CHAPTER-I

INTRODUCTION

29
1.1 Introduction to Financial Statement Analysis
The process of examining a company's financial statements in order to make decisions is

known as financial statement analysis. It is used by external stakeholders to assess an

organization's general health as well as its financial performance and market worth. It serves

as a monitoring tool for handling funds for internal stakeholders.

• Financial accounting requires all businesses to produce a balance sheet, income statement,

and cash flow statement, which serve as the foundation for financial statement analysis and

are used by internal and external stakeholders to assess company performance and value.

Three methods used by analysts are horizontal, vertical, and ratio analysis.

Financial Reports

The following firm-related issue is one that managers, shareholders, creditors, and other

interested parties are looking for an answer to:

• In what state of financial health is the company right now?

• How has the company's financial performance been throughout the course of time?

• Where did the money come from and what did it be used for at that time?

The balance sheet and the profit and loss account, as well as the auxiliary statement, the cash

flow statement, are the two main statements that the accountant creates in order to respond

to these queries.

Financial Statement Analysis Process

The study of financial accounts generally consists of three phases. the following

I Selection,

ii) Classification,

iii) Interpretation.

Information selection is the initial phase (data). The meticulous categorization of the data is

the second phase, and forming inferences and conclusions is the third.

30
The analysis and evaluation are done using the following process:

Financial statement interpretation:

1) The analyst should get familiar with the tenets and precepts of accounting.

2) To choose the area of work, the scope of the analysis should be specified.

3) The financial information provided in the statements has to be rearranged and

reorganised.

4) Financial statements are related to one another using analytical tools and procedures

including ratios, trends, common sizes, money flow, etc.

5) The data is analysed in a straightforward and clear manner. It is emphasised how

important and useful financial data is for aiding decision-making.

6) Reports including the findings of the interpretation are sent to the management.

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1.2 IMPORTANCE OF THE STUDY
To diagnosis the information included in financial statements, a study of financial statement
analysis is required. in order to evaluate the organisation HERITAGE FOODS IND LTD's
profitability and financial status.
Before making a determination on the firm's financial health, financial analysts use a variety
of analytical methods to analyse the financial statements. It is crucial to highlight Heritage
Foods India Ltd.'s history. The financial accounts' significance and importance

32
1.3 OBJECTIVE OF THE STUDY
1. To assess the firm's financial strength and weaknesses.
2. To ascertain the firm's short-term problem-solving strategy.
3. To be aware of managerial effectiveness.
4. To analyse the financial statement data in order to assess the firm's profitability and
popularity.
5. To determine how certain numbers of the income statement and balance sheet relate to
one another.

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1.4 SCOPE OF THE STUDY

The scope of the analysis of financial statements (AFS) may vary from one circumstance to
another since it might be carried out by various parties and for various objectives. Some of
the AFS's methods include: financial statements that compare. examination of trend
percentages. An explanation of financial status changes. Ratio analysis, cost-volume-profit
relationships, and other concepts.
The last approach, or ratio analysis, is the most widely used, all-inclusive, and potent AFS
tool. The significance of ratio analysis rests in the comparative nature of the information it
displays. As a result, our research exclusively concentrates on this ratio analysis.

1.5HYPOTHESIS
H0 - An organization's ratio performance and income statement do not significantly
correlate.
H1: An organization's income statement and ratio performance are significantly correlated.

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1.6 METHODOLOGY

Designing research
This is a methodical approach to solving the issue of the study, and it is a crucial element
without which the format may not be obtained. A research design is the set up of parameters
for data collecting and analysis in a manager that tries to combine efficient data gathering
and analysis with relevance to the research objective.
WHAT RESEARCH DESIGN MEANS
The difficult task that comes after defining the research problem is the creation of the
research project's design, also referred to as the research design. This involves making
decisions about what, where, when, how much, and by what means an inquiry of a research
study constitutes a research design. A research design is the set up of parameters for data
collecting and analysis in a manager that tries to combine efficient data gathering and
analysis with relevance to the research objective.
DATA SOURCES
We gathered information from two sources.
• Initial data.
Secondary information
Primary data
The information that is fresh and obtained for the first time is considered primary data since
it is unique in nature.
Primary Data:
The secondary data was gathered from various websites, brochures, newspapers, firm offer
documents, various publications, as well as via recommendations from the project guide and
our college's professors.
HERITAGE FOODS IND LTD is the name of the company.
Source of Information: Secondary Information
45 days were allotted for the investigation.
2022 is the study's time frame.
Magazines, the Internet, and annual reports are the sources of secondary data.
• It contains information obtained from HERITAGE FOODS IND LTD's annual reports.
• The articles were taken from the Heritage Foods India Ltd. official website.

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1.7 LIMITATIONS OF THE STUDY:

1) All it is an analysis of interim reports.

2) Financial analysis exclusively considers financial data; non-financial aspects are
disregarded.
3) Different persons may have different interpretations of the same analysis.
4) It does not take price level fluctuations into account.
5) Financial analysis may often be inaccurate due to firm-specific changes in accounting
procedures.

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 CHAPTERIZATION, 1.8
Introduction in Chapter 1
The subject, need, scope, study goals, project limits, and research methods are all covered in
this chapter.
Chapter 2: Literature Review
This chapter provides a theoretical basis, essays by many writers, and a succinct description
of the subject.
INDUSTRY PROFILE & COMPANY PROFILE, CHAPTER 3
DATA ANALYSIS AND INTERPRETATION IN CHAPTER 4
This chapter offers an interpretation based on the research as well as a comparative
examination of the financial statements of the five years of data.
SUMMARY AND CONCLUSION IN CHAPTER 5
This chapter contains an overview of the project as well as a conclusion based on the
research conducted throughout the relevant time.

