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Accounting Policies of Taj GVK Hotels & Resorts Ltd. Company

Mar 31, 2015

I. Basis of preparation of financial statements:

The financial statements have been prepared to comply in all material respects with generally accepted accounting principles in India ("Indian GAAP") and the applicable Accounting Standards notified under Section 211 (3)(C) ofthe Companies Act, 1956 [The Companies (Accounting Standards) Rules, 2006 (as amended)] (which are deemed to be applicable as per section 133 of the Companies Act, 2013, read with rule 7 of the Companies (Accounts) Rules, 2014),

The financial statements have been prepared under the historical cost convention on accrual basis.

All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. Based on the services rendered and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current and non-current classification of assets and liabilities.

ii. Use of estimates:

The preparation of financial statements in conformity with accounting principles generally accepted in India requires management, where necessary, to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised.

iii. Exceptional and Extraordinary Items

a. Exceptional Items: Items of income and expense within profit or loss from ordinary activities are of such size, nature or incidence that their disclosure is relevant to explain the performance of the enterprise for the period, the nature and amount of such items are disclosed separately as exceptional items.

b. Extraordinary Items: Extraordinary items are income or expenses that arise from events or transactions that are clearly distinct from the ordinary activities of the enterprise and, therefore, are not expected to recur frequently or regularly.

iv. Revenue Recognition:

a. Income from guest accommodation is recognised on a day to day basis after the guest checks into the Hotels. Income from Food and Beverages are recognised at the point of serving these items to the guests. Income stated is exclusive of taxes collected. Rebates and discounts granted to customers are reduced from revenue.

b. Shop rentals are recognized on accrual basis.

c. Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

d. Insurance claims are recognized as and when they are settled / admitted.

v. Inventories:

Inventories are valued at lower of cost, ascertained at Weighted Average Method, or realizable value.

vi. Fixed Assets:

a. Fixed assets are stated at cost, net of credit availed in respect of any taxes, duties less accumulated depreciation. Cost comprises of the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Financing costs relating to acquisition of fixed assets which takes substantial period of time to get ready for intended use are also included to the extent they relate to the period up to such assets are ready for their intended use. Expenditure directly relating to construction/erection activity is capitalized. Indirect expenditure incurred during construction period is capitalized as part of the construction cost to the extent such expenditure is related to construction or is incidental thereto.

Direct expenditure during construction period attributable to the cost of assets under construction is considered as capital work in progress and indirect expenditure is included under expenditure during construction period pending allocation.

b. Intangible assets are carried at cost, net of credit availed in respect of any taxes and duties, less accumulated amortization. Computer software is classified under "Intangible Assets".

c. Subsequent expenditure incurred on existing fixed assets is added to their book value only if such expenditure increases the future benefits from the existing assets beyond their previously assessed standard of performance.

vii. Depreciation and Amortisation:

Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value. 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 re-assessed as under based on technical

evaluation, 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.

Plant and machinery : 10 to 20 years

Electrical installations and equipment : 20 years Hotel Wooden Furniture : 15 years

End User devices- Computers, Laptops, etc : 6 years In respect of Leasehold land, depreciation is provided from the date land is put to use for commercial operations, over the balance period of the lease. The renewal of these leases is considered as certain in view of past experience for the purpose of depreciation of building on leased property. In respect of improvements to buildings, depreciation is provided based on estimated useful life.

Intangible assets with finite lives are amortised over their estimated useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation periods are reviewed and impairment evaluations are carried out once a year. The rates currently used for amortising intangible assets are as under: Website Development Cost : 5 years

Cost of Customer Reservation System (including licensed software) : 6 years

Service 8 Operating Rights : 10 years

viii. I.eases:

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of assets over the lease term, are classified as operating leases. Operating lease payments are recognized as an expense in the Statement of Profit and Loss.

ix. Foreign Exchange Transactions:

a. Initial recognition: Transactions in foreign currencies are initially recorded at the exchange rates prevailing on the date of the transaction.

b. Conversion: Foreign currency monetary items are reported at the exchange rates on Balance Sheet date.

c. Exchange Difference: Exchange differences arising on the settlement of monetary items, on reporting of such monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or expense in the year in which they arise. Foreign currency assets / liabilities are restated at the rates prevailing at the year end and the gain / loss arising out of such restatement is taken to revenue.

x. Investments:

Investments that are readily realisable and are intended to be held for not more than one year from the date of such investment are classified as current investments. All other investments are classified as non-current.

