2.9 Provisions, Contingent Liabilities and Contingent Assets
2.9.1 Provisions
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it
is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation. The expense relating to a provision is presented in the statement of
profit and loss net of any reimbursement.
If the effect of time value of money is material, provisions are discounted using a current pre tax rate that reflects, when
appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of
time is recognised as a finance cost.
2.9.2 Contingent Liabilities
Contingent liabilities are disclosed when there is a possible obligation arising 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 Company or a present obligation that arises from past events where it is either not probable that an outflow
of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made.
2.9.3 Contingent Assets
Contingent assets are not recognised in the financial statements. Contingent assets if any, are disclosed in the notes to the
financial statements.
2.10 Revenue from Operation
Revenue from contracts with customers is recognized on transfer of control of promised goods or services to a customer at
an amount that reflects the consideration to which the Company is expected to be entitled to in exchange for those goods or
services. 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 and services rendered is net of
variable consideration on account of various discounts and schemes offered by the Company as part of the contract. This variable
consideration is estimated based on the expected value of outflow. Revenue (net of variable consideration) is recognized only
to the extent that it is highly probable that the amount will not be subject to significant reversal when uncertainty relating to its
recognition is resolved.
Revenue from sale of products is recognized when the control on the goods have been transferred to the customer. The performance
obligation in case of sale of product is satisfied at a point in time i.e., when the material is shipped to the customer or on delivery
to the customer, as may be specified in the contract.
2.11 Export incentives
Revenue from export incentives are accounted for on export of goods if the entitlements can be estimated with reasonable
assurance and conditions precedent to claim are fulfilled.
The Company has received approval under the Production Linked Incentive Scheme of the Government of India for specific product
categories. Incentive under the scheme is subject to meeting certain committed investments and defined incremental sales
threshold. Such Incentive are recognised as other operating revenue when there is a reasonable assurance that the Company will
comply with all necessary conditions attached to the incentive. Income from such incentive is recognised on a systematic basis
over the periods to which they relate.
2.12 Other Non-Operating Income
2.12.1 Interest Income
Interest income is recognized using the Effective Interest Rate (EIR) method.
2.12.2 Dividend Income
Dividend income on investments is recognised when the right to receive dividend is established.
2.13 Employee Benefits
Liabilities in respect of employee benefits to employees are provided for as follows:
a) Short-term employee benefits
i) 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 incurred
when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.
b) Long Term Employee Benefit Plan
The Company has a policy on compensated absences which are both accumulating and non-accumulating in nature. The
expected cost of accumulating compensated absences is determined by actuarial valuation performed by an independent
actuary at each balance sheet date using projected unit credit method on the additional amount expected to be paid /
availed as a result of the unused entitlement that has accumulated at the balance sheet date. Expense on non-accumulating
compensated absences is recognized in the period in which the absences occur.
c) Post Separation Employee Benefit Plan
i) Defined Benefit Plan
• Gratuity Liability on the basis of actuarial valuation as per Ind AS-19. Liability recognised in the balance sheet in
respect of gratuity is the present value of the defined benefit obligation at the end of each 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 defined benefit is determined by discounting the estimated future cash outflows by reference to
market yield at the end of each reporting period on government bonds that have terms approximate 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 benefit expense in the
statement of profit and loss.
• Actuarial gain / loss pertaining to above and other components of re-measurement of net defined benefit liability
(asset) are accounted for as OCI. All remaining components of costs are accounted for in statement of profit & loss.
ii) Defined Contribution Plans:
Defined contribution plans are Employee Provident Fund scheme and Employee State Insurance scheme for eligible
employees. The Company's contribution to defined contribution plans is recognised as an expense in the Statement of
Profit and Loss as they fall due.
2.14 Taxes
2.14.1 Current Taxes
Current tax comprises the expected tax payable or recoverable on the taxable profit or loss for the year and any adjustment
to the tax payable or recoverable in respect of previous years.
