2 Material accounting policies
2.1 Statement of compliance
These financial statements have been prepared in
accordance with the Indian Accounting Standards
(referred to as “Ind AS”) as prescribed under Section
133 of the Companies Act, 2013 “the act” read with
Companies (Indian Accounting Standards) Rules as
amended from time to time.
2.2 Basis of preparation
These financial statements have been prepared under
the historical cost convention on the accrual basis,
except for certain financial instruments and gratuity
benefits which are measured at fair values, as per
the provisions of the Companies Act, 2013 ('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 Companies (Indian Accounting Standards)
Amendment Rules, 2016.
Accounting policies have been consistently applied
except where a newly issued accounting standard is
initially adopted or a revision to an existing accounting
standard requires a change in the accounting policy
hitherto in use.
These financial statements have been prepared on
going concern assumption.
2.3 Use of estimates and judgements
The preparation of the financial statements in
conformity with Ind AS requires management to make
estimates, judgments and assumptions. These estimates,
judgments and assumptions affect the application of
accounting policies and the reported amounts of assets
and liabilities, the disclosures of contingent assets and
liabilities at the date of the financial statements and
reported amounts of revenues and expenses during
the period. Accounting estimates could change from
period to period. Actual results could differ from
those estimates. Appropriate changes in estimates are
made as management becomes aware of changes in
circumstances surrounding the estimates. Changes in
estimates are reflected in the financial statements in
the period in which changes are made and, if material,
their effects are disclosed in the notes to the financial
statements.
2.4 Measurement of fair values
A number of the Company’s accounting policies and
disclosures require the measurement of fair values, for
both financial and non-financial assets and liabilities.
Fair values are categorized into different levels in a
fair value hierarchy based on the inputs used in the
valuation techniques as follows:
Level 1: quoted prices (unadjusted) in active markets
for identical assets or liabilities.
Level 2: inputs other than quoted prices included in
Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived
from prices).
Level 3: inputs for the asset or liability that are not
based on observable market data (unobservable inputs).
When measuring the fair value of an asset or a liability,
the Company uses observable market data as far as
possible. If the inputs used to measure the fair value
of an asset or a liability fall into different levels of the
fair value hierarchy, then the fair value measurement
is categorized in its entirety in the same level of the
fair value hierarchy as the lowest level input that is
significant to the entire measurement.
The Company recognizes transfers between levels of
the fair value hierarchy at the end of the reporting
period during which the change has occurred. Further
information about the assumptions made in measuring
fair values is included in the following notes:
Note 32 - financial instruments;
Note 16.6 - share based payment arrangement;
2.5 Critical accounting estimates
2.5.1 Provision for income taxes and deferred tax assets
The Company's tax jurisdiction is India. Significant
judgements are involved in determining the provision
for income taxes, including amount expected to be
paid/recovered for uncertain tax positions. A deferred
tax asset is recognised to the extent that it is probable
that future taxable profit will be available against which
the deductible temporary differences and tax losses
can be utilised. Accordingly, the Company exercises its
judgement to reassess the carrying amount of deferred
tax assets at the end of each reporting period.
2.5.2 Useful lives of property, plant and equipment
Property, plant and equipment represent a significant
proportion of the asset base of the Company. The
charge in respect of periodic depreciation is derived
after determining an estimate of an asset’s expected
useful life and the expected residual value at the end
of its life. The useful lives and residual values of the
Company's assets are determined by management at
the time the asset is acquired and reviewed periodically,
including at each financial year end. The lives are based
on historical experience with similar assets as well as
anticipation of future events, which may impact their
life, such as changes in technology.
2.5.3 Employee benefits
The liabilities with regard to the Gratuity Plan are
determined by actuarial valuation. 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 reporting date. The parameter most
subject to change is the discount rate. In determining
the appropriate discount rate for plans operated in
India, the management considers the interest rates of
government bonds in currencies consistent with the
currencies of the post-employment benefit obligation.
The mortality rate is based on publicly available
mortality tables. Those mortality tables tend to change
only at interval in response to demographic changes.
Future salary increases and gratuity increases are based
on expected future inflation rate and past trends.
2.5.4 Provisions and contingent liabilities
The Company estimates the provisions that have
present obligations as a result of past events, and it is
probable that outflow of resources will be required to
settle the obligations. These provisions are reviewed at
the end of each reporting period and are adjusted to
reflect the current best estimates.
The Company uses significant judgements to disclose
contingent liabilities. Contingent liabilities are disclosed
when there is a possible obligation arising from past
events, the existence of which 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 or a present obligation that arises
from past events where it is either not probable that
an outflow of resources will be required to settle the
obligation or a reliable estimate of the amount cannot
be made. Contingent assets are neither recognised nor
disclosed in the financial statements.
2.5.5 Leases
The Company evaluates if an arrangement qualifies
to be a lease as per the requirements of Ind AS 116.
Identification of a lease requires significant judgment.
The Company uses significant judgement in assessing
the lease term (including anticipated renewals) and the
applicable discount rate.
