BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The Financial statements are prepared on accrual basis under the
historical cost convention (except where impairment is made and
revaluation is carried out) on the basis of going concern and is in
accordance with Accounting standards notified by the Companies
(Accounting standards) rules, 2006 issued by the Central Government in
consultation with the National Advisory Committee on Accounting
standards and relevant provisions of the Companies Act, 1956.
USE OF ESTIMATES
In preparing the Financial statements in conformity with accounting
principles generally accepted in India, Management is required to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosure of contingent liabilities as at the
date of Financial statements and the amounts of revenue and expenses
during the reported period. Actual results could differ from those
estimates. Any revision to such estimates is recognised in the period
the same is determined.
PRIOR PERIOD ADJUSTMENTS, EXCEPTIONAL ITEMS, EXTRAORDINARY ITEMS AND
CHANGES IN ACCOUNTING POLICIES
Prior period adjustments, exceptional items, extraordinary items and
changes in accounting policies having material impact on the financial
affairs of the Company are disclosed.
Fixed Assets are stated at cost of acquisition or construction and in
case of revaluation of assets at revalued amounts net of impairment
loss if any, less depreciation/amortisation. Cost represents direct
expenses incurred on acquisition or construction of the assets and the
share of indirect expenses relating to construction allocated in
proportion to the direct cost involved.
Assets acquired under lease are capitalised at the present value of
minimum lease payments and are stated at the capitalised value net of
Capital work-in-progress comprises the cost of fixed assets that are not
yet ready for their intended use on the reporting date and materials at
Depreciation on fixed assets other than land, certain buildings on
leasehold lands and leased vehicles and machinery is provided on
straight Line Method at the rates prescribed under schedule XIV of
the Companies Act, 1956. Certain fixed assets including leased vehicles
and leased machinery, building installed on leasehold land (other than
on perpetual lease) are depreciated over the lives of the respective
leases or over the remaining lease period from the date of installation
whichever is shorter. Vehicles acquired on lease are depreciated over
their respective lease period or sixty months from the date of
acquisition whichever is earlier. Long term Leasehold land (other than
on perpetual lease) are depreciated over the balance period of lease,
commencing from the date the land is put to use for commercial
purposes. the additional depreciation on the increase in the value of
assets due to revaluation is adjusted against revaluation reserve.
- Revenue from hospitality services is recognised when the services are
rendered and the same becomes chargeable. revenue from sale of printing
and other materials is recognised on despatch of materials. revenue
from shop Licence Fee, Management and Marketing Fee included under
other services is recognised on accrual basis as per terms of
- Revenue from interest is accrued and recognised on time basis and
determined by contractual rate of interest.
- Dividend income is stated at gross and is recognised when right to
receive payment is established.
IMPAIRMENT OF ASSETS
Impairment is ascertained at each Balance sheet date in respect of the
Company''s fixed assets. An impairment loss is recognised whenever the
carrying amount of an asset or cash generating unit exceeds its
In respect of assets acquired on or after 1st April, 2001, the same are
capitalised at the lower of the fair value and present value of the
minimum lease payments at the inception of the lease term. Lease
payments are apportioned between the interest charges and reduction of
the lease liability so as to achieve a constant rate of interest on the
remaining balance of the liability. interest component is charged to
the profit and Loss account under interest and Finance charges.
Operating lease payments are recognised as expenditure in the statement
of profit and Loss on straight line basis, over the lease period.
Investments held by the Company which are long term in nature are
stated at cost unless there is any permanent diminution in value where
provision for diminution is made on individual investment basis.
Current investments are valued at cost or market price or fair value,
whichever is lower. Earnings on investments are accounted for on
inventories are valued at cost which is based on First-in-First-out
method or net realisable value, whichever is lower. unserviceable/
damaged/discarded stocks and shortages are charged to the profit and
TRANSACTIONS IN FOREIGN CURRENCY
Sales made in foreign currency are converted at the prevailing
applicable exchange rate. Gain/Loss arising out of fluctuations in
exchange rate is accounted for on realisation.
Payments made in foreign currency including for acquiring investments
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. Monetary items
denominated in foreign currency are converted at the exchange rate
prevailing at the end of the year.
Revenue expenditure of all the overseas sales offices are converted at
the average exchange rate for the year. Assets and liabilities other
than Fixed Assets are converted at the exchange rate prevailing at the
close of the accounting year and Fixed Assets are converted at the
month-end exchange rate of the month of acquisition.
Foreign currency loans covered by forward contracts are realigned at
the forward contract rates, while those not covered by forward
contracts are realigned at the rates ruling at the year end. the
differences on realignment is accounted for in the statement of profit
Short term employee Benefit is recognised as expense in the statement of
profit and Loss of the year in which related service is rendered.