Current investments are stated at lower of cost and fair value. Non-current Investments are valued at cost of acquisition including related expenses. Provision is made for diminution in the value of investments, if any, if such decline is other than temporary.

xi. Unamortised Expenses:

Preliminary expenses of erstwhile Sri Tripurasundari Hotels Limited merged with the Company, have been written off over a period of 5 years from the year of commencement of operations of the hotel at Chennai.

xii. Retirement Benefits:

a. Defined Contribution Plan:

Company's contribution towards Provident Fund, Employees State Insurance Corporation and Labour Welfare Fund are recognized in the Statement of Profit and Loss.

b. Defined Benefit Plan:

Gratuity to employees is covered under Group Gratuity Life Assurance Scheme. At the reporting date, Company's liability towards gratuity is determined by independent actuarial valuation using the projected unit credit method which considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Actuarial gain and losses are recognized in the Statement of Profit and Loss as income or expense. Obligation is measured at the present value of estimated futu re cash fl ows using a discount rate that is determ i ned by reference to market yields at the Balance Sheet date on Government Bonds where the currency and terms of the Government bonds are consistent with the currency and estimated terms of the defined benefit obligation.

c. Company recognizes the undiscounted amount of employee benefits l ike Leave Encashment, Leave Travel Assistance, etc., during the accounting period based on eligibility of employees as per Company's rules in this regard.

xiii. Borrowing Costs:

General and specific borrowing costs directly attributable to the acquisition, construction of qualifying assets, which take a substantial period of time to get ready for their intended use, initially carried under expenditure incurred during the construction period are added to the cost of those assets, till such time the assets are substantially ready for their intended use.

All other borrowing costs are recognised in Statement of Profit and Loss in the period in which they are incurred.

xiv. Taxes on income:

Tax expense comprising of current tax and deferred tax are considered in the determination of the net profit or loss for the year.

a. Current tax: Provision for current tax is made for Income- tax liability estimated to arise on the profit for the year at

the current rate of tax in accordance with the Income- tax Act,

b. Deferred Tax: In accordance with the Accounting Standard (AS) 22 "Accounting for taxes on income" the company has recognised the deferred tax I iability / asset in the accou nts. Deferred tax reflects the impact of timing differences between taxable income and accounting income. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax asset is recognised only to the extent there is virtual certainty that sufficient taxable income will be available in future against which such deferred tax asset can be realized.

c. Minimum alternate tax (MAT) credit: MAT credit is recognised as an asset only when and to the extent there is convincing evidence that the company will pay normal tax within the specified period and the MAT credit available can be utilised. Such asset is reviewed at each Balance Sheet date and the carrying amount is written down if considered not recoverable within the specified period.

xv. Farningspershare:

a. Basic earnings per share: Basic earnings per share is calculated by dividing the net profit or loss for the year after tax attributable to equity share holders by weighted average number of equity shares outstanding during the period.

b. Diluted earnings per share: Diluted earnings per share is calculated by dividing the net profit or loss for the year after tax attributable to equity shareholders by the weighted average number of equity shares outstanding including equity shares which would have been issued on the conversion of all dilutive potential equity shares unless they are considered anti-dilutive in nature.

xvi. Impairment of assets:

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount ofthe asset or the recoverable amount of the cash generation unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the profit and loss account. If at the balance sheet date there is an indication that if previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost.

xvii. Provisions and Contingencies:

A provision is recognised when the Company has a present obligation as a result of past event; 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. Provisions are not discounted to their present value and are determined based on 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 when there is a probable obligation arising from past events, the existence of which will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made, and such liability that may arise is termed as a contingent liability.