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 branch 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.
Income tax expense is recognized in the statement of profit and loss except to the extent that it relates to items recognized
directly in equity/OCI, in which case it is recognized in other comprehensive income. The company offsets current tax
assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it
intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
2.14.2 Deferred Taxes
Deferred income tax assets and liabilities are recognized for all temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets are recognised to the
extent that it is probable that taxable profit will be available against which the deductible temporary timing differences and
the carry forward of unused tax credits and unused tax losses can be utilised. Such assets are reviewed at each reporting
date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
Deferred tax assets are not recognised for temporary differences between the carrying amount and tax bases of investments
in subsidiaries where it is not probable that the differences will reverse in the foreseeable future and taxable profit will not
be available against which the temporary difference can be utilised.
Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and MAT credit entitlements
only if it is probable that future taxable amounts will be available to utilise those temporary differences, losses and credit.
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 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.
2.15 Foreign Currencies
The Company's functional currency is Indian Rupee (INR) and it is also the presentation currency for the Company.
Transactions in foreign currencies are initially recorded by the Company at the functional currency spot rate of exchange prevailing
on the date of the transaction. Monetary assets and monetary liabilities denominated in foreign currencies and remaining unsettled
at the end of the year are converted at the functional currency spot rate of exchange prevailing on the reporting date.
Differences arising on settlement or conversion of monetary items are recognised in statement of profit and loss. Non-monetary
items that are measured in terms of historical cost in a foreign currency are recorded using the exchange rates at the date of the
transaction except for the qualifying cash flow hedge, which are recognised in OCI to the extent that the hedges are effective.
2.16 Borrowing Cost
Borrowing cost includes interest, amortisation of ancillary costs incurred in connection with the arrangement of borrowings.
Borrowing costs, if any, directly attributable to the acquisition, construction or production of an asset that necessarily takes a
substantial period of time to get ready for its intended use or sale are capitalised, if any. All other borrowing costs are expensed in
the period in which they occur.
2.17 Leases
The Company evaluates if an arrangement qualifies to be a lease as per the requirements of Ind AS 116. Identification of a lease
requires significant judgment. The Company uses significant judgement in assessing the lease term (including anticipated renewals)
and the applicable discount rate.
The Company determines the lease term as the non-cancellable period of a lease, together with both periods covered by an option
to extend the lease if the Company is reasonably certain to exercise that option; and periods covered by an option to terminate
the lease if the Company is reasonably certain not to exercise that option. In assessing whether the Company is reasonably
certain to exercise an option to extend a lease, or not to exercise an option to terminate a lease, it considers all relevant facts and
circumstances that create an economic incentive for the Company to exercise the option to extend the lease, or not to exercise the
option to terminate the lease. The Company revises the lease term if there is a change in the non-cancellable period of a lease
The discount rate is generally based on the incremental borrowing rate specific to the lease being evaluated or for a portfolio of
leases with similar characteristics
The Company's lease asset classes primarily consist of leases for Land and Buildings and Plant & Machinery. The Company assesses
whether a contract is or 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 recognises a right-of-use asset ("ROU”) and a corresponding lease
liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short term leases)
and leases of low value assets. For these short term and leases of low value assets, the Company recognises the lease payments
as an operating expense on a straight line basis over the term of the lease. The right-of-use assets are initially recognised 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, if any. Right-of-use assets are depreciated from the commencement date on a straight-line
basis over the shorter of the lease term and useful life of the underlying asset.
The lease liability is initially measured at the present value of the future lease payments. The lease payments are discounted using
the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates. The lease liability is
subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount
to reflect the lease payments made.
A lease liability is remeasured upon the occurrence of certain events such as a change in the lease term or a change in an index or
rate used to determine lease payments. The remeasurement normally also adjusts the leased assets.
Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been classified as
financing cash flows.
