Accounting Policies of Best Eastern Hotels Ltd. Company

Mar 31, 2025

NOTE 2: SUMMARY OF MATERIAL ACCOUNTING POLICIES

Summary of statement of compliance, basis of preparation and presentation, critical accounting estimates,
assumptions and judgements and material accounting policies

(i) Statement of compliance

The Financial Statements comply, in all material aspects, with Indian Accounting Standards (‘Ind AS’) notified under
Section 133 of the Companies Act, 2013 (‘the Act’) read with Rule 3 of the Companies (Indian Accounting Standards)
Rules, 2015 and other relevant provisions of the Act.

The financial statements for the year ended March 31,2025 were approved by the Board of Directors and authorized
for issue on May 21,2025.

(ii) Basis of preparation and presentation

These Financial Statements have been prepared on the historical cost basis, except for certain financial instruments
and defined benefit plans which are measured at fair value at the end of each reporting period. Historical cost is
generally based on the fair value of the consideration given in exchange for goods and services. Fair value is the
price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date.

The Company adopted Disclosure of Accounting Policies (Amendments to Ind AS 1) from April 1,2023. Although the
amendments did not result in any changes in the accounting policies themselves, they impacted the accounting
policy information disclosed in the financial statements.

The amendments require the disclosure of ''material'' rather than ''significant'' accounting policies. The amendments
also provide guidance on the application of materiality to disclosure of accounting policies, assisting entities to
provide useful, entity specific accounting policy information that users need to understand other information in the
financial statements.

All assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle
and other criteria set out in the Schedule III to the Act.

(iii) Rounding of amounts

All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakhs as per the
requirement of Schedule III, unless otherwise stated.

(iv) Critical accounting estimates, assumptions and judgements

The preparation of the Financial Statements requires management to make estimates, assumptions and judgments
that affect the reported balances of assets and liabilities and disclosures as at the date of the Financial Statements
and the reported amounts of income and expense for the periods presented.

The estimates and associated assumptions are based on historical experience and other factors that are considered
to be relevant. Actual results may differ from these estimates considering different assumptions and conditions.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimates are revised and future periods are affected.

The said estimates are based on the facts and events, that existed as at the reporting date, or that occurred after that
date but provide additional evidence about conditions existing as at the reporting date.

In particular, information about significant areas of estimation, uncertainty and critical judgments in applying accounting
policies that have the most significant effect on the amounts recognised in the financial statements pertain to:

(a) Useful Lives of Property, Plant and Equipment:

Management reviews the estimated useful lives and residual value of PPE and Intangibles at the end of each
reporting period. Factors such as changes in the expected level of usage, nature of assets, the operating
condition of the asset, past history of replacement, anticipated technological changes, etc., could significantly
impact the economic useful lives and the residual values of these assets. This reassessment may result in
change in depreciation expense in future periods.

(b) Impairment Testing:

Property, plant and equipment, Right-of-Use assets and intangible assets that are subject to depreciation/
amortisation are tested for impairment periodically including when events occur or changes in circumstances
indicate that the recoverable amount of the cash generating unit is less than its carrying value. The recoverable
amount of cash generating units is higher of value-in-use and fair value less cost to sell. The calculation
involves use of significant estimates and assumptions which includes turnover and earnings multiples, growth
rates and net margins used to calculate projected future cash flows, risk-adjusted discount rate, future economic
and market conditions.

(c) Fair value measurement of financial instruments:

When the fair values of the financial assets and liabilities recorded in the balance sheet cannot be measured
based on the quoted market prices in active markets, their fair value is measured using valuation techniques.
The inputs to these models are taken from the observable market, where possible, but where this is not
feasible, a review of judgement is required in establishing fair values. Changes in assumptions relating to
these assumptions could affect the fair value of financial instruments.

(d) Deferred income tax assets and liabilities:

Deferred tax assets are recognised to the extent that it is regarded as probable that deductible temporary
differences can be realised. The Company estimates deferred tax assets and liabilities based on current tax
laws and rates and in certain cases, business plans, including management’s expectations regarding the
manner and timing of recovery of the related assets. Changes in these estimates may affect the amount of
deferred tax liabilities or the valuation of deferred tax assets and thereby the tax charges in the Statement of
Profit and Loss.

(e) Employee benefit obligations:

Employee benefit obligations are determined using actuarial valuations. An actuarial valuation involves making
various assumptions that may differ from actual developments. These include the estimation of the appropriate
discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and
its long-term nature, the employee benefit obligation is highly sensitive to changes in these assumptions. All
assumptions are reviewed at each reporting date.

(f) Provisions and contingencies:

From time to time, the Company is subject to legal proceedings, the ultimate outcome of each being subject to
uncertainties inherent in litigation. A provision for litigation is made when it is considered probable that a
payment will be made and the amount can be reasonably estimated. Material judgement is required when
evaluating the provision including, the probability of an unfavourable outcome and the ability to make a
reasonable estimate of the amount of potential loss. Litigation provisions are reviewed at each accounting
period and revisions made for the changes in facts and circumstances. Contingent liabilities are disclosed in
the notes forming part of the Financial Statements. Contingent assets are not disclosed in the Financial
Statements unless an inflow of economic benefits is probable.

(v) Material accounting policies

(a) Property, Plant and Equipment (PPE):

The Company had applied for the one time transition exemption of considering the carrying cost on the transition
date i.e. 1st April, 2016 as the deemed cost under IND AS. Hence regarded thereafter as historical cost.

Recognition and measurement:

Items of property, plant and equipment (PPE) are measured at cost less accumulated depreciation and
impairment, if any. The cost of property, plant and equipment includes purchase price, including freight, duties,
taxes and expenses incidental to acquisition and installation. 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. Property, plant and equipment are derecognized from financial statements,
either on disposal or when no economic benefits are expected from its use or disposal. The gain or losses
arising from disposal of property, plant and equipment are recognized in the Statement of Profit and Loss in
the year of occurrence.

Subsequent expenditures:

Subsequent expenditures related to an item of property, plant and equipment are added to its carrying value
only when it is probable that the future economic benefits from the asset will flow to the Company and cost can
be reliably measured. All other repair and maintenance costs are recognized in the Statement of Profit and
Loss during the year in which they are incurred.

Depreciation methods, estimated useful lives and residual value:

Depreciation is provided on all property, plant and equipment on straight-line method in the manner and
useful life prescribed in Schedule II of the Companies Act, 2013. Depreciation on additions/deletion is
provided on pro-rata basis with reference to the date of addition/deletion as the case may be. Capital work-
in-progress is not depreciated.

Useful lives and residual values of assets are reviewed at the end of each reporting period.

Losses arising from the retirement of, and gains or losses arising from disposal/adjustments of PPE are
recognised in the Statement of Profit and Loss.

(b) Capital work-in-progress (‘CWIP’):

Capital work-in-progress comprises cost of PPE that are not yet ready for their intended use at the year end.
Such cost includes indirect expenses incurred during construction period if the recognition criteria are met.

Projects under commissioning and other CWIP are carried at cost, comprising direct cost, related incidental
expenses and attributable borrowing cost.

(c) Impairment of Non-Financial Assets:

The Company assesses at each Balance Sheet date whether there is any indication that an asset may be
impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. The
recoverable amount is the higher of an asset''s or cash generating unit’s (CGU) fair value less costs of disposal
and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the
continuing use of an asset and from its disposal at the end of its useful life. If such recoverable amount of the
asset or cash generating unit is less than its carrying amount, the carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss and is recognized in the Statement of Profit and Loss.
If at the Balance Sheet date there is any indication that any impairment loss recognized for an asset in prior
years may no longer exist or may have decreased, the recoverable amount is reassessed and such reversal
of impairment loss is recognized in the Statement of Profit and Loss, to the extent the amount was previously
charged to the Statement of Profit and Loss.

