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NOTES TO ACCOUNTS

Ansal Housing Ltd.

You can view the entire text of Notes to accounts of the company for the latest year
Market Cap. (₹) 31.18 Cr. P/BV 0.11 Book Value (₹) 48.56
52 Week High/Low (₹) 18/4 FV/ML 10/1 P/E(X) 0.00
Bookclosure 27/09/2019 EPS (₹) 0.00 Div Yield (%) 0.00
Year End :2018-03 

NOTE

1. BACKGROUND & OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

A. CORPORATE INFORMATION

- Ansal Housing and Construction Limited referred to as (“the Company” or “Ansal Housing”) engaged in the business of promotion, construction and development of integrated townships, residential and commercial complexes, multi-storeyed buildings, flats, houses, apartments, shopping malls etc.

- The Company is a public limited company incorporated and domiciled in India. The address of its registered office 606, Indra Prakash, 21 Barakhamba Road, New Delhi-110 001 having Corporate Identity Number: L45201DL1983PLC016821. The Company is listed on the National Stock Exchange of India Limited. (NSE) and BSE Limited (BSE).

iii. Legal formalities relating to conveyance of freehold building having gross value of Rs. 638.75 Lakh (as at 31st March, 2017: Rs. 638.75 Lakh, as at 1st April, 2016 Rs. 638.75 Lakh) and lease deed of lease hold building having gross value of Rs. 1218.49 Lakh (as at 31st March, 2017: Rs. 1218.49 Lakh, as at 1st April, 2016: Rs. 1218.49 Lakh) are pending execution.

iv. For details of Assets charged, Refer Note-16 and Note - 20

2.1. The average credit period is 21 to 45 days. For payments, beyond credit period, interest is charged as per contractual rate on outstanding balances which has been accounted for as per the policy of the company.

2.2. The real estate sales are made on the basis of cash down payment or construction linked payment plans. In case of construction linked payment plans, invoice is raised on the customer in accordance with milestones achieved as per the flat buyer agreement. The final possession of the property is offered to the customer subject to payment of full value of consideration. Accordingly, the Company does not expects any credit losses.

3.1 Fixed Deposits with Banks includes deposits of Rs. Nil (Previous year Rs. Nil) with maturity of more than 12 months.

3.2 Cash and Bank balances includes restricted cash balance of Rs.1312.95 Lakh (as at 31st March 2017: Rs.1342.19 Lakh). The restrictions are primarily on account of cash and bank balances held as margin money, deposit against guarantees, unpaid dividends and escrow accounts.

3.3 The deposit maintained by the Company with banks can be withdrawn at any point of time without prior notice or penalty on the principal.

4.1 Terms/ Rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs.10/- per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares would be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of the equity shares held by the shareholders.

4.2 Equity Shares bought back and extinguished during the last five years

- 3,97,296 Equity Shares bought back during the financial year 2012-13

4.3 The Company has not issued any preference share capital

5.1 Nature and purpose of reserves:

- Capital Reserve - The Company has transferred the amount received on forfeiture of partly paid share/warrant in Capital reserve.

- Capital Redemption Reserve - The Company has transferred a part of the net profit of the company to the Capital Redemption Reserve in previous years on buy back of equity shares

- Securities Premium Account - The amount received in excess of the face value of the equity share issued by the company is recognised in securities premium reserve.

- General Reserve - The Company has transferred a part of the net profit of the company to the general reserve in previous years.

- Retained earnings - Retained earnings are profits of the company earned till date less transferred to general reserve.

5.2 The Company had revalued building on 31st March, 1996 on the basis of approved valuer report and had balance of Rs. 606.21 Lakh in revaluation reserve on the date of transition. On transition (i.e. 1st April, 2016) company has elected to Para D7AA of Ind AS-101 as deemed cost due to which such revaluation reserve has been transferred to general reserve.

NOTES:

6.1 Term Loan from Bank referred above to the extent of:

- Rs. Nil (as at 31st March,2017: Rs. Nil and as at 1st April,2016: Rs. 3400.00 Lakh) are secured by way of mortgage of project land owned by the Company and its subsidiaries situated at Gurgaon and hypothecation of finished goods and receivables of Gurgaon Project, assignment of receivables of Alwar project, pledge of term deposit, pledge of shares of a subsidiary company and pledge of part of promoters shareholding in the Company.

6.2 Bank Overdraft referred above to the extent of:

- Rs. 316.38 Lakh (as at 31st March,2017: Rs. 414.38 Lakh and as at 1st April,2016: Rs.490.33 Lakh) overdraft facility is secured by way of mortgage of unsold units owned by the Company in one of its project at Ghaziabad and guaranteed by promoter directors.

