Accounting Policies of Apollo Sindoori Hotels Ltd. Company
Mar 31, 2023
Note 1: CORPORATE INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
1. Corporate Information
Apollo Sindoori Hotels Limited (âthe Companyâ), is a company incorporated under the Companies Act with its Registered Office at 43/5, Hussain Mansion, Ground Floor, Greams Road, Thousand Lights, Chennai. The Company is in the business of managing food outlets at hospitals and reputed organisations. The Company also undertakes Outdoor Catering Services, skilled manpower to hospitals etc. The companyâs shares are listed in NSE Ltd. The Company is classified under âMediumâ category since 8th Oct, 2020 vide MSME UDYAM RegistrationNo.UDYAM-TN-02-0014743
1.1 General Information and statement of compliance with IND AS
Effective April 1,2017, the Company has adopted all the applicable Ind AS Standards and the adoption was carried out in accordance with Ind AS 101, First Time Adoption of Indian Accounting Standards, with April 1, 2016, as the transition date. The transition was carried out from Indian Accounting Principles Generally Accepted in India (IGAAP), as prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (iGAAP), which was the previous GAAP.
1.2 Application of new and revised Indian Accounting Standards (Ind AS)
All the Ind AS issued and notified by the Ministry of Corporate Affairs under the Companies (Indian Accounting Standards) Rules, 2015 (as amended) till the standalone financial statements are authorized have been considered in preparing these standalone financial statements.
1.3 Ministry of Corporate Affairs âMCAâ has notified the following new amendments to INDAS which the Company has not applied as they are effective for annual periods beginning on or after April 1,2023
Amendment to IND AS 1 âPresentation of Financial Statementâ
The amendments require companies to disclose their material accounting policies rather than their significant accounting policies. Accounting policy information is material if, together with other information can reasonably be expected to influence decisions of primary users of general purpose financial statements. The Company does not expect this amendment to have any significant impact in its financial statements.
Amendment to Ind AS 12 âIncome Taxesâ
The amendments clarify how companies account for deferred tax on transactions such as leases and decommissioning obligations. The amendments narrowed the scope of the recognition exemption in paragraphs 15 and 24 of Ind AS 12 (recognition exemption) so that it no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences. The Company does not expect this amendment to have any significant impact in its financial statements.
Amendment to Ind AS 8 âAccounting Policies, Changes in Accounting Estimates and Errorsâ
The amendments will help entities to distinguish between accounting policies and accounting estimates. The definition of a change in accounting estimates has been replaced with a definition of accounting estimates. Under the new definition, accounting estimates are âmonetary amounts in financial statements that are subject to measurement uncertaintyâ. Entities use measurement techniques and inputs to develop accounting estimates if accounting policies require items in financial statements to be measured in a way that involves measurement uncertainty. The Company does not expect this amendment to have any significant impact in its financial statements.
2. Significant Accounting Policies and Key Accounting Estimates and Judgements Use of estimates:
The preparation of financial statements requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and notes thereto. The management believes that these estimates and assumptions are reasonable and prudent. However, actual results could differ from these estimates. Any revision to accounting estimates is recognized prospectively in the current and future period.
This note provides an overview of the areas that involved a higher degree of judgment or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgments is included in the relevant notes together with information about the basis of calculation for each affected line item in the financial statements.
The areas where significant estimates were made by the management are:
i) Defined employee benefit obligations- Refer Note No 2.15
ii) Estimation of useful life of Property, Plant and Equipment Refer Note No 2.6
iii) Estimation and evaluation of provisions and contingencies relating to tax litigations Refer Note No 2.17
iv) Recoverability/Recognition of Deferred Tax Assets Refer Note No 2.13 b
The standalone financial statements of the company have been prepared in accordance with the Indian Accounting Standards (IND AS) notified under section 133 of the Companies Act, 2013 (âthe Actâ) read with the Companies (Indian Accounting Standards) Rules, 2015 and relevant provisions of the act.
The standalone financial statements for the year ended 31st March 2023 were authorized and approved for issue by the Board of Directors on 19th May 2023 and is subject to adoption by shareholders in the ensuing Annual General Meeting
The Standalone financial statements of the Company have been prepared using the significant accounting policies and measurement bases summarised below. These were used throughout all periods presented in the financial statements in accordance with Indian Accounting Standards (âInd ASâ) specified under Section 133 of the Companies Act, 2013 (âthe Actâ), read with Companies (Indian Accounting Standards) Rules, 2015, (as amended from time to time).
2.3 Basis of preparation and presentation
The standalone financial statements have been prepared on historical cost basis, except for certain financial instruments that are measured at fair values at the end of each reporting period, as explained in the accounting policies below:
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of Ind AS 102, leasing transactions that are within the scope of Ind AS 116, and measurements that have some similarities to fair value but are not fair value, such as net realizable value in Ind AS 2 or value in use in Ind AS 36.
In addition, for financial reporting purposes, fair value measurements are categorized into Level 1,2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
⢠Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
⢠Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
⢠Level 3 inputs are unobservable inputs for the asset or liability.
2.4 Current / Non-Current Classification
An asset or liability is classified as current if it satisfies any of the following conditions
(i the asset / liability is expected to be realized / settled in the Companyâs normal operating cycle;
(ii) the asset is intended for sale or consumption;
(iii) the asset / liability is held primarily for the purpose of trading;
(iv) the asset / liability is expected to be realized / settled within twelve months after the reporting period;
(v) the asset is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period;
(vi) in the case of a liability, the Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period.
All other assets and liabilities are classified as non-current
The operating cycle is the time between the acquisition of assets for processing and their realization in cash and cash equivalents. The Company has identified twelve months as its operating cycle. Deferred tax assets and liabilities are classified as non-current assets and liabilities.
2.5 Property Plant and equipmenta. The cost of an item of Property, Plant and equipment (PPE) is recognized as assets if, and only if:
⢠It is probable that future economic benefits associated with the item will flow to the entity.
⢠The cost of the item can be reliably measured.
⢠The cost of property, plant and equipment at stated at cost, less accumulated depreciation, amortization and cumulative impairment.
