n) Provisions
Provisions are recognized 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. When the
Company expects some or all of a provision
to be reimbursed, for example, under an
insurance contract, the reimbursement
is recognized as a separate asset, but
only when the reimbursement is virtually
certain. The expense relating to a provision
is presented in the Statement of profit and
loss net of any reimbursement.
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 increase in the
provision due to the passage of time is
recognized as interest expense.
Provisions are reviewed at each balance
sheet date and adjusted to reflect the
current best estimate. If it is no longer
probable that the outflow of resources
would be required to settle the obligation,
the provision is reversed.
o) Earnings per share
Basic earnings per share is calculated
by dividing the net profit or loss for the
period attributable to equity shareholders
(after deducting attributable taxes) by
the weighted average number of equity
shares outstanding during the period. The
weighted average number of equity shares
outstanding during the period is adjusted
for events including a bonus issue.
For the purpose of calculating diluted
earnings per share, the net profit or
loss for the period attributable to equity
shareholders and the weighted average
number of shares outstanding during the
period are adjusted for the effects of all
dilutive potential equity shares.
Potential ordinary shares shall be treated
as dilutive when, and only when, their
conversion to ordinary shares would
decrease earnings per share or increase
loss per share from continuing operations.
p) Taxes
Current income tax
Current income tax assets and liabilities
are measured at the amount expected to
be recovered from or paid to the taxation
authorities. The tax rates and tax laws used
to compute the amount are those that
are enacted or substantively enacted, at
the reporting date in the countries where
the Company operates and generates
taxable income.
Current income tax relating to items
recognized outside profit or loss is
recognized outside profit or loss (either
in other comprehensive income or in
equity). Current tax items are recognized
in correlation to the underlying
transaction either in OCI or directly
in equity. Management periodically
evaluates positions taken in the tax
returns with respect to situations in which
applicable tax regulations are subject to
interpretation and establishes provisions
where appropriate.
Deferred tax
Deferred tax is the tax expected to be
payable or recoverable on differences
between the carrying value of assets
and liabilities in the financial statements
and the corresponding tax base used
in computation of taxable profit and is
accounted for using the balance sheet
liability method.
Deferred tax liabilities are recognized
for all taxable temporary differences
and deferred tax assets are recognized
for all deductible temporary differences.
Deferred tax assets are recognized to
the extent that it is probable that taxable
profit will be available against which the
deductible temporary differences, and the
carry forward of unused tax credits and
unused tax losses can be utilized. Deferred
tax relating to items recognized outside
profit or loss is recognized outside profit
or loss (either in other comprehensive
income or in equity). Deferred tax items
are recognized in correlation to the
underlying transaction either in OCI or
directly in equity.
The carrying amount of deferred tax
assets is reviewed at each reporting date
and reduced to the extent that it is no
longer probable that sufficient taxable
profit will be available to allow all or part
of the deferred tax asset to be utilized.
Unrecognized deferred tax assets are
re-assessed at each reporting date and
are recognized to the extent that it has
become probable that future taxable
profits will allow the deferred tax asset
to be recovered.
Current tax assets and current tax
liabilities are offset when there is a legally
enforceable right to set off the recognised
amounts and there is an intention to settle
the asset and the liability on a net basis.
Deferred tax assets and deferred tax
liabilities are offset when there is a legally
enforceable right to set off current tax
assets against current tax liabilities; and
the deferred tax assets and the deferred
tax liabilities relate to income taxes levied
by the same taxation authority.
q) Government grants and subsidies
Government grants are recognized where
there is reasonable assurance that the grant
will be received and all attached conditions
will be complied with. When the grant
relates to an expense item, it is recognized
as income on a systematic basis over the
periods that the related costs, for which it
is intended to compensate, are expensed.
When the grant relates to an asset, it is
recognized as income in equal amounts over
the expected useful life of the related asset.
r) Segment reporting
In terms of Paragraph 4 of Ind AS 108
'Operating Segments', entity wide
disclosures have been presented in the
consolidated financial statements.
s) Financial guarantee contracts
Financial guarantee contracts issued by the
Company are those contracts that require
a payment to be made to reimburse the
holder for a loss it incurs because the
specified debtor fails to make a payment
when due in accordance with the terms of
a debt instrument.