Mar 31, 2013

I. Basis of preparation of financial statements:

The financial statements have been prepared to comply in all material respects with accounting principles generally accepted in India and the applicable Accounting Standards notified under Section 211(3C) [the Companies (Accounting Standards) Rules, 2006 (as amended)] and the provisions of the Companies Act, 1956 of India ("the Act"). The financial statements have been prepared under the historical cost convention on accrual basis.

All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Schedule VI to the Companies Act, 1956. Based on the services rendered and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current and non-current classification of assets and liabilities.

ii. Use of estimates:

The preparation of financial statements in conformity with accounting principles generally accepted in India requires management, where necessary, to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised.

iii. Revenue Recognition:

a. Income from guest accommodation is recognised on a day to day basis after the guest checks into the Hotels. Income from Food and Beverages are recognised at the point of serving these items to the guests. Income stated is exclusive of amount recovered towards Sales Tax, Luxury Tax, and Service Tax.

b. Shop rentals are recognized on accrual basis.

c. Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

d. Insurance claims are recognized as and when they are settled / admitted.

iv. Inventories:

Inventories are valued at lower of cost, ascertained at Weighted Average Method, or realizable value.

v. Fixed Assets:

a. Tangible Assets: Fixed assets are stated at cost, net of credit availed in respect of any taxes,

duties less accumulated depreciation. Cost comprises of the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Financing costs relating to acquisition of fixed assets which takes substantial period of time to get ready for intended use are also included to the extent they relate to the period up to such assets are ready for their intended use. Expenditure directly relating to construction/ erection activity is capitalized. Indirect expenditure incurred during construction period is capitalized as part of the construction cost to the extent such expenditure is related to construction or is incidental thereto.

Direct expenditure during construction period attributable to the cost of assets under construction is considered as capital work in progress and indirect expenditure is included under expenditure during construction period pending allocation.

b. Intangible Assets: Computer software is classified under "Intangible Assets".

c. Subsequent expenditure incurred on existing fixed assets is added to their book value only if such expenditure increases the future benefits from the existing assets beyond their previously assessed standard of performance.

vi. Depreciation and Amortisation:

a. Depreciation on tangible assets put to use is provided on straight line method at the rates prescribed and in the manner laid down under Schedule XIV to the Companies Act, 1956.

b. Intangible assets are amortised over the useful life of the asset.

c. Depreciation on additions made to assets in licensed property is provided at the rates worked out on the basis of balance license period or at rates as per Schedule XIV.

vii. Leases:

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of assets over the lease term, are classified as operating leases. Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term.

viii. Foreign Exchange Transactions:

a. Initial recognition: Transactions in foreign currencies are initially recorded at the exchange rates prevailing on the date of the transaction.

b. Translation: Foreign currency monetary items as at the Balance Sheet date are reported using the year end closing rate. Any gain or loss on such translation or settlement is recognised in the statement of profit and loss.

ix. Investments:

Investments that are readily realisable and are intended to be held for not more than one year from the date of such investment are classified as current investments. All other investments are classified as long term.

Long term Investments are valued at cost of acquisition including related expenses. Provision is made for diminution in the value of investments, if any, if such decline is other than temporary. Current investments are stated at lower of cost and fair value.

x. Unamortised Expenses:

Preliminary expenses of erstwhile Sri Tripurasundari Hotels Limited merged with the Company, are being written off over a period of 5 years from the year of commencement of operations of the hotel at Chennai.

xi. Retirement Benefits:

a. Defined Contribution Plan:

Company''s contribution paid/payable during the year to Provident Fund, Employees State Insurance Corporation and Labour Welfare Fund are recognized in the Profit and Loss Account.

b. Defined Benefit Plan:

Gratuity to employees is covered under Group Gratuity Life Assurance Scheme. At the reporting date, Company''s liability towards gratuity is determined by independent actuarial valuation using the projected unit credit method which considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Actuarial gain and losses are recognized in the Statement of Profit and Loss as income or expense. Obligation is measured at the present value of estimated future cash flows using a discount rate that is determined by reference to market yields at the Balance Sheet date on Government Bonds where the currency and terms of the Government bonds are consistent with the currency and estimated terms of the defined benefit obligation.

c. Company recognizes the undiscounted amount of employee benefits like Leave Encashment, Leave Travel Assistance, etc., during the accounting period based on eligibility of employee as per Company''s rules in this regard.

xii. Borrowing Costs:

General and specific borrowing costs directly attributable to the acquisition, construction of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use, initially carried under expenditure incurred during the construction period are added to the cost of those assets, till such time the assets are substantially ready for their intended use.

