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Accounting Policies of Sayaji Hotels Ltd. Company

Mar 31, 2016

NOTE 1.

Sayaji Hotels Limited (“SHL” or the “Company”), is a listed public limited company incorporated under the provisions of the Companies Act, 2013. Its shares are listed on Bombay stock exchange on India. The Company is primarily engaged in the business of owning, operating & managing hotels.

SIGNIFICANT ACCOUNTING POLICIES

Convention

To prepare financial statements in accordance with applicable Accounting Standards in India. A summary of accounting policies, which have been applied consistently, is set out below. The financial statements have also been prepared in accordance with relevant presentational requirement of the Companies Act, 2013.

Basis of Accounting

The financial statements have been prepared under the historical cost convention and on accrual basis and ongoing concern concept. Use of Estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reported period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

Fixed Assets

To state Fixed Assets at cost of acquisition inclusive of inward freight, duties and taxes and incidental expenses related to acquisition. In respect of major projects involving construction/fabrication, related pre-operational expenses form part of the value of the assets capitalized. Expenses capitalized also includes applicable borrowing costs.

To capitalize software where it is expected to provide future enduring economic benefits. Capitalization costs includes license fees. The costs are capitalized in the year in which the relevant software is implemented for use. Subsequent expenditure related to an item of fixed assets is added to its book value only if increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repairs and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.

Gains or losses arising from de-recognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

Depreciation

No amortization is provided in the Accounts in respect of leasehold land in view of the long term tenure, which is akin to ownership.

Depreciation on Fixed Assets is provided for on Written Down Value Method, based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013 except in respect of the following assets, where useful life is different than those prescribed in Schedule II are used;

Investments

Current investments are stated at lower of cost and fair market value, and long term investments are stated at cost. Where applicable, provision is made where there is a permanent fall in valuation of long term investments.

Inventories

Inventories consisting of Stock of Food and Beverages and Stores & Operating Supplies are valued at cost or net realisable value, whichever is less, after providing for obsolescence & damage.

Cost is arrived at on Weighted Average basis. Cost comprises expenditure incurred in normal course of the business in bringing such inventories to its location. Obsolete, slow moving and defective inventories are identified at the time of physical verification of inventories and, where necessary, provision is made for such inventories.

Foreign Currency Transactions

(a) Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction.

(b) Monetary items denominated in foreign currencies at the yearend are restated at the yearend rates. In case of items which are covered by forward exchange contracts, the difference between the yearend rate and the rate on the date of the contract is recognized as exchange difference and the premium paid on forward contracts is recognized over the life of the contract.

(c) Any income or expense on account of exchange difference either on settlement or on translation is recognized in the statement of profit and loss account.

Income

Revenue comprises sale of rooms, food and beverages, allied services relating to Hotel operations. Revenue is recognized upon rendering of service. Life time club membership fees treated as income in the year of receipt.

Sale is exclusive of Luxury tax, Sales tax, Service Tax and other taxes. Sales tax under the composition scheme is also excluded. Benefits to Workmen

Employee benefit plans comprise both defined benefit and defined contribution plans.

Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year. Actuarial gains/ losses are immediately taken to the statement of profit and loss account and are not deferred.

Provident fund is a defined contribution plan. Each eligible employee and the company make contributions at a percentage of the basic salary specified under the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952.

The Company''s contributions are charged to the profit and loss account of the year when the contributions to the respective funds are due. The company has no further obligations under the plan beyond its periodic contributions. Benefit in terms of workmen demand pending settlement, medical reimbursement and leave travel concession are accounted, when paid and bonus to employees, is provided for on accrual basis. Leave Encashment is determined based on the available leave entitlement at the end of the year.

Taxes of Income

To provide and determine current tax as the amount of tax payable in respect of taxable income for the period.

To provide and recognize deferred tax on timing differences between taxable income and accounting income subject to consideration of prudence.

Not to recognize deferred tax assets on unabsorbed depreciation and carry forward of losses unless there is virtual certainty that there will be sufficient future taxable income available to realize such assets.

Minimum Alternative Tax (“MAT”) credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the Company will pay normal income tax during the specified period.

Impairment of Assets

Impairment is ascertained at each balance sheet date in respect of company''s fixed assets. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use. In assessing value and use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

Accounting for Provisions, Contingent Liabilities & Contingent Assets

Provisions are recognized in terms of Accounting Standard 29-“Provisions, Contingent Liabilities and Contingent Assets” issued by The Institute of Chartered Accountant of India, when there is a present legal or statutory obligation as a result of past event where it is probable that there will be outflow of resources to settle the obligation and when a reliable estimate of the amount of the obligation can be made.

Contingent Liabilities are recognized only when there is a possible obligation arising from past events due to occurrence or non occurrence of one or more uncertain future events not wholly within the control of the company or where reliable estimate of the obligation cannot be made. Obligations are assessed on an ongoing basis and only those having largely probable outflow of resources are provided for.

Contingent Assets are not recognized in the financial statements.

Borrowing Costs

General and specific 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. All other borrowing costs are charged to Statement of Profit and Loss over the tenure of the borrowing.

Events occurring after the date of Balance Sheet date

Where material, events occurring after the date of Balance Sheet are considered up to the date of adoption of the accounts.

