(J) Provisions
Provisions are recognised when the Company has
a present obligation (legal or constructive)as a
result of a past event, for which 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 obligation. The expense relating to a provision
is presented in the statement of profit and loss.
If the effect of the time value of money is material,
provisions are discounted using a current pre-tax
rate that reflects current market assessments of
the time value of money and 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.
(K) Employee benefits
I. Short term employee benefits
Short-term employee benefit obligations such
as salaries, incentives, special awards, medical
benefits are measured on an undiscounted basis
and are expensed as the related service is provided.
II. Post-employment obligations
The Company operates the following post¬
employment schemes:
a. Defined contribution plan
Retirement benefits in the form of provident
fund is a defined contribution scheme. The
Company recognises contribution payable to
the provident fund scheme as an expenditure,
when an employee renders the related service.
The Company has no obligation, other than the
contribution payable to the provident fund.
b. Defined benefit plan
The cost of providing benefits under the defined
benefit plan is determined using the projected
unit credit method. Remeasurements of the
net defined benefit liability, which comprise
actuarial gains and losses, the return on plan
assets (excluding interest) and the effect of
the asset ceiling (if any, excluding interest),
are recognised in OCI. Remeasurements
are not reclassified to profit or loss in
subsequent periods.
Past service costs are recognised in the
statement of profit and loss on the earlier of:
• The date of the plan amendment or
curtailment, and
• The date that the Group recognises related
restructuring costs
Net interest is calculated by applying the
discount rate to the net defined benefit liability
or asset. The Company recognises the following
changes in the net defined benefit obligation as
an expense in the statement of profit and loss:
• Service costs comprising current service
costs, past-service costs, gains and
losses on curtailments and non routine
settlements; and
• Net interest expense or income.
A liability for a termination benefit is recognised
at the earlier of when the entity can no longer
withdraw the offer of the termination benefit
and when the entity recognises any related
restructuring costs.
The liability for the defined benefit gratuity plan
is determined based on actuarial valuations
carried out by an independent actuary as
at year end. An actuarial valuation involves
making various assumptions that may differ
from actual developments in the future. These
include the determination of the discount rate,
future salary increases and mortality rates. Due
to the complexities involved in the valuation
and its long-term nature, a defined benefit
obligation is highly sensitive to changes in these
assumptions. All assumptions are reviewed at
each reporting date.
The parameter most subject to change is the
discount rate. In determining the appropriate
discount rate for plans operated in India, the
management considers the government bonds
yield rates for the life of the obligation. The
mortality rate is based on publicly available
mortality tables. Those mortality tables tend
to change only at interval in response to
demographic changes. Future salary increases
and gratuity increases are based on expected
future inflation rates.
III. Other long term employee benefit
The Company has leave encashment policy for
all the employees. Liabilities for such benefits
are provided on the basis of valuation, as at the
balance sheet date, carried out by an independent
actuary. The actuarial valuation method used by an
independent actuary for measuring the liability is
the projected unit credit method. Actuarial gain and
loss are recognised in the statement of profit and
loss during the year in which they occur.
The Company presents the leave as the current
liability in the balance sheet to the extent it does
not have the unconditional / legal and contractual
right to defer its settlement for twelve months
after the reporting date. Where the Company has
the unconditional / legal and contractual right to
defer its settlement beyond twelve months after the
reporting date, it is presented as the non current
liability in Balance sheet.
IV. Share-based payments
Share-based compensation benefits are provided
to employees via Employee Stock Appreciation
Rights Plan whereby employees render services as
consideration for equity instruments (equity-settled
transactions).
The cost of equity-settled transactions is determined
by the fair value at the date when the grant is made
using an appropriate valuation model.
That cost is recognised, together with a corresponding
increase in Employee stock appreciation rights
('ESAR') reserve in equity, over the period in which the
performance and/or service conditions are fulfilled
in employee benefits expense. The cumulative
expense recognised for equity-settled transactions
at each reporting date until the vesting date reflects
the extent to which the vesting period has expired
and the Company's best estimate of the number
of equity instruments that will ultimately vest. The
expense or credit in the statement of profit and loss
for a period represents the movement in cumulative
expense recognised as at the beginning and end
of that period and is recognised in employee
benefits expense.
Service and non-market performance conditions
are not taken into account when determining the
grant date fair value of awards, but the likelihood
of the conditions being met is assessed as part
of the Company's best estimate of the number of
equity instruments that will ultimately vest. Market
performance conditions are reflected within the
grant date fair value. Any other conditions attached
to an award, but without an associated service
requirement, are considered to be non-vesting
conditions. For share-based payment awards
with non-vesting conditions, the grant date fair
value of the share-based payment is measured to
reflect such conditions and there is no true-up for
differences between expected and actual outcomes.