(d) 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. Financial assets and financial liabilities are recognized when the Company
becomes a party to the contractual provisions of the instruments.

Financial Assets-

Initial recognition and measurement

The Company recognizes financial assets when it becomes a party to the contractual provisions of the
instrument. All financial assets are recognized initially at fair value plus transaction costs that are directly
attributable to the acquisition of the financial asset.

Subsequent measurement

For the purpose of subsequent measurement, the financial assets are classified as under:

¦ Financial assets at amortised cost

A financial asset is measured at the amortised cost, if both the following conditions are met:

• The asset is held within a business model whose objective is to hold assets for collecting contractual
cash flows, and

• Contractual terms of the asset give rise on specified dates to cash flows that are solely payments
of principal and interest (SPPI) on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortised cost
using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account
any discount or premium and fees or costs that are an integral part of the EIR. Interest income
from these financial assets is included in other income using the EIR in the Statement of Profit
and Loss. The losses arising from impairment are recognized in the Statement of Profit and Loss.

¦ Financial assets at fair value through other comprehensive income (FVTOCI)

Financial assets are classified as FVTOCI, if both of the following criteria are met:

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

• Contractual terms of the asset give rise on specified dates to cash flows that are solely payments
of principal and interest (SPPI) on the principal amount outstanding.

Fair value movements are recognised in the other comprehensive income (OCI), except for the
recognition of impairment gains or losses, interest income and foreign exchange gains or losses
which are recognised in profit and loss. When the financial asset is derecognised, the cumulative
gain or loss previously recognised in OCI is reclassified from equity to Profit or Loss and recognised
in other income/(loss).

¦ Financial assets at fair value through profit or loss (FVTPL)

Financial assets that do not meet the criteria for amortized cost or FVTOCI are measured at fair value
through profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value
through profit or loss and is recognized in profit or loss and presented net in the Statement of Profit and
Loss within other income in the period in which it arises.

¦ Impairment of financial assets

The Company applies ‘simplified approach’ for recognition of impairment loss on financial assets for
loans, deposits and trade receivables.

The application of simplified approach does not require the company to track changes in credit risk.
Rather, it recognizes impairment loss allowance based on lifetime Expected Credit Loss at each reporting
date, right from its initial recognition.

¦ De-recognition

A financial asset is derecognized when:

• the rights to receive cash flows from the assets have expired or

• the Company has transferred substantially all the risk and rewards of the asset, or

• the Company has neither transferred nor retained substantially all the risk and rewards of the
asset, but has transferred control of the asset.

¦ Cash and Cash Equivalents:

Cash and cash equivalents in the balance sheet comprise cash at banks and on hand, demand deposit
and short-term deposits with an original maturity of three months or less, which are subject to an
insignificant risk of changes in value.

Financial Liabilities-

Initial recognition and measurement

All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables,
net of directly attributable transaction cost.

Subsequent measurement

Financial liabilities are subsequently measured at amortised cost using the effective interest rate method. For
trade and other payables maturing within operating cycle, the carrying amounts approximate the fair value due
to short maturity of these instruments.

Loans and borrowings

After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost
using Effective Interest Rate (EIR) method. Gain and losses are recognized in the Statement of Profit and
Loss when the liabilities are derecognized.

Amortised cost is calculated by taking into account any discount or premium on acquisition and transaction
costs. The EIR amortization is included as finance costs in the Statement of Profit and Loss.

Derecognition

The Company derecognizes financial liabilities when, and only when, the Company’s obligations are discharged,
cancelled or have expired. When an existing financial liability is replaced by another from the same lender on
substantially different terms, or the terms of an existing liability are substantially modified, such an exchange
or modification is treated as the derecognition of the original liability and the recognition of a new liability. The
difference in the respective carrying amounts is recognized in the Statement of Profit and Loss.

Offsetting financial instruments

Financial assets and financial liabilities are offset and the net amount is reflected in the balance sheet when
there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net
basis, to realize the assets and settle the liabilities simultaneously.

(e) Leases

On inception of a contract, the Company assesses whether it contains a lease. A contract contains a lease
when it conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
The right to use the asset and the obligation under the lease to make payments are recognised in the Company’s
statement of financial position as a right-of-use asset and a lease liability.

Right-of-Use Assets

The right-of-use asset recognised at lease commencement includes the amount of lease liability recognised,
initial direct costs incurred, and lease payments made at or before the commencement date, less any lease
incentives received. Right-of-use assets are depreciated over the shorter of the asset’s estimated useful life
and the lease term. Right-of-use assets are also adjusted for any re-measurement of lease liabilities and are
subject to impairment testing. Residual value is reassessed annually.

Lease Liabilities

At the commencement date of the lease, the Company recognises lease liabilities measured at the present
value of lease payments to be made over the lease term. The lease payments include fixed payments (including
in substance fixed payments) less any lease incentives receivable, variable lease payments that depend on
an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments
also include the exercise price of a purchase option reasonably certain to be exercised by the Company and
payments of penalties for terminating the lease, if the lease term reflects the Company exercising the option to
terminate. Variable lease payments that do not depend on an index or a rate are recognized as expenses
(unless they are incurred to produce inventories) in the period in which the event or condition that triggers the
payment occurs.

In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the
lease commencement date because the interest rate implicit in the lease is not readily determinable. After the

commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced
for the lease payments made. In addition, the carrying amount of lease liabilities is re-measured if there is a
modification, a change in the lease term, a change in the lease payments.

Short-term leases and leases of low-value assets

The Company applies the short-term lease recognition exemption to its short-term leases of machinery and
equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and
do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to
leases of office equipment that are considered to be low value. Lease payments on short-term leases and
leases of low-value assets are recognised as expense on a straight-line basis over the lease term.

(f) Revenue Recognition:

Revenue is recognised at an amount that reflects the consideration to which the Company expects to be
entitled in exchange for transferring the promised goods or services to a customer i.e. on transfer of control of
the goods or service to the customer. Revenue from sales of goods or rendering of services is net of Indirect
taxes, returns and variable consideration on account of discounts and schemes offered by the company as
part of the contract.

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

Revenue is recognized upon rendering of the service, provided pervasive evidence of an arrangement exists,
tariff / rates are fixed or are determinable and collectability is reasonably certain. Revenue from rendering of
services is net of Indirect taxes, returns, variable consideration on account of discounts and schemes offered
by the company as part of the contract.

Contract Balances-

¦ Contract Assets

A contract asset is the right to consideration in exchange for goods or services transferred to the customer.
If the Company performs by transferring goods or services to a customer before the customer pays
consideration or before payment is due, a contract asset is recognised for the earned consideration that
is conditional.

¦ Contract Liabilities

A contract liability is the obligation to transfer services to a customer for which the Company has received
consideration from the customer. If a customer pays consideration before the Company transfers goods
or services to the customer, a contract liability is recognised when the payment is made. Contract
liabilities are recognised as revenue when the Company performs under the contract.

(g) Employee benefits plans

Employee benefits consist of provident fund, gratuity fund and compensated absences, etc.

¦ Short-Term Employee Benefits

Employee benefits such as salaries, wages, short-term compensated absences, bonus, ex-gratia and
performance-linked rewards falling due wholly within twelve months of rendering the service are
classified as short-term employee benefits and are expensed in the period in which the employee
renders the service.

¦ Defined contribution plan

The Company makes Provident Fund contributions to regulatory authorities for eligible employees.
Under the schemes, the Company is required to contribute a specified percentage of the payroll costs to
fund the benefits. The contributions as specified under the law are paid to the provident fund authorities.
The Company does not expect any shortfall in the foreseeable future.

