenue from Membership fees
The Company recognises the membership fees over the tenure of membership as the performance obligation is fulfilled over the tenure of membership (33 years / 25 years / 10 years or any other tenure applicable to the respective member). The Company will recognise revenue on a straight line basis over the tenure of membership after considering the expected customer unexercised rights from date of admission of each member. The revenue which will be recognised in future periods are disclosed under other liabilities - contract liability - deferred revenue-vacation ownership. Revenue from consumer offers and other benefits provided on membership are recognized as and when such benefits are provided to members at its respective fair value.
Discounts and other incentives provided to the customer''s are reduced from the overall contract value. Incremental costs of acquisition of the members are deferred over the period of effective membership in line with revenue deferral. Incremental costs are those that would not have been incurred if the contract was not obtained. Such cost which will be amortised in the future period are disclosed under deferred acquisition cost.
Revenue from Annual subscription fees
Annual subscription fee dues from members are recognized as income on accrual basis and fees pertaining to the period beyond the date of the Balance Sheet is grouped under Other liabilities -Deferred revenue - Annual subscription fee.
Interest income on deferred payment plans
Interest revenue is recognised only to the extent that a contract asset (or receivable) or a contract liability is recognised in accounting for a contract with the customer. Also refer accounting policy for financial instruments (note no. xv).
Revenue is recognized only when it is probable that the economic benefits associated with the transaction will flow to the Company. Revenue with respect to instalments/contracts where
there is an uncertainty about collectability, is deferred (even though the membership is not cancelled). The estimation of such revenues where there is uncertainity in collection has been made by the Company based on past trends of year-wise cancellation of memberships and considering factors impacting future collections.
b. Income from resorts include income from room rentals, food and beverages, etc. and is recognized when services are rendered.
(iv) Leases
The Company''s lease asset classes primarily consist of leases for land and buildings. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.
At the date of commencement of the lease, the Company recognizes a right-of-use asset (âROU") and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short-term and low value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.
The right-of-use assets are initially recognized at cost, which comprises the present value of future lease liability. They are subsequently measured at cost less accumulated depreciation and impairment losses. Right-of-use assets are depreciated from the commencement date on a straight-line basis over the period of lease term. Right of use assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable.
The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the incremental borrowing rates in the country of domicile of these leases.
(v) Foreign currencies
The financial statements of the Company are presented in Indian Rupees (''), which is the Company''s functional currency. In preparing the financial statements of the Company, transactions in currencies other than the Company''s functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period,
monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Under previous GAAP, paragraph 46A of AS 11, The Effects of Changes in Foreign Exchange Rates, provided an accounting treatment to Companies with respect to exchange differences arising on restatement of long-term foreign currency monetary items. Exchange differences in respect of items other than those related to acquisition of depreciable assets, could be accumulated in a foreign currency monetary item translation difference account (''FCMITDR''), and amortised over the balance period of such long term monetary item. Ind AS provides an option to Company to continue the above accounting treatment in respect of long term foreign currency items recognised in the financial statements for the period ending immediately before the beginning of the first Ind As reporting period. The Company has elected this option.
(vi) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.
All other borrowing costs are recognized in the statement of profit or loss in the period in which they are incurred.
(vii) Employee benefits
Employee benefits include provident fund, superannuation fund, employee state insurance scheme, gratuity fund and compensated absences.
Defined contribution plans
The Company''s contribution to provident fund, superannuation fund and employee state insurance scheme are considered as defined contribution plans and are recognized as an expense when employees have rendered service entitling them to the contributions.
Defined benefit plans
For defined benefit plans in the form of gratuity fund, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out by an independent actuary at the end of each reporting period. Defined benefit costs
are categorised as follows:
⢠Service cost (including current service cost, past service cost, as well as gains and losses on curtailments; settlements);
⢠Net interest expense or income; and
⢠Re-measurement
The Company presents the first two components of defined benefit costs in profit or loss in the line item ''Employee benefits expense''. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Re-measurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding net interest), is reflected immediately in the balance sheet with a charge or credit recognized in other comprehensive income in the period in which they occur. Re-measurement recognized in other comprehensive income is reflected immediately in retained earnings and is not reclassified to profit or loss. Curtailment gains and losses are accounted for as past service costs. Past service cost is recognized in profit or loss in the period of a plan amendment.
The obligation recognized in the balance sheet represents the actual deficit or surplus in the Company''s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.
Short-term and other long-term employee benefits
A liability is recognized for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.
Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.
Liabilities recognized in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflow expected to be made by the Company in respect of services provided by employees upto the reporting date.
(viii) Share based payment arrangements
Equity-settled share based payments to employees are measured at the fair value of the equity instruments at the grant date.
Details regarding the determination of the fair value of equity-settled share-based transactions are set out in Note 23.
The fair value determined at the grant date of the equity-settled share based payments is expensed on a straight-line basis over the vesting period, based on the Company''s estimate of equity instruments that will eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Company revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognized in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to Share options outstanding account in Reserves & Surplus.
(ix) Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from ''profit before tax'' as reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The company''s current tax is calculated using tax rates that have been enacted by the end of the reporting period.
Deferred tax
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such deferred tax assets and liabilities are not recognized if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognized if the temporary difference arises from the initial recognition of goodwill.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred taxes are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realized, based on the tax rates and the tax laws enacted or substantively enacted as at the reporting date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively.
(x) Property, plant and equipment (PPE)
Buildings held for use in the supply or production of goods or services, or for administrative purposes, are stated in the balance sheet at cost less accumulated depreciation and accumulated impairment losses.
Freehold land is valued at Fair value based on valuations by external independent valuers at sufficient regularity.
Any revaluation surplus is recognised in other comprehensive income and accumulated in equity under revaluation reserve, except to the extent that it reverses a revaluation decrease of the same asset previously recognised in profit or loss, in which case the increase is recognised in profit or loss. A revaluation deficit is recognised in profit or loss, except to the extent that it offsets an existing surplus on the same asset carried in the revaluation reserve.
Fixtures and equipment are stated at cost less accumulated depreciation and accumulated impairment losses.
PPE in the course of construction for supply, production or administrative purposes are carried at cost, less any recognized impairment loss. Cost includes professional fees, other directly attributable expenses and, for qualifying assets, borrowing costs capitalized in accordance with the Company''s accounting policy. Such properties are classified to the appropriate categories of property, plant and equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.
Category of Asset |
Estimated useful lives |
Leasehold Building |
Period of lease |
Buildings (other than those mentioned below) |
30 - 60 years |
Floating cottages (grouped under buildings) |
25 years |
Plant & equipment |
5 - 15 years |
Furniture and Fixtures (other than those mentioned below) |
5 - 10 years |
Furniture and Fixtures (in Club Mahindra Holiday World) |
3 years |
Vehicles (other than those mentioned below) |
8 years |
Motor vehicles/other assets provided to employees |
4/5 years |
Office equipment |
5 years |
Depreciation is recognized so as to write off the cost of assets (other than freehold land and properties under construction) less their residual values over their useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in the statement of profit and loss.
(xi) Intangible assets
Intangible assets with finite useful lives are carried at cost less accumulated amortisation and accumulated impairment losses. Amortization is recognized on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.
Category of Asset |
Estimated useful lives |
Computer Software and website development cost |
3 years |
An intangible asset is derecognized on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognized in statement of profit and loss when the asset is derecognized.
(xii) Impairment of tangible and intangible assets
At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-
generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cashgenerating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cashgenerating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in statement of profit and loss.
When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in statement of profit and loss.
(xiii) Inventories
Inventories are carried at the lower of cost and net realizable value. Costs of inventories are determined on moving weighted average basis. Cost includes the purchase price, non-refundable taxes and delivery handling cost. Net realizable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale.
(xiv) Provisions
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
(xv) Financial instruments
Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in statement of profit and loss.
Interest income from other financial assets is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset''s net carrying amount on initial recognition.
Dividend income from investments is recognized when the shareholder''s right to receive payment has been established, provided that it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably.
Effective interest method
The effective interest method is a method of calculating the amortized cost of a financial instrument and of allocating interest over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts/payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.
(xvi) Financial assets
A financial asset is any asset that is:
(a) cash;
(b) an equity instrument of another entity;
(c) a contractual right:
(i) to receive cash or another financial asset from another entity; or
(ii) to exchange financial assets or financial liabilities with another entity under conditions that are potentially favorable to the Company; or
(d) a contract that will or may be settled in the
Company''s own equity instruments and is:
(i) a non-derivative for which the Company is or may be obliged to receive a variable number of the entity''s own equity instruments; or
(ii) a derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the Company''s own equity instruments.
All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.
All recognized financial assets are subsequently measured in their entirety at either amortized cost or fair value, depending on the classification of the financial assets.
Classification of financial assets Debt
Debt instruments that meet the following conditions are subsequently measured at amortised cost (except for debt instruments that are designated as at âfair value through profit or loss (FVTPL)" on initial recognition):
the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and
the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Debt instruments (except for debt instruments that are designated as at FVTPL on initial recognition) that meet the following conditions are subsequently measured at âfair value through other comprehensive income (FVTOCI)":
the asset is held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets; and
the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Income is recognized on an effective interest basis for debt instruments other than those financial assets classified as at FVTPL.
Interest income is recognized in profit or loss for FVTOCI debt instruments. For the purposes of recognising foreign exchange gains and losses, FVTOCI debt instruments are treated as financial assets measured at amortised cost. Thus, the exchange differences on the amortized cost are
recognized in profit or loss and other changes in the fair value of FVTOCI financial assets are recognized in other comprehensive income and accumulated under the heading of ''Reserve for debt instruments through other comprehensive income''. When the investment is disposed of, the cumulative gain or loss previously accumulated in this reserve is reclassified to profit or loss.
A debt instrument that meets the amortised cost criteria or the FVTOCI criteria may be designated as at FVTPL upon initial recognition if such designation eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets or liabilities or recognising the gains and losses on them on different bases.
Debt instruments classified as FVTPL are measured at fair value at the end of each reporting period, with any gains or losses arising on re-measurement recognized in profit or loss. The Company has not designated any debt instrument as at FVTPL.
Equity
Investments in equity instruments are classified as at FVTPL, unless the Company irrevocably elects on initial recognition to present subsequent changes in fair value in other comprehensive income for investments in equity instruments which are not held for trading.
Equity instruments at FVTPL are measured at fair value at the end of each reporting period, with any gains or losses arising on re-measurement recognized in profit or loss. The net gain or loss recognized in profit or loss incorporates any dividend earned on the financial asset and is included under ''Other income''. Dividend on financial assets at FVTPL is recognized when the Company''s right to receive the dividends is established and the dividend does not represent a recovery of part of cost of the investment and the amount of dividend can be measured reliably.
Investments in equity instruments of subsidiaries, joint ventures and associates are measured at cost.
Impairment of financial assets
The Company applies the expected credit loss model for recognising impairment loss on financial assets measured at amortised cost, trade receivables, and other contractual rights to receive cash or other financial asset not designated as at FVTPL.
Expected credit losses are the weighted average of credit losses with the respective risks of default occurring as the weights. Credit loss is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the Company expects to receive (i.e. all cash shortfalls). The Company estimates cash flows by considering all contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) through the expected life of that financial instrument.
The Company measures the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses considering the nature of industry and the deferred payment schemes operated.
When making the assessment of whether there has been a significant increase in credit risk since initial recognition, the Company uses the change in the risk of a default occurring over the expected life of the financial instrument instead of the change in the amount of expected credit losses. To make that assessment, the Company compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition and considers reasonable and supportable information, that is available without undue cost or effort, that is indicative of significant increases in credit risk since initial recognition.
For trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 115, the Company always measures the loss allowance at an amount equal to lifetime expected credit losses.
Further, for the purpose of measuring lifetime expected credit loss allowance for trade receivables, the Company has used a practical expedient as permitted under Ind AS 109. This expected credit loss allowance is computed based on a provision matrix which takes into account historical credit loss experience and adjusted for forward-looking information.
Derecognition of financial assets
The Company derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognise the financial asset and also recognizes a collateralized borrowing for the proceeds received.
On derecognition of a financial asset in its entirety, the difference between the asset''s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income and accumulated in equity is recognized in profit or loss if such gain or loss would have otherwise been recognized in profit or loss on disposal of that financial asset.
On derecognition of a financial asset other than
in its entirety (e.g. when the Company retains an option to repurchase part of a transferred asset), the Company allocates the previous carrying amount of the financial asset between the part it continues to recognise under continuing involvement, and the part it no longer recognises on the basis of the relative fair values of those parts on the date of the transfer. The difference between the carrying amount allocated to the part that is no longer recognized and the sum of the consideration received for the part no longer recognized and any cumulative gain or loss allocated to it that had been recognized in other comprehensive income is recognized in profit or loss if such gain or loss would have otherwise been recognized in profit or loss on disposal of that financial asset. A cumulative gain or loss that had been recognized in other comprehensive income is allocated between the part that continues to be recognized and the part that is no longer recognized on the basis of the relative fair values of those parts.
Foreign exchange gains and losses on financial assets
The fair value of financial assets denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of each reporting period.
For foreign currency denominated financial assets measured at amortised cost and FVTPL, the exchange differences are recognized in profit or loss.
Changes in the carrying amount of investments in equity instruments at FVTOCI relating to changes in foreign currency rates are recognized in other comprehensive income.
For the purposes of recognising foreign exchange gains and losses, FVTOCI debt instruments are treated as financial assets measured at amortised cost. Thus, the exchange differences on the amortized cost are recognized in profit or loss and other changes in the fair value of FVTOCI financial assets are recognized in other comprehensive income.
(xvii) Financial liabilities and equity instruments Classification as debt or equity
Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognized at the proceeds received, net of direct issue costs.
Repurchase of the Company''s own equity instruments is recognized and deducted directly in equity. No gain or loss is recognized in profit or loss
on the purchase, sale, issue or cancellation of the
Company''s own equity instruments.
Financial liabilities
A financial liability is any liability that is:
(a) a contractual obligation :
(i) to deliver cash or another financial asset to another entity; or
(ii) to exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavorable to the Company; or
(b) a contract that will or may be settled in the
Company''s own equity instruments and is:
(i) a non-derivative for which the Company is or may be obliged to deliver a variable number of the Company''s own equity instruments; or
(ii) a derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the Company''s own equity instruments. For this purpose, rights, options or warrants to acquire a fixed number of the entity''s own equity instruments for a fixed amount of any currency are equity instruments if the Company offers the rights, options or warrants pro rata to all of its existing owners of the same class of its own non-derivative equity instruments. Apart from the aforesaid, the equity conversion option embedded in a convertible bond denominated in foreign currency to acquire a fixed number of the Company''s own equity instruments is an equity instrument if the exercise price is fixed in any currency.
All financial liabilities are subsequently measured at amortised cost using the effective interest method or at FVTPL.
However, financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing involvement approach applies, financial guarantee contracts issued by the Company, and commitments issued by the Company to provide a loan at below-market interest rate are measured in accordance with the specific accounting policies set out below.
Financial liabilities at FVTPL
Financial liabilities are classified as at FVTPL when the financial liability is either contingent consideration recognized by the Company as an acquirer in a business combination to which Ind AS 103 applies or is held for trading or it is designated as at FVTPL.
A financial liability is classified as held for trading if:
a) it has been incurred principally for the purpose of repurchasing it in the near term; or
b) on initial recognition it is part of a portfolio of identified financial instruments that the Company manages together and has a recent actual pattern of short-term profit-taking; or
c) it is a derivative that is not designated and effective as a hedging instrument.
A financial liability other than a financial liability held for trading or contingent consideration recognized by the Company as an acquirer in a business combination to which Ind AS 103 applies, may be designated as at FVTPL upon initial recognition if:
a) such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise;
b) the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Company''s documented risk management or investment strategy, and information about the Company is provided internally on that basis; or
c) it forms part of a contract containing one or more embedded derivatives, and Ind AS 109 permits the entire combined contract to be designated as at FVTPL in accordance with Ind AS 109.
Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on re-measurement recognized in profit or loss. The net gain or loss recognized in profit or loss incorporates any interest paid on the financial liability and is included in the ''Other income'' / ''Other expenses'' line item as appropriate.
Gains or losses on financial guarantee contracts and loan commitments issued by the Company that are designated by the Company as at fair value through profit or loss are recognized in profit or loss.
Financial liabilities subsequently measured at amortised cost
Financial liabilities that are not held-for-trading and are not designated as at FVTPL are measured at amortised cost at the end of subsequent accounting periods. The carrying amounts of financial liabilities that are subsequently measured at amortised cost are determined based on the effective interest method. Interest expense that is not capitalized as part of costs of an asset is included under ''Finance costs''.
Financial guarantee contracts
A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of a debt instrument.
Financial guarantee contracts issued by the Company
are initially measured at their fair values and, if not designated as at FVTPL, are subsequently measured at the higher of:
- the amount of loss allowance determined in accordance with impairment requirements of Ind AS 109; and
- the amount initially recognized less, when appropriate, the cumulative amount of income recognized.
