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Heritage Foods Ltd.

BSE: 519552 Sector: Agri and agri inputs
NSE: HERITGFOOD ISIN Code: INE978A01027
BSE 00:00 | 06 Jul 267.60 -1.65
(-0.61%)
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270.05

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271.45

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261.65

NSE 15:40 | 06 Jul 267.65 -1.45
(-0.54%)
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269.10

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OPEN 270.05
PREVIOUS CLOSE 269.25
VOLUME 2367
52-Week high 565.00
52-Week low 250.25
P/E 11.80
Mkt Cap.(Rs cr) 1,242
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 270.05
CLOSE 269.25
VOLUME 2367
52-Week high 565.00
52-Week low 250.25
P/E 11.80
Mkt Cap.(Rs cr) 1,242
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Heritage Foods Ltd. (HERITGFOOD) - Auditors Report

Company auditors report

To the Members of Heritage Foods Limited

Report on the Audit of the Standalone Financial Statements

Opinion

1. We have audited the accompanying standalone financial statements of Heritage FoodsLimited (‘the Company') which comprise the Balance Sheet as at 31 March 2021 theStatement of Profit and Loss (including Other Comprehensive Income) the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofthe significant accounting policies and other explanatory information.

2. 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 Companies Act 2013 (‘Act') in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India includingIndian Accounting Standards (‘Ind AS') specified under section 133 of the Act of thestate of a airs of the Company as at 31 March 2021 and its profit (including othercomprehensive income) its cash flows and the changes in equity for the year ended on thatdate.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Our responsibilities under those standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India (‘ICAI')together with the ethical requirements that are relevant to our audit of the standalonefinancial statements under the provisions of the Act and the rules thereunder and we havefulfi lled our other ethical responsibilities in accordance with these requirements andthe Code of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.

Key Audit Matter

4. Key audit matters are those matters that in our professional judgment were of mostsignifi cance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

5. We have determined the matter described below to be the key audit matter to becommunicated in our report.

Key audit matter How our audit addressed the key audit matter
Revenue recognition Our audit included but was not limited to the following procedures:
Revenue from sale of goods is recognised when control of the products being sold is transferred to the customer and when there are no longer any unfulfi lled obligations. The performance obligations in the contracts are fulfi lled at the time of dispatch delivery or upon formal customer acceptance depending on terms. • Assessed the appropriateness of the revenue recognition accounting policies including those relating to discounts in accordance with Ind AS 115 – Revenue from contracts with customers (‘Ind AS 115').
Majority of the Company's sales arrangements are on a point of sale basis and requires little judgement to be exercised. • Evaluated the integrity of the general information and technology control environment and tested the operating e ectiveness of key IT application controls.
Discounts are material and there are arrangements with varying terms based on schemes implemented throughout the year. There is a risk of revenue being overstated resulting from pressure the management may feel to achieve performance targets at the reporting period end. • Evaluated the design and implementation of Company's controls in respect of revenue recognition including discounts.
• Performed substantive testing by selecting samples of revenue transactions recorded during the year by verifying the underlying documents which included trip sheets invoices shipping documents and evidence of collection of receipts as appropriate.
Due to the materiality of amounts involved and above said considerations revenue recognition from sale of goods is determined to be a key audit matter for the current year audit. • Performed substantive testing by selecting samples of discount transactions recorded during the year and comparing the parameters used in the calculation of the discounts with the relevant source documents (including invoices and schemes) to assess whether the methodology adopted in the calculation of the discounts was in accordance with the terms and conditions defined in the schemes.
Refer Note 3(d) to the Standalone Financial Statements
– Summary of the significant accounting policies and Note 25 for the revenue recognized during the year.
• Performed cut-o testing by selecting samples of revenue transactions recorded before and after the financial year end date by tracing to the relevant underlying documentation to assess whether the revenue was recognized in the correct period.
• Assessed manual journal entries posted to revenue to identify unusual items and tested such entries on a sample basis.
• Evaluated appropriateness of disclosures made in the standalone financial statements in accordance with the requirements of Ind AS 115 and other applicable regulations.

