Financial Statement Analysis at Heritage Foods

ABSTRACT
This project presents a financial statement analysis that distinguishes leverage that arises in
financing activities from leverage that arises in operations. The analysis yields two leveraging
equations, one for borrowing to ﬁnance operations and one for borrowing in the course of
operations. These leveraging equations describe how the two types of leverage affect book
rates of return on equity. An empirical analysis shows that the financial statement analysis
explains cross-sectional differences in current and future rates of return as well as price-to-
book ratios, which are based on expected rates of return on equity. The paper therefore
concludes that balance sheet line items for operating liabilities are priced differently than
those dealing with financing liabilities. Accordingly, financial statement analysis that
distinguishes the two types of liabilities informs on future pro tangibility and aids in the
evaluation of appropriate price-to-book ratios. The project has undertaken in VST ltd which
is one of the oldest org in Hyderabad. keeping in mind the importance of financial statement
analysis I selected this topic and analyzed the performance of company by selecting the past
5 years performance of company.

INDEX
S.No CHAPTER Page No
LIST OF TABLES i
LIST OF GRAPHS ii
1 CHAPTER - I 1-21
INTRODUCTION
2 CHAPTER - II 22-37
COMPANY PROFILE
3 CHAPTER – III 38-72
DATA ANALYSIS &INTERPRETATION
4 CHAPTER - IV 73-76
FINDINGS
SUGGESTIONS
CONCLUSION
BIBLIOGRAPHY 77
LIST OF TABLES
TABLE.N PAGE
TABLE NAME
O NO
Comparative Income Statement of Heritage Foods India
3.1 Limited For the year Ended 1-4-2021 to 31-3-2022 39
Comparative Income Statement of Heritage Foods India Limited
3.2 For the year Ended 1-4-2020 to 31-3-2021 41
Comparative Balance sheet of Heritage Foods India Limited for
3.5 the year Ended 1-4-2021 to 31-3-2022 47
Comparative Balance Sheet of Heritage Foods India Limited For
3.6 the Year Ended 1-4-2020 to 31-3-2021 49

3.7 the Year Ended 1-4-2019 to 31-3-2020 51
3.8 the Year Ended 1-4-2018 to 31-3-2019 53
Common Size Income Statement of Heritage Foods India
Common size Balance Sheet of Heritage Foods India Limited
Common size balance Sheet of Heritage Foods India Limited
3.14 For the year ended 1-4-2020 to 31-3-2021 66
Common size balance Sheet of HERITAGE FOODS INDIA
3.15 LIMITED For the year ended 1-4-2019 to 31-3-2020 68
Common size Balance Sheet of HERITAGE FOODS INDIA
i
LIST OF GRAPHS
PAGE
GRAPH.NO GRAPH NAME
NO
Comparative Balance sheet of Heritage Foods India Limited for
3.5 the year Ended 1-4-2021 to 31-3-2022 48
Comparative Balance Sheet of Heritage Foods India Limited
3.6 For the Year Ended 1-4-2020 to 31-3-2021 50
Common size Balance Sheet of Heritage Foods India Limited
Common size balance Sheet of Heritage Foods India Limited
3.14 For the year ended 1-4-2020 to 31-3-2021 67
Common size balance Sheet of HERITAGE FOODS INDIA
Common size Balance Sheet of HERITAGE FOODS INDIA
ii
CHAPTER – I
INTRODUCTION
INTRODUCTION
Meaning of financial statement
Financial statements at least refer to the two statements which are prepared by a business
concern at the end of the year. They are:
 Income statement or trading and profit and loss account which is prepared by
a business concern in order to know the profit earned and loss sustained during
a specific period.
 Position statement or balance sheet which is prepared by a business concern on a
particular date in order to know its financial position.
Nature of Financial Statement
Financial statements are prepared for the purpose of presenting a periodical review or report
by the management and deal with the state of investments in business and result achieved
during the period under review. They reflect a combination or recorded facts accounting
conventions and personal judgments and conventions applied affect them materially. Form
this it is clear that financial statements are affected by three things i.e., recorded facts,
Accounting conventions and personal judgments. Only those facts which are recorded in
business books will be reflected in the financial statements.
The following points reflect truly the nature of financial statements of business entities.
 This are reports are summarized reviews about the performance, achievements
and weakness of the business.
 These are prepared at the end of the accounting period so that various parties can
take decision of their future actions in respect of the relationship with the
business.
 The reliability of financial statements depends on the reliability of accounting
data. These statements cannot be said to be true and fare representatives of the
strength of profitability of the concern if there are numerous frauds and
defalcations in the accounts.
The figures in the financial statements are a combination of records facts. There may be
certain developments and factors which may be very important for the business are not taken
in to account as these are not recorded in the routine of accounting. More over fixed assets
are recorded at a historical value without taking in to consideration the changes in their
values due to price level fluctuations.
These statements are prepared as per accounting concepts and conventions
These financial statements are influence by the judgment of the accountant though he is
expected to be more objective in his approach. These judgments may be related to valuation
of inventory, depreciation of fixed assets and while making the distinction between capital
and revenue.
Importance of Financial Statements
The information given in the financial statements is very useful to a number of parties these
are the following
 Owners: - The Owners provide funds for the operations of a business and they
want to know whether their funds are being properly utilized or not. The financial
statements prepared from time to time satisfy their curiosity.
 Creditors: -Creditors (i.e.., suppliers of goods and services on credit, banker’s
another lender of money) want to know the financial position of a concern before
giving loans or granting credit. The financial statements help them in judging such
position.
 Inventors: - Perspective inventors, who want to invest money in a firm would like
to make an analysis of financial statements of that firm to know how safe the
reposed investment will be.
 Employees: - Employees are interested in the financial position of a concern they
serve, particularly when payment of bonus depends upon the size of the profits
earned, they would like to know that the bonus being paid to them is correct; so
they become interested in the preparation of correct profit and loss account.
 Government: - Central and State Governments are interested in the financial
statements because they reflect the earnings for a particular period for taxation.
Moreover, these financial statements are used for compiling statistics concerning
business which, in turn help on compiling national accounts
 Research Scholars: -The financial statements, being a mirror of the financial
position on a firm, are of immense value to the research scholar who wants to
make a study into financial operations of a particular firm.
 Consumers: -Consumers are interested in the establishment of good accounting
control so that cost of production may be reduced with the resultant reduction of
the prices of good they buy.
 Managers: - Management is the area of getting things done through others. This
requires that the subordinates are doing work properly. Financial statements are an
aid in this respect because they serve the manager in appraising the performance
of the subordinates. Actual results achieved by the employees can be measured
against the budgeted performance they were expected to achieve and remedial
action can be taken if the performance is not up to the mark.
Limitations of Financial Statements
The following are the main limitations of the financial statements
 Interim and not final Reports: - Financial statements do not depict the exact
position and are essentially interim reports. The exact position can be only
knowing if the business in closed.
 Lack of Precision and Definiteness: - Financial statements may not be realistic
because these are prepared by the following certain basic concepts and
conventions, For example, going concern gives us an idea that business will
continue and assets are to be recorded at cost but the book value at which the
assets is shown may not be actually realizable.
 Lack of Objective Judgment: - Financial statements are influenced by the
personal judgment of the accountant; He may select any method for depreciation,
Valuation of stock, amortization of fixed assets and treatment of deferred revenue
expenditure. Such judgment if based on integrity and competency of the
accountant will definitely affect the preparation of the financial statements.
 Records Only Monetary Facts - Financial statements disclose only monetary

facts, i.e.., and those transactions are recorded in the books of accounts which can
be measured in monetary terms. Those transactions which cannot be measured in
monetary terms such as, conflict between production manager and marketing
manager may be very important for a business concern bur not recorded in the
business books.
 Historical in Nature: - These statements are drawn after the actual happening of
the events they attempt to present a view of the past performance and have
nothing to do with the accounting for the future. Modern management is forward
looking bur these statements do not directly help them in making future estimates
and taking decisions for the future.
 Artificial View: - These statements do not give a real and correct report about the
worth of the assets and their loss of value as these are shown on historical cost
basis. Thus, these statements provide artificial view as market or replacement
value and the effect of the changes in the price level are completely ignored.
 Scope of Manipulation: - These statements are sometimes prepared according to
the need of the whims of the management. A highly efficient concern may conceal
its real profitability by disclosing loss or minimum profit whereas an inefficient
concern may declare dividend by wrongly showing profit in the profit and loss
account. For this under or over valuation of inventory, over or under charge of
depreciation, excessive or inadequate provision for anticipated losses and other
such manipulation may be resorted to. Window dressing may also be resorted to in
order to show better financial position of a concern than its real position.
 Inadequate Information: - there are many parties who are interested in the
information given in the financial statements but their objectives and requirements
differ. The financial statements as prepared under the provision of companies’ act,
1956, fail to meet the need of all. These are mainly prepared to safeguard the
interest of shareholders.
Profit and Loss Account
This account is prepared to calculator the net profit of the business. There are certain items of
incomes and expenses of the business which must be taken into consideration for calculating
net profit of the business. These are of indirect nature, i.e.., co concerning the whole business
and relating to various activities which are done by the business for the purpose of making
the goods available to the consumers. Indirect expenses may be selling and distribution
expenses, management expenses, financial expenses, extraordinary losses and expenses to
maintain the assets into working order. This account is prepared form nominal account and its
balance is transferred to capital account as the whole profit or loss will be that of the owner
and it wok increase or decrease his capital, the specimen proforma of this account is given as
under.
Importance of Profit and Loss Account
 Information of Net Profile or Net Loss: One of the important objectives of

maintaining accounts is to see whether the business has earned profit or suffered loss
during the accounting period. Profit and Loss Account provides information regarding
this important objective because it gives information about the profitability or
otherwise of the business.
 Comparison of current Profit with Past profit: Profit and Loss Account affords
comparison of the current year’s net profit with those of the past years. With this
comparison it can be ascertained whether net profit of the business is showing a rising
trend or downward trend.
 Comparison of Expenses: Comparison of the various expenses include in the Profit
and Loss Account with the expenses of the previous period helps in taking effective
steps for control of unnecessary expenses.
 Helpful in Preparation of Balance Sheet: Net profit or net loss disclosed by the
Profit and Loss Account is transferred to Capital Account and Capital Account
appears on the liabilities side of the Balance Sheet, without taking net profit net loss.
The Balance Sheet cannot be completed, thus, profit and Loss Account helps in the
preparation of the Balance Sheet.
 Helpful in Future Growth of the Business: On the basis of profit figures of the
current and the previous period, estimates about the profit in the year to come can be
made and projection about the expansion of the business can be made.
Indirect expenses to be shown on the debit side of profit and loss account can also be
divided into two categories i.e.
 Operating expenses
 Non-Operating expenses
Operating expenses are those expenses which are incurred in a concern to run the business
efficiently and smoothly, Expenses incurred on administration, selling and distribution come
under this category.
Non – operating expenses are those expenses which are not required to be incurred for
efficient and smooth operation of the business but still shown on the debit side of profit and
loss account. These include loss on the sale of fixed assets, writing off tangible assets and
intangible assets, financial expense etc.
Balance Sheet
A balance sheet is a statement prepared with a view to measure the financial position of a
business on a certain fixed date. The financial position of a concern is indicated by its assets
on a given date and its assets on a given data and its liabilities on that date. Excess of assets
over liabilities represent the capital and is indicative of the financial soundness of a company.
A Balance Sheet is also described as a ‘statement showing the source and application of
capital’. It is a statement and not an account and prepared from real and personal accounts.
The left hand side of the balance sheet may be viewed as a description of the sources from
which the business has obtained the capital with which that capital is invested on a specified
date.
On the left hand side of the balance sheet, the several liability items describe how much
capital was obtained from trade creditors, form banks, from bill holders and other outside
parties; The Owner’s equity section shows the capital supplied by the owner.
Capital obtained from various sources has been invested according to management’s best
judgment of the optimum mix or combination of assets for the business. A certain fraction is
invested in buildings; another fraction in stock, another fraction is retained as cash for current
needs of the business and so on. The assets side of the balance sheet, therefore, shows the
result of these management judgments’ as on the date of the balance sheet.
A properly drawn up balance sheet gives information relating to
 The nature and value of assets.

