To the Members
Your Directors have a great pleasure in presenting the Twenty Ninth (29th) AnnualReport together with the Standalone & Consolidated Audited Financial Statements ofyour Company for the Financial Year ended March 31 2021.
Financial Results and Performance
The Company's financial performance for the year ended March 31 2021 is summarizedbelow:
| || ||( Rs in Millions) |
| ||Standalone |
|Particulars ||FY 2020-21 ||FY 2019-20 |
|Net Sales ||24067.87 ||26795.94 |
|Other Operating Income ||2.42 ||15.13 |
|Total Revenue ||24070.29 ||26811.06 |
|Add: i) Other Income ||84.07 ||83.24 |
|ii) Gain due to changes in fair value ||- ||2944.89 |
|of derivative Liability || || |
|Total Income ||24154.36 ||29839.19 |
|Less: i) Total Expenditure ||21525.36 ||25481.47 |
|ii) Fair value loss on FVTPL equity ||48.12 ||5116.06 |
|securities || || |
|Profi t/(Loss) before Finance cost ||2580.88 ||(758.33) |
|Depreciation Amortisation Expense and || || |
|Tax || || |
|Less: i) Finance cost ||178.48 ||208.07 |
|ii) Depreciation and ||440.54 ||480.36 |
|Amortisation Expense || || |
|Profi t /(Loss) before tax ||1961.86 ||(1446.76) |
|Less: i) Provision for current Tax ||500.37 ||185.05 |
|ii) Provision for deferred taxation ||9.85 ||(31.77) |
|Profit/(Loss)after tax ||1451.64 ||(1600.04) |
Performance of the Company Standalone
Your Company during the year under review earned revenue from operations (Gross) of24070.29 Million against
26811.06 million over the previous year. The profit/(loss) before Finance Costdepreciation & amortization and tax was of 2580.88 Millions as against (758.33)Million in the previous year.
The Profit After Tax for the current year is 1451.64 Million against (1600.04)Million in the previous year.
Your Company during the year under review earned revenue from operations (Gross) of24731.13 Million against 27259.04 million over the previous year. The profit/(loss)before Finance Cost depreciation & amortization and tax was of 2679.24 Millions asagainst (806.10) Million in the previous year.
The Profit After Tax for the current year is 1490.50 Million against (1687.23) Millionin the previous year.
Your Company has complied with all the Acts Rules Regulations and Guidelinesissued/prescribed by the Securities Exchange Board of India Reserve Bank of IndiaMinistry of Corporate A airs and other statutory authorities.
Transfer to General/Other Reserves
Your Directors do not propose to transfer any amount to general/other reserves for thefinancial year ended March 31 2021.
Your Directors have pleasure in recommending a dividend of 100% i.e. Rs5/- per equityshare of face value of Rs5/- each for the financial year ended March 31 2021at theirmeeting held on May 19 2021 amounting to Rs231.99 Million. The dividend payout is subjectto approval of members at the ensuing Annual General Meeting. The Board of Directorsrecommended the dividend of 100% the 1st time in the history of the Company keeping inview of the profitability and realisation of the sale of investment in Future RetailLimited during the year and keeping the view of the dividend distribution policy of theCompany. Similar kind of dividend may or may not be recommend in the future years. TheRegister of Members and Share Transfer Books will remain closed from Saturday July 242021 to Friday July 30 2021 (both days inclusive) for the purpose of payment of dividendfor the financial year ended March 31 2021. The Annual General Meeting is scheduled to beheld on July 30 2021.
Dividend Distribution Policy
In terms of Regulation 43A of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations") the Company has formulated and adopted a Dividend Distribution Policywith the objective of providing clarity to its stakeholders on the profit distributionstrategies of the Company. During the year the said Policy has been reviewed by the Boardof Directors of the Company and hosted on the website of the Company athttps://www.heritagefoods.in/policy
The Authorised Share Capital of the Company as on March 31 2021 was Rs 500000000/-divided into 96000000 equity shares of Rs5/- each and 2000000 preference shares ofRs10/- each. The paid up Equity Share Capital as on March 31 2021 stood at Rs231990000/- divided into 46398000 equity shares face value of Rs 5/- each. Duringthe year under review the Company has not issued any shares including shares withdifferential voting rights not granted any stock options and not issued any sweat equityshare to its employees/directors. As on March 31 2021 none of the Directors of theCompany holds any instruments convertible into equity shares of the Company. The Companyhas not issued equity shares with differential rights as to dividend voting or otherwise.
Your Company has not accepted any deposits from the Directors/ Members/Public pursuantto Section 73 of the Companies Act 2013 read with the Companies (Acceptance of Deposits)Rules 2014 and hence there are no unpaid/ unclaimed deposits nor amount of principal orinterest on public deposits was outstanding as on the Balance Sheet date.
Buy Back of shares and disinvestment
The Company has not bought back any of its shares during the Financial Year ended March31 2021.
The Company during the year under review has disposed o its entire holdings/investmentof 17847420 equity shares in Future Retail Limited (CIN:L51909MH2007PLC268269). Theabove shares were alloted by Future Retail Limited on 27th July 2017 as per the compositescheme of Arrangement entered amongst the Company Heritage Nutrivet Limited (Formerlyknown as Heritage Foods Retail Limited) and Future Retail Ltd (FRL). These shares weresold through Stock Exchange in Open Market in various tranches and the net amount ofRs1319.4 million was received by the company.
Further the Company has disposed o its entire holdings/ Investments of 892371 equityshares held in Praxis Home Retail Limited. The above shares were allotted to the Companyby Praxis Home Retail Limited (CIN:L52100MH2011PLC212866) pursuant to the CompositeScheme of Arrangement among Future Retail Limited and Bluerock eServices Private Limitedand Praxis Home Retail Limited on 8th December 2017. The shares were sold through StockExchange in Open Market in various tranches and the net amount of Rs39.4 million wasreceived by the company.
The above said proceeds were utilised by the company for the repayment of the Termloans and working capital.
Particulars of Loans Guarantees or Investments
Loans guarantees and investments covered under Section 186 of the Companies Act 2013forms part of the notes (note no. 20) to the standalone financial statements provided inthis Annual Report. The Company has given corporate guarantee as at March 31 2021 of Rs207.50 Million for the credit facilities availed by its wholly owned subsidiary Companynamely M/s.HeritageNutrivetLimited(CIN:U15400TG2008PLC062054) (the outstanding as on March31 2021 was Rs 115.61 Million and Rs 220 Million for the credit facilities availed by itsjoint venture Company namely Heritage Novandie Foods Private Limited (CIN:U74999TG2017PTC120860) (the outstanding as on March 31 2021 was Rs 149.54 Million).
Particulars of Contract or Arrangements made with Related Parties
The particulars of contracts or arrangements with related parties as per Section 188 ofthe Companies Act 2013 and rules made thereof as amended from time to time and as per theRelated Party Transaction (RPT) policy the Company during the financial year ended March31 2021 in prescribed Form AOC-2 is annexed to this Board's Report (Annexure-1). Furtherthere are no materially significant related party transactions during the year underreview with Promoters Directors Key Managerial Personnels and their relatives which mayhave potential conflict with interest of the company at large. The related partytransactions were placed before the audit committee and also to the Board at theirrespective meetings for approval. All related party transactions entered during the yearwere in the ordinary course of business and at arm's length basis. Details of the relatedparty transactions during the year are part of the financial statements forming part ofthis Annual Report.
Material changes and commitments affecting financial position between the end of thefinancial year and date of report
There are no material changes and commitments affecting financial position of thecompany which occurred after the end of the financial year i.e. March 31 2021 exceptthe impact of Covid-19 second wave pandemic on the business operation of the Company asfollows:
The Company is categorised under "Essential Commodities" as per the notification issued by Ministry of Home A airs (MHA) Govt. of India for supply of Milk and MilkProducts. The pandemic has not had any material adverse impact on the company's businessalthough the sales of milk and value-added products have come down because of thelockdown. Transportation has also been impacted initially to some extent due toabsenteeism of drivers. All the milk supplied by farmers was procured and processed duringthe lockdown period.