All other borrowing costs are recognised in Statement of Profit and Loss in the period in which they are incurred.

xiii. Taxes on income:

a. Tax expense comprising of current and deferred tax, are considered in the determination of the net profit or loss for the year.

b. Current tax: Provision for current tax is made for Income-tax liability estimated to arise on the profit for the year at the current rate of tax in accordance with the Income-tax Act, 1961.

c. Deferred Tax: In accordance with the Accounting Standard - 22, Accounting for taxes on income, the company has recognised the deferred tax liability in the accounts. Deferred tax reflects the impact of timing differences between taxable income and accounting income. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax asset is recognised only to the extent there is virtual certainty that sufficient taxable income will be available in future against which such deferred tax asset can be realised.

d. Minimum alternate tax (MAT) credit: MAT credit is recognised as an asset only when and to the extent there is convincing evidence that the company will pay normal tax within the specified period and the MAT credit available can be utilised. Such asset is reviewed at each Balance Sheet date and the carrying amount is written down if considered not recoverable within the specified period.

xiv. Earnings per share:

a. Basic earnings per share: Basic earnings per share is calculated by dividing the net profit or loss for the year after tax attributable to equity share holders by weighted average number of equity shares outstanding during the period.

b. Diluted earnings per share: Diluted earnings per share is calculated by dividing the net profit or loss for the year after tax attributable to equity shareholders by the weighted average number of equity shares outstanding including equity shares which would have been issued on the conversion of all dilutive potential equity shares unless they are considered anti-dilutive in nature.

xv. Impairment of assets:

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generation unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the profit and loss account. If at the balance sheet date there is an indication that if previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost.

xvi. Provisions and Contingencies:

A provision is recognised when the Company has a present obligation as a result of past event; 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. Provisions are not discounted to their present value and are determined based on 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 when there is a probable obligation arising from past events, the existence of which will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made, and such liability that may arise is termed as a contingent liability.

xvii. Segmental Reporting:

Disclosure of segment wise information is not applicable as hoteliering is the Company''s only business segment.


Mar 31, 2012

I. Basis of preparation of financial statements:

The financial statements have been prepared to comply in all material respects with accounting principles generally accepted in India and the applicable Accounting Standards notified under Section 211(3C) [the Companies (Accounting Standards) Rules, 2006 (as amended)] and the provisions of the Companies Act, 1956 of India ("the Act"). The financial statements have been prepared under the historical cost convention on accrual basis.

All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the Schedule VI to the Companies Act, 1956. Based on the services rendered and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current and non-current classification of assets and liabilities.

ii. Use of estimates:

The preparation of financial statements in conformity with accounting principles generally accepted in India requires management, where necessary, to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised.

iii. Revenue Recognition:

a. Income from guest accommodation is recognised on a day to day basis after the guest checks into the Hotels. Income from Food and Beverages are recognised at the point of serving these items to the guests. Income stated is exclusive of amount recovered towards Sales Tax, Luxury Tax, and Service Tax.

b. Shop rentals are recognized on accrual basis.

c. Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

d. Insurance claims are recognized as and when they are settled / admitted.

iv. Inventories:

Inventories are valued at lower of cost, ascertained at Weighted Average Method, or realizable value.

v. Fixed Assets:

a. Tangible Assets: Fixed assets are stated at cost, net of credit availed in respect of any taxes, duties less accumulated depreciation. Cost comprises of the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Financing costs relating to acquisition of fixed assets which takes substantial period of time to get ready for intended use are also included to the extent they relate to the period up to such assets are ready for their intended use. Expenditure directly relating to construction/erection activity is capitalized. Indirect expenditure incurred during construction period is capitalized as part of the construction cost to the extent such expenditure is related to construction or is incidental thereto.