 The nature and extent of liabilities.
 Whether the firm is solvent.
 Whether the firm is overtrading.
If assets exceed the liabilities, the firm is solvent i.e.., able to pay its debts in full. A business
is, therefore, solvent by the amount of ownership capital in it, as it is the excess of assets over
liabilities, the last point i.e..; (IV) concerns the stability of the business. It the total of the
debts due to creditors (including bank overdraft) is greater than the liquid assets (i.e.., cash,
investments, bills etc.) the position of the firm may be financially unsound. Whether the debts
are being incurred without sufficient means of payment, the firm is said to be overtrading,
For the position to be quite sound, there should be some working capital i.e.., some spare
liquid assets available for current expenditure. It is not a wise policy to lock up the entire in
fixed assets. The concern may be solvent without being sound.
Characteristics of Balance Sheet
The following are the main Characteristics:
 It is prepared on a particular date and not for a particular period.

 It is prepared after the preparation of Trading and Profit & Loss Account.
 As assets must be equal to total liabilities, the two sides of the balance must have
the same total.
 It shows the financial position of a business as a going concern.
 It is a statement of assets (debit balances) and liability (credit balances) and no an
account.
Information that Balance Sheet Convey to Outsiders
The following are the main items of information that the balance sheet convey to an outsider
 The nature and the value of assets.

 It shows the nature and extends of liabilities.
 It shows the owner’s equity (i.e.., assets – liabilities =capital)
 It tells about credit worthiness and solvency of the firm.
 It reflects the liquidity of a firm.
 It reveals other information required to change in economic reserves and
obligations.
Classification of Assets and liabilities

Assets:Assets are property and possession of a business. Stock, land, buildings, books debts,
cash, bills receivable are some examples of assets. The classification of assets depends on
their nature. The various types of assets are
 Fixed Assets: Those assets which are acquired and held permanently in this business
and are used for the purpose of earning profits are called fixed assets. Land and
building, machinery, furniture and fixtures are some examples of these assets.
 Current Assets: Those assets such as cash, debtors and stock that can be realized and
readily available to discharge liabilities within an operating cycle of one year are
called current assets.
 Tangible Assets; these are definite assets which can be seen, touched and have
volume such as machinery, cash, Stock, etc
 Fictitious Assets: These assets are fictitious in nature i.e... They are virtually not
assets. These are either the past accumulated losses or expenses which are incurred
once in the life of a business and are capitalized for the time being. Profit and loss
account (debit balance), organization expenses, discount on the issues of shares and
advertisement expenses capitalized for the times being are example of such assets.
 Intangible Assets: Those assets which cannot be seen touched and have no volume
but have are called intangible assets. Goodwill, patents, licenses and trademarks are
example of such assets but quite valuable to the undertaking, an intangible asset may
not be fictitious. If on account of the past goodwill purchased along with an existing
concern, sales are readily affected and profit is readily earned, the assets is certainly
not fictitious though it is intangible, However, if the amount of goodwill was paid in
respect of a losing concern, the assets would be factious.
 Wasting Assets: Those assets such as mines, quarries etc. that become exhausted be
converted into cash quickly.
 Contingent Assets: It is an asset the existence, value and ownership of which is

dependent on the occurrence of a specified act. Suppose a firm has filed a suit for
some specified property now in possession of someone else. If the suit is decided in
firm’s favors, the firm will get the property. At the moment it is a contingent asset.
Similar would be the position of a patent applied for arising of a firm’s own research
effort. Contingent liability in respect of a contract for capital expenditure already
entered into will give rise to an asset on payment, at present it is only a contingent
asset.
Liabilities: A liability is an amount which a business is legally bound to pay. It is a claim

by an outsider on the asset of a business. Liabilities may be classified into four categories:
 Fixed liabilities: These are those liabilities which are payable on the termination
of the business such as capital which is a liability to the owner.
 Long term liabilities: those liabilities which are not payable within the next
accounting period but will be payable within next five to ten years are called long
term liabilities such as debentures.
 Current liabilities: those liabilities which are payable out of current assets within
the next accounting period usually year or already due or called current liabilities
such as debentures.
 Contingent liabilities: A contingent liability is one which is not an actual liability

but which will become an actual one on the happening of some event which is
uncertain. Thus such liabilities have 2 characteristics:
 Uncertainty as to whether the amount will be payable to all, and

 Uncertainty about the amount involved. It is sufficient if the amount of such
liability is stated on the face of the balance sheet by way of a note unless there
is a probability that a loss will materialize. In that event it is no more a
contingent liability and a specific provision should be made therefore.
Examples of such liabilities are
 Claims against the companies not acknowledge as debts.
 Uncalled liabilities on partly paid up shares.
 Arrears of fixed cumulative dividend.
Introduction
Methods used by interested parties such as investors, creditors, and management to evaluate
the past, current, and projected conditions and performance of the firm. Ratio analysis is the
most common form of financial analysis. It provides relative measure of the firm conditions
and performance. Horizontal analysis and vertical analysis are also popular firms. Horizontal
analysis is use to evaluate the trend in the accounts over the years, while vertical analysis,
also called a common size financial statement discloses the internal structure of the firm. It
indicates the existing relationship between sales and each Unicom statement account. It
indicates the mix of assets that produce income and the mix of sources o f capital, whether by
a current or long term debt or by equity funding. When using the financial ratios, a financial
analysis makes 2 types of comparisons.
Meaning of Analysis of Financial Statement
Analysis is the process of critically examining in details accounting information given in the
financial statement. For the purpose of analysis, individual items are studied, there
interrelationships with other related figures established, the data is sometimes rearranged to
have better understanding of the information with the help of different techniques or
relationship between component parts of financial statements to obtain a better understanding
firms position and performance. In the words of Myer, “Financial statement analysis is
largely a study of relationship among the various financial factors in a business as disclosed
by a single set of statement and a study of the trend of these factors as shown in a series of
statements”. The analysis of financial statements thus refers to the treatment of the
information contained in the financial statements in a way so as to afford a full diagnosis of
the profitability and financial position of the firm concerned. For this purpose, financial
statements are classified methodically, analyzed and compared with the figures of previous
years or other similar firms.
Meaning of Interpretation
Analysis and interpretation are closely related. Interpretation is not possible without analysis
and without interpretation analysis has no value. Various account balances appear in the
financial statements. These account balances do not represent homogeneous data so it is
difficult to interpret them and draw some conclusions. This requires an analysis of the data in
the financial statements so as to bring some homogeneity to figures shown in the financial
statements. Interpretation is thus drawing of inference and stating what the figures in the
financial statements really mean. Interpretation is dependent on interpreter himself.
Interpreter must have experience, understanding and intelligence to draw correct conclusions
from the analyzed data.
In other words of Kennedy and Memullar, “The analysis and interpretation of financial
statements are an attempt to determine the significance and meaning of the financial
statements data so that a forecast may be made of the prospects for future earnings, ability to
pay interest and get maturities (both current and long-term), and probability of a sound
dividend policy “.
The most important objective of the analysis and interpretation of financial statements are to
understand the significance and meaning of financial statements data to know the strength
and weakness of a business undertaking so that a forecast may be made of the future
prospects of the business undertaking.
Objectives of Financial Analysis
Financial analysis is helpful in assessing the position and profitability of a concern. This is
done through comparison by ratios for the same concern over a period of years, or for one
concern against another, or for one concern against the industry as a whole (inter-firm
comparison), or for one concern against the predetermined standards, or for one departments
of the same concern (intra-firm comparison). Accounting ratios calculated for a number of
years show the trend of the change of position, that is weather the trend is upward or
downward or static, the ascertainment of trend helps us in making estimates for the future.
For examples, ratio of gross profit to sales for the last five years indicates a rising trend; we
can safely estimate that ratios of gross profit to sales for the next year will also arise. Keeping
In view the importance of accounting ratios the accountant should calculate the ratios in
appropriate form, as early as possible, for presentation to the management for managerial
control.
In short, the main objectives of analysis of financial statements or to assess:
 The present and future earning capacity or profitability of the concern.

 The operational efficiency of the concern as a whole and of its various parts of
departments.
 The short term and long term solvency of the concern for the benefit of the
debenture holders and trade creditors.
 The comparative study in regarding to one firm with another firm or one
department with another department.
 The possibility of developments in the future by making forecast and preparing
budgets.
 The financial stability of a business concern.
 The real meaning and significance of financial data, and
 The long term liquidity of its funds.
Types of Financial Statement Analysis

Different types of financial statement analysis can be made on the basis of
1) The nature of the analyst and the material used by him.

2) The objectives of the analyst.
3) The modus operandi of the analysis.
Above three points is discussed one by one.
1) According to the nature of the analyst and the used by him:

On the basis, the financial analysis can be internal and external analysis:
a) Internal Analysis: It is made by those persons who have access to the books of
accounts. They are members of the organization. Analysis of financial statements
or financial data for managerial purpose is the internal type of analysis. The
internal analyst can give more reliable result than the external analyst because
every type of information is at his disposal.
b) External Analysis: It is made by those persons who are not connected with the
enterprise. They do not have access to the enterprise they do not have access to
detailed record of the company and have to depend mostly on published
statements. Such type of analysis made by investors, credit agencies, government
agencies and research scholars.
2) According to the objectives of the analysis: - on the basis of, the analysis
can be long term and short term analysis.
a) Long term analysis: -This analysis is made in order to study the long term
financial stability, solvency and liquidity as well as profitability and earning
capacity of a business concern. The purpose of making such type of analysis is to
know weather in a long run the concern will be able to earn a minimum amount
which will be sufficient to maintain a reasonable rate of return on the investment
so as to provide the funds required for modernization, growth and development of
the business and to meet its costs of capital. This type of analysis helps the long
term financial planning which is essential for the continued success of a business.
b) Short-term analysis: -this is made to determine the short-term solvency, stability

and liquidity as well as earning capacity of the business. The purpose of this
analysis is to know weather in the short run a business concern will have adequate
funds readily available to meet its short-terms requirements and sufficient
borrowing capacity to meet contingencies in the near future. This analysis is made
with reference to items of current assets and current liability (working capital
analysis) to have fairly sufficient knowledge about the company’s current position
which may be help full for short term financial planning and long-term planning.
3) According to the modus operation of the analysis: - on this basis, the

analysis may be horizontal analysis and vertical analysis.
a) Horizontal (or dynamic) Analysis: - This analysis is made toreview and analyze
financial statements of a number of years and therefore based on financial data taken
from several years. This is very useful for long term trend analysis and planning.
Comparative financial statement is an example of this type of analysis.
b) Vertical (or Static) analysis: - this analysis is made to review and analyze the
financial statements of one particular year only. Ratio analysis of the financial year
relating to a particular accounting year is an example of this type of analysis.
Techniques (Tools or Methods) of Analysis and Interpretation
The following techniques can be used in connection with analysis and interpretation of
financial statements:
 Comparative Financial Statements (or Analysis)
 Common Measurement Statements (or Analysis)
 Trends Percentages Analysis
 Funds Flow Statement
 Net Working Capital Analysis
 Cash Flow Statement
 Ratio analysis
1) Comparative Financial Statements:
These statements are prepared in a way so as to provide time perspective to the consideration
of various elements of financial position embodied in such statements. This is done to make
the financial data more meaningful. The statements of two or more years are prepared to
show absolute data of two or more years, increases or decreases in absolute data in value and
in terms of percentages. Comparative statements can be prepared for income statement as
well as position statement or balance sheet.
i) Comparative Income Statement: -This statement discloses the net profit

