Heritage Foods Limited | 32nd Annual Report 2023-24

Consolidated STRATEGIC REVIEW STATUTORY REPORT FINANCIAL STATEMENTS 233 HERITAGE FOODS LTD | 32ND ANNUAL REPORT 2023-24 Independent Auditor’s Report To the Members of Heritage Foods Limited Report on the Audit of the Consolidated Financial Statements Opinion 1. We have audited the accompanying consolidated financial statements of Heritage Foods Limited (‘the Holding Company’) and its subsidiaries (the Holding Company and its subsidiaries together referred to as ‘the Group’), its associate and joint venture, as listed in Annexure 1, which comprise the Consolidated Balance Sheet as at 31 March 2024, the Consolidated Statement of Profit and Loss (including Other Comprehensive Loss), the Consolidated Cash Flow Statement and the Consolidated Statement of Changes in Equity for the year then ended, and notes to the consolidated financial statements, including a material accounting policy information and other explanatory information. 2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid consolidated financial statements give the information required by the Companies Act, 2013 (‘the Act’) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards (‘Ind AS’) specified under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, and other accounting principles generally accepted in India of the consolidated state of affairs of the Group, its associate and joint venture, as at 31 March 2024, and their consolidated profit (including other comprehensive income), consolidated cash flows and the consolidated changes in equity for the year ended on that date. Basis for Opinion 3. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group, its associate and joint venture in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (‘ICAI’) together with the ethical requirements that are relevant to our audit of the consolidated financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key Audit Matters 4. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. 5. We have determined the matters described below to be the key audit matters to be communicated in our report. Key audit matter How our audit addressed the key audit matter Revenue recognition Refer Note 3(d) to the accompanying consolidated financial statements for material accounting policy on revenue recognition and Note 24 for details of revenue from operations. Revenue from sale of goods is recognised in accordance with the principles of Ind AS 115, “Revenue from Contracts with Customers” (‘Ind AS 115’), at a point in time when control of the products being sold is transferred to the customer and when there are no longer any unfulfilled obligations. The Holding Company also focuses on revenue as a key performance measure, which could create an incentive for overstating revenue resulting from the pressure on management to achieve performance targets at the reporting period end. Our audit procedures relating to revenue recognition included, but was not limited to, the following: • Understood the process of revenue recognition and assessed the appropriateness of the revenue recognition accounting policies adopted by the management in accordance with Ind AS 115; • Evaluated the design, integrity of the general information and technology control environment and tested the operating effectiveness of Holding Company’s manual and IT application controls in respect of revenue recognition, including discounts; • Performed substantive testing on a sample of revenue transactions recorded during the year by verifying the underlying documents, such as trip sheets, invoices, shipping documents and evidence of collection of receipts, as appropriate to ensure the accuracy of revenue recorded during the year; • Performed substantive testing on a sample of discount transactions recorded during the year by verifying the terms and conditions of the underlying approved scheme and credit notes, basis which the discount was granted;

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