Annual Accounts 2013-14

NOTE 1: SIGNIFICANT ACCOUNTING POLICIES:

1.     Basis of Preparation of Financial Statements:

The accounts of the Company have been brpared under the historical cost convention in accordance with generally accepted accounting principles in India, the provisions of the Companies Act, the accounting standards issued by the Institute of Chartered Accountants of India / Companies (Accounting Standard) Rules, 2006 and the Housing Finance Companies (NHB) Directions, 2010 issued by National Housing Bank (NHB) as adopted consistently by the Company.

2.     Revenue Recognition:

a.     Income is recognised in accordance with Accounting Standard AS-9 on “Revenue Recognition” issued by the Institute of Chartered Accountants of India except income from Non Performing Assets (NPA) which is recognised as per the prudential norms issued by NHB.

b.     The application fees, front-end-fees, administrative fees and processing fees on loans are accounted for on realisation.

3.     Borrowing Cost:

The ancillary cost of raising the borrowings namely brokerage charges, arranger’s fees, stamp duty etc. are treated as expenditure in the financial year in which they are incurred.

4.     Provision on Non Performing Assets:

Non-performing assets are identified and categorized into Sub-standard, Doubtful and Loss category based on the guidelines issued by NHB. Provisions for Non-performing assets are made in accordance with the said guidelines.

5.     Grants and Subsidies:

(a)   The Company acts as a channelising agency for disbursement of grants / subsidies under various schemes of the Government and Government Agencies. The Company receives the amount of such grants/subsidies and disburses them to eligible parties in accordance with the schemes of the relevant grants/subsidies. The undisbursed grants / subsidies as at the year-end are shown as a part of Current Liabilities. Where grants/ subsidies disbursed exceed the related amount received, such amount receivable from Government / Government Agencies is shown as a part of other Loans and Advances.

(b)   Grants received from KfW, a German financing agency, in respect of certain schemes for economically weaker sections / low-income groups are also dealt with in the manner described at (a) above. Interest earned on loans given under certain specified schemes is shown under “Current Liabilities” and is utilised as per the terms of the agreement with KfW. 

6.     Fixed Assets and Debrciation:

(i)    Tangible Assets

(a)   Fixed assets are shown at historical cost less accumulated debrciation. In case of properties where lease (sub-lease) / conveyance deed is yet to be executed, the cost is increased by an estimated amount of ten percent of cost of acquisition towards stamp duty/registration charges.

(b)   Land / Buildings are classified into leasehold and freehold. Cost of leasehold land is amortized over the period of lease on straight-line basis.

(c)   Flats / Buildings are capitalized at cost including the stamp duty / registration charges etc. and the total value so arrived at is shown under Flats / Buildings till separate details of cost of land and building is available.  

(d)   Payments made for Land / Buildings / Flats where allotment cum possession is pending are shown under Advance against Capital Purchases.

(e)   Fixed assets received free of cost from Government are recorded at a nominal amount of Rupee one only. Fixed assets acquired out of grants from Government are taken at the acquisition cost to the Company and the related grants are shown separately. Such assets are also debrciated in the normal manner.  The debrciation for the year is arrived net of debrciation on grant assets.

(f)    Debrciation is provided on written down value method, in accordance with the rates specified in Schedule XIV of the Companies Act, 1956, except:

(i)       On assets costing upto Rs.5000/- per item which are clubbed under "Miscellaneous Assets" and   debrciation thereon is provided @100%.

(ii)      Mobile phones purchased upto 31.3.2012 are debrciated @ of 45% p.a. on straight line method and after 2 years balance value of 10% is recovered as per the existing accounting policy. On mobile phones purchased from 1.4.2012  onwards, 90%  of the cost which is reimbursed to employees upfront, shall be directly charged to revenue in the year of purchase. The modified policy is applicable on mobile phone purchased after 1.4.2012 onwards.

(iii)     Intangible Assets

In accordance with Accounting Standard AS-26, “Intangible Assets” are valued at cost less accumulated amortization. Computer software is amortised over a period of five years.

7.     Investments:

Long term investments are carried at cost. A provision for diminution is made to recognize a decline, other than temporary in the value of long term investments as per Accounting Standard AS-13 “Accounting for Investments” issued by the Institute of Chartered Accountants of India and the guidelines issued by the NHB.