or net loss resulting from the operations of business. Such statement shows the
operating results for a number of accounting periods so that changes in absolute
data from one period to another period may be stated in terms of absolute change
or in terms of percentage. This statement helps in deriving meaningful conclusions
as it is very easy to ascertain the changes in sales volume, administrative
expenses, selling and distribution expenses, cost of sales etc.
It is calculated as: -
Absolute change
------------------------ * 100
Base year
ii) Comparative Balance Sheet: -This statement prepared on two or more

different dates can be used for comparing assets and liabilities and to find out may
increase or decrease in these items. This facilitates the comparison of figures of
two or more periods and provides necessary information which may be useful in
forming an opinion regarding the financial condition as well as progressive
outlook of the concern.
Absolute change
--------------------------- * 100
Base year.
2) Common Measurement or Size Statement: -This statement indicates the relationshipof

various items (expressed as percentage of the common item).
In the income statement the sale figure is taken as base and all other figures are expressed as
percentage of sales. Similarly, in the balance sheet the total of assets and liabilities is taken as
base and all other figures are expressed as a percentage of this total. The percentages so
calculated can be easily compared with the corresponding percentages in other periods and
meaningful conclusions can be drawn.
Individual money amount
---------------------------------------- * 100
Total amount in statement
3) Trend Percentage Analysis: - this analysis is an important tool of horizontal

financial analysis. This method is immensely helpful in making a comparative study of
the financial statements of several years. Under this method trend percentage are
calculated for each item of the financial statements taking the figure of base year as 100.
The starting year is usually taken as the base year. The trend percentages show the
relationship of each item with its proceeding year’s percentages. These percentages can
also be presented in the form of index numbers direction. These trend ratios may be
compared with industry in order to know the strong or weak points of a concern. These
are calculated only for major items instead of calculating for all items in the financial
statement.
While calculating trend percentage, the following precautions may be taken:
 The accounting principles and practices must be followed constantly over the period for
which the analysis is made. This is necessary to maintain consistency and
comparability.
 The base year selected should be normal and representative year.
 Trend percentage should be calculated only for those items which have logical
relationship with one another.
 Trend percentage should also be carefully studied after considering the absolute figures
on which these are based. Otherwise, they may give misleading conclusions.
 To make the comparison meaningful, trend percentage of the current year should be
adjusted in the light of price level changes as compared to the base year.
1) Funds Flow Statement: -This statement is prepared in order to know clearly the
various sources where from the funds are procured to finance the activities of a
business concern during the accounting period and also brings to highlight the uses to
which these funds are put during the staid period.
2) Cash Flow Statement: - This statement is prepared to know clearly the various
items of inflow and outflow of cash. It is an essential tool for short term financial
analysis and is very helpful in the evaluation of current liquidity of a business
concern. It helps the business executives of a business in the efficient cash
management and internal financial management.
3) Net Working Capital: -This statement is prepared to know the net change in
working capital of the business between two specified dates. It is prepared from
current asserts ant current liabilities of the said dates to show the net increase or
decrease in working capital.
4) Ratio Analysis: -It is done to develop meaningful relationship between individual

items or group of items usually shown in the periodical financial statements published
by the concern. An accounting ratio shows the relationship between the two inter-
related accounting figures as gross profit to sales, current assert to current liabilities,
loaned capital to owned capital etc. ratio should not be calculated between the two
unrelated figures as sales and discount on issue of shares, operating costs and equity
capital etc. As it will not serve any useful purpose.
Limitations of Financial Statement Analysis
Analysis of financial statements is a very important device but the person using this device
must keep in mind its limitations. The following are the main limitations of analysis:
1) Historical Nature of Financial Statement: The basic nature of these

statements is historical, i.e., relating to the past period. Past can never be a precise and
infallible index of the future and can never be hundred percent helpful for the future
forecast and planning.
2) No Substitute for Judgment: - Analysis of financial statement is a tool which

can be used profitably by an expert analyst but may lead to faulty conclusions if used
by unskilled analyst. The result of analyst, thus, should not be taken as judgments or
conclusions.
3) Reliability of Figure: -The reliability of analysis depends on reliability of the figures
of the financial statements under the security. The entire working of analysis will be
vitiated by manipulations in the income statement, window dressing in the balance
sheet. questionable procedure adopted by the accountant for the valuation of Fixed
assets and such other factors.
4) Single Year Analysis is Not Much Valuable and Useful: The analysis of
these statements relating to a single year only will have limited use and value. It will
not be advisable to depend fully on such analysis. Analysis should be extended over a
number of years so that the results may be compared to draw meaningful conclusions.
5) Results May Have Different Interpretation: The results or indications
derived from the analysis of these statements may be differently by different users.
For example, a high current ratio may suit banker, a supplier of goods or short -term
lenders but it may be index puff inefficiency of the management due to non
utilizations of funds.
6) Change in Accounting Methods: Analysis will be effective if the figure
derived from the financial statements are comparable. Due to change in accounting
methods (i.e., depreciation method, or method of valuation stock), the figures of the
current period may be no comparable base, and then the whole exercise of analysis
will become futile and will be little value.
7) Pitfalls in Inter-Firm Comparison:When different firms are adopting
different procedures, records, objectives, policies and different items under similar
headings, comparison will become more difficult. If done, it will not provide reliable
basis to assess the performance, efficiency, profitability and financial condition of the
compared to industry as a whole.
8) Price Level Change Reduce the Validity of the Analysis: The continuous
and rapid changes in the value of money, in the present day economy, also reduce the
validity of analysis. Acquisition of assets at different levels of prices make
comparison useless as on meaningful conclusions can be drawn from a comparative
analysis of such items relating to several accounting periods.
Shortcoming of the Tool of Analysis: There are different tools of analysis (already
discussed) available to the analyst. Which tools are to be used in a particular situation
depends on the skills, training, intelligence and expertise of the analyst. If wrong tool is used,
it may give misleading results and may lead to wrong conclusions or inferences which may
be harmful to the interest of business
RESEARCH METHODOLOGY
NEED OF THE STUDY:
To understand the existing financial position of the Asian Paints Limited relating to its
financial position and to know what are the factors that result and organization yield profit
and loss.
The need of financial statement analysis study to diagnose the information contain in
financial statement so as to judge the profitability and financial position of the firm Asian
Paints Limited Financial analyst analyses the financial statement with various tools of
analysis before commanding upon the financial health of the firm.
SCOPE OF THE STUDY:

Analysis of financial statement (AFS) can be undertaken by different persons and for
different purposes, therefore, the scope of the AFS may be varying various
circumstances for business decision making process However, the following are some the
techniques of the AFS are (a) Comparative financial statements (b) Common-size financial
statements (c) Trend percentage analysis (d) Statement of changes in financial position (e)
Cost-volume-profit relations, and (f) Ratio analysis.
The ratio analysis is the most common, comprehensive and powerful tool of the AFS.
The importance of ratio analysis lies in the fact that it presents facts on a
comparative basis. As such, this study focuses only on ratio analysis. To carry out this
study, it was collected financial information of Heritage Foods India Limited from financial
year 2015-16 to financial year 2019-20
OBJECTIVES OF THE STUDY

To determine the financial statements and weakness of the firm.
To determine the short –term solving of the firm
To diagnose the information contained to financial statements so as to judge the profitability

and fondness of the firm.
To establish relationship between various figures or the income statement and balance sheet.
To know the financial position of the firm.
METHODOLOGY OF THE STUDY

RESEARCH DESIGN:
This is a systematic way to solve the research problem and it is important component for the
study without which researches may not be able to obtain the format. A research design is the
arrangement of conditions for collection and analysis of data in a manager that aims to
combine for collection and analysis of data relevance to the research purpose with economy
in procedure.
The formidable problem that follows the task of defining the research problem is the
preparation of design of the research project, popularly known as the research design,
decision regarding what, where, when, how much, by what means concerning an inquiry of a
research study constitute a research design. A research design is the arrangement of
conditions for collection and analysis of data in a manager that aims to combine for collection
and analysis of data relevance to the research purpose with economy in procedure.
TOOLS AND TECHNIQUES:

Comparative Income and Balance Sheet Statements and some ratios
SOURCES OF DATA
Data we collected based on two sources.
 Primary data.
 Secondary data.
Primary data
The Primary data are those information’s, which are collected afresh and for the first time,
and thus happen to be original in character.
Secondary Data:
The Secondary data are those which have already been collected by some other agency and
which have already been processed. The sources of Secondary data are Annual Reports,
browsing Internet, through magazines.
 It includes data gathered from the annual reports of Heritage Foods India Ltd
 Articles are collected from official website of Heritage Foods India Ltd
LIMITATIONS OF THE STUDY
Through an attempt has been made to study the Financial Statement Analysis. Study may
suffer from the following limitations.
 The study is conducted for the purpose of fulfillment of the condition stipulated for
Completion of course, so the study may not be fulfillment of the requirements of a
detailed investigation.
 The study was conducted with the data available and the analysis was made according
the detail of the study is for the past years only form 2017-18 to 2021-2022.
 Time was the major constraint. It does not allow me to study in depth.
 It does not consider the changes in prices level.
 Different people may interpret the same analysis in different ways.
CHAPTER – II
COMPANY PROFILE
22
COMPANY PROFILE
Heritage Foods Limited

The Heritage Foods Limited was founded by Mr. Nara Chandrababu Naidu in the year 1992,
which is one of the fastest growing Public Listed Companies in India, with two business
divisions - Dairy and Renewable Energy. The annual turnover of Heritage Foods crossed INR
2681 crores in the financial year 2019-20.
Currently, Heritage's milk and milk products have a market presence in Andhra Pradesh,
Telangana, Karnataka, Kerala, Tamil Nadu, Maharastra, Odisha, NCR Delhi, Haryana,
Rajasthan, Uttarakhand & Uttar Pradesh.
In the year 1994, HFL went public and was oversubscribed 54 times. HFL shares are listed on
BSE (Stock Code: 519552) and NSE (Stock Code: HERITGFOOD).
Vision
Delighting every home with Fresh & Healthy products and empowering the Farmer.
Mission
 To be a nationally recognized brand for Healthy and Fresh products with a revenue of
INR 6000 Crore by 2024
 To anticipate, understand and respond to our Customers' needs by creating high-
quality products and making them available through innovative and convenient
channels
 To embrace the right technology to delight our Customers
 Advocating the balancing of economic, social and environmental aspects to create a
better tomorrow
 Empowering the farmer community through our unique 'Relationship Farming' Model
 Be the Employer of Choice by nurturing entrepreneurship and promoting
empowerment, alongside transparency
23
CORPORATE MANAGEMENT TEAM
Mrs. Bhuvaneswari Nara
Vice-Chairperson & Managing Director
A B.A. Graduate and a Director for several companies. Is a
dynamic leader who has extensive experience in business and has
been successfully steering Heritage Foods Limited towards growth
and better prospects. Joined Heritage in 1994 as whole-time
Director and is now serving as Vice Chairperson & Managing Director. Is guiding and
monitoring the overall workflow of the organization.
Mrs. Brahmani Nara

Executive Director
Holds a Master's in Business Administration from Stanford
University, Bachelor’s in Electrical Engineering from Santa Clara
University, California, USA and Communication Engineering from
Chaitanya Bharathi Institute of Technology, Hyderabad, India.
Investment Associate in Vertex Venture Management Pvt Ltd
between 2009-2011 in Singapore. Joined Heritage in 2011 as Vice President Business
Development and is now serving as Executive Director. Takes care of such vital functions as
design, development and implementation of strategic plans for the organization in a cost-
effective and time-efficient manner.
Dr. M. Sambasiva Rao

President,
Post Graduate and Doctorate in Zoology. Served the state and
central governments for about two decades as a member of the
Indian Administrative Services (IAS). Dr Rao was the Joint
Secretary in the Department of Commerce under the Ministry of
Commerce and Industry, Government of India.
24
CA A. Prabhakara Naidu
Vice President - Finance & Accounts,
Fellow Member of the Institute of Chartered Accountants of
India and graduated from Sri Venkateswara University with a
university rank in science. Has 26 years of experience in finance
and accounts. Has been associated with the Heritage group since
its inception.
Mr. Umakanta Barik