2.18 Dividend
The Company recognises a liability for any dividend declared but not distributed at the end of the reporting period, when the
distribution is authorised and the distribution is no longer at the discretion of the Company on or before the end of the reporting
period. As per Corporate laws in India, a distribution is authorized when it is approved by the shareholders. A corresponding amount
is recognized directly in equity.
2.19 Earnings Per Share
Basic earnings per equity share are 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.
For the purpose of calculating diluted earnings per share, the net profit for the period attributed to equity shareholders and the
weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.
2.20 Business combinations
Business combinations involving entities that are controlled by the company or ultimately controlled by the same party or parties
both before and after the business combination, and where control is not transitory, are accounted for using the pooling of interests
method as follows:
The assets and liabilities of the transferred division/Company are reflected at their carrying amounts immediately prior to the
transfer.
No adjustments are made to reflect fair values, or recognise any new assets or liabilities. Adjustments are only made to harmonise
accounting policies.
The financial information of the transferred Company in respect of prior periods is restated as if the business combination had
occurred from the beginning of the preceding period in the financial statements, irrespective of the actual date of the combination,
however, where the business combination had occurred after that date, the prior period information is restated only from that date.
The difference between the carrying investment amount in ADF Foods (India) Limited and the carrying amounts of the net assets
acquired (as reduced by reserves) has been transferred to Capital reserve on account of common control business combination
and should be presented separately from other capital reserves.
3. 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. In May 2025, MCA notified amendments to Ind AS 21 - The Effects of
Changes in Foreign Exchange Rates, applicable w.e.f. April 1, 2025.
The Company has reviewed the amendment and based on its evaluation has determined that it does not have any significant impact
in its financial statements. In August 2025, MCA notified the following amendments to:
1. Ind AS 1, Presentation of Financial Statements, applicable w.e.f. April 1, 2025 - The amendment relates to classification of
liabilities as current or non-current and non-current liabilities with covenants. In the context of classifying a liability as current,
it removes the requirement of existence of a right to defer settlement for at least 12 months after the reporting date and
instead requires that the said right should exist on the reporting date and have substance. The amendment also introduces
guidance on classification of liabilities with covenants. The Company has no impact of these amendments in its classification
criteria of current and non-current liabilities.
2. Ind AS 7, Statement of Cash Flows and Ind AS 107, Financial Instruments: Disclosures, applicable w.e.f. April 1, 2025 - The
amendment in Ind AS 7 requires to inform users of financial statements of the existence of supplier finance arrangements and
explain the nature of the arrangements, the carrying amount of liabilities and the range of payment due dates. Ind AS 107 has
been amended to add supplier finance arrangements as a factor that may cause concentration of liquidity risk. The Company
does not have any supplier finance arrangements during the reporting period.
3. Ind AS 12, International Tax Reform - Pillar Two Model Rules applicable immediately - The amendments provide a temporary
mandatory relief from deferred tax accounting for top-up tax and disclose that they have applied the relief. This relief is
immediate and applies retrospectively (Refer note 23).
The below amendments are notified but not yet effective
Amendment to Ind AS 1 'Presentation of Financial Statements'- Classification of Liabilities as current or non-current and non-current
liabilities with covenants:
The amendment includes specific provisions that will take effect for reporting periods beginning on or after 1 April 2026,
retrospectively, as outlined below:
a) Breach of material covenant for long-term loan arrangement on or before end of reporting period with effect that liability
becomes payable on demand as on reporting date, then it shall be classified as current liability, if lender agreed after reporting
period and before approval of financial statements to not demand payment as a consequence of breach.
b) Classify as non-current liability, if lender agreed by end of reporting period to provide grace period ending at least 12 months
after reporting period within which entity can rectify the breach provided lender does not demand immediate repayment.
c) Disclose information about the timing of settlement to understand the impact of the liability on the financial statements. The
Group does not expect this amendment to have an impact on its operations or consolidated financial statements.
