Click it and Unblock the Notifications
Accounting Policies of Sayaji Hotels Ltd. Company
Mar 31, 2025
A. Reporting entity
Sayaji Hotels Limited (SHLâ or the âCompanyâ), is a company domiciled in India and limited by shares (CIN: L51100GJ1982PLC162541). The shares of the company are publicly traded on Bombay Stock Exchange of India Limited. The address of the Companyâs registered office is 441, 942/1942, T P No. 66, Near Bhimnath Bridge, Sayajiganj, Vadodara, Gujarat, India, 390020. The Company is primarily engaged in the business of owning, operating & managing hotels.
The Financial Statements for the year ended 31st March, 2025, were approved by Board of Directors and authorized for issue on 30th May,2025.
B. Basis of Preparation1. Statement of Compliance
These financial statements have been prepared in accordance with Indian Accounting Standards (âInd ASâ) as prescribed under Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules, 2015 and other provisions of the Companies Act, 2013 as amended from time to time.
2. Basis of measurement/Use of Estimates
(i) The Financial Statements are prepared on accrual basis under the historical cost convention except certain financial assets and liabilities (including derivatives instruments) that are measured at fair value. The methods used to measure fair values are discussed in notes to financial statements.
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.
Assets held for sale has been measured at fair value less cost to sell.
(ii) The preparation of financial statements requires judgments, estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/ materialized. Major Estimates are discussed in Part D.
C. Significant accounting policies
A summary of the significant accounting policies applied in the preparation of the financial statements are as given below. These accounting policies have been applied consistently to all periods presented in the financial statements.
1. Current and non-current classification
The Company presents assets and liabilities in the balance sheet based on current/non-current classification.
An asset is current when it is:
⢠Expected to be realized or intended to sold or consumed in normal operating cycle;
⢠Held primarily for the purpose of trading;
⢠Expected to be realized within twelve months after the reporting period; or
⢠Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is current when:
⢠It is expected to be settled in normal operating cycle;
⢠It is held primarily for the purpose of trading;
⢠It is due to be settled within twelve months after the reporting period; or
⢠There is no unconditional right to defer settlement of the liability for at least twelve months after the reporting period.
All other liabilities are classified as non-current.
Deferred tax assets/liabilities are classified as non-current.
2. Property Plant & Equipment2.1. Initial recognition and measurement
An item of property, plant and equipment recognized as an asset if and only if it is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be measured reliably.
Items of Property, Plant and Equipment are measured at cost less accumulated depreciation/amortization and accumulated impairment losses. Cost includes expenditure that is directly attributable to bringing the asset, borrowing cost, inclusive of non-refundable taxes & duties, to the location and condition necessary for it to be capable of operating in the manner intended by management.
When parts of an item of property, plant and equipment have different useful lives, they are recognized separately.
Items of spare parts, stand-by equipment and servicing equipment which meet the definition of Property, Plant and Equipment are capitalized.
Subsequent expenditure is recognized as an increase in the carrying amount of the asset when it is probable that future economic benefits deriving from the cost incurred will flow to the enterprise and the cost of the item can be measured reliably.
The cost of replacing part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The carrying amount of the replaced part is derecognized. The costs of the day-to-day servicing of Property, Plant and Equipment are recognized in profit or loss as incurred.
Property, Plant and Equipment are derecognized when no future economic benefits are expected from their use or upon their disposal. Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and are recognized in the statement of profit and loss.
2.4. Depreciation/amortization
Depreciation of each part of an item of Property, Plant and Equipment is recognized in profit or loss on a Written Down Value Method over the estimated useful lives as prescribed in Schedule II of Companies Act, 2013, except in respect of the following categories of assets, in whose case the life of assets had been re-assessed as under based on technical evaluation, taking into account the nature of asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes, manufacturerâs warranties and maintenance support.
Assets constructed on leased premises. Over the lease period
Leasehold lands are amortized over the lease term unless it is reasonably certain that the Company will obtain ownership by the end of the lease term.
Freehold land is not depreciated.
Depreciation on additions to/deductions from fixed assets during the year is charged on prorata basis from/up to the date on which the asset is available for use/disposed.
Where it is probable that future economic benefits deriving from the cost incurred will flow to the enterprise and the cost of the item can be measured reliably, subsequent expenditure on a PPE along-with its unamortized depreciable amount is charged off prospectively over the revised useful life determined by technical assessment.
In circumstance, where a property is abandoned, the cumulative capitalized costs relating to the property are written off in the same period.
3. Non-current assets (or disposal groups) held for sale
Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable. They are measured at the lower of their carrying amount and fair value less costs to sell, except for assets such as deferred tax assets, assets arising from employee benefits, financial assets and contractual rights under insurance contracts, which are specifically exempt from this requirement.
An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group) to fair value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset (or disposal group), but not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date of the sale of the non-current asset (or disposal group) is recognised at the date of derecognition. Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while they are classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale continue to be recognised.
Non-current assets classified as held for sale and the assets of a disposal group classified as held for sale are presented separately from the other assets in the balance sheet. The liabilities of a disposal group classified as held for sale are presented separately from other liabilities in the balance sheet.
The cost of self-constructed assets includes the cost of materials & direct labour, any other costs directly attributable to bringing the assets to the location and condition necessary for it to be capable of operating in the manner intended by management and borrowing costs.
Expenses directly attributable to construction of property, plant and equipment incurred till they are ready for their intended use are identified and allocated on a systematic basis on the cost of related assets.
Deposit works/cost plus contracts are accounted for on the basis of statements of account received from the contractors.
5. Intangible assets and intangible assets under development5.1. Initial recognition and measurement
An intangible asset is recognized if and only if it is probable that the expected future economic benefits that are attributable to the asset will flow to the company and the cost of the asset can be measured reliably.
Intangible assets that are acquired by the Company, which have finite useful lives, are recognized at cost. Subsequent measurement is done at cost less accumulated amortization and accumulated impairment losses. Cost includes any directly attributable incidental expenses necessary to make the assets ready for its intended use.
Subsequent expenditure is recognized as an increase in the carrying amount of the asset when it is probable that future economic benefits deriving from the cost incurred will flow to the enterprise and the cost of the item can be measured reliably.
An intangible asset is derecognized when no future economic benefits are expected from their use or upon their disposal. Gains and losses on disposal of an item of intangible assets are determined by comparing the proceeds from disposal with the carrying amount of intangible assets and are recognized in the statement of profit and loss.
Intangible assets having definite life are amortized on Written Down Value method in their useful lives. Useful life of computer software is estimated at five years. If life of any intangible asset is indefinite, then it is not amortized and tested for Impairment at the reporting date.
Borrowing costs that are directly attributable to the acquisition, construction/exploration/ development or erection of qualifying assets are capitalized as part of cost of such asset until such time the assets are substantially ready for their intended use. Qualifying assets are assets which take a substantial period of time to get ready for their intended use or sale. Capitalization of borrowing costs ceases when substantially all the activities necessary to prepare the qualifying assets for their intended uses are complete.
All other borrowing costs are charged to revenue as and when incurred.
Borrowing costs consist of (a) interest expense calculated using the effective interest method as described in Ind AS 109 - âFinancial Instrumentsâ (b) finance charges in respect of finance leases recognized in accordance with Ind AS 116 - âLeasesâ (c) exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs and (d) other costs that an entity incurs in connection with the borrowing of funds. Income earned on temporary investment of the borrowings pending their expenditure on the qualifying assets is deducted from the borrowing costs eligible for capitalization.
7. Investment in Subsidiary, Associate & Joint Venture
These are Companyâs Separate Financial Statements. Company has opted to show investments in Subsidiary, Associates & Joint Venture at cost. Dividend from these is recognized as and when right to receive is established.
Impairment loss is recognized as per Ind AS 36.
Stock of Food and Beverages and stores and operating supplies are carried at the lower of cost and net realizable value. Cost includes cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition, including duties and taxes (other than those refundable). Cost is determined on Weighted Average Basis. Costs of purchased inventory are determined after deducting rebates and discounts. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.
The diminution in the value of obsolete, unserviceable and surplus stores & spares is ascertained on review and provided for.
Cash and cash equivalent in the balance sheet comprise cash at banks and cash on hand and short-term deposits with an original maturity of three months or less, which are subject to insignificant risk of change in value.
Government grants that compensate the company for the cost of asset are recognized initially as deferred income when there is reasonable assurance that they will be received and the Company will comply with the conditions associated with the grant and are recognized in profit or loss on a systematic basis over the useful life of the related asset. Grants that compensate the Company for expenses incurred are recognized over the period in which the related costs are incurred and are deducted from the related expenses.
11. Provisions and contingent liabilities and Contingent Assets
A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.
Contingent liabilities are possible obligations that arise from past events and whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events not wholly within the control of the Company. Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Contingent liabilities are disclosed on the basis of judgment of the management/independent experts. These are reviewed at each balance sheet date and are adjusted to reflect the current management estimate.
Contingent assets are possible assets that arise from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. Contingent assets are disclosed in the financial statements when inflow of economic benefits is probable on the basis of judgment of management. These are assessed continually to ensure that developments are appropriately reflected in the financial statements.
12. Foreign currency transactions and translation
Transactions in foreign currencies are initially recorded at the functional currency spot rates at the date the transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. Exchange differences arising on settlement or translation of monetary items are recognized in profit or loss in the year in which it arises.
Non-monetary items are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.
Effective April 1, 2018, the Company adopted Ind AS 115 âRevenue from Contracts with Customersâ which introduces the five-step model described as follows: -
1. Identify the contract with a customer.
2. Identify the separate performance obligations in the contract.
3. Determine the transaction Price.
4. Allocate the transaction price to the separate performance obligations.
5. Recognize revenue when (or as) each performance obligation is satisfied.
The Company derives revenues primarily from sale of rooms, food and beverages, allied services relating to hotel operations such as management fees for the management of the hotels.
A. Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services.
The Company presents revenues net of indirect taxes in statement of Profit and loss.
B. Trade receivables and Contract Balances
The company recognises contract assets on an amount equals to consideration related to goods and services already transferred to customers when the right to receive such consideration is conditioned upon something other than passage of time.
Unconditional right to receive consideration are recognised as trade receivable.
Trade receivable and contract assets are subject to impairment as per Ind AS 109 âFinancial Instrumentsâ.
The company recognises amount already received from customer against which transfer for goods and services are not made as contract liability.
For all financial instruments measured at amortized cost and interest-bearing financial assets classified as fair value through other comprehensive income, interest income is recorded using the effective interest rate (EIR). The EIR is the rate that exactly discounts the estimated future cash receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset. When calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) but does not consider the expected credit losses. Interest income is included in other income in the statement of profit or loss.
Dividend Income is recognized when the Companyâs right to receive is established which generally occurs when the shareholders approve the dividend.
Other Income is recognized in the statement of profit and loss when increase in future economic benefits related to an increase in an asset op a decrease of a liability has arisen that can be measured reliably.
14. Employee Benefits 14.1Short Term Benefit
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.
A liability is recognized for the amount expected to be paid under performance related pay if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.
Employee benefit that are payable after the completion of employment are Post-Employment Benefit (other than termination benefit). These are of two type:
14.2.1 Defined contribution plans
Defined contribution plans are those plans in which an entity pays fixed contribution to separate entities under the plan and will have no legal or constructive obligation to pay further amounts to employee in future under the Plan. Provident Fund and Employee State Insurance are Defined Contribution Plans in which company pays a fixed contribution and will have no further obligation.
A defined benefit plan is a post-employment benefit plan other than a defined contribution plan.
Company pays Gratuity as per provisions of the Gratuity Act, 1972.The Companyâs net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. Any unrecognized past service costs and the fair value of any plan assets are deducted. The discount rate is based on the prevailing market yields of Indian government securities as at the reporting date that have maturity dates approximating the terms of the Companyâs obligations and that are denominated in the same currency in which the benefits are expected to be paid.
The calculation is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a liability to the company, the present value of liability is recognized as provision for employee benefit. Any actuarial gains or losses are recognized in OCI in the period in which they arise.
14.3 Long Term Employee Benefit
Benefits under the Companyâs leave encashment constitute other long term employee benefits. Leave Encashment is determined based on the available leave entitlement at the end of the year.
Income tax expense comprises current and deferred tax. Income tax expense is recognized in profit or loss except to the extent that it relates to items recognized directly in other comprehensive income or equity, in which case is the current and deferred tax are also recognized in OCI or directly in equity, respectively.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted and as applicable at the reporting date, and any adjustment to tax payable in respect of previous years. Current income taxes are recognized under âIncome tax payableâ net of payments on account, or under âTax receivablesâ where there is a debit balance. 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 is recognized using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes, except when the deferred income tax arises from the initial recognition of goodwill, an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profits or loss at the time of the transaction.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.
A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
MAT (Minimum Alternate Tax) is recognized as an asset only when and to the extent it is probable evidence that the Company will pay normal income tax and will be able to utilize such credit during the specified period. In the year in which the MAT credit becomes eligible to be recognized as an asset, the said asset is created by way of a credit to the Statement of Profit and loss and is included in Deferred Tax Assets. The Company reviews the same at each balance sheet date and if required, writes down the carrying amount of MAT credit entitlement to the extent there is no longer probable that Company will be able to absorb such credit during the specified period.
Additional income taxes that arise from the distribution of dividends are recognized at the same time that the liability to pay the related dividend is recognized.
Ind AS 116 - Leases, has become applicable effective annual reporting period beginning April 1, 2019. The Company has adopted the standard beginning April 1, 2019, using the modified retrospective approach for transition. Accordingly, the company has not restated the comparative information. Further, in respect of leases that were classified as operating leases applying Ind AS
17. There is no impact on Opening Retained Earnings.
At the date of commencement of the lease, the Company recognises a right-of-use asset (âROUâ) and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short-term and low value leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the term of the lease.
Lease contracts may contain both lease and non-lease components. The Company allocates payments in the contract to the lease and non-lease components based on their relative stand-alone prices and applies the lease accounting model only to lease components.
The right-of-use assets are initially recognised at cost, which comprises the initial amount of the lease liability adjusted for initial direct costs incurred, lease payments made at or before the commencement date, any asset restoration obligation, and less any lease incentives received. They are subsequently measured at cost less accumulated depreciation and impairment losses. Right-of-use assets are also adjusted for any re-measurement of lease liabilities. Unless the Company is reasonably certain to obtain ownership of the leased assets or renewal of the leases at the end of the lease term, recognised right-of-use assets are depreciated to a residual value over the shorter of their estimated useful life or lease term.
The lease liability is initially measured at the present value of the lease payments to be made over the lease term. The lease payments include fixed payments (including âin-substance fixedâ payments) and variable lease payments that depend on an index or a rate, less any lease incentives receivable. âIn-substance fixedâ payments are payments that may, in form, contain variability but that, in substance, are unavoidable. In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable.