⢠The cost of the Property, plant and equipment comprises of purchase price, including import duties and nonrefundable purchase taxes, after deducting trade discounts and rebates and also includes any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
⢠Cost of property, plant and equipment is depreciated on a straight line basis over the useful lives of the assets prescribed in Schedule II of the Companies Act, 2013.
⢠Residual value is generally considered between 0-5 percent of cost of assets.
b. Intangible assets Intangible assets acquired separately
Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortization and accumulated impairment losses. Amortization is recognized on a straight-line basis over their estimated useful lives. The estimated useful life is reviewed annually with the effect of any changes in estimate being accounted for on a prospective basis.
Useful lives of intangible assets
Intangible assets are amortized equally over the estimated useful life not exceeding five years.
Estimated useful life of Computer Software is five years.
De-recognition of tangible and intangible assets
An item of tangible and intangible asset is de-recognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of tangible and intangible assets is determined as the difference between the sales proceeds if any and the carrying amount of the asset is recognized in the statement of profit or loss.
Impairment of tangible and intangible assets
The Company annually reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash- generating unit) is estimated to be less than its carrying amount, the
carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in Statement of Profit and Loss.
When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash generating unit) is increased to the revised estimate of its recoverable amount, so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in Statement of Profit and Loss.
Ind AS 115 âRevenue Recognitionâ deals with recognition of revenue and established principles for reporting useful information to users of financial statements about the nature, amount of timing and uncertainty of revenue and cash flows arising from an entityâs contracts with customers. Revenue is recognised when a customer obtains control of a promised goods or services and thus has the ability to direct the use and obtain the benefits therein and reflects the consideration to which the entity expects to be entitled in exchange for those goods and services.
As per Ind AS 115 following is the process to be applied before revenue can be recognised:
⢠Identification of contracts with customers;
⢠Identification of the separate performance obligation;
⢠Determination of the transaction price of the contract;
⢠Allocation of the transaction price of the separate performance obligations; and
⢠Recognition of revenue as each performance obligation is satisfied.
a. i. Revenue from sale of traded goods recognised as follows:
Revenue is recognised when the control of the same is transferred to the customer and it is probable that the Company will collect the consideration to which it is entitled for the exchanged goods.
ii. Revenue from services is recognized as follows:
1. Cost plus contracts: Revenue from cost plus contracts is recognised over time and is determined with reference to the extent performance obligations have been satisfied. The amount of transaction price allocated to the performance obligations satisfied represents the recoverable costs incurred during the period plus the margin as agreed with the customer.
2. Fixed Price Contracts: Revenue from rendering of services is recognised over time as the customer receives the benefit of the Companyâs performance and the Company has an enforceable right to payment for services transferred.
Interest income from debt instruments is recognized using the effective interest rate method. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying value of a financial asset. While calculating the effective interest rate, the company estimates the expected cash flows by considering all the contractual terms of the financial instrument (for example, prepayment, extension, call and similar options), but does not consider the expected credit losses.
Dividends are recognized in profit or loss only when the right to receive payment is established and the amount dividend can be reliably measured.
d. Rental Income:
Rental Income from operating leases is recognized on a straight-line basis over the lease term.
Inventories are stated at the lower of cost and net realisable value. Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale. Stock of provisions, stores and other consumables are valued at cost (average price) on FIFO basis.
The Company assesses at contract inception whether a contract is, or contains a lease. That is, if the contract conveys the right to control the use of as identified asset for a period of time in exchange for consideration.
The Company applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Company recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.
The company recognises right of use assets as at the commencement date of lease (i.e., the date the underlying assets is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment of losses, and adjusted for any remeasurement of lease liabilities. The cost of right of use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets.
If ownership of the leased asset transfers to the company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the assets. The right-of-use assets are also subject to impairment.
c. Lease Liabilities
At the commencement date of the lease, the Company recognises the lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including insubstance fixed payments) less any lease incentives receivables, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating the lease, if the lease term reflects the Company exercising the option to terminate.
After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments or a change in the assessment of an option to purchase the underlying asset. The companyâs lease liabilities are included in interest bearing loans and borrowings.
d. Short-term leases and leases of low-value assets.
The company applies the short-term lease recognition for leases that have a lease term 12 months or less from the commencement date and do not contain a purchase option.
2.9 Financial instruments Financial Assets
a. Initial recognition and measurement
All financial assets are recognized initially at fair value, in case financial assets are not recognized at fair value through profit and loss are recorded at transaction cost that is incurred for acquisition of a financial assets.
For the purpose of subsequent measurement financial assets are categorized under three categories:-
⢠Financial assets amortized at cost.
⢠Financial assets at fair value through profit and loss (FVTPL).
⢠Financial assets at fair value through other comprehensive income (FVTOCI).
c. Financial assets amortized at cost
Financial assets are amortized at cost if both the following conditions are met:
⢠The assets are held in the business model whose objective is to hold assets for collecting contractual cash flows.
⢠Contractual terms of the assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
⢠Amortized cost are amounts at which the financial assets are measured using initial recognition minus the repayment plus the interest using effective interest rate method, the EIR recognized in the financial income under profit and loss statements. The losses arising out of impairment are recognized in Statement of Profit and loss.
A debt instrument is measured at FVTOCI if both of the following conditions are met:
⢠The objective of the business model is achieved by collecting contractual cash flows and selling the financial assets, and the contractual cash flows represent slowly payment of principal and interest.
⢠Debt instrument included at FVTOCI category are initially as well as each reporting date at fair value. Fair value movements are recognized under other comprehensive income.
However, the Company recognizes interest income, impairment losses and reversals and foreign exchange gain and losses under profit and loss accounts. On de-recognition of the assets, cumulative gain and loss previously recognized in the Oci shall be reclassified to the Statement of Profit and Loss.
Investments in equity instruments of Joint venture associates and subsidiary are accounted at cost in the separate financial statement as per IND AS 27 investment in other equity instruments are carried at fair value.
f. Debt Instruments and derivatives at FVTPL.
FVTPL is a residual category for debt instruments. Any instrument fails to be categorized under FVTOCI are categorized under FVTPL.