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 CHAPTER-II
THEORITICAL FRAMEWORK
&
REVIEW OF LITERATURE

38
 2.1 THEORITICAL BACKGROUND
Financial analysis, sometimes referred to as analysis and interpretation of financial
statements, is the process of identifying a company's financial strengths and weaknesses by
strategically relating the balance sheet, profit and loss account, and other operational data.
Financial analysis, according to Myers, is the act of analysing how different financial
statement elements relate to one another in order to better comprehend a company's situation
and performance.
The goal of financial analysis is to interpret the data in financial statements in order to
determine the firm's profitability and financial stability. In the same way as a doctor takes a
patient's temperature, blood pressure, etc. during a physical examination. A financial analyst
uses a variety of analytical methods to analyse the financial statements before drawing
conclusions about the sickness and before prescribing a course of therapy before commenting
on the strength or weakness of an enterprise's finances.
To unravel the enigma of the statistics in financial accounts, analysis and interpretation of
financial statements are necessary. A solid divided policy will be profitable if financial
statements analysis is done in order to estimate future revenues, the capacity to pay interest
and debt maturities (both current and long-term), and its importance and meaning.
Types of financial analysis: - Financial analysis is divided into many categories based on (1)
the data utilised and (2) the procedure employed in the analysis or the modus operandi.

Financial analysis categories:

1. Based on the source material: Financial analysis may be of two forms, depending on the
source material
• External evaluation
• Internal evaluation
External Analysis: For financial analysis, outside parties to the company rely almost
exclusively on the firm's published financial statements. These external stakeholders include
investors, prospective investors, creditors, potential creditors, government agencies, credit
ggencies, and the general public.
Internal analysis is the analysis carried out by those who have access to a company
organization's internal accounting records.

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In accordance with the modus operandi, there are two different forms of financial analysis.
Vertical analysis
Vertebrate analysis
Horizontal analysis: The comparing of financial data from a corporation across a number of
years is referred to as horizontal analysis. The data for this kind of study is shown
horizontally over many columns. The data from different years are contrasted with the base
year. An initial year is known as a base year. Because it is based on data from year to year
rather than just data from one particular year, this sort of analysis is also known as "dynamic
analysis." It is feasible to concentrate attention on things that have changed considerably over
the time under consideration thanks to the horizontal analysis.
Vertical analysis is the examination of the relationships between the different items in the
financial statements of a single accounting period. These analyses compare a year's worth of
financial statement data to a base number taken from the same statement.
Financial analysis techniques: - The following analytical techniques are often employed: -
Comparative Statements.
• Analysis of Trends
• Analysis of cash flows.
• Ratio Evaluation

Comparative financial statements: These are summaries of the financial situation at various
points in time. A comparative statement that includes the aspects of financial status gives an
understanding of the financial situation across two or more periods. For financial analysis,
two financial statements—the balance sheet and the income statement—are often created in
comparative form.
THE COMPARISON MAY DISPLAY: • Absolute numbers (rupee amounts)
• Alterations in absolute numbers, such as an increase or reduction in absolute numbers.
• Absolute percentage-based statistics.
• A change in percentages, either up or down.
THE TWO COMPARATIVE STATEMENTS INCLUDE AN INCOME STATEMENT
AND A COMPARABLE BALANCE SHEET.
Comparative balance sheet: The examination of the trend of the same items, groups of items,
and calculated items in two or more balance sheets of the same commercial company on
various dates is known as a comparative balance sheet analysis. By comparing the balance
sheet at the beginning and end of a period, it is possible to see how certain periodic balance
40
sheet components have changed over time. These changes may be used to create a judgement
about how well an organisation is doing.
DIRECTIONS FOR DEFINING THE COMPARATIVE BALANCE SHEET
The following elements should be studied by the interpreter when interpreting comparative
balance sheets: 1. Current financial condition and liquidity situation
2. The financial status going forward
3. The firm's profitability.
BALANCE SHEET TREND ANALYSIS: Trend analysis is a crucial tool for horizontal
financial analysis.
This study makes it possible to determine how the financial function and operational
efficiency have changed during the selected time period.
By doing a trend analysis on each item, we can determine the direction of changes and alter
the alternatives accordingly.

Absolute
TrendValue
= of item in the statement understudy X 100
Absolute Value of same item in the base statement

RATIO ANALYSIS
INTRODUCTION:
One kind of financial analysis known as ratio analysis use ratios as a benchmark for assessing
a firm's financial health and performance. A qualified and experienced analyst may have a
better insight of the financial situation and performance of the company via the study and
interpretation of numerous accounting ratios than he could have by just reading through the
financial statements.

RATIOS' SIGNIFICANCE: Ratios are mathematical expressions of connections between

objects that are somehow related to one another. Evidently, comparing two sets of data that
have no relation to one another at all will serve no use. Additionally, absolute numbers are
not appropriate for comparison. The information in the financial statements may be analysed
using a variety of approaches or models, including ratio analysis, comparative statements,
common size statements, trend percentages, and funds flow analysis. The management of the
company or others outside of it, such as owners, creditors, investors, etc., do financial
analysis. The most popular and effective instrument or approach for financial analysis is ratio

41
analysis. The numerical quantitative connection between two variables is referred to as a
ratio. It displays the mathematical connection between two figures and provides three
possible expressions.
• Percentage \s• Fraction \s• Proportion
The management benefits from a study of the strategic ratios' trend in terms of planning,
forecasting, and decision-making. It aids in locating certain work areas. In summary, the
solvency, effectiveness, and profitability of the company may be evaluated using the ratio
analysis approach.
RATIO ANALYSIS IS IMPORTANT Ratio analysis aids in the financial statement's
simplification for easier comprehension.
• It assists in deriving relevant conclusions from the data in the financial accounts, which is
helpful for making decisions and formulating solid company practises going forward.
• It aids in determining the firm's financial strengths and weaknesses, which raises the worth
of the financial statements.
• Comparative analysis of the ratios of rival businesses enables one to ascertain the
effectiveness of the latter.
• It enables the investor to evaluate the company's financial standing before making an
investment.
• Ratio analysis aids workers who are interested in salary increases and perks linked to the
amount of profits made by the company.
•
Data for inter-firm comparison are provided through ratio analysis. Ratios draw attention to
the characteristics of successful and failing businesses. They also show which companies are
overvalued and undervalued, as well as strong and weak ones.
• Ratio analysis aids in predicting and planning. A company or sector may build standards
over time that predict future success or failure. The ratios may provide hints on patterns and
potential issues if there are relationships between changes in the firm's data throughout
various time periods.
• Ratio analysis also enables performance comparisons between the various business units.
The ratios are useful in determining their previous efficiency or lack thereof as well as their
anticipated future performance.
Ratios may thus help management with its fundamental tasks of forecasting, planning,
coordination, control, and communication.

