A Oneindia Venture
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Accounting Policies of HLV Ltd. Company
Mar 31, 2025
(iv) Material Accounting Policies:
(a) Revenue recognition:
(i) Income from operations
Revenue from operations is accounted on accrual, is net of indirect taxes, returns and discounts. Revenue is measured at the fair
value of the consideration received or receivable. Revenue comprises of sale of rooms, food and beverages and allied services.
Rentals basically consists of rental revenue earned from letting of residential and commercial spaces. Revenue for rental is
recognised in the period in which services are being rendered.
(ii) Interest:
Interest income is accrued on a time proportion basis using the effective interest rate method.
(b) property, plant and Equipment:
Property, plant and equipment are initially recorded at cost. Cost includes the acquisition cost or the cost of construction, expenses
directly related to bringing the asset to the location and condition necessary for making them operational for their intended use and, in
the case of qualifying assets, the attributable borrowing costs.
Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured
reliably.
On transition to Ind AS, the Company has elected to continue with the carrying value of all property, plant and equipment recognised
as at 1st April, 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and
equipment.
(c) Investment property:
Investment Property are initially measured at cost, including transaction cost. Subsequent to initial recognition, Investment property
are carried at cost less accumulated depreciation and accumulated impairment loss, if any.
Investment Property are derecognised either when they have disposed of or when they are permanently withdrawn from use and no
future economic benefit is expected from the disposal. The difference between the net disposal proceeds and the carrying amount of
the asset is recognized in the Statement of Profit and Loss in the period of derecognising.
Transfers to or from investment property is made when and only when there is a change in use.
On transition to Ind AS, the company has elected to continue with the carrying value of all its investment properties recognised as of
April 1,2016 measured as per previous GAAP and use that carrying value as its deemed cost as of the transition date.
(d) Intangible Assets:
Intangible assets are stated at cost less accumulated amortisation and impairments, if any. An intangible asset is recognised if it is
probable that the expected future economic benefits that are attributable to the asset will flow to the Company and its cost can be
measured reliably.
On transition to Ind AS, the company has elected to continue with the carrying value of all its intangible assets recognised as of April
1,2016 measured as per previous GAAP and use that carrying value as its deemed cost as of the transition date.
(e) Capital WIP
Capital work-in-progress comprises the cost of property, plant and equipment that are not yet ready for their intended use on the
reporting date and materials at site net of impairment if any.
(f) Depreciation and Amortisation:
The Company depreciates its property, plant and equipment and investment property over the useful life in the manner prescribed in
Schedule II of the Companies Act, 2013 under straight line method except as under:
(i) Based on technical evaluation, the useful life of continuous process plant other than windmill has been estimated as 15 years
(on a single shift basis) and that of motor boat 6 years.
(ii) Depreciation on additions / deletions during the year are provided on pro-rata basis. Assets purchased / installed during the
year costing less than '' 5,000 each are fully depreciated.
(iii) Building constructed on leasehold land are depreciated at the applicable rate on the assumption that the lease would be
renewed in the normal course. Improvements in the owned building are depreciated over the period of 10 years.
(iv) Leasehold improvement are depreciated over the expected period of the lease.
(v) Computer Software and website is amortised in six years and other intangible assets are amortised in five years.
The useful lives of assets and residual values are reviewed at the Balance Sheet date and the effects of any changes in estimates
are accounted for on a prospective basis.
Depreciation /amortisation is not provided on non-current assets held for sale or part of the disposal group from the date of such
assets are classified as held for sale or part of disposal group.
Depreciation is not recorded on capital work-in-progress until construction and installation are complete and the asset is ready
for its intended use.
(g) Investments in subsidiaries:
Investment in a subsidiary is a long-term investment and is carried at cost. On transition to Ind AS, previous GAAP carrying amount as
on that date, i.e. April 1,2016 is considered as cost.
(h) Inventories:
Stock of food and beverages, stores and operating supplies are stated âat cost or net realisable value, whichever is lower''. Cost
comprise fair value of consideration paid including duties and taxes (other than those refundable), cost of conversion and other costs
in bringing the inventories to their present location and condition computed under weighted average cost method. Due allowance is
estimated and made for defective and obsolete items, wherever necessary.
(i) Employee benefits:
(i) Short-term benefits:
The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by
employees is recognised during the period when the employee renders the service.
(ii) Post-employment obligations
The Company operates the following post-employment schemes:
(a) The Company makes annual contributions to gratuity fund which is a defined benefit plan.
The liability or asset recognised in the balance sheet in respect of gratuity plans is the present value of the defined benefit
obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated
annually by actuaries using the projected unit credit method. The net interest cost is calculated by applying the discount
rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee
benefit expense in the Statement of Profit and Loss. Remeasurement gains and losses arising from experience adjustments and
changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income.
They are included in retained earnings in the statement of changes in equity and in the balance sheet.
(b) Defined contribution plans such as provident fund are charged to the Statement of Profit and Loss as and when incurred.
(j) Borrowing Costs:
Borrowing costs that are directly attributable to the acquisition and construction of qualifying assets are capitalised. A qualifying asset
is an asset that necessarily takes substantial period of time to get ready for its intended use.
Interest cost for the borrowings is computed under effective interest method.
Foreign exchange difference relating to foreign currency borrowings regarded as an adjustment to borrowing cost to the extent not
capitalised is disclosed under finance cost.
(k) Taxation:
(i) Provision for current taxation has been made in accordance with the Income Tax laws applicable to the assessment year
considering the taxable income of both continued and discontinued operations.
(ii) Deferred tax is recognized on timing difference being the difference between taxable incomes and accounting income that
originates in one period and is capable of reversal in one or more subsequent periods. Where there is unabsorbed depreciation,
or carry forward losses, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets.
(l) Impairment of assets:
The carrying amounts of assets are reviewed at each balance sheet date, to assess any indication of impairment. If any such indication
exists, the recoverable amount of such assets is estimated. An impairment loss is recognized wherever the carrying amount of the
assets exceed its recoverable amount. The recoverable amount is greater of the net selling price or value in use. In assessing value in
use, the estimated future cash flows are discounted to their present value, based on an appropriate discounting factor.
After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful life. A previously
recognized impairment loss is increased or reversed depending on changes in circumstances. However, the carrying value after
reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.
(m) Foreign currency transaction:
Foreign currency transactions are recorded at the rates of exchange prevailing on the date of the transactions.
The monetary assets and liabilities in foreign currency as at balance sheet date are translated at rates prevailing at the year-end and
the resultant net gains or losses are recognized as income or expense in the year in which they arise.
(n) Leases :
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 an identified asset for a period of time in exchange for consideration.
The Company determines the lease term as the non-cancellable period of a lease, together with both periods covered by an option to
extend the lease if the Company is reasonably certain to exercise that option; and periods covered by an option to terminate the lease
if the Company is reasonably certain not to exercise that option. In assessing whether the Company is reasonably certain to exercise an
option to extend a lease, or not to exercise an option to terminate a lease, it considers all relevant facts and circumstances that create
an economic incentive for the Company to exercise the option to extend the lease, or not to exercise the option to terminate the lease.
The Company revises the lease term if there is a change in the non-cancellable period of a lease.
Company as a lessee
The Company''s leases assets mainly comprise buildings. The Company assesses whether a contract contains a lease, at inception of
a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time
in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified assets, the Company
assesses whether: (i) the contact involves the use of an identified asset (ii) the Company has substantially all of the economic benefits
from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.
As a lessee, the Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right of-use asset
is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before
the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset
or to restore the underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease
term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements
of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date,
discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the incremental borrowing rate.
Generally, the Company uses incremental borrowing rate as the discount rate.
Lease payments included in the measurement of the lease liability comprise the fixed payments, including in-substance fixed payments;
The lease liability is measured at amortised cost using the effective interest method.
The Company has used number of practical expedients when applying Ind AS 116 - Short-term leases, leases of low-value assets and
single discount rate.
The Company has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12
months or less, leases of low-value assets and lease where term of the lease is already expired and not yet renewed. The Company
recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
Variable lease payments that do not depend on an index or a rate are recognised as expenses in the period in which the event or
condition that triggers the payment occurs.
Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments are presented as follows in
the Company''s statement of cash flows:
⢠short-term lease payments, payments for leases of low-value assets and variable lease payments that are not included in the
measurement of the lease liabilities are presented within cash flows from operating activities;
⢠payments for the interest element of recognised lease liabilities are included in âinterest paid'' within cash flows from operating
activities; and
⢠payments for the principal element of recognised lease liabilities are presented within cash flows from financing activities.
As practical expedient of Ind AS 116 âLeasesâ, the company has considered Covid-19-related rent concessions not to be lease
modification, hence the income towards rent concession is recognised in âOther Incomeâ in the statement of profit and loss account.
Company as a lessor
Leases for which the Company is a lessor is classified as finance or operating lease. Leases in which the Company does not transfer
substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Rental income arising is
accounted for on a straight-line basis over the lease terms. Initial direct costs incurred in negotiating and arranging an operating lease
are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income.
(o) Government Grants/Incentives:
Government grants/incentives that the Company is entitled to on fulfilment of certain conditions, but are available to the Company only
on completion of some other conditions, are recognised as income at fair value on completion of such other conditions.
Grants/incentives that the Company is entitled to unconditionally on fulfilment of certain conditions, such grants/incentives are
recognised at fair value as income when there is reasonable assurance that the grant/incentive will be received.
(p) Income from Joint Development Agreement (JDA):
Income from JDA is accounted under percentage of completion method (POCM) as per the Guidance Note on Accounting for Real
Estate Transactions. Balance cost of land and other expense related to JDA is grouped under Assets held for sale.
Mar 31, 2024
(iv) Material Accounting Policies:
(a) Revenue recognition:
(i) Income from operations
Revenue from operations is accounted on accrual, is net of indirect taxes, returns and discounts. Revenue is measured at the fair value of the consideration received or receivable. Revenue comprises of sale of rooms, food and beverages and allied services. Rentals basically consists of rental revenue earned from letting of residential and commercial spaces. Revenue for rental is recognised in the period in which services are being rendered.
(ii) Interest:
Interest income is accrued on a time proportion basis using the effective interest rate method.
(b) property, plant and Equipment:
Property, plant and equipment are initially recorded at cost. Cost includes the acquisition cost or the cost of construction, expenses directly related to bringing the asset to the location and condition necessary for making them operational for their intended use and, in the case of qualifying assets, the attributable borrowing costs.
Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably.
On transition to Ind AS, the Company has elected to continue with the carrying value of all property, plant and equipment recognised as at 1st April, 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment.
(c) Investment property:
Investment Property are initially measured at cost, including transaction cost. Subsequent to initial recognition, Investment property are carried at cost less accumulated depreciation and accumulated impairment loss, if any.
Investment Property are derecognised either when they have disposed of or when they are permanently withdrawn from use and no future economic benefit is expected from the disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognized in the Statement of Profit and Loss in the period of derecognising.
Transfers to or from investment property is made when and only when there is a change in use.
On transition to Ind AS, the company has elected to continue with the carrying value of all its investment properties recognised as at 1st April, 2016 measured as per previous GAAP and use that carrying value as its deemed cost as of the transition date.
(d) Intangible Assets:
Intangible assets are stated at cost less accumulated amortisation and impairments, if any. An intangible asset is recognised if it is probable that the expected future economic benefits that are attributable to the asset will flow to the Company and its cost can be measured reliably.
On transition to Ind AS, the company has elected to continue with the carrying value of all its intangible assets recognised as of 1st April, 2016 measured as per previous GAAP and use that carrying value as its deemed cost as of the transition date.
(e) Capital WIP
Capital work-in-progress comprises the cost of property, plant and equipment that are not yet ready for their intended use on the reporting date and materials at site net of impairment if any.
(f) Depreciation and Amortisation:
The Company depreciates its property, plant and equipment and investment property over the useful life in the manner prescribed in Schedule II of the Companies Act, 2013 under straight line method except as under:
(i) Based on technical evaluation, the useful life of continuous process plant other than windmill has been estimated as 15 years (on a single shift basis) and that of motor boat 6 years.
