A provision is recognised if, as a result of a past event,
the Company has a present legal or constructive
obligation that can be estimated reliably, and it is
probable that an outflow of economic benefits will
be required to settle the obligation. Provisions are
determined by discounting the expected future
cash flows (representing the best estimate of the
expenditure required to settle the present obligation at
the balance sheet date) at a pre-tax rate that reflects
current market assessments of the time value of money
and the risks specific to the liability. The unwinding of
the discount is recognised as finance cost. Expected
future operating losses are not provided for.
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 recognized because it is not probable that
an outflow of economic 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
a contingent liability but discloses its existence in
the financial statements. A contingent asset is not
recognized unless it becomes virtually certain that an
inflow of economic benefits will arise. When an inflow
of economic benefits is probable, contingent assets
are disclosed in the financial statements. Contingent
liabilities and contingent assets are reviewed at each
balance sheet date.
3.14 Borrowing cost
Borrowing costs are interest and other costs (including
exchange differences relating to foreign currency
borrowings to the extent that they are regarded as an
adjustment to interest costs) incurred in connection
with the borrowing of funds. Borrowing costs directly
attributable to acquisition or construction of an asset
which necessarily take a substantial period of time
to get ready for their intended use are capitalised as
part of the cost of that asset. Other borrowing costs
are recognised as an expense in the period in which
they are incurred. Investment income earned on
the temporary investment of specific borrowings
is deducted from the borrowing costs eligible for
capitalisation.
3.15 Research and development expenditure
Revenue expenditure on research and development
is recognised as an expense in the period in which
they are incurred.
3.16 Earnings per share
The basic earnings per share is computed by dividing
the net profit attributable to equity shareholders for
the period by the weighted average number of equities
shares outstanding during the year.
The diluted earnings per share is computed by dividing
the net profit attributable to equity shareholders for
the year by the weighted average number of equity
and equivalent potential dilutive equity shares
outstanding during the year, except where the result
would be anti-dilutive.
3.17 Cash and cash equivalents
For the purpose of presentation in the statement of
cash flows, cash and cash equivalents includes cash on
hand, deposits held at call with financial institutions,
other short-term, highly liquid investments with
original maturities of three months or less that are
readily convertible to known amount of cash and which
are subject to an insignificant risk of changes in value.
3.18 Cash flow statement
Cash flows are reported using the indirect method,
whereby profit before tax is adjusted for the effects
of transactions of a non-cash nature, any deferrals
or accruals of past or future operating receipts or
payments and items of income or expenses associated
with investing or financing cash flows. The cash flows
from operating, investing and financing activities of
the Company are segregated.
3.19 Dividend
The Company recognizes a liability to make cash
distributions to equity shareholders when the
distribution is authorized and the distribution is no
longer at the discretion of the Company. As per the
corporate laws in India, a distribution is authorized
when it is approved by the shareholders of the Company.
4. Changes in material accounting policies
For the year ended 31 March 2025, there were no
changes in material accounting policies.
5. Standard issued but not effective.
As on 31 March 2025, MCA has notified the Companies
(Indian Accounting Standards) Amendment Rules,
2025 which are effective from their notification in
Official Gazette which is 7 May 2025.
Amendments are made to Ind AS 21 -
The Effects of Changes in Foreign Exchange Rates.
These amendments relate to exchangeable currency.
The Company has evaluated these amendments, and
the impact of the amendment is not expected to be
significant to the financial statements.
19 Other equity (Contd..)
Retained earning
Retained earnings are the accumulated profits earned by the Company till date, less dividend paid to the shareholders.
Cash flow hedge reserve, net of tax
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. For hedging interest rate risk, the Company uses interest rate swaps which are designated as
cash flow hedges.
Remeasurement of defined benefit liability, net of tax
Remeasurements of defined benefit liability (asset) comprises actuarial gains and losses on defined benefit liability and
return on plan assets (excluding interest income) and is considered as part of Retained Earnings.