Information other than the Financial Statements and Auditor's Report thereon

6. The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report but does not includethe standalone financial statements and our auditor's report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements

7. The accompanying standalone financial statements have been approved by the Company'sBoard of Directors. The Company's Board of Directors is responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including the IndAS specified under section 133 of the Act. This responsibility also includes maintenanceof adequate accounting records in accordance with the provisions of the Act forsafeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone financial statements that give a true andfair view and are free from material misstatement whether due to fraud or error.

8. In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

9. Those Board of Directors is also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

10. Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith Standards on Auditing will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these standalone financial statements.

11. As part of an audit in accordance with Standards on Auditing we exerciseprofessional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol;

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls with reference to standalone financial statements inplace and the operating effectiveness of such controls;

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management;

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern;

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

12. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant defi ciencies in internal control that we identify during our audit.

13. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.

14. From the matters communicated with those charged with governance we determinethose matters that were of most signifi cance in the audit of the standalone financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

15. As required by section 197(16) of the Act based on our audit we report that theCompany has paid remuneration to its directors during the year in accordance with theprovisions of and limits laid down under section 197 read with Schedule V to the Act.

16. As required by the Companies (Auditor's Report) Order 2016 (‘the Order')issued by the Central Government of India in terms of section 143(11) of the Act we givein the Annexure A a statement on the matters specified in paragraphs 3 and 4 of theOrder.

17. Further to our comments in Annexure A as required by section 143(3) of the Actbased on our audit we report to the extent applicable that: a) we have sought andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purpose of our audit of the accompanying standalonefinancial statements; b) in our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books; c) thestandalone financial statements dealt with by this report are in agreement with the booksof account; d) in our opinion the aforesaid standalone financial statements comply withInd AS specified under section 133 of the Act; e) on the basis of the writtenrepresentations received from the directors and taken on record by the Board of Directorsnone of the directors is disqualified as on 31 March 2021 from being appointed as adirector in terms of section 164(2) of the Act; f) we have also audited the internalfinancial controls with reference to standalone financial statements of the Company as on31 March 2021 in conjunction with our audit of the standalone financial statements of theCompany for the year ended on that date and our report dated 19 May 2021 as per Annexure Bexpressed unmodified opinion; and g) with respect to the other matters to be included inthe Auditor's Report in accordance with rule 11 of the Companies (Audit and Auditors)Rules 2014 (as amended) in our opinion and to the best of our information and accordingto the explanations given to us: i. the Company as detailed in note 43(b) to thestandalone financial statements has disclosed the impact of pending litigations on itsfinancial position as at 31 March 2021; ii. the Company did not have any long-termcontracts including derivative contracts for which there were any material foreseeablelosses as at 31 March 2021; iii. there has been no delay in transferring amounts requiredto be transferred to the Investor Education and Protection Fund by the Company during theyear ended 31 March 2021; iv. the disclosure requirements relating to holdings as well asdealings in specified bank notes were applicable for the period from 8 November 2016 to 30December 2016 which are not relevant to these standalone financial statements. Hencereporting under this clause is not applicable.

For Walker Chandiok & Co LLP
Chartered Accountants
Firm's Registration No.: 001076N/N500013
Sanjay Kumar Jain
Partner
Membership No.: 207660
UDIN: 21207660AAAACY2569
Place: Hyderabad
Date: 19 May 2021

Annexure A to the Independent Auditor's Report of even date to the members of HeritageFoods Limited on the standalone financial statements for the year ended 31 March 2021

Based on the audit procedures performed for the purpose of reporting a true and fairview on the standalone financial statements of the Company and taking into considerationthe information and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that:

(i) (a) The Company has maintained proper records showing full particularsincludingquantitative details and situation of Property plant and equipment.

(b) The Property plant and equipment have been physically verifi ed by the managementduring the year and no material discrepancies were noticed on such verifi cation. In ouropinion the frequency of verifi cation of the Property plant and equipment is reasonablehaving regard to the size of the Company and the nature of its assets. (c) The title deedsof all the immovable properties (which are included under the head ‘Property plantand equipment') are held in the name of the Company.