(ii) Depreciation on additions / deletions during the year are provided on pro-rata basis. Assets purchased / installed during the year costing less than '' 5,000 each are fully depreciated.
(iii) Building constructed on leasehold land are depreciated at the applicable rate on the assumption that the lease would be renewed in the normal course. Improvements in the owned building are depreciated over the period of 10 years.
(iv) Leasehold improvement are depreciated over the expected period of the lease.
(v) Computer Software and website is amortised in six years and other intangible assets are amortised in five years.
The useful lives of assets and residual values are reviewed at the Balance Sheet date and the effects of any changes in estimates are accounted for on a prospective basis.
Depreciation /amortisation is not provided on non-current assets held for sale or part of the disposal group from the date of such assets are classified as held for sale or part of disposal group.
Depreciation is not recorded on capital work-in-progress until construction and installation are complete and the asset is ready for its intended use.
(g) Investments in subsidiaries:
Investment in a subsidiary is a long-term investment and is carried at cost. On transition to Ind AS, previous GAAP carrying amount as on that date, i.e. 1st April. 2016 is considered as cost.
(h) Inventories:
Stock of food and beverages, stores and operating supplies are stated âat cost or net realisable value, whichever is lower''. Cost comprise fair value of consideration paid including duties and taxes (other than those refundable), cost of conversion and other costs in bringing the inventories to their present location and condition computed under weighted average cost method. Due allowance is estimated and made for defective and obsolete items, wherever necessary.
(i) Employee benefits:
(i) Short-term benefits
The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees is recognised during the period when the employee renders the service.
(ii) Post-employment obligations
The Company operates the following post-employment schemes:
(a) The Company makes annual contributions to gratuity fund which is a defined benefit plan.
The liability or asset recognised in the balance sheet in respect of gratuity plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is
calculated annually by actuaries using the projected unit credit method. The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the Statement of Profit and Loss. Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.
(b) Defined contribution plans such as provident fund are charged to the Statement of Profit and Loss as and when incurred.
(j) Borrowing Costs:
Borrowing costs that are directly attributable to the acquisition and construction of qualifying assets are capitalised. A qualifying asset is an asset that necessarily takes substantial period of time to get ready for its intended use.
Interest cost for the borrowings is computed under effective interest method.
Foreign exchange difference relating to foreign currency borrowings regarded as an adjustment to borrowing cost to the extent not capitalised is disclosed under finance cost.
(k) Taxation:
(i) Provision for current taxation has been made in accordance with the Income Tax laws applicable to the assessment year considering the taxable income of both continued and discontinued operations.
(ii) Deferred tax is recognized on timing difference being the difference between taxable incomes and accounting income that originates in one period and is capable of reversal in one or more subsequent periods. Where there is unabsorbed depreciation, or carry forward losses, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets.
(l) Impairment of assets:
The carrying amounts of assets are reviewed at each balance sheet date, to assess any indication of impairment. If any such indication exists, the recoverable amount of such assets is estimated. An impairment loss is recognized wherever the carrying amount of the assets exceed its recoverable amount. The recoverable amount is greater of the net selling price or value in use. In assessing value in use, the estimated future cash flows are discounted to their present value, based on an appropriate discounting factor.
After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful life. A previously recognized impairment loss is increased or reversed depending on changes in circumstances. However, the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.
(m) Foreign currency transaction:
Foreign currency transactions are recorded at the rates of exchange prevailing on the date of the transactions.
The monetary assets and liabilities in foreign currency as at balance sheet date are translated at rates prevailing at the year-end and the resultant net gains or losses are recognized as income or expense in the year in which they arise.
(n) Leases :
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 an identified asset for a period of time in exchange for consideration.
The Company determines the lease term as the non-cancellable period of a lease, together with both periods covered by an option to extend the lease if the Company is reasonably certain to exercise that option; and periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise that option. In assessing whether the Company is reasonably certain to exercise an option to extend a lease, or not to exercise an option to terminate a lease, it considers all relevant facts and circumstances that create an economic incentive for the Company to exercise the option to extend the lease, or not to exercise the option to terminate the lease. The Company revises the lease term if there is a change in the non-cancellable period of a lease.
Company as a lessee
The Company''s leases assets mainly comprise buildings. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified assets, the Company assesses whether: (i) the contact involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.
As a lessee, the Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the incremental borrowing rate. Generally, the Company uses incremental borrowing rate as the discount rate.
Lease payments included in the measurement of the lease liability comprise the fixed payments, including in-substance fixed payments; The lease liability is measured at amortised cost using the effective interest method.
The Company has used number of practical expedients when applying Ind AS 116 - Short-term leases, leases of low-value assets and single discount rate.
The Company has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less, leases of low-value assets and lease where term of the lease is already expired and not yet renewed. The Company recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
Variable lease payments that do not depend on an index or a rate are recognised as expenses in the period in which the event or condition that triggers the payment occurs.
Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments are presented as follows in the Company''s statement of cash flows:
⢠short-term lease payments, payments for leases of low-value assets and variable lease payments that are not included in the measurement of the lease liabilities are presented within cash flows from operating activities;
⢠payments for the interest element of recognised lease liabilities are included in âinterest paid'' within cash flows from operating activities; and
⢠payments for the principal element of recognised lease liabilities are presented within cash flows from financing activities.
As practical expedient of Ind AS 116 âLeasesâ, the company has considered Covid-19-related rent concessions not to be lease modification, hence the income towards rent concession is recognised in âOther Incomeâ in the statement of profit and loss account.
Company as a lessor
Leases for which the Company is a lessor is classified as finance or operating lease. Leases in which the Company does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income.
(o) Government Grants/Incentives:
Government grants/incentives that the Company is entitled to on fulfilment of certain conditions, but are available to the Company only on completion of some other conditions, are recognised as income at fair value on completion of such other conditions.
Grants/incentives that the Company is entitled to unconditionally on fulfilment of certain conditions, such grants/incentives are recognised at fair value as income when there is reasonable assurance that the grant/incentive will be received.
(p) Income from Joint Development Agreement (JDA):
Income from JDA is accounted under percentage of completion method (POCM) as per the Guidance Note on Accounting for Real Estate Transactions. Balance cost of land and other expense related to JDA is grouped under Assets held for sale.
Mar 31, 2023
(iv) Significant Accounting Policies:
(a) Revenue recognition:
(i) Income from operations
Revenue from operations is accounted on accrual, is net of indirect taxes, returns and discounts. Revenue is measured at the fair value of the consideration received or receivable. Revenue comprises of sale of rooms, food and beverages and allied services. Rentals basically consists of rental revenue earned from letting of residential and commercial spaces. Revenue for rental is recognised in the period in which services are being rendered.
(ii) Interest:
Interest income is accrued on a time proportion basis using the effective interest rate method.
(b) Property, Plant and Equipment:
Property, plant and equipment are initially recorded at cost. Cost includes the acquisition cost or the cost of construction, expenses directly related to bringing the asset to the location and condition necessary for making them operational for their intended use and, in the case of qualifying assets, the attributable borrowing costs.
Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably.
On transition to Ind AS, the Company has elected to continue with the carrying value of all property, plant and equipment recognised as at 1st April, 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment.
(c) Investment Property:
Investment Property are initially measured at cost, including transaction cost. Subsequent to initial recognition, Investment property are carried at cost less accumulated depreciation and accumulated impairment loss, if any.
Investment Property are derecognised either when they have disposed of or when they are permanently withdrawn from use and no future economic benefit is expected from the disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognized in the Statement of Profit and Loss in the period of derecognising.
Transfers to or from investment property is made when and only when there is a change in use.
On transition to Ind AS, the company has elected to continue with the carrying value of all its investment properties recognised as of April 1,2016 measured as per previous GAAP and use that carrying value as its deemed cost as of the transition date.
(d) Intangible Assets:
Intangible assets are stated at cost less accumulated amortisation and impairments, if any. An intangible asset is recognised if it is probable that the expected future economic benefits that are attributable to the asset will flow to the Company and its cost can be measured reliably.
On transition to Ind AS, the company has elected to continue with the carrying value of all its intangible assets recognised as of April 1,2016 measured as per previous GAAP and use that carrying value as its deemed cost as of the transition date.
(e) Capital WIP
Capital work-in-progress comprises the cost of property, plant and equipment that are not yet ready for their intended use on the reporting date and materials at site net of impairment if any.
(f) Depreciation and Amortisation:
The Company depreciates its property, plant and equipment and investment property over the useful life in the manner prescribed in Schedule II of the Companies Act, 2013 under straight line method except as under:
(i) Based on technical evaluation, the useful life of continuous process plant other than windmill has been estimated as 15 years (on a single shift basis) and that of motor boat 6 years.
(ii) Depreciation on additions / deletions during the year are provided on pro-rata basis. Assets purchased / installed during the year costing less than '' 5,000 each are fully depreciated.
(iii) Building constructed on leasehold land are depreciated at the applicable rate on the assumption that the lease would be renewed in the normal course.
(iv) Computer Software and website is amortised in six years and other intangible assets are amortised in five years.
The useful lives of assets and residual values are reviewed at the Balance Sheet date and the effects of any changes in estimates are accounted for on a prospective basis.
Depreciation /amortisation is not provided on non-current assets held for sale or part of the disposal group from the date of such assets are classified as held for sale or part of disposal group.
Depreciation is not recorded on capital work-in-progress until construction and installation are complete and the asset is ready for its intended use.
(g) Investments in subsidiaries:
Investment in a subsidiary is a long-term investment and is carried at cost. On transition to Ind AS, previous GAAP carrying amount as on that date, i.e. April 1,2016 is considered as cost.
(h) Inventories:
Stock of food and beverages, stores and operating supplies are stated âat cost or net realisable value, whichever is lower''. Cost comprise fair value of consideration paid including duties and taxes (other than those refundable), cost of conversion and other costs in bringing the inventories to their present location and condition computed under weighted average cost method. Due allowance is estimated and made for defective and obsolete items, wherever necessary.
(i) Employee benefits:
(i) Short-term benefits:
The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees is recognised during the period when the employee renders the service.
(ii) Post-employment obligations
The Company operates the following post-employment schemes:
(a) The Company makes annual contributions to gratuity fund which is a defined benefit plan.
The liability or asset recognised in the balance sheet in respect of gratuity plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is
calculated annually by actuaries using the projected unit credit method. The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the Statement of Profit and Loss. Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.
(b) Defined contribution plans such as provident fund are charged to the Statement of Profit and Loss as and when incurred.
(j) Borrowing Costs:
Borrowing costs that are directly attributable to the acquisition and construction of qualifying assets are capitalised. A qualifying asset is an asset that necessarily takes substantial period of time to get ready for its intended use.
Interest cost for the borrowings is computed under effective interest method.
Foreign exchange difference relating to foreign currency borrowings regarded as an adjustment to borrowing cost to the extent not capitalised is disclosed under finance cost.
(k) Taxation:
(i) Provision for current taxation has been made in accordance with the Income Tax laws applicable to the assessment year considering the taxable income of both continued and discontinued operations.
(ii) Deferred tax is recognized on timing difference being the difference between taxable incomes and accounting income that originates in one period and is capable of reversal in one or more subsequent periods. Where there is unabsorbed depreciation, or carry forward losses, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets.
(l) Impairment of assets:
The carrying amounts of assets are reviewed at each balance sheet date, to assess any indication of impairment. If any such indication exists, the recoverable amount of such assets is estimated. An impairment loss is recognized wherever the carrying amount of the assets exceed its recoverable amount. The recoverable amount is greater of the net selling price or value in use. In assessing value in use, the estimated future cash flows are discounted to their present value, based on an appropriate discounting factor.
After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful life. A previously recognized impairment loss is increased or reversed depending on changes in circumstances. However, the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.
(m) Foreign currency transaction:
Foreign currency transactions are recorded at the rates of exchange prevailing on the date of the transactions.
The monetary assets and liabilities in foreign currency as at balance sheet date are translated at rates prevailing at the year-end and the resultant net gains or losses are recognized as income or expense in the year in which they arise.
(n) Leases :
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 an identified asset for a period of time in exchange for consideration.