However the availability of raw materials and the supply chain of the company are notaffected
The Company has taken conscious decision to balance uninterrupted operations andensuring a safe working environment. The company is continuously ensuring a safe workingenvironment to its employees by sanitizing its work place regularly. Your Company hascomplied with the COVID-19 guidelines issued by the Government of India and the respectiveState Governments.
In view of the same and considering the MCA circulars your Company will be conveningthe 29th AGM through VC/ OAVM without the physical presence of the members at a commonvenue. However the deemed venue for the AGM shall be the Registered O ce of the Company.
Schedule if any for restarting the operations;
Since the Company's operations are fully functional this question does not arise.
Steps taken to ensure smooth functioning of operations
The Company has put in place strict monitoring process for Covid-19 precautionsensuring the following
Sanitizing the premises and vehicles on regular basis
Maintenance of social distancing at all work places
Enforcing wearing of masks and regular cleaning of hands with soap water
Regular update of the health of all the employees and their families
Thermal scanning of all the employees while entering the officepremises
Asking all employees to install Aarogya Setu App and follow the instructionsthereof
The Company has been regularly conducting awareness programs for all its employees. Allemployees of the Company have been communicated about the measures taken by the Companythrough mails and video conferencing calls virtual town-hall meetings which includesvideo-clip discussions from the desk of Vice Chairperson & Managing Director andExecutive Director of the Company explaining about the steps required to be taken byindividuals to maintain safety.
Estimation of the future impact of CoVID-19 on its operations;
As explained above due to COVID-19 there has not been any material adverse impact onthe Company's performance in terms of top-line and bottom-line.
Capital and financial resources
The Company does not plan to raise any capital in the near future and hence there is noimpact. Presently the Company doesn't need any additional funding from Banks/ FinancialInstitutions. However already sanctioned long-term loans and working capitals arehonoured by the Banks/ Financial Institutions without any additional rate of interest andcovenants. During the Financial year 2020-21 the company has prepaid its Long Term Loansand Debts amounting to Rs 1771.93 million.
As mentioned earlier the profits are not adversely impacted. The transportationsegment which acts as an enabler is marginally impacted. As of now it can be concludedthat the Covid-19 impact on profits will not be material. However the company has recordedhighest ever profit before tax for the financial year 2020-21.
The Company operates on cash-and-carry basis of its substantial business howevercollection from some of the debtors has been impacted marginally with some of thecustomers requested for a deferred payment schedule which the company keeping in mind thelong term relationship has accepted. The Company has been meeting all its financialobligations.
Ability to service debt and other assets /fi financing arrangements
The Company has not availed moratorium for any of its installment payments and hasnever defaulted on any interest or loan installment and does not see any issue meetingfuture obligations too. None of the assets of the Company have been impacted or impairedby the Covid-19.
Internal financial reporting and control
The Company has robust Internal Financial Control (IFC) system in place and all itslocations are well networked with S4 Hana SAP System. Even during the lockdown with acombination of sta working from the plants and/ o ces etc. and all others working fromhome all reporting systems worked seamlessly without any disruption
As the Company has been categorized under "essential commodities" by CentralGovernment there has been less impact of supply chain inward-and-outward. The situationis improving and we expect normal operations in this segment soon.
Demand for its products/services
During the crisis there has been no impact on the supplies though there was a drop insales in absence of consumption out of home.
Existing contracts/agreements where non-fulfi llment of the obligations by any partywill have significant impact on the listed entity's business
The Company is in a position to honor all agreements with its vendors andconsumers. The vendors from whom the Company avails product or services those are few innumbers and are not in any way impacted by the pandemic.
Repayment of Loan installments
The Company has been repaying all the loan instalments without any default. Even thoughReserve Bank of India allowed for moratorium/ deferment of instalment payments theCompany didn't opt for it. During the period under review the Company has prepaidsubstantially the long term loans out of the proceeds received from the sale ofinvestments.
Payments to Employee
During the period the Company has paid to all its working employees and none of theEmployees were terminated from the services. The Company also covered all its employees'under various insurance policies
Payments to Suppliers/Creditors
During this period the Company didn't default any of its payment to its suppliers/creditors.
Contributed to COVID-19
Your Company has contributed Rs 10 Million towards fi ght against Covid-19 pandemic tothe following State Govt Relief Fund/ Disaster Management Fund on 1st week of ApriI 2020out of its CSR Amount of FY 2020-21
i. ChiefMinister/DisasterReliefFundAndhraPradesh-Rs 3million ii. ChiefMinister/Disaster Relief Fund Telangana- Rs 3 million iii. Chief Minister/Disaster ReliefFund Karnataka- Rs 1 million iv. Chief Minister/Disaster Relief Fund Tamil Nadu- Rs 1million v. Chief Minister/Disaster Relief Fund Maharashtra- Rs 1 million vi. ChiefMinister/ Disaster Relief Fund Delhi- Rs 1 million
COVID Precautions & Facilities extended to Employees
At Heritage "Health and Well being of employees continue to be the paramountfocus. Your Company has enabled benefits and extended services for all employees andeligible dependents during the Covid-19 pandemic. The gist of extended benefitsfacilities & implemented precautions are as follows:
Maintain hygienic working conditions Daily fumigation at workplaces Strict temperaturemonitoring & screening
Set up a Multi Functional Committees for cooperation from all employees andstakeholders such as: Monitoring Committee Co-ordination Committee and Core Committee:WebinarsonCOVID-19Facts&FadsbyreputedDoctors Initial COVID19 Medical Kit provided tosymptomatic (Direct / Indirect employees) Plasma donation for needed employees and theirfamily members 24x7 HFL COVID Command Control Centre helpdesk Tie-up with ICMR approvedtesting labs for sample collection & to facilitate early detection to enable speedytreatment Vaccination for employees through network hospitals Enhanced Health InsuranceFacilities
Variation in market capitalization
| ||As at March 31 || |
| ||2021 ||2020 ||Increase / (decrease) in % |
|Market Capitalization (Rs in million) ||13622.50 ||9889.70 ||37.7% |
|Price earnings Ratio ||9.38 ||(6.18) ||217.4% |
Note: Data based on share prices quoted on BSE
Management Discussion and Analysis
In terms of the provisions of SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 as amended from time to time the Management's Discussion and Analysisis provided in a separate section and forms an integral part of this Report.
Corporate governance is an ethically driven business process that is committed tovalues aimed at enhancing an organization's brand and reputation. This is ensured bytaking ethical business decisions and conducting business with a firm commitment tovalues while meeting stakeholders' expectations. It is imperative that your company's aairs are managed in a fair and transparent manner. This is vital to gain and retain thetrust of the stakeholders.
In terms of Regulation 34 of the Securities Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 (hereinafter "ListingRegulations") as amended from time to time a Report on Corporate Governance alongwith Compliance Certificate issued by Statutory Auditors of the Company forms integralpart of this Annual Report.
Your Company has not changed its nature of business during the period under review.Your Company has Two Divisions in operation in different States in India as on March 312021.
Global Dairy Industry:
The global dairy market has progressed promptly over the years and the market isfurther anticipated to escalate during the forecasted years 2021 to 2025. The market wouldaugment owing to numerous growth drivers such as escalating disposable income rising milkproducts demand augmenting need for nutritional food increasing urban populationescalating ice cream industry etc.
Indian Dairy Industry
The Indian Dairy Industry holds an inimitable space in the country for its highemployment potential and for ensuring the availability of nutritious yet a ordable foodfor India's ever increasing population. Getting the tag of largest milk producer was madepossible by Operation Flood and the historic dairy cooperative movement; and as productionincreased dairy industry started showing promising growth potential. India is the largestproducer of milk in the world with an annual output of 138 Million Tonnes
India also has the largest bovine population in the world. However the milk productionper animal is significantly low in our country as compared to the other major dairyproducers country. Moreover nearly all of the dairy produce in India is consumeddomestically with the majority of it being sold as fl uid milk. On account of this theIndian dairy industry holds tremendous potential for value-addition and overalldevelopment.Indian dairy industry also offers good opportunities to both domestic andforeign investors for entry and expansion. Due to their rich nutritional qualities dairyproducts' consumption has been growing exponentially in the country.
As of 2020-21 India is the leading milk producing country in the world accounting for21% of the global market share. The milk processing industry in India is expected toexpand at a compound annual growth rate (CAGR) of 16% between FY 2019-20 and FY 2023-24.
