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Accounting Policies of Viceroy Hotels Ltd. Company

Mar 31, 2015

(a) Basis of preparation offinancial Statements.

The financial statements have been prepared under the historical cost convention in accordance with Generally Accepted Accounting Principles and the provisions ofthe Companies Act, 2013.

b) Use of estimates

The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on 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 and differences between actual results and estimates are recognized in the periods in which the results are known / materialize.

(c) RevenueRecognition:

Revenue is recognized when it is earned and no significant uncertainty exists as to its realization or collection.

Revenue from restaurant and sweet shop sales (food and beverages) is recognized upon rendering of service. Salesare net of discounts. Value added tax is reducedfrom sales.

The Company also operates through franchise arrangements with third parties in terms of which the third parties are permittedto use the Company's establishedtrademarks:

* Initial Access Premium Fee charged to franchisees, in consideration of being considered as competent to open a restaurant under a Company owned trademark, is recognized on formalization of the franchise agreement. The Initial Access Premium Fee is non - refundable, regardless of whether the restaurant outlet under the franchise agreement commencesoperationsornot.56

* Royaltyand Management Fee charged to franchisees forthe use ofthe trademarks is calculated as a percentage of monthly sales ofthe restaurant and accruedfor inline with restaurant sales.

Revenue from displays and sponsorships are recognized based on the period for which the products or the sponsor's advertisement sarepromoted/displayed.

In respect of gift vouchers and point awards scheme operated by the company, sales are recognized when the gift vouchers or points are redeemed and on sale of mealsto customers.

(d) EmployeeBenefits:

Compensation to employees for services rendered is measured and accounted for in accordance with Accounting Standard 15on Employee Benefits.

Employee Benefits such as salaries, allowances, non-monetary benefits and employee benefits under defined contribution plans such as provident and otherfunds, which fall due for payment within a period of twelve months after rendering service, are charged as expense to the Statement of Profit and Loss in the period in which the serviceisrendered.

Employee Benefits under defined benefit plans such as gratuity which fall due for payment after completion of employment are measured bythe projected unit credit method, on the basis of actuarial valuations carried out by third party actuaries at each balance sheet date. The company's obligations recognized in the balance sheet representthepresentvalueofobligationsas reduced bythefairvalueofplan assets, where applicable.

Actuarial Gains and losses are recognized immediately in the Statement of Profit and Loss.

(e) Investments

Investments are classified as current or longterm in accordance with Accounting Standard 13 on Accounting for Investments.

Current investments are stated at the lower of cost and fair value. Any reduction in the carrying amount and any reversals of such reductionsare charged or creditedto the Statement of Profitand Loss.

Long term investments are stated at cost. Provision for diminution is made to recognize a decline, other than temporary, in the value of such investments.

(f) Fixed Assets:

(i) TangibleAssets

Tangible Assets are stated at their cost of acquisition less accumulateddepreciationand impairment losses.

Cost comprises of all costs incurred to bring the assets to their present location and working condition. Assetsacquiredunderfinanceleasesare accounted for at the inception of the lease in accordance with Accounting Standard 19 on Leases at the lower of the fair value of the asset and presentvalue of minimum lease payments

(ii)Intangible assets

Intangible assets are stated at their cost of acquisition, less accumulated amortization and impairment losses. An intangible asset is recognized, where it is probable that the future economic benefits attributable to the asset will flow to the enterprise and where its cost can be reliably measured.

The company capitalizes software costs where it is reasonably estimated that the software has an enduring useful life. Software is depreciated overthe management's estimate of its useful life of five years. Trademarksareamortized uniformlyoveraperiod o f five years.

(g) Depreciation:

Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the CompaniesAct, 2013.

Leasehold improvements are depreciated over the lower of the lease period and the management's estimate of the useful life ofthe asset.

The depreciable amount of intangible assets is allocated over the best estimate of its useful life on a straight-line basis.

(h) Impairment of Assets:

The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment of assets. If any indication of such impairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount on these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and value in use. Value in use is arrived at by discounting the future cash flow to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognised for an asset in prior accounting periods no longer exists or may have decreased, such reversal ofimpairment loss is recognised.

(i) Transactions in Foreign Exchange:

Transactionsinforeigncurrencies are accounted for attheprevailin grates ofexchangeonthedate of the transaction.

Monetary items denominated in foreign currencies, are restated at the prevailing rates of exchange at the Balance Sheet date. All gains and losses arising out of fluctuations in exchange rates are accounted for in the Statement of Profit and Loss.