Commission charged from the entity on
whose behalf the guarantee has been
issued is taken as corporate guarantee
charges in the Statement of profit and loss.
t) Cash and cash equivalents
Cash and cash equivalent in the standalone
balance sheet comprise cash at banks
and on hand and short-term deposits with
an original maturity of three months or
less, which are subject to an insignificant
risk of changes in value.
u) Contingent liabilities
A contingent liability is a possible
obligation that arises from past events
whose existence will be confirmed by the
occurrence or non-occurrence of one or
more uncertain future events beyond
the control of the Company or a present
obligation that is not recognized because it
is not probable that an outflow of resources
will be required to settle the obligation. A
contingent liability also arises in extremely
rare cases where there is a liability that
cannot be recognized because it cannot be
measured reliably. The Company does not
recognize contingent liability but discloses
its existence in the financial statements.
v) Significant management judgement
in applying accounting policies and
estimation uncertainty
The following are the critical judgments
and the key estimates concerning the
future that management has made in
the process of applying the Company's
accounting policies and that may have the
most significant effect on the amounts
recognized in the financial statements
or that have a significant risk of causing
a material adjustment to the carrying
amounts of assets and liabilities within the
next financial year.
a. Impairment of trade receivables -
The impairment for trade receivables
reflects management's estimate of
losses inherent in its credit portfolio.
This allowance is based on Company's
estimate of the losses to be incurred,
which derives from past experience
with similar receivables, current and
historical past due amounts, write¬
offs and collections, the careful
monitoring of portfolio credit quality
and current and projected economic
and market conditions. Should the
present economic and financial
situation persist or even worsen,
there could be a further deterioration
in the financial situation of the
Company's debtors compared to that
already taken into consideration in
calculating the allowances recognized
in the financial statements.
b. Defined benefit obligation (DBO)
- Management's estimate of the
DBO is based on a number of critical
underlying assumptions such as
standard rates of inflation, mortality,
discount rate and anticipation of
future salary increases. Variation in
these assumptions may significantly
impact the DBO amount and the
annual defined benefit expenses.
c. Evaluation of indicators for
impairment of assets - Th e
evaluation of applicability of indicators
of impairment of assets requires
assessment of several external and
internal factors which could result
in deterioration of recoverable
amount of the assets.
d. Recognition of deferred tax assets
- The extent to which deferred tax
assets can be recognized is based on
an assessment of the probability of the
future taxable income against which
the deferred tax assets can be utilized.
e. Contingent liabilities - The Company
is the subject of legal proceedings
and tax issues covering a range of
matters, which are pending in various
jurisdictions. Due to the uncertainty
inherent in such matters, it is difficult
to predict the final outcome of
such matters. The cases and claims
against the Company often raise
difficult and complex factual and
legal issues, which are subject to
many uncertainties, including but not
limited to the facts and circumstances
of each particular case and claim,
the jurisdiction and the differences
in applicable law. In the normal
course of business, management
consults with legal counsel and
certain other experts on matters
related to litigation and taxes. The
Company accrues a liability when it is
determined that an adverse outcome
is probable and the amount of the
loss can be reasonably estimated.
f. Inventory - The valuation of
finished rice involves estimations
around determination of overhead
absorption rates, rice yield from
paddy and quantum of purchased rice
and manufactured rice forming part
of closing inventory. The production
process also involves ageing the
paddy/ rice to achieve the desired
quality of rice and thus calculation
of holding period and determination
of weighted average borrowing cost
involves management estimation.
Further, management estimates the
net realisable values of inventories
including by- products, taking into
account the most reliable evidence
available at each reporting date.
g. Impairment of Investments- The
Company estimates the value in use of
the investments based on the future
cash flows after considering current
economic conditions and trends,
estimated future operating results
and growth rates and anticipated
future economic and regulatory
conditions. The estimated cash flows
are developed using internal forecasts.
The cash flows are discounted using
a suitable discount rate in order to
calculate the present value. Further
details of the Company's impairment
review and key assumptions are
set out in note 4 of accompanying
financial statements.
Footnote:
The Company holds long-term investments in subsidiaries, associates, and a joint venture, which are measured at
cost less accumulated impairment losses. During the year ended March 31,2025, the Company evaluated indicators
of impairment in respect of its investment in Kameda LT Foods (India) Private Limited ("the Joint Venture"), considering
recurring operational losses and the outlook for future profitability.