No expense is recognised for awards that do not
ultimately vest because non-market performance
and/or service conditions have not been met. Where
awards include a market or non-vesting condition,
the transactions are treated as vested irrespective
of whether the market or non-vesting condition is
satisfied, provided that all other performance and/
or service conditions are satisfied.
(L) Taxation
Income tax expense comprises of current tax and
deferred tax. Income tax expense is recognised in the
statement of profit and loss, except when it relates
to items recognised in the other comprehensive
income or items recognised directly in the equity.
In such cases, the income tax expense is also
recognised in the other comprehensive income or
directly in the equity as applicable.
Current taxes
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.
Management periodically evaluates positions
taken in the tax returns with respect to situations
in which applicable tax regulations are subject to
interpretation or under dispute with authorities and
establishes provisions where appropriate.
Current income tax assets and liabilities are
measured at the amount expected to be recovered
from or paid to the taxation authorities. Current
tax assets and current tax liabilities are offset only
if there is a legally enforceable right to set off the
recognised amounts, and it is intended to realise
the asset and settle the liabilities on a net basis
or simultaneously.
Deferred taxes
Deferred tax is recognised in respect of temporary
differences between the tax bases of assets and
liabilities and their carrying amounts for financial
reporting purposes at the reporting date.
Deferred tax is recognised for all taxable temporary
differences, except for:
• Temporary difference arising on the initial
recognition of goodwill or an asset or liability in
a transaction that is not a business combination
and, at the time of the transaction, affects neither
the accounting nor taxable profit or loss
• Taxable temporary differences associated with
investments in subsidiaries when the timing
of the reversal of the temporary differences
can be controlled and it is probable that the
temporary differences will not reverse in the
foreseeable future.
Deferred tax assets are recognised for all deductible
temporary differences, the carry forward of unused
tax credits and any unused tax losses. Deferred tax
assets are recognised 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 utilised.
For operations carried out under tax holiday period
(Section 80IB and 80IE benefits of Income Tax Act,
1961), deferred tax assets or liabilities, if any, have
been recognised for the tax consequences of those
temporary differences between the carrying values
of assets and liabilities and their respective tax
bases that reverse after the tax holiday ends.
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 utilised. Unrecognised
deferred tax assets are re-assessed at each
reporting date and are recognised to the extent that
it has become probable that future taxable profits
will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured
at the tax rates that are expected to apply in the
year when the asset is realised or the liability is
settled, based on tax rates (and tax laws) that have
been enacted or substantively enacted at the
reporting date.
Deferred tax relating to items recognised outside
profit or loss is recognised outside profit or loss (either
in OCI or in equity). Deferred tax items are recognised
in correlation to the underlying transaction either in
OCI or directly in equity.
Deferred tax assets and deferred tax liabilities are
offset if a legally enforceable right exists to offset
current tax assets against current tax liabilities and
the deferred taxes relate to the same taxable entity
and the same taxation authority.
Minimum alternate tax (MAT)
MAT expense in a year is charged to the statement
of profit and loss as current tax for the year. The MAT
credit available only to the extent that it is probable
that the Company will pay normal income tax
during the specified period, i.e., the period for which
MAT credit is allowed to be carried forward and is
disclosed as deferred tax asset. In the year in which
the Company recognises MAT credit as an asset, it
is created by way of credit to the statement of profit
and loss and shown as part of deferred tax asset.
The Company reviews the "MAT credit entitlement"
asset at each reporting date and writes down the
asset to the extent that it is no longer probable that
it will pay normal tax during the specified period.
(M) Foreign currencies
Transactions in foreign currencies are initially
recorded by the Company at its functional currency
spot rate at the date the transaction first qualifies
for recognition. Exchange differences arising on
settlement or restatement of transactions, are
recognised as income or expense in the year in
which they arise. Monetary assets and liabilities
denominated in foreign currencies are translated
at the functional currency spot rates of exchange
at the reporting date. Exchange differences arising
on settlement or translation of monetary items
are recognised in the statement of profit and loss.
Non-monetary items that are measured in terms of
historical cost in a foreign currency are translated
using the exchange rates at the dates of the
initial transactions.
(N) Fair value measurement
Fair value is 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. The fair value measurement is
based on the presumption that the transaction to sell
the asset or transfer the liability takes place either:
• In the principal market for the asset or liability; or
• In the absence of a principal market, in the most
advantageous market for the asset or liability.
