(xiii) Provisions & Contingent Liabilities:
The Company recognizes a provision when there is a present obligation (legal or constructive)
as a result of a past event and it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and a reliable estimate can be made of the amount
of the obligation.
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.
(xiv) Earnings per share
Basic earnings per share is calculated by dividing the net profit / (loss) for the year attributable to
the equity shareholders by weighted average number of equity shares outstanding during the year.
For the purpose of calculating diluted earnings per share, the net profit / (loss) for the period
attributable to equity shareholders and the weighted average number of shares outstanding during
the period are adjusted for the effects of all dilutive potential equity shares.
(xv) Dividend
Dividend to the equity shareholders is recognized as a liability in the Company’s financial
statements in the period in which the dividend is approved by the shareholders.
2. USE OF ESTIMATES AND JUDGEMENTS
The preparation of financial statements in conformity with Ind AS requires management to make
judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, income,
expenses and disclosures of contingent liabilities at the reporting date. However, uncertainty about
these assumptions and estimates could result in outcomes that require a material adjustment to the
carrying amount of the asset or liability affected in future periods.
Estimates and underlying assumptions are reviewed at each reporting date. Any revision to accounting
estimates and assumptions are recognised prospectively i.e. recognised in the period in which the
estimate is revised and future periods affected.
(i) Recognition and measurement of defined benefit obligations
The cost of defined benefit plans and the present value of the defined benefit obligation are based
on actuarial valuations using the projected unit credit method. An actuarial valuation involves
making various assumptions that may differ from actual developments in the future. These
include the determination of discount rate, future salary increase 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.
(ii) Fair value measurement of financial instruments
When the fair values of the financial assets and liabilities recorded in the balance sheet cannot
be measured based on the quoted market prices in active markets, their fair value is measured
using valuation techniques. The inputs to these models are taken from the observable market,
where possible, but where this is not feasible, a review of judgement is required in establishing
fair values. Changes in assumptions relating to these assumptions could affect the fair value of
financial instruments.
(iii) Deferred taxes
Deferred tax is recorded on temporary differences between tax bases of assets and liabilities
and their carrying amounts, at the rates that have been enacted or substantively enacted at the
reporting date. The ultimate realization of deferred tax assets is dependent upon the generation
of future taxable profit during the periods in which those temporary differences and the tax loss
carry forwards become deductible. The Company considers the expected reversal of deferred tax
liabilities and projected future taxable income in making this assessment. The amount of deferred
tax assets considered realizable, however, could be reduced in the near term if estimates of future
taxable income during the carry forward periods are reduced.
b) Fair value hierarchy and Method of valuation
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value
that are either observable or unobservable and consists of the following three levels:
A. Level 1:
Level 1 hierarchy includes financial instruments measured using quoted prices in an active market. This
included listed equity instruments, traded debentures and mutual funds that have quoted price. The fair
value of all equity instruments (including debentures) which are traded in the stock exchanges is valued
using the closing price as at the reporting period. The company do not have any investment in financial
instruments that are quoted on stock exchanges.
B. Level 2:
Level 2 hierarchy includes financial instruments that are not traded in an active market The fair value in
this hierarchy is determined using valuation techniques which maximize the use of observable market
data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair
value an instrument are observable, the instrument is included in level 2. The company have no such
financial instruments that are value usng Level 2 hierarchy.
C : Level 3
If one or more of the significant Inputs is not based on observable market data, the instrument is
included in level 3. Fair values are determined in whole or in part using a valuation model based on
assumptions that are neither supported by prices from observable current market transactions in the
same instrument nor are they based on available market data. Financial instruments such as unlisted
equity shares, loans are included in this hierarchy.
c) Risk management framework
The Company’s principal financial liabilities include borrowing, trade and other payables. The
Company’s principal financial assets include loans, trade receivable, cash and cash equivalents and
others. The Company is exposed to credit risk, liquidity risk and market risk. The Company's senior
managment oversees the management of these risks. The Company's senior management provides
assurance that the Company’s financial risk activities are governed by appropriate policies and
procedures and that financial risks are identifed, measured and managed in accordance with the
Company's policies and risk objectives.
d) Financial Risk Management
The Company has exposure to the following risks arising from financial instruments:
i) Credit Risk
ii) Liquidity Risk
iii) Market Risk
i) Credit Risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial
instrument fails to meet its contractual obligations, and arises principally from the Company's
receivables from customers. To manage this, the Company periodically assesses the financial
reliability of customers, taking into account the financial condition, and ageing of accounts
receivable.
Credit risks arises from cash and cash equivalents, deposits with banks. The Company's policy
is to place cash and cash equivalents and short term deposits with reputable banks and financial
institutions.
ii) Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations
associated with its financial liabilities that are settled by delivering cash or another financial
asset. The Company's approach to managing liquidity is to ensure as far as possible that it will
have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed
condition, without incurring unacceptable losses or risking damage to the Company's reputation.
The Management monitors rolling forecasts of the Company's liquidity position on the basis of
expected cash flows.The Company’s objective is to maintain a balance between continuity of
funding and flexibility through the use of surplus funds, bank loans and inter-corporate loans.
iii) Market Risk
Market risk is the risk that changes in market prices such as foreign exchange rates, interest rates
and commodity prices which will affect the Company’s income or the value of its holdings of financial
instruments. The objective of market risk management is to manage and control market exposures
within acceptable parameters, while optimising the return.
Currency risk
Currency risk is not material, as the Company's primary business activities are within India and does
not have any exposure in foreign currency.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. The company continously co-ordinates with its banker with
an indication of decline in market base rate of interest.
32. CAPITAL MANAGEMENT
The Company manages its capital to ensure that it will be able to continue as going conercn while
maximising the return to stakeholders through the optimisation of the debt and equity balance. The
capital structure of the Company consists of net debt and the total equity of the Company. For this
purpose, net debt is defined as total borrowings less cash and cash equivalents.
The Company manages its capital structure and makes adjustments in light of changes in economic
conditions and the requirements of the financial covenants. The funding requirments are met through
short-term/long-term borrowings. The Company monitors the capital structure on the basis of total debt
to equity ratio and maturity profile of the overall debt portfolio of the Company.
34. CONTINGENT LIABILITY
Nil
35. SEGMENT REPORTING
The segment reporting of the Company has been prepared in accordance with Indian Accounting
Standard (IND AS-108), "Operating Segments" .
Segment Reporting Policies
(a) Identification of Segments:
Primary - Business Segment
The Company has identified two reportable segments viz. Hoteliering & Real Estate on the basis
of the nature of services, the risk return profile of individual business and the internal business
reporting systems.
Secondary - Geographical Segment
The Company operates entirely in India and hence has no reportable geographical segment.
(b) Revenue and expenses have been identified to the segment on the basis of relationship to
operating activities of the segment. Revenue and expenses which relate to enterprise as a whole
and are not allocable to a segment on reasonable basis have been disclosed as "unallocable
expenses/Income". Since the Real Estate segment is still in 'preoperative stage' all the other
unallocable expenses are allocated to Hoteliering segment.
(c) Segment assets and segment liabilities represent assets and liabilities in respective segments.
Investment and other assets and liabilities that cannot be allocated to a segment on reasonable
basis have been disclosed as "unallocated assets" and "unallocated liabilities".
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