¦ Defined benefit plans

The Company has a defined benefit gratuity plan. The gratuity plan is primarily governed by the
Payment of Gratuity Act, 1972 and is provided on the basis of its actuarial valuation based on the
projected unit credit method at each Balance Sheet date and funded through contributions to a
Scheme administered by the Life Insurance Corporation of India (‘LIC’). Employees who are in
continuous service for a period of five years are eligible for gratuity. The level of benefits provided
depends on the member''s length of service and salary at the retirement date. Changes in actuarial
gains or losses are charged or credited to other comprehensive income in the period in which they
arise.

¦ Other long-term employee benefit obligations

Compensated absences which are not expected to occur within twelve months after the end of the
period in which the employee renders the related services are recognised as a liability at the present
value of the obligation as at the Balance sheet date determined based on an actuarial valuation.
Changes in actuarial gains or losses are charged or credited to profit or loss in the period in which
they arise.

(h) Inventories:

Stock of food and beverages and stores and operating supplies are carried at the lower of cost or net
realisable value. Cost includes the fair value of consideration paid including duties and taxes (other than
those refundable), inward freight and other expenditure directly attributable to the purchase. Trade
discounts and rebates are deducted in determining the cost of purchase.

(i) Income Taxes:

The tax expense comprises current and deferred tax. Tax is recognized in the Statement of Profit and Loss
except to the extent that it relates to items recognized directly in equity or in OCI.

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. It is measured using tax
rates enacted or substantially enacted at the reporting date.

Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the
recognized amounts and there is an intention to settle the asset and the liability on a net basis.

Deferred Tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities
for financial reporting purpose and the amount used for taxation purposes.

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets
are recognized for unused tax losses, unused tax credits and deductible temporary differences to the extent
that it is probable that future taxable profits will be available against which those deductible temporary
differences can be utilised. The carrying amount of deferred tax asset is reviewed at each reporting date
and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow
all or part of the asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in
which the liability is settled or the asset realized, based on tax rates that have been enacted or
substantively enacted by the end of the reporting period.

Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set off
assets against liabilities representing current tax and where the deferred tax assets and the deferred tax
liabilities relate to taxes on income levied by the same governing taxation laws.

MAT Credit

The Company recognizes MAT credit available as an asset only to the extent that there is convincing
evidence that the Company will pay normal income tax during the specified period, i.e., the period for which
MAT credit is allowed to be carried forward. The Company reviews the “MAT credit entitlement” asset at
each reporting date and writes down the asset to the extent the Company does not have convincing
evidence that it will pay normal tax during the specified period.

(j) Borrowing Costs:

Borrowing costs attributable to the acquisition or construction of qualifying assets are captialised as part of
the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get
ready for its intended use.

All other borrowing costs are recognized as expense in the period in which these are incurred.

---

Mar 31, 2024

NOTE 2: SUMMARY OF MATERIAL ACCOUNTING POLICIES

Summary of statement of compliance, basis of preparation and presentation, critical accounting estimates,
assumptions and judgements and material accounting policies

(i) Statement of compliance

The Financial Statements comply, in all material aspects, with Indian Accounting Standards (‘Ind AS’) notified under
Section 133 of the Companies Act, 2013 (‘the Act’) read with Rule 3 of the Companies (Indian Accounting Standards)
Rules, 2015 and other relevant provisions of the Act.

The financial statements for the year ended March 31,2024 were approved by the Board of Directors and authorized
for issue on May 29, 2024.

(ii) Basis of preparation and presentation

These Financial Statements have been prepared on the historical cost basis, except for certain financial instruments
and defined benefit plans which are measured at fair value at the end of each reporting period. Historical cost is
generally based on the fair value of the consideration given in exchange for goods and services. Fair value is the
price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date.

The Company adopted Disclosure of Accounting Policies (Amendments to Ind AS 1) from April 1,2023. Although the
amendments did not result in any changes in the accounting policies themselves, they impacted the accounting
policy information disclosed in the financial statements.

The amendments require the disclosure of ‘material’ rather than ‘significant’ accounting policies. The amendments
also provide guidance on the application of materiality to disclosure of accounting policies, assisting entities to
provide useful, entity specific accounting policy information that users need to understand other information in the
financial statements.

All assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle
and other criteria set out in the Schedule III to the Act.

(iii) Rounding of amounts

All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakhs as per the
requirement of Schedule III, unless otherwise stated.

(iv) Critical accounting estimates, assumptions and judgements

The preparation of the Financial Statements requires management to make estimates, assumptions and judgments
that affect the reported balances of assets and liabilities and disclosures as at the date of the Financial Statements
and the reported amounts of income and expense for the periods presented.

The estimates and associated assumptions are based on historical experience and other factors that are considered
to be relevant. Actual results may differ from these estimates considering different assumptions and conditions.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimates are revised and future periods are affected.

The said estimates are based on the facts and events, that existed as at the reporting date, or that occurred after that
date but provide additional evidence about conditions existing as at the reporting date.

In particular, information about significant areas of estimation, uncertainty and critical judgments in applying accounting
policies that have the most significant effect on the amounts recognised in the financial statements pertain to:

(a) Useful Lives of Property, Plant and Equipment:

Management reviews the estimated useful lives and residual value of PPE and Intangibles at the end of each
reporting period. Factors such as changes in the expected level of usage,nature of assets, the operating condition
of the asset, past history of replacement, anticipated technological changes, etc., could significantly impact the
economic useful lives and the residual values of these assets. This reassessment may result in change in
depreciation expense in future periods.

(b) Impairment Testing:

Property, plant and equipment, Right-of-Use assets and intangible assets that are subject to depreciation/
amortisation are tested for impairment periodically including when events occur or changes in circumstances
indicate that the recoverable amount of the cash generating unit is less than its carrying value. The recoverable
amount of cash generating units is higher of value-in-use and fair value less cost to sell. The calculation involves
use of significant estimates and assumptions which includes turnover and earnings multiples, growth rates and
net margins used to calculate projected future cash flows, risk-adjusted discount rate, future economic and
market conditions.

(c) Fair value measurement of financial instruments:

When the fair values of the financial assets and liabilities recorded in the balance sheet cannot be measured
based on the quoted market prices in active markets, their fair value is measured using valuation techniques.
The inputs to these models are taken from the observable market, where possible, but where this is not feasible,
a review of judgement is required in establishing fair values. Changes in assumptions relating to these assumptions
could affect the fair value of financial instruments.

(d) Deferred income tax assets and liabilities:

Deferred tax assets are recognised to the extent that it is regarded as probable that deductible temporary
differences can be realised. The Company estimates deferred tax assets and liabilities based on current tax
laws and rates and in certain cases, business plans, including management’s expectations regarding the manner
and timing of recovery of the related assets. Changes in these estimates may affect the amount of deferred tax
liabilities or the valuation of deferred tax assets and thereby the tax charges in the Statement of Profit and Loss.

(e) Employee benefit obligations:

Employee benefit obligations are determined using actuarial valuations. An actuarial valuation involves making
various assumptions that may differ from actual developments. These include the estimation of the appropriate
discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and
its long-term nature, the employee benefit obligation is highly sensitive to changes in these assumptions. All
assumptions are reviewed at each reporting date.

(f) Provisions and contingencies:

From time to time, the Company is subject to legal proceedings, the ultimate outcome of each being subject to
uncertainties inherent in litigation. A provision for litigation is made when it is considered probable that a payment
will be made and the amount can be reasonably estimated. Material judgement is required when evaluating the
provision including, the probability of an unfavourable outcome and the ability to make a reasonable estimate of
the amount of potential loss. Litigation provisions are reviewed at each accounting period and revisions made
for the changes in facts and circumstances. Contingent liabilities are disclosed in the notes forming part of the
Financial Statements. Contingent assets are not disclosed in the Financial Statements unless an inflow of
economic benefits is probable.