Foreign exchange gains and losses on financial liabilities
For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains are determined based on the amortised cost of the instruments and are recognized in âOther income" and losses are recognised in âFinance Cost" to the extent it is related to borrowings.
The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. For financial liabilities that are measured as at FVTPL, the foreign exchange component forms part of the fair value gains or losses and is recognized in statement of profit and loss.
Derecognition of financial liabilities
The Company derecognizes financial liabilities when, and only when, the Company''s obligations are discharged, cancelled or have expired. An exchange with a lender of debt instruments with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability (whether or not attributable to the financial difficulty of the debtor) is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in statement of profit and loss.
(xviii) Cash flow statements
Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.
Cash flows from operating activities are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of noncash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flow from operating, investing and financing activities of
the Company are segregated based on the available information.
(xix) Earnings per share
Basic earnings per share is computed by dividing the profit after tax by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate.
(xx) Insurance Claims
Insurance claims are accounted for on the basis of claims admitted / expected to be admitted and to the extent that the amount recoverable can be measured reliably and it is reasonable to expect ultimate collection.
(xxi) Operating cycle
Based on the nature of services / activities of the Company and the normal time between acquisition of assets and their realization in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.
2(b) Critical accounting judgements and key sources of estimation uncertainty
In the application of the Company''s accounting policies, which are described above, the management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only the period of the revision and future periods if the revision affects both current and future periods.
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts
of assets and liabilities within the next financial year are
discussed below :
a. Share based payments
The entity initially measures the cost of equity settled transactions with employees using the Black Scholes model to determine the fair value of the options granted. Estimating the fair value of the share options granted require determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. The assumptions and models used for estimating the fair value for the share based payment transactions are disclosed in Note 23.
b. Defined benefit plans (gratuity)
The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. Further details about the gratuity obligation are disclosed in Note 43.
c. Intangible assets under development
The Company capitalizes intangibles under development in accordance with the accounting policy. Initial capitalization of costs is based on management''s judgement that technological and economic feasibility is confirmed.
d. Estimation towards revenue deferred due to uncertainity of collection
The quantum of revenue deferred due to uncertainity of collection is computed based on past trends of year-wise cancellation of memberships and considering factors impacting future collections.
e. Significant financing component
Given the nature of vacation ownership business, the Company has determined that membership fee does not include a significant financing component. Where the payment is received in installments, the Company charges appropriate interest to the members.
f. Customer unexercised rights
The Company considers the expected Customers unexercised rights, while determining the effective membership period over which the membership fee needs to be recognised. This customer unexercised right is computed based on past trend of utilisation of membership by the customer.
g. Litigation for taxation matters
The company is subject to tax litigation, the outcome of which is subject to many uncertainities inherent in litigation such as interpretation of legislation, outcome of appeals etc. Litigation provisions are reviewed at each accounting period and revisions made for the change in facts and circumstances.
h. Fair valuation of Freehold land
Freehold land is measured at Fair value based on valuations by external independent valuers using the market approach at sufficient regularity.
i. Leases
The Company makes an assessment on the expected lease term on a lease-by lease basis as per the contract period. Further, discount rate is based on the incremental borrowing rate of the company at the time of commencement of lease.
3 Recent pronouncements:
Ministry of Corporate Affairs (âMCA") notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On March 23, 2022, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2022, applicable from April 1, 2022, as below:
(i) Ind AS 103 - Reference to Conceptual Framework
The amendments specify that to qualify for recognition as part of applying the acquisition method, the identifiable assets acquired and liabilities assumed must meet the definitions of assets and liabilities in the Conceptual Framework for Financial Reporting under Indian Accounting Standards (Conceptual Framework) issued by the Institute of Chartered Accountants of India at the acquisition date. These changes do not significantly change the requirements of Ind AS 103. The Company does not expect the amendment to have any significant impact in its financial statements.
(ii) Ind AS 16 - Proceeds before intended use
The amendments mainly prohibit an entity from deducting from the cost of property, plant and equipment amounts received from selling items produced while the company is preparing the asset for its intended use. Instead, an entity will recognise such sales proceeds and related cost in profit or loss. The Company does not expect the amendments to have any impact in its recognition of its property, plant and equipment in its financial statements.
(iii) Ind AS 109 - Annual Improvements to Ind AS (2021)
The amendment clarifies which fees an entity includes when it applies the ''10 percent'' test of Ind AS 109 in assessing whether to derecognise a financial liability. The Company does not expect the amendment to have any significant impact in its financial statements.
Mar 31, 2018
(i) Statement of compliance:
The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015.
(ii) Basis of preparation and presentation:
The financial statements of the Company have been prepared on the historical cost basis except for certain financial instruments that are measured at fair value at the end of each reporting period, as explained in the accounting policies below.
All amounts have been rounded off to the nearest Lacs, unless stated otherwise.
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/ or disclosure purposes in these financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of Ind AS 102 and measurements that have some similarities to fair value but are not fair value, such as net realizable value in Ind AS 2 or value in use in Ind AS 36.
In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
- Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
- Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
- Level 3 inputs are unobservable inputs for the asset or liability.
The principal accounting policies are set out below.
(iii) Revenue recognition:
a. Revenue from sale of Vacation Ownership
The Companyâs business is to sell Vacation ownership and provide holiday facilities to members for a specified period each year, over a number of years, for which membership fee is collected either in full upfront, or on a deferred payment basis.
Revenue from Membership fees
Admission fee is recognized as income on admission of a member. Admission fee collected is non refundable.
Entitlement fee, which entitles the members the vacation ownership facilities over the agreed membership period, is recognized as income equally over the tenure of membership (33 years / 25 years / 10 years or any other tenure applicable to the respective member), commencing from the year of admission of each member. Entitlement fees which will be recognised in future periods are disclosed under Other Liabilities - Deferred revenue - Entitlement fee.
Revenue from Annual subscription fees
Annual subscription fee dues from members are recognized as income on accrual basis and fees pertaining to the period beyond the date of the Balance Sheet is grouped under Other liabilities -Deferred revenue - Annual subscription fee.
Interest income on deferred payment plans
Interest income is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time proportionate basis, by reference to the principal outstanding and at the agreed rates.
Revenue is recognized only when it is probable that the economic benefits associated with the transaction will flow to the Company. Revenue with respect to installments/contracts where there is an uncertainty about collectability is deferred at inception (even though the membership is not cancelled). The estimation of such revenues doubtful of recovery has been made by the Company based on past trends of year-wise cancellation of memberships and considering factors impacting future collections.
b. Income from resorts include income from room rentals, food and beverages, etc. and is recognized when services are rendered.
c. Interest income from other financial assets is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that assetâs net carrying amount on initial recognition.
d. Securitised receivables are de-recognised as the contractual rights therein are transferred to the third party. On de-recognition, the excess of consideration received over the principal amounts of receivable from members (net of reversals in respect of cancelled members) is recognised as income from Securitisation. No such transactions have been entered subsequent to 1st April, 2016, warranting a different treatment under Ind AS.
e. Dividend income from investments is recognized when the shareholderâs right to receive payment has been established, provided that it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably.
(iv) Leases:
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
Assets held under finance leases are initially recognized as assets of the Company at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation. Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Contingent rentals are recognized as expenses in the periods in which they are incurred.
Rental expense pertaining to properties taken on operating leases is generally recognised on a straight-line basis over the term of the relevant lease. Where the rentals are structured solely to increase in line with expected general inflation to compensate for the lessorâs expected inflationary cost increases, such increases are recognised in the year in which such benefits accrue. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred. In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are accrued.
(v) Foreign currencies:
The financial statements of the Company are presented in Indian Rupees (INR), which is the Companyâs functional currency. In preparing the financial statements of the Company, transactions in currencies other than the Companyâs functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Under previous GAAP, paragraph 46A of AS 11, The Effects of Changes in Foreign Exchange Rates, provided an accounting treatment to Companies with respect to exchange differences arising on restatement of long-term foreign currency monetary items. Exchange differences in respect of items other than those related to acquisition of depreciable assets, could be accumulated in a foreign currency monetary item translation difference account (âFCMITDRâ), and amortised over the balance period of such long term monetary item or upto 31st March, 2020, whichever is earlier. Ind AS provides an option to Company to continue the above accounting treatment in respect of long term foreign currency items recognised in the financial statements for the period ending immediately before the beginning of the first Ind As reporting period. The Company has elected this option.
(vi) Borrowing costs:
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.
All other borrowing costs are recognized in the statement of profit or loss in the period in which they are incurred.
(vii) Employee benefits:
Employee benefits include provident fund, superannuation fund, employee state insurance scheme, gratuity fund and compensated absences.
Defined contribution plans:
The Companyâs contribution to provident fund, superannuation fund and employee state insurance scheme are considered as defined contribution plans and are recognized as an expense when employees have rendered service entitling them to the contributions.
Defined benefit plans:
For defined benefit plans in the form of gratuity fund, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out by an independent actuary at the end of each reporting period. Defined benefit costs are categorised as follows:
- Service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);
- Net interest expense or income; and
- Re-measurement
The Company presents the first two components of defined benefit costs in profit or loss in the line item âEmployee benefits expenseâ. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Re-measurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding net interest), is reflected immediately in the balance sheet with a charge or credit recognized in other comprehensive income in the period in which they occur. Re-measurement recognized in other comprehensive income is reflected immediately in retained earnings and is not reclassified to profit or loss. Curtailment gains and losses are accounted for as past service costs. Past service cost is recognized in profit or loss in the period of a plan amendment.
The obligation recognized in the balance sheet represents the actual deficit or surplus in the Companyâs defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.
Short-term and other long-term employee benefits
A liability is recognized for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.
Liabilities recognized in respect of short -term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.
Liabilities recognized in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflow expected to be made by the Company in respect of services provided by employees upto the reporting date.
(viii) Share based payment arrangements
Equity-settled share based payments to employees are measured at the fair value of the equity instruments at the grant date. Details regarding the determination of the fair value of equity-settled share-based transactions are set out in Note 20.
The fair value determined at the grant date of the equity-settled share based payments is expensed on a straight-line basis over the vesting period, based on the Companyâs estimate of equity instruments that will eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Company revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognized in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the equity-settled employee benefits reserve.
(ix) Taxation:
Income tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from âprofit before taxâ as reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The companyâs current tax is calculated using tax rates that have been enacted by the end of the reporting period.
Deferred tax
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such deferred tax assets and liabilities are not recognized if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognized if the temporary difference arises from the initial recognition of goodwill.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred taxes are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realized, based on the tax rates and the tax laws enacted or substantively enacted as at the reporting date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively
(x) Property, plant and equipment:
Land and buildings held for use in the supply or production of goods or services, or for administrative purposes, are stated in the balance sheet at cost less accumulated depreciation and accumulated impairment losses. Freehold land is not depreciated.
Fixtures and equipment are stated at cost less accumulated depreciation and accumulated impairment losses.
PPE in the course of construction for supply, production or administrative purposes are carried at cost, less any recognized impairment loss. Cost includes professional fees, other directly attributable expenses and, for qualifying assets, borrowing costs capitalized in accordance with the Companyâs accounting policy. Such properties are classified to the appropriate categories of property, plant and equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.
Depreciation is recognized so as to write off the cost of assets (other than freehold land and properties under construction) less their residual values over their useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.
(xi) Intangible assets:
Intangible assets with finite useful lives are carried at cost less accumulated amortisation and accumulated impairment losses. Amortization is recognized on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets with indefinite useful lives are carried at cost less accumulated impairment losses.
An intangible asset is derecognized on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognized in profit or loss when the asset is derecognized.
(xii) Impairment of tangible and intangible assets:
At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in profit or loss.
When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.
(xiii) Inventories:
Inventories are carried at the lower of cost and net realizable value. Costs of inventories are determined on moving weighted average basis. Cost includes the purchase price, non-refundable taxes and delivery handling cost. Net realizable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale.
(xiv) Provisions:
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
(xv) Financial instruments:
Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.
Effective interest method
The effective interest method is a method of calculating the amortized cost of a financial instrument and of allocating interest over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts/payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.
(xvi) Financial assets:
A financial asset is any asset that is:
(a) cash;
(b) an equity instrument of another entity;
(c) a contractual right:
(i) to receive cash or another financial asset from another entity; or
(ii) to exchange financial assets or financial liabilities with another entity under conditions that are potentially favorable to the Company; or
(d) a contract that will or may be settled in the Companyâs own equity instruments and is:
(i) a non-derivative for which the Company is or may be obliged to receive a variable number of the entityâs own equity instruments; or
(ii) a derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the Companyâs own equity instruments.
All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.
All recognized financial assets are subsequently measured in their entirety at either amortized cost or fair value, depending on the classification of the financial assets.
Classification of financial assets Debt
Debt instruments that meet the following conditions are subsequently measured at amortised cost (except for debt instruments that are designated as at âfair value through profit or loss (FVTPL)â on initial recognition):
the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and
the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Debt instruments (except for debt instruments that are designated as at FVTPL on initial recognition) that meet the following conditions are subsequently measured at âfair value through other comprehensive income (FVTOCI)â:
the asset is held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets; and
the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Income is recognized on an effective interest basis for debt instruments other than those financial assets classified as at FVTPL.
Interest income is recognized in profit or loss for FVTOCI debt instruments. For the purposes of recognising foreign exchange gains and losses, FVTOCI debt instruments are treated as financial assets measured at amortised cost. Thus, the exchange differences on the amortized cost are recognized in profit or loss and other changes in the fair value of FVTOCI financial assets are recognized in other comprehensive income and accumulated under the heading of âReserve for debt instruments through other comprehensive incomeâ. When the investment is disposed of, the cumulative gain or loss previously accumulated in this reserve is reclassified to profit or loss.
A debt instrument that meets the amortised cost criteria or the FVTOCI criteria may be designated as at FVTPL upon initial recognition if such designation eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets or liabilities or recognising the gains and losses on them on different bases.
Debt instruments classified as FVTPL are measured at fair value at the end of each reporting period, with any gains or losses arising on re-measurement recognized in profit or loss. The Company has not designated any debt instrument as at FVTPL.
Equity
Investments in equity instruments are classified as at FVTPL, unless the Company irrevocably elects on initial recognition to present subsequent changes in fair value in other comprehensive income for investments in equity instruments which are not held for trading.
Equity instruments at FVTPL are measured at fair value at the end of each reporting period, with any gains or losses arising on re-measurement recognized in profit or loss. The net gain or loss recognized in profit or loss incorporates any dividend earned on the financial asset and is included under âOther incomeâ. Dividend on financial assets at FVTPL is recognized when the Companyâs right to receive the dividends is established and the dividend does not represent a recovery of part of cost of the investment and the amount of dividend can be measured reliably.
Investments in equity instruments of subsidiaries, joint ventures and associates are measured at cost.
Impairment of financial assets
The Company applies the expected credit loss model for recognising impairment loss on financial assets measured at amortised cost, trade receivables, and other contractual rights to receive cash or other financial asset not designated as at FVTPL.
Expected credit losses are the weighted average of credit losses with the respective risks of default occurring as the weights. Credit loss is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the Company expects to receive (i.e. all cash shortfalls). The Company estimates cash flows by considering all contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) through the expected life of that financial instrument.
The Company measures the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses considering the nature of industry and the deferred payment schemes operated.
When making the assessment of whether there has been a significant increase in credit risk since initial recognition, the Company uses the change in the risk of a default occurring over the expected life of the financial instrument instead of the change in the amount of expected credit losses. To make that assessment, the Company compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition and considers reasonable and supportable information, that is available without undue cost or effort, that is indicative of significant increases in credit risk since initial recognition.
For trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 18, the Company always measures the loss allowance at an amount equal to lifetime expected credit losses.
Further, for the purpose of measuring lifetime expected credit loss allowance for trade receivables, the Company has used a practical expedient as permitted under Ind AS 109. This expected credit loss allowance is computed based on a provision matrix which takes into account historical credit loss experience and adjusted for forward-looking information.
Derecognition of financial assets
The Company derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognise the financial asset and also recognizes a collateralized borrowing for the proceeds received.
On derecognition of a financial asset in its entirety, the difference between the assetâs carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income and accumulated in equity is recognized in profit or loss if such gain or loss would have otherwise been recognized in profit or loss on disposal of that financial asset.
On derecognition of a financial asset other than in its entirety (e.g. when the Company retains an option to repurchase part of a transferred asset), the Company allocates the previous carrying amount of the financial asset between the part it continues to recognise under continuing involvement, and the part it no longer recognises on the basis of the relative fair values of those parts on the date of the transfer. The difference between the carrying amount allocated to the part that is no longer recognized and the sum of the consideration received for the part no longer recognized and any cumulative gain or loss allocated to it that had been recognized in other comprehensive income is recognized in profit or loss if such gain or loss would have otherwise been recognized in profit or loss on disposal of that financial asset. A cumulative gain or loss that had been recognized in other comprehensive income is allocated between the part that continues to be recognized and the part that is no longer recognized on the basis of the relative fair values of those parts.
Foreign exchange gains and losses on financial assets
The fair value of financial assets denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of each reporting period.