Note 36 (a)
Income tax matters
Income tax demand comprise demand from the Indian tax authorities, upon completion of their tax review for the
assessment years 2008-09. The tax demands are mainly on account of certain transfer pricing adjustments of expenses
claimed by the Company under the Income Tax Act. The matters are pending before the Assessing Officer.
Custom duty matters
Custom duty demand comprise demand from the Office of the Commissioner of Custom of INR 14.77 Million (31
March 2024: INR 14.77 Million). The tax demands are mainly related to benefit received by the Company under Vishesh
Krishi and Gram Udyog Yojana (VKGUY), which as per Department's contention, have been availed under incorrect and
inadmissible notification. Management is of the view that such benefits are admissible and cannot be denied only because
of incorrect mentioning of the notification. This litigation is pending before CESTAT (Custom Excise and Service Tax
Appellate Tribunal).
The Company is contesting the demands and the management believes that its position will likely be upheld in the appellate
process. The management believes that the ultimate outcome of these proceeding will not have a material adverse effect on
the Company's financial position and results of operations.
Pending resolution of the respective proceedings, it is not practicable for the Company to estimate the timings of the
cash flow, if any, in respect of the above as it is determinable only on receipt judgements / decision pending with various
forums/authorities.
Indirect tax matters
The above Indirect Tax matters comprise of three demands.
One demand in relation to Goods and Service Tax (GST) from the Office of the Commissioner, Central Tax, Pune - II,
Commissionerate of INR 14.89 Million (31 March 2024: INR 53.75 Million) including penalty (excluding interest). The tax
demands are mainly related to reclassification of HSN Code of certain products, which as per Department's contention,
have been availed incorrectly. The entity plans to make an appeal before the Appellate Tribunal to be constituted under
section 109 of the Central Goods and Services Tax Act, 2017.
Note 36 (a) (Contd..)
The second demand is in relation to CENVAT Credit availed from the Office of the Commissioner, Central Tax, Pune - II,
Commissionerate of INR 17.02 Million (31 March 2024: INR 17.02 Million). The tax demands are mainly related to wrong
availment of CENVAT Credit. This litigation is pending before The Principal Commissioner (Revisionary Authority).
The third demand in relation to Central Goods and Service Tax (CGST) from the Office of the Joint Commissioner, Central
Tax, Pune - II, Commissionerate of INR 103.27 Million (31 March 2024: Nil) including penalty (excluding interest) for four
years. The tax demands are mainly related to reclassification of HSN Code of certain products, which as per Department's
contention, have been availed incorrectly. This litigation is pending before Commissioner Appeals CGST, Pune. The
Company has also received a demand from the Deputy Commissioner of State Tax, Pune of INR 41.26 Million (including
tax, interest and penalty) for one of the years. This demand is included in third demand under CGST above, hence not
disclosed separately. The Company has made an appeal before the Joint Commissioner (Appeal).
The Company has reviewed all its pending litigations and proceedings and has adequately provided for where the
provision is required and disclosed as contingent liabilities where applicable, in its financial statements.
Note 36 (b)
Based on the Supreme Court judgement dated 28 February 2019, the Company has reassessed the components to be
included in basic salary for the purpose of employer's contribution towards Provident Fund. However, there has been no
corresponding amendment in the Act or Scheme framed under the Provident Fund Act, consequent to Supreme Court
judgement. Management does not expect the Supreme Court decision to have any significant impact on the Company's
financial position as at 31 March 2025.
39 Leases
Company as a lessee
The company's leases mainly comprises of buildings. The company leases buildings primarily for offices and warehouses.
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.
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.
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 or
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 with a corresponding
adjustment to the carrying value of Right-of-use assets.
Lease liability and Right-of-use assets is separately presented in the Balance Sheet and lease payments are classified as
financing cash flows.
The company recognizes lease payments as operating expense on a straight line basis over the period of lease for certain
short - term (less than or equal to twelve months) or low value arrangements.
