Heritage Foods Limited

FINANCIAL STATEMENTS Standalone 29 th Annual Report 2020-21 | 163 value of the loan and the proceeds received. The loan is subsequently measured as per the accounting policy applicable to fi nancial liabilities. f. Taxes Current income tax Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax is recognised in the standalone statement of pro fi t and loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate. Deferred tax Deferred tax is provided using the Balance Sheet approach on temporary di ff erences between the tax bases of assets and liabilities and their carrying amounts for fi nancial reporting purposes at the reporting date. Deferred tax liabilities are recognised for all taxable temporary di ff erences, except when the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, a ff ects neither the accounting pro fi t nor taxable pro fi t or loss. Deferred tax assets are recognised for all deductible temporary di ff erences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable pro fi t will be available against which the deductible temporary di ff erences, and the carry forward of unused tax credits and unused tax losses can be utilised, except when the deferred tax asset relating to the deductible temporary di ff erence arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, a ff ects neither the accounting pro fi t nor taxable pro fi t or loss. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that su ffi cient taxable pro fi t will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable pro fi ts will allow the deferred tax asset to be recovered. Deferred tax is recognised in the standalone statement of pro fi t and loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the deferred tax is also recognised in other comprehensive income or directly in equity, respectively. Deferred tax assets and deferred tax liabilities are o ff set if a legally enforceable right exists to set o ff current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority. Dividend distribution tax (DDT) Dividend distribution tax arising out of payment of dividends to shareholders under the Indian Income tax regulations is not considered as tax expense for the Company and all such taxes are recognised in the standalone statement of changes in equity as part of the associated dividend payment. The Finance Act 2020 has repealed the Dividend Distribution Tax. Companies are now required to pay/ distribute dividend after deducting applicable taxes. The remittance of dividends outside India is also subject to withholding tax at applicable rates. g. Property, plant and equipment Property, plant and equipment are stated at cost net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, the cost of replacing the part of plant and equipment and borrowing costs if capitalization criteria are met and any attributable cost of bringing the asset to its working condition and location for the intended use.When signi fi cant parts of plant and equipment are required to be replaced at intervals, the Company depreciates them separately based on their speci fi c useful lives. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satis fi ed. All other repair and maintenance costs are recognised in the standalone statement of pro fi t and loss as incurred. The present value of the expected cost for the