6.3 Term Loan from Corporate Bodies referred above to the extent of:

- Rs. 18384.62 Lakh (as at 31st March,2017: Rs. 17055.68 Lakh and as at 1st April,2016: Rs.19055.81 Lakh) are secured by way of mortgage of project land owned by the Company and its subsidiaries situated at Agra, Indore, Meerut and Gurgaon, mortgage of building situated at Noida, mortgage of premises situated at Delhi owned by promoter directors and their families, assignment of receivables of Agra, Indore, Meerut and certain Gurgaon projects and pledge of part of promoters shareholding in the Company and guaranteed by promoter directors.

The Ind AS adjustment on the above loan is Rs. 240.35 Lakh (as at 31st March, 2017 Rs. 360.83 Lakh and as at 1st April, 2016 Rs. 125.31 Lakh)

- Rs. 709.14 Lakh (as at 31st March,2017: Rs. 967.49 Lakh and as at 1st April,2016: Rs. 787.77 Lakh) are secured by way of mortgage of Commercial Plot owned by the Company, Residential plot owned by promoter situated at Noida and Palam Vihar respectively, unsold units in the project at Meerut and guaranteed by promoter director.

- Rs. 8456.14 Lakh (as at 31st March,2017: Rs. 8117.56 Lakh and as at 1st April,2016: Rs.9375.00 Lakh) are secured by way of mortgage of land owned by the Company and its subsidiaries situated at Yamunanagar and Amritsar and assignment of receivables of Yamunanagar Project and guaranteed by promoter directors.

- Rs.22.67 Lakh (as at 31st March,2017: Rs. 485.67 Lakh and as at 1st April,2016: Rs.818.00 Lakh) are secured by way of mortgage of land owned by the Company and its subsidiaries situated at Jhansi and Ghaziabad and assignment of receivables of Jhansi and Ghaziabad Projects and guaranteed by promoter directors.

- Rs. 13083.82 Lakh (as at 31st March,2017: Rs. 11937.97 Lakh and as at 1st April,2016: Rs. 3738.87 Lakh) are secured by way of mortgage of land owned by the Company and its subsidiaries situated at Gurgaon, assignment of receivables of Gurgaon Projects, pledge of term deposit and pledge of shares of a subsidiary company and associate company and guaranteed by promoter directors.

The Ind AS adjustment on the above loan is Rs. 704.68 Lakh (as at 31st March, 2017: Rs. 1253.28 Lakh and as at 1st April, 2016: Rs. NIL)

- The rate of interest are as per the sanction letter/agreement.

6.4 Vehicle/ Equipment Loan from Bank/ Corporate Bodies referred above are secured by way of hypothecation of respective vehicle/ construction equipment.

6.5 Term Loan from Bank referred above to the extent of: Rs. 316.38 have been guaranteed by the promoter (As at 31st March,2017: Rs. 414.38 Lakh and As at 1st April, 2016: Lakh directors. Rs.3890.33 Lakh)

6.6 Term Loan from Corporate Bodies referred above to the extent of: Rs.. 761.33 have been guaranteed by the promoter (As at 31st March,2017 Rs. 38290.73 Lakh and As at 1st April, Lakh directors. 2016 Rs. 33775.45 Lakh) Rs. 21,562.63 have been guaranteed by the subsidiary (As at 31st March,2017 Rs.20541.20 Lakh and As at 1st April, Lakh companies. 2016 Rs.13931.87 Lakh)

6.7 Public Deposits:

The Company has discontinued acceptance / renewal of fixed deposits w.e.f. 1st April, 2016. Due to recession in the real estate industry resulting in financial crunch, the Company approached the National Company Law Tribunal (NCLT), New Delhi, in July 2016 under section 74(2) of the Companies Act, 2013 and has received the approval for extension of time to repay the deposits vide NCLT’s order dated 3rd October, 2016. The total deposits at the time of Company’s application to the NCLT amounting to Rs.8457.47 Lakh are generally being repaid by the Company as per the terms of NCLT Orders though there are some overdue amounts. However, the NCLT vide its order dated 1st December,2017 has permitted to pay Rs. 125.00 Lakh per month including hardship cases and same scheme has been extended by NCLT till July 2018 vide its latest order dated 10.05.2018. The Company is in the process of complying with the above NCLT orders. The outstanding amount of public deposits as on 31st March, 2018 has been classified into current and non current after considering extension granted by the NCLT.

6.8 Loan under Restructuring:

Long term loan from IFCI have been restructured on 17th November 2017 with cut-off date of 15th July 2017. The Company is entitled to reliefs and concessions granted by the financial institution effective from the cut-off date. Key terms of restructuring is as under:

- Tenure : 8 Years and 6 Months

- Additional moratorium of 3 months from cut-off date on principal repayments.