Variable lease payments that do not depend on an index or a rate are recognised as an expense in the period over which the event or condition that triggers the payment occurs. In respect of variable leases which guarantee a minimum amount of rent over the lease term, the guaranteed amount is considered to be an âin-substance fixedâ lease payment and included in the initial calculation of the lease liability. Payments which are âin-substance fixedâ are charged against the lease liability.
Consequently, in the statement of profit and loss for the current period, the nature of expenses in respect of operating leases has changed from lease "Rent" / "Other expenses" in previous period to "Depreciation and amortisation expense" for the right of use assets and "Finance cost" for interest accrued on lease liability. As a result, the "Rent" / "Other expenses", "Depreciation and amortisation expense" and "Finance cost" of the current period is not comparable to the earlier periods.
17. Impairment of Non-Financial Assets
The carrying amounts of the Companyâs non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment considering the provisions of Ind AS 36 âImpairment of Assetsâ. If any such indication exists, then the assetâs recoverable amount is estimated.
The recoverable amount of an asset or cash-generating unit is the higher of its fair value less costs to disposal and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the âcash-generating unitâ, or âCGUâ).
An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment losses are recognized in profit or loss. Impairment losses recognized in respect of CGUs are reduced from the carrying amounts of goodwill of that CGU, if any and then the assets of the CGU.
Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the assetâs carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.
In accordance with Ind AS 108 - Operating Segments, the operating segments used to present segment information are identified on the basis of internal reports used by the Companyâs Management to allocate resources to the segments and assess their performance. The Board of Directors is collectively the Companyâs âChief Operating Decision Makerâ or âCODMâ within the meaning of Ind AS 108. For management purpose company is organized into major operating activity of hoteliering in India. The indicators used for internal reporting purposes may evolve in connection with performance assessment measures put in place.
Dividends and interim dividends payable to a Companyâs shareholders are recognized as changes in equity in the period in which they are approved by the shareholdersâ meeting and the Board of Directors respectively.
20. Material Prior Period Errors
Material prior period errors are corrected retrospectively by restating the comparative amounts for the prior periods presented in which the error occurred. If the error occurred before the earliest prior period presented, the opening balances of assets, liabilities and equity for the earliest prior period presented, are restated.
Basic earnings per equity share is computed by dividing the net profit or loss attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the financial year.
Diluted earnings per equity share is computed by dividing the net profit or loss attributable to equity shareholders of the Company by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.
Statement of cash flows is prepared in accordance with the indirect method prescribed in Ind AS-7 âStatement of cash flows.
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.
Initial recognition and measurement
All financial assets are recognized initially at fair value plus or minus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition or issue of the financial asset.
Subsequent measurementDebt instruments at amortized cost
A âdebt instrumentâ is measured at the amortized cost if both the following conditions are met:
(a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
(b) 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 amortized cost using the EIR method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the profit or loss. The losses arising from impairment are recognized in the profit or loss. This category generally applies to trade and other receivables.
Debt instrument at FVTOCI (Fair Value through OCI)
A âdebt instrumentâ is classified as at the FVTOCI if both of the following criteria are met:
(a) The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets, and
(b) The assetâs contractual cash flows represent SPPI
Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the OCI. However, the Company recognizes interest income, impairment losses & reversals and foreign exchange gain or loss in the profit and loss. On derecognition of the asset, cumulative gain or loss previously recognized in OCI is reclassified from the equity to profit and loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the EIR method.
Debt instrument at FVTPL (Fair value through profit or loss)
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.
In addition, the Company may elect to classify a debt instrument, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as âaccounting mismatchâ). Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the profit and loss.
All equity investments in entities other than subsidiaries, associates and joint ventures are measured at fair value. Equity instruments which are held for trading are classified as at FVTPL. For all other equity instruments, the Company decides to classify the same either as at FVTOCI or
FVTPL. The Company makes such election on an instrument by instrument basis. The classification is made on initial recognition and is irrevocable.
If the company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instruments, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to P&L, even on sale of investment. However, the company may transfer cumulative gain or loss within the equity.
Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the profit and loss.
Equity investments in subsidiaries, associate and joint ventures are measured at cost. Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is primarily derecognized (i.e. removed from the Companyâs balance sheet) when:
⢠The rights to receive cash flows from the asset have expired, or
⢠The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a âpass-throughâ arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
Impairment of financial assets
In accordance with Ind-AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure:
⢠Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt securities, deposits, trade receivables and bank balance.
⢠Trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 115.
⢠Lease Receivables under Ind AS 116.
⢠Loan Commitments which are not measured as at FVTPL.
The Company follows âsimplified approachâ for recognition of impairment loss allowance on:
Trade receivables or contract assets resulting from transactions within the scope of Ind AS 115, if they do not contain a significant financing component
Trade receivables or contract assets resulting from transactions within the scope of Ind AS 115 that contain a significant financing component, if the Company applies practical expedient to ignore separation of time value of money, and
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 ECLs at each reporting date, right from its initial recognition.
For recognition of impairment loss on other financial assets and risk exposure, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a
significant increase in credit risk since initial recognition, then the entity reverts to recognizing impairment loss allowance based on 12-month ECL.
Initial recognition and measurement
All financial liabilities are recognized at fair value and in case of loans, net of directly attributable cost. Fees of recurring nature are directly recognised in the Statement of Profit and Loss as finance cost.
Financial liabilities are carried at amortized cost using the effective interest method. Amortized cost is calculated by taking into account any discount or premium on acquisition and any material transaction that are any integral part of the EIR. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
Derecognition
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as 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 or loss.
Derivative financial instruments
The Company uses forwards to mitigate the risk of changes in interest rates, exchange rates and commodity prices. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are also subsequently measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Any gains or losses arising from changes in the fair value of derivatives are taken directly to Statement of Profit and Loss, except for the effective portion of cash flow hedges which is recognised in Other Comprehensive Income and later to Statement of Profit and Loss when the hedged item affects profit or loss or treated as basis adjustment if a hedged forecast transaction subsequently results in the recognition of a non-financial assets or non-financial liability.
Hedges that meet the criteria for hedge accounting are accounted for as follows: a) Cash flow hedge
The Company designates derivative contracts or non-derivative financial assets / liabilities as hedging instruments to mitigate the risk of movement in interest rates and foreign exchange rates for foreign exchange exposure on highly probable future cash flows attributable to a recognised asset or liability or forecast cash transactions. When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognized in the cash flow hedging reserve being part of other comprehensive income. Any ineffective portion of changes in the fair value of the derivative is recognized immediately in the Statement of Profit and Loss. If the hedging relationship no longer meets the criteria for hedge accounting, then hedge accounting is discontinued prospectively. If the hedging instrument expires or is sold, terminated or exercised, the cumulative gain or loss on the hedging instrument recognized in cash flow hedging reserve till the period the hedge was effective remains in cash flow hedging reserve until the underlying transaction occurs. The cumulative gain or loss previously recognized in the cash flow hedging reserve is transferred to the Statement of Profit and Loss upon the occurrence of the underlying transaction. If the forecasted transaction is no longer expected to occur, then the amount accumulated in cash flow hedging reserve is reclassified in the Statement of Profit and Loss.
Changes in the fair value of hedging instruments and hedged items that are designated and qualify as fair value hedges are recorded in the Statement of Profit and Loss. If the hedging relationship no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of a hedged item for which the effective interest method is used is amortised to Statement of Profit and Loss over the period of maturity.
24. The company discloses certain financial information both including and excluding exceptional items. The presentation of information excluding exceptional items allows a better understanding of the underlying trading performance of the company and provides consistency with the companyâs internal management reporting. Exceptional items are identified by virtue of either their size or nature so as to facilitate comparison with prior periods and to assess underlying trends in the financial performance of the company. Exceptional items can include, but are not restricted to, gains and losses on the disposal of assets/investments, impairment charges, exchange gain/loss on long term borrowings/ assets and changes in fair value of derivative contracts.
D. Major Estimates made in preparing Financial Statements1. Useful life of property, plant and equipment
The estimated useful life of property, plant and equipment is based on a number of factors including the effects of obsolescence, demand, competition and other economic factors (such as the stability of the industry and known technological advances) and the level of maintenance expenditures required to obtain the expected future cash flows from the asset.
Useful life of the assets other than Plant and machinery are in accordance with Schedule II of the Companies Act, 2013.
The Company reviews at the end of each reporting date the useful life of property, plant and equipment, and are adjusted prospectively, if appropriate.
Ind AS 116 requires lessees to determine the lease term as the non-cancellable period of a lease adjusted with any option to extend or terminate the lease, if the use of such option is reasonably certain. The Company makes an assessment on the expected lease term on a lease-by-lease basis and there by assesses whether it is reasonably certain that any options to extend or terminate the contract will be exercised. In evaluating the lease term, the Company considers factors such as any significant leasehold improvements undertaken over the lease term, costs relating to the termination of the lease and the importance of the underlying asset to Companyâs operations taking into account the location of the underlying asset and the availability of suitable alternatives. The lease term in future periods is reassessed to ensure that the lease term reflects the current economic circumstances.
3. Post-employment benefit plans
Employee benefit obligations are measured on the basis of actuarial assumptions which include mortality and withdrawal rates as well as assumptions concerning future developments in discount rates, the rate of salary increases and the inflation rate. The Company considers that the assumptions used to measure its obligations are appropriate and documented. However, any changes in these assumptions may have a material impact on the resulting calculations.
4. Provisions and contingencies
The assessments undertaken in recognizing provisions and contingencies have been made in accordance with Ind AS 37, âProvisions, Contingent Liabilities and Contingent Assetsâ. The evaluation of the likelihood of the contingent events has required best judgment by management regarding the probability of exposure to potential loss. Should circumstances change following unforeseeable developments, this likelihood could alter.
5. Impairment Test of Non-Financial Assets
The recoverable amount of investment in subsidiary is based on estimates and assumptions regarding in particular the future cash flows associated with the operations of the investee company. Any changes in these assumptions may have a material impact on the measurement of the recoverable amount and could result in impairment.
Mar 31, 2024
C. Significant accounting policies
A summary of the significant accounting policies applied in the preparation of die financial statements are as given below. These accounting policies have been apphed consistently to all periods presented in the financial statements.
1. Current and non-current classification
The Company presents assets and liabilities in the balance sheet based on current/non-current classification.
An asset is current when it is:
* Expected to be realized or intended to sold or consumed in normal operating cycle;
* Held primarily for the purpose of trading;
* Expected to be realized within twelve months after the reporting period; or
* Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is current when:
* It is expected to be settled in normal operating cycle;
* It is held primarily for the purpose of trading;
* It is due to be settled within twelve months after the reporting period; or
* There is no unconditional right to defer settlement of the liability for at least twelve months after the reporting period.
All other liabilities are classified as non-current.
Deferred tax assets/liabilities are classified as non-current.
2. Property Plant & Equipment
2.1. Initial recognition and measurement
An item of property, plant and equipmentâs recognized as an asset if and only if it is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be measured reliably.
Items of Property, Plant and Equipment are measured at cost less accumulated depreciation/amortization and accumulated impairment losses. Cost includes expenditure that is directly attributable to bringing the asset, borrowing cost, inclusive of non-refundable taxes & duties, to the location and condition necessary for it to be capable of operating in the manner intended by management.
When parts of an item of property, plant and equipment have different useful lives, they are recognized separately.
Items of spare parts, stand-by equipment and servicing equipment which meet the definition of Property, Plant and Equipment are capitalized.
2.2. Subsequent costs
Subsequent expenditure is recognized as an increase in the carrying amount of the asset when it is probable that future economic benefits deriving from the cost incurred will flow to the enterprise and die cost of the item can be measured reliably.
The cost of replacing part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The carrying amount of the replaced part is derecognized. The costs of the day-to-day servicing of Property, Plant and Equipment are recognized in profit or loss as incurred.
23. Derecognition
Property, Plant and Equipment are derecognized when no future economic benefits are expected from their use or upon their disposal. Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and are recognized in the statement of profit and loss.
2.4. Depreciation/amortization
Depreciation of each part of an item of Property, Plant and Equipment is recognized in profit or loss on a Written Down Value Method over the estimated useful lives as prescribed in Schedule II of Companies Act, 2013, except in respect of the following categories of assets, in whose case the life of assets had been re-assessed as under based on technical evaluation, taking into account the nature of asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes, manufacturerâs warranties and maintenance support.
Class of Assets Useful Life
Assets constmcted on leased premises. Over the lease period
Leasehold lands are amortized over the lease term unless it is reasonably certain that the Company will obtain ownership by the end of the lease term.
Freehold land is not depreciated.
Depreciation on additions to/deductions from fixed assets during the year is charged on prorata basis from/up to the date on which the asset is available for use/disposed.
Where it is probable that future economic benefits deriving from the cost incurred will flow to the enterprise and the cost of the item can be measured reliably, subsequent expenditure on a PPE along-with its unamortized depreciable amount is charged off prospectively over the revised useful life determined by technical assessment.
In circumstance, where a property is abandoned, the cumulative capitalized costs relating to the property are written off in the same period.
3. Non-current assets (or disposal groups) held for sale
Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable. They are measured at the lower of their carrying amount and fair value less costs to sell, except for assets such as deferred tax assets, assets arising from employee benefits, financial assets and contractual rights under insurance contracts, which are specifically exempt from this requirement.
An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group) to fair value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset (or disposal group), but not in excess of any cumulative impairment loss previously recognised. Again or loss not previously recognised by the date of the sale of the non-current asset (or disposal group) is recognised at the date of de-recognition. Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while they are classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale continue to be recognised. Non-current assets classified as held for sale and the assets of a disposal group classified as held for sale are presented separately from the other assets in the balance sheet. The liabilities of a disposal group classified as held for sale are presented separately from other liabilities in the balance sheet.
4. Capital work-in-progress
The cost of self-constructed assets includes the cost of materials & direct labour, any other costs directly attributable to bringing the assets to the location and condition necessary for it to be capable of operating in the manner intended by management and borrowing costs.
Expenses directly attributable to construction of property, plant and equipment incurred till they are ready for their intended use are identified and allocated on a systematic basis on the cost of related assets.
Deposit works/cost plus contracts are accounted for on the basis of statements of account received from the contractors.
5. Intangible assets and intangible assets under development 5.1. Initial recognition and measurement
An intangible asset is recognized if and only if it is probable that the expected future economic benefits that are attributable to the asset will flow to the company and the cost of the asset can be measured reliably.
