Heritage Foods Limited

FINANCIAL STATEMENTS Consolidated 29 th Annual Report 2020-21 | 235 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 Group. c. Fair value measurement of fi nancial instruments When the fair values of fi nancial assets and fi nancial liabilities recorded in the consolidated balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. d. Leases Ind AS 116 requires lessees to determine the lease term as the non-cancellable period of a lease adjusted with any option to extend or terminate the lease, if the use of such option is reasonably certain. The Group makes an assessment on the expected lease term on a lease-by- lease basis and thereby assesses whether it is reasonably certain that any options to extend or terminate the contract will be exercised. In evaluating the lease term, the Group considers factors such as any signi fi cant leasehold improvements undertaken over the lease term, costs relating to the termination of the lease and the importance of the underlying asset to Group’s operations taking into account the location of the underlying asset and the availability of suitable alternatives. 5. Standards and recent pronouncements issued but not yet e ff ective On 24 March 2021, the Ministry of Corporate A ff airs (“MCA”) through a noti fi cation, amended Schedule III of the Companies Act, 2013. The amendments revise Division I, II and III of Schedule III and are applicable from 1 April 2021. Key amendments relating to Division II which relate to companies whose consolidated fi nancial statements are required to comply with Companies (Indian Accounting Standards) Rules 2015 are: Consolidated Balance Sheet: a. Lease liabilities to be disclosed separately under the head ‘ fi nancial liabilities’, duly distinguished as current or non-current. b. Certain additional disclosures in the Consolidated statement of changes in equity such as changes in equity share capital due to prior period errors and restated balances at the beginning of the current reporting period. c. Speci fi ed format for disclosure of shareholding of promoters. d. Speci fi ed format for ageing schedule of trade receivables, trade payables, capital work-in-progress and intangible asset under development. e. Disclosure of amounts borrowed and utilised for other than the speci fi c purposes . f. Speci fi c disclosure under ‘additional regulatory requirement’ such as compliance with approved schemes of arrangements, compliance with number of layers of companies, title deeds of immovable property not held in name of Group, loans and advances to promoters, directors, key managerial personnel (KMP) and related parties, details of benami property held etc. Consolidated Statement of pro fi t and loss: g. Additional disclosures relating to Corporate Social Responsibility (CSR), undisclosed income and crypto or virtual currency speci fi ed under the head ‘additional information’ in the notes forming part of the consolidated fi nancial statements. Theamendments areextensiveand theGroupwill evaluate the same to give e ff ect to them as required by law.