a. Segment reporting
Operating segments are reported in a manner consistent with the internal reporting
provided to the chief operating decision maker.
The Chairman and Managing Director (CMD) of the Company has been identified as the
chief operating decision maker for the segment information presented.
b. Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of the Company are measured using the
currency of its primary economic environment in which the Company operates
('the functional currency'). The financial statements are presented in Indian rupees
(INR), which is the Company's functional and presentation currency.
(ii) Transactions and translations
Foreign-currency denominated monetary assets and liabilities are translated
into the relevant functional currency at exchange rates in effect at the Balance
Sheet date. The gains or losses resulting from such translations are included in
net profit in the Statement of Profit and Loss. Non-monetary assets and non¬
monetary liabilities denominated in a foreign currency and measured at fair value
are translated at the exchange rate prevalent at the date when the fair value was
determined. Non-monetary assets and nonmonetary liabilities denominated in a
foreign currency and measured at historical cost are translated at the exchange
rate prevalent at the date of the transaction.
Transaction gains or losses realized upon settlement of foreign currency
transactions are included in determining net profit for the period in which the
transaction is settled. Revenue, expense and cash-flow items denominated in
foreign currencies are translated into the relevant functional currencies using the
exchange rate in effect on the date of the transaction
c. Revenue recognition
The Company earns revenue primarily from sale of Shrimp Feed. Revenue is recognized
upon transfer of control of promised products or services to customers in an amount
that reflects the consideration the Company expects to receive in exchange for those
products or services. To recognize revenues, we apply the following five step approach:
(1) identify the contract with a customer,
(2) identify the performance obligations in the contract,
(3) determine the transaction price,
(4) allocate the transaction price to the performance obligations in the contract, and
(5) recognize revenues when a performance obligation is satisfied.
At contract inception, the Company assesses its promise to transfer products or services
to a customer to identify separate performance obligations. The Company applies
judgement to determine whether each product or services promised to a customer
are capable of being distinct, and are distinct in the context of the contract, if not, the
promised product or services are combined and accounted as a single performance
obligation. The Company allocates the arrangement consideration to separately
identifiable performance obligation based on their relative stand-alone selling price
or residual method. Stand-alone selling prices are determined based on sale prices for
the components when it is regularly sold separately, in cases where the Company is
unable to determine the stand-alone selling price, the Company uses third-party prices
for similar deliverables or the company uses expected cost plus margin approach in
estimating the stand-alone selling price.
Revenue towards satisfaction of a performance obligation is measured at the amount
of transaction price (net of variable consideration) allocated to that performance
obligation. The transaction price of goods sold is net of variable consideration on
account of various discounts and schemes offered by the company as part of the
contract.
d. Government grant
Grants from the government are recognised at their fair value where there is a reasonable
assurance that the grant will be received and the Company will comply with all attached
conditions.
Government grants relating to income are deferred and recognised in the Statement of
Profit and Loss over the period necessary to match them with the costs that they are
intended to compensate and presented within other income.
Government grants relating to the purchase of property, plant and equipment are
included in non-current liabilities as deferred income and are credited to Statement of
Profit and Loss on a straight-line basis over the expected lives of the related assets and
presented within other income.
Loans received from government in the nature of interest free deferred sales taxes
are treated in the nature of government grant. The difference between the fair value
of the loan and the amount of loan received is accounted as government grant. The
government grant is recognised in the Statement of Profit and Loss over the period of
loan.
e. Income Tax
The income tax expense or credit for the period is the tax payable on the current
period's taxable income based on the applicable income tax rate for each jurisdiction
adjusted by changes in deferred tax assets and liabilities attributable to temporary
differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or
substantively enacted at the end of the reporting period in the countries where the
Company operates and generates taxable income. Management periodically evaluates
positions taken in tax returns with respect to situations in which applicable tax regulation
is subject to interpretation. It establishes provisions, where appropriate, on the basis of
amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary
differences arising between the tax bases of assets and liabilities and their carrying
amounts in the financial statements. Deferred income tax is also not accounted for
if it arises from initial recognition of an asset or liability in a transaction other than a
business combination that at the time of the transaction affects neither accounting
profit nor taxable profit (tax loss). Deferred income tax is determined using tax rates
(and laws) that have been enacted or substantially enacted by the end of the reporting
period and are expected to apply when the related deferred income tax asset is realised
or the deferred income tax liability is settled.