Intangible assets that are acquired by the Company, which have finite useful lives, are recognized at cost. Subsequent measurement is done at cost less accumulated amortization and accumulated impairment losses. Cost includes any directly attributable incidental expenses necessary to make the assets ready for its intended use.
52. Subsequent costs
Subsequent expenditure is recognized as an increase in the carrying amount of the asset when it is probable diat future economic benefits deriving from the cost incurred will flow to the enterprise and the cost of the item can be measured reliably.
53. Derecognition
An intangible asset is derecognized when no future economic benefits are expected from their use or upon their disposal. Gains and losses on disposal of an item of intangible assets are determined by comparing the proceeds from disposal with die carrying amount of intangible assets and are recognized in the statement of profit and loss.
5.4. Amortization
Intangible assets having definite life are amortized on Written Down Value method in their useful lives. Useful life of computer software is estimated at five years. If life of any intangible asset is indefinite, then it is not amortized and tested for Impairment at the reporting date.
6. Borrowing Cost
Borrowing costs that are directly attributable to the acquisition, construction/exploration/ development or erection of qualifying assets are capitalized as part of cost of such asset until such time the assets are substantially ready for their intended use. Qualifying assets are assets which take a substantial period of time to get ready for their intended use or sale. Capitalization of borrowing costs ceases when substantially all die activities necessary to prepare the qualifying assets for their intended uses are complete.
All other borrowing costs are charged to revenue as and when incurred.
Borrowing costs consist of (a) interest expense calculated using the effective interest method as described in Ind AS 109 - âFinancial Instrumentsâ (b) finance charges in respect of finance leases recognized in accordance with Ind AS 116 - âLeasesâ (c) exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs and (d) other costs tiiat an entity incurs in connection with die borrowing of funds. Income earned on temporary investment of the borrowings pending their expenditure on the qualifying assets is deducted from the borrowing costs eligible for capitalization.
7. Investment in Subsidiary, Associate & Joint Venture
These are Companyâs Separate Financial Statements. Company has opted to show investments in Subsidiary, Associates & Joint Venture at cost. Dividend from these is recognized as and when right to receive is established.
Impairment loss is recognized as per Ind AS 36.
8. Inventories
Stock of Food and Beverages and stores and operating supplies are carried at die lower of cost and net realizable value. Cost includes cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition, including duties and taxes (other than those refundable). Cost is determined on Weighted Average Basis. Costs of purchased inventory are determined after deducting rebates and discounts. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and die estimated costs necessary to make die sale.
The diminution in the value of obsolete, unserviceable and surplus stores & spares is ascertained on review and provided for.
9. Cash and Cash Equivalent
Cash and cash equivalent in the balance sheet comprise cash at banks and cash on hand and short-term deposits with an original maturity of three months or less, which are subject to insignificant risk of change in value.
10. Government Grants
Government grants that compensate the company for the cost of asset are recognized initially as deferred income when there is reasonable assurance that they will be received and the Company will comply with die conditions associated with the grant and are recognized in profit or loss on a systematic basis over the useful life of the related asset. Grants that compensate the Company for expenses incurred are recognized over the period in which the related costs are incurred and are deducted from die related expenses.
Mar 31, 2023
Terms/rights attached to preference shares :
That during Finacial year 2014-15 company had issued 10,00,000, 10% Cumulative Redeemable Preference Shares of Rs. 100/- each at a premium of Rs.50/- each. Out of above, pending 83338 shares were subscribed & paid up during the year 2015-16.(P.Y. 10,00,000 Preference Shares) of Rs.100/- each)
That above shares were to be redeemed within five years from the date of issue of same,but the redemption period of the 10% Cumulative Preference shares is extended by the Preference Shareholders mutually for the further period of 5 years from the original date of the allotment.
These shares are in the nature of compound financial instruments. And so they are bifurcated into equity and liability component in accordance with Ind AS 32. Equity component is computed as below:
That above Preference share holders are having preference over payment of dividend to equity share holders and accordingly arrears of preference dividends is required to be cleared before payment to Equity Share holders. And on the date of Balance Sheet, dividend on preference shares for more than 3 years are in arrears. And accordingly vide Second Proviso to Section 47(2) of the Companies Act, 2013, in case company is unable to pay dividend on preference shares for two years or more then such class of preference shareholders shall have a right to vote on all the resolutions placed before the company.
22.2.1 Term loans outstanding of State Bank of India include term loans account. Loan were secured by way of mortgage of land & building at Indore hotel, Vadodara,Pune and Lease Hold Rights of the Amber Convention Center along with building Structure thereon & hypothecation of movables, present & future except stocks of food beverages, operating supplies, stores,spares, book-debts (excluding credit card receivables), bills etc. offered specifically to the bankers for securing the working capital finance. The terms of repayment of all term loans of State Bank of India is on quarterly basis & interest is payable on monthly basis.
22.2.2 Term loan outstanding from TFCIL was secured on pari-passu basis by way of mortgage of land & building at Indore, Pune & Vadodara & hypothecation of the movables, present & future, except stocks of food beverages, operating supplies, stores,spares, book-debts (excluding credit card receivables), bills etc. And by way of Mortgage of lease hold right of Amber Garden, Indore along with building Structure thereon. The term of repayment of the term loan is on quarterly basis & the interest is payable on monthly basis, This loan is personally guranteed by Smt Suchitra Dhanani.
22.2.3 Corporate loan outstanding from Aditya Birla was secured by first pari passu Charge with existing term lender by way ofmortgage ofland and building at Indore, Pune, Vadodara, Lease Hold Rights of the Amber Convention Center along with building and Hypothecation of the plant and machinery and other movable fixed assets of company (present and future except vehicles Funded through Vehicle Loan). The term of repayment of prinipal and interest is on monthly basis
43 Disclosure as per Ind AS-19, Employee benefits (a) Defined benefit plan
The Company makes annual contributions to the Employeeâs Group Gratuity scheme of the SBI Life Insurance Co. Ltd., a funded defined benefit plan for the qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment as per the terms of the scheme. Vesting occurs upon completion of five years of service.
The present value of the defined benefit obligation and current service cost were measured using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. The following table sets out the status of the funded gratuity plan and the amounts recognized in the companyâs financial statements as at March 31, 2023:-
46 Disclosure as per Ind AS-37, Provisions, Contingent Liabilities and Contingent Assets
I Contingent Liabilities not provided for
(i) Disputed liability of Rs 28.39 lakhs (P.Y.32.93 lakhs) not provided for in respect of Income Tax TDS (AY 2013-14,2014-15 and 2015-16).
(ii) Disputed liability of Rs. 25.78 lakhs not provided for in respect of Service Tax pending before Appellate Authorities. (P.Y. Nil)
^...^ Disputed liability of Rs 76.48 lakhs not provided for in respect of Commercial tax. The matters are pending before Appellate Authorities. (P.Y. Rs. 66.04 Lakhs)
Disputed liability of Rs. 65.18 lakhs not provided for in respect of Property Tax demand (FY 2015-16, 2016-17 & 2017-18). The matter is pending before High Court, Indore. (P.Y. Rs. 55.12 lakhs).
(iv)
(v) Arrears of Cummulative Dividend on Preference Shares & Income Tax Thereon, not paid during the Year Rs.920.82 lakhs (P.Y. Rs.820.82 lakhs).
(vi) In respect of the leasehold land of Indore hotel, Indore development authority has cancelled the lease vide order dated 20th Dec. 2017. Company had challenged the said order before Hon''ble High Court,
Indore bench. Hon''ble High Court Single Bench has decided the matter against Company vide their order dated 16th July 2018. However, Company has filed revision Writ Appeal before Division Bench of Honâble High Court, Indore bench. The State of MP has framed rules for mitigation of lease terms/compounding and further amended the said rules on 9th April 2021 due to which SHL also became eligible under the said rules to apply for compounding/ mitigation and hence SHL applied to IDA for compounding of alleged violations of the lease deed. On 8th March 2022, High Court, Indore bench admitted the Writ Appeal and further directed IDA to decide the compounding application of SHL. Personal hearing has been done on 29th March 2022 before the IDA regarding the compounding application and order is awaited. Indore Development Authority has also filed an application before the Competent Authority under The Public Premises (Eviction) Act for eviction of the Company from said premises. High Court has granted stay on the passing of any order under the said eviction proceedings.
(vii) Disputed liability of Rs. 19.34 lakhs not provided for in respect of cases filed in labour court. (P.Y. Rs. 19.99 lakhs)
(viii) Disputed liability of Rs. 162.31 lakhs (PY 162.31 lakhs) not provided for in respect of solar unit adjustments. Matter is pending before High Court, Indore.
II Commitments
Estimated capital commitments not provided for Rs. Nil (P.Y. Rs. Nil )
47 Disclosure as per Ind AS-108, Operating Segment
The Companyâs only business being hoteliering, disclosure of segment-wise information is not applicable under Ind AS108 - âOperating Segmentâ (Ind AS-108) notified by the Companies (Indian Accounting
Standards) Rules, 2015 and subsequent amendments thereto.
Information about major customers
No single customer contributes more than 10% or more of the Companyâs total revenue for the years ended March 31, 2023 and March 31, 2022.
49 Disclosure as per Ind AS-107, Financial Instruments Financial Risk Managment
The Companyâs principal financial liabilities comprise Borrowings, trade payables and other payables. The main purpose of these financial liabilities is to finance the Companyâs operations. The Companyâs principal financial assets include trade & other receivables, loan given, cash & cash Equivalent, Investment, deposits and derivative that derive directly from its operations.
The Company''s Financial Risk Management is an integral part of how to plan and execute its business strategies. The Company''s financial risk management is set by the Managing Board.
Company is exposed to following risk from the use of its financial instrument:
a) -Credit Risk
b) -Liquidity Risk
c) -Market Risk
a) Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations resulting in a financial loss to the Company. Credit risk arises principally from trade receivables, loans & advances, cash & cash equivalents and deposits with banks and financial institutions.
Customer credit risk is managed by each business unit subject to the Companyâs established policy, procedures and control relating to customer credit risk management. Trade receivables are non-interest bearing and are generally on 7 days to 45 days credit term. Credit limits are established for all customers based on internal rating criteria. Outstanding customer receivables are regularly monitored. The Company has no concentration of credit risk as the customer base is widely distributed both economically and geographically.
An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The calculation is based on actual incurred historical data. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low. The requirement of impairment is analysed as each reporting date.
Other Financial Instruments and Cash & Cash Equivalents
Credit risk from balances with banks and financial institutions is managed by the Companyâs treasury department in accordance with the Companyâs policy. Investments of surplus funds are made only with approved counterparties who meets the minimum threshold requirements under the counterparty risk assessment process. The Company monitors the ratings, credit spreads and financial strength of its counterparties. Based on its on-going assessment of counterparty risk, the group adjusts its exposure to various counterparties. The Companyâs maximum exposure to credit risk for the components of the Balance sheet as of March 31st, 2023 and March 31st, 2022 is the carrying amount as disclosed in Note 50(1) except for financial guarantees. The Companyâs maximum exposure for financial guarantee is given in Note 46.
(ii) Provision for Expected Credit or Loss
(a) Financial assets for which loss allowance is measured using 12 month expected credit losses.
The Company has assets where the counter-parties have sufficient capacity to meet the obligations and where the risk of default is very low. Accordingly, no loss allowance for impairment has been recognised.
(b) Financial assets for which loss allowance is measured using life time expected credit losses
The Company provides loss allowance on trade receivables using life time expected credit loss and as per simplified approach.
b) Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Companyâs approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companyâs reputation.
c) Market Risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the Companyâs income. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.
The Board of Directors is responsible for setting up of policies and procedures to manage market risks of the Company. All such transactions are carried out within the guidelines set by the risk management committee.
Foreign Currency sensitivity
The Companyâs exposure to foreign currency changes for all other currencies is not material. Hence there is no major impact on company''s profit before tax due to change in the fair value of monetary assets and liabilities.
50 Capital Risk Management
For the purpose of the Companyâs capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Companyâs capital management is to ensure that it maintains an efficient capital structure and healthy capital ratios in order to support its business and maximise shareholder value.
The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions or its business equirements. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total equity. The Company includes within net debt, interest bearing loans and borrowings less cash and cash equivalents.
Fair Value Hierarchy
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are
(a) recognised and measured at fair value and
(b) measured at amortised cost and for which fair values are disclosed in financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into three levels prescribed under the accounting standard. An explanation of each level follows underneath the table:
(A) Specific valuation technique is used to determine the fair value of the financial instruments which include:
i) For Investments in Equity Investments- Quoted Market prices are used and and for unquoted Equity Instruments best possible inputs are taken to identify the fair value.
ii) For financial liabilities (vendor liabilities, domestic currency loans) :- appropriate market borrowing rate of the entity as of each balance sheet date used.
iii) For financial assets (employee loans) : appropriate market rate of the entity as of each balance sheet date used.
55 Corporate Social Responsibility (CSR)
As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities.Though the net profit for the FY 21-22 is more than 5 Cr.,but the average net profit for immediately preceding three financial years does not turn out to be a positive number. Therefore the Company is not required to spend any amount on CSR.
56 Details of Crypto Currency or Virtual Currency
During the year company has not invested in any virtual currency.
I Other Notes
The Board of Directors of the Company, in its meeting held on December 4, 2021, and the Board of directors of Ahilya Hotels Limited (âAHLâ), Sayaji Hotels (Indore) Limited (âSHILâ), Sayaji Hotels (Pune) Limited (âSHPLâ) and Sayaji Hotels Management Limited (âSHMLâ) have approved a composite scheme of arrangement (âthe Schemeâ) pursuant to section 230 to 232 and the other relevant provisions of the Companies Act, 2013 and Regulation 37 of SEBI (Listing Obligations and Disclosure Requirements), 2015 as orignally framed and altered/amended from time to time, for the:-
a) Amalgamation of AHL into SHL and consequential cancellation and reduction of share capital of SHL
b) Demerger of Baroda and Pune business of SHL into its wholly owned subsidiary, SHPL and Indore business of SHL into its wholly owned subsidiary, SHIL and reduction of share capital of SHPL and SHIL
c) Amalgamation of SHML into SHL
The respective Boards of other companies which are parts of the proposed scheme have also approved the scheme. The application for ordering a court convened meeting of shareholders & creditors is filed with appropriate authorities on June 6, 2022. In response to our application, the appropriate authorities have passed an order for convening the meeting of shareholders & creditors on September 9, 2022 and the same is duly convened. The proposed appointed date of the scheme is April 1, 2022, and the implementation of the scheme would be subject to the receipt of requisite regulatory approval. Pending approvals, the effect of the scheme has not been considered in the financial results of the Company for the quarter and year ended March 31st, 2023.