For foreign currency denominated financial assets measured at amortised cost and FVTPL, the exchange differences are recognized in profit or loss.
Changes in the carrying amount of investments in equity instruments at FVTOCI relating to changes in foreign currency rates are recognized in other comprehensive income.
For the purposes of recognising foreign exchange gains and losses, FVTOCI debt instruments are treated as financial assets measured at amortised cost. Thus, the exchange differences on the amortized cost are recognized in profit or loss and other changes in the fair value of FVTOCI financial assets are recognized in other comprehensive income.
(xvii) Financial liabilities and equity instruments
Classification as debt or equity
Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognized at the proceeds received, net of direct issue costs.
Repurchase of the Companyâs own equity instruments is recognized and deducted directly in equity. No gain or loss is recognized in profit or loss on the purchase, sale, issue or cancellation of the Companyâs own equity instruments.
Financial liabilities
A financial liability is any liability that is:
(a) a contractual obligation :
(i) to deliver cash or another financial asset to another entity; or
(ii) to exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavorable to the Company; or
(b) a contract that will or may be settled in the Companyâs own equity instruments and is:
(i) a non-derivative for which the Company is or may be obliged to deliver a variable number of the Companyâs own equity instruments; or
(ii) a derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the Companyâs own equity instruments. For this purpose, rights, options or warrants to acquire a fixed number of the entityâs own equity instruments for a fixed amount of any currency are equity instruments if the Company offers the rights, options or warrants pro rata to all of its existing owners of the same class of its own non-derivative equity instruments. Apart from the aforesaid, the equity conversion option embedded in a convertible bond denominated in foreign currency to acquire a fixed number of the Companyâs own equity instruments is an equity instrument if the exercise price is fixed in any currency.
All financial liabilities are subsequently measured at amortised cost using the effective interest method or at FVTPL.
However, financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing involvement approach applies, financial guarantee contracts issued by the Company, and commitments issued by the Company to provide a loan at below-market interest rate are measured in accordance with the specific accounting policies set out below.
Financial liabilities at FVTPL
Financial liabilities are classified as at FVTPL when the financial liability is either contingent consideration recognized by the Company as an acquirer in a business combination to which Ind AS 103 applies or is held for trading or it is designated as at FVTPL.
A financial liability is classified as held for trading if:
a) it has been incurred principally for the purpose of repurchasing it in the near term; or
b) on initial recognition it is part of a portfolio of identified financial instruments that the Company manages together and has a recent actual pattern of short-term profit-taking; or
c) it is a derivative that is not designated and effective as a hedging instrument.
A financial liability other than a financial liability held for trading or contingent consideration recognized by the Company as an acquirer in a business combination to which Ind AS 103 applies, may be designated as at FVTPL upon initial recognition if:
a) such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise;
b) the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Companyâs documented risk management or investment strategy, and information about the Company is provided internally on that basis; or
c) it forms part of a contract containing one or more embedded derivatives, and Ind AS 109 permits the entire combined contract to be designated as at FVTPL in accordance with Ind AS 109.
Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on re-measurement recognized in profit or loss. The net gain or loss recognized in profit or loss incorporates any interest paid on the financial liability and is included in the âOther incomeâ / âOther expensesâ line item as appropriate.
However, for financial liabilities not held-for-trading that are designated as at FVTPL, the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability is recognized in other comprehensive income, unless the recognition of the effects of changes in the liabilityâs credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss, in which case these effects of changes in credit risk are recognized in profit or loss. The remaining amount of change in the fair value of liability is always recognized in profit or loss. Changes in fair value attributable to a financial liabilityâs credit risk that are recognized in other comprehensive income are reflected immediately in retained earnings and are not subsequently reclassified to profit or loss.
Gains or losses on financial guarantee contracts and loan commitments issued by the Company that are designated by the Company as at fair value through profit or loss are recognized in profit or loss.
Financial liabilities subsequently measured at amortised cost
Financial liabilities that are not held-for-trading and are not designated as at FVTPL are measured at amortised cost at the end of subsequent accounting periods. The carrying amounts of financial liabilities that are subsequently measured at amortised cost are determined based on the effective interest method. Interest expense that is not capitalized as part of costs of an asset is included under âFinance costsâ.
Financial guarantee contracts
A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of a debt instrument.
Financial guarantee contracts issued by the Company are initially measured at their fair values and, if not designated as at FVTPL, are subsequently measured at the higher of:
- the amount of loss allowance determined in accordance with impairment requirements of Ind AS 109; and
- the amount initially recognized less, when appropriate, the cumulative amount of income recognized.
Foreign exchange gains and losses on financial liabilities
For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains are determined based on the amortised cost of the instruments and are recognized in âOther incomeâ and losses are recognised in âFinance Costâ to the extent it is related to borrowings.
The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. For financial liabilities that are measured as at FVTPL, the foreign exchange component forms part of the fair value gains or losses and is recognized in statement of profit and loss.
Derecognition of financial liabilities
The Company derecognizes financial liabilities when, and only when, the Companyâs obligations are discharged, cancelled or have expired. An exchange between with a lender of debt instruments with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability (whether or not attributable to the financial difficulty of the debtor) is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in statement of profit and loss.
(xviii)Cash flow statements:
Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.
Cash flows from operating activities are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of noncash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flow from operating, investing and financing activities of the Company are segregated based on the available information.
(xix) Earnings per share:
Basic earnings per share is computed by dividing the profit after tax by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate.
(xx) Insurance Claims:
Insurance claims are accounted for on the basis of claims admitted / expected to be admitted and to the extent that the amount recoverable can be measured reliably and it is reasonable to expect ultimate collection.
(xxi) Operating cycle:
Based on the nature of services / activities of the Company and the normal time between acquisition of assets and their realization in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.
Mar 31, 2017
1 Corporate Information
The Company was incorporated on September 20, 1996, and is in the business of selling vacation ownership and providing holiday facilities.
2 Significant Accounting Policies
(i) Statement of compliance:
The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015.
Up to the year ended March 31, 2016, the Company prepared its financial statements in accordance with the requirements of Generally Accepted Accounting Principles in India (previous GAAP), which includes Standards notified under the Companies (Accounting Standards) Rules, 2006. These are the Company''s first Ind AS financial statements. The date of transition to Ind AS is April 1, 2015. Refer Note 2 (xxiii) for the details of first-time adoption exemptions availed by the Company.
(ii) Basis of preparation and presentation:
The financial statements of the Company have been prepared on the historical cost basis except for certain financial instruments that are measured at fair value at the end of each reporting period, as explained in the accounting policies below.
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/ or disclosure purposes in these financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of Ind AS 102, leasing transactions that are within the scope of IND AS 17 and measurements that have some similarities to fair value but are not fair value, such as net realizable value in Ind AS 2 or value in use in Ind AS 36.
In addition, for financial reporting purposes, fair value measurements are categorized into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
- Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
- Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
- Level 3 inputs are unobservable inputs for the asset or liability.
The principal accounting policies are set out below.
(iii) Revenue recognition:
a. Revenue from sale of Vacation Ownership
The Company''s business is to sell Vacation ownership and provide holiday facilities to members for a specified period each year, over a number of years, for which membership fee is collected either in full upfront, or on a deferred payment basis.
Revenue from Membership fees
Admission fee is recognized as income on admission of a member. Admission fee collected is non refundable.
Entitlement fee, which entitles the members the vacation ownership facilities over the agreed membership period, is recognized as income equally over the tenure of membership (33 years / 25 years / 10 years or any other tenure applicable to the respective member), commencing from the year of admission of each member. Entitlement fees which will be recognized in future periods are disclosed under Other Liabilities - Deferred revenue - Vacation ownership entitlement fee.
Revenue from Annual subscription fees
Annual subscription fee dues from members are recognized as income on accrual basis and fees pertaining to the period beyond the date of the Balance Sheet is grouped under Other liabilities -Deferred revenue - Annual subscription fee.
Interest income on deferred payment plans
Interest income is recognized when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time proportionate basis, by reference to the principal outstanding and at the agreed rates.
Revenue is recognized only when it is probable that the economic benefits associated with the transaction will flow to the Company. Revenue with respect to installments/contracts where there is an uncertainty about collectability is deferred at inception (even though the membership is not cancelled). The estimation of such revenues doubtful of recovery has been made by the Company based on past trends of year-wise cancellation of memberships and considering factors impacting future collections.
b. Income from resorts include income from room rentals, food and beverages, etc. and is recognized when services are rendered.
c. Interest income from other financial assets is recognized when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset''s net carrying amount on initial recognition.
d. Securitized receivables are de-recognized as the contractual rights therein are transferred to the third party. On de-recognition, the excess of consideration received over the principal amounts of receivable from members (net of reversals in respect of cancelled members) is recognized as income from Securitization. No such transactions have been entered in the current year as well as in the previous year warranting a different treatment under Ind AS. Refer Note 2 (xxiii) for the details of first-time adoption exemption availed by the Company in this regard.
e. Dividend income from investments is recognized when the shareholder''s right to receive payment has been established, provided that it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably.
(iv) Leases:
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
Assets held under finance leases are initially recognized as assets of the Company at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the less or is included in the balance sheet as a finance lease obligation. Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance expenses are recognized immediately in profit or loss, unless they are directly attributable to qualifying assets, in which case they are capitalized in accordance with the Company''s general policy on borrowing costs (see note 2 (vi) below). Contingent rentals are recognized as expenses in the periods in which they are incurred.
Rental expense pertaining to properties taken on operating leases is generally recognized on a straight-line basis over the term of the relevant lease. Where the rentals are structured solely to increase in line with expected general inflation to compensate for the less orâs expected inflationary cost increases, such increases are recognized in the year in which such benefits accrue. Contingent rentals arising under operating leases are recognized as an expense in the period in which they are incurred. In the event that lease incentives are received to enter into operating leases, such incentives are recognized as a liability. The aggregate benefit of incentives is recognized as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are accrued.
Refer Note 2(xxiii)(h) for the first time adoption choice elected by the Company with respect to leases.
(v) Foreign currencies:
The financial statements of the Company are presented in Indian Rupees (INR), which is the Company''s functional currency. In preparing the financial statements of the Company, transactions in currencies other than the Company''s functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
(vi) Borrowing costs:
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.
All other borrowing costs are recognized in profit or loss in the period in which they are incurred.
(vii) Employee benefits:
Employee benefits include provident fund, superannuation fund, employee state insurance scheme, gratuity fund and compensated absences.
Defined contribution plans:
The Company''s contribution to provident fund, superannuation fund and employee state insurance scheme are considered as defined contribution plans and are recognized as an expense when employees have rendered service entitling them to the contributions.
Defined benefit plans:
For defined benefit plans in the form of gratuity fund, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out by an independent actuary at the end of each reporting period. Defined benefit costs are categorized as follows:
- Service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);
- Net interest expense or income; and
- Re-measurement
The Company presents the first two components of defined benefit costs in profit or loss in the line item ''Employee benefits expense''. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Re-measurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding net interest), is reflected immediately in the balance sheet with a charge or credit recognized in other comprehensive income in the period in which they occur. Re-measurement recognized in other comprehensive income is reflected immediately in retained earnings and is not reclassified to profit or loss. Curtailment gains and losses are accounted for as past service costs. Past service cost is recognized in profit or loss in the period of a plan amendment.
The obligation recognized in the balance sheet represents the actual deficit or surplus in the Company''s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.
Short-term and other long-term employee benefits:
A liability is recognized for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.
Liabilities recognized in respect of short -term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.
Liabilities recognized in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflow expected to be made by the group in respect of services provided by employees upto the reporting date.
(viii) Share based payment arrangements:
Equity-settled share based payments to employees are measured at the fair value of the equity instruments at the grant date. Details regarding the determination of the fair value of equity-settled share-based transactions are set out in Note 20.
The fair value determined at the grant date of the equity-settled share based payments is expensed on a straight-line basis over the vesting period, based on the Company''s estimate of equity instruments that will eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Company revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognized in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the equity-settled employee benefits reserve.
Refer Note 2(xxiii)(f) for the first time adoption choice elected by the Company regarding share based payments.
(ix) Taxation:
Income tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from ''profit before tax'' as reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The company''s current tax is calculated using tax rates that have been enacted by the end of the reporting period.
Deferred tax
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such deferred tax assets and liabilities are not recognized if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognized if the temporary difference arises from the initial recognition of goodwill.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred taxes are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realized, based on the tax rates and the tax laws enacted or substantively enacted as at the reporting date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively.
(x) Property, plant and equipment:
Land and buildings held for use in the supply or production of goods or services, or for administrative purposes, are stated in the balance sheet at cost less accumulated depreciation and accumulated impairment losses. Freehold land is not depreciated.
Fixtures and equipment are stated at cost less accumulated depreciation and accumulated impairment losses.
PPE in the course of construction for supply, production or administrative purposes are carried at cost, less any recognized impairment loss. Cost includes professional fees and, for qualifying assets, borrowing costs capitalized in accordance with the Company''s accounting policy. Such properties are classified to the appropriate categories of property, plant and equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.
Depreciation is recognized so as to write off the cost of assets (other than freehold land and properties under construction) less their residual values over their useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.
Refer Note 2(xxiii)(d) for the first time adoption choices elected by the Company regarding property, plant and equipment.
(xi) Intangible assets:
Intangible assets with finite useful lives are carried at cost less accumulated amortization and accumulated impairment losses. Amortization is recognized on a straight-line basis over their estimated useful lives. The estimated useful life and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate being
An intangible asset is derecognized on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognized in profit or loss when the asset is derecognized.
Refer Note 2(xxiii)(d) for the first time adoption choices elected by the Company regarding intangible assets.
(xii) Impairment of tangible and intangible assets:
At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in profit or loss.
When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.
(xiii) Inventories:
Inventories are carried at the lower of cost and net realizable value. Costs of inventories are determined on a first-in-first-out basis. Cost includes the purchase price, non-refundable taxes and delivery handling cost. Net realizable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale.
(xiv) Provisions:
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
(xv) Financial instruments:
Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.
Effective interest method
The effective interest method is a method of calculating the amortized cost of a financial instrument and of allocating interest over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts/payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.
(xvi) Financial assets:
A financial asset is any asset that is:
(a) cash;
(b) an equity instrument of another entity;
(c) a contractual right:
(i) to receive cash or another financial asset from another entity; or
(ii) to exchange financial assets or financial liabilities with another entity under conditions that are potentially favorable to the Company; or
(d) a contract that will or may be settled in the Company''s own equity instruments and is:
(i) a non-derivative for which the Company is or may be obliged to receive a variable number of the entity''s own equity instruments; or
(ii) a derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the Company''s own equity instruments.
All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.
All recognized financial assets are subsequently measured in their entirety at either amortized cost or fair value, depending on the classification of the financial assets.
Classification of financial assets Debt
Debt instruments that meet the following conditions are subsequently measured at amortized cost (except for debt instruments that are designated as at âfair value through profit or loss (FVTPL)" on initial recognition): the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Debt instruments (except for debt instruments that are designated as at FVTPL on initial recognition) that meet the following conditions are subsequently measured at âfair value through other comprehensive income (FVTOCI)": the asset is held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets; and the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Income is recognized on an effective interest basis for debt instruments other than those financial assets classified as at FVTPL.
Interest income is recognized in profit or loss for FVTOCI debt instruments. For the purposes of recognizing foreign exchange gains and losses, FVTOCI debt instruments are treated as financial assets measured at amortized cost. Thus, the exchange differences on the amortized cost are recognized in profit or loss and other changes in the fair value of FVTOCI financial assets are recognized in other comprehensive income and accumulated under the heading of ''Reserve for debt instruments through other comprehensive income''. When the investment is disposed of, the cumulative gain or loss previously accumulated in this reserve is reclassified to profit or loss.
A debt instrument that meets the amortized cost criteria or the FVTOCI criteria may be designated as at FVTPL upon initial recognition if such designation eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets or liabilities or recognizing the gains and losses on them on different bases.
Debt instruments classified as FVTPL are measured at fair value at the end of each reporting period, with any gains or losses arising on re-measurement recognized in profit or loss. The Company has not designated any debt instrument as at FVTPL.
Equity
Investments in equity instruments are classified as at FVTPL, unless the Company irrevocably elects on initial recognition to present subsequent changes in fair value in other comprehensive income for investments in equity instruments which are not held for trading.
Equity instruments at FVTPL are measured at fair value at the end of each reporting period, with any gains or losses arising on re-measurement recognized in profit or loss. The net gain or loss recognized in profit or loss incorporates any dividend earned on the financial asset and is included under ''Other income''. Dividend on financial assets at FVTPL is recognized when the Company''s right to receive the dividends is established and the dividend does not represent a recovery of part of cost of the investment and the amount of dividend can be measured reliably.
Impairment of financial assets
The Company applies the expected credit loss model for recognizing impairment loss on financial assets measured at amortized cost, trade receivables, and other contractual rights to receive cash or other financial asset not designated as at FVTPL.