The principal or the most advantageous market
must be accessible by the Company.
The fair value of an asset or a liability is measured
using the assumptions that market participants
would use when pricing the asset or liability,
assuming that market participants act in their
economic best interest. A fair value measurement
of a non-financial asset takes into account a market
participant's ability to generate economic benefits
by using the asset in its highest and best use or by
selling it to another market participant that would
use the asset in its highest and best use.
The Company uses valuation techniques that are
appropriate in the circumstances and for which
sufficient data are available to measure fair value,
maximising the use of relevant observable inputs
and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is
measured or disclosed in the financial statements
are categorised within the fair value hierarchy,
described as follows, based on the lowest level input
that is significant to the fair value measurement as
a whole:
• Level 1 — Quoted (unadjusted) market prices in
active markets for identical assets or liabilities
• Level 2 — Valuation techniques for which the
lowest level input that is significant to the fair value
measurement is directly or indirectly observable
• Level 3 — Valuation techniques for which the
lowest level input that is significant to the fair
value measurement is unobservable
For assets and liabilities that are recognised in
the financial statements on a recurring basis, the
Company determines whether transfers have
occurred between levels in the hierarchy by re¬
assessing categorisation (based on the lowest level
input that is significant to the fair value measurement
as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the
Company has determined classes of assets and
liabilities on the basis of the nature, characteristics
and risks of the asset or liability and the level of
the fair value hierarchy as explained above. Other
fair value related disclosures are given in the
relevant notes.
(O) Financial instruments
I) Recognition and initial measurement
A financial instrument is any contract that gives
rise to a financial asset of one entity and a financial
liability or equity instrument of another entity. Trade
receivables are initially recognised when they are
originated. All other financial assets and financial
liabilities are initially recognised when the Company
becomes a party to the contractual provisions of
the instrument.
A financial assets (unless it is a trade receivable
without a significant financing component) or
financial liabilities is initially measured at fair
value plus or minus, for an item not at fair value
through profit and loss (FVTPL), transaction costs
that are directly attributable to its acquisition
or issue. A trade receivable without a significant
financing component is initially measured at the
transaction price.
II) Classification and subsequent measurement
Financial assets
On initial recognition, a financial asset is classified
as measured at:
• amortised cost;
• FVOCI - debt investment;
• FVOCI - equity investment; or
• FVTPL.
Financial assets are not reclassified subsequent
to their initial recognition unless the Company
changes its business model for managing financial
assets, in which case all affected financial assets
are reclassified on the first day of the first reporting
period following the change in the business model.
A financial asset is measured at amortised cost if
it meets both of the following conditions and is not
designated as at FVTPL:
• it is held within a business model whose objective
is to hold assets to collect contractual cash
flows; and
• its contractual terms give rise on specified dates
to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
These assets are subsequently measured at
amortised cost using the effective interest method.
The amortised cost is reduced by impairment losses.
Interest income, foreign exchange gains and losses
and impairment are recognised in the statement of
profit or loss. Any gain or loss on derecognition is
recognised in the statement of profit or loss.
A debt investment is measured at FVOCI if it
meets both of the following conditions and is not
designated as at FVTPL:
• it is held within a business model whose objective
is achieved by both collecting contractual cash
flows and selling financial assets; and
• its contractual terms give rise on specified dates
to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
These assets are subsequently measured at fair
value. Interest income calculated using the effective
interest method, foreign exchange gains and losses
and impairment are recognised in the statement
of profit or loss. Other net gains and losses are
recognised in OCI. On derecognition, gains and
losses accumulated in OCI are reclassified to the
statement of profit or loss.
On initial recognition of an equity investment that is
not held for trading, the Company may irrevocably
elect to present subsequent changes in the
investment's fair value in OCI. This election is made
on an investment-by-investment basis.
These assets are subsequently measured at fair
value. Dividends are recognised as income in the
statement of profit or loss unless the dividend
clearly represents a recovery of part of the cost
of the investment. Other net gains and losses are
recognised in OCI and are never reclassified to the
statement of profit or loss.