** The Company has reclassified previous year figures to conform to this year classification.
CTT11 riooTit A oo^nTitiTirr "D/an ac otiH AthAr Mntpc 1
Mar 31, 2018
A. Significant accounting policies
A summary of the significant accounting policies applied in the preparation of the financial statements are as given below. These accounting policies have been applied consistently to all periods presented in the financial statements.
The Company has elected to utilize the option under Ind AS 101 by not applying the provisions of Ind AS 16 and Ind AS 38 retrospectively and continue to use the previous GAAP carrying amount as a deemed cost under Ind AS at the date of transition to Ind AS. Therefore, the carrying amount of property, plant and equipment and intangible assets at 1 April 2016, the Companyâs date of transition to Ind AS, according to the previous GAAP were maintained in transition to Ind AS.
1. Current and non-current classification
The Company presents assets and liabilities in the balance sheet based on current/non-current classification.
An asset is current when it is:
- Expected to be realized or intended to sold or consumed in normal operating cycle;
- Held primarily for the purpose of trading;
- Expected to be realized within twelve months after the reporting period; or
- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is current when:
- It is expected to be settled in normal operating cycle;
- It is held primarily for the purpose of trading;
- It is due to be settled within twelve months after the reporting period; or
- There is no unconditional right to defer settlement of the liability for at least twelve months after the reporting period.
All other liabilities are classified as non-current.
Deferred tax assets/liabilities are classified as non-current.
2. Property Plant & Equipment
2.1. Initial recognition and measurement
An item of property, plant and equipments recognized as an asset if and only if it is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be measured reliably.
Items of Property, Plant and Equipment are measured at cost less accumulated depreciation/amortization and accumulated impairment losses. Cost includes expenditure that is directly attributable to bringing the asset, borrowing cost, inclusive of non-refundable taxes & duties, to the location and condition necessary for it to be capable of operating in the manner intended by management.
When parts of an item of property, plant and equipment have different useful lives, they are recognized separately.
Items of spare parts, stand-by equipment and servicing equipment which meet the definition of Property, Plant and Equipment are capitalized.
2.2. Subsequent costs
Subsequent expenditure is recognized as an increase in the carrying amount of the asset when it is probable that future economic benefits deriving from the cost incurred will flow to the enterprise and the cost of the item can be measured reliably.
The cost of replacing part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The carrying amount of the replaced part is derecognized. The costs of the day-to-day servicing of Property, Plant and Equipment are recognized in profit or loss as incurred.
2.3. Derecognition
Property, Plant and Equipment are derecognized when no future economic benefits are expected from their use or upon their disposal. Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and are recognized in the statement of profit and loss.
2.4. Depreciation/amortization
Depreciation of each part of an item of Property, Plant and Equipment is recognized in profit or loss on a Written Down Value Method over the estimated useful lives as prescribed in Schedule II of Companies Act, 2013, except in respect of the following categories of assets, in whose case the life of assets had been re-assessed as under based on technical evaluation, taking into account the nature of asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes, manufacturerâs warranties and maintenance support of each part of an item of Property, Plant and Equipment. _
Class of Assets Useful Life
Assets constructed on leased premises. Over the lease period
Leasehold lands are amortized over the lease term unless it is reasonably certain that the Company will obtain ownership by the end of the lease term.
Assets constructed on leased premises are depreciated/amortized over the lease period.
Assets costing up to Rs. 5,000/- are fully depreciated in the year of acquisition.
Depreciation on additions to/deductions from fixed assets during the year is charged on pro-rata basis from/up to the date on which the asset is available for use/disposed.
Where it is probable that future economic benefits deriving from the cost incurred will flow to the enterprise and the cost of the item can be measured reliably, subsequent expenditure on a PPE along-with its unamortized depreciable amount is charged off prospectively over the revised useful life determined by technical assessment.
In circumstance, where a property is abandoned, the cumulative capitalized costs relating to the property are written off in the same period.
3. Capital work-in-progress
The cost of self-constructed assets includes the cost of materials & direct labour, any other costs directly attributable to bringing the assets to the location and condition necessary for it to be capable of operating in the manner intended by management and borrowing costs.
Expenses directly attributable to construction of property, plant and equipment incurred till they are ready for their intended use are identified and allocated on a systematic basis on the cost of related assets.
Deposit works/cost plus contracts are accounted for on the basis of statements of account received from the contractors.
4. Intangible assets and intangible assets under development
4.1. Initial recognition and measurement
An intangible asset is recognized if and only if it is probable that the expected future economic benefits that are attributable to the asset will flow to the company and the cost of the asset can be measured reliably.
Intangible assets that are acquired by the Company, which have finite useful lives, are recognized at cost. Subsequent measurement is done at cost less accumulated amortization and accumulated impairment losses. Cost includes any directly attributable incidental expenses necessary to make the assets ready for its intended use.
4.2. Subsequent costs
Subsequent expenditure is recognized as an increase in the carrying amount of the asset when it is probable that future economic benefits deriving from the cost incurred will flow to the enterprise and the cost of the item can be measured reliably.
4.3. Derecognition
An intangible asset is derecognized when no future economic benefits are expected from their use or upon their disposal. Gains and losses on disposal of an item of intangible assets are determined by comparing the proceeds from disposal with the carrying amount of intangible assets and are recognized in the statement of profit and loss.
4.4. Amortization
Intangible assets having definite life are amortized on Written Down Value method in their useful lives. Useful life of computer software is estimated at five years. If life of any intangible asset is indefinite then it is not amortized and tested for Impairment at the reporting date.
5. Borrowing Cost
Borrowing costs that are directly attributable to the acquisition, construction/exploration/ development or erection of qualifying assets are capitalized as part of cost of such asset until such time the assets are substantially ready for their intended use. Qualifying assets are assets which take a substantial period of time to get ready for their intended use or sale. Capitalization of borrowing costs ceases when substantially all the activities necessary to prepare the qualifying assets for their intended uses are complete.
All other borrowing costs are charged to revenue as and when incurred.
Borrowing costs consist of (a) interest expense calculated using the effective interest method as described in Ind AS 109 -
âFinancial Instrumentsâ (b) finance charges in respect of finance leases recognized in accordance with Ind AS 17 - âLeasesâ (c) exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs and (d) other costs that an entity incurs in connection with the borrowing of funds. Income earned on temporary investment of the borrowings pending their expenditure on the qualifying assets is deducted from the borrowing costs eligible for capitalization.
6. Investment in Subsidiary, Associate & Joint Venture
These are Companyâs Separate Financial Statements. Company has opted to show investments in Subsidiary, Associates & Joint Venture at cost. Dividend from these is recognized as and when right to receive is established.
Impairment loss is recognized as per Ind AS 36.
7. Inventories
InventoriesStock of Food and Beverages and stores and operating supplies are are valued carried at the lower of cost and net realizable value. Cost includes cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition, including duties and taxes (other than those refundable). Cost is determined on Weighted Average Basis. Costs of purchased inventory are determined after deducting rebates and discounts. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.
The diminution in the value of obsolete, unserviceable and surplus stores & spares is ascertained on review and provided for.
8. Cash and Cash Equivalent
Cash and cash equivalent in the balance sheet comprise cash at banks and cash on hand and short-term deposits with an original maturity of three months or less, which are subject to insignificant risk of change in value.
9. Government Grants
Government grants that compensate the company for the cost of asset are recognized initially as deferred income when there is reasonable assurance that they will be received and the Company will comply with the conditions associated with the grant and are recognized in profit or loss on a systematic basis over the useful life of the related asset. Grants that compensate the Company for expenses incurred are recognized over the period in which the related costs are incurred and are deducted from the related expenses.
10. Provisions and contingent liabilities and Contingent Assets
A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.
Contingent liabilities are possible obligations that arise from past events and whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events not wholly within the control of the Company. Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Contingent liabilities are disclosed on the basis of judgment of the management/independent experts. These are reviewed at each balance sheet date and are adjusted to reflect the current management estimate.
Contingent assets are possible assets that arise from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. Contingent assets are disclosed in the financial statements when inflow of economic benefits is probable on the basis of judgment of management. These are assessed continually to ensure that developments are appropriately reflected in the financial statements.
11. Foreign currency transactions and translation
Transactions in foreign currencies are initially recorded at the functional currency spot rates at the date the transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. Exchange differences arising on settlement or translation of monetary items are recognized in profit or loss in the year in which it arises.
Non-monetary items are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.
12. Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company, and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable and taking into account contractually defined terms of payment. The Company has concluded that it is the principal in all of its revenue arrangements since it is the primary obligor in all the revenue arrangements as it has pricing latitude and is also exposed to inventory and credit risks.
The Company operates loyalty programme, which allows its eligible customers to earn points based on their spending at the hotels. The points so earned by such customers are accumulated. The revenue allocated to award points is deferred and on redemption of the award points, the revenue is recognised. Membership fees received from the loyalty program is recognised as revenue on time-proportion basis.
12.1 Rendering of services
Revenue comprises sale of rooms, food and beverages, allied services relating to Hotel operations, including management fees for the management of the hotels.
Revenue is recognized upon rendering of service, provided pervasive evidence of an arrangement exists, tariff / rates are fixed or are determinable and collectability is reasonably certain. Life Membership fees is amortised over a period of 10 years, taken as an estimate by the management.Life time club membership fees treated as income in the year of receipt.
Sale is exclusive of Luxury tax, Sales tax, Service Tax and other taxes. Sales tax under the composition scheme is also excludedRevenue from sales of goods or rendering of services is net of indirect taxes, returns and discounts.
Life Membership fees is amortised over a period of 10 years, taken as an estimate by the management.
Management Fees earned from hotels managed by the Company are usually under long-term contracts with the hotel owner and is recognised when earned in accordance with the terms of the contract.
12.2 Interest Income
For all financial instruments measured at amortised cost and interest-bearing financial assets classified as fair value through other comprehensive income, interest income is recorded using the effective interest rate (EIR). The EIR is the rate that exactly discounts the estimated future cash receipts over the expected life of the financial instrument or a shorter period, whereever appropriate, to the net carrying amount of the financial asset. When calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial instrument (which inter alia includes for example, prepayment, extension, call and similar options) but does not considerexcluding the expected credit losses. Interest income is included in other income in the statement of profit or loss.
12.3 Dividend
Dividend Income is recognised when the Companyâs right to receive is established which generally occurs when the shareholders approve the dividend.
12.4 Other Income
Other income is recognized in the statement of profit and loss when increase in future economic benefits related to an increase in an asset or a decrease of a liability has arisen that can be measured reliably.
13. Employee Benefits
13.1. Short Term Benefit
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.
A liability is recognized for the amount expected to be paid under performance related pay if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.
13.2. Post-Employment benefits
Employee benefit that are payable after the completion of employment are Post-Employment Benefit (other than termination benefit). These are of two type:
13.2.1. Defined contribution plans
Defined contribution plans are those plans in which an entity pays fixed contribution into separate entities under the plan and will have no legal or constructive obligation to pay further amounts to employee in future under the Plan. Provident Fund and Employee State Insurance are Defined Contribution Plans in which company pays a fixed contribution and will have no further obligation.
13.2.2. Defined benefit plans
A defined benefit plan is a post-employment benefit plan other than a defined contribution plan.
Company pays Gratuity as per provisions of the Gratuity Act, 1972. The Companyâs net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. Any unrecognized past service costs and the fair value of any plan assets are deducted. The discount rate is based on the prevailing market yields of Indian government securities as at the reporting date that have maturity dates approximating the terms of the Companyâs obligations and that are denominated in the same currency in which the benefits are expected to be paid.
The calculation is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a liability to the company, the present value of liability is recognized as provision for employee benefit. Any actuarial gains or losses are recognized in OCI in the period in which they arise.
13.2.3. Long Term Employee Benefit
Benefits under the Companyâs leave encashment constitute other long term employee benefits.
Leave Encashment is determined based on the available leave entitlement at the end of the year.
14. Income Taxes
Income tax expense comprises current and deferred tax. Current Income tax expense is recognized in profit or loss except to the extent that it relates to items recognized directly in other comprehensive income or equity, in which case it isis the current and deferred tax are also recognized in OCI or directly in equity, respectively.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted and as applicable at the reporting date, and any adjustment to tax payable in respect of previous years. Current income taxes are recognized under âIncome tax payableâ net of payments on account, or under âTax receivablesâ where there is a debit balance. 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 is recognized using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes, except when the deferred income tax arises from the initial recognition of goodwill, an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profits or loss at the time of the transaction.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.
Deferred tax is recognized in profit or loss except to the extent that it relates to items recognized directly in OCI or equity, in which case it is recognized in OCI or equity.
A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
Additional income taxes that arise from the distribution of dividends are recognized at the same time that the liability to pay the related dividend is recognized.
15. Leases As Lessee Accounting for finance leases
Leases of Property, Plant and Equipment where the Company, as lessee has substantially all risks and rewards of ownership are classified as finance lease. On initial recognition, assets held under finance leases are recorded as Property, Plant and Equipment and the related liability is recognized under borrowings. At inception of the lease, finance leases are recorded at amounts equal to the fair value of the leased asset or, if lower, the present value of the minimum lease payments. Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability.
Accounting for operating leases
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as lessee are classified as operating lease. Payments made under operating leases are recognized as an expense over the lease termcharged to the Statement of Profit and Loss on a straight- line basis over the period of the lease unless the payments are structured to increase in line with the expected general inflation to compensate the lessorâs expected inflationary cost increases.
16. Impairment of Non-financial Assets
The carrying amounts of the Companyâs non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment considering the provisions of Ind AS 36 âImpairment of Assetsâ. If any such indication exists, then the assetâs recoverable amount is estimated.
The recoverable amount of an asset or cash-generating unit is the higher of its fair value less costs to disposal and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the âcash-generating unitâ, or âCGUâ).
An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment losses are recognized in profit or loss. Impairment losses recognized in respect of CGUs are reduced from the carrying amounts of goodwill of that CGU, if any and then the assets of the CGU.
Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the assetâs carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.
17. Operating Segments
In accordance with Ind AS 108 - Operating Segments, the operating segments used to present segment information are identified on the basis of internal reports used by the Companyâs Management to allocate resources to the segments and assess their performance. The Board of Directors is collectively the Companyâs âChief Operating Decision Makerâ or âCODMâ within the meaning of Ind AS 108. For management purpose company is organized into major operating activity of hoteliering in India. The indicators used for internal reporting purposes may evolve in connection with performance assessment measures put in place.
18. Dividends
Dividends and interim dividends payable to a Companyâs shareholders are recognized as changes in equity in the period in which they are approved by the shareholdersâ meeting and the Board of Directors respectively.
