Accounting Policies of Samhi Hotels Ltd. Company

Mar 31, 2025

2. MATERIAL ACCOUNTING POLICIES

1) Business Combinations

Business Combinations (other than common
control business combinations) are accounted
for using the purchase (acquisition) method
when the acquired set of activities and assets
meets the definition of a business and control
is transferred to the Company. In determining
whether a particular set of activities and assets
is business, the Company assesses whether
the set of assets and activities acquired
includes, at minimum, an input and substantive
process and whether the acquired set has
the ability to produce outputs. The cost of an
acquisition is measured as the fair value of the
consideration transferred, equity instruments
issued and liabilities incurred or assumed as
at the date the control is acquired (acquisition
date) The consideration transferred does not
include amounts related to the settlement of
pre-existing relationships with the acquiree.
Such amounts are generally recognized in the
Standalone Statement of Profit and Loss

The cost of acquisition also includes the fair value
of any contingent consideration. Any contingent
consideration is measured at fair value at the date
of acquisition. If an obligation to pay contingent
consideration that meets the definition of a
financial instrument is classified as equity, then
it is not remeasured and settlement is accounted
for within equity. Otherwise, other contingent
consideration is remeasured at fair value at each
reporting date and subsequent changes in the
fair value of the contingent consideration are

recognized in the Standalone Statement of Profit
and Loss.

Identifiable assets acquired and liabilities and
contingent liabilities assumed in a business
combination are measured initially at fair value at
the date of acquisition. Transaction costs incurred
in connection with a business combination
are expensed as incurred. The excess of the
consideration transferred over the fair value of
the net identifiable assets acquired is recorded
as goodwill. If those amounts are less than the
fair value of the net identifiable assets of the
business acquired, the difference is recognized in
other comprehensive income and accumulated
in equity as capital reserve provided there is clear
evidence of the underlying reasons for classifying
the business combination as a bargain purchase.
If there does not exist clear evidence of the
underlying reasons for classifying the business
combination as a bargain purchase, then gain on
a bargain purchase is recognized directly in equity
as capital reserve.

If a business combination is achieved in stages,
then the previously held equity interest in the
acquiree is re-measured at its acquisition date
fair value and the resulting gain or loss, if any, is
recognized in profit and loss or OCI, as appropriate.

Business combinations arising from transfers of
interests in entities or businesses that are under
the control of the shareholder that controls the
Group are accounted for as if the acquisition
had occurred at the beginning of the earliest
comparative period presented or, if later, at the
date that common control was established; for
this purpose, comparatives are revised. The assets
and liabilities acquired are recognized at their
carrying amounts. The identity of the reserves
is preserved, and they appear in the standalone
financial statements of the Company in the same
form in which they appeared in the standalone
financial statement of the acquired entity. The
differences, if any, between the consideration and
the amount of share capital of the acquired entity is
transferred to capital reserve (if credit) or revenue
reserves (if debit) and if there are no reserves or
inadequate reserves, to an amalgamation deficit
reserve (if debit), with disclosure of its nature and
purpose in the notes to the standalone financial
statements.

2) Property, plant and equipment
Recognition and measurement

The cost of an item of property, plant and
equipment shall be recognized as an asset if, and
only if 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.

Items of property, plant and equipment (including
capital-work-in-progress) are measured at cost,
which includes capitalized borrowing cost less
accumulated depreciation and any accumulated
impairment losses. Freehold land is carried at
historical cost less any accumulated impairment
losses.

Cost of an item of property, plant and equipment
comprises its purchase price, including import
duties and non-refundable purchase taxes, after
deducting trade discounts and rebates, any
directly attributable cost of bringing the item to
its working condition for its intended use and
estimated costs of dismantling and removing the
item and restoring the site on which it is located.

The cost of a self-constructed item of property,
plant and equipment comprises the cost of
materials and direct labor, any other costs directly
attributable to bringing the item to working
condition for its intended use, and estimated
costs of dismantling and removing the item and
restoring the site on which it is located.

If significant parts of an item of property, plant
and equipment have different useful lives, then
they are accounted for as separate items (major
components) of property, plant and equipment.

Any gain or loss on disposal of an item of property,
plant and equipment is recognized in profit or loss.

Subsequent expenditure

Subsequent expenditure is capitalized only if it
is probable that the future economic benefits
associated with the expenditure will flow to
the Company and the cost of the item can be
measured reliably.

Depreciation

Depreciation is calculated on cost of item of
property, plant and equipment less their estimated
residual values using the straight-line method
over their estimated useful lives and is generally
recognized in the Standalone Statement of Profit
and Loss. Freehold land is not depreciated.

Leasehold improvements are depreciated over the
shorter of lease term and their useful lives.

Depreciation methods, useful lives and
residual values are reviewed at each reporting
date and adjusted if appropriate. Based on
technical evaluation and consequent advice, the
management believes that its estimates of useful
lives as given above best represent the period over
which management expects to use these assets.

Depreciation on addition/ (disposals) is provided
on a pro-rata basis i.e. from / (up to) the date on
which the asset is ready for use/ (disposed off).

3) Other intangible assets

Recognition and measurement

Intangible assets acquired separately are
measured on initial recognition at cost. An
intangible asset is recognized only if it is probable
that future economic benefits attributable to the
asset will flow to the Company and the cost of the
asset can be measured reliably. Following initial
recognition, other intangible asset are measured
at cost less accumulated amortization and any
accumulated impairment loss.

Subsequent expenditure

Subsequent expenditure is capitalized only when it
increases the future economic benefits embodied
in the specific asset to which it relates and the
cost of the asset can be measured reliably.

Amortization

Amortization is calculated to write off the cost
of intangible assets less their estimated residual
values using the straight-line method over their
estimated useful lives and is generally recognized
in depreciation and amortization in Standalone
Statement of Profit and Loss. Goodwill is not
amortized.

Amortization methods, useful lives and residual
values are reviewed at each reporting date and
adjusted if appropriate.

4) Financial instruments

A financial instrument is any contract that gives
rise to a financial asset of one entity and a financial
liability or equity instrument of another entity.

Recognition and initial measurement

Trade receivables and debt securities issued are
initially recognized when they are originated. All
other financial assets and financial liabilities are
initially recognized when the Company becomes
a party to the contractual provisions of the
instrument.

A financial asset (unless it is a trade receivable
without a significant financing component) or
financial liability is initially measured at fair value
plus or minus, for an item not at FVTPL, transaction
costs that are attributable to its acquisition or
issue. A trade receivable without a significant
financing component is initially measured at the
transaction price.

Classification and Subsequent measurement

Financial assets

On initial recognition, a fiinancial assets is classified
as measured at:

• Amortized cost

• FVOCI - debt investment;

• FVOCI - equity investment; or

• FVTPL.

Financial assets are not reclassified subsequent
to their initial recognition unless the Company
changes its business model for managing
financial asset, in which case all affected financial
assets are reclassified on the first day of the first
reporting period following the changes in the
business model.

A financial asset is measured at amortized cost if
it meets both of the following conditions and is not
designated as at FVTPL:

- the asset is held within a business model
whose objective is to hold assets to collect
contractual cash flows; and

- the contractual terms of the financial asset
give rise on specified dates to cash flows that
are solely payments of principal and interest
on the principal amount outstanding.

A debt investment is measured at FVOCI if it
meets both of the following conditions and is not
designated as at FVTPL:

- the asset is held within a business model
whose objective is achieved by both
collecting contractual cash flows and selling
financial assets; and

- the contractual terms of the financial asset
give rise on specified dates to cash flows that
are solely payments of principal and interest
on the principal amount outstanding.