Company Secretary,
Has a Master’s in Economics, LLB, FCS, and LIII. Is a Fellow
Member of the Institute of Company Secretaries of India, New
Delhi and a Licentiate from Insurance Institute of India, Mumbai.
Has over 19 years of experience in the domains of Secretarial,
Legal, Insurance & Intellectual Property Rights.
Mr. J. Samba Murthy

Head - Dairy Division,
Holds an MBA in Marketing and a Bachelor's in Science. Is the
Senior Vice President at Heritage and has been associated with
the Company since 2007. Has worked previously in APDDCF
Limited, Visakha Dairy NDDB, and Reliance in various
positions in the field of Sales & Marketing.
Heritage Commitments
Milk Producers
• Effecting change in the standard of living for dairy farmers in terms of:
• Regular income through co-operative efforts
• Women’s participation in income generation
• Protecting farmers from price exploitation by the un-organized sector
• Providing remunerative prices for milk
• Increasing milk productivity through input and extension activities
• Credit facilitation for purchase and insuring of cattle
• Cattle healthcare activities
• Supplying high-quality cattle feed at reasonable prices
25
Customers
• Timely supply of pure & fresh products
• Supply of high-quality milk and milk products at affordable prices
• More than 15 lakh happy customers
• High customer satisfaction
• Customer care centre
• Supply of products through multiple channels like MRF, e-Commerce & Parlours
Employees
• Enhancing the technical and managerial skills of employees through continuous
training and development
• Instituting the best appraisal systems to motivate employees
• Fostering incentive, bonus and reward systems to encourage employees
• Providing fair opportunities to all for career development
Shareholders
Returns
• Dividend Payment since Public Issue (January 1995)
Service
• Highest importance to investor service; no notice from any regulatory authority since
2001 in respect of investor service
• Very transparent disclosures
Suppliers
• Prompt payments to all suppliers
• Associated with high-quality equipment / ingredient suppliers
Society
• Potential Employment Generation
• More than 3,100 employees are working with Heritage
• More than 12,020 procurement representatives have found self-employment in
rural areas
• More than 6900 sales representatives are associated with the company
• More than 1,033 franchisees operating Heritage Parlours
26
Awards & Recognitions
Heritage Foods is proud to have been recognized by some of the most important and
influential publications and organizations around the world.
2022
Certificate of Appreciation
 We are overjoyed to announce that we have won the prestigious award ‘e4m Pride of
India- Best South Brand’ at the exchange4media (e4m) Pride of India Brand Awards
2022
2021
Certificate of Appreciation
 Government of India, Ministry of Finance, Punjab, 2021

 Government of India, Ministry of Finance, Haryana, 2021
2018
• India’s 100 Best CFO’s Awards
• ICAI Awards
• 100 Top HR Mind in India Award
2017
• Telangana Best Employer Brand Award 2017
• Hyderabad CFO Leadership Award
• Most Innovative 50 CIOs/CTOs of India
• The Great Indian Ice-Cream & FD Contest
• “National Energy Conservation Award”
• Golden Peacock Award for Excellence in Corporate Governance
2016
• Excellence Awards in Corporate Social Responsibility
• Most Innovative 100 CIOs/CTOs of India
• 100 Most Influential CFO’s in India
• Golden Peacock Award for Excellence in Corporate Governance
27
• Great Indian Ice Cream Contest 2016 Season-5
• COCA COLA Golden Spoon Award 2016
2015
2014
• ‘Most Admired Retailer of the Year 2014’
• COCA COLA Golden Spoon Award
• Economics Times
2013
• Fortune-50 Most Powerful Business Women
CSR ACTIVITIES
Rebuilding cyclone-affected lives

Donated Rs.48.50 lakhs from the CSR funds and
Rs.17.67 lakhs from the Heritage Employee Welfare
funds to SMART Andhra Pradesh Foundation in
support of Cyclone Titli that affected families in
Srikakulam, AP.
Helping Kerala stand up after the floods

Donated Rs.44,23,129/- worth of Skimmed Milk
Powder from the CSR funds and employees’ one
day’s salary to the needy people in Kerala’s tragic
floods.
Uplifting women through education

Inauguration of the Heritage Foods Academic
Block at NTR Junior College for Girls, Gandipet by
28
DAIRY
Heritage Dairy
We are one of the Leading Private Dairy Players in India with a Chilling Capacity of 1.95
million litres per day, Processing Capacity of 2.57 million litres per day and Packaging
Capacity of 1.71 million litres per day. By deeply committing ourselves to innovation and to
providing authentic, high-quality milk products, we have grown multifold to occupy a
sizeable share in India's Dairy Market.
We process and market a full line of dairy products including fresh milk, curd, buttermilk,
lassi, ice-cream, paneer, ghee, table butter, cooking butter, milk powder, flavored milk, UHT
milk and dairy whitener. Headquartered in Hyderabad, we have a significant presence in the
states of Andhra Pradesh, Telangana, Karnataka, Kerala, Tamil Nadu, Maharastra, Odisha,
NCR Delhi, Haryana, Rajasthan, Punjab, Uttarakhand, Himachal Pradesh, Uttar Pradesh &
Madhya Pradesh.
EXPORTS
The Heritage dairy plant, Gokul at Kasipentla in Chittoor District, Andhra Pradesh is certified
and approved for export of ghee and butter manufactured in this plant by the Exports
Inspection Agency, India. Our products are exported to Europe, the Gulf and several
countries in Asia.
Our major exports are:

• Heritage Pure Ghee in Bulk and Consumer Packs
• Heritage Butter in Bulk and Consumer Packs
• Heritage SMP (Skimmed Milk Powder) in Bulk & Consumer Packs
HERITAGE PARLOUR
Heritage Parlours are exclusive outlets selling the whole range of Heritage products including
Heritage milk, milk products, ice cream and also products supplied/approved by Heritage
Foods Ltd.
It is a franchisee-based business model that provides excellent business opportunities for new
entrepreneurs as well as existing business owners.
With a well-established network of over 1,033 Parlours in Hyderabad, Vishkapatanam,

Rajahmundry, Vijayawada, Tirupati and Chennai, Heritage Parlours play a vital role in
ensuring that Heritage products are available to customers at their doorstep. We consider
29
every parlour a brand ambassador of Heritage, and HFL along with the Franchisee ensures
that every Heritage Parlour delivers the right message to customers.
You need to fulfill these criteria to become a Heritage Parlour franchisee owner:
• Visibility – The shop should be in a residential or semi-commercial location.
• Shop Area: 100 square feet.
• Exclusive Heritage outlet- Selling only Heritage products and items
supplied/approved by Heritage Foods Limited.
• Will need to obtain the Shops and Establishment License and other required statutory
licenses/permissions.
• The Franchisee has to renovate/modify the shop as per the HFL design.
• The Franchisee would be required to furnish an interest-free refundable security
deposit of Rs.10,000/-.
• The delivery of products will be done through the regular channel of the company on
a cash and carry basis. (We do not have a policy of supply on credit.)
• The franchisee will have to invest in a deep freezer (300/400 ltrs capacity) for Ice-
creams and a Chest Cooler/Glass door refrigerator for milk and milk products.
• Franchisee should possess a bank account and will be required to submit residential
and identity proofs.
• The agreement with HFL has to be executed by the Franchisee for a period of three
years.
• Product sale depends on the season: For example, Butter-milk, Lassi and Ice creams
will have higher sales in summer and less in winter. The Franchisee should make
efforts to sell more quantities based on the season and should also cater to the milk
and milk products requirements of the nearby consumers/households on a regular
basis.
Heritage Distribution Centre

The Heritage Distribution Centre (HDC) is an exclusive distribution wing for Heritage Foods
Ltd., selling the whole range of Heritage products including Heritage Milk, milk products,
ice-cream, and private label products and also products supplied/authorized by Heritage
Foods Ltd.
We consider the HDC to be a brand ambassador of the Heritage brand and, HFL along with
the Franchisee, ensures that every Heritage Distribution Center delivers the right service to
30
customers.
To become a Heritage Distribution Center franchisee owner:

• It must be an exclusive Heritage Outlet – selling only Heritage brand of products or
products/brands authorized by HFL.
• Should have at least 5 years of experience in selling Dairy/FMCG distribution.
• Should possess sound knowledge of distribution and should know the retailers and the
general business environment of the assigned market.
• Would obtain all the requisite licenses and permissions to run a distribution set-up.
• Should have requisite manpower and vehicles to conduct the distribution business.
• The franchisee needs to meet the laid down sales targets to ensure the overall viability
of the HDC.
• The franchisee would be required to furnish an interest free refundable security
deposit of Rs.75000/-.
• The franchisee would incur a fixed investment of Rs.5 lacs and a monthly expense of
approximately Rs.40500/-.
• The delivery of products will be done on a cash and carry basis.
• HFL would assist the franchisee in terms of milk coolers & freezers required for
storage of dairy products and conditional and part reimbursement of distribution
expenses.
• The Franchisee should possess a bank account and needs to furnish proof of identity
and residence.
• The agreement with HFL has to be executed by the franchisee for a period of three
years.
• Product sale depends on the season: For example, buttermilk, lassi and ice-creams
will have higher sales in summers and less in winters. The franchisee should make
effort to sell more quantities based on the season and should also cater to the milk &
milk products requirements of consumers/households of the nearby residential
colonies on a regular basis.
HERITAGE RENEWABLE ENERGY

We at Heritage have recognized our responsibilities to protect the environment. With this, we
are dedicated to expand our green footprint and thus we have started our clean energy journey
by entering into renewable energy projects for captive consumption.We have commissioned
and been distributing energy through our captive solar & wind power plants at 11 different
31
plants and locations, namely, Bangalore packing station in Karnataka, Battiprolu packing
station in Andhra Pradesh, Bobbili packing station in Andhra Pradesh, Kalluru packing
station in Telangana, Madanapalli in Andhra Pradesh, Mulugu in Teangana, Sangvi packing
station in Maharashtra & Vadamadurai packing station in Tamil Nadu. Wind power plants are
located in Chinahothur, Vajrakarur & Beluguppa, Ananthapur District in Andhra Pradesh.
PRODUCTS
MILK
TONED MILK
Fresh & Pure milk is produced from our
farmers and processed, pasteurized,
homogenized and packed at state of the art
processing plants utmost care to ensure
goodness. Homogenized tone milk nurtures a
healthy body, and in turn, a healthy mind.
Milk us available in poly packs of various sizes.
DOUBLE TONED MILK