19. Material Prior Period Errors
Material prior period errors are corrected retrospectively by restating the comparative amounts for the prior periods presented in which the error occurred. If the error occurred before the earliest prior period presented, the opening balances of assets, liabilities and equity for the earliest prior period presented, are restated.
20. Earnings Per Share
Basic earnings per equity share is computed by dividing the net profit or loss attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the financial year.
Diluted earnings per equity share is computed by dividing the net profit or loss attributable to equity shareholders of the Company by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.
21. Statement of Cash Flows
Statement of cash flows is prepared in accordance with the indirect method prescribed in Ind AS-7 âStatement of cash flows.
22. 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.
22.1. Financial assets
Initial recognition and measurement
All financial assets are recognized initially at fair value plus or minus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition or issue of the financial asset.
Subsequent measurement Debt instruments at amortized cost
A âdebt instrumentâ is measured at the amortized cost if both the following conditions are met:
(a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
(b) 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 amortized cost using the EIR method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the profit or loss. The losses arising from impairment are recognized in the profit or loss. This category generally applies to trade and other receivables.
Debt instrument at FVTOCI (Fair Value through OCI)
A âdebt instrumentâ is classified as at the FVTOCI if both of the following criteria are met:
(a) The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets, and
(b) The assetâs contractual cash flows represent SPPI
Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the OCI. However, the Company recognizes interest income, impairment losses & reversals and foreign exchange gain or loss in the profit and loss. On derecognition of the asset, cumulative gain or loss previously recognized in OCI is reclassified from the equity to profit and loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the EIR method.
Debt instrument at FVTPL (Fair value through profit or loss)
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.
In addition, the Company may elect to classify a debt instrument, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as âaccounting mismatchâ). Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the profit and loss.
Equity investments
All equity investments in entities other than subsidiaries, associates and joint ventures are measured at fair value. Equity instruments which are held for trading are classified as at FVTPL. For all other equity instruments, the Company decides to classify the same either as at FVTOCI or FVTPL. The Company makes such election on an instrument by instrument basis. The classification is made on initial recognition and is irrevocable.
If the company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instruments, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to P&L, even on sale of investment. However the company may transfer cumulative gain or loss within the equity.
Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the profit and loss. Equity investments in subsidiaries, associated and joint ventures are measured at cost.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is primarily derecognized (i.e. removed from the Companyâs balance sheet) when:
- The rights to receive cash flows from the asset have expired, or
- The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a âpass-throughâ arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
Impairment of financial assets
In accordance with Ind-AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure:
- Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt securities, deposits, trade receivables and bank balance
- Trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 11 and Ind AS 18
- The Company follows âsimplified approachâ for recognition of impairment loss allowance on:
- Trade receivables or contract assets resulting from transactions within the scope of Ind AS 11 and Ind AS 18, if they do not contain a significant financing component
- Trade receivables or contract assets resulting from transactions within the scope of Ind AS 11 and Ind AS 18 that contain a significant financing component, if the Company applies practical expedient to ignore separation of time value of money, and
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 ECLs at each reporting date, right from its initial recognition.
For recognition of impairment loss on other financial assets and risk exposure, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognizing impairment loss allowance based on 12-month ECL.
22.2 Financial liabilities
Initial recognition and measurement
All financial liabilities are recognized at fair value and in case of loans, net of directly attributable cost. Fees of recurring nature are directly recognised in the Statement of Profit and Loss as finance cost.
Subsequent measurement
Financial liabilities are carried at amortized cost using the effective interest method. Amortized cost is calculated by taking into account any discount or premium on acquisition and any material transaction that are any integral part of the EIR. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
Derecognition
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as 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 or loss. Derivative financial instruments
The Company uses forwards to mitigate the risk of changes in interest rates, exchange rates and commodity prices. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are also subsequently measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Any gains or losses arising from changes in the fair value of derivatives are taken directly to Statement of Profit and Loss, except for the effective portion of cash flow hedges which is recognised in Other Comprehensive Income and later to Statement of Profit and Loss when the hedged item affects profit or loss or treated as basis adjustment if a hedged forecast transaction subsequently results in the recognition of a non-financial assets or non-financial liability.
Hedges that meet the criteria for hedge accounting are accounted for as follows:
a) Cash flow hedge
The Company designates derivative contracts or non derivative financial assets / liabilities as hedging instruments to mitigate the risk of movement in interest rates and foreign exchange rates for foreign exchange exposure on highly probable future cash flows attributable to a recognised asset or liability or forecast cash transactions. When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognized in the cash flow hedging reserve being part of other comprehensive income. Any ineffective portion of changes in the fair value of the derivative is recognized immediately in the Statement of Profit and Loss. If the hedging relationship no longer meets the criteria for hedge accounting, then hedge accounting is discontinued prospectively. If the hedging instrument expires or is sold, terminated or exercised, the cumulative gain or loss on the hedging instrument recognized in cash flow hedging reserve till the period the hedge was effective remains in cash flow hedging reserve until the underlying transaction occurs. The cumulative gain or loss previously recognized in the cash flow hedging reserve is transferred to the Statement of Profit and Loss upon the occurrence of the underlying transaction. If the forecasted transaction is no longer expected to occur, then the amount accumulated in cash flow hedging reserve is reclassified in the Statement of Profit and Loss.
b) Fair Value Hedge
Changes in the fair value of hedging instruments and hedged items that are designated and qualify as fair value hedges are recorded in the Statement of Profit and Loss. If the hedging relationship no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of a hedged item for which the effective interest method is used is amortised to Statement of Profit and Loss over the period of maturity.
23. The company discloses certain financial information both including and excluding exceptional items. The presentation of information excluding exceptional items allows a better understanding of the underlying trading performance of the company and provides consistency with the companyâs internal management reporting. Exceptional items are identified by virtue of either their size or nature so as to facilitate comparison with prior periods and to assess underlying trends in the financial performance of the company. Exceptional items can include, but are not restricted to, gains and losses on the disposal of assets/investments, impairment charges, exchange gain/loss on long term borrowings/ assets and chages in fair value of derivative contracts.
A. Major Estimates made in preparing Financial Statements
1. Useful life of property, plant and equipment
The estimated useful life of property, plant and equipment is based on a number of factors including the effects of obsolescence, demand, competition and other economic factors (such as the stability of the industry and known technological advances) and the level of maintenance expenditures required to obtain the expected future cash flows from the asset.
Useful life of the assets other than Plant and machinery are in accordance with Schedule II of the Companies Act, 2013.
The Company reviews at the end of each reporting date the useful life of property, plant and equipment, and are adjusted prospectively, if appropriate.
2. Post-employment benefit plans
Employee benefit obligations are measured on the basis of actuarial assumptions which include mortality and withdrawal rates as well as assumptions concerning future developments in discount rates, the rate of salary increases and the inflation rate. The Company considers that the assumptions used to measure its obligations are appropriate and documented. However, any changes in these assumptions may have a material impact on the resulting calculations.
3. Provisions and contingencies
The assessments undertaken in recognizing provisions and contingencies have been made in accordance with Ind AS 37, âProvisions, Contingent Liabilities and Contingent Assetsâ. The evaluation of the likelihood of the contingent events has required best judgment by management regarding the probability of exposure to potential loss. Should circumstances change following unforeseeable developments, this likelihood could alter.
4. Impairment Test of Non-Financial Assets:
The recoverable amount of investment in subsidiary is based on estimates and assumptions regarding in particular the future cash flows associated with the operations of the investee company. Any changes in these assumptions may have a material impact on the measurement of the recoverable amount and could result in impairment.
Mar 31, 2016
NOTE 1.
Sayaji Hotels Limited (âSHLâ or the âCompanyâ), is a listed public limited company incorporated under the provisions of the Companies Act, 2013. Its shares are listed on Bombay stock exchange on India. The Company is primarily engaged in the business of owning, operating & managing hotels.
SIGNIFICANT ACCOUNTING POLICIES
Convention
To prepare financial statements in accordance with applicable Accounting Standards in India. A summary of accounting policies, which have been applied consistently, is set out below. The financial statements have also been prepared in accordance with relevant presentational requirement of the Companies Act, 2013.
Basis of Accounting
The financial statements have been prepared under the historical cost convention and on accrual basis and ongoing concern concept. Use of Estimates
The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reported period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.
Fixed Assets
To state Fixed Assets at cost of acquisition inclusive of inward freight, duties and taxes and incidental expenses related to acquisition. In respect of major projects involving construction/fabrication, related pre-operational expenses form part of the value of the assets capitalized. Expenses capitalized also includes applicable borrowing costs.
To capitalize software where it is expected to provide future enduring economic benefits. Capitalization costs includes license fees. The costs are capitalized in the year in which the relevant software is implemented for use. Subsequent expenditure related to an item of fixed assets is added to its book value only if increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repairs and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.
Gains or losses arising from de-recognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.
Depreciation
No amortization is provided in the Accounts in respect of leasehold land in view of the long term tenure, which is akin to ownership.
Depreciation on Fixed Assets is provided for on Written Down Value Method, based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013 except in respect of the following assets, where useful life is different than those prescribed in Schedule II are used;
Investments
Current investments are stated at lower of cost and fair market value, and long term investments are stated at cost. Where applicable, provision is made where there is a permanent fall in valuation of long term investments.
Inventories
Inventories consisting of Stock of Food and Beverages and Stores & Operating Supplies are valued at cost or net realisable value, whichever is less, after providing for obsolescence & damage.
Cost is arrived at on Weighted Average basis. Cost comprises expenditure incurred in normal course of the business in bringing such inventories to its location. Obsolete, slow moving and defective inventories are identified at the time of physical verification of inventories and, where necessary, provision is made for such inventories.
Foreign Currency Transactions
(a) Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction.
(b) Monetary items denominated in foreign currencies at the yearend are restated at the yearend rates. In case of items which are covered by forward exchange contracts, the difference between the yearend rate and the rate on the date of the contract is recognized as exchange difference and the premium paid on forward contracts is recognized over the life of the contract.
(c) Any income or expense on account of exchange difference either on settlement or on translation is recognized in the statement of profit and loss account.
Income
Revenue comprises sale of rooms, food and beverages, allied services relating to Hotel operations. Revenue is recognized upon rendering of service. Life time club membership fees treated as income in the year of receipt.
Sale is exclusive of Luxury tax, Sales tax, Service Tax and other taxes. Sales tax under the composition scheme is also excluded. Benefits to Workmen
Employee benefit plans comprise both defined benefit and defined contribution plans.
Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year. Actuarial gains/ losses are immediately taken to the statement of profit and loss account and are not deferred.
Provident fund is a defined contribution plan. Each eligible employee and the company make contributions at a percentage of the basic salary specified under the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952.
The Company''s contributions are charged to the profit and loss account of the year when the contributions to the respective funds are due. The company has no further obligations under the plan beyond its periodic contributions. Benefit in terms of workmen demand pending settlement, medical reimbursement and leave travel concession are accounted, when paid and bonus to employees, is provided for on accrual basis. Leave Encashment is determined based on the available leave entitlement at the end of the year.
Taxes of Income
To provide and determine current tax as the amount of tax payable in respect of taxable income for the period.
To provide and recognize deferred tax on timing differences between taxable income and accounting income subject to consideration of prudence.
Not to recognize deferred tax assets on unabsorbed depreciation and carry forward of losses unless there is virtual certainty that there will be sufficient future taxable income available to realize such assets.
Minimum Alternative Tax (âMATâ) credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the Company will pay normal income tax during the specified period.
Impairment of Assets
Impairment is ascertained at each balance sheet date in respect of company''s fixed assets. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use. In assessing value and use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.
Accounting for Provisions, Contingent Liabilities & Contingent Assets
Provisions are recognized in terms of Accounting Standard 29-âProvisions, Contingent Liabilities and Contingent Assetsâ issued by The Institute of Chartered Accountant of India, when there is a present legal or statutory obligation as a result of past event where it is probable that there will be outflow of resources to settle the obligation and when a reliable estimate of the amount of the obligation can be made.
Contingent Liabilities are recognized only when there is a possible obligation arising from past events due to occurrence or non occurrence of one or more uncertain future events not wholly within the control of the company or where reliable estimate of the obligation cannot be made. Obligations are assessed on an ongoing basis and only those having largely probable outflow of resources are provided for.
Contingent Assets are not recognized in the financial statements.
Borrowing Costs
General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use. All other borrowing costs are charged to Statement of Profit and Loss over the tenure of the borrowing.
Events occurring after the date of Balance Sheet date
Where material, events occurring after the date of Balance Sheet are considered up to the date of adoption of the accounts.
Accounting for Leases
In respect of operating lease transactions, the assets are not capitalized in the books of the Company and lease payments are charged to the Statement of Profit and Loss Account.
Periodic escalations in the lease rentals are considered as and when the same are effective as per the terms of lease and the same are not straight lined.
Claims
To disclose claims against the company not acknowledged as debts after a careful evaluation of the facts and legal aspect of the matter involved
Mar 31, 2015
NOTE 1.
Sayaji Hotels Limited ("SHL" or the "Company"), is a listed public
limited company incorporated under the provisions of the Companies Act,
1956. Its shares are listed on Bombay stock exchange, Vadodara stock
exchange, Madhya Pradesh stock exchange & Ahmedabad stock exchange on
India. The Company is primarily engaged in the business of owning,
operating & managing hotels.
Convention
To prepare financial statements in accordance with applicable
Accounting Standards in India. A summary of accounting policies, which
have been applied consistently, is set out below. The financial
statements have also been prepared in accordance with relevant
presentational requirement of the Companies Act, 2013.
Basis of Accounting
The financial statements have been prepared under the historical cost
convention and on accrual basis and on going concern concept.
Use of Estimates
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reported period. Difference
between the actual results and estimates are recognized in the period
in which the results are known / materialized.
Fixed Assets
To state Fixed Assets at cost of acquisition inclusive of inward
freight, duties and taxes and incidental expenses related to
acquisition. In respect of major projects involving
construction/fabrication, related pre-operational expenses form part of
the value of the assets capitalized. Expenses capitalized also includes
applicable borrowing costs.
To capitalize software where it is expected to provide future enduring
economic benefits. Capitalization costs includes license fees. The
costs are capitalized in the year in which the relevant software is
implemented for use. Subsequent expenditure related to an item of fixed
assets is added to its book value only if increases the future benefits
from the existing asset beyond its previously assessed standard of
performance. All other expenses on existing fixed assets, including
day-to-day repairs and maintenance expenditure and cost of replacing
parts, are charged to the statement of profit and loss for the period
during which such expenses are incurred.
Gains or losses arising from de-recognition of fixed assets are
measured as the difference between the net disposal proceeds and the
carrying amount of the asset and are recognized in the statement of
profit and loss when the asset is derecognized.