Accounting for Leases

In respect of operating lease transactions, the assets are not capitalized in the books of the Company and lease payments are charged to the Statement of Profit and Loss Account.

Periodic escalations in the lease rentals are considered as and when the same are effective as per the terms of lease and the same are not straight lined.

Claims

To disclose claims against the company not acknowledged as debts after a careful evaluation of the facts and legal aspect of the matter involved


Mar 31, 2015

NOTE 1.

Sayaji Hotels Limited ("SHL" or the "Company"), is a listed public limited company incorporated under the provisions of the Companies Act, 1956. Its shares are listed on Bombay stock exchange, Vadodara stock exchange, Madhya Pradesh stock exchange & Ahmedabad stock exchange on India. The Company is primarily engaged in the business of owning, operating & managing hotels.

Convention

To prepare financial statements in accordance with applicable Accounting Standards in India. A summary of accounting policies, which have been applied consistently, is set out below. The financial statements have also been prepared in accordance with relevant presentational requirement of the Companies Act, 2013.

Basis of Accounting

The financial statements have been prepared under the historical cost convention and on accrual basis and on going concern concept.

Use of Estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reported period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

Fixed Assets

To state Fixed Assets at cost of acquisition inclusive of inward freight, duties and taxes and incidental expenses related to acquisition. In respect of major projects involving construction/fabrication, related pre-operational expenses form part of the value of the assets capitalized. Expenses capitalized also includes applicable borrowing costs.

To capitalize software where it is expected to provide future enduring economic benefits. Capitalization costs includes license fees. The costs are capitalized in the year in which the relevant software is implemented for use. Subsequent expenditure related to an item of fixed assets is added to its book value only if increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repairs and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.

Gains or losses arising from de-recognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

Depreciation

No amortization is provided in the Accounts in respect of leasehold land in view of the long term tenure, which is akin to ownership.

Depreciation on Fixed Assets is provided for on Written Down Value Method, based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013 except in respect of the following assets, where useful life is different than those prescribed in Schedule II are used;

Investments

To state current investments at lower of cost and fair value, and long term investments are stated at cost. Where applicable, provision is made where there is a permanent fall in valuation of long term investments.

Inventories

Inventories consisting of Stock of Food and Beverages and Stores & Operating Supplies are valued at cost or net realisable value, whichever is less, after providing for obsolescence & damage.

Cost is arrived at on Weighted Average basis. Cost comprises expenditure incurred in normal course of the business in bringing such inventories to its location. Obsolete, slow moving and defective inventories are identified at the time of physical verification of inventories and, where necessary, provision is made for such inventories.

Foreign Currency Transactions

(a) Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction.

(b) Monetary items denominated in foreign currencies at the year end are restated at the year end rates. In case of items which are covered by forward exchange contracts, the difference between the year end rate and the rate on the date of the contract is recognized as exchange difference and the premium paid on forward contracts is recognized over the life of the contract.

(c) Any income or expense on account of exchange difference either on settlement or on translation is recognized in the profit and loss account.

Income

Revenue comprises sale of rooms, food and beverages, allied services relating to Hotel operations. Revenue is recognized upon rendering of service. Life time club membership fees treated as income in the year of receipt.

Sale is exclusive of Luxury tax, Sales tax, Service Tax and other taxes. Sales tax under the composition scheme is also excluded.

Benefites to Workmen

Employee benefit plans comprise both defined benefit and defined contribution plans.

Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year. Actuarial gains/ losses are immediately taken to profit and loss account and are not deferred.

Provident fund is a defined contribution plan. Each eligible employee and the company make contributions at a percentage of the basic salary specified under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952.

The Company's contributions are charged to the profit and loss account of the year when the contributions to the respective funds are due. The company has no further obligations under the plan beyond its periodic contributions. Benefit in terms of workmen demand pending settlement, medical reimbursement and leave travel concession are accounted, when paid and bonus to employees, is provided for on accrual basis. Leave Encashment is determined based on the available leave entitlement at the end of the year.

Taxes of Income

To provide and determine current tax as the amount of tax payable in respect of taxable income for the period.

To provide and recognize deferred tax on timing differences between taxable income and accounting income subject to consideration of prudence.

Not to recognize deferred tax assets on unabsorbed depreciation and carry forward of losses unless there is virtual certainty that there will be sufficient future taxable income available to realize such assets.

Minimum Alternative Tax ("MAT") credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the Company will pay normal income tax during the specified period.

Impairment of Assets

Impairment is ascertained at each balance sheet date in respect of company's fixed assets. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use. In assessing value and use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

Accounting for Provisions, Contingent Liabilities & Contingent Assets

Provisions are recognized in terms of Accounting Standard 29-"Provisions, Contingent Liabilities and Contingent Assets" issued by The Institute of Chartered Accountant of India, when there is a present legal or statutory obligation as a result of past event where it is probable that there will be outflow of resources to settle the obligation and when a reliable estimate of the amount of the obligation can be made.

Contingent Liabilities are recognized only when there is a possible obligation arising from past events due to occurrence or non occurrence of one or more uncertain future events not wholly within the control of the company or where reliable estimate of the obligation can not be made. Obligations are assessed on an ongoing basis and only those having largely probable outflow of resources are provided for.