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RATIO ANALYSIS LIMITATIONS
• Because ratios have restricted applications, a single ratio may not be helpful. The
computation of more ratios makes interpretation conceivable, but it also makes it more
difficult for the analyst to draw any conclusive conclusions.
• If corporate policies are continually changing, ratios may not be accurate prognoses of the
future since they are based on previous performance.
• A change in accounting practises might make ratio analysis inaccurate. For instance,
switching from LIFO to FIFO inventory valuation methodologies may have an impact on the
analysis.
• Ratio analysis only takes into account quantitative elements; it ignores qualitative ones.
• If the consequences of price level fluctuations are not taken into consideration, ratio
analysis might provide false findings.
• When ratio analysis is read differently by various persons, the analyst's bias or prejudice
may come into play.

Articles (2.2)
Analysis of financial statements, beta, and size impact. International Journal of Commerce
and Management, Volume 13, Number 1, 2003, Leanza Xu This research looks at the
correlation between and stock returns, the link between and risk variables including beta and
size, and the capacity of fundamental summary measure to forecast earnings change for the
next year. is a likelihood index produced using financial statement data and a logistic model?
The size is regulated by include size as an independent variable in the regression models,
while the beta impact is reduced by combining companies into beta portfolios. Evidence from
the research shows that, after adjusting for beta, has a positive and substantial connection
with adjusted market returns and a great capacity to forecast future earnings change. When
beta and size are modified concurrently, the association with adjusted market returns is
reduced.
Financial Statement Analysis Research.
Journal of Business and Financial Affairs, Shashikala, 07 (02), January 2019.
This project report is being completed as a requirement for the MBA programme and is
named "A Study on Financial Statement Analysis. In Tamil Nadu Newsprint and Papers
Limited, Kitamura." The study's goal is to analyse Tamil Nadu Newsprint and Papers
Limited, Kagithapuram's financial statements. The research is conducted from 2012–2014
through 2018–2019 over a five-year span. Information was gathered from secondary sources.
43
to recognise the company's financial statements and comprehend the liquidity status.
Comparative balance sheets, common size balance sheets, and ratio analysis are the analysis's
instruments.
Financial statement-based working capital management.
2013's Suk mal Datta, Management Accountant, Vol. 30, No. 11, pp. 826–832. He discovered
that the majority of businesses were experiencing a working capital shortfall in his research,
"Working Capital Management via Financial Statement: Analysis of the Paper Industry in
West Bengal." One of the main reasons for this working capital shortfall was that the majority
of the companies under consideration were unable to generate sufficient profits and were also
experiencing losses. The working capital issue was also brought on by the growth of fixed
assets. The quantity of money set aside for long-term investments was insufficient to cover
the amount of money used.
estimating stock returns based on financial statement data. David Flaker and Robert
Holshausen, Journal of Accounting & Economics, Vol. 15. We look at the profitability of a
trading strategy built on a model intended to forecast the direction of future excess returns
using accounting ratios over the course of a year. Depending on the precise measure of excess
return and weighting scheme used, the trading strategy's average yearly excess return over the
1978–1988 period varied between 4.3 and 9.5 percent. Our use of the & Penman (1989)
trading technique, which is based on a model that forecasts upcoming unexpected earnings-
per-share using accounting ratios, does not, however, provide excess returns for the period
between 1978 and 1988.
Organizing Financial Statement Analysis projects to advance the development of critical
thinking abilities. Journal of Accounting Education, Volume 18, Beth B. Kern, 2019. In order
to foster the growth of students' critical thinking abilities, this article outlines a way for
designing financial statement analysis assignments. The initiative is set up in a cooperative
learning framework where students acquire financial statement data from the Internet,
evaluate financial statements, and then participate in an activity with peers who have studied
businesses in the same sector. The project's solo and team stages both provide chances for
students to practise various crucial critical thinking abilities.

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 CHAPTER-III
INDUSTRYPROFILE
AND
COMPANY PROFILE

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The Heritage Group, founded in 1992 by Sri Nara Chandra Babu Naidu, is one of the fastest
growing Private Sector Enterprises in India, with three-business divisions i.e.,
 Dairy
 Retail and
 Agri
Presently Heritage’s milk products have market presence in Andhra Pradesh, Karnataka,
Kerala, Tamil Nadu and Maharashtra and its retail stores across Bangalore, Chennai and
Hyderabad.
The products offered by the Heritage are:
Category 1: Milk
Category 2: Fresh Products
Category 3: Long Life Products
Category 4: Ice Creams
Category 5: FMCG Products
Annual Turnover of Heritage Foods is crossed INR 24,070 million in the financial year 2020-
21.

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About the founder:
One of the most dynamic, pragmatic, forward-thinking, and visionary leaders
of the twenty-first century is Sri Chandra Babu Naidu. He and his family, friends, and
acquaintances established Heritage Foods in 1992, taking advantage of the Industrial Policy,
1991 of the Government of India, with the goal of bringing wealth into rural people via
cooperative efforts. He has been successful in this endeavour. All of the states in South India
now have Heritage on the market. In these states, five lakh farmers and more than three
thousand villages benefit. On the other hand, Heritage is meeting the requirements of over 6
lakh customers, employing over 700 individuals, and creating indirect job opportunities for
over 5000 more. The sales turnover rose from a meagre yearly revenue of only Rs. 4.38
crores in 1993–1994 to around Rs. 300 crores in the financial year 2005–2006. As chief
minister of Andhra Pradesh, minister of finance and revenue, minister of archives and
cinematography, member of the A.P. Legislative Assembly, director of the A.P. Small
Industries Development Corporation, and chairman of Karshaka Parishad, Sri Naidu held a
number of prestigious and honourable positions. Sri Naidu has received various honours,
including those for being a member of the World Economic Forum's Dream Cabinet, South
Asian of the Year, Business Person of the Year, and Millennium IT Indian, among others
(India Today). Due to his unwavering support for technology and commitment to
transforming the State of Andhra Pradesh, Sri Naidu was named by Business Week magazine
as one of 50 leaders at the forefront of change in the year 2000.