- Principal Repayment of Loans: 99 structured monthly installments starting from 15th October, 2017 till 15th December, 2025

- Interest obligation aggregating Rs. 518.13 Lakh on cut-off date was converted into Funded Interest term Loan (FITL) and repayable in 21 structured monthly installments starting from 15th August, 2017

NOTES:

9.1 Working Capital Loans from Scheduled Banks are secured by charge over stocks of materials, unsold finished stock, construction work-in-progress, book-debts of the Company, Commercial Flats at Indra Prakash Building, Commercial Plot at Parwanoo, Residential Plot at Lucknow, Residential Plots at Gurgaon owned by director & their family, Unsold area & Corporate Office at Ghaziabad and have been guaranteed by promoter directors & their family. The rate of interest are as per the sanction letter.

9.2 Term Loan from Corporate Bodies of Rs. Nil (as at 31st March,2017: Rs. Nil and as at 1st April,2016 Rs. 500.00 Lakh) is secured by way of mortgage of project land owned by a Subsidiary Company at Gurgaon. The rate of interest are as per the agreement/ sanction letter.

10.1 Refer Note 47 for Trade payables which are going to be settled within 12 months from the reporting date & for information about liquidity risk and market risk.

NOTE:

11.1 The Other payables referred above includes Brokerage Provision, Customer Refund, payable to Associates Co. and Staff Imprest. Further Customer Refund Includes Rs. 698.52 Lakh (as at 31st March 2017 Rs. 100.77 Lakh and as at 01st April, 2016 Rs. 100.77 Lakh) payable to subsidiary company and Rs. 110.52 Lakh (as at 31st March 2017 Rs. 19.14 Lakh and as at 01st April 2016 Rs. 10.00 Lakh) payable to other related parties.

11.2 Other payables also includes Rs. 3.90 Lakh (as at 31st March,2017: Rs. 3.95 Lakh and as at 1st April, 2016: Rs. 5.27 Lakh) payable to subsidiary Companies.

11.3 Refer Note 47 for other financial liabilities which are going to be settled within 12 months from the reporting date & for information about liquidity risk and market risk.

NOTES:

12.1 The Advances from Customers referred above includes Rs. 2,986.32 Lakh (as at 31st March,2017: Rs.2,927.72 Lakh and as at 31st March,2016: Rs. 2,899.10 Lakh) received from subsidiary Companies and Rs.733.98 Lakh (as at 31st March,2017 Rs. 1,636.65 Lakh and as at 31st March,2016: Rs. 1,525.21 Lakh) from other related parties.

12.2 Advances from customers are against sale of real estate projects and generally are not refundable except in the case of cancellation of bookings.

a) In respect of certain assessment years upto 2006-07, the Delhi High Court has allowed the appeal of the Income Tax Department filed against the order of the Income Tax Appellate Tribunal, New Delhi, holding that the Notional Annual Letting Value of Flats/Commercial spaces etc. lying unsold in the closing stock is liable to tax under the head ‘Income from House Property’. Based on the High Court Order, the tax department has created a demand of Rs.1232.34 Lakh (as at 31.03.2017: Rs. 1217.24 Lakh, as at 01.04.2016 Rs.1112.67 Lakh) against the Company and a further liability of Rs.360.42 Lakh (as at 31.03.2017: Rs.360.42 Lakh, as at 01.04.2016 Rs.442.62 Lakh) is estimated in respect of cases which are pending before the ITAT/High Court. The Company has filed special leave petition before the Supreme Court against the order of the Delhi High Court which has been admitted by the Supreme Court.

b) In respect of certain assessment years, Sales tax authorities have held that construction of properties by developer/ builder is liable to sales tax / VAT and have raised a demand of Rs.1211.06 Lakh (as at 31.03.2017: Rs.1066.37 Lakh, as at 01.04.2016 Rs. 825.21 Lakh) against the Company which are being disputed by the Company before the appellate authorities. Against these demands, the Company has paid Rs.634.47 Lakh (as at 31.03.2017: Rs.612.72 Lakh, as at 01.04.2016 Rs.482.57 Lakh) under protest and the balance demand has been stayed by the authorities. The management is of the view that in case the Company becomes liable to pay sales tax /VAT, the same will be recovered from the customers to whom these properties have been sold and there is no contingent liability in this respect. The Company has started collecting VAT from Customers on provisional basis.

c) The Revenue Authorities of different states have raised demands of Rs.709.84 Lakh (as at 31.03.2017: Rs.691.70 Lakh, as at 01.04.2016 Rs.691.70 Lakh) towards deficiency in Stamp Duty on purchase of land / registration of agreements. Against these demands, the Company has paid Rs.233.92 Lakh (as at 31.03.2017: Rs.214.59 Lakh, as at 01.04.2016 Rs.214.59 Lakh) under protest and the balance demand has been stayed by the appellate authorities. Pending final decision in the matter, no provision has been considered necessary.

