2.13 Provisions, Contingent Liabilities and Contingent Assets
A Provision is recognized when the Company has present determined obligations as a result of past events an outflow of resources
embodying economic benefits will be required to settle the obligations. Provisions are recognized at the best estimate of the
expenditure required to settle the present obligation at the Balance Sheet date.
If the effect of the time value of money is material, provisions are discounted using a current pre tax rate that reflects, where
appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time
is recognized as a finance cost.
A Contingent Liability is not recognized but disclosed in the Notes to the accounts, unless the probability of an outflow of resources
is remote. A Contingent Asset is generally neither recognized nor disclosed.
2.14 Financial Instruments
A. Financial Instruments - Initial recognition and measurement
Financial Assets and Financial Liabilities are recognized in the Company's Statement of Financial position when the
Company becomes a party to the contractual provisions of the instrument. The Company determines the classification of its
Financial Assets and Liabilities at initial recognition. All Financial Assets are recognized initially at fair value plus, in the case
of Financial Assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition
of the financial asset.
B. 1. Financial Assets-Subsequent measurement
The Subsequent measurement of Financial Assets depends on their classification which is as follows:
a. Financial Assets at fair value through Profit or Loss
Financial Assets at fair value through Profit and Loss include Financial Assets Held for Sale in the near term and those
designated upon initial recognition at fair value through profit or loss.
b. Financial Assets measured at amortized cost
Loans and Receivables are non-derivative Financial Assets with fixed or determinable payments that are not quoted
in an active market. Trade Receivables do not carry any interest and are stated at their nominal value as reduced
by appropriate allowance for estimated irrecoverable amounts based on the ageing of the receivables balance and
historical experience. Additionally, a large number of minor Receivables are grouped into homogenous groups and
assessed for impairment collectively. Individual Trade Receivables are written off when management deems them not
to be collectible.
c. Financial Assets at fair value through OCI
All Equity Investments, except Investments in Subsidiaries, Joint Ventures and Associates, falling within the scope of Ind
AS 109, are measured at fair value through Other Comprehensive Income (OCI). The Company makes an irrevocable
election on an instrument by instrument basis to present in Other Comprehensive Income subsequent changes in the fair
value. The classification is made on initial recognition and is irrevocable.
If the Company decides to designate an Equity Instrument at fair value through OCI, then all fair value changes on the
instrument, excluding Dividends, are recognized in the OCI.
B. 2. Financial Assets-Derecognition
The Company derecognizes a financial asset when the contractual rights to the cash flows from the Assets expire or it
transfers the financial asset and substantially all the risks and rewards of ownership of the asset.
Upon derecognition of Equity Instruments designated at fair value through OCI, the associated fair value changes of that
equity instrument is transferred from OCI to Retained Earnings.
C. Investment in Subsidiaries, Joint Ventures and Associates
Investments made by the Company in Subsidiaries, Joint Ventures and Associates are measured at cost in the Standalone
Financial Statements of the Company.
D.1. Financial liabilities-Subsequent measurement
The Subsequent measurement of financial liabilities depends on their classification which is as follows:
a. Financial Liabilities at fair value through Profit or Loss
Financial Liabilities at fair value through Profit or Loss include Financial Liabilities Held for Trading, if any.
b. Financial Liabilities measured at amortized cost
Interest bearing loans and borrowings including debentures issued by the Company are subsequently measured at
amortized cost using the Effective Interest Rate method (EIR). Amortized cost is calculated by taking into account any
discount or premium on acquisition and fee or costs that are integral part of the EIR. The EIR amortized is included in
finance costs in the Statement of Profit and Loss
D. 2. Financial Liabilities -Derecognition
A Financial Liability is derecognized when the obligation under the liability is discharged or expires. When an existing
financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing
liability are substantially modified, such an exchange or modification is treated as derecognition of the original liability and
the recognition of new liability. The difference in the respective carrying amount is recognized in the Standalone Statement
of Profit and Loss.
E. Offsetting Financial Instruments
Financial Assets and Financial Liabilities are offset and the net amount reported in the Statement of Financial Position, if and
only if, there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a
net basis, or to realize the Assets and settle the Liabilities simultaneously.
F. Fair value measurement
The Company measures certain financial instruments at fair value at each reporting date. 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 presumption that the transaction to sell the asset or transfer the
liability takes place either:
Ý In the principal market for the Assets or Liability or
Ý 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 to the Company.