The Company has elected not to apply the requirements of Ind AS 116 to leases which are expiring within 12 months from
the date of transition by class of asset and leases for which the underlying asset is of low value on a lease-by-lease basis.
40 Capital management
A business objective of the Company is to sustain the strongest possible equity base in order to foster confidence in all
key stakeholders and promote the Company's onward development. A sound equity base is also a key factor in ensuring a
stable risk rating with lenders, which is important for obtaining acceptable borrowing terms for the Company. The Board of
Directors and the shareholders of the Company ensure a responsible dividend policy and an appropriate return on invested
capital to promote value growth and safeguard the Company's future.
The Board of Directors of the Company are kept informed about the equity position of the Company as part of quarterly
reporting. Measures are implemented as necessary, taking the tax and legal frameworks into account, to sustain an
appropriate capital base that enables the Company to attain operating targets and to meet the strategic goals.
The Company is required to comply with certain covenants for the borrowing facilities availed by the Company. The
Company has complied with these covenants as on the reporting date.
41 Transfer pricing regulations
The Company has established a comprehensive system of maintenance of information and documentation as required by
the transfer pricing legislation under section 92 - 92F of the Income Tax Act, 1961. The Company is in process of preparing
related documentation for the financial year 2024-2025.
The management is of the opinion that its international transactions are at arm's length such that the aforesaid legislation
will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for
taxation as at and for the year ended 31 March 2025.
42 Segment Information
A. Business Segments
An operating segment is a component of the Company that engages in business activities from which it may
earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the
Company's other components, and for which discrete financial information is available. The Company recognizes
its sale of Prepared Foods activity as its only primary business segment since its operations predominantly consist of
manufacture and sale of Prepared Foods to its customers. The 'Chief Operating Decision Maker' monitors the operating
results of the Company's business as single segment. Accordingly in context of 'Ind AS 108 - Operating Segments' the
principle business of the Company constitute a single reportable segment. Geographically, primary segment in India
and secondary segment is rest of the world, details of which are given below:-
B. Post employment benefit plan
The Company operates the following post employment benefit plans:
The Company has a defined benefit plan, governed by the Payment of Gratuity Act, 1972. Benefit plan entitles an employee,
who has rendered at least five years of continuous service, to gratuity at the rate of fifteen days for every completed year
of service or part thereof in excess of six months., based on the rates of wages last drawn by the employee concerned.
The defined benefit plan for gratuity is administered and funded through Tasty Bite Employees Gratuity Trust.
These defined benefit plans expose the Company to actuarial risk, such as longevity risk, interest rate risk, market
(investment) risk and salary increment risk.
43 Assets and liabilities relating to employee benefits (Contd..)
C. Funding
Gratuity Plan is funded by the Company. The funding requirements are based on the gratuity fund's actuarial
measurement framework set out in the funding policies of the plan. The funding of Gratuity Plan is based on separate
actuarial valuation for funding purposes for which assumption may differ from the assumptions set out in (E).
Employees do not contribute to the plan.
The Company expects to pay INR 10.00 Million as contributions to its defined benefit plans in 2025-2026 (Forecast for
2024-25 was INR 10.00 Million).
No significant judgment is involved in evaluating when a customer obtains control of the promised goods. The payment
is generally due within 30-60 days. There are no obligations on account of refunds or returns.
Disclosure for transaction price allocated to the remaining performance obligations
There is no remaining performance obligation for any contract for which revenue has been recognised till period end.
Further, in accordance with paragraph 121 of Ind AS 115, the Company is not required to disclose information about its
remaining performance obligation since the Company does not have any performance obligation that has an original
expected duration of more than one year.
Determining the timing of satisfaction of performance obligations
There is no significant judgement involved in ascertaining the timing of satisfaction of performance obligations,
in evaluating when a customer obtains control of promised goods, transaction price and allocation of it to the
performance obligations.