Expected credit losses are the weighted average of credit losses with the respective risks of default occurring as the weights. Credit loss is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the Company expects to receive (i.e. all cash shortfalls). The Company estimates cash flows by considering all contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) through the expected life of that financial instrument.
The Company measures the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses considering the nature of industry and the deferred payment schemes operated.
When making the assessment of whether there has been a significant increase in credit risk since initial recognition, the Company uses the change in the risk of a default occurring over the expected life of the financial instrument instead of the change in the amount of expected credit losses. To make that assessment, the Company compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition and considers reasonable and supportable information, that is available without undue cost or effort, that is indicative of significant increases in credit risk since initial recognition.
For trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind
AS 18, the Company always measures the loss allowance at an amount equal to lifetime expected credit losses.
Further, for the purpose of measuring lifetime expected credit loss allowance for trade receivables, the Company has used a practical expedient as permitted under Ind AS 109. This expected credit loss allowance is computed based on a provision matrix which takes into account historical credit loss experience and adjusted for forward-looking information.
The impairment requirements for the recognition and measurement of a loss allowance are equally applied to debt instruments at FVTOCI except that the loss allowance is recognized in other comprehensive income and is not reduced from the carrying amount in the balance sheet.
Derecognition of financial assets
The Company derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognizes its retained interest in the asset and an associated liability for amounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognize the financial asset and also recognizes a collateralized borrowing for the proceeds received.
On derecognition of a financial asset in its entirety, the difference between the asset''s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income and accumulated in equity is recognized in profit or loss if such gain or loss would have otherwise been recognized in profit or loss on disposal of that financial asset.
On derecognition of a financial asset other than in its entirety (e.g. when the Company retains an option to repurchase part of a transferred asset), the Company allocates the previous carrying amount of the financial asset between the part it continues to recognize under continuing involvement, and the part it no longer recognizes on the basis of the relative fair values of those parts on the date of the transfer. The difference between the carrying amount allocated to the part that is no longer recognized and the sum of the consideration received for the part no longer recognized and any cumulative gain or loss allocated to it that had been recognized in other comprehensive income is recognized in profit
or loss if such gain or loss would have otherwise been recognized in profit or loss on disposal of that financial asset. A cumulative gain or loss that had been recognized in other comprehensive income is allocated between the part that continues to be recognized and the part that is no longer recognized on the basis of the relative fair values of those parts.
Foreign exchange gains and losses on financial assets
The fair value of financial assets denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of each reporting period.
For foreign currency denominated financial assets measured at amortized cost and FVTPL, the exchange differences are recognized in profit or loss.
Changes in the carrying amount of investments in equity instruments at FVTOCI relating to changes in foreign currency rates are recognized in other comprehensive income.
For the purposes of recognizing foreign exchange gains and losses, FVTOCI debt instruments are treated as financial assets measured at amortized cost. Thus, the exchange differences on the amortized cost are recognized in profit or loss and other changes in the fair value of FVTOCI financial assets are recognized in other comprehensive income.
(xvii) Financial liabilities and equity instruments:
Classification as debt or equity
Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognized at the proceeds received, net of direct issue costs.
Repurchase of the Company''s own equity instruments is recognized and deducted directly in equity. No gain or loss is recognized in profit or loss on the purchase, sale, issue or cancellation of the Company''s own equity instruments.
Financial liabilities
A financial liability is any liability that is:
(a) a contractual obligation :
(i) to deliver cash or another financial asset to another entity; or
(ii) to exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavorable to the Company; or
(b) a contract that will or may be settled in the Company''s own equity instruments and is:
(i) a non-derivative for which the Company is or may be obliged to deliver a variable number of the Company''s own equity instruments; or
(ii) a derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the Company''s own equity instruments. For this purpose, rights, options or warrants to acquire a fixed number of the entity''s own equity instruments for a fixed amount of any currency are equity instruments if the Company offers the rights, options or warrants pro rata to all of its existing owners of the same class of its own non-derivative equity instruments. Apart from the aforesaid, the equity conversion option embedded in a convertible bond denominated in foreign currency to acquire a fixed number of the Company''s own equity instruments is an equity instrument if the exercise price is fixed in any currency.
All financial liabilities are subsequently measured at amortized cost using the effective interest method or at FVTPL.
However, financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing involvement approach applies, financial guarantee contracts issued by the Company, and commitments issued by the Company to provide a loan at below-market interest rate are measured in accordance with the specific accounting policies set out below.
Financial liabilities at FVTPL
Financial liabilities are classified as at FVTPL when the financial liability is either contingent consideration recognized by the Company as an acquirer in a business combination to which Ind AS 103 applies or is held for trading or it is designated as at FVTPL.
A financial liability is classified as held for trading if:
a) it has been incurred principally for the purpose of repurchasing it in the near term; or
b) on initial recognition it is part of a portfolio of identified financial instruments that the Company manages together and has a recent actual pattern of short-term profit-taking; or
c) it is a derivative that is not designated and effective as a hedging instrument.
A financial liability other than a financial liability held for trading or contingent consideration recognized by the Company as an acquirer in a business combination to which Ind AS 103 applies, may be designated as at FVTPL upon initial recognition if:
a) such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise;
b) the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Company''s documented risk management or investment strategy, and information about the Company is provided internally on that basis; or
c) it forms part of a contract containing one or more embedded derivatives, and Ind AS 109 permits the entire combined contract to be designated as at FVTPL in accordance with Ind AS 109.
Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on re-measurement recognized in profit or loss. The net gain or loss recognized in profit or loss incorporates any interest paid on the financial liability and is included in the ''Other income'' / ''Other expenses'' line item as appropriate.
However, for financial liabilities not held-for-trading that are designated as at FVTPL, the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability is recognized in other comprehensive income, unless the recognition of the effects of changes in the liability''s credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss, in which case these effects of changes in credit risk are recognized in profit or loss. The remaining amount of change in the fair value of liability is always recognized in profit or loss. Changes in fair value attributable to a financial liability''s credit risk that are recognized in other comprehensive income are reflected immediately in retained earnings and are not subsequently reclassified to profit or loss.
Gains or losses on financial guarantee contracts and loan commitments issued by the Company that are designated by the Company as at fair value through profit or loss are recognized in profit or loss.
Financial liabilities subsequently measured at amortized cost
Financial liabilities that are not held-for-trading and are not designated as at FVTPL are measured at amortized cost at the end of subsequent accounting
periods. The carrying amounts of financial liabilities that are subsequently measured at amortized cost are determined based on the effective interest method. Interest expense that is not capitalized as part of costs of an asset is included under ''Finance costs''.
Financial guarantee contracts
A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of a debt instrument.
Financial guarantee contracts issued by the Company are initially measured at their fair values and, if not designated as at FVTPL, are subsequently measured at the higher of:
- the amount of loss allowance determined in accordance with impairment requirements of Ind AS 109; and
- the amount initially recognized less, when appropriate, the cumulative amount of income recognized in accordance with the principles of Ind AS 18.
Foreign exchange gains and losses on financial liabilities
For financial liabilities that are denominated in a foreign currency and are measured at amortized cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortized cost of the instruments and are recognized in ''Other income''.
The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. For financial liabilities that are measured as at FVTPL, the foreign exchange component forms part of the fair value gains or losses and is recognized in profit or loss.
Derecognition of financial liabilities
The Company derecognizes financial liabilities when, and only when, the Company''s obligations are discharged, cancelled or have expired. An exchange between with a lender of debt instruments with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability (whether or not attributable to the financial difficulty of the debtor) is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in profit or loss.
Refer Note 2(xxiii)(a),(b) and (c) for the first time adoption choices elected by the Company with respect to financial instruments.
(xviii)Cash flow statements:
Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.
Cash flows from operating activities are reported using the indirect method, whereby profit before extra-ordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flow from operating, investing and financing activities of the Company are segregated based on the available information.
(xix) Earnings per share:
Basic earnings per share is computed by dividing the profit after tax by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate.
(xx) Insurance Claims:
Insurance claims are accounted for on the basis of claims admitted / expected to be admitted and to the extent that the amount recoverable can be measured reliably and it is reasonable to expect ultimate collection.
(xxi) Service tax input credit:
Service tax input credit is accounted for in the books in the period in which the underlying service received is accounted and when there is reasonable certainty in availing / utilizing the credits.
(xxii) Operating cycle:
Based on the nature of services / activities of the Company and the normal time between acquisition of assets and their realization in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.
(xxiii) First-time adoption - mandatory exceptions and optional exemptions:
Overall principle
The Company has prepared the opening balance sheet as per Ind AS as of April 1, 2015 (the transition date) by recognizing all assets and liabilities whose recognition is required by Ind AS, not recognizing items of assets or liabilities which are not permitted by Ind AS, by reclassifying items from previous GAAP to Ind AS as required under Ind AS, and applying Ind AS in measurement of recognized assets and liabilities. However, this principle is subject to the certain mandatory exception and certain optional exemptions availed by the Company as detailed below.
a. Derecognition of financial assets and financial liabilities
The Company has applied the derecognition requirements of financial assets and financial liabilities prospectively for transactions occurring on or after April 1, 2015 (the transition date).
b. Classification of debt instruments
The Company has determined the classification of debt instruments in terms of whether they meet the amortized cost criteria or the FVTOCI criteria based on the facts and circumstances that existed as of the transition date.
c. Impairment of financial assets
The Company has applied the impairment requirements of Ind AS 109 retrospectively; however, as permitted by Ind AS 101, it has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial instruments were initially recognized in order to compare it with the credit risk at the transition date. Further, the Company has not undertaken an exhaustive search for information when determining, at the date of transition to Ind ASs, whether there have been significant increases in credit risk since initial recognition, as permitted by Ind AS 101.
d. Deemed cost for property, plant and equipment and intangible assets
The Company has not elected the exemption of previous GAAP carrying value for its Property, Plant and Equipment and Intangible Assets recognized as of April 1, 2015 (transition date) as deemed cost. Consequently, these items are carried at values arrived at by applying the Ind AS retrospectively.
e. Past business combinations
The Company has elected not to apply IND AS 103 Business Combinations retrospectively to past business combinations that occurred before the transition date of April 1, 2015.
f. Share based payments
The Company has availed the exemption to adopt Ind AS 102 Share based payment, for all options that have not vested as on the transition date.
g. Investments in subsidiaries and joint ventures
The Company has availed the exemption to exercise the option of considering Indian GAAP carrying amount as deemed cost under Ind AS as on transition date.
h. Determining whether an arrangement contains a lease
The Company has applied Appendix C of Ind AS 17 Determining whether an Arrangement contains a Lease to determine whether an arrangement existing at the transition date contains a lease on the basis of facts and circumstances existing at that date. The Company does not have any arrangements that contain a lease.
> Critical accounting judgments and key sources of estimation uncertainty
In the application of the Company''s accounting policies, which are described above, the management is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only the period of the revision and future periods if the revision affects both current and future periods.
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below :
a. Share based payments
The entity initially measures the cost of equity settled transactions with employees using the Black Scholes model to determine the fair value of the options granted. Estimating the fair value of the share options granted require determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. The assumptions and models used for estimating the fair value for the share based payment transactions are disclosed under Note 20.
b. Defined benefit plans (gratuity)
The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. Further details about the gratuity obligation are disclosed under Note 43.
c. Intangible assets under development
The Company capitalizes intangibles underdevelopment in accordance with the accounting policy. Initial capitalization of costs is based on management''s judgment that technological and economic feasibility is confirmed.
d. Life time Expected credit losses
Life time expected credit loss allowance is computed based on historical credit loss experience and adjusted for forward-looking information on collection.
e. Estimation towards revenue deferred at inception
The quantum of revenue deferred at inception is computed based on past trends of year-wise cancellation of memberships and considering factors impacting future collections.
Mar 31, 2016
1. Corporate Information
The Company was incorporated on September 20, 1996, and is in the
business of selling vacation ownership and providing holiday
facilities.
(i) Basis for preparation of financial statements:
The financial statements of the Company have been prepared in accordance
with the Generally Accepted Accounting Principles in India (Indian
GAAP) to comply with the Accounting Standards specified under Section
133 of the Companies Act, 2013, read with Rule 7 of the Companies
(Accounts) Rules, 2014 and the relevant provisions of the Companies
Act, 2013 ("the 2013 Act") as applicable. The financial statements have
been prepared on accrual basis under the historical cost convention.
The accounting policies adopted in the preparation of the financial
statements are consistent with those followed in the previous year.
(ii) Use of estimates:
The preparation of financial statements in conformity with Indian GAAP
requires the management to make estimates and assumptions considered in
the reported amounts of assets and liabilities (including contingent
liabilities) and the reported income and expenses during the year. The
management believes that the estimates used in preparation of the
financial statements are prudent and reasonable. Future results could
differ due to these estimates and the differences between the actual
results and the estimates are recognised in the years in which the
results are known / materialise.
(iii) Inventories:
Inventories are carried at lower of cost and net realisable value. Cost
is determined on First-in- First-out basis. Cost includes the purchase
price, non refundable taxes and delivery handling cost. Net realisable
value is determined at the expected selling price less cost of sales.
(iv) Cash and cash equivalents:
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are short- term balances (with an original maturity of
three months or less from the date of acquisition), highly liquid
investments that are readily convertible into known amounts of cash and
which are subject to insignificant risk of changes in value.
(v) Cash flow statements:
Cash flows are reported using the indirect method, whereby profit before
extra-ordinary items and tax is adjusted for the effects of transactions
of non cash nature and any deferrals or accruals of past or future cash
receipts or payments. The cash flow from operating, investing and
financing activities of the Company are segregated based on the
available information.
(vi) Depreciation and amortisation:
Depreciation on tangible fixed assets has been provided on the
straight-line method as per the useful life prescribed in Schedule II
to the Companies Act, 2013 except in respect of the following
categories of assets, in whose case the life of the assets has been
assessed as under taking into account the nature of the asset, the
estimated usage of the asset, the operating conditions of the asset,
past history of replacement, anticipated technological changes,
manufacturers warranties and maintenance support, etc.
(a) Leasehold land and buildings are amortised over the period of
lease.
(b) Floating cottages grouped under building are depreciated over the
useful life of 25 years.
(c) Furniture and Fixtures in ''Club Mahindra Holiday World''are
amortised over a period of 36 months.
(d) Motor vehicles/other assets provided to employees are depreciated
over a period of 48/60 months respectively.
(e) Assets individually costing less than Rs. 5,000 each are fully
depreciated in the year of capitalisation.
Intangible assets:
(f) Expenditure incurred towards software is amortised over a period of
36 months.
The estimated useful life of the intangible assets and the amortisation
period are reviewed at the end of the each financial year and the
amortisation method is revised to reflect the changed pattern, if any.
(vii) Revenue recognition:
(a) The Company''s business is to sell Vacation ownership and provide
holiday facilities to members for a specified period each year, over a
number of years, for which membership fee is collected either in full
upfront, or on a deferred payment basis. Admission fee, which is
non-refundable, is recognized as income on admission of a member.
Entitlement fee (disclosed under Deferred income  Entitlement fee),
which entitles the vacation ownership members for the vacation
ownership facilities is recognized as income equally over the tenure of
membership (33 years / 25 years / 10 years or any other tenure
applicable to the respective member), commencing from the year of
admission of each member. Requests for cancellation of membership are
accounted for when it is accepted by the Company. In respect of
installments considered doubtful of recovery by the management, the
membership is treated as cancelled and related revenues are
de-recognised.
(b) Annual subscription fee dues from members are recognised as income
over the period of subscription as per terms agreed with the members.
Subscription pertaining to the period beyond the date of the Balance
Sheet is grouped under Deferred Income - Annual subscription fee.
(c) Interest on installment sales is recognised as income on an accrual
basis.
(d) Income from resorts includes income from room rentals, food and
beverages, etc. and is recognised when services are rendered.
(e) Securitised assets are derecognised as the contractual rights
therein are transferred to the third party. On being derecognised, the
excess of consideration received over the principal amounts of
receivable from members (net of reversals in respect of cancelled
members) is recognised as income from Securitisation.
(f) Income from travel services includes commission on tickets/hotel
booking, service charges from customers, etc. and is recognised when
services are rendered.
(viii) Other Income:
Interest income is accounted on accrual basis. Dividend income is
accounted for when the right to receive it is established.
(ix) Fixed assets - Tangible and intangible:
Fixed assets are carried at cost less accumulated depreciation /
amortisation and impairment losses, if any. The cost of fxed assets
comprises its purchase price net of any trade discounts and rebates,
any import duties and other taxes (other than those subsequently
recoverable from the tax authorities), any directly attributable
expenditure on making the asset ready for its intended use, other
incidental expenses and interest on borrowings attributable to
acquisition of qualifying fixed assets up to the date the asset is ready
for its intended use. Subsequent expenditure on fixed assets after its
purchase / completion is capitalised only if such expenditure results
in an increase in the future benefits from such asset beyond its
previously assessed standard of performance.
Capital work-in-progress:
Projects under which tangible fixed assets are not yet ready for their
intended use are carried at cost, comprising direct cost, related
incidental expenses and attributable interest. Revenue expenses
incurred in connection with construction of resorts insofar as such
expenses relate to the period prior to the date the resort is put to
use are treated as part of project cost and capitalised.