Management assesses the carrying value of such investments by considering entity-specific financial projections,
current and anticipated economic and market conditions, and other relevant factors. Where indicators of impairment
are present, the recoverable amount is determined using a 'value-in-use' model based on discounted cash flow
projections. These projections are prepared using key assumptions, including volume forecasts, margins, terminal
growth rates, and associated risks in the operating environment. The discount rate applied reflects a pre-tax weighted
average cost of capital that captures the market's assessment of risks specific to the investment and the time
value of money.
As of March 31,2025, based on an independent valuation report and management's assessment, the estimated value-
in-use of the Joint Venture exceeds its carrying amount. However, in line with the Company's accounting policy and
in the absence of objective evidence to support reversal under the applicable accounting framework, the impairment
loss previously recognized has not been reversed.
The value-in-use calculation is based on future cash flows projected over an eight-year period, applying a terminal
growth rate of 4% (March 31,2024: 5%) and a pre-tax weighted average cost of capital of 23.60% (March 31,2024: 20.90%).
Accordingly, the Company did not record any further impairment provision for the year ended March 31,2025 (March
31,2024: f 405.91 million).
Impact of possible changes in key assumptions
The value-in-use of the Joint Venture is determined based on discounted cash flow projections, which involve significant
management judgement, estimates, and assumptions. While the estimated value-in-use as at March 31,2025 exceeds
the carrying value and no reversal of impairment has been recognised, the outcome remains sensitive to changes in
key valuation inputs.
If the weighted average cost of capital applied to the cash flow projections had been 1% higher, with all other
assumptions held constant, the reversal of impairment loss would have been lower by approximately f 140.93.
For March 31, 2024, had the weighted average cost of capital been higher by 1%, the Company would have had to
recognise additional impairment loss of f 169.40
If the terminal growth rate applied to the cash flow projections had been 1% lower, with all other assumptions held
constant, the reversal of impairment loss would have been lower by approximately f 58.41. For March 31, 2024,
had the terminal growth rate been lower by 1%, the Company would have had to recognise additional impairment
loss of f 93.21.
Nature and purpose of other reserves
Retained earnings
Retained earnings are the profits that Company has earned till date less transfers to general reserve dividends or
other distributions paid to shareholders. It includes re-measurement (loss)/ gain on defined benefit plans (net of
taxes) that will not be reclassified to the statement of profit and loss.
General reserve:
The Company had transferred a portion of the net profit before declaring dividend to general reserve pursuant
to the earlier provision of Companies Act 1956. Mandatory transfer to general reserve is not required under the
Companies Act, 2013.
Securities premium reserve:
Securities premium reserve represents premium received on issue of shares. The reserve is to be utilized in accordance
with the provisions of the Companies Act.
Footnote:-
a. The Company has pending appeals before the Income Tax Appellate Tribunal (ITAT) for the assessment years
2010-11 and 2012-13 to 2014-15. For these years, no relief was granted by the Commissioner of Income Tax
(CIT) (Appeals) in respect of matters amounting to f 754.74 (March 31,2024: f 754.74).
The Company had appeals for assessment years 2003-04 and 2007-08 to 2009-10 amounting to f 57.54 and f
458.41 (March 31,2024: f 57.54 and f 458.41) respectively, against which the Income Tax Appellate Tribunal
(ITAT) has passed orders in favour of the Company. However, the appeal effect is yet to be processed by the
Ld. Assessing Officer.
The Company in previous years has received demand order under section 271(1)(c) of the Income Tax Act
for the assessment year 1999-00 amounting to f 36.27 (March 31, 2024: f 36.27) against which an appeal
before the Income Tax Appellate Tribunal (ITAT) has been filed. Further, the Company has also received
demand order for assessment year 2010-11, amounting to f 177.43 (March 31, 2024: f 177.43) against
which an appeal before the Commissioner of Income Tax (CIT) (Appeals) has been filed. The outcome of such
appeals is pending.
The Company during the financial year 2019-20, has received demand under section 147 of the Income Tax
Act for the assessment year 2015-16 amounting to f 466.81 (March 31, 2024: f 466.81) against which the
Commissioner of Income Tax (CIT) (Appeals) has passed an order dated February 26, 2024 in favour of the
Company allowing the claim of the Company, but the Income Tax Department has further filed an appeal
before the Income Tax Appellate Tribunal (ITAT). The outcome of such appeal is pending.