Deferred tax assets are recognised for all deductible temporary differences and unused
tax losses only if it is probable that future taxable amounts will be available to utilise
those temporary differences and losses.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to
offset current tax assets and liabilities and when the deferred tax balances relate to the
same taxation authority. Current tax assets and tax liabilities are offset where the entity
has a legally enforceable right to offset and intends either to settle on a net basis, or to
realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in Statement of Profit and Loss, except to the
extent that it relates to items recognised in other comprehensive income or directly in
equity. In this case, the tax is also recognised in other comprehensive income or directly
in equity, respectively.
f. Ind AS 116 - Leases :
As a lesseeV
The Company's lease asset classes primarily consist of leases for land and buildings.
The Company assesses whether a contract contains a lease, at inception of a contract.
A contract is, or contains, a lease if the contract conveys the right to control the use of
an identified asset for a period of time in exchange for consideration. To assess whether
a contract conveys the right to control the use of an identified asset, the Company
assesses whether: (i) the contract involves the use of an identified asset (ii) the
Company has substantially all of the economic benefits from use of the asset through
the period of the lease and (iii) the Company has the right to direct the use of the asset.
At the date of commencement of the lease, the Company recognizes a right-of-use
(ROU) asset and a corresponding lease liability for all lease arrangements in which it is a
lessee, except for leases with a term of 12 months or less (short-term leases) and low value
leases. For these short-term and low-value leases, the Company recognizes the lease
payments as an operating expense on a straight-line basis over the term of the lease.
Certain lease arrangements includes the options to extend or terminate the lease
before the end of the lease term. ROU assets and lease liabilities includes these options
when it is reasonably certain that they will be exercised. The ROU assets are initially
recognized at cost, which comprises the initial amount of the lease liability adjusted for
any lease payments made at or prior to the commencement date of the lease plus any
initial direct costs less any lease incentives. They are subsequently measured at cost
less accumulated depreciation and impairment losses.
g. Impairment of assets
Intangible assets that have an indefinite useful life are not subject to amortisation
and are tested annually for impairment, or more frequently if events or changes in
circumstances indicate that they might be impaired. Other assets are tested for
impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is recognised for the amount by
which the asset's carrying amount exceeds its recoverable amount. The recoverable
amount is higher of an asset's fair value less costs of disposal and value in use. For the
purpose of assessing impairment, assets are grouped at the lowest levels for which
there are separately identifiable cash inflows which are largely independent of the cash
flows from other assets or group of assets (cash-generating units). Non-financial assets
other than goodwill that suffered an impairment are reviewed for possible reversal of
the impairment at the end of each reporting period.
h. Cash and cash equivalents
Cash and cash equivalents in the balance sheet includes cash at bank and cash on
hand, deposits held at call with financial institutions, other short-term, highly liquid
investments with original maturities of three months or less that are readily convertible
to known amounts of cash and which are subject to an insignificant risk of changes in
value. Bank overdrafts are shown within borrowings in current liabilities in the balance
sheet. For the purpose of statement of cash flows, cash and cash equivalents cash an
short term deposits as defined above is net of outstanding bank overdrafts as they are
considered an integral part of the Company's cash management.
i. Inventories
Inventories include raw materials, work-in-progress, finished goods, stores & spares.
Inventories are valued at lower of cost and net realizable value. Cost of raw materials,
components and stores and spares is determined on a weighted average basis.
