Heritage Foods Limited

FINANCIAL STATEMENTS Consolidated 29 th Annual Report 2020-21 | 261 Financial liabilities - Capital creditors As at 31 March 2021 As at 31 March 2020 - EURO 2.70 - Foreign currency sensitivity The following table demonstrates the sensitivity to a reasonably possible change in EURO exchange rate, with all other variables held constant. Particulars Impact on pro fi t/ ( loss ) before tax for the year ended 31 March 2021 31 March 2020 EURO sensitivity ₹ /EURO - Increase by 5% (0.14) - ₹ /EURO - Decrease by 5% 0.14 - iii. Equity price risk: The Group’s listed and non-listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Group manages the equity price risk through diversi fi cation and by placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Group’s senior management on a regular basis. The Group’s Board of Directors reviews and approves all equity investment decisions. At the reporting date, the exposure to unlisted equity securities at fair value was ₹ 2.60 (31 March 2020: ₹ 2.60). Sensitivity analyses of these investments have been provided in Note 35. At the reporting date, the exposure to listed equity securities at fair value was ₹ 0.13 (31 March 2020: ₹ 1,438.64). A decrease of 5% in market price of the securities, which are measured at FVTPL, would have an adverse impact of ₹ Nil (31 March 2020: ₹ 53.94) on the Statement of Pro fi t and loss of the Group, and an increase in prices, a visa versa impact. Further decrease of 5% in market price of the securities, which are measured at FVTOCI, would have an adverse impact of ₹ 0.01 (31 March 2020: ₹ 17.99) on the OCI of the Group, and an increase in prices, a visa versa impact. 38. Capital risk management For the purpose of the Group’s capital management, capital includes issued equity capital, share premium and all other reserves attributable to the equity holders. The primary objective of the Group’s capital management is to maximise the shareholder value. The Group manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the fi nancial covenants. To maintain or adjust the capital structure, the Group may adjust the dividend payments to shareholders, return capital to shareholders or issue new shares. The Group monitors capital using a gearing ratio, which is net debt divided by total equity plus net debt. The Group’s policy is to keep the gearing ratio up to 35%. The Group includes within net debt, borrowings from banks less cash and cash equivalents. Borrowings from banks comprise of term loans and loans repayable on demand. Particulars As at 31 March 2021 As at 31 March 2020 Borrowings from banks (note 19 and 20) 585.86 2,991.56 Less: Cash and cash equivalents (note 15(i))* (217.14) (558.34) Net debt ( A ) 368.72 2,433.22 Total equity ( B ) 5,963.13 4,617.36 Net debt and total equity (A) + (B) 6,331.85 7,050.58 Gearing ratio ( % ) 5.82% 34.51% *excluding restricted cash In order to achieve this overall objective, the Group’s capital management, amongst other things, aims to ensure that it meets fi nancial covenants attached to the borrowings. Breaches in meeting the fi nancial covenants would permit the lenders to immedi- ately call back the borrowings. There was no breach in the fi nancial covenants of any borrowings during the year ended 31 March 2021. Further there is no impact on the consolidated fi nancial statements due to breach in a fi nancial covenant attached to the borrowing of the Group during the previous year ended 31 March 2020. No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2021 and 31 March 2020. Summary of the signi fi cant accounting policies and other explanatory information (All amounts in ₹ millions, except share data and where otherwise stated)