The financial statements have been prepared on the following basis:
(a) Statement of compliance:
These financial statements have been prepared in accordance with Indian Accounting Standards ("Ind AS") 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.
(b) Basis of preparation:
These financial statements have been prepared on a historical cost basis, except for certain financial instruments which
are measured at fair value at the end of each reporting period. Historical cost is generally based on the fair value of the
consideration given in exchange for goods and services. Fair value is the price that would be received to sell an asset or paid
to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether
that price is directly observable or estimated using another valuation technique.
All assets and liabilities are classified as current and non-current as per company's normal operating cycle of 12 months
which is based on the nature of business of the Company. Current Assets do not include elements which are not expected to
be realised within 1 year and Current Liabilities do not include items which are due after 1 year, the period of 1 year being
reckoned from the reporting date.
The Financial Statements are presented in Indian Rupees Lakhs, and all values are rounded off to the nearest two decimals
except when otherwise stated.
(c) Critical accounting estimates and judgements
The preparation of these financial statements in conformity with the recognition and measurement principles of Ind AS
requires management to make judgements, estimates and assumptions, that affect the reported balances of assets and
liabilities, disclosures relating to contingent liabilities as at the date of the financial statements and the reported amounts of
income and expenses for the years presented. The estimates and associated assumptions are based on historical experience
and other factors that are considered to be relevant. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised
in the period in which the estimates are revised and in any future periods affected.
In particular, information about significant areas of estimation, uncertainty and critical judgments in applying accounting
policies that have the most significant effect on the amounts recognized in the financial statements pertain to:
• Useful lives of property, plant and equipment and intangible assets: The Company has estimated useful life of each
class of assets based on the nature of assets, the estimated usage of the asset, the operating condition of the asset, past
history of replacement, anticipated technological changes, etc. The Company reviews the useful life of property, plant
and equipment and Intangible assets at the end of each reporting period. This reassessment may result in change in
depreciation expense in future periods.
• Impairment testing: Property, plant and equipment and Intangible assets are tested for impairment when events occur
or changes in circumstances indicate that the recoverable amount of the cash generating unit is less than its carrying
value. The recoverable amount of cash generating units is higher of value-in-use and fair value less cost of disposal.
The calculation involves use of significant estimates and assumptions which includes turnover and earnings multiples,
growth rates and net margins used to calculate projected future cash flows, risk-adjusted discount rate, future economic
and market conditions.
• Impairment of investments: The Company reviews its carrying value of investments carried at cost or amortised cost
annually, or more frequently when there is indication for impairment. If the recoverable amount is less than its carrying
amount, the impairment loss is accounted for.
• Income Taxes: Deferred tax assets are recognized to the extent that it is regarded as probable that deductible temporary
differences can be realized. The Company estimates deferred tax assets and liabilities based on current tax laws and
rates and in certain cases, business plans, including management's expectations regarding the manner and timing
of recovery of the related assets. Changes in these estimates may affect the amount of deferred tax liabilities or the
valuation of deferred tax assets and the tax charge in the statement of profit or loss.
Provision for tax liabilities require judgements on the interpretation of tax legislation, developments in case law and
the potential outcomes of tax audits and appeals which may be subject to significant uncertainty. Therefore the actual
results may vary from expectations resulting in adjustments to provisions, the valuation of deferred tax assets, cash tax
settlements and therefore the tax charge in the statement of profit or loss.
• Fair value measurement of derivative and other financial instruments: The fair value of financial instruments that
are not traded in an active market is determined by using valuation techniques. This involves significant judgements to
select a variety of methods and make assumptions that are mainly based on market conditions and performance of the
entity existing at the end of each reporting period and in identifying the most appropriate estimate of fair value when a
wide range of fair value measurements are possible.
• Litigation: From time to time, the Company is subject to legal proceedings the ultimate outcome of each being always
subject to many uncertainties inherent in litigation. A provision for litigation is made when it is considered probable
that a payment will be made and the amount of the loss can be reasonably estimated. Significant judgement is made
when evaluating, among other factors, the probability of unfavorable outcome and the ability to make a reasonable
estimate of the amount of potential loss. Litigation provisions are reviewed at each accounting period and revisions
made for the changes in facts and circumstances.
• Defined benefit plans: The cost of the defined benefit plans and the present value of the defined benefit obligation
are based on actuarial valuation using the projected unit credit method. An actuarial valuation involves making various
assumptions that may differ from actual developments in the future. These include the determination of the discount
rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long term
nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at
each Balance Sheet date.
• Leases: Critical judgements in determining the lease term 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 Company's
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.
Critical judgements in determining the discount rate: The Company cannot readily determine the interest rate
implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities.The discount rate
is generally based on the incremental borrowing rate specific to the lease being evaluated or for a portfolio of leases
with similar characteristics.
(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, Food and Beverage & Banquets: Revenue is recognised at the transaction price that is allocated to the performance
obligation. Revenue includes room revenue, food and beverage sale and banquet services which is recognised once the rooms
are occupied, food and beverages are sold and banquet services have been provided as per the contract with the customer.
Space and shop rentals: Rentals basically consist 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.
Management and Operating fees: Management fees earned from hotels managed by the Company are usually under long¬
term contracts with the hotel owner. Under Management and Operating Agreements, the company’s performance obligation
is to provide hotel management services and a license to use the Company's trademark and other intellectual property.
Management and incentive fee is earned as a percentage of revenue and profit and are recognized when earned in accordance
with the terms of the contract based on the underlying revenue, when collectability is certain and when the performance
criteria are met. Both are treated as variable consideration.
(e) Employee Benefits:
i. Short term-Employment 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.
a. 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), 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
Company accounts for the net present value of its obligations for gratuity benefits, based on an independent actuarial
valuation, determined on the basis of the projected unit credit method. Actuarial gains and losses are recognised
immediately in the 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.
iv. Long Service Awards
The Company has a scheme for long service awards for employees, the liability for which is determined on the basis of
an independent actuarial valuation using the projected unit credit method carried out at the balance sheet date.
(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 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.
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.
For transition to Ind AS, the Company had 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 used that carrying value
as its deemed cost as of the transition date.
Capital work in progress represents projects under which the property, plant and equipment's are not yet ready for their
intended use and are carried at cost determined as aforesaid.
(g) Intangible Assets:
Intangible assets include cost of acquired software. 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 amortized over their estimated useful economic life and assessed for impairment
whenever there is an indication that the intangible asset may be impaired. The amortisation periods are reviewed and
impairment is done only if indicators of impairment exist.
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 the 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
(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.
Minimum Alternative Tax ("MAT”) 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.
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