Debt instruments included under the FVTPL category are measured at fair value with all the changes recognized under profit and loss statements, interest element under such instruments are presented under interest income.
g. De-recognition of financial assets
A financial instrument (where a part of financial assets or part of group of similar assets) is primarily derecognized when
⢠The right to receive cash flows are expired, or
⢠The company transferred the right to receive cash flows without delay, or the company has completely transferred the risk and reward of the assets.
h. Impairment of financial assets
⢠The Company has applied expected credit loss (ECL) for the measurement and recognition of the impairment loss of the following financial assets and credit exposure. The Company measures expected credit losses on a case to case basis.
⢠Financial assets are trade receivable, debt instruments, loans and cash deposits are measured at amortized cost.
All Financial liabilities are accounted at Fair value upon initial recognition. The Companyâs financial liabilities include trade payable, other liabilities and borrowings.
The measurement of financial liabilities depends upon their classification:
1. Financial liabilities at fair value through profit or loss
Financial liabilities are recognized at fair value through profit and loss includes financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit and loss.
2. Financial liabilities at amortized cost
Financial liabilities that are not held for trading or designated at initial recognition at fair value through profit and loss are measured at amortized cost at the end of the subsequent accounting period. The carrying amount of financial liabilities that are designated at amortized cost are determined based on effective interest rate method (EIR). Gain and losses are recognized in profit and loss when the liabilities are derecognized and through the EIR amortization process. Amortization cost is calculated by taking into account any discount or premium on acquisition fees and cost that are integral part of EIR. The EIR amortization is included as finance cost in statement of profit and loss.
3. De-recognition of financial liabilities
A financial liability is derecognized when the financial obligation is discharged or cancelled or expires, when the financial liability is replaced by the same lender on subsequently in different terms and the terms of the subsequent liabilities are modified, such an exchange or modification is treated as the original liability and recognition of the new liability. The difference in the respective carrying amount is recognized in statement of profit and loss statements.
k. Impairment of non-financial assets
At each reporting date the Company makes an assessment, whether there is an indication of impairment either internal or external exist, by which the actual carrying amount of the assets is higher than the recoverable amount of an assets or cash generating units. Recoverable amount is determined for individual assets, unless the assets donât generate cash flow that is largely independent of those from other assets or group of assets.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflect current market assessment of the time value money and the risk specific to the assets
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 are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization. All other borrowing costs are recognized in the Statement of Profit and Loss in the period in which they are incurred.
2.11 Foreign Currency Transactions
The Companyâs financial statements are presented in Indian rupee (Functional Currency)
Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction.
Monetary assets and liabilities denominated in foreign currency are translated at rates of exchange on the balance sheet date.
Non- Monetary items denominated in foreign currencies (such as investments, fixed assets) are valued at the exchange rate on the date of acquisition of the assets or incurrence of the liabilities.
Exchange differences arising on foreign currency transactions are recognised in the profit and loss account.
2.12 Taxes on incomea. Current Income Tax
Provision under current tax is made as per the provisions of the Income Tax Act, 1961.
Current income tax assets or liabilities are measured at the amount expected to be recovered or paid to the taxation authorities. The tax rate and tax laws used to compute the amount are those that are enacted or subsequently enacted at future date.
b. Deferred Tax
Deferred tax is recognized under balance sheet method for all taxable temporary differences between the tax bases of assets and liabilities and carrying amounts.
Deferred tax asset is recognized for all taxable temporary differences like Provision for employee benefits, unused tax losses and any unused tax credits.
The tax rate and tax laws used to compute the amount are those that are enacted or subsequently enacted at future date.
Basic earnings per share amounts are computed by dividing net profit or loss for the year before comprehensive income attributable to equity shareholders by the weighted average number of shares outstanding during the year. Diluted earnings per share are computed and disclosed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the year.
2.14 Employee Benefitsa. Short-term Employee Benefits
Short-term Employee Benefits for Services rendered by employees are recognized as expenses during the period when the services are rendered.
b. Post -Employment Benefits Defined Contribution Plan
The Company makes Provident fund contributions for qualifying employees. Under the Provident Fund scheme, the Company is required to contribute a specified percentage of payroll cost to the Employees Provident Fund Scheme,1952 to fund the benefits and interest as declared by the Government from time to time accrues to the credit of the employees under the scheme.
The Company makes annual contributions to the Employeesâ Group Gratuity-cum-Life Assurance Scheme of an Insurer, a funded defined benefit plan for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment. Liability for un availed leave for qualifying employees is actuarially valued.
Payment made under Voluntary retirement scheme is charged to statement of profit and loss on incurrence.
d. Re-measurement of post-employment defined benefit plans
Re-measurement comprises of actuarial gain and losses, the effect of changes in assets ceiling (excluding amount included in the net interest on net defined benefit liability) and the return on plan assets (excluding amounts included in net interest in net defined liability), are recognized immediately in the balance sheet with a corresponding debit or credit to the Other Comprehensive Income (OCI) in the period in which they occur, re measurement are not reclassified to profit and loss accounts subsequently.
The company measures financial instruments at fair value at each balance sheet date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
⢠In the principal market for the asset or liability or
⢠In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that the market participants act in their economic best interest.
2.16 Provisions, Contingent Liabilities and Contingent Assets Provisions
A provision is recorded when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reasonably estimated.
Provisions are measured at the present value of managementâs best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognized as interest expenses.
Wherever there is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity or a present obligation that arises from past events but is not recognized because:
it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or
the amount of the obligation cannot be measured with sufficient reliability.
Contingent assets are neither recognized nor disclosed.2.17 Cash flow statement
Cash flows are reported using the indirect method, whereby profit / (loss) before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
Cash and Cash equivalents comprise cash in hand, demand deposits with banks or corporations and short term highly liquid investments (original maturity less than 3 months) that are readily convertible into known amounts of cash and are subject to an insignificant risk of change in value.
2.18 Events after reporting period
Where events occurring after the Balance sheet date provide evidence of conditions that existed at the end of the reporting period, the impact of such events is adjusted within the financial statements. Otherwise, events after the Balance Sheet date of material size of nature are only disclosed.
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.