On initial recognition of an equity investment
that is not held for trading, the Company may
irrevocably elect to present subsequent changes
in the investment''s fair value in OCI. This election
is made on an investment-by-investment basis.

All financial assets not classified as measured at
amortized cost or FVOCI as described above are
measured at FVTPL. This includes all derivative
financial assets. On initial recognition, the
Company may irrevocably designate a financial
asset that otherwise meets the requirements to
be measured at amortized cost or at FVOCI as
at FVTPL if doing so eliminates or significantly
reduces an accounting mismatch that would
otherwise arise.

Financial assets: Business model assessment
The Company makes an assessment of the
objective of the business model in which a
financial asset is held at a portfolio level because
this best reflects the way the business is managed

and information is provided to management. The
information considered includes:

- the stated policies and objectives for
the portfolio and the operation of those
policies in practice. These include whether
management''s strategy focuses on earning
contractual interest income, maintaining
a particular interest rate profile, matching
the duration of the financial assets to the
duration of any related liabilities or expected
cash outflows or realizing cash flows through
the sale of the assets;

- how the performance of the portfolio is
evaluated and reported to the Company''s
management;

- the risks that affect the performance of the
business model (and the financial assets
held within that business model) and how
those risks are managed;

- how managers of the business are
compensated - e.g. whether compensation
is based on the fair value of the assets
managed or the contractual cash flows
collected; and

- the frequency, volume and timing of sales of
financial assets in prior periods, the reasons
for such sales and expectations about future
sales activity.

Transfers of financial assets to third parties in
transactions that do not qualify for derecognition
are not considered sales for this purpose,
consistent with the Company''s continuing
recognition of the assets.

Financial assets: Assessment whether contractual
cash flows are solely payments of principal and
interest

For the purposes of this assessment, ''principal''
is defined as the fair value of the financial asset
on initial recognition. ''Interest'' is defined as
consideration for the time value of money and
for the credit risk associated with the principal
amount outstanding during a particular period of
time and for other basic lending risks and costs
(e.g. liquidity risk and administrative costs), as
well as a profit margin.

In assessing whether the contractual cash flows
are solely payments of principal and interest, the
Company considers the contractual terms of the

all of the risks and rewards of ownership and does not
retain control of the financial asset.

If the Company enters into transactions whereby it
transfers assets recognized on its balance sheet, but
retains either all or substantially all of the risks and
rewards of the transferred assets, the transferred
assets are not derecognized.

Financial liabilities

The Company derecognizes a financial liability when its
contractual obligations are discharged or cancelled, or
expire.

The Company also derecognizes a financial liability
when its terms are modified and the cash flows under
the modified terms are substantially different. In this
case, a new financial liability based on the modified
terms is recognized at fair value. The difference
between the carrying amount of the financial liability
extinguished and the new financial liability with
modified terms is recognized in profit or loss.

Offsetting

Financial assets and financial liabilities are offset and
the net amount presented in the Balance Sheet when,
and only when, the Company currently has a legally

Financial liabilities: Classification, subsequent
measurement and gains and losses

Financial liabilities are classified as measured at
amortized cost or FVTPL. A financial liability is
classified as at FVTPL if it is classified as held- for-
trading, or it is a derivative or it is designated as such
on initial recognition. Financial liabilities at FVTPL
are measured at fair value and net gains and losses,
including any interest expense, are recognized in profit
or loss. Other financial liabilities are subsequently
measured at amortized cost using the effective interest
method. Interest expense and foreign exchange gains
and losses are recognized in profit or loss. Any gain
or loss on derecognition is also recognized in profit
or loss.

Derecognition

Financial assets

The Company derecognizes a financial asset when the
contractual rights to the cash flows from the financial
asset expire, or it transfers the rights to receive the
contractual cash flows in a transaction in which
substantially all of the risks and rewards of ownership
of the financial asset are transferred or in which the
Company neither transfers nor retains substantially

enforceable right to set off the amounts and it intends
either to settle them on a net basis or to realize the
asset and settle the liability simultaneously.

Financial guarantee

Financial guarantee contract is a contract that requires
the issuer to make specified payments to reimburse the
holder for a loss it incurs because a specified debtor
fails to make payment when due in accordance with the
original or modified terms of a debt instrument.

Such guarantees are initially measured at fair value and
subsequently at the higher of:

- the expected credit loss allowance determined in
accordance with Ind AS 109; and

- the amount recognized initially less, when
appropriate, cumulative amortization recognized
in accordance with Ind AS.

Modification of financial assets and liabilities

Financial assets:

If the terms of a financial assets are modified, the
Company evaluates whether the cash flows of the
modified asset are substantially different. If the cash
flows are substantially different, then the contractual
rights to cash flows from the original financial asset
are deemed to have expired. In this case, the original
financial asset is derecognized and a new financial
asset is recognized at fair value.

If the cash flows of the modified asset carried at
amortized cost are not substantially different, then the
modification does not result in derecognition of the
financial asset. In this case, the Company recalculates
the gross carrying amount of the financial asset and
recognizes the amount arising from adjusting the gross
carrying amount as a modification gain or loss in profit
or loss.

Financial liabilities:

The Company derecognizes a financial liability when its
terms are modified and the cash flows of the modified
liability are substantially different. In this case, a
new financial liability based on the modified terms is
recognized at fair value. The difference between the
carrying amount of the financial liability extinguished
and the new financial liability with modified terms is
recognized in profit or loss.

Embedded Derivative

A derivative embedded in a hybrid contract, with a
financial liability or non-financial host, is separated

from the host and accounted for as a separate
derivative if: the economic characteristics and risks are
not closely related to the host; a separate instrument
with the same terms as the embedded derivative
would meet the definition of a derivative; and the hybrid
contract is not measured at fair value through profit or
loss. Embedded derivatives are measured at fair value
with changes in fair value recognized in profit or loss.
Reassessment only occurs if there is either a change
in the terms of the contract that significantly modifies
the cash flows that would otherwise be required or a
reclassification of a financial asset out of the fair value
through profit or loss category.

Interest free loans

The Company has given interest free loans to its
subsidiary companies which are repayable at the
option of respective subsidiary companies (perpetual
debt). These loans have been recognized as deemed
investment in the subsidiaries.

The Company has obtained interest free loans from
its subsidiary company. Such interest free loans are
measured at fair values determined using a present
value technique with inputs that include future cash
flows and discount rates that reflect assumptions
that market participants would apply in pricing such
loans. The difference between the transaction price
and the fair value of such loans has been recognized
as income in the Standalone Statement of Profit and
Loss. The loan component is subsequently measured
at amortized costs and interest expense is recognized
using effective interest rate method.

5) Impairment

A. Impairment of financial instruments

The Company recognizes loss allowances
for expected credit losses on financial assets
measured at amortized cost.

The Company also recognizes loss allowances
for expected credit losses on finance lease
receivables, which are disclosed as financial
assets.

At each reporting date, the Company assesses
whether financial assets carried at amortized
cost and debt securities at Fair value through
profit and loss (FVTPL) are credit-impaired. A
financial asset is ''credit- impaired'' when one or
more events that have a detrimental impact on
the estimated future cash flows of the financial
asset have occurred.

Evidence that a financial asset is credit- impaired
includes the following observable data:

- significant financial difficulty of the borrower
or issuer;

- a breach of contract such as a default or
being past due for two years or more;

- the restructuring of a loan or advance by the
Company on terms that the Company would
not consider otherwise;

- it is probable that the borrower will enter
bankruptcy or other financial reorganization;
or

- the disappearance of an active market for a
security because of financial difficulties.

