1) Background
Suryo Foods and Industries Limited was incorporated on 12th May ,1989 under the Register of Company, Cuttack, Odisha (CIN Number: L05004OR1989PLC002264). The Company is listed its securities in the Bombay Stock of Exchange India (BSE) having SCRIP Code: SURFI.The Company is engaging in the business of shrimps hatchery and other sea products.
2) SIGNIFICANT ACCOUNTING POLICIES
1 Basis of preparation
(i) Compliance with Ind AS i
The financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) ,Companies (Indian Accounting Standards) Rules, 2015 and other relevant provisions of the Act.
The financial statements up to year ended 31 March 2024 were prepared in accordance with the accounting standards notified under Companies (Accounting Standard) Rules, 2006 (as amended) and other relevant provisions of the Act.
These financial statements are the first financial statements under Ind AS. Refer to Note No.46 for an explanation of how the transition from previous GAAP to Ind AS has affetctedthe company financial postion, fincial performance and cash flows.
(ii) Historical cost convention :
The financial statements have been prepared under the historical cost convention, except for the following:
a) Certain financial assets and liabilities that is measured at fair value;
b) Net Defined Obligations
c) Non Current Assets held for sale
(iii) Current And Non -Current Classification
All assets and liabilities have been classified as current and non-current as per the company's operating cycle and other criteria set out in the Schedule III to the Companies Act 2013. The company has ascertained its operating cycle as 12 months for the purpose of current and non-current classifications.
2 Property, plant and equipment,Intangible Assets and Capital Work-in-progress
i) Recognition and Measurement
Freehold land is carried at histoiical cost. All other items of properly, plant and equipment are stated at historical cost less accumulated depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the assets's carrying amount or recognized as a separate assets ,as appropiate , 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 relibly.The carrying amount of any component accounted as separate assets is derecognized when replaced.All other repairs and maintainance are charged to profit and loss during the reporting period in which they are incurred.
The cost of Property,plant and equipment not availbale for use as on each reporting date are disclosed under capital work-inprogress.
ii) Transition to Ind AS
On transition to Ind AS, the entity has elected to continue with the cariying value of all of its property, plant and equipment recognised as atl April 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment.
iii) Depreciation methods, estimated useful lives and residual value
a) Depreciation is calculated using the Written Down Value Method (WDV) to allocate their cost ,net of their residual values over their estimated usefullives. The useful lives have been determined based on the technical evaluation done by the independent experts which are in line with the Schedule II to the Companies Act ,2013.
b) Any asstes whose aggregate actual cost does not exceed five thousands rupees has been fully charged off in the year of addition.
c) The residual values are not more than 3% of the origional cost of the assets.The assets's residual values and usefullives are reviewed and adjusted at the end of each reporting period.
d) Depreciation on assets purchased/acquired during the year is charged from the date of purchase of the assets. Assets that are acquired during the year are depreciated on pro rata basis from the date of such addition or, as the case may be , upto the date on which such assets has been derecognized.
e) 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.
f) Gains and losses on disposals are determined by comparing proceeds with carrying amount These are included in profit or loss within other gains/(losses).
g) Amortization of leasehold land cost has not been done since the same is perpetual in nature.
iv) Intangible assets :
a) Recognitions and Measurements :
Intanigible assets acquired separately are measured on intial recognition at cost.Following intial recognition , intangible asstets are carried at cost less accumulated amortization and accumulated impairment losses , if any.
b) Amortisation methods and periods
Inttangible Assets with finite usefullives are amortized on straight line basis over their estimated useful lives .
c) Transition to Ind AS
On transition to Ind AS, the entity has elected to continue with the cariying value of all of intangible assets recognised as at 1 April 2016 measured as per the previous GAAP and use that cariying value as the deemed cost of intangible assets.
3 Revenue recognition :
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are inclusive of excise duty and net of returns, trade allowances, rebates, value added taxes,goods and service tax and amounts collected on behalf of third parties.
It recognises revenue when all the following conditions have been satisfied :
(1) Has transferred to the buyer the significant risks and rewards of ownership of the goods
(2) the company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
(3) the amount of revenue can be measured reliably ;
(4) it is probable that the economic benefits associated with the transaction will flow to the entity and
(5) the costs incurred or to be incurred in respect of the transaction can be measured reliably.
4 Other Incomes
i) Insurance claims has been recognized as revenue on cash basis.
ii) Dividends shall be recognised as revenue when the shareholder’s rightto receive payment is established.
iii) Interest shall be recognised as revenue using the effective interest method as set out in Ind AS 109.
iv) Revenue other than above is recognised only when it is probable that the economic benefits associated with the transaction will flow to the entity. However, when an uncertainly arises about the collectibility of an amount already included in revenue, the uncollectible amount or the amount in respect of which recovery has ceased to be probable is recognised as an expense, rather than as an adjustment of the amount of revenue originally recognised.