Mar 31, 2018
1. Background
Apollo Sindoori Hotels Limited (âthe Companyâ), is a company incorporated under the Companies Act with its registered office at Chennai. The Company is in the business of managing food outlets at hospitals and reputed organisations. The Company also undertakes Outdoor Catering Services, skilled manpower to hospitals etc.
2. Significant Accounting Policies Statement of compliance
The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (âInd ASâ) notified under the Companies (Indian Accounting Standards) Rules, 2015 read with the Companies (Indian Accounting Standards) Amendment Rules, 2016 and comply with all material aspects with all relevant provisions of the act. For all the periods up to 31st March 2017, the financial statements were prepared in accordance with the previous GAAP which included accounting standards notified under the Companies (Accounting Standards) Rules, 2006. These financial statements are the first financial statements prepared in accordance with 1st April 2016 as the date of transition to Ind AS. Refer Note 33 for the details of first-time adoption exemptions availed by the Company.
Basis of preparation and presentation
The standalone financial statements have been prepared on historical cost basis, except for certain financial instruments that are measured at fair values at the end of each reporting period, as explained in the accounting policies below.
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of Ind AS 102, leasing transactions that are within the scope of Ind AS 17, and measurements that have some similarities to fair value but are not fair value, such as net realizable value in Ind AS 2 or value in use in Ind AS 36.
In addition, for financial reporting purposes, fair value measurements are categorized into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
- Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
- Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
- Level 3 inputs are unobservable inputs for the asset or liability.
3. Fixed Assets
3.1 Property Plant and equipment
The cost of an item of Property, Plant and equipment (PPE) is recognized as assets if, and only if:
i) It is probable that future economic benefits associated with the item will flow to the entity.
ii) The cost of the item can be reliably measured.
3.1.1 The cost of property, plant and equipment at stated at cost, less accumulated depreciation, amortization and cumulative impairment.
3.1.2 The cost of the Property, plant and equipment comprises of purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates and also includes any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
3.2 Intangible assets
3.2.1 Computer software / licenses other than specific software that are integral part of hardware are capitalized as intangible assets and amortized over a period over useful life.
3.2.2 Intangible assets acquired separately are measured on initial recognition at cost. Following recognition, intan gible assets are carried at cost less any accumulated amortization and accumulated impairment loss.
3.2.3 Intangible assets with finite lives are amortized over the economic useful life and assessed for impairment whenever there is indication that the intangible assets are impaired. Intangible assets with indefinite useful lives that are acquired separately are carried at cost, less accumulated impairment losses.
3.3 Depreciation/ Amortization
3.3.1 Cost of property, plant and equipment is depreciated on a straight line basis over the useful lives of the assets prescribed in Schedule II of the Companies Act, 2013.
3.3.2 Residual value is generally considered between 0-5 percent of cost of assets.
3.3.3 Gain or losses arising from de-recognition of property, plant and equipment are measured as the difference between the net disposal proceeds and the carrying amount of the assets and are recognized in the state ments of profits or loss when the assets are derecognized.
3.3.4 Intangible assets are amortized equally over the estimated useful life not exceeding three years.
4. Inventory
Stock of provisions, stores and other consumables are valued at cost (average price) on FIFO basis.
5. Leases
A lease is classified at the inception date as a finance lease or an operating lease, A lease that transfers substantially all the risk and reward of ownership is classified as financial lease.
5.1.1 Operating lease as lessee
Lease rentals are recognized as expenses on a straight line basis with reference to lease term and other conditions except where
i) Another systematic basis is more representative of the time pattern of the benefit derived from the assets taken or given on lease.
ii) Contingent rent is recognized as the expenses in the period in which it occurs.
5.1.2 Operating lease as lessor
Rental income from operating lease is recognized on straight line basis over the terms of the relevant lease except where -
i) Another systematic basis is more representative of the time pattern of the benefit derived from the assets taken or given on lease.
ii) Contingent rent is recognized as the expenses in the period in which it occurs.
5.2 Financial Lease as a lesse
i) Under financial lease lessor will recognize the assets as well as liability in their books at the inception date fair value of the lease property or if lower the present value of minimum lease payments, lease payments are apportioned between finance charges and lease liability, finance charges are recorgnized as finance cost in the Statement of Profit and Loss, unless they are directly attributable to the qualifying assets. Contingent rents are recognized as expenses in the period in which they are incurred.
ii) A leased asset is depreciated over the useful life of the asset. However, there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the assets are depreciated over shorter of the estimated useful life of the assets and the lease term.
6. Impairment of non-financial assets
At each reporting date the Company makes an assessment, whether there is an indication of impairment either internal or external exist, by which the actual carrying amount of the assets is higher than the recoverable amount of an assets or cash generating units. Recoverable amount is determined for individual assets, unless the assets donât generate cash flow that is largely independent of those from other assets or group of assets. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflect current market assessment of the time value money and the risk specific to the assets.
7. Foreign exchange transactions
7.1 The Companyâs financial statements are presented in Indian rupee (Functional Currency)
7.2 Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction.
7.3 Monetary assets and liabilities denominated in foreign currency are translated at rates of exchange on the balance sheet date.
7.4 Non- Monetary items denominated in foreign currencies (such as investments, fixed assets) are valued at the exchange rate prevailing at the end of the reporting period.
7.5 Exchange differences arising on foreign currency transactions are recognised in the profit and loss account.
8. Revenue Recognition
Revenue is recognized to the extent it is probable that economic benefit will flow to the entity and the revenue can be reliably measured. Revenue is measured at fair value of the consideration received or receivable taking into account contractual defined terms of payment excluding taxes or duties collected on behalf of the government.
The recognition criteria must be met before recognizing revenue.
8.1 Sale of goods
Revenue is recognized when the goods are transferred to the buyer and all the risk and reward of ownership have been transferred to the buyer. There is no uncertainty regarding the collectability of the revenue. Revenue is measured at the fair value of the consideration received or receivable net of trade discount and volume rebates.
8.2 Rendering of services
Revenue is recognized when it is probable that economic benefit associated with the transaction will flow to the seller and the stage of completion can be measured reliably. Income from various services rendered is recognized on the basis of contract between the parties. Room revenue is recognized on time proportion basis.