d) The service tax demand received by the company from the Service Tax Authorities has been reduced to NIL, (as at 31.03.2017: Rs.183.78 Lakh, as at 01.04.2016 Rs.271.31 Lakh) on transfer changes / administrative charges / processing charges recovered from the customers for the period upto March 2010. The Company had filed an appeal with Custom, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi. The CESTAT had deleted the penalty levied by the service tax department and reduced the demand to Rs.135.73 Lakh. The Company has filed an application before CESTAT for rectification and rehearing of the appeal as the written representation of the Company were not considered by the CESTAT. The CESTAT wide its order dated 27.09.2017 has accepted the appeal of the company and reduced the above demand of Rs.135.73 Lakh to NIL. During the previous year, the company had received a further demand of Rs.48.05 Lakh for the period April 2010 to June 2012 on similar matter against which the Company has filed an appeal before the CESTAT, New Delhi. The CESTAT wide its order dated 17.11.17 has accepted the appeal of the company and reduced the above demand of Rs.48.05 Lakh to NIL.

In respect of various claims against the Company disclosed above, it has been advised that it has a reasonably good case to succeed at various appellate authorities and hence does not expect any material liability when the cases are finally decided.

iii) In respect of block assessment for the period 01April 1989 to 10 February 2000, Income Tax Appellate Tribunal (ITAT) has given full relief to the company and rejected departments ground of appeal for tax claim of Rs.127.07 Lakh (as at 31.03.2017: Rs.127.07 Lakh, as at 01.04.2016: Rs.127.07 Lakh). Further, in respect of assessment of certain years, demands had been raised by the Income Tax Department against the Company amounting to Rs.723.45 Lakh (as at 31.03.2017: Rs.723.45 Lakh, as at 01.04.2016 Rs.786.82 Lakh) approx by disallowing deduction under section 80(IB) of the Income Tax Act, 1961 and other matters. The appeal filed by the Company have been decided in its favour by CIT (Appeals) / ITAT / High Court. The tax department has gone for further reference in the above matters to ITAT/High Court/Supreme Court. The Management has been advised that it has a good case to succeed and no tax liability is likely to be arise in these cases.

iv) Due to depressed market conditions, in some of the cases sale consideration received on sale of plots / flats/ apartments is lower than the value adopted or assessed by the regulatory authorities for the purpose of payment of stamp duty (circle rate) and could attract the provisions of section 43CA of the Income Tax Act, 1961. For the year Assessment Year 2014-15 & 2015-16, the assessing officer has added the difference between sale consideration and circle rates to the income of the Company and created additional demand of Rs.773.04 Lakh (Previous year Rs.222.76 Lakh) . The Company has opted to refer the matter to Valuation Cell of the Income Tax Department for assessing the fair value of the properties sold. The final tax liability under section 43CA can not be ascertained at this stage as the Income Tax Department has not completed the valuation exercise. Such dispute is likely to arise for the subsequent financial years also.

13.1 Capital and Other Commitments

i) Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for Rs.NIL (Previous year Rs NIL).

ii) The Company has entered into joint development agreements with owners of land for its construction and development. As stipulated under the agreements, the Company is required to share in area/ revenue from such development in exchange of undivided share in land as stipulated under the agreements. As on March 31,2018 the Company has paid Rs.8116.01 Lakh (as at 31.03.2017: Rs.8506.67 Lakh, as at 01.04.2016: Rs.8319.34 Lakh) as deposits/ advances against the joint development agreements. Further, the Company has given advances for purchase of land. Under the agreements executed with the land owners, the Company is required to make further payments based on terms/ milestones stipulated in the agreement. The future commitment in respect of purchase of land, to the extent quantifiable, amounts to Rs. NIL/- (as at 31.03.2017: Rs.Nil, as at 01.04.2016: Rs.225.00 Lakh).

14. The Company did not have any long term contracts including derivative contracts for which there are any material foreseeable losses.

15. There have been no delays in transferring amounts required to be transferred to the Investor Education and Protection Fund.

16. The Company has no outstanding derivative or foreign currency exposure as at the end of the current year and previous year.

17. Inventory of Land includes Rs.830.99 Lakh (as at 31st March,2017: Rs.880.57 Lakh and as at 1st April,2016: Rs.1267.39 Lakh) acquired by subsidiary companies/ others. The land is registered in the name of the subsidiary companies/ others but is under the possession and control of the Company for development and sale of Real Estate Projects in terms of collaboration agreement with these companies.

18. The Company is engaged primarily in the business of Real Estate development and also running Hospitality Business. The Board for the purpose of resource allocation and assessment of segment performance focus of real estate and hospilality division However, there are no separate reportable segments as per criterion set out under Ind AS 108 on “Segment Reporting” in the Company.

19. The Company has opted for ‘composition scheme’ notified by the State of Haryana with effect from 1st April, 2014 under which VAT is payable at compounded lumpsum rate of 1% plus surcharge of 5%. Under the scheme, the Company is debarred from recovering the VAT paid from the customers. The VAT payable under the said scheme for the period 1.4.2014 to 30.06.2017 amounting to Rs.1126.36 Lakh (including interest) has been provided in the books of account of the Company and charged to project expenses of the related projects.