All financial assets not classified as measured
at amortised cost or FVOCI as described above
are measured at FVTPL. On initial recognition, the
Company may irrevocably designate a financial
asset that otherwise meets the requirements to be
measured at amortised cost or at FVOCI as at FVTPL
if doing so eliminates or significantly reduces an
accounting mismatch that would otherwise arise. "
Financial liabilities
Financial liabilities are classified as measured
at amortised cost or FVTPL. A financial liability is
classified as at FVTPL if it is classified as held-for-
trading, it is a derivative or it is designated as such
on initial recognition. Financial liabilities at FVTPL are
measured at fair value and net gains and losses,
including any interest expense, are recognised in the
statement of profit or loss. Other financial liabilities
are subsequently measured at amortised cost using
the effective interest method. Interest expense and
foreign exchange gains and losses are recognised
in the statement of profit or loss. Any gain or loss on
derecognition is also recognised in the statement of
profit or loss.
III) De-recognition
Financial assets
The Company derecognises a financial asset when
the contractual rights to the cash flows from the
financial asset expire, or it transfers the rights to
receive the contractual cash flows in a transaction
in which substantially all of the risks and rewards of
ownership of the financial asset are transferred or
in which the Company neither transfers nor retains
substantially all of the risks and rewards of ownership
and does not retain control of the financial asset.
If the Company enters into transactions whereby it
transfers assets recognised on its balance sheet, but
retains either all or substantially all of the risks and
rewards of the transferred assets, the transferred
assets are not derecognised.
Financial liabilities
A financial liability is derecognised when the
obligation under the liability is discharged or
cancelled or expires. When an existing financial
liability is replaced by another from the same
lender on substantially different terms, or the terms
of an existing liability are substantially modified,
such an exchange or modification is treated as
the de-recognition of the original liability and the
recognition of a new liability. The difference in the
respective carrying amounts is recognised in the
statement of profit and loss.
IV) Offsetting of financial instruments
Financial assets and financial liabilities are offset
and the net amount is reported in the balance sheet
if there is a currently enforceable legal right to offset
the recognised amounts and there is an intention
either to settle on a net basis or to realise the assets
and settle the liabilities simultaneously.
V) Impairment of financial assets
In accordance with Ind AS 109, the Company applies
expected credit loss (ECL) model for measurement
and recognition of impairment loss on the following
financial assets and credit risk exposure:
a) Financial assets that are debt instruments, and
are measured at amortised cost e.g., loans,
debt securities, deposits, trade receivables and
bank balance
b) Financial assets that are measured at FVTOCI
c) Trade receivables or any contractual right to
receive cash or another financial asset that
result from transactions that are within the
scope of Ind AS 115
The Company follows 'simplified approach' for
recognition of impairment loss allowance on
Trade receivables.
The application of simplified approach does not
require the Company to track changes in credit risk.
Rather, it recognises impairment loss allowance
based on lifetime ECLs at each reporting date, right
from its initial recognition.
For recognition of impairment loss on other financial
assets and risk exposure, the Company determines
that whether there has been a significant increase
in the credit risk since initial recognition. If credit risk
has not increased significantly, 12-month ECL is used
to provide for impairment loss. However, if credit risk
has increased significantly, lifetime ECL is used. If, in
a subsequent period, credit quality of the instrument
improves such that there is no longer a significant
increase in credit risk since initial recognition, then
the entity reverts to recognising impairment loss
allowance based on 12-month ECL.
Lifetime ECL are the expected credit losses resulting
from all possible default events over the expected
life of a financial instrument. The 12-month ECL is a
portion of the lifetime ECL which results from default
events that are possible within 12 months after the
reporting date.
ECL is the difference between all contractual cash
flows that are due to the Company in accordance
with the contract and all the cash flows that the
entity expects to receive (i.e., all cash shortfalls),
discounted at the original EIR. When estimating the
cash flows, an entity is required to consider:
• All contractual terms of the financial instrument
(including prepayment, extension, call and similar
options) over the expected life of the financial
instrument. However, in rare cases when the
expected life of the financial instrument cannot
be estimated reliably, then the entity is required
to use the remaining contractual term of the
financial instrument
• Cash flows from the sale of collateral held or
other credit enhancements that are integral to
the contractual terms
As a practical expedient, the Company uses a
provision matrix to determine impairment loss
allowance on portfolio of its trade receivables. The
provision matrix is based on its historically observed
default rates over the expected life of the trade
receivables and is adjusted for forward-looking
estimates. At every reporting date, the historical
observed default rates are updated and changes
in the forward-looking estimates are analysed.
ECL impairment loss allowance (or reversal)
recognized during the period is recognized as
(income) / expense in the statement of profit and loss
(p&l). Financial assets measured as at amortised
cost, contractual revenue receivables and lease
receivables: ECL is presented as an allowance, i.e., as
an integral part of the measurement of those assets
in the balance sheet. The allowance reduces the
net carrying amount. Until the asset meets write-off
criteria, the Company does not reduce impairment
allowance from the gross carrying amount.
