A. SIGNIFICANT ACCOUNTING POLICIES:
1. Basis of Accounting:
The accounts are prepared on Historical Cost Convention based on
accrual method of accounting and applicable account- ing standards.
2. Fixed Assets:
a) Fixed assets are stated at cost less depreciation.
b) All costs relating to acquisition and installation of fixed assets
are capitalised and include finance cost on borrowed funds attributable
to acquisition of fixed assets for the period upto the date of
c) In respect of Land and Building taken on lease prior 1.4.1995 (When
the guidance Note of Accounting for Leases issued by the Institute of
Chartered Accountants of India was not in force) the annual rentals
paid in advance for the Lease period of 99 years has been treated as
cost and is being amortised as follows:
Leasehold land - Over the period of lease.
Leasehold Building- At the rate of depreciation applicable as per
Schedule XIV of the Companies Act, 1956 being more than the normal
annual rent payable for the lease period.
In respect of land taken on lease after 1.4.95, the lease rentals paid
in advance has been treated as prepaid lease rent and is being charged
off to Profit & Loss Account over the period of lease.
Inventories are values at cost or market value whichever is lower.
Depreciation on Fixed Assets is provided on straight-line basis at the
rated and in the manner specified in Schedule XIV of the Companies Act,
Sale comprise of sale of goods and services-net of discounts, sales tax
and luxury tax wherever applicable.
6. Club Membership fee:
Club Membership fee is treated as income on admission of the members to
7. Shares Issue Expense:
Share Issue Expenses are not be amortised over a period of 5 years from
the date of commencement of commercial operations of Expansion
programme (new Hotel Complex)
8. Pre-operative Expenses:
Pre-operative Expenses relate to expansion programme (new Hotel
Complex) and are to be amortised from the date of commencement of
9. Foreign Currency Transactions:
Transaction of foreign exchange area accounts fir at exchange rates
prevailing on the date on which the transaction takes place.
10. Retirement Benefits:
Gratuity liability determined in accordance with the provisions of the
Payment of Gratuity Act has been provided for in the accounts.
11. Government Grants:
The subsidy received from Government of Kerala towards investment in
fixed assets are deducted from assets on the basis of cost of assets
considered for subsidy section.
12. Administrative and general overheads relating to new Hotel Complex
under implementation have been carried forward and included under the
heading pre-operative expenses pending allocation.