The Company determines the lease term as the non-cancellable period of a lease, together with both periods covered by an option to extend the lease if the Company is reasonably certain to exercise that option; and periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise that option. In assessing whether the Company is reasonably certain to exercise an option to extend a lease, or not to exercise an option to terminate a lease, it considers all relevant facts and circumstances that create an economic incentive for the Company to exercise the option to extend the lease, or not to exercise the option to terminate the lease. The Company revises the lease term if there is a change in the non-cancellable period of a lease.
Company as a lessee
The Company''s leases assets mainly comprise buildings. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified assets, the Company assesses whether: (i) the contact involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.
As a lessee, the Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the incremental borrowing rate. Generally, the Company uses incremental borrowing rate as the discount rate.
Lease payments included in the measurement of the lease liability comprise the fixed payments, including in-substance fixed payments; The lease liability is measured at amortised cost using the effective interest method.
The Company has used number of practical expedients when applying Ind AS 116 - Short-term leases, leases of low-value assets and single discount rate.
The Company has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less, leases of low-value assets and lease where term of the lease is already expired and not yet renewed. The Company recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
Variable lease payments that do not depend on an index or a rate are recognised as expenses in the period in which the event or condition that triggers the payment occurs.
Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments are presented as follows in the Company''s statement of cash flows:
⢠short-term lease payments, payments for leases of low-value assets and variable lease payments that are not included in the measurement of the lease liabilities are presented within cash flows from operating activities;
⢠payments for the interest element of recognised lease liabilities are included in âinterest paid'' within cash flows from operating activities; and
⢠payments for the principal element of recognised lease liabilities are presented within cash flows from financing activities.
As practical expedient of Ind AS 116 âLeasesâ, the company has considered Covid-19-related rent concessions not to be lease modification, hence the income towards rent concession is recognised in âOther Incomeâ in the statement of profit and loss account.
Company as a lessor
Leases for which the Company is a lessor is classified as finance or operating lease. Leases in which the Company does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income.
(o) Government Grants/Incentives:
Government grants/incentives that the Company is entitled to on fulfilment of certain conditions, but are available to the Company only on completion of some other conditions, are recognised as income at fair value on completion of such other conditions.
Grants/incentives that the Company is entitled to unconditionally on fulfilment of certain conditions, such grants/incentives are recognised at fair value as income when there is reasonable assurance that the grant/incentive will be received.
(p) Income from Joint Development Agreement (JDA):
Income from JDA is accounted under percentage of completion method (POCM) as per the Guidance Note on Accounting for Real Estate Transactions. Balance cost of land and other expense related to JDA is grouped under Assets held for sale.
Mar 31, 2018
Note 1: Corporate Information
Hotel Leelaventure Limited (âHLVLâ or the âCompanyâ), is a public limited company incorporated in India and has its registered office situated at âThe Leela Mumbaiâ, Sahar, Mumbai 400 059.
The Company is primarily engaged in the business of owning, operating & managing hotels and resorts.
The financial statements for the year ended 31st March, 2018 were approved by the Board of Directors and authorized for issue on 30th May, 2018.
Note 2: basis of preparation, critical accounting estimates and judgments, significant accounting policies and recent accounting pronouncements:
(i) Compliance with Ind AS
In accordance with the notification issued by the Ministry of Corporate Affairs, the Company has adopted Indian Accounting Standards (âInd ASâ) notified under the Companies (Indian Accounting Standards) Rules, 2015 with effect from 1st April, 2017. Previous periods have been restated to Ind AS in accordance with Ind AS 101 First time Adoption of Indian Accounting Standards, the Company has presented a reconciliation from the presentation of financial statements under Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (Previous GAAP) to Ind AS of Shareholdersâ equity as at 31st March, 2017 and 1st April, 2016 and the comprehensive net income for the year ended 31st March, 2017.
These standalone financial statements have been prepared in accordance with Ind AS as prescribed under Section 133 of the Companies Act, 2013 (the Act) read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016. Refer Note 35 for an explanation of how the transition from previous GAAP to Ind AS has affected the companyâs financial position, financial performance and cash flows.
(ii) Basis of preparation
These financial statements have been prepared on a historical cost basis, except for defined benefit plans and certain financial instruments which are measured at fair value at the end of each reporting period.
(iii) Critical accounting estimates and judgments
The preparation of these financial statements in conformity with the recognition and measurement principles of Ind AS requires, management to make judgments, estimates and assumptions that affect the reported balances of assets and liabilities, disclosures relating to contingent liabilities as at the date of the financial statements and the reported amounts of income and expenses for the years presented.
Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.
In particular, information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements pertain to:
(a) Useful lives of property, plant and equipment and intangible assets:
The Company has estimated the useful life of each class of assets based on the nature of assets, the estimated usage of the asset, the operating condition of the asset, past history of replacement, anticipated technological changes, etc. The Company reviews the useful life of property, plant and equipment and intangible assets as at the end of each reporting period. This reassessment may result in change in depreciation expense in future periods.
(b) Impairment testing:
Property, plant and equipment and intangible assets that are subject to amortization /depreciation are tested for impairment when events occur or changes in circumstances indicate that the recoverable amount of the cash generating unit is less than its carrying value. The recoverable amount of cash generating units is higher of value-in-use and fair value less cost to sell. The calculation involves use of significant estimates and assumptions which include turnover and earnings multiples, growth rates and net margins used to calculate projected future cash flows, risk-adjusted discount rate, and future economic and market conditions.
(c) Income Taxes:
Deferred tax assets are recognized to the extent that it is regarded as probable that deductible temporary differences can be realized. The Company estimates deferred tax assets and liabilities based on current tax laws and rates and in certain cases, business plans, including managementâs expectations regarding the manner and timing of recovery of the related assets. Changes in these estimates may affect the amount of deferred tax liabilities or the valuation of deferred tax assets and thereby the tax charge in the Statement of Profit or Loss.
Provision for tax liabilities require judgments on the interpretation of tax legislation, developments in case law and the potential outcomes of tax audits and appeals which may be subject to significant uncertainty. Therefore the actual results may vary from expectations resulting in adjustments to provisions, the valuation of deferred tax assets, cash tax settlements and therefore the tax charge in the Statement of Profit or Loss.
(d) Litigation:
From time to time, the Company is subject to legal proceedings the ultimate outcome of each being always subject to many uncertainties inherent in litigation. A provision for litigation is made when it is considered probable that a payment will be made and the amount of the loss can be reasonably estimated. Significant judgment is made when evaluating, among other factors, the probability of unfavorable outcome and the ability to make a reasonable estimate of the amount of potential loss. Litigation provisions are reviewed at each accounting period and revisions made for the changes in facts and circumstances.
(e) Defined benefit plans:
The cost of the defined benefit plans and the present value of the defined benefit obligation are based on actuarial valuation using the projected unit credit method. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each Balance Sheet date.
(iv) Significant Accounting Policies:
(a) Revenue recognition:
(i) Income from operations
Revenue from operations is accounted on accrual, is net of indirect taxes, returns and discounts. Revenue is measured at the fair value of the consideration received or receivable. Revenue comprises of sale of rooms, food and beverages and allied services relating to hotel operations and management fees for the management of the hotels. Management fees earned from hotels managed by the Company are usually under long -term contracts with the hotel owner and is recognized when earned in accordance with the terms of the contract.
(ii) Interest:
Interest income is accrued on a time proportion basis using the effective interest rate method.
(b) Property, Plant and Equipment:
Property, plant and equipment are initially recorded at cost. Cost includes the acquisition cost or the cost of construction, expenses directly related to bringing the asset to the location and condition necessary for making them operational for their intended use and, in the case of qualifying assets, the attributable borrowing costs.
Subsequent costs are included in the assetâs carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably.
On transition to Ind AS, the Company has elected to continue with the carrying value of all property, plant and equipment recognized as at 1st April, 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment.
(c) Investment Property:
Up to 31st March, 2016, Investment Property were carried in the Balance Sheet in accordance with Indian GAAP. The company has elected to avail the exemption granted by Ind AS 101 âFirst time adoption of Ind ASâ, to regard those amounts as deemed cost at the date of the transition of Ind AS. (i.e. as on 1st April, 2016)
Investment Property are initially measured at cost, including transaction cost. Subsequent to initial recognition, Investment property are carried at cost less accumulated depreciation and accumulated impairment loss, if any.
Investment Property are derecognized either when they have disposed of or when they are permanently withdrawn from use and no future economic benefit is expected from the disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognized in the Statement of Profit and Loss in the period of derecognising.
Transfers to or from investment property is made when and only when there is a change in use.
(d) Intangible Assets:
Intangible assets are stated at cost less accumulated amortization and impairments, if any. An intangible asset is recognized if it is probable that the expected future economic benefits that are attributable to the asset will flow to the Company and its cost can be measured reliably.
On transition to Ind AS, the company has elected to continue with the carrying value of all its intangible assets recognized as of 1st April , 2016 measured as per previous GAAP and use that carrying value as its deemed cost as of the transition date.
(e) Depreciation and Amortization:
The Company depreciates its property, plant and equipment and investment property over the useful life in the manner prescribed in Schedule II of the Companies Act, 2013 under straight line method.
Based on technical evaluation, the useful life of continuous process plant other than windmill has been estimated as 15 years (on a single shift basis), which is different from that prescribed in Schedule II of the Act.
Depreciation on additions / deletions during the year are provided on pro-rata basis. Assets purchased / installed during the year costing less than '' 5,000 each are fully depreciated.
Building constructed on leasehold land are depreciated at the applicable rate on the assumption that the lease would be renewed in the normal course. Computer Software and website is amortized in six years and other intangible assets are amortized in five years.
(f) Investments in subsidiaries:
Investment in a subsidiary is a long-term investment and is carried at cost. On transition to Ind AS, previous GAAP carrying amount as on that date, i.e. 1st April , 2016 is considered as cost.
(g) Inventories:
Stock of food and beverages, stores and operating supplies are stated âat cost or net realizable value, whichever is lowerâ. Cost comprise fair value of consideration paid including duties and taxes (other than those refundable), cost of conversion and other costs in bringing the inventories to their present location and condition computed under weighted average cost method. Due allowance is estimated and made for defective and obsolete items, wherever necessary.
(h) Employee benefits:
(i) Short-term benefits:
The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees is recognized during the period when the employee renders the service.
(ii) Post-employment obligations
The Company operates the following post-employment schemes:
(a) The Company makes annual contributions to gratuity fund which is a defined benefit plan.
The liability or asset recognized in the balance sheet in respect of gratuity plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by actuaries using the projected unit credit method. The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the Statement of Profit and Loss. Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.
(b) Defined contribution plans such as provident fund are charged to the Statement of Profit and Loss as and when incurred.
(i) Borrowing Costs:
Borrowing costs that are directly attributable to the acquisition and construction of qualifying assets are capitalized. A qualifying asset is an asset that necessarily takes substantial period of time to get ready for its intended use.
Interest cost for the borrowings made after 1st April, 2016 is computed under effective interest method.
Foreign exchange difference relating to foreign currency borrowings regarded as an adjustment to borrowing cost to the extent not capitalized is disclosed under finance cost.
(j) Taxation:
(i) Provision for current taxation has been made in accordance with the Income Tax laws applicable to the assessment year.
(ii) Deferred tax is recognized on timing difference being the difference between taxable incomes and accounting income that originates in one period and is capable of reversal in one or more subsequent periods. Where there is unabsorbed depreciation, or carry forward losses, deferred tax assets are recognized only if there is virtual certainty of realization of such assets.
(iii) Minimum Alternate Tax (âMATâ) credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. Such asset is reviewed at each balance sheet date and the carrying amount is written down to the extent there is no longer a convincing evidence that the Company will be liable to pay normal income tax during the specified period.
(k) Impairment of assets:
The carrying amounts of assets are reviewed at each balance sheet date, to assess any indication of impairment. If any such indication exists, the recoverable amount of such assets is estimated. An impairment loss is recognized wherever the carrying amount of the assets exceed its recoverable amount. The recoverable amount is greater of the net selling price or value in use. In assessing value in use, the estimated future cash flows are discounted to their present value, based on an appropriate discounting factor.
After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful life. A previously recognized impairment loss is increased or reversed depending on changes in circumstances. However, the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.