For assessing increase in credit risk and impairment
loss, the Company combines financial instruments
on the basis of shared credit risk characteristics
with the objective of facilitating an analysis that is
designed to enable significant increases in credit
risk to be identified on a timely basis.
The Company does not have any purchased or
originated credit-impaired (POCI) financial assets,
i.e., financial assets which are credit impaired on
purchase/ origination.
(P) Cash and cash equivalents
Cash and cash equivalents consist of 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.
For the purpose of the cash flow statement, cash
and cash equivalents consist of cash and short¬
term deposits, as defined above, net of outstanding
bank overdrafts as they are considered an integral
part of the Company's cash management.
(Q) Borrowing cost
Borrowing costs 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
as part of the cost of the respective asset. All other
borrowing costs are expensed in the period they
are incurred. Borrowing cost includes interest and
other costs that an entity incurs in connection with
the borrowing of funds. Borrowing cost also includes
exchange differences to the extent regarded as an
adjustment to the borrowing costs.
(R) Earnings per share
Basic earnings per share is calculated by dividing
the net profit or loss for the period attributable
to equity shareholders 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 such as bonus issue, bonus element in
a rights issue, share split, and reverse share split
(consolidation of shares) that have changed the
number of equity shares outstanding, without a
corresponding change in resources.
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.
(S) Contingent liability and contingent assets
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 not wholly within
the control of the Company or a present obligation
that is not recognised because it is not probable
that an outflow of resources will be required to settle
the obligation. A contingent liability also arises
where there is a liability that cannot be recognised
because it cannot be measured reliably. The
Company does not recognise a contingent liability
but discloses its existence in the financial statements.
Contingent asset is not recognised in financial
statements since this may result in the recognition
of income that may never be realised. However,
when the realisation of income is virtually certain,
then the related asset is not a contingent asset and
is recognized.
Contingent liabilities and contingent assets are
reviewed at each balance sheet date.
(T) Interest Income
For all debt instruments measured at amortised
cost, interest income is recorded using the Effective
Interest Rate ('ElR'). EIR is the rate that exactly
discounts the estimated future cash receipts over the
expected life of the financial instrument or a shorter
period, where appropriate, to the gross carrying
amount of the financial asset. When calculating
the EIR, the Company estimates the expected cash
flows by considering all the contractual terms of
the financial instrument (for example, prepayment,
extension, call and similar options) but does not
consider the expected credit losses.
(U) Recent Pronouncements
Ministry of Corporate Affairs ("MCA") notifies new
standards or amendments to the existing standards
under Companies (Indian Accounting Standards)
Rules as issued from time to time. For the year
ended March 31, 2025, MCA has notified Ind AS - 117
Insurance Contracts and amendments to Ind AS 116 -
Leases, relating to sale and leaseback transactions,
applicable to the Company w.e.f. April 1, 2024. The
Company has reviewed the new pronouncements
and based on its evaluation has determined
that it does not have any significant impact in its
financial statements.
Note 33: Earnings per share ('EPS')
Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the parent by the
weighted average number of equity shares outstanding during the year.
Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the parent by the weighted
average number of equity shares outstanding during the year plus the weighted average number of equity shares
that would be issued on conversion of all the dilutive potential equity shares into equity shares.
Note 34: Employee benefits
(a) Defined contribution plans
a. Provident and other fund
The Company makes provident and other funds to defined contribution plan for eligible employees. Under
the scheme, the Company is required to contribute a specified percentage of the payroll costs. The Company
has no obligation, other than the contribution payable to the fund. The Company recognises contribution
payable to the provident fund scheme as an expense, when an employee renders the related service.
Note 35: Leases
i) Company as a lessee
The Company has lease contracts for land, building and manufacturing facilities with lease term ranging between
2 to 10 years. There are certain lease contracts that include extension and termination options. These options
are negotiated by management to provide flexibility in managing the leased-asset portfolio and align with the
Company's business needs. Management exercises judgement in determining whether these extension and
termination options are reasonably certain to be exercised.
The Company also has certain leases of office premises and warehouses with lease term of 12 months or less
and those of low value. The Company applies the 'short-term lease' and 'lease of low-value assets' recognition
exemptions as available in Ind AS 116 'Leases' for these leases.
b. During the year ended March 31, 2025, the Company received a show cause notice from the office of
the Directorate General of GST Intelligence, Karnataka regarding the classification issue for its product
category Extruded Namkeen (including Fried Pellet Namkeens "Fryums") under the Goods and Service
Tax Act. This notice is issued for all the GST registrations of the Company across different states for the
period July 2017 to March 2024.
