(XVII) Provisions, Contingent Liabilities & Contingent Assets.
Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be outflow of resources. Contingent Liabilities are not recognized but are disclosed in Notes. Contingent Assets are neither recognized nor disclosed in the financial statements.
(XVIII) Employee benefits
Liabilities for Salaries and Wages to employees are expected to be settled wholly within 12 months after the end of the period in which the employee renders the related service 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.
a. Short Term Employee Benefits.
Employee benefits payable wholly within twelve months of rendering of the service are classified as short tem employees benefits and are recognised in the period in which the employee renders the related service.
b. Defined Contribution Plan:
Defined Contribution Plans such as Provident Fund etc., are charged to the Statement of Profit and Loss as incurred.
c. Defined Benefits Plan:
Post employment and other long term employee benefits in the form of Gratuity is considered as defined benefit obligation.
Gratuity
Gratuity is provided for the year under Defined Benefit Plan as per the Actuarial valuation. The liability or asset recognized 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.
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 adjusted to 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.
(XIX) Contribution 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.
(XX) Earnings Per Share
Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders of the Company by the weighted average number of equity shares outstanding during the period. Diluted earnings per equity share is computed by dividing the net profit attributable to the equity holders of the Company by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number ofequity shares that could have been issued upon conversion of all dilutive potential equity shares. The dilutive potential equity shares are adjusted for the proceeds receivable had the equity shares been actually issued at fair value (i.e. the average market value of the outstanding equity shares). Dilutive potential equity shares are deemed converted as at the beginning of the period, unless issued at a later date.Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for any share splits and bonus shares issues including for changes effected prior to the approval of the financial statements by the Board of Directors.
(XXI) Rounding of amounts
All amounts disclosed in the financial statements and notes have been rounded off to the nearest Rupees in Millions as per the requirement of Schedule III, unless otherwise stated.
Nature of Security and Terms of Repayment
I. Security Particulars of HDFC Bank Pre-Shipment Finance, Cash Credit Facility, Post Shipment Finance,
Working Capital Demand Loan and Term Loan (Facility limit of ? 1670 millions.)
a. Primarily secured by:
Hypothecation of all present and future current assets, movable fixed assets of the company. The charge to be shared
on 1st pari-passu basis with Yes Bank.
b. Collaterally secured by :
• Equitable mortgage on pari-passu basis of various residential properties, industrial plots comprising of factory buildings and other commercial properties details of which are as follows:-Residential Properties: First Pari Passu charge on following Properties:-
1. Property bearing Door No. 19-10-629, Umaya gardens, T Sy. No. 225 -1A and R Sy Nos: 350 - 1A, 86 Attavar Village, B R Karkera Road, Pandeshwar, Mangalore Taluk, Dakshina Kannada District - 575001
2. Property bearing Door No. 19-10-623/11, Umaya gardens, Block A, T Sy. No. 225 -2B and R Sy Nos: 350 -2B & 350-2B, 85 Attavar Village, B R karkera Road, Pandeshwar, Mangalore Taluk, Dakshina Kannada, District -575001
3. Property bearing, Umaya gardens, Block B, T Sy. No. 225-2B & 225 -2B and R Sy Nos : 350 - 2B, 85 Attavar Village, B R Karkera Road, Pandeshwar, Mangalore Taluk, Dakshina Kannada District- 575001
4. Property bearing Door No. 3 - 464/3, Sy Nos: 94 - 1P of Munnur Village & 46-2(P) of 95 Permannur Village, 3 rd Cross Santoshnagar, Kuthar, Mangalore Taluk, Dakshina Kannada, District - 575017
Industrial Properties: First Pari Passu charge on following Properties:-
1. Property bearing R Sy No: 172 - 2 & T Sy Nos : 14 / 2(D), Door Nos : 18-2-16/4(2), 16/4(3) and 16/4(5) Mukka Sea Food Industries Private Limited Building”, Attavar Village, Milrages Ward, Mangalore Taluk, Dakshina Kannada - 575001
2. Property bearing Plot No: 140C, Door No: 6- 82, Sy No: 85, Baikampady Village, Baikampady Industrial Estate, Mangalore, Dakshina Kannada - 575011
3. Property bearing No 49, R Sy No: 12-3A, 12-3B, Door Nos: 14-161, 162, 163 & 164 Surathkal Village, Mangalore taluk, Dakshina Kannada - 574146 and Property bearing, R Sy No 203/5, Door Nos: 14-158, 159 and 160 Surathkal Village, Mangalore taluk, Dakshina Kannada - 574146.