Contingent Assets are not recognized in the financial statements.

Borrowing Costs

General and specific 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. All other borrowing costs are charged to Statement of Profit and Loss over the tenure of the borrowing.

Events occurring after the date of Balance Sheet date

Where material, events occurring after the date of Balance Sheet are considered up to the date of adoption of the accounts.

Accounting for Leases

In respect of operating lease transactions, the assets are not capitalized in the books of the Company and lease payments are charged to the Profit and Loss Account.

Periodic escalations in the lease rentals are considered as and when the same are effective as per the terms of lease and the same are not straight lined.

Claims

To disclose claims against the company not acknowledged as debts after a careful evaluation of the facts and legal aspect of the matter involved.


Mar 31, 2014

Convention

To prepare financial statements in accordance with applicable Accounting Standards in India. A summary of accounting policies, which have been applied consistently, is set out below. The financial statements have also been prepared in accordance with relevant presentational requirement of the Companies Act, 1956.

Basis of Accounting

The financial statements have been prepared under the historical cost convention and on accrual basis and ongoing concern concept.

Use of Estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and abilities on the date of the financial statements and the reported amount of revenues and expenses during the reported period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

Fixed Assets

To state Fixed Assets at cost of acquisition inclusive of inward freight, duties and taxes and incidental expenses related to acquisition. In respect of major projects involving construction/fabrication, related pre-operational expenses from part of the value of the assets capitalized. Expenses capitalized also includes applicable borrowing costs.

To capitalize software where it is expected to provide future enduring economic benefits. Capitalization costs includes license fees. The costs are capitalized in the year in which the relevant software is implemented for use. Subsequent expenditure related to an item of fixed assets is added to its book value only if increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repairs and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.

Gains or losses arising from de-recognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

Depreciation

No amortization is provided in the Accounts in respect of leasehold land in view of the long term tenure, which is akin to ownership.

Depreciation on Fixed Assets is provided for on Written Down Value Method at the rates and in the manner specified in the Schedule XIV of the Companies Act, 1956.

Investments

To state current investments at lower of cost and fair value, and long term investments are stated at cost. Where applicable, provision is made when there is a permanent fall in valuation of long term investments.

Inventories

Inventories consisting of Stock of Food and Beverages and Stores & Operating Supplies are valued at cost or net realisable value, whichever is less, after providing for obsolescence & damage.

Cost is arrived at on First in First Out basis. Cost comprises expenditure incurred in normal course of the business in bringing such inventories to its location. Obsolete, slow moving and defective inventories are identified at the time of physical verification of inventories and, where necessary, provision is made for such inventories.

Foreign Currency Transactions

(a) Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction.f

(b) Monetary items denominated in foreign currencies at the year end are restated at the year end rates. In case of items which are covered by forward exchange contracts, the difference between the year end rate and the rate on the date of the contract is recognized as exchange difference and the premium paid on forward contracts is recognized over the life of the contract.

(c) Any income or expense on account of exchange difference either on settlement or on translation is recognized in the profit and loss account.

Income

Revenue comprises sale of rooms, food and beverages, allied services relating to Hotel operations. Revenue is recognized uponrendering of service. Life time club membership fees treated as income in theyear of receipt.

Sale is exclusive of Luxury tax, Sales tax, Service Tax and other taxes. Sales tax under the composition scheme is also excluded.

Benefites to Workmen

Employee benefit plans comprise both defined benefitand defined contribution plans.

Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year. Actuarial gains/ losses are immediately taken to profit and loss account and are not deferred.

Provident fund is a defined contribution plan. Each eligible employee and the company make contributions at a percentage of the basic salary specified under the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952.

The Company''s contributions are charged to the profit and loss account of theyear when the contributions to the respective funds are due. The company has no further obligations under the plan beyond its periodic contributions. Benefit in terms of workmen demand pending settlement, medical reimbursement and leave travel concession are accounted, when paid and bonus to employees, is provided for on accrual basis. Leave Encashment is determined based on the available leave entitlement at the end of the year.

Taxes of Income

To provide and determine current tax as the amount of tax payable in respect of taxable income for the period.

To provide and recognize deferred tax on timing differences between taxable income and accounting income subject to consideration of prudence.

Not to recognize deferred tax assets on unabsorbed depreciation and carry forward of losses unless there is virtual certainty that there will be sufficient future taxable income available to realize such assets.

Minimum Alternative Tax ("MAT") credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. Such assetis reviewed ateach Balance Sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the Company will pay normal income tax during the specified period.

Impairment of Assets

Impairment is ascertained at each balance sheet date in respect of company''s fixed assets. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use. In assessing value and use, the estimated future cash flows are discounted to their present value based on an appropriate discountfactor.

Accounting for Provisions, Contingent Liabilities&Contingent Assets

Provisions are recognized in terms of Accounting Standard 29-"Provisions, Contingent Liabilities and Contingent Assets" issued by The Institute of Chartered Accountant of India, when there is a present legal or statutory obligation as a result of past event where it is probable thatthere will be outflow of resources to settle the obligation and when a reliable estimate of the amount of the obligation can be made.

