Note 1 Company Overview
Arunis Abode Limited (hereinafter referred to as "the company") is a public company domiciled in India and is
incorporated under the provisions of the Companies Act, 1956 having a CIN: L70100GJ1994PLC021759 (old CIN
L65910GJ1994PTC021759). Equity shares are listed on Bombay Stock Exchange (BSE).
The Management of the Company changed its main object in the financial year 2020-21 to undertake Real Estate Business
and dealing in commodities as per Resolution dated 27th May, 2020. The company has filed prescribed documents with
the Registrar of Companies. Certificate of Incorporation pursuant to change of Name of the company issued by Ministry of
Corporate Affairs on 09/11/2020. Earlier the Company was engaged only in business of Stock and Securities Trading and
Investment. Further, the management has discontinued active trading / investing in shares and mutual funds in Cash and
Future & Options segments from February 2024.
The Registered office of the company is situated at “Desai House”, Survey No: 2523, Costal High Way, Umersadi, Killa
Pardi, Valsad, Gujarat 396125.
Note 2 Basis of preparation of financial statements
2.1 Basis of preparation and compliance with Ind AS
The financial statements of the Company as at and for the year ended March 31, 2024 have been prepared in accordance
with Indian Accounting standards ('Ind AS') notified under section 133 of the Companies Act, 2013 ('Act') and the
Companies (Indian Accounting Standards) Rules issued from time to time and relevant provisions of the Companies Act,
2013 (collectively called as Ind AS).
2.2 Basis of measurement
The standalone financial statements have been prepared on a historical cost basis, except for fair value through other
comprehensive income (FVOCI) instruments, derivative financial instruments, other financial assets held for trading and
financial assets and liabilities designated at fair value through profit or loss (FVTPL), all of which have been measured at
fair value.
2.3 Functional and presentation currency
The financial statements are prepared in Indian Rupees, which is the Company's functional and presentation currency. All
financial information presented in Indian Rupees has been rounded to the nearest Rupee.
2.4 Current and non-current classification
The Company presents assets and liabilities in the Balance Sheet based on current / non-current classification. An asset is
classified as current if it satisfies any of the following criteria:
a) It is expected to be realised or intended to sale or consumed in the Company's normal operating cycle,
b) It is held primarily for the purpose of trading,
c) It is expected to be realised within twelve months after the reporting period, or
d) It is a cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve
months after the reporting period.
All other assets are classified as non-current.
A liability is classified as current if it satisfies any of the following criteria:
a) it is expected to be settled in the Company's normal operating cycle,
b) it is held primarily for the purpose of trading,
c) it is due to be settled within twelve months after the reporting period,
d) there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting
period.
The Company classifies all other liabilities as noncurrent. Current liabilities include current portion of noncurrent
financial liabilities. Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The standalone financial statements for the year ended March 31, 2024 are being authorised for issue in accordance with
a resolution of the Board of Directors passed on May 24, 2024.
The Company has applied the following accounting policies total periods presented in the financial statements.
2.1 - Revenue recognition
Revenue from Contracts with Customers
Revenue (other than for those items to which Ind AS 109 Financial Instruments are applicable) is measured at fair value
of the consideration received or receivable. Ind AS 115, Revenue from contracts with customers, outlines a single
comprehensive model of accounting for revenue arising from contracts with customers.
The Company recognises revenue from contracts with customers based on a five-step model as set out in Ind AS 115:
Step 1: Identify contract(s) with a customer: A contract is defined as an agreement between two or more parties that
creates enforceable rights and obligations and sets out the criteria for every contract that must be met.
Step 2: Identify performance obligations in the contract: A performance obligation is a promise in a contract with a
customer to transfer a good or service to the customer.
Step 3: Determine the transaction price: The transaction price is the amount of consideration to which the Company
expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected
on behalf of third parties.
Step 4: Allocate the transaction price to the performance obligations in the contract: For a contract that has more than
one performance obligation, the Company allocates the transaction price to each performance obligation in an amount
that depicts the amount of consideration to which the Company expects to be entitled in exchange for satisfying each
performance obligation.
