s. Provisions, Contingent liabilities and Contingent assets
Provisions
Provisions are recognised when the Company has a present legal or constructive obligation
as a result of past events, it is probable that an outflow of resources will be required to settle
the obligation and the amount can be reliably estimated. Provisions are not recognised for
future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be
required in settlement is determined by considering the class of obligations as a whole. A
provisions is recognized even if the likelihood of an outflow with respect to any one item
included in the same class of obligations may be small.
Provisions are measured at the present value of management's best estimate of the
expenditure required to settle the present obligation at the end of the reporting period.
The discount rate used to determine the present value is a pre-tax rate that reflects current
market assessments of the time value of money and the risks specific to the liability. The
increase in the provisions due to the passage of time is recognized as interest expense.
Contingent liabilities
Contingent Liabilities are disclosed, unless the possibility of outflow of resources is
remote, when there is
• A possible obligation that arises from past events, the existence of which will be
confirmed only by the occurrence or non-occurrence of one or more uncertain future
events not wholly within the control of the entity or
• A present obligation that arises from past events whether it is either not probable that
an outflow of resources will be required to settle the obligation or reliable estimate of
the amount cannot be made
The company has disclosed the same as per the requirements of Ind AS 37
Contingent assets
A contingent asset is a possible asset that arises from past events and whose existence of
which will be confirmed only by the occurrence or non-occurrence of one or more uncertain
future events not wholly within the control of the entity. The Company does not recognize
the contingent asset in its standalone financial statements since this may result in the
recognition of income that may never be realised. Where an inflow of economic benefits
are probable, the company disclose a brief description of the nature of contingent assets
at the end of the reporting period. However, when the realisation of income is virtually
certain, then the related asset is not a contingent asset and the Company recognize such
assets.
t. Employee benefits
(i) Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits that are expected
to be settled wholly within 12 months after the end of the period in which the employees
render the related service are recognised in respect of employees' services up to the
end of the reporting period and are measured at the amounts expected to be paid
when the liabilities are settled. The liabilities are presented as current employee
benefit obligations in the balance sheet.
(ii) Other long-term employee benefit obligations
The liabilities for earned leave and sick leave are not expected to be settled wholly
within 12 months after the end of the period in which the employees render the
related service. They are therefore measured as the present value of expected future
payments to be made in respect of services provided by employees up to the end
of the reporting period using the projected unit credit method. The benefits are
discounted using the market yields at the end of the reporting period that have terms
approximating to the terms of the related obligation. Remeasurements as a result
of experience adjustments and changes in actuarial assumptions are recognised in
profit or loss.
The obligations are presented as current liabilities in the balance sheet if the entity
does not have an unconditional right to defer settlement for at least twelve months
after the reporting period, regardless of when the actual settlement is expected to
occur.
(iii) Post- employment obligations
The Company operates the following post-employment schemes:
(a) defined benefit plans such as gratuity; and
(b) defined contribution plans such as Provident fund, Employee State Insurance and
Superannuation fund
Gratuity obligations
The liability or asset recognised in the balance sheet in respect of defined benefit
gratuity 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 defined benefit obligation denominated by discounting
the estimated future cash outflows by reference to market yields at the end of the
reporting period on government bonds that have terms approximating to the terms
of the related obligation.
The net interest cost is calculated by applying the discount rate to the net balance of
the defined benefit obligation and the fair value of plan assets. This cost is included
in employee benefits expense in the Statement of Profit and Loss.
Remeasurement gains and losses arising from experience adjustments and changes
in actuarial assumptions are recognised 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 recognised immediately in profit or loss as past
service cost.
Defined contribution plans
The Company pays provident fund contributions to publicly administered Provident
funds and Employee State Insurance funds as per local regulations. The Company
has no further payment obligations once the contributions have been paid. The
contributions are accounted for as defined contribution plans and the contributions
are recognised as employee benefits expense when they are due. Prepaid
contributions are recognised as an asset to the extent that a cash refund or a
reduction in the future payments is available. Superannuation Scheme (administered
through a 'Superannuation Trust' formed by the Company) is a defined contribution
plans, where the Company has no further obligations under the plan beyond its
monthly / quarterly contributions.
(iv) Bonus plans
The Company recognises a liability and an expense for bonuses. The Company
recognises a provision where contractually obliged or where there is a past practice
that has created a constructive obligation.
u. Contributed Equity
Equity shares are classified as equity.