Depreciation
No amortization is provided in the Accounts in respect of leasehold
land in view of the long term tenure, which is akin to ownership.
Depreciation on Fixed Assets is provided for on Written Down Value
Method, based on useful life of the assets as prescribed in Schedule II
to the Companies Act, 2013 except in respect of the following assets,
where useful life is different than those prescribed in Schedule II are
used;
Investments
To state current investments at lower of cost and fair value, and long
term investments are stated at cost. Where applicable, provision is
made where there is a permanent fall in valuation of long term
investments.
Inventories
Inventories consisting of Stock of Food and Beverages and Stores &
Operating Supplies are valued at cost or net realisable value,
whichever is less, after providing for obsolescence & damage.
Cost is arrived at on Weighted Average basis. Cost comprises
expenditure incurred in normal course of the business in bringing such
inventories to its location. Obsolete, slow moving and defective
inventories are identified at the time of physical verification of
inventories and, where necessary, provision is made for such
inventories.
Foreign Currency Transactions
(a) Transactions denominated in foreign currencies are recorded at the
exchange rate prevailing on the date of the transaction.
(b) Monetary items denominated in foreign currencies at the year end
are restated at the year end rates. In case of items which are covered
by forward exchange contracts, the difference between the year end rate
and the rate on the date of the contract is recognized as exchange
difference and the premium paid on forward contracts is recognized over
the life of the contract.
(c) Any income or expense on account of exchange difference either on
settlement or on translation is recognized in the profit and loss
account.
Income
Revenue comprises sale of rooms, food and beverages, allied services
relating to Hotel operations. Revenue is recognized upon rendering of
service. Life time club membership fees treated as income in the year
of receipt.
Sale is exclusive of Luxury tax, Sales tax, Service Tax and other
taxes. Sales tax under the composition scheme is also excluded.
Benefites to Workmen
Employee benefit plans comprise both defined benefit and defined
contribution plans.
Gratuity liability is a defined benefit obligation and is provided for
on the basis of an actuarial valuation on projected unit credit method
made at the end of each financial year. Actuarial gains/ losses are
immediately taken to profit and loss account and are not deferred.
Provident fund is a defined contribution plan. Each eligible employee
and the company make contributions at a percentage of the basic salary
specified under the Employees' Provident Funds and Miscellaneous
Provisions Act, 1952.
The Company's contributions are charged to the profit and loss account
of the year when the contributions to the respective funds are due. The
company has no further obligations under the plan beyond its periodic
contributions. Benefit in terms of workmen demand pending settlement,
medical reimbursement and leave travel concession are accounted, when
paid and bonus to employees, is provided for on accrual basis. Leave
Encashment is determined based on the available leave entitlement at
the end of the year.
Taxes of Income
To provide and determine current tax as the amount of tax payable in
respect of taxable income for the period.
To provide and recognize deferred tax on timing differences between
taxable income and accounting income subject to consideration of
prudence.
Not to recognize deferred tax assets on unabsorbed depreciation and
carry forward of losses unless there is virtual certainty that there
will be sufficient future taxable income available to realize such
assets.
Minimum Alternative Tax ("MAT") credit is recognised as an asset only
when and to the extent there is convincing evidence that the Company
will pay normal income tax during the specified period. Such asset is
reviewed at each Balance Sheet date and the carrying amount of the MAT
credit asset is written down to the extent there is no longer a
convincing evidence to the effect that the Company will pay normal
income tax during the specified period.
Impairment of Assets
Impairment is ascertained at each balance sheet date in respect of
company's fixed assets. An impairment loss is recognized wherever the
carrying amount of an asset exceeds its recoverable amount. The
recoverable amount is the greater of the net selling price and value in
use. In assessing value and use, the estimated future cash flows are
discounted to their present value based on an appropriate discount
factor.
Accounting for Provisions, Contingent Liabilities & Contingent Assets
Provisions are recognized in terms of Accounting Standard
29-"Provisions, Contingent Liabilities and Contingent Assets" issued by
The Institute of Chartered Accountant of India, when there is a present
legal or statutory obligation as a result of past event where it is
probable that there will be outflow of resources to settle the
obligation and when a reliable estimate of the amount of the obligation
can be made.
Contingent Liabilities are recognized only when there is a possible
obligation arising from past events due to occurrence or non occurrence
of one or more uncertain future events not wholly within the control of
the company or where reliable estimate of the obligation can not be
made. Obligations are assessed on an ongoing basis and only those
having largely probable outflow of resources are provided for.
Contingent Assets are not recognized in the financial statements.
Borrowing Costs
General and specific borrowing costs directly attributable to the
acquisition, construction or production of qualifying assets, which are
assets that necessarily take a substantial period of time to get ready
for their intended use or sale, are added to the cost of those assets,
until such time as the assets are substantially ready for their
intended use. All other borrowing costs are charged to Statement of
Profit and Loss over the tenure of the borrowing.
Events occurring after the date of Balance Sheet date
Where material, events occurring after the date of Balance Sheet are
considered up to the date of adoption of the accounts.
Accounting for Leases
In respect of operating lease transactions, the assets are not
capitalized in the books of the Company and lease payments are charged
to the Profit and Loss Account.
Periodic escalations in the lease rentals are considered as and when
the same are effective as per the terms of lease and the same are not
straight lined.
Claims
To disclose claims against the company not acknowledged as debts after
a careful evaluation of the facts and legal aspect of the matter
involved.
Mar 31, 2014
Convention
To prepare financial statements in accordance with applicable
Accounting Standards in India. A summary of accounting policies, which
have been applied consistently, is set out below. The financial
statements have also been prepared in accordance with relevant
presentational requirement of the Companies Act, 1956.
Basis of Accounting
The financial statements have been prepared under the historical cost
convention and on accrual basis and ongoing concern concept.
Use of Estimates
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
abilities on the date of the financial statements and the reported
amount of revenues and expenses during the reported period. Difference
between the actual results and estimates are recognized in the period
in which the results are known / materialized.
Fixed Assets
To state Fixed Assets at cost of acquisition inclusive of inward
freight, duties and taxes and incidental expenses related to
acquisition. In respect of major projects involving
construction/fabrication, related pre-operational expenses from part of
the value of the assets capitalized. Expenses capitalized also
includes applicable borrowing costs.
To capitalize software where it is expected to provide future enduring
economic benefits. Capitalization costs includes license fees. The
costs are capitalized in the year in which the relevant software is
implemented for use. Subsequent expenditure related to an item of fixed
assets is added to its book value only if increases the future benefits
from the existing asset beyond its previously assessed standard of
performance. All other expenses on existing fixed assets, including
day-to-day repairs and maintenance expenditure and cost of replacing
parts, are charged to the statement of profit and loss for the period
during which such expenses are incurred.
Gains or losses arising from de-recognition of fixed assets are
measured as the difference between the net disposal proceeds and the
carrying amount of the asset and are recognized in the statement of
profit and loss when the asset is derecognized.
Depreciation
No amortization is provided in the Accounts in respect of leasehold
land in view of the long term tenure, which is akin to ownership.
Depreciation on Fixed Assets is provided for on Written Down Value
Method at the rates and in the manner specified in the Schedule XIV of
the Companies Act, 1956.
Investments
To state current investments at lower of cost and fair value, and long
term investments are stated at cost. Where applicable, provision is
made when there is a permanent fall in valuation of long term
investments.
Inventories
Inventories consisting of Stock of Food and Beverages and Stores &
Operating Supplies are valued at cost or net realisable value,
whichever is less, after providing for obsolescence & damage.
Cost is arrived at on First in First Out basis. Cost comprises
expenditure incurred in normal course of the business in bringing such
inventories to its location. Obsolete, slow moving and defective
inventories are identified at the time of physical verification of
inventories and, where necessary, provision is made for such
inventories.
Foreign Currency Transactions
(a) Transactions denominated in foreign currencies are recorded at the
exchange rate prevailing on the date of the transaction.f
(b) Monetary items denominated in foreign currencies at the year end
are restated at the year end rates. In case of items which are covered
by forward exchange contracts, the difference between the year end rate
and the rate on the date of the contract is recognized as exchange
difference and the premium paid on forward contracts is recognized over
the life of the contract.
(c) Any income or expense on account of exchange difference either on
settlement or on translation is recognized in the profit and loss
account.
Income
Revenue comprises sale of rooms, food and beverages, allied services
relating to Hotel operations. Revenue is recognized uponrendering of
service. Life time club membership fees treated as income in theyear of
receipt.
Sale is exclusive of Luxury tax, Sales tax, Service Tax and other
taxes. Sales tax under the composition scheme is also excluded.
Benefites to Workmen
Employee benefit plans comprise both defined benefitand defined
contribution plans.
Gratuity liability is a defined benefit obligation and is provided for
on the basis of an actuarial valuation on projected unit credit method
made at the end of each financial year. Actuarial gains/ losses are
immediately taken to profit and loss account and are not deferred.
Provident fund is a defined contribution plan. Each eligible employee
and the company make contributions at a percentage of the basic salary
specified under the Employees'' Provident Funds and Miscellaneous
Provisions Act, 1952.
The Company''s contributions are charged to the profit and loss account
of theyear when the contributions to the respective funds are due. The
company has no further obligations under the plan beyond its periodic
contributions. Benefit in terms of workmen demand pending settlement,
medical reimbursement and leave travel concession are accounted, when
paid and bonus to employees, is provided for on accrual basis. Leave
Encashment is determined based on the available leave entitlement at
the end of the year.
Taxes of Income
To provide and determine current tax as the amount of tax payable in
respect of taxable income for the period.
To provide and recognize deferred tax on timing differences between
taxable income and accounting income subject to consideration of
prudence.
Not to recognize deferred tax assets on unabsorbed depreciation and
carry forward of losses unless there is virtual certainty that there
will be sufficient future taxable income available to realize such
assets.
Minimum Alternative Tax ("MAT") credit is recognised as an asset only
when and to the extent there is convincing evidence that the Company
will pay normal income tax during the specified period. Such assetis
reviewed ateach Balance Sheet date and the carrying amount of the MAT
credit asset is written down to the extent there is no longer a
convincing evidence to the effect that the Company will pay normal
income tax during the specified period.
Impairment of Assets
Impairment is ascertained at each balance sheet date in respect of
company''s fixed assets. An impairment loss is recognized wherever the
carrying amount of an asset exceeds its recoverable amount. The
recoverable amount is the greater of the net selling price and value in
use. In assessing value and use, the estimated future cash flows are
discounted to their present value based on an appropriate
discountfactor.
Accounting for Provisions, Contingent Liabilities&Contingent Assets
Provisions are recognized in terms of Accounting Standard
29-"Provisions, Contingent Liabilities and Contingent Assets" issued by
The Institute of Chartered Accountant of India, when there is a present
legal or statutory obligation as a result of past event where it is
probable thatthere will be outflow of resources to settle the
obligation and when a reliable estimate of the amount of the obligation
can be made.
Contingent Liabilities are recognized only when there is a possible
obligation arising from past events due to occurrence or non occurrence
of one or more uncertain future events not wholly within the control of
the company or where reliable estimate of the obligation can not be
made. Obligations are assessed on an ongoing basis and only those
having largely probable outflow of resources are provided for.
Contingent Assets are not recognized in the financial statements.
Borrowing Costs
General and specific borrowing costs directly attributable to the
acquisition, construction or production of qualifying assets, which are
assets thatnecessarilytakeasubstantial period oftime to get ready for
their intended use or sale, are added to the cost of those assets,
until such time as the assets are substantially ready for their
intended use. All other borrowing costs are charged to Statement of
Profit and Loss over the tenure of the borrowing.
Events occurring afterthe date of Balance Sheetdate
Where material, events occurring after the date of Balance Sheet are
considered up to the date of adoption of the accounts.
Accounting for Leases
In respect of operating lease transactions, the assets are not
capitalized in the books of the Company and lease payments are charged
to the Profitand Loss Account.
Periodic escalations in the lease rentals are considered as and when
the same are effective as per the terms of lease and the same are not
straight lined.
Claims
To disclose claims against the company not acknowledged as debts after
a careful evaluation of the facts and legal aspect of the matter
involved.
Terms/rights attached to equity shares:
2.1 The company has only one class of equity shares having a par value
of Rs.10/- per share. Each Holder of equity shares is entitled to one
vote per share. The company declares and pays dividends in Indian
rupees. The dividend proposed, if any, by the Board of Directors is
subject to the approval of the shareholders in the ensuing Annual
General Meeting. During the year ended 31st March 2014, the amount of
per share dividend recognised as distributions to equity shareholders
was Rs. Nil (Previous Year Rs.Nil)
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 ownerships of shares.
4.3 Secured Term Loan from bank includes term loans outstanding from
State Bank of India, Axis Bank Ltd, State Bank of Mysore & HDFC
bank Ltd.
4.3.1 Term loans outstanding of State Bank of India are secured byway
of mortgage of land & building at Indore,Vadodara & Pune &
hypothecation of movables, present & future except stocks of food
beverages, operating supplies, stores, spares, book-debts (excluding
credit card receivables), bills etc. offered to the bankers for
securing the working capital finance. The terms of repayment of all
term loans of State Bank of India is on quarterly basis & interest is
payable on monthly basis.
4.3.2 Term loans outstanding of Axis Bank Ltd include term loans
account & vehicle loans account. Term loan outstanding is secured by
way of hypothecation of movable, present & future, except stocks of
food beverages, operating supplies, stores, spares, book-debts
(excluding credit card receivables), bills etc. The other term loan
outstanding is secured by first charge by way of hypothecation of
stocks of food, beverages, operating supplies, spares & book-debts,
bills etc. of the company & also byway of second charge on the
immovable properties of the company at Indore & Baroda & also byway of
pledge of shares belonging to promoters. The term of repayment of both
the term loan is on quarterly basis & interest is payable on monthly
basis. Vehicle loans outstanding are secured by way of hypothecation of
the specific vehicles financed by bank. These loans were personally
guranteed by Late Shri Sajid Dhanani, Company is in the process for
making alternative arrangement for replacement of the personal
guarantee.
4.3.3 Term loan outstanding of State Bank of Mysore is secured byway of
mortgage of land & building at Indore, Vadodara & Pune & hypothecation
of movables, present & future, except stocks of food beverages,
operating supplies, stores, spares, book- debts (excluding credit card
receivables), bills etc. The term of repayment of the term loan is on
quarterly basis & the interest is payable on monthly basis. These loans
were personally guranteed by Late Shri Sajid Dhanani, Company is in the
process for making alternative arrangementfor replacement of the
personal guarantee.
4.3.4 Vehicle loans outstanding fromHDFC Bank issecured by way of
hypothecation of the specific vehicles financedby bank.