(x) Foreign currency transactions and translations:
Transactions in foreign currencies entered into by the Company are
accounted at the exchange rates prevailing on the date of the
transaction or at rates that closely approximate the rate at the date
of the transaction. Exchange differences arising on settlement /
restatement of foreign currency monetary assets and liabilities of the
Company are recognised as income or expense in the Statement of Profit
and Loss. Foreign currency monetary items of the Company, outstanding
at the balance sheet date are restated at the year-end rates.
Non-monetary items of the Company are carried at historical cost.
(xi) Investments:
Long-term investments are carried individually at cost less provision
for diminution, other than temporary, in the value of such investments.
Current investments are carried individually, at the lower of cost and
fair value. Cost of investments include acquisition charges such as
brokerage, fees and duties.
(xii) Employee benefits:
Employee benefits include provident fund, superannuation fund, employee
state insurance scheme, gratuity fund and compensated absences.
Defined contribution plans:
The Company''s contribution to provident fund, superannuation fund and
employee state insurance scheme are considered as defined contribution
plans and are charged as an expense based on the amount of contribution
required to be made and when services are rendered by the employees.
Defined benefit plans:
For defined benefit plans in the form of gratuity fund, the cost of
providing benefits is determined using the Projected Unit Credit method,
with actuarial valuations being carried out at each balance sheet date.
Actuarial gains and losses are recognised in the Statement of Profit and
Loss in the period in which they occur. Past service cost is recognised
immediately to the extent that the benefits are already vested and
otherwise is amortised on a straight-line basis over the average period
until the benefits become vested. The retirement benefit obligation
recognised in the Balance Sheet represents the present value of the
defined benefit obligation as adjusted for unrecognised past service
cost, as reduced by the fair value of scheme assets. Any asset
resulting from this calculation is limited to past service cost, plus
the present value of available refunds and reductions in future
contributions to the schemes.
Short-term employee benefits:
The undiscounted amount of short-term employee benefits expected to be
paid in exchange for the services rendered by employees are recognised
during the year when the employees render the service. These benefits
include performance incentive and compensated absences which are
expected to occur within twelve months after the end of the period in
which the employee renders the related service.
The cost of short-term compensated absences is accounted as under :
(a) in case of accumulated compensated absences, when employees render
the services that increase their entitlement of future compensated
absences; and
(b) in case of non-accumulating compensated absences, when the absences
occur.
Long-term employee benefits:
Compensated absences which are not expected to occur within twelve
months after the end of the period in which the employee renders the
related service are recognised as a liability at the present value of
the defined benefit obligation as at the balance sheet date.
Employee Stock Option Scheme:
The compensation cost of stock option granted to employees is measured
by Intrinsic Value method, which is the excess of market price of the
underlying equity shares as of the date of grant over the exercise
price of the option. This is recognised and amortised on straight line
basis over the vesting period.
(xiii) Borrowing Cost:
Borrowing cost that are attributable to the acquisition, construction
or production of qualifying asset are capitalised as part of cost of
such asset till such time as the asset is ready for its intended use or
sale. A qualifying asset is an asset that necessarily requires a
substantial period of time to get ready for its intended use or sale.
All other borrowing costs are recognised as expenses in the period in
which they are incurred.
(xiv) Segment reporting:
The Company identifies primary segments based on the dominant source,
nature of risks and returns and the internal organisation and
management structure.
(xv) Leases:
Assets leased by the Company in its capacity as a lessee, where
substantially all the risks and rewards of ownership vest in the
Company are classified as finance leases. Such leases are capitalised at
the inception of the lease at the lower of the fair value and the
present value of the minimum lease payments and a liability is created
for an equivalent amount. Each lease rental paid is allocated between
the liability and the interest cost so as to obtain a constant periodic
rate of interest on the outstanding liability for each year.
Lease arrangements where the risks and rewards incidental to ownership
of an asset substantially vest with the lessor are recognised as
operating leases. Lease rentals under operating leases are recognised
in the Statement of Profit and Loss on a straight-line basis over the
lease term.
(xvi) Earnings per share:
Basic earnings per share is computed by dividing the profit after tax
(including the post tax effect of extraordinary items, if any) by the
weighted average number of equity shares outstanding during the year.
Diluted earnings per share is computed by dividing the profit / (loss)
after tax (including the post tax effect of extraordinary items, if any)
as adjusted for dividend, interest and other charges to expense or
income relating to the dilutive potential equity shares, by the
weighted average number of equity shares considered for deriving basic
earnings per share and the weighted average number of equity shares
which could have been issued on the conversion of all dilutive
potential equity shares. Potential equity shares are deemed to be
dilutive only if their conversion to equity shares would decrease the
net proft per share from continuing ordinary operations. Potential
dilutive equity shares are deemed to be converted as at the beginning
of the period, unless they have been issued at a later date. The
dilutive potential equity shares are adjusted for the proceeds
receivable had the shares been actually issued at fair value (i.e.
average market value of the outstanding shares). Dilutive potential
equity shares are determined independently for each period presented.
The number of equity shares and potentially dilutive equity shares are
adjusted for share splits / reverse share splits and bonus shares, as
appropriate.
(xvii) Taxes on income:
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the applicable tax rates and the
provisions of the Income Tax Act, 1961 and other applicable tax laws.
Deferred tax is recognised on timing differences, being the differences
between the taxable income and the accounting income that originate in
one period and are capable of reversal in one or more subsequent
periods. Deferred tax is measured using the tax rates and the tax laws
enacted or substantively enacted as at the reporting date. Deferred
tax liabilities are recognised for all timing differences. Deferred tax
assets are recognised for timing differences of items other than
unabsorbed depreciation and carry forward losses only to the extent
that reasonable certainty exists that sufficient future taxable income
will be available against which these can be realised. However, if
there are unabsorbed depreciation and carry forward of losses and items
relating to capital losses, deferred tax assets are recognised only if
there is virtual certainty supported by convincing evidence that there
will be sufficient future taxable income available to realise the assets.
Deferred tax assets and liabilities are offset if such items relate to
taxes on income levied by the same governing tax laws and the Company
has a legally enforceable right for such set of. Deferred tax assets
are reviewed at each balance sheet date for their reliability.
Current and deferred tax relating to items directly recognised in
reserves are recognised in reserves and not in the Statement of Profit
and Loss.
(xviii) Impairment of assets:
The carrying values of assets / cash generating units at each balance
sheet date are reviewed for impairment if any indication of impairment
exists. If the carrying amount of the assets exceed the estimated
recoverable amount, an impairment is recognised for such excess amount.
The impairment loss is recognised as an expense in the Statement of
Profit and Loss.
The recoverable amount is the greater of the net selling price and
their value in use. Value in use is arrived at by discounting the
future cash flows to their present value based on an appropriate
discount factor.
When there is indication that an impairment loss recognised for an
asset in earlier accounting periods no longer exists or may have
decreased, such reversal of impairment loss is recognised in the
Statement of Profit and Loss, to the extent the amount was previously
charged to the Statement of Profit and Loss.
(xix) Provision and contingencies:
A provision is recognised when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation in respect of which reliable
estimate can be made. Provisions (excluding retirement benefits) are not
discounted to their present value and are determined based on the best
estimate required to settle the obligation at the Balance sheet date.
These are reviewed at each Balance Sheet date and adjusted to reflect
the current best estimates. Contingent Liabilities are disclosed in the
notes.
(xx) Share issue expenses:
Share issue expenses are adjusted against the Securities Premium
Account as permissible under Section 52 of the Companies Act, 2013, to
the extent any balance is available for utilisation in the Securities
Premium Account. Share issue expenses in excess of the balance in the
Securities Premium Account is expensed in the Statement of Profit and
Loss.
(xxi) Insurance claims:
Insurance claims are accounted for on the basis of claims admitted /
expected to be admitted and to the extent that the amount recoverable
can be measured reliably and it is reasonable to expect ultimate
collection.
(xxii) Service tax input credit:
Service tax input credit is accounted for in the books in the period in
which the underlying service received is accounted and when there is
reasonable certainty in availing / utilising the credits.
(xxiii) Operating cycle:
Based on the nature of services / activities of the Company and the
normal time between acquisition of assets and their realisation in cash
or cash equivalents, the Company has determined its operating cycle as
12 months for the purpose of classification of its assets and
liabilities as current and non-current.
Mar 31, 2015
(i) Basis for preparation of financial statements:
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards specified under
Section 133 of the Companies Act, 2013, read with Rule 7 of the
Companies (Accounts) Rules, 2014 and the relevant provisions of the
Companies Act, 2013 ("the 2013 Act") / Companies Act, 1956 ("the
1956 Act"), as applicable. The accounting policies adopted in the
preparation of the financial statements are consistent with those
followed in the previous year. Also Refer Note No. 22.1 regarding
recognition of entitlement fee.
(ii) Use of estimates:
The preparation of financial statements in conformity with Indian GAAP
requires the management to make estimates and assumptions considered in
the reported amounts of assets and liabilities (including contingent
liabilities) and the reported income and expenses during the year. The
management believes that the estimates used in preparation of the
financial statements are prudent and reasonable. Future results could
differ due to these estimates and the differences between the actual
results and the estimates are recognised in the years in which the
results are known / materialise.
(iii) Inventories:
Inventories are carried at lower of cost and net realisable value. Cost
is determined on First-in-First- out basis. Cost includes the purchase
price, non refundable taxes and delivery handling cost. Net realisable
value is estimated at the expected selling price less estimated costs
of procurement and sales.
(iv) Cash and cash equivalents:
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are short- term balances (with an original maturity of
three months or less from the date of acquisition), highly liquid
investments that are readily convertible into known amounts of cash and
which are subject to insignificant risk of changes in value.
(v) Cash flow statements:
Cash flows are reported using the indirect method, whereby
profit/(loss) before extra-ordinary items and tax is adjusted for the
effects of transactions of non cash nature and any deferrals or
accruals of past or future cash receipts or payments. The cash flow
from operating, investing and financing activities of the company are
segregated based on the available information.
(vi) Depreciation and amortisation:
Depreciation on tangible fixed assets has been provided on the
straight-line method as per the useful life prescribed in Schedule II
to the Companies Act, 2013 except in respect of the following
categories of assets, in whose case the life of the assets has been
assessed as under taking into account the nature of the asset, the
estimated usage of the asset, the operating conditions of the asset,
past history of replacement, anticipated technological changes,
manufacturers warranties and maintenance support, etc.
(a) Leasehold land and buildings are amortised over the period of
lease.
(b) Floating cottages grouped under building are depreciated over the
useful life of 25 years.
(c) Furniture and Fixtures in ''Club Mahindra Holiday World'' are
amortised over a period of 36 months from the date of capitalisation.
(d) Motor vehicles provided to employees are depreciated over a period
of 48 months. Other assets provided to employees are depreciated over a
period of 60 months.
Intangible assets are amortised over their estimated useful life on
straight line method as follows:
(a) Expenditure incurred towards software is amortised over a period of
36 months.
(b) Expenditure on product design and development & web portal is
amortised over the estimated useful life of the asset i.e. 3 / 4 years.
(c) Non-compete fee is amortised over a period of 5 years.
Assets individually costing less than Rs. 5000 each are fully depreciated
in the year of capitalisation. The estimated useful life of the
intangible asset and the amortisation period are reviewed at the end of
the each financial year and the amortisation method is revised to
reflect the changed pattern.
(vii) Expenditure during construction period:
Revenue expenses incurred in connection with construction of resorts
insofar as such expenses relate to the period prior to the date the
resort is put to use are treated as part of project cost and
capitalised.
(viii) Revenue recognition:
(a) The Company''s business is to sell Vacation ownership and provide
holiday facilities to members for a specified period each year, over a
number of years, for which membership fee is collected either in full
upfront, or on a deferred payment basis. Admission fee, which is
non-refundable, is recognized as income on admission of a member.
Entitlement fee (disclosed under Deferred income - Entitlement fee),
which entitles the vacation ownership members for the vacation
ownership facilities is recognized as income equally over the tenure of
membership (33 years / 25 years / 10 years or any other tenure
applicable to the respective member), commencing from the year of
admission of each member. Requests for cancellation of membership are
accounted for when it is accepted by the Company. In respect of
instalments considered doubtful of recovery by the management, the
membership is treated as cancelled and related revenues are
de-recognised.
(b) Annual subscription fee dues from members are recognised as income
over the period of subscription as per terms agreed with the members.
Subscription pertaining to the period beyond the date of the Balance
Sheet is grouped under Deferred Income.
(c) Interest on instalment sales is recognised as income on an accrual
basis.
(d) Income from resorts includes income from room rentals, food and
beverages, etc. and is recognised when services are rendered.
(e) Securitised assets are derecognised as the contractual rights
therein are transferred to the third party. On being derecognised, the
excess of consideration received over the principal amounts of
receivable from members (net of reversals in respect of cancelled
members) is recognised as income from Securitisation.
(f) Income from travel services includes commission on tickets/hotel
booking, service charges from customers, etc. and is recognised when
services are rendered.
(ix) Other Income:
Interest income is accounted on accrual basis. Dividend income is
accounted for when the right to receive it, is established.
(x) Fixed assets:
Fixed assets are carried at cost less accumulated
depreciation/amortisation and accumulated impair- ment losses, if any.
Cost comprises of purchase price and other directly attributable costs
of bringing the asset to its working condition for its intended use and
includes interest on money borrowed for construction/acquisition of
fixed assets up to the period the assets are ready for use. Projects
under which assets are not ready for their intended use and other
capital work-in-progress are carried at cost, comprising direct cost,
related incidental expenses and attributable interest.
(xi) Foreign currency transactions and translations:
Transactions in foreign currencies entered into by the Company are
accounted at the exchange rates prevailing on the date of the
transaction or at rates that closely approximate the rate at the date
of the transaction. Exchange differences arising on
settlement/restatement of foreign currency monetary assets and
liabilities of the Company are recognised as income or expense in the
Statement of Profit and Loss.
Foreign currency monetary items of the Company, outstanding at the
balance sheet date are restated at the year-end rates. Non-monetary
items of the Company are carried at historical cost.
(xii) Investments:
Long-term investments are carried individually at cost less provision
for diminution, other than temporary, in the value of such investments.
Current investments are carried individually, at the lower of cost and
fair value. Cost of investments include acquisition charges such as
brokerage, fees and duties.
(xiii) Employee benefits:
Employee benefits include provident fund, superannuation fund, employee
state insurance scheme, gratuity fund and compensated absences.
(a) Short term employee benefit plans
All short term employee benefit plans such as salaries, wages, bonus,
special awards and, medical benefits which fall due within 12 months of
the period in which the employee renders the related services which
entitles
him to avail such benefits are recognized on an undiscounted basis and
charged to the statement of profit and loss.
(b) Long term employee benefit plans
The Company has defined contribution and defined benefit plans. The
plans are financed by the Company and in the case of some defined
contribution plans employees also contribute to the plan.
Defined Contribution Plan
The Company''s contribution to provident fund, superannuation fund and
employee state insurance scheme are considered as defined contribution
plans and are charged as an expense based on the amount of contribution
required to be made and when services are rendered by the employees.
Defined Benefit Plan
For defined benefit plans in the form of gratuity fund, the cost of
providing benefits is determined using the Projected Unit Credit
method, with actuarial valuations being carried out at each balance
sheet date. Actuarial gains and losses are recognised in the Statement
of Profit and Loss in the period in which they occur. Past service cost
is recognised immediately to the extent that the benefits are already
vested and otherwise is amortised on a straight-line basis over the
average period until the benefits become vested. The retirement benefit
obligation recognised in the Balance Sheet represents the present value
of the defined benefit obligation as adjusted for unrecognised past
service cost, as reduced by the fair value of scheme assets. Any asset
resulting from this calculation is limited to past service cost, plus
the present value of available refunds and reductions in future
contributions to the schemes.
Employee Stock Option Scheme
The compensation cost of stock option granted to employees is measured
by Intrinsic Value Method. The intrinsic value, which is the excess of
market price of the underlying equity shares as of the date of grant
over the exercise price of the option, is recognised and amortised on
straight line basis over the vesting period.
(xiv) Borrowing Cost:
Borrowing cost that are attributable to the
acquisition, construction or production of qualifying
asset are capitalized as part of cost of such asset till
such time as the asset is ready for its intended use or sale. A
qualifying asset is an asset that necessarily requires a substantial
period of time to get ready for its intended use or sale. All other
borrowing costs are recognized as expenses in the period in which they
are incurred.
(xv) Segment reporting:
The Company has a single reportable segment namely sale of Vacation
Ownership and other services for the purpose of Accounting Standard 17
on Segment Reporting. Business segment is considered as the primary
segment.
(xvi) Leases:
Assets leased by the Company in its capacity as a lessee, where
substantially all the risks and rewards of ownership vest in the
Company are classified as finance leases. Such leases are capitalised
at the inception of the lease at the lower of the fair value and the
present value of the minimum lease payments and a liability is created
for an equivalent amount. Each lease rental paid is allocated between
the liability and the interest cost so as to obtain a constant periodic
rate of interest on the outstanding liability for each year.
