adf foods has announced that its wholly owned subsidiary, ADF Holdings (USA) Ltd, has received a tariff refund amounting to US$ 2.1 million from U.S. Customs and Border Protection (CBP). The refund, equivalent to approximately Rs. 19.97 crore, was issued following directives from the US Supreme Court to the US Government to refund excess tariffs collected from importers. This financial recovery improves the liquidity position of the US subsidiary.

The intimation was submitted to the exchanges pursuant to Regulation 30 read with Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The disclosure confirmed that the funds were received as a direct consequence of the Supreme Court's ruling regarding the excess collection of tariffs.

Key Details of the Refund

The following table outlines the primary details of the refund received by the subsidiary:

The Company stated that it will take suitable steps regarding the utilization and accounting of these funds in accordance with applicable regulations. The receipt of the refund marks the conclusion of the subsidiary's claim process related to the tariff dispute.

ADF Foods Ltd announced that the United States District Court, Southern District of New York, has issued a favourable order in litigation involving its step-down wholly owned subsidiary, ADF Foods (USA) Ltd. The court's Findings of Fact and Conclusions of Law mark a significant positive outcome for the company in the dispute filed by Ascot Valley Foods, Ltd.

The litigation originated from a case filed by Ascot Valley Foods, Ltd. against ADF Foods (USA) Ltd. for alleged violation of a Co-pack agreement. In response, ADF Foods (USA) Ltd. filed counterclaims, including allegations of misappropriation of its proprietary recipes and trade secrets. The court has now ruled largely in favour of the subsidiary, directing that Ascot disgorge profits earned through the misappropriation of ADF's proprietary information.

Financial Implications

The order specifies that ADF Foods (USA) Ltd. is entitled to US$ 2,298,114 towards disgorgement of Ascot's profits computed till December 2025. This amount represents Ascot's profits earned through the misuse of ADF's proprietary recipes and trade secrets up to December 31, 2025. Additionally, the court has outlined a mechanism to compute further amounts for the period from 2026 onwards.

Conversely, the liability of ADF Foods (USA) Ltd. has been restricted to US$ 100,706.96 plus interest. The parties have been granted 14 days from the date of the order to meet and confer, or raise objections to the proposed judgment and injunction order in case of disagreement.

Next Steps

ADF has been directed to file a proposed judgment for its trade secret claim, which includes the mechanism for computing damages beyond 2025 and a proposed permanent injunction order. ADF Foods (USA) Ltd. stated it will take the necessary steps in accordance with the court's directions.

The company noted that the matter remains subject to final judgement, any further proceedings, and recovery or enforcement processes. Consequently, the amounts mentioned should not be construed as having an immediate financial statement or profit and loss impact. The financial impact will be assessed in accordance with applicable accounting standards upon completion of the relevant legal and accounting evaluation.