Accounting Policies of Fomento Resorts & Hotels Ltd. Company

Mar 31, 2018

1. SIGNIFICANT ACCOUNTING POLICIES

Significant Accounting Policies adopted in the preparation and presentation of these financial statements are as under:

A) Basis of preparation of financial statements and compliance with Ind AS

i. For all periods upto and including the year ended 31st March, 2017, the Company had prepared its financial statements in accordance with Generally Accepted Accounting Principles (GAAP) in India and complied with the accounting standards (Previous GAAP) as notified under Section 133 of the Companies Act, 2013 read together with the Rule 7 of the Companies (Accounts) Rules, 2014, to the extent applicable, and the presentation requirements of the Companies Act, 2013. Pursuant to the notification dated February 16, 2015 issued by the Ministry of Corporate Affairs, the Company has adopted Indian Accounting Standards notified under Section 133 read with the Rule 4A of the Companies (Indian Accounting Standards) Rules, 2015, as amended and the relevant provisions of the Companies Act, 2013 (collectively, “Ind AS”) with effect from April 1, 2017 and the Company is required to prepare its financial statements in accordance with Ind AS for the year ended March 31, 2018. These financial statements for the year ended March 31, 2018 are the first financial statements the company has prepared in accordance with Ind AS. The transition to Ind AS was carried out in accordance with Ind AS 101 First-Time Adoption of Indian Accounting Standards with the date of transition as April 01, 2016.

ii. The financial statements have been prepared as a going concern on accrual basis using historical cost convention except for certain financial instruments which are measured at fair value at the end of each reporting period.

iii. In preparing the financial statements in conformity with recognition and measurement principles of Ind AS requires management to make estimates and assumptions that may affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities as at the date of financial statements and the amounts of revenue and expenses during the reported period. Actual results could differ from those estimates. Any revision to such estimates is recognised in the period the same is determined.

B) Property, plant and equipment

i) Recognition and measurement:

a) Property, plant and equipment are stated at cost less accumulated depreciation except freehold land which is carried at historical cost. Costs include non-refundable taxes and duties, borrowing costs and other expenses incidental to the acquisition and installation upto to the date the asset is ready for intended use. The Company has elected to apply the optional exemption to use the previous GAAP value as deemed cost at 1st April, 2016, the date of transition.

b) Intangible assets:

Intangible assets are stated at cost less accumulated amortization.

c) Capital work in progress :

Capital work in progress in respect of asset which are not ready for their intended use are carried at cost, comprising of direct costs, related incidental expenses and attributable interest.

ii) Depreciation and amortization

Depreciation has been provided on straight line method on all tangible assets (other than freehold land) as per the useful life prescribed in Schedule II of the Companies Act 2013. Intangible assets being computer software is amortised over the period of five years.

C) Equity Instruments

The Company measures all equity instruments at fair value. Dividend from such instruments is recognized in the statement of profit and loss as other income when the company’s rights to receive payment is established.

D) Inventory

Inventory of Stores and Spares, Food & Beverages is valued at cost on “Moving Weighted Average” method or net realisable value whichever is less.

E) Retirement Benefits

Retirement benefits to employees are provided by way of contribution to Provident Fund, Superannuation Fund and Gratuity. Contribution for Gratuity is made on actuarial valuation to Fomento Resorts and Hotels Ltd Employees Gratuity Trust and Superannuation contributions are made to Fomento Resorts and Hotels Ltd Superannuation Fund. Both the funds are maintained with HDFC Standard Life Insurance Company Ltd.

F) Foreign currency transactions:

Transactions in Foreign Currency are recorded at the rates of exchange in force at the time the transactions are effected. Exchange differences arising on realisation of foreign currency are accounted at the time of realisation. Foreign currency assets and liabilities are translated into rupees at the exchange rate prevailing at the Balance Sheet date.

G) Revenue recognition:

Income from Operations

Revenue is measured at fair value of the consideration received or receivable. Revenue comprises sale of rooms, food and beverages and allied services relating to hotel operations.