5 Inventories t
Raw materials.Stores and spares,Semi-finsihed goods, traded and finished goods
Inventories are valued as under -
a) Raw materials, Stores spares, loose tools and Erection materials materials are valued at cost
b) Finished goods are stated at lower of Cost or Net Realisable Value
c) Saleable scraps, whose cost is not identifiable, are valued at estimated realisable value
Cost of raw materials and stores comprises cost of purchase.Cost of inventories also include all other costs incurred in bringing the inventories to their present location and condition.Net realizable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and the estimated costs necessary to make the sale.
Net realizable value is the estimated selling price in the ordinary course of business after deduction of the estimated cost of completion and the estimated costs necessary to make the sale.
6 Financial Instruments
Financial assets and liabilities are recognized when the company becomes a party to the contractual provisions of the instrument
Financial Assets
(i) Trade Receivables
Trade Reecvibales are recognized intially at fairvalue and subsequently measured at amortized costs less of provisions for impairment
(ii) Other Financial Assets
a) Classifications
The company classifies its finacial assets in the following catagorie:
#Those to be measured subsequently at fair value (either through other comprhensive income or through profit and loss )
#Those measured at amoritized costs
The classification depends upon the business model for managing the financial assets and contractual chararcterstics ofthe cash flows.
b) Measurements Intial Recognition;
Financial assets are initially measured at fairvalue. Transaction costs that are directly attributable to the acquisition or issue of financial assets (other than financial assets at fair value through profit or loss) are added to or deducted from the fair value measured on initial recognition of financial assets . The transaction costs directly attributable to the acquisition of financial assets at fair value through profit or loss are immediately recognized in profit or loss.
Subsequent Measurement;
There are three subsequent measurement categories into which the company classifies its debt instruments financial assets:
# measured at amortised 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 to collect contractual cash flows and the contractual terms ofthe financial assets give rise on specified dates to cash flow tliat are solely payments of principal and interest on the principal amount outstanding.
## measured at fair value through other comprehensive income
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 on specified dates to cash flow that are solely payments of principal and interest on the principal amount outstanding and selling financial assets.
### measured at fair value through profit or loss
Financial assets are measured at fair value through profit or loss unless it is measured at amortised cost or fair value through other comprehensive income on initial recognition.
Equity instruments i
An equity instruments is a contract that evidences residual interest in the assets of the company after deducting all of its liabilities.Equity instruments recognised at the proceeds received net off direct issue cost.
All equity instruments classified under financial assets are subsequently measured at fair value.The company has made an irrecoverable election at the time of intial recognition to account for the equity instrument at fair value through other comprehensive income.
C) Impairment of Financial Assets :
The company assesses on forward looking basis the expected credit losses associated with its assets carried at amortized costs.The impairment methodlogy applied depends on whether there has been a significant increase in credit risks.
For trade receivables only,the company has applies the simplified approach permitted by Ind AS 109 Financial Instruments,which requires expected life time losses to be recognized from intial recognition of the receivables.
d) Derecognition of Financial Assets ;
A financial assets is derecognized only when :
(i) The company has transferred the rights to receive cash flows from the financial assets or
(ii) Retains the contractual rights to receive the cash flows of the financial assets but assumes a contractual obligation to pay the cash flows to one or more recipients.
Financial Liabilities
a) Borrowings :
(i) Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortized cost Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in profit or loss over the period of the borrowings using the effective interest method.
(ii) 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).
(iii) Borrowings are classified as current liabilities unless the entity 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.
b) Trade and other payables :
These amounts represent liabilities for goods and services provided to the entity prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid within 45 days of recognition. 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 attheir fair value and subsequently measured at amortised cost using the effective interest method.
C) Other Financial Liabilities
Financial liabilities are measured at amortised cost using effective interest method.Financial liabilities carried at fair value through profit or loss are measured at fair value with all changes in fair value recognised in the statement of profit and loss. Interest bearing loans and borrowings are subsequently measured at amortized cost using effective interest rate method. Gain and losses recognized in profit and loss when the liabilities are derecognized.
d ) Offsetting of Financial Instruments:
A financial asset and a financial liability shall be offset and the net amount presented in the balance sheet when, and only when, an entity:
(a) currently has a legally enforceable right to setoff the recognised amounts; and
(b) intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
7 Employee benefits :
(i) Short-term employee benefit 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 atthe amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.
All Shortterm employee benefits such as salaries, incentives, special aw'ard, medical benefits which fall due within 12 months of the period in which the employee renders related services, which entitles him to avail such benefits and non accumulating compensated absences (like maternity leave and sick leave) are recognized on an undiscounted basis and charged to Profit and Loss Statement
(ii) Post-employment obligations
The entity operates the following post-employment schemes:
(a) defined contribution plans such as provident fund.