Incremental costs directly attributable to the issue of new shares are shown in equity as a
deduction, net of tax, from the proceeds.
v. Dividends
Provision is made for the amount of any dividend declared, being appropriately authorized
and no longer at the discretion of the entity, on or before the end of the reporting period
but not distributed at end of the reporting period.
w. Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to owners of
the Company by the weighted average number of equity shares outstanding during
the financial year.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic
earnings per share to take into account:
- the after income tax effect of interest and other financing costs associated with
dilutive potential equity shares, and
- the weighted average number of additional equity shares that would have been
outstanding assuming the conversion of all dilutive potential equity shares.
x. Rounding of amounts
All amounts disclosed in the financial statements and notes have been rounded off to the
nearest Lakhs as per the requirement of Schedule-III, unless otherwise stated.
2.5 Recent pronouncements
Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing
standards under Companies (Indian Accounting Standards) Rules as issued from time to time.
For the year ended 31st March 2025, MCA has not notified any new standards or amendments to
the existing standards applicable to the Company.
As per records of the Company, including its register of shareholders/ members and other declaration
received from shareholders regarding beneficial interest, the above shareholding represent both
legal and beneficial ownerships of shares.
c) Rights attached to equity shares
The Company has only one class of equity shares having par value of '1/- per share (31 March, 2024:
'1/- per share). Each holder of equity shares is entitled to one vote per share. The Company declares
and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the
approval of the shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive
remaining assets of the Company, after distribution of all preferential amounts. The distribution will
be in proportion to the number of equity shares held by the shareholders.
General reserve
The general reserve is used from time to time to transfer profits from retained earnings for
appropriation purposes. As the general reserve is created by a transfer from one component of equity
to another and is not an item of other comprehensive income, items included in the general reserve
will not be reclassified subsequently to statement of profit and loss. The reserve is utilised for Bonus
issue in accordance with the provisions of Companies Act 2013.
Securities premium
Securities premium reserve is used to record the premium on issue of shares. The reserve is utilised
for Bonus issue in accordance with the provisions of Companies Act 2013.
The working capital limits, sanctioned by State Bank of India (SBI) and HDFC Bank as at 31 March,
2025, are '3,000.00 Lakhs and '2,000.00 Lakhs, respectively (31 March, 2024: '3,000.00 Lakhs and
'2,000.00 Lakhs respectively).
The working capital limits from SBI is secured by first charge on all current assets, Collateral First
charge on Property, Plant and Equipment of the company. The same is repayable on demand and
carries interest MCLR 0.35%.
The working capital limits from HDFC Bank is secured by first charge on all current assets, Collateral
First charge on Property, Plant and Equipment of the company. The same is repayable on demand and
carries interest @ 8.70% p.a.
Quarterly returns or statements of current assets filed by the Company with banks or financial
institutions are in agreement with the books of accounts.
Note: Debit balance in cash credit accounts as on 31 March, 2025 (and 31 March, 2024) have been
grouped under the head "Cash and Cash equivalents".
Dues to micro and small enterprises
With the promulgation of the Micro, Small and Medium Enterprises Development Act, 2006, the
Company is required to identify Micro, Small and Medium Suppliers and pay them interest on overdue
beyond the specified period irrespective of the terms with the suppliers. The Company has circulated
letter to all suppliers seeking their status and the same has been received. In view of this, the liability of
interest calculated and the required disclosures made, in the below table, to the extent of information
available with the Company.
(i) The Company purchased soya bean in the year 2004-05, converted the same in to DOC in
2005-06 and used some part for own consumption in manufacturing of shrimp feed and some
part was exported. The resultant soya oil was sold locally. The Sales Tax Act pertaining to soya
bean processing and soya oil sale was amended with effect from 13.12.2004 and Commercial Tax
department took the view that the soya bean purchased prior to 13.12.2004 will attract tax at old
rates and a demand to '29.22 Lakhs was raised. This is being contested by the Company in the
High Court of Madhya Pradesh.
(ii) Company is importing Squid Liver Powder (SLP) which was one of the raw materials for
manufacturing of shrimp feed. SLP was imported by the Company under raw material
classification. However, Customs has disputed our claim and demanding duty applicable for
import of complete feed. Company appealed against the order of CESTAT, Chennai, before
Madras High Court.