(l) Foreign currency transaction:
Foreign currency transactions are recorded at the rates of exchange prevailing on the date of the transactions.
The monetary assets and liabilities in foreign currency as at balance sheet date are translated at rates prevailing at the year-end and the resultant net gains or losses are recognized as income or expense in the year in which they arise.
(m) Leases:
(i) As a lessee:
A Lease in which a significant portion of the risks and rewards of ownership are not transferred to the Company is classified as operating lease. Payments made under operating lease are charged to profit and loss account on a straight-line basis over the period of lease.
In respect of operating lease transactions, the assets are not capitalized in the books of the Company and the lease payments are charged to the profit and loss account.
The interest free security deposits paid for long term leases are recorded at their fair value. The difference between amount of the deposit paid and its fair value is considered as additional rental expense on a straight line basis. The Company also recognises interest income on the deposits using effective interest rate through its profit and loss account over the term of the deposit.
(ii) As a lessor:
Lease income from operating leases where the Company is a lessor is recognized as income on a straight-line basis over the lease term unless the receipts are structured to increase in line with expected general inflation to compensate for the expected inflationary cost increases. The respective leased assets are included in the balance sheet based on their nature.
The interest free security deposits received for long term leases are recorded at their fair value .The difference between amount of deposit received and its fair value is considered as additional rental income under straight line basis over the lease term. The Company also recognizes interest expense on the deposits using effective interest rate through its profit and loss account over the term of the deposit.
(n) Government Grants/Incentives:
Government grants/incentives that the Company is entitled to on fulfillment of certain conditions, but are available to the Company only on completion of some other conditions, are recognized as income at fair value on completion of such other conditions.
Grants/incentives that the Company is entitled to unconditionally on fulfillment of certain conditions, such grants/incentives are recognized at fair value as income when there is reasonable assurance that the grant/incentive will be received.
(o) Income from Joint Development Agreement (JDA):
Income from JDA is accounted under percentage of completion method (POCM) as per the Guidance Note on Accounting for Real Estate Transactions. Balance cost of land and other expense related to JDA is grouped under Assets held for sale.
(p) Accounting for Provisions, Contingent Liabilities and Contingent Assets:
(i) Provisions are recognized when the Company has a binding present obligation. This may be either legal because it derives from a contract, legislation or other operation of law because the Company created valid expectations on the part of the third parties by accepting certain responsibilities. To record such an obligation it must be probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made for the amount of the obligation.
(ii) Contingent Liability is disclosed in case of;
(a) A present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle that obligation;
(b) A present obligation when no reliable estimate is possible; and
(c) A possible obligation arising from past events where the probability of outflow of resources is remote
(iii) Disclosure of the contingent assets are made when it is probable that there is an inflow of future economic benefits. However, when the realization of income is virtually certain, then the related asset is no longer a contingent asset, but it is recognized as an asset.
(q) Exceptional items:
The company discloses certain financial information both including and excluding exceptional items. The presentation of information excluding exceptional items allows a better understanding of the underlying performance of the company and provides consistency with the companyâs internal management reporting. Exceptional items are identified by virtue of either their size or nature so as to facilitate comparison with prior periods and to assess underlying trends in the financial performance of the company.
(r) Statement of Cash Flows :
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. Cash flow for the year are classified by operating, investing and financing activities.
(s) Earnings per Share :
Basic earnings per share is computed, by dividing the profit or loss after tax by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share.
(t) Financial Instruments:
(1) Financial assets
Initial recognition and measurement
Financial assets are recognized when and only when, the Company becomes a party to the contractual provisions of the financial instrument. The Company determines the classification of its financial assets at initial recognition.
When financial assets are recognized initially, they are measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets, which are not at fair value through profit or loss, are adjusted to the fair value on initial recognition.
Classification:
a. Cash and Cash Equivalents
Cash comprises cash/cheques on hand and demand deposits with banks. Cash equivalents are short-term balances with an original maturity of three months or less from the date of acquisition, highly liquid investment that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.
b. Debt Instruments
The Company classifies its debt instruments, as subsequently measured at amortized cost or fair value through Other Comprehensive Income or fair value through profit or loss based on its business model for managing the financial assets and the contractual cash flow characteristics of the financial asset.
(i) Financial assets at amortized cost
Financial assets are subsequently measured at amortized cost if these financial assets are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest. Interest income from these financial assets is included as a part of the Companyâs income in the Statement of Profit and Loss using the effective interest rate method.
(ii) Financial assets at fair value through Other Comprehensive Income (FVOCI)
Financial assets are subsequently measured at fair value through Other Comprehensive Income if these financial assets are held for collection of contractual cash flows and for selling the financial assets, where the assets cash flows represent solely payments of principal and interest. Movements in the carrying value are taken through Other Comprehensive Income, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains or losses which are recognized in the Statement of Profit and Loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in Other Comprehensive Income is reclassified from Other Comprehensive Income to the Statement of Profit and Loss. Interest income on such financial assets is included as a part of the Companyâs income in the Statement of Profit and loss using the effective interest rate method.
(iii) Financial assets at fair value through profit or loss (FVTPL)
Assets that do not meet the criteria for amortized cost or FVOCI are measured at fair value through profit or loss. A gain or loss on such debt instrument that is subsequently measured at FVTPL and is not part of a hedging relationship as well as interest income is recognized in the Statement of Profit and Loss.
c. Equity Instruments
The Company subsequently measures equity investment in a wholly owned subsidiary and investment in certain power generation Companies at cost. Dividends from such investments are recognized in the Statement of Profit and Loss as other income when the Companyâs right to receive payment is established.
De-recognition
A financial asset is de-recognized only when the Company has transferred the rights to receive cash flows from the financial asset. Where the Company has transferred an asset, the Company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset is de-recognized. Where the Company has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not de-recognized. Where the Company retains control of the financial asset, the asset is continued to be recognized to the extent of continuing involvement in the financial asset.
(2) Financial liabilities
Initial recognition and measurement
Financial liabilities are recognized when and only when, the Company becomes a party to the contractual provisions of the financial instrument. The Company determines the classification of its financial liabilities at initial recognition.
All financial liabilities are recognized initially at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial liabilities, which are not at fair value through profit or loss, are adjusted to the fair value on initial recognition.
Subsequent measurement
After initial recognition, financial liabilities that are not carried at fair value through profit or loss are subsequently measured at amortized cost using the effective interest method. Gains and losses are recognized in the Statement of Profit and Loss when the liabilities are derecognized, and through the amortization process.
De-recognition
A financial liability is de-recognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a de-recognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognized in the Statement of Profit and Loss.
(3) Impairment of financial assets
The Company assesses, at each reporting date, whether a financial asset or a group of financial assets is impaired and allowance for losses on such assessment is made in the Statement of Profit and Loss.
) Recent accounting pronouncements:
(a) Appendix B to Ind AS 21, Foreign currency transactions and advance consideration:
On 28th March, 2018 Ministry of Corporate Affairs (âMCAâ) has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income when the entity has received or paid advance consideration in foreign currency.
The amendment will come in to force from 1st April, 2018. The Company is evaluating the requirement of the amendment and the impact on the financial statements. The effect on adoption of Ind AS 21 is expected to be insignificant.
(b) Ind AS 115:
In March 2018, the Ministry of Corporate Affairs has notified the Companies (Indian Accounting Standards) Amended Rules, 2018 (âamended rulesâ). As per amended rules, Ind AS 115 âRevenue from contracts with customersâ supersedes Ind AS 11,âConstruction contractsâ and Ind AS 18, âRevenueâ and is applicable for all accounting periods commencing on or after 1st April 2018.
Ind AS 115 introduces a new framework of five steps model for the analysis of revenue transactions. The model specifies that revenue should be recognized when (or as) an entity transfer control of goods or services to a customer at the amount to which the entity expects to be entitled. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entityâs contract with the customers. The new revenue standard is applicable to the Company from 1st April, 2018.
The standard permits two possible methods of transition:
Retrospective approach: Under the approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS
8 -Accounting Policies, Changes in Accounting Estimates and Errors.
Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (cumulative catch-up approach).
The Company is evaluating the requirement of the amendment and the impact on the financial statements. The effect on adoption of Ind AS 115 is expected to be insignificant.
(a) First ranking pari passu charge on all of the fixed assets (both movable and immovable) of hotel properties at Mumbai, Udaipur, New Delhi and Chennai and the Windmills.
(b) Second ranking pari passu charge on the current assets of hotel properties at Mumbai, Udaipur, New Delhi and Chennai.
(c) Revenue from hotel properties at Mumbai, Udaipur, New Delhi and Chennai and receivables from sale of Hyderabad Land and Joint Development at Bangalore.
(d) Pledge of Promotersâ shareholding in the Company, subject to minimum of 51% of their holding.
(e) Personal guarantee of Promoters - Mr. Vivek Nair and Mr. Dinesh Nair.
(f) Corporate Guarantee of Leela Lace Holdings Private Limited.
(g) Negative lien on the non-core assets.
(h) To the extent of âexisting term debt provided by Bank of Baroda and Syndicate Bank under CDR documentsâ and assigned to JM Financial Asset Reconstruction Co. Ltd., the security is second ranking pari passu charge on the fixed assets of the hotel properties at Mumbai, Udaipur, New Delhi and Chennai and the Windmills, and as referred in clause b to g above.
(i) To the extent of working capital facility assigned by Bank of Baroda, Oriental Bank of Commerce, State Bank of India and Vijaya Bank, the security is first ranking pari passu charge on inventory, receivables and other current assets of the hotel properties at Mumbai, Udaipur, New Delhi and Chennai and second ranking pari passu charge on the fixed assets of the hotel properties at Mumbai, Udaipur, New Delhi and Chennai and the Windmills, and as referred in clause c to g above.
(j) First pari passu charge on the immovable properties of the Leela Palace, Bangalore.
(k) Receivables from Bangalore Hotel.
(l) Receivables from Pune Joint Development.
(m) Hypothecation of vehicles
Note B :
The loan will be converted to Rupee term loan on 1st August, 2018 and repayable in 5 annual installments thereafter.
Mar 31, 2017
Note 1 Significant Accounting Policies
a) Convention
The financial statements are prepared under the historical cost convention in accordance with the applicable Accounting Standards and the provisions of the Companies Act, 2013
b) Use of estimates
The preparation of financial statements require the management of the Company to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and the reported amount of income and expenses during the year. Examples of such estimates include provisions for doubtful debts, employee benefits, provision for income taxes, useful life of depreciable fixed assets and provision for impairment.
c) Fixed assets
Fixed assets are stated at cost (or valuation as applicable) less depreciation. Cost includes expenses incidental to the installation of the assets and attributable borrowing costs. Cost also includes exchange differences arising on reporting of long term foreign currency monetary items at rates different from those at which they were initially recorded during the period or reported in previous financial statements, in so far as they relate to acquisition of a depreciable capital asset.
Revalued fixed assets are stated based on the revaluation and all other fixed assets are stated at cost. Additions on account of valuation are credited to Revaluation Reserve.
d) Depreciation and amortisation
Effective 1st April 2014, the Company depreciates its fixed assets over the useful life in the manner prescribed in Schedule II of the Companies Act, 2013.
Based on technical evaluation, the useful life of continuous process plant other than windmill has been estimated as 15 years (on a single shift basis), which is different from that prescribed in Schedule II of the Act.
Depreciation on additions / deletions during the year are provided on prorata basis. Assets purchased / installed during the year costing less than Rs.5,000 each are fully depreciated.
Premium and other capitalised cost relating to leasehold land is amortised over the period of lease.
Buildings constructed on leasehold land are depreciated at the applicable rate on the assumption that the lease would be renewed in the normal course.
Depreciation on Computer Software is provided over a period of six years. License fee and Franchise fee are amortised over five years.
e) Investments
Current investments are carried at lower of cost and quoted / fair value. Long term investments are carried at cost. However provision for diminution is made to recognise a decline, other than temporary, in the value of investments, such reduction being determined and made for each investment individually.
f) Inventories
Inventories are valued at lower of cost (weighted average basis) or net realisable value.
g) Employee benefit
i) Post-employment benefit plans
Contribution to defined contributory retirement benefit schemes are recognised as an expense when employees have rendered services entitling them to contributions.