The Company during the financial year 2021-22, has received demand under section 143(3) of the Income
Tax Act for the assessment year 2017-18 amounting to f 599.12 (March 31, 2024: f 599.12) against which
an appeal before the Commissioner of Income Tax (CIT) (Appeals) has been filed. The outcome of such
appeal is pending.
The Company in previous years has received demand order under section 143(3) of the Income Tax Act for
the assessment year 2018-19 amounting to f 375.57 (March 31, 2024: f 375.57) against which an appeal
before the Income Tax Appellate Tribunal (ITAT) has been filed. The outcome of such appeal is pending.
The Company in previous years has received revised demand order vide dated May 17, 2023 and February
06, 2024 for assessment years 2014-15 and 2015-16 under section 147 amounting to f 20.59 (March 31,2024:
f 20.59) and f 350.14 (March 31, 2024: f 350.14) respectively, against which the Commissioner of Income
Tax (CIT) (Appeals) has passed an order in favour of the Company allowing the claim of the Company, but
the Income Tax Department has further filed an appeal before the Income Tax Appellate Tribunal (ITAT). The
outcome of such appeal is pending.
The Company during the current year has received an order under Section 143(3) of the Income Tax Act for
the assessment years 2020-21, with a tax effect amounting to f 309.17 (March 31,2024: Nil), against which an
appeal before the Income Tax Appellate Tribunal (ITAT) has been filed. The outcome of such appeal is pending.
The Company during the current year has received demand order under Section 143(3) of the Income Tax Act
for the assessment year 2021-22 amounting to f 310.68 (March 31,2024: Nil), against which an appeal before
the Income Tax Appellate Tribunal (ITAT) has been filed. The outcome of such appeal is pending.
The Company during the current financial year, has received demands under Section 201(1) of the Income
Tax Act for the assessment year 2017-18 to 2019-20 amounting to f 49.41 (March 31, 2024: f Nil) against
which appeals before the Commissioner of Income Tax (CIT) (Appeals) has been filed. The outcome of such
appeal is pending.
The Company has paid f 1,651.26 (March 31, 2024: f 1,651.26) as per the directions of the Income Tax
Department against the outstanding demands of various assessment years and the same will be adjusted/
refunded, once the appeals are finalised. The amount paid includes f 631.95 lakhs deposited against cases
in respect of which favourable order has been received.
The Company is confident that its position is likely to be upheld in the appeals pending before various
appellate authorities and no liability could arise on account of these proceedings.
b. An Order dated January 27, 2025, has been passed by the Additional Commissioner, Central Goods and
Services Tax, Delhi South Commissionerate, raising a GST demand (including penalty) of f 358.32. The
Company has filed an appeal against this order before the Commissioner (Appeals-II), Central Goods and
Services Tax. The outcome of such appeal in pending.
Another Order dated February 4, 2025, has been issued by the Superintendent, Central Tax, Bangalore
North West Commissionerate, raising a GST demand (including penalty) of f14.29 (March 31,2024: Nil). An
appeal has been filed before the Joint/Additional Commissioner (Appeals), Central Tax. The outcome of such
appeal in pending.
The Company is confident that that the demands aggregating to f372.61 will be set aside by the
appellate authorities.
c. The guarantees given by LT Foods Limited on behalf of related parties against the loan availed by such
companies for their business purposes.
(B) Capital commitments
Capital commitments remaining to be executed and not provided for, net of capital advances f 980.99 (March 31,
2024: f 75.36).
42 Segment information
In terms of Paragraph 4 of Ind AS 108 'Operating Segments', entity wide disclosures have been presented in the
consolidated financial statements.
43 Transfer pricing
As per the international transfer pricing norms introduced in India with effect from April 01, 2001, the Company is
required to use certain specified methods in computing arm's length price of international transactions between
the Company and its associated enterprises and maintain prescribed information and documents relating to such
transactions. The appropriate method to be adopted will depend on the nature of transactions/ class of transactions,
class of associated persons, functions performed and other factors, which have been prescribed. The management
confirms that all international transactions with associate enterprises are undertaken at negotiated contracted prices
on usual commercial terms. The Company is in the process of conducting a transfer pricing study for the current
financial year. However, in the opinion of the Management the same would not have a material impact on these
standalone financial statements as the transactions between the Company and its associated enterprises are at arms
length. Accordingly, these financial standalone statements do not include any adjustments for the transfer pricing
implications, if any.
