1.1 Basis for Preparation of Financial Statements:
The financial statements are prepared and presented under the
historical cost convention on the accrual basis of accounting in
accordance with accounting principles accepted in India (Indian GAAP)
and are in compliance with Accounting Standards as notified by the
Companies (Accounting Standards) Rules, 2006.
1.2 Use of Estimates:
The preparation of the financial statements in conformity with the
Indian GAAP requires Company management to make estimates and
assumptions that affect the reported amount of assets and liabilities
and the disclosure of contingent liabilities as of the date of the
financial statements. Actual results could differ from these estimates
and assumptions. Any revision to accounting estimates is recognized
prospectively in the current and future periods.
1.3 Revenue Recognition:
The Company derives revenues primarily from hospitality services.
Revenue on time and material contracts are recognized as the related
services are performed. Revenue yet to be billed is recognized as
unbilled revenue. Sales and services are stated exclusive of taxes.
Export Benefits arising out of Duty Free Scrips utilised for the
acquisition of fixed and other assets are being adjusted against the
cost of the related assets.
1.4 Fixed Assets:
Fixed Assets are stated at cost less depreciation. In the case of new
projects successfully implemented, substantial expansion of existing
units and expenditure resulting into enduring benefit, all
pre-operative expenses including interest on borrowings for the
project, incurred up to the date of installation are capitalized and
added pro-rata to the cost of fixed assets.
i. Depreciation is provided in the accounts on straight-line method at
the rates prescribed in Schedule XIV to the Companies Act, 1956.
ii. Where the historical cost of a depreciable asset undergoes a
change due to increase or decrease on account of price adjustments,
changes in duties or similar factors, depreciation on the revised
amount is provided prospectively over the residual useful life of the
In accordance with Accounting Standard 28 - Impairment of Assets, the
carrying amount of the Company''s assets including intangible assets are
reviewed at each balance sheet date to determine whether there is any
indication of impairment. If any such indication exists, the asset''s
recoverable amount is estimated, as the higher of the net selling price
and the value in use. Any impairment loss is recognized whenever the
carrying amount of an asset or its cash generating unit exceeds its
Long Term Investments are valued at cost. Provision for diminution in
value is made, if in the opinion of the management, such a decline is
considered permanent. Other Investments are valued at cost or market
value whichever is lower.
Stock of food, beverages and operating supplies are carried at cost
(computed on weighted average basis) or net realizable value, whichever
1.9 Employee Benefits:
Company''s contributions to Provident Fund are charged to Statement of
Profit and Loss. Gratuity payable at the time of retirement are charged
to Statement of Profit and Loss on the basis of independent external
actuarial valuation determined on the basis of the projected unit
credit method carried out annually. Actuarial gains and losses are
immediately recognized in the Statement of Profit and Loss. Gratuity in
certain applicable cases is provided for in accordance with the
provisions of the Goa Shops & Establishment Act, 1973. Provision for
compensated absences is made on the basis of independent external
actuarial valuation carried out at the end of the year.
1.10 Foreign Currency Transactions:
(i) Sales made in foreign currency are converted at the prevailing
applicable exchange rate.
(ii) Payment made in foreign currency including for acquiring fixed
assets are converted at the applicable rate prevailing on the date of
remittance. Liability on account of foreign currency is converted at
the exchange rate prevailing at the end of the year except in cases of
subsequent payments where liability is provided at actual. Foreign
currency in hand is translated at the year-end exchange rate.
(iii) Monetary assets and liabilities denominated in foreign currency
at the balance sheet date other than long term foreign currency items
of assets and liabilities having a term of twelve months or more as
discussed herein below, are translated at the year end exchange rate
and the resultant exchange differences are recognized in the Statement
of Profit and Loss. Exchange differences relating to long term foreign
currency items of assets and liabilities having a term of twelve months
or more as covered in the Companies (Accounting Standards) Amendment
Rules 2009 on Accounting Standard
11 (AS-11) notified by Government of India on March 31, 2009 in so far
as they relate to the acquisition of a depreciable capital asset, are
added to or deducted from the cost of the assets and depreciated over
the balance useful life of the asset, and in other cases are
accumulated in a Foreign Currency Monetary Item Translation Difference
Account and amortized over the balance period of such long term
monetary item in accordance with the aforesaid Notification.
1.11 Prior Period Adjustments, Extra Ordinary Items and Changes in
Prior period adjustments, extraordinary items and changes in accounting
policies having material impact on the financial affairs of the Company
Lease payment under an operating lease is recognized as an expense in
the Statement of Profit and Loss with reference to the lease terms and
Assets taken on finance lease are capitalized and finance charges are
charged to the Statement of Profit and Loss on accrual basis.
1.13 Borrowing Costs:
Borrowing costs that are directly attributable to and incurred on
acquiring qualifying assets (assets that necessarily takes a
substantial period of time for its intended use) are capitalized. Other
borrowing costs are recognized as expenses in the period in which same
1.14 Segment Accounting:
Reportable Segments are identified having regard to the dominant source
of revenue and nature of risks and returns.
1.15 Taxes on Income:
Tax on income for the current period is determined on the basis of
taxable income and tax credits computed in accordance with the
provisions of the Income Tax Act, 1961. Deferred tax is recognized on
timing differences between the accounting income and the taxable income
for the year and quantified using the tax rates and laws enacted as on
the Balance Sheet date. Deferred tax assets are recognized and carried
forward to the extent that there is a reasonable certainty that
sufficient future taxable income will be available against which such
deferred tax assets can be realized.
1.16 Accounting Provisions, Contingent Liabilities and Contingent
Provisions are recognized in terms of Accounting Standards 29 -
Provisions, Contingent Liabilities and Contingent Assets as notified
by the Companies (Accounting Standards) Rules, 2006, when there is a
present legal or statutory obligation as a result of past events where
it is probable that there will be outflow of resources to settle the
obligation and when a reliable estimate of the amount of the obligation
can be made.
Contingent Liabilities are recognized only when there is a possible
obligation arising from past events due to occurrence of one or more
uncertain future events not wholly within the control of the Company or
where any present obligation cannot be measured in terms of future
outflow or resources or where a reliable estimate of the obligation
cannot be made. Obligations are assessed on an ongoing basis and only
those having a largely probable outflow of resources are provided for.