2 Significant Accounting Policies
2.1 Property, Plant and Equipment (PPE)
On adoption of Ind AS, the Company retained 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 used that as its deemed cost as permitted by Ind AS 101 ‘First-time
Adoption of Indian Accounting Standards'.
Property, plantand equipmentare initially recognized atcost. The initial cost of property, plantand
equipment comprises its purchase price, including non-refundable duties and taxes net of any trade
discounts and rebates. The cost of property, plant and equipment includes interest on borrowings
(borrowing cost) directly attributable to acquisition, construction or production of qualifying assets
subsequent to initial recognition. Property, plant and equipment are stated at cost less accumulated
depreciation (other than freehold land, which are stated at cost) and Impairment losses, if any.
Subsequent costs are included in the asset's carrying amount or recognized 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 derecognized 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 as per the useful life 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 carrying values of property, plant and equipment are reviewed for impairment when events or
changes in circumstances indicate that the carrying value may not be recoverable.
The residual values, useful life and depreciation method are reviewed at each financial year-end to
ensure that the amount, method and period of depreciation are consistent with previous estimates
and the expected pattern of consumption of the future economic benefits embodied in the items of
property, plant and equipment.
An item of property, plant and equipment is derecognized upon disposal or when no future economic
benefits are expected to arise from the continued use of the asset. Any gain or loss arising on disposal or
retirement of an item of property, plant and equipment is determined as the difference between sales
proceeds and the carrying amount of the asset and is recognized in profit or loss. Fully depreciated
assets still in use are retained in financial statements.
2.1. 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. All intangible assets are tested for impairment.
Amortization expenses and impairment losses and reversal of impairment losses are taken to the
Statement of Profit and Loss.
An intangible asset is derecognized on disposal, or when no future economic benefits are expected
from use or disposal. Gains or losses on derecognition are determined by comparing proceeds with
carrying amount. These are included in profit or loss.
(i) Computer software
Computer software are stated at cost, less accumulated amortization 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) Amortization methods and periods
Intangible assets with finite useful live are amortized over their respective individual estimated useful
lives on a straight-line basis.
2.3 Capital work-in-progress and intangible assets under development
Capital work-in-progress/intangible assets under development are carried at cost, comprising direct
cost, related incidental expenses and attributable borrowing cost.
2.4 Non-derivative Financial Instruments
Financial assets and liabilities are recognized when the Company becomes a party to the contractual
provisions of the instrument. Financial assets and liabilities are initially measured at fair value. Transaction
costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities
(other than financial assets and financial liabilities at fair value through profit or loss) are added to or
deducted from the fair value measured on initial recognition of financial asset or financial liability.
Cash and cash equivalents
The Company considers all highly liquid financial instruments, which are readily convertible into
known amounts of cash that are subject to an insignificant risk of change in value and having original
maturities of three months or less from the date of purchase, to be cash equivalents. Cash and cash
equivalents consist of balances with banks which are unrestricted for withdrawal and usage.
Financial assets at amortized cost
Financial assets are subsequently measured at amortized cost if these financial assets are held within
a business whose objective is to hold these assets in order to collect contractual cash flows and
the contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
Financial assets at fair value through other comprehensive income (FVTOCI)
Financial assets are measured at fair value through other comprehensive income if these financial
assets are held within a business whose objective is achieved by both collecting contractual cash
flows that give rise on specified dates to solely payments of principal and interest on the principal
amount outstanding and by selling financial assets.
Financial assets at fair value through profit or loss (FVTPL)
Financial assets are measured at fair value through profit or loss unless it is measured at amortized
cost or at fair value through other comprehensive income on initial recognition. The transaction costs
directly attributable to the acquisition of financial assets and liabilities at fair value through profit or
loss are immediately recognized in profit or loss.
Financial liabilities
Financial liabilities are measured at amortized cost using the effective interest method.
Equity instruments
An equity instrument is a contract that evidences residual interest in the assets of the Company after
deducting all of its liabilities. Equity instruments recognized by the Company are measured at the
proceeds received net off direct issue cost.
Offsetting of financial instruments
Financial assets and financial liabilities are off set and the net amount is reported in financial
statements if there is a currently enforceable legal right to offset the recognized amounts and there
is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
2.5 Impairment
Financial assets (other than at fair value)
Financial assets (other than at fair value) The Company assesses on a forward-looking basis the expected
credit losses associated with its assets carried at amortized cost and FVTOCI debt instruments. The
impairment methodology applied depends on 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 lifetime losses to be recognized from initial recognition
of the receivables.
PPE and intangible assets
Property, plant and equipment and intangible assets with finite life are evaluated for recoverability
whenever there is any indication that their carrying amounts may not be recoverable. If any such
indication exists, the recoverable amount (i.e., higher of the fair value less cost to sell and the value-
in-use) is determined on an individual asset basis unless the asset does not generate cash flows
that are largely independent of those from other assets. In such cases, the recoverable amount is
determined for the cash generating unit (CGU) to which the asset belongs.