20. The Company has an investment of Rs.491.67 Lakh (as at 31 March, 2017: Rs.491.67 Lakh and as at 1st April,2016: Rs.491.67 Lakh) in a wholly owned subsidiary company in Sri Lanka by way of equity shares. The subsidiary company had filled an arbitration claim against the board of investment of Sri lanka (BOI) which has been withdrawn during the year and company gone for settlement. The board of Investment has terminated the agreements for development of integrated township in sri lanka between the subsidiary company and BOI. During the year, the management of the susidiary company written off all work in progress amounting Rs.1118.24 Lakh. Net worth of the company is Rs. (8.45) Lakh. Now the subsidiary does not have enough assets to redeem the said investment but management of company is of the opinion that they will able to redeem the said investment to the settlement and write down of investment is not required at this stage.

21. The disclosures of Employee Benefits as defined in Indian Accounting Standard 15 are given below:

A. Defined Benefit Plan

i) Gratuity: The employees’ gratuity fund scheme is a defined benefit plan. The Company provides gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees’ last drawn basic salary per month computed proportionately for 15 days salary multiplied by the number of years of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy through the trustees of the trust. The present value of the obligation is determined on the basis of year end acturial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit seperately to build up the final obligation.

ii) Leave Encashment: Leave Encashment: The company also has a leave encashment scheme with defined benefits for its employees. The company makes provision for such liability in the books of accounts on the basis of year end acturial valuation. No fund has been created for this scheme.

X Risk Exposure

These plans typically expose the Company to actuarial risks such as :-

- Interest Rate Risk : the defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

- Salary Inflation risk : higher than expected increases in salary will increase the defined benefit obligation.

- Demographic risks : this is the risk of volatility of results due to unexpected nature of decrements that include mortality attrition, disability and retirement. The effects of these decrement on the DBO depends upon the combination salary increase, discount rate, and vesting criteria and therefore not very straight forward. It is important not to overstate withdrawal rate because the cost of retirement benefit of a short caring employees will be less compared to long service employees.

- Asset Liability Mismatch : This will come into play unless the funds are invested with a term of the assets replicating the term of the liability.

- Investment Risk : For funded plans that rely on insurers for managing the assets, the value of assets certified by the insurer may not be the fair value of instruments backing the liability. In such cases, the present value of the assets is independent of the future discount rate. This can result in wide fluctuations in the net liability or the funded status if there are significant changes in the discount rate during the inter-valuation period.

- Liquidity Risk : Employees with high salaries and long durations or those higher in hierarchy, accumulate significant level of benefits. If some of such employees resign / retire from the company there can be strain on the cash flows.

- Legislative Risk/Regulatory Risk : Legislative risk is the risk of increase in the plan liabilities or reduction in the plan assets due to change in the legislation / regulation. The government may amend the Payment of Gratuity Act thus requiring the companies to pay higher benefits to the employees. This will directly affect the present value of the Defined Benefit Obligation and the same will have to be recognized immediately in the year when any such amendment is effective.

XI Leave Encashment

The leave obligations cover the Company’s liability for earned leaves. The amount of provision of Rs.12.38 Lakh (as at 31 March 2017: Rs.50.41 Lakh, 1st April 2016: Rs.67.46 Lakh) is presented as current, since the Company does not have an unconditional right to defer settlement for any of these obligations. However, based on past experience, the Company does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months, therefore based on the independent actuarial report, only a certain amount of provision has been presented as current and remaining as non-current. The amount debited/ (recognized) for the year is:

22.1 The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in employment market.

B. Defined Contribution Plan

The Company makes provident fund contribution to defined contribution retirement benefit plan for its employees. Under the scheme, the company deposits an amount determined as a specified percentage of basic pay with the regional provident fund commissioner. Contribution to defined contribution plan recognized as expense for the year is Rs.106.52 Lakh (as at 31st March, 2017: Rs.143.88 Lakh and as at 1st April, 2016: Rs.184.21 Lakh)

23. Related Party Disclosures

As per Indian Accounting Standard-24, the disclosures of transactions with related parties are given below:

a) List of the related parties where control exist and related parties with whom transaction have taken place and description of their relationship: :

1 Wholly Owned Subsidiaries M/s Geo Connect Ltd.

M/s Housing & Construction Lanka Pvt. Ltd.

M/s Maestro Promoters Pvt. Ltd.

M/s Wrangler Builders Pvt. Ltd.

M/s Anjuman Buildcon Pvt. Ltd.

M/s A R Infrastructure Pvt. Ltd.

M/s A R Paradise Pvt. Ltd.

M/s Fenny Real Estates Pvt. Ltd.

M/s Third Eye Media Pvt Ltd.

M/s Sunrise Facility Management Pvt. Ltd.

M/s Aevee Iron & Steel Works Pvt. Ltd.