Provident fund obligations
Contribution to the provident fund, which is a defined contribution plan, made to the Regional Provident Fund Commissioner is charged to the Profit and loss Statement on accrual basis.
S Foreign currency translation :
(i) Functional and presentation currency
Each items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The financial statements are presented in Indian rupee (INK), which is functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions i.e. Revenue, expense and cash-flow items denominated in foreign currencies are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognised in profit or loss.
Non monetary items that are measured that are measured at fair value in a foreign currency are transalated using the exchange rates at the date when the fair value is determined.Transalation differences on assets and liabilities carried at fair value are reported as part of fair value gain or loss.
9 Income tax :
(i) 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.
(ii) 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 and its subsidiaries and associates operate and generate 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.
(iii) Current income tax expense comprises taxes on income from operations in India and is determined in accordance with the provisions of the Income Tax Act, 1961.Minimum Alternate Tax (MAT) is paid in accordance with the tax laws, which gives rise to future economic benefits in the form of tax credit against future income tax liability. The company offsets on a year on basis, the current tax assets and liabilities, where it intends to settle such assets and liabilities on a net basis. The current tax expense recognized in the financial statements is net off MAT credit utilized during the period.
(iv) Deferred income tax is provided in full, using the balance sheet approach, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, deferred tax liabilities are not recognized if they arise from the initial recognition of goodwill. 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 realized or the deferred income tax liability is settled.
(v) 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.
(vi) 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.
(vii) Current and deferred tax is recognised in profit or 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.
10 Cash and cash equivalents :
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of twelve months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts.
11 Borrowing costs :
a) 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.
b) Other borrowing costs are expensed in the period in which they are incurred.
12 Provisions & Contingent Liabilities:
a) A provision is recognized if, as a result of a past event, the Company has a present legal obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by the best estimate of the outflow of economic benefits required to settle the obligation at the reporting date. Where no reliable estimate can be made, a disclosure is made as contingent liability. Contingent assets are not recognized.
b) 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 provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.
13 Contributed equity i
a) Equity:
Equity shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
b) Dividends :
Provisions is made for any amount of dividend declared , being appropiately authorized and no longer at the discretion of the entity, on or before the end of reporting period but not distributed at the end of the reporting period.
14 Earning Per Share :
a) Basic Earning Per Share
Basic Earning Per Share is calculated by dividing the profit attributable to oweners of the company by the weighted average number of equity shares outstanding during the financial year.
b) Diluted Earning Per Share
Diluted Earning Per Share adjusts the figures used in the determination of the basic earning per share to take into account the after income tax effect of of intersts or other finance costs associated with the dilutive potential equily shares and the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dillutive potential equity shares.
15 Segment Reporting :
Ind AS 108 "Operating Segments" establishes standards for the way that public business enterprises report information about operating segments and related disclosures about products and services, geographic areas, and major customers. The Company's operations predominantly relate to providing end-to-end business solutions to enable clients to enhance business performance. Based on the "management approach" as defined in Ind AS 108, the Chief Operating Decision Maker (CODM) evaluates the Company's performance and allocates resources based on an analysis of various performance indicators by business segments and geographic segments. Accordingly, information has been presented both along business segments and geographic segments. The accounting principles used in the preparation of the financial statements are consistently applied to record revenue and expenditure in individual segments, and are as set out in the significant accounting policies.
16 Others :
xA.ll amounts disclosed in the financial statements and notes have been rounded off to the nearest thousand as per the requirement of Schedule III, unless otherwise stated. Previous Year figures have been Regrouped/Rearranged where necessary.
4) Critical Estimates and Judgments:
a) Use of Estimates :
The preparation of the financial statements in conformity with Ind AS requires management to make estimates, judgments and assumptions. These estimates; judgments and assumptions affect the application of accounting policies and the. reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Application of accounting policies that require critical accounting estimates involving complex and subjective judgments and the use of assumptions in these financial statements have been disclosed below. Accounting estimates could change from period to period. Actual results could differ from those; estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their: effects are disclosed in the notes to the financial statements.
b) Critical Accounting Estimates :
i) Property, plant and equipment
Property, plant and equipment represent a significant proportion of the asset base of the Company. The charge in respect of periodic depreciation is derived after determining an estimate of an asset’s expected useful life and the expected residual value at the end of its life. The useful lives and residual values of company’s assets are determined by management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology.
ii) Income Taxes :
The 'Company's major tax jurisdictions is in India.Significant judgements are involved in determining the provision for income taxes, including amount expected to be paid/recovered for uncertain tax positions.
iii) Impairment of trade receivables
The company estimates the uncollectability of accounts receivables by analysing historical payment patterns, customer concentrations, customer credit worthiness and current economic trends. If the financial condition of customer deteriorates, additional allowances may be required.
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