Heritage Foods Limited

FINANCIAL STATEMENTS Standalone 29 th Annual Report 2020-21 | 147 Key audit matter How our audit addressed the key audit matter Discounts are material and there are arrangements with varying terms based on schemes implemented throughout the year. There is a risk of revenue being overstated, resulting from pressure the management may feel to achieve performance targets at the reporting period end. Due to the materiality of amounts involved and above said considerations, revenue recognition from sale of goods is determined to be a key audit matter for the current year audit. Refer Note3(d) to the Standalone Financial Statements – Summary of the signi fi cant accounting policies and Note 25 for the revenue recognized during the year. • Evaluated the design and implementation of Company’s controls in respect of revenue recognition, including discounts. • Performed substantive testing by selecting samples of revenue transactions recorded during the year by verifying the underlying documents, which included trip sheets, invoices, shipping documents and evidence of collection of receipts, as appropriate. • Performed substantive testing by selecting samples of discount transactions recorded during the year and comparing the parameters used in the calculation of the discounts with the relevant source documents (including invoices and schemes) to assess whether the methodology adopted in the calculation of the discounts was in accordance with the terms and conditions de fi ned in the schemes. • Performed cut-o ff testing by selecting samples of revenue transactions recordedbeforeandafter the fi nancial year end date by tracing to the relevant underlying documentation, to assess whether the revenue was recognized in the correct period. • Assessed manual journal entries posted to revenue to identify unusual items and tested such entries on a sample basis. • Evaluated appropriateness of disclosures made in the standalone fi nancial statements in accordance with the requirements of Ind AS 115 and other applicable regulations. Information other than the Financial Statements and Auditor’s Report thereon 6. The Company’s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the standalone fi nancial statements and our auditor’s report thereon. Our opinion on the standalone fi nancial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the standalone fi nancial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone fi nancial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.