47
The following remarks are made in the future: "We have grown and meant to expand, focused
on leveraging our willingness to experiment and innovate our capacity to adapt our drive
towards excellence in quality, our people first mentality, and our strategic orientation.
Mission: To provide clients with a sanitary, cost-effective, and easy supply of " Fresh and
Healthy " food items. This would bring prosperity to rural Indian households.
Vision: By 2020, we want to be a progressive $1 billion company with a pan-India presence.

This may be accomplished by providing clients with "Fresh and Healthy" food items, which
are the standard for excellence in the sector.
Through our distinctive "Relationship Agricultural" Model, we are dedicated to enhancing
prosperity and the empowerment of the farming community.
to become a sought-after employer by promoting entrepreneurship, fostering career goals,
and offering creative ways to increase employee prosperity.
Historical Slogan:
We are healthy when you are healthy.
We are joyful when you are joyful.
Your "HEALTH & HAPPINESS" is what we live for.
Quality standards at HFIL:
By processing and packaging milk and milk products hygienically, we are dedicated to
achieving customer satisfaction. By updating our technology and systems, we aim to
continuously raise the quality of our goods and services. The unwritten permanent promise to
continually manufacture and offer high-quality goods while making constant attempts to
enhance the environment and process has always been ingrained in the very essence of
Heritage. As part of its moral obligation and ongoing pursuit of excellence in the quality of
milk, milk products, and milk systems, Heritage has always placed a premium on not just
assessing and redefining quality standards but also effectively putting them into practise.
Each department's thorough quality plans have been used to record every processing, quality
control, purchase, stores, marketing, and training operations.
The ISO certificate, in the opinion of Heritage today, serves as both a benchmark for goals
accomplished and a measuring stick for what still has to be done on a regular basis. Heritage
has started the process of standardising and implementing comparable quality procedures at
the majority of its other factories, even though it is only the beginning.
Commitments:
Producers of milk:
48
Rural households' lifestyles have changed in terms of their regular high income obtained via
cooperative efforts.
• The contribution of women to revenue generating.
• Protected against price gouging by the unorganised sector.
• Competitive milk pricing.
• Enhanced milk production via input and extension efforts
Establishment of Cattle Health Care Centers; Transition from Risky Agriculture to Dairy
Farming; Financial Support for Cattle Purchase; Cattle Insurance
• Providing premium cattle feed; • coordinating "RythuSadasu" and video initiatives to teach
farmers about dairy farming

Customers: • Timely Provision of High-Quality and Healthful Goods

• Concentrated on providing nutritious foods; • Affordably priced milk and milk products;
• More than 4 lakh satisfied clients
• 24 hour help lines (10 complaints each day); high customer satisfaction

The best assessment methods to inspire workers; Incentive, bonus, and reward systems to
motivate employees; enhancing technical and managerial abilities of employees via ongoing
training and development;
• With the slogan "give value to all you do," Heritage forges onward.
• Regular Dividend Payments Since Public Issue (January 1995)
• The worst investor service; there hasn't been a regulatory authority notification about
investor service since 2001.
• Exceptionally open disclosures
Suppliers:
Technical cooperation in milk beverages, yoghurt beverages, and fruit-flavored beverages
Alfa-Laval is a provider of cutting-edge equipment and technical assistance. concentrating on
the Tetra Pack affiliation for product packaging.
• Employment Generation in Society The legacy company employs more than 3500 people.
In rural regions, more than 9500 procurement agents found self-employment. More than 5000
sales representatives working with the business.
• Generating extremely wholesome goods for the public consumption; • Creating jobs for
youngsters by supporting the establishment of MINI DAIRIES financially and in terms of
animal husbandry;
49
Management principles include the following characteristics: • Customer focus to
comprehend and satisfy the evolving requirements and expectations of customers.
• Involving individuals to foster teamwork and unlock their potential.
• Establishing a consistent vision and quality culture across the business.
• Process method to evaluate each process' efficacy and efficiency.
• Systems method to comprehend the interactions and order of processes.
• Fact-based decision-making to guarantee correctness.
• Processes of ongoing improvement for better company outcomes.
• The growth of providers to get the proper goods and services at the proper time and
location.

Integrity and honesty

All Members are expected to conduct their business with honesty, integrity, and fairness both
on behalf of the Company and on their own behalf. They will behave in good faith,
responsibly, with appropriate care, competence, and diligence, enabling their subordinates to
exercise autonomous judgement. Members must uphold their fiduciary duties and operate in
the company's best interests.

BUSINESS RELATIONSHIP POLICY

The Company shall operate in a morally and legally responsible manner. The best instrument
for the firm to do business is the calibre of its goods and the effectiveness of its services at
the most affordable price. Profits do not excuse unfair or immoral behaviour. In all
commercial dealings, all Members must maintain the highest standards of ethics.

AGENDA FOR INTELLECTUAL PROPERTY

As it is essential to the operation of the business, all Members have a duty to recognise and
safeguard the intellectual property, trade secrets, and private information held by the
Company and its customers or collaborators. Intellectual property rights (IPR) include things
like trademarks, copyrightable subjects, trade secrets, and typically patented or potentially
patentable discoveries.