8.3 Dividends
Dividend income is recognized when the Companyâs right to receive the dividend is established.
8.4 Interest Income
Interest income is recorded using the effective interest rate (EIR). EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instruments or a shorter period.
8.5 Others
Claims (including interest on outstanding) are recognized at cost, when there is reasonable certainty regarding ultimate collection.
9. Taxes on income
9.1 Current Income Tax
Provision under current tax is made as per the provision of the income tax Act, 1961.
Current income tax assets or liabilities are measured at the amount expected to be recovered or paid to the taxation authorities. The tax rate and tax laws used to compute the amount are those that are enacted or subsequently enacted at future date.
9.2 Deferred Tax
Deferred tax is recognized under balance sheet method for all taxable temporary differences between the tax bases of assets and liabilities and carrying amounts.
Deferred tax asset is recognized for all temporary differences like Provision for employee benefits, unused tax losses and any unused tax credits.
The tax rate and tax laws used to compute the amount are those that are enacted or subsequently enacted at future date.
10. Earnings Per Share
Basic earnings per share amounts are computed by dividing net profit or loss for the year before comprehensive income attributable to equity shareholders by the weighted average number of shares outstanding during the year. Diluted earnings per share is computed and disclosed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the year.
11. Provision contingent liabilities and contingent assets
A provision is recognized when there is present obligation as result of past events for which there is outflow of resources embodying economic benefit is required to settle the obligation and reliable estimate can be made for the obligations. Any provision has been created for the outflow that is required to be made in the subsequent year is discounted using pre tax rate, when discounting is used; the increase in provision due to passage of time is recognized as finance cost.
11.1 Contingent Liabilities
Contingent liabilities are disclosed in the notes when the probability of the occurrence of event is depends on the happening of the event in the future date. When there is possible obligation in respect of which the likely hood of outflow of resources is remote is kept out of the purview of disclosure in notes.
12. Employee Benefits
12.1 Short-term Employee Benefits
Short Term Employee Benefits for Services rendered by employees are recognized as expenses during the period when the services are rendered.
12.2 Post-Employment Benefits
12.2.1 Defined Contribution Plan
The Company makes Provident fund contributions for qualifying employees. Under the Provident Fund scheme, the Company is required to contribute a specified percentage of payroll cost to the Employees Provident Fund Scheme,1952 to fund the benefits and interest as declared by the Government from time to time accrues to the credit of the employees under the scheme.
12.2.2 Defined Benefit Plan
The Company makes annual contributions to the Employeesâ Group Gratuity cum - Life Assurance Scheme of an Insurer, a funded defined benefit plan for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment. Liability for unavailed leave for qualifying employees is actuarially valued and provided for but is partially funded.
12.3 Termination Benefits
Payment made under Voluntary retirement scheme is charged to statement of profit and loss on incurrence.
12.4 Re measurement of post-employment defined benefit plans
Remeasurement comprises of actuarial gain and losses, the effect of changes in assets ceiling (excluding amount included in the net interest on net defined benefit liability)and the return on plan assets (excluding amounts included in net interest in net defined liability), are recognized immediately in the balance sheet with a corresponding debit or credit to the Other Comprehensive Income (OCI) in the period in which they occur, re measurement are not reclassified to profit and loss accounts subsequently.
13. Current Vs Non- Current classifications
The company presents assets and liabilities in the balance sheet based on Current / non-current classification.
13.1 An assets is treated as current when it is:
- Expected to be realized or intended to be sold or consumed in normal operating cycle.
- Held primarily for the purpose of trading.
- Expected to be realized within 12 months from the reporting period.
- Cash and cash equivalent unless restricted to be exchanged or used to settle a liability for at least 12 months after the reporting period.
13.2 All other assets will be treated as Non-Current.
14. A liability is current when:
- It is expected to be settled in the normal operating cycle
- It is held primarily for the purpose of trading
- It is due to be settled within 12 months after the reporting period or
- There is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period.
14.1 The company classifies all other liabilities as non-current.
15. FINANCIAL INSTRUMENTS
A financial instrument is any contract that gives rise to a financial asset of one entity and financial entity of another entity.
15.1 Financial assets
15.1.1 Initial recognition and measurement.
All financial assets are recognized initially at fair value, in case financial assets are not recognized at fair value through profit and loss are recorded at transaction cost that is incurred for acquisition of a financial assets.
15.1.2 Subsequent measurement.
For the purpose of subsequent measurement financial assets are categorized under three categories
- Financial assets amortized at cost.
- Financial assets fair value through profit and loss.
- Financial assets fair value through other comprehensive income.
15.1.3 Financial assets amortized at cost.
Financial assets are amortized at cost if both the following conditions are met
- The assets are held in the business model whose objective is to hold assets for collecting contractual cash flows.
- Contractual terms of the assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
- Amortized cost are amount at which the financial assets are measured using initial recognition minus the repayment plus the interest using effective interest rate method, the EIR recognized in the financial income under profit and loss statements. The losses arising out of impairment are recognized in profit and loss.
15.1.4 Debt instrument at FVTOCI
A debt instrument is measured at FVTOCI if both of the following conditions are met. The objective of the business model is achieved by collecting contractual cash flows and selling the financial assets, and The assets contractual cash flows represent slowly payment of principal and interest.
Debt instrument included at FVTOCI category are initially as well as each reporting date at fair value. Fair value movements are recognized under other comprehensive income. However the company recognizes interest income, impairment losses and reversals and foreign exchange gain and losses under profit and loss accounts. On derecognition of the assets, cumulative gain and loss previously recognized in the OCI shall be reclassified to P&L.
15.1.5 Equity instruments at FVTOCI.
A. Equity instruments in JV and associates.
Investments in joint venture and associates are accounted for cost in standalone financial statements.
15.1.6 Debt Instruments and derivatives at FVTPL.
FVTPL is a residual category for debt instruments. Any instrument fails to be categorized under FVTOCI are categorized under FVTPL.
Debt instruments included under the FVTPL category are measured at fair value with all the changes recognized under profit and loss statements, interest element under such instruments are presented under interest income.
