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Heritage Foods Ltd.

BSE: 519552 Sector: Agri and agri inputs
NSE: HERITGFOOD ISIN Code: INE978A01027
BSE LIVE 15:40 | 13 Dec 772.05 11.05
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NSE 15:55 | 13 Dec 772.50 11.50
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OPEN 772.65
PREVIOUS CLOSE 761.00
VOLUME 2109
52-Week high 830.00
52-Week low 412.53
P/E 70.00
Mkt Cap.(Rs cr) 3,582
Buy Price 772.05
Buy Qty 50.00
Sell Price 0.00
Sell Qty 0.00
OPEN 772.65
CLOSE 761.00
VOLUME 2109
52-Week high 830.00
52-Week low 412.53
P/E 70.00
Mkt Cap.(Rs cr) 3,582
Buy Price 772.05
Buy Qty 50.00
Sell Price 0.00
Sell Qty 0.00

Heritage Foods Ltd. (HERITGFOOD) - Auditors Report

Company auditors report

To

The Members of

HERITAGE FOODS LIMITED

(Formerly known as Heritage Foods (India) Limited)

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Heritage FoodsLimited (‘the Company') which comprise the balance sheet as at 31 March 2017 thestatement of profit and loss and the cash fl ow statement for the year then ended and asummary of significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash fl ows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating eff ectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of aff airs of the Companyas at 31 March 2017 and its profit and its cash fl ows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the Annexure A a statement on the matters specified in the paragraph3 and 4 of the order.

2. As required by Section 143 (3) of the Act we report that:

a. We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

b. In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books; c. The balance sheetthe statement of profit and loss and the cash fl ow statement dealt with by this Reportare in agreement with the books of account;

d. In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014;

e. On the basis of the written representations received from the directors as on 31March 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2017 from being appointed as a director in terms of Section164 (2) of the Act;

f. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating eff ectiveness of such controls refer to ourseparate report in "Annexure B"; and

g. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us: i. thecompany does not have any pending litigations which would impact its financial positionexcept as listed in the notes to accounts (note: 30)

ii. the Company did not have any material foreseeable losses on long-term contractsincluding derivative contracts.

iii. there is no amount required to be transferred to the Investor Education andProtection Fund by the Company.

iv. the company has provided requisite disclosures in its standalone financialstatements as to holdings as well as dealings in Specified Bank Notes during the periodfrom 8th November 2016 to 30th December 2016 and these are in accordance with the booksof accounts maintained by the company. (note: 45)

For Raju and Prasad
Chartered Accountants
FRN: 003475S
M Sivaram Prasad
Date : May 25 2017 Partner
Place : Hyderabad M.No: 018943

Annexure - A to the Auditors' Report

The Annexure referred to in our Report of even date to the members of Heritage FoodsLimited on the accounts of the company for the year ended 31st March 2017.

i. (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) These fixed assets have been physically verified by the management during the yearand discrepancies noticed on such verification have been properly dealt with in the booksof accounts. In our opinion the frequency of verification is reasonable having regard tothe size of the company and the nature of the assets

(c) The title deeds of immovable properties are held in the name of the company.

ii. The inventory has been physically verified during the year by the management. Inour opinion the frequency of verification is reasonable. Also discrepancies noticed onsuch verification have been properly dealt with in the books of accounts.

iii. The company has granted loans to company covered in the register maintained underSection 189 of the Act. And:

a) The terms and conditions of the grant of such loans are not prejudicial to thecompany's interest; b) The schedule of repayment of principle an payment of interest hasbeen stipulated and the receipts are regular. c) There is no overdue amount outstandingfor more than ninety days..

iv. In respect of loans investments guarantees and security provisions of section185 and 186 of the Companies Act 2013 have been complied with.

v. The Company has not accepted any deposits from the public within the meaning ofSections 73 to 76 of the Act and the rules framed there under to the extent notified.

vi. We have broadly reviewed the books of account maintained by the Company in respectof products where pursuant to the rules made by the Central Government of India themaintenance of cost records has been specified under subsection (1) of Section 148 of theAct and are of the opinion that prima facie the prescribed accounts and records havebeen made and maintained. We have not however made a detailed examination of the recordswith a view to determine whether they are accurate or complete.

vii. (a) The company is regular in depositing undisputed statutory dues includingProvident Fund Employees' State Insurance Income Tax Sales Tax Service Tax Duty ofCustoms Duty of Excise Value Added Tax Cess and any other statutory dues with theappropriate authorities. There are no undisputed statutory dues outstanding for more thansix months as on 31.03.2017.

b) According to the information and explanations given to us following are thedisputed dues relating to sales tax/VAT which have not been deposited as at 31st March2017

Nature of Statue Nature of Dispute Amount ( Rs. In Lakhs) Period to which the amounts relate (A.Y) Forum where the dispute is pending
A.P.G.S.T ACT 1957 Levy of purchase tax on purchase of milk 83.75 2001-02 High Court of TG and AP
C.S.T ACT Levy of purchase tax on purchase of milk 37.34 2002-03 High Court of TG and AP
C.S.T ACT Levy of purchase tax on purchase of milk 1.42 1998-99 High Court of TG and AP
AP VAT Input tax credit disallowance and others 1.79 2008-09 High Court of TG and AP
TN VAT Act Input tax credit disallowed 24.38 2013-14 CTO

viii. The Company has not defaulted in repayment of dues to any bank as at the balancesheet date.

ix. The company has not raised any money by way of initial public off er or furtherpublic off er (Including debt instruments). Further the term loans taken by the Companywere applied for the purpose for which they were obtained.

x. According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.

xi. According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.

Xii. In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.

xiii. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

xiv. According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly paragraph 3(xiv) of the Order is not applicable.

xv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with directors which requires complianceunder Section 192. Accordingly paragraph 3(xv) of the Order is not applicable.

xvi. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For Raju and Prasad
Chartered Accountants
FRN: 003475S
M Sivaram Prasad
Date : May 25 2017 Partner
Place : Hyderabad M.No: 018943

ANNEXURE - B TO THE AUDITORS' REPORT

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of HeritageFoods Limited ("the Company") as of 31 March 2017 in conjunction with our auditof the standalone financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI').

These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating eff ectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated eff ectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating eff ectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly refl ect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material eff ect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating eff ectively as at 31 March 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For Raju and Prasad
Chartered Accountants
FRN: 003475S
M Siva Ram Prasad
Date : May 25 2017 Partner
Place : Hyderabad M.No: 018943