Step 5: Recognise revenue when (or as) the Company satisfies a performance obligation.
The Company recognises revenue from consultancy provided for real-estate projects. Interest income is recognized using
the effective interest rate method. Interest is earned on delayed payments from customers and is recognised on a time
proportion basis taking into account the amount outstanding from customers and the rates applicable. Dividend income
is recognised when the right to receive payment of the dividend is established,
it is probable that the economic benefits associated with the dividend will flow to the Company and the amount of the
dividend can be measured reliably.
2.2. - Operating Segments
Segments have been identified in accordance with Indian Accounting Standards (Ind AS) 108 on Operating Segments
considering the risk or return profiles of the business. As required under Ind AS 108, the Chief Operating Decision Maker
(CODM) evaluates the performance and allocates resources based on analysis of various performance indicators.
Accordingly, information has been presented for the Company's operating segments and the Company has identified
business segment as primary segment. The reportable segment is real estate consultancy and the trading in securities.
2.3 - Investment in subsidiaries
Investment in subsidiaries is carried at cost in the separate financial statements.
2.4 - Property, plant and equipment
Property, plant and equipment are stated at acquisition cost less accumulated depreciation and accumulated impairment
losses, if any. Subsequent costs are included in the asset's carrying amount. Items of property, plant and equipment are
initially recorded at cost.
Cost comprises acquisition cost, borrowing cost if capitalization criteria are met, and directly attributable cost of bringing
the asset to its working condition for the intended use. Subsequent expenditure relating to property, plant and equipment
is capitalized only when it is probable that future economic benefit associated with these will flow with the Company and
the cost of the item can be measured reliably. Items of Property, plant and equipment that have been retired from active
use and are held for disposal are stated at the lower of their net book value or net realisable value and are shown
separately in the financial statements, if any.
Depreciation methods, estimated useful lives and residual value
Depreciation on Property, plant and equipment is provided on Straight Line Method at the rates prescribed in Schedule II
to the Company's Act, 2012. Depreciation on additions to Property, plant and equipment and assets disposed
off/discarded is charged on pro-rata basis.
The useful lives have been determined based on technical valuation done by the management's expert which are higher
than those specified by Schedule II to the Companies Act; 2013, in order to reflect the actual usage of the assets. The
residual values are not more than 5% of the original cost of the asset.
The assets' residual values and useful lives are reviewed and adjusted if appropriate, at the end of each reporting period.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is
greater than its estimated recoverable amount.
Capital work-in-progress and Capital advances:
Capital work-in-progress are property, plant and equipment which are not yet ready for their intended use. Advances
given towards acquisition of fixed assets outstanding at each reporting date are shown as other non-financial assets.
Depreciation is not recorded on capital work-in-progress until construction and installation is completed and assets are
ready for its intended use.
De-recognition:
The carrying amount of an item of property, plant and equipment is derecognized on disposal or when no future
economic benefits are expected from its use or disposal. Gains or losses arising from de-recognition, disposal or
retirement of an item of property, plant and equipment are measured as the difference between the net disposal proceeds
and the carrying amount of the asset and are recognised net, within “Other Income” or “Other Expenses”, as the case
maybe, in the Statement of Profit and Loss in the year of de-recognition, disposal or retirement.
2.5 - Borrowing costs
Borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that
an entity incurs in connection with the borrowing of funds.
2.6 - Investment
Investment in equity shares which were not regularly traded on stock exchange is considered to be current investment.
2.7 - Financial instruments
Recognition and Initial Measurement
The Company recognizes all the financial assets and liabilities at its fair value on initial recognition; In the case of financial
assets not valued at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or
issue of the financial asset are added to the fair value on initial recognition. The financial assets are accounted on a trade
date basis.