Based on the information available with the Company, this matter is an industry vide issue and similar
notices have also been issued to other key players of the industry.
The Company has filed a writ petition before the Hon'ble High Court of Karnataka and obtained stay on
the proceedings of the said Show Cause Notice. No demand order has been issued in this matter till
date. Further, the pending writ petition has now been listed with similar writs filed by other key players
of the industry and the same is pending for disposal as at the year end.
The Company has assessed the impact of this matter on its financial statements and based on past
favorable judgements by the Hon'ble Supreme Court of India on similar classification matter under
the erstwhile indirect tax regime and opinion obtained from its tax advisors, it is of the view that the
contention of the tax authorities in this matter is not tenable and unlikely to be retained.
2. There were many interpretative issues relating to the Supreme Court (SC) judgement dated February 28, 2019
on Provident Fund (PF) as regards definition of PF wages and inclusion of certain allowances for the purpose
of PF contribution, as well as effective date of its applicability. Having consulted and evaluated impact on its
financial statement, the Company has implemented the changes as per clarifications vide the Apex Court
judgement dated February 28, 2019, with effect from 1 March 2019 i.e., immediately after pronouncement of
the judgement. The Company will evaluate its position, in case there is any other interpretation issued in
future either in form of Social Security Code 2020, or by authorities concerned under the Employees' Provident
Funds and Miscellaneous Provisions Act.
Note 38: Related party transactions
Names of related parties and related party relationship
(a) Related parties where control exists: Nil
(b) Other related parties with whom transactions have taken place during the current year or previous year:
Enterprise having significant influence Peak XV Partners Growth Investments II (formerly known as SCI Growth
Investment II) (upto 25.02.2025)
C] Notes
1. Segment revenue in the geographical segments considered for disclosure are as follows:
a) Revenue within India includes sales to customers located within India.
b) Revenue outside India includes sales to customers located outside India.
2. The Company does not have any customer, with whom revenue from transactions is more than 10% of
Company's total revenue.
3. Non current assets consist of property, plant and equipment, capital work-in-progress, goodwill, intangible
assets, capital advances and intangible assets under development.
Note 40: Government grants
Government grant consists of GST incentive amounting to ' 171.92 Lakhs (March 31, 2024: ' 39.53 Lakhs) and capital
subsidy amounting to ' 293.48 Lakhs (March 31, 2024: ' 317.62 Lakhs). There are no unfulfilled conditions or contingencies
attached to these grants.
Note 41: Exceptional item
A fire occurred at one of the Company's plants located in Jammu on December 30, 2024. This incident significantly
affected the building, plant and machinery, leasehold improvements, and inventories at the site; however, there
were no human casualties. The total financial loss resulting from this event is estimated at ' 3,433.53 Lakhs. The
Company has adequate insurance coverage to recover its loss and has initiated the requisite claim process with the
Insurance Company.
During the year ended March 31, 2025, the Company also received an insurance claim amounting to ' 892.81 Lakhs.
This claim was filed in an earlier year with respect to the loss of property, plant and equipment, and inventories due
to a fire accident that occurred on November 3, 2021 at one of the Company's plants located in Howrah, West Bengal.
Given the nature and impact of these events on the Company's financial statements, the cumulative impact of the
above amounts has been disclosed as an exceptional item in the Statement of Profit and Loss for the year ended
March 31, 2025.
There was another fire accident in the finished goods warehouse of a Co-manufacturing plant located in Hoogly,
West Bengal, on June 6, 2023. The fire affected inventories lying at the warehouse; however, there were no human
casualties. The total financial loss from this event amounted to ' 95.91 Lakhs and this was disclosed as an exceptional
item in Statement of Profit and Loss for the year ended March 31, 2024.
Note 42: Employee Stock Appreciation Rights
The Nomination and Remuneration Committee of the Board of Directors of the Company at its meeting held on August
09, 2019, February 04 2022, August 19, 2022, August 02, 2023 and August 01, 2024 have granted 3,47,000, 59,800, 2,00,821,
4,927 and 43,146 Stock Appreciation Rights ('SAR') respectively to eligible employees of the Company under the Prataap
Employees Stock Appreciation Rights Plan 2018 ('ESAR'). The said ESAR was approved by the shareholders in their Annual
General Meeting held on September 28, 2018. The rights entitle the employees, to equity shares of the Company on
the satisfaction of service conditions attached to the grant and consequent exercise of the rights by the employees.
The SAR shall be vested in four instalments every year commencing from the end of one year from the grant date.
