1 SIGNIFICANT ACCOUNTING POLICIES 1.1 Accounting Convention The Financial Statements have been brpared in accordance with historical cost convention, the accounting principles generally accepted in India including the applicable Accounting Standards specified u/s 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and relevant provisions of the Companies Act, 2013 and guidelines issued by the National Housing Bank. The brparation of financial statements requires the management to make estimates and assumptions in the reported amounts of assets and liabilities (including contingent liabilities) as of the date of the financial statements and the reported income and expenses during the reporting period. Management believes that the estimates used in brparation of the financial statements are prudent and reasonable. Future results could differ from these estimates. All assets and liabilities have been classified as current or non-current as per GRUH’s operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of its activities, GRUH has determined its operating cycle as 12 months for the purpose of current and non-current classification of assets and liabilities. 1.2 System of Accounting GRUH adopts the accrual concept in the brparation of the accounts. The Balance Sheet and Statement of Profit and Loss of GRUH are brpared in accordance with the provisions contained in the Companies Act, 2013, read with Schedule III thereto. 1.3 Inflation Assets and Liabilities are recorded at historical cost to GRUH. These costs are not adjusted to reflect the changing value in the purchasing power of money. 1.4 Interest on Loans Repayments of loans are by way of Equated Monthly Installments (EMIs) comprising principal and interest. Interest on loans is computed either on an annual rest, on a monthly rest or on a daily rest basis depending upon loan product. EMIs commence once the entire loan is disbursed. Pending commencement of EMIs, Pre-EMI interest is payable every month. Interest on loan assets classified as “Non-Performing” is recognised only on actual receipt. 1.5 Income from Investment Interest Income from investment is accounted on an accrual basis. The gain/loss on account of discount/brmium on investments made in debentures/bonds and government securities is recognised over the life of the security on a pro-rata basis. 1.6 Investments Investments are capitalised at cost inclusive of related expenses and are classified into two categories, viz. Current or Long-Term. Long- Term Investments are carried individually at cost less provision for diminution, other than temporary in the value of such investments. Current Investments are carried individually, at the lower of cost and fair value. Provision for diminution in the value of investments is made in accordance with the guidelines issued by the National Housing Bank and the Accounting Standard on ‘Accounting for Investment’ (AS 13). 1.7 Brokerage and Incentive on Deposit Brokerage and incentive on deposits is amortised over the period of the deposit. 1.8 Properties Acquired under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 Stock of acquired properties is valued at realisable value or outstanding dues, whichever is less. 1.9 Tax on Income The accounting treatment for the Income Tax in respect of GRUH’s income is based on the Accounting Standard on ‘Accounting for Taxes on Income’ (AS-22). The provision made for Income Tax in Accounts comprises both, the current tax and deferred tax. Deferred tax is recognised for all timing differences, being the differences between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Such deferred tax is quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date. The carrying amount of deferred tax asset/liability is reviewed at each Balance Sheet date and consequential adjustments are carried out. 1.10 Tangible Assets Tangible Assets are carried at cost inclusive of legal and/or installation expenses. Debrciation Debrciation is provided on all assets on a pro-rata basis on the “Straight Line Method” over the useful lives and in the manner brscribed under schedule II to the Companies Act, 2013 except for Computers where based on a technical evaluation, useful life is estimated at four years in order to reflect the actual usage of the assets. 1.11 Intangible Assets Intangible Assets comprising of Application Software are stated at cost of acquisition, including any cost attributable for bringing the same in its working condition less accumulated amortisation. Any expenses on such software for support and maintenance payable annually are charged to revenue. Amortisation Application software is amortised over a period of four years. 1.12 Provision for Standard Assets, Non-Performing Assets (NPAs) and Contingencies GRUH’s policy is to carry adequate amounts towards Provision for Standard Assets, Non-Performing Assets (NPAs) and other contingencies. All loans and other credit exposures where the installments are overdue for ninety days and more are classified as NPAs in accordance with the prudential norms brscribed by the National Housing Bank (NHB). The provisioning policy of GRUH covers the minimum provisioning required as per the NHB guidelines. Excess provisions over and above provisioning requirement for Standard Assets and NPAs are carried under Provision for Contingencies Account. 1.13 Employee Benefits GRUH has Defined Contribution Plans for post employment benefits namely Provident Fund and Superannuation Fund which are recognised by the Income Tax Authorities. These funds are administered through trustees and GRUH’s contributions thereto are charged to revenue every year. GRUH’s Contribution to State Plans namely Employee’s Pension Scheme is charged to revenue every year. GRUH has Defined Benefit Plans namely leave encashment / compensated absences and Gratuity for all the employees, the liability for which is determined on the basis of an actuarial valuation at the year end based on the Projected Unit Credit method and incremental liability, if any, is provided for in the books. Gratuity scheme is administered through trust recognised by the Income Tax Authorities. Actuarial Gains and Losses comprise of experience adjustments and the effects of changes in actuarial assumptions and are recognised immediately in Statement of Profit and Loss as income or expense. 1.14 Contingent Liabilities Contingent liabilities, if any, are disclosed in the notes on accounts. Provision is made in the accounts in respect of those contingencies which are likely to materialise into liabilities after the year end till the adoption of accounts by Board of Directors and which have material effect on the position stated in the Balance Sheet. 1.15 Capital Issue Expenses Expenses in connection with issue of Shares and Debentures are being adjusted against Security Premium as permitted by section 52 of the Companies Act, 2013. 1. National Housing Bank (NHB) vide its letter No.NHB(ND)/DRS/SUP/2294/2016 dated March 7, 2016 has imposed penalty of Rs. 36.64 lacs for non-compliance with the provisions under section 29B (1) & (2) of the NHB Act, 1987 regarding non-maintenance of requisite percentage of liquid assets during the period 01.04.2013 to 30.09.2014. While GRUH has paid the penalty as directed by NHB, GRUH has submitted its appeal to reconsider and review NHB’s decision. 2 There are no indications which reflects that any of the assets of GRUH had got impaired from its potential use and therefore no impairment loss was required to be accounted in the current year as per Accounting Standard on ‘Impairment of Assets’ (AS 28). 3 Figures less than Rs. 50,000 which are required to be shown separately, have been shown as actual in brackets. 4 Previous year’s figures have been re-grouped / re-classified wherever necessary to correspond with current year’s classification disclosure. |