As per the research report by IMARC Group it is estimated that the Indian dairyindustry was worth a value of INR 11360 Billion in 2020 and it anticipates the market toreach a value of INR 21971 Billion by 2024 exhibiting a CAGR of around 16% during the2020-2024.
Organized & Unorganized Dairy Market in India
Being one of the primary dairy consumables in India the demand increase for milk inthe country is owed to the increasing population. As of FY 2020-21 81.1% of the Indiandairy and milk processing market was part of the unorganized sector.
State-wise segment insights: Uttar Pradesh Rajasthan Madhya Pradesh AndhraPradesh and Gujarat have been the major milk producing states in India. Uttar Pradesh isthe largest milk-producing State because it is home to the highest bu alo population andthe second-highest cattle population in the country. The majority of the rural populationin this state is engaged in livestock rearing and dairying. Gujarat has numerouscooperative dairy milk unions and primary milk cooperative societies which play vitalrole in the production of milk in the state. The Andhra Pradesh dairy market reached avalue of INR 506.7 Billion in 2020. IMARC Group expects the Andhra Pradesh dairy market togrow at a CAGR of 9.50% during 2021-2026.
Value-added product wise insights: Apart from milk the revenue of the Indian dairyand milk processing industry is generated from several value-added products such as curdpaneer fl avoured milk cheese etc.
Export: From India the export of dairy products has increased to countries likeBhutan Afghanistan Canada Egypt and the United Arab Emirates.
Key growth drivers of the market: India's livestock sector is regarded as one ofthe largest in the world with a bovine population of 299.90 Mn which comprises of cow'sand bu alo's. The growth of the Indian dairy and milk processing market is ensured by thesteady supply of milk which is the primary raw material for this industry.
The major challenge faced by the Dairy Industry is the organization of the supply chainand logistics. The good part is that challenges are nothing but opportunities in disguiseand in order to meet this challenge headon proactive steps need to be taken to empowerfarmers and provide a stronger supply chain for them to rely on. Even though India is thelargest producer of milk in the world the industry itself is largely unorganized withonly 28 percent of the total milk produced being channelized in an organized manner. Thefirst step to countering this would be to shift the focus to smaller dairy farms whichsometimes lack veterinary facilities and basic nutritious fodder etc.
Increasing Demand for Milk and Value-Added Products
With an increase in the spending power of the population the demand for milk and othervalue-added dairy products is expected to increase in the coming years. In order to meetthe rising demand there needs to be a marked shift from the unorganized to the organizedsector. Moreover consumers now-a-days are not only hold greater buying power but alsohealth conscious regarding what they consume. There is thus a necessity to provide healthydairy products which can be readily consumed. This creates an opportunity for boutiquedairy farms to set up local operations providing fresh cow or bu alo milk to consumers.Over and above with people having less time these days the demand for premium value addedproducts such as probiotic yoghurt cheese milk shakes etc. are on the rise. Theseproducts not only have a higher margin but also have a longer shelf life which makes thesupply chain easier and cost effective.
The organised dairy sector is poised for healthy growth in coming years. Milkproduction CAGR of 5% over FY12-FY20 coupled with 5-6% infl ation indicates 10% growth inrevenue terms. Organised players account for just 28% of the overall milk market andexpect their share to grow going forward. Also expect rising milk procurement prices to bepassed on by B2C players resulting in stable margins.
Government is progressively taking initiatives to promote the dairy industry in Indiain which inclination towards cattle breeding clean milk production dairy developmentand feed fodder management are included. The Department of Animal Husbandry NDDB andother government a liated institutions manage these initiatives in a constructive way.Utilizing the available resources for dairy industry to their full extent is the mainobjective behind these initiatives. The manner in which Dairy industry would enhance milkproduction and upgrade milk processing technologies is also supervised by thesedepartments.
Your Company is a market leader in the curd segment and is now looking to expand itsproduct basket by entering into the fastest growing product like Yoghurt through a JointVenture Company.
The motto of your company is to empower farmers by doing the following activities
Facilitating loans for the purchase of cattle through commercial banks/ NBFCs
Facilitating cattle insurance;
Conducting veterinary camps for animals at frequent intervals;
Supply of high quality cattle feed and fodder seeds;
Helping to source good productive animals;
Supply of milk analyzers for ensuring accurate measurement of milk quality and
Ensuring timely payment to farmers.
In its bid to become a pan India player your Company has expanded its collection anddistribution of products to 11 states in India covering South West and North India. Ithas almost 100% direct procurement network of 0.3 million dairy farmers across eight majormilk producing States namely Andhra Pradesh Telangana Karnataka Tamil NaduMaharashtra Rajasthan Punjab and Haryana. The direct route of milk procurement enablesit to maintain quality. The company also operates 189 bulk coolers chilling plants andprocured 1.3 Million liters of milk per day. It operates 18 own processing plants withinstalled milk processing capacity of 2.7 million liters per day.
Your Company procured 1.3 Million litres of milk daily from 0.3 million farmers acrosseight states. The milk is directly procured from farmers which ensures greater consistencyin milk quality and consistency in supply. The company's installed processing capacity is2.7 Million liters per day and chilling capacity is 2.13 Million LPD. After processing 1.3Million litres milk is sold to about 1.5 Million households on a daily basis and theremaining is converted into value added products and products are available across 11states viz. Andhra Pradesh Telangana Karnataka Kerala Tamil Nadu Maharashtra OdishaNCR Delhi Haryana Uttar Pradesh and Uttarakhand.
The Board of Directors expressed their satisfaction about the way company has handledthe business during the period of COVID-19 outbreak. During the period of COVID-19outbreak the procurement price of milk has come down and volume increased.
During the financial year 2020-21 Dairy Division has increased milk Chilling capacityby 0.06 Million LPD by commissioning of 7 units which includes Bulk chilling units MiniChilling units and chilling centres.
Renewable Energy Division:
Your Company strongly recognizes the responsibility towards protecting the environment.As a forward-looking enterprise it is strongly committed to extending the Green'footprint.
Your Company is taking a lot of initiatives for conservation of energy. Renewableenergy was the major focus area in the last ten years. Now your Company has 10.39 MW ofsolar and wind power for captive consumption. Your Company is continuously investing inlatest technologies and e ciencies to conserve energy.
Renewable Energy Division of your Company had achieved the turnover of Rs 68.83 Millionduring the year under review
Subsidiary / Associate Companies
Your Company as on March 31 2021 is having following subsidiary/associate/jointventure Companies:
Heritage Nutrivet Limited (CIN: U15400TG2008PLC062054)
A wholly owned Subsidiary Company operating with Animal Nutrition and one of theleading Live Stock Feed & Feed Supplements Company in Southern and Western Indiacovering over 0.3 million farmers spread across five states viz. Andhra PradeshTelangana Tamil Nadu Karnataka and Maharastra. Product quality is pivotal in endeavortowards "HEALTHY MILCH ANIMAL HAPPY FARMER"
Skil Raigam Power (India) Limited (CIN:U40102TG2009PLC063671)
A associate Company is under process to setup a hydro power plant at Raigam Districtin Arunachal Pradesh. Your Company is having 44.22% of shareholding in this Company.
Heritage Novandie Foods Private Limited (CIN: U74999TG2017PTC120860)
A 50:50 Joint Venture Company between Heritage Foods Limited (HFL) Hyderabad Indiaand Novanide Maromme France with an object to manufacture and market various FruitYoghurt and other dairy products in India. The Company had started the commercialproduction on February 16 2021 and launched French Yoghurt brand Mamie Yova' inIndia.