The Company determines the lease term as the non¬
cancellable period of a lease, together with both
periods covered by an option to extend the lease if the
Company is reasonably certain to exercise that option;
and periods covered by an option to terminate the lease
if the Company is reasonably certain not to exercise that
option. In assessing whether the Company is reasonably
certain to exercise an option to extend a lease, or not
to exercise an option to terminate a lease, it considers
all relevant facts and circumstances that create an
economic incentive for the Company to exercise the
option to extend the lease, or not to exercise the option
to terminate the lease. The Company revises the lease
term if there is a change in the non-cancellable period
of a lease.
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.
2.6 Revenue recognition
The Company generates revenue from providing
amusement park services, resort and others.
Amusement park revenue includes ticket revenue,
sale of merchandise and cooked food. Revenue from
resorts include mainly room revenue, cooked food and
sale of beverages.
Revenue is recognised upon transfer of control of
promised products or services to customers in an
amount that reflects the consideration which the
Company expects to receive in exchange for those
products or services.
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.
The revenue recognition policy followed by the
Company is:
• Entry charges are recognized at the time when
entry tickets are issued to visitors for entry into
the parks.
• Income from rooms, restaurants and other
services comprise room rentals, sale of food and
beverages and other allied services relating to
resort operations. Revenue is recognized upon
rendering of the services.
• Sale of traded items are recognized when the
control is transferred to the customers. Sales are
recorded net of discounts and goods and service
tax.
• Lease income represents share of revenue from
shops and restaurants, which is recognized as per
the terms of the agreement with the respective
operators.
• Dividends are recognised in profit or loss only
when the right to receive payment is established, it
is probable that the economic benefits associated
with the dividend will flow to the Company, and
the amount of the dividend can be measured
reliably. Interest income is recognized on time
proportion basis taking into account the amount
outstanding and applicable rate of interest.
• Other income is recognized on accrual basis
except when there are significant uncertainties.
2.7 Property, plant and equipment
2.7.1 Initial recognition
Items of property, plant and equipment are measured
at cost of acquisition or construction less accumulated
depreciation and/or accumulated impairment loss,
if any. The cost of an item of property, plant and
equipment comprises its purchase price, including
import duties and other non-refundable taxes or levies
and any directly attributable cost of bringing the asset
to its working condition for its intended use; any trade
discounts and rebates are deducted in arriving at the
purchase price. Borrowing costs directly attributable to
the construction of a qualifying asset are capitalised as
part of the cost.
When parts of an item of property, plant and equipment
have different useful lives, they are accounted for as
separate items (major components) of property, plant
and equipment.
Property, plant and equipment under construction are
disclosed as capital work-in-progress.
Advances paid towards the acquisition of property,
plant and equipment outstanding at each reporting
date are disclosed under ‘Other non-current assets’.
2.7.2 Subsequent cost
The cost of replacing a part of an item of property, plant
and equipment is recognised 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 derecognised.
The costs of the day-to-day servicing of property, plant
and equipment are recognised in the statement of
profit and loss as incurred.
2.7.3 Disposals
An item of property, plant and equipment is
derecognised upon disposal or when no future benefits
are expected from its use or 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 recognised net within other
income/ expenses in the statement of profit and loss.
2.7.4 Depreciation
Depreciation on property, plant and equipment is
provided using the straight-line method over the
estimated useful life of each asset as determined by
the management. Depreciation for assets purchased
/ sold during the year is proportionately charged.
Depreciation is charged with reference to the estimated
useful life of fixed assets prescribed in Schedule II to the
Companies Act, 2013, which is taken as the minimum
estimated useful life of the asset. If the management’s
estimate of the useful life of a fixed asset at the time of
acquisition of the asset or of the remaining useful life
on a subsequent review is shorter than envisaged in the
aforesaid schedule, depreciation is provided at a higher
rate based on the management’s estimate of the useful
life/remaining useful life.
Freehold land is not depreciated.
Individual assets costing less than T 5,000 are
depreciated in full in the year of purchase / installation.
The estimated useful lives of items of property, plant
and equipment for the current and comparative periods
are as follows:
2.8.3 Amortisation
Amortisation is calculated over the cost of the asset,
or other amount substituted for cost, less its residual
value. Amortisation is recognised in statement of profit
and loss on a straight-line basis over the estimated
useful lives of intangible assets from the date that they
are available for use, since this most closely reflects
the expected pattern of consumption of the future
economic benefits embodied in the asset.
The estimated useful lives for current and comparative
periods are as follows:
Depreciation is not recorded on capital work-in¬
progress until construction and installation is complete
and the asset is ready for its intended use except for
those rides where the carrying value is lower than the
fair value, where the Company will write down and
charge the difference over the period to the Statement
of profit and loss.
2.7.5 Capital work-in-progress
Amount paid towards the acquisition of property, plant
and equipment outstanding as of each reporting date
and the cost of property, plant and equipment not
ready for intended use before such date are disclosed
under capital work-in-progress. The capital-work-
in progress is carried at cost, comprising direct cost,
related incidental cost and attributable interest.
2.8 Intangible assets
2.8.1 Initial recognition
Intangible asset is recognised when the asset is
identifiable, is within the control of the Company, it
is probable that the future economic benefits that are
attributable to the asset will flow to the Company and
cost of the asset can be reliably measured.
