1 Corporate Information

Manjeera Constructions Limited is a company registered in India under the companies act,1956, having its registered office at 711, Manjeera Trinity Corporate, JNTU and Hitech City Road, KPHB Colony, Hyderabad - 520072 is in the business of property development, civil construction contracts, infrastructure projects development and Windmill Energy Production.

Fair value of the investment property

The fair value of the investment properties as at March 31,2018, March 31,2017 and April 1,2016 have been arrived at on the basis of a valuation carried out as on the respective dates. The fair value was derived using the market comparable approach based on recent market prices without any significant adjustments being made to the market observable data.

2.1. The credit period towards trade receivables generally ranges between 30 to 180 days. Generally, no interest is recovered for payments received beyond due date.

2.2 In determining the allowance for trade receivables the company has used practical expedients based on financial condition of the customer, ageing of the customer receivables and overdues, availability of collaterals and historical experience of collections from customers. The concentration of risk with respect to trade receivables is reasonably low as most of the customers settle within the due dates, though there may be normal delays in collections.

The Company's past history in dues becoming bad or doubtful was very insignificant

2.3 Rights of the share holders

The Company has only one class of shares- Equity shares having a par value of '10/-. Each holder of equity shares is entitled to one vote per share. All the equity shares rank pari passu in all respects including bu not limited to entitlement for dividend, bonus issueand rights issue.

The Company declares and pays dividens in a Indian Rupees. The dividend proposed by the Board of Directors, if any, is subject to the approval of the shareholders in the ensuing general meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company in proportion of their shareholding.

3.1 Term loan amounting to Rs. 520.11 lakhs (March 31, 2017: Rs. 600 lakhs) is secured by exclusive hypothecation charge on construction materials and work in progress. Equitable mortgage of total land area of Ac. 5.01 Gunts with proposed construction of 23 villas with total build up area of 78335.71 sq. feet belonging to Sri G. Yoganand, Managing Director and Manjeera Estates Private Limited including land measuring 6998.37 sq. yards covering above villas out of total area of Ac. 5.01 Gts besides assignment of development right over the entire project. Present interest at 13.6% on monthly basis. Term loan repayble in eight quarterly equal installments starting from June 30, 2018. The loan is further personally guaranteed by Sri G. Yoganand, Managing Director.

3.2 Security for loan from LIC Housing Limited: Equitable Mortagage on land & Buildings of Total Manjeera Monarch Project and Unit number 304 A in Aditya Trade Centre (F&G Blocks) & Open Exhibition area in ground floor and unit number 4,5,6,7 & 8 belongs to Manjeera Estates Pvt Limited and G Yoganand in aditya Trade Centre(F&G Blocks).

3.3 Vehicles loan amounting to Rs. 20.88 Lakhs (March 31, 2017: Rs. 26.68 Lakhs) is secured by hypothecation of vehicles purchased.

4.1 A. Defined benefit plan

The Company provides for gratuity for employees as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity at the rate of 15 days basic salary for each year of service until the retirement age. As at March 31, 2018 and March 31, 2017 the plan assets were invested in insurer managed funds.

B. Defined contribution plan

The Company provides benefits in the nature of defined contribution plans viz, employee state insurance scheme, provident fund and superannuation fund for qualifying employees. Under these Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs. 8.56 Lakhs (March 31, 2017: Rs. 7.26 Lakhs) towards contribution for mentioned funds in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the Schemes.

C. Sensitivity analysis Description of Risk Exposures

Valuations are performed on certain basic set of pre-determined assumptions which may vary over time. Thus, the Company is exposed to various risks in providing the above benefit which are as follows:

Interest Rate Risk: The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of liability (as shown in financial statements).

Liquidity Risk: This is the risk that the Company is not able to meet the short term benefit payouts. This may arise due to non availability of enough cash/cash equivalent to meet the liabilities or holding of illiquid assets not being sold in time.

Salary Escalation Risk: The present value of the above benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase in salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan's liability.

Demographic Risk: The company has used certain mortality and attrition assumptions in valuation of the liability. The Company is exposed to the risk of actual experience turning out to be worse compared to the assumption.

Regulatory Risk: Gratuity benefit is paid in accordance with the requirements of the Payment of Gratuity Act, 1972 (as amended from time to time). There is a risk of change in regulations requiring higher gratuity payouts (for example, increase in the maximum liability on gratuity of ' 10 Lakhs).

Asset Liability Mismatching or Market Risk: The duration of the liability is longer compared to duration of assets exposing the company to market risks for volatilities/fall in interest rate.

Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase and mortality. The sensitivity analysis below have been determined based on reasonably possible changes of the assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

5.1 Cash Credit is secured by hypothecation of current assets of construction contract business division (excluding assets of real estate division). Margin 25%. Rate of interest - Bench Mark 1 year MCLR of bank plus spread of 2.5% chargeable on monthly test)

5.2 Domestic purchase bill factoring is secured by collateral security with minimum asset cover of 2.5 times of the entire facility of Rs. 750.00 Lakhs by pledge of shares of promoters of Company and partly by equitable mortage of Commercial Property owned by Manjeera Estates Private Limited. Personal Gurantee of G. Yoganand, Managing Director and corporate guaratee of Gajjala Investment and Holding s Private limited and Manjeera Estates Private Limited.

5.3 Unsecured loans taken from related parties carries interest of 18% per annum compounded on quarterly basis and are repayable on demand.

5.4 Unsecured inter-corporate deposit amounting to Rs. 23.66 Lakhs (March 31, 2017: Rs. 9.25 Lakhs) taken from differenet Parties carries an average interest rate of 15% p.a (March 31, 2017: average interest rate of 17%)

6.1 Trade payable other than acceptances do not include any dues to Micro and Small Enterprises, under the Micro, Small and Medium Enterprises Development Act, 2006.

Due to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the Auditors.

7.1 Defined contribution plans

The Company made Provident Fund contributions to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs. 8.56 Lakhs (March 31, 2017: Rs. 7.25 Lakhs) for Provident Fund contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

8 Contingent Liabilities and Commitments

(i) Contingent Liability

a. Claims against the Company not acknowledged as debts:

Claims against the Company not acknowledged as debts include demands raised by Income Tax authorities aggregating to Rs. 0.00 (Previous year Rs. 464.30 lakhs).

Other Contingent Liabilities

Guarantees issued by bankers on behalf of the company towards performance obligations ' 158.24 Lakhs (Previous year Rs. 613.93 lakhs).

Corporate Guarantee of Rs. 30,000 lakhs (Previous year Rs. 30,000 lakhs) issued on behalf of subsidiary company Manjeera Retail Holdings Private Limited.

Notes to financial instruments

The management assessed that the fair value of cash and cash equivalents, trade receivables, loans, trade payables and other financial liabilities approximate the carrying amount largely due to short-term maturity of these instruments. The management assessed that the fair value of borrowings approximate the carrying amount largely due to such borrowings carry floating interest rates or rates are negotiable.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

9 Financial risk management

Financial risk factors

The Company's activities expose it to market risk, liquidity risk and credit risk. The Company's Board of Directors has overall responsibility for the establishment and oversight of the Company's risk management framework. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the related impact in the financial statements.

a. Credit risk

Credit risk is the risk that a counterparty fails to discharge its obligation to the Company. The Company's exposure to credit risk is influenced mainly by cash and cash equivalents, trade receivables and financial assets measured at amortized cost. The Company continuously monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls. Credit risk related to cash and cash equivalents and bank deposits is managed by accepting highly rated banks and diversifying bank deposits.

Credit risk management

The finance function of the Company assesses and manages credit risk based on internal credit rating system. Internal credit rating is performed for each class of financial instruments with different characteristics.

Based on business environment in which the Company operates, a default on a financial asset is considered when the counterparty fails to make payments within the agreed time period as per contract. Loss rates reflecting defaults are based on actual credit loss experience and considering differences between current and historical economic conditions.

Assets are written off when there is no reasonable expectation of recovery, such as a debtor declaring bankruptcy or a litigation decided against the Company. The Company continues to engage with parties whose balances are written off and attempts to enforce repayment. Recoveries made are recognized in statement of profit and loss.

Expected credit loss for trade receivables under simplified approach Real estate business

The Company's trade receivables does not have any expected credit loss as registry of properties sold is generally carried out once the Company receives the entire payment. During the periods presented, the Company made no write-offs of trade receivables and no recoveries from receivables previously written off. But a general provision for Expected credit loss @ 0.4% has been provided

b. Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the nature of the business, the Company maintains flexibility in funding by maintaining availability under committed facilities.

Management monitors rolling forecasts of the Company's liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates.

c. Interest rate risk

The Company's fixed rate borrowings are carried at amortized cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, 'Financial Instruments - Disclosures', since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

10 Capital Management

The Company's objectives when managing capital are to:

Safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

The Company monitors its capital using gearing ratio, which is net debt divided by total equity. Net debt includes long term borrowings, short term borrowings, current maturities of long term borrowings less cash and cash equivalents and other bank balances.

11 First time adoption of Ind AS

These are the Company's first financial statements prepared in accordance with Ind AS.

The accounting policies set out in note 1 have been applied in preparing the financial statements for the year ended 31 March 2018, the comparative information presented in these financial statements for the year ended 31 March 2017 and in the preparation of an opening Ind AS balance sheet at 1 April 2016 (the Company's date of transition).