Cost of raw materials comprise of weighted average cost of purchase. Cost of work-in¬
progress and finished goods comprises direct raw materials, labour and a proportion
of manufacturing overheads based on normal operating capacity. Cost is determined
on a weighted average basis. Cost of inventories also include all other costs incurred in
bringing the inventories to their present location and condition.
Net realisable value is the estimated selling price in the ordinary course of business less
the estimated costs of completion and the estimated costs necessary to make the sale.
j. Biological assets
The Company recognises biological assets only when, the Company controls the assets
as a result of past events, it is probable that future economic benefits associated with
such assets will flow to the Company. Biological assets of the Company are in the
nature of Consumable Biological Assets. It is bifurcated into Brood Stock, (the Parents)
and harvested species which undergo biological transformation under different stages
as Nauplius, Zoea, Mysis and Post Larvae. The Company sells the biological assets
harvested from brood stock at Nauplius and Post Larvae Stages. The Brood Stock has
a maximum useful life of 6 months for laying eggs. and thereafter these are destroyed.
The valuation of the Brood stock biological assets are determined on the following
basis:
Brood stock are used for captive consumption or to support farmers, it can not be sold
before the end of its useful life and as such, there is no active market. Other references
to market prices such as market prices for similar assets are also not available due
to the uniqueness of the breed. Valuation based on a discounted cash flow method
is considered to be unreliable given the uncertainty with respect to mortality rates
and production. Consequently, brood stock and Shrimp seed (Different stages) are
measured at cost, less depreciation and impairment losses.
The transmission phase from Nauplius to Zoea and Mysis are not considered as
significant transformation of biological asset and hence Zoea and Mysis are not valued
as per Ind AS - 41.
The Company recognises other biological assets at the fair value or cost of the assets
that can be measured reliably. Expenditure incurred on biological assets are measured
on initial recognition and at the end of each reporting period at its fair value less costs
to sell. The gain or loss arising from a change in fair value less costs to sell of biological
assets are included in Statement of Profit and Loss for the period in which it arises.
Management estimates the fair value less costs to sell of biological assets, taking
into account the most reliable evidence available at each reporting date. The future
realization of these biological assets may be affected by their survival rate, age and / or
other market-driven changes that may reduce the future economic benefits associated
with such assets. The fair value is arrived at based on the observable market prices of
biological assets adjusted for cost to sells, as applicable.
k. Investments and other financial assets
(i) Classification
The Company classifies its financial assets in the following measurement categories:
- those to be measured subsequently at fair value (either through other
comprehensive income, or through profit or loss), and
- those measured at amortised cost.
The classification depends on the entity's business model for managing the
financial assets and the contractual terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit
or loss or other comprehensive income. For investments in debt instruments, this
will depend on the business model in which the investment is held. For investments
in equity instruments, this will depend on whether the Company has made an
irrevocable election at the time of initial recognition to account for the equity
investment at fair value through other comprehensive income.
The Company reclassifies debt investments when and only when its business
model for managing those assets changes.
(ii) Measurement
At initial recognition, the Company measures a financial asset at its fair value, plus
in the case of a financial asset not at fair value through profit or loss, transaction
costs that are directly attributable to the acquisition of the financial asset.
Transaction costs of financial assets carried at fair value through profit or loss are
expensed in Statement of Profit and Loss. However, trade receivables that do not
contain a significant financing component are measured at transaction price.
Debt instruments
Subsequent measurement of debt instruments depends on the Company's
business model for managing the asset and the cash flow characteristics of the
asset. There are three measurement categories into which the Company classifies
its debt instruments:
- Amortised cost: Assets that are held for collection of contractual cash flows where
those cash flows represent solely payments of principal and interest are measured
at amortised cost. A gain or loss on a debt investment that is subsequently
measured at amortised cost and is not part of a hedging relationship is recognised
in profit or loss when the asset is derecognised or impaired. Interest income from
these financial assets is included in finance income using the effective interest rate
method.