Nature of Reserves
(a) Capital reserve
The Company recognises profit and loss on purchase, sale, issue or cancellation of the Company's own equity instruments to capital
reserve.
(b) Capital redemption reserve
As per Companies Act, 2013, capital redemption reserve is created when company purchases its own shares out of free reserves
or securities premium. A sum equal to the nominal value of the shares so purchased is transferred to capital redemption reserve.
(c ) Securities Premium
Securities premium reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with the
provision of the Companies Act, 2013.
(d) General reserve
General reserve is created from time to time by way of transfer of profits from retained earnings for appropriation purposes. General
reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income.
(e) Retained earning
This represents surplus of profit and loss account.
(f) Cash flow hedge reserve
The Company uses hedging instruments as part of its management of foreign currency risk associated with its highly probable
forecast sale. For hedging foreign currency risk, the Company uses foreign currency forward contracts which are designated as
cash flow hedges.To the extent these hedges are effective; the change in fair value of the hedging instrument is recognised in the
cash flow hedging reserve. Amounts recognised in the cash flow hedging reserve is reclassified to profit or loss when the hedged
item affects profit or loss.
41. Disclosures made in terms of Schedule V of the SEBI (Listing Obligation and Disclosure Requirements)
Regulations, 2015
a. Advances to Subsidiaries
For disclosure of loans, investments and Guarantee- 'Refer Note 39'.
b. Deposits paid to related parties
Interest free security deposit of Rs. 6.50 lakhs (PY 2024-25: Rs. 7.00 lakhs), paid for guest house taken on lease from a Related
party.
42. Disclosures u/s 186(4) of the Companies Act, 2013
1) Details of investments made are disclosed under Note 5 & 11 and Guarantees are disclosed under note no. 39(a).
2) No Loan to related Party repayable on Demand.
3) No loans are due from Directors or other officers of the Company either severally or jointly with any other person or amount
due by firms or private companies in which any director is a partner, a director or a member.
43. Disclosures in respect of Ind AS 116 - Lease
The Company has applied discount rate between 7.00% to 9.00% to a portfolio of leases with reasonably similar characteristics.
The Company has treated the leases with remaining lease term of less than 12 months as if they were "short term leases”
The Company has not applied the requirements of Ind AS 116 for leases of low value assets.
Movement of right-of-use assets and depreciation is given in Note no. 4(a) and Interest on account of Ind AS 116 is given in Note
no. 35
The Company has entered into operating leases on its Land, office building and guest house. These leases have terms of between
3 and 99 years. All leases include a clause to enable upward revision of the rental charge on an annual basis according to prevailing
market conditions. Future minimum contractual rentals payable under non-cancellable operating leases as at March 31, 2026 are,
as follows.
For FY 2025-26
Total cash outflow is Rs. 506.02 Lakhs, which includes short term lease payment recognised in the Statement of Profit and Loss of
Rs.312.69 lakhs and 193.33 Lakhs related to lease premises on which IND AS 116 is applied.
For FY 2024-25
Total cash outflow is Rs. 465.71 Lakhs, which includes short term lease payment recognised in the Statement of Profit and Loss of
Rs.286.09 lakhs and Rs. 179.62 Lakhs related to lease premises on which IND AS 116 is applied.
The Company's hedging policy only allows for effective hedge relationships to be established. Hedge effectiveness is determined
at the inception of the hedge relationship and through periodic prospective effectiveness assessments to ensure that an economic
relationship exists between the hedged item and hedging instrument. The Company enters into hedge relationships where the
critical terms of the hedging instrument match exactly with the terms of the hedged item, and so a qualitative assessment of
effectiveness is performed. If changes in circumstances affect the terms of the hedged item such that the critical terms no longer
match exactly with the critical terms of the hedging instrument, the Company uses the hypothetical derivative method to assess
effectiveness.