The Company uses valuation technique that are appropriate in the circumstances and for which sufficient data are available
to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
Level 1 - Quoted (unadjusted) market prices in active market for identical Assets or Liabilities.
Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or
indirectly observable.
Level 3 - Valuation technique for which the lowest level input that is significant to the fair value measurement is unobservable.
2.15 Selling Costs
Selling expenses related to specific projects/units are being charged to Statement of Profit and Loss in the year in which the
revenue thereof is accounted.
2.16 Revenue Recognition
Revenue from contracts with customer is recognized, when control of the goods or services are transferred to the customer, at
an amount that reflects the consideration to which the Group is expected to be entitled in exchange for those goods or services.
The Group assesses its revenue arrangements against specific criteria in order to determine if it is acting as principal or agent.
The Group concluded that it is acting as a principal in all of its revenue arrangements. The specific recognition criteria described
below must also be met before revenue is recognized.
The specific recognition criteria for the various types of the Company's activities are described below:
i. Revenue from Real Estate Projects
The Group recognizes revenue, on execution of agreement or letter of allotment and when control of the goods or services
are transferred to the customer, at an amount that reflects the consideration (i.e. the transaction price) to which the Group
is expected to be entitled in exchange for those goods or services excluding any amount received on behalf of third
party (such as indirect taxes). An asset created by the Group's performance does not have an alternate use and as per
the terms of the contract, the Group has an enforceable right to payment for performance completed till date. Hence the
Group transfers control of a good or service over time and, therefore, satisfies a performance obligation and recognizes
revenue over time. The Group recognizes revenue at the transaction price which is determined on the basis of agreement
or letter of allotment entered into with the customer. The Group recognizes revenue for performance obligation satisfied
over time only if it can reasonably measure its progress towards complete satisfaction of the performance obligation. The
Group would not be able to reasonably measure its progress towards complete satisfaction of a performance obligation
if it lacks reliable information that would be required to apply an appropriate method of measuring progress. In those
circumstances, the Group recognizes revenue only to the extent of cost incurred until it can reasonably measure outcome of
the performance obligation.
The Group uses cost based input method for measuring progress for performance obligation satisfied over time. Under this
method, the Group recognizes revenue in proportion to the actual project cost incurred (excluding land and finance cost)
as against the total estimated project cost (excluding land and finance cost).
The management reviews and revises its measure of progress periodically and are considered as change in estimates
and accordingly, the effect of such changes in estimates is recognized prospectively in the period in which such changes
are determined.
A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Group
performs by transferring goods or services to a customer before the customer pays consideration or before payment is due,
a contract asset is recognized for the earned consideration that is conditional.
A contract liability is the obligation to transfer goods or services to a customer for which the Group has received consideration
(or an amount of consideration is due) from the customer. If a customer pays consideration before the Group transfers goods
or services to the customer, a contract liability is recognized when the payment is made or the payment is due (whichever
is earlier). Contract liabilities are recognized as revenue when the Group performs under the contract
ii. Interest income
Interest income from Debt Instruments (including Fixed Deposits) is recognized using the Effective Interest Rate method. The
Effective Interest Rate is that rate that exactly discounts estimated future cash receipts through the expected life of the Financial
Asset to the gross carrying amount of a Financial Asset. While calculating the Effective Interest Rate, the Company estimates
the expected cash flows by considering all the contractual terms of the Financial instrument (for example, prepayment,
extension, call and similar options) but does not consider the expected credit losses.
iii. Dividends
Revenue is recognized when the Company's right to receive the payment is established.
iv. Delayed Payment Charges
Delayed Payment Charges claimed to expedite recoveries are accounted for on realization.
v. Other Income
Other Income is accounted for on accrual basis except, where the receipt of income is uncertain.
vi. Rental Income
Rental income arising from operating leases is accounted over the lease terms.
2.17 Foreign Currency Transactions
Foreign Currency Transactions are translated into Indian rupee using the exchange rates prevailing on the date of the transaction.
Foreign exchange gains and losses resulting from the settlement of these transactions and from the translation of monetary Assets
and Liabilities denominated in foreign currencies at year end exchange rates are recognized in the Statement of Profit or Loss.
2.18 Income Taxes
Current tax
The Current Tax expense for the period is determined as the amount of tax payable in respect of taxable income for the period,
based on the applicable income tax rates.
Current Tax relating to items recognized in Other Comprehensive Income or Equity is recognized in Other Comprehensive Income
or Equity, respectively.