Opportunities at Corporte

50
Members are specifically forbidden from making unlawful use of information or property or
abusing their position, and they have a responsibility to the Company to promote its
legitimate interests whenever the chance to do so arises. STOPPING INSIDER TRADING
Insider trading is against the law and against business policy. When a person subscribes to,
purchases, or sells the firm's stocks while in knowledge of any Unpublished Price Sensitive
Information about the company, they are typically engaging in insider trading.

Information that has a direct or indirect connection to the firm and that, if made public, may
significantly alter the price of the company's stocks is referred to as "price sensitive
information." It is crucial to remember that information, whether favourable or unfavourable,
may be price sensitive.

Members are prohibited from using their access to and ownership of information about the
Company, which is not in the public domain and so constitutes insider knowledge, to make
money, help others make money, or make money on their behalf by offering investment
advice. Members must abide by the Securities Exchange Board of India's recommendations
for preventing insider trading (SEBI).

FINANCIAL MARKET POLICY

The Company pledges to abide with the securities laws in every market where its securities
are listed. The corporation forbids all Members from engaging in dishonest or unfair business
activities with reference to the Company's securities.

INFORMATION CONFIDENTIALITY POLICY

Confidential knowledge about the company is a significant resource. Members must
comprehend how crucial it is to preserve all sensitive data. Members should agree to preserve
secret business and personal information collected from customers, business partners, and
workers.

Any information about the Company's operations, including its clients, vendors, and
customers, which is not in the public domain and to which Members have access or possess
such information, should be treated as secret and retained in confidence, unless disclosure is
permitted or compelled by law. Members must have specific permission before giving any
information, whether publicly or informally, to the press or any other publicity outlet.
51
OBEDIENCE TO LAWS, REGULATIONS, AND RULES
All relevant laws, rules, and regulations must be followed by members in word and spirit.
Members are required to notify the Company Secretary of any potential violations of the law,
rules, regulations, or the code of conduct in order to help the Company promote moral and
ethical behaviour.

PROTECTION AND ADEQUATE USE OF THE COMPANY'S RESOURCES

Each Member is accountable for safeguarding the company's resources, ensuring their best
use, and reporting and documenting all transactions. Assets belonging to the Company must
only be used for business purposes and other uses explicitly allowed by management; they
must never be utilised for any illicit or personal reasons. Members are responsible for
protecting the Company's assets against loss, damage, abuse, or theft.

CONCURRENCE POLICY
The Company shall only engage in legal and moral competition. It forbids any conduct that is
anti-competitive or in any other way goes against the regulations that regulate market
competition. The same must be upheld by members.

CHOOSEN SUPPLIERS
The success of the company is significantly influenced by its suppliers. According to
company policy, supplies are purchased or made available depending on necessity, quality,
service, pricing, and other business terms and circumstances. Suppliers need to be chosen
based on merit, cost, performance, and quality. Every time feasible, it is our policy to choose
important suppliers via a competitive bid procedure. The Company shall not, nor shall any of
its employees, agents, or contractors, in any manner whatsoever, seek to compel suppliers.

HEALTH, SAFETY, AND ENVIRONMENTAL POLICY

Members are expected to go above and above what is expected of them as an organisation in
terms of environmental awareness and to help protect the environment and safety measures in
their own workplaces. To protect our own health and the quality of others' lives, it is
everyone's duty to conduct activities in a safe and ecologically friendly manner. Members are
required to follow this policy.
AVOIDANCE OF CHILD LABOR

52
The Company has a policy of opposing child labour. The Company is dedicated to carrying
out the 1986 Child Labor (Prohibition and Regulation) Act's requirements. To support this,
the company urges its suppliers to have a policy of no child labour in their respective fields.
Members must adhere carefully to the company's policy on using child labour.

THE END OF FORCED LABOR

Forced or required labour is expressly prohibited by the Company. The Company is dedicated
to making sure that workers join the Company and remain there of their own free choice.
Members are required to maintain this rule.

DONATIONS & GIFTS

No Member may accept or provide, directly or indirectly, any gifts, contributions,
compensation, hospitality, unlawful payments, or similar perks that are meant or seem to be
intended to elicit commercial (or noncompetitive) favours or decisions for the operation of
the company. For certain occasions, the Board may receive customary presents of a
commemorative character.

ADDITIONAL DIRECTORSHIPS
The Company believes that being on the boards of other corporations might cause serious
issues with possible conflicts of interest. All Directors must thus annually record and disclose
their affiliations to the Board. The Company does not believe that being on the board of a
direct rival is in the Company's best interests. Therefore, none of the Directors may take such
a job without the Board's approval.

ACCOUNTABILITY
The Company's adherence to moral and legal requirements will be monitored by the Board of
Directors (BOD). All employees and BOD members are required to halt or prohibit behaviour
that can endanger clients or the company's reputation, and to report such behaviour as soon as
it happens so that the appropriate measures can be taken and the behaviour is not repeated.

CONFORMITY TO CODE OF CONDUCT

According to the Annexure to the Code, each Director and senior management staff member
must abide by this code of conduct and annually attest to their compliance with it. There will
be appropriate disciplinary action taken if this Code is violated.
53
ABOLITION OF THE CODE
Any waiver of the Code's applicability or of the application of any Code provision to any
Member must be authorised by the Board of Directors and notified in accordance with any
legal requirements or SEBI/stock exchange rules.

HFIL'S BRANCHES: HFIL has several wings. These include dairy and retail.
1. Dairy is the largest of all the wings. HFIL produces milk, curd, butter, ghee, flavor-added
milk, paneer, doodhpeda, and ice cream among other dairy products.
2. Retail: HFIL owns stores called "Fresh@" in the retail sector. Vegetables, milk and milk
products, groceries, pulses, fruits, etc. are sold at these establishments.
There are 19 retail stores in Hyderabad. There are 3 and 4, respectively, in Bangalore and
Chennai. There are 26 retail stores in total.
A distinctive network of retail establishments called Fresh@ was created to cater to the
demands of the contemporary Indian customer. Every day, the store rediscovers the flavour
of nature, making food shopping unlike anything else.
The largest selection of fresh fruits and vegetables that are hand-picked from farms is what
makes Fresh@ special and different. Customers are constantly greeted with fresh fruits and
veggies no matter what hour they go in, and their products are always fresh.