The details of transaction are available in the AOC-1 which is forming part of theconsolidated financial statement. The gist of financial performance of theSubsidiary/Associate/Joint Venture companies is as follows.
| || || || || || ||Rs in Millions |
|Particulars || |
Heritage Nutrivet Ltd (Wholly Owned Subsidiary) year ended on
Skil Raigam Power (India) Ltd (Associate) year ended on
Heritage Novandie Foods Pvt Ltd (Joint Venture) year ended on
| ||31/03/2021 ||31/03/2020 ||31/03/2021 ||31/03/2020 ||31/03/2021 ||31/03/2020 |
|Total Income ||1218.56 ||1045.86 ||- ||- ||1.17 ||1.15 |
|Total Expenses ||1120.98 ||1038.83 ||0.19 ||0.22 ||45.33 ||15.16 |
|Profi t/ (Loss) before tax ||97.58 ||7.03 ||(0.19) ||(0.22) ||(44.16) ||(14.01) |
|Tax expense Reversal of taxes of earlier years ||- ||- ||- ||- ||- ||- |
|Current tax expense ||16.03 ||0.88 ||- ||- ||- ||- |
|Deferred tax expense/ (benefi t) ||9.43 ||(0.59) ||- ||- ||- ||- |
|Profi t/ (loss) for the year ||72.12 ||6.73 ||(0.19) ||(0.22) ||(44.16) ||(14.01) |
During the financial year under review your Company has not added/removed anysubsidiaries joint ventures or associate companies.
In accordance with Section 136 of the Companies Act 2013 the audited financialstatements including the consolidated financial statements and related information of theCompany and audited accounts of each of its Subsidiary Associate and Joint Venture areavailable on the website of your Company www.heritagefoods.in. These documents will alsobe available for inspection during the business hours of the Company at its registeredofficein Hyderabad India.
Your Company continues the journey of delivering value to its consumers/customersthrough significant investments in quality programs.
Your Company adheres to international quality standard certifi cations such as ISO22000:2005(FSMS) ISO 9001:2015(QMS) OHSAS 18001:2007 ISO 14001:2015 (EMS) ISO50001:2011(EnMS) and Halal Certifi cation by JUHF Mumbai.
Your Company has also received renewal of AgMark BIS and EIA certificates.
The Quality department of your Company handles large change management initiatives todrive quality and productivity improvements across the Company using various techniquesand updated technologies.
"Heritage" as a brand reflects your companies identity core values andbelieve system. Your Company is actively working on diversifying its products portfoliowhich is in line with the current consumer trend and mission of brining health nutrition& happiness to every home. On the communication front company is focusing on social& digital media platforms as these have become an important source of seekinginformation leading to brand evaluation & adoption apart from the traditional brandingactivities.
Awards & Recognitions
During the financial year 2020-21 Three packing station's of your company won thePrestigious National Energy Conservation Awards (NECA - 2020) in Dairy Sector for the year2020 at all India level for the effective energy conservation process/methods which hadresulted in substantial energy saving and higher productivity for the energy consumed:
1st Prize won by Gokul Plant Kasipentala (V) Charndragiri (M) ChittoorDist-517101 Andhra Pradesh India
2nd Prize won by Bayyavaram Plant Bayyavaram (V) Kasimakota (M) VisakhapatnamDistrict-531031 Andhra Pradesh India
Certificate of Merit to Bengaluru Plant Yadavanhalli (V) Anekal TalukBengaluru South-562107 Karnataka India
Human Resources and Industrial Relations
Your Company takes pride in the commitment competence and dedication shown by itsemployees in all areas of business. Your company ensures that it provides a harmonious andcordial working environment to all its employees. To ensure good human resourcesmanagement your Company focused on all aspects of the employee lifecycle. This provides aholistic experience for the employee as well. During their tenure at the Companyemployees are motivated through various skill- development program engagement andvolunteering programs. Your company has put in continued efforts in building capabilitiesof Human Resources with adoption of specific and targeted interventions. Your Company hasa structured induction process at all locations and management development programs toupgrade skills of managers. Objective appraisal systems based on Key Result Areas are inplace for all employees.
Your Company is committed to nurturing enhancing and retaining talent through superiorLearning & Organizational Development. This is a part of Corporate HR function and isa critical pillar to support the organization's growth and its sustainability in long run.
The total strength of your Company employees at the end of financial year 2020-21 was3014.
Your Company continuously strives for excellence in its Investor Relationship (IR)engagement with Domestic and International investors and has set up feedback mechanism tomeasure IR effectiveness. Structured conference calls and periodic investor/analystinteractions participation in investor conferences quarterly earnings calls and annualanalyst meet with the Executive Director President and Business Heads were organisedduring the year. Your Company always believes in leading from the front with emerging bestpractices in IR and building a relationship of mutual understanding with investor/analysts. Your Company ensures that relevant information about the Company is available toall the investors by uploading all such information at the Company's website and the StockExchanges where the shares of the company are listed.
The details of the credit rating are as follows:
(a) Credit rating obtained by the company: in respect to long term and short term debts
(b) Name of the credit rating agency: Credit Rating Information Services of IndiaLimited (CRISIL) i. Long term Rating: CRISIL A/Positive ii. Short term Rating: CRISIL A1(c) Date on which the credit rating was obtained: March 31 2021 (valid up to March 312022) (d) Revision in the credit rating: No (e) Reasons provided by the rating agency fora downward revision: NA
The table containing the names and other particulars of employees in accordance withthe provisions of Section 197(12) of the Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are providedin Annexure-2A. A statement containing the names of every employee employed throughout thefinancial year and in receipt of remuneration of
Rs 10.20 million or more per annum or employed for part of the year and in receipt ofRs 0.85 million or more in a month under Rule 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 as amended from time to time areprovided in Annexure-2B to this report.
Information Technology and Digitization:
Your company actively focuses on transformation from traditional to digital operations.Digitization was a primary focus during the Financial Year 2020-21 to streamline businessprocesses and workforce. During the Financial Year 2020-21 your company has undertakenvarious digital initiatives.
Heritage TUCH App: Heritage TUCH is an online milk and dairy products delivery app inHyderabad offering natural farm-fresh milk and dairy products right at the consumersdoorstep every morning. It's a one-stop solution for fulfi lling all your dairy productneeds.
Heritage VET+" is a digital initiative a one-stop solution for milch animalmanagement that covers all important aspects related to best practices in veterinary careand dairy management to empower and share knowledge to dairy farmers. Heritage VET+ in itscore objective has laid down focus on cattle health nutrition and wellbeing its focus isto provide remote veterinary services necessary for primary diagnosis.
Your Company recognizes and embraces the importance of a diverse board for its success.Your Company believes that a truly diverse board will leverage differences in thoughtperspective knowledge skill and industry experience cultural and geographicalbackground age and gender which will help the Company retain its competitive advantage.The Board has adopted the Board Diversity Policy which sets out the approach to diversityof the Board of Directors. The Policy is available in the Company website i.e.www.heritagefoods.in > Investor > Policies.
Meetings of the Board
The Board met Nine (9) times during the financial year 2020-21 the details of whichare given in the Corporate Governance Report forms part of this Annual Report. Theintervening gap between any two meetings was within the period prescribed by the CompaniesAct 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015.
Policy on Director's Appointment and Remuneration
The current policy is to have an appropriate mix of Executive and Non-executive &Independent and Women Directors to maintain the independence of the Board and separateits functions of governance and management. As on March 31 2021 the Board consists of 6members 2 of them are Executive/Whole-time directors 1 is Non-Executive Director 1 isNon-Executive Independent Woman Director and 2 are Non-Executive Independent Directors.The Board periodically evaluates the need for change in its composition and size.
The policy of your Company on directors' appointment and remuneration includingcriteria for determining qualifications positive attributes independence of a directorand other matters as provided under Section 178(3) of the Companies Act 2013 and SEBI(Listing Obligations & Disclosure Requirements) Regulations 2015 was adopted by theBoard. It is a rmed that the remuneration paid to the Director(s) are as per the termslaid out in the nomination and remuneration policy of the Company.
Declaration from Directors
Your Company has received necessary declaration from all directors stating that theyare not debarred or disqualified from being appointed or continuing as Directors ofcompanies as per the Securities and Exchange Board of India Reserve Bank of IndiaMinistry of Corporate A airs or any such other Statutory Authority.
Declaration by Independent Directors
Your Company has received necessary declaration from each independent director statingthat they met the criteria prescribed for independence under Section 149 of the CompaniesAct 2013 and Regulation 25 of SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 and the Board has confi rmed its veracity and taken the same on record.
As per the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 as amended from time to time the Nominationand Remuneration Committee laid down criteria for performance evaluation of individualdirector(s) the board and its committee(s). Accordingly an annual evaluation was carriedout for the Board's performance its Committees and individual director(s).