Expenditure on research activities is recognised in the
statement of profit and loss as incurred. Development
expenditure is capitalised only if the expenditure can be
measured reliably, the product or process is technically
and commercially feasible, future economic benefits
are probable and the Company intends to and has
sufficient resources to complete development and to
use or sell the asset.
Intangible assets acquired by the Company that have
finite useful lives are measured at cost less accumulated
amortisation and any accumulated impairment losses.
2.8.2 Subsequent measurement
Subsequent expenditure is capitalised only when it
increases the future economic benefits embodied in
the specific asset to which it relates.
2.9 Financial instruments
2.9.1 Initial recognition
The Company recognizes financial assets and financial
liabilities when it becomes a party to the contractual
provisions of the instrument. All financial assets and
liabilities are initially recognized at fair value. Transaction
costs that are directly attributable to the acquisition or
issue of financial assets and financial liabilities that are
not at fair value through profit or loss, are added to the
fair value on initial recognition. Regular way purchase
and sale of financial assets are accounted for at trade
date
2.9.2 Subsequent measurement
2.9.2.1 Non-derivative financial instruments
(a) Financial assets carried at amortised cost
A financial asset is subsequently measured at
amortised cost if it is held within a business model
whose objective is to hold the asset in order to
collect contractual cash flows and the contractual
terms of the financial asset give rise on specified
dates to cash flows that are solely payments of
principal and interest on the principal amount
outstanding.
(b) Financial assets at fair value through other
comprehensive income
A financial asset is subsequently measured at fair
value through other comprehensive income if it is
held within a business model whose objective is
achieved by both collecting contractual cash flows
and selling financial assets and the contractual
terms of the financial asset give rise on specified
dates to cash flows that are solely payments of
principal and interest on the principal amount
outstanding.
(c) Financial assets at fair value through profit or
loss
A financial asset which is not classified in any of
the above categories are subsequently fair valued
through profit or loss. Net gains and losses,
including any interest or dividend income, are
recognised in statement of profit and loss.
(d) Financial liabilities
Financial liabilities are subsequently carried
at amortized cost using the effective interest
method, except for contingent consideration
recognized in a business combination which is
subsequently measured at fair value through
profit and loss. 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.
2.9.2.2 Share capital
Ordinary Shares
Ordinary shares are classified as equity. Incremental
costs directly attributable to the issuance of new
ordinary shares and share options are recognized as a
deduction from equity, net of any tax effects.
2.9.3 Derecognition of financial instruments
The Company derecognizes a financial asset when the
contractual rights to the cash flows from the financial
asset expire or it transfers the financial asset and the
transfer qualifies for derecognition under Ind AS 109.
A financial liability (or a part of a financial liability) is
derecognized from the Company's balance sheet when
the obligation specified in the contract is discharged
or cancelled or expires. The Company derecognises a
financial liability when its terms are modified and the
cash flows under the modified terms are substantially
different. In this case, a new financial liability based
on the modified terms is recognised at fair value. The
difference between the carrying amount of the financial
liability extinguished and the new financial liability with
modified terms is recognised in profit or loss.
2.10 Fair value of financial instruments
In determining the fair value of its financial instruments,
the Company uses a variety of methods and
assumptions that are based on market conditions and
risks existing at each reporting date. The methods used
to determine fair value include discounted cash flow
analysis, available quoted market prices and dealer
quotes. All methods of assessing fair value result in
general approximation of value, and such value may
never actually be realized.
For all other financial instruments, the carrying amounts
approximate fair value due to the short maturity of
those instruments.
2.11 Impairment of non-financial assets
The Company assesses at each balance sheet date
whether there is any indication that an asset or
cash generating unit (CGU) may be impaired. If any
such indication exists, the Company estimates the
recoverable amount of the asset. The recoverable
amount is the higher of an asset’s or CGU’s fair
value less costs of disposal or its value in use. Where
the carrying amount of an asset or CGU exceeds its
recoverable amount, the asset is considered impaired
and is written down to its recoverable amount.
In assessing the 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. In determining fair value less costs
of disposal, recent market transactions are considered.
An impairment loss is recognised if the carrying amount
of an asset or CGU exceeds its recoverable amount.
Impairment losses are recognised in the statement of
profit and loss. They are allocated first to reduce the
carrying amount of any goodwill allocated to the CGU,
and then to reduce the carrying amounts of the other
assets in the CGU on a pro rata basis.
An impairment loss in respect of goodwill is not reversed.
For other assets, an impairment loss is reversed only to
the extent that the asset’s carrying amount does not
exceed the carrying amount that would have been
determined, net of depreciation or amortisation, if no
impairment loss had been recognised
2.12 Inventories
Raw materials, stock-in-trade, stores and spares and
others are valued at lower of cost and net realisable
value. Cost of raw materials, stock-in-trade, stores and
spares and others comprises cost of purchases. Cost
of inventories also include all other costs incurred in
bringing the inventories to their present location and
condition.
Cost of stock-in-trade is ascertained on weighted
average basis.
Cost of raw materials and stores and others are
ascertained on weighted average basis.
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