The Reserve Bank of India registered the company on December 5th, 1998, as a Hire
Purchase Company under the category of Non-Banking Financial Institution.

As of right now, the firm accepts dairy loans from small farmers thanks to a tie-up with
Heritage Foods (India) Limited. Since its start, the company has been profitable and has
operated in accordance with Reserve Bank of India regulations.

The company's directors are as follows:

• Nara Bhuvaneshwari, Rajesh, N. Sri Vishnu Raju, M. Samba Siva Rao

54
 CHAPTER-IV
DATA ANALYSIS
AND
INTERPRETATION

41
DATA ANALYSIS
The process of gathering, modelling, and evaluating data in order to derive conclusions that
assist decision-making. Depending on the sector and the objective of the research, there are
several ways and procedures for conducting analysis.
These many different approaches are generally based on two main fields of study:
quantitative and qualitative research.
Financial methods including the schedule of changes in ratio analysis, least squares, and
comparative statements have been employed for the analysis in this chapter in an effort to
examine how well Heritage Foods Ind. Ltd. manages the study of its financial statements. It is
necessary to categorise and summarise numerous company transactions for the financial
statement. It is created with the intention of providing a periodic evaluation or report of the
advancements made by the company, and it covers the situation of the investment, the status
of the company, and "result accomplished" during the accounting period. The results of the
accounting process are the financial statement, income statement, and position statement.
A approach for analysing and interpreting financial statements is ratio analysis. It serves as a
tool for analysing and deciphering a company's financial situation. Ratio analysis of a
financial statement aids in decision-making control structures.

42
1) Current Ratio: -
The word "current ratio" refers to the relationships between current assets and
current liabilities. It is the ratio most often used to assess liquidity. It is calculated by
dividing current assets by current liabilities. The value of current assets may be realised in
less than a year. Debts having a one-year payment deadline are known as current
obligations. A current ratio of roughly 2:1 is ideal.

Current Assets
Current Ratio =
Current liabilities

TABLE – 4.1 Current Ratio

(In crores)
Year Current Assets Current liabilities Current Ratio
2017-2018 14343 8446 1.70
2018-2019 17331 18321 0.95
2019-2020 21863 15420 1.42
2020-2021 27705 19821 1.40
2021-2022 36901 28333 1.30
Source: secondary Data

43
 Current Ratio
40000 1.80

35000 1.60

30000 1.40
1.20
25000
1.00
20000
0.80
15000
0.60
10000 0.40
5000 0.20
0 0.00
2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

Current Assets Current liabilities Current Ratio

Interpretation: -
According to the aforementioned ratio, 2017 and 2018 were 1.70, 0.95, 1.42, 1.40, and 2021
and 2022, respectively.
Therefore, the current ratio analysis shown above is sufficient. Exceptionally, 2018 has a
0.95 ratio.

44
2) Liquid Ratio: -
The capacity of a company to pay its short-term commitments as and when they become due
is referred to as "liquidity." Quick assets, also known as liquid assets, are current assets that
can be quickly turned into cash. Except for stock and prepaid costs, it consists of all current
assets. By dividing fast assets by quick liabilities, it is calculated.
Liquid Assets
Liquid Ratio =
Liquid Liabilities
TABLE – 4.2 Liquid Ratio
(In crores)
Year Liquid Assets Liquid Liabilities Liquid Ratio
2017-2018 18427 8446 2.18
2018-2019 12587 18321 0.69
2019-2020 21821 15420 1.42
2020-2021 27648 19821 1.39
2021-2022 36823 28333 1.30
Source: Secondary Data

45
 Liquid Ratio
70000

60000

50000

40000

30000

20000

10000

0
2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

Liquid Assets Liquid Liabilities Liquid Ratio

Interpretation: -
The above ratio indicates the following years: 2017–2018: 2.18; 2018–2019: 0.69; 2019–
2020: 1.42; 2020–21: 1.39; and 2021–2022: 1.30.
As a result, the liquid ratio analysis shown above is adequate. Exceptionally, the ratio for
2018–2019 is 0.69.

46
3) Net Profit Ratio: -
The net profit ratio provides a connection between sales and net profit (after taxes). It
calculates the profit per rupee of sales by dividing the net revenue after tax by the net sales
for the time period.
Net Profit
Net Profit Ratio = ------------------------------- x 100
Sales
TABLE- 4.3 Net Profit Ratio
(In crores)
Year Net Profit Sales Net Profit
Ratio
2017-2018 953 18336 5.20
2018-2019 1779 15,525 11.46
2019-2020 2416 19739 12.24
2020-2021 2859 21501 13.30
2021-2022 3148 28033 11.23
Source: Secondary Data

47
 Net Profit Ratio
30000 14

25000 12

10
20000
8
15000
6
10000
4
5000 2

0 0
2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

Net Profit Sales Net Profit

Interpretation: -
According to the ratio above, the following years had lower ratios: 2017–2018 – 5.20; 2018–
2019 – 11.46; 2019–2020 – 12.24; 2020–21 – 13.30; and 2021–2022 – 11.23.
The foregoing examination of the net profit ratio is therefore adequate. All years except
2017–2018 had a 5.20 ratio.

