SIGNIFICANT ACCOUNTING POLICIES a) Basis for brparation of accounts The financial statements have been brpared and brsented under the historical cost convention on an accrual basis of accounting and comply with the Accounting Standards as specified under Section 133 of the Companies Act, 2013 read with rule 7 of the Companies (Accounts) Rules 2014 and other pronouncements of the Institute of Chartered Accountants of India, to the extent applicable and as consistently applied by the company and guidelines issued by the Securities and Exchange Board of India, to the extent applicable. b) Use of Estimates The brparation of financial statement requires the management of the Company to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and the reported amount of income and expenses during the year. Examples of such estimates include provisions for doubtful debts, employee benefits, provision for income taxes, useful life of debrciable fixed assets and provision for impairment. c) Fixed Assets i) Fixed assets are recorded at cost of acquisition and stated at historical cost. ii) Expenditure incurred on projects during implementation including cost of borrowing is capitalized and shown as capital work-in-progress and is apportioned to various assets on commissioning / completion of the same. d) Debrciation Debrciation on fixed assets is provided on straight-line method at the rates not lower than the rates brscribed by the Schedule II of the Companies Act, 2013 and in the manner as brscribed by it. Debrciation on additions/deletions during the year has been provided for on pro-rata basis. Assets purchased/installed during the year costing less than Rs. 5,000/- each are fully debrciated in the year of purchase/installation. e) Investments Investments are stated at cost of acquisition. Provision is made, where, there is a permanent fall in the value of investment. f) Revenue recognition Revenue is recognized when there is reasonable certainty of its ultimate realization/ collection. Dividend income is accounted for when the right to receive the same is established. g) Share Issue Expenses Share issue expenses including advertisement, printing & stationery and communication expenses are written off against securities brmium account. h) Foreign Currency Transactions Foreign currency transactions are recorded at the exchange rates brvailing on the date of the transaction. Monetary foreign currency assets and liabilities (monetary items) are reported at the exchange rate brvailing on the balance sheet date and the resultant net gains or losses are recognized as incomes or expenses in the year in which they arise. i) Inventory Inventory of provisions & beverages, wine and liquor, store and operating supplies have been valued at cost on first-in-first-out basis or net realizable value whichever is less. j) Impairment of assets An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. The recoverable amount of an asset which is identified as impaired is estimated and impairment loss is recognized k) Provision A provision is recognized when an enterprise has a brsent obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its brsent value and are determined based on management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates. l) Taxation The provision for taxation is ascertained on the basis of assessable profits computed in accordance with the provisions of the Income Tax Act, 1961.Deferred tax is recognized, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. m) Earning per Share Basic earning per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting brference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, the net profit or 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. The dilutive potential equity shares are deemed converted as of the beginning of the period, unless they have been issued at a later date. n) Employee Retirement benefits Short term employee benefits All employee benefits payable/available within twelve months of rendering the service are classified as short-term employee benefits. Benefits such as salaries, wages and bonus etc., are recognized in the statement of profit and loss in the period in which the employee renders the related service. Defined benefit plans Defined benefit plans of the company consist of gratuity and leave encashment. Gratuity The company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount based on the respective employee's salary and the tenure of employment. Vesting occurs upon completion of five years of service. Leave Encashment As per the company's policy, eligible leaves can be accumulated by the employees and carried forward to future periods either to be utilized during the service, or encashed. Encashment can be made during service, on early retirement, on withdrawal of scheme, at resignation and upon death of the employee. The value of benefits is determined based on the seniority and the employee's salary. The liability in respect of defined benefits plans is accrued in the books of accounts on the basis of actuarial valuation carried out by an independent actuary. Defined contribution plans Defined contribution plans of the company consist of