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
2.5.1Provision 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.
2.5.2Useful 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.
2.5.3Employee 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.
2.5.4Provisions 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 service, resorts 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 park.
• 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 service.
• 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
2.7.1Initial 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’.
2.7.2Subsequent 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 H5,000 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.
2.7.5Capital 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
2.8.1Initial 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.
2.8.2Subsequent 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
2.9.1Initial recognition
The Company recognises financial assets and financial
liabilities when it becomes a party to the contractual
provisions of the instrument. All financial assets and
liabilities are initially recognised 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.
2.9.2Subsequent 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
amortised 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 recognised as a deduction
from equity, net of any tax effects.
2.9.3Derecognition of financial instruments
The Company derecognises 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 realised.
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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