SIGNIFICANT ACCOUNTING POLICIES
A. Property, plant & equipment
a) The cost of an item of property, plant and equipment is recognized as an asset only if it is probable that future economic benefits associated with the item
will flow to the entity and the cost of the item can be measured reliably.
b) Property, plant and equipment are stated at cost net of tax / duty credit availed, less accumulated depreciation and accumulated impairment loss, if any.
c) The initial cost of an asset comprises its purchase price or construction cost (including import duties and non-refundable taxes), any costs directly
attributable to bringing the asset into the location and condition necessary for it to be capable of operating in the manner intended by management, the
initial estimate of any decommissioning obligation (if any) and the applicable borrowing cost till the asset is ready for its intended use.
d) Advances paid towards the acquisition of property, plant and equipment outstanding at each Balance Sheet date is classified as capital advances under
other non-current assets and the cost of assets not ready for intended use at the reporting date are disclosed under 'Capital work-in-progress'. Subsequent
expenditure relating to property, plant and equipment is capitalised only if it is probable that the future economic benefits associated with the expenditure
will flow to the Company.
e) An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss
arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds if any and the carrying amount of the asset) is
included in the Statement of Profit and Loss when the asset is derecognised.
f) Direct expenses incurred during construction period on capital projects are capitalised.
B Right of use asset
The company had leasehold land which is a finance lease. The carrying amount representing the fair value (revalued before the date of transition to
Ind AS) of the leased land, was recognized under Right-of-Use asset and was treated as deemed cost on adoption of Ind AS. The Right-of-Use assets are
stated at cost, less accumulated depreciation and accumulated impairment loss, if any.
D Accounting for Leases
The Company as a Lessee
On Inception of a Contract, the Company (as a lessee) assesses whether a contract contains a lease. A contract is, or contains, a lease if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the
right to control the use of an identified asset, the Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company has
substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the
asset.
At the date of commencement of the lease, the Company recognizes a right-of-use asset(“ROU”) 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 recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.
Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term. 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 not reasonably certain that it will exercise the option. ROU assets and lease liabilities includes these options when it is reasonably certain that they will
be exercised.
The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at
or prior to the commencement date of the lease plus any initial direct costs less any lease incentives received. They are subsequently measured at cost
less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and useful life of the underlying asset. If the Company is
reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying assets useful life. The Company applies Ind AS
- 36 to determine whether a Right-of-Use asset is impaired and accounts for any identified impairment loss.
The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the
interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates that the Company would have to pay to borrow
funds. Lease liabilities are remeasured with a corresponding adjustment to the related right of use asset if the Company changes its assessment if
whether it will exercise an extension or a termination option.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a
constant periodic rate of interest on the remaining balance of the liability for each period.
Lease liabilities and ROU assets have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.
The Company as a lessor
Leases for which the Company is a lessor is classified as a finance or operating lease. Whenever the terms of the lease transfer substantially all the risks
and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases.
When the Company is an intermediate lessor, it accounts for its interests in the head lease and the sublease separately. The sublease is classified as a
finance or operating lease by reference to the right-of-use asset arising from the head lease.
For operating leases, rental income is recognized on a straight line basis over the term of the relevant lease.
E Inventories
Inventories are stated at cost or net realizable value, whichever is lower. Cost of inventories comprises of expenditure incurred in the normal course of
business in bringing inventories to their present location, including appropriate overheads apportioned on a reasonable and consistent basis and is
determined on the following basis:
a Food and Beverages on weighted average basis.
b. Stores and other operating supplies on weighted average basis.
Obsolete, slow moving, surplus and defective stocks are identified and where necessary, provision is made for such stocks.
F Revenue Recognition
Sale of goods: Revenue from the sale of goods is recognised when the performance obligation is satisfied by transferring the related goods to the
customer. The performance obligation is considered to be satisfied when the customer obtains control of the goods.
Revenue from the sale of goods is measured at the fair value of the consideration received or receivable (after including fair value allocations related to
arrangements involving more than one performance obligation), net of returns, taxes or duties collected on behalf of the Government and applicable trade
discounts or rebates.
Interest income is recognised using Effective Interest Rate (EIR) method.
Dividend income is recognized when the right to receive payment is established.
G Employee Benefits
Short term employee benefits are recognized as an expense at an undiscounted amount in the Statement of Profit & Loss for the year/period in which the
related services are rendered.
The Company's post-employment benefit consists of provident fund and gratuity. The Company also provides for leave encashment which is in the nature
of long term benefit.
Company's contributions to provident fund which is a defined contribution plan, are recognised as an expense in the Statement of Profit & Loss for the
year/period in which the services are rendered. The Company's contribution to the Provident Fund is remitted to government provident fund authority
based on a fixed percentage of the eligible employee's salary and charged to Statement of Profit and Loss.
The Company operates defined benefit plan for Gratuity and Leave Encashment. The cost of providing such defined benefit is determined using the
projected unit credit method of actuarial valuation made at the end of the year.
Actuarial gains and losses are recognised in other comprehensive income for gratuity and leave encashment.
Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined
benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognised immediately
in the balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Remeasurements are not
reclassified to profit or loss in subsequent periods.
Past service costs are recognised in profit or loss on the earlier of:
a The date of the plan amendment or curtailment, and
b The date that the Company recognises related restructuring costs.
Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Company recognises the following changes in the
net defined benefit obligation as an expense in the statement of profit and loss:
a Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-routine settlements; and
b Net interest expense or income
H Borrowing costs
Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing costs that are attributable to
the acquisition or construction of qualifying assets (i.e. an asset that necessarily takes a substantial period of time to get ready for its intended use) are
capitalized as a part of the cost of such assets till the month in which the asset is ready for use. All other borrowing costs are charged to the Statement
of Profit & Loss.
I Foreign Currency Transactions
Monetary items:
Transactions in foreign currencies are initially recorded at their respective exchange rates at the date the transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are translated at spot rates of exchange at the reporting date.
Exchange differences arising on settlement or translation of monetary items are recognised in Statement of Profit & Loss.
Non - Monetary items:
Non-monetary items that are measured in terms of historical cost are recorded at the exchange rates at the dates of the initial transactions.
|