The Company is contesting the demands and the management, including its tax advisors, believe
that its position will likely be upheld in the appellate process. No tax expense has been accrued in
the financial statements for the tax demand raised. The management believes that the ultimate
outcome of this proceeding will not have a material adverse effect on the Company's financial
position and results of operations.
iii) The Company has purchased spares like pellet dies etc. in the year 2017-2018 & 2018-2019 under
stores & spares clasification and paid IGST @12%. In the year 2022-23 customs has reclassified
these items and charged IGST @18% and asked the Company to pay differential tax along with
Interest. The Company has paid the differential amount of GST along with interest and asked
waiver for fine and penalty. But the customs department has raised a fine '7,00,000/- and penalty
'4,44,140/-. Aggrieved by the demand the Company has filed an appeal with the Commissioner
of Customs ( Appeals), Maharashtra.
The Company is contesting these demands and believes that its position will likely be upheld in
the appellate process. Accordingly, the Company has not accounted the fine and penalty raised
by the GST authorities. The management believes that the ultimate outcome of this proceeding
will not have a material adverse effect on the Company's financial position and results of
operations.
31. Capital Commitments
Estimated amount of capital contracts remaining to be executed to the extent not provided for (net of
advances) '620.94 Lakhs (31 March, 2024: '275.84 Lakhs).
32. Corporate Social Responsibility Expenditure
During the year, the amount required to be spent on corporate social responsibility activities
amounted to '568.72 Lakhs (31 March 2024 : '569.10 Lakhs) in accordance with Section 135 of the Act.
The following amounts were actually spent during the current & previous year:
34. Segment reporting
The Company is engaged in the business of Shrimp feed, Shrimp Hatchery and power generation. The
Chairman and Managing Director (CMD) has been identified as the Chief Operating Decision maker
(CODM). There are three segments in the Company i.e. Shrimp Feed, Shrimp Hatchery, Wind Mills.
As the Company does not have revenue from any significant external customer amounting to 10% or
more of the Company's total revenue, the related information as required under paragraph 34 of Ind
AS 108 has not been disclosed.
Shrimp Feed is manufactured & marketed through dealers, which is used to grow shrimp.
Company had installed four wind mills of 3.2 MW at Chitradurga, Karnataka. Power generated from
wind mills is sold to BESCOM under Power Purchase agreement.
Shrimp Hatchery produces shrimp seed and sold to the aqua farmers.
Segment Revenue and Results
All segment revenues & expenses that are directly attributable to the segments are reported under
the respective segment. The revenues and expenses that are not directly attributable to any segments
are shown as unallocated expenses.
Segment assets and liabilities
Segment assets include all operating assets used by the business segment and consist principally
Property, Plant and Equipment, Debtors and Inventories. Segment liabilities primarily include
creditors and other liabilities. Assets and Liabilities that cannot be allocated between the segments
are shown as a part of unallocated assets and liabilities respectively.
(ii) Defined Contribution Plans
The Company also has certain defined contribution plans. Contributions are made to provident fund
(at the rate of 12% of basic salary); Employee State Insurance and Superannuation Fund in India for
employees as per regulations. The contributions are made to registered funds administered by the
government. The obligation of the Company is limited to the amount contributed and it has no further
contractual nor any constructive obligation. The expense recognised during the period towards
defined contribution plan is '544.75 Lakhs (31 March, 2024 - '493.99 Lakhs).
(iii) Defined benefit Plans
Gratuity
The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972.
Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount
of gratuity payable on retirement / termination is the employee's last drawn basic salary per month
computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity
plan is a funded plan. The Company does not fully fund the liability and maintains a target level of
funding to be maintained over a period of time based on estimations of expected gratuity payments.
The amounts recognised in the balance sheet and the movements in the defined benefit obligation
over the year are as follows:
Through its defined benefit plan, the Company is exposed to a number of risks, the most significant of
which are detailed below:
Asset volatility: The plan liabilities are calculated using a discount rate set with reference to bond
yields; if plan assets under perform this yield, this will create a deficit. The Company's plan assets are
insurer managed funds and are subject to less material risk.
Changes in bond yields: A decrease in bond yields will increase plan liabilities and the Company
ensures that it has enough reserves to fund the liability.
The carrying amount of the current financial assets and current financial liabilities are considered to
be same as their fair values, due to their short term nature. In absence of specified maturity period,
the carrying amount of the non-current financial assets and non-current financial liabilities such as
security deposits, are considered to be same as their fair values.