Deferred Tax
Deferred Tax is provided using the liability method on temporary differences between the tax bases of Assets and Liabilities and
their carrying amounts for financial reporting purposes at the reporting date.
Deferred Tax liabilities are recognized for all taxable temporary differences. Deferred tax Assets are recognized for all deductible
temporary differences and, the carry forward of unused tax credits and any unused tax losses. Deferred Tax Assets are recognized
to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, the carry
forward of unused tax credits and unused tax losses can be utilized.
Deferred Tax Assets and Liabilities are measured at the tax rates that are expected to apply in the year when the Asset is realized
or the Liability is settled, based on tax rates (and tax laws) that have been enacted at the Reporting date.
Deferred tax relating to items recognized in Other Comprehensive Income or Equity is recognized in Other Comprehensive Income
or Equity, respectively.
Deferred Tax Assets and Deferred Tax Liabilities are offset if a legally enforceable right exists to set off current tax Assets against
Current Tax Liabilities.
2.19 Earnings Per Share
The basic Earnings Per Share (EPS) is calculated by dividing the net profit or loss for the year attributable to the equity shareholders
by the weighted average number of equity shares outstanding during the year.
For the purpose of calculating Diluted Earnings per Share, the net profit or loss for the year attributable to the Equity Shareholders
and the weighted average number of Equity Shares outstanding during the year is adjusted for the effects of all dilutive potential
Equity Shares.
2.20 Exceptional Items
Exceptional items refer to items of income or expense within Statement of Profit and Loss from ordinary activities which are
non-recurring and are of such size, nature or incidence that their separate disclosure is considered necessary to explain the
performance of the Company.
2.21 Retirement and Other Employee Benefits
Retirement and other Employee benefits are accounted in accordance with Ind AS 19 - Employee Benefits.
Defined Contribution Plan
The Company contributes to a recognized provident fund for all its employees. Contributions are recognized as an expense when
employees have rendered services entitling them to such benefits.
Gratuity (Defined Benefit Scheme)
The Company provides for its gratuity liability based on actuarial valuation as at the balance sheet date which is carried out by
an independent actuary using the Projected Unit Credit Method. Actuarial gains and losses are recognized in full in the Other
Comprehensive Income for the period in which they occur.
Note 4 : Investments in Properties (Contd.)
Note: Investment in properties comprises of commercial offices in Navi Mumbai.
The Company's investment properties consists of only one class of asset that is commercial offices, which have been determined based
on the nature, characteristics and risk of each property. The fair value of the properties reflected are after accounting of any transfer/
sale/disposal during the year.
The Fair value of investment properties has been determined by external, independent registered property valuers as defined under rule
2 of companies (Registered Valuers and Valuation) Rules, 2017, having apprpriate recognised professional qualification and recent
experience in the location and category of the property being valued in conjunction with valuer assessment services undertaken by
approved valuer.
The Company obtains independent valuation for its investment property at least annually and fair value measurements are categorized
as Level 3 measurement for residential properties and commercial/ retail mall respectively in the fair value hierarchy. The valuation has
been taken considering values arrived using the following methodologies.
(a) Discounted cash flow method, net present value is determined based on projected cash flows discounted at an appropriate rate; or
(b) Sales comparable method, which compares the price or price per unit area of similar properties being sold in the marketplace
Note 16 : Borrowings (Contd.)
Notes on Borrowings :
Secured, Rate of Interest & Repayable by :-
(a) Term loan of Rs. 50 crore santioned by STCI Finance Limited at interest rate @ 11.75% p.a. is secured by certain office units at
Arihant Aura C wing of Arihant Paradise Realty Private Limited, and repayable by August 2028 in 10 quarterly installment starting
from May 2026.
(b) Two Term loan of Rs. 63 crore sanctioned by Bajaj Finance at interest rate @ 10.75% to 11.10% p.a. Repayable by monthly
installments in 7 Years and is secured against 1st floor arihant Aura A Wing of Arihant Paradise Realty Private Limited and 1901 to
1904, 2001-2004 in Arihant Aura C wing
(c) SBI Term Loan for the Construction of World Villa Project, Karjat and secured by on the same project. Interest @ 10.10%, Repayable
by June 2030 in 8 quarterly installment staring from Sep 2028 and Personal Guarantee of Director
(d) Equipment loan from Banks @ 9.50% to 9.55% p.a. Repayable by monthly installments in 4 to 5 Years and is secured
against Equipments
(e) 70,00,000 Unlisted Unrated Secured Redeemable Non-Convertible Debentures, at 16.31% having a face value of Rs. 100/-
each aggregating to Rs. 70 Crore issued during the year by way of private placement. These NCDs are secured against Arihant's
project namely, Adarsh, Aayan and Aaradhya.Redemption of these debentures shall be done equally in 24 months commencing
from october 2026.
