Accounting Policies of Manraj Housing Finance Ltd. Company

Mar 31, 2024

22)CORPORATE INFORMATION :

Man raj Housing Finance Limited is a listed Company incorporated in India under tire provisions of tne
Companies Act, 1956, Earlier it was engaged m the business of providing finance for housing, This activity
of late has been discontinued and since last few years the company has started construction activity and
is otherwise dealing in real estate business,

23)

23.1 Compliance with Ind 45;

The financial statements comply in ail material aspects with Indian Accounting Standards [Ind A5) notified
under Section 133 of the Companies Act Act, 2013 f''the Act''T read with rule 3 of the Companies (Indian
Accounting Standards) Amendment Rules, 2016 and other relevant provisions of the Art.

Accounting policies have been consistently applied except where a newly issued accounting standard is
initially adopted gr a revision to an existing accounting standard requires a change in the accounting
policy hitherto in use-

23.2 Historic^ cost convention :

The accounts have been prepared on historical cost basis of accounting. The Company adopts the aocrual
concept in the preparation of accounts, unless otherwise stated.

23.3 Current versus non-current classification i

The Company presents Its assets and liabilities In the Balance Sheet based on current / non-current
classification.

AH the assets and liabilities have been classified as current or non- current as per the Company''s normal
operating cycle and other cntens set out in Schedule III to the Companies Act, 2013. Based on the nature
of products and tame between tire acquisition of assets for processing and their realisation in cash or cash
equivalents, the Company has ascertained its operating cycle as twelve months for the purposeof current
/ non* current Classification of assets and liabilities,

23.4 Use of estimates and judgments:

The preparation of the Financial statements in conformity with Ind AS requires the management to mate
estimates, judgments and assumptions that affect the reported balances of assets and liabilities (Including
contingent liabilities) as at the date of the financial statements and the reported income and expenses for
the years presented- Application of accounting policies that require cntical accounting estimates involving
complex and subjective Judgments and the use of assumptions in these financial statements have been
disclosed below, Accounting estimates could change from period to period. Actual results could differ from
those estimates, Appropriate changes In estimates are made as management becomes aware of changes
in circumstances surrounding the estimates. Changes in estimates are reflected m the financial
statements In the period in which changes are made and, if material, their effects are disposed in the
notes to the financial statements.

23.5 ReyfliwftjtePflnfflqn i

As for the real estate business the revenue from sale of properties constructed is recognized on transfer
of significant risk and rewards to the buyer. Accordingly cost of construction /development is charged to
the profit and loss account in proportion to the revenue recognised during the period and batanoe costs
are earned as inventories. Amounts receivable/payable are reflected as DeMora/Advances from
Customers, respectively, after consrdering income recognized m the aforesaid manner.

Dividend Income is recognized when the right Id receive dividend is established,

23.6 faeiiMavjeteit.ajMl fiaHiumsjit;

1, All the flJted assets have been stated at cost inclusive of incidental expenses less
accumulated depreciation less impairment if any,

2. Depreciation on Fixed Assets was provided on Straight Line Method at the rates and in the manner
specrfied in Schedule II to the Companies Act, 2013 till 31.03,2014. Since then as ail the assets are fully
depreciated, nD depreciation has been provided in the boote.

23.7 Impairment of Assets r

Canrymg amount of Tangible and Intangible Assets are tested for impairment whenever events or
changes id circumstances indicate that the carrying amount may not be recoverable. An impairment lass
is recognized for the amount by which the asset''s carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset''s fair value tess costs of disposal and value in use.

In assessing value in use, the estimated future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset. In determining fair value less costs of disposal, recent market transactions are
taken into account. If no such transactions can be identified, an appropriate valuation model is used.

Investments are classified as long term investments. The company measures them at cost. Provision for
diminution, rf any, in the value of investments is made to recognize a decline, other than, that of a
temporary nature.Dividend Income from such investments is recognized in statement of profit or loss as
other income when the company''s right to receive payment is established.

23.9 LKmiajiiadvances.;

The carrying amounts of assets are reviewed at each balance sheet date to determine the impairment in
values, if any. An Impairment loss 6 recognized wherever the carrying amount of an asset exceeds Its
recoverable amount.In the opinion of the board, the Current assets, loans and advances, have a value on
realization in the ordinary course of business at least equal to the amount at which they ate stated in the
Balance sheet,

23J.Q Inventories:

Inventories are valued at lower of cast and net realizable value after providing for cost of obsolescence
and other anticipated losses, whenever considered necessary.