Contingent Liabilities are recognized only when there is a possible obligation arising from past events due to occurrence or non occurrence of one or more uncertain future events not wholly within the control of the company or where reliable estimate of the obligation can not be made. Obligations are assessed on an ongoing basis and only those having largely probable outflow of resources are provided for.

Contingent Assets are not recognized in the financial statements.

Borrowing Costs

General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets thatnecessarilytakeasubstantial period oftime 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. All other borrowing costs are charged to Statement of Profit and Loss over the tenure of the borrowing.

Events occurring afterthe date of Balance Sheetdate

Where material, events occurring after the date of Balance Sheet are considered up to the date of adoption of the accounts.

Accounting for Leases

In respect of operating lease transactions, the assets are not capitalized in the books of the Company and lease payments are charged to the Profitand Loss Account.

Periodic escalations in the lease rentals are considered as and when the same are effective as per the terms of lease and the same are not straight lined.

Claims

To disclose claims against the company not acknowledged as debts after a careful evaluation of the facts and legal aspect of the matter involved.

Terms/rights attached to equity shares:

2.1 The company has only one class of equity shares having a par value of Rs.10/- per share. Each Holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed, if any, by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. During the year ended 31st March 2014, the amount of per share dividend recognised as distributions to equity shareholders was Rs. Nil (Previous Year Rs.Nil)

As per records of the company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

4.3 Secured Term Loan from bank includes term loans outstanding from State Bank of India, Axis Bank Ltd, State Bank of Mysore & HDFC

bank Ltd.

4.3.1 Term loans outstanding of State Bank of India are secured byway of mortgage of land & building at Indore,Vadodara & Pune & hypothecation of movables, present & future except stocks of food beverages, operating supplies, stores, spares, book-debts (excluding credit card receivables), bills etc. offered to the bankers for securing the working capital finance. The terms of repayment of all term loans of State Bank of India is on quarterly basis & interest is payable on monthly basis.

4.3.2 Term loans outstanding of Axis Bank Ltd include term loans account & vehicle loans account. Term loan outstanding is secured by way of hypothecation of movable, present & future, except stocks of food beverages, operating supplies, stores, spares, book-debts (excluding credit card receivables), bills etc. The other term loan outstanding is secured by first charge by way of hypothecation of stocks of food, beverages, operating supplies, spares & book-debts, bills etc. of the company & also byway of second charge on the immovable properties of the company at Indore & Baroda & also byway of pledge of shares belonging to promoters. The term of repayment of both the term loan is on quarterly basis & interest is payable on monthly basis. Vehicle loans outstanding are secured by way of hypothecation of the specific vehicles financed by bank. These loans were personally guranteed by Late Shri Sajid Dhanani, Company is in the process for making alternative arrangement for replacement of the personal guarantee.

4.3.3 Term loan outstanding of State Bank of Mysore is secured byway of mortgage of land & building at Indore, Vadodara & Pune & hypothecation of movables, present & future, except stocks of food beverages, operating supplies, stores, spares, book- debts (excluding credit card receivables), bills etc. The term of repayment of the term loan is on quarterly basis & the interest is payable on monthly basis. These loans were personally guranteed by Late Shri Sajid Dhanani, Company is in the process for making alternative arrangementfor replacement of the personal guarantee.

4.3.4 Vehicle loans outstanding fromHDFC Bank issecured by way of hypothecation of the specific vehicles financedby bank.

4.4 Secured term loans from Financial Institutions includes term loan outstanding of Tourism Finance Corporation of India Ltd(TFCIL) &

Madhya Pradesh Finance Corporation (MPFC).

4.4.1 Term loan outstanding from TFCIL is secured on pari-passu basis byway of mortgage of land & building at Indore, Pune & Vadodara & hypothecation of the movables, present & future, except stocks of food beverages, operating supplies, stores, spares, book-debts (excluding credit card receivables), bills etc & also byway of pledge of shares belonging to promoters. The term of repayment is on monthly basis. These loan were personally guranteed by Late Shri Sajid Dhanani, Company is in the process for making alternative arrangementfor replacement of the personal guarantee.

4.4.2 Term loan outstanding from MPFC are secured by way of mortgage of land & building at Indore & hypothecation of the movables, present & future, except stocks of food beverages, operating supplies, stores, spares, book-debts (excluding credit card receivables), bills etc bankers for securing the working capital finance. The term of repayment is on quarterly basis & interest is payable on monthly basis. These loan were personally guranteed by Late Shri Sajid dhanani, Company is in the process for making alternative arrangement for replacement of the personal guarantee.

4.5 Loan outstanding from Magma Fincorp Limited is unsecured loan. Repayment is being made on EMI basis. Post dated cheques has been given for all instalments.

6.1 Provision for employee benefits includes provision of Gratuity & leave encashment payable after 12 month.

6.2 The Company makes annual contributions to the Employee''s Group Gratuity scheme of the SBI Life Insurance Co. Ltd., a funded defined benefit plan for the qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment as per the terms of the scheme. Vesting occurs upon completion of five years of service.

6.2.1 The present value of the defined benefit obligation and current service cost were measured using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. The following table sets out the status of the funded gratuity plan and the amounts recognized in the company''s financial statements as at March 31,2014:-

6.3 Leave Encashment:

The provision of leave encashment have been made on outstanding privilege leave of employees at the end of year and calculated on the basis of basic pay of employees. Attrition rate taken same as Actuarial valuation report of gratuity liability.