The Board performance evaluation is carried out through a structured questionnairewhich provides a clear and valuable feedback for Board effectiveness and highlightingareas for further development.
The following are some of the broad issues that are considered in performanceevaluation questionnaire
Criteria for evaluation of Board and its Committees:
Ability to act on a fully informed basis in good faith with due diligence andin the best interest of the company and the stakeholders.
Optimum combination of knowledge skill experience and diversity on the Boardas well as its Committees.
Relationships and effective communication among the Board members.
E ectiveness of individual non-executive and executive directors and Committeesof Board.
Quality of the discussions general information provided on the company and itsperformance papers and presentations to the Board.
Risk management as well as processes for identifying and reviewing risks.
Criteria for evaluation of Individual Directors:
Attendance at Board as well as Committee Meetings
Procurement of Information preparation for Board Meetings and value ofcontribution at meetings
Relationships with fellow Board members the company secretary and seniormanagement and mutual trust and respect they stimulated within the Board.
Keeping update with the latest developments in the areas of governance andfinancial reporting
Willingness to devote time and e ort to understand the company and its business
Providing necessary guidance using their knowledge and experience in developmentof corporate strategy major plans of action risk policy and setting performanceobjectives.
Independence exercised in taking decisions listening to views of others andmaintaining their views with resolute attitude
Ability in assisting the Company in implementing the best corporate governancepractices.
Capability in exercising independent judgement to tasks where there is potentialconflict of interest
Commitment in fulfi lling the director's obligations fiduciary responsibilities.
The Board of Directors received all evaluations from each Director including Board as awhole and its committee based on the above criteria discussed various points and allpoints are satisfactory no further action is required. There were no actions pending fromthe previous year observations. The detailed format of Board evaluation is available inthe website of the Company i.e. https://www.heritagefoods.in/ uploads/ investors/pdf/15870145475 Board_&_Director_ Evaluation_ Framework.pdf
Training of Independent Directors
Every new independent director of the Board attends an orientation program. Tofamiliarize the new inductees with the strategy operations and functions of your Companythe Executive Directors/Senior Managerial Personnel make presentations to the inducteesabout the Company's strategy operations product and service offerings marketsorganization structure quality and risk management etc.
In order to comply with the provisions of section 152 (6) of the Companies Act 2013and rules applicable thereunder the appointment of Mrs. N. Brahmani (DIN: 02338940)Director is liable to retire by rotation at this Annual General Meeting being eligibleoffers herself for re-appointment.
The above proposed retirement by rotation shall not alter any terms and conditions withregard to remuneration tenure of appointment and such other terms and conditions relatingto her appointment as an Executive Director of the company for a term of five year (w.e.f.01.04.2019) as approved by the members of the Company by way of postal Ballot and remotee-voting the results of which were declared on March 12 2019.
Mr. Rajesh Thakur Ahuja (DIN: 00371406) was appointed as Non-Executive IndependentDirector of the Company by the members at the 24th AGM of the Company held on August 192016 for a period of five consecutive years up to August 18 2021. Based on therecommendation of Nomination and Remuneration Committee and in terms of the provisions ofSections 149 150 152 read with Schedule IV and any other applicable provisions of theAct and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 Mr.Rajesh Thakur Ahuja (DIN: 00371406) being eligible for re-appointment as Non-ExecutiveIndependent Director and offering himself for re-appointment in the opinion of the Boardthat he is a young and dynamic personality made valuable contribution to the Companyduring his first tenure and have a knowledge about the dairy industry and investment inother sectors the Board also discussed his performance based on the criteria ofperformance evaluation lead by Nomination and Remuneration Committee of the Boardaccordingly it is proposed to re-appoint him as Non-Executive Independent Director forsecond term of five consecutive years from August 19 2021 to August 18 2026.
Retirements and Resignations
Mr. D. Seetharamaiah resigned from the position of Non-executive Independent Directorand Chairperson of the Company wef. July 01 2020 and left for heavenly abode on July 192020 after a brief illness. Late Mr. D. Seetharamaiah was associated with the Companysince the inception as a
Director of the Company. The Board of Directors express their deep condolences and paytribute to late Mr. D. Seetharamaiah a great visionary leader.
The Board of Directors place on record their deep sense of gratitude and appreciationfor the invaluable contribution rendered by Mr. D. Seetharamaiah during his Three decadeslong illustrious career with the Company in this roles and recently as the Non-ExecutiveIndependent Director & Chairperson of the Company.
Except the above None of the Directors retired or resigned from the Board.
Key Managerial Personnel
During the year under review the Company is having the following persons as KeyManagerial Personnel.
|Name of the O cial ||DIN/M. No ||Designation |
|Mrs. N. Bhuvaneswari ||00003741 ||Vice Chairperson & Managing Director |
|Mrs. N. Brahmani ||02338940 ||Executive Director |
|Mr. A Prabhakara Naidu ||FCA 200974 ||Chief Financial Officer |
|Mr. Umakanta Barik ||FCS 6317 ||Company Secretary & Compliance Officer |
|Dr. M Sambasiva Rao || ||President |
Committees of the Board
Currently the Board has six committees i.e. Audit Committee Nomination andRemuneration Committee Corporate Social Responsibility Committee StakeholdersRelationship Committee Risk Management Committee and Management Committee.
A detailed note on the Board and its committees is provided under the CorporateGovernance Report section in this Annual Report. The composition of the committees andcompliances as per the applicable provisions of the Act and Rules are as follows:
|Name of the Committee ||Composition of the Committee ||Highlights of duties responsibilities and activities |
|Audit committee ||Mrs. Aparna Surabhi (C) Mr. D Seetharamaiah (M) || All recommendations made by the audit committee during the year were accepted by the Board. |
| ||(up to 01/07/2020) || Reviewing with the management the quarterly financial statements before submission to the Board for approval. |
| ||Mr. Rajesh Thakur Ahuja (M) || |
| ||Mr. N Sri Vishnu Raju (M) || |
| ||Dr V Nagaraja Naidu (M) || Approval or any subsequent modification of transactions of the Company with related parties. |
| || || Reviewing with the management the performance of statutory auditors and internal auditors adequacy of internal control systems etc. |
|Nomination and Remuneration Committee ||Mr. N Sri Vishnu Raju (C) || The committee oversees and administers executive compensation operating under a written charter adopted by our Board of Directors. |
| ||Mr. D Seetharamaiah (M) (up to 01/07/2020) || |
| ||Mr. Rajesh Thakur Ahuja (M) || The nomination and remuneration committee has framed the nomination and remuneration policy. |
| ||Mrs. Aparna Surabhi (M) || |
| ||(wef. 01/07/2020) || |
|Corporate Social Responsibility Committee ||Mr. D Seetharamaiah (C) || To formulate and recommend to the Board a Corporate Social Responsibility (CSR) Policy indicating activities to be undertaken by the Company in compliance with provisions of the Companies Act 2013 and rules made there under. |
| ||(up to 01/07/2020) || |
| ||Mr. Rajesh Thakur Ahuja (C) (wef. 01/07/2020) || |
| ||Mr. N Sri Vishnu Raju (M) || To monitor the implementation of the CSR Policy of the Company from time to time |
| ||Mrs. N Bhuvaneswari (M) || |
|Stakeholders Relationship Committee ||Dr. V Nagaraja Naidu (C) || The committee reviews and ensures redressal of investor grievances. |
| ||Mr. D Seetharamaiah (M) (up to 01/07/2020) || |
| || || The committee noted that all the grievances of the investors have been resolved during the year. |
| ||Mr. N Sri Vishnu Raju (M) || |
| ||Mrs. N Bhuvaneswari (M) || |
| ||Mr. Rajesh Thakur Ahuja(M) || |
| ||(wef. 01/07/2020) || |
|Risk Management Committee ||Mr. Rajesh Thakur Ahuja (C) || The purpose of the committee is to assist the Board in fulfi lling its corporate governance with regard to the identifi cation evaluation & mitigation of operational strategic and environmental risks efficiently and effectively. |
| ||Mr. D Seetharamaiah (M) || |
| ||(up to 01/07/2020) || |
| ||Mr. N Sri Vishnu Raju (M) || |
| ||Mrs. N Bhuvaneswari (M) || The Company has developed and implemented a risk management framework that includes identification of elements of risk if any which in the opinion of the Board may threaten the existence of the Company. |
| ||Mrs. Aparna Surabhi (M) (wef. 01/07/2020) || |
|Management Committee ||Mr. D Seetharamaiah (C) (up to 01/07/2020) || Setting the strategic direction to guide and direct the activities of the organization; |
| ||Mrs. Aparna Surabhi(C) (wef. 01/07/2020) || Ensuring the effective management of the organization and its activities; and |
| ||Mr. N Sri Vishnu Raju (M) || Monitoring the activities of the organization to ensure they are in keeping with the founding principles objects and values. |
| ||Mrs. N Bhuvaneswari (M) || |
C- Chairperson M-Member
The SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 mandatedthe formulation of certain policies for all listed companies. All the corporate policiesare available in the Company website (www.heritagefoods.in/Investors/ policies). Thepolicies are reviewed periodically by the Board and updated based on need and newcompliance requirement.
