Significant Accounting policies
Note 1:
Corporate information
Shri Havisha Hospitality and Infrastructure Limited (formerly known as Shri Matre Power and Infrastructure Limited
and Shri Shakti LPG Ltd.) was in the business of LPG marketing. In the FY 2021-22, M/s Shri Shakti Resorts and
Hotels Limited (Transferor Company) merged into the company vide NCLT Order, Hyderabad Bench, Telanagana
dated November 16, 2021. Now the company is primarily engaged in the business of owning, operating & managing
hotel. The registered office of the company is located at Venus Plaza, Adjacent to Old Airport, Begumpet, Hyderabad -
500016, Telangana State.
The financial statements for the year ended March 31, 2025 were adopted by the Board of Directors and authorized for
issue on May 27, 2025.
Note 2: Summary of significant accounting policies
This note provides a list of the significant accounting policies adopted in the preparation of these financial statements.
These policies have been consistently applied to all the years presented, unless otherwise stated.
(a) Basis for preparation
The financial statements comply in all material aspects with the Indian Accounting Standards (Ind AS) notified under
Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other
relevant provisions of the Act.
The financial statements have been prepared on a historical cost basis, except for the following:
• certain financial assets and liabilities (including derivative instruments) and contingent consideration is measured at
fair value
• assets held for sale - measured at fair value less cost to sell
• defined benefit plans - plan assets measured at fair value
• share-based payments.
(b) Statement of Compliance
These financial statement of the Company have been prepared in accordance with Indian Accounting Standard (Ind AS)
under the historical cost convention on the accrual basis except for certain financial instruments which are measured at
fair values, the provisions of the Companies Act, 2013 ('the Act') (to the extent notified). The Ind AS are prescribed
under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and
relevant amendment rules issued thereafter.
(c) Use of estimates and judgement
The preparation of financial statement in conformity with Ind AS requires management to make judgements, estimates
and assumptions that affect the application of accounting policies and the reported amount of assets and liabilities,
revenues and expenses and disclosure of contingent liabilities. Such estimates and assumptions are based on
management’s evaluation of relevant facts and circumstances as on the date of financial statement. The actual outcome
may diverge from these estimates.
The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the
revision and future periods if the revision affects both current and future periods.
(i) Useful lives of property, plant and equipment - refer note no. 3
(ii) recognition of deferred tax assets for carried forward tax losses - refer note no. 20
(iii) Provisions and contingent liabilities : refer note no. 39
(d) Functional and presentation currency
Items included in the financial statement of the Company are measured using the currency of the primary economic
environment in which the Company operates (i.e. the “functional currency”). The financial statement are presented in
Indian Rupee, the national currency of India, which is the functional currency of the Company.
(e) 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 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 discounts.
a) 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.
b) 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 recognised in the
period in which services are being rendered.
c) Other Allied services: In relation to laundry income, communication income, health club income, airport transfers
income and other allied services, the revenue has been recognised by reference to the time of service rendered.
d) Interest income: Interest income from a financial asset is recognised when it is probable that the economic benefits
will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time
basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly
discounts estimated future cash receipts through the expected life of the financial asset of that asset’s net carrying
amount on initial recognition.
(f) Leases
The Company, at the inception of a contract, assesses whether the contract is a lease or not lease. A contract is, or
contains, a lease if the contract conveys the right to control the use of an identified asset for a time in exchange for a
consideration. This policy has been applied to contracts existing and entered into on or after April 1, 2019 (standard
effective date). The Company recognises a right-of-use asset and a lease liability at the later of lease commencement
date or April 01, 2019. The right-of-use asset is initially measured at cost, which comprises the initial amount of the
lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs
incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the
site on which it is located, less any lease incentives received. The right-of-use asset is subsequently depreciated using the
straight-line method from the commencement date to the end of the lease term. The lease liability is initially measured at
the present value of the lease payments that are not paid at the commencement date, discounted using the Company’s
incremental borrowing rate. It is premeasured when there is a change in future lease payments arising from a change in
an index or rate, if there is a change in the Company’s estimate of the amount expected to be payable under a residual
value guarantee, or if the Company changes its assessment of whether it will exercise a purchase, extension or
termination option.
When the lease liability is premeasured in this way, a corresponding adjustment is made to the carrying amount of the
right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to
zero.
The Company has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease
term of 12 months or less and leases of low-value assets. The Company recognises the lease payments associated with
these leases as an expense over the lease term.