Revenue is recognised at the time the bills are raised on customers and there exist no significant uncertainty as to determination or realization of debts. Revenue from sale of goods or rendering of services is net of indirect taxes, returns and discounts.

Interest

Interest income is accrued on a time proportion basis using the effective interest rate method.

H) Borrowing cost:

Borrowing costs that are directly attributable to the acquisition and construction of qualifying assets are capitalised.

I) Segment reporting:

The Company is presently operating only one integrated hotel business at Goa namely, Cidade de Goa. The entire operation is governed by the same set of risk and returns and hence the same has been considered as representing a single segment. The said treatment is in accordance with the guiding principles enunciated in accordance with Ind AS -108 “Operating Segment”.

J) Earnings per share

Earnings per share is calculated by diving net profit/ (loss) after tax by weighted average number of equity shares outstanding during the year.

K) Taxes on income:

Provision for Income tax is made on the basis of tax liability computed in accordance with relevant tax rates and tax laws. Provision for deferred tax has been made as per Ind AS-12. Deferred tax assets are recognised only if there is reasonable certainty that they will be realised and are reviewed for the appropriateness of their respective carrying values at each Balance sheet date.

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Mar 31, 2016

NOTE - 1

ACCOUNTING POLICIES:

Basis of preparation

The financial statements of the Company are prepared under the historical cost convention on accrual basis of accounting in all material respects in accordance with the applicable accounting standards as prescribed under section 133 of the Companies Act, 2013 (‘Act’) read with Rule 7 of the Companies (Accounts) Rule, 2014. The accounting policies have been consistently applied by the Company during the year.

Significant Accounting Policies adopted in the preparation and presentation of accounts is as under:

A) FIXED ASSETS:

Fixed Assets are valued at cost less accumulated depreciation/amortization.

B) DEPRECIATION:

a) In respect of Fixed assets acquired during the year, depreciation is charged on straight line method based on the life assigned to each asset in accordance with Schedule II of the Companies Act, 2013 and for the assets acquired prior to 01.04.2014 the carrying amount as on 01.04.2014 is depreciated over the remaining useful life as specified in Schedule II of the Companies Act, 2013.

b) Intangible Asset is amortized on straight line basis over the period of sixty months

C) INVESTMENTS:

Investments are stated at cost.

D) INVENTORY:

Inventory of Stores & Spares, Food & Beverages is valued at cost and method of valuation adopted is “Moving Weighted Average” method.

E) RETIREMENT BENEFITS:

Retirement benefits to employees are provided by way of contribution to Provident Fund, Superannuation Fund & Gratuity. Contribution for Gratuity is made on actuarial valuation to Fomento Resorts & Hotels Ltd Employees Gratuity Trust and Superannuation contributions are made to Fomento Resorts and Hotels Ltd Superannuation Fund. Both the funds are maintained with HDFC Standard Life Insurance Company Ltd.

F) FOREIGN CURRENCY TRANSACTIONS:

Transactions in Foreign Currency are recorded at the rates of exchange in force at the time the transactions are affected. Exchange differences arising on realization of foreign currency are accounted at the time of realization. Foreign currency assets and liabilities are translated into rupees at the exchange rate prevailing at the Balance Sheet date.

G) REVENUE RECOGNITION:

Revenue is recognized at the time the bills are raised on customers and there exist no significant uncertainty as to determination or realization of debts.

H) BORROWING COST:

Borrowing costs that are directly attributable to the acquisition and construction of qualifying assets are capitalized.

I) SEGMENT REPORTING:

The Company is presently operating only one integrated hotel business at Goa namely, Cidade de Goa. The entire operation is governed by the same set of risk and returns and hence the same has been considered as representing a single segment. The said treatment is in accordance with the guiding principles enunciated in Accounting Standard 17 (AS-17).

J) TAXES ON INCOME:

Provision for Income tax is made on the basis of tax liability computed in accordance with relevant tax rates and tax laws. Provision for deferred tax has been made as per Accounting Standard 22 (AS-22). 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.