The number of equity shares to be issued shall be determined based on the difference between the base price as
per the scheme and the share price on the date of exercise. The SAR expire at the end of 5 years from the grant date.
The management assessed that fair value of trade receivables, other current financial assets, current loans, cash and
bank balances, trade payables, current borrowings and other current financial liabilities approximate their carrying
amounts largely due to the short-term maturities of these instruments.
The fair value of the financial assets and liabilities is included 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. The following
methods and assumptions were used to estimate the fair values:
1. Loans and other financial assets are evaluated by the Company based on parameters such as interest rates,
individual credit worthiness of the counterparties and expected duration of realisability as at the balance
sheet date.
The Company determines the fair value of its financial instruments on the basis of the following hierarchy:
Level 1: The fair value of financial instruments that are quoted in active markets are determined on the basis of quoted
price for identical assets or liabilities.
Level 2: The fair value of financial instruments that are not traded in an active market are determined using valuation
techniques based on observable market data.
Level 3: The fair value of financial instruments that are measured on the basis of entity specific valuations using inputs
that are not based on observable market data (unobservable inputs).
There are no transfers between different fair value hierarchy levels in March 31, 2025 and March 31, 2024.
Fair value measurements
The following table shows the valuation technique used in measuring level 2 for financial instruments
Note 45: Financial risk management objectives and policies
The Company's principal financial liabilities comprise borrowings, lease liabilities, trade and other payables. The
main purpose of these financial liabilities is to finance the Company's operations. The Company's principal financial
assets include loans, subsidy receivable, cash and cash equivalents, trade receivables and other receivables that
are derived directly from its operations.
The Company is exposed to market risks, credit risks and liquidity risks. The Company's senior management oversees
the management of these risks. The Company's senior management provides assurance that the Company's financial
risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured
and managed in accordance with the Company's policies and risk objectives. The Board of Directors review and agree
policies for managing each of these risks.
Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes
in market prices. Market risk comprises three types of risks namely interest rate risk, currency risk and price risk, such
as equity price risk. The Company is not significantly exposed to currency risk and price risk whereas the exposure to
interest risk is given below.
Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. The Company's exposure to the risk of changes in market interest rates relates
primarily to the Company's borrowings.
Interest rate sensitivity
The sensitivity analysis below has been determined based on exposure to interest rates for term loans that have
floating rate at the end of the reporting period and the stipulated change taking place at the beginning of the financial
year and held constant throughout the reporting period.
If the interest rates had been 100 basis points higher or lower and all the other variables were held constant, the effect
on Interest expense for the respective financial years and consequent effect on Company's profit in that financial
year would have been as below:
Credit Risk
Credit risk is the risk that the counterparty will not meet its obligations under a financial instrument or customer
contract, leading to a financial loss. The Company is exposed to credit risk arising on its trade receivables and
loan to employees under Employee Stock Purchase Plan. Based on the historical experience and credit profile of
counterparties (scheduled banks, government and employees), the Company does not expect any significant risk of
defaults arising on financial assets except trade receivables and loan to employees under Employee Stock Purchase
Plan i.e. loans, subsidy receivables, cash and cash equivalents and other financial assets.
Refer Note a and b below for credit risk and other information in respect of trade receivables and Loan to employees
under Employee Stock Purchase Plan respectively.
a. Trade receivables
Customer credit is managed by the Company through established policies and procedures related to customer
credit risk management. Each outstanding customer receivables are regularly monitored and if outstanding is
above due date, the further shipments are controlled and can only be released if there is a proper justification.
The Company uses a provision matrix to determine impairment loss allowance on portfolio of its trade receivables.
The provision matrix is based on its historically observed default rates over the expected life of the trade receivables
and is adjusted for forward-looking estimates. At every reporting date, the historical observed default rates are
updated and changes in the forward-looking estimates are analysed. Based on the industry practices and the
business environment in which the Company operate, management considers the trade receivables are in
default (credit impaired) if the payments are more than 365 days past due.
The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are
located in several jurisdictions and operate in largely independent markets and are monitored at periodical
intervals. The maximum exposure to credit risk at the reporting date is the carrying value of each class of
financial assets.
Liquidity Risk
(i) Liquidity risk management
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 principle sources
of liquidity are cash and bank balances, fixed deposits and the cash flow that is generated from operations. The
Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing
facilities, by continuously monitoring forecast and actual cash flows and matching the maturity profiles of
financial assets and liabilities. The Company believes that the working capital is sufficient to meet its current
requirements. Accordingly, liquidity risk is considered as low. The Company closely monitors its liquidity position
and also maintains adequate source of funding.