Direct expenditure during construction period attributable to the cost of assets under construction is considered as capital work in progress and indirect expenditure is included under expenditure during construction period pending allocation.

b. Intangible Assets: Computer software is classified under "Intangible Assets".

c. Subsequent expenditure incurred on existing fixed assets is added to their book value only if such expenditure increases the future benefits from the existing assets beyond their previously assessed standard of performance.

vi. Depreciation and Amortisation:

a. Depreciation on tangible assets put to use is provided on straight line method at the rates prescribed and in the manner laid down under Schedule XIV to the Companies Act, 1956.

b. Intangible assets are amortised over the useful life of the asset.

c. Depreciation on additions made to assets in licensed property is provided at the rates worked out on the basis of balance license period or at rates as per Schedule XIV.

vii. Leases:

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of assets over the lease term, are classified as operating leases. Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term.

viii. Foreign Exchange Transactions:

a. Initial recognition: Transactions in foreign currencies are initially recorded at the exchange rates prevailing on the date of the transaction.

b. Translation: Foreign currency monetary items as at the Balance Sheet date are reported using the year end closing rate. Any gain or loss on such translation or settlement is recognised in the statement of profit and loss.

ix. Investments:

Investments that are readily realisable and are intended to be held for not more than one year from the date of such investment are classified as current investments. All other investments are classified as long term.

Long term Investments are valued at cost of acquisition including related expenses. Provision is made for diminution in the value of investments, if any, if such decline is other than temporary. Current investments are stated at lower of cost and fair value.

x. Unamortised Expenses:

Preliminary expenses of erstwhile Sri Tripurasundari Hotels Limited merged with the Company, are being written off over a period of 5 years from the year of commencement of operations of the hotel at Chennai.

xi. Retirement Benefits:

a. Defined Contribution Plan:

Company's contribution paid/payable during the year to Provident Fund, Employees State Insurance Corporation and Labour Welfare Fund are recognized in the Profit and Loss Account.

b. Defined Benefit Plan:

Gratuity to employees is covered under Group Gratuity Life Assurance Scheme. At the reporting date, Company's liability towards gratuity is determined by independent actuarial valuation using the projected unit credit method which considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Actuarial gain and losses are recognized in the Statement of Profit and Loss as income or expense. Obligation is measured at the present value of estimated future cash flows using a discount rate that is determined by reference to market yields at the Balance Sheet date on Government Bonds where the currency and terms of the Government bonds are consistent with the currency and estimated terms of the defined benefit obligation.

c. Company recognizes the undiscounted amount of employee benefits like Leave Encashment, Leave Travel Assistance, etc., during the accounting period based on eligibility of employee as per Company's rules in this regard.

xii. Borrowing Costs:

General and specific borrowing costs directly attributable to the acquisition, construction of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use, initially carried under expenditure incurred during the construction period are added to the cost of those assets, till such time the assets are substantially ready for their intended use.

All other borrowing costs are recognised in Statement of Profit and Loss in the period in which they are incurred.

xiii. Taxes on income:

a. Tax expense comprising of current and deferred tax, are considered in the determination of the net profit or loss for the year.

b. Current tax: Provision for current tax is made for Income-tax liability estimated to arise on the profit for the year at the current rate of tax in accordance with the Income-tax Act, 1961.

c. Deferred Tax: In accordance with the Accounting Standard - 22, Accounting for taxes on income, the company has recognised the deferred tax liability in the accounts. Deferred tax reflects the impact of timing differences between taxable income and accounting income. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax asset is recognised only to the extent there is virtual certainty that sufficient taxable income will be available in future against which such deferred tax asset can be realised.

d. Minimum alternate tax (MAT) credit: MAT credit is recognised as an asset only when and to the extent there is convincing evidence that the company will pay normal tax within the specified period and the MAT credit available can be utilised. Such asset is reviewed at each Balance Sheet date and the carrying amount is written down if considered not recoverable within the specified period.