(v) Material accounting policies

(a) Property, Plant and Equipment (PPE):

The Company had applied for the one time transition exemption of considering the carrying cost on the transition
date i.e. 1st April, 2016 as the deemed cost under IND aS. Hence regarded thereafter as historical cost.

Recognition and measurement:

Items of property, plant and equipment (PPE) are measured at cost less accumulated depreciation and
impairment, if any. The cost of property, plant and equipment includes purchase price, including freight, duties,

taxes and expenses incidental to acquisition and installation. 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. Property, plant and equipment are derecognized from financial statements,
either on disposal or when no economic benefits are expected from its use or disposal. The gain or losses
arising from disposal of property, plant and equipment are recognized in the Statement of Profit and Loss in the
year of occurrence.

Subsequent expenditures:

Subsequent expenditures related to an item of property, plant and equipment are added to its carrying value
only when it is probable that the future economic benefits from the asset will flow to the Company and cost can
be reliably measured. All other repair and maintenance costs are recognized in the Statement of Profit and Loss
during the year in which they are incurred.

Depreciation methods, estimated useful lives and residual value:

Depreciation is provided on all property, plant and equipment on straight-line method in the manner and useful
life prescribed in Schedule II of the Companies Act, 2013. Depreciation on additions/deletion is provided on pro¬
rata basis with reference to the date of addition/deletion as the case may be. Capital work-in-progress is not
depreciated.

Useful lives and residual values of assets are reviewed at the end of each reporting period.

Losses arising from the retirement of, and gains or losses arising from disposal/adjustments of PPE are recognised
in the Statement of Profit and Loss.

(b) Capital work-in-progress (‘CWIP’):

Capital work-in-progress comprises cost of PPE that are not yet ready for their intended use at the year end.
Such cost includes indirect expenses incurred during construction period if the recognition criteria are met.

Projects under commissioning and other CWIP are carried at cost, comprising direct cost, related incidental
expenses and attributable borrowing cost.

(c) Impairment of Non-Financial Assets:

The Company assesses at each Balance Sheet date whether there is any indication that an asset may be
impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. The
recoverable amount is the higher of an asset’s or cash generating unit’s (CGU) fair value less costs of disposal
and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the
continuing use of an asset and from its disposal at the end of its useful life. If such recoverable amount of the
asset or cash generating unit is less than its carrying amount, the carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss and is recognized in the Statement of Profit and Loss.
If at the Balance Sheet date there is any indication that any impairment loss recognized for an asset in prior
years may no longer exist or may have decreased, the recoverable amount is reassessed and such reversal of
impairment loss is recognized in the Statement of Profit and Loss, to the extent the amount was previously
charged to the Statement of Profit and Loss.

(d) 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. Financial assets and financial liabilities are recognized when the Company
becomes a party to the contractual provisions of the instruments.

Financial Assets-

Initial recognition and measurement

The Company recognizes financial assets when it becomes a party to the contractual provisions of the instrument.
All financial assets are recognized initially at fair value plus transaction costs that are directly attributable to the
acquisition of the financial asset.

Subsequent measurement

For the purpose of subsequent measurement, the financial assets are classified as under:

¦ Financial assets at amortised cost

A financial asset is measured at the amortised cost, if both the following conditions are met:

• The asset is held within a business model whose objective is to hold assets for collecting contractual
cash flows, and

• Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of
principal and interest (SPPI) on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortised cost using
the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount
or premium and fees or costs that are an integral part of the EIR. Interest income from these financial
assets is included in other income using the EIR in the Statement of Profit and Loss. The losses arising
from impairment are recognized in the Statement of Profit and Loss.

¦ Financial assets at fair value through other comprehensive income (FVTOCI)

Financial assets are classified as FVTOCI, if both of the following criteria are met:

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

• Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of
principal and interest (SPPI) on the principal amount outstanding.

Fair value movements are recognised in the other comprehensive income (OCI), except for the recognition
of impairment gains or losses, interest income and foreign exchange gains or losses which are recognised
in profit and loss. When the financial asset is derecognised, the cumulative gain or loss previously
recognised in OCI is reclassified from equity to Profit or Loss and recognised in other income/(loss).

¦ Financial assets at fair value through profit or loss (FVTPL)

Financial assets that do not meet the criteria for amortized cost or FVTOCI are measured at fair value
through profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value
through profit or loss and is recognized in profit or loss and presented net in the Statement of Profit and
Loss within other income in the period in which it arises.

¦ Impairment of financial assets

The Company applies ‘simplified approach’ for recognition of impairment loss on financial assets for loans,
deposits and trade receivables.

The application of simplified approach does not require the company to track changes in credit risk. Rather,
it recognizes impairment loss allowance based on lifetime Expected Credit Loss at each reporting date,
right from its initial recognition.

¦ De-recognition

A financial asset is derecognized when:

• the rights to receive cash flows from the assets have expired or

• the Company has transferred substantially all the risk and rewards of the asset, or

• the Company has neither transferred nor retained substantially all the risk and rewards of the asset,
but has transferred control of the asset.

¦ Cash and Cash Equivalents:

Cash and cash equivalents in the balance sheet comprise cash at banks and on hand, demand deposit
and short-term deposits with an original maturity of three months or less, which are subject to an insignificant
risk of changes in value.

Financial Liabilities-

Initial recognition and measurement

All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables,
net of directly attributable transaction cost.

Subsequent measurement

Financial liabilities are subsequently measured at amortised cost using the effective interest rate method. For
trade and other payables maturing within operating cycle, the carrying amounts approximate the fair value due
to short maturity of these instruments.

Loans and borrowings

After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost
using Effective Interest Rate (EIR) method. Gain and losses are recognized in the Statement of Profit and Loss
when the liabilities are derecognized.

Amortised cost is calculated by taking into account any discount or premium on acquisition and transaction
costs. The EIR amortization is included as finance costs in the Statement of Profit and Loss.

Derecognition

The Company derecognizes financial liabilities when, and only when, the Company’s obligations are discharged,
cancelled or have expired. When an existing financial liability is replaced by another from the same lender on
substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as the derecognition of the original liability and the recognition of a new liability. The
difference in the respective carrying amounts is recognized in the Statement of Profit and Loss.

Offsetting financial instruments

Financial assets and financial liabilities are offset and the net amount is reflected in the balance sheet when
there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net
basis, to realize the assets and settle the liabilities simultaneously.

(e) Leases

On inception of a contract, the Company assesses whether it contains a lease. A contract contains a lease
when it conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
The right to use the asset and the obligation under the lease to make payments are recognised in the Company’s
statement of financial position as a right-of-use asset and a lease liability.

Right-of-Use Assets

The right-of-use asset recognised at lease commencement includes the amount of lease liability recognised,
initial direct costs incurred, and lease payments made at or before the commencement date, less any lease
incentives received. Right-of-use assets are depreciated over the shorter of the asset’s estimated useful life
and the lease term. Right-of-use assets are also adjusted for any re-measurement of lease liabilities and are
subject to impairment testing. Residual value is reassessed annually.

Lease Liabilities

At the commencement date of the lease, the Company recognises lease liabilities measured at the present
value of lease payments to be made over the lease term. The lease payments include fixed payments (including
in substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an
index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also
include the exercise price of a purchase option reasonably certain to be exercised by the Company and payments
of penalties for terminating the lease, if the lease term reflects the Company exercising the option to terminate.
Variable lease payments that do not depend on an index or a rate are recognized as expenses (unless they are
incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the
lease commencement date because the interest rate implicit in the lease is not readily determinable. After the
commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced
for the lease payments made. In addition, the carrying amount of lease liabilities is re-measured if there is a
modification, a change in the lease term, a change in the lease payments.

