Heritage Foods Limited

FINANCIAL STATEMENTS Standalone 29 th Annual Report 2020-21 | 195 Summary of the signi fi cant accounting policies and other explanatory information (All amounts in ₹ millions, except share data and where otherwise stated) 35 Fair value hierarchy (i) Financial assets and fi nancial liabilities at fair value on a recurring basis as of the reporting dates are as follows: Particulars As at 31 March 2021 As at 31 March 2020 Financial assets Fair value hierarchy (Level 1) Quoted equity shares 0.13 1,438.65 Fair value hierarchy (Level 3) Unquoted equity shares 2.60 2.60 There are no transfers between levels during the current and previous year ended 31 March 2021 and 31 March 2020 respectively. The Company’s policy is to recognise transfers into and transfers out of fair value hierarchy levels at the end of the reporting period. (ii) Valuation technique and inputs used for level 3 instruments: The fair value of the level 3 instruments has been estimated using the discounted cash fl ow model. The valuation requires management to make certain assumptions about the model inputs, including forecasting of cash fl ows, discount rate, credit risk and volatility. The probabilities of the various estimates within the range can be reasonably assessed and are used in the management’s estimate of the fair value for these level 3 instruments. The signi fi cant unobservable inputs used in the fair value measurement categorised within Level 3 of the fair value hierarchy together with a quantitative sensitivity analysis as at 31 March 2021 and 31 March 2020 are as shown below: Signi fi cant unobservable inputs* Assumption made Sensitivity of the inputs Future growth rate 3% 5% increase/(decrease) in the growth rate would result in increase/(decrease) in fair value by ₹ 0.89/( ₹ 0.89) as on 31 March 2021 and 31 March 2020. Discount rate 20% 5% increase/ (decrease) in the discount rate would result in (decrease)/ increase in fair value by ( ₹ 0.72)/ ₹ 0.72 as on 31 March 2021 and 31 March 2020. Discount for lack of marketability (DFLM) 15% 5% increase/ (decrease) in the DFLM would result in (decrease)/ increase in fair value by ( ₹ 0.15)/ ₹ 0.15 as on 31 March 2021 and 31 March 2020. *keeping all other inputs constant. (iii) Reconciliation of level 3 fair value measurement: Particulars Amount As at 1 April 2019 2.60 Changes during the year - As at 31 March 2020 2.60 Changes during the year - As at 31 March 2021 2.60