M/s Enchant Constructions Pvt. Ltd.

M/s Rishu Builtech Pvt. Ltd.

M/s Sonu Buildwell Pvt. Ltd.

M/s Andri Builders & Developers Pvt. Ltd.

M/s VS Infratown Pvt. Ltd.

M/s Cross Bridge Developers Pvt. Ltd.

M/s Identity Buildtech Pvt. Ltd.

M/s Shamia Automobiles Pvt. Ltd.

M/s Oriane Developers Pvt. Ltd.

2 Key Management Personnel (KMP’s)/ Mr. Deepak Ansal (Chairman & Managing Director)

Non Executive Director Mrs. Divya Ansal (Non Executive Director w.e.f. 14.09.2017)

Mr. Kushagr Ansal (Whole Time Director)

Mrs. Nisha Ahuja (Non Executive Director upto 13.09.2017)

Mr. Ashok Khanna (Non Executive Director)

Mr. Surrinder Lal Kapur (Non Executive Director)

Mr. Maharaj Kishen Trisal (Non Executive Director)

Mr. Karun Ansal (President)

Mr. KK Singhal (Executive Director upto 31.05.2017)

Mr. Sanjay Mehta (Chief Financial Officer)

Mr. SN Grover (Company Secretary)

3 Relatives of Key Management Personnel M/s Deepak Ansal-(H.U.F)- (Karta Mr. Deepak Ansal)

(With whom transaction taken place during the year) Mrs. Divya Ansal (Wife of Mr. Deepak Ansal)

Mrs. Megha Ansal (wife of Mr. Kushagr Ansal)

Mrs. Neha Ansal (wife of Mr. Karun Ansal)

Mr. Aryan Ansal (Son of Mr. Kushagr Ansal)

Ms. Ayesha Ansal (Daughter of Mr. Kushagr Ansal)

Mr. Veer Ansal (Son of Mr. Karun Ansal)

Ms. Geeta Singhal ( Wife of Mr. K K Singhal)

Mrs Jyotika Mehta (Wife of Mr. Sanjay Mehta)

Mrs. Chandani Mehta (Daughter of Mr. Sanjay Mehta)

4 Associates M/s Optus Corona Developers Pvt. Ltd.

5 Enterprise over which KMP and their relatives M/s Infinet India Ltd.

have significant influence (SI) M/s Akash Deep Portfolios Private Ltd.

M/s Suraj Kumari Charitable Trust M/s Ansal Clubs Pvt. Ltd.

M/s Sungrace Security Services Private Ltd.

M/s Snow White Cable Network Private Ltd.

M/s Global Consultant & Designers Private Ltd.

M/s Glorious Properties Private Ltd.

M/s Toptrack Infotech Private Ltd.

M/s Toptrack Real Estate Private Ltd.

M/s Ansal Land & Housing Private Ltd.

M/s Shree Satya Sai Construction and Development Private Ltd. M/S Ansal Rep (Construction) International Pvt. Ltd.

M/S Ansal Development Pvt. Ltd.

M/S Effective Investments Consultants Ltd.

M/S Ansal Theatres & Clubotels Pvt. Ltd.

M/s Ansal Buildwell Ltd.

M/s Khanna Watches Ltd.

6 Trust Employee Benefit Ansal Housing & Construction Ltd. Group Gratuity Trust

*The amount represents monies received against sale of flats for which revenue is recognised on percentage of completion basis on overall progress of the project.

**The amount represents money which is due for payments against cancellation of booked flats/plots for which revenue is derecognised on percentage of completion basis on overall progress of the project.

The Company has disclosed financial instruments such as trade receivables, unbilled revenue, cash and cash equivalents, loans, other financial assets, trade payables and other financial liabilities at carrying value because their carrying amounts represents the best estimate of the fair values.

(ii) Fair value hierarchy

The fair value of financial instruments have been classified into three categories depending on the input used in the valuation technique. The categories used are as follows:

Level 1: Quoted prices for identical instruments in an active market

Level 2: Directly or indirectly observable market input, other than Level 1 inputs

Level 3: Inputs which are not based on observable market date

B Financial Risk Management

The Company’s business operations are exposed to various financial risks such as liquidity risk, market risks, credit risk, interest rate risk, funding risk etc. The Company’s financial liabilities mainly includes borrowings taken for the purpose of financing company’s operations, trade payable and other financial liabilities. Financial assets mainly includes trade receivables, unbilled revenue, investment in subsidiaries/associates, loans, security deposit etc. The company is not exposed to foreign currency risk and the company have not obtained entered in forward contracts and derivative transactions.

The Company has a system based approach to financial risk management. The Company has internally instituted an integrated financial risk management framework comprising identification of financial risks and creation of risk management structure. The financial risks are identified, measured and managed in accordance with the Company’s policies on risk management. Key financial risks and mitigation plans are reviewed by the board of directors of the Company.