7.1 Working capital facilities include Cash Credit Facilities from State Bank of India outstanding Rs 350.03 lacs & Axis Bank outstanding Rs. 173.37 lacs both of which are secured by first charge byway of hypothecation of stocks of food, beverages, operating supplies, stores, spares, book-debts (excluding credit card receivables), bills etc. of the company and also byway of a second charge on the immovable properties of the company at Indore, Baroda and Pune. Cash Credit Facilities from Axis bank Ltd were personally guranteed by Late Shri Sajid Dhanani, Company is in the process for making alternative arrangement for replacement of the personal guarantee.

7.2 Fixed deposits from Public has maturity period of 12 months and interest is payable @ 10% pa compounded monthly.

7.3 Loans from related parties & others includes loan from directors, associates and friends & relatives of directors.

8.1 The Company has not received information from vendors regarding their status under the Micro, Small & Medium Enterprises Development Act, 2006 and hence disclosure relating to amount unpaid at the year end together with interest paid/payable under the Act have not been given.

8.2 Trade Payable having scheduled payment beyond 12 months after reporting date Rs. Nil (Previous Year Rs. Nil)

9.1 Current maturities of term loans from bank includes Principal instalments payable to State Bank of India, Axis Bank Ltd, State Bank of Mysore and toHDFC. Bank wise Current maturity is give under Note no 4.1. Other terms are same as given in Note no 4.2.

9.2 Current maturities of term loans from financial institutions includes Principal instalments payable to Tourism Finance Corporation of India Ltd, and Madhya Pradesh Finance Corporation. Financial Institution wise current maturities is given under Note no 4.1 Other terms are same as given in note no 4.3.

9.3 Current maturities of term loan from NBFC is of Magma Fincorp Limited. Other terms are same as given in note no 4.5

9.4 Statutory dues includes VAT, luxury tax, TDS, service tax & other statutory payables.

9.5 Advances received from customer includes advances against future bookings for functions to be held in next 12 Months

9.6 Other Currentliabilities includes rent payable, interest payable and staff dues.

12.1 Barbeque Nation Hospitality Ltd(BNHL) is subsidiary of the company with 54.70% shareholding. During the year company has sold 415000 shares of BNHL at Rs 334.54 per share to Tamara Private Limited.

* Includes 1942592 Equity Shares, deposited in Escrow A/c. with Citi Bank NA, Mumbai pursuant to Escrow Agreement dated 10-04-2013 between BNHL, SHL & AAJV Investment Trust read with Shareholders agreement dated 26-03-2013 to facilitate the investor, for suitable Exit either through IPO or Investor Drag Rights within 54 months from the effective date i.e. 12-04-2013.

12.2 Malwa Hospitality Pvt Ltd is subsidiary of the company with 65% shareholding therein.

12.3 Aries Hotels Pvt Ltd. is subsidiary of the company with 52% shareholdingtherein.


Mar 31, 2013

1.1 Convention :

1.1.1 The financial statements have been prepared under the historical cost convention and on the basis of going concern, in accordance with the generally accepted accounting principles and provisions of the Companies Act1956.

1.1.2 The Company generally follows mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis.

1.1.3 Where changes in presentation are made, comparative figures for the previous year are regrouped accordingly.

1.2 Fixed Assets :

1.2.1 Accounted at acquisition cost including directly attributable costs such as freight, insurance and specific installation charges for bringing the asset to its working condition for use.

1.2.2 Expenditure relating to existing fixed assets is added to the cost of the assets where it increases the performance/life of the assets as assessed earlier.

1.2.3 Fixed assets are eliminated from financial statements, either on disposal or when retired from active use. Generally, such retired assets are disposed of soon thereafter.

1.2.4 Pre-operative expenses, including interest on specific loans for the projects incurred till the projects are ready for Commercial Operation, are capitalised.

1.2.5 Expenditure on the new projects are included in Capital Work-in-Progress.

1.3 Depreciation:

1.3.1 Leasehold Land is not amortised.

1.3.2 Depreciation is charged on fixed assets except on Freehold & leasehold land as per the Written down value method at the rates and in the manner prescribed under Schedule XIV to the Companies Act, 1956.

1.3.3 Assets like vehicles, computers etc. utilized during the construction period are not depreciated till the project is ready.

1.3.4 During the year under review, the method of depreciation in respect of fixed assets of the company have been c hanged from Straight Line Method to Written Down Value Method for better representation of the financial statements. In compliance with Accounting Standard (AS 6) issued by the Institute of Chartered Accountants of India, depreciation has been recomputed from the date of commissioning of the fixed assets at the WDV rates applicable to those years on such fixed assets. As a result of this change, there is additional charge of depreciation during the year of Rs 4353.20 lacs (up to 31st March 2012) relating to earlier years, which is debited to Profit & loss Account under Exceptional and Extra Ordinary items.

Had there been no change in the method of depreciation, the charge for the current year would have been lower by Rs 688.21 lacs. Consequently, Operating Loss Before Taxes would have been lower and Reserves and surplus & Net Block of assets would have been higher by Rs 688.21 lacs

1.4 Investments :

Investments are carried at lower of cost or quoted/ fair value. Provision for diminution is made only if such decline is other than

temporary.