Determining the transaction price and the amounts allocated to performance obligations
The transaction price ascertained for the single performance obligation of the Company (i.e. Sale of goods) is agreed in the
contract with the customer. There is no variable consideration involved in the transaction price.
Details of contract assets:
There are no contract assets as at 31 March 2025 and 31 March 2024. Refer note 12 for information on trade receivables.
46 Financial instruments - fair value (Contd..)
B. Measurement of fair value
Specific valuation technique used to value financial instruments include:
a) The use of quoted market price or dealer quotes of similar instruments
b) the fair value of interest rate swaps is calculated at the present value of the estimated future cash flows based on
observable yield curves
c) the fair value of forward foreign exchange contracts and principle swap is determined using forward exchange
rates at the balance sheet date
d) the fair value of the remaining financial instruments is determined using discounted cash flow analysis
All of the resulting fair value estimates, where the fair values have been determined based on present values and the
discount rates used were adjusted for counterparty or own credit risk
47 Financial instruments - risk management
A. Financial risk management
The Company has exposure to the following risk arising from financial instruments:
- credit risk (see (ii) below);
- liquidity risk (see (iii) below); and
- market risk (see (iv) below).
i. Risk management framework
The Company's board of directors has overall responsibility for the establishment and oversight of the Company's
risk management framework. The board of directors have established a Risk Management Framework, which is
reviewed and monitored by the Chief Financial Officer (CFO). The CFO reports regularly to the board of directors.
The Company's risk management policies are established to identify and analyse the risks faced by the Company,
to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies
and systems are reviewed regularly to reflect changes in market conditions and the Company's activities. The
Company, through its training and established procedures, aims to maintain a disciplined and constructive
control environment in which all employees understand their roles and obligations.
The Company's Audit Committee oversees how management monitors compliance with the Company's risk
management policies and procedures, and reviews the adequacy of the risk management framework in relation
to the risks faced by the Company. The Audit Committee is assisted in its oversight role by internal auditors.
Internal auditors undertake regular reviews of risk management controls and procedures, the results of which are
reported to the Audit Committee.
ii. Credit risk
Credit risk is the risk of financial loss to the Company if a customer or a counterparty to a financial instrument
fails to meet its contractual obligation, and arises principly from the Companies receivable from customer
and loans, if any.
The carrying amounts of financial asset represents the maximum credit risk exposure.
Trade receivables are typically unsecured and are derived from revenue earned from customers located in India
and outside India. Credit risk is managed by a periodic review of amounts outstanding from customers by treasury
head and the chief financial officer. On account of adoption of Ind AS 109, the Company uses expected credit
loss model to assess the impairment loss or gain. The Company computes the expected credit loss allowance for
trade receivables based on available external and internal credit risk factors such as the ageing of its dues, market
information about the customer, industry information and the Company's historical experience for customers.
The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer.
However, management also considers the factors that may influence the credit risk of its customer base, including
the default risk associated with the industry and country in which customers operate.
The Company limits its exposure to credit risk from trade receivables by establishing a maximum payment period
for customers. Credit risk is also controlled by analysing credit limits and credit worthiness of customers on a
continuous basis.
Refer Note 12 for the following information:
- Exposure to the credit risk for trade receivables by geographic region
- Exposure to the credit risk for trade receivables by type of counterparty (concentration of credit risk)
- Movement in the allowance for expected credit loss
Also refer note 3.6 for policy related to impairment
Cash and cash equivalent and bank balances other than cash and cash equivalent ('collectively referred as
Bank balance')
The Bank balance is held with Banks. Credit risk on Bank balance is limited as the Company generally invest in
deposits with banks with high credit ratings assigned by domestic credit rating agencies. Bank balances comprising
current accounts are maintained with banks with high credit ratings assigned by credit rating agencies.
iii. 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 Company's treasury department is responsible for liquidity and funding. The Company manages its liquidity
risk by continuously monitoring its working capital and by preparing month on month cash flow projections to
monitor liquidity requirements.
iv. 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 optimising the return.