(ii) Maturities of financial liabilities
The following tables detail the Company's remaining contractual maturity for its financial liabilities with agreed
repayment periods. The amount disclosed in the tables have been drawn up based on the undiscounted cash
flows of financial liabilities based on the earliest date on which the Company can be required to pay. To the
extent that interest flows are floating rate, the undiscounted amount is derived from interest rate at the end of the
reporting period. The contractual maturity is based on the earliest date on which the Company may be required
to pay.
Note 47: Capital management
For the purpose of the Company's capital management, equity includes issued equity capital, securities premium
and all other equity reserves attributable to the equity holders of the Company. The Company's capital management
objectives are to maintain equity including all reserves to protect economic viability and to finance any growth
opportunities that may be available in future so as to maximise shareholders' value. The Company is monitoring
capital using debt equity ratio as its base, which is debt to equity. The Company's policy is to keep healthy debt equity
ratio ensuring minimum debt. The Company manages its capital structure and makes adjustments in light of changes
in economic conditions and the requirements of the financial covenants.
Note 48: Loan to employees under Employee Stock Purchase Plan
The Company had formulated an Employee Stock Purchase Plan (ESPP) where the company granted loan to employees
through a separate Prataap Snacks employee welfare trust (the 'Trust') for providing monetary assistance to the
employees for acquisition of shares granted under the ESPP plan. The Trust was identified as a subsidiary. In the
standalone financial statements, the Company had adopted the policy of considering the trust as a legal entity
separate from the Company and therefore, was not consolidating the Trust in the standalone financial statements.
During the year ended March 31, 2024, the Company changed its accounting policy whereby it decided to consolidate
the Trust in the financial statements to reflect a more appropriate presentation of the activity of the Trust in the financial
statements as the Trust carried out activities for the benefit of the employees of the Company. Consequently, in the
financial statements of the Company, the loan given to the Trust (including interest) is eliminated.
(iii) The Company does not have any charges or
satisfaction which is yet to be registered with ROC
beyond the statutory period
(iv) The Company has not traded or invested in Crypto
currency or Virtual Currency during the current
financial year and previous financial year
(v) 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
(vi) 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,
(vii) The Company does not have any such transactions
which has not been recorded in the books of
accounts but 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
(viii) Except for the instances mentioned below, the
Company has used accounting softwares for
maintaining its books of account, which have a
feature of recording audit trail (edit log) facility
and the same has operated throughout the
year for all relevant transactions recorded in the
respective software:
(a) The feature of recording audit trail (edit log)
facility was not enabled at the application layer
to log any data changes in the following:
- certain fields/tables of the accounting
software related to the revenue process
and general ledger from April 1, 2024 to
June 13, 2024.
- certain fields/tables of the accounting
software related to the payroll process
during the period April 1, 2024 to June 13,
2024/ February 25, 2025, as applicable.
- certain fields/tables of the accounting
software used for maintaining inventory
records during the period April 1, 2024
to June 13, 2024/ February 25, 2025,
as applicable.
(b) The feature of recording audit trail (edit log)
facility was also not enabled during the period
from April 1, 2024 to June 13, 2024 for another
software used by the Company for maintaining
certain records related to procurement,
inventory and revenue process.
(c) The feature of audit trail was not enabled at
the database level for the accounting software
used for maintaining the books of account to
log any direct data changes.
Further, wherever the audit trail (edit log)
facility was enabled and was operating for the
respective accounting software, there were
no instance of the audit trail feature being
tampered with. Additionally, the audit trail has
been preserved by the Company as per the
statutory requirements for record retention.
(ix) The Company has not been declared as wilful
defaulter by any bank of financial institution or
other lender.
(x) The Company has not entered into any scheme of
arrangement which has an accounting impact on
current or previous financial year.
(xi) The Company has borrowings from banks on the
basis of security of current assets. No quarterly
returns or statements of current assets are required
to be submitted with such banks.
As per our report of even date For and on behalf of the Board of Directors of
For B S R & Co. LLP Prataap Snacks Limited
ICAI Firm registration number: 101248W/
W-100022
Chartered Accountants
Ashwin Bakshi Amit Kumat Arvind Mehta
Partner Managing Director and Chief Chairman and Executive Director
Membership no.: 506777 Executive Officer DIN - 00215183
DIN - 02663687
Sumit Sharma Sanjay Chourey
Chief Financial Officer Company Secretary
Place: Indore Place: Indore
Date: May 05, 2025 Date: May 05, 2025
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