Ineffectiveness is recognised on a cash flow hedge where the cumulative change in the designated component value of the
hedging instrument exceeds on an absolute basis the change in value of the hedged item attributable to the hedged risk. In hedges
of foreign currency forecast sale may arise if:
- The critical terms of the hedging instrument and the hedged item differ (i.e. nominal amounts, timing of the forecast transaction,
interest resets changes from what was originally estimated), or
- Differences arise between the credit risk inherent within the hedged item and the hedging instrument.
Refer Note -19 for the details related to movement in cash flow hedge reserve.
46. Employee Benefits
a. Defined contribution plans
Amount of Rs. 129.05 lakhs (PY 2024-25: Rs. 117.89 lakhs) representing contribution to provident fund is recognised as an expense
and is included in "Employee benefits expenses” in the Statement of Profit and Loss.
Amount of Rs. 9.54 lakhs (PY 2024-25: Rs. 9.33 lakhs) representing contribution to Employee State Insurance scheme is recognised
as an expense and is included in "Employee benefits expenses” in the Statement of Profit and Loss.
Amount of Rs. 0.24 lakhs (PY 2024-25: Rs. 0.24 lakhs) representing contribution to Labour Welfare fund is recognised as an
expense and is included in "Employee benefits expenses” in the Statement of Profit and Loss.
b. Defined benefit plan
Compensated absence
Provision for compensated absences is made for outstanding leave balance at the year end at salary cost which can be utilized in
future and are en-cashable. Amount of Rs. 233.42 lakhs (PY 2024-25: Rs. 146.20 lakhs) has been recognised in balance sheet of
which Rs. 210.76 lakhs (PY 2024-25: Rs. 130.82 lakhs) shown under long term provision and balance Rs. 22.66 lakhs (PY 2024-25:
Rs. 15.38 lakhs) is shown under short term provision as given in the Actuarial report as on March 31, 2026.
Expenses of Rs. 64.19 lakhs (PY 2024-25: Rs. 30.14 lakhs) are recognised in the Statement of Profit and Loss.
Compensated sick leave
Provision for compensated absences is made for outstanding sick leave balance at the year end at salary cost which can be utilized
in future and are non en-cashable. Amount of Rs. 38.29 lakhs (PY 2024-25: Rs. 30.30 lakhs) has been recognised in balance sheet
of which Rs. 33.27 lakhs (PY 2024-25: Rs. 26.09 lakhs) shown under long term provision and balance Rs. 5.02 lakhs (PY 2024-25:
Rs. 4.21 lakhs) is shown under short term provision as given in the Actuarial report as on March 31, 2026.
Expenses of Rs. 12.00 lakhs (PY 2024-25: Rs. 5.95 lakhs) are recognised in the Statement of Profit and Loss.
Gratuity
Funded
The Company has offered its employees defined benefit plan in the form of Group Gratuity Scheme. Gratuity Scheme covers
all qualifying employees as statutorily required under the Payment of Gratuity Act, 1972. The Company has made irrevocable
contribution of funds to LIC of India.
The present value of the defined benefit obligation and the related current service cost is measured using the Projected Unit Credit
method, with actuarial valuations being carried out at each Balance Sheet date.
The present value of the defined benefit obligation and the related current service cost is measured using the Projected Unit
Credit method, with actuarial valuations being carried out at each Balance Sheet date.
48. As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its
average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas
for CSR activities are eradication of hunger and malnutrition, promoting education, art and culture, healthcare, destitute care and
rehabilitation, environment sustainability, disaster relief and rural development projects. A CSR committee has been formed by the
company as per the Act. The funds were primarily allocated to a corpus and utilized through the year on these activities which are
specified in Schedule VII of the Companies Act, 2013
49. The Company held majority shareholding in Power Brands (Foods) Private Limited ('PBFPL'). It presently holds 2,08,85,992 fully paid
Equity Shares of Rs. 10/- each (including 20,75,992 Equity shares acquired at Rs. 330.08 lakhs in Financial Year 2012-13). PBFPL is
presently under voluntary liquidation process.
