Heritage Foods Limited | 30th Annual Report 2021-22
Financial Statements Company Overview Statutory Reports 229 Notes: (a) The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31 March 2022, the Group has not recorded any impairment of receivables relating to amounts owed by related parties (31 March 2021: ` Nil). This assessment is undertaken each financial year through examining the financial position of the related parties and the market in which such parties operates. (b) As at 31 March 2022, the Group has an outstanding guarantee given to a banker towards term loan and working capital facility availed by its joint venture i.e. Heritage Novandie Foods Private Limited. Amount outstanding to the banker by Heritage Novandie Foods Private Limited as at 31 March 2022 aggregates to ` 120.26 (31 March 2021: ` 149.54). (c) Post-employment and other long-term benefits, disclosed above, does not include those benefits which are computed for the Group as a whole. 44. Contingent liabilities and commitments As at 31 March 2022 31 March 2021 (a) Commitments Estimated amount of contracts remaining to be executed on capital account and not provided for 60.45 57.47 Note: Refer note 48(d) for commitments in respect of a joint venture. (b) Contingent liabilities, not provided for In respect of income tax matters [refer (i) below] 5.21 - In respect of sales tax / value added tax matters [refer (ii) below] 18.67 18.67 In respect of other matters [refer (iii) below] 59.73 20.65 (i) The Company had received demand order from the income tax authorities for the assessment years 2017-18 and 2018-19 in relation to the inadmissibility of expenditure claimed under Section 80G of the Income Tax Act, 1961. The management, on the basis of its internal assessment of the facts of the case, the underlying nature of transactions, is of the view that the probability of the case being settled against the Company is remote and accordingly do not foresee any adjustment to these standalone financial statements in this regard. The litigation is currently pending with the Commissioner of Income Tax (Appeals) (“CIT(A)”). As at 31 March 2022 31 March 2021 (ii) - Disputed purchase tax levied under Andhra Pradesh Value Added Tax Act, 2005 on purchase of milk @ 9.51 9.51 - Disputed Input tax credit disallowed under Andhra Pradesh Value Added Tax Act, 2005 @ 4.69 4.69 - Disputed Input tax credit disallowed under The Central Sales Tax, 1956 # 4.47 4.47 @ litigation pending with Hon’ble High Court of Telangana; # litigation pending with Joint Commissioner of commerical Taxes (Appeals), Bangalore. (iii) - Disputed entry tax levied under Andhra Pradesh Tax on Entry of Goods into Local Areas Act, 2001 on interstate purchases & 3.77 - - Disputed entry tax levied under Telangana Tax on Entry of Goods into Local Areas Act, 2001 on interstate purchases @ 10.37 10.34 - Disputed penalty levied under Central GST Act, 2017 on classification of flavored milk product & 35.28 - - Disputed milk cess levied on installed capacity under the Haryana Murrah Buffalo and other Milch Animal Breed Act, 2001 ^ 10.31 10.31 & litigation pending with Hon’ble High Court of Andhra Pradesh; ^ litigation pending with Supreme Court of India Based on the internal assessment and / or legal opinion, the Management is confident that, for the aforesaid mentioned contingent liabilities under paragraph (ii) and (iii) above, no further provision is required to be made as at 31 March 2022. (c) Guarantees excluding financial guarantees 2.96 3.49 Summary of the significant accounting policies and other explanatory information (All amounts in ` millions, except share data and where otherwise stated) Consolidated
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