For defined benefit schemes, the cost of providing benefits is determined using the Project Unit Credit Method, with actuarial valuation being carried out at each balance sheet date. Actuarial gains and losses are recognized in full in the profit and loss account for the period in which they occur. Past service cost is recognized immediately to the extent that the benefits are already vested, and otherwise amortized on straight-line basis over the average period until the benefits become eligible for being vested.
ii) Short-term employee benefits
The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees is recognised during the period when the employee renders the service.
iii) Long-term employee benefits
Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related services are recognized as a liability at the present value of the defined benefit obligation at the balance sheet date.
h) Recognition of income and expenditure
Revenue/incomes and Costs/expenditures are accounted on accrual.
i) Borrowing costs
Borrowing costs that are directly attributable to the acquisition and construction of qualifying assets are capitalised. A qualifying asset is an asset that necessarily takes substantial period of time to get ready for its intended use.
j) Taxation
(i) Provision for current taxation has been made in accordance with the Income Tax laws applicable to the assessment year.
(ii) Deferred tax is recognized on timing difference being the difference between taxable income and accounting income that originates in one period and is capable of reversal in one or more subsequent periods. Where there is unabsorbed depreciation, or carry forward losses, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets.
(iii) Minimum Alternate Tax (âMATâ) credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. Such asset is reviewed at each balance sheet date and the carrying amount is written down to the extent there is no longer a convincing evidence that the Company will be liable to pay normal income tax during the specified period.
k) Impairment of assets
The carrying amounts of assets are reviewed at each balance sheet date, to assess any indication of impairment. If any such indication exists, the recoverable amount of such assets is estimated. An impairment loss is recognized wherever the carrying amount of the assets exceed its recoverable amount. The recoverable amount is greater of the net selling price or value in use. In assessing value in use, the estimated future cash flows are discounted to their present value, based on an appropriate discounting factor.
After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful life. A previously recognized impairment loss is increased or reversed depending on changes in circumstances. However, the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.
l) Foreign currency transaction
Foreign currency transactions are recorded at the rates of exchange prevailing on the date of the transactions.
In line with the option given by the Ministry of Corporate Affairs vide Notification No G.S.R.225 (E) dated 31st March 2009, the exchange differences arising on reporting of long term foreign currency monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements, in so far as they relate to acquisition of a depreciable capital asset, are added to or deducted from the cost of the asset and will be depreciated over the balance life of the asset, and in other cases are accumulated in âForeign Currency Monetary Item Translation Difference Accountâ and amortized over the balance period of such long-term asset/liability but not beyond 31st March 2020, by recognising income or expense in each of the periods except the exchange differences which are regarded as adjustment to interest costs in terms of paragraph 4(e) of Accounting Standard AS (16) Borrowing costs.
All other monetary assets and liabilities in foreign currency as at balance sheet date are translated at rates prevailing at the year-end and the resultant net gains or losses are recognized as income or expense in the year in which they arise.
m) Assets taken on lease
In respect of operating lease transactions, the assets are not capitalised in the books of the Company and the lease payments are charged to the profit and loss account.
n) Accounting for provisions, contingent liabilities and contingent assets
A provision is recognised when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to present value and are determined as best estimates required to settle the obligation at the balance sheet date.
Contingent Liability is disclosed in case of
(i) A present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle that obligation;
(ii) A present obligation when no reliable estimate is possible; and
(iii) A possible obligation arising from past events where the probability of outflow of resources is remote.
Contingent Assets are not recognized in the financial statements.
o) Government Grants
Revenue Grants are recognized in the profit and loss account in accordance with the related scheme and in the period in which these are accrued.
Mar 31, 2015
A) Convention
The financial statements are prepared under the historical cost
convention in accordance with the applicable Accounting Standards and
the provisions of the Companies Act, 2013
b) Use of Estimates
The preparation of financial statements require the management of the
Company to make estimates and assumptions that affect the reported
balances of assets and liabilities and disclosures relating to the
contingent liabilities as at the date of the financial statements and
the reported amount of income and expenses during the year. Examples of
such estimates include provisions for doubtful debts, employee
benefits, provision for income taxes, useful life of depreciable fixed
assets and provision for impairment.
c) Fixed Assets
Fixed assets are stated at cost (or valuation as applicable) less
depreciation. Cost includes expenses incidental to the installation of
the assets and attributable borrowing costs. Cost also includes
exchange differences arising on reporting of long term foreign currency
monetary items at rates different from those at which they were
initially recorded during the period or reported in previous financial
statements, in so far as they relate to acquisition of a depreciable
capital asset.
Valuation of freehold land and leasehold rights on properties situated
at Mumbai, Bangalore and Goa was carried out during March 2009. The
fixed assets of Goa were initially revalued in the year 2001 and that
of Mumbai in the year 2004. Valuation was carried out in all the cases
by professional valuers, the basis of valuation being realisable value
as determined by the valuer.
Revalued fixed assets are stated based on the revaluation and all other
fixed assets are stated at cost. Additions on account of valuation are
credited to Revaluation Reserve.
d) Depreciation and Amortisation
Effective 1st April 2014, the Company depreciates its fixed assets over
the useful life in the manner prescribed in Schedule II of the
Companies Act, 2013, as against the earlier practice of depreciating at
the rates prescribed in Schedule XIV of the Companies Act, 1956.
Based on technical evaluation, the useful life of continuous process
plant other than windmill has been estimated as 15 years (on a single
shift basis), which is different from that prescribed in Schedule II of
the Act.
Depreciation on additions / deletions during the year are provided on
prorata basis. Assets purchased / installed during the year costing
less than Rs. 5,000 each are fully depreciated.
Premium and other capitalised cost relating to leasehold land is
amortised over the period of lease.
Buildings constructed on leasehold land are depreciated at the
applicable rate on the assumption that the lease will be renewed in the
normal course. Depreciation on Computer Software is provided over a
period of six years. License fee and Franchise fee are amortised over
five years.
Depreciation on revalued portion is withdrawn from Revaluation Reserve
till 31st March, 2014 and charged to profit and loss account for the
subsequent period.
e) Investments
Current investments are carried at lower of cost and quoted / fair
value. Long-term investments are carried at cost. However provision for
diminution is made to recognise a decline, other than temporary, in the
value of investments, such reduction being determined and made for each
investment individually.
f) Inventories
Inventories are valued at lower of cost (weighted average basis) or net
realisable value.
g) Employee benefit
i) Post-employment benefit plans
Contribution to defined contributory retirement benefit schemes are
recognised as an expense when employees have rendered services
entitling them to contributions.
For defined benefit schemes, the cost of providing benefits is
determined using the Project Unit Credit Method, with actuarial
valuation being carried out at each balance sheet date. Actuarial gains
and losses are recognized in full in the profit and loss account for the
period in which they occur. Past service cost is recognized immediately
to the extent that the benefits are already vested, and otherwise
amortized on straight-line basis over the average period until the
benefits become eligible for being vested.
ii) Short-term employee benefits
The undiscounted amount of short term employee benefits expected to be
paid in exchange for the services rendered by employees is recognised
during the period when the employee renders the service. These benefits
include compensated absences such as paid annual leave.
iii) Long-term employee benefits
Compensated absences which are not expected to occur within twelve
months after the end of the period in which the employee renders the
related services are recognized as a liability at the present value of
the defined benefit obligation at the balance sheet date.
h) Recognition of income and Expenditure
Revenue/Incomes and Costs/Expenditures are accounted on accrual.
i) Borrowing Costs
Borrowing costs that are directly attributable to the acquisition and
construction of qualifying assets are capitalised. A qualifying asset
is an asset that necessarily takes substantial period of time to get
ready for its intended use. Gains/Losses (net) on settlement of
derivative contracts where they relate to the acquisition or
construction of fixed assets are adjusted to the carrying cost of such
assets.
j) Taxation
(i) Provision for current taxation has been made in accordance with the
Income Tax laws applicable to the assessment year.
(ii) Wealth tax for the year has been provided as required under the
Wealth Tax Act and Rules, 1957.
(iii) Deferred tax is recognized on timing difference being the
difference between taxable income and accounting income that originates
in one period and is capable of reversal in one or more subsequent
periods. Where there is unabsorbed depreciation, or carry forward
losses, deferred tax assets are recognised only if there is virtual
certainty of realisation of such assets.
(iv) Minimum Alternate Tax ("MAT") credit is recognised as an asset
only when and to the extent there is convincing evidence that the
Company will pay normal income tax during the specified period. Such
asset is reviewed at each balance sheet date and the carrying amount is
written down to the extent there is no longer a convincing evidence
that the Company will be liable to pay normal income tax during the
specified period.
k) Impairment of assets
The carrying amounts of assets are reviewed at each balance sheet date,
to assess any indication of impairment. If any such indication exists,
the recoverable amount of such assets is estimated. An impairment loss
is recognized wherever the carrying amount ofthe assets exceeds its
recoverable amount. The recoverable amount is greater of the net
selling price or value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value, based on an
appropriate discounting factor.
After impairment, depreciation is provided on the revised carrying
amount of the assets over its remaining useful life. A previously
recognized impairment loss is increased or reversed depending on
changes in circumstances. However, the carrying value after reversal is
not increased beyond the carrying value that would have prevailed by
charging usual depreciation if there was no impairment.
l) Foreign Currency Transaction
Foreign currency transactions are recorded at the rates of exchange
prevailing on the date of the transactions.
In line with option given by the Ministry of Corporate Affairs vide
Notification No G.S.R.225 (E) dated 31st March 2009, the exchange
differences arising on reporting of long term foreign currency monetary
items at rates different from those at which they were initially
recorded during the period, or reported in previous financial
statements, in so far as they relate to acquisition of a depreciable
capital asset, are added to or deducted from the cost of the asset and
will be depreciated over the balance life of the asset, and in other
cases are accumulated in 'Foreign Currency Monetary Item Translation
Difference Account' and amortized over the balance period of such
long-term asset/ liability but not beyond 31st March 2020, by
recognising income or expense in each of the periods except the exchange
differences which are regarded as adjustment to interest costs in terms
of paragraph 4(e) of Accounting Standard AS (16) Borrowing costs.
All other monetary assets and liabilities in foreign currency as at
balance sheet date are translated at rates prevailing at the year-end
and the resultant net gains or losses are recognized as income or
expense in the year in which they arise.
m) Assets taken on lease
In respect of operating lease transactions, the assets are not
capitalised in the books of the Company and the lease payments are
charged to the profit and loss account.
n) Accounting for Provisions, Contingent Liabilities and Contingent
Assets
A provision is recognised when the Company has a present obligation as
a result of past event and it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to present
value and are determined as best estimates required to settle the
obligation at the balance sheet date. Contingent Liability is disclosed
in case of
(i) A present obligation arising from past events, when it is not
probable that an outflow of resources will be required to settle that
obligation;
(ii) A present obligation when no reliable estimate is possible; and
(iii) A possible obligation arising from past events where the
probability of outflow of resources is remote.
Contingent Assets are not recognized in the financial statements.
o) Government Grants
Revenue Grants are recognized in the profit and loss account in
accordance with the related scheme and in the period in which these are
accrued.
Note A : The Loans are secured by :
(a) First ranking pan passu charge on all of the fixed assets (both
movable and immovable) of Hotel Properties at Mumbai, Goa, Udaipur, New
Delhi, and Chennai and the Windmills.
(b) Second ranking pari passu charge on the Current Assets of Hotel
Properties at Mumbai, Goa, Udaipur, New Delhi and Chennai.
(c) Revenue from Hotel Properties at Mumbai, Goa, Udaipur, New Delhi,
and Chennai and receivables from sale of Hyderabad Land and Joint
Development at Bangalore.
(d) Pledge of Promoters' shareholding, in the Company, subject to
minimum of 51% of their holding
(e) Personal Guarantee of Promoters - Mr. Vivek Nair and Mr Dinesh
Nair.
(f) Corporate Guarantee of Leela Lace Holdings Private Limited.
(g) Negative lien on the Non-Core Assets.
(h) Second ranking pari passu charge on the fixed assets (both movable
& immovable) of Hotel Properties at Mumbai, Goa, Udaipur, New Delhi,
and Chennai and the Windmills.