The Company measures loss allowances at an
amount equal to lifetime expected credit losses,
except for the following, which are measured as
12 month expected credit losses:

- debt securities that are determined to have
low credit risk at the reporting date; and

- other debt securities and bank balances
for which credit risk (i.e. the risk of default
occurring over the expected life of the
financial instrument) has not increased
significantly since initial recognition.

Loss allowances for trade receivables are always
measured at an amount equal to lifetime expected
credit losses.

Lifetime expected credit losses are the expected
credit losses that result from all possible default
events over the expected life of a financial
instrument.

12-month expected credit losses are the portion
of expected credit losses that result from default
events that are possible within 12 months after the
reporting date (or a shorter period if the expected
life of the instrument is less than 12 months).

In all cases, the maximum period considered when
estimating expected credit losses is the maximum
contractual period over which the Company is
exposed to credit risk.

When determining whether the credit risk of a
financial asset has increased significantly since
initial recognition and when estimating expected
credit losses, the Company considers reasonable

and supportable information that is relevant and
available without undue cost or effort. This includes
both quantitative and qualitative information
and analysis, based on the Company''s historical
experience and informed credit assessment and
including forward- looking information.

Measurement of expected credit losses (ECLs)

Expected credit losses are a probability-weighted
estimate of credit losses. Credit losses are
measured as the present value of all cash
shortfalls (i.e. the difference between the cash
flows due to the Company in accordance with the
contract and the cash flows that the Company
expects to receive).

As a practical expedient, the Company uses a
provision matrix to determine impairment loss
allowance on portfolio of its trade receivables.
The provision matrix is based on its historically
observed default rates over the expected life of
the trade receivables and is adjusted for forward
looking estimates. At every reporting date, the
historical observed default rates are updated and
changes in the forward looking estimates are
analyzed.

ECLs are discounted at the effective interest rate
of the financial asset.

Presentation of allowance for expected credit
losses in the balance sheet

Loss allowances for financial assets measured
at amortized cost are deducted from the gross
carrying amount of the assets.

For debt securities at FVOCI, the loss allowance is
charged to profit or loss and is recognized in OCI.

Write-off

The gross carrying amount of a financial asset is
written off when the Company has no reasonable
expectations of recovering a financial asset in
its entirety or a portion thereof. For corporate
customers, the Company individually makes
an assessment with respect to the timing and
amount of write-off based on whether there is a
reasonable expectation of recovery. The Company
expects no significant recovery from the amount
written off. However, financial assets that are
written off could still be subject to enforcement
activities in order to comply with the Company''s
procedures for recovery of amounts due.

B. Impairment of non-financial assets

The carrying amounts of assets are reviewed at
each reporting date if there is any indication of
impairment based on internal/external factors.
If any such indication exists, then the asset''s
recoverable amount is estimated.

For impairment testing, assets are grouped
together into the smallest group of assets that
generates cash inflows from continuing use that
are largely independent of the cash inflows of
other assets or CGUs.

The recoverable amount of an individual asset
or Cash Generating Unit (CGU) is the greater of
its value in use and its fair value less costs to
disposal. Value in use is based on the estimated
future cash flows, discounted to their present
value using a pre-tax discount rate that reflects
current market assessments of the time value of
money and risks specific to the asset or CGU.

An impairment loss is recognized if the carrying
amount of an asset or CGU exceeds its estimated
recoverable amount. Impairment losses are
recognized in the Standalone Statement of Profit
and Loss. They are allocated first to reduce the
carrying amount of any goodwill allocated to the
CGU, and then to reduce the carrying amounts of
the other assets of the CGU on a pro rata basis.

An impairment loss in respect of goodwill is not
subsequently reversed. In respect of other assets
for which impairment loss has been recognized
in prior periods, the Company reviews at each
reporting date whether there is any indication
that the loss has decreased or no longer exists.
An impairment loss is reversed if there has been
a change in the estimates used to determine the
recoverable amount. Such a reversal is made only
to the extent that the asset''s carrying amount
does not exceed the carrying amount that would
have been determined, net of depreciation or
amortization, if no impairment loss had been
recognized.

6) Inventories

Inventories which comprises stock of food and
beverages (including liquor), operating supplies
and stock-in-trade are carried at the lower of
cost and net realizable value. Cost of inventories
comprises all costs of purchase and other costs
incurred in bringing the inventory to their present
location and condition. In determining the cost,

first in first out ("FIFO") method is used. Net
realizable value is the estimated selling price in the
ordinary course of business, less estimated costs
of completion and the estimated costs to make
the sale.

The comparison of cost and net realizable value is
made on an item-by-item basis.

7) Government grants and subsidies

Grants and subsidies from the government
related to assets are initially recognized as
deferred income at fair value if there is reasonable
assurance that (i) the Company will comply with
the conditions attached to them, and (ii) the grant/
subsidy will be received.

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Mar 31, 2024

2. MATERIAL ACCOUNTING POLICIES

1) Business Combinations

Business Combinations (other than common control business combinations) are accounted for using the purchase (acquisition) method. The cost of an acquisition is measured as the fair value of the consideration transferred, equity instruments issued and liabilities incurred or assumed at the date of exchange. The consideration transferred does not include amounts related to the settlement of pre-existing relationships with the acquiree. Such amounts are generally recognised in the Standalone Statement of Profit and Loss.

The cost of acquisition also includes the fair value of any contingent consideration. Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay contingent consideration that meets the definition of a financial instrument is classified as equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, other contingent consideration is remeasured at fair value at each reporting date and subsequent changes in the fair value of the contingent consideration are recognised in the Standalone Statement of Profit and Loss.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at fair value at the date of acquisition. Transaction costs incurred in connection with a business combination are expensed as incurred. The excess of the consideration transferred over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognised in other comprehensive income and accumulated in equity as capital reserve provided there is clear

evidence of the underlying reasons for classifying the business combination as a bargain purchase. If there does not exist clear evidence of the underlying reasons for classifying the business combination as a bargain purchase, then gain on a bargain purchase is recognised directly in equity as capital reserve.

I f a business combination is achieved in stages, then the previously held equity interest in the acquiree is re-measured at its acquisition date fair value and the resulting gain or loss, if any, is recognised in profit and loss or OCI, as appropriate. Business combinations arising from transfers of interests in entities or businesses that are under the control of the shareholder that controls the Group are accounted for as if the acquisition had occurred at the beginning of the earliest comparative period presented or, if later, at the date that common control was established; for this purpose, comparatives are revised. The assets and liabilities acquired are recognized at their carrying amounts. The identity of the reserves is preserved, and they appear in the standalone financial statements of the Company in the same form in which they appeared in the standalone financial statement of the acquired entity. The differences, if any, between the consideration and the amount of share capital of the acquired entity is transferred to capital reserve (if credit) or revenue reserves (if debit) and if there are no reserves or inadequate reserves, to an amalgamation deficit reserve (if debit), with disclosure of its nature and purpose in the notes to the standalone financial statements.

2) Property, plant and equipment Recognition and measurement

The cost of an item of property, plant and equipment shall be recognized as an asset if, and only if 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.

Items of property, plant and equipment (including capital-work-in-progress) are measured at cost, which includes capitalized borrowing cost less accumulated depreciation and any accumulated impairment losses. Freehold land is carried at historical cost less any accumulated impairment losses.

Cost of an item of property, plant and equipment comprises its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing the item to its working condition for its intended use and estimated costs of dismantling and removing the item and restoring the site on which it is located. The cost of a self-constructed item of property, plant and equipment comprises the cost of materials and direct labour, any other costs directly attributable to bringing the item to working condition for its intended use, and estimated costs of dismantling and removing the item and restoring the site on which it is located.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss. Subsequent expenditure Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company and the cost of the item can be measured reliably.