An explanation of how the transition from previous GAAP to Ind AS has affected the Company's financial position, financial performance and cash flows is set out in the following tables and notes.

A Ind AS optional exemptions

Ind-AS 101, 'First-time Adoption of Indian Accounting Standards', allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind-AS. The Company has accordingly applied the following exemptions.

1 Deemed cost for Property, Plant and Equipment, Intangible Assets and Investment Property

Ind AS 101 'First-time Adoption of Indian Accounting Standards' permits a first-time adopter to elect to measure an item of property plant and equipment at the date of transition to IndAS at it's fair value or continue with the carrying value for all of its property, plant and equipment as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition. This exemption can also be used for intangible assets covered by Ind AS 38, 'Intangible Assets' and for investment property covered by Ind AS 40, 'Investment Properties'. Accordingly, the Company has elected to measure all of its property, plant and equipment, and intangible assets at their previous GAAP carrying value and to measure Investment Property at fair value on the date of transition to IndAS.

B Ind AS mandatory exceptions

1 Estimates

An entity's estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

2 Classification and measurement of financial assets and liabilities

Classification of financial asset is required to be made on the basis of the facts and circumstances that exist at the date of transition to Ind AS. Further, it is impractible for the Company to apply retrospectively the effective interest method in Ind AS 109, the fair value of the financial asset or the financial liability at the date of transition to Ind AS shall be the new gross carrying amount of that financial asset or the new amortised cost of that financial liability at the date of transition to Ind AS.

3 De-recognition of financial assets and liabilities

Ind AS 101, 'First-time Adoption of Indian Accounting Standards' requires a first-time adopter to apply the de-recognition provisions of Ind AS 109,'Financial Instruments' prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101, 'First-time Adoption of Indian Accounting Standards' allows a first-time adopter to apply the derecognition requirements in Ind AS 109,'Financial Instruments' retrospectively from a date of the entity's choosing, provided that the information needed to apply Ind AS 109,'Financial Instruments' to financial assets and financial liabilities derecognized as a result of past transactions was obtained at the time of initially accounting for those transactions. The Company has elected to apply the de-recognition provisions of Ind AS 109,'Financial Instruments' prospectively from the date of transition to Ind AS.

C Reconciliations between previous GAAP and Ind AS

Ind AS 101, 'First-time Adoption of Indian Accounting Standards' requires an entity to reconcile equity, total comprehensive income and cash flows for prior years. The following tables represent the reconciliations from previous GAAP to Ind AS.

Notes to first time adoption:

i To comply with the Companies (Accounting Standard) Rules, 2006, certain account balances have been regrouped as per the format prescribed under Division II of Schedule III to the Companies Act, 2013.

ii Financial instruments at amortised cost

(a) Financial liabilities at amortised cost

Under previous GAAP financial liabilities were initially recognized at transaction price. Subsequently, any finance costs was recognized based on contractual terms. Under Ind AS, such financial instruments are initially recognized at fair value and subsequently carried at amortised cost determined using the effective interest rate. Any difference between transaction price and fair value affects profit and loss unless it quantifies for recognition as some other type of liability.

(b) Financial assets at amortised cost

Under previous GAAP financial assets were initially recognized at transaction price. Subsequently, any finance income was recognized based on contractual terms. Under Ind AS, such financial instruments are initially recognized at fair value and subsequently carried at amortised cost determined using the effective interest rate. Any difference between transaction price and fair value affects profit and loss unless it qualifies for recognition as some other type of asset.

iii Defined benefit liabilities:

Both under previous GAAP and Ind AS, the company recognized costs related to its post-employment defined benefit plan on an actuarial basis. Under previous GAAP the entire cost, including actuarial gains and losses, are charged to the statement of profit or loss. Under Ind AS, re-measurements comprising of actuarial gains and losses are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI. Thus, the employee benefit cost is reduced by such amount with a corresponding adjustment on defined benefit plans has been recognized in the OCI.

iv Other comprehensive income

Under Ind AS, all items of income and expense recognized in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognized in profit or loss but are shown in the statement of profit and loss as ‘other comprehensive income' includes re-measurements of defined benefit plans, foreign exchange differences arising on translation of foreign operations, effective portion of gains and losses on cash flow hedging instruments and fair value gains or (losses) on FVOCI equity instruments. The concept of other comprehensive income did not exist under previous GAAP There is no impact on the total equity or profit as a result of this adjustment.

v Retained earnings

Retained earnings as at 1 April 2016 and 31 March 2017 has been adjusted consequent to the above Ind AS transition adjustments.

vi Investment property

Under the previous GAAP investment properties were presented as part of property, plant and equipment. Under Ind AS, investment properties are required to be seperately presented on the face of the balance sheet. The fair value as on the date of transition is considered as the deemed cost and the same is effected to retained earnings.