Lease arrangements where the risks and rewards incidental to ownership
of an asset substantially vest with the lessor are recognised as
operating leases. Lease rentals under operating leases are recognised
in the Statement of Profit and Loss on a straight-line basis over the
lease term.
(xvii) Earnings per share:
Basic earnings per share is computed by dividing the profit / (loss)
after tax (including the post tax effect of extraordinary items, if
any) by the weighted average number of equity shares outstanding during
the year. Diluted earnings per share is computed by dividing the profit
/ (loss) after tax (including the post tax effect of extraordinary
items, if any) as adjusted for dividend, interest and other charges to
expense or income relating to the dilutive potential equity shares, by
the weighted average number of equity shares considered for deriving
basic earnings per share and the weighted average number of equity
shares which could have been issued on the conversion of all dilutive
potential equity shares. Potential equity shares are deemed to be
dilutive only if their conversion to equity shares would decrease the
net profit per share from continuing ordinary operations. Potential
dilutive equity shares are deemed to be converted as at the beginning
of the period, unless they have been issued at a later date. The
dilutive potential equity shares are
adjusted for the proceeds receivable had the shares been actually
issued at fair value (i.e. average market value of the outstanding
shares). Dilutive potential equity shares are determined independently
for each period presented. The number of equity shares and potentially
dilutive equity shares are adjusted for share splits / reverse share
splits and bonus shares, as appropriate.
(xviii) Taxes on income:
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the applicable tax rates and the
provisions of the Income Tax Act, 1961 and other applicable tax laws.
Deferred tax is recognised on timing differences, being the differences
between the taxable income and the accounting income that originate in
one period and are capable of reversal in one or more subsequent
periods. Deferred tax is measured using the tax rates and the tax laws
enacted or substantively enacted as at the reporting date. Deferred
tax liabilities are recognised for all timing differences. Deferred tax
assets are recognised for timing differences of items other than
unabsorbed depreciation and carry forward losses only to the extent
that reasonable certainty exists that sufficient future taxable income
will be available against which these can be realised. However, if
there are unabsorbed depreciation and carry forward of losses and items
relating to capital losses, deferred tax assets are recognised only if
there is virtual certainty supported by convincing evidence that there
will be sufficient future taxable income available to realise the
assets. Deferred tax assets and liabilities are offset if such items
relate to taxes on income levied by the same governing tax laws and the
Company has a legally enforceable right for such set off. Deferred tax
assets are reviewed at each balance sheet date for their realisability.
Current and deferred tax relating to items directly recognised in
reserves are recognised in reserves and not in the Statement of Profit
and Loss.
(xix) Impairment of assets:
The carrying values of assets/cash generating units at each balance
sheet date are reviewed for impairment. If any indication of impairment
exists the recoverable amount of such asset is estimated and impairment
is recognised, if the carrying amount of these assets exceed their
recoverable amount. The recoverable amount is the greater of the net
selling price and their value in use. Value in
use is arrived at by discounting the future cash flows to their present
values based on an appropriate discount factor. When there is
indication that an impairment loss recognised for an asset in earlier
accounting period no longer exists or may have decreased, such reversal
of impairment loss is recognised in the statement of profit and loss,
except in the case of re-valued asset.
(xx) Provision and contingencies:
A provision is recognised when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation in respect of which reliable
estimate can be made. Provisions (excluding retirement benefits) are
not discounted to their present value and are determined based on the
best estimate required to settle the obligation at the Balance sheet
date. These are reviewed at each Balance Sheet date and adjusted to
reflect the current best estimates. Contingent Liabilities are
disclosed in the notes.
(xxi) Share issue expenses:
Share issue expenses are adjusted against the Securities Premium
Account as permissible under Section 52 of the Companies Act, 2013, to
the extent any balance is available for utilisation in the Securities
Premium Account. Share issue expenses in excess of the balance in the
Securities Premium Account is expensed in the Statement of Profit and
Loss.
(xxii) Insurance claims:
Insurance claims are accounted for on the basis of claims admitted /
expected to be admitted and to the extent that the amount recoverable
can be measured reliably and it is reasonable to expect ultimate
collection.
(xxiii) Service tax input credit:
Service tax input credit is accounted for in the books in the period in
which the underlying service received is accounted and when there is
reasonable certainty in availing / utilising the credits.
(xxiv) Operating cycle:
Based on the nature of services / activities of the Company and the
normal time between acquisition of assets and their realisation in cash
or cash equivalents, the Company has determined its operating cycle as
12 months for the purpose of classification of its assets and
liabilities as current and non-current.
3 a) The above includes 48,995,228 equity shares allotted as fully
paid-up by way of Bonus shares by capitalisation of balance in
Statement of Profit & Loss and General Reserve on November 24, 2007 in
the ratio of 5 equity shares for every 3 shares held. 3 b) Terms /
rights attached to equity shares:
i) The company has only one class of shares referred to as equity
shares having a par value of Rs. 10/-. Each holder of equity share is
entitled to one vote per share.
ii) The dividends proposed by the Board of Directors is subject to
approval of the shareholders in the Annual General Meeting.
iii) For the year ended March 31, 2015, the amount of dividend proposed
to be distributed to equity shareholders is Rs. 355,123,424 at Rs. 4 per
share (Previous year Rs. 355,123,424 at Rs. 4 per share).
iv) Repayment of capital will be in proportion to the number of equity
shares held.
Mar 31, 2014
(i) Basis for preparation of financial statements:
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards notifi ed under
Section 211(3C) of the Companies Act, 1956 ("the 1956 Act") (which
continue to be applicable in respect of Section 133 of the Companies
Act, 2013 ("the 2013 Act") in terms of General Circular 15/2013 dated
13th September, 2013 of the Ministry of Corporate Af airs) and the
relevant provisions of the 1956 Act/ 2013 Act, as applicable. The fi
nancial statements have been prepared on accrual basis under the
historical cost convention The accounting policies adopted in the
preparation of the financial statements are consistent with those
followed in the previous year.
Use of estimates:
The preparation of financial statements in conformity with Indian GAAP
requires the management to make estimates and assumptions considered in
the reported amounts of assets and liabilities (including contingent
liabilities) and the reported income and expenses during the year. The
management believes that the estimates used in preparation of the fi
nancial statements are prudent and reasonable. Future results could dif
er due to these estimates and the dif erences between the actual
results and the estimates are recognised in the years in which the
results are known / materialise.
(ii) Fixed assets:
Fixed assets are carried at cost less accumulated depreciation /
amortisation and accumulated impairment losses, if any. Cost comprises
of purchase price and other directly attributable costs of bringing the
asset to its working condition for its intended use and includes
interest on moneys borrowed for construction/acquisition of fixed
assets up to the period the assets are ready for use. Projects under
which assets are not ready for their intended use and other capital
work-in-progress are carried at cost, comprising direct cost, related
incidental expenses and attributable interest.
Depreciation is calculated on straight line method at the rates and in
the manner prescribed in Schedule XIV of the Companies Act, 1956 except
for the following categories of assets:
(a) Leasehold land and buildings are amortised over the period of
lease.
(b) Floating cottages grouped under buildings are depreciated over the
useful life of 25 years.
(c) Furniture and Fixtures in ''Club Mahindra Holiday World'' are
amortised over a period of 36 months from the date of capitalisation.
(d) Motor vehicles provided to employees are depreciated over a period
of 48 months. Other assets provided to employees are depreciated over
a period of 60 months.
(e) Intangible assets representing ''vacation ownership'' is amortised
over a period of 10 years.
(f) Expenditure incurred towards software is amortised over a period of
36 months.
(g) Expenditure on product design and development & web portal is
amortised over the estimated useful life of the asset i.e. 3 / 4 years.
(h) Non- compete fee is amortised over a period of 5 years.
(i) Assets individually costing less than Rs. 5000/- each are fully
depreciated in the year of capitalisation. The estimated useful life of
the intangible asset and the amortisation period are reviewed at the
end of the each financial year and the amortisation method is revised
to refl ect the changed pattern.
(iii) Expenditure during construction period:
Revenue expenses incurred in connection with construction of resorts
insofar as such expenses relate to the period prior to the date the
resort is put to use are treated as part of project cost and
capitalised.
(iv) Inventories:
Inventories are carried at lower of cost and net realisable value. Cost
is determined on First-in- First-out basis. Cost includes the purchase
price, non refundable taxes and delivery handling cost. Net realisable
value is estimated at the expected selling price less estimated costs
of procurement and sales.
(v) Investments:
Long-term investments are carried individually at cost less provision
for diminution, other than temporary, in the value of such investments.
Current investments are carried individually, at the lower of cost and
fair value. Cost of investments include acquisition charges such as
brokerage, fees and duties.
(vi) Revenue recognition:
(a) The company''s business is to sell Vacation ownership and provide
holiday facilities to members for a specifi ed period each year, over a
number of years, for which membership fee is collected either in full
up front, or on a deferred payment basis. Admission fee, which is
non-refundable, is recognised as income on admission of a member.
Entitlement fee (disclosed under Advance towards Members facilities),
which entitles the vacation ownership member for the vacation ownership
facilities over the membership usage period, is recognized as income
equally over the usage period. Requests for cancellation of membership
is accounted for when it is accepted by the Company. In respect of
instalments considered doubtful of recovery by the management, the same
is treated as a cancellation and accounted for accordingly.
(b) Annual subscription fee dues from members are recognised as income
on an accrual basis.
(c) Interest on instalment sales is recognised as income on an accrual
basis.
(d) Income from resorts includes income from room rentals, food and
beverages, etc. and is recognised when services are rendered.
(e) Securitised assets are derecognised as the contractual rights
therein are transferred to the third party. On being derecognised, the
excess of consideration received over the principal amounts of
receivable from members (net of reversals in respect of cancelled
members) is recognised as income from Securitisation.
(f) Income from travel services includes commission on tickets/hotel
booking, service charges from customers, etc. and is recognised when
services are rendered.
(g) Income from home stays is recognised when services are rendered.
(h) Interest income from loans is accounted on time proportion basis
and dividend income from mutual funds is accounted as and when right to
receive is established.
(vii) Foreign currency transactions and translations:
Transactions in foreign currencies entered into by the Company are
accounted at the exchange rates prevailing on the date of the
transaction or at rates that closely approximate the rate at the date
of the transaction. Exchange dif erences arising on settlement /
restatement of foreign currency monetary assets and liabilities of the
Company are recognised as income or expense in the Statement of Profit
and Loss.
Foreign currency monetary items of the Company, outstanding at the
balance sheet date are restated at the year-end rates. Non-monetary
items of the Company are carried at historical cost.
(viii) Employee benefits:
Employee benefits include provident fund, superannuation fund,
employee state insurance scheme, gratuity fund and compensated
absences.
(a) Short term employee benefit plans
All short term employee benefit plans such as salaries, wages, bonus,
special awards and, medical benefits which fall due within 12 months
of the period in which the employee renders the related services which
entitles him to avail such benefits are recognized on an undiscounted
basis and charged to the statement of Profit and loss.
(b) Long term employee benefit plans
The Company has defi ned contribution and defi ned benefit plans. The
plans are fi nanced by the Company and in the case of some defi ned
contribution plans employees also contribute to the plan.
Defi ned Contribution Plan
The Company''s contribution to provident fund, superannuation fund and
employee state insurance scheme are considered as defi ned contribution
plans and are charged as an expense based on the amount of contribution
required to be made and when services are rendered by the employees.
Defi ned benefit Plan
For defi ned benefit plans in the form of gratuity fund, the cost of
providing benefits is determined using the Projected Unit Credit
method, with actuarial valuations being carried out at each balance
sheet date. Actuarial gains and losses are recognised in the Statement
of Profit and Loss in the period in which they occur. Past service
cost is recognised immediately to the extent that the benefits are
already vested and otherwise is amortised on a straight-line basis over
the average period until the benefits become vested. The retirement
benefit obligation recognised in the Balance Sheet represents the
present value of the defi ned benefit obligation as adjusted for
unrecognised past service cost, as reduced by the fair value of scheme
assets. Any asset resulting from this calculation is limited to past
service cost, plus the present value of available refunds and
reductions in future contributions to the schemes.
(ix) Taxes on income:
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of the Income Tax
Act, 1961.
Deferred tax is recognised on timing dif erences, being the dif erences
between the taxable income and the accounting income that originate in
one period and are capable of reversal in one or more subsequent
periods. Deferred tax is measured using the tax rates and the tax laws
enacted or substantively enacted as at the reporting date. The
carrying amount of deferred tax assets and liabilities are reviewed at
each Balance Sheet date.
(x) Share issue expenses:
Expenses incurred in connection with issue of share capital are
adjusted against securities premium account.
(xi) Borrowing Cost:
Borrowing cost that are attributable to the acquisition, construction
or production of qualifying asset are capitalized as part of cost of
such asset till such time as the asset is ready for its intended to use
or sale. A qualifying asset is an asset that necessarily requires a
substantial period of time to get ready for its intended use or sale.
All other borrowing costs are recognised as expenses in the period in
which they are incurred.
(xii) Impairment of assets
The carrying values of assets/cash generating units at each balance
sheet date are reviewed for impairment. If any indication of impairment
exists the recoverable amount of such asset is estimated and impairment
is recognised,if the carrying amount of these assets exceed their
recoverable amount. The recoverable amount is the greater of the net
selling price and their value in use. Value in use is arrived at by
discounting the future cash fl ows to their present values based on an
appropriate discount factor. When there is indication that an
impairment loss recognised for an asset in earlier accounting period no
longer exists or may have decreased, such reversal of impairment loss
is recognised in the statement of Profit and loss, except in the case
of re-valued asset.
(xiii) Cash and cash equivalents:
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are short- term balances (with an original maturity of
three months or less from the date of acquisition), highly liquid
investments that are readily convertible into known amounts of cash and
which are subject to insignifi cant risk of changes in value.
(xiv) Cash fl ow statements:
Cash fl ows are reported using the indirect method, whereby profi
t/(loss) before extra-ordinary items and tax is adjusted for the ef
ects of transactions of non cash nature and any deferrals or accruals
of past or future cash receipts or payments. The cash fl ow from
operating, investing and fi nancing activities of the company are
segregated based on the available information.
(xv) Provision & contingencies:
A provision is recognised when the Company has a present obligation as
a result of past events and it is probable that an outfl ow of
resources will be required to settle the obligation in respect of which
reliable estimate can be made. Provisions (excluding retirement benefi
ts) are not discounted to their present value and are determined based
on the best estimate required to settle the obligation at the Balance
sheet date. These are reviewed at each Balance Sheet date and adjusted
to refl ect the current best estimates. Contingent Liabilities are
disclosed in the notes.
(xvi) Earnings per share:
Basic earnings per share is computed by dividing the Profit / (loss)
after tax (including the post tax ef ect of extraordinary items, if
any) by the weighted average number of equity shares outstanding during
the year. Diluted earnings per share is computed by dividing the profi
t / (loss) after tax
(including the post tax ef ect of extraordinary items, if any) as
adjusted for dividend, interest and other charges to expense or income
relating to the dilutive potential equity shares, by the weighted
average number of equity shares considered for deriving basic earnings
per share and the weighted average number of equity shares which could
have been issued on the conversion of all dilutive potential equity
shares. Potential equity shares are deemed to be dilutive only if their
conversion to equity shares would decrease the net Profit per share
from continuing ordinary operations. Potential dilutive equity shares
are deemed to be converted as at the beginning of the period, unless
they have been issued at a later date. The dilutive potential equity
shares are adjusted for the proceeds receivable had the shares been
actually issued at fair value (i.e. average market value of the
outstanding shares). Dilutive potential equity shares are determined
independently for each period presented. The number of equity shares
and potentially dilutive equity shares are adjusted for share splits /
reverse share splits and bonus shares, as appropriate.
(xvii) Leases:
Assets leased by the Company in its capacity as a lessee, where
substantially all the risks and rewards of ownership vest in the
Company are classifi ed as fi nance leases. Such leases are capitalised
at the inception of the lease at the lower of the fair value and the
present value of the minimum lease payments and a liability is created
for an equivalent amount. Each lease rental paid is allocated between
the liability and the interest cost so as to obtain a constant periodic
rate of interest on the outstanding liability for each year.
Lease arrangements where the risks and rewards incidental to ownership
of an asset substantially vest with the lessor are recognised as
operating leases. Lease rentals under operating leases are recognised
in the Statement of Profit and Loss on a straight-line basis.
(xviii) Insurance claims:
Insurance claims are accounted for on the basis of claims admitted /
expected to be admitted and to the extent that the amount recoverable
can be measured reliably and it is reasonable to expect ultimate
collection.
(xix) Service tax input credit:
Service tax input credit is accounted for in the books in the period in
which the underlying service received is accounted and when there is no
reasonable certainty in availing / utilising the credits.
(xx) Operating cycle:
Based on the nature of services / activities of the Company and the
normal time between acquisition of assets and their realisation in cash
or cash equivalents, the Company has determined its operating cycle as
12 months for the purpose of classifi cation of its assets and
liabilities as current and non-current.
