Scheduleforming part of the Balance Sheet - Domain-b

The Indian Hotels Company Limited
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Schedule forming part of the Balance Sheet
Schedule 14 : Notes to the Balance Sheet and the Profit and Loss Account
1. Significant Accounting Policies:
The financial statements are prepared under historical cost convention on an accrual basis and comply with the
Accounting Standards (AS) notified by the Companies (Accounting Standards) Rules, 2006. The preparation of
financial statements requires the Management to make estimates and assumptions considered in the reported amounts
of assets and liabilities (including contingent liabilities) as of the date of financial statements and the reported income
and expenses during the reporting period. The management believes that the estimates used in preparation of the
financial statements are prudent and reasonable. Future results could differ from these estimates. The significant
accounting policies adopted in the presentation of the Accounts are as under:-
(a) Sales:
Sales comprise sale of rooms, food and beverages, allied services relating to hotel operations, including net income
from telecommunication services and management and operating fees. Revenue is recognised upon rendering of the
service.
(b) Export Benefits Entitlement:
Export Benefits in the nature of Duty Credit Scrips are recognised in the Profit and Loss Account upon the actual
utilisation of Duty Credit Scrips.
(c) Employee Benefits:
i. Provident Fund
The Company’s Contribution to the recognised Provident Fund, paid/payable during the year, is debited to the
Profit and Loss Account. The shortfall, if any, between the return guaranteed by the statute and actual earnings of
the Fund is provided for by the Company and contributed to the Fund.
ii. Gratuity Fund
The Company makes annual contributions to funds administered by trustees and managed by insurance
companies for amounts notified by the said insurance companies. The Company accounts for the net present value
of its obligations for gratuity benefits based on an independent external actuarial valuation determined on the basis
of the projected unit credit method carried out annually. Actuarial gains and losses are immediately recognised in
the Profit and Loss Account.
iii. Post Retirement Benefits
The net present value of the Company’s obligation towards post retirement pension scheme for whole time
directors is actuarially determined based on the projected unit credit method. Actuarial gains and losses are recognised
immediately in the Profit and Loss Account.
iv. Superannuation
The Company has a defined contribution plan, wherein it annually contributes a sum equivalent to the employee’s
eligible annual basic salary to an insurance company, which administers the fund. The Company recognises such
contributions as an expense in the year they are incurred.
The Company also has separate funded and unfunded schemes, which guarantee a minimum pension to certain
categories of employees. The Company accounts for the net present value of its obligations therein, based on an
independent external actuarial valuation carried out annually, which is determined on the basis of the projected
unit credit method. Actuarial gains and losses are immediately recognised in the Profit and Loss Account.