Classification and subsequent measurement of financial asset or financial liability: For subsequent measurement,
financial assets are categorised into:
a. Amortised cost: The Company classifies the financial assets at amortised cost if the contractual cash flows represent
solely payments of principal and interest on the principal amount outstanding and the assets are held under a business
model to collect contractual cash flows. The gains and losses resulting from fluctuations in fair value are not recognised
for financial assets classified in amortised cost measurement category.
b. Fair value through other comprehensive income (FVOCI): The Company classifies the financial assets as FVOCI if the
contractual cash flows represent solely payments of principal and interest on the principal amount outstanding and the
Company's business model is achieved by both collecting contractual cash flow and selling financial assets. In case of debt
instruments measured at FVOCI, changes in fair value are recognised in other comprehensive income.
The impairment gains or losses, foreign exchange gains or losses and interest calculated using the effective interest
method are recognised in profit or loss. On de-recognition, the cumulative gain or loss previously recognised in other
comprehensive income is re-classified from equity to profit or loss as a reclassification adjustment. In case of equity
instruments irrevocably designated at FVOCI, gains / losses including relating to foreign exchange, are recognised
through other comprehensive income. Further, cumulative gains or losses previously recognised in other comprehensive
income remain permanently in equity and are not subsequently transferred to profit or loss on de-recognition.
c. Fair value through profit or loss (FVTPL): The financial assets are classified as FVTPL if these do not meet the criteria
for classifying at amortised cost or FVOCI. Further, in certain cases to eliminate or significantly reduce a measurement or
recognition inconsistency (accounting mismatch), the Company irrevocably designates certain financial instruments at
FVTPL at initial recognition. In case of financial assets measured at FVTPL, changes in fair value are recognised in profit
or loss.
Profit or loss on sale of investments is determined on the basis of first-in-first-out (FIFO) basis.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The fair value measurement is based on the presumption that the
transaction to sell the asset or transfer the liability takes place either:
- In the principal market for the asset or liability, or
- In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when
pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic
benefits by using the asset in its highest and best use or by selling it to another market participant that would use the
asset in its highest and best use.
In order to show how fair values have been derived, financial instruments are classified based on a hierarchy of valuation
techniques, as summarised below:
Level 1 financial instruments: Those where the inputs used in the valuation are unadjusted quoted prices from active
markets for identical assets or liabilities that the Company has access to at the measurement date. The Company
considers markets as active only if there are sufficient trading activities with regards to the volume and liquidity of the
identical assets or liabilities and when there are binding and exercisable price quotes available on the balance sheet date.
Level 2 financial instruments: Those where the inputs that are used for valuation and are significant, are derived from
directly or indirectly observable market data available over the entire period of the instrument's life.
Level 3 financial instruments: Those that include one or more unobservable input that is significant to the measurement
as whole.
Based on the Company's business model for managing the investments, the Company has classified its investments and
securities for trade at FVTPL.
Financial liabilities are carried at amortised cost using the effective interest rate method. For trade and other payables,
the carrying amount approximates the fair value due to short maturity of these instruments.
d. De-recognition: The Company derecognises a financial asset when the contractual rights to the cash flows from the
financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially
all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers
nor retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset. The
Company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire.
e. Impairment of financial assets: In accordance with Ind AS 109, the Company applies expected credit loss model (ECL)
for measurement and recognition of impairment loss. The Company recognises lifetime expected losses for all contract
assets and / or all trade receivables that do not constitute a financing transaction. At each reporting date, the Company
assesses whether the loans have been impaired. The Company is exposed to credit risk when the customer defaults on his
contractual obligations. For the computation of ECL, the loan receivables are classified into three stages based on the
default and the aging of the outstanding. If the amount of an impairment loss decreases in a subsequent period, and the
decrease can be related objectively to an event occurring after the impairment was recognised, the excess is written back
by reducing the loan impairment allowance account accordingly. The write-back is recognised in the statement of profit
and loss.
The Company recognises life time expected credit loss for trade receivables and has adopted the simplified method of
computation as per Ind AS 109. The Company considers outstanding overdue for more than 90 days for calculation of
expected credit loss. A financial asset is written off when there is no reasonable expectation of recovering the contractual
cash flows.
2.8 Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an
original maturity of three months or less, which are subject to an insignificant risk of changes in value. For the purpose of
the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above.
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