(f) 45,00,000 Unlisted Unrated Secured Redeemable Non-Convertible Debentures, at 16.43% having a face value of Rs. 100/-
each aggregating to Rs. 45 Crore was repaid during the year.
(g) Vehicle loans are secured against the vehicle itself having rate ranging from 7.25% to 8.75% p.a. Repayable in 3 to 5 Years.
Note 30 : Financial Risk Management
The Company is exposed to financial risks arising from its operations and the use of financial instruments. The Company has identified
financial risks and categorised them in three parts viz.
(i) Credit Risk,
(ii) Liquidity Risk and
(iii) Market Risk.
Risk management framework
The Company's board of directors has overall responsibility for the establishment and oversight of the Company's risk management
framework. The board of directors are responsible for developing and monitoring the Company's risk management.
The Company's risk management framework, are established to identify and analyse the risks faced by the Company, to set appropriate
risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to
reflect changes in market conditions and the Company's activities. The Company, through its training and management standards
and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles
and obligations.
(i) Credit Risk
Credit risk refers to the possibility of a customer and other counterparties not meeting their obligations and terms and conditions
which would result into financial losses. Such risk arises mainly from trade receivables, other receivables, loans and investments.
The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase
in credit risk on an ongoing basis through each reporting period. To assess whether there is a significant increase in credit risk the
Company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial
recognition. It considers reasonable and supportive forwarding-looking information such as:
i) Actual or expected significant adverse changes in business,
ii) Actual or expected significant changes in the operating results of the counterparty,
iii) Financial or economic conditions that are expected to cause a significant change to the counterparty's ability to meet its
obligations,
iv) Significant increase in credit risk on other financial instruments of the same counterparty,
v) Significant changes in the value of the collateral supporting the obligation or in the quality of the third-party guarantees or
credit enhancements
Financial assets are written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a
repayment plan with the Company. Where loans or receivables have been written off, the Company continues to engage in
enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognized as income in
the statement of profit and loss. The Company establishes an allowance for doubtful debts and impairment that represents its
estimate of incurred losses in respect of trade and other receivables, loans and advances. The maximum exposure to credit risk
in case of all the financial instruments covered below is restricted to their respective carrying amount.
Note 30 : Financial Risk Management (Contd.)
a) Currency risk
The Company is not exposed to any currency risk as the Company does not have any import payables, short term payables,
short term borrowings and export receivables in foreign currency.
b) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market interest rates. Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest
rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates.
Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because of
fluctuations in the interest rates.
The Management is responsible for the monitoring of the Company's interest rate position. Various variables are considered by
the Management in structuring the Company's borrowings to achieve a reasonable, competitive, cost of funding.
- Capital Management
The Company' s capital management objectives are:
a) to ensure the Company's ability to continue as a going concern
b) to provide an adequate return to shareholders"
The Company monitors capital on the basis of the carrying amount of equity less cash and cash equivalents as presented
on the face of balance sheet.
The Management assesses the Company's capital requirements in order to maintain an efficient overall financing structure
while avoiding excessive leverage. This takes into account the subordination levels of the Company's various classes
of debt. The Company manages the capital structure and makes adjustments to it in the light of changes in economic
conditions and the risk characteristics of the underlying assets. 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.
Note 37 : Impairment of Assets
On the basis of physical verification of assets, as specified in IND AS - 36 and cash generation capacity of those assets, in the
management perception there is no impairment of such assets as appearing in the Balance Sheet as on March 31,2025.
Note 38 : Segment Information
In accordance with Indian Accounting Standard 108 "Operating Segments" prescribed by Companies (Accounting Standards) Rules,
2015, the company has determined its primary business segment as a single segment of Real Estate Business. Since there are no other
business segments in which the company operates, there are no other primary reportable segments. Therefore, the Segment Revenue,
Segment Results, Segment Assets, Segment Liabilities, total cost incurred to acquire Segment Assets, depreciation charge are all as is
reflected in the financial statements.
Note 41 : Employee benefits
Expenses and liabilities in respect of employee benefits are recorded in accordance with Ind-AS -19, Employee Benefits, notified in the
Companies (Accounting Standard) Rules, 2015.