23.11 Trade Receivables :

Trade receivables are initially recognized at farr value and subsequently measured at amortized cost using
the effective interest method, less provision for impairment-

23.12 Cash flow statement :

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects
oftransactions of ngn-cash nature and any deferrals or accruals of past or future cash receipts or
payments and item of income or expenses associated with investing or financing cash flows. Cash flow
from operating, investing and financing activities are segregated.

23.13 siara&iaiiaL;

Ordinary shares are classified as equity,

Incremental costs directly attributable to the issue of new ordinary shares are shown in equity as a
deduction, net of tax, from the proceeds,

23.14 Impairment of financial assets :

In accordance with Ind AS 109, the Group applies Expected Credit Loss (ECL) model for measurement
and recognition of impairment loss on the following financial assets and credit risk exposure:

a) Financial assets that are measured at amortized cost e.g., loans, deposits, and bank balance.

t>) Trade receivabies.

The Group follows ''simplified approach'' for recognition of impairment loss allowance on trade receivables
which do not contain a significant financing component. The application of simplified approach does not
require the Group to track changes in credit risk. Rather, it recognizes impairment loss allowance based
on lifetime ECLs at each reporting date, right from its initial recognition.

For all other financial assets, ECL is measured at an amount equal to the twelve month ECL unless there
has been a significant increase in credit risk from the initial recognition in which case those are measured
at lifetime ECL.

23.15 Financial liabilities:

(I) Borrowings:

Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortized cost. Any difference between the proceeds (net of transaction cost) and the
redemption amount is recognized in statement of profit or loss over the penod of the borrowings using
the effective interest method.

Borrowings are removed from the Balance 5heet when the obligation specified in the contract is
discharged, cancelled or expired. The difference between the carrying amount of a financial liability that
has been extinguished and the consideration paid is recognized in statement of profit or loss as other
gains / losses.

Borrowmgs are classified as current liabilities unless the company has an unconditional right to defer
settlement of the liability for at least 12 months after the reporting period. Where there Is a breach of a
material provision of a long term loan arrangement on or before the end of reporting period with the
effect that the liability becomes payable on demand on the reporting date, the entity does not classify
the liability as current, if the lender agreed, after the reporting period and before the approval of the
financial statements for issue, not to demand payment as a consequence of this breach.

(II) Trade payables :

These amounts represent liabilities for goods and services that have been acquired in the ordinary
course of business from suppliers. Trade payables are presented as current liabilities unless payment is
not due within 12 months after reporting penod. They are recognized initially at their fair value and
subsequently measured at amortized cost using the effective interest method.

23.16 BomwIlULCflSlJ

Borrowing cost incurred for qualifying assets is capitalized up to the date the asset is ready for its
intended use, based on borrowings incurred specifically for financing the asset or the weighted average
rate of all other borrowings, if no specific borrowings have been incurred for the asset.

The company has incurred borrowing costs directly identifiable with acquisition of business asset. The
asset for which advance was paid to the vendor needed substantial period of time in order to pass on a
dear title m the asset. The vendor had carried substantial technical and administrative work upto
31.03.2016. However, there has been very little active development during the year under consideration
due to the deadlock posed by tenants occupying the asset The capitalization has been suspended
because of the interruption of the activities in line with Para 17 of AS-16 on Borrowing Costs, Issued by

ICAI. Further the interest already capitalized upto 31.03.2016 is also adjusted in profit and Loss
Appropriation account for the year 31.03,2017 to set the matter right in accordance with Ind AS.

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Mar 31, 2015

A) Accounting Methodology

The accounts have been prepared on historical cost basis of accounting in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 2013. The Company adopts the accrual concept in the preparation of accounts, unless otherwise stated.

B) Investments

Investments classified as long term investments are carried at cost. Provision for diminu- tion, if any, in the value of investments is made to recognize a decline, other than, that of a temporary nature.