In addition to its Code of Conduct and Ethics key policies that have been adopted bythe Company are as follows:
|Name of the policy ||Brief description ||Web link |
|Whistleblower Policy (Policy on vigil mecha- nism) ||The Company has adopted the whistleblower mechanism for directors and employees to report concerns about unethical behaviour actual or suspected fraud or violation of the Company's code of conduct and ethics. It also provides for adequate safeguards against victimization of employees who availed the mechanism and also provides for direct access to the Chairperson of the Audit Committee. ||https://www.heritagefoods.in/ policy |
|Insider Trading Policy and Code of Practices and Procedures for Fair Disclosure of Unpub- lished Price Sensitive Information ||The Company has adopted a Code of Conduct to Regulate Monitor & Report Trading by Insiders and Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information as per the SEBI (Prohibition of Insider Trading) Regulation 2015 with a view to regulate trading in securities by the Directors and Designated Persons while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed and other certain situations. All Board of Directors and the designated employees have confi rmed compliance with the Code. ||https://www.heritagefoods.in/ policy |
|Nomination and Remuneration Policy ||This policy formulates the criteria for determining qualifications competencies positive attributes and independence for the appointment of a director (executive / non-executive) and also the criteria for determining the remuneration of the directors key managerial personnel and senior management of the Company. ||https://www.heritagefoods.in/ policy |
|Corporate Social Responsibility Policy ||The policy outlines the Company's strategy to bring about a positive impact on Society through programs relating to hunger poverty education healthcare environment relief disaster management etc. as per the provisions of the Companies Act 2013. ||https://www.heritagefoods.in/ policy |
|Policy for Determining Material Subsidiaries ||The policy is used to determine the material subsidiaries and material non-listed Indian subsidiaries of the Company and to provide the governance framework for them. ||https://www.heritagefoods.in/ policy |
|Related Party Transac- tion Policy ||The policy regulates all transactions between the Company and its related parties ||https://www.heritagefoods.in/ policy |
|Policy on Preservation of Documents ||The policy deals with the preservation of corporate records of the Company. ||https://www.heritagefoods.in/ policy |
|Archival Policy ||The policy deals with the retention and archival of corporate records of the Company. ||https://www.heritagefoods.in/ policy |
|Business Responsibility Policy ||This Policy endorses the Company's commitment to follow principles and core elements in conducting its business as laid down in the National Voluntary Guidelines on Social Environmental and Economic responsibilities of Business. ||https://www.heritagefoods.in/ policy |
|Dividend Distribution Policy ||This Policy is to ensure the right balance between the quantum of Dividend paid and amount of profits retained in the business for var- ious purposes. ||https://www.heritagefoods.in/ policy |
|Policy on Determination of Materiality of Events ||The Policy is to determine materiality of events or information relat- ing to the Company and to ensure timely and accurate disclosure on all material matters concerning the Company. ||https://www.heritagefoods.in/ policy |
|Policy and procedure of inquiry in case of leak or suspected leak of unpublished price sensi- tive information ("upsi") ||The Policy aims to provide a framework for inquiry in case of leak or suspected leak of Unpublished Price Sensitive Information. ||https://www.heritagefoods.in/ policy |
Note: There were no changes in the above policies except the Code of Practices andProcedures for Fair Disclosure of Unpublished Price Sensitive Information and CSR policyof the Company.
Remuneration of Directors Key Managerial Personnel and Senior Management
The remuneration paid to the Directors Key Managerial Personnel and Senior Managementis in accordance with the Nomination and Remuneration Policy formulated in accordance withSection 178 of the Act and Regulation 19 of the Listing Regulations.
The information required under Section 197 of the Act read with Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 in respect of Directors/ employeesof the Company is set out in the Annexure-2 [A&B] to this report.
Auditors' & Auditor's Report
As per Section 139 of the Companies Act 2013 (the Act') read with the Companies(Audit and Auditors) Rules 2014 the Members of the Company at the 25th Annual GeneralMeeting held in the year 2017 approved the appointment of M/s. Walker Chandiok & Co.LLP Chartered Accountants (FRN 001076N/500013) as the Statutory Auditors of the Companyfor a term of 5 years i.e. from the conclusion of 25th Annual General Meeting till theconclusion of 30th Annual General Meeting of the Company to be held in the year 2022.
Pursuant to amendments in Section 139 of the Companies Act 2013 the requirement toplace the matter relating to such appointment for ratifi cation by members at every annualgeneral meeting has been omitted with effect from 7th May 2018. The Board of Directorsare empowered to fi x the remuneration of the Statutory Auditor on yearly basis.
The Audit reports (Standalone UDIN:21207660AAAACY2569) (ConsolidatedUDIN:21207660AAAACX8708) issued by M/s. Walker Chandiok & Co. LLP CharteredAccountants Statutory Auditors on the Company's standalone and consolidated financialstatements for the financial year ended 2020-21 is part of the Annual Report. There hasbeen no qualification reservation or adverse remark in their Report.
In terms of the Section 148 of the Companies Act 2013 (the Act') read with Rule8 of the Companies (Accounts) Rules 2014 it is stated that the cost accounting recordsare made and maintained by the Company as specified by the Central Government undersub-section (1) of Section 148 of the Companies Act 2013. As your Company is dealing withSkimmed Milk Powder which require to maintain the cost records. Your Company hasmaintained all the required records as specified by the Central Government undersub-section (1) of Section 148 of the Companies Act 2013 and the appointment of CostAuditor is not applicable for your Company.
Secretarial Auditors and Secretarial Standards
The Secretarial Audit was carried out by Mrs. Savita Jyoti Partner M/s. Savita JyotiAssociates Practicing Company Secretary (CP No:1796 M.No.3738) Secunderabad - 500094for the financial year 2020-21. The Report issued by the Secretarial Auditors is annexedas Annexure-3 and forms integral part of this Report. There has been no qualificationreservation or adverse remark in their Report.
In terms of Section 204 of the Companies Act 2013 read with the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 the Board of Directors appointedMrs. Savita Jyoti Partner M/s. Savita Jyoti Associates Practicing
Company Secretary (CP No:1796 M.No.3738) Secunderabad
- 500094 as the Secretarial Auditors of the Company for the financial year 2021-22.Your Company had received the written consent that the appointment will be in accordancewith the applicable provisions of the Act and rules framed thereunder.
In terms of the amended SEBI (Listing Obligation and Disclosure Requirements)Regulation 2015 the Company has obtained the Secretarial Compliance certificate fromMrs. Savita Jyoti Partner M/s. Savita Jyoti Associates Practicing Company Secretary (CPNo:1796 M.No.3738) Secunderabad - 500094 which is annexed as Annexure-3(i) and formspart of the Annual Report and the same was also intimated to the Stock Exchanges where theshares of the Company are listed.
Pursuant to Regulation 34(3) and Schedule V Para C clause (10) (i) of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 Company has obtained acertificate from Mrs. Savita Jyoti Partner M/s. Savita Jyoti Associates PracticingCompany Secretary (CP No:1796 M.No.3738) Secunderabad
- 500094 which is annexed as Annexure-3(ii) and forms part of the Annual Report andthe same was also intimated to the Stock Exchanges where the shares of the Company arelisted.