Mar 31, 2013
(i) Basis for preparation of financial statements:
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards notified under
the Companies (Accounting Standards) Rules, 2006 (as amended) and the
relevant provisions of the Companies Act, 1956. The financial
statements have been prepared on accrual basis under the historical
cost convention. The accounting policies adopted in the preparation of
the financial statements are consistent with those followed in the
previous year.
Use of estimates:
The preparation of financial statements in conformity with Indian GAAP
requires the management to make estimates and assumptions considered in
the reported amounts of assets and liabilities (including contingent
liabilities) and the reported income and expenses during the year. The
management believes that the estimates used in preparation of the
financial statements are prudent and reasonable. Future results could
differ due to these estimates and the differences between the actual
results and the estimates are recognised in the years in which the
results are known / materialise.
(ii) Fixed assets:
Fixed assets are stated at cost less accumulated depreciation and
accumulated impairment losses, if any. Cost comprises of purchase price
and other directly attributable costs of bringing the asset to its
working condition for its intended use and includes interest on moneys
borrowed for construction/ acquisition of fixed assets up to the period
the assets are ready for use. Projects under which assets are not ready
for their intended use and other capital work-in-progress are carried
at cost, comprising direct cost, related incidental expenses and
attributable interest.
Depreciation is calculated on straight line method at the rates and in
the manner prescribed in Schedule XIV of the Companies Act, 1956 except
for the following:
(a) Leasehold land and buildings are amortised over the period of
lease.
(b) Floating cottages grouped under building are depreciated over the
useful life of 25 years.
(c) Furniture and Fixtures in ''Club Mahindra Holiday World'' are
amortised over a period of 36 months from the date of capitalisation.
(d) Motor vehicles provided to employees are depreciated over a period
of 48 months. Other assets provided to employees are depreciated over
a period of 60 months.
(e) Intangible assets representing ''vacation ownership'' is amortised
over a period of 10 years.
(f) Expenditure incurred towards software is amortised over a period of
36 months.
(g) Expenditure on product design and development & web portal is
amortised over the estimated useful life of the asset i.e. 3 / 4 years.
(h) Non- compete fee is amortised over a period of 5 years.
(iii) Expenditure during construction period
Revenue expenses incurred in connection with construction of resorts
insofar as such expenses relate to the period prior to the date the
resort is put to use are treated as part of project cost and
capitalised.
(iv) inventories:
Inventories are carried at lower of cost and net realisable value. Cost
is determined on First-in- First-out basis. Cost includes the purchase
price, non refundable taxes and delivery handling cost. Net realisable
value is estimated at the expected selling price less estimated costs
of procurement and sales.
(v) investments:
Long-term investments are carried individually at cost less provision
for diminution, other than temporary, in the value of such investments.
Current investments are carried individually, at the lower of cost and
fair value. Cost of investments include acquisition charges such as
brokerage, fees and duties.
(vi) Revenue recognition:
(a) The company''s business is to sell Vacation ownership and provide
holiday facilities to members for a specified period each year, over a
number of years, for which membership fee is collected either in full
up front, or on a deferred payment basis. Admission fee, which is
non-refundable, is recognized as income on admission of a member.
Entitlement fee (disclosed under Advance towards Members facilities),
which entitles the vacation ownership member for the vacation ownership
facilities over the membership usage period, is recognized as income
equally over the usage period.Requests for cancellation of membership
is accounted for when it is accepted by the Company. In respect of
instalments considered doubtful of recovery by the management, the same
is treated as a cancellation and accounted for accordingly.
(b) Annual subscription fee dues from members are recognised as income
on an accrual basis.
(c) Interest on instalment sales is recognised as income on an accrual
basis.
(d) Income from resorts includes income from room rentals, food and
beverages, etc. and is recognised when services are rendered.
(e) Securitised assets are derecognised as the contractual rights
therein are transferred to the third party. On being derecognised, the
excess of consideration received over the principal amounts of
receivable from members (net of reversals in respect of cancelled
members) is recognised as income from Securitisation.
(f) Income from travel services includes commission on tickets/hotel
booking, service charges from customers, etc. and is recognised when
services are rendered.
(g) Income from home stays is recognized when services are rendered.
(h) Interest income from loans is accounted on time proportion basis
and dividend income from mutual funds is accounted as and when right to
receive is established.
(vii) Foreign exchange transactions:
Foreign exchange transactions are recorded at exchange rates prevailing
on the date of the transactions. The exchange gain / loss arising on
settlement of such transactions is adjusted to the statement of profit
and loss.
Monetary assets and liabilities denominated in foreign currency are
translated at exchange rates prevailing at the Balance sheet date and
gain or loss arising out of such translation is adjusted to the
statement of profit and loss.
(viii) employee benefits:
(a) Short term employee benefit plans
All short term employee benefit plans such as salaries, wages, bonus,
special awards and medical benefits which fall due within 12 months of
the period in which the employee renders the related services which
entitles him to avail such benefits are recognized on an undiscounted
basis and charged to the statement of profit and loss.
(b) Long term employee benefit plans
The Company has defined contribution and defined benefit plans. The
plans are financed by the Company and in the case of some defined
contribution plans employees also contribute to the plan.
Defined Contribution Plan
Contributions to the provident and pension funds are made monthly at a
predetermined rate to the Regional Provident Fund Commissioner and
debited to the statement of profit and loss on an accrual basis.
Contributions to superannuation fund are accounted on the same basis
and is made to the Life Insurance Corporation of India (LIC).
Defined Benefit Plan
The company has an arrangement with the Life Insurance Corporation of
India (LIC) to administer its gratuity fund. The contribution
paid/payable to the fund based on liability towards gratuity determined
on the basis of an independent actuarial valuation as at balance sheet
date using the Projected Unit Credit method is debited to the statement
of profit and loss. Actuarial gains and losses arising during the year
are recognized in the statement of profit and loss. Long term
compensated absences similarly determined on an actuarial basis is
provided for and is not funded.
(ix) Taxes on income:
"Current tax is the amount of tax payable on the taxable income for
the year as determined in accordance with the provisions of the Income
Tax Act, 1961."
Deferred tax is recognised on timing differences, being the differences
between the taxable income and the accounting income that originate in
one period and are capable of reversal in one or more subsequent
periods. Deferred tax is measured using the tax rates and the tax laws
enacted or substantively enacted as at the reporting date. The
carrying amount of deferred tax assets and liabilities are reviewed at
each Balance Sheet date.
(x) Share issue expenses:
Expenses incurred in connection with issue of share capital are
adjusted against securities premium account.
(xi) Borrowing Cost:
Borrowing cost that are attributable to the acquisition, construction
or production of qualifying asset are capitalized as part of cost of
such asset till such time as the asset is ready for its intended to use
or sale. A qualifying asset is an asset that necessarily requires a
substantial period of time to get ready for its intended use or sale.
All other borrowing costs are recognized as expenses in the period in
which they are incurred.
(xii) Impairment of assets
The carrying values of assets/cash generating units at each balance
sheet date are reviewed for impairment. If any indication of impairment
exists the recoverable amount of such asset is estimated and impairment
is recognised, if the carrying amount of these assets exceed their
recoverable amount. The recoverable amount is the greater of the net
selling price and their value in use. Value in use is arrived at by
discounting the future cash flows to their present values based on an
appropriate discount factor. When there is indication that an
impairment loss recognised for an asset in earlier accounting period no
longer exists or may have decreased, such reversal of impairment loss
is recognised in the statement of profit and loss, except in the case
of re-valued asset.
(xiii) Cash and cash equivalents:
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are short- term balances (with an original maturity of
three months or less from the date of acquisition), highly liquid
investments that are readily convertible into known amounts of cash and
which are subject to insignificant risk of changes in value.
(xiv) Cash flow statements:
Cash flows are reported using the indirect method, whereby
profit/(loss) before extra-ordinary items and tax is adjusted for the
effects of transactions of non cash nature and any deferrals or
accruals of past or future cash receipts or payments. The cash flow
from operating, investing and financing activities of the company are
segregated based on the available information.
(xv) provision & contingencies:
A provision is recognised when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation in respect of which reliable
estimate can be made. Provisions (excluding retirement benefits) are
not discounted to their present value and are determined based on the
best estimate required to settle the obligation at the Balance sheet
date. These are reviewed at each Balance Sheet date and adjusted to
reflect the current best estimates. Contingent Liabilities are
disclosed in the notes.
(xvi) Earnings per share:
Basic earnings per share is computed by dividing the profit / (loss)
after tax (including the post tax effect of extraordinary items, if
any) by the weighted average number of equity shares outstanding during
the year. Diluted earnings per share is computed by dividing the profit
/ (loss) after tax (including the post tax effect of extraordinary
items, if any) as adjusted for dividend, interest and other charges to
expense or income relating to the dilutive potential equity shares, by
the weighted average number of equity shares considered for deriving
basic earnings per share and the weighted average number of equity
shares which could have been issued on the conversion of all dilutive
potential equity shares. Potential equity shares are deemed to be
dilutive only if their conversion to equity shares would decrease the
net profit per share from continuing ordinary operations. Potential
dilutive equity shares are deemed to be converted as at the beginning
of the period, unless they have been issued at a later date. The
dilutive potential equity shares are adjusted for the proceeds
receivable had the shares been actually issued at fair value (i.e.
average market value of the outstanding shares). Dilutive potential
equity shares are determined independently for each period presented.
The number of equity shares and potentially dilutive equity shares are
adjusted for share splits / reverse share splits and bonus shares, as
appropriate.
(xvii) Leases:
Assets leased by the Company in its capacity as a lessee, where
substantially all the risks and rewards of ownership vest in the
Company are classified as finance leases. Such leases are capitalised
at the inception of the lease at the lower of the fair value and the
present value of the minimum lease payments and a liability is created
for an equivalent amount. Each lease rental paid is allocated between
the liability and the interest cost so as to obtain a constant periodic
rate of interest on the outstanding liability for each year.
Lease arrangements where the risks and rewards incidental to ownership
of an asset substantially vest with the lessor are recognised as
operating leases. Lease rentals under operating leases are recognised
in the Statement of Profit and Loss on a straight-line basis.
(xviii) Insurance claims:
Insurance claims are accounted for on the basis of claims admitted /
expected to be admitted and to the extent that there is no uncertainty
in receiving the claims.
(xix) Service tax input credit:
Service tax input credit is accounted for in the books in the period in
which the underlying service received is accounted and when there is no
uncertainty in availing / utilising the credits.
Mar 31, 2012
(i) Basis for preparation of accounts
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards notified under
the Companies (Accounting Standards) Rules, 2006 (as amended) and the
relevant provisions of the Companies Act, 1956. The financial
statements have been prepared on accrual basis under the historical
cost convention. The accounting policies adopted in the preparation of
the financial statements are consistent with those followed in the
previous year.
Use of estimates:
The preparation of financial statements in conformity with Indian GAAP
requires the management to make estimates and assumptions considered in
the reported amounts of assets and liabilities (including contingent
liabilities) and the reported income and expenses during the year. The
management believes that the estimates used in preparation of the
financial statements are prudent and reasonable. Future results could
differ due to these estimates and the differences between the actual
results and the estimates are recognised in the periods in which the
results are known / materialise.
(ii) Fixed assets
Fixed assets are stated at cost less accumulated depreciation and
accumulated impairment losses, if any. Cost comprises of purchase
price and other directly attributable costs of bringing the asset to
its working condition for its intended use and includes interest on
moneys borrowed for construction/acquisition of fixed assets up to the
period the assets are ready for use. Projects under which assets are
not ready for their intended use and other capital work-in-progress are
carried at cost, comprising direct cost, related incidental expenses
and attributable interest.
Depreciation is calculated on straight line method at the rates and in
the manner prescribed in Schedule XIV of the Companies Act, 1956 except
for the following:
(a) Leasehold land and buildings are amortised over the period of
lease.
(b) Floating cottages grouped under building are depreciated over the
useful life of 25 years.
(c) Furniture and Fixtures in 'Club Mahindra Holiday World' are
amortised over a period of 36 months from the date of capitalisation.
(d) Motor vehicles provided to employees are depreciated over a period
of 48 months. Other assets provided to employees are depreciated over a
period of 60 months.
(e) Intangible assets representing 'vacation ownership' is amortised
over a period of ten years.
(f) Expenditure incurred towards software is amortised over a period of
36 months.
(g) Expenditure on product design and development & web portal is
amortised over the estimated useful life of the asset i.e. 3 / 4 years.
(h) Non- compete fee is amortised over a period of 5 years.
(iii) Assets taken on Lease and Hire Purchase
Assets taken on Lease and Hire Purchase arrangements, where
substantially all the risks and rewards of ownership vest in the
company are classified as finance leases. Such leases are capitalised
at the inception of lease at the lower of fare value and the present
value of the minimum lease payments.
(iv) Expenditure during construction period
Revenue expenses incurred in connection with construction of resorts in
so far as such expenses relate to the period prior to the date the
resort is put to use are treated as part of project cost and
capitalised.
(v) Inventories
Inventories are carried at lower of cost and net realisable value. Cost
is determined on First-in-First-out basis. Cost includes the purchase
price, non refundable taxes and delivery handling cost. Net realisable
value is estimated at the expected selling price less estimated costs
of procurement and sales.
(vi) Investments
Long-term investments are carried individually at cost less provision
for diminution, other than temporary, in the value of such investments.
Current investments are carried individually, at the lower of cost and
fair value. Cost of investments include acquisition charges such as
brokerage, fees and duties.
(vii) Revenue recognition
(a) The company's business is to sell Vacation ownership and provide
holiday facilities to members for a specified period each year, over a
number of years, for which membership fee is collected either in full
up front, or on a deferred payment basis. Admission fee, which is
non-refundable, is recognised as income on admission of a member.
Entitlement fee (disclosed under Advance towards Members facilities),
which entitles the vacation ownership member for the vacation ownership
facilities over the membership usage period, is recognised as income
equally over the usage period. Requests for cancellation of membership
is accounted for when it is accepted by the Company. In respect of
instalments considered doubtful of recovery by the management, the same
is treated as a cancellation and accounted for accordingly.
(b) Annual subscription fee dues from members are recognised as income
on an accrual basis.
(c) Interest on instalment sales is recognised as income on an accrual
basis.
(d) Income from resorts includes income from room rentals, food and
beverages, etc. and is recognised when services are rendered.
(e) Securitised assets are derecognised as the contractual rights
therein are transferred to the third party. On being derecognised, the
difference between book value of the securitised asset and
consideration received is recognised as gain or loss arising on
securitisation.
(f) Income from travel services includes commission on tickets/hotel
booking, service charges from customers, etc. and is recognised when
services are rendered.
(g) Income from home stays is recognised when services are rendered.
(h) Interest income from loans is accounted on time proportion basis
and dividend income from mutual funds is accounted as and when right to
receive is established.
(viii) Foreign exchange transactions
Foreign exchange transactions are recorded at exchange rates prevailing
on the date of the transactions. The exchange gain / loss arising on
settlement of such transactions is adjusted to the statement of profit
and loss.
Monetary assets and liabilities denominated in foreign currency are
translated at exchange rates prevailing at the Balance sheet date and
gain or loss arising out of such translation is adjusted to the
statement of profit and loss.
(ix) Employee benefits
(a) Short term employee benefit plans
All short term employee benefit plans such as salaries, wages, bonus,
special awards and, medical benefits which fall due within 12 months of
the period in which the employee renders the related services which
entitles him to avail such benefits are recognised on an undiscounted
basis and charged to the statement of profit and loss.
(b) Long term employee benefit plans
The Company has defined contribution and defined benefit plans. The
plans are financed by the Company and in the case of some defined
contribution plans employees also contribute to the plan.
Defined Contribution Plan
Contributions to the provident and pension funds are made monthly at a
predetermined rate to the Regional Provident Fund Commissioner and
debited to the statement of profit and loss on an accrual basis.
Contributions to superannuation fund are accounted on the same basis
and is made to the Life Insurance Corporation of India (LIC).
Defined Benefit Plan
The company has an arrangement with the Life Insurance Corporation of
India (LIC) to administer its gratuity fund. The contribution
paid/payable to the fund based on liability towards gratuity determined
on the basis of an independent actuarial valuation as at balance sheet
date using the Projected Unit Credit method is debited to the statement
of profit and loss. Actuarial gains and losses arising during the year
are recognised in the statement of profit and loss. Long term
compensated absences similarly determined on an actuarial basis is
provided for and is not funded.
(x) Taxes on income
Income taxes are accounted for in accordance with Accounting Standard
22 on Accounting for Taxes on Income. Tax expense comprises both
current and deferred tax. Current tax is determined as the amount of
tax payable in respect of taxable income for the period using the
applicable tax rates and tax laws. Deferred tax assets and liabilities
are recognised, subject to consideration of prudence, on timing
differences, being the difference between taxable income and accounting
income, that originate in one period and are capable of reversal in one
or more subsequent periods and are measured using tax rates enacted or
substantively enacted as at the Balance Sheet date. The carrying amount
of deferred tax assets and liabilities are reviewed at each Balance
Sheet date.