A Gratuity
The Company provides gratuity for employees in India as per the Payment of Gratuity Act, 1972. The planned
assets are managed by Life Insurance Corporation of India. 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 employees
last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years
of service. For the funded plan the Company makes contributions to recognized funds in India. 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 above sensitivity analysis are based on a change in an assumption while holding all other assumptions
constant. In practice, this is unlikely to occur and changes in some of the assumptions may be correlated.
When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the
same method (present value of the defined benefit obligation calculated with the projected unit credit
method at the end of the reporting period) has been applied which was applied while calculating the defined
benefit obligation liability recognised in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared
to prior period.
Notes:
1 The discount rate is based on the prevailing market yields of Indian Government securities as at the
balance sheet date for the estimated term of obligations.
2 The estimates of future salary increases considered takes into account the inflation, seniority, promotion
and other relevant factors on long term basis.
C Provident fund and ESI fund
Contribution made towards provident fund by the Company during the year is f 283.25 (March 31,2024: f 255.92)
Contribution made towards ESI fund by the Company during the year is f 14.41 (March 31,2024: f 17.23)
ii) Fair values hierarchy
Financial assets and financial liabilities measured at fair value in the balance sheet are categorised into three
levels of fair value hierarchy. The three levels are defined based on the observability of significant inputs to the
measurement, as follows:
Level 1: Quoted prices (unadjusted) in active markets for financial instruments.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the-
counter derivatives) is determined using valuation techniques which maximise the use of observable market
data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an
instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is
included in level 3.
There are no financial liabilities as at March 31,2024 which have been measured at fair value.
Valuation process and technique used to determine fair value
(i) Key man insurance policy fair value is based on surrender value stated by Life Insurance Corporation of
India, Max New York Life Insurance Company Limited, SBI Life Insurance Company Limited, Star Union Dai-
Ichi Life Insurance and Canara HSBC OBC Life Insurance.
(ii) The Company does not have any significant investments in equity instruments, hence no fair value
adjustments have been made.
(iii) Foreign exchange forward contracts and foreign exchange option contracts are valued using valuation
techniques, which employs the use of market observable inputs. The most frequently applied valuation
techniques include forward pricing models, using present value calculations. The models incorporate various
inputs including the credit quality of counterparties, foreign exchange spot and forward rates etc.
The carrying value of loans, trade receivables, cash & cash equivalents, other bank balances, other financial
assets, lease liabilities and other financial liabilities approximate their fair value largely due to the short-term
maturities of these instruments. The fair value of the financial assets and liabilities are estimated at the amount at
which the instrument could be exchanged in a current transaction between willing parties, other than in a forced
or liquidation sale.
All the borrowing facilities (other than vehicles loans) availed by the Company are variable rate facilities which are
subject to changes in underlying Interest rate indices. Further, the credit spread on these facilities are subject to
change with changes in Company's creditworthiness. The management believes that the current rate of interest on
these loans are in close approximation from market rates applicable to the Company. Therefore, the management
estimates that the fair value of these borrowings are approximate to their respective carrying values.
48 Financial risk management
(i) Risk management framework
The Company's activities expose it to market risk, liquidity risk and credit risk. This note explains the sources of
risk which the Company is exposed to and how the Company manages the risk and the related impact in the
financial statements. 'The Company does not have any significant investments in equity instruments which create
an exposure to price risk.
The Company's risk management is carried out by a central treasury department (of the Company) under
policies approved by the board of directors. The board of directors provides written principles for overall risk
management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit
risk and investment of excess liquidity.
A) 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. The Company is exposed to credit risk principally from the trade
receivables and other financial assets including cash & bank balances and loans. The carrying amount of
financial assets represents the maximum credit exposure.
Cash and cash equivalents and other bank balances
Credit risk related to cash and cash equivalents and bank deposits is managed by only accepting highly rated
banks and diversifying bank deposits and accounts in different banks.
Trade receivables
The Company closely monitors the creditworthiness of the debtors through internal systems that are
configured to define credit limits of customers, thereby, limiting the credit risk to pre-calculated amounts.