Short-term leases and leases of low-value assets

The Company applies the short-term lease recognition exemption to its short-term leases of machinery and
equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do
not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of
office equipment that are considered to be low value. Lease payments on short-term leases and leases of low-
value assets are recognised as expense on a straight-line basis over the lease term.

(f) Revenue Recognition:

Revenue is recognised at an amount that reflects the consideration to which the Company expects to be entitled
in exchange for transferring the promised goods or services to a customer i.e. on transfer of control of the goods
or service to the customer. Revenue from sales of goods or rendering of services is net of Indirect taxes, returns
and variable consideration on account of discounts and schemes offered by the company as part of the contract.

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

Revenue is recognized upon rendering of the service, provided pervasive evidence of an arrangement exists,
tariff / rates are fixed or are determinable and collectability is reasonably certain. Revenue from rendering of
services is net of Indirect taxes, returns, variable consideration on account of discounts and schemes offered by
the company as part of the contract.

Contract Balances-

¦ Contract Assets

A contract asset is the right to consideration in exchange for goods or services transferred to the customer.
If the Company performs by transferring goods or services to a customer before the customer pays
consideration or before payment is due, a contract asset is recognised for the earned consideration that is
conditional.

¦ Contract Liabilities

A contract liability is the obligation to transfer services to a customer for which the Company has received
consideration from the customer. If a customer pays consideration before the Company transfers goods or
services to the customer, a contract liability is recognised when the payment is made. Contract liabilities
are recognised as revenue when the Company performs under the contract.

(g) Employee benefits plans

Employee benefits consist of provident fund, gratuity fund and compensated absences, etc.

¦ Short-Term Employee Benefits

Employee benefits such as salaries, wages, short-term compensated absences, bonus, ex-gratia and
performance-linked rewards falling due wholly within twelve months of rendering the service are classified
as short-term employee benefits and are expensed in the period in which the employee renders the service.

¦ Defined contribution plan

The Company makes Provident Fund contributions to regulatory authorities for eligible employees. Under
the schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the
benefits. The contributions as specified under the law are paid to the provident fund authorities. The Company
does not expect any shortfall in the foreseeable future.

¦ Defined benefit plans

The Company has a defined benefit gratuity plan. The gratuity plan is primarily governed by the Payment
of Gratuity Act, 1972 and is provided on the basis of its actuarial valuation based on the projected unit
credit method at each Balance Sheet date and funded through contributions to a Scheme administered by
the Life Insurance Corporation of India (‘LIC’). Employees who are in continuous service for a period of five
years are eligible for gratuity. The level of benefits provided depends on the member’s length of service
and salary at the retirement date. Changes in actuarial gains or losses are charged or credited to other
comprehensive income in the period in which they arise.

¦ Other long-term employee benefit obligations

Compensated absences which are not expected to occur within twelve months after the end of the period
in which the employee renders the related services are recognised as a liability at the present value of the
obligation as at the Balance sheet date determined based on an actuarial valuation. Changes in actuarial
gains or losses are charged or credited to profit or loss in the period in which they arise.

(h) Inventories:

Stock of food and beverages and stores and operating supplies are carried at the lower of cost or net realisable
value. Cost includes the fair value of consideration paid including duties and taxes (other than those refundable),
inward freight and other expenditure directly attributable to the purchase. Trade discounts and rebates are
deducted in determining the cost of purchase.

(i) Income Taxes:

The tax expense comprises current and deferred tax. Tax is recognized in the Statement of Profit and Loss
except to the extent that it relates to items recognized directly in equity or in OCI.

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. It is measured using tax rates enacted
or substantially enacted at the reporting date.

Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the
recognized amounts and there is an intention to settle the asset and the liability on a net basis.

Deferred Tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities for
financial reporting purpose and the amount used for taxation purposes.

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are
recognized for unused tax losses, unused tax credits and deductible temporary differences to the extent that it
is probable that future taxable profits will be available against which those deductible temporary differences can
be utilised. The carrying amount of deferred tax asset is reviewed at each reporting date and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the asset to
be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which
the liability is settled or the asset realized, based on tax rates that have been enacted or substantively enacted
by the end of the reporting period.

Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set off
assets against liabilities representing current tax and where the deferred tax assets and the deferred tax liabilities
relate to taxes on income levied by the same governing taxation laws.

MAT Credit

The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence
that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is
allowed to be carried forward. The Company reviews the “MAT credit entitlement” asset at each reporting date
and writes down the asset to the extent the Company does not have convincing evidence that it will pay normal
tax during the specified period.

(j) Borrowing Costs:

Borrowing costs attributable to the acquisition or construction of qualifying assets are captialised as part of the
cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for
its intended use.

All other borrowing costs are recognized as expense in the period in which these are incurred.

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Mar 31, 2018

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(i) Basis of preparation:

The financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (“the Act”) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act. The financial statements have been prepared on the historical cost basis except for certain financial assets and liabilities and land and building, which are measured at fair value.

The financial statements up to year ended March 31, 2017 were prepared in accordance with the accounting standards notified under section 133 of the Act read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (“Indian GAAP”) and the relevant provisions of the Act as applicable. These financial statements are the first financial statements of the Company under Ind AS. Refer to note 3 for information on first time adoption of Ind AS. Current Assets do not include elements which are not expected to be realised within 1 year and Current Liabilities do not include items which are due after 1 year, the period of 1 year being reckoned from the reporting date.

(ii) Fair value measurement

The Company’s accounting policies and disclosures require the measurement of fair values for financial assets and liabilities.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

- Level 1- Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

- Level 2- Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.

- Level 3- Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

(iii) Revenue Recognition:

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

Revenue is recognized upon rendering of the service, provided pervasive evidence of an arrangement exists, tariff / rates are fixed or are determinable and collectability is reasonably certain. Revenue from rendering of services is net of Indirect taxes, returns and discounts.

(iv) Property, Plant and Equipment:

Recognition and measurement:

Items of property, plant and equipment, Land and Building are measured at cost less accumulated depreciation and impairment, if any. The cost of property, plant and equipment includes purchase price, including freight, duties, taxes and expenses incidental to acquisition and installation. 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. Property, plant and equipment are derecognized from financial statements, either on disposal or when no economic benefits are expected from its use or disposal. The gain or losses arising from disposal of property, plant and equipment are recognized in the Statement of Profit and Loss in the year of occurrence.

Subsequent expenditures:

Subsequent expenditures related to an item of property, plant and equipment are added to its carrying value only when it is probable that the future economic benefits from the asset will flow to the Company and cost can be reliably measured. All other repair and maintenance costs are recognized in the Statement of Profit and Loss during the year in which they are incurred.

Depreciation:

Depreciation is provided on all property, plant and equipment on straight-line method in the manner and useful life prescribed in Schedule II of the Companies Act, 2013. Depreciation on additions/deletion is provided on pro-rata basis with reference to the date of addition/deletion as the case may be.

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognized as at 01 April 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment.

Company has adopted cost model for all class of items of Property Plant and Equipment.

(v) Impairment of Non-Financial Assets:

The Company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. The recoverable amount is the higher of an asset’s or cash generating unit’s (CGU) fair value less costs of disposal and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. If such recoverable amount of the asset or cash generating unit is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Statement of Profit and Loss. If at the Balance Sheet date there is any indication that any impairment loss recognized for an asset in prior years may no longer exist or may have decreased, the recoverable amount is reassessed and such reversal of impairment loss is recognized in the Statement of Profit and Loss, to the extent the amount was previously charged to the Statement of Profit and Loss..

(vi) 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. Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments.