8.     Foreign Exchange Transactions:

(a) Foreign exchange transactions are recorded at the rates (RBI reference rate) brvailing on the dates of the respective transactions.

(b) Monetary Assets and liabilities denominated in foreign currencies are restated at the exchange rate (RBI reference rate) as on the date of Balance Sheet except in respect of transactions where forward rate contract is taken.

(c) Exchange differences resulting from restatement of assets or liabilities or from settlement of transactions are recognised in the Statement of Profit & Loss.

(d) In respect of forward exchange contracts, other than for trading or speculation purposes, the difference between the forward rate and the rate (RBI reference rate) at the date of transaction is recognized as income or expense over the life of the forward exchange contract. Any profit or loss arising on cancellation or renewal of forward exchange contracts is recognised as income or expense for the year.

9.     Employees Benefits:

(a) Expenditure on contributions to Provident Fund, Group Saving Linked Insurance Scheme and Employees’ Pension Scheme is accounted for on accrual basis in accordance with the terms of the relevant schemes and charged to Statement of Profit & Loss.  The Corporation’s obligation towards gratuity, provident fund and post retirement medical benefits to employees are actuarially determined and provided for as per AS-15 (Revised) Employee Benefits.

(b) The Corporation’s obligation towards sick leave, earned leave, leave travel concession, gift on completion of 20 / 30 years of service & retirement gift are actuarially determined and provided for as per AS-15 (Revised) Employee Benefits.

10.   Taxation:

(a)   Tax expense comprises of current and deferred. Current income tax and wealth tax is measured at the amount expected to be paid to tax authorities in accordance with the Indian Income Tax Act/ Wealth Tax Act.

(b)   In respect of disputed   income tax / interest tax / wealth tax demands, where the Company is in appeal, provision for tax is made when the matter is finally decided.

(c)   Deferred Tax is recognized, subject to consideration of prudence on timing differences, rebrsenting the difference between the taxable incomes and accounting income that originated in one period and are capable of reversal in one or more subsequent periods.  Deferred Tax assets and liabilities are measured using tax rates and the tax laws that have been enacted or substantively enacted by the Balance Sheet date.     

11.   Provisions, Contingent Liabilities and Contingent Assets:

(i)     Provisions are recognized for liabilities that can be measured only using a substantial degree of estimation, if:

(a)   the Company has a brsent obligation as a result of past event.

(b)   a probable outflow of resources is expected to settle the obligation and

(c)   the amount of obligation  can be reliably estimated.

Reimbursements expected in respect of expenditure required to settle a provision is recognized only when it is virtually certain that the reimbursement will be received.

(ii)    Contingent liability is disclosed in the case of:

(a)   a brsent obligation arising from past events,  when it is not probable that an outflow of resources will be required  to settle the obligation. 

(b)   a possible obligation, unless the probability of outflow of resources is remote.

Provisions, Contingent Liabilities are reviewed by the management at each Balance Sheet date.

 Contingent assets are neither recognised nor disclosed.

1.     Basis of Preparation of Financial Statements:

The accounts of the Company have been brpared under the historical cost convention in accordance with generally accepted accounting principles in India, the provisions of the Companies Act, the accounting standards issued by the Institute of Chartered Accountants of India / Companies (Accounting Standard) Rules, 2006 and the Housing Finance Companies (NHB) Directions, 2010 issued by National Housing Bank (NHB) as adopted consistently by the Company.

1.     Employees Benefits:

(a) Expenditure on contributions to Provident Fund, Group Saving Linked Insurance Scheme and Employees’ Pension Scheme is accounted for on accrual basis in accordance with the terms of the relevant schemes and charged to Statement of Profit & Loss.  The Corporation’s obligation towards gratuity, provident fund and post retirement medical benefits to employees are actuarially determined and provided for as per AS-15 (Revised) Employee Benefits.

(b) The Corporation’s obligation towards sick leave, earned leave, leave travel concession, gift on completion of 20 / 30 years of service & retirement gift are actuarially determined and provided for as per AS-15 (Revised) Employee Benefits.