Heritage Foods Limited | 30th Annual Report 2021-22

Financial Statements Company Overview Statutory Reports 171 36. Disclosure pursuant to requirements of Rule 11(e) (i) & (ii) of the Companies (Audit and Auditors) Rules i) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). ii) The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries. 37. The Company has not extended any loans or advances in the nature of loans to its promoters, directors, key managerial personnel and its related parties, as defined under the Act, during the years ended 31 March 2022 and 31 March 2021. 38. Fair value hierarchy (i) Financial assets and financial liabilities at fair value on a recurring basis as of the reporting dates are as follows: Particulars As at 31 March 2022 As at 31 March 2021 Financial assets Fair value hierarchy (Level 1) Quoted equity shares 0.20 0.13 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 2022 and 31 March 2021 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 flow model. The valuation requires management to make certain assumptions about the model inputs, including forecasting of cash flows, 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 significant unobservable inputs used in the fair value measurement categorised within Level 3 of the fair value hierarchy as at 31 March 2022 and 31 March 2021 are as shown below. The impact on account of change in these assumptions are not considered as significant. Significant unobservable inputs* Assumption made Future growth rate 3% Discount rate 20% Discount for lack of marketability (DFLM) 15% (iii) Reconciliation of level 3 fair value measurement: Amount As at 1 April 2020 2.60 Changes during the year - As at 31 March 2021 2.60 Changes during the year - As at 31 March 2022 2.60 39. Categories of Financial instruments and their fair values The carrying amount of all financial assets and financial liabilities appearing in the financial statements are reasonable approximation of their fair values, except for deferred payment liabilities whose fair value amounts to ` 33.82 and ` 46.36 as on 31 March 2022 and 31 March 2021 respectively. Summary of the significant accounting policies and other explanatory information (All amounts in ` millions, except share data and where otherwise stated) Standalone