(g) Foreign currencies
Transactions in currencies other than the entity’s functional currency (foreign currencies) are recognized at the rates of
exchange prevailing at the date of the transaction. At the end of each reporting period, monetary items denominated in
foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items that are measured in terms of
historical cost in a foreign currency are not retranslated. Exchange differences on monetary items are recognised in the
statement of profit and loss in the period in which they arise except for exchange differences on transactions designated
as fair value hedge, if any.
(h) Borrowing costs
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 the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
(i) Employee benefits
Leave Encashment : Compensatory absence which accrue to the employees which are expected to be availed or
encashed within twelve months after the end of the period in which the employees render the related service are short¬
term in nature. These compensatory absences require measurement on an actual basis and not on actuarial basis.
Defined contribution plan : The company makes defined contribution to Provident Fund and Employee State Insurance
which are recognized in the statement of Profit and Loss on accrual basis.
Defined benefit plan : The company’s liability towards gratuity is determined on the basis of year end actuarial
valuations applying the Projected Unit Credit Method done by an independent actuary as on the Balance sheet date.
The actuarial valuation method used by the independent actuary for measuring the liability is the projected unit credit
method. Actuarial losses and gains are recognized in Other Comprehensive Income (OCI) and are not reclassified to the
statement of profit and loss in any subsequent periods. Changes in the present value of the defined benefit obligation
resulting from plan amendments or curtailments are recognized immediately in the statement of profit and loss as past
service costs.
(j) Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
a) Current tax: Current tax is the amount of tax payable on the taxable income for the year as determined in accordance
with the applicable tax rates and the provisions of the Income T ax Act, 1961.
b) Deferred tax: Deferred tax is recognized using the balance sheet approach. Deferred tax assets and liabilities are
recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statement and
the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised
for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary
differences to the extent that it is probable that taxable profits will be available against which those deductible temporary
differences can be utilised. The carrying amount of deferred tax assets is reviewed at the end of each reporting period
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 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 realised, based on tax rates (and tax laws) that have been enacted or
substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects
the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting
period, to recover or settle the carrying amount of its assets and liabilities.
(k) Property, Plant and Equipment
Land and buildings held for use in the production or supply of goods or services, or for administrative purposes, are
stated at cost less accumulated depreciation and accumulated impairment losses. Freehold land is carried at historical
cost.
Property, plant and equipment are carried at cost less accumulated depreciation and impairment losses, if any. The cost
of property, plant and equipment comprises its purchase price/ acquisition cost, net of any trade discounts and rebates,
any import duties and other taxes (other than those subsequently recoverable from the tax authorities), any directly
attributable expenditure on making the asset ready for its intended use, other incidental expenses and interest on
borrowings attributable to acquisition of qualifying property, plant and equipment up to the date the asset is ready for its
intended use. Subsequent expenditure on property, plant and equipment after its purchase / completion is capitalised
only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed
standard of performance.
Depreciation on Property, plant and equipment (other than freehold land) has been provided on the straight-line method
as per the useful life prescribed in Schedule II to the Companies Act, 2013. The estimated useful life of the tangible
assets and the useful life are reviewed at the end of the each financial year and the depreciation period is revised to
reflect the changed pattern, if any. An item of property, plant and equipment is derecognised upon disposal or when no
future economic benefits are expected to arise from 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.
(l) Business combinations
Business combinations of entities under common control are accounted using the “pooling of interests” method and
assets and liabilities are reflected at the predecessor carrying values and the only adjustments that are made are to
harmonise accounting policies. The figures for the previous periods are restated as if the business combination had
occurred at the beginning of the preceding period irrespective of the actual date of the combination.
(m) Intangible assets
Intangible assets are stated at cost less accumulated amortisation and impairment. Intangible assets are amortised over
their respective estimated useful lives on a straight line basis, from the date that they are available for use. The estimated
useful life of an identifiable intangible asset 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.
Estimated useful lives of the intangible assets is 6 years which contains Software. The estimated useful life of the
intangible assets and the amortisation period are reviewed at the end of the each financial year and the amortisation
period is revised to reflect the changed pattern, if any.
(n) Impairment of tangible and intangible assets
At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to
determine whether there is any indication that those assets have suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
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. If the recoverable amount of an asset is estimated to be less than its carrying amount, the
carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in
profit or loss.
When an impairment loss subsequently reverses, the carrying amount of the asset 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 in prior years. A reversal of an impairment loss is
recognised immediately in statement of profit and loss.
(o) 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. Net realisable value is the estimated selling price in the ordinary course of
business less the estimated costs of completion and selling expenses. Cost includes the fair value of consideration paid
including duties and taxes (other than those refundable), inward freight, and other expenditure directly attributable to the
purchase. Trade discounts and rebates are deducted in determining the cost of purchase.
|