Depreciation

Depreciation is calculated on cost of item of property, plant and equipment less their estimated residual values using the straight-line method over their estimated useful lives and is generally recognized in the Standalone Statement of Profit and Loss. Freehold land is not depreciated.

Leasehold improvements are depreciated over the shorter of lease term and their useful lives. Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate. Based on technical evaluation and consequent advice, the management believes that its estimates of useful lives as given above best represent the period over which management expects to use these assets. Depreciation on addition/ (disposals) is provided on a pro-rata basis i.e. from / (up to) the date on which the asset is ready for use/ (disposed off).

3) Other intangible assets

Recognition and measurement

Intangible assets acquired separately are measured on initial recognition at cost. An intangible asset is recognized only if it is probable that future economic benefits attributable to the asset will flow to the Company and the cost of the asset can be measured reliably. Following initial recognition, other intangible asset are measured at cost less accumulated amortisation and any accumulated impairment loss.

Subsequent expenditure Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates and the cost of the asset can be measured reliably. Amortisation

Amortisation is calculated to write off the cost of intangible assets less their estimated residual values using the straight-line method over their estimated useful lives and is generally recognized in depreciation and amortization in Standalone Statement of Profit and Loss. Goodwill is not amortised.

Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

4) Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Recognition and initial measurement

Trade receivables and debt securities issued are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the Company becomes a party to the contractual provisions of the instrument.

A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus or minus, for an item not at FVTPL, transaction costs that are attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

Classification and Subsequent measurement

Financial assets

On initial recognition, a financial assets is classified as measured at:

• Amortised cost

• FVOCI - debt investment;

• FVOCI - equity investment; or

• FVTPL.

Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial asset, in which case all affected financial assets are reclassified on the first day of the first reporting period following the changes in the business model.

A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:

- the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and

- the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

- the asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and

- the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment''s fair value in OCI. This election is made on an investment-by-investment basis. All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

Financial assets: Business model assessment The Company makes an assessment of the objective of the business model in which a financial asset is held at a portfolio level because this best reflects the way the business is managed and information is provided to management. The information considered includes:

- the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether management''s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realising cash flows through the sale of the assets;

- how the performance of the portfolio is evaluated and reported to the Company''s management;

- the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed;

- how managers of the business are compensated - e.g. whether compensation is based on the fair value of the assets managed or the contractual cash flows collected; and

- the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.

Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this purpose, consistent with the Company''s continuing recognition of the assets.

Financial assets: Assessment whether contractual cash flows are solely payments of principal and interest

For the purposes of this assessment, ''principal'' is defined as the fair value of the financial asset on initial recognition. ''Interest'' is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin.

I n assessing whether the contractual cash flows are solely payments of principal and interest, the Company considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this

condition. In making this assessment, the Company considers:

- contingent events that would change the amount or timing of cash flows;

- terms that may adjust the contractual coupon rate, including variable interest rate features;

- prepayment and extension features;

- terms that limit the Company’s claim to cash flows from specified assets (e.g. non-recourse features). Financial assets: Subseauent measurement and gains and losses

Financial liabilities: Classification, subsequent measurement and gains and losses Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for- trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss. Derecognition Financial assets

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset.

If the Company enters into transactions whereby it transfers assets recognised on its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognized. Financial liabilities

The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire.

The Company also derecognizes a financial liability when its terms are modified and the cash flows under the modified terms are substantially different. In this case, a new financial liability based on the modified terms is recognised at fair value. The difference between the carrying amount of the financial liability extinguished and the new financial liability with modified terms is recognised in profit or loss.

Offsetting

Financial assets and financial liabilities are offset and the net amount presented in the Balance Sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

Financial guarantee

Financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument.

Such guarantees are initially measured at fair value and subsequently at the higher of:

- the expected credit loss allowance determined in accordance with Ind AS 109; and

- the amount recognised initially less, when appropriate, cumulative amortisation recognised in accordance with Ind AS.

Modification of financial assets and liabilities

Financial assets:

If the terms of a financial assets are modified, the Company evaluates whether the cash flows of the modified asset are substantially different. If the cash flows are substantially different, then the contractual rights to cash flows from the original financial asset are deemed to have expired. In this case, the original financial asset is derecognized and a new financial asset is recognized at fair value.

If the cash flows of the modified asset carried at amortized cost are not substantially different, then the modification does not result in derecognition of the financial asset. In this case, the Company recalculates the gross carrying amount of the financial asset and recognizes the amount arising from adjusting the gross carrying amount as a modification gain or loss in profit or loss.

Financial liabilities:

The Company derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different. In this case, a new financial liability based on the modified terms is recognised at fair value. The difference between the carrying amount of the financial liability extinguished and the new financial liability with modified terms is recognised in profit or loss.

Fully compulsorily convertible debentures The Company has issued fully compulsorily convertible debentures (FCCDs). As per the terms of debenture agreement, each debenture will be converted into equity shares based on an agreed

conversion formula (fixed to variable conversion). Accordingly, the whole amount has been treated as financial liability in books and carried at amortised cost.

Non-convertible debentures The Company has issued unsecured nonconvertible debentures (NCDs). As per the terms of debenture agreement, each debenture will be redeemed within 36-48 months from the deemed date of allotment. Accordingly, the same amount has been treated as financial liability in books and carried at amortised cost.

Embedded Derivative

A derivative embedded in a hybrid contract, with a financial liability or non-financial host, is separated from the host and accounted for as a separate derivative if: the economic characteristics and risks are not closely related to the host; a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative; and the hybrid contract is not measured at fair value through profit or loss. Embedded derivatives are measured at fair value with changes in fair value recognised in profit or loss. Reassessment only occurs if there is either a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required or a reclassification of a financial asset out of the fair value through profit or loss category.

The Company has identified the redemption right as an equity component of convertible PIK obligation of non-convertible debentures issued by its subsidiaries i.e., Barque and SAMHI JV. As the risks associated with the underlying variable are not closely related to the host instrument, the equity component has been separately accounted for as deemed investment in subsidiaries. The equity component has been fair valued through profit or loss at each balance sheet date.

Interest free loans

The Company has given interest free loans to its subsidiary companies which are repayable at the option of respective subsidiary companies (perpetual debt). These loans have been recognised as deemed investment in the subsidiaries.

The Company has obtained interest free loans from its subsidiary company. Such interest free loans are measured at fair values determined using a present value technique with inputs that include future cash flows and discount rates that

reflect assumptions that market participants would apply in pricing such loans. The difference between the transaction price and the fair value of such loans has been recognised as income in the Standalone Statement of Profit and Loss. The loan component is subsequently measured at amortized costs and interest expense is recognised using effective interest rate method. Concessional overdraft facility The Company has pledged fixed deposits with banks for overdraft facility availed by its subsidiaries. The overdraft facility availed by subsidiaries carries an interest rate lower than the market rate. Difference between interest charged by bank and market rate is recognised as deemed investment in subsidiary with corresponding credit to the Standalone Statement of Profit and Loss.

5) Impairment

A. Impairment of financial instruments

The Company recognises loss allowances for expected credit losses on financial assets measured at amortised cost.

The Company also recognises loss allowances for expected credit losses on finance lease receivables, which are disclosed as financial assets.