1 Provident fund
The Company makes contribution to statutory provident fund in accordance with the Employees' Provident Funds and Miscellaneous
Provisions Act, 1952. In terms with Ind-AS -19, Employee Benefits, notified in the Companies (Accounting Standard) Rules, 2015.
2 Gratuity and leave Obligation
The Company has a defined benefit gratuity plan which is unfunded and is governed by the Payment of Gratuity Act, 1972. Under
the Act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on
the employee's length of service and salary at retirement age.
The following tables summarise the components of net benefit expense recognised in the Statement of Profit or Loss and the funded
status and amounts recognised in the Balance Sheet for the respective plans:
Note 43:
The Company has maintained proper books of account as prescribed under Section 128(1) of the Companies Act, 2013 (as amended).
The books of accounts are maintained in electronic mode as required under Section 128 (1) of the Companies Act, 2013 read with
the Companies (Accounts) Rules, 2014 (as amended). Back-ups of books of account and other relevant books and papers maintained
in electronic mode is kept as per the policy of the Company effective August 5, 2022. The back-up of the principal accounting system
is kept in a server physically located in India and is done on a daily basis.
Note 44:
In the month of March 2025, the Income-Tax authorities (referred to as "the department") conducted search operations at the office
premises and residences of directors of the Company. The Company fully cooperated with the officials during the search and furnished
all necessary documents, details, and clarifications. As of the date of issuance of these condensed financial results, the Company has
not received any formal communication from the department regarding the findings of the search. Consequently, any potential impact
on these financial results cannot be determined at this time. Based on the records and information currently available, the Management
believes that there is no material adverse effect on the Company's financial position and no significant adjustments are required to the
condensed financial results for the year ended March 31, 2025.
Note 45 : Other additional regulatory information
1 The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for
holding any Benami property.
2 The company has not identified any transactions or balances in any reporting periods with companies whose name is struck off
under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
3 The company has not traded or invested in Crypto currency or Virtual Currency during the year.
4 The company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding that the Intermediary shall:
(a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
company (Ultimate Beneficiaries) or
(b) Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
5 The company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the
understanding (whether recorded in writing or otherwise) that the Company shall:
(a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
Funding Party (Ultimate Beneficiaries) or
(b) Provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
6 The company does not have any transaction which is not recorded in the books of account that has been surrendered or disclosed
as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant
provisions of the Income Tax Act, 1961).
7 The company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
8 No layer of companies have been established beyond the limit prescribed under clause (87) of section 2 of the Act read with
Companies (Restriction on numbers of Layers) Rules, 2017.
9 The company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.
10 The fair value of investment property is based on the valuation by a registered valuer as defined under rule 2 of Companies
(Registered Valuers and Valuation) Rules, 2017
1 1 The title deeds of immovable properties (other than immovable properties where the Company is the lessee and the leases
agreements are duly executed in favour of the lessee) are duly held and registered in the name of the company.
12 The company has not revalued its Property, Plant and Equipment (including Right of Use Asset) and Intangible Asset, thus valuation
by a registered valuer as defined under rule 2 of the Companies (Registered Valuers and Valuation) Rules, 2017 is not applicable.
Note 45 : Other additional regulatory information (Contd.)
13 The company has not granted any loans or advances in the nature of loans to its Promoters, KMPs and related parties except intra¬
company loans during the year.
14 The company neither proposed any scheme of arrangements nor approved by the competent authority in terms of section 230 to
237 of the Companies Act, 2013.
Note 46 : Event after the reporting period
The Board of Directors have recommended dividend of Rs. 1.50/- per fully paid up equity share of Rs. 10/- each for the financial year
2024-25 subject to approval by shareholder in AGM.
Note 47 : Previous Year Figure's regrouping:
Previous year figures have been regrouped, re-arranged and re-classified wherever necessary to conform to current year's
classification.
As per our attached report of even date
For Ummed Jain & Co. For and on behalf of the Board of Directors of
Chartered Accountants Arihant Superstructures Limited
Firm Reg. No.: 119250W
CA U. M. Jain Ashokkumar B. Chhajer Parth Chhajer
Partner Chairman & MD Whole Time Director
Membership No.: 070863 DIN- 01965094 DIN- 06646333
Dhiraj Jopat Manoj Dhondge
Place: Navi Mumbai Chief Financial Officer Company Secretary
Date: May 24, 2025 ACS: A55592
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