The fair value of quoted equity investments, has been classified as Level 1 in the fair value hierarchy
as the fair value has been determined on the basis of market value. The fair value of unquoted equity
instruments has been classified as Level 2 in the fair value hierarchy as the fair value has been
determined on the basis of discounted cash flows. The fair value of mutual funds is classified as Level
2 in the fair value hierarchy as the fair value has been determined on the basis of Net Assets Value
(NAV) declared by the mutual fund. The fair value of Financial derivative contracts has been classified
as Level 2 in the fair value hierarchy as the fair value has been determined on the basis of mark-to-
market provided by the Bank from which the contract has been entered. The corresponding changes
in fair value of investment is disclosed as 'Other Income'.
The Company's risk management is carried out by the JMD under policies approved by the Risk
Management Committe a sub-committe of the Board of Directors. The Committe provides guiding
principles for overall risk management, as well as policies covering specific areas such as interest
rate risk, credit risk and investment of excess liquidity.
Credit Risk
(i) Credit risk management
Credit risk arises from cash and cash equivalents, loans, security deposits and deposits with banks
and financial institutions, as well as credit exposures to customers including outstanding receivables.
Credit risk is managed by the Marketing General Manager of the Avanti Feeds Limited. The Company
has few customer with most of them being foreign customers. The Company provides a credit period
of 60-90 days which is in line with the normal industry practice.
The Marketing GM undertakes the credit analysis of each customer before transacting. The finance
team under the guidance of Marketing GM also periodically review the credit rating of the customers
and follow up on long outstanding invoices.
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 on going basis through out each reporting period.
To assess whether there is a significant increase in credit risk the Company compares the risk of a
default occurring on the asset as at the reporting date with the risk of default as at the date of initial
recognition. It considers available reasonable and supportive forwarding-looking information. The
below factors are considered:
- external credit rating (as far as available)
- actual or expected significant adverse changes in business, financial or economic conditions
that are expected to cause a significant change to the borrower's ability to meet its obligations.
- actual or expected significant changes in the operating results of the borrower.
- significant increase in credit risk on other financial instruments of the same borrower.
- Significant changes in the expected performance and behaviour of the borrower, including
changes in the payment status of the borrower in the Company and changes in operating results
of the borrower.
Macro economic information (such as regulatory changes, market interest rate or growth rates)
is incorporated as part of the internal rating model. In general, it is presumed that credit risk has
significantly increased since initial recognition if the payments are more than 180 days past due.
A default on a financial asset is when the counter party fails to make contractual payments within
365 days of when they fall due. This definition of default is determined by considering the business
environment in which the entity operates and other macro-economic factors.
Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations
associated with its financial liabilities that are settled by delivering cash or another financial asset. The
Company's approach to managing liquidity is to ensure, as far as possible, that it will have sufficient
liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without
incurring unacceptable losses or risking damage to the Company's reputation.
The Joint Managing Director monitors rolling forecasts of the Company's liquidity position and cash
and cash equivalents on the basis of expected cash flows and any excess/short liquidity is managed
in the form of current borrowings, bank deposits and investment in mutual funds.
(i) Maturities of financial liabilities
The following are the remaining contractual maturities of financial liabilities at the reporting date.
The amounts are gross and undiscounted, and include estimated interest payments and exclude the
impact of netting agreements.
38. Capital management
a) Risk Management
The Company's objectives when managing capital are to
> safeguard their ability to continue as a going concern, so that they can continue to provide
returns for shareholders and benefits for other stakeholders, and
> Maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends
paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The Company has been maintaining a steady dividend.
The Company's capital structure is largely equity based. It monitors capital on the basis of the following
gearing ratio: Net debt divided by Total 'equity' (as shown in the balance sheet).
(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC
beyond the statutory period.
(iv) The Company has not traded or invested in Crypto Currency or Virtual Currency during the
financial year.
(v) The Company has not been declared wilful defaulter by any bank or financial institution or
government or any government authority.
(vi) 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.
(vii) 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 Group 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 Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(viii) The Company has not entered into any such transactions which are not recorded in the books
of accounts 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.
41. Previous year figures have been regrouped/reclassified, where necessary, to conform to this year's
classification.
The accompanying notes are an integral part of the financial statements
As per our Report of even date
For TUKARAM & CO. LLP For and on behalf of the Board of Directors
Chartered Accountants
ICAI Firm Registration No. 004436S / S200135 A. Indra Kumar
DIN: 00190168
Chairman & Managing Director
Pachari Murali
Partner C. Ramachandra Rao N. Ram Prasad
Membership No: 221625 DIN: 00026010 DIN: 00145558
Jt. Managing Director, Director
Place : Hyderabad Company Secretary & CFO
Date : 28.05.2025
|