Pursuant to a special resolution passed on November 5, 2012 by its members, PBFPL went into the members' voluntary liquidation.
In the course of liquidation process, the voluntary liquidator, with the prior approval of the members vide their special resolution
dated March 8, 2013, distributed PBFPL's intangible asset - Ashoka brand and part of cash and bank balance to its Shareholders in
proportion to their respective shareholding in PBFPL while retaining certain other fixed and current assets to meet its contingent
and other liabilities.
By virtue of the above distribution, the Company received Ashoka brand in the financial year 2012-13 (valued at Rs. 2,935.99
lakhs by an independent valuer) in lieu of its investment in PBFPL's equity shares of Rs. 2,211.08 lakhs. Accordingly, the Company
capitalised the said brand in its books at Rs. 2,935.99 lakhs in the said financial year after adjusting the same against the investment
value of Rs. 2,211.08 lakhs and carried the balance of Rs. 724.91 lakhs to the credit of the Statement of Profit and Loss as an
exceptional item in that year.
During the Financial Year 2012-13, the voluntary liquidator, with the prior approval of the members vide their special resolution dated
10th November 2014, distributed PBFPL's immovable property situated at Sewree, Mumbai and part of cash and bank balance to
its Shareholders in proportion to their respective shareholding in PBFPL while retaining certain other current assets to meet with its
contingent and other liabilities. The excess value of assets so received over the investment value in Equity Shares of PBFPL was
accounted for in the Company's Statement of Profit & Loss under the head exceptional item.
Consequently, the investment in Equity Shares of PBFPL stand fully realised. However, pending completion of liquidation process,
the Company has not surrendered the said shares to the Voluntary liquidator and they have been shown under the head "Investment”
at nil value.
50. Financial instruments - Fair values and risk management
Accounting classification and fair values
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the
Fair Value Hierarchy
The fair value of financial instruments as referred to in note above have been classified into three categories depending on the
inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active markets for identical
assets or liabilities (Level 1 measurements) and lowest priority to unobservable inputs (Level 3 measurements).
The categories used are as follows:
• Level 1: Quoted prices for identical instruments in an active market;
• Level 2: Directly or indirectly observable market inputs, other than Level 1 inputs; and
• Level 3: Inputs which are not based on observable market data.
Calculation of Fair Values
The fair values of the financial assets and liabilities are defined as the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at the measurement date. Methods and assumptions used
to estimate the fair values are consistent with prior years.
Financial assets and liabilities measured at fair value as at Balance Sheet date:
1. The fair values of investments in mutual fund units is based on the net asset value ('NAV') as stated by the issuers of these
mutual fund units in the published statements as at Balance Sheet date. NAV represents the price at which the issuer will issue
further units of mutual fund and the price at which issuers will redeem such units from the investors.
2. The fair values of the derivative financial instruments have been determined using valuation techniques with market observable
inputs. The models incorporate various inputs including the credit quality of counter-parties and foreign exchange forward
rates.
3. Loans - Security Deposits have fair values that approximate to their carrying amounts as it is based on the net present value of
the anticipated future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities.
51. Financial Risk Management
The Company's activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company's primary focus
is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.
The primary market risk to the Company is foreign exchange risk. The Company uses derivative financial instruments - foreign
currency forward contracts to mitigate foreign exchange related risk exposures. The Company's exposure to credit risk, excluding
receivables from related parties, is influenced mainly by the individual characteristic of each customer.
(i) Credit Risk
Credit risk arises from trade receivables, cash and cash equivalents and deposits with banks and financial institutions.
Credit risk refers to the risk of default on its obligation by the counter party resulting in a financial loss. Credit risk is managed on a
financial asset basis. For banks and financial institutions, only high rated banks/institutions are accepted.