15.1.7 Derecognition
A financial instruments (where a part of financial assets or part of group of similar assets ) is primarily derecognized when
- The right to receive cash flows are expired, or
- The company transferred the right to receive cash flows without delay, or the company has completely transferred the risk and reward of the assets.
15.1.8 Impairment of financial assets.
The company has applied expected credit loss (ECL) for the measurement and recognition of the impairment loss of the following financial assets and credit exposure.
Financial assets are trade receivable, debt instruments, loans, cash deposit are measured at amortized cost.
15.2 Financial Liabilities.
15.2.1 Financial liabilities are classified at initial recognition at fair value through profit and financial liabilities at amortized cost net of directly attributable amortized cost.The companyâs financial liabilities include trade payable, other liabilities and borrowings.
15.2.2 Subsequent measurement
The measurement of financial liabilities depends upon their classification:
15.2.2.1 Financial liabilities at fair value through profit or loss
Financial liabilities are recognized at fair value through profit and loss includes financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit and loss.
15.2.2.2 Financial liabilities at amortized cost
Financial liabilities that are not held for trading or designated at initial recognition at fair value through profit and loss are measured at amortized cost at the end of the subsequent accounting period. The carrying amount of financial liabilities that are designated at amortized cost are determined based on effective interest rate method (EIR). Gain and losses are recognized when in profit and loss when the liabilities are derecognized and through the EIR amortization process. Amortization cost is calculated by taking into account any discount or premium on acquisition fees and cost that are integral part of EIR. The EIR amortization is included as finance cost in statement of profit and loss.
15.2.2.3 Derecognition
A financial liability is derecognized when the financial obligation is discharged or cancelled or expires, when the financial liability is replaced by the same lender on subsequently in different terms and the terms of the subsequent liabilities are modified, such an exchange or modification is treated as the original liability and recognition of the new liability. The difference in the respective carrying amount is recognized in statement of profit and loss statements.
Mar 31, 2015
I) Basis of preparation of financial statements
The financial statements of "the Company " have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards specified under
Section 133 of the Companies Act, 2013, read with Rule 7 of the
Companies (Accounts) Rules, 2014 and the relevant provisions of the
Companies Act, 2013 ("the 2013 Act")/Companies Act, 1956 ("the Act
1956"), as applicable. The statements have been prepared on accrual
basis under the historical cost convention. The accounting policies
adopted in the preparation of the financial statements are consistent
with those followed in the previous year.
ii) Use of estimates
The preparation of the financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of revenues and expenses during the reporting period,
reported balances of assets and liabilities, and disclosure of
contingent assets and liabilities as at the date of the financial
statements. Actual results could differ from those estimates. Any
revision to accounting estimates is recognized prospectively in current
and future periods.
iii) Fixed assets and depreciation
Fixed assets are stated at the cost of acquisition less accumulated
depreciation. Cost is inclusive of freight, duties, taxes and other
directly attributable costs incurred to bring the assets to their
working condition for intended use.
Depreciation is provided on all fixed assets on the straight-line
method in accordance with Schedule II to the Companies Act, 2013
adopting the useful life for assets as specified therein and reckoning
the residual value at 5% of the original cost of the asset.
In respect of fixed assets (other than freehold land and capital
work-in-progress) acquired during the year, depreciation/amortisation
is charged on a straight line basis so as to write off the cost of the
assets over the useful lives and for the assets acquired prior to 1
April, 2014, the carrying amount as on 1 April, 2014 is depreciated
over the remaining useful life based on an evaluation.
Intangible assets are amortized equally over the estimated useful life
not exceeding three years.
iv) Inventory
Stocks of provisions, stores and other consumables are valued at cost.
Kitchen Utilities included in Inventories also includes cutlery and
crockery and items of similar nature and are amortised over a period of
three years.
v) Investments
Investments are classified as Long Term Investments and Current
Investments and are valued in accordance with Accounting Standards on
'Accounting for Investments' (AS-13), issued by The Institute of
Chartered Accountants of India. Current Investments are carried at
lower of cost and market value/NAV, computed individually. Long Term
Investments are stated at cost. Provision for diminution in the value
of Long Term Investments is made only if such decline is other than
temporary in the opinion of the management.
vi) Leases
Finance leases, which effectively transfers substantially all the risks
and benefits incidental to ownership of the leased item, are
capitalized at the lower of the fair value and present value of the
minimum lease payments at the inception of the lease and disclosed as
assets taken on lease. Lease payments are apportioned between the
finance charges and reduction of the lease liability based on the
implicit interest rate or incremental borrowing rate as applicable.
Finance charges are charged directly against income.
Lease payments under an operating lease, are recognized as an expense
in the statement of profit and loss on a straight line basis over the
lease term.
vii) Impairment of Assets
An asset is treated as impaired when the carrying cost of such assets
exceeds its recoverable value. An impairment loss is charged to the
Profit & Loss Account in the year in which an asset is identified as
impaired, after considering adjustment if any already carried out.
viii) Revenue Recognition
Income from various services rendered is recognised on the basis of
contract between the parties. Room revenue is recognised on time
proportion basis.
ix) Foreign exchange transactions
Transactions in foreign currencies are recorded at the exchange rates
prevailing on the date of the transaction. Monetary assets and
liabilities denominated in foreign currency are translated at rates of
exchange on the balance sheet date. Exchange differences arising on
foreign currency transactions are recognised in the profit and loss
account.
x) Taxation
Income-tax expense comprise current tax (i.e. amount of tax for the
year determined in accordance with the income-tax law) and deferred tax
charge or credit (reflecting that tax effects of timing differences
between accounting income and taxable income for the year). The
deferred tax charge or credit and the corresponding deferred tax
liabilities or assets are recognized using the tax rates and tax laws
that have been enacted or substantively enacted by the balance sheet
date. Deferred tax assets are recognized only to the extent there is a
reasonable certainty that the assets can be realized in future;
however, where there is unabsorbed depreciation or carried forward loss
under taxation laws, deferred tax assets are recognized only if there
is a virtual certainty of realization of such assets. Deferred tax
assets are reviewed as at the balance sheet date and written down or
written up to reflect the amount that is reasonably/virtually certain
(as the case may be) to be realized.
