Heritage Foods Limited

Heritage Foods Limited 172 s. Cash fl ow statement The standalone cash fl ow statement is prepared in accordance with the Indirect method. Standalone cash fl ow statement presents the cash fl ows by operating, fi nancing and investing activities of the Company. Operating cash fl ows are arrived by adjusting pro fi t or loss before tax for the e ff ects of transactions of a non- cash nature, any deferrals or accruals of past or future operating cash receipts or payments, and items of income or expense associated with investing or fi nancing cash fl ows. t. Cash and cash equivalents Cash and cash equivalent in the standalone balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insigni fi cant risk of changes in value. For the purpose of the standalone cash fl ow statement, cash and cash equivalents consist of cash at banks and on hand and deposits, as de fi ned above, net of outstanding loans repayable on demand from banks as they are considered an integral part of the Company’s cash management. u. Cash dividends to equity holders The Company recognises a liability to make cash distributions to equity holders when the dividend distribution is authorised and the distribution is no longer at the discretion of the Company. As per the corporate laws in India, a distribution is authorised when it is approved by the shareholders. A corresponding reduction is recognised directly in equity. v. Investments in subsidiary, joint venture and associate The Company has elected to recognise its investments in equity instruments in subsidiary, joint venture and associate at cost in accordance with the option available in Ind AS 27, ‘Separate Financial Statements’. w. Research and Development Expenditure on research activities is recognised in the Statement of Pro fi t and Loss as incurred. Development expenditure is capitalised as part of the cost of the resulting intangible asset only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic bene fi ts are probable, and the Company intends to and has su ffi cient resources to complete the development and to use or sell the asset. Otherwise, it is recognised in the Statement of Pro fi t and Loss as incurred. Subsequent to the initial recognition, the asset is measured at cost less accumulated amortisation and accumulated impairment losses, if any. 4. Key accounting estimates, judgements and assumptions The preparation of the Company’s standalone fi nancial statements requires management to make judgements, estimates and assumptions that a ff ect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities a ff ected in future periods. The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a signi fi cant risk of causing amaterial adjustment to the carrying amounts of assets and liabilities within the next fi nancial year, are described below. a. De fi ned bene fi t plans and other long-term bene fi t plan The cost and present value of the de fi ned bene fi t gratuity plan and leave encashment (other long-term bene fi t plan) are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may di ff er from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a de fi ned bene fi t obligation and other long- term bene fi ts are highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. b. Useful lives of depreciable and amortisable assets Management reviews the useful lives of depreciable and amortisable assets at each reporting date, based on the expected utility of the assets to the Company. c. Fair value measurement of fi nancial instruments When the fair values of fi nancial assets and fi nancial liabilities recorded in the standalone balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques