(d) Revenue Recognition:
Revenue is recognised at an amount that reflects the consideration to which the Company expects to be
entitled in exchange for transferring the promised goods or services to a customer i.e. on transfer of
control of the goods or service to the customer. Revenue from sales of goods or rendering of services is
net of Indirect taxes, returns and variable consideration on account of discounts and schemes offered by
the company as part of the contract.
Income from operations
Rooms and Food & Beverage: Revenue is recognised at the transaction price that is allocated to the
performance obligation. Revenue includes room revenue, food and beverage sale & banquet services
which is recognised once the rooms are occupied over a period of occupation, food & beverages are sold
and banquet services have been provided as per the contract with the customer.
Space and Shop Rentals: Rentals basically consists of rental revenue earned from letting of spaces for
retails and office at the properties. These contracts for rentals are generally of short term in nature.
Revenue is recognized in the period in which services are being rendered.
Other Allied services: In relation to the laundry income, communication income, health club income,
airport transfers income and other allied services, the revenue has been recognized by reference to the
time of service rendered.
(e) Employee Benefits:
i. Short term-Employee Benefits:
Short term employee benefits are expensed as the related services are provided. A liability is recognised
for the amount expected to be paid 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.
ii. Post-Employment Benefits:
Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed
contributions into a separate entity and will have no legal or constructive obligation to pay further
amounts.
Provident Fund:
The eligible employees of the Company are entitled to receive benefits under the provident fund, a
defined contribution plan, in which both employees and the Company make monthly contributions at
a specified percentage of the covered employees' salary (currently 12% of employees' salary), which is
recognised as an expense in the Statement of Profit and Loss during the year. The contributions as
specified under the law are paid to the respective Regional Provident Fund Commissioner (RPFC). In
respect of contribution to RPFC, the Company has no further obligations beyond making the
contribution, and hence, such employee benefit plan is classified as Defined Contribution Plan
Defined benefit plans
Gratuity Fund:
The Company makes annual contributions to gratuity funds administered by the trustees for amounts
notified by the funds. The Gratuity plan provides for lump sum payment to vested employees on
retirement, death or termination of employment of an amount based on the respective employee's last
drawn salary and tenure of employment. The obligation determined as aforesaid less the fair value of
the plan assets is reported as a liability or asset as of the reporting date. Actuarial gains and losses are
recognised immediately in Other Comprehensive Income and reflected in retained earnings and will
not be reclassified to the Statement of Profit and Loss.
iii. Other Long-term Employee Benefits:
The Company provides for encashment of leave or leave with pay subject to certain rules. The
employees are entitled to accumulate leave subject to certain limits for future encashment / availment.
The Company makes provision for compensated absences based on an independent actuarial valuation
carried out at the end of the year. Actuarial gains and losses are recognised in the Statement of Profit
and Loss.
(f) Property, Plant and Equipment:
Property, plant and equipment are stated at cost, less accumulated depreciation (other than freehold land)
and accumulated impairment losses, if any.
All property, plant and equipment are initially recorded at cost. Cost includes the acquisition cost or the
cost of construction, including duties and taxes (other than those refundable), expenses directly related to
the location of assets and making them operational for their intended use and, in the case of qualifying
assets, the attributable borrowing costs. All other repair and maintenance costs are recognised in profit or
loss as incurred. First-time issues of operating supplies for a new hotel property, consisting of linen and
chinaware, glassware and silverware (CGS) are capitalised and depreciated over their estimated useful life.
Subsequent expenditure relating to property, plant and equipment is capitalised only when it is probable
that future economic benefits associated with these will flow to the Company and the cost of the item can
be measured reliably.
An assets' carrying amount is written down immediately to its recoverable amount if the asset's carrying
amount is greater than its estimated recoverable amount.
Depreciation is charged to profit or loss so as to write off the cost of assets (other than freehold land and
properties under construction) less their residual values over their useful lives, using the straight line
method, as per the useful life prescribed in in part “C” of Schedule II to the Companies Act, 2013 except
in respect of the following categories of assets, in whose case the life of the assets had been re-assessed as
under based on technical evaluation made at the group level, taking into account the nature of the asset,
the estimated usage of the asset, the operating conditions of the asset, past history of replacement,
anticipated technological changes, manufacturers' warranties, maintenance support, etc..
In respect of buildings on leasehold land, depreciation is based on the tenure which is lower of the life of
the buildings or the expected lease period. Improvements to leasehold buildings are depreciated on the
basis of their estimated useful lives or the expected lease period, whichever is lower. In respect of
improvements to buildings carried under renovation projects, company estimates useful lives as 15 years in
line with normal renovation cycle.
The estimated useful lives, residual values and depreciation method are reviewed at the Balance Sheet date,
with the effect of any changes in estimate accounted for on a prospective basis.
For transition to Ind AS, the Company has elected to continue with the carrying value of all of its
property, plant and equipment recognised as of April 1, 2015 (transition date) measured as per the
previous GAAP and use that carrying value as its deemed cost as of the transition date.
An item of property, plant and equipment is derecognised upon disposal or when no future economic
benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal
or retirement of an item of property, plant and equipment is determined as the difference between the sales
proceeds and the carrying amount of the asset and is recognised in the Statement of Profit and Loss.
Proportionate depreciation is charged for the addition and disposal of an item of property, plant and
equipment made during the year.
Capital work in progress represents projects under which the property, plant and equipments are not yet
ready for their intended use and are carried at a cost determined as aforesaid.
(g) Intangible Assets:
Intangible assets include cost of acquired software and designs, and cost incurred for development of the
Company's website and certain contract acquisition costs. Intangible assets are initially measured at
acquisition cost including any directly attributable costs of preparing the asset for its intended use and are
carried at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets with finite lives are amortised over their estimated useful life and assessed for impairment
whenever there is an indication that the intangible asset may be impaired. Intangible assets with indefinite
useful lives are tested for impairment at least annually, and whenever there is an indication that the asset
may be impaired. The estimated useful life used for amortising intangible assets is as under:
Class of Assets Estimated Useful Life (Years)
Website Development Cost 5 years
Software and Licences 6 years
Service and Operating Rights 10 years
An intangible asset is derecognized on disposal, or when no future economic benefits are expected from
use of disposal. Gains or losses arising from derecognition of an intangible asset, measured as the
difference between the net disposal proceeds and the carrying amount of the asset, are recognized in the
Statement of Profit and Loss when the asset is derecognized.
For transition to Ind AS, the Company has elected to continue with carrying value of all of its intangible
assets recognised as of April 1, 2015 (transition date) measured as per the previous GAAP and use that
carrying value as its deemed cost as of the transition date.
(h) Impairment of assets:
Assets that are subject to amortisation are reviewed for impairment periodically including whenever events
or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss
is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in
use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset for which
the estimates of future cash flows have not been adjusted.
Where the asset does not generate cash flows that are independent from other assets, the company
estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a
reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to
individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating
units for which a reasonable and consistent allocation basis can be identified.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying
amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount.
An impairment loss is recognised immediately in the Statement of Profit and Loss. When an impairment
loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the
revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the
carrying amount that would have been determined had no impairment loss been recognised for the asset
(or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in the
Statement of Profit and Loss to the extent that it eliminates the impairment loss which has been
recognised for the asset in prior years.
(i) Foreign Currency Translation:
The functional currency of the Company is Indian rupee (').
Initial Recognition
On initial recognition, all foreign currency transactions are recorded by applying to the foreign currency
amount the exchange rate between the reporting currency and the foreign currency at the date of the
transaction.
Subsequent Recognition
As at the reporting date, non-monetary items which are carried at historical cost and denominated in a
foreign currency are reported using the exchange rate at the date of the transaction. All non-monetary
items which are carried at fair value or other similar valuation denominated in a foreign currency are
reported using the exchange rates that existed when the values were fair value measured.
All monetary assets and liabilities in foreign currency are restated at the end of accounting period.
Exchange differences on restatement of all monetary items are recognised in the Statement of Profit and
Loss.
(j) Leases:
On inception of a contract, the Company assesses whether it contains a lease. A contract is, or contains a
lease when it conveys the right to control the use of an identified asset for a period of time in exchange for
consideration. The right to use the asset and the obligation under the lease to make payments are
recognised in the Company's statement of financial position as a right-of-use asset and a lease liability.
Right of Use Assets
The right-of-use asset recognised at lease commencement includes the amount of lease liability recognised,
initial direct costs incurred, and lease payments made at or before the commencement date, less any lease
incentives received. Right-of-use assets are depreciated over the shorter of the asset's estimated useful life
and the lease term. Right-of-use assets are also adjusted for any re-measurement of lease liabilities and are
subject to impairment testing. Residual value is reassessed annually.
Lease Liabilities
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 'in-substance fixed' payments) and variable
lease payments that depend on an index or a rate, less any lease incentives receivable, and payments of
penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.
'In-substance fixed' payments are payments that may, in form, contain variability but that, in substance, are
unavoidable. The lease payments also include the exercise price of a purchase option reasonably certain to
be exercised by the Company. 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.
The lease term includes periods subject to extension options which the Company is reasonably certain to
exercise and excludes the effect of early termination options where the Company is reasonably certain that
it will not exercise the option.
After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest
and reduced for lease payments made. In addition, the carrying amount of lease liabilities is re-measured if
there is a modification, a change in the lease term, a change in the 'in-substance fixed' lease payments or as
a result of a rent review or change in the relevant index or rate.
Variable Lease
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.
Short-term leases and leases of low-value assets
The Company has opted not to apply the lease accounting model to intangible assets, leases of low-value
assets or leases which have a lease term of 12 months or less and don't contain purchase option. Costs
associated with such leases are recognised as an expense on a straight-line basis over the lease term.
Disclosure
Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments are
presented as follows in the Company's statement of cash flows:
• Short-term lease payments, payments for leases of low-value assets and variable lease payments that are
not included in the measurement of the lease liabilities are presented within cash flows from operating
activities;
• Payments for the interest element of recognized lease liabilities are included in 'interest paid' within cash
flows from operating activities; and
• Payments for the principal element of recognized lease liabilities are presented within cash flows from
financing activities
Refer Note No. 30 of the Financial Statement for details.
(k) Inventories:
Stock of food and beverages and stores and operating supplies are carried at the lower of cost (computed
on a Weighted Average basis) or net realisable value. Cost include the cost of purchase including duties
and taxes (other than those refundable), inward freight, and other expenditure directly attributable to the
purchase. Trade discounts and rebates are deducted in determining the cost of purchase.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs
of completion and selling expenses.
(l) Income Taxes:
Income tax expense comprises current tax expense and the net change in the deferred tax asset or liability
during the year. Current and deferred tax are recognised in statement of profit or loss, except when they
relate to items that are recognised in other comprehensive income or directly in equity, in which case, the
current and deferred tax are also recognised in other comprehensive income or directly in equity,
respectively.
(i) Current tax:
Current Tax expenses are accounted in the same period to which the revenue and expenses relate.
Provision for current income tax is made for the tax liability payable on taxable income after
considering tax allowances, deductions and exemptions determined in accordance with the applicable
tax rates and the prevailing tax laws.
Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off
the recognised amounts and there is an intention to settle the asset and the liability on a net basis.
(ii) Deferred tax:
Deferred income tax is recognised using the balance sheet approach. Deferred income tax assets and
liabilities are recognised for deductible and taxable temporary differences arising between the tax base
of assets and liabilities and their carrying amount in financial statements, 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 income tax assets are recognised to the extent that it is probable that taxable profit will be
available against which the deductible temporary differences and the carry forward of unused tax
credits and unused tax losses can be utilised.
The carrying amount of deferred tax assets is reviewed at the end of each reporting date and reduced
to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or
part of the deferred income tax asset to be utilised.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period
in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been
enacted or substantively enacted by the end of the reporting date.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current
tax assets against current tax liabilities and when they relate to income taxes levied by the same
taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.
|