Current tax and deferred tax assets and liabilities are offset to the
extent to which the Company has a legally enforceable right to set off
and they relate to taxes on income levied by the same governing
taxation laws.
xi) Earnings per share
Basic earnings per share amounts are computed by dividing net profit or
loss for the year attributable to equity shareholders by the weighted
average number of shares outstanding during the year. Diluted earnings
per share is computed and disclosed using the weighted average number
of equity and dilutive equity equivalent shares outstanding during the
year.
xii) Provisions and contingent liabilities
The Company creates a provision when there is present obligation as a
result of past event that probably requires an outflow of resources and
a reliable estimate can be made of the amount of the obligation. A
disclosure for a contingent liability is made when there is a possible
obligation or a present obligation that may, but probably will not,
require an outflow of resources. Where there is a possible obligation
or a present obligation in respect of which the likelihood of outflow
of resources is remote, no provision or disclosure is made. Contingent
assets are neither recognised nor disclosed in the financial
statements.
xii) Cash flow statement
Cash flows are reported using the indirect method, whereby profit
before tax is adjusted for the effects of transactions of a non-cash
nature and any deferrals or accruals of past or future cash receipts or
payments. The cash flows from regular revenue generating, financing and
investing activities of the Company are segregated.
Mar 31, 2014
I) Basis of preparation of financial statements
The financial statements are prepared and presented under the
historical cost convention on the accrual basis of accounting in
accordance with the generally accepted accounting principles (''GAAP'')
in India and comply with the Accounting Standards notified by the
Central Government pursuant to Companies (Accounting Standard) Rules,
2006 and the relevant provisions of the Companies Act, 1956.
ii) Use of estimates
The preparation of the financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of revenues and expenses during the reporting period,
reported balances of assets and liabilities, and disclosure of
contingent assets and liabilities as at the date of the financial
statements. Actual results could differ from those estimates. Any
revision to accounting estimates is recognized prospectively in current
and future periods.
iii) Fixed assets and depreciation
Fixed assets are stated at the cost of acquisition less accumulated
depreciation. Cost is inclusive of freight, duties, taxes and other
directly attributable costs incurred to bring the assets to their
working condition for intended use.
Depreciation is provided on all fixed assets on the straight-line
method. The rates of depreciation prescribed in Schedule XIV to the
Companies Act, 1956 are considered as the minimum rates. If the
management''s estimate of the useful life of a fixed asset at the time
of acquisition of the asset or of the remaining useful life on a
subsequent review is shorter than that envisaged in the aforesaid
schedule, depreciation is provided at a higher rate based on the
management''s estimate of the useful life/remaining useful life.
Depreciation charged on a pro-rata basis for assets purchased during
the year. Individual assets Equivalent to INR 5,000 or less are
depreciated at 100%. No depreciation has been charged for assets which
are disposed off during the year.
Intangible assets consist of application system software and are
amortised over their economic useful lives. Managements'' estimate of
useful life of such software is three years.
iv) Inventory
Stocks of provisions, stores and other consumables are valued at cost.
v) Investments
Investments are classified as Long Term Investments and Current
Investments and are valued in accordance with Accounting Standards on
''Accounting for Investments'' (AS-13), issued by The Institute of
Chartered Accountants of India. Current Investments are carried at
lower of cost and market value/NAV, computed individually. Long Term
Investments are stated at cost. Provision for diminution in the value
of Long Term Investments is made only if such decline is other than
temporary in the opinion of the management.
vi) Leases
Finance leases, which effectively transfers substantially all the risks
and benefits incidental to ownership of the leased item, are
capitalized at the lower of the fair value and present value of the
minimum lease payments at the inception of the lease and disclosed as
assets taken on lease. Lease payments are apportioned between the
finance charges and reduction of the lease liability based on the
implicit interest rate or incremental borrowing rate as applicable.
Finance charges are charged directly against income.
Lease payments under an operating lease, are recognized as an expense
in the statement of profit and loss on a straight line basis over the
lease term.
vii) Impairment Of Assets
An asset is treated as impaired when the carrying cost of such assets
exceeds its recoverable value. An impairment loss is charged to the
Profit & Loss Account in the year in which an asset is identified as
impaired, after considering adjustment if any already carried out.
viii) Revenue Recognition
Income from various services rendered is recognised on the basis of
contract between the parties.
Room revenue is recognised on time proportion basis.
ix) Foreign exchange transactions
Transactions in foreign currencies are recorded at the exchange rates
prevailing on the date of the transaction. Monetary assets and
liabilities denominated in foreign currency are translated at rates of
exchange on the balance sheet date. Exchange differences arising on
foreign currency transactions are recognised in the profit and loss
account.
x) Taxation
Income-tax expense comprise current tax (i.e. amount of tax for the
year determined in accordance with the income-tax law) and deferred tax
charge or credit (reflecting that tax effects of timing differences
between accounting income and taxable income for the year). The
deferred tax charge or credit and the corresponding deferred tax
liabilities or assets are recognized using the tax rates and tax laws
that have been enacted or substantively enacted by the balance sheet
date. Deferred tax assets are recognized only to the extent there is a
reasonable certainty that the assets can be realized in future;
however, where there is unabsorbed depreciation or carried forward loss
under taxation laws, deferred tax assets are recognized only if there
is a virtual certainty of realization of such assets. Deferred tax
assets are reviewed as at the balance sheet date and written down or
written up to reflect the amount that is reasonably/virtually certain
(as the case may be) to be realized.
Current tax and deferred tax assets and liabilities are offset to the
extent to which the Company has a legally enforceable right to set off
and they relate to taxes on income levied by the same governing
taxation laws
xi) Earnings per share
Basic earnings per share amounts are computed by dividing net profit or
loss for the year attributable to equity shareholders by the weighted
average number of shares outstanding during the year. Diluted earnings
per share is computed and disclosed using the weighted average number
of equity and dilutive equity equivalent shares outstanding during the
year.
xii) Provisions and contingent liabilities
The Company creates a provision when there is present obligation as a
result of past event that probably requires an outflow of resources and
a reliable estimate can be made of the amount of the obligation. A
disclosure for a contingent liability is made when there is a possible
obligation or a present obligation that may, but probably will not,
require an outflow of resources. Where there is a possible obligation
or a present obligation in respect of which the likelihood of outflow
of resources is remote, no provision or disclosure is made. Contingent
assets are neither recognised nor disclosed in the financial
statements.
xii) Cash flow statement
Cash flows are reported using the indirect method, whereby profit
before tax is adjusted for the effects of transactions of a non-cash
nature and any deferrals or accruals of past or future cash receipts or
payments. The cash flows from regular revenue generating, financing and
investing activities of the Company are is segregated.