At each reporting date, the Company assesses whether financial assets carried at amortised cost and debt securities at Fair value through profit and loss (FVTPL) are credit-impaired. A financial asset is ''credit- impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit- impaired includes the following observable data:

- significant financial difficulty of the borrower or issuer;

- a breach of contract such as a default or being past due for two years or more;

- the restructuring of a loan or advance by the Company on terms that the Company would not consider otherwise;

- it is probable that the borrower will enter bankruptcy or other financial reorganization; or

- the disappearance of an active market for a security because of financial difficulties.

The Company measures loss allowances at an amount equal to lifetime expected credit losses, except for the following, which are measured as 12 month expected credit losses:

- debt securities that are determined to have low credit risk at the reporting date; and

- other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowances for trade receivables are always measured at an amount equal to lifetime expected credit losses.

Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected life of a financial instrument.

12-month expected credit losses are the portion of expected credit losses that result from default events that are possible within 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

In all cases, the maximum period considered when estimating expected credit losses is the maximum contractual period over which the Company is exposed to credit risk.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating expected credit losses, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company’s historical experience and informed credit assessment and including forward- looking information. Measurement of expected credit losses (ECLs) Expected credit losses are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive).

As a practical expedient, the Company uses a provision matrix to determine impairment loss allowance on portfolio of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of

the trade receivables and is adjusted for forward looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward looking estimates are analyzed.

ECLs are discounted at the effective interest rate of the financial asset.

Presentation of allowance for expected credit losses in the balance sheet Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.

For debt securities at FVOCI, the loss allowance is charged to profit or loss and is recognised in OCI. Write-off

The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For corporate customers, the Company individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Company expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company''s procedures for recovery of amounts due.

B. Impairment of non-financial assets

The carrying amounts of assets are reviewed at each reporting date if there is any indication of impairment based on internal/external factors. If any such indication exists, then the asset''s recoverable amount is estimated.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs.

The recoverable amount of an individual asset or Cash Generating Unit (CGU) is the greater of its value in use and its fair value less costs to disposal. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the asset or CGU.

An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its estimated

recoverable amount. Impairment losses are recognised in the Standalone Statement of Profit and Loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets of the CGU on a pro rata basis.

An impairment loss in respect of goodwill is not subsequently reversed. In respect of other assets for which impairment loss has been recognised in prior periods, the Company reviews at each reporting date whether there is any indication that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. Such a reversal is made only to the extent that the asset''s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

6) Inventories

Inventories which comprises stock of food and beverages (including liquor), operating supplies and stock-in-trade are carried at the lower of cost and net realizable value. Cost of inventories comprises all costs of purchase and other costs incurred in bringing the inventory to their present location and condition. In determining the cost, first in first out ("FIFO") method is used. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs to make the sale.

7) Government grants and subsidies

Grants and subsidies from the government are recognised when there is reasonable assurance that (i) the Company will comply with the conditions attached to them, and (ii) the grant/ subsidy will be received.

---

Mar 31, 2023

(i) Corporate information

SAMHI Hotels Limited (‘the Company’) is a Company domiciled in India. The Company was incorporated in India on 28 December 2010 as per the provisions of Indian Companies Act and is limited by shares.

The Company is a hotel development and investment company with focus on operating internationally branded hotels across key cities in the Indian sub-continent.

Presently the Company has three operational hotels under it i.e., Fairfield by Marriott- Bengaluru, Fairfield Sriperumbudur- Chennai and Caspia- New Delhi.

(ii) Basis of preparation

A. Statement of compliance

These standalone financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 as amended notified under Section 133 of Companies Act, 2013, (the ‘Act’) and other relevant provisions of the Act.

The standalone financial statements were approved for issue in accordance with the resolution of the Board of Directors of the Company on 17 August 2023.

B. Functional and presentation currency

The standalone financial statements are presented in Indian Rupees (INR), which is also the Company’s functional currency. All amounts have been rounded-off to the nearest millions, unless otherwise indicated.

C. Basis of Measurement

The standalone financial statements have been prepared on the historical cost basis except for the following items:

Items	Measurement Basis
Financial assets and liabilities i.e., derivative instruments	Fair Value

Also refer note 48 for going concern basis of accounting used by the management.

D. Significant accounting judgments, estimates and assumptions

The preparation of standalone financial statements in conformity with Ind AS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses and the accompanying disclosures. Uncertainty about the assumptions and estimates could result in outcomes that may require material adjustment to the carrying value of assets or liabilities affected in future periods.

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 periojksT^& affected. ''''\<^x

The following are the significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the standalone financial statements:

i) Provisions and contingencies

The assessments undertaken in recognizing provisions and contingencies have been made in accordance with Ind AS 37, ‘Provisions, Contingent Liabilities and Contingent Assets’, which involves key assumptions about the likelihood and magnitude of an outflow of resources.

ii) Leases

Critical judgements in determining the lease period:

Ind AS 116 required lessees to determine the lease term as the non-cancellable period of a lease adjusted with an option to extend or terminate the lease, if the use of such option is reasonably certain. The Company makes an assessment on the expected lease term on a lease-by-lease basis and thereby assesses whether it is reasonably certain that any options to extend or terminate the contract will be exercised. In evaluating the lease term, the Company considers factors such as any significant leasehold improvements undertaken over the lease term, costs relating to the termination of the lease and the importance of the underlying asset to the Company’s operations taking into account the location of the underlying asset and the availability of suitable alternatives. The lease term in the future possible periods are reassessed to ensure that the lease term reflects the current economic circumstances.

Critical judgements in determining the discount rate:

The discount rate is generally based on the incremental borrowing rate specific to the lease being evaluated or for the portfolio of leases with similar characteristics.

iii) Useful lives and impairment assessment of property, plant and equipment, right of use assets and other intangible assets

The estimated useful lives and recoverable amounts of property, plant and equipment, right of use assets and other intangible assets are based on estimates and assumptions regarding the expected market outlook, expected future cash flows, obsolescence, demand, competition, known technological advances. The Company reviews the useful lives and recoverable amounts of property, plant and equipment, right of use assets and other intangible assets at the end of each reporting date.

iv) Employee benefit obligations

Employee benefit obligations (gratuity and compensated absences) are determined using actuarial valuations, which involves 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 eaplK> reporting date. / A/.

v) Fair value measurement of financial instruments

The fair values of financial instruments recorded in the standalone balance sheet in respect of which quoted prices in active markets are not available, are measured using valuation techniques. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. Also, refer note 40 for further disclosures.

vi) Recognition of Deferred tax assets/liabilities

Recognition of deferred tax assets/liabilities involves making judgements and estimations about the availability of future taxable profit against which carried forward tax losses can be used. A deferred tax asset is recognised for unused tax losses and deductible temporaiy differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized.

Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

vii) Going Concern assumption

The standalone financial statements of the Company have been prepared on a going concern basis. The Company has incurred a net loss of INR 656.36 million during the year ended 31 March 2023, and as of that date, the Company’s current liabilities exceed its current assets by INR 3,614.48 million. Further, the Company has contractual cash outflows of INR 4,467.35 million (excluding future contractual interest payments) due within 12 months of the balance sheet date.

The Company has prepared budgets / cash flow forecasts, which involves judgement and estimation around the sources of funds to meet the financial obligations and cash flow requirements. Also refer note 48.

E. Current and non-current classification

The Company presents assets and liabilities in the balance sheet based on current / non-current classification.

An asset is classified as current when it satisfies any of the following criteria:

- it is expected to be realized in, or is intended for sale or consumption in, the Company’s normal operating cycle.

- it is held primarily for the purpose of being traded;

- it is expected to be realized within 12 months after the reporting date; or

- it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date.

