Heritage Foods Limited

FINANCIAL STATEMENTS Standalone 29 th Annual Report 2020-21 | 171 at the initial date of recognition, and only if the criteria in Ind AS 109 are satis fi ed. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognized in OCI. These gains/ losses are not subsequently transferred to the standalone statement of pro fi t and loss. However, the company may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognised in the standalone statement of pro fi t and loss. The company has not designated any fi nancial liability as at fair value through pro fi t and loss. Loans and borrowings After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in the standalone statement of pro fi t and loss when the liabilities are derecognised as well as through the EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as fi nance costs in the standalone statement of pro fi t and loss. This category generally applies to borrowings from banks. Financial guarantee contracts Financial guarantee contracts issued by the Company are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the speci fi ed debtor fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind AS 109 and the amount recognised less cumulative amortisation. Trade and other payables These amounts represent liabilities for goods and services provided to the Company prior to the end of fi nancial year which are unpaid. The amounts are unsecured and are usually paid as per agreed terms. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognised initially at their fair value and subsequently measured at amortised cost using the e ff ective interest method. De-recognition A fi nancial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing fi nancial liability is replaced by another from the same lender on substantially di ff erent terms, or the terms of an existing liability are substantially modi fi ed, such an exchange or modi fi cation is treated as the de- recognition of the original liability and the recognition of a new liability. The di ff erence in the respective carrying amounts is recognised in the standalone statement of pro fi t and loss. O ff setting of fi nancial instruments Financial assets and fi nancial liabilities are o ff set and the net amount is reported in the standalone balance sheet if there is a currently enforceable legal right to o ff set the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously. Derivative fi nancial instrument - Initial recognition and subsequent measurement Derivative fi nancial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as fi nancial assets when the fair value is positive and as fi nancial liabilities when the fair value is negative. Any gains or losses arising from changes in the fair value of derivatives are taken directly to the standalone statement of pro fi t and loss. r. Earnings per share Basic earnings per share are calculated by dividing the net pro fi t or loss for the period attributable to equity shareholders (after deducting preference dividends, if any, and attributable taxes) by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net pro fi t or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the e ff ects of all dilutive potential equity shares.