Double Toned Milk is low in fat, yet retains milk's
other benefits. Especially, for those that want to
say away from fat yet seek calcium, Double-
Toned Homogenized Milk is best suited. Milk is
available in poly packs of various sizes.
FULL CREAM MILK
FULL Cream Milk is rich in fat, so it is

suitable for those with a low BMI. What's
more, it is at its purest and best because it is
processed at our state-of-the-art processing
plants. Milk is available in poly pack of
various sizes.
STANDARDIZED MILK
32
Fresh & Pure milk is procured from our farmers
and processed, pasteurized, homogenized and
packed at state-of-the-art processing plants with
utmost to ensure goodness. Our Standardized
milk is available in poly packs.
GOLDEN COW MILK
Golden Cow Milk Is The Culmination Of A Series Of Step Such A Procurement,
Processing, Pasteurization, Homogenization And
Packing At State-Of-The-Art Processing Plants With
Utmost Care To Ensure Goodness. Our Golden Cow
Milk Is Available In Poly Packs.
SLIM MILK
Skimmed Milk Contains The Least Fat And Is Thus
Ideally Most Suitable For People Of All Ages And
Types Of Fat Requirements. Milk Is Processed To
Separate Fat, Pasteurized, And Packed At State-Of-
The-Art Processing Plants With Utmost Care To
Ensure The Goodness.
UHT MILK
Fresh & pure milk is procured form
our farmers, processed, and
pasteurized at ultra-high temperature
to ensure each and every particle of
milk is free from bacteria and packed
diligently at state-of-the-art
processing plants to ensure goodness. Heritage Special Milk (UHT MILK) is available in
multilayered oxygen barrier poly packs.
CURD
Fresh & pure milk procured form our
farmers is processed, homogenized,
33
pasteurized and packed in state of the art of processing plants with utmost care to ensure
goodness.
Heritage Curd is one of the flagship value-added products from the house of Heritage.
Heritage Curd is prepared with a selected culture having beneficial becteria. The culture is
selected after research by a team of experts to impart a thick, ceamy, rich and glossy texture.
Available in poly packs, cups, tubs, buckets/matkas.
BUTTERMILK
Buttermilk is prepared form fresh and pure
curd in state-of-the-art processing plants
with utmost care to ensure goodness.
Different variants of buttermilk are
available like plain, salted, spicy, jeera, etc.
LASSI
SWEET LASSI
Sweet Lassi is made with pasteurized
homogenized curd. Lassi is a fermented drink
that contains many healthy bacteria. Lassi is
thick and rich mouth feel and it comes with a
natural elaichi flavor.
RAGI LASSI
Heritage Ragi Lassi is a very healthy and nutritious fermented drink, It is made
by mixing Ragi millet flour and fresh curd together and by smoothening the
mixture.
SABJA LASSI
Heritage Sabja Lassi is a very healthy and nutritious fermented drink; It is
made by mixing Sabja seeds and fresh curd together and by
smoothening the mixture.
ICE-CREAMS
TUBS
34
Alpenvie Ice-creams made with nuts/fruits and with your
favorite flavours (Chocolate, pineapple, Fruit Fusion,
Pistachio, Butterscotch, Vanilla and Rajbhog)
BARS
Everyone likes a good ice-cream bar. Well, with our range
we have something differenet for everybody.(Almond
Crunch, Black Current, Chocolate, Overload, Classic
Vannila, Mango Lychee and Melon Rush).
KULFI
Classic Kulfi : The coolest traditional ice-cream to be ever made.
Kohinoor Kulfi: Kohinoor Kulfi made with Real Kesar, Almond and
Cashew nut powder.
FROZEN DESSERTS
CONES
A range of crunchy biscuits with a blend of delightful
flavours and colours.(Strawberry, Butterscotch, Banana
caramel, Black current, Rajbhog, Double chocolate, Vanilla
and Chocochips).
CUPS
Everyone loves this new found delicacy of Heritage ice-
cream Cup. ( Vanilla, Strawberry, Butterscotch, Chocolate
and Orange tango).
JUICY BARS
Get more joy with less price and different flavours of (Grape
Jelly, Raspberry Twin, Mango Twin, Orange Juice and
Mango Juice).
FAMILY PACKS
35
The range of packs gives family enjoyment with delicious
flavors of Vanilla, Strawberry, Butter Scotch, Anjeer Badam,
Badam Pista Kesar, Orange Tango, Mango, Chocolate &
Lychee Caramel.
FLAVOURED MILK
Prepared from fresh & pure Heritage Double Toned Milk with
different Food-grade nature identical flavours & colours. We
provide different variants of Heritage Flavoured Milk in glass
bottles and PP bottles. It is a delicious and refreshing milk-based
drink.
Available Flavours : Badam, Strawberry, Pineapple, Vanilla, Elachi, Pista, Chocolate, Rose,
mango & Banana.
PANEER
Fresh & pure milk procured from our farmers is processed,
homogenized and packed in state-of-the-art processing plants
with utmost care to ensure goodness. Heritage Fresh Paneer is
uniform and has a pleasing white appearance. It has a mild
acidic flavor with a soft, cohesive and compact texture.
Vacuum packed in a multiayered film to maintain freshness.
SWEETS
DOODH PEDA
Heritage Doodh Peda is made from pure and fresh milk. With
the right amount of sucrose addition, it is rich in taste and
granular with better chewiness. You can never stop with one
bite.
MILK CAKE
Heritage Milk Cakes are made from highest quality skimmed
milk power and pure ghee. It is ready to melt in your mouth,
with its smooth texture and richness in taste.
GHEE
36
Prepared from pure butter in State-of-the-art processing plants
with utmost care to ensure goodness. Three variants are
available form the House of Heritage.
Cow Ghee- Prepared from pure cow butter, it is golden yellow
in colour. It has a good aroma and is granular
Buffalo Ghee - Prepared from pure buffalo butter, it is white in colour. It has a good aroma
and is granular.
HI AROMA GHEE
Hi Aroma Ghee (Special ghee) - Prepared from pure ripened cream
with the selected bacterial culture in state-of-the-art processing plants
with utmost care to ensure goodness. Hi-Aroma Ghee is light brown in
color with a naturally developed rich aroma and smooth granules.
BUTTER
TABLE BUTTER
The rich Heritage Salted Butter is made from best quality fresh
cream and contains no added ingredients other than salt.
Manufactured in state-of-the-art processing plants with utmost care
to ensure goodness, it goes just anything from as basic as bread
toasts to as diverse as Maghalai dishes.
COOKING BUTTER
The rich Heritage Unsalted Cooling Butter is made from best
quality fresh cream in state-of-the-art processing plants with utmost
care to ensure goodness.
37
CHAPTER – III
DATA ANALYSIS
&
INTERPRETATION
38
DATA ANALYSIS AND INTERPRETATION
TABLE 3.1 Tabular representation of Comparative Income Statement of Heritage
Foods India Limited For the year Ended 1-4-2021 to 31-3-2022
Absolute
Particulars 2021 2022 Change % Change
A) Income
161977
Sales 7 1884162 264385 16.32230856
(_) Excise Duty 87929 139404 51475 58.54155057
153184
Net Sales 8 1744758 212910 13.89889859
Profit on sale of assets _ 20 _ _
operating profit 203169 -108393 -311562 -153.351151
other income 30002 41781 11779 39.26071595
profit from operation activities 41082 -378304 -419386 -1020.850981
180610
Total Income A 1 1299862 -506239 -28.02938485
B) Expenditure
Material Consumed 925939 1318229 392290 42.36672178
staff cost 88436 93956 5520 6.241801981
Expenses 219340 345533 126193 57.53305371
123371
Total Operating Expenses 5 1757718 524003 42.47358588
Depreciation 94696 120138 25442 26.86702712
Financial Expenses 163590 190170 26580 16.24793692
Mise 268 268
149226
Total Expenditure B 9 2068294 576025 38.60061423
Surplus/Deficit(A-B) 313832 -768432 -1082264 -343.85
Source: Annual Report of Heritage Foods India Limited
39
GRAPH 3.1Graphical representation of Comparative Income Statement of Heritage
Foods India Limited For the year Ended 1-4-2021 to 31-3-2022.
2500000
2000000
1500000
1000000
500000 Series1
Series2
0
s e s y s s t e s e t s s s e
ar m le ut le et fi m e e A ur ed os se se on se is e B B)
-500000 cul nco Sa e D t Sa ass pro nco tiviti om dit sum ff c pen pen ciati pen M itur it(A-
rti ) I is e f g i c c n n ta x x e x nd fic
Pa A Exc N le o atin her on a al In xpe l Co s E g E epr al E pe /De
) sa e r ot ti t ) E ia tin D ci x
-1000000 (_ n p ra To B ter a an l E us
to o pe a per Fin o ta rpl
fi o M T Su
Pr
o m lO
f ro o ta
t T
ofi
pr
INTERPRETATION
Sales volume is increased by 13.89% during the year 2022,Profit on sale of assets nil in 2021
and in the 2022 it was RS 20,000,Other income is increased by 39.20%,Increases in sales are
highlighting increase in Material consumption, staff cost, depreciation, financial expenses,
misc exp written off,Surplus is decreased by 343.85%.
40
Absolute
A) Income
Sales 982368 1619777 637409 63.88495146
(_) Excise Duty 51606 87929 36323 70.38522652
Net Sales 930762 1531848 601086 63.5799893
Profit on sale of assets _ _ _ _
other income 12521 30002 17481 139.6134494
profit from operation activities 58564 41082 -17482 -29.85110307
100184
Total Income A 7 1806101 804254 80.27712814
B) Expenditure
staff cost 72145 88436 16291 22.58091344
Expenses 127763 219340 91577 71.67724615
Depreciation 61817 94696 32879 53.18763447
Misc exp written off 268 268
Surplus/Deficit(A-B) 121141 313832 192691 159.0634055
Source: Annual Report of Heritage Foods India Limited.
41
2000000
1800000
1600000
1400000
1200000
1000000
800000
600000
Series1
400000
Series2
200000
0
s e s y s s e s e d t s s n s B )
ar m le t le et m e
ul nco Sa e Du t Sa ass nco tiviti e A itur me cos nse nse tio nse n off re A-B
c om d su ff e e
p p c p ia e e u
i t(
t
arti ) I
A x cis Ne of r i ac
e e n l Inc pen on sta Ex Ex pre l Ex ritt end efici
P l a x lC g e a w
(_
)E sa oth atio ot B) E ria atin D nci exp l Exp us/D
o n r T e r a c a l
fit op
e at pe Fin Mis Tot urp
o M l O S
Pr ro
m
o ta
t f T
r ofi
p
INTERPRETATION:
Sales volume is increased by 63.57% during the year 2020,Other income is increased by
139.61%,Increases in sales are highlighting increase in Material consumption, staff cost,

depreciation, financial expenses, misc exp written off,Surplus has increased tremendously
which adds to financial stability.
42
Absolute
A) Income
144974
Sales 8 982368 -467380 -32.23870631
(_) Excise Duty 74687 51606 -23081 -30.90363785
137506
Net Sales 1 930762 -444299 -32.3112211
other income 9800 12521 2721 27.76530612
profit from operation activities 129043 58564 -70479 -53.61667816
151390
Total Income A 4 1001847 -512057 -33.82361101
B) Expenditure
staff cost 64132 72145 8013 12.49454251
Expenses 112241 127763 15522 13.82917116
Depreciation 47556 61817 14261 29.98780385
Mise 268 268 0 0
Surplus/Deficit(A-B) 646183 -552 - 646735 -100.085424
43
1600000
1400000
1200000
1000000
800000
600000
Series1
400000 Series2
200000
0
rs les s e ed s on ise B)
-200000 ula ale m se
c Sa t S n co sum en
ciati M t(A-
p ci
rti Ne ri n Ex pr
e
Pa the l Co e Defi
o ia D /
er us
at r pl
M Su
INTERPRETATION:
Sales volume is decreased by 32.31% during the year 2020,Other income is increased by
27.76%,Decrease in sales are highlighting decline in some of the associated expenditure
compare to last year,Surplus is decreased by 100.085%.
44
Absolute
A) Income
Sales 572977 1449748 876771 153.0202783
(_) Excise Duty 36886 74687 37801 102.480616
Net Sales 536091 1375061 838970 156.4976842
other income 8374 9800 1426 17.02889897
profit from operation activities 173154 129043 44111 -23.4750
Total Income A 723619 1513904 790285 109.212859
B) Expenditure
staff cost 54123 64132 10009 18.4930621
Expenses 102141 112241 10100 9.888291675
Depreciation 39996 47556 7560 18.90189019
Mise 268 268 0 0
Surplus/Deficit(A-B) -77085 646183 723268 938.27
45
GRAPH 3.4 Graphical representation of Comparative Income Statement of Heritage
1600000
1400000
1200000
1000000
800000
600000
400000
Series1
200000
Series2
0
-200000 lars me ales uty ales sets me ities eA u re ed ost ses ses on ses ise e B -B)
u
c c o S D S s
a c vo m it m c en en ati en M tur (A
rti ) In cise Net of r in acti nco end nsu staff Exp Exp reci Exp di ficit
a
P A x le e n l I x p C o g p l en e
)E sa oth atio ot
a
) E rial
e a
tin D nci xp s/D
(_ n r T B a l E
o e at
e r a a lu
ofit op M O pe Fin Tot urp
l S
Pr ro
m
o ta
t f T
ofi
pr
INTERPRETATION:
Sales volume is increased by 156.49% during the year 2019,Other income is increased by
17.028%,Increases in sales are highlighting increase in Material consumption, staff cost,
depreciation, financial expenses, misc exp written off,Surplus is increased by 938.27%.
46
TABLE 3.5 Tabular representation ofComparative Balance sheet of Heritage Foods
India Limited for the year Ended 1-4-2021 to 31-3-2022.
Particulars Schedule Previous Current Absolute % change

year 2021 year 2022 Change
I) source of fund
1)shareholders funds
a)capital A 570050 699470 129420 22.703
b)Reserves& surplus B 62592 4028 -58564 -93.565
2)loan funds C
a)secured loans 1,805,933 2,028,153 222,220 12.305
b)unsecured loans 41,415 26,719 -14,696 -33.485
3)Differed tax liability R 98,510 194,321 95,811 97.260
TOTAL 2578500 2952691 374191 13.511
ii)Application of funds
1)fixed Assets D
a)Gross block 1,885,352 2,036,574 151,222 8.021
b)less: Depreciation 252,481 372,591 120,110 47.572
c)Net block 1,632,871 1,663,983 31,112 1.905
d)Capital work in progress& adv 50,173 143,434 93,261 183.879
1,683,044 1,807,417 124,373 7.390
2)Investment 8550 137911 129361 1512.99
3)current asset, loan & adv
a)Inventories E 1,271,442 1,070,107 -201,335 -13.835
b)sundry debtors F 79,042 51,528 -27,514 -33.809
c)cash bank balances G 126,796 442,934 316,138 249.328
d)other current asset H 10,970 21,762 10,792 98.377
e)loans&adv I 85,402 39,975 -45,427 -53.192
1,573,652 1,626,306 52,654 3.346
less: current liabilities provisions
a)liabilities J 660,626 945,134 284,508 43.066
b)provisions K 27,994 3,178 -24,816 -88.648
688620 948,312 259,692 37.712
net current assets 885,037 677,994 -207,043 -23.394
iv)a)miscellaneous exp to the extent not L 1,874 16,06 -13.301
written off or adjusted -268
b)profit & Loss A/c 0 327,763 327,763 0.000
TOTAL 2578500 2952691 374191 13.511

47
GRAPH 3.5 Graphical representation of Comparative Balance sheet of Heritage Foods
India Limited for the year Ended 1-4-2021 to 31-3-2022.
3500000
2500000
I) source of fund
1500000 1)shareholders funds A
500000 I) source of fund
-500000 1)shareholders funds
570050
I) source of fund
699470
I) source of fund
129420
I) source of fund
22.703
INTERPRETATION:
COMPARATIVE BALANCE SHEET FOR THE YEAR 2021-2022
Share capital is increased by 22.703%,Reserves and surplus has highly decreased by 93.5%,
Secured loans are increased by 12.3%,Unsecured loans are decreased by 33.4%,Fixed assets
are increased by 1.9%,Capital work in progress has been highly increased by
183.8%,Investment of the bank has been increased highly by 1512.99%,Cash and bank
balances have been highly increased by 249.3%,Other current asset has been increased by
98.3%,Inventories, sundry debtors, loans & advances have been slightly decreasing,Current
liabilities are increased by 43%,Provisions are decreased highly by 88.6%,Miscellaneous
expenses are decreased by 13.3%.
48
TABLE 3.6Tabular representation of Comparative Balance Sheet of Heritage Foods
India Limited For the Year Ended 1-4-2020 to 31-3-2021.
Particulars Schedu Previous Current Absolute %
le year 2020 year 2021 change change
A) Source of funds
a)Share capital A 567804 570050 22246 3.917
b)Reserves& surplus B 46,208 62,592 16,384 33.46
607,708 624,092 16,384 2.70
2)Loan funds C
a)secured loans 1,715,704 1,805,933 90,229 3.26
b)unsecured loans 22,836 41,415 18,579 81.36
1,738,540 1,847,348 108,808 6.26
3)Differed tax liability R4 78,508 98,510 20,002 23.477
TOTAL 2,431,060 2,578,500 147,440 6.0648
1)fixed Assets D
a)Gross block 1,740,823 1,885,352 144,529 8.304
c)Net block 1,583,038 1,632,871 49,833 3.15
d)Capital work in progress& adv 58,912 50,173 -8,739 -13.83
1,641,950 1,683,044 41,094 2.50
2)Investment 6322 8550 2228 33.24
3)current asset, loan & adv
a)Inventories E 806,095 1,271,442 465,347 57.73
b)sundry debtors F 111,286 79,042 -32,244 -28.97
d)other current asset H 10,835 10,970 135 1.25
e) loans&adv I 125,967 85,402 -40,565 -32.2028
1,111,953 1,573,652 461,699 41.52
less: current liabilities provisions
a)liabilities J 266,590 660,626 394,036 147.89
b)provisions K 64,699 27,994 -36,705 -56.731
331,289 688,620 357,331 107.86
Net current assets 780,664 885,032 104,368 13.37
iv)a)miscellaneous exp to the extent L 2,142 1,874 -268 -12.51
not written off or adjusted
TOTAL 2,431,060 2,578,500 147,440 6.0648
Source: Annual report of Heritage Foods India Limited
49
GRAPH 3.6 Graphical representation of Comparative Balance Sheet of Heritage
Foods India Limited for the Year Ended 1-4-2020 to 31-3-2021.
3000000
2500000
2000000
1500000
1000000
500000
0
Previous year 2020

Current year 2021
INTERPRETATION:
Share capital has been increased by 3.917%,Reserves and surplus are increased by 33.46%,
Secured loans are slightly increased by 3.26%,Unsecured loans are increased highly by
81.36%,Fixed assets are increased by 3.16%,Capital work in progress is decreased by
13.83%,Cash and bank balances are highly increased by 119.48%,Other current assets are
increased by 1.25%,Inventories are increased by 57.73%,Investment has been increased by
33.24%, Sundry debtors, loans & advances are slightly decreasing,Current liabilities are
increased highly by 147.89%,Provisions are decreased by 56.73%,Miscellaneous expenses
are decreased by 12.51%.
50
TABLE 3.7Tabular representation ofComparative Balance Sheet of Heritage Foods
RS. in
Crores
Particulars Schedule Previous Current Absolute % change
year 2019 year 2020 Change
A) Source of funds
a)Share capital A 565925 567804 1879 0.3320
b)Reserves& surplus B 48,299 46,208 -2,091 -3.3239
614,224 614,012 -212 -0.345
2)Loan funds C
a)secured loans 1,414,344 1,715,704 301,360 21.30740
b)unsecured loans 101,025 22,836 -78,189 -77.39
1,515,370 1,738,540 223,170 13.727096
TOTAL 2,205,896 2,431,060 225,164 10.207
1)fixed Assets D
a)Gross block 935,444 1,740,823 805,379 86.09
c)Net block 839,475 1,583,038 743,563 88.574763
d)Capital work in 485,405 58,912 -426,493 -87.86
progress& adv
1,324,879 1,641,950 317,071 23.932072
2)Investment 4425 6322 1897 42.87
3)current asset, loan &
adv
a)Inventories E 660,219 806,095 145,876 22.095
b)sundry debtors F 21,626 111,286 89,660 413.59354
c)cash bank balances G 181,081 57,770 -123,311 -68.097
d)other current asset H 15,670 10,835 -4,835 -30.855
e)loans&adv I 85,130 125,967 40,837 47.97
963,730 1,111,953 148,223 13.380137
less: current liabilities
provisions
a)liabilities J 29,773 266,590 236,817 793.40859
b)provisions K 59,773 64,699 4,926 8.2411791
89,546 331,289 241,743 269.96515
Net current assets 874,184 780,664 -93,520 -10.697976
iv)a)miscellaneous exp L 2,411 2,142 -269 -11.157196
to the extent not written
off or adjusted
51
TOTAL 2,205,896 2,431,060 225,164 10.207
Source: Annual report of Heritage Foods India Limited.

Foods India Limited For the Year Ended 1-4-2019 to 31-3-2020.
2500000
2000000
1500000
1000000
500000
0
Previous year 2019

Current year 2020
INTERPRETATION:
COMPARATIVE BALANCE SHEET FOR THE YEAR 2019-2020.
Share capital of a company has been slightly increased by 0.33%,Reserves and surplus are
decreased by 4%, Secured loans are increased by 21.3%,Unsecured loans are decreased
highly by 77.3%,Fixed assets are increased by 88.5%,Capital work in progress is decreased
highly by 87.86%,Cash and bank balances are highly decreased by 68.09%,Other current
assets are decreased by 30.85%,Inventories are increased by 22%,Investment has been
increased by 42.87%, Sundry debtors are highly increased by 413.59%,Current liabilities are
increased highly by 793.40%,Provisions are increased by 8.24%,Miscellaneous expenses are
decreased by 11.15%.
52
TABLE 3.8Tabular representation of Comparative Balance Sheet of Heritage Foods
RS. in
crores
Particulars Sched Previous Current Absolute % change
ule year 2018 year 2019 Change
A) Source of funds
a)Share capital A 564598 565925 1327 0.235
b)Reserves& surplus B _ 48,299 48,299 0
564598 614,224 49,626 8.7896
2)Loan funds C
a)secured loans 1,088,344 1,414,344 326,000 29.95
b)unsecured loans 9,071 101,025 91,954 1013.71
1,097,415 1,515,370 417,955 38.085
TOTAL 1,713,103 2,205,896 492,793 28.766
1)fixed Assets D
a)Gross block 829,283 935,444 106,161 12.80
c)Net block 780,850 839,475 58,625 7.5078
d)Capital work in 93,501 485,405 391,904 419.144
progress& adv
874,351 1,324,880 450,529 51.527
2)Investment 3098 4425 1327
42.83
3)current asset, loan &
adv
a)Inventories E 915,338 660,219 -255,119 -27.87
b)sundry debtors F 430 21,626 21,196 4929.30
d)other current asset H 8,764 15,670 6,906 78.799
53
e)loans and advances I 16,940 85,130 68,190 402.57
949,671 963,730 14,059 1.48040742
5
less: current liabilities
provisions
a)liabilities J 151,471 29,773 -121,698 -80.344
b)provisions K 2,064 59,773 57,709 2793.97
Net current assets 153,535 874,184 720,649 469.371

iv)a)miscellaneous exp to L 2678 2,411 -267 -9.9
the extent not written off
or adjusted
Profit & Loss A/C 36842 _ -36,842 -100
39520 2410 -37,110 -
93.9018218
6
TOTAL 1,713,103 2,205,896 492,793 28.766
54
Foods India Limited For the Year Ended 1-4-2018 to 31-3-2019.
2500000
2000000
1500000
1000000
500000
0
Previous year 2018