Company's maximum exposure to credit risk for each class of financial asset is the carrying amount of the financial assets recognised
in the statement of financial position.
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 ongoing basis throughout 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 at the date
of initial recognition. It considers available reasonable and supportive forwarding-looking information. Especially the following
indicators are incorporated:
- Historical trend default in case of applicable financial asset
- Actual or expected significant adverse changes in business, financial or economic conditions that are expected to cause a
significant change to the counter party's ability to meet its obligations
- Other applicable macroeconomic information such as regulatory changes
A default on a financial asset is when the counter party fails to make contractual payments within agreed credit terms from the date
when they fall due. This definition of default is determined by considering the business environment in which entity operates and
other macro-economic factors.
The maximum exposure to the credit risk at the reporting date is primarily from trade receivables amounting to Rs.15,630.04 lakhs
(PY March 31, 2025 - Rs. 11,586.93 lakhs) shown as current as at reporting date. Trade receivables are typically unsecured. Credit
risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers
to which the Company grants credit terms in the normal course of business. The Company expects that estimate of expected credit
loss for impairment is immaterial based on historical trend and the nature of business. No provision is considered necessary as at
reporting date other than disclosed in Note 12 and Management continuously assesses the requirement for provision on ongoing
basis. During the year, the Company has made no write-offs of trade receivables.
(ii) 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 Management regularly monitors rolling forecasts of the Company's liquidity position on the basis of expected cash flows to
ensure it has sufficient cash to meet ongoing operational fund requirements.
(iii) Currency Risk
The Company operates internationally and is exposed to foreign exchange risk arising from foreign currency transactions, primarily
with respect to the USD and GBP. Foreign exchange risk arises from future commercial transactions and recognised assets and
liabilities denominated in a currency that is not the Company's functional currency. The risk is measured through a forecast of
highly probable foreign currency cash flows. The objective of the hedges is to minimize the volatility of the INR cash flows of highly
probable forecast transactions.
The company's risk management policy is to consider 100% of forecasted net exposures for period of 1 to 3 months of export sales
and 70% of forecasted net exposures for 4 to 12 months of export sales for hedge purpose under hedge program.
In accordance with its risk management policies and procedures, the Company uses foreign currency forward contracts to hedge its
risks associated with foreign currency fluctuations relating to highly probable forecasted transactions. When derivative is entered
into for the purpose of being a hedge, the Company negotiates the terms of those derivatives to match the terms of the hedge
exposure and assesses the effectiveness of the hedged item and hedging relationship based on economic relationship.
The carrying amount of the Company's exposure to foreign currency at the end of the reporting period expressed in INR, are as
follows:
52. The Company is primarily engaged in the business of manufacturing and trading of processed foods. There is no separate reportable
segment as per Ind AS 108 - Operating Segments for standalone financial statements for the year ended March 2026.
53. During any point of time of the year, the Company has been sanctioned working capital limits in excess of Rs. 5 crores rupees, in
aggregate from Banks on the basis of security of current assets.
The Company has availed the facility of packing credit and as on March 31, 2026, there is no overdrawn amount.
The Quarterly returns filed by the Company with Banks are in agreement with Books of Accounts.
Further, during any point of time of the year, the Company has not been sanctioned working capital limits from financial institutions,
on the basis of security of current assets.
54. The Board of Directors in its meeting held 13 May, 2026 declared a Final Dividend of Rs. 0.60/- per share (i.e. 30%) on equity shares
of the Company of face value of Rs. 2 /- (Rupees Two Only) each for the Financial Year 2025-26. On November 07, 2025, the Board
had declared an interim dividend of Rs. 0.60 per equity share (i.e. 30%) which was paid to the eligible shareholders. Accordingly, the
total dividend for the Financial Year 2025-26 amounts to Rs. 1.20 per equity share (i.e. 60% on the face value of Rs. 2/- per share).