1.5 Inventories :

1.5.1 Inventories are valued at cost or net realisable value, whichever is less, after providing for obsolescence & damage.

1.5.2 In the case of raw materials, operating supplies and stores, cost represents purchase price and other costs incurred for bringing inventories upto their locations and are determined on First-In-First-Out basis.

1.6 Sales:

Sale is exclusive of Luxury tax, Sales tax, Service Tax and other taxes. Sales tax under the composition scheme is also excluded .

1.7 Accounting for Provisions, Contingent Liabilities and Contingent Assets :

A provision is recognized when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Accounting for contingencies (gains and losses) arising out of contractual obligations, are made only on the basis of mutual acceptances.

1.8 Events occurring after the date of Balance Sheet date :

Where material, events occurring after the date of Balance Sheet are considered up to the date of adoption of the accounts.

1.9 Employee Benefit :

1.9.1 Employee benefit plans comprise both defined benefit and defined contribution plans.

1.9.2 Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year. Actuarial gains/ losses are immediately taken to profit and loss account and are not deferred.

1.9.3 Provident fund is a defined contribution plan. Each eligible employee and the company make contributions at a percentage of the basic salary specified under the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952. The Company''s contributions are charged to the profit and loss account of the year when the contributions to the respective funds are due. The company has no further obligations under the plan beyond its periodic contributions.

1.9.4 Leave Encashment is determined based on the available leave entitlement at the end of the year.

1.10 Taxation:

1.10.1 Provision for current taxation has been made in accordance with the Income Tax Laws applicable to the assessment year.

1.10.2 Deferred Tax is recognized on timing difference 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. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognized only if there is virtual certainty of realization of such assets. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

1.11 Foreign Currency transactions :

1.11.1 Foreign currency transactions are accounted at the rate prevailing on the date of transaction. Gain or loss arising out of translation/conversion is taken credit for or charged to the Profit & Loss Account.

1.11.2 Exchange difference arising due to repayment or restatement of liabilities incurred for the purpose of acquiring fixed assets are adjusted in the carrying amount of the respective fixed assets.

1.12 Accounting for Leases :

1.12.1 In respect of operating lease transactions, the assets are not capitalized in the books of the Company and lease payments are charged to the Profit and Loss Account.

1.12.2 Periodic escalations in the lease rentals are considered as and when the same are effective as per the terms of lease and the same are not straight lined.

1.13 Borrowing Costs :

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the post of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

1.14 Impairment of Assets :

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.


Mar 31, 2012

1.1 Convention:

1.1.1 The financial statements have been prepared under the historical cost convention and on the basis of going concern, in accordance with the generally accepted accounting principles and provisions of the Companies Act 1956.

1.1.2 The Company generally follows mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis.

1.1.3 Where changes in presentation are made, comparative figures for the previous year are regrouped accordingly.

1.2 Fixed Assets:

1.2.1 Accounted at acquisition cost including directly attributable costs such as freight, insurance and specific installation charges for bringing the asset to its working condition for use.

1.2.2 Expenditure relating to existing fixed assets is added to the cost of the assets where it increases the performance/life of the assets as assessed earlier.

1.2.3 Fixed assets are eliminated from financial statements, either on disposal or when retired from active use. Generally, such retired assets are disposed of soon thereafter.

1.2.4 Pre-operative expenses, including interest on specific loans for the projects incurred till the projects are ready for Commercial Operation, are capitalised.

1.2.5 Expenditure on the new projects are included in Capital Work-in-Progress.

1.3 Depreciation:

1.3.1 Leasehold Land is not amortised.

1.3.2 Depreciation is charged on fixed assets except on Freehold & leasehold land and buildings (in respect of restaurant chain business) as per the straight-line method at the rates and in the manner prescribed under Schedule XIV to the Companies Act, 1956.

1.3.3 Buildings (in respect of the restaurant chain business) constructed on the rented properties are depreciated over the term of the respective leases.

1.3.4 Assets like vehicles, computers etc. utilized during the construction period are not depreciated till the project is ready.

1.3.5 Computer software and licence are depreciated overa period of three years.

1.3.6 Liquor licences purchased for restaurant chain business are depreciated over the period of lease term of the respective restaurants.

1.4 Investments:

Investments are carried at lower of cost or quoted/ fair value. Provision for diminution is made only if such decline is other than temporary.

1.5 Inventories:

1.5.1 Inventories are valued at cost or net realisable value, whichever is less, after providing for obsolescence and damage.

1.5.2 In the case of raw materials, operating supplies and stores, cost represents purchase price and other costs incurred for bringing inventories upto their locations and are determined on First-In-First-Out basis.

1.6 Sales:

Sale is exclusive of Luxury tax, Sales tax, Service Tax and other taxes. Life membership fee of club is treated as income in the year of its receipts.

1.7 Accounting for Provisions, Contingent Liabilities and Contingent Assets:

A provision is recognized when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Accounting for contingencies (gains and losses) arising out of contractual obligations, are made only on the basis of mutual acceptances.