I Liquidity Risk

Liquidity risk is the risk that the Company may face to meet its obligations for financial liabilities. The objective of liquidity risk management is that the Company has sufficient funds to meet its liabilities when due. However, presently the Company is under stressed conditions, which has resulted in delays in meeting its liabilities. The Company, regularly monitors the cash outflow projections and arrange funds to meet its liabilities.

The following table summarises the maturity analysis of the Company’s financial liabilities based on contractual undiscounted cash outflows:

II Market risk

Market risk is the risk that future cash flows will fluctuate due to changes in market prices i.e. interest rate risk and price risk.

a. Interest rate risk

Interest rate risk is the risk that the future cash flows will fluctuate due to changes in market interest rates. The Company is mainly exposed to the interest rate risk due to its borrowings. The Company manages its interest rate risk by having balanced portfolio of fixed and variable rate borrowings. The Company does not enter into any interest rate swaps.

Interest rate sensitivity analysis

The exposure of the company’s borrowing to interest rate change at the end of the reporting periods are as follows :

b. Price risk

The Company has very limited exposure to price sensitive securities, hence price risk is not material.

III Credit Risk

Credit risk is the risk that customer or counter-party will not meet its obligation under the contract, leading to financial loss. The Company is exposed to credit risk for receivables from its real estate customers and refundable security deposits.

Customers credit risk is managed, generally by receipt of sale consideration before handing over of possession and/or transfer of legal ownership rights. The Company credit risk with respect to customers is diversified due to large number of real estate projects with different customers spread over different geographies.

Loans to related parties and project deposits

The company has loans to related parties and project deposits. The settlements of such instruments is linked to the completion of the respective underlying projects. Such financial assets are not impaired as on the reporting date.

Cash and Bank Balances

Credit risk from cash and bank balances is managed by the company’s finance department in accordance with the company’s policy.

24. Capital Management

For the purpose of capital management, capital includes equity capital, share premium and retained earnings. The Company maintains balance between debt and equity. The Company monitors its capital management by using a debt-equity ratio, which is total debt divided by total capital.

iii The company has recognised deferred tax assets on its unabsorbed depreciation and business losses carried forward. The Company has executed flat/plot sale agreements with the customers against the Company has also received advances, as disclosed in Note 24 of the financial statements. Revenue in respect of such sale agreements will get recognised in future years on percentage completion method. Based on these sale agreements, the company has reasonable certainty as on the date of the balance sheet, that there will be sufficient taxable income available to realize such assets in the near future. Accordingly, the Company has created deferred tax assets on its carried forward unabsorbed depreciation and business losses.

25. Events after the Reporting period

There are no events observed after the reported period which have an impact on the company operations.

26. Approval of the financial statements

The financial statements were approved for issue by Board of Directors on 29 May, 2018

27. Recent Accounting Pronouncement

a. In March 2018, the Ministry of Corporate Affairs notified Ind AS 115, “Revenue from Contracts with Customers”. It is applicable to the Company from 1 April 2018. Ind AS 115 requires an entity to recognise revenue to depict the transfer of promised goods or services to customers in amount that reflects the consideration in which entity expects to be entitled in exchange for those goods or services. It introduces a single comprehensive model of accounting for revenues arising from goods or services and will supresede the current revenue recoginition guidance and Ind AS 18 & Ind AS 11. It will effect the measurement, recoginition and disclosure of revenue. The Company is evaluating the requirements of the Ind AS 115 and its impact on financial statements.

b. On 28 March, 2018, the Ministry of Corporate Affairs has issued the Companies (Indian Accounting Standards) Amendment Rules, 2018 Containing Appendix B to Ind AS 21, foreign currency transactions and advances considerations which clarifies the date of the transactions for the purpose of determining the exchange rate to use an initial recognition of the related asset, expenses or income,when an entity has received or paid advance consideration in foreign currency. The effect on the financial statements is being evaluated by the company.

28. First time Ind AS adoption reconciliations:

I Disclosures as required by Indian Accounting Standard (Ind-AS) 101 First Time Adoption of Indian Accounting Standard (Ind AS):

These are Company’s first standalone financial statements prepared in accordance with Ind AS.

The Company has adopted Ind AS with effect from 1st April, 2017 with comparatives being restated. Accordingly, the impact of transition has been provided in the opening retained earnings as at 1 April 2016 and all the periods presented have been restated accordingly.

A. Exemption and Exceptions Availed A.1 Ind AS mandatory exceptions

The following mandatory exceptions have been applied in accordance with Ind AS 101 in preparing the financial statements:

a. Estimates:

An entity’s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustment to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error. Ind AS estimates as at 1st April, 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP.

(i) Investments in equity instruments carried as FVTPL or FVOCI.

(ii) Investments in debt instruments carried as amortised cost.

