Consolidated STRATEGIC REVIEW STATUTORY REPORT FINANCIAL STATEMENTS 284 32ND ANNUAL REPORT 2023-24 | HERITAGE FOODS LTD The table below summarises the maturity profile of the Group’s financial liabilities based on contractual undiscounted payments: Particulars As at 31 March 2024 As at 31 March 2023 On demand Up to 1 year More than 1 year Total On demand Up to 1 year More than 1 year Total Financial guarantees # 63.55 - - 63.55 110.21 - - 110.21 Borrowings - 176.76 751.47 928.23 1,263.96 34.58 44.96 1,343.50 Lease liabilities - 80.54 586.23 666.77 - 61.17 549.07 610.24 Trade payables - 1,449.83 - 1,449.83 - 770.49 - 770.49 Other financial liabilities - 1,032.08 - 1,032.08 - 707.18 - 707.18 63.55 2,739.21 1,337.70 4,140.46 1,374.17 1,573.42 594.03 3,541.62 # Represents loan amount outstanding to the bankers by the joint venture, against which financial guarantees were extended by the Holding Company as at 31 March 2024 and 31 March 2023. C. Market risk Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse changes in the market rates and prices. Market risk is attributable to all market risk-sensitive financial instruments, all foreign currency receivables and payables and all short-term and long-term borrowings. Market risk comprises three types of risk: interest rate risk, currency risk and other price risks such as equity price risk. i. Interest risk: Interest rate risk is the risk that the fair value or future cash flows of a financial instrument shall fluctuate because of changes in the market interest rates. The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s long-term obligations with floating interest rates. The impact on account of change in interest rate on the Company’s long-term obligations is not considered as significant. ii. Foreign currency risk: Foreign currency risk is the risk that the fair value or future cash flows of an exposure shall fluctuate because of changes in foreign exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s operating and investing activities (when revenue or expense including capital expenditure is denominated in a foreign currency). The exposure of foreign currency risk to the Group is low as it enters very limited transactions in foreign currencies and accordingly any impact on account of change in the exchange rate is not considered as significant. 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 diversification 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 2023: ₹2.60). The impact on account of change in the assumptions are not considered as significant. 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 financial 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. Summary of the material accounting policies and other explanatory information (All amounts in ₹ millions, except share data and where otherwise stated)
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