Heritage Foods Limited

Heritage Foods Limited 168 the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity; or • a present obligation that arises from past events but is not recognised because:  it is not probable that an out fl ow of resources embodying economic bene fi ts will be required to settle the obligation; or  the amount of the obligation cannot be measured with su ffi cient reliability. Contingent assets are neither recognized nor disclosed, unless in fl ow of economic bene fi ts is probable. However, when realization of income is virtually certain, related asset is recognized. p. Employee bene fi ts Short term bene fi ts Short Term Employee Bene fi ts are accounted for in the period during which the services have been rendered. Post-employment bene fi ts and other long-term employee bene fi ts Provident Fund: Retirement bene fi t in the form of provident fund is a de fi ned contribution scheme. The contributions to the provident fund administered by the Central Government under the Provident Fund Act, 1952, are charged to the standalone statement of pro fi t and loss for the year in which the contributions are due. The company has no obligation, other than the contribution payable to the provident fund. If the contribution payable to the scheme for service received before the standalone balance sheet date exceeds the contribution already paid, the de fi cit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the standalone balance sheet date, then excess is recognized as an asset to the extent that the pre-payment will lead to a reduction in future payment. Gratuity: The Company operates a de fi ned bene fi t gratuity plan in India, which requires contributions to be made to a separately administered fund. The cost of providing bene fi ts under the de fi ned bene fi t plan is determined using the projected unit credit method. Remeasurements, comprising mainly of actuarial gains and losses, are recognised immediately in the standalone balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Remeasurements are not reclassi fi ed to the standalone statement of pro fi t and loss in subsequent periods. Leave Encashment: The Company operates a long-term leave encashment plan in India. Accrued liability for leave encashment including sick leave is determined on actuarial valuation basis using Projected Unit Credit (PUC) Method at the end of the year and provided completely in pro fi t and loss account as per Ind AS - 19 “Employee Bene fi ts”. q. Financial instruments A fi nancial instrument is any contract that gives rise to a fi nancial asset of one entity and a fi nancial liability or equity instrument of another entity. Financial assets Initial recognition and measurement All fi nancial assets are recognised initially at fair value plus, in the case of fi nancial assets not recorded at fair value through pro fi t or loss, transaction costs that are attributable to the acquisition of the fi nancial asset. Subsequent measurement For purposes of subsequent measurement, fi nancial assets are classi fi ed in four categories: • Debt instruments at amortised cost • Debt instruments at fair value through other comprehensive income (FVTOCI) • Debt instruments, derivatives and equity instruments at fair value through pro fi t or loss (FVTPL) • Equity instruments measured at FVTOCI and FVTPL Debt instruments at amortised cost A ‘debt instrument’ is measured at the amortised cost if both the following conditions are met: a) The asset is held within a business model, whose objective is to hold assets for collecting contractual cash fl ows, and b) Contractual terms of the asset give rise on speci fi ed dates to cash fl ows that are solely payments of principal and interest (SPPI) on the principal amount outstanding. After initial measurement, such fi nancial assets are subsequently measured at amortised cost using the e ff ective interest rate (EIR) method. Amortised cost is