Post employment and other Long term employee Benefits are provided in
the Accounts in the following manner:
(i) Gratuity - Maintained as a defend benefit retirement plan and
contribution is made to the Life insurance Corporation of India, as per
Company''s scheme. provision/ write back, if any, is made on the basis
of the present value of the liability as at the Balance sheet date
determined by actuarial valuation following projected unit Credit
Method and is treated as liability under other Current Liability.
(ii) Leave encashment on termination of service - As per actuarial
valuation as at the Balance sheet date following projected unit Credit
(iii) Provident Fund - provident Fund for most of the employees is a
defend Contribution scheme, where the contribution is made to a Fund
administered by the Government provident Fund Authority.
For a few employees, provident Fund, administered by a recognised
trust, is a defend Benefit plan wherein the employee and the Company
make monthly contributions. Pending the issuance of Guidance Note from
the Actuarial society of India, actuarial valuation is not carried out
and the Company provides for required liability at year end, in respect
of the shortfall, if any, upon confirmation from the trustees of such
Borrowing cost that is attributable to the acquisition / construction
of fixed assets are capitalised as part of the cost of the respective
assets. other borrowing costs are recognised as expenses in the year in
which they arise.
SHARE ISSUE EXPENSES
Share issue expenses are written off against the securities premium
Account in accordance with section 78 of the Companies Act, 1956.
TAXES ON INCOME
Income-tax is accounted for in accordance with Accounting standard on
''Accounting for taxes on income'' notified pursuant to the Companies
(Accounting standards) rules, 2006.
Minimum Alternate tax (MAT) is accounted for in accordance with tax
laws which give rise to future economic benefits in the form of tax
credit against which future income tax liability is adjusted and is
recognised as an asset in the balance sheet.
deferred tax is provided and recognised on timing differences between
taxable income and accounting income subject to prudential
consideration. deferred tax assets on unabsorbed depreciation and carry
forward of losses are not recognised unless there is virtual certainty
about availability of future taxable income to realise such assets.
Dividend recommended by the Board of directors is provided for in the
Accounts pending shareholders'' approval.
PROVISIONS CONTINGENT LIABILITIES AND CONTINGENT ASSETS
provisions are recognised when there is a present legal or statutory
obligation as a result of past events and 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 recognised only when there is a possible
obligation arising from past events due to occurrence or non-
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 of resources or where a reliable
estimate of the obligation cannot be made. obligations are assessed on
an on going basis and only those having a largely probable outflow of
resources are provided for.
Contingent Assets are not recognised in the financial statements.
b) The Company has one class of equity shares having a par value of Rs.
2 per share. each share holder is eligible for one vote per share held
and such dividend as proposed by the Board of directors, subject to the
approval of the shareholders in the ensuing Annual General Meeting.
d) Out of the above shares of the company, 130,984,657 shares were
issued as fully paid up Bonus shares by Capitalisation of securities
premium Account in 2006-07.
e) 178,615,442 shares of face value Rs. 2 each have been alloted as
fully paid up shares at a premium of Rs. 64 per share to the
shareholders on rights basis during 2010-11.
Dividend of Rs. 1.10 per share (2011 - Rs. 0.90 per share) amounting to
Rs.628.73 Million (2011 - Rs. 514.41 Million) has been recommended by
the Board of directors. this dividend will be paid to the shareholders
if approved at the forthcoming Annual General Meeting.
PARTICULARS OF TERM LOANS :
(i) Term Loan from ICICI Bank Limited carries interest at bank''s base
rate 2.5% repayable in 7 quarterly installments of Rs. 200 million
each. repayment will be complete in December 2014.
(ii) The Finance Lease obligations are secured by hypothecation of
vehicles taken under Lease. Repayments are done by equated monthly
installment over 36 to 60 months.
PARTICULARS OF SECURITIES :
Term loan from ICICI Bank Limited is secured by way of equitable
mortgage by deposit of title deeds in respect of the Company''s hotel in
delhi known as Maidens Hotel, ranking pari passu.
PARTICULARS OF SHORT TERM BORROWINGS :
Cash credit facilities are secured by way of hypothecation of all stock
of inventories, book debts and other current assets of the company,
both present and future, ranking pari passu. Cash Credit with united
Bank of India is additionally secured by way of second charge in
respect of the company''s hotel in Kolkata known as the oberoi Grand.
Cash Credit is repayable on demand and carries interest at floating rate
linked to the base rates of the respective banks.
* others includes withholding and other taxes payable Rs. 177.64
Million (2011 - Rs. 227.35 Million)
* National savings Certifcates have been lodged with Government
Authorities as security deposit.
* Inventories are valued at cost which is based on First-in-First-out
method or net realisable value, whichever is lower.
Shortfall arising on final settlement of insurance claim for loss due to
business interruption surplus arising on final settlement of insurance
claim for damage profit on sale of property and Apartment