(i) First pari passu charge on the immovable properties of the Leela
Palace, Bangalore.
(j) First pari passu charge on the immovable properties of the Leela
Palace, Bangalore and receivables from Pune Joint Development.
(k) Hypothecation of Vehicles.
Note B :
(a) The loan will be converted to RTL on 1st August, 2018 and repayable
in 5 annual instalments thereafter.
(i) Working capital facilities from IDBI Bank Ltd (Previous
year-consortium of banks) are secured by:
(A) First ranking pari passu charge on inventory, receivables and other
current assets of the Hotel properties at Mumbai, Goa, Udaipur, New
Delhi and Chennai.
(B) Second ranking pari passu charge on the fixed assets of the Hotel
properties at Mumbai, Goa, Udaipur, New Delhi, and Chennai and the
windmills.
(C) Securities listed in note 4 (A) (d) to (g)
(ii) Short term loan from HDFC Ltd was secured by mortgage of certain
residential flats and personal guarantee of promoters Mr. Vivek Nair
and Mr. Dinesh Nair.
(a) Additions during the year is on account of exchange variations in
the long term foreign currency monetary items relating to non
depreciable assets.
(b) The balance in foreign currency translation difference account
would be amortised over the balance period of the long term liability
but not beyond 31st March 2020 by recognition as income or expenditure.
Mar 31, 2014
A) Convention
The financial statements are prepared under the historical cost
convention in accordance with the applicable Accounting Standards and
the provisions of the Companies Act, 1956.
b) Use of Estimates
The preparation of financial statements require the management of the
Company to make estimates and assumptions that affect the reported
balances of assets and liabilities and disclosures relating to the
contingent liabilities as at the date of the financial statements and
the reported amount of income and expenses during the year. Examples of
such estimates include provisions for doubtful debts, employee
benefits, provision for income taxes, useful life of depreciable fixed
assets and provision for impairment.
c) Fixed Assets
Fixed assets are stated at cost (or valuation as applicable) less
depreciation. Cost includes expenses incidental to the installation of
the assets and attributable borrowing costs. Cost also includes
exchange differences arising on reporting of long term foreign currency
monetary items at rates different from those at which they were
initially recorded during the period or reported in previous financial
statements, insofar as they relate to acquisition of a depreciable
capital asset.
Valuation of freehold land and leasehold rights on properties situated
at Mumbai, Bangalore and Goa was carried out during March 2009. The
fixed assets of Goa were initially revalued in the year 2001 and that
of Mumbai in the year 2004. Valuation was carried out in all the cases
by professional valuers, the basis of valuation being realisable value
as determined by the valuer.
Revalued fixed assets are stated based on the revaluation and all other
fixed assets are stated at cost. Additions on account of valuation are
credited to Revaluation Reserve.
d) Depreciation and Amortisation
Depreciation on fixed assets is provided on straight-line method at
rates specified in Schedule XIV to the Companies Act, 1956.
Depreciation on additions / deletions during the year are provided on
pro-rata basis. Assets purchased / installed during the year costing
less than Rs. 5,000 each are fully depreciated. Premium and other
capitalised cost relating to leasehold land is amortised over the
period of lease. Revaluation Reserve is withdrawn to the extent of
incremental depreciation on account of revaluation.
Buildings constructed on leasehold land are depreciated at the
applicable rate on the assumption that the lease will be renewed in the
normal course.
Depreciation on Computer Software is provided over a period of six
years. License fee and Franchise fee are amortised over five years.
e) Investments
Current investments are carried at lower of cost and quoted / fair
value. Long- term investments are carried at cost.
f) Inventories
Inventories are valued at lower of cost (weighted average basis) or net
realisable value.
g) Employee benefit
i) Post-employment benefit plans
Contribution to defined contributory retirement benefit schemes are
recognised as an expense when employees have rendered services
entitling them to contributions.
For defined benefit schemes, the cost of providing benefits is
determined using the Project Unit Credit Method, with actuarial
valuation being carried out at each Balance Sheet Date. Actuarial gains
and losses are recognized in full in the profit and loss account for
the period in which they occur. Past service cost is recognized
immediately to the extent that the benefits are already vested, and
otherwise it is amortized on straight-line basis over the average
period until the benefits become eligible for being vested.
ii) ShortÂterm employee benefits
The undiscounted amount of short term employee benefits expected to be
paid in exchange for the services rendered by employees is recognised
during the period when the employee renders the service. These
benefits include compensated absences such as paid annual leave. iii)
Long-term employee benefits Compensated absences which are not expected
to occur within twelve months after the end of the period in which the
employee renders the related services are recognized as a liability at
the present value of the defined benefit obligation at the Balance
Sheet date.
h) Recognition of income and Expenditure
Revenue/Incomes and Costs/Expenditures are accounted on accrual.
i) Borrowing Costs
Borrowing costs that are directly attributable to the acquisition and
construction of qualifying assets are capitalised. A qualifying asset
is an asset that necessarily takes substantial period of time to get
ready for its intended use. Gains/Losses (net) on settlement of
derivative contracts where they relate to the acquisition or
construction of fixed assets are adjusted to the carrying cost of such
assets.
j) Taxation
(i) Provision for current taxation has been made in accordance with the
Income Tax laws applicable to the assessment year.
(ii) Wealth Tax for the year has been provided as required under the
Wealth Tax Act and Rules, 1957.
(iii) Deferred tax is recognized on timing difference being the
difference between taxable income and accounting income that originates
in one period and is capable of reversal in one or more subsequent
periods. Where there is unabsorbed depreciation, or carry forward
losses, deferred tax assets are recognised only if there is virtual
certainty of realisation of such assets.
(iv) Minium Alternate Tax ("MAT") credit is recognised as an asset only
when and to the extent there is covincing evidence that the Company
will pay normal income tax during the specified period. Such asset is
reviewed at each Balance Sheet date and the carrying amount is written
down to the extent there is no longer a convincing evidence that the
Company will be liable to pay normal income tax during the specified
period.
k) Impairment of assets
The carrying amounts of assets are reviewed at each balance sheet date,
if there is any indication of impairment. If any such indication
exists, the recoverable amount of such assets is estimated. An
impairment loss is recognized wherever the carrying amount of the
assets exceeds its recoverable amount. The recoverable amount is
greater of the net selling price or value in use. In assessing value in
use, the estimated future cash flows are discounted to their present
value, based on an appropriate discounting factor.
After impairment, depreciation is provided on the revised carrying
amount of the assets over its remaining useful life. A previously
recognized impairment loss is increased or reversed depending on
changes in circumstances. However, the carrying value after reversal
is not increased beyond the carrying value that would have prevailed by
charging usual depreciation if there was no impairment.
l) Foreign Currency Transaction
Foreign currency transactions are recorded at the rates of exchange
prevailing on the date of the transactions.
In line with option given by the Ministry of Corporate Affairs vide
Notification No G.S.R.225 (E) dated 31st March, 2009, the exchange
differences arising on reporting of long term foreign currency monetary
items at rates different from those at which they were initially
recorded during the period, or reported in previous financial
statements, in so far as they relate to acquisition of a depreciable
capital asset, are added to or deducted from the cost of the asset and
depreciated over the balance life of the asset, and in other cases are
accumulated in ''Foreign Currency Monetary Item Translation Difference
Account'' and amortized over the balance period of such long-term asset/
liability but not beyond 31st March, 2020, by recognising income or
expense in each of the periods except the exchange differences which
are regarded as adjustment to interest costs in terms of paragraph 4(e)
of Accounting Standard AS (16) Borrowing costs.
All other monetary assets and liabilities in foreign currency as at
Balance Sheet date are translated at rates prevailing at the year-end
and the resultant net gains or losses are recognized as income or
expense in the year in which they arise.
m) Assets taken on lease
In respect of operating lease transactions, the assets are not
capitalised in the books of the Company and the lease payments are
charged to the Profit and Loss Account.
n) Accounting for Provisions, Contingent Liabilities and Contingent
Assets
A provision is recognised when the Company has a present obligation as
a result of past event and it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to present
value and are determined as best estimates required to settle the
obligation at the Balance Sheet date. Contingent Liability is
disclosed in case of (i) A present obligation arising from past events,
when it is not probable that an outflow of resources will be required
to settle that obligation; (ii) A present obligation when no reliable
estimate is possible; and (iii) A possible obligation arising from past
events where the probability of
outflow of resources is remote. Contingent Assets are not recognized
in the financial statements.
o) Government Grants
Revenue Grants are recognized in the Profit and Loss account in
accordance with the related scheme and in the period in which these are
accrued.
Mar 31, 2013
A) Convention
The financial statements are prepared under the historical cost
convention in accordance with the applicable Accounting Standards and
the provisions of the Companies Act, 1956.
b) Use of Estimates
The preparation of financial statements require the management of the
Company to make estimates and assumptions that affect the reported
balances of assets and liabilities and disclosures relating to the
contingent liabilities as at the date of the financial statements and
the reported amount of income and expenses during the year. Examples of
such estimates include provisions for doubtful debts, employee
benefits, provision for income taxes, useful life of depreciable fixed
assets and provision for impairment.
c) Fixed Assets
Fixed assets are stated at cost (or valuation as applicable) less
depreciation. Cost includes expenses incidental to the installation of
the assets and attributable borrowing costs. Cost also includes
exchange differences arising on reporting of long term foreign currency
monetary items at rates different from those at which they were
initially recorded during the period or reported in previous financial
statements, insofar as they relate to acquisition of a depreciable
capital asset.
Valuation of freehold land and leasehold rights on properties situated
at Mumbai, Bangalore, Goa and Kovalam was carried out during March
2009. All the fixed assets of Goa were initially revalued in the year
2001 and that of Mumbai in the year 2004. Valuation was carried out in
all the cases by professional valuers, the basis of valuation being
realisable value as determined by the valuer.
Revalued fixed assets are stated based on the revaluation and all other
fixed assets are stated at cost. Additions on account of valuation are
credited to Revaluation Reserve.
d) Depreciation and Amortisation
Depreciation on fixed assets is provided on straight-line method at
rates specified in Schedule XIV to the Companies Act, 1956.
Depreciation on additions / deletions during the year are provided on
pro-rata basis. Assets purchased / installed during the year costing
less than Rs. 5,000 each are fully depreciated. Premium and other
capitalised cost relating to leasehold land is amortised over the
period of lease. Revaluation Reserve is withdrawn to the extent of
incremental depreciation on account of revaluation. Buildings
constructed on leasehold land are depreciated at the applicable rate on
the assumption that the lease will be renewed in the normal course.
Depreciation on Computer Software is provided over a period of six
years. License fee and Franchise fee are amortised over five years.
e) Investments
Current investments are carried at lower of cost and quoted / fair
value. Long- term investments are carried at cost.
f) Inventories
Inventories are valued at lower of cost (weighted average basis) or net
realisable value.
g) Employee benefit
i) Post-employment benefit plans
Contribution to defined contributory retirement benefit schemes are
recognised as an expense when employees have rendered services
entitling them to contributions.
For defined benefit schemes, the cost of providing benefits is
determined using the Project Unit Credit Method, with actuarial
valuation being carried out at each Balance Sheet Date. Actuarial gains
and losses are recognized in full in the profit and loss account for
the period in which they occur. Past service cost is recognized
immediately to the extent that the benefits are already vested, and
otherwise it is amortized on straight-line basis over the average
period until the benefits become eligible for being vested.
ii) ShortÂterm employee benefits
The undiscounted amount of short term employee benefits expected to be
paid in exchange for the services rendered by employees is recognised
during the period when the employee renders the service. These
benefits include compensated absences such as paid annual leave and
performance incentive.
iii) Long-term employee benefits
Compensated absences which are not expected to occur within twelve
months after the end of the period in which the employee renders the
related services are recognized as a liability at the present value of
the defined benefit obligation at the Balance Sheet date.
h) Recognition of income and Expenditure
Revenue/Incomes and Costs/Expenditures are accounted on accrual.
i) Borrowing Costs
Borrowing costs that are directly attributable to the acquisition and
construction of qualifying assets are capitalised. A qualifying asset
is an asset that necessarily takes substantial period of time to get
ready for its intended use. Gains/Losses (Net) on settlement of
derivative contracts where they relate to the acquisition or
construction of fixed assets are adjusted to the carrying cost of such
assets.
j) Taxation
(i) Provision for current taxation has been made in accordance with the
Income Tax laws applicable to the assessment year.