The Company is exposed to foreign exchange risk through purchases from overseas suppliers and sales to
overseas customers in various foreign currencies. The Company uses derivatives to manage market risk. All such
transactions are carried out within the guidelines set by the Company. Generally, the Company seeks to apply
hedge accounting to manage volatility in profit or loss.
A) Currency risk
The Company is exposed to currency risk to the extent that there is a mismatch between the currencies in
which sales, purchases and borrowings are denominated and the functional currency (INR) of the Company.
The primary exposure of the company is in US Dollars (USD), British Pounds (GBP) and Euro (EUR).
The Company uses forward exchange contracts to hedge its currency risk, most with a maturity of less than
one year from the reporting date. Such contracts are generally designated as cash flow hedges. At any point
of time, the Company hedges 60% of its estimated foreign currency exposure in respect of forecasted sales.
Exposure to currency risk
The summary of quantitative data about the Company's exposure to currency risk as at reporting
date is as follows:
B) Interest rate risk
The Company adopts the policy of ensuring that between 80% and 90% of its interest rate risk exposure on its
non-current borrowings is at a fixed rate. This is achieved partly by entering into fixed-rate instruments and
partly by borrowing at floating rate and using interest rate swaps as hedges of the variability in cash flows to
interest rate risk. Interest rate risk related to External Commercial Borrowings have been fully hedged using
forward contracts on same dates as the loan are due for repayment.
D) Other Risks
Financial assets carried at amortized cost as at 31 March 2025 is INR 1,015.45 Million (2024: INR
712.63 Million).
The Company has assessed the counterparty credit risk in connection with Cash and cash equivalents and
Other bank balances amounting to INR 153.87 Million as at 31 March 2025 (2024: INR 85.92 Million).
Trade receivables amounting to INR 740.00 Million as at 31 March 2025 are valued at considering provision
for allowance under the expected credit loss method. This assessment is based on the likelihood of the
recoveries from the customers in the present situation. The Company closely monitors its customers who
are going through financial stress and assesses actions such as change in payment terms, recognition of
revenue on collection basis etc., depending on severity of each case.
Based on this internal assessment, the allowance for doubtful trade receivables is considered adequate.
48 Additional regulatory information (Contd..)
D. The Company does not have transactions with companies struck off under section 248 of the Companies Act 2013 or
section 560 of Companies Act 1956.
E. The Company does not hold any benami property under the Prohibition of Benami Property Transactions Act, 1988
and rules made thereunder.
F. The Company has not availed borrowings from banks or financial institutions on the basis of security of current
assets and has not been declared a wilful defaulter by any bank or financial institutions or government or government
authority.
G. The Company has not traded or invested in crypto currency or virtual currency during the current year.
H. A) The Company has not advanced or loaned or invested funds to any persons or entities, including foreign entities
(Intermediaries) with the understanding that the Intermediary shall:
i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on
behalf of the company (Ultimate Beneficiaries) or
ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
B) The Company has not received any fund from any persons or entities, including foreign entities (Funding Party)
with the understanding (whether recorded in writing or otherwise) that the Company shall:
i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on
behalf of the Funding Party (Ultimate Beneficiaries) or
ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
I. The Company does not have any 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).
J. The Company does not have any charges, satisfaction of which is yet to be registered with Registrar of Companies
(ROC) beyond the statutory period.
The accompanying notes referred to above form an integral part of financial statements
For and on behalf of the Board of Directors of
Tasty Bite Eatables Limited
CIN: L15419PN1985PLC037347
Dilen Gandhi Shashank Shekhar
Managing Director Whole-time Director
DIN:10298654 DIN: 10942818
Naresh Chitlangia Vimal Tank
Chief Financial Officer Company Secretary
Place: Pune
Date: 27 May 2025
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