If the recoverable amount of an asset (or CGU) is estimated to be less than it carrying amount, the
carrying amount of the asset (or CGU) is reduced to its recoverable amount. An impairment loss is
recognized in the Statement of Profit and Loss.
2.6 Inventories
Inventories are valued at lower of cost (on weighted average basis) and net realizable value after
providing for obsolescence and other losses, where considered necessary. Cost includes all charges in
bringing the goods to their present location and condition, including all taxes and other levies, transit
insurance and receiving charges. Work-in-progress and finished goods include appropriate proportion
of overheads. Net realizable 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. Biological
assets of the Company comprise of live stocks of shrimps' breeders and different phases of shrimp
that are classified as current biological assets. The Company recognizes biological assets when,
and 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 and the fair value or cost of
the assets 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.
2.7 Revenue recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the
company and the revenue can be reliably measured.
Sale of goods
Revenue from sale of shrimps is recognized when all the significant risks and rewards of ownership
have been passed to the buyer- normally when the shipment is loaded which is in accordance with
industry practice and entitlement of export subsidies are based on shipment of goods. Shipments that
have been dispatched but have not been delivered at the end of the financial reporting period have
been recognized as “Revenue on Shipments in Transit”.
Export benefits are accounted on recognition of export sales.
Revenue from the sale of Feeds is recognized when the goods are delivered and titles have passed, at
which time all the following conditions are satisfied:
• The Company has transferred to the buyer the significant risks and rewards of ownership of the goods;
• The Company retains neither continuing managerial involvement to the degree usually associated
with ownership nor effective control over the goods sold
• The amount of revenue can be measured reliably;
• It is probable that the economic benefits associated with the transaction will flow to the Company;
and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Rendering of services
Income recognition for services takes place as and when the services are performed.
Interest Income
Interest income from financial assets is recognized when it is probable that economic benefits will
flow to the Company and the amount of income can be measured reliably. Interest income is accrued
on a time basis, by reference to the principal outstanding and at the effective interest rate applicable,
which is the rate that exactly discounts estimated future cash receipts through the expected life of the
financial assets to that asset's net carrying amount on initial recognition.
Insurance claims
Insurance claims are accounted for on the basis of claims admitted / expected to be admitted and to
the extent that there is no uncertainty in receiving the claims.
2.8 Research and Development expenses
Research expenditure is charged to the Statement of Profit and Loss. Development costs of products
are also charged to the Statement of Profit and Loss unless a product's technical feasibility has been
established, in which case such expenditure is capitalized. Tangible assets used in research and
development are capitalized.
2.9 Leases
Leases are classified as finance leases whenever the terms of lease transfer substantially all the risks
and rewards of ownership to the lessee. Leases where a significant portion of the risks and rewards of
ownership are retained by the lessor are classified as operating leases.
(i) Operating Lease:
Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a
straight-line basis over the lease term except where another systematic basis is more representative of
the time pattern in which economic benefits from leased assets are consumed. The aggregate benefit
of incentives (excluding inflationary increases where rentals are structured solely to increase in line
with the expected general inflation to compensate for the lessor's inflationary cost increases, such
increases are recognized in the year in which the benefits accrue) provided by the lessor is recognized
as a reduction of rental expense over the lease term on a straight-line basis.
(ii) Finance Lease:
Assets held under finance leases are initially recognized as assets of the Company at their
fair value at the inception of the lease or, if lower, at the present value of the minimum lease
payments. The corresponding liability to the lessor is included in the Balance Sheet as a finance
lease obligation.
Assets held under finance leases are depreciated over their expected useful lives on the same basis
as owned assets or, where shorter, the term of the relevant lease. Lease payments are apportioned
between finance expenses and reduction of the lease obligation so as to achieve a constant rate of
interest on the remaining balance of the liability.
Finance expenses are recognized immediately in profit or loss, unless they are directly attributable to
qualifying assets, in which case they are capitalized in accordance with the Company's general policy
on borrowing costs. Contingent rentals are recognized as expenses in the periods in which they are
incurred.
2.10 Non-current assets held for sale
Non-current assets are classified as held for sale if their carrying amount will be recovered principally
through a sale transaction rather than through continuing use. This condition is regarded as met only
when the asset is available for immediate sale in its present condition subject only to terms that are
usual and customary for sales of such asset and its sale is highly probable. Management must be
committed to the sale, which should be expected to qualify for recognition as a completed sale within
one year from the date of classification.
When the Company is committed to a sale plan involving disposal of an investment, the investment
that will be disposed of is classified as held for sale when the criteria described above are met.
Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their
carrying amount and fair value less costs to sell.
2.11 Employee benefit expenses
Employee benefits consist of contribution to provident fund, superannuation fund, gratuity fund and
compensated absences.
(i) Post-employment benefit plans
Defined Contribution plans
Payments to defined contribution retirement benefit scheme for eligible employees in the form
of superannuation fund are charged as an expense as they fall due. Such benefits are classified as
Defined Contribution Schemes as the Company does not carry any further obligations, apart from the
contributions made.
The Company also makes contribution towards provident fund, in substance a defined contribution
retirement benefit plan for qualifying employees. The provident fund is deposited with the Provident
Fund Commissioner which is recognized by the Income Tax authorities.
Defined benefit plans
The Company operates various defined benefit plan such as gratuity fund.
The liability or asset recognized in the balance sheet in respect of its defined benefit plans is the present
value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets.
The defined benefit obligation is calculated annually by actuaries using the projected unit credit method.
The present value of the said obligation is determined by discounting the estimated future cash
outflows, using market yields of government bonds that have tenure approximating the tenures of the
related liability.
The interest income / (expense) are calculated by applying the discount rate to the net defined benefit
liability or asset. The net interest income / (expense) on the net defined benefit liability or as set is
recognized in the Statement of Profit and loss.
Re-measurement gains and losses arising from experience adjustments and changes in actuarial
assumptions are recognized in the period in which they occur, directly in other comprehensive income.
They are included in retained earnings in the Statement of Changes in Equity and in the Balance Sheet.
Changes in the present value of the defined benefit obligation resulting from plan amendments or
curtailments are recognized immediately in profit or loss as past service cost.
(ii) Short term employee benefit
Compensated absences which accrue to employees and which can be carried to future periods but are
expected to be encashed or availed in twelve months immediately following the year end are reported
as expenses during the year in which the employees perform the services that the benefit covers and
the liabilities are reported at the undiscounted amount of the benefits after deducting amounts already
paid. Where there are restrictions on availment of encashment of such accrued benefit or where the
availment or encashment is otherwise not expected to wholly occur in the next twelve months, the
liability on account of the benefit is actuarially determined using the projected unit credit method.
2.12 Foreign currency translation
The functional currency of the Company is Indian rupee
On initial recognition, all foreign currency transactions are translated into the functional currency
using the exchange rates prevailing on the date of the transaction. As at the reporting date, foreign
currency monetary assets and liabilities are translated at the exchange rate prevailing on the Balance
Sheet date and the exchange gains or losses are recognized in the Statement of Profit and Loss.
2.13 Borrowing cost
Borrowing costs are interest and ancillary costs incurred in connection with the arrangement of
borrowings. General and specific borrowing costs attributable to acquisition and construction of any
qualifying asset (one that takes a substantial period of time to get ready for its designated use or sale)
are capitalized until such time as the assets are substantially ready for their intended use or sale, and
included as part of the cost of that asset. Investment income earned on the temporary investment of
specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing
costs eligible for capitalization. All the other borrowing costs are recognized in the Statement of Profit
and Loss within Finance costs of the period in which they are incurred.
2.14 Income tax
Income tax expense comprises current tax expense and the net change in the deferred tax asset or
liability during the year.
Current and deferred taxes are recognized in Statement of Profit and Loss, except when they relate to
items that are recognized in other comprehensive income or directly in equity, in which case, the current
and deferred tax are also recognized in other comprehensive income or directly in equity, respectively.
Current tax
Current tax is measured at the amount of tax expected to be payable on the taxable income for the year
as determined in accordance with the provisions of the Income Tax Act, 1961.
Current tax assets and current tax liabilities are off set when there is a legally enforceable right to
set off the recognized amounts and there is an intention to settle the asset and the liability on a
net basis.
Deferred tax
Deferred income tax is recognized using the Balance Sheet approach. Deferred income tax assets and
liabilities are recognized for deductible and taxable temporary differences arising between the tax
base of assets and liabilities and their carrying amount, except when the deferred income tax arises
from the initial recognition of an asset or liability in a transaction that is not a business combination
and affects neither accounting nor taxable profit or loss at the time of the transaction.
Deferred tax assets are recognized only to the extent that it is probable that either future taxable
profits or reversal of deferred tax liabilities will be available, against which the deductible temporary
differences, and the carry forward of unused tax credits and unused tax losses can be utilized.
The carrying amount of a deferred tax asset shall be reviewed at the end of each reporting date and
reduced to the extent that it is no longer probable that sufficient taxable profit will be available to
allow all or part of the deferred income tax asset to be utilized.
Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted
or substantively enacted by the end of the reporting period and are expected to apply when the related
deferred tax asset is realized or the deferred tax liability is settled.
Deferred tax assets and liabilities are off set 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.
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