Mar 31, 2013
I) BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The financial statements are prepared and presented under the
historical cost convention on the accrual basis of accounting in
accordance with the generally accepted accounting principles (''GAAP'')
in India and comply with the Accounting Standards notified by the
Central Government pursuant to Companies (Accounting Standard) Rules,
2006 and the relevant provisions of the Companies Act, 1956.
ii) USE OF ESTIMATES
The preparation of the financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of revenues and expenses during the reporting period,
reported balances of assets and liabilities, and disclosure of
contingent assets and liabilities as at the date of the financial
statements. Actual results could differ from those estimates. Any
revision to accounting estimates is recognized prospectively in current
and future periods.
iii) FIXED ASSETS AND DEPRECIATION
Fixed assets are stated at the cost of acquisition less accumulated
depreciation. Cost is inclusive of freight, duties, taxes and other
directly attributable costs incurred to bring the assets to their
working condition for intended use.
Depreciation is provided on all fixed assets on the straight-line
method. The rates of depreciation prescribed in Schedule XIV to the
Companies Act, 1956 are considered as the minimum rates. If the
management''s estimate of the useful life of a fixed asset at the time
of acquisition of the asset or of the remaining useful life on a
subsequent review is shorter than that envisaged in the aforesaid
schedule, depreciation is provided at a higher rate based on the
management''s estimate of the useful life/remaining useful life.
Depreciation charged on a pro-rata basis for assets purchased during
the year. Individual assets Equivalent to INR 5,000 or less are
depreciated at 100%. No depreciation has been charged for assets which
are disposed off during the year.
Intangible assets consist of application system software and are
amortised over their economic useful lives. Managements'' estimate of
useful life of such software is three years.
iv) INVENTORY
Stocks of provisions, stores and other consumables are valued at cost.
v) INVESTMENTS
Investments are classified as Long Term Investments and Current
Investments and are valued in accordance with Accounting Standards on
''Accounting for Investments'' (AS-13), issued by The Institute of
Chartered Accountants of India. Current Investments are carried at
lower of cost and market value/NAV, computed individually. Long Term
Investments are stated at cost. Provision for diminution in the value
of Long Term Investments is made only if such decline is other than
temporary in the opinion of the management.
vi) LEASES
Finance leases, which effectively transfers substantially all the risks
and benefits incidental to ownership of the leased item, are
capitalized at the lower of the fair value and present value of the
minimum lease payments at the inception of the lease and disclosed as
assets taken on lease. Lease payments are apportioned between the
finance charges and reduction of the lease liability based on the
implicit interest rate or incremental borrowing rate as applicable.
Finance charges are charged directly against income.
Lease payments under an operating lease, are recognized as an expense
in the statement of profit and loss on a straight line basis over the
lease term.
vii) IMPAIRMENT OF ASSETS
An asset is treated as impaired when the carrying cost of such assets
exceeds its recoverable value. An impairment loss is charged to the
Profit & Loss Account in the year in which an asset is identified as
impaired, after considering adjustment if any already carried out.
viii) REVENUE RECOGNITION
Income from various services rendered is recognised on the basis of
contract between the parties.
Room revenue is recognised on time proportion basis.
ix) FOREIGN EXCHANGE TRANSACTIONS
Transactions in foreign currencies are recorded at the exchange rates
prevailing on the date of the transaction. Monetary assets and
liabilities denominated in foreign currency are translated at rates of
exchange on the balance sheet date. Exchange differences arising on
foreign currency transactions are recognised in the profit and loss
account.
x) TAXATION
Income-tax expense comprise current tax (i.e. amount of tax for the
year determined in accordance with the income-tax law) and deferred tax
charge or credit (reflecting that tax effects of timing differences
between accounting income and taxable income for the year). The
deferred tax charge or credit and the corresponding deferred tax
liabilities or assets are recognized using the tax rates and tax laws
that have been enacted or substantively enacted by the balance sheet
date. Deferred tax assets are recognized only to the extent there is a
reasonable certainty that the assets can be realized in future;
however, where there is unabsorbed depreciation or carried forward loss
under taxation laws, deferred tax assets are recognized only if there
is a virtual certainty of realization of such assets. Deferred tax
assets are reviewed as at the balance sheet date and written down or
written up to reflect the amount that is reasonably/virtually certain
(as the case may be) to be realized.
Current tax and deferred tax assets and liabilities are offset to the
extent to which the Company has a legally enforceable right to set off
and they relate to taxes on income levied by the same governing
taxation laws.
xi) EARNINGS PER SHARE
Basic earnings per share amounts are computed by dividing net profit or
loss for the year attributable to equity shareholders by the weighted
average number of shares outstanding during the year. Diluted earnings
per share is computed and disclosed using the weighted average number
of equity and dilutive equity equivalent shares outstanding during the
year.
xii) PROVISIONS AND CONTINGENT LIABILITIES
The Company creates a provision when there is present obligation as a
result of past event that probably requires an outflow of resources and
a reliable estimate can be made of the amount of the obligation. A
disclosure for a contingent liability is made when there is a possible
obligation or a present obligation that may, but probably will not,
require an outflow of resources. Where there is a possible obligation
or a present obligation in respect of which the likelihood of outflow
of resources is remote, no provision or disclosure is made. Contingent
assets are neither recognised nor disclosed in the financial
statements.
xiii) CASH FLOW STATEMENT
Cash flows are reported using the indirect method, whereby profit
before tax is adjusted for the effects of transactions of a non-cash
nature and any deferrals or accruals of past or future cash receipts or
payments. The cash flows from regular revenue generating, financing and
investing activities of the Company are segregated
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