A liability is classified as current when it satisfies any of the following criteria:

- it is expected to be settled in the Company’s normal operating cycle;

- it is held primarily for the purpose of being traded; /^Vr

- it is due to be settled within 12 months after the reporting date; or (0Q f Cti

- the Company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

Current assets/liabilities include current portion of non-current financial assets/1 iabilities respectively.

All other assets/ liabilities are classified as non-current. Deferred tax assets and liabilities (if any) are classified as non-current assets and liabilities.

Operating cycle

Based on the nature of the operations and the time between the acquisition of assets for processing and their realization in cash or cash equivalents, the Company has ascertained its operating cycle as twelve months for the purpose of current/non-current classification of assets and liabilities.

F. Measurement of fair values

A number of the Company’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities. The Company has an established control framework with respect to the measurement of fair values. The finance team of the Company has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values, and reports directly to the Company’s Chief Financial Officer.

They regularly review significant unobservable inputs and valuation adjustments. If third party information is used to measure fair values then the finance team assesses the evidence obtained from the third parties to support the conclusion that such valuations meet the requirements of Ind AS, including the level in the fair value hierarchy in which such valuations should be classified.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

• In the principal market for the asset or liability, or

• In the absence of a principal market, in the most advantageous market for the asset or liability

When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

¦ Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety at the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

The Company recognizes transfers between levels of the fair value hierarchy at the end of the reportimg^& i period during which the change has occurred.

m information about the assumptions made in measuring fair values is included in Note 40. Lq ( Gw)u^i

lb. Summary of significant accounting policies 1) Property, plant and equipment Recognition and measurement

Property, plant and equipment including capital work in progress are measured at cost less accumulated depreciation and any accumulated impairment losses if any.

Cost of property, plant and equipment not ready for use as at the reporting date are disclosed as capital work-in-progress.

Cost comprises the purchase price, import duties and other non-refundable taxes or levies, borrowing costs if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for its intended use and estimated costs of dismantling and removing the item and restoring the site on which it is located. Any trade discounts and rebates are deducted in arriving at the purchase price.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.

Subsequent costs and disposal

Subsequent expenditure related to an item of property, plant and equipment is added to its book value only if it is probable that the future economic benefits associated with the expenditure will flow to the Company. All other expenses on existing property, plant and equipment, including day-to-day repair and maintenance expenditure, are charged to the profit or loss for the period during which such expenses are incurred.

Gains or losses arising from derecognition of property, plant and equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the profit or loss when the asset is derecognized.

Depreciation

Depreciation on property, plant and equipment is calculated using the straight-line method (SLM) to allocate their cost, net of their residual values, over their estimated useful lives (determined by the management based on technical estimates). Further, leasehold improvements are depreciated over the shorter of lease term and their useful lives. The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. In case of a revision, the unamortized depreciable amount is charged over the remaining useful life.

Depreciation on addition/ (disposals) is provided on a pro-rata basis i.e. from / (up to) the date on which the asset is ready for use/ (disposed off).

_ . [cof

The management estimate of the useful life of various categories of assets is as follows: l£Df©ui

Asset Category*	Useful Life (Years)	Useful life as per Schedule II to the Companies Act, 2013 (Years)
Building	15-60	60
Computers and accessories	3-6	3-6
Plant and machinery	3-30	15
Furniture and fixtures	5-8	10
Vehicles	8	8
Office equipment	5-10	5

* For the above class of assets, the management based on internal technical evaluation, has determined that the useful lives as given above best represent the period over which management expects to use these assets. Hence, the useful lives of few assets included in the above asset categories are different from the useful lives as prescribed under Part C of Schedule II to the Companies Act 2013.

Freehold land is not depreciated.

The residual values, useful lives and methods of depreciation of property plant and equipment’s are reviewed by management at each reporting date and adjusted prospectively, as appropriate.

Transition to Ind AS

The Company had elected to use the fair value of all the items of property, plant and equipment on the date of transition i.e. 1 April 2015, and designate the same as deemed cost. Fair value was determined by obtaining an external third-party valuation, a level 3 valuation technique.

2) Intangible assets

Recognition and measurement

Intangible assets that are acquired by the Company are measured initially at cost. After initial recognition, an intangible asset is carried at its cost less accumulated amortisation and accumulated impairment loss, if any.

Subsequent expenditure is capitalised only when it increases the future economic benefits from the specific asset to which it relates.

Amortisation

Intangible assets of the Company represent computer software. Computer software are amortized using the straight-line method over the estimated useful life (at present three to ten years). The amortization period and the amortization method are reviewed at least at each financial year end. If the expected useful life of the asset is significantly different from previous estimates, the amortization period is changed accordingly.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the profit or R>jS^₍ when the asset is derecognized. I⁰³

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Financial assets

i. Recognition and initial measurement

Trade receivables and debt securities issued are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the Company becomes a party to the contractual provisions of the instrument.

All financial assets (except trade receivable without a significant financing component) are initially recognised at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of a financial instrument on initial recognition is generally its transaction price (that is, the fair value of the consideration given or received). However, if there is a difference between the transaction price and the fair value of financial instruments whose fair value is based on a quoted price in an active market or a valuation technique that uses only data from observable markets, the Company recognizes the difference as a gain or loss at inception (‘day 1 gain or loss’). In all other cases, the entire day 1 gain or loss is deferred and recognised in the Statement of Profit and Loss over the life of the transaction until the transaction matures or is closed out. A trade receivable without a significant financing component is initially measured at the transaction price.

A financial asset or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue.

ii. Classification and subsequent measurement Financial assets

On initial recognition, a financial asset is classified as measured at:

- Amortised cost

- Debt investment measured at fair value through other comprehensive income (FVOCI)

- Fair value through profit or loss (FVTPL)

- Equity investments measured at fair value through other comprehensive income (FVOCI)

Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its business model for managing financial assets.

A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:

- the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and

- the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated ^ as at FVTPL:

- the asset is held within a business model whose objective is achieved by both collecyfftaZ

contractual cash flows and selling financial assets; and (cOlfcA ''

- the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment’s fair value in OCI. This election is made on an investment-by-investment basis.

Financial assets: Business model assessment

The Company makes an assessment of the objective of the business model in which a financial asset is held at a portfolio level because this best reflects the way the business is managed and information is provided to management. The information considered includes:

- the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether management’s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realising cash flows through the sale of the assets;

- how the performance of the portfolio is evaluated and reported to the Company’s management;

- the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed; and

- the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.

Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this purpose, consistent with the Company’s continuing recognition of the assets.

Financial assets: Assessment whether contractual cash flows are solely payments of principal and interest

For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset on initial recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin.

In assessing whether the contractual cash flows are solely payments of principal and interest, the Company considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Company considers:

- contingent events that would change the amount or timing of cash flows;

- terms that may adjust the contractual coupon rate, including variable interest rate features;

- prepayment and extension features;

- terms that limit the Company’s claim to cash flows from specified assets (e.g. non-recourse /Hy""''

features). (iL .

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Financial assets at FVTPL	These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in profit or loss.
Financial assets at amortised cost	These assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.
Debt investments at FVOCI	These assets are subsequently measured at fair value. Interest income under the effective interest method, foreign exchange gains and losses and impairment are recognised in profit or loss. Other net gains and losses are recognised in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss.
Equity investments at FVOCI	These assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are not reclassified to profit or loss.

Financial liabilities: Classification, subsequent measurement and gains and losses

Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss.

iii. Derecognition Financial assets

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset.

If the Company enters into transactions whereby it transfers assets recognised on its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognized.

Financial liabilities

The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire.