48
4) Operating Ratio: -
An indication of the relationship between sales and cost of sales is the operating
ratio. Direct cost of products sold as well as other operational costs are included in "cost of
sales." It is a crucial ratio that is utilised to talk about the company's overall profitability. It
is computed by subtracting the entire operational expense from the revenue.
Cost of goods sold + Net operating expenses
Operating ratio = ----------------------------------------------------- X100
Sales
Cost of goods sold = sales = gross profit.
TABLE – 4.4 Operating ratio
(In crores)
Year Cost of goods sold Sales Operating ratio
+ operating
expenses
2017-2018 8673 18336 47.3
2018-2019 19902 15525 128.2
2019-2020 15960 19739 80.9
2020-2021 17936 21501 83.4
2021-2022 23163 28033 82.6
Source: Secondary Data

49
 Operating Ratio

2021-2022

2020-2021

2019-2020

2018-2019

2017-2018

0 5000 10000 15000 20000 25000 30000

Operating ratio Sales Cost of goods sold + operating expenses

Interpretation: -
According to the ratio above, the following years had lower ratios: 2017–2018 – 47.3; 2018–
2019 – 128.2; 2019–2020 – 80.9; 2020–21 – 83.4; and 2021–2022 – 82.6.
As a result, the operating ratio analysis shown above is adequate. Except for the 47.3 ratio in
2017–2018.

50
5) Gross Profit Ratio: -
Gross Profit Ratio, which is often expressed as a percentage, evaluates how gross
profit compares to net sales. In two managerial domains, this ratio is crucial. The ratio is a
useful tool for financial management since it shows how well the company can use outside
funding sources. Additionally, this ratio is a crucial instrument for the company's pricing
strategy. The formula for calculating this ratio is to divide net sales by gross profit.
Gross Profit
Gross Profit Ratio = -------------------------- X 100
Net Sales

Table – 4.5 Gross Profit ratio

(In crores)
Year Gross profit Sales Gross Profit Ratio
2017-2018 1763 18336 9.61
2018-2019 2623 15525 16.90
2019-2020 3779 19739 19.14
2020-2021 4465 21501 20.77
2021-2022 4880 28033 17.41
Source: Secondary Data

51
 GROSS PROFIT
2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

10%

28%
15%

22%

25%

Interpretation: -
According to the ratio above, the following years have the lowest ratios: 2017–2018, 9.61;
2018–2019, 16.90; 2019–2020, 19.14; 2020–21, 20.77; and 2021–2022, 17.41.
As a result, the analysis of the gross profit ratio provided above is adequate. All years except
2017–2018 had a 9.61 ratio.

52
Income Statement
Comparative Statement for the year
2017-2018 to 2018-2019
(In crores)

Particulars 2017-18 2018-19 Absolute change % Of change

Sales 2,373 2,514 141 0.06

Other Income 403 140 -263 -0.65

Total Income 2,776 2,654 -122 -0.04

Total
2,667 2,505 -162 -0.06
Expenditure

EBIT 108 149 41 0.38

Interest 18 21 3 0.17

Tax 27 44 17 0.63

Net Profit 62 83 21 0.34

Sources: Secondary Data

53
 3,000

2,500

2,000

1,500

1,000

500

0
Sales Other Total Total EBIT Interest Tax Net Profit
-500 Income Income Expenditure

2017-18 2018-19 Absolute change % Of change

Interpretation: -
In the year-by-year comparison between 2017-2018 and 2018-2019. The aforementioned
table unequivocally demonstrates the enormous growth in sales (0.06), EBIT (0.38), interest
(0.7), tax (0.63), and net profit (0.34).
Additionally, the aforementioned data shows a reduction in other revenue of -0.65, total
income of -0.04, and total expenditure of -0.06.

54
Income Statement
Comparative Statement for the year
2018-19 to 2019-20
(In crores)
Absolute
Particulars 2018-19 2019-20 % Of change
change
Sales 2,514 2,725 211 -0.08

Other Income 140 303 163 -0.54

Total Income 2,654 3,029 375 -0.12

Total
2,505 3,159 654 -0.21
Expenditure
EBIT 149 -129 -278 -2.16
Interest 21 22 1 -0.05
Tax 44 15 -29 1.93

Net Profit 83 -167 -250 -1.50

Sources: Secondary Data

55
 Net Profit

Tax

Interest

EBIT

Total Expenditure

Total Income

Other Income

Sales

-1,000 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000

2018-19 2019-20 Absolute change % Of change

Interpretation: -
In the year-by-year comparison between 2018-2019 and 2019-2020. The preceding chart
clearly shows the drastic decline in sales (-0.08, other income -0.54, total income -0.12, total
expenditure -0.21, EBIT -2.16, interest -0.05, and net profit -1.50) and other income (total
income + total expenditure + total income).
The tax rise of 1.93 is also shown in the table above.

56
Income Statement
Comparative Statement for the year
2019-2020 to 2020-2021
(In crores)

Absolute
Particulars 2019-20 2020-21 % Of change
change

Sales 2,725 2,473 -252 -0.09

Other Income 303 8 -295 -0.97

Total Income 3,029 2,481 -548 -0.18

Total
3,159 2,257 -902 -0.29
Expenditure

EBIT -129 223 352 -2.73

Interest 22 19 -3 -0.14
Tax 15 53 38 2.53
Net Profit -167 151 318 -1.90
Sources: Secondary Data

57
 Net Profit

Tax

Interest

EBIT

Total Expenditure

Total Income

Other Income

Sales

-2,000 -1,000 0 1,000 2,000 3,000 4,000 5,000 6,000

2019-20 2020-21 Absolute change % of change

Interpretation: -
In the year-by-year comparison between the 2019–2020 and 2020–2021. The accompanying
table clearly illustrates the drastic decline in sales (down by 0.09), other income (down by
0.97), total income (down by 0.18), total expenditure (down by 0.29), EBIT (down by 2.73),
interest (down by 0.14), and net profit (down by 1.90).
The increase in tax of 2.53 is also shown in the table above.

