15.CAPITAL MANAGEMENT - ADDITIONAL CAPITAL DISCLOSURES:

The Company adheres to the Capital Management framework which is underpinned by the following guiding principles:

(a) The key objective is to ensure that it maintains a stable capital structure with the focus on total equity to uphold investor, creditor, and customer confidence and to ensure future development of its business.

(b) Leverage optimally in order to maximize shareholder returns while maintaining strength and flexibility of the Balance Sheet.

(c) The Company also focusses on keeping strong total equity base to ensure independence, security, as well as a high financial flexibility for potential future borrowings, if required without impacting the risk profile of the Company.

(d) Proactively manage exposure in forex, interest and commodities to mitigate risk to earnings.

(e) The Company's goal is to continue to be able to return excess liquidity to shareholders to distribute annual dividends in future years.

This framework is adjusted based on underlying macro-economic factors affecting business environment, financial market conditions and interest rates environment.

16.FINANCIAL INSTRUMENTS:

Valuation:

The financial instruments are initially recognized and subsequently re-measured at fair value as described below :

(a) The fair value of Forward Foreign Exchange contracts is determined using forward exchange rates and yield curves at the balance sheet date.

(b) The fair value of the remaining financial instruments is determined using discounted cash flow analysis.

(c) All foreign currency denominated assets and liabilities using exchange rate at the reporting date.

Fair Value measurement hierarchy:

The fair value of cash and cash equivalents, other bank balances, loans, trade receivables, trade payables and others approximates their carrying amount. The company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation techniques. The fair valuation of various financial assets are done by adopting Level 3 category valuation.

Level 1 :

Quoted prices (unadjusted) in active markets for identical assets and liabilities.

Level 2 :

Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (derived from prices)

Level 3 :

Inputs for the asset or liability that are not based on observable market data (unobservable inputs)

The data required for disclosing information with regard to sensitivity analysis is not made available by the Actuary despite the concerted attempts made by the company to gather the information in this regard and hence the information relating to sensitivity analysis in terms of the amount of responsiveness and the financial impact consequent to change in discount rate, change in rate of salary escalation and change in rate of employee turnover (while holding all the other factors constant), have not been provided for during the year.

These plans typically expose the company to actuarial risks such as:

Investment risk:

The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds.

Interest risk:

A decrease in the bond interest rate will increase the plan liability, however, this will be partially offset by an increase in the return on the plan debt investments.

Longevity risk:

The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan's liability.

Salary risk:

The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan's liability.

The company has one customer individually accounted for more than 10% of the total revenue amounting to approximately Rs.66 crores for the year 2017-18 and Rs.63 crores for the year 2016-17 respectively.

The interest rate sensitivity analysis is done holding on the assumption that all other variables remaining constant. The increase / decrease in interest expense is mainly attributable to the Company's exposure to interest rates on its variable rate of borrowings.

32(iii) Commodity price risk:

Commodity price risk arises due to fluctuation in prices of eggs, feeds and other products. The company has a risk management framework aimed at prudently managing the risk by reducing the external dependability and enhancement of self reliance by manufacturing the commodities in house to the extent possible.

32(iv) Credit risk:

Credit risk is a risk that a customer or counterparty to a financial instrument fails to perform or pay the amounts due, causing financial loss to the company. Credit risk arises from Company's outstanding receivables from customers and other parties. The company has a prudent and conservative process for managing its credit risk arising in the course of its business activities.

32(v) Liquidity risk:

Liquidity risk arises from the company's inability to meet its cash flow commitments on time. Prudent liquidity risk management implies maintaining sufficient stock of cash and cash equivalents (Rs.19.99 crores as on 31st March 2018) & (Rs.17.11 crores as on 31st March 2017) and maintaining availability of standby funding through an adequate line up of committed credit facilities (Rs.43.72 crores as on 31st March 2018) & (Rs.43.07 crores as on 31st March 2017).