Exchange differences on forward exchange contracts, entered into for hedging for eign exchange fluctuation risk in respect of an existing asset/liability, are recognized in the Statement of Profit and Loss in the reporting period in which the exchange rate changes. Premium / Discount on forward exchange contracts is amortized over the periodofthe contract.

(j) Borrowing Cost:

i. Interest and other borrowing costs, attributable to qualifying assets are capitalised.

ii. Interest not attributable to qualifying assets is charged to the Profit and Loss Account in the year in which it is incurred.

iii. Debenture issue costs and the entire premium on redemption of Debentures are adjusted against the Securities Premium Account in accordance with the provision of Section 52 of the Companies Act, 2013.

iv. Other Borrowing Costs are charged to revenue account over the tenureofthe borrowing.

(k) Inventories:

Stock of food and beverages and operating supplies are carried at cost or Market Value, whichever is lower as per AS-2.

Cost of inventories comprises of all costs of purchase and other costs incurred in bringing the inventories to their present condition and location. Cost of materials is determined by the FIFO method.

(l) Taxes on income:

(i) Income tax is computed in accordance with Accounting Standard 22-'Accounting for Taxes on Income (AS-22), issued by the ICAI. Tax expenses are accounted in the same period to which the revenue and expenses relate.

(ii) Provision for current income tax is made on the tax liability payable on taxable income after considering tax allowances, deductions and exemptions determined in accordance with the prevailing tax laws. The differences between taxable income and the net profit or loss before tax for the year as per the financial statements are identified and the tax effect of the deferred tax asset or deferred tax liabilities recorded for timing differences, i.e. differences that originate in one accounting period and reverse in another. The tax effect is calculated on accumulated timing differences at the end of the accounting year based on effective tax rates that would apply in the years in which the timing differences are expected to reverse.

(iii) Deferred tax assets are recognized only if there is reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each balance sheet date.

(m) Accounting for provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognized in terms of Accounting Standard 29-'Provisions, Contingent Liabilities and Contingent Assets' (AS-29), issued by the ICAI., when there is a present legal or statutory obligation as a result of past events, where it is probable that there will be outflow of resources to settle the obligation and when a reliable estimate of the amount of the obligation can be made.

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

Contingent Assets are not recognized in the financial statements.

(n) Earningsper Share:

The Company reports basic and diluted Earnings per Share (EPS) in accordance with Accounting Standard 20 on Earnings per Share. Basic EPS is computed by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. Diluted EPS is computed by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive.




Mar 31, 2014

The financial statements are prepared under the historical cost convention, on an accrual basis and comply with the Accounting Standards (AS) notified by the Companies (Accounting Standards) Rules, 2006. The preparation of the financial statements requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) as of the date of the financial statements and the reported income and expenses. The Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Future results could differ from these estimates. The significant accounting policies adopted in the presentation of the financial statements are as under:

(a) Basis of preparation of financial Statements.

The financial statements have been prepared under the historical cost convention in accordance with Generally Accepted Accounting Principles and the provisions of the Companies Act, 1956.

b) Use of estimates

The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on 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 and differences between actual results and estimates are recognized in the periods in which the results are known/ materialize.

(c) Revenue Recognition:

Revenue is recognized when it is earned and no significant uncertainty exists asto its realization or collection.

Revenue from restaurant and sweet shop sales (food and beverages) is recognized upon rendering of service. Sales are net ofdiscounts. Value added tax is reduced from sales.

The Company also operates through franchise arrangements with third parties in terms of which the third parties are permitted to usethe Company''s established trademarks:

- Initial Access Premium Fee charged to franchisees, in consideration of being considered as competentto open a restaurant under a Company owned trademark, is recognized on formalization of the franchise agreement. The Initial Access Premium Fee is non - refundable, regardless of whether the restaurant outlet under the franchise agreement commences operations or not.56

- Royalty and Management Fee charged to franchisees for the use of the trademarks is calculated as a percentage of monthly sales of the restaurantand accrued for in line with restaurant sales.

Revenue from displays and sponsorships are recognized based on the period for which the products or the sponsor''s advertisements are promoted /displayed.

In respect of gift vouchers and point awards scheme operated by the company, sales are recognized when the gift vouchers orpoints are redeemed andon sale of meals to customers.

(d) EmployeeBenefits:

Compensation to employees for services rendered is measured and accounted for in accordance with Accounting Standard 15 on Employee Benefits.