Current year 2019
INTERPRETATION:
Share capital has slightly increased,Reserves and surplus are increased, Secured loans are
increased by 29.95%,Unsecured loans are increased highly by 1013.7%,Fixed assets are
increased by 7.5%,Capital work in progress is increased highly by 419.14%,Cash and bank
balances are highly increased by 2109.11%,Other current assets are increased by
78.79%,Inventories are decreased by 27.87%,Investment has been increased by 42.83%,
Sundry debtors are highly increased by 4906.01%,Current liabilities are decreased highly by
80.34%,Provisions are increased highly by 2793.97%.,Miscellaneous expenses are decreased
by 9.9%.
55
TABLE 3.9 Tabular representation of Common Size Income Statement of Heritage
Particulars 2021 2022
Rs % Rs %
A) Income
Sales 1619777 89.6836334 1884162 143.9509256
(_) Excise Duty 87929 3.86844313 139404 10.72452306
Net Sales 1531848 83.8151903 1744758 133.2264025
Profit on sale of assets _ _ 20 0.001538625
operating profit 203169 11.2490387 -108393 -8.338808273
other income 30002 1.66114741 41781 3.214264283
Profit from operation activities 41082 2.27462362 -378304 -29.10339713
Total Income A 1806101 100 1299862 100
B) Expenditure
Material Consumed 925939 62.0490676 1318229 63.73508795
staff cost 88436 28.1794081 93956 3.54268107
Expenses 219340 13.6984223 345533 16.70618394
Total Operating Expenses 1233715 82.6737673 1757718 83.98395296
Depreciation 94696 6.34577278 120138 3.808555263
Financial Expenses 163590 10.9625007 190170 9.194534239
Mise 268 0.01795923 268 0.012957539
Total Expenditure B 1492269 100 2068294 100
Surplus/Deficit(A-B) 313832 21.0305247 -768432 -37.15293861
56
GRAPH 3.9 Graphical representation of Common Size Income Statement of Heritage
2500000
2000000
1500000
1000000
Series1
500000 Series2
Series3
0 Series4
s e es ty es ts fit e es A re ed st es es n es se B )
lar om Sal Du Sal asse pro com viti me ditu um ff co ens ens iatio ens Mi ture (A-B
-500000ticu In
c e t n ti o s p p c p i it
Pa
r
A) x cis Ne e of ting er i n ac l Inc pen Con sta Ex Ex pre l Ex end efic
E a l a th o a x l g e i a p D
(_
) s er o ati ot ) E ria tin D nc x /
-1000000 on op er T B ate era n a al E lus
t p i t p
r ofi m
o M l Op F To Sur
P ta
fro To
fit
o
Pr
INTERPRETATION:
Sales volume has increases from 2021-2022 giving its effects on the company revenues,Other
income also increases by 3.21%,Total operating expenses has increases by 83.98% in the year
2021,Depreciation decreased by 3.8% in the year 2018 and also other expenses decreased
57

Rs % Rs %
A) Income
Sales 982368 98.0556911 1619777 89.68363342
(_) Excise Duty 51606 3.15108594 87929 3.868443127
Net Sales 930762 92.9046052 1531848 83.81519029
Profit on sale of assets _ _ _
operating profit 203169 11.24903868
other income 12521 1.24979163 30002 1.661147411
Profit from operation activities 58564 3.84560317 41082 2.274623623
Total Income A 1001847 100 1806101 100
B) Expenditure
staff cost 72145 8.19172346 88436 28.17940809
Expenses 127763 13.5068842 219340 13.69842234
Depreciation 61817 7.01902792 94696 6.34577278
Mise 268 0.03043013 268 0.017959229
Surplus/Deficit(A-B) 121141 13.7549875 313832 21.03052466
58
2000000
1800000
1600000
1400000
1200000
1000000
800000
600000 Series1
400000 Series2
200000 Series3
0 Series4
ar om Sal Du Sal asse pro com viti me ditu um ff co ens ens iatio ens Mi ture (A-B
cul c
rti In ise et f g in cti co n ns ta xp xp ec xp i it
nd efic
Pa A) E xc N le o atin her on a al In xpe l Co s E g E epr al E p e
(_
) sa er ot ati ot ) E ria tin D nci x /D
l E lus
t on op er T B te
a era ina ta p
ofi op M Op F To Sur
r m l
P
fro ta
t To
ofi
Pr
INTERPRETATION:
Sales volume has decreases from 2020-2021, giving its effects on the company
revenues,Other income also increases to 1.66%,Total operating expenses has increases to
82.67% in the year 2020,Depreciation is decreased to 6.34% in the year 2018 and also other
expenses decreases.
59

Rs % Rs %
A) Income
Sales 1449748 93.7622148 982368 98.05569114
(_) Excise Duty 74687 3.93340397 51606 3.151085944
Net Sales 1375061 90.8288108 930762 92.90460519
Profit on sale of assets _ _
operating profit
other income 9800 0.64733299 12521 1.249791635
Profit from operation activities 129043 8.5238562 58564 3.845603171
Total Income A 1513904 100 1001847 100
B) Expenditure
staff cost 64132 7.39085489 72145 8.191723458
Expenses 112241 12.9351485 127763 13.50688425
Depreciation 47556 3.48056345 61817 7.019027916
Mise 268 0.0308855 268 0.030430132
60
1600000
1400000
1200000
1000000
800000
600000
400000 Series1
Series2
200000
Series3
0 Series4
ar om Sal Du Sal asse pro com viti me ditu um ff co ens ens iatio ens Mi ture (A-B
cul c
rti In ise et f g in cti co n ns ta xp xp ec xp i it
nd efic
Pa A) E xc N le o atin her on a al In xpe l Co s E g E epr al E p e
) a t
s er o ati ot ) E ria tin D nc i x / D
(_ on op ra l E lus
t p er T B ate e ina ta p
r ofi m
o M l Op F To Sur
P ta
fro To
fit
o
Pr
INTERPRETATION:
Sales volume has increases from 2019-2020, giving its effects on the company
revenues,Other income also increases to1.24%,Total operating expenses has decreases to
81.79% in the year 2019,Depreciation increases to 7.01% in the year 2019 and also financial
expenses increased in the year 2020.
61
TABLE 3.12Tabular representation of Common Size Income Statement of Heritage
Rs % Rs %
A) Income
Sales 572977 153.311884 1449748 93.76221478
(_) Excise Duty 36886 9.93399064 74687 3.933403967
Net Sales 536091 143.377893 1375061 90.82881081
Profit on sale of assets _ _
operating profit
other income 8374 2.25525234 9800 0.647332988
Profit from operation activities -173154 -46.633146 129043 8.523856202
Total Income A 371311 100 1513904 100
B) Expenditure
staff cost 54123 6.7594267 64132 7.390854895
Expenses 102141 12.7563994 112241 12.93514851
Depreciation 39996 3.99510431 47556 3.480563453
Mise 268 0.03347055 268 0.030885504
62
Foods India Limited For the year Ended 1-4-2018 to 31-3-2019
1600000
1400000
1200000
1000000
800000
600000
Series1
400000 Series2
200000 Series3
Series4
0
s e s y s s t e s e t s s s e
-200000 ular o m ale Dut ale sset rofi om itie e A itur med cos nse nse tion nse Mis re B -B)
c c S S a p c v m d u ff e e i e a tu (A
arti ) In cise Net of ng r in acti Inco en ons sta Exp Exp rec Exp ndi ficit
P A
)E
x le ti e n l xp C g ep al e e
(_ sa pera oth atio ota ) E rial atin D nci Exp s/D
n r T B e a l u
to o pe at per Fin ota rpl
fi o M T u
Pr
o m lO S
f ro o ta
t T
ofi
Pr
INTERPRETATION:
Sales volume has decreases from 2018-19,giving its effects on the company revenues,Other
income also decreases to 0.64%,Total operating expenses has decreases to 83.67% in the year
2015,Depreciation increased to 3.48% in the year 2015 and also other expenses increasing.
63
TABLE 3.13Tabular representation of Common size Balance Sheet of Heritage Foods
India Limited For the year Ended 31-3-2021 to 31-3-2022.
Particular 2021 2022
Rs % Rs %
A. Sources of Funds :-
Share capital 570050 17.45 699470 17.93
Reserves & Surplus 62592 1.915 4028 0.103
B. Loan Funds
Secured Loans 1805933 53.275 2028153 51.98
Un Secured Loans 41415 1.267 26719 0.685
C. Current Liabilities
Liabilities 660626 20.22 945134 23.23
Provisions 27994 0.856 3178 0.082
Tax Liability 98510 3.015 194321 3.98
Total ( A+B+C) 3267120 100 3901003 100
A. Application Funds :-
Fixed Assets 1,632,871 49.978 1,663,983 42.65
Capital Work in Progress in
advances 50,173 1.53 143,434 3.67
Investment 8550 0.262 137971 3.54
B. Current Assets, Loans &

Advances
Inventories 1,271,442 38.916 1,070,107 27.43
Sundry debtors 79,042 2.42 51,528 1.32
Cash bank balances 126,796 3.89 442,934 11.35
Other current asset 10,970 0.336 21,762 0.5578
Loans&adv 85,402 2.61 39,975 1.025
64
C. Misc.expenses 1,874 0.05735 1,607 0.0412
D. Profit & Loss A/C 327,763 8.4
Total ( A+B+C+D) 3,267,120 100 3,901,003 100
GRAPH 3.13 Graphical representation of Common size Balance Sheet of Heritage

4000000
3500000
3000000
2500000
2000000
1500000
1000000
500000 Series1
0 Series2
ar :- s s s es s ts nt ces ors set C Series3
cul nds rplu und Loan iliti ision sse
m
e an bt as s A/
rti u Su F d ab v A st dv de nt s Series4
Pa of F s & Loan ure t Li Pro d e e Lo
e B. Sec ren iF xe Inv & A dry urr &
es
rc serv
s n c fit
r an Su her ro
u
o Re Un . Cu Lo
Ot
P
.S C s, D.
A set
s
n tA
r re
. Cu
B
INTERPRETATION:
COMMON SIZE BALANCE SHEET OF FOR THE YEAR 2021-22
Share capital is decreased to 17.93%, Reserves and surplus are decreased from1.92% to
0.103,Secured loans have been decreased from 53.275% to 51.98%,Unsecured loans have
been decreased slightly from 1.27% to 0.71%,Current liabilities are increased from 20.22% to
23.23%,Provisions are decreased to 0.082%,Tax liability is increased from 3.015% to
3.98%,Fixed assets are decreased from 49.978% to 42.65%,Investment have been increased
from 0.262% to 3.54%,Capital work in progress is increased to 3.67%,In the current assets,
inventories is decreased from 38.92% to 27.43%, sundry debtors, Loans and advances have
been decreased to 2.61 and 1.025 respectively,Cash and bank balance and other current assets
have been increased to 11.35and 0.56 % respectively.
65
TABLE 3.14 Tabular representation ofCommon size balance Sheet of Heritage Foods
India Limited For the year ended 1-4-2020 to 31-3-2021.
Rs % Rs %
Share capital 567804 20.55 570050 17.45
Reserves & Surplus 46,208 1.67 62592 1.915
B. Loan Funds
Secured Loans 1,715,704 62.11 1805933 53.275
Un Secured Loans 22,836 0.826 41415 1.267
Liabilities 266,590 9.65 660626 20.22
Provisions 64,699 2.34 27994 0.856
Tax Liability 78,508 2.84 98515 3.015
Total ( A+B+C) 2,762,349 100 3267425 100
Fixed Assets 1,583,038 57.31 1,632,871 49.978
advances 58,912 2.13 50,173 1.53
Investments 6322 0.23 8550 0.262
B. Current Assets, Loans

& Advances
Inventories 806,095 29.18 1,271,442 38.916
Sundry debtors 111,286 3.03 79,042 2.42
Loans&adv 125,967 3.56 85,402 2.61
66
C. Misc. expenses 2,142 0.077 1,879 0.05735
D. Profit & Loss A/C
Total ( A+B+C+D) 2,762,349 100 3,267,425 100
Annual report of Heritage Foods India Limited.
GRAPH 3.14 Graphical representation of Common size balance Sheet of Heritage Foods
India Limited For the year ended 1-4-2020 to 31-3-2021.
3500000
3000000
2500000
2000000
1500000
1000000
500000 Series1
Series2
0
Series3
ar :- s s s es s ts s s rs et /C
cul nds rplu und Loan iliti ision sse ent ance bto ass sA
Series4
rti u Su F d ab v A tm dv e nt s
Pa of F s & Loan ure t Li Pro ed es A y d re Lo
s e . c
re
n Fix Inv s & ndr cur t &
ce rv B Se n Su her ofi
o ur ese U n Cur oa t Pr
L .
A .S R C. ts, O D
sse
A
ent
r r
. Cu
B
INTERPRETATION:
Share capital is increased to 17.45%, Reserves and surplus are increased from1.67% to
1.92%,Secured loans have been decreased from 62% to 55%,Unsecured loans have been
increased slightly from 0.83% to 1.27%,Current liabilities are increased from 9.65% to
20.22%...,Provisions are decreased to 0.85%,Tax liability is increased from 2.8% to
3.015%.,Fixed assets are decreased from57.31% to 49.98%,Investment have been increased
to 0262%,Capital work in progress is decreased to 1.53%.,In the current assets, inventories
are increased from 29.18% to 38.92%, sundry debtor’s loans and advances have been
decreased to 3.56 and 2.61 respectively,Cash and bank balance have been increased to 3.89%
and other current assets are decreased to 0.336%.
67
TABLE 3.15 Tabular representation of Common size balance Sheet of HERITAGE
FOODS INDIA LIMITED For the year ended 1-4-2019 to 31-3-2020.
Rs % Rs %
Share capital 565925 23.65 567804 20.55
Reserves & Surplus 48,299 2.104 46,208 1.67
B. Loan Funds
Secured Loans 1,414,344 61.62 1,715,704 62.11
Un Secured Loans 101,025 3.40 22,836 0.826
Liabilities 29,773 1.297 266,590 9.65
Provisions 59,773 2.60 64,699 2.34
Tax Liability 76,303 3.33 78,508 2.84
Total ( A+B+C) 2,295,442 100 2,762,349 100
Fixed Assets 839,476 36.57 1,583,038 57.31
Capital Work in Progress in advances 485,404 21.10 58,912 2.13
Investment 4425 0.193 6322 0.23