You Company also has obtained a secretarial Audit Report of its wholly owned subsidiarycompany namely Heritage Nutrivet Limited from Mrs. Khusboo Laxmi Bhagat Partner of M/s.KLB & Associates Practicing Company Secretary (CP No:14703 M.No.9376) Hyderabad-500016 which is annexed as Annexure- 3(iii) and forms part of the Annual Report.
The Director's have devised proper systems to ensure compliance with the provisions ofall applicable Secretarial Standards issued by the Institute of Company Secretaries ofIndia New Delhi and that such systems are adequate and operating effectively.
The Company has appointed external firms of Chartered Accountants across India asinternal auditors to conduct internal audit and to review internal controls and operatingsystems and procedures as per the scope of the audit. The Internal Audit Reports of thecompany are reviewed by the Audit Committee on monthly basis. The Internal Auditors sendthe quarterly audit observations to the Company and the same were presented quarterly bythe lead internal auditor of the Company to the Audit Committee. The Audit Committee alongwith Statutory Auditors and the management of the Company meets all Internal Auditors ofthe Company once in a year and review the internal controls and its adequacy. The Board ofDirectors on recommendation of the Audit Committee appoints/re-appoints the InternalAuditors every year in compliance with Section 138 of the Act read with the
Companies (Accounts) Rules 2014. List of Internal Auditors is provided in thecorporate information section in the Annual Report.
Internal Audit & Control Systems
Your Company has a well-defi ned and documented internal audit & control systemwhich is adequately monitored. Checks & balances and control systems have beenestablished to ensure that assets are safe guarded utilized with proper authorization andrecorded in the books of account. The Internal control systems are improved and modifiedcontinuously to meet the changes in business conditions statutory and accountingrequirements.
These are supplemented by internal audit of your Company carried out by reputed firmsof Chartered Accountants across the locations of the Company. Your Company has an AuditCommittee consisting of Three Non-Executive Independent Directors and one Non-ExecutiveDirector. The Audit Committee of the Board of Directors and Statutory Auditors areperiodically apprised of the internal audit findings and corrective actions taken. TheAudit Committee of the Board of Directors reviews the adequacy and effectiveness ofinternal control system and suggests improvements if any for strengthening them. YourCompany has a robust Management Information System which is an integral part of thecontrol mechanism.
Listing and Custodian Fees
The equity shares of your Company are listed at BSE Limited Mumbai and National StockExchange of India Limited Mumbai. The applicable annual listing fees were paid before thedue date. The annual custodian fees have also been paid to the depositories before the duedate.
Signifi cant Material Orders Passed by the Regulators
There were no significant material orders passed by any Regulators/Courts that wouldimpact the going concern status of the Company and its future operations.
The Annual Return as on March 31 2021as required under Section 92(3) and Section134(3)(a) of the Companies Act 2013 is available on the Company's website (https://www.heritagefoods.in/annualreturn)
Internal financial control and its adequacy
The Board has inter alia reviewed the adequacy and effectiveness of the Company'sinternal financial controls relating to its financial statements.
The Board has discussed with the Management of the Company the major financial riskexposures and the steps taken by it to monitor and control such exposures overseen andreviewed the functioning of the Whistle Blower Mechanism and the findings in respect ofthe investigations conducted on frauds if any which were material in nature and theactions taken by the Management in this regard. Your Company has adopted necessarypolicies and procedures for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of financial information. During the year suchcontrols were tested and no reportable material weakness in the design or operation wasobserved by the consultant appointed by the Board of Directors of the company During theyear no fraud by the Company or on the Company by its o cers or employees has been noticesand reported.
Declaration as per Section 134(3)(ca) of the Companies Act 2013
During the year the statutory auditors and secretarial auditor have not reported anyinstances of frauds committed by or against the Company by its Directors/O cers/ Employeesto the Audit Committee or Board under section 143(12) of the Companies Act 2013 and rulesmade thereof. Therefore no detail is required to be disclosed under Section 134 (3)(ca) ofthe Act.
CEO & CFO Certifi cation
The Vice Chairperson & Managing Director and the Chief Financial Officer of theCompany has given annual certifi cation on financial reporting and internal controls tothe Board in terms of Regulation 17(8) of the SEBI (Listing Obligation & DisclosureRequirements) Regulation 2015. Vice Chairperson & Managing Director and the ChiefFinancial Officer also give quarterly certifi cation on financial results while placingthe financial results before the Board in terms of Regulation 33(2) (a) of the SEBI(Listing Obligation & Disclosure Requirements) Regulation 2015. The annualcertificate given by the Vice-Chairperson & Managing Director and the Chief FinancialOfficer forms part of this Annual Report.
Corporate Social Responsibility (CSR)
Your Company has been an early adopter of corporate social responsibility (CSR)initiatives. Your Company has made Corporate Social Responsibility (CSR) an integral partof its ethos and culture Your company has constituted a Corporate Social ResponsibilityCommittee ("CSR Committee") in accordance with Section 135 of the Companies Act2013. A robust system of reporting and monitoring has been put in place to ensureeffective implementation of planned CSR initiatives
The identified CSR activities/ projects as per the provisions of the Companies Act2013 and rules made thereof will be undertaken directly by the Company or through aregistered trust or a registered society. During the Financial Year 2020-21 the CSRCommittee of the Board evaluated various options to implement the CSR activities anddecided to contribute the mandated CSR amount to the NTR Memorial Trust Hyderabad tocarry out the activities such as promoting education enhancing the vocational skill &supply of clean drinking water disaster management relief and rehabilitation etc. aspart of the CSR activities of the Company. As the NTR Memorial Trust is operating since1997 towards the promoting and preventive of health care of the needy groups meeting theeducational needs of underprivileged students advancing the concept of entrepreneurshipand self-employment and offering support and relief during disasters and lot more otherinitiatives for the up-liftment of the backward and needy population in the society.
These projects are in accordance with Schedule VII of the Companies Act 2013 and theCompany's CSR Policy. The Report as required under Rule 9 of Companies (Corporate SocialResponsibility Policy) Rules 2014 on CSR activities is set out as Annexure-4 forming partof the Board's Report and the Policy has been uploaded on the Company's website atwww.heritagefoods.in.
Business Responsibility Report (BRR)
Pursuant to regulation 34(2)(f) of SEBI (Listing Obligation and DisclosureRequirements) Regulations 2015 top 1000 listed entities based on their marketcapitalisation as on 31st March every year are required to submit their BusinessResponsibility Report (BRR) as a part of their Annual Report. The Annual Report shallcontain a Business Responsibility Report (BRR) describing the initiatives taken by theCompany from an environmental social and governance perspective. BRR has been designed asa tool to help companies understand the principles and core elements of responsiblebusiness practices and start implementing which reflect their adoption in the manner thecompany undertakes its business. In compliance with the regulation the BRR is annexed inAnnexure-5 to the board report.
Energy Conservation Technology Absorption & Foreign Exchange Earnings & Outgo
The particulars as prescribed under Sub-section (3)(m) of Section 134 of the CompaniesAct 2013 read with the Companies (Accounts) Rules 2014 are provided in the Annexure-6 tothe Board Report.
Transfer of Un-Claimed Dividends and Shares
Pursuant to Section 124(5) of the Companies Act 2013 [Section 205C(2) of the CompaniesAct 1956] read with the Investor Education and Protection Fund Authority (AccountingAudit Transfer and Refund) Rules 2016 as amended from time to time the unclaimed/unpaiddividend amount of 1115461/- (Eleven Lakhs Fifteen Thousand Four Hundred Sixty One Only)for the year 2012-13 was transferred to the Investor Education and Protection Fund duringthe financial year 2020-21.
In compliance with the provisions of Section 124 of the Companies Act 2013 theCompany has transferred 63880 no of equity shares belongs to 61 members of the company toInvestor Education and Protection fund Authority (IEPF) on October 16 2020 of thosemembers who have not claimed the dividends for a continuous period of 7 years.
Pursuant to Section 124(5) of the Companies Act 2013 [Section 205C (2) of theCompanies Act 1956] read with the Investor Education and Protection Fund (awareness andprotection of Investors) Rules 2001 as amended from time to time the unclaimed/unpaiddividend and the shares thereof pertaining for the financial year 2013-14 shall betransferred to the Investor Education and Protection Fund during the financial year2021-22.