The Company also derecognizes a financial liability when its terms are modified and the cash flows , under the modified terms are substantially different. In this case, a new financial liability based on tht/^ modified terms is recognised at fair value. The difference between the carrying amount of the financial/ SqX extinguished and the new financial liability with modified terms is recognised in profit or losfcPu

iv. Offsetting

Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

v. Financial guarantee

Financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument.

Such guarantees are initially measured at fair value and subsequently at the higher of:

- the expected credit loss allowance determined in accordance with Ind AS 109; and

- the amount recognised initially less, when appropriate, cumulative amortisation recognised in accordance with Ind AS.

vi. Modification of financial assets and liabilities

Financial assets:

If the terms of a financial assets are modified, the Company evaluates whether the cash flows of the modified asset are substantially different. If the cash flows are substantially different, then the contractual rights to cash flows from the original financial asset are deemed to have expired. In this case, the original financial asset is derecognized and a new financial asset is recognized at fair value.

If the cash flows of the modified asset carried at amortized cost are not substantially different, then the modification does not result in derecognition of the financial asset. In this case, the Company recalculates the gross carrying amount of the financial asset and recognizes the amount arising from adjusting the gross carrying amount as a modification gain or loss in profit or loss.

Financial Liabilities:

The Company derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different. In this case, a new financial liability based on the modified terms is recognised at fair value. The difference between the carrying amount of the financial liability extinguished and the new financial liability with modified terms is recognised in profit or loss.

vii. Fully Compulsorily convertible debentures

The Company has issued fully compulsorily convertible debentures (FCCDs). As per the terms of debenture agreement, each debenture will be converted into equity shares based on an agreed conversion formula (fixed to variable conversion). Accordingly, the whole amount has been treated as financial liability in books and carried at amortised cost.

viii. Non-convertible debentures (unsecured)

The Company has issued unsecured non-convertible debentures (NCDs). As per the terms of debenture agreement, each debenture will be redeemed within 36-48 months from the deemed date of allotmenL^o Accordingly, the same amount has been treated as financial liability in books and carried at amorti

ix. Embedded Derivative

A derivative embedded in a hybrid contract, with a financial liability or non-financial host, is separated from the host and accounted for as a separate derivative if: the economic characteristics and risks are not closely related to the host; a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative; and the hybrid contract is not measured at fair value through profit or loss. Embedded derivatives are measured at fair value with changes in fair value recognised in profit or loss. Reassessment only occurs if there is either a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required or a reclassification of a financial asset out of the fair value through profit or loss category.

The Company has identified the redemption right as an equity component of convertible PIK obligation of non-convertible debentures issued by its subsidiaries i.e., Barque and SAMHI JV. As the risks associated with the underlying variable are not closely related to the host instrument, the equity component has been separately accounted for as deemed investment in subsidiaries. The equity component has been fair valued through profit or loss at each balance sheet date.

x. Interest free loans

The Company has given interest free loans to its subsidiary companies. Such interest free loans are measured at fair values determined using a present value technique with inputs that include future cash flows and discount rates that reflect assumptions that market participants would apply in pricing such loans. The difference between the transaction price and the fair value of such loans have been recognised as a deemed investment in the subsidiary. The loan component is subsequently measured at amoliized costs and interest income is recognised using effective interest rate method.

The Company has obtained interest free loans from its subsidiary company. Such interest free loans are measured at fair values determined using a present value technique with inputs that include future cash flows and discount rates that reflect assumptions that market participants would apply in pricing such loans. The difference between the transaction price and the fair value of such loans has been recognised as income in the Statement of Profit and Loss. The loan component is subsequently measured at amortized costs and interest expense is recognised using effective interest rate method.

xi. Concessional overdraftfacility

The Company has pledged fixed deposits with banks for overdraft facility availed by its subsidiaries. The overdraft facility availed by subsidiaries carries an interest rate lower than the market rate. Difference between interest charged by bank and market rate is recognised as deemed investment in subsidiary with corresponding credit to the Standalone Statement of Profit and Loss.

4) Impairment

A. Impairment of financial instruments

The Company recognises loss allowances for expected credit losses on financial assets measured at amortised cost.

At each reporting date, the Company assesses whether financial assets carried at amortised cost and debj^r ^ securities at Fair value through profit and loss (FVTPL) are credit-impaired. A financial asset is ‘credm?~>

jttmtiwred'' when one or more events that have a detrimental impact on the estimated future cash flo\ysP@f f —\ ImlaM

Evidence that a financial asset is credit-impaired includes the following observable data:

- significant financial difficulty of the borrower or issuer;

- a breach of contract such as a default or being past due for 90 days or more;

- the restructuring of a loan or advance by the Company on terms that the Company would not consider otherwise;

- it is probable that the borrower will enter bankruptcy or other financial reorganization; or -the disappearance of an active market for a security because of financial difficulties.

The Company measures loss allowances at an amount equal to lifetime expected credit losses, except for the following, which are measured as 12 month expected credit losses

debt securities that are determined to have low credit risk at the reporting date; and

other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over

the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowances for trade receivables are always measured at an amount equal to lifetime expected credit losses.

Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected life of a financial instrument.

12-month expected credit losses are the portion of expected credit losses that result from default events that are possible within 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

In all cases, the maximum period considered when estimating expected credit losses is the maximum contractual period over which the Company is exposed to credit risk.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating expected credit losses, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company’s historical experience and informed credit assessment and including forward-looking information.

Measurement of expected credit losses

Expected credit losses are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive).

As a practical expedient, the Company uses a provision matrix to determine impairment loss allowance on portfolio of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analyzed.

Presentation of allowance for expected credit losses in the balance sheet

Loss allowances for financial assets measured at amortised cost are deducted from the gross carry in^^g amount of the assets.

for debt securities at FVOCI, the loss allowance is charged to profit or loss and is recognised in Otfieri [Guru

Write-off

The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. This is generally the case when the Company determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write- off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company’s procedures for recovery of amounts due.

B. Impairment of non-financial assets

The carrying amounts of assets are reviewed at each reporting date if there is any indication of impairment based on intemal/extemal factors. If any such indication exists, then the asset''s recoverable amount is estimated.

The recoverable amount is the greater of the asset’s (or Cash Generating Unit’s) fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the asset (or cash generating unit (CGU)).

An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its estimated recoverable amount. Impairment losses are recognised in the Statement of Profit and Loss. Impairment loss recognised in respect of a CGU is allocated first to reduce the canying amount of any goodwill allocated, if any to the CGU, and then to reduce the carrying amounts of the other assets of the CGU (or group of CGUs) on a pro rata basis.

An impairment loss in respect of goodwill is not subsequently reversed. In respect of other assets for which impairment loss has been recognised in prior periods, the Company reviews at each reporting date whether there is any indication that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. Such a reversal is made only to the extent that the asset''s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

5) Inventories

Inventories which comprises stock of food and beverages (including liquor), operating supplies and stock-in-trade are carried at the lower of cost and net realizable value. Cost of inventories comprises all costs of purchase and other costs incurred in bringing the inventory to their present location and condition. In determining the cost, first in first out (“FIFO”) method is used. Net realisable value is th^l? estimated selling price in the ordinary course of business, less estimated costs of completion and/o^/pT estimated costs to make the sale. (CD(GiV''r

6) Government grants and subsidies

Grants and subsidies from the government are recognised when there is reasonable assurance that (i) the Company will comply with the conditions attached to them, and (ii) the grant/subsidy will be received.

Export Promotion Capital Goods scheme

The grant or subsidy received to compensate the import cost of assets, subject to an export obligation is recognised in the Statement of Profit and Loss in ratio of fulfilment of associated export obligations.