(ii) In our opinionthe management has conducted physical verifi cation of inventory atreasonable intervals during the year except for goods-in-transit and stocks lying withthird parties. For stocks lying with third parties at the year-end written confi rmationshave been obtained by the management. No material discrepancies were noticed on theaforesaid verifi cation.

(iii) The Company has not granted any loan secured or unsecured to companies firmsLimited Liability Partnerships (LLPs) or other parties covered in the register maintainedunder Section 189 of the Act. Accordingly the provisions of clauses 3(iii)(a) 3(iii)(b)and 3(iii)(c) of the Order are not applicable.

(iv) In our opinion the Company has complied with the provisions of Section 186 inrespect of investments and guarantees. Further in our opinion the Company has notentered into any transaction covered under Section 185 and Section 186 of the Act inrespect of loans and security.

(v) In our opinion the Company has not accepted any deposits within the meaning ofSections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (asamended). Accordingly the provisions of clause 3(v) of the Order are not applicable.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the Rules made by the Central Government for the maintenance of cost records undersub-section (1) of Section 148 of the Act in respect of Company's products and are of theopinion that prima facie the prescribed accounts and records have been made andmaintained. However we have not made a detailed examination of the cost records with aview 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 goods and services tax duty of excise value added tax cess and other materialstatutory dues as applicable to the appropriate authorities. Further no undisputedamounts payable in respect thereof were outstanding at the year-end for a period of morethan six months from the date they become payable.

(b) The dues outstanding in respect of income-tax sales-tax service-tax goods andservices tax duty of customs duty of excise andvalue added taxon account of any disputeare as follows:

( in millions)
Name of the statute Nature of dues Amount Amount -Paid under Protest Period to which the amount relates Forum where dispute is pending
Andhra Pradesh General Purchase Tax 9.51 1.14 2001-02 The High Court of Judicature
Sales Tax Act 1957 Sales Tax/ VAT 4.69 - 2008-09 at Hyderabad for the State of Telangana
Name of the statute Nature of dues Amount Amount -Paid under Protest Period to which the amount relates Forum where dispute is pending
The Central Sales Tax Sales Tax/VAT 1.59 1.59 2010-11 Joint Commissioner of commercial taxes (Appeals) Bangalore
Act1956 Sales Tax/ VAT 2.15 1.58 2011-12
Sales Tax/VAT 0.73 0.73 2012-13
Telangana Tax on Entry Entry tax 0.41 0.10 2011-12 The High Court of Judicature at Hyderabad for the State of Telangana
of Goods into Local Areas Entry tax 2.72 0.68 2012-13
Act 2001 Entry tax 3.82 0.95 2013-14
Entry tax 0.29 0.07 2014-15
Entry tax 0.41 0.10 2015-16
Entry tax 2.70 0.68 2016-17
Entry tax 0.02 0.01 2017-18
Haryana Murrah Bu alo and other Milch Animal Breed Act 2001 Milk cess 10.31 3.48 December 2014 to September 2019 The Supreme Court of India

(viii) The Company has not defaulted in repayment of borrowings to any bank during theyear. There are no loans or borrowings payable to financial institutions or government andno dues payable to debenture-holders.

(ix) The Company did not raise moneys by way of initial public offer or further publicoffer (including debt instruments). In our opinion the term loans were applied for thepurposes for which the loans were obtained.

(x) No fraud by the Company or on the Company by its o cers or employees has beennoticed or reported during the period covered by our audit.

(xi) Managerial remuneration has been paid and provided by the Company in accordancewith the requisite approvals mandated by the provisions of Section 197 of the Act readwith Schedule V to the Act.

(xii) In our opinion the Company is not a Nidhi Company. Accordingly provisions ofclause 3(xii) of the Order are not applicable.

(xiii) In our opinion all transactions with the related parties are in compliance withSections 177 and 188 of Act where applicable and the requisite details have beendisclosed in the standalone financial statements etc. as required by the applicable IndAS.