Financial Assets

Initial recognition and measurement

The Company recognizes financial assets when it becomes a party to the contractual provisions of the instrument. All financial assets are recognized initially at fair value plus transaction costs that are directly attributable to the acquisition of the financial asset.

Subsequent measurement

For the purpose of subsequent measurement, the financial assets are classified as under:

i) Financial assets at amortised cost

A financial asset is measured at the amortised cost, if both the following conditions are met:

- The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and

- Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium and fees or costs that are an integral part of the EIR. Interest income from these financial assets is included in other income using the EIR in the Statement of Profit and Loss. The losses arising from impairment are recognized in the Statement of Profit and Loss.

ii) Financial assets at fair value through other comprehensive income (FVTOCI)

Financial assets are classified as FVTOCI, if both of the following criteria are met:

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

- Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

Fair value movements are recognised in the other comprehensive income (OCI), except for the recognition of impairment gains or losses, interest income and foreign exchange gains or losses which are recognised in profit and loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to Profit or Loss and recognised in other income/(loss).

iii) Financial assets at fair value through profit or loss (FVTPL)

Financial assets that do not meet the criteria for amortized cost or FVTOCI are measured at fair value through profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value through profit or loss and is recognized in profit or loss and presented net in the Statement of Profit and Loss within other income in the period in which it arises.

iv) Impairment of financial assets

The Company applies ‘simplified approach’ for recognition of impairment loss on financial assets for loans, deposits and trade receivables.

The application of simplified approach does not require the company to track changes in credit risk. Rather, it recognizes impairment loss allowance based on lifetime Expected Credit Loss at each reporting date, right from its initial recognition.

De-recognition

A financial asset is derecognized when:

- the rights to receive cash flows from the assets have expired or

- the Company has transferred substantially all the risk and rewards of the asset, or

- the Company has neither transferred nor retained substantially all the risk and rewards of the asset, but has transferred control of the asset.

Financial Liabilities

- Initial recognition and measurement

All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction cost.

- Subsequent measurement

Financial liabilities are subsequently measured at amortised cost using the effective interest rate method. For trade and other payables maturing within operating cycle, the carrying amounts approximate the fair value due to short maturity of these instruments.

- Loans and borrowings

After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using Effective Interest Rate (EIR) method. Gain and losses are recognized in the Statement of Profit and Loss when the liabilities are derecognized.

Amortised cost is calculated by taking into account any discount or premium on acquisition and transaction costs. The EIR amortization is included as finance costs in the Statement of Profit and Loss.

- Derecognition

The Company derecognizes financial liabilities when, and only when, the Company’s obligations are discharged, cancelled or have expired. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the Statement of Profit and Loss.

- Offsetting financial instruments

Financial assets and financial liabilities are offset and the net amount is reflected in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.

(vii) Inventories:

Stock of food and beverages and stores and operating supplies are carried at the lower of cost or net realisable value. Cost includes the fair value of consideration paid including duties and taxes (other than those refundable), inward freight, and other expenditure directly attributable to the purchase. Trade discounts and rebates are deducted in determining the cost of purchase.

(viii) Taxes:

The tax expense comprises current and deferred tax. Tax is recognized in the Statement of Profit and Loss except to the extent that it relates to items recognized directly in equity or in OCI.

i. 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. It is measured using tax rates enacted or substantially enacted at the reporting date.

Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognized amounts and there is an intention to settle the asset and the liability on a net basis.

ii. Deferred Tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities for financial reporting purpose and the amount used for taxation purposes.

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are recognized for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which those deductible temporary differences can be utilised. The carrying amount of deferred tax asset is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set off assets against liabilities representing current tax and where the deferred tax assets and the deferred tax liabilities relate to taxes on income levied by the same governing taxation laws.

(ix) Employee benefits:

Short term employee benefits:

The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees are recognized as an expense during the period when the employees render the services.

Defined contribution plans:

The Company’s contribution to Provident Fund, Pension, Superannuation and Employees State Insurance Contribution are considered as defined contribution plans, as the Company does not carry any further obligations apart from the contribution made to the respective fund/scheme and are charged as an expense based on the amount of contribution required to be made.

Gratuity is funded through Group Gratuity scheme formed by Life Insurance Corporation of India.

(x) Borrowing Costs:

Borrowing costs attributable to the acquisition or construction of qualifying assets are captialised as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use.

All other borrowing costs are recognized as expense in the period in which these are incurred.

(xi) Cash and Cash Equivalents:

Cash and cash equivalents in the balance sheet comprise cash at banks and on hand, demand deposit and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

(xii) Provisions & Contingent Liabilities:

The Company recognizes a provision when there is a present obligation (legal or constructive) as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made.

(xiii) Earnings per share

Basic earnings per share is calculated by dividing the net profit / (loss) for the year attributable to the equity shareholders by weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, the net profit / (loss) for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

2. USE OF ESTIMATES AND JUDGEMENTS

The preparation of financial statements in conformity with Ind AS requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, income, expenses and disclosures of contingent liabilities at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.

Estimates and underlying assumptions are reviewed at each reporting date. Any revision to accounting estimates and assumptions are recognised prospectively i.e. recognised in the period in which the estimate is revised and future periods affected.

i. Fair value measurement of financial instruments

When the fair values of the financial assets and liabilities recorded in the balance sheet cannot be measured based on the quoted market prices in active markets, their fair value is measured using valuation techniques. The inputs to these models are taken from the observable market, where possible, but where this is not feasible, a review of judgement is required in establishing fair values. Changes in assumptions relating to these assumptions could affect the fair value of financial instruments.

ii. Deferred taxes

Deferred tax is recorded on temporary differences between tax bases of assets and liabilities and their carrying amounts, at the rates that have been enacted or substantively enacted at the reporting date. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable profit during the periods in which those temporary differences and the tax loss carry forwards become deductible. The Company considers the expected reversal of deferred tax liabilities and projected future taxable income in making this assessment. The amount of deferred tax assets considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carry forward periods are reduced.

3. FIRST TIME ADOPTION OF IND AS

The accounting policies set out in note 1 have been applied in preparing the financial statements for the year ended March 31, 2018, the comparative information presented in these financial statements for the year ended March 31, 2017 and in the preparation of an opening Ind AS balance sheet as at April 01, 2016 (the Company’s date of transition to Ind aS). In preparing its opening Ind AS balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (as amended) and other relevant provisions of the Act (“Indian GAAP” or “previous GAAP”). The effects of the transition to Ind AS on equity, total comprehensive income and reported cash flows are presented in this section and are further explained in the following notes.

Ind AS 101 allows first-time adopters certain exemptions/exceptions from the retrospective application of certain requirements under Ind AS. In preparing these financial statements, the Company has applied the following exemptions:

Ind AS Optional Exemptions:

Deemed cost for property, plant and equipment

Ind AS 101 permits a first time adopter to elect to continue with the carrying value for all its property, plant and equipment as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition. Accordingly, the Company has elected to measure all of its property, plant and equipment at their previous GAAP carrying value and use that as its deemed cost as at the date of transition (April 01,2016).

Reconciliation

The following reconciliations provide the effect of transition to Ind AS from previous GAAP in accordance with Ind AS 101:

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Mar 31, 2016

I. Significant Accounting Policies :

1) Basis of preparation of financial statements :

The financial statements have been prepared in accordance with the applicable mandatory accounting standards dealt with the provisions of the Companies Act, 2013 and as specified by the Institute of Chartered Accountants of India.

2) Basis of Accounting :

The accounts have been prepared using historical cost convention and on the basis of going concern, with revenue recognized and expenses accounted on accrual basis.

3) Revenue Recognition :

Revenue recognized when there is reasonable certainty of its ultimate realization / collection, Sales and Services are stated at net of taxes.