xiv. Earnings per share:

a. Basic earnings per share: Basic earnings per share is calculated by dividing the net profit or loss for the year after tax attributable to equity share holders by weighted average number of equity shares outstanding during the period.

b. Diluted earnings per share: Diluted earnings per share is calculated by dividing the net profit or loss for the year after tax attributable to equity shareholders by the weighted average number of equity shares outstanding including equity shares which would have been issued on the conversion of all dilutive potential equity shares unless they are considered anti-dilutive in nature.

xv. Impairment of assets:

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generation unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the profit and loss account. If at the balance sheet date there is an indication that if previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost.

xvi. Provisions and Contingencies:

A provision is recognised when the Company has a present obligation as a result of past event; 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. Provisions are not discounted to their present value and are determined based on 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 when there is a probable obligation arising from past events, the existence of which will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made, and such liability that may arise is termed as a contingent liability.

xvii. Segmental Reporting:

Disclosure of segment wise information is not applicable as hoteliering is the Company's only business segment.


Mar 31, 2011

The accounts have been prepared primarily on historical cost convention and in accordance with generally accepted accounting practices. i. Revenue Recognition

a. Income from guest accommodation is recognised on a day to day basis after the guest checks into the Hotels. Income from Food and Beverages are recognised at the point of serving these items to the guests. Income stated is exclusive of amount recovered towards Sales Tax, Luxury Tax, and Service Tax.

b. Insurance claims are recognized as and when they are settled / admitted.

ii. Annual lease rentals on lease hold land at Chandigarh and Chennai is charged to revenue.

iii. Foreign Exchange Transactions

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transactions. Exchange differences arising on foreign currency transactions are recognised as income or expense in the period in which they arise.

iv. Inventories

Inventories are valued at lower of cost, ascertained at Weighted Average Method, or realizable value.

v. Fixed Assets and Depreciation:

a. Fixed Assets are stated at historical cost of acquisition, which is inclusive of freight, installation, taxes and other incidental expenses.

b. Depreciation on various assets put to use is provided on straight line method as per schedule XIV to the Companies Act, 1956.

c. Depreciation on additions made to assets in licensed property is provided at the rates worked out on the basis of balance license period.

vi. Preliminary expenses of erstwhile Sri Tripurasundari Hotels Limited merged with the Company, are being written off over a period of 5 years from the year of commencement of operations of the hotel at Chennai.

vii. Contingent liabilities are indicated by way of note and will be provided / paid on crystallization.

viii. Retirement Benefits:

a. Defined Contribution Plan

Companys contribution paid/payable during the year to Provident Fund, Employees State Insurance Corporation and Labour Welfare Fund are recognized in the Profit and Loss Account.

b. Defined Benefit Plan

Gratuity to employees is covered under Group Gratuity Life Assurance Scheme. At the reporting

date, Companys liability towards gratuity is determined by independent actuarial valuation using the projected unit credit method which considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Actuarial gain and losses are recognized in the Profit and Loss Account as income or expense. Obligation is measured at the present value of estimated future cash flows using a discount rate that is determined by reference to market yields at the Balance Sheet date on Government Bonds where the currency and terms of the Government bonds are consistent with the currency and estimated terms of the defined benefit obligation.

Company recognizes the undiscounted amount of short-term employee benefits like Leave Encashment, Leave Travel Assistance, etc., during the accounting period based on eligibility of employee as per Companys rules in this regard.

ix. IMPAIRMENT OF ASSETS:

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generation unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the profit and loss account. If at the balance sheet date there is an indication that if previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost.

x. Taxes on income:

a. Provision is made for Income-tax liability estimated to arise on the profit for the year at the current rate of tax in accordance with the Income-tax Act, 1961.

b. In accordance with the Accounting Standard - 22, Accounting for taxes on income, the Company has recognised the deferred tax liability in the accounts, whereby:-

- Deferred tax liability resulting from timing differences between book and tax profits is accounted for at tax rate enacted or substantively enacted at the balance sheet date.