4. Property bearing No 49, R Sy No: 12-3A, 12-3B, Door Nos: 14-161, 162, 163 & 164 Surathkal Village, Mangalore taluk, Dakshina Kannada - 574146 and Property bearing, R Sy No 203/5, Door Nos: 14-158, 159 and 160 Surathkal Village, Mangalore taluk, Dakshina Kannada - 574146.
5. Property bearing Plot No: 139 /A2, Door No: 6-83 & 6-84, R Sy No: 124/P, Baikampady Village, Baikampady Industrial Estate, Mangalore, Dakshina kannada - 575011.
Industrial Property: Exclusive charge on EM on land and building admeasuring 3.65 acres situated at SNo.84p1,84p2, 100p1 at Kadiyali Tq village, Rajula Dist, Amrelli -Personal guarantees following Directors / Shareholders of the company:-
(i). Mr. K. Abdul Razak (ii) Mr. K. Mohammed Haris (iii) Mr. K. Mohammed Arif (iv) Mr. K Mohammed Althaf (v) Mrs. Umaiyya Banu
- Corporate Guarantee of M/s Haris Marine Products Pvt Ltd
-10% Cash margin (only for SBLC Limit) and 10% margin on order book for Pre-shipment finance.
-25% margin for Cash Credit / WCDL
Terms of Repayment of Term Loan of ? 11.01 millions availed from HDFC Bank Ltd
The loan is repayable in 36 equal monthly installments of ? 0.31 millions starting from 19th October 2023 which ends on 18th September 2026.
II. Security particulars of SBLC for funding to subsidiary Ocean Aquatic Proteins LLC at Oman through Gift City from HDFC Bank ( facility limit of ? 99.44 millions.)
The facility has been sanctioned in 2020 for 6 years. The Terms of Securities of the factility is as follows:-
i. Exclusive charge of Commercial Property Property bearing Door No: 17-3- 124/1, 17-3-124/2, 17-3-124/3, 17-3-124/4 and 17-3-124/5 with R Sy No: 1/2A1B & 1/1A and T. S, No. 731/2A1B and 731/1 A, Jappinamogaru Village, Falnir Ward, Father Mulleurs Road, Valencia, Mangalore 575002
ii. . 10% cash margin for SBLC limit to be used for funding of Oman Subsidiary from Gift City.
iii3. . Personal guarantees following:- (i). Mr. K. Abdul Razak (ii) Mr. K. Mohammed Haris (iii) Mr. K. Mohammed Arif (iv) Mr. K Mohammed Althaf (v) Mrs. Umaiyya Banu
III. Security particulars of Various Credit Facilities from Yes Bank ( facility limit of ? 400.00 millions.)
a. Primarily secured by:
Hypothecation of all present and future current assets and movable fixed assets of the company. The charge to be shared on 1st pari-passu basis with HDFC Bank.
b. Collaterally secured by :
-EMT on pari-passu basis of residential properties, industrial plots comprising of factory buildings and other commercial properties mentioned in detail under Facility I with HDFC Bank above.
-Personal guarantees following Directors / Shareholders of the company:-
(i). Mr. K. Abdul Razak (ii) Mr. K. Mohammed Haris (iii) Mr. K. Mohammed Arif (iv) Mr. K Mohammed Althaf (v) Mrs. Umaiyya Banu
c. Terms of Repayment of WCTL:
- Yes Bank Working capital term loan is repayable in 24 equel monthly installment of ? 30.70 Lakhs each and 25th installment of ? 15.99 Lakhs starting from April 2021 and ending on March 2023. However, Entire loan has been paid by the company till March 31, 2024.
IV. Security Particulars of Axis Bank Cash Credit Facility, Working Capital Demand Loan, Export Packing Credit, Pre Shipment Finance, (Facility limit of? 500 millions.)
a. Primarily secured by:
Hypothecation of all present and future current assets and unencumbered movable fixed assets of the company. The charge to be shared on 1st pari-passu basis with HDFC Bank & Yes bank.
b. Collaterally secured by :
Fixed deposit of 20% of overall facility to be kept under lien.