The Company assesses increase in credit risk on an ongoing basis for amounts receivable that become past
due and default is considered to have occurred when amounts receivable become past due one year.
Other financial assets measured at amortised cost
Other financial assets measured at amortised cost includes loans and advances to employees, security
deposits and others. Credit risk related to these other financial assets is managed by monitoring the
recoverability of such amounts continuously, while at the same time internal control system in place ensure
the amounts are within defined limits.
b) Expected credit losses
Expected credit losses for financial assets other than trade receivables
The Company provides for expected credit losses on financial assets other than trade receivables by
assessing individual financial instruments for expectation of any credit losses. Since, the Company deals
with only high-rated banks and financial institutions, credit risk in respect of cash and cash equivalents,
other bank balances and bank deposits is evaluated as very low. In respect of other financial assets,
credit risk is evaluated based on Company's knowledge of the credit worthiness of those parties and loss
allowance is measured as lifetime expected credit losses. The Company does not have any expected loss
based impairment recognised on such assets considering their low credit risk nature, though incurred
loss provisions are disclosed under each sub-category of such financial assets.
B) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the
availability of funding through an adequate amount of committed credit facilities to meet obligations
when due. Due to the nature of the business, the Company maintains flexibility in funding by maintaining
availability under committed facilities.
Management monitors rolling forecasts of the Company's liquidity position and cash and cash equivalents
on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the
Company operates.
a) Financing arrangements
The Company had access to the following undrawn 'fund based' borrowing facilities at the end of the
reporting period:
b) Maturities of financial liabilities
The tables below analyse the Company's financial liabilities into relevant maturity of the Company based
on their contractual maturities for all non-derivative financial liabilities.
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12
months equal their carrying balances as the impact of discounting is not significant.
C) Market risk
Market risk is the risk that changes in market prices - such as foreign exchange rates and interest rates
- will affect the Company's income or the value of its holdings of financial instruments. The objective of
market risk management is to manage and control market risk exposures within acceptable parameters,
while optimizing the return.
1) Foreign currency risk
The Company is exposed to foreign exchange risk arising from foreign currency transactions, primarily
with respect to the US Dollar, Euro and other foreign currencies. 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 (INR). The risk is measured through a forecast of highly probable
foreign currency cash flows. The objective of the hedges is to minimise the volatility of the INR cash
flows of highly probable forecast transactions.
The Company's policy is to hedge all material foreign exchange risk associated with highly probable
forecast sales transactions denominated in foreign currencies that are expected to occur within a
maximum 12-month period. The Company uses combination of pre-shipment credit in foreign currency
(PCFC), forward contracts and foreign currency option contracts (derivative instruments) to hedge its
exposure in foreign currency risk.
Sensitivity
A reasonably possible strengthening (weakening) of the Euro, US dollar, GBP and CHF against all other currencies at
March 31,2025 and March 31,2024 would have affected the measurement of financial instruments denominated
in a foreign currency and affected equity and profit or loss by the amounts shown below. Further, the sensitivity
of profit or loss to changes in the exchange rates arises mainly from foreign currency denominated financial
instruments and the impact on other components of equity arises from foreign forward exchange contracts and
pre-shipment credit in foreign currency (PCFC) designated as cash flow hedges. This analysis assumes that all other
variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.
49 Capital management
The Company's capital management objectives are:
- to ensure the Company's ability to continue as a going concern
- to provide an adequate return to shareholders
The Company monitors capital on the basis of the carrying amount of equity less cash and cash equivalents as
presented on the face of balance sheet.
Management assesses the Company's capital requirements in order to maintain an efficient overall financing structure
while avoiding excessive leverage. This takes into account the subordination levels of the Company's various classes
of debt. The Company manages the capital structure and makes adjustments to it in the light of changes in economic
conditions and the risk characteristics of the underlying assets. 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.
b) Loan covenants
Under the terms of major borrowing facilities, the Company is required to comply with the following covenants:
- the current ratio must be more than 1.33 times (March 31,2024: 2 times);
- the debt to equity must remain lower than 2 times (March 31,2024: 2 times);
- the promoter's holding must not be less than 51%;
- the total outside liability to tangible net worth ratio must not exceed 2 times (March 31,2024: 2 times);
- the Debts to Earnings Before Interest, Taxes, Depreciation and Amortisation must not exceed 4 times;
- the Net Working Capital to be maintained at minimum level of 25% of current assets;
- Interest Service Coverage Ratio to be more than 2 times;
- Asset Coverage Ratio not to fall below as approved at the time of assessment
- To maintain a minimum Adjusted Tangible Net Worth of INR 12,000 million
- Debt Service Coverage Ratio not less than 1.5 times
The Company has complied with these covenants throughout the reporting period.