C) Revenue Recognition

As for the real estate business the revenue from sale properties constructed is recognized on transfer of significant risk and rewards to the buyer. Accordingly cost of construction /development is charged to the profit and loss account in proportion to the revenue recognized during the period and balance costs are carried as inventories. Amounts re- ceivable/payable are reflected as Debtors/Advances from Customers, respectively, after considering income recognized in the aforesaid manner.

Dividend Income is recognized when the right to receive dividend is established.

D) Fixed Assets

1. All the fixed assets have been stated at cost inclusive of incidental expenses less accumulated depreciation less impairment if any.

2. Depreciation on Fixed Assets is provided on Straight Line Method at the rates and in the manner specified in Schedule II to the Companies Act, 2013.

E) Inventories

Inventories are valued at lower of cost and net realizable value.

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Mar 31, 2014

A) Accounting Methodology

The accounts have been prepared on historical cost basis of accounting in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 1956. The Company adopts the accrual concept in the preparation of accounts, unless otherwise stated.

B) Investments

Investments classified as long term investments are carried at cost. Provision for diminution, if any, in the value of investments is made to recognize a decline, other than, that of a temporary nature.

C) Revenue Recognition

As for the real estate business the revenue from sale properties constructed is recognized on transfer of significant risk and rewards to the buyer. Accordingly cost of construction /development is charged to the profit and loss account in proportion to the revenue recognized during the period and balance costs are carried as inventories. Amounts receivable/payable are reflected as Debtors/Advances from Customers, respectively, after considering income recognized in the aforesaid manner.

Dividend is accounted for on cash basis.

D) Fixed Assets

1. All the fixed assets have been stated at cost inclusive of incidental expenses

less accumulated depreciation less impairment if any.

2. Depreciation on Fixed Assets is provided on Straight Line Method at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

E) Inventories

Inventories are valued at lower of cost and net realizable value.

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Mar 31, 2011

A) Accounting Methodology

The accounts have been prepared on historical cost basis of accounting in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 1956. The Company adopts the accrual concept in the preparation of accounts, unless otherwise stated.

B) Investments

Investments classified as long term investments are carried at cost. Provision for diminution, if any, in the value of investments is made to recognize a decline, other than, that of a temporary nature.

C) Revenue Recognition

Repayment of housing loans is by way of equated monthly installments (EMls) comprising principal and interest. Interest is calculated with monthly rests on the balance outstanding. The Company's income from this operation is accounted for on an accrual basis, wherever applicable determined in accordance with the prudential norms prescribed by the National Housing Bank for the Housing Finance Companies. Other Revenue/Income and Costs/expenditure (other than dividend) are accounted for on accrual basis, except in cases where prudential norms prescribed by NHB are otherwise required to be observed.

Dividend is accounted for on cash basis.

D) Fixed Assets

1. All the fixed assets have been stated at cost inclusive of incidental expenses less accumulated depreciation less impairment if any.

2. Depreciation on Fixed Assets is provided on Straight Line Method at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

E) Inventories

Inventories are valued at lower of cost and net realizable value.

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Mar 31, 2010

A) Accounting Methodology

The accounts have been prepared on historical cost basis of accounting in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 1956. The Company adopts the accrual concept in the preparation of accounts, unless otherwise stated.

B) Investments

Investments classified as long term investments are carried at cost. Provision for diminution, if any, in the value of investments is made to recognize a decline, other than, that of a temporary nature.

C) Revenue Recognition

Repayment of housing loans is by way of equated monthly installments (EMls) com- prising principal and interest. Interest is calculated with monthly rests on the balance outstanding. The Companys income from this operation is accounted for on an accrual basis, wherever applicable determined in accordance with the prudential norms prescribed by the National Housing Bank for the Housing Finance Companies. Other Revenue/Income and Costs/expenditure (other than dividend) are accounted for on ac- crual basis, except in cases where prudential norms prescribed by NHB are otherwise required to be observed.

Dividend is accounted for on cash basis.

D) Bad Debts

Bad Debts are written off or provided for on the basis of the provisioning guidelines for Housing Finance Companies issued by National Housing Bank. Additional amount is written off if the management on the review of loans/advances, considers it necessary.

E) Fixed Assets

1. All the fixed assets have been stated at cost inclusive of incidental expenses less accumulated depreciation less impairment if any.

2. Depreciation on Fixed Assets is provided on Straight Line Method at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.