(ii) Wealth Tax for the year has been provided as required under the
Wealth Tax Act and Rules, 1957.
(iii) Deferred tax is recognized on timing difference being the
difference between taxable income and accounting income that originates
in one period and is capable of reversal in one or more subsequent
periods. Where there is unabsorbed depreciation, or carry forward
losses, deferred tax assets are recognised only if there is virtual
certainty of realisation of such assets.
(iv) Minimum Alternative Tax ("MAT") credit is recognised as an asset
only when and to the extent there is covincing evidence that the
Company will pay normal income tax during the specified period. Such
asset is reviewed at each Balance Sheet date and the carrying amount is
written down to the extent there is no longer a convincing evidence
that the Company will be liable to pay normal income tax during the
specified period.
k) Impairment of assets
The carrying amounts of assets are reviewed at each balance sheet date,
if there is any indication of impairment. If any such indication
exists, the recoverable amount of such assets is estimated. An
impairment loss is recognized wherever the carrying amount of the
assets exceeds its recoverable amount. The recoverable amount is
greater of the net selling price or value in use. In assessing value in
use, the estimated future cash flows are discounted to their present
value, based on an appropriate discounting factor. After impairment,
depreciation is provided on the revised carrying amount of the assets
over its remaining useful life. A previously recognized impairment loss
is increased or reversed depending on changes in circumstances.
However, the carrying value after reversal is not increased beyond the
carrying value that would have prevailed by charging usual depreciation
if there was no impairment.
l) Foreign Currency Transaction
Foreign currency transactions are recorded at the rates of exchange
prevailing on the date of the transactions.
In line with option given by the Ministry of Corporate Affairs vide
Notification No G.S.R.225 (E) dated 31st March 2009, the exchange
differences arising on reporting of long term foreign currency monetary
items at rates different from those at which they were initially
recorded during the period, or reported in previous financial
statements, in so far as they relate to acquisition of a depreciable
capital asset, are added to or deducted from the cost of the asset and
will be depreciated over the balance life of the asset, and in other
cases are accumulated in ''Foreign Currency Monetary Item Translation
Difference Account'' and amortized over the balance period of such
long-term asset/ liability but not beyond 31st March 2020, by
recognising income or expense in each of the periods except the
exchange differences which are regarded as adjustment to interest costs
in terms of paragraph 4(e) of Accounting Standard AS (16) Borrowing
costs.
All other monetary assets and liabilities in foreign currency as at
Balance Sheet date are translated at rates prevailing at the year-end
and the resultant net gains or losses are recognized as income or
expense in the year in which they arise.
m) Assets taken on lease
Assets taken on operating lease are not capitalised in the books of the
Company and the lease payments are charged to the Profit and Loss
Account.
n) Accounting for Provisions, Contingent Liabilities and Contingent
Assets
A provision is recognised when the Company has a present obligation as
a result of past event and it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to present
value and are determined as best estimates required to settle the
obligation at the Balance Sheet date. Contingent Liability is
disclosed in case of (i) A present obligation arising from past events,
when it is not probable that an outflow of resources will be required
to settle that obligation; (ii) A present obligation when no reliable
estimate is possible; and (iii) A possible obligation arising from past
events where the probability of outflow of resources is remote.
Contingent Assets are not recognized in the financial statements.
o) Government Grants
Revenue Grants are recognized in the Profit and Loss account in
accordance with the related scheme and in the period in which these are
accrued.
Mar 31, 2012
A) Convention
The financial statements are prepared under the historical cost
convention in accordance with the applicable Accounting Standards and
the provisions of the Companies Act, 1956.
b) Use of Estimates
The preparation of financial statements require the management of the
Company to make estimates and assumptions that affect the reported
balances of assets and liabilities and disclosures relating to the
contingent liabilities as at the date of the financial statements and
the reported amount of income and expenses during the year. Examples of
such estimates include provisions for doubtful debts, employee
benefits, provision for income taxes, useful life of depreciable fixed
assets and provision for impairment.
c) Fixed Assets
Fixed assets are stated at cost (or valuation as applicable) less
depreciation. Cost includes expenses incidental to the installation of
the assets and attributable borrowing costs. Cost also includes
exchange differences arising on reporting of long term foreign currency
monetary items at rates different from those at which they were
initially recorded during the period or reported in previous financial
statements, in so far as they relate to acquisition of a depreciable
capital asset.
Valuation of freehold land and leasehold rights on properties situated
at Mumbai, Bangalore, Goa and Kovalam was carried out during March
2009. All the fixed assets of Goa were initially revalued in the year
2001 and that of Mumbai in the year 2004. Valuation was carried out in
all the cases by professional valuers, the basis of valuation being
realizable value as determined by the valuer.
Revalued fixed assets are stated based on the revaluation and all other
fixed assets are stated at cost. Additions on account of valuation are
credited to Revaluation Reserve.
d) Depreciation and Amortization
Depreciation on fixed assets is provided on straight-line method at
rates specified in Schedule XIV to the Companies Act, 1956.
Depreciation on additions / deletions during the year are provided on
pro-rata basis. Assets purchased / installed during the year costing
less than Rs. 5,000 each are fully depreciated. Premium and other
capitalized cost relating to leasehold land is amortized over the
period of lease. Revaluation Reserve is withdrawn to the extent of
incremental depreciation on account of revaluation.
Buildings constructed on leasehold land are depreciated at the
applicable rate on the assumption that the lease will be renewed in the
normal course. Depreciation on Computer Software is provided over a
period of six years. License fee and Franchise fee are amortized over
five years.
e) Investments
Current investments are carried at lower of cost and quoted / fair
value. Long- term investments are carried at cost.
f) Inventories
Inventories are valued at lower of cost (weighted average basis) or net
realisable value.
g) Employee benefit
i) Post-employment benefit plans
Contribution to defined contributory retirement benefit schemes are
recognized as an expense when employees have rendered services
entitling them to contributions.
For defined benefit schemes, the cost of providing benefits is
determined using the Project Unit Credit Method, with actuarial
valuation being carried out at each Balance Sheet date. Actuarial gains
and losses are recognized in full in the Profit and Loss Account for
the period in which they occur. Past service cost is recognized
immediately to the extent that the benefits are already vested, and
otherwise it is amortized on straight-line basis over the average
period until the benefits become eligible for being vested.
ii) Short-term employee benefits
The undiscounted amount of short term employee benefits expected to be
paid in exchange for the services rendered by employees is recognized
during the period when the employee renders the service. These
benefits include compensated absences such as paid annual leave and
performance incentive.
iii) Long-term employee benefits
Compensated absences which are not expected to occur within twelve
months after the end of the period in which the employee renders the
related services are recognized as a liability at the present value of
the defined benefit obligation at the Balance Sheet date.
h) Recognition of Income and Expenditure
Revenue/Incomes and Costs/Expenditures are accounted on accrual.
i) Borrowing Costs
Borrowing costs that are directly attributable to the acquisition and
construction of qualifying assets are capitalized. A qualifying asset
is an asset that necessarily takes substantial period of time to get
ready for its intended use. Gains/Losses (Net) on settlement of
derivative contracts where they relate to the acquisition or
construction of fixed assets are adjusted to the carrying cost of such
assets.
j) Taxation
(i) Provision for current taxation has been made in accordance with the
Income Tax laws applicable to the assessment year.
(ii) Wealth Tax for the year has been provided as required under the
Wealth Tax Act and Rules, 1957.
Deferred tax is recognized on timing difference being the difference
between taxable income and accounting income that originates in one
period and is capable of reversal in one or more subsequent periods.
Where there is unabsorbed depreciation, or carry forward losses,
deferred tax assets are recognized only if there is virtual certainty
of realization of such assets.
k) Impairment of assets
The carrying amounts of assets are reviewed at each Balance Sheet date,
if there is any indication of impairment. If any such indication
exists, the recoverable amount of such assets is estimated. An
impairment loss is recognized wherever the carrying amount of the assets
exceeds its recoverable amount. The recoverable amount is greater of
the net selling price or value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value,
based on an appropriate discounting factor.
After impairment, depreciation is provided on the revised carrying
amount of the assets over its remaining useful life. A previously
recognized impairment loss is increased or reversed depending on
changes in circumstances. However, the carrying value after reversal
is not increased beyond the carrying value that would have prevailed by
charging usual depreciation if there was no impairment.
l) Foreign Currency Transaction
(i) Foreign currency transactions are recorded at the rates of exchange
prevailing on the date of the transactions.
(ii) In line with option given by the Ministry of Corporate Affairs
vide Notification No G.S.R.225 (E) dated 31st March 2009, the exchange
differences arising on reporting of long term foreign currency monetary
items at rates different from those at which they were initially
recorded during the period, or reported in previous financial
statements, in so far as they relate to acquisition of a depreciable
capital asset, are added to or deducted from the cost of the asset and
will be depreciated over the balance life of the asset, and in other
cases are accumulated in 'Foreign Currency Monetary Item Translation
Difference Account' in the Company's financial statements and amortized
over the balance period of such long-term asset/liability but not
beyond 31st March 2020, by recognition as income or expense in each
such of the periods except exchange differences which are regarded as
an adjustment to interest costs in terms of paragraph 4(e) of
Accounting Standard AS (16) Borrowing costs.
(iii) All other monetary assets and liabilities in foreign currency as
at Balance Sheet date are translated at rates prevailing at the
year-end and the resultant net gains or losses are recognized as income
or expense in the year in which they arise.
m) Assets taken on lease
In respect of operating lease transactions, the assets are not
capitalized in the books of the Company and the lease payments are
charged to the Profit and Loss Account.
n) Accounting for Provisions, Contingent Liabilities and Contingent
Assets A provision is recognized when the Company has a present
obligation as a result of past event and it is probable that an outflow
of resources will be required to settle the obligation, in respect of
which a reliable estimate can be made. Provisions are not discounted to
present value and are determined as best estimates required to settle
the obligation at the Balance Sheet date. Contingent Liability is
disclosed in case of:
(i) A present obligation arising from past events, when it is not
probable that an outflow of resources will be required to settle that
obligation;
(ii) A present obligation when no reliable estimate is possible; and
(iii) A possible obligation arising from past events where the
probability of outflow of resources is remote.
Contingent Assets are not recognized in the financial statements. o)
Government Grants Revenue Grants are recognized in the Profit and Loss
Account in accordance with the related scheme and in the period in
which these are accrued.
p) Service Tax Input Credit
Service Tax input credit is accounted for in the books in the period in
which the underlying service received is accounted and when there is no
uncertainty in availing/utilizing the credits.
Mar 31, 2011
A) Convention:
The financial statements are prepared under the historical cost
convention in accordance with the applicable Accounting Standards and
the provisions of the Companies Act, 1956.
b) Use of Estimates:
The preparation of financial statements require the management of the
Company to make estimates and assumptions that affect the reported
balances of assets and liabilities and disclosures relating to the
contingent liabilities as at the date of the financial statements and
the reported amount of income and expenses during the year. Examples of
such estimates include provisions for doubtful debts, employee
benefits, provision for income taxes, useful life of depreciable fixed
assets and provision for impairment.
c) Fixed Assets:
Fixed assets are stated at cost (or valuation as applicable) less
depreciation. Cost includes expenses incidental to the installation of
the assets and attributable borrowing costs. Cost also includes
exchange differences arising on reporting of long term foreign currency
monetary items at rates different from those at which they were
initially recorded during the period or reported in previous financial
statements, insofar as they relate to acquisition of a depreciable
capital asset.
Valuation of freehold land and leasehold rights on properties situated
at Mumbai, Bangalore, Goa and Kovalam was carried out during March
2009. All the fixed assets of Goa were initially revalued in the year
2001 and that of Mumbai in the year 2004. Valuation was carried out in
all the cases by professional valuers, the basis of valuation being
realizable value as determined by the valuer.