- Deferred tax assets are recognised only when there is virtual certainty, supported by convincing evidence, that such assets will be realised.

xi. Segmental Reporting:

Disclosure of segment - wise information is not applicable as hoteliering is the Companys only business segment

xii. Long term investments are carried at cost. Diminution in value of investments, if any, other than temporary, will be provided for on an individual basis.

xiii. Borrowing Costs:

Interest and other borrowing costs on specific borrowings, attributable to qualifying assets are capitalized. Interest not attributable to qualifying assets is charged to revenue account in the year in which it is incurred.

xiv. Earnings per share:

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity share holders by weighted average number of equity shares outstanding during the period.


Mar 31, 2010

The accounts have been prepared primarily on historical cost convention and in accordance with generally accepted accounting practices.

i. Revenue Recognition

a. Income from guest accommodation is recognised on a day to day basis after the guest checks into the Hotels. Income from Food and Beverages are recognised at the point of serving these items to the guests. Income stated is exclusive of amount recovered towards Sales Tax, Luxury Tax, and Service Tax.

b. Insurance claims are recognized as and when they are settled / admitted.

ii. Annual lease rentals on lease hold land at Chandigarh and Chennai is charged to revenue.

iii. Foreign Exchange Transactions

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transactions. Exchange differences arising on foreign currency transactions are recognised as income or expense in the period in which they arise.

iv. Inventories

Inventories are valued at lower of cost, ascertained at Weighted Average Method, or realizable value.

v. Fixed Assets and Depreciation:

a. Fixed Assets are stated at historical cost of acquisition, which is inclusive of freight, installation, taxes and other incidental expenses.

b. Depreciation on various assets put to use is provided on straight line method as per schedule XIV to the Companies Act, 1956.

c. Depreciation on additions made to assets in licensed property is provided at the rates worked out on the basis of balance license period.

d. Expenditure incurred during the construction period is treated as unallocated capital expenditure and allocated to assets as and when the assets are put to use.

vi. Preliminary expenses of erstwhile Sri Tripurasundari Hotels Limited merged with the Company, are being written off over a period of 5 years from the year of commencement of operations of the hotel at Chennai.

vii. Contingent liabilities are indicated by way of note and will be provided / paid on crystallization.

viii. Retirement Benefits:

a. Defined Contribution Plan

Companys contribution paid/payable during the year to Provident Fund, Employees State Insurance Corporation and Labour Welfare Fund are recognized in the Profit and Loss Account.

b. Defined Benefit Plan

Gratuity to employees is covered under Group Gratuity Life Assurance Scheme. At the reporting date, Companys liability towards gratuity is determined by independent.actuarial valuation using the projected unit credit method which considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Actuarial gain and losses are recognized immediately in the statement of the Profit and Loss Account as income or expense. Obligation is measured at the present value of estimated future cash flows using a discount rate that is determined by reference to market yields at the Balance Sheet date on Government Bonds where the currency and terms of the Government bonds are consistent with the currency and estimated terms of the defined benefit obligation.

Company recognizes the undiscounted amount of short-term employee benefits like Leave Encashment, Leave Travel Assistance, etc., during the accounting period based on service rendered by employee.

ix. IMPAIRMENT OF ASSETS:

The carrying amounts of companys assets are reviewed at each balance sheet date and the impairment loss, if any, is recognized in accordance with Accounting Standard - AS 28.

x. Taxes on income:

a. Provision is made for Income-tax liability estimated to arise on the profit for the year at the current rate of tax in accordance with the Income-tax Act, 1961.

b. In accordance with the Accounting Standard - 22, Accounting for taxes on income, the company has recognised the deferred tax liability in the accounts, whereby:-

- Deferred tax liability resulting from timing differences between book and tax profits is accounted for at the current rate of tax.

- Deferred tax assets are recognised only when there is virtual certainty, supported by convincing evidence, that such assets will be realised.

xi. Segmental Reporting:

Disclosure of segment - wise information is not applicable as hoteliering is the Companys only business segment

xii. Long term investments are carried at cost. Diminution in value of investments, if any, other than temporary, will be provided for on an individual basis.

 
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