-Fair value through other comprehensive income (FVOCI): Assets that are held
for collection of contractual cash flows and for selling the financial assets, where
the assets cash flows represent solely payments of principal and interest, are
measured at fair value through other comprehensive income (FVOCI). Movements
in the carrying amount are taken through OCI, except for the recognition of
impairment gains or losses, interest revenue and foreign exchange gains and
losses which are recognised in Statement of Profit and Loss. When the financial
asset is derecognised, the cumulative gain or loss previously recognised in OCI is
reclassified from equity to profit or loss and recognised in other gains/(losses).
Interest income from these financial assets is included in other income using the
effective interest rate method.
-Fair value through profit or loss: Assets that do not meet the criteria for amortised
cost or FVOCI are measured at fair value through profit or loss. A gain or loss on
a debt investment that is subsequently measured at fair value through profit or
loss and is not part of a hedging relationship is recognised in profit or loss and
presented net in the Statement of Profit and Loss within other gains/(losses) in
the period in which it arises. Interest income from these financial assets is included
in other income.
Equity instruments
The Company subsequently measures all equity investments at fair value. Where
the Company elected to present fair value gains and losses on equity investments
in other comprehensive income, there is no subsequent reclassification of fair
value gains and losses to profit or loss. Dividends from such investments are
recognised in Statement of Profit and Loss as other income when the Company
right to receive payments is established.
Changes in the fair value of financial assets at fair value through profit or loss are
recognised in other gain/(losses) in the Statement of Profit and Loss. Impairment
losses (and reversal of impairment losses) on equity investments measured at
FVOCI are not reported separately from other changes in fair value.
Investment in subsidiaries & associates
Investment in subsidiaries & associates is carried at cost in the separate financial
statements.
(iii) Impairment of financial assets
The Company assesses on a forward booking basis the expected credit losses
associated with its assets carried at amortised cost and FVOCI debt instruments.
The impairment methodology applied depends on whether there has been a
significant increase in credit risk. Note 37 details how the Company determines
whether there has been a significant increase in credit risk.
For trade receivables only, the Company applies the simplified approach permitted
by Ind AS 109 Financial Instruments, which requires expected life time losses to be
recognised from initial recognition of the receivables.
The Company reviews its carrying value of investments carried at cost (net of
impairment, if any) annually, or more frequently when there is indication for
impairment. If the recoverable amount is less than its carrying amount, the
impairment loss is accounted for in the statement of profit and loss.
(iv) Derecognition of financial assets
A financial asset is derecognised only when
- the Company has transferred the rights to receive cash flows from the
financial asset or
- retains the contractual rights to receive the cash flows of the financial asset,
but assumes a contractual obligation to pay the cash flows to one or more
recipients.
Where the entity has transferred an asset, the Company evaluates whether it
has transferred substantially all risks and rewards of ownership of the financial
asset. In such cases, the financial asset is derecognised. Where the entity has not
transferred substantially all risks and rewards of ownership of the financial asset,
the financial asset is not derecognised.
Where the entity has neither transferred a financial asset nor retains substantially
all risks and rewards of ownership of the financial asset, the financial asset is
derecognised if the Company has not retained control of the financial asset.
Where the Company retains control of the financial asset, the asset is continued
to be recognised to the extent of continuing involvement in the financial asset.
(v) Income recognition
Interest income:
Interest income from debt instruments is recognised using the effective interest
rate method. The effective interest rate is the 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. When 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.