1.8 Events occurring after the date of Balance Sheet date:

Where material, events occurring after the date of Balance Sheet are considered up to the date of adoption of the accounts.

1.9 Employee Benefit:

1.9.1 Employee benefit plans comprise both defined benefit and defined contribution plans.

1.9.2 Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year. Actuarial gains/ losses are immediately taken to profit and loss account and are not deferred.

1.9.3 Provident fund is a defined contribution plan. Each eligible employee and the company make contributions at a percentage of the basic salary specified under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. The Company's contributions are charged to the profit and loss account of the year when the contributions to the respective funds are due. The company has no further obligations under the plan beyond its periodic' contributions.

1.9.4 Leave Encashment is determined based on the available leave entitlement at the end of the year.

1.10 Taxation:

1.10.1 Provision for current taxation has been made in accordance with the Income Tax Laws applicable to the assessment year.

1.10.2 Deferred Tax is recognized on timing difference 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. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognized only if there is virtual certainty of realization of such assets. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

1.10.3 In accordance with the Guidance Note on Accounting for credit available in respect of MAT under the Income Tax Act, 1961 issued by the ICAI and in view of convincing evidences of the entitlement of credit of the MAT, the current years' MAT provision has been recognised and credited to the Profit & Loss Account.

1.11 Foreign Currency transactions:

1.11.1 Foreign currency transactions are accounted at the rate prevailing on the date of transaction. Gain or loss arising out of translation/conversion is taken credit for or charged to the Profit & Loss Account.

1.11.2 Exchange difference arising due to repayment or restatement of liabilities incurred for the purpose of acquiring fixed assets are adjusted in the carrying amount of the respective fixed assets.

1.12 Accounting for Leases:

1.12.1 In respect of operating lease transactions, the assets are not capitalized in the books of the Company and lease payments are charged to the Profit and Loss Account.

1.12.2 Periodic escalations in the lease rentals are considered as and when the same are effective as per the terms of lease and the same are not straight lined.

1.13 Borrowing Costs:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

1.14 Impairment of Assets:

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.


Mar 31, 2011

A) Convention :

i. The financial statements have been prepared under the historical cost convention and on the basis of going concern, in accordance with the generally accepted accounting principles and provisions of the Companies Act 1956.

ii. The Company generally follows mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis.

iii. Where changes in presentation are made, comparative figures for the previous year are regrouped accordingly.

b) Fixed Assets :

i. Accounted at acquisition cost including directly attributable costs such as freight, insurance and specific installation charges for bringing the asset to its working condition for use.

ii. Expenditure relating to existing fixed assets is added to the cost of the assets where it increases the performance/life of the assets as assessed earlier.

iii. Fixed assets are eliminated from financial statements, either on disposal or when retired from active use. Generally, such retired assets are disposed of soon thereafter.

iv. Pre-operative expenses, including interest on specific loans for the projects incurred till the projects are ready for Commercial Operation, are capitalised.

v. Expenditure on the new projects are included in Capital Work-in-Progress.

c) Depreciation :

i. Leasehold Land is not amortised.

ii. Depreciation is charged on fixed assets except on Freehold & leasehold land and buildings (in respect of restaurant chain business) as per the straight-line method at the rates and in the manner prescribed under Schedule XIV to the Companies Act, 1956.

iii. Buildings (in respect of the restaurant chain business) constructed on the rented properties are depreciated over the term of the respective leases.

iv. Assets like vehicles, computers etc. utilized during the construction period are not depreciated till the project is ready.

v. Computer software and licence are depreciated over a period of three years.

vi. Liquor licences purchased for restaurant chain business are depreciated over the period of lease term of the respective restaurants.

d) Investments :

Long term Investments are stated at cost of acquisition including brokerage, stamp duty, fees, if any.

e) Inventories :

i. Inventories are valued at cost or replacement value, whichever is less, after providing for obsolescence and damage.

ii. In the case of raw materials, operating supplies and stores, cost represents purchase price and other costs incurred for bringing inventories upto their locations and are determined on First-In-First-Out basis.

f) Sales :

Sales is exclusive of Luxury tax, Sales tax, Service Tax and other taxes. Life membership fee of club is treated as income in the year of its receipts.

g) Accounting for Provisions, Contingent Liabilities and Contingent Assets :

A provision is recognized when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Accounting for contingencies (gains and losses) arising out of contractual obligations, are made only on the basis of mutual acceptances.

h) Events occurring after the date of Balance Sheet date :

Where material, events occurring after the date of Balance Sheet are considered up to the date of adoption of the accounts.

i) Employee Benefit :

Employee benefit plans comprise both defined benefit and defined contribution plans.

Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year. Actuarial gains/ losses are immediately taken to profit and loss account and are not deferred.

Provident fund is a defined contribution plan. Each eligible employee and the company make contributions at a percentage of the basic salary specified under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. The Company's contributions are charged to the profit and loss account of the year when the contributions to the respective funds are due. The company has no further obligations under the plan beyond its periodic contributions.