Service Exports from India scheme (SEIS)

The scheme entitles the Company to receive SEIS licenses basis the annual earnings in foreign currency. These licenses can be utilized by the Company or sold in the market. The grant is recognised in the Statement of Profit and Loss on an accrual basis at realizable value.

7) Provisions

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 embodying economic benefits will be required to settle the obligation, in respect of which a reliable estimate can be made of the amount of the obligation.

The Company records a provision for site restoration costs to be incurred for the restoration of leasehold land at the end of the lease period. The provision is measured at the present value of the best estimate of the expected costs to settle the obligation and recognised as part of the cost of property, plant and equipment. The estimated future costs of decommissioning are reviewed annually and adjusted as appropriate. Changes in the estimated future costs or in the discount rate applied are added to or deducted from the costs of the asset and site restoration obligation.

If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost. Provisions are reviewed by the management at each reporting date and adjusted to reflect the current best estimates at each reporting date.

8) Contingent liabilities

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation, or a present obligation whose amount cannot be estimated reliably. The Company does not recognize a contingent liability but discloses its existence in the standalone financial statements.

9) Borrowing costs

Borrowing costs are interest and other costs (including exchange differences arising from foreign

currency borrowings to the extent that they are regarded as an adjustment to interest costs) incurred byz\

^lhe-Xompany in connection with the borrowing of funds. Borrowing costs directly attributable \p y /r<\ F/Tx 1 CD

acquisition and/or construction of an asset which necessarily take a substantial period of time to get ready for their intended use are capitalized as part of cost of that asset. Capitalisation of borrowing costs is suspended in the period during which active development is delayed due to interruption, other than temporary interruption. Other borrowing costs are recognised as an expense in the standalone statement of profit and loss in the period in which they are incurred.

10) Employee benefits

(a) Short-term employee benefits

Employee benefits payable wholly within twelve months of receiving employee services are classified as short-term employee benefits. These benefits include salaries and wages, short-term bonus and ex-gratia. The undiscounted amount of short-term employee benefits to be paid in exchange for employee services is recognised as an expense as the related service is rendered by employees.

(b) Share based payment transactions

The grant date fair value of equity settled share-based payment awards granted to employees under the Employee Stock Option Scheme is recognised as an employee stock option expense, with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the awards. The amount recognised as an expense is based on the estimate of the number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that do meet the related service and non-market vesting conditions at the vesting date. The increase in equity recognised in connection with a share based payment transaction is presented in "Employee stock option outstanding account", as a separate component in equity. For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

(c) Post-employment benefits

Defined contribution plan - Provident fund and Employee state insurance

A defined contribution plan is a post-employment benefit plan under which an entity pays specified contributions and has no obligation to pay any further amounts. Provident fund scheme and employee state insurance are defined contribution schemes. The Company makes specified monthly contributions towards these schemes. The Company’s contributions are recorded as an expense in the profit or loss during the period in which the employee renders the related service. If the contribution already paid is less than the contribution payable under the scheme for service received before the balance sheet date, the deficit payable under the scheme is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset to the extent that the pre-payment will lead to a reduction in future payment or a cash refund.

Defined benefit plan - Gratuity

The Company’s gratuity scheme is a defined benefit plan. The present value of obligations under siuttKz ^^j^^tt^dbenefit plans are determined based on actuarial valuation carried out by an independent acti Od

using the Projected Unit Credit Method, which recognizes each period of service as giving rise to an additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The obligation is measured at the present value of estimated future cash flows. The discount rates used for determining the present value of obligation under defined benefit plans, are based on the market yields on government securities as at the balance sheet date, having maturity period approximating to the terms of related obligations.

Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in standalone other comprehensive income and are never reclassified to profit or loss. Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognized immediately in the profit or loss as past service cost.

(d) Other long-term employee benefit obligations - Compensated absences

The employees can carry-forward a portion of the unutilized accrued compensated absences and utilize it in future service periods or receive cash compensation on termination of employment. Since the compensated absences do not fall due wholly within twelve months after the end of the period in which the employees render the related service and are also not expected to be utilized wholly within twelve months after the end of such period, the benefit is classified as a long-term employee benefit. The Company records an obligation for such compensated absences in the period in which the employee renders the services that increase this entitlement. The obligation is measured on the basis of independent actuarial valuation using the projected unit credit method. Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognized in the profit or loss.

11) Revenue recognition

Revenue is recognized at an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring the goods or services to a customer i.e. on transfer of control of the goods or service to the customer. Revenue is net of indirect taxes and discounts.

Contract asset represents the Company’s right to consideration in exchange for services that the Company has transferred to a customer when that right is conditioned on something other than the passage of time.

When there is unconditional right to receive cash, and only passage of time is required to do invoicing, the same is presented as Unbilled revenue.

A contract liability is recognized if a payment is received or a payment is due (whichever is earlier) from a customer before the Company transfers the related goods or services and the Company is under an obligation to provide only the goods or services under the contract. Contract liabilities are recognized as revenue when the Company performs under the contract (i.e., transfers control of the related goods or services to the customer).

The specific recognition criteria described below must also be met before revenue is recognized: {fa.

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Room revenue, sale of food and beverages, recreation services

Revenue is recognized at the transaction price that is allocated to the performance obligation. Revenue comprises room revenue, sale of food and beverages, recreation and other services relating to hotel operations. Revenue is recognised upon rendering of the services and sale of food and beverages which is recognised once the rooms are occupied, food and beverages are sold and other services have been provided as per the contract with the customer.

Other services

Other services comprises amount billed to subsidiary companies on account of allocation of common cost incurred during the year. The income is recognised when services are rendered as per the terms of the contract and no significant uncertainty exists regarding the collection of the consideration.

12) Recognition of dividend income, interest income or expense

Dividend income is recognised in profit or loss on the date on which the Company’s right to receive payment is established.

Interest income or expense is recognised using the effective interest method.

The ‘effective interest rate’ is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:

- the gross carrying amount of the financial asset; or

- the amortised cost of the financial liability.

In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortised cost of the liability. However, for financial assets that have become credit-impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the amortised cost of the financial asset. If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.

13) Foreign currency translation Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognised in the Statement of profit and loss.

Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the profit or loss, within finance costs. All other foreign exchange gains and losses are presented in the profit or loss on a net basis.

14) Income taxes

Income tax comprises current and deferred tax. It is recognised in profit or loss except to the extent Imr/''''''

^rlTgtates to an item recognised directly in equity or in other comprehensive income. (rofffiui

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Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount expected to be paid or received after considering the uncertainty, if any, related to income taxes. It is measured using tax rates (and tax laws) enacted or substantively enacted by the reporting date.

Current tax assets and current tax liabilities are offset only if there is a legally enforceable right to set off the recognised amounts, and it is intended to realise the asset and settle the liability on a net basis or simultaneously.

Deferred tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes. Deferred tax is also recognised in respect of carried forward tax losses and tax credits.

Deferred tax is not recognised for

- temporary differences arising on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss at the time of the transaction;

- taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which they can be used. The existence of unused tax losses is strong evidence that future taxable profit may not be available. Therefore, in case of a history of recent losses, the Company recognizes a deferred tax asset only to the extent that it has sufficient taxable temporary differences or there is convincing other evidence that sufficient taxable profit will be available against which such deferred tax asset can be realized. Deferred tax assets - unrecognized or recognized, are reviewed at each reporting date and are recognised/ reduced to the extent that it is probable/ no longer probable respectively that the related tax benefit will be realized.

Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on the laws that have been enacted or substantively enacted by the reporting date.

The measurement of deferred tax reflects the tax consequences that would follow from the manner in wh