54 The Supreme court of India in the month of February 2019 had passed a judgement relating to definition of
wages under the Provident Fund Act,1952. There are numerous interpretation issues relating to the judgement
passed by Supreme Court dated February 28, 2019 in the matter of Surya Roshni Ltd and others v/s State of
M.P. on Provident fund. The order does not specifically mention the date of applicability of this judgement,
whether it will be retrospectively or prospectively. Pending issuance of guidelines by the regulatory authorities
on the application of this ruling, the impact on the Company for the previous periods, if any, can be ascertained.
However, the Company has adopted the above changes prospectively.
55 The Code on Social Security, 2020 ('Code') relating to employee benefits during employment and post-employment
received Indian Parliament approval and Presidential assent in September 2020. The Code has been published
in the Gazette of India and subsequently on November 13, 2020 draft rules were published and invited for
stakeholders' suggestions. However, the date on which the Code will come into effect has not been notified. The
Company will assess the impact of the Code when it comes into effect and will record any related impact in the
period the Code becomes effective.
56 New and amended standards adopted by the Company
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. During the year ended March 31,
2025, MCA has notified Ind AS 117 - Insurance Contracts and amendments to Ind As 116 - Leases, relating to sale
and lease back transactions, applicable from April 1,2024. The Company has assessed that there is no significant
impact on its financial statements.
New and amemded standards issued but not effective
On May 9, 2025, MCA notifies the amendments to Ind AS 21 - Effects of Changes in Foreign Exchange Rates. These
amendments aim to provide clearer guidance on assessing currency exchangeability and estimating exchange
rates when currencies are not readily exchangeable. The amendments are effective for annual periods beginning
on or after April 1, 2025. The Company is currently assessing the probable impact of these amendments on its
financial statements.
57 The Company has a working capital limit of ' 69,800 (March 31,2024: ' 69,800). For said facility, the management
files returns/ statements, with such banks on monthly basis. The management also files revised returns/ statements
as at quarter-end and for the quarter then ended, with such banks on quarterly basis after reconciling the data
with quarter-end accounts. The revised returns/ statements filed with such banks, except for few immaterial
differences, are in agreement with the unaudited books of accounts of the Company on aggregate basis.
58 Other statutory information:
(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against
the Company for holding any Benami property.
(ii) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(iii) 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.
(iv) 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: a) 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 , b) provide any guarantee, security or the like on behalf of the
Ultimate Beneficiaries.
(v) The Company has no such transaction which is 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).
(vi) The Company has not been declared as wilful defaulter by any bank or financial institution (as defined under the
Companies Act, 2013) or consortium thereof, in accordance with the guidelines on wilful defaulters issued by the
Reserve Bank of India.
(vii) The Company does not have any transactions with company struck-off under section 248 of the Companies Act,
2013 or section 560 of Companies Act, 1956.
(viii) The Company has not entered into any scheme of arrangement which has an accounting impact on current or
previous financial year.
(ix) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the
statutory period.
(x) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read
with the Companies (Restriction on number of Layers) Rules, 2017.
(xi) The borrowings obtained by the Company from banks and financial institutions have been applied for the
purposes for which such borrowings were taken.
(xii) Title deeds of all immovable properties (other than properties where the Company is the lessee and the lease
agreements are duly executed in favour of the lessee) are held in the name of the Company.
For MSKA & Associates For and on behalf of Board of Directors of
Chartered Accountants LT Foods Limited
Firm Registration Number:- 105047W
Rahul Aggarwal Ashwani Kumar Arora Surinder Kumar Arora
Partner Managing Director and Managing Director
Membership Number: 505676 Chief Executive Officer DIN: 01574728
DIN:01574773
Sachin Gupta Monika Chawla Jaggia
Place : Gurugram Chief Financial Officer Company Secretary
Date : May 15, 2025 Membership No. :- 99415 Membership No. :- F5150
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