(b) Right, preferences and restrictions attached to shares:

Equity Shares

The Company has one class of equity shares having par value of Rs.10 each. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

Preference Shares

7.5% redeemable cumulative preference shares would be redeemable at par after 5 years from the date of allotment i.e. 10th January 2015. These shares would carry a fixed dividend of 7.5% p.a. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

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Mar 31, 2014

Basis of preparation

The financial statements of the Company are prepared under the historical cost convention on accrual basis of accounting in all material respects in accordance with the applicable accounting standards and the provisions of the Companies Act, 1956. The accounting policies have been consistently applied by the Company during the year.

Significant Accounting Policies adopted in the preparation and presentation of accounts is as under:

A) FIXED ASSETS:

Fixed Assets are valued at cost net of recoverable taxes less accumulated depreciation/amortisation.

B) DEPRECIATION:

a) In respect of Leasing Division depreciation has been provided on written down value method as per the rates mentioned in Schedule XIV of the Companies Act, 1956.

b) In respect of Hotel Division depreciation has been provided on the Straight Line Method as per the rates mentioned in Schedule XIV of the Companies Act, 1956.

c) Intangible Asset is amortised on straight line basis over the period of sixty months and is stated at cost less accumulated amortisation.

C) INVESTMENTS:

Investments are stated at cost.

D) INVENTORY:

Inventory of Stores & Spares, Food & Beverages is valued at cost and method of valuation adopted is "Moving Weighted Average" method.

E) RETIREMENT BENEFITS:

Retirement benefits to employees are provided by way of contribution to Provident Fund, Superannuation Fund & Gratuity. Contribution for Gratuity is made on actuarial valuation to Fomento Resorts & Hotels Ltd Employees Gratuity Trust and Superannuation contributions are made to Fomento Resorts and Hotels Ltd Superannuation Fund. Both the funds are maintained with HDFC Standard Life Insurance Company Ltd.

F) FOREIGN CURRENCY TRANSACTIONS:

Transactions in Foreign Currency are recorded at the rates of exchange in force at the time the transactions are effected. Exchange differences arising on realisation of foreign currency are accounted at the time of realisation. Foreign currency assets and liabilities are translated into rupees at the exchange rate prevailing at the Balance Sheet date.

G) REVENUE RECOGNITION:

Revenue is recognised at the time the bills are raised to customers and there exist no significant uncertainty as to determination or realisation of debts.

H) BORROWING COST:

Borrowing costs that are directly attributable to the acquisition and construction of qualifying assets are capitalised.

I) SEGMENT REPORTING:

The Company is presently operating only one integrated hotel business at Goa namely, Cidade de Goa. The entire operation is governed by the same set of risk and returns and hence the same has been considered as representing a single segment. The said treatment is in accordance with the guiding principles enunciated in Accounting Standard 17 (AS-17).

J) TAXES ON INCOME:

Provision for Income tax is made on the basis of tax liability computed in accordance with relevant tax rates and tax laws. Provision for deferred tax has been made as per Accounting Standard 22 (AS-22). Deferred tax assets are recognised only if there is reasonable certainty that they will be realised and are reviewed for the appropriateness of their respective carrying values at each Balance sheet date.

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Mar 31, 2012

A) FIXED ASSETS:

Fixed Assets are valued at cost net of recoverable taxes less accumulated deprecia- tion. .

B) DEPRECIATION:

a) In respect of Leasing Division depreciation has been provided on written down value method as per the rates mentioned in Schedule XIV of the Companies Act, 1956.

b) In respect of Hotel Division depreciation has been provided on the Straight Line Method as per the rates mentioned in Schedule XIV of the Companies Act, 1956.

C) INVESTMENTS:

Investments are stated at cost.

D) INVENTORY:

Inventory of Stores & Spares, Food & Beverages is valued at cost and method of valuation adopted is 'First in First out'.

