1. We have audited the attached Balance Sheet of M/s. HERITAGE FOODS
(INDIA) LIMITED, as at 31st March, 2012 and also the statement of
Profit and Loss for the year ended on that date annexed thereto and
cash flow statement for the year ended on that date. These financial
statements are the responsibility of the Company''s management. Our
responsibility is to express an opinion on these financial statements
based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An Audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
3. As required by the Companies (Auditors'' Report) Order 2003, as
amended by the Companies (Auditors'' Report) Order 2004, issued by the
Government of India, in terms of sub-section (4A) of Section 227 of the
Companies Act 1956, we enclose in the annexure a statement on the
matters specified in paragraph 4 and 5 of the said order
4. Further to our comments in the annexure referred to in paragraph 3
above, we report that
i. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
ii. In our opinion the Company as required by law has kept proper
books of account so far as it appears from our examination of the books
and proper returns adequate for the purpose of our audit have been
received from the units not visited by us.
iii. The Balance Sheet and statements of Profit and Loss dealt with by
this report are in agreement with the books of account maintained.
iv. In our opinion the Balance sheet, statement of Profit and Loss and
the cash flow statement comply with the accounting standards referred
to in Sec.211 (3C) of the Companies Act.1956.
v. On the basis of written representation given to us, no director of
the Company, as at 31st March 2012 and taken on record by the Board of
Directors we report that none of the Directors as on 31st March, 2012
is disqualified from being appointed as a director under clause (g) of
Sub- Section (1) of Section 274 of the Companies Act, 1956.
vi. In our opinion and to the best of our information and according to
the explanations given to us, the financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India:
a. in the case of Balance Sheet, of the state of affairs of the
Company, as at 31st March, 2012.
b. in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date and
c. in the case of Cash Flow statement, of the cash flows for the year
ended on that date.
ANNEXURE TO AUDITORS'' REPORT
(Referred to in paragraph 3 of our report of even date)
i) a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
b) These fixed assets have been physically verified by the management
during the year and discrepancies noticed on such verification have
been properly dealt with in the books of account. In our opinion, the
frequency of verification is reasonable having regard to the size of
the company and the nature of the assets.
c) No substantial part of fixed assets has been disposed off during the
ii) a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
b) The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the company and the nature of its business.
c) The Company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.
iii) a) The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under Section 301 of the Companies Act, 1956 or to companies under the
same management as defined in Section 370(1-B) of the Companies Act,
1956. Consequently, Clauses (iii)(b), (iii)(c) and (iii)(d) are not
e) The company had taken unsecured loan from a company, covered in the
register maintained under Section 301 of the Companies Act, 1956. The
maximum amount involved during the year was Rs. 1 Crore and the year-end
balance of loan is Rs. 1 Crore.
f) In our opinion, the rate of interest and other terms and conditions
on which loan taken from the above company are not, prima facie,
prejudicial to the interest of the company.
g) As per the agreed terms, no repayment of loan was required during
the F.Y 2011-12. The company has been regular in the payment of
iv) In our opinion and according to the information and explanation
given to us, Considering the size of the company and nature of business
of various divisions of the company with regard to purchase of
inventory and fixed assets and with regard to sale of goods and
services, the internal control system commensurate with the size of the
company and nature of its business. During the course of our audit, we
have not observed any continuing failure to correct major weaknesses in
internal control system.
v) a) According to the information and explanations given to us, we are
of the opinion that the transactions that need to be entered into the
register maintained under Section 301 of the Companies Act, 1956 have
been so entered. b) In our opinion and according to the information
and explanations given to us, the transactions made in pursuance of
contracts or arrangements entered in the register maintained under
Section 301 of the Companies Act, 1956 and exceeding value of rupees
five lakhs in respect of any party during the year, have been made at
prices which are reasonable, having regard to prevailing market prices
at the relevant time.
vi) The Company has not accepted deposits from the public governed by
Section 58A and 58AA of the Companies Act, 1956 for the year under
vii) In our opinion, the Company has an adequate internal audit system
commensurate with the size and nature of its business.
viii) The Central Government has prescribed maintenance of Cost records
under Section 209 (1) (d) of the Companies Act, 1956, in respect of its
products manufactured during the year. We are of the opinion that,
prima facie, the prescribed accounts and records are properly prepared
and maintained. We have not, however, carried out detailed examination
of the same.
ix) a) The Company is regular in depositing undisputed statutory dues
with the appropriate authorities including Provident Fund, Investor
Education and Protections Fund, Employees State Insurance, Income Tax,
Sales Tax, Wealth Tax and Other Statutory dues applicable to it. There
are no undisputed statutory dues outstanding for more than six months
as on 31.03.2012.
b) According to the information and explanations given to us following
are the disputed dues relating to income tax, wealth tax, cess and
sales tax, which have not been deposited as at 31st March, 2012:
Name of the
statue Nature of the
dispute Amount (Rs.in
Act, 1957 General sales tax 7.41
ACT, 1957 General sales tax 95.11
The C.S.T ACT General sales tax 37.34
The C.S.T ACT FILING OF C Forms 1.42
AP VAT ACT ITC 127.06
Tariff Act, 1985 vide Tariff No. 3.99
Name of the statue Period to which the. Forum where the disputes
amounts relate (F.Y)
Act, 1957 1999-00 to 2004-05 Writ Petition filed
with A.P.H.C (15493,
ACT, 1957 2001-02 Writ petition filed
with Tribunal (1267/
The C.S.T ACT 2002-03 A.P.S.T.A.T (952/2008
The C.S.T ACT 1998-99 A.P.S.T.A.T. (1266/2007
AP VAT ACT 2007-08 A.P.S.T.A.T (419/2011
Tariff Act, 1985 Central Excise Tariff
Act, 1985 (V/19/15/
x) The Company does not have any accumulated losses as at the end of
the financial year under reference and the company has not incurred
cash loss in the financial year under reference and in the financial
year immediately proceeding such financial year.
xi) The Company has not defaulted in the repayment of its dues to
financial institutions or banks.
xii) The Company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
xiii) In our opinion, the Company is not a chit fund or nidhi / mutual
benefit fund / society. Therefore the provisions of Clause 4 (xiii) of
the Companies (Auditors'' Report) Order, 2003 are not applicable to the
xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Investments have
been held by the company in its own name.
xv) The Company has not given any guarantee for loans taken by others
from banks or financial institutions.
xvi) In our opinion, the term loans taken by the Company were applied
for the purpose for which they were taken.
xvii) In our opinion and according to explanations and information
given to us, funds raised on short-term basis have not been used for
long term investment.
xviii) According to the information and explanation given to us, during
the year the Company has not made any preferential allotment of equity
shares/warrants to parties and Companies covered in the register
maintained under Section 301 of the Companies Act, 1956.
xix) The company has not issued any debentures
xx) The Company, during the year, has not raised money by public
xxi) According to explanations and information given to us no material
frauds on or by the Company has been noticed during the year.
Place: Hyderabad For Raju & Prasad,
Date: 29th May 2012 Chartered Accountants
Membership No: 22738