Report on the Financial Statements:
We have audited the accompanying financial statements of M/s. Heritage
Foods (India) Limited, which comprise the Balance Sheet as at March 31,
2013, and the Statement of Profit and loss and Cash Flow Statement for
the year then ended, and a summary of significant accounting policies
and other explanatory information.
Management's Responsibility for the Financial Statements:
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub- section (3C) of Section
211 of the Companies Act, 1956. This responsibility includes the
design, implementation and maintenance of internal control relevant to
the preparation and presentation of the financial statements that give
a true and fair view and are free from material misstatement, whether
due to fraud or error.
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
Company's preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in
the circumstances. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of
the accounting estimates made by management, as well as evaluating the
overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
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
a) In the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;
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 the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on other legal and Regulatory Requirements:
1. As required by the Companies (Auditors' Report) Order, 2003 , as
amended by the companies (Auditor' Report) Order 2004, issued by the
Central Government of India in terms of sub-section (4A) of Section 227
of the Act, we give in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the Order.
2. As required by Section 227(3) of the Act, we report that:
a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
b) In our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and
Cash Flow Statement comply with the Accounting Standards referred to in
subsection (3C) of Section 211 of the Companies Act, 1956;
e) On the basis of written representations received from the Directors
as on March 31, 2013, and taken on record by the Board of Directors,
none of the directors are disqualified as on March 31, 2013, from being
appointed as a director in terms of clause (g) of Sub- section (1) of
Section 274 of the Companies Act, 1956.
f) Since the Central Government has not issued any notification as to
the rate at which the cess is to be paid under Section 441A of the
Companies Act, 1956 nor has it issued any Rules under the said section,
prescribing the manner in which such cess is to be paid, no cess is due
and payable by the Company.
Annexure to the Auditors' report
The Annexure referred to in our Report of even date to the members of
Heritage Foods (India) Limited on the accounts of the company for the
year ended 31st March, 2013.
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
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 Nil.
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 Financial Year 2012-13. The Company has been regular in the payment
iv. In our opinion and according to the information and explanations
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
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 31.3.2013.
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, 2013:
Nature of the Amount
Name of the statue dispute (Rs. in lakhs)
The A.P.G.S.T ACT 1957 General sales tax 7.41
The A.P.G.S.T ACT 1957 General sales tax 83.76
AP VAT ACT Input tax credit 127.06
The C.S.T ACT General sales tax 37.34
AP C.S.T ACT Filing of C Forms 1.42
Central Excise Exemption Claim Vide 0.62
Tariff Act, 1985 Tariff No:21069099
AP VAT ACT Stamp Duty 8.76
Name of the Status Period to which Forum where the disputes
relate (F.Y) is pending
The A P G S T ACT 1957 2001 to 2003 Commercial Tax Officer.
The A P G S T ACT 1957 2001-02 Writ petition filed
with H.C (WP No:
AP VAT ACT 2007-08 A.P.S.T.A.T (Tribunal)
The C S T ACT 2002-03 A.P.S.T.A.T (Tribunal)
AP C S T ACT 1998-99 Appeal Pending before
AP H.C (W.P No:
Central Excise Tariff
Act, 1985 2012-13 Pending at Asst.
Commissioner of Excise.
AP VAT ACT 2012-13 Commercial Tax Officer.
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 preceeding 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.
For Raju & Prasad
M. Sivaram Prasad
Place : Hyderabad Partner
Date : 30-05-2013 M No. 018943