4) Fixed Assets :

Fixed Assets are stated at cost of acquisition and subsequent improvement thereto inclusive of freight and other incidental expenses related to acquisitions, improvements and installations.

5) Depreciation:

Depreciation on fixed assets is provided on Straight Line Method, at the rates and in the manner specified in Schedule II to the Companies Act, 2013.

6) Inventories :

Inventories are valued at cost. Unserviceable / damaged / discarded stocks and shortages are charged to the Profit & Loss Account.

7) Retirement Benefits :

Retirement benefits are provided in the accounts on accrual basis in the following manner:

a) The Company makes contribution to provident fund as and when they become due.

b) Gratuity is accounted for on the basis of actuarial valuation and funded to an approved Gratuity Fund.

c) Leave encashment provided in the books is paid in the subsequent year.

8) Provision, Contingent Liabilities and Contingent Assets:

Provision are recognized for when the company has at present, legal or contractual obligation as a result of past events, only if it is probable that an outflow of resources embodying economic outgo or loss will be required and if the amount involved can be measured reliably.

Contingent liabilities being a possible obligation as a result of past events, the existence of which will be confirmed only by the occurrence or non occurrence of one or more future events not wholly in control of the company are not recognized in the accounts. The nature of such liabilities and an estimate of its financial effect are disclosed in notes to the Financial Statements.

9) Foreign Currency Transactions :

Foreign currency transactions (realization through credit cards) are recorded on the basis of certificates issued by the concerned banks at the year end.

10) Taxes on Income

Provision for tax for the year comprises current income tax determined to be payable in respect of taxable income as per the provisions of Income Tax Act, 1961 and deferred tax being the tax effect of timing difference representing the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets on account of timing differences are recognized only to the extent there is reasonable certainty of its realization.

11) Borrowing Cost :

Borrowing cost that is attributable to the acquisition / construction of fixed assets is capitalized as part of the cost of the respective assets. Other borrowing costs are recognized as expenses in the year in which they arise.

12) Earnings Per Share:

The Company reports basic and diluted earnings per share (EPS) in accordance with the Accounting Standard 20 as specified in the Companies (Accounting Standard) Rules 2006 (as amended). The Basic EPS has been computed by dividing the income available to equity shareholders by the weighted average number of equity shares outstanding during the accounting year. The Diluted EPS has been computed using the weighted average number of equity shares and dilutive potential equity shares outstanding at the end of the year.

13) Cash Flow Statement:

(i) Cash & Cash Equivalents (For the purpose of cash flow statement):

Cash comprises cash on hand and demand deposit with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

(ii) Cash Flow Statement:

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, financing and investing activities of the company are segregated.

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Mar 31, 2015

1) Basis of preparation of financial statements :

The financial statements have been prepared in accordance with the applicable mandatory accounting standards dealt with section 211(3C) of the Companies Act, 1956 and as specified by the Institute of Chartered Accountants of India.

2) Basis of Accounting :

The accounts have been prepared using historical cost convention and on the basis of going concern, with revenue recognized and expenses accounted on accrual basis.

3) Revenue Recognition :

Revenue recognized when there is reasonable certainty of its ultimate realization / collection, Sales and Services are stated at net of taxes.

4) Fixed Assets :

Fixed Assets are stated at cost of acquisition and subsequent improvement thereto inclusive of freight and other incidental expenses related to acquisitions, improvements and installations.

5) Depreciation:

Depreciation on fixed assets is provided on Straight Line Method, at the rates and in the manner specified in Schedule II to the Companies Act, 2013.

6) Inventories :

Inventories are valued at cost. Unserviceable / damaged / discarded stocks and shortages are charged to the Profit & Loss Account.

7) Retirement Benefits :

Retirement benefits are provided in the accounts on accrual basis in the following manner:

a) The Company makes contribution to provident fund as and when they become due.

b) Gratuity is accounted for on the basis of actuarial valuation and funded to an approved Gratuity Fund.

c) Leave encashment provided in the books is paid in the subsequent year.

8) Provision, Contingent Liabilities and Contingent Assets:

Provision are recognised for when the company has at present, legal or contractual obligation as a result of past events, only if it is probable that an outflow of resources embodying economic outgo or loss will be required and if the amount involved can be measured reliably.

Contingent liabilities being a possible obligation as a result of past events, the existence of which will be confirmed only by the occurrence or non occurrence of one or more future events not wholly in control of the company are not recognised in the accounts. The nature of such liabilities and an estimate of its financial effect are disclosed in notes to the Financial Statements.

9) Foreign Currency Transactions :

Foreign currency transactions (realization through credit cards) are recorded on the basis of certificates issued by the concerned banks at the year end.

10) Taxes on Income

Provision for tax for the year comprises current income tax determined to be payable in respect of taxable income as per the provisions of Income Tax Act, 1961 and deferred tax being the tax effect of timing difference representing the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets on account of timing differences are recognized only to the extent there is reasonable certainty of its realization.

11) Borrowing Cost :

Borrowing cost that is attributable to the acquisition / construction of fixed assets is capitalized as part of the cost of the respective assets. Other borrowing costs are recognized as expenses in the year in which they arise.

12) Earnings Per Share:

The Company reports basic and diluted earnings per share (EPS) in accordance with the Accounting Standard 20 as specified in the Companies (Accounting Standard) Rules 2006 (as amended). The Basic EPS has been computed by dividing the income available to equity shareholders by the weighted average number of equity shares outstanding during the accounting year. The Diluted EPS has been computed using the weighted average number of equity shares and dilutive potential equity shares outstanding at the end of the year.

13) Cash Flow Statement:

(i) Cash & Cash Equivalents (For the purpose of cash flow statement):

Cash comprises cash on hand and demand deposit with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

(ii) Cash Flow Statement:

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, financing and investing activities of the company are segregated.

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Mar 31, 2014

1) Basis of preparation of financial statements :

The financial statements have been prepared in accordance with the applicable mandatory accounting standards dealt with section 211(3C) of the Companies Act, 1956 and as specified by the Institute of Chartered Accountants of India.

2) Basis of Accounting :

The accounts have been prepared using historical cost convention and on the basis of going concern, with revenue recognized and expenses accounted on accrual basis.

3) Revenue Recognition :

Revenue recognized when there is reasonable certainty of its ultimate realization / collection, Sales and Services are stated at net of taxes.

4) Fixed Assets :

i) Fixed Assets are stated at cost of acquisition and subsequent improvement thereto inclusive of freight and other incidental expenses related to acquisitions, improvements and installations.

ii) Depreciation on Fixed Assets is provided on the basis of Straight Line Method as per the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956.

5) Inventories :

Inventories are valued at cost. Unserviceable / damaged / discarded stocks and shortages are charged to the Profit & Loss Account.

6) Investments :

Investment held by the Company which are long term in nature are stated at cost unless there is any permanent diminution in value.

7) Retirement Benefits :

Retirement benefits are provided in the accounts on accrual basis in the following manner:

a) The Company makes contribution to provident fund as and when they become due.

b) Gratuity is accounted for on the basis of actuarial valuation and funded to an approved Gratuity Fund.

c) Liability of Leave encashment provided in the books is paid in the subsequent years.

8) Contingent Liabilities :

No provision is made for liabilities which are contingent in nature, unless it is probable that future events will confirm that an asset has been impaired or a liability incurred as at the Balance Sheet date and a reasonable estimate of the resulting loss can be made. However, all known and material contingent liabilities are disclosed by way of separate notes.

9) Foreign Currency Transactions :

Foreign currency transactions (realization through credit cards) are recorded on the basis of certificates issued by the concerned banks at the year end.

10) Taxes on Income

Provision for tax for the year comprises current income tax determined to be payable in respect of taxable income as per the provisions of Income Tax Act, 1961 and deferred tax being the tax effect of timing difference representing the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets on account of timing differences are recognized only to the extent there is reasonable certainty of its realization.