(iii) Impairment of financial assets based on the expected credit loss model;

(iv) Discounting of advances

The estimates used by the Company to present the amounts in accordance with the Ind AS reflect conditions that existed at the date on transition to Ind AS.

b. Derecognition of financial assets and liabilities:

The Company has elected to apply the derecognition requirements for financial assets and financial liabilities as per Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS.

c. Classification and measurement of financial assets and liabilities:

Ind AS 101 requires an entity to assess classification and measurement of financial assets (investment in debt instrument) on the basis of the facts and circumstances that exist at the date of transition to Ind AS.

A.2 Ind AS optional exemptions

On first time adoption of Ind AS, Ind AS 101 allows certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has availed the following exemptions:

a. Deemed Cost

The Company has opted to continue with the carrying values measured under the previous GAAP and used that carrying value as the deemed cost for property, plant and equipment on the date of transition.

Further, the Company had revalued certain buildings based on approved valuer as at 31st March, 1996 and had a balance of Rs. 606.21 Lakh in revaluation reserve on the date of transition. On transition, such revaluation reserve has been transferred to general reserve.

b. Investment in subsidiaries and associate

Ind AS 101, provides the option to measure investments in subsidiaries and associate at previous GAAP carrying amount as the deemed cost, if the Company in its separate financial statements have elected to account for its investments in subsidiaries and associate at cost. The Company has opted the previous GAAP carrying amount as deemed cost for investments in subsidiaries and associate.

c. Business Combination

Ind AS 101, provides the option to apply Ind AS 103 prospectively from the transition date or from a specific date prior to the transition date. This provides relief from full retrospective application that would require restatement of all business combinations prior to the transition date. The Company has opted to apply Ind AS 103 prospectively from the transition date and therefore, the balances have been restated accordingly on the transition date.

E. Explanation of material adjustments to Statement of Cash Flows for the year ended 31st March, 2017

There were no material differences between the statement of cash flows presented under Ind AS and the previous GAAP except due to various re-classification adjustments recorded under Ind AS and difference in the definition of cash and cash equivalents under these two GAAPs.

Note: As per Para (10) of Ind AS 101 requires an entity to reclassify items that it had recognised in accordance with previous GAAP as one type of asset, liability or component of equity, but are a different type of asset, liability or component of equity in accordance with Ind AS. Accordingly, assets and liabilities which are different types of assets and liabilities in Ind AS were reclassified as at transition date.

II Notes to First Time Adoption of Ind AS a Investment

The company has certain investments in the Equity shares and Mutual Funds of the company. Under previous GAAP, all the short term investments were recorded at lower of cost or fair value. For Long term Investments , it has to be measured at cost except there were permanent decline in the value . Under Ind AS Investments are required to be valued at fair value. The Company has classified these investments as fair value through Profit and Loss. The resultant imapct has been transferred to Profit and Loss/ Retained earnings.

b Trade Receivables/Sales

Under Ind AS, long-term trade receivables have been discounted at present value.

c Fair value of Financial Assets and Financial Liabilities

Under previous GAAP, financial assets and financial liabilities were carried at book value. Under Ind-AS 109, all financial assets and financial liabilities are required to be initially carried at fair value. The fair value changes are taken to the statement of profit and loss in respect of financial assets and financial liabilities carried at amortised cost.

d Borrowings/Trade Receivables/Inventory/Cost of Constructions/Revenue

Ind AS 109 requires transaction costs/prepaid interest incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognised in the standalone Statement of Profit and Loss over the tenure of the borrowing as part of the interest expenses by applying the effective interest rate method. Under previous GAAP, these transaction costs were capitalised to the respective projects/charged to profit and loss . Accordingly, these transaction costs capitalised/charged off under previous GAAP have been adjusted to borrowings as at each Balance Sheet date. Accordingly, due to application of percentage completion method on these projects, trade receivables, inventory and revenue has been reduced.

e Deferred Tax

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12, “Income taxes”, requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the Balance Sheet and its tax base. The application of Ind AS 12 has resulted in recognition of deferred tax on new temporary differences, which was not required under Indian GAAP. Deferred tax impact on above stated adjustments & exemptions opted by the Company have been recognised. f Retained Earnings Retained Earnings as at 1 April, 2016 has been adjusted consequent to Ind AS transition adjustments.

g Proposed Dividend

Under the previous Indian GAAP, proposed dividend including dividend distribution tax (DDT), were recognised as liability in the period to which they relate, irrespective of when they were declared. Under Ind AS, proposed dividend is recognised as a liability in the period in which it is declared by the Company, usually when approved by shareholders in a general meeting or paid.

h Defined benefit liabilities

Both under previous Indian GAAP and Ind AS, the Group recognised costs related to its post-employment defined benefit plan on an actuarial basis. Under previous Indian GAAP, the entire cost, including remeasurements, are charged to profit or loss. Under Ind AS, remeasurements [comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts included in net interest on the net defined benefit liability] are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI.

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