Employee Benefits such as salaries, allowances, non-monetary benefits and employee benefits under defined contribution plans such as provident and other funds, which fall due for payment within a period of twelve months after rendering service, are charged as expense to the Statement of Profit and Loss in the period in which the service isrendered.

Employee Benefits under defined benefit plans such as gratuity which fall due for payment after completion of employment are measured by the projected unit credit method, on the basis of actuarial valuations carried out by third party actuaries at each balance sheet date. The company''s obligations recognized in the balance sheet representthepresentvalueofobligationsas reduced bythefair value of plan assets, where applicable.

Actuarial Gains and losses are recognized immediately in the Statement of Profit and Loss.

(e) Investments

Investments are classified as current or long term in accordance with Accounting Standard 13 on Accounting for Investments.

Current investments are stated at the lower of cost and fair value. Any reduction in the carrying amount and any reversals of such reductionsare charged or credited to the Statement of Profit and Loss.

Long term investments are stated at cost. Provision for diminution is made to recognize a decline, other than temporary, inthe value of such investments.

(f) Fixed Assets:

(i) Tangible Assets

Tangible Assets are statedattheircost ofacquisition less accumulateddepreciation and impairmentlosses. Cost comprisesofallcosts incurred to bring the assets to their present location and working condition.

Assets acquired under finance leases are accounted for at the inception of the lease in accordance with Accounting Standard 19 on Leases at the lower of the fair value of the asset and present value of minimum lease payments.

(ii) Intangible assets

Intangible assets are stated at their cost of acquisition, less accumulated amortization and impairment losses. An intangible asset is recognized, where it is probable that the future economic benefits attributable to the asset will flow to the enterprise and where its cost can be reliably measured.

The company capitalizes software costs where it is reasonably estimated that the software has an enduring useful life. Software is depreciated overthe management''s estimate of its useful life of fiveyears.

Trade marks are amortized uniformly overa period of five years.

(g) Depreciation:

Depreciation on assets is provided, pro-rata for the period of use, by the written down value method at the rates prescribed in Schedule XIVto the Act. Assets costing less than Rs. 5,000 are depreciated at 100%.

Leasehold improvements are depreciated over the lower of the lease period and the management''s estimate of the useful lifeoftheasset.

The depreciable amount of intangible assets is allocated overthe best estimate of its useful life on a straight-line basis.

(h) ImpairmentofAssets:

The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment of assets. If any indication of such impairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount on these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and value in use. Value in use is arrived at by discounting the future cash flowto their present value based on an appropriate discount factor. When there is indication that an impairment loss recognised for an asset in prior accounting periods no longer exists or may have decreased, such reversal ofimpairment loss is recognised.

(i) Transactions in Foreign Exchange:

Transactions in foreign currencies are accounted for at the prevailing rates of exchange on the date of the transaction.

Monetary items denominated in foreign currencies, are restated at the prevailing rates of exchange at the Balance Sheet date. All gains and losses arising out of fluctuations in exchange rates are accounted for in the Statement of Profit and Loss.

Exchangedifferences on forward exchange contracts, entered into for hedging foreign exchange fluctuation riskin respect of an existing asset/liability, are recognized in the Statement of Profit and Loss in the reporting period in which the exchange rate changes. Premium / Discount on forward exchange contracts is amortized over the period ofthecontract.

(j) Borrowing Cost:

i. Interest and other borrowing costs, attributable to qualifying assets are capitalised.

ii. Interest not attributable to qualifying assets is charged to the Profit and Loss Account inthe year inwhich it is incurred.

iii. Debenture issue costs and the entire premium on redemption of Debentures are adjusted against the Securities Premium Account in accordance with the provision of Section 78 ofthe Companies Act, 1956.

iv. Other Borrowing Costs are charged to revenue account over the tenure of the borrowing.

(k) Inventories:

Stock of food and beverages and operating supplies are carried at cost or Market Value, whichever is lower as per AS-2.

Cost of inventories comprises of all costs of purchase and other costs incurred in bringing the inventories to their present condition and location. Cost of materials is determined by the FIFO method.

(l) Taxes on income:

(i) Income tax is computed in accordance with Accounting Standard 22-''Accounting for Taxes on Income (AS- 22), issued by the ICAI. Tax expenses are accounted in the same period to which the revenue and expenses relate.

(ii) Provision for current income tax is made on the tax liability payable on taxable income after considering tax allowances, deductions and exemptions determined in accordance with the prevailing tax laws. The differences between taxable income and the net profit or loss before tax for the year as per the financial statements are identified and the tax effect of the deferred tax asset or deferred tax liabilities recorded for timing differences, i.e. differences that originate in one accounting period and reverse in another. The tax effect is calculated on accumulated timing differences at the end ofthe accounting year based on effective tax rates that would apply in the years in which the timing differences are expected to reverse.