11) Borrowing Cost :

Borrowing cost that is attributable to the acquisition / construction of fixed assets is capitalized as part of the cost of the respective assets. Other borrowing costs are recognized as expenses in the year in which they arise.

As per records of the company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares

a) 12% Non-Cumulative Preference Shares of Rs.10/- each to be redeemed on or before 27th June, 2019 but not later than 27th June, 2019.

b) Each equity share of the nominal value of Rs. 2/- each sub-divided into 2 (two) equity shares of Re.1/- each w.e.f. 18/11/2013.

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Mar 31, 2013

1) Basis of preparation of financial statements :

The financial statements have been prepared in accordance with the applicable mandatory accounting standards dealt with section 211(3C) of the Companies Act, 1956 and as specified by the Institute of Chartered Accountants of India.

2) Basis of Accounting :

The accounts have been prepared using historical cost convention and on the basis of going concern, with revenue recognized and expenses accounted on accrual basis.

3) Revenue Recognition :

Revenue recognized when there is reasonable certainty of its ultimate realization / collection, Sales and Services are stated at net of taxes.

4) Fixed Assets :

i) Fixed Assets are stated at cost of acquisition and subsequent improvement thereto inclusive of freight and other incidental expenses related to acquisitions, improvements and installations.

ii) Depreciation on Fixed Assets is provided on the basis of Straight Line Method as per the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956.

5) Inventories :

Inventories are valued at cost. Unserviceable / damaged / discarded stocks and shortages are charged to the Profit & Loss Account.

6) Investments :

Investment held by the Company which are long term in nature are stated at cost unless there is any permanent diminution in value.

7) Retirement Benefits :

Retirement benefits are provided in the accounts on accrual basis in the following manner:

a) The Company makes contribution to provident fund as and when they become due.

b) Gratuity provided in the books of account is on the basis of actuarial valuation and funded to an approved Gratuity Fund.

c) Liability of Leave encashment provided in the books is paid in the subsequent years.

8) Contingent Liabilities :

No provision is made for liabilities which are contingent in nature, unless it is probable that future events will confirm that an asset has been impaired or a liability incurred as at the Balance Sheet date and a reasonable estimate of the resulting loss can be made. However, all known and material contingent liabilities are disclosed by way of separate notes.

9) Foreign Currency Transactions :

Foreign currency transactions (realization through credit cards) are recorded on the basis of certificates issued by the concerned banks at the year end.

10) Taxes on Income

Provision for tax for the year comprises current income tax determined to be payable in respect of taxable income as per the provisions of Income Tax Act, 1961 and deferred tax being the tax effect of timing difference representing the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets on account of timing differences are recognized only to the extent there is reasonable certainty of its realization.

11) Borrowing Cost :

Borrowing cost that is attributable to the acquisition / construction of fixed assets is capitalized as part of the cost of the respective assets. Other borrowing costs are recognized as expenses in the year in which they arise.

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Mar 31, 2012

1) Basis of preparation of financial statements :

The financial statements have been prepared in accordance with the applicable mandatory accounting standards dealt with section 211(3C) of the Companies Act, 1956 and as specified by the Institute of Chartered Accountants of India.

2) Basis of Accounting :

The accounts have been prepared using historical cost convention and on the basis of going concern, with revenue recognized and expenses accounted on accrual basis.

3) Revenue Recognition :

Revenue recognized when there is reasonable certainty of its ultimate realization / collection, Sales and Services are stated at net of taxes.

4) Fixed Assets :

i) Fixed Assets are stated at cost of acquisition and subsequent improvement thereto inclusive of freight and other incidental expenses related to acquisitions, improvements and installations.

ii) Depreciation on Fixed Assets is provided on the basis of Straight Line Method as per the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956.

5) Inventories :

Inventories are valued at cost. Unserviceable / damaged / discarded stocks and shortages are charged to the Profit & Loss Account.

6) Investments :

Investment held by the Company which are long term in nature are stated at cost unless there is any permanent diminution in value.

7) Retirement Benefits :

Retirement benefits are provided in the accounts on accrual basis in the following manner:

a) The Company makes contribution to provident fund as and when they become due.

b) Gratuity provided in the books of account is on the basis of actuarial valuation and funded to an approved Gratuity Fund.

c) Liability of Leave encashment provided in the books is paid in the subsequent years.

8) Contingent Liabilities :

No provision is made for liabilities which are contingent in nature, unless it is probable that future events will confirm that an asset has been impaired or a liability incurred as at the Balance Sheet date and a reasonable estimate of the resulting loss can be made. However, all known and material contingent liabilities are disclosed by way of separate notes.

9) Foreign Currency Transactions :

Foreign currency transactions (realization through credit cards) are recorded on the basis of certificates issued by the concerned banks at the year end.

10) Taxes on Income

Provision for tax for the year comprises current income tax determined to be payable in respect of taxable income as per the provisions of Income Tax Act, 1961 and deferred tax being the tax effect of timing difference representing the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets on account of timing differences are recognized only to the extent there is reasonable certainty of its realization.

11) Borrowing Cost :

Borrowing cost that is attributable to the acquisition / construction of fixed assets is capitalized as part of the cost of the respective assets. Other borrowing costs are recognized as expenses in the year in which they arise.

As per records of the company, including its register of shareholders/members and other declarations received from share- holders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares

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Mar 31, 2010

1) Basis of preparation of financial statements :

The financial statements have been prepared in accordance with the applicable mandatory accounting standards dealt with Section 211 (3C) of the Companies Act, 1956 and as specified by the Institute of Chartered Accountants of India.

2) Basis of Accounting :

The accounts have been prepared using historical cost convention and on the basis of going concern, with revenue recognized and expenses accounted on accrual basis.

3) Revenue Recognition :

Revenue recognized when there is reasonable certainty of its ultimate realization / collection, Sales are stated at net of taxes.

4) Fixed Assets :

i) Fixed Assets are stated at cost of acquisition and subsequent improvement thereto inclusive of freight and other incidental expenses related to acquisitions, improvements and installations.

ii) Depreciation on Fixed Assets is provided on the basis of Straight Line Method as per the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956.

5) Inventories :

Inventories are valued at cost basedon First In First Out method. Unserviceable / damaged / discarded stocks and shortages are charged to the Profit & Loss Account.

6) Investments :

Investment held by the Company which are long term in nature are stated at cost unless there is any permanent diminution in value.

7) Retirement Benefits :

Retirement benefits are provided in the accounts on accrual basis in the following manner:

a) The Company makes contribution to provident fund as and when they become due.

b) Gratuity provided in the books of account is fairly valued by the management.

c) Liability of Leave encashment provided in the books is paid in the subsequent years.

8) Contingent Liabilities :

No provision is made for liabilities which are contingent in nature, unless it is probable that future events will confirm that an asset has been impaired or a liability incurred as at the Balance Sheet date and a reasonable estimate of the resulting loss can be made. However, all known and material contingent liabilities are disclosed by way of separate notes.

9) Foreign Currency Transactions :

Foreign currency transactions (realization through credit cards) are recorded on the basis of certificates issued by the concerned banks at the year end.

10) Taxes on Income

Provision for tax for the year comprises current income tax determined to be payable in respect of taxable income as per the provisions of Income Tax Act, 1961 and deferred tax being the tax effect of timing difference representing the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets on account of timing differences are recognized only to the extent there is reasonable certainty of its realization.

11) Borrowing Cost :

Borrowing cost that is attributable to the acquisition / construction of fixed assets is capitalized as part of the cost of the respective assets. Other borrowing costs are recognized as expenses in the year in which they arise.