(vi) Dividends:
Dividends are recognised in profit or loss only when the right to receive payment 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.
l. Derivatives
Derivatives are initially recognised at fair value on the date a derivative contract is
entered into and are subsequently re-measured to their fair value at the end of each
reporting period and are included in other gains/(losses).
m. Offsetting financial instruments
Financial assets and liabilities are offset and the net amount is reported in the balance
sheet where there is a legally enforceable right to offset the recognised amounts and
there is an intention to settle on a net basis or realise the asset and settle the liability
simultaneously. The legally enforceable right must not be contingent on future events
and must be enforceable in the normal course of business and in the event of default,
insolvency or bankruptcy of the Company or the counterparty.
n. Property, plant and equipment
Freehold land is carried at historical cost. All other items of property, plant
and equipment are stated at historical cost less depreciation. Historical cost
includes expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset's carrying amount or recognised as a
separate asset, as appropriate, only when it is probable that future economic benefits
associated with the item will flow to the Company and the cost of the item can be
measured reliably. The carrying amount of any component accounted for as a separate
asset is derecognised when replaced. All other repairs and maintenance are charged to
profit or loss during the reporting period in which they are incurred.
Depreciation methods, estimated useful lives and residual value
Depreciation on tangible assets is calculated on a straight-line basis so as to expense
the cost less residual value over the estimated useful life's prescribed and in the manner
laid down under Schedule II to the Companies Act, 2013. The useful lives have been
determined based on technical evaluation 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 estimated useful lives and residual values are
reviewed at the end of each reporting period, with the effect of any change in estimate
accounted for on a prospective basis. Assets costing individually rupee equivalent of
INR 5,000 or less are fully charged off on purchase. Depreciation for assets purchased
/ sold during the period is proportionately charged.
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. Gains or
losses arising from disposal of property, plant and equipment which are carried at cost
are recognised in the Statement of Profit and Loss.
o. Intangible assets
Intangible assets that are acquired are recognized at cost initially and carried at cost
less accumulated amortization and accumulated impairment loss, if any.
(i) Computer software
Computer software are stated at cost, less accumulated amortisation and
impairment losses, if any. Cost comprises the purchase price and any attributable
cost of bringing the asset to its working condition for its intended use.
(ii) Amortisation methods and periods
Intangible assets with finite useful live are amortized over their respective individual
estimated useful lives (6 years in case of computer software's) on a straight line
basis.
p. Trade and other payables
These amounts represent liabilities for goods and services provided to the Company
prior to the year end which are unpaid . The amounts are unsecured and are usually
paid as per mutually agreed terms. Trade and other payables are presented as current
liabilities unless payment is not due within 12 months after the reporting period. They
are recognised initially at their fair value and subsequently measured at amortised cost
using the effective interest method.
q. Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred.
Borrowings are subsequently measured at amortised cost. Any difference between the
proceeds (net of transaction costs) and the redemption amount is recognised in profit
or loss over the period of the borrowings using the effective interest method. Fees
paid on the establishment of loan facilities are recognised as transaction costs of the
loan to the extent that it is probable that some or all of the facility will be drawn down.
In this case, the fee is deferred until the draw down occurs. To the extent there is no
evidence that it is probable that some or all of the facility will be drawn down, the fee is
capitalised as a prepayment for liquidity services and amortised over the period of the
facility to which it relates.
Borrowings are removed from the balance sheet when the obligation specified in the
contract is discharged, cancelled or expired. The difference between the carrying
amount of a financial liability that has been extinguished or transferred to another
party and the consideration paid, including any non-cash assets transferred or liabilities
assumed, is recognised in profit or loss as other gains/(losses).
Borrowings are classified as current liabilities unless the Company has an unconditional
right to defer settlement of the liability for at least 12 months after the reporting period.
Where there is a breach of a material provision of a long-term loan arrangement on or
before the end of the reporting period with the effect that the liability becomes payable
on demand on the reporting date, the entity does not classify the liability as current, if
the lender agreed, after the reporting period and before the approval of the financial
statements for issue, not to demand payment as a consequence of the breach.
r. Borrowing Cost
General and specific borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying asset are capitalised during the period of
time that is required to complete and prepare the asset for its intended use or sale.
Qualifying assets are assets that necessarily take a substantial period of time to get
ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending
their expenditure on qualifying assets is deducted from the borrowing costs eligible for
capitalisation.
Other borrowing costs are expensed in the period in which they are incurred.
|