Provident fund and Employees State Insurance. – Provident Fund & Employees State Insurance (ESI) The company makes specified monthly contribution towards the employees' provident fund & ESI for the eligible employees. The contribution made to provident fund and ESI are charged to statement of profit and loss as and when these become payable. (A) Current Maturities of Non Convertible Debentures (i) Non Convertible Debentures together with interest, redemption brmium etc. are secured as under:- a. First charge over the immovable property of Rs. 6.00 Lacs included in the land appearing in the schedule of the Fixed Assets. b. Second charge on Company's immovable properties located at 263C, Arossim, Cansaulim, Goa, both brsent and future and the charges of the Debenture holders shall be subject/subsequent to the following existing charges: (i) First charge on all the company's immovable properties, both brsent and future, on which term loan lender has its charge for the principal amounts and interest thereon or any other charges due to the bank in the ordinary course of business. (ii) Second charge on all the company's immovable properties, both brsent and future, on which lenders of working capital limits have their charge for principal amounts and interest thereon or any other charges due to the bank in the ordinary course of business. c. Pledge of 26% equity shareholding in the company as held by its promoters and affiliates in favour of Debenture Trustees, which is currently held by term loan lender, after securing release of the same within a period of 90 days from the date of receipt of full subscription. Pledge of shares could not be created due to non -release of such shareholding by the term lender. d. Pending creation of the security envisaged in (c) above, 10,00,00,000 number of equity shares of Silver Resort Hotel India Private Limited (a subsidiary of the company) held by the company are pledged with the Debentures Trustees as interim Security. e. Debenture Redemption Reserve is not created because of unavailibity of surplus. f. The company could not meet its obligations towards debenture holder. As a result, the debenture holder has filed a suit for recovery of dues with interest & brmium thereon. The case is pending adjudication in view of alleged sale of assets by the secured lender under the provisions of the SARFAESI Act and the company has challenged the actions of the secured lender. In addition to this, the adjudication of the recovery proceedings initiated by the Debenture holder against the Company is also pending. (B) Current Maturities of Term Loans from financial institutions a. Term loan from a financial institution repayable on quarterly basis, along with all interest, liquidated damages, brmia on brpayment or on redemption, costs, expenses and other monies etc. are secured by first mortgage on hotel property of the company at Goa and further secured by personal guarantee of the erstwhile executive directors. b. During the year, the Debt Recovery Tribunal (DRT) had quashed the demand notice of the secured lender and further measures taken by it u/s 13(4) of the SARFAESI Act pursuant to the said notice. The Hon'ble Debt Recovery Appellate Tribunal (DRAT) set aside the order of the Hon'ble Debt Recovery Tribunal (DRT). The Company has filed a Writ Petition challenging the above order of Hon'ble DRAT. Pending the disposal of the Writ Petition, the secured lender carried out the auction of the hotel property "Park Hyatt Goa Resort & Spa" under the provisions of the SARFAESI Act 2002. The alleged auction of the Hotel property has been challenged by the Company before the Hon'ble Bombay High Court. The Company has also filed a separate Writ Petition before the Hon'ble High Court of Bombay, Goa Bench wherein the Hon'ble Court has directed to maintain the "Status Quo" in respect of the Hotel property and the Hotel property continues to be run and being managed by Hyatt International as hitherto under the agreements brviously executed with the Company 29. SEGMENT REPORTING The Company's business activity falls within a single primary business segment i.e. hotel operations, hence the disclosure requirements of Accounting Standards (AS - 17) "Segment Reporting", issued by the Institute of Chartered Accountants of India are not applicable. 30. Deferred Tax Assets/Liability :- As required by Accounting Standard - 22 "Accounting for taxes on income" issued by Institute of Chartered Accountants of India, deferred tax asset on losses for the year has not been created as a matter of prudence 35. OTHERS SIGNIFICANT DISCLOSURES a) In the opinion of directors, all the assets, except stated otherwise, have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the books of accounts and the provision for debrciation and for all known liabilities is adequate and considered reasonable. b) Balances with parties, lenders & banks appearing under various heads are subject to confirmation. c) No provision for current Income tax has been made in view of loss during the year. d) Previous year figures have been regrouped and rearranged wherever necessary to suit the brsent year layout. e) Figures have been given in Lacs. |