The information in respect of unclaimed/unpaid dividend & shares thereto and thelast date for claiming the dividend are given below:
| || || ||Unclaimed/Unpaid Dividend as on March 31 2021 |
|Financial year ended ||Date of Declaration of Dividend ||Last date for claiming unpaid Dividend ||Amount outstanding (Rs in Rupees) ||No of Shares |
|2013-14 ||26-09-2014 ||29-10-2021 ||2325168 ||775056 |
|2014-15 ||24-09-2015 ||28-10-2022 ||2259102 ||753034 |
|2015-16 ||19-08-2016 ||22-09-2023 ||1767753 ||589251 |
|2016-17 ||23-08-2017 ||25-09-2024 ||3021884 ||755471 |
|2017-18 ||30-08-2018 ||02-10-2025 ||1558172 ||779086 |
|2018-19 ||30-08-2019 ||02-10-2026 ||1497988 ||748994 |
|2019-20 ||28-08-2020 ||01-10-2027 ||1743684 ||697474 |
The voting rights on the shares outstanding shall remain frozen till the rightful ownerof such shares claims the shares. The company sends reminders to the members concerned toclaim the unclaimed and unpaid dividends & shares thereto before they are transferredto the IEPF Authority as per the applicable provisions.
The members whose shares got transferred to IEPF Authority shall claim the dividendsand shares from IEPF Authority by submitting an online application in the prescribede-Form No. IEPF-5 available on the website www.iepf.gov.in and the procedure prescribedthereon.
Mr. Umakanta Barik is the Nodal Officer who was appointed by the Company under theprovisions of IEPF.
Your Company have constituted a Risk Management Committee pursuant to Section 134 (3)(n) of the Companies Act 2013
& Regulation 21 of SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 which has been entrusted with the responsibility to assist the Board in(a) Overseeing and approving the Company's enterprise risk management framework; and (b)Overseeing that all the risks that the organization faces such as strategic financialcredit market liquidity security property Information Technology legal regulatoryreputational and other risks have been identified and assessed and there is an adequaterisk management infrastructure in place capable of addressing those risks.
The Committee had formulated a Risk Management Policy for dealing with different kindsof risks which it faces in day to day operations of the Company. Risk Management Policy ofthe Company outlines different kinds of risks and risk mitigating measures to be adoptedby the Board. The Risk Management Procedure shall be reviewed by the Risk ManagementCommittee and Board of Directors on a half- yearly basis at the time of review ofFinancial Results of the Company.
The policy is available in the Company website: www.heritagefoods.in>Investor>policies
Policy on Sexual Harassment
The Company has always believed in providing a safe and harassment free workplace forevery women working in Company's premises through various interventions and practices.The Company has adopted policy and constituted the Internal Complaint Committee underPrevention of Sexual Harassment of Women at Workplace in accordance with the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 asamended from time to time.
The Company has not received any complaints during the year.
The Company regularly conducts awareness programmes for its employees.
The following are the summary of sexual harassment complaints received and disposed oduring the year:
|Sl Particulars No ||Status of the No. of complaints received and disposed o |
|1 Number of complaints on sexual harassment received ||Nil |
|2 Number of complaints disposed o during the year ||Nil |
|3 Number of cases pending for more than ninety days ||Not Applicable |
|4 Number of workshops or awareness programmes against sexual harassment carried out ||The Company regularly conducts necessary awareness programmes for its employees |
|5 Nature of action taken by the employer or district o cer ||Not Applicable |
Vigil Mechanism policy
The Board of Directors of the Company had adopted the Whistle Blower Policy incompliance with the provisions of Section 177 of the Companies Act 2013 and Regulation 22of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. Amechanism has been established for employees to report concerns about unethical behaviouractual or suspected fraud or violation of Code of Conduct and Ethics. It also providesfor adequate safeguards against the victimization of employees who avail of the mechanismand allows direct access to the Chairperson of the Audit Committee in exceptional cases.The Audit Committee reviews periodically the functioning of whistle blower mechanism. Nocomplaint have been received during the Financial Year ended March 31 2021. No personnelhave been denied access to the Audit Committee during the Financial Year 2020-21.
The details of said vigil mechanism are given in Corporate Governance Report whichforms part of this Annual Report. A copy of the Whistle Blower Policy is available in thecompany's website i.e. www.heritagefoods.In.
Indian Accounting Standards (Ind AS)
The Company has adopted Indian Accounting Standards (Ind AS) with effect from April 12017 pursuant to Ministry of Corporate A airs' notifi cation of the Companies (IndianAccounting Standards) Rules 2015. The standalone and consolidated financial statements ofthe Company forming part of the Annual Report have been prepared and presented inaccordance with all the material aspects of the Indian Accounting Standards (IndAS') as notified under section 133 of the Companies Act 2013 read with the Companies(Indian Accounting Standards) Rules 2015 (by Ministry of Corporate A airs (MCA'))and relevant amendment rules issued thereafter and guidelines issued by the SecuritiesExchange Board of
India ("SEBI"). There was no revision of Financial Statements (Standalone& Consolidated) and Board Reports during the year under review. The financial figureare presented in millions for the financial year 2020-21 and the previous correspondenceyear figures are also presented in millions.
Prevention of Insider Trading Code
As per SEBI (Prohibition of Insider Trading) Regulation 2015 as amended from time totime the Company has adopted a Code of Conduct for Prevention of Insider Trading. TheCompany has appointed Mr. Umakant Barik Company Secretary of the Company as ComplianceOfficer who is responsible for setting forth procedures and implementation of the code ofconduct for trading in Company's securities. During the year under review there has beendue compliance with the said code.
Director's Responsibility Statement as required under Section 134 (3)(c) & (5) ofthe Companies Act 2013.
The financial statements are prepared in accordance with the provision of Section 129of the Companies Act 2013 read with Schedule III of the Companies Act 2013 and the rulesmade thereof Ind-AS and Generally Accepted Accounting Principles (GAAP) under thehistorical cost convention on accrual basis except the sale proceeds received under RECMechanism of the Renewable Energy. GAAP comprises mandatory accounting standards asprescribed under Section 133 of the Companies Act 2013 (the Act') read with Rule 7of the Companies (Accounts) Rules 2014 the provisions of the Act and guidelines issuedby the Securities and Exchange Board of India (SEBI). There are no material departuresfrom prescribed accounting standards in the adoption of these standards.
The Board of Directors to the best of their knowledge and understand confirm that:
In the preparation of the annual accounts (Standalone & Consolidated) forthe financial year 2020-21 the applicable accounting standards have been followed alongwith proper explanation relating to material departures.
They have selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of a airs of the Company at the end of the financial year 2020-21and ofthe profit and loss of the Company for that period.
They have taken Proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities if any
The annual accounts of the company have been prepared on a going concern basis.
They have laid down internal financial controls to be followed by the companyand that such internal financial controls are adequate and were operating effectively; and
They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
Acknowledgement and Appreciation
The Directors regrets the loss of life due to Covid-19 pandemic and are deeply gratefuland have immense respect for every person who risked their life and safety to fi ght thispandemic.
The Board takes this opportunity to thank all consumers customers farmers vendorsinvestors bankers and Statutory Authorities for their continued support during the year.The Board also wishes to place on record its sincere appreciation of the e ort/contribution made by its employees at all levels for their hard work dedication andcommitment. The enthusiasm and unstinting efforts of the employees have enabled theCompany to remain an industry leader. The Company's consistent growth was made possible bytheir hard work solidarity cooperation and support and look forward to their continuedsupport in the future.
| ||For and on behalf of || |
| ||HERITAGE FOODS LIMITED || |
|Registered O ce: || || |
|#6-3-541/C Panjagutta || || |
|Hyderabad 500 082 || || |
|Telangana India || || |
|CIN: L15209TG1992PLC014332 || || |
|Tel.: +91-40-23391221/2 || || |
|Fax: +91-40-23318090 ||N Bhuvaneswari ||N Brahmani |
|E-mail: hfl @heritagefoods.in ||Vice-Chairperson & Managing Director ||Executive Director |
|Date: May 19 2021 ||(DIN: 00003741) ||(DIN:02338940) |