4.4 Secured term loans from Financial Institutions includes term loan
outstanding of Tourism Finance Corporation of India Ltd(TFCIL) &
Madhya Pradesh Finance Corporation (MPFC).
4.4.1 Term loan outstanding from TFCIL is secured on pari-passu basis
byway of mortgage of land & building at Indore, Pune & Vadodara &
hypothecation of the movables, present & future, except stocks of food
beverages, operating supplies, stores, spares, book-debts (excluding
credit card receivables), bills etc & also byway of pledge of shares
belonging to promoters. The term of repayment is on monthly basis.
These loan were personally guranteed by Late Shri Sajid Dhanani,
Company is in the process for making alternative arrangementfor
replacement of the personal guarantee.
4.4.2 Term loan outstanding from MPFC are secured by way of mortgage of
land & building at Indore & hypothecation of the movables, present &
future, except stocks of food beverages, operating supplies, stores,
spares, book-debts (excluding credit card receivables), bills etc
bankers for securing the working capital finance. The term of repayment
is on quarterly basis & interest is payable on monthly basis. These
loan were personally guranteed by Late Shri Sajid dhanani, Company is
in the process for making alternative arrangement for replacement of
the personal guarantee.
4.5 Loan outstanding from Magma Fincorp Limited is unsecured loan.
Repayment is being made on EMI basis. Post dated cheques has been given
for all instalments.
6.1 Provision for employee benefits includes provision of Gratuity &
leave encashment payable after 12 month.
6.2 The Company makes annual contributions to the Employee''s Group
Gratuity scheme of the SBI Life Insurance Co. Ltd., a funded defined
benefit plan for the qualifying employees. The scheme provides for lump
sum payment to vested employees at retirement, death while in
employment or on termination of employment as per the terms of the
scheme. Vesting occurs upon completion of five years of service.
6.2.1 The present value of the defined benefit obligation and current
service cost were measured using the Projected Unit Credit Method, with
actuarial valuations being carried out at each balance sheet date. The
following table sets out the status of the funded gratuity plan and the
amounts recognized in the company''s financial statements as at March
31,2014:-
6.3 Leave Encashment:
The provision of leave encashment have been made on outstanding
privilege leave of employees at the end of year and calculated on the
basis of basic pay of employees. Attrition rate taken same as Actuarial
valuation report of gratuity liability.
7.1 Working capital facilities include Cash Credit Facilities from
State Bank of India outstanding Rs 350.03 lacs & Axis Bank outstanding
Rs. 173.37 lacs both of which are secured by first charge byway of
hypothecation of stocks of food, beverages, operating supplies, stores,
spares, book-debts (excluding credit card receivables), bills etc. of
the company and also byway of a second charge on the immovable
properties of the company at Indore, Baroda and Pune. Cash Credit
Facilities from Axis bank Ltd were personally guranteed by Late Shri
Sajid Dhanani, Company is in the process for making alternative
arrangement for replacement of the personal guarantee.
7.2 Fixed deposits from Public has maturity period of 12 months and
interest is payable @ 10% pa compounded monthly.
7.3 Loans from related parties & others includes loan from directors,
associates and friends & relatives of directors.
8.1 The Company has not received information from vendors regarding
their status under the Micro, Small & Medium Enterprises Development
Act, 2006 and hence disclosure relating to amount unpaid at the year
end together with interest paid/payable under the Act have not been
given.
8.2 Trade Payable having scheduled payment beyond 12 months after
reporting date Rs. Nil (Previous Year Rs. Nil)
9.1 Current maturities of term loans from bank includes Principal
instalments payable to State Bank of India, Axis Bank Ltd, State Bank
of Mysore and toHDFC. Bank wise Current maturity is give under Note no
4.1. Other terms are same as given in Note no 4.2.
9.2 Current maturities of term loans from financial institutions
includes Principal instalments payable to Tourism Finance Corporation
of India Ltd, and Madhya Pradesh Finance Corporation. Financial
Institution wise current maturities is given under Note no 4.1 Other
terms are same as given in note no 4.3.
9.3 Current maturities of term loan from NBFC is of Magma Fincorp
Limited. Other terms are same as given in note no 4.5
9.4 Statutory dues includes VAT, luxury tax, TDS, service tax & other
statutory payables.
9.5 Advances received from customer includes advances against future
bookings for functions to be held in next 12 Months
9.6 Other Currentliabilities includes rent payable, interest payable
and staff dues.
12.1 Barbeque Nation Hospitality Ltd(BNHL) is subsidiary of the company
with 54.70% shareholding. During the year company has sold 415000
shares of BNHL at Rs 334.54 per share to Tamara Private Limited.
* Includes 1942592 Equity Shares, deposited in Escrow A/c. with Citi
Bank NA, Mumbai pursuant to Escrow Agreement dated 10-04-2013 between
BNHL, SHL & AAJV Investment Trust read with Shareholders agreement
dated 26-03-2013 to facilitate the investor, for suitable Exit either
through IPO or Investor Drag Rights within 54 months from the effective
date i.e. 12-04-2013.
12.2 Malwa Hospitality Pvt Ltd is subsidiary of the company with 65%
shareholding therein.
12.3 Aries Hotels Pvt Ltd. is subsidiary of the company with 52%
shareholdingtherein.
Mar 31, 2013
1.1 Convention :
1.1.1 The financial statements have been prepared under the historical
cost convention and on the basis of going concern, in accordance with
the generally accepted accounting principles and provisions of the
Companies Act1956.
1.1.2 The Company generally follows mercantile system of accounting and
recognizes significant items of income and expenditure on accrual
basis.
1.1.3 Where changes in presentation are made, comparative figures for
the previous year are regrouped accordingly.
1.2 Fixed Assets :
1.2.1 Accounted at acquisition cost including directly attributable
costs such as freight, insurance and specific installation charges for
bringing the asset to its working condition for use.
1.2.2 Expenditure relating to existing fixed assets is added to the
cost of the assets where it increases the performance/life of the
assets as assessed earlier.
1.2.3 Fixed assets are eliminated from financial statements, either on
disposal or when retired from active use. Generally, such retired
assets are disposed of soon thereafter.
1.2.4 Pre-operative expenses, including interest on specific loans for
the projects incurred till the projects are ready for Commercial
Operation, are capitalised.
1.2.5 Expenditure on the new projects are included in Capital
Work-in-Progress.
1.3 Depreciation:
1.3.1 Leasehold Land is not amortised.
1.3.2 Depreciation is charged on fixed assets except on Freehold &
leasehold land as per the Written down value method at the rates and in
the manner prescribed under Schedule XIV to the Companies Act, 1956.
1.3.3 Assets like vehicles, computers etc. utilized during the
construction period are not depreciated till the project is ready.
1.3.4 During the year under review, the method of depreciation in
respect of fixed assets of the company have been c hanged from Straight
Line Method to Written Down Value Method for better representation of
the financial statements. In compliance with Accounting Standard (AS 6)
issued by the Institute of Chartered Accountants of India, depreciation
has been recomputed from the date of commissioning of the fixed assets
at the WDV rates applicable to those years on such fixed assets. As a
result of this change, there is additional charge of depreciation
during the year of Rs 4353.20 lacs (up to 31st March 2012) relating to
earlier years, which is debited to Profit & loss Account under
Exceptional and Extra Ordinary items.
Had there been no change in the method of depreciation, the charge for
the current year would have been lower by Rs 688.21 lacs. Consequently,
Operating Loss Before Taxes would have been lower and Reserves and
surplus & Net Block of assets would have been higher by Rs 688.21 lacs
1.4 Investments :
Investments are carried at lower of cost or quoted/ fair value.
Provision for diminution is made only if such decline is other than
temporary.
1.5 Inventories :
1.5.1 Inventories are valued at cost or net realisable value, whichever
is less, after providing for obsolescence & damage.
1.5.2 In the case of raw materials, operating supplies and stores, cost
represents purchase price and other costs incurred for bringing
inventories upto their locations and are determined on
First-In-First-Out basis.
1.6 Sales:
Sale is exclusive of Luxury tax, Sales tax, Service Tax and other
taxes. Sales tax under the composition scheme is also excluded .
1.7 Accounting for Provisions, Contingent Liabilities and Contingent
Assets :
A provision is recognized when the Company has a present obligation as
a result of past event and it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Accounting for contingencies (gains and
losses) arising out of contractual obligations, are made only on the
basis of mutual acceptances.
1.8 Events occurring after the date of Balance Sheet date :
Where material, events occurring after the date of Balance Sheet are
considered up to the date of adoption of the accounts.
1.9 Employee Benefit :
1.9.1 Employee benefit plans comprise both defined benefit and defined
contribution plans.
1.9.2 Gratuity liability is a defined benefit obligation and is
provided for on the basis of an actuarial valuation on projected unit
credit method made at the end of each financial year. Actuarial gains/
losses are immediately taken to profit and loss account and are not
deferred.
1.9.3 Provident fund is a defined contribution plan. Each eligible
employee and the company make contributions at a percentage of the
basic salary specified under the Employees'' Provident Funds and
Miscellaneous Provisions Act, 1952. The Company''s contributions are
charged to the profit and loss account of the year when the
contributions to the respective funds are due. The company has no
further obligations under the plan beyond its periodic contributions.
1.9.4 Leave Encashment is determined based on the available leave
entitlement at the end of the year.
1.10 Taxation:
1.10.1 Provision for current taxation has been made in accordance with
the Income Tax Laws applicable to the assessment year.
1.10.2 Deferred Tax is recognized on timing difference being the
difference between taxable income and accounting income that originate
in one period and are capable of reversal in one or more subsequent
periods. Where there is unabsorbed depreciation or carry forward
losses, deferred tax assets are recognized only if there is virtual
certainty of realization of such assets. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income
using the tax rates and tax laws that have been enacted or
substantively enacted by the balance sheet date.
1.11 Foreign Currency transactions :
1.11.1 Foreign currency transactions are accounted at the rate
prevailing on the date of transaction. Gain or loss arising out of
translation/conversion is taken credit for or charged to the Profit &
Loss Account.
1.11.2 Exchange difference arising due to repayment or restatement of
liabilities incurred for the purpose of acquiring fixed assets are
adjusted in the carrying amount of the respective fixed assets.
1.12 Accounting for Leases :
1.12.1 In respect of operating lease transactions, the assets are not
capitalized in the books of the Company and lease payments are charged
to the Profit and Loss Account.
1.12.2 Periodic escalations in the lease rentals are considered as and
when the same are effective as per the terms of lease and the same are
not straight lined.
1.13 Borrowing Costs :
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the post
of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for intended use. All other
borrowing costs are charged to revenue.
1.14 Impairment of Assets :
An asset is treated as impaired when the carrying cost of the asset
exceeds its recoverable value. An impairment loss is charged to the
Profit and Loss Account in the year in which an asset is identified as
impaired. The impairment loss recognized in prior accounting period is
reversed if there has been a change in the estimate of recoverable
amount.
Mar 31, 2012
1.1 Convention:
1.1.1 The financial statements have been prepared under the historical
cost convention and on the basis of going concern, in accordance with
the generally accepted accounting principles and provisions of the
Companies Act 1956.
1.1.2 The Company generally follows mercantile system of accounting and
recognizes significant items of income and expenditure on accrual
basis.
1.1.3 Where changes in presentation are made, comparative figures for
the previous year are regrouped accordingly.
1.2 Fixed Assets:
1.2.1 Accounted at acquisition cost including directly attributable
costs such as freight, insurance and specific installation charges for
bringing the asset to its working condition for use.
1.2.2 Expenditure relating to existing fixed assets is added to the
cost of the assets where it increases the performance/life of the
assets as assessed earlier.
1.2.3 Fixed assets are eliminated from financial statements, either on
disposal or when retired from active use. Generally, such retired
assets are disposed of soon thereafter.
1.2.4 Pre-operative expenses, including interest on specific loans for
the projects incurred till the projects are ready for Commercial
Operation, are capitalised.
1.2.5 Expenditure on the new projects are included in Capital
Work-in-Progress.
1.3 Depreciation:
1.3.1 Leasehold Land is not amortised.
1.3.2 Depreciation is charged on fixed assets except on Freehold &
leasehold land and buildings (in respect of restaurant chain business)
as per the straight-line method at the rates and in the manner
prescribed under Schedule XIV to the Companies Act, 1956.
1.3.3 Buildings (in respect of the restaurant chain business)
constructed on the rented properties are depreciated over the term of
the respective leases.
1.3.4 Assets like vehicles, computers etc. utilized during the
construction period are not depreciated till the project is ready.
1.3.5 Computer software and licence are depreciated overa period of
three years.
1.3.6 Liquor licences purchased for restaurant chain business are
depreciated over the period of lease term of the respective
restaurants.
1.4 Investments:
Investments are carried at lower of cost or quoted/ fair value.
Provision for diminution is made only if such decline is other than
temporary.
1.5 Inventories:
1.5.1 Inventories are valued at cost or net realisable value, whichever
is less, after providing for obsolescence and damage.
1.5.2 In the case of raw materials, operating supplies and stores, cost
represents purchase price and other costs incurred for bringing
inventories upto their locations and are determined on
First-In-First-Out basis.
1.6 Sales:
Sale is exclusive of Luxury tax, Sales tax, Service Tax and other
taxes. Life membership fee of club is treated as income in the year of
its receipts.
1.7 Accounting for Provisions, Contingent Liabilities and Contingent
Assets:
A provision is recognized when the Company has a present obligation as
a result of past event and it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Accounting for contingencies (gains and
losses) arising out of contractual obligations, are made only on the
basis of mutual acceptances.
1.8 Events occurring after the date of Balance Sheet date:
Where material, events occurring after the date of Balance Sheet are
considered up to the date of adoption of the accounts.
1.9 Employee Benefit:
1.9.1 Employee benefit plans comprise both defined benefit and defined
contribution plans.
1.9.2 Gratuity liability is a defined benefit obligation and is
provided for on the basis of an actuarial valuation on projected unit
credit method made at the end of each financial year. Actuarial gains/
losses are immediately taken to profit and loss account and are not
deferred.
1.9.3 Provident fund is a defined contribution plan. Each eligible
employee and the company make contributions at a percentage of the
basic salary specified under the Employees' Provident Funds and
Miscellaneous Provisions Act, 1952. The Company's contributions are
charged to the profit and loss account of the year when the
contributions to the respective funds are due. The company has no
further obligations under the plan beyond its periodic' contributions.
1.9.4 Leave Encashment is determined based on the available leave
entitlement at the end of the year.
1.10 Taxation:
1.10.1 Provision for current taxation has been made in accordance with
the Income Tax Laws applicable to the assessment year.