Leave Encashment is determined based on the available leave entitlement at the end of the calendar year.

j) Taxation :

i. Provision for current taxation has been made in accordance with the Income Tax Laws applicable to the assessment year.

ii. Deferred Tax is recognized on timing difference 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. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognized only if there is virtual certainty of realization of such assets. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

iii. In accordance with the Guidance Note on Accounting for credit available in respect of MAT under the Income Tax Act,1961 issued by the ICAI and in view of convincing evidences of the entitlement of credit of the MAT, the current years' MAT provision has been recognised and credited to the Profit & Loss Account.

k) Foreign Currency transactions :

Foreign currency transactions are accounted at the rate prevailing on the date of transaction. Gain or loss arising out of translation/conversion is taken credit for or charged to the Profit & Loss Account.

Exchange difference arising due to repayment or restatement of liabilities incurred for the purpose of acquiring fixed assets are adjusted in the carrying amount of the respective fixed assets.

l) Accounting for Leases :

i. In respect of finance lease transactions, lease rents paid are charged to the Profit and Loss Account in accordance with the terms of the lease agreements.

ii. In respect of operating lease transactions, the assets are not capitalized in the books of the Company and lease payments are charged to the Profit and Loss Account.

iii. Periodic escalations in the lease rentals are considered as and when the same are effective as per the terms of lease and the same are not straight lined.

m) Borrowing Costs :

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

n) Impairment of Assets :

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.


Mar 31, 2010

A) Convention :

i. The financial statements have been prepared under the historical cost convention and on the basis of going concern, in accordance with the generally accepted accounting principles and provisions of the Companies Act 1956.

ii. The Company generally follows mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis.

iii. Where changes in presentation are made, comparative figures for the previous year are regrouped accordingly.

b) Fixed Assets :

i. Accounted at acquisition cost including directly attributable costs such as freight, insurance and specific installation charges for bringing the asset to its working condition for use.

ii. Expenditure relating to existing fixed assets is added to the cost of the assets where it increases the performance/life of the assets as assessed earlier.

iii. Fixed assets are eliminated from financial statements, either on disposal or when retired from active use. Generally, such retired assets are disposed of soon thereafter.

iv. Pre-operative expenses, including interest on specific loans for the projects incurred till the projects are ready for Commercial Operation, are capitalised.

v. Expenditure on the new projects are included in Capital Work-in-Progress.

c) Depreciation :

i. Depreciation is charged on fixed assets except on Freehold & leasehold land and buildings (in respect of restaurant chain business) as per the straight-line method at the rates and in the manner prescribed under Schedule XIV to the Companies Act, 1956.

ii. Buildings (in respect of the restaurant chain business) constructed on the rented properties are depreciated over the term of the respective leases.

iii. Assets like vehicles, computers etc. utilized during the construction period are not depreciated till the project is ready.

iv. Computer software and licence are depreciated over a period of three years.

v. Liquor licences purchased for restaurant chain business are depreciated over the period of lease term of the respective restaurants.

d) Investments :

Long term Investments are stated at cost of acquisition including brokerage, stamp duty, fees, if any.

e) Inventories :

i. Inventories are valued at cost or replacement value, whichever is less, after providing for obsolescence and damage.

ii. In the case of raw materials, operating supplies and stores, cost represents purchase price and other costs incurred for bringing inventories upto their locations and are determined on First-In-First-Out basis.

f) Sales :

Sales is exclusive of Luxury tax, Sales tax, Service Tax and other taxes.

g) Accounting for Provisions, Contingent Liabilities and Contingent Assets :

A provision is recognized when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Accounting for contingencies (gains and losses) arising out of contractual obligations, are made only on the basis of mutual acceptances.

h) Events occurring after the date of Balance Sheet date :

Where material, events occurring after the date of Balance Sheet are considered up to the date of adoption of the accounts.

i) Employee Benefit :

Employee benefit plans comprise both defined benefit and defined contribution plans.

Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year. Actuarial gains/ losses are immediately taken to profit and loss account and are not deferred.

Provident fund is a defined contribution plan. Each eligible employee and the company make contributions at a percentage of the basic salary specified under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. The Company’s contributions are charged to the profit and loss account of the year when the contributions to the respective funds are due. The company has no further obligations under the plan beyond its periodic contributions.

j) Taxation :

i. Provision for current taxation has been made in accordance with the Income Tax Laws applicable to the assessment year.

ii. Deferred Tax is recognized on timing difference 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. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognized only if there is virtual certainty of realization of such assets. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

iii. In accordance with the Guidance Note on Accounting for credit available in respect of MAT under the Income Tax Act,1961 issued

by the ICAI and in view of convincing evidences of the entitlement of credit of the MAT, the current years’ MAT provision has been recognised and credited to the Profit & Loss Account.

k) Foreign Currency transactions :

Foreign currency transactions are accounted at the rate prevailing on the date of transaction. Gain or loss arising out of translation/conversion is taken credit for or charged to the Profit & Loss Account.

Exchange difference arising due to repayment or restatement of liabilities incurred for the purpose of acquiring fixed assets are adjusted in the carrying amount of the respective fixed assets.

l) Assets taken on lease :

i. In respect of finance lease transactions, lease rents paid are charged to the Profit and Loss Account in accordance with the terms of the lease agreements.

ii. In respect of operating lease transactions, the assets are not capitalized in the books of the Company and lease payments are charged to the Profit and Loss Account.

m) Borrowing Costs :

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

n) Impairment of Assets :

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

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