Advances
Inventories 660,219 28.76 806,095 29.18
Sundry debtors 21,626 0.94 111,286 3.03
Loans&adv 85,130 3.708 125,967 3.56
68
C. Misc.expenses 2,411 0.105 2,142 0.077
D. Profit & Loss A/C
Total ( A+B+C+D) 2,295,442 100 2,762,349 100
GRAPH 3.15 Graphical representation of Common size balance Sheet of HERITAGE

3000000
2500000
2000000
1500000
1000000
500000 Series1
0 Series2
Series3
ar :- s s s es s ts t s rs et /C
cul nds rplu und Loan iliti ision s se en ance bto ass sA Series4
rti u Su F d ab v A stm dv de nt s
Pa of F s & Loan ure t Li Pro ed ve A y re Lo
es e B. Sec ren Fix In s & ndr cur t &
rc serv r n Su er ofi
u
o Re Un . Cu Loa th . Pr
S
A . C ts, O D
sse
tA
en
rr
. Cu
B
INTERPRETATION:
COMMON SIZE BALANCE SHEET OF FOR THE YEAR 2019-2020 Share capital is
decreased to 20.55% in the year 2020, Reserves and surplus are decreased from 2.10%
to1.67%,Secured loans have been increased from 61.62% to 62.11%,Unsecured loans have
been decreased from 3.40% to 0.82%,Current liabilities are increased from 1.29% to
9.65%,Provisions are decreased to 2.34%,Tax liability is decreased to 2.84%,Fixed assets are
increased from 36.57% to57.31%,Investment has been slightly increased to 0.23%,Capital
work in progress is decreased to 2.13 %.,In the current assets, inventories are increased from
28.76% to 29.18%, sundry debtor’s loans & advances increasing 3.03% & 3.56%
respectively,Cash and bank balance have been decreased to 2.09% and other current assets
are decreased to 0.39%.
69
TABLE 3.16 Tabular representation of Common size Balance Sheet of HERITAGE

Rs % Rs %
Share capital 564598 30.25 561,500 23.65
Reserves & Surplus 0 0 48,298 2.104
B. Loan Funds
Secured Loans 1,088,344 58.31 1,414,344 61.62
Un Secured Loans 9,071 0.486 101,025 3.40
Liabilities 151,471 8.11 29,722 1.297
Provisions 2,064 0.110 59,772 2.60
Tax Liability 51,090 2.73 76,303 3.33
Total ( A+B+C) 1,866,638 100 2,295,442 100
Fixed Assets 780,849 41.83 839,423 36.57
advances 93,501 3.009 485,404 21.10
Investment 3098 0.166 4425 0.193

Advances
Inventories 915,338 49.036 660,218 28.76
Sundry debtors 430 0.023 21,625 0.94
Loans&adv 16,940 0.9075 85,135 3.708
70
C. Misc.expenses 2,678 0.143 2,410 0.105
D. Profit & Loss A/C 36842 1.97
Total ( A+B+C+D) 1,866,638 100 2,295,442 100

Annual report of Heritage Foods India Limited
GRAPH 3.16 Graphical representation of Common size Balance Sheet of HERITAGE

2500000
2000000
1500000
1000000
500000
Series1
0 Series2
ar :- s s s es s ts t s rs et C Series3
cul nds rplu und Loan iliti ision sse en ance bto ass s A/ Series4
rti F m
A st dv de nt s
u Su d ab v Lo
Pa of F s & Loan ure t Li Pro d e
iF xe Inv & A dry urr
e
&
es e B. Sec re n s n c fit
rc serv r an Su her ro
u
So Re Un . Cu Lo
Ot
P
. C s, D.
A set
s
ntA
r re
Cu
B.
INTERPRETATION:
Share capital is decreased to 23.65% in the year 2018, Reserves and surplus are nil in the year
2016,Secured loans have been increased from 58.30% to 61.62%,Unsecured loans have been
increased from 0.48% to 3.40%,Current liabilities are decreased from 8.11%
to1.29%,Provisions are increased to 2.60%,Tax liability is increased to 3.3%,Fixed assets are
decreased from 41.83% to 36.57%,Investment have been slightly increased to 0.193%,Capital
work in progress is increased to 21.10 %,In the current assets, inventories are decreased from
49.04 to 28.76%, sundry debtor’s loans & advances increasing 0.91% & 3.7% respectively,
Cash and bank balance have been increased to 7.88% and other current assets are increased to
0.68%.
71
72
CHAPTER – IV
FINDINGS
SUGGESTIONS
CONCLUSION
72
FINDINGS
 The comparative Balance Sheet of the company reveals that during the year 2018
there has been a decrease in current assets of Rs. 12302712 i.e., 0.89%. While
current liabilities have decreased by Rs. 19472581 i.e., 3.74%. This fact depicts that
the company is suffering with inadequate working capital to meet its short-term
obligations.
 While there is increase in fixed assets value to the extent of Rs. 82776289 to that of
current liabilities. This fact depicts that the company has diverted its loans in the
form of working capital to meet its short-term obligations.
 On the whole the overall financial position of the company is satisfactory.
 The comparative Balance Sheet of the company reveals that during the 2019 there
has been an increase in current assets of Rs. 579256200 i.e., 42%. While current
liabilities also increased by Rs.210218075 i.e., 53.74%. This fact depicts that the
company is having adequate working capital to meet its short-term obligations.
current liabilities. This fact depicts that the company has diverted its cash & bank
balances to acquire these fixed assets.
there has been an increase in current assets of Rs. 522543202 i.e., 26%. While
current liabilities also increased by Rs.46721842 i.e., 7.74%. This fact depicts that
the company is having adequate working capital to meet its short-term obligations.
current liabilities. This fact depicts that the company has diverted its cash & bank
balances to acquire these fixed assets.
there has been an increase in current assets of Rs. 1611780465 i.e., 65%. While
current liabilities also increased by Rs.771304963 i.e., 119%. This fact depicts that
the company is having adequate working capital to meet its short-term obligations.
73
SUGGESTIONS
 The water industry is huge and has huge potential for growth; the company should its
operations.
 The management needs to increase the stock.
 It can be done by increasing production, achieve economies of scale and hen increase
market penetration.
 It is suggested for the company to control over the current liabilities.
 The product is doing reasonably well in most of the market so they should promote
the product accordingly. Eg: free sampling, discounts etc.
74
CONCLUSION
This project of Financial Statement analysis in the production concern is not merely a work
of the project. But a brief knowledge and experience of that how to analyse the financial
performance of the firm. The study undertaken has brought in to the light of the following
conclusions. According to this project I came to know that from the analysis of financial
statements it is clear that Heritage. This satisfactory level of profits during the period of
study. So the firm should focus on maximising the profits in the coming years by taking care
of internal as well as external factors. And with regard to resources, the firm is take
utilization of the assets properly. And also the firm has a maintained low inventory.
75
BIBLIOGRAPHY
BOOKS:
1. Cadwick, L.PHL, (The essence of financial accounting), 2nd Edition
2. Paul, (Financial and Accounting), 4th Edition
3. Raj K Agrawal Rupesh Agarwal, (Financial and accounting), 2015 Edition
4. P , C Tulsain, (Financial and accounting), 2012 Edition
5. Dr.R.K Arya, (Elements of Financial Accounting), 2015 Edition
JOURNALS:
1. Management of accounting research, volume 1 issue 3 2002

2. Journal of Financial and Quantitative Analysis volume 7, issue 2 March 1972
3. Kevin,”Sebi’s forensic accounting team is welcome move to expose frauds “, 2010
4. Journal of Accounting and Economics volume 30, issue 3 December 2000
5. Sumeet Mehta, ICAI drafts norms for interim results , December 7,2001
NEWS PAPERS:
1. BUSINESS TODAY
2. ECONOMIC TIMES
3. BUSINESS STANDARD
WEBSITES
1. https://www.google.com/search?q=http://www.heritagefoods.in/
2. https://www.google.com/search?q=http://www.ibef.org/
3. https://www.moneycontrol.com/
76
77

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Financial Statement Analysis at Heritage Foods

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ABSTRACT

Comparative Balance Sheet of Heritage Foods India Limited For

Nature of Financial Statement

These statements are prepared as per accounting concepts and conventions

Importance of Financial Statements

Limitations of Financial Statements

The following are the main limitations of the financial statements

 Records Only Monetary Facts - Financial statements disclose only monetary

Profit and Loss Account

Importance of Profit and Loss Account

 Information of Net Profile or Net Loss: One of the important objectives of

A properly drawn up balance sheet gives information relating to

 The nature and value of assets.

Characteristics of Balance Sheet

The following are the main Characteristics:

 It is prepared on a particular date and not for a particular period.

Information that Balance Sheet Convey to Outsiders

 The nature and the value of assets.

Classification of Assets and liabilities

 Contingent Assets: It is an asset the existence, value and ownership of which is

Liabilities: A liability is an amount which a business is legally bound to pay. It is a claim

 Contingent liabilities: A contingent liability is one which is not an actual liability

 Uncertainty as to whether the amount will be payable to all, and

Meaning of Analysis of Financial Statement

Objectives of Financial Analysis

 The present and future earning capacity or profitability of the concern.

Types of Financial Statement Analysis

1) The nature of the analyst and the material used by him.

1) According to the nature of the analyst and the used by him:

b) Short-term analysis: -this is made to determine the short-term solvency, stability

3) According to the modus operation of the analysis: - on this basis, the

Techniques (Tools or Methods) of Analysis and Interpretation

 Comparative Financial Statements (or Analysis)

 Common Measurement Statements (or Analysis)

 Trends Percentages Analysis

 Funds Flow Statement

 Net Working Capital Analysis

 Cash Flow Statement

i) Comparative Income Statement: -This statement discloses the net profit

ii) Comparative Balance Sheet: -This statement prepared on two or more

2) Common Measurement or Size Statement: -This statement indicates the relationshipof

Individual money amount

Total amount in statement

3) Trend Percentage Analysis: - this analysis is an important tool of horizontal

While calculating trend percentage, the following precautions may be taken:

4) Ratio Analysis: -It is done to develop meaningful relationship between individual

Limitations of Financial Statement Analysis

1) Historical Nature of Financial Statement: The basic nature of these

2) No Substitute for Judgment: - Analysis of financial statement is a tool which

SCOPE OF THE STUDY:

OBJECTIVES OF THE STUDY

To determine the short –term solving of the firm

To diagnose the information contained to financial statements so as to judge the profitability

METHODOLOGY OF THE STUDY

TOOLS AND TECHNIQUES:

Heritage Foods Limited

Mrs. Brahmani Nara

Dr. M. Sambasiva Rao

Mr. Umakanta Barik

Mr. J. Samba Murthy

 Government of India, Ministry of Finance, Punjab, 2021

Rebuilding cyclone-affected lives