1.10.2 Deferred Tax is recognized on timing difference being the
difference between taxable income and accounting income that originate
in one period and are capable of reversal in one or more subsequent
periods. Where there is unabsorbed depreciation or carry forward
losses, deferred tax assets are recognized only if there is virtual
certainty of realization of such assets. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income
using the tax rates and tax laws that have been enacted or
substantively enacted by the balance sheet date.
1.10.3 In accordance with the Guidance Note on Accounting for credit
available in respect of MAT under the Income Tax Act, 1961 issued by
the ICAI and in view of convincing evidences of the entitlement of
credit of the MAT, the current years' MAT provision has been
recognised and credited to the Profit & Loss Account.
1.11 Foreign Currency transactions:
1.11.1 Foreign currency transactions are accounted at the rate
prevailing on the date of transaction. Gain or loss arising out of
translation/conversion is taken credit for or charged to the Profit &
Loss Account.
1.11.2 Exchange difference arising due to repayment or restatement of
liabilities incurred for the purpose of acquiring fixed assets are
adjusted in the carrying amount of the respective fixed assets.
1.12 Accounting for Leases:
1.12.1 In respect of operating lease transactions, the assets are not
capitalized in the books of the Company and lease payments are charged
to the Profit and Loss Account.
1.12.2 Periodic escalations in the lease rentals are considered as and
when the same are effective as per the terms of lease and the same are
not straight lined.
1.13 Borrowing Costs:
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for intended use. All other
borrowing costs are charged to revenue.
1.14 Impairment of Assets:
An asset is treated as impaired when the carrying cost of the asset
exceeds its recoverable value. An impairment loss is charged to the
Profit and Loss Account in the year in which an asset is identified as
impaired. The impairment loss recognized in prior accounting period is
reversed if there has been a change in the estimate of recoverable
amount.
Mar 31, 2011
A) Convention :
i. The financial statements have been prepared under the historical
cost convention and on the basis of going concern, in accordance with
the generally accepted accounting principles and provisions of the
Companies Act 1956.
ii. The Company generally follows mercantile system of accounting and
recognizes significant items of income and expenditure on accrual
basis.
iii. Where changes in presentation are made, comparative figures for
the previous year are regrouped accordingly.
b) Fixed Assets :
i. Accounted at acquisition cost including directly attributable costs
such as freight, insurance and specific installation charges for
bringing the asset to its working condition for use.
ii. Expenditure relating to existing fixed assets is added to the cost
of the assets where it increases the performance/life of the assets as
assessed earlier.
iii. Fixed assets are eliminated from financial statements, either on
disposal or when retired from active use. Generally, such retired
assets are disposed of soon thereafter.
iv. Pre-operative expenses, including interest on specific loans for
the projects incurred till the projects are ready for Commercial
Operation, are capitalised.
v. Expenditure on the new projects are included in Capital
Work-in-Progress.
c) Depreciation :
i. Leasehold Land is not amortised.
ii. Depreciation is charged on fixed assets except on Freehold &
leasehold land and buildings (in respect of restaurant chain business)
as per the straight-line method at the rates and in the manner
prescribed under Schedule XIV to the Companies Act, 1956.
iii. Buildings (in respect of the restaurant chain business)
constructed on the rented properties are depreciated over the term of
the respective leases.
iv. Assets like vehicles, computers etc. utilized during the
construction period are not depreciated till the project is ready.
v. Computer software and licence are depreciated over a period of
three years.
vi. Liquor licences purchased for restaurant chain business are
depreciated over the period of lease term of the respective
restaurants.
d) Investments :
Long term Investments are stated at cost of acquisition including
brokerage, stamp duty, fees, if any.
e) Inventories :
i. Inventories are valued at cost or replacement value, whichever is
less, after providing for obsolescence and damage.
ii. In the case of raw materials, operating supplies and stores, cost
represents purchase price and other costs incurred for bringing
inventories upto their locations and are determined on
First-In-First-Out basis.
f) Sales :
Sales is exclusive of Luxury tax, Sales tax, Service Tax and other
taxes. Life membership fee of club is treated as income in the year of
its receipts.
g) Accounting for Provisions, Contingent Liabilities and Contingent
Assets :
A provision is recognized when the Company has a present obligation as
a result of past event and it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Accounting for contingencies (gains and
losses) arising out of contractual obligations, are made only on the
basis of mutual acceptances.
h) Events occurring after the date of Balance Sheet date :
Where material, events occurring after the date of Balance Sheet are
considered up to the date of adoption of the accounts.
i) Employee Benefit :
Employee benefit plans comprise both defined benefit and defined
contribution plans.
Gratuity liability is a defined benefit obligation and is provided for
on the basis of an actuarial valuation on projected unit credit method
made at the end of each financial year. Actuarial gains/ losses are
immediately taken to profit and loss account and are not deferred.
Provident fund is a defined contribution plan. Each eligible employee
and the company make contributions at a percentage of the basic salary
specified under the Employees' Provident Funds and Miscellaneous
Provisions Act, 1952. The Company's contributions are charged to the
profit and loss account of the year when the contributions to the
respective funds are due. The company has no further obligations under
the plan beyond its periodic contributions.
Leave Encashment is determined based on the available leave entitlement
at the end of the calendar year.
j) Taxation :
i. Provision for current taxation has been made in accordance with the
Income Tax Laws applicable to the assessment year.
ii. Deferred Tax is recognized on timing difference being the
difference between taxable income and accounting income that originate
in one period and are capable of reversal in one or more subsequent
periods. Where there is unabsorbed depreciation or carry forward
losses, deferred tax assets are recognized only if there is virtual
certainty of realization of such assets. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income
using the tax rates and tax laws that have been enacted or
substantively enacted by the balance sheet date.
iii. In accordance with the Guidance Note on Accounting for credit
available in respect of MAT under the Income Tax Act,1961 issued by the
ICAI and in view of convincing evidences of the entitlement of credit
of the MAT, the current years' MAT provision has been recognised and
credited to the Profit & Loss Account.
k) Foreign Currency transactions :
Foreign currency transactions are accounted at the rate prevailing on
the date of transaction. Gain or loss arising out of
translation/conversion is taken credit for or charged to the Profit &
Loss Account.
Exchange difference arising due to repayment or restatement of
liabilities incurred for the purpose of acquiring fixed assets are
adjusted in the carrying amount of the respective fixed assets.
l) Accounting for Leases :
i. In respect of finance lease transactions, lease rents paid are
charged to the Profit and Loss Account in accordance with the terms of
the lease agreements.
ii. In respect of operating lease transactions, the assets are not
capitalized in the books of the Company and lease payments are charged
to the Profit and Loss Account.
iii. Periodic escalations in the lease rentals are considered as and
when the same are effective as per the terms of lease and the same are
not straight lined.
m) Borrowing Costs :
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for intended use. All other
borrowing costs are charged to revenue.
n) Impairment of Assets :
An asset is treated as impaired when the carrying cost of the asset
exceeds its recoverable value. An impairment loss is charged to the
Profit and Loss Account in the year in which an asset is identified as
impaired. The impairment loss recognized in prior accounting period is
reversed if there has been a change in the estimate of recoverable
amount.
Mar 31, 2010
A) Convention :
i. The financial statements have been prepared under the historical
cost convention and on the basis of going concern, in accordance with
the generally accepted accounting principles and provisions of the
Companies Act 1956.
ii. The Company generally follows mercantile system of accounting and
recognizes significant items of income and expenditure on accrual
basis.
iii. Where changes in presentation are made, comparative figures for
the previous year are regrouped accordingly.
b) Fixed Assets :
i. Accounted at acquisition cost including directly attributable costs
such as freight, insurance and specific installation charges for
bringing the asset to its working condition for use.
ii. Expenditure relating to existing fixed assets is added to the cost
of the assets where it increases the performance/life of the assets as
assessed earlier.
iii. Fixed assets are eliminated from financial statements, either on
disposal or when retired from active use. Generally, such retired
assets are disposed of soon thereafter.
iv. Pre-operative expenses, including interest on specific loans for
the projects incurred till the projects are ready for Commercial
Operation, are capitalised.
v. Expenditure on the new projects are included in Capital
Work-in-Progress.
c) Depreciation :
i. Depreciation is charged on fixed assets except on Freehold &
leasehold land and buildings (in respect of restaurant chain business)
as per the straight-line method at the rates and in the manner
prescribed under Schedule XIV to the Companies Act, 1956.
ii. Buildings (in respect of the restaurant chain business)
constructed on the rented properties are depreciated over the term of
the respective leases.
iii. Assets like vehicles, computers etc. utilized during the
construction period are not depreciated till the project is ready.
iv. Computer software and licence are depreciated over a period of
three years.
v. Liquor licences purchased for restaurant chain business are
depreciated over the period of lease term of the respective
restaurants.
d) Investments :
Long term Investments are stated at cost of acquisition including
brokerage, stamp duty, fees, if any.
e) Inventories :
i. Inventories are valued at cost or replacement value, whichever is
less, after providing for obsolescence and damage.
ii. In the case of raw materials, operating supplies and stores, cost
represents purchase price and other costs incurred for bringing
inventories upto their locations and are determined on
First-In-First-Out basis.
f) Sales :
Sales is exclusive of Luxury tax, Sales tax, Service Tax and other
taxes.
g) Accounting for Provisions, Contingent Liabilities and Contingent
Assets :
A provision is recognized when the Company has a present obligation as
a result of past event and it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Accounting for contingencies (gains and
losses) arising out of contractual obligations, are made only on the
basis of mutual acceptances.
h) Events occurring after the date of Balance Sheet date :
Where material, events occurring after the date of Balance Sheet are
considered up to the date of adoption of the accounts.
i) Employee Benefit :
Employee benefit plans comprise both defined benefit and defined
contribution plans.
Gratuity liability is a defined benefit obligation and is provided for
on the basis of an actuarial valuation on projected unit credit method
made at the end of each financial year. Actuarial gains/ losses are
immediately taken to profit and loss account and are not deferred.
Provident fund is a defined contribution plan. Each eligible employee
and the company make contributions at a percentage of the basic salary
specified under the Employeesà Provident Funds and Miscellaneous
Provisions Act, 1952. The CompanyÃs contributions are charged to the
profit and loss account of the year when the contributions to the
respective funds are due. The company has no further obligations under
the plan beyond its periodic contributions.
j) Taxation :
i. Provision for current taxation has been made in accordance with the
Income Tax Laws applicable to the assessment year.
ii. Deferred Tax is recognized on timing difference being the
difference between taxable income and accounting income that
originate in one period and are capable of reversal in one or more
subsequent periods. Where there is unabsorbed depreciation or carry
forward losses, deferred tax assets are recognized only if there is
virtual certainty of realization of such assets. The effect on deferred
tax assets and liabilities of a change in tax rates is recognized in
income using the tax rates and tax laws that have been enacted or
substantively enacted by the balance sheet date.
iii. In accordance with the Guidance Note on Accounting for credit
available in respect of MAT under the Income Tax Act,1961 issued
by the ICAI and in view of convincing evidences of the entitlement of
credit of the MAT, the current yearsà MAT provision has been recognised
and credited to the Profit & Loss Account.
k) Foreign Currency transactions :
Foreign currency transactions are accounted at the rate prevailing on
the date of transaction. Gain or loss arising out of
translation/conversion is taken credit for or charged to the Profit &
Loss Account.
Exchange difference arising due to repayment or restatement of
liabilities incurred for the purpose of acquiring fixed assets are
adjusted in the carrying amount of the respective fixed assets.
l) Assets taken on lease :
i. In respect of finance lease transactions, lease rents paid are
charged to the Profit and Loss Account in accordance with the terms of
the lease agreements.
ii. In respect of operating lease transactions, the assets are not
capitalized in the books of the Company and lease payments are charged
to the Profit and Loss Account.
m) Borrowing Costs :
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for intended use. All other
borrowing costs are charged to revenue.
n) Impairment of Assets :
An asset is treated as impaired when the carrying cost of the asset
exceeds its recoverable value. An impairment loss is charged to the
Profit and Loss Account in the year in which an asset is identified as
impaired. The impairment loss recognized in prior accounting period is
reversed if there has been a change in the estimate of recoverable
amount.
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article
More Information on Sayaji Hotels Ltd.
-
Sayaji Hotels Ltd. Tools
- Bulk Deals
- Block Deals
-
Sayaji Hotels Ltd. Company Details
- Company Profile
- Company History
- Management Team
- Capital Structure
- Product Mix
- Banker/Auditor/Registrar
-
Company History
- Rights
- BSE Price History
- NSE Price History
-
Sayaji Hotels Ltd. Key Financial Ratios
- Ratios
-
Sayaji Hotels Ltd. Results
- Quarterly Results
- Half Yearly Results
- Nine Months Results
- Annual Results
-
Sayaji Hotels Ltd. Financial Data
- Audited Results
- Cash Flow
- Balance Sheet
-
Sayaji Hotels Ltd. Reports
- Accounting Policies
- Auditors Report
- Directors Report
- Notes To Account
-
Sayaji Hotels Ltd. Corporate Announcements
- Book Closure
- Dividend
- Board Meetings
-
Stocks To Buy Today, Dec 19: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Friday -
Stocks To Buy Today, Dec 18: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Thursday -
Stocks To Buy Today, Dec 17: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Wednesday -
Stocks To Buy Today, Dec 16: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Tuesday -
India Stock Market Weekly Review: Nifty and Sensex Fall as Caution Spreads -
Stocks To Buy Today, Dec 15: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Monday
-
Stocks To Buy Today, Dec 12: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Friday -
Market Outlook 2026: Kotak Securities Sees Nifty 50 at 30,000; THESE 4 Sectors Lead Rally, Gold To Stay Strong -
Stocks To Buy Today, Dec 10: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Wednesday -
D-Street Bleeds For 2nd Day! Sensex Slumps 678 Pts; Nifty Cracks 25,800; Why Stock Market Is Falling Today? -
Stocks To Buy Today, Dec 9: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Tuesday -
Stocks To Buy Today, Dec 8: Top 4 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Monday -
Stock Market Alert! Major Pre-Open Session Change From Dec 8: Full Timings, Rules & All You Need To Know -
Bank Nifty Surges: RBI’s 25 bps Rate Cut Triggers Strong Upside in Major Banking Stocks -
Closing Bell: Sensex Ends 158 pts Higher, Nifty Climbs Above 26,000; Hero MotoCorp, HAL Up 2% Each -
Stocks To Buy Today, Dec 4: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Thursday
-
Block for 8 hours
-
Block for 12 hours
-
Block for 24 hours
-
Don't block
Sign in with Google- Male
- Female
- Others
- Under 18
- 18 to 25
- 26 to 35
- 36 to 45
- 45 to 55
- 55+