(iii) Deferred tax assets are recognized only if there is reasonable certainty that they will be realized and are reviewed forthe appropriateness of their respective carrying values at each balance sheet date.

(m) Accounting for provisions, Contingent Liabilitiesand ContingentAssets:

Provisions are recognized in terms of Accounting Standard 29- ''Provisions, Contingent Liabilities and Contingent Assets'' (AS-29), issued by the ICAI., when there is a present legal or statutory obligation as a result of past events, where it is probable that there will be outflow of resources to settle the obligation and when a reliable estimate of the amount of the obligation can be made.

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

Contingent Assets are not recognized in the financial statements.

(n) Earningsper Share:

The Company reports basic and diluted Earnings per Share (EPS) in accordance with Accounting Standard 20 on Earnings per Share. Basic EPS is computed by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. Diluted EPS is computed by dividing the net profit or loss forthe year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive.


Mar 31, 2013

The financial statements are prepared under historical cost convention on an accrual basis and comply with the Accounting Standards (AS) issued by the Institute of Chartered Accountants of India(ICAI), referred to in Section 211(3C) ofthe Companies Act, 1956. The significant accounting policies adopted in the presentation ofthe Accounts are as under:

(a) Accounting Conventionand Revenue Recognition:

The Financial statements have been prepared in accordance with historical cost convention except for such fixed assets which are revalued. Both the income and expenditure items are recognized onaccrual basis.

(b) Retirement Benefits:

The Company has not obtained Actuarial valuation towards gratuity as per Accounting Standard – 15 (Employee Benefits). However Managementofthe Companyisproviding provision for gratuityon estimation basis.

(c) Fixed Assets:

Fixed assets are statedatcost of acquisition and subsequent improvements thereto, inclusiveoftaxes, freight, and other incidental expenses related to acquisition, improvements and installation, except in case of revaluation of fixed assets where it is stated at revalued amount. Interest during construction period on loans to finance fixed assets is capitalized as per AS-10.

(d) Depreciation:

Depreciation on fixed assets other than land is provided under the straight-line method at the rates and in the manner specifiedinSchedule XIVtothe Companies Act, 1956,asexisting on that date as per AS-6.

(e) TransactionsinForeign Exchange:

Sales made in foreign currency are converted at the prevailing applicable exchange rate. Gain/loss arising out of the fluctuationinexchange rate isaccounted for on realization.

Paymentsmade in foreign currency are convertedatthe applicable rate prevailingon thedateof remittanceas perAS-11.

(f) Borrowing Cost:

Borrowing cost that is attributable to the acquisition/ construction of fixed assets is capitalized as part of the cost of respective assets as per AS-16.

(g) Inventories:

Stock of food and beverages and operating supplies are carried at cost or Market Value, whichever is lower as per AS-2.

(h) Taxesonincome:

(i) Income tax is computed in accordance with Accounting Standard 22-''Accounting for Taxes on Income (AS- 22), issued by the ICAI. Tax expenses are accounted in the same period to which the revenue and expenses relate.

(ii) Provision for current income tax is made on the tax liability payable on taxable income after considering tax allowances, deductions and exemptions determined in accordance with the prevailing tax laws. The differences between taxable income and the net profit or loss before tax for the year as per the financial statements are identified and the tax effect of the deferred tax asset or deferred tax liabilities recorded for timing differences, i.e. differences that originate in one accounting period and reverse in another. The tax effect iscalculated on accumulated timing differences atthe end of the accounting year based on effective tax rates that would apply in the years in which the timing differences are expectedtoreverse.

(iii) Deferred tax assets are recognized only if there is reasonable certainty that they will be realized and are reviewed for the appropriatenessoftheir respective carrying values at each balance sheet date.

(i) Accounting for provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognized intermsof Accounting Standard 29 – ''Provisions, Contingent Liabilities and Contingent Assets'' (AS-29), issued by the ICAI., when there is a present legal or statutory obligation as a result of past events, where it is probable that there will be outflow of resources to settle the obligation and when a reliable estimate of the amountofthe obligation can be made.

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

Contingent Assets are not recognized in the financial statements.

(j) Earnings per Share:

The earning considered in ascertaining the earning per share comprises net profit after tax. The number of shares used in computing basic earning per share is the weighted average number of shares outstanding during the year as per AS-20.

 
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