-Personal guarantees following Directors / Shareholders of the company:-
(i). Mr. K. Abdul Razak (ii) Mr. K. Mohammed Haris (iii) Mr. K. Mohammed Arif (iv) Mr. K Mohammed Althaf (v) Mrs. Umaiyya Banu
c. Terms of Repayment of WCDL
Working capital Demand loan is repayable on demand.
V. Vehicle Loans from HDFC Bank
Vehicle Loan I - The loan is secured against hypothecation of Motor Vehicle against which loan is availed. The Loan is repayable in 60 EMI of ? 0.07 millions each starting from April 2021 and ends on March 2026.
Vehicle Loan II - The loan is secured against hypothecation of Motor Vehicle against which loan is availed. The Loan is repayable in 48 EMI of ? 0.06 millions each starting from March 2022 and ends on February 2026.
Fair Value Hierarchy
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 noncurrent financial assets and non-current financial liabilities such as security deposits, are considered to be same as their fair values. With respect to Corporate Guarantees, the management has determined the fair value of such guarantee contracts as ‘Nil’ as the subsidiary company is not being benefited significantly from such guarantees.
Note 41 Financial Risk Management
The Company has exposure to the following risks from its use of financial instruments :
> Credit risk
> Liquidity Risk
> Market Risk
The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The Board of Directors has established a risk management policy to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risk and adherence to limits. Risk management systems are reviewed periodicially to reflect changes in market conditions and the Company’s activities.
Market Risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Such changes in the values of financial instruments may result from changes in the foreign currency exchange rates, interest rates, credit, liquidity and other market changes. The Company has medium exposure to said market risk.
(I) Interest Risk
The Company’s main interest rate risk arises from long term and short term borrowings with variable rates, which exposes the Company to cash flow interest rate risk.
The exposure of the Company to interest rate changes at the end of the reporting period are as follows:
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.
Credit Risk :
Credit risk is the risk of financial loss to the company if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Company's trade receivables, and other activities that are in nature of leases.
Exposure to credit risk
The gross carrying amount of financial assets, net of any imapirment losses recognized represents the maximum credit exposure. The maximum exposures to credit risk as at 31st March, 2024 and 31 March 2023 was as follows :
46 Additional Regulatory Information
b There are no proceedings that have been initiated or pending against the Company for holding any benami property under the Prohibition of Benami Property Transactions Act, 1988 (as amended from time to time) (earlier Benami Transactions (Prohibition) Act, 1988) and the rules made thereunder.
e The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017, and there are no companies beyond the specified layers.
f Utilisation of Borrowed funds and share premium;
A. The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (“Intermediaries”) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall
(i) 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
(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
The Company has not received any fund from any person(s) or entity(ies), including foreign entities (“Funding Party”) with the understanding (whether recorded in writing or otherwise) that the company shall
(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries); or
(ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
g During the year, the company has been sanctioned working capital limits in excess of ? five crores in aggregate from banks on the basis of security of current assets of the entities. The quarterly returns/statements filed by these entities with such banks were not in agreement with the unaudited books of account of these entities on account of timing difference in reporting to the banks and routine bookclosure process and the details of which are as follows:
h Undisclosed Income : The Company does not have any transaction 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). Further, there was no previously unrecorded income and no additional assets were required to be recorded in the books of account during the year.
i Details of Crypto Currency or Virtual Currency : The Company has neither traded nor invested in Crypto currency or Virtual Currency during the financial year ended March 31, 2024. Further, the Company has also not received any deposits or advances from any person for the purpose of trading or investing in Crypto Currency or Virtual Currency.
47 Events after the reporting period
There was no significant event after the end of the reporting period which requires any adjustment or disclosure in the Standalone Financial Statements.
48 Previous periods’ figures have been reworked / restated / regrouped to the extent practicable, whenever necessary.
As per our report of even date attached For Shah & Taparia
For and on behalf of Board
Chartered Accountants F.R.NO. 109463W
Bharat Joshi Kalandan Mohammed Haris Kalandan Mohammed Althaf
Partner Managing Director and CEO Whole Time Director and CFO
M.No. 130863 DIN : 03020471 DIN : 03051103
Mehaboobsab Mahmadgous Chalyal
Company Secretary ACS No. A67502
Place : Mumbai Place : Mangaluru
Date: May 14, 2024 Date: May 14, 2024
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