E) RETIREMENT BENEFITS:

Retirement benefits to employees are provided by way of contribution to Provident Fund, Superannuation Fund & Gratuity. Contribution for Gratuity is made on actuarial valuation to Fomento Resorts & Hotels Ltd Employees Gratuity Trust and Superan- nuation contributions are made to Fomento Resorts and Hotels Ltd Superannuation Fund. Both the funds are maintained with HDFC Standard Life Insurance Company Ltd.

F) FOREIGN CURRENCY TRANSACTIONS:

Transactions in Foreign Currency are recorded at the rates of exchange in force at the time the transactions are effected. Exchange differences arising on realisation of foreign currency are accounted at the time of realisation. Foreign currency assets and liabilities are translated into rupees at the exchange rate prevailing at the Balance Sheet date.

G) REVENUE RECOGNITION:

Revenue is recognised at the time the bills are raised to customers and there exist no significant uncertainty as to determination or realisation of debts.

H) SEGMENT REPORTING:

The Company is presently operating only one integrated hotel business at Goa namely, Cidade de Goa. The entire operation is governed by the same set of risk and returns and hence the same has been considered as representing a single segment. The said treatment is in accordance with the guiding principles enunciated in Accounting Standard 17(AS-17).

I) TAXES ON INCOME:

Provision for Income tax is made on the basis of tax liability computed in accordance with relevant tax rates and tax laws. Provision for deferred tax has been made as per Accounting Standard 22 (AS-22). Deferred tax assets are recognised only if there is reasonable certainty that they will be realised and are reviewed for the appropriateness of their respective carrying values at each Balance sheet date.

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Mar 31, 2010

Basis of preparation

The financial statements of the Company are prepared under the historical cost convention on accrual basis of accounting in all material respects in accordance with the applicable accounting standards and the provisions of the Companies Act, 1956. The accounting policies have been consistently applied by the Company during the year.

Significant Accounting Policies adopted in the preparation and presentation of accounts are as under:

A) FIXED ASSETS:

Fixed Assets are valued at cost less accumulated depreciation.

B) DEPRECIATION:

a) In respect of Leasing Division depreciation has been provided on written down value method as per the rates mentioned in Schedule XIV of the Companies Act, 1956.

b) In respect of Hotel Division depreciation has been provided on the Straight Line Method as per the rates mentioned in Schedule XIV of the Companies Act, 1956.

C) INVESTMENTS:

Investments are stated at cost.

D) INVENTORY:

Inventory of Stores & Spares, Food & Beverages is valued at cost and method of valuation adopted is First in First out.

E) RETIREMENT BENEFITS:

Retirement benefits to employees are provided by way of contribution to Provident Fund, Superannuation Fund & Gratuity. Contribution for Gratuity is made on actuarial valuation to HDFC Employees Gratuity Trust. Superannuation contributions are made to HDFC Standard Life Insurance Company Ltd.

F) FOREIGN CURRENCY TRANSACTIONS:

Transactions in Foreign Currency are recorded at the rates of exchange in force at the time the transactions are effected. Exchange differences arising on realisation of foreign currency are accounted at the time of realisation. Foreign currency assets and liabilities are translated into rupees at the exchange rate prevailing at the Balance Sheet date.

G) REVENUE RECOGNITION:

Revenue is recognised at the time the bills are raised to customers and there exist no significant uncertainty as to determination or realisation of debts.

H) SEGMENT REPORTING:

The Company is presently operating only one integrated hotel business at Goa namely, Cidade de Goa. The entire operation is governed by the same set of risk and returns and hence the same has been considered as representing a single segment. The said treatment is in accordance with the guiding principles enunciated in Accounting Standard 17 (AS-17) issued by the Institute of Chartered Accountants of India on Segment Reporting.

l) TAXES ON INCOME:

Provision for Income tax is made on the basis of tax liability computed in accordance with relevant tax rates and tax laws. Provision for deferred tax has been made as per Accounting standard 22 (AS-22) issued by the Institute of Chartered Accountants of India. Deferred tax assets are recognised only if there is reasonable certainity that they will be realised and are reviewed for the appropriateness of their respective carrying values at each Balance sheet date.