55. The Regional Director, Gujarat, has approved the scheme of amalgamation of ADF Foods (India) Limited, a step-down subsidiary,
with Telluric Foods Limited, another step-down subsidiary of the Company on April 01, 2026, with an appointed date of October
01, 2025. Pursuant to the Scheme, the equity shares held by Telluric Foods Limited in ADF Foods (India) Limited stand cancelled,
and no shares or consideration are payable. Accordingly, in line with Ind AS 103 - "Business Combinations” applicable to common
control transactions, the amalgamation has been accounted for using the pooling of interest method.
Other than disclosed above, the company has not entered into any scheme of arrangement which has an accounting impact in the
current or previous financial year.
56. The Gujarat Pollution Control Board (GPCB) had issued closure directions dated 11 April 2025 in respect of the Company's two
manufacturing units situated at Nadiad for alleged non-compliance with certain provisions of the Water (Prevention and Control of
Pollution) Act, 1974. Subsequently, based on the Company's representation, GPCB revoked the closure directions with effect from
28 April 2025, subject to fulfillment of certain conditions.
The Company undertook the necessary compliance measures and, on 19 November 2025, GPCB permanently revoked the aforesaid
closure directions. During the intervening period, both manufacturing units remained fully operational and there was no impact on
the Company's production activities, operations, financial performance, cash flows or any other business activities.
Accordingly, the matter stands resolved and both manufacturing units continue to operate normally as on the date of approval of
these financial statements.
57. Labour code:
Pursuant to the notification issued by the Ministry of Labour and Employment, multiple existing labour legislations have been
consolidated into a unified framework comprising four Labour Codes collectively referred to as the 'New Labour Codes' which
became effective from November 21, 2025. The Group has reassessed its employee benefit obligations in accordance with the
revised definition of wages. Accordingly, an incremental liability of Rs. 683.00 lakhs have been recognised as an "Exceptional Item”
for the year ended March 31, 2026. The management will continue to track and evaluate the impact of the rules notified by the
central/state government post March 31, 2026, and consider the appropriate accounting effect in the relevant period, as needed.
58. The Company is closely monitoring developments regarding the imposition of tariffs by the United States Government on imports of
processed foods. The Company is actively engaging with its customers through various strategies to manage the potential impact
on its financial position. Given the evolving nature of the situation, the Company will continue to assess the developments and
review its strategies periodically. For the year ended March 2026, these developments had no material impact on the Company's
standalone financial statement.
59. There are no other subsequent events that occurred after the reporting date that require adjustment to the disclosure in the
standalone financial statement.
60. The Company has advanced or loaned or invested (either from borrowed funds or share premium or any other source of funds)
to other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing
or otherwise) that the intermediary shall whether directly or indirectly lend or invest in other persons or entities identified in any
manner whatsoever by or behalf of the company (Ultimate Beneficiaries) or provide any guarantee, security or like on or 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 either 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 provide any
guarantee, security or the like on behalf of the Ultimate Beneficiaries.
61. No transactions to report against the following disclosure requirements as notified by MCA pursuant to amended Schedule III:
a) Crypto Currency or Virtual Currency
b) Benami Property held under Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder
c) Registration of charges or satisfaction with Registrar of Companies
62. The Company did not have any transactions with companies struck off under Section 248 of the Companies Act, 2013 or Section
560 of Companies Act, 1956.
63. The company did not have any transactions not recorded in books of accounts that has been surrendered or disclosed as income
during the year in tax assessments under the Income Tax Act, 1961.
64. The company has compiled with the number of layers prescribed under section 2(87) of the companies Act, 2013 with the
Companies (Restriction on Number of Layers) Rules, 2017.
65. The Company has used an accounting software for maintaining its books of account which has a feature of recording audit trail (edit
log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. Further, there is
no instance of audit trail feature being tampered with. Additionally, the audit trail of prior years has been preserved by the Company
as per the statutory requirements for record retention.
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