Revalued fixed assets are stated based on the revaluation and all other
fixed assets are stated at cost. Additions on account of valuation are
credited to Revaluation Reserve.
d) Depreciation:
Depreciation on fixed assets has been provided on straight-line method
at rates specified in Schedule XIV to the Companies Act, 1956.
Depreciation on additions / deletions during the year has been provided
on pro-rata basis. Assets purchased / installed during the year costing
less than Rs. 5,000 each are fully depreciated. Revaluation Reserve is
withdrawn to the extent of incremental depreciation on account of
revaluation.
e) Investments:
Long-term investments are carried at cost.
f) Inventories:
Inventories are valued at lower of cost (weighted average basis) or net
realizable value.
g) Employee benefit:
i) Post-employment benefit plans
Contribution to defined contributory retirement benefit schemes are
recognised as an expense when employees have rendered services
entitling them to contributions.
For defined benefit schemes, the cost of providing benefits is
determined using the Project Unit Credit Method, with actuarial
valuation being carried out at each Balance Sheet Date. Actuarial gains
and losses are recognized in full in the profit and loss account for
the period in which they occur. Past service cost is recognized
immediately to the extent that the benefits are already vested, and
otherwise it is amortized on straight-line basis over
the average period until the benefits become eligible for being vested.
ii) Short Ãterm employee benefits
The undiscounted amount of short term employee benefits expected to be
paid in exchange for the services rendered by employees is recognised
during the period when the employee renders the service. These benefits
include compensated absences such as paid annual leave and performance
incentive.
iii) Long- term employee benefits
Compensated absences which are not expected to occur within twelve
months after the end of the period in which the employee renders the
related services are recognized as a liability at the present value of
the defined benefit obligation at the Balance Sheet date.
h) Sales and Services:
Sales comprise room revenue, food and beverages, other operating
services, Income from Rental and related services and sale of power.
i) Borrowing Costs:
Borrowing costs that are directly attributable to the acquisition and
construction of qualifying assets are capitalized. A qualifying asset
is an asset that necessarily takes substantial period of time to get
ready for its intended use. Gains/Losses (Net) on settlement of
derivative contracts where they relate to the acquisition or
construction of fixed assets are adjusted to the carrying cost of such
assets.
j) Taxation:
(i) Provision for current taxation has been made in accordance with the
Income Tax laws applicable to the assessment year.
(ii) Wealth Tax for the year has been provided as required under the
Wealth Tax Act and Rules, 1957.
(iii) Deferred tax is recognized on timing difference being the
difference between taxable income and accounting income that originates
in one period and is capable of reversal in one or more subsequent
periods. Where there is unabsorbed depreciation, or carry forward
losses, deferred tax assets are recognised only if there is virtual
certainty of realization of such assets.
k) Impairment of assets:
The carrying amounts of assets are reviewed at each balance sheet date,
if there is any indication of impairment. If any such indication
exists, the recoverable amount of such assets is estimated. An
impairment loss is recognized wherever the carrying amount of the
assets exceeds its recoverable amount. The recoverable amount is
greater of the net selling price or value in use. In assessing value in
use, the estimated future cash flows are discounted to their present
value, based on an appropriate discounting factor.
After impairment, depreciation is provided on the revised carrying
amount of the assets over its remaining useful life. A previously
recognized impairment loss is increased or reversed depending on
changes in circumstances. However, the carrying value after reversal is
not increased beyond the carrying value that would have prevailed by
charging usual depreciation if there was no impairment.
l) Foreign Currency Transaction:
(i) Foreign currency transactions are recorded at the rates of exchange
prevailing on the date of the transactions.
(ii) In line with
option given by the Ministry of Corporate Affairs vide Notification No
G.S.R.225 (E) dated 31st March 2009, the exchange differences arising
on reporting of long term foreign currency monetary items at rates
different from those at which they were initially recorded during the
period, or reported in previous financial statements, in so far as they
relate to acquisition of a depreciable capital asset, are added to or
deducted from the cost
of the asset and will be depreciated over the balance life of the
asset, and in other cases are accumulated in ÃForeign Currency Monetary
Item Translation Difference Accountà in the CompanyÃs financial
statements and amortized over the balance period of such long-term
asset/liability but not beyond 31st March 2011, by recognition as
income or expense in each such of the periods except exchange
differences which are regarded as an adjustment to interest costs in
terms of paragraph 4(e) of Accounting Standard AS (16) Borrowing costs
(iii) All other monetary assets and liabilities in foreign currency as
at Balance Sheet date are translated at rates prevailing at the year-
end and the resultant net gains or losses are recognized as income or
expense in the year in which they arise.
m) Assets taken on lease:
In respect of operating lease transactions, the assets are not
capitalized in the books of the Company and the lease payments are
charged to the profit and loss account.
n) Accounting for Provisions, Contingent Liabilities and Contingent
Assets:
A provision is recognised when the Company has a present obligation as
a result of past event and it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to present
value and are determined as best estimates required to settle the
obligation at the Balance Sheet date. Contingent Liability is
disclosed in case of:
(a) A present obligation arising from past events, when it is not
probable that an outflow of resources will be required to settle that
obligation;
(b) A present obligation when no reliable estimate is possible; and
(c) A possible obligation arising from past events where the
probability of outflow of resources is remote.
Contingent Assets are not recognized in the financial statements.
Mar 31, 2010
A) Convention:
The financial statements are prepared under the historical cost
convention in accordance with the applicable Accounting Standards and
the provisions of the Companies Act, 1956.
b) Use of Estimates:
The preparation of financial statement requires the management of the
Company to make estimates and assumptions that affect the reported
balances of assets and liabilities and disclosures relating to the
contingent liabilities as at the date of the financial statements and
the reported amount of income and expenses during the year. Examples of
such estimates include provisions for doubtful debts, employee
benefits, provision for income taxes, useful life of depreciable fixed
assets and provision for impairment.
c) Fixed Assets:
Fixed assets are stated at cost (or valuation as applicable) less
depreciation. Cost includes expenses incidental to the installation of
the assets and attributable borrowing costs. Cost also includes
exchange differences arising on reporting of long term foreign currency
monetary items at rates different from those at which they were
initially recorded during the period, or reported in previous financial
statements, insofar as they relate to acquisition of a depreciable
capital asset.
Valuation of freehold land and leasehold rights on properties situated
at Mumbai, Bangalore, Goa and Kovalam was carried out during the March
2009. All the fixed assets of Goa were initially revalued in the year
2001 and that of Mumbai in the year 2004. Valuation is carried out in
all the cases by a professional valuer, the basis of valuation being
realizable value as determined by the valuer.
Revalued fixed assets are stated based on the revaluation and all other
fixed assets are stated at cost.
Additions on account of valuation are credited to Revaluation Reserve.
d) Depreciation:
Depreciation on fixed assets has been provided on straight-line method
at rates specified in Schedule XIV to the Companies Act, 1956.
Depreciation on additions / deletions during the year has been provided
for on pro-rata basis. Assets purchased / installed during the year
costing less than Rs.5,000/- each are fully depreciated. Revaluation
Reserve is withdrawn to the extent of incremental depreciation on
account of revaluation.
e) Investments:
Long-term investments are carried at cost.
f) Inventories:
Inventories are valued at lower of cost (weighted average basis) or net
realizable value.
g) Employee benefit:
i) Post-employment benefit plans
Contribution to defined contributory retirement benefit schemes are
recognised as an expense when employees have rendered services
entitling them to contributions.
For defined benefit schemes, the cost of providing benefits is
determined using the Project Unit Credit Method, with actuarial
valuation being carried out at each Balance Sheet Date. Actuarial gains
and losses are recognized in full in the profit and loss account for
the period in which they occur. Past service cost is recognized
immediately to the extent that the benefits are already vested, and
otherwise it is amortized on straight-line basis over the average
period until the benefits become eligible for being vested.
ii) Short term employee benefits
The undiscounted amount of short term employee benefits are expected to
be paid in exchange for the services rendered by employees is
recognised during the period when the employee renders the service.
These benefits include compensated absences such as paid annual leave
and performance incentive.
iii) Long- term employee benefits
Compensated absences which are not expected to occur within twelve
months after the end of the period in which the employee renders the
related services are recognized as a liability at the present value of
the defined benefit obligation at the Balance Sheet date..
h) Sales and Services:
Sales comprise sale of rooms, food and beverages, Galleria Rentals and
allied services relating to hotel operations, including income from
management and operating fees and income from sale of electricity.
i) Borrowing Costs:
Borrowing costs that are directly attributable to the acquisition and
construction of qualifying assets are capitalised. A qualifying asset
is an asset that necessarily takes substantial period of time to get
ready for its intended use. Gains/Losses (Net) on settlement of
derivative contracts where they relate to the acquisition or
construction of fixed assets are adjusted to the carrying cost of such
assets.
j) Taxation:
(i) Provision for current taxation has been made in accordance with the
Income Tax laws applicable to the
assessment year.
(ii) Wealth Tax for the year has been provided as required under the
Wealth Tax Act and Rules, 1957.
(iii) Deferred tax is recognized on timing difference that is being the
difference between taxable income and accounting income that originates
in one period and is capable of reversal in one or more subsequent
periods. Where there is unabsorbed depreciation, or carry forward
losses, deferred tax assets are recognised only if there is virtual
certainty of realization of such assets.
k) Impairment of assets:
The carrying amounts of assets are reviewed at each balance sheet date
if there is any indication of impairment of the carrying amount of the
Companys assets. If any indication exists, the recoverable amount of
such assets is estimated. An impairment loss is recognized wherever
the carrying amount of the assets exceeds its recoverable amount. The
recoverable amount is greater of the net selling price or value in use.
In assessing value in use, the estimated future cash flows are
discounted to their present value, based on an appropriate discounting
factor.
After impairment, depreciation is provided on the revised carrying
amount of the assets over its remaining useful life. A previously
recognized impairment loss is increased or reversed depending on
changes in circumstances. However, the carrying value after reversal is
not increased beyond the carrying value that would have prevailed by
charging usual depreciation if there was no impairment.
l) Foreign Currency Transaction:
(i) Foreign currency transactions are recorded at the rates of exchange
prevailing on the date of the transactions.
(ii) In line with option given in the Ministry of Corporate Affairs
Notification No G.S.R.225 (E) dated 31st March 2009, the exchange
differences arising on reporting of long term foreign currency monetary
items at rates different from those at which they were initially
recorded during the period, or reported in previous financial statements,
insofar as they relate to acquisition of a depreciable capital asset,
is added to or deducted from the cost of the asset and will be deprecia
-ted over the balance life of the asset, and in other cases is accumula
-ted in Foreign Currency Monetary Item Translation Difference Account
in the Companys financial statements and amortized over the balance
period of such long-term asset/liability but not beyond 31st March 2011,
by recognition as income or expense in each such of the periods except
exchange differences which are regarded as an adjustment to interest
costs in terms of paragraph 4(e) of Accounting Standard AS (16) Borrowing
costs.
(iii) All other monetary assets and liabilities in foreign currency as
at Balance Sheet date are translated at rates prevailing at the
year-end and the resultant net gains or losses are recognized as
incomes or expenses in the year in which they arise.
m) Assets take on lease:
In respect of operating lease transactions, the assets are not
capitalized in the books of the Company and lease payments are charged
to the profit and loss account.
n) Accounting for Provisions, Contingent Liabilities and Contingent
Assets:
A provision is recognised when the Company has a present obligation as
a result of past event and it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to present
value and are determined as best estimates required to settle the
obligation at the Balance Sheet date.
Contingent Liability is disclosed in case of:
(a) A present obligation arising from past events, when it is not
probable that an outflow of resources will be required to settle that
obligation;
(b) A present obligation when no reliable estimate is possible; and
(c) A possible obligation arising from past events where the
probability of outflow of resources is remote.
Contingent Assets are not recognized in the financial statements.
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HLV Ltd. Tools
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HLV Ltd. Company Details
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- Management Team
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Company History
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HLV Ltd. Key Financial Ratios
- Ratios
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HLV Ltd. Results
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HLV Ltd. Financial Data
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HLV Ltd. Reports
- Accounting Policies
- Auditors Report
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- Notes To Account
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HLV Ltd. Corporate Announcements
- Book Closure
- Dividend
- Board Meetings
- Change of Name
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