(xi) Share issue expenses
Expenses incurred in connection with issue of share capital are
adjusted against securities premium account.
(xii) Borrowing Cost
Borrowing cost that are attributable to the acquisition, construction
or production of qualifying asset are capitalised as part of cost of
such asset till such time as the asset is ready for its intended to use
or sale. A qualifying asset is an asset that necessarily requires a
substantial period of time to get ready for its intended use or sale.
All other borrowing costs are recognised as expenses in the period in
which they are incurred.
(xiii) Impairment of assets
The carrying values of assets/cash generating units at each balance
sheet date are reviewed for impairment. If any indication of
impairment exists the recoverable amount of such asset is estimated and
impairment is recognised, if the carrying amount of these assets exceed
their recoverable amount. The recoverable amount is the greater of the
net selling price and their value in use. Value in use is arrived at by
discounting the future cash flows to their present values based on an
appropriate discount factor. When there is indication that an
impairment loss recognised for an asset in earlier accounting period no
longer exists or may have decreased, such reversal of impairment loss
is recognised in the statement of profit and loss, except in the case
of re-valued asset.
(xiv) Cash and cash equivalents
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are short-term balances (with an original maturity of three
months or less from the date of acquisition), highly liquid investments
that are readily convertible into known amounts of cash and which are
subject to insignificant risk of changes in value.
(xv) Cash flow statements
Cash flows are reported using the indirect method, whereby
profit/(loss) before extra-ordinary items and tax is adjusted for the
effects of transactions of non cash nature and any deferrals or
accruals of past or future cash receipts or payments. The cash flow
from operating, investing and financing activities of the company are
segregated based on the available information.
(xvi) Provision & contingencies
A provision is recognised when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation in respect of which reliable
estimate can be made. Provisions (excluding retirement benefits) are
not discounted to their present value and are determined based on the
best estimate required to settle the obligation at the Balance sheet
date. These are reviewed at each Balance Sheet date and adjusted to
reflect the current best estimates. Contingent Liabilities are
disclosed in the notes.
(xvii) Earnings per share
Basic earnings per share is computed by dividing the profit / (loss)
after tax (including the post tax effect of extraordinary items, if
any) by the weighted average number of equity shares outstanding during
the year. Diluted earnings per share is computed by dividing the
profit / (loss) after tax (including the post tax effect of
extraordinary items, if any) as adjusted for dividend, interest and
other charges to expense or income relating to the dilutive potential
equity shares, by the weighted average number of equity shares
considered for deriving basic earnings per share and the weighted
average number of equity shares which could have been issued on the
conversion of all dilutive potential equity shares. Potential equity
shares are deemed to be dilutive only if their conversion to equity
shares would decrease the net profit per share from continuing ordinary
operations. Potential dilutive equity shares are deemed to be converted
as at the beginning of the period, unless they have been issued at a
later date. The dilutive potential equity shares are adjusted for the
proceeds receivable had the shares been actually issued at fair value
(i.e. average market value of the outstanding shares). Dilutive
potential equity shares are determined independently for each period
presented. The number of equity shares and potentially dilutive equity
shares are adjusted for share splits / reverse share splits and bonus
shares, as appropriate.
Mar 31, 2011
(i) Basis for preparation of accounts:
The financial statements have been prepared under the historical cost
convention in accordance with the accounting principles generally
accepted in India and comply with the mandatory Accounting Standards
notified by the Central Government of India under The Companies
(Accounting Standards) Rules, 2006 and with the relevant provisions of
the Companies Act, 1956.
Use of estmates:
The preparation of the financial statements, in conformity with the
generally accepted accounting principles, requires estimates and
assumptions to be made that affect the reported amounts of assets and
liabilities on the date of financial statements and the reported
amounts of revenues and expenses during the reported period.
Differences between the actual results and estimates are recognised in
the period in which the results are known/ materialised.
(ii) Fixed assets:
Fixed assets are stated at cost less depreciation. Cost comprises of
purchase price and other directly attributable costs of bringing the
asset to its working condition for its intended use and includes
interest on moneys borrowed for construction/ acquisition of fixed
assets up to the period the assets are ready for use. Depreciation is
calculated on straight line method at the rates and in the manner
prescribed in Schedule XIV of the Companies Act, 1956 except for the
following:
(a) Leasehold land and buildings are amortised over the period of
lease.
(b) Floating cottages grouped under building are depreciated over the
useful life of 25 years.
(c) Furniture and Fixtures in Club Mahindra Holiday World are
amortised over a period of 36 months from the date of capitalisation.
(d) Motor vehicles provided to employees are depreciated over a period
of 48 months. Other assets provided to employees are depreciated over a
period of 60 months.
(e) Intangible assets representing vacation ownership is amortised
over a period of ten years.
(f) Expenditure incurred towards software is amortised over a period of
36 months.
(g) Expenditure on product design and development & web portal is
amortised over the estimated useful life of the asset i.e. 3 / 4
years.
(h) Non- compete fee is amortised over a period of 5 years.
(iii) Assets taken on Lease and Hire Purchase:
Assets taken on Lease and Hire Purchase arrangements, wherein the
Company has an option to acquire the assets at the end of the lease are
accounted for as fixed assets in accordance with Accounting Standard 19
on Leases.
(iv) Expenditure during construction period:
Revenue expenses incurred in connection with construction of resorts
insofar as such expenses relate to the period prior to the date the
resort is put to use are treated as part of project cost and
capitalised.
(v) Inventories:
Inventories are stated at cost or net realisable value, whichever is
lower. The cost is arrived at on first in first out method.
(vi) Investments:
Long term investments are stated at acquisition cost less provision, if
any, for diminution in value other than temporary.
Current investments are carried at lower of cost and fair value.
(vii) Revenue recognition:
(a) The companys business is to sell Vacation ownership and provide
holiday facilities to members for a specified period each year, over a
number of years, for which membership fee is collected either in full
up front, or on a deferred payment basis. Admission fee, which is
non-refundable, is recognized as income on admission of a member.
Entitlement fee (disclosed under Advance towards Members facilities),
which entitles the vacation ownership member for the vacation ownership
facilities over the membership usage period, is recognized as income
equally over the usage period. Requests for cancellation of membership
is accounted for when it is accepted by the Company. In respect of
instalments considered doubtful of recovery by the management, the same
is treated as a cancellation and accounted for accordingly.
(b) Annual subscription fee dues from members are recognised as income
on an accrual basis.
(c) Interest on instalment sales is recognised as income on an accrual
basis.
(d) Income from resorts includes income from room rentals, food and
beverages, etc. and is recognised when services are rendered.
(e) Securitised assets are derecognised as the contractual rights
therein are transferred to the third party. On being derecognised, the
difference between book value of the securitised asset and
consideration received is recognised as gain or loss arising on
securitisation.
(f) Income from travel services includes commission on tickets/hotel
booking, service charges from customers, etc. and is recognised when
services are rendered.
(g) Income from home stays is recognized when services are rendered.
(viii) Foreign exchange transactions:
Foreign exchange transactions are recorded at exchange rates prevailing
on the date of the transactions. The exchange gain / loss arising on
settlement of such transactions is adjusted to the profit and loss
account.
Monetary assets and liabilities denominated in foreign currency are
translated at exchange rates prevailing at the Balance sheet date and
gain or loss arising out of such translation is adjusted to the profit
and loss account.
(ix) Employee benefits:
Short term employee benefit plans
All short term employee benefit plans such as salaries, wages, bonus,
special awards and, medical benefits which fall due within 12 months of
the period in which the employee renders the related services which
entitles him to avail such benefits are recognized on an undiscounted
basis and charged to the profit and loss account.
Defined Contribution Plan
Contributions to the provident and pension funds are made monthly at a
predetermined rate to the Regional Provident Fund Commissioner and
debited to the profit and loss account on an accrual basis.
Contributions to superannuation fund are accounted on the same basis
and is made to the Life Insurance Corporation of India (LIC).
Defined Benefit Plan
The company has an arrangement with the Life Insurance Corporation of
India (LIC) to administer its gratuity scheme. The contribution
paid/payable is debited to the profit and loss account on an accrual
basis. Liability towards gratuity is provided on the basis of an
actuarial valuation as at balance sheet date using the Projected Unit
Credit method and debited to the profit and loss account on an accrual
basis. Actuarial gains and losses arising during the year are
recognized in the profit and loss account. Long term compensated
absences is similarly valued on an actuarial basis and is unfunded.
(x) Taxes on income:
Income taxes are accounted for in accordance with Accounting Standard
22 on Accounting for Taxes on Income. Tax expense comprises both
current and deferred tax. Current tax is determined as the amount of
tax payable in respect of taxable income for the period using the
applicable tax rates and tax laws. Deferred tax assets and liabilities
are recognised, subject to consideration of prudence, on timing
differences, being the difference between taxable income and accounting
income, that originate in one period and are capable of reversal in one
or more subsequent periods and are measured using tax rates enacted or
substantively enacted as at the Balance Sheet date. The carrying amount
of deferred tax assets and liabilities are reviewed at each Balance
Sheet date.
(xi) Share issue expenses:
Expenses incurred in connection with issue of share capital are
adjusted against securities premium account.
(xii) Borrowing Cost:
Borrowing cost that are attributable to the acquisition, construction
or production of qualifying asset are capitalized as part of cost of
such asset till such time as the asset is ready for its intended to use
or sale. A qualifying asset is an asset that necessarily requires a
substantial period of time to get ready for its intended use or sale.
All other borrowing costs are recognized as expenses in the period in
which they are incurred.
(xiii) Impairment of assets
Consideration is given at each balance sheet date to determine whether
there is any indication of impairment of the carrying amount of the
companys fixed assets. If any indication exists, an assets
recoverable amount is estimated. An impairment loss is recognised
whenever the carrying amount of an asset exceeds its recoverable
amount. The recoverable amount is greater of the net selling price and
value in use. In assessing the value in use, the estimated future cash
flows are discounted to their present value based on an appropriate
discount factor.
(xiv) Provision & contingencies:
A provision is recognised when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation in respect of which reliable
estimate can be made. Provisions are not discounted to present value
and are determined based on the best estimate required to settle the
obligation at the Balance sheet date. These are reviewed at each
Balance Sheet date and adjusted to reflect the current best estimates.
Contingent Liabilities are not recognised but are disclosed in the
notes. Contingent Assets are neither recognised nor disclosed in the
financial statements.
Mar 31, 2010
(i) Basis for preparation of accounts:
The fnancial statements have been prepared under the historical cost
convention in accordance with the accounting principles generally
accepted in India and comply with the mandatory Accounting Standards
notifed by the Central Government of India under The Companies
(Accounting Standards) Rules, 2006 and with the relevant provisions of
the Companies Act, 1956.
Use of estimates:
The preparation of the fnancial statements, in conformity with the
generally accepted accounting principles, requires estimates and
assumptions to be made that affect the reported amounts of assets and
liabilities on the date of fnancial statements and the reported amounts
of revenues and expenses during the reported period. Differences
between the actual results and estimates are recognised in the period
in which the results are known/ materialised.
(ii) Fixed assets:
Fixed assets are stated at cost less depreciation. Cost comprises of
purchase price and other directly attributable costs of bringing the
asset to its working condition for its intended use and includes
interest on moneys borrowed for construction/acquisition of fxed assets
up to the period the assets are ready for use. Depreciation is
calculated on straight line method at the rates and in the manner
prescribed in Schedule XIV of the Companies Act, 1956 except for the
following:
(a) Leasehold land and buildings are amortised over the period of
lease.
(b) Floating cottages grouped under building are depreciated over the
useful life of 25 years.
(c) Furniture and Fixtures in ÃClub Mahindra Holiday Worldà are
amortised over a period of 36 months from the date of capitalisation.
(d) Motor vehicles provided to employees are depreciated over a period
of 48 months. Other assets provided to employees are depreciated over a
period of 60 months.
(e) Intangible assets representing Ãvacation ownershipà is amortised
over a period of ten years.
(f) Expenditure incurred towards software is amortised over a period of
36 months.
(g) Expenditure on product design and development & web portal is
amortised over the estimated useful life of the asset i.e. 3 / 4 years.
(h) Non- compete fee is amortised over a period of 5 years.
(iii) Assets taken on Lease and Hire Purchase:
Assets taken on Lease and Hire Purchase arrangements, wherein the
Company has an option to acquire the assets at the end of the lease are
accounted for as fxed assets in accordance with Accounting Standard 19
on Leases
(iv) Inventories:
Inventories are stated at cost or net realisable value, whichever is
lower. The cost is arrived at on frst in frst out method.
(v) Investments:
Long term investments are stated at acquisition cost less provision, if
any, for diminution in value other than temporary. Current investments
are carried at lower of cost and fair value.
(vi) Revenue recognition:
(a) The companyÃs business is to sell Vacation ownership and provide
holiday facilities to members for a specifed period each year, over a
number of years, for which membership fee is collected either in full
up front, or on a deferred payment basis. Admission fee, which is
non-refundable, is recognized as income on admission of a member.
Entitlement fee (disclosed under Advance towards Members facilities),
which entitles the vacation ownership member for the vacation ownership
facilities over the membership usage period, is recognized as income
equally over the usage period. Requests for cancellation of membership
is accounted for when it is accepted by the Company. In respect of
instalments considered doubtful of recovery by the management, the same
is treated as a cancellation and accounted for accordingly.
(b) Annual subscription fee dues from members are recognised as income
on an accrual basis.
(c) Interest on instalment sales is recognised as income on an accrual
basis.
(d) Income from resorts includes income from room rentals, food and
beverages, etc. and is recognised when services are rendered.
(e) Securitised assets are derecognised as the contractual rights
therein are transferred to the third party. On being derecognised, the
difference between book value of the securitised asset and
consideration received is recognised as gain or loss arising on
securitisation.
(f) Income from travel services includes commission on tickets/hotel
booking, service charges from customers, etc. and is recognised when
services are rendered.
(g) Income from home stays is recognized when services are rendered.
(vii) Foreign exchange transactions:
Foreign exchange transactions are recorded at exchange rates prevailing
on the date of the transactions. The exchange gain / loss arising on
settlement of such transactions is adjusted to the proft and loss
account.
Monetary assets and liabilities denominated in foreign currency are
translated at exchange rates prevailing at the Balance sheet date and
gain or loss arising out of such translation is adjusted to the proft
and loss account.
(viii) Employee benefts:
Short term employee beneft plans
All short term employee beneft plans such as salaries, wages, bonus,
special awards and, medical benefts which fall due within 12 months of
the period in which the employee renders the related services which
entitles him to avail such benefts are recognized on an undiscounted
basis and charged to the proft and loss account.
Defned Contribution Plan
Contributions to the provident and pension funds are made monthly at a
predetermined rate to the Regional Provident Fund Commissioner and
debited to the proft and loss account on an accrual basis.
Contributions to superannuation fund are accounted on the same basis
and is made to the Life Insurance Corporation of India (LIC).
Defned Beneft Plan
The company has an arrangement with the Life Insurance Corporation of
India (LIC) to administer its gratuity scheme. The contribution
paid/payable is debited to the proft and loss account on an accrual
basis. Liability towards gratuity is provided on the basis of an
actuarial valuation as at balance sheet date using the Projected Unit
Credit method and debited to the proft and loss account on an accrual
basis. Actuarial gains and losses arising during the year are
recognized in the proft and loss account. Long term compensated
absences is similarly valued on an actuarial basis and is unfunded.
(ix) Taxes on income:
Income taxes are accounted for in accordance with Accounting Standard
22 on Accounting for Taxes on Income. Tax expense comprises both
current and deferred tax. Current tax is determined as the amount of
tax payable in respect of taxable income for the period using the
applicable tax rates and tax laws. Deferred tax assets and liabilities
are recognised, subject to consideration of prudence, on timing
differences, being the difference between taxable income and accounting
income, that originate in one period and are capable of reversal in one
or more subsequent periods and are measured using tax rates enacted or
substantively enacted as at the Balance Sheet date. The carrying amount
of deferred tax assets and liabilities are reviewed at each Balance
Sheet date.
(x) Share issue expenses:
Expenses incurred in connection with issue of share capital are
adjusted against securities premium account.
(xi) Borrowing Cost:
Borrowing cost that are attributable to the acquisition, construction
or production of qualifying asset are capitalized as part of cost of
such asset till such time as the asset is ready for its intended use or
sale. A qualifying asset is an asset that necessarily requires a
substantial period of time to get ready for its intended use or sale.
All other borrowing costs are recognized as expenses in the period in
which they are incurred.
(xii) Provision & contingencies:
A provision is recognised when the Company has a present obligation as
a result of past events and it is probable that an outfow of resources
will be required to settle the obligation in respect of which reliable
estimate can be made. Provisions are not discounted to present value
and are determined based on the best estimate required to settle the
obligation at the Balance sheet date. These are reviewed at each
Balance Sheet date and adjusted to refect the current best estimates.
Contingent Liabilities are not recognised but are disclosed in the
notes. Contingent Assets are neither recognised nor disclosed in the
financial statements.
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