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures.

(xv) In our opinion the Company has not entered into any non-cash transactions withthe directors or persons connected with them covered under Section 192 of the Act.

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

For Walker Chandiok & Co LLP
Chartered Accountants
Firm's Registration No.: 001076N/N500013
Sanjay Kumar Jain
Partner
Membership No.: 207660
UDIN: 21207660AAAACY2569
Place: Hyderabad
Date:19May 2021

Annexure B to the Independent Auditor's Report of even date to the members of HeritageFoods Limited on the standalone financial statements for the year ended 31 March 2021

Independent Auditor's Report on the internal financial controls with reference to thestandalone financial statements under Clause (i) of Sub-section 3 of Section 143 of theCompanies Act 2013 (‘the Act')

1. In conjunction with our audit of the standalone financial statements of HeritageFoods Limited (‘the Company') as at and for the year ended 31 March 2021 we haveaudited the internal financial controls with reference to standalone financial statementsof the Company as at that date.

Responsibilities of Management and Those Charged with Governance for Internal FinancialControls

2. The Company's Board of Directors is responsible for establishing and maintaininginternal financial controls based on 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 Reporting("Guidance Note") issued by the Institute of Chartered Accountants of India(ICAI). These responsibilities include the designimplementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of the Company's business including adherence to theCompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

Auditor's Responsibility for the Audit of the Internal Financial Controls withReference to Standalone Financial Statements

3. Our responsibility is to express an opinion on the Company' sinternal financialcontrols with reference to standalone financial statements based on our audit. Weconducted our audit in accordance with the Standards on Auditing issued by the Instituteof Chartered Accountants of India (‘ICAI') prescribed under Section 143(10) of theAct to the extent applicable to an audit of internal financial controls with reference tostandalone financial statements and the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (‘the Guidance Note') issued by the ICAI. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit toobtain reasonable assurance about whether adequate internalfinancial controls with reference to standalone financial statements were established andmaintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls with reference to standalone financial statements andtheir operating effectiveness.Our audit of internal financial controls with reference tostandalone financial statements includes obtaining an understanding of such internalfinancial controls assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness ofi nternal control based on theassessed risk. The procedures selected depend on the auditor'sjudgement including theassessment of the risks of material misstatement of the standalone financial statementswhether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovidea basis for our audit opinion on the Company's internal financial controls withreference to standalone financial statements.

Meaning of Internal Financial Controls with Reference to Standalone FinancialStatements

6. A company's internal financial controls with reference to standalone financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of standalone financial statements for externalpurposes in accordance with generally accepted accountingprinciples. A company's internalfinancial controls with reference to standalone financial statements include thosepolicies and procedures that (1) pertain to the maintenance of records that in reasonabledetail accurately and fairly reflect the transactions and dispositions of the assets ofthe company; (2)provide reasonable assurance that transactions are recorded as necessaryto permit preparation of standalone financial statements in accordance with generallyaccepted accounting principles and thatreceipts and expenditures of the company are beingmade only in accordance with authorisations of management and directors of the company;and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the standalone financial statements.

Inherent Limitations of Internal Financial Controls with Reference to StandaloneFinancial Statements

7. Because of the inherent limitations of internal financial controls with reference tostandalone financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of theinternal financial controlswith reference to standalone financial statements to future periods are subject to therisk that the internal financial controls with reference to standalone financialstatements may become inadequate because of changes inconditions or that the degree ofcompliance with the policies or procedures may deteriorate.

Opinion

8. In our opinion the Company has in all material respects adequate internalfinancial controls with reference to standalone financial statements and such controlswere operating effectively as at 31 March 2021 based on the internal control overfinancial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note issued by the ICAI.

For Walker Chandiok & Co LLP
Chartered Accountants
Firm's Registration No.: 001076N/N500013
Sanjay Kumar Jain
Partner
Membership No.:207660
UDIN: 21207660AAAACY2569
Place: Hyderabad
Date: 19 May 2021

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