58
Balance Sheet Statement
Comparative Statement for the year
2017-2018 to 2018-2019
(In crores)
Absolute
Particulars 2017-18 2018-19 % Of change
change

Share Capital 23 23 0 0

Reserves &
751 776 25 0.03
Surplus
Current
325 325 0 0.00
Liabilities
Other
606 509 -97 -0.16
Liabilities
Total
1,706 1,634 -72 -0.04
Liabilities
Fixed Assets 441 517 76 0.17
Current
254 274 20 0.08
Assets

Other Assets 1,010 842 -168 -0.17

Total Assets 1,706 1,634 -72 -0.04

Contingent
34 11 -23 -0.68
Liabilities

59
 2000

1500

1000

500

0
2017-18 2018-19 Absolute change % Of change
-500

Share Capital Reserves & Surplus Current Liabilities Other Liabilities

Total Liabilities Fixed Assets Current Assets Other Assets
Total Assets Contingent Liabilities

Interpretation: -
In the year-by-year comparison between 2017-2018 and 2018-2019. The preceding table
amply illustrates the dramatic decline in other liabilities (-0.16), total liabilities (-0.04), other
assets (-0.17), and contingent liabilities (-0.68; see table).
The aforementioned data also shows a rise in reserve and surplus of 0.03 and in current
assets of 0.08 and fixed assets of 0.17.

60
Balance Sheet Statement
Comparative Statement for the year
2018-2019 to 2019-2020
(In crores)
Absolute
Particulars 2018-19 2019-20 % Of change
change

Share Capital 23 23 0 0

Reserves &
776 433 -343 -0.44
Surplus
Current
325 319 -6 -0.02
Liabilities
Other
509 212 -297 -0.58
Liabilities
Total
1,634 988 -646 -0.40
Liabilities
Fixed Assets 517 558 41 0.08
Current
274 268 -6 -0.02
Assets

Other Assets 842 161 -681 -0.81

Total Assets 1,634 988 -646 -0.40

Contingent
11 31 20 1.82
Liabilities

61
 3000

2500

2000

1500

1000

500

-500

-1000

2018-19 2019-20 Absolute change % Of change

Interpretation: -
In the year-by-year comparison between 2018-2019 and 2019-2020. The above table amply
demonstrates the drastic decline in reserves and surplus, which were both -0.44, current
liabilities were -0.02, other liabilities were -0.58, total liabilities were -0.40, other assets
were -0.81, current assets were -0.02, total assets were -0.40, and contingent liabilities were
-0.68.
The fixed asset growth was 0.08 and the rise in contingent liabilities was 1.82, as seen in the
table above.

62
Balance Sheet Statement
Comparative Statement for the year
2018-2019 to 2019-2020
(In crores)
Absolute
Particulars 2019-20 2020-21 % Of change
change

Share Capital 23 23 0 0

Reserves &
433 569 136 0.31
Surplus
Current
319 207 -112 -0.35
Liabilities
Other
212 77 -135 -0.64
Liabilities
Total
988 878 -110 -0.11
Liabilities
Fixed Assets 558 598 40 0.07
Current
268 259 -9 -0.03
Assets

Other Assets 161 20 -141 -0.88

Total Assets 988 878 -110 -0.11

Contingent
31 9 -22 -0.71
Liabilities

63
 1200 0.4
1000 0.2
800 0
600 -0.2
400 -0.4
200 -0.6
0 -0.8
-200 -1

2019-20 2020-21 Absolute change % Of change

Interpretation: -
In the year-by-year comparison between the 2019–2020 and 2020–2021. The
aforementioned table amply demonstrates the drastic decline in current liabilities, which
were down by 0.35, other liabilities, which were down by 0.64, total liabilities, which were
down by 0.11, and current assets, which were down by 0.03 and other assets, which were
down by 0.88, total assets, which were down by 0.11 and contingent liabilities, which were
down by 0.71.
The aforementioned data also shows an increase in reserve and surplus of 0.31 as well as in
fixed assets of 0.07.

64
Income Statement:
One of a company's primary financial statements, the Income Statement, displays profit and
loss over a certain time period. After deducting all costs associated with both operational
and non-operating operations, the profit or loss is calculated.
TABLE–Income Statement
(In crores)
Annual 22-Mar 21-Mar 20-Mar 19-Mar 18-Mar

Sales 2681 2473 2725 2514 2373

Other Income 11 8 303 140 403

Total Income 2692 2481 3029 2654 2776

Total 2551 2257 3159 2505 2667

Expenditure
EBIT 140 223 -129 149 108
Interest 4 19 22 21 18
Tax 34 53 15 44 27

Net Profit 102 151 -167 83 62

65
 INCOME STATEMENT
16,000

14,000

12,000 2,776
2,373 2,667

10,000
2,514 2,654 2,505
8,000
2,725 3,029 3,159
6,000

4,000 2,473 2,481 2,257

2,000
2,681 2,692 2,551
403
140 108
149
223 62
83
0 303
8
11 140
-129 18
21
22
19
4 27
44
15
53
34 151
102
-167
Sales Other Total Total EBIT Interest Tax Net Profit
-2,000
Income Income Expenditure

Mar-22 Mar-21 Mar-20 Mar-19 Mar-18

Interpretation:
Based on the HFPL income statement from 2018 to 2022 and the graph above. 5 percent in
2017–2018, 20 percent in 2018–2019, 35 percent in 2019–2020, 30 percent in 2020–2021, and
22 percent in 2021–2022.
With the exception of 2020–2021, both management of the income statement and performance
were better than in the prior years. Consequently, the aforementioned revenue statement is
accurate.

66
Balance Sheet: -
A financial statement that lists a company's assets, liabilities, and shareholder equity at a
certain moment in time is referred to as a balance sheet. The foundation for calculating
investor return rates and assessing the capital structure of a firm is provided by balance
sheets. TABLE – Balance Sheet Statement
(In crores)
Equities & 22-Mar 21-Mar 20-Mar 19-Mar 18-Mar
Liabilities
Share Capital 23 23 23 23 23
Reserves & 634 569 433 776 751
Surplus
Current Liabilities 182 207 319 325 325

Other Liabilities 62 77 212 509 606

Total Liabilities 902 878 988 1634 1706

Assets
Fixed Assets 587 598 558 517 441
Current Assets 290 259 268 274 254

Other Assets 24 20 161 842 1010

Total Assets 902 878 988 1634 1706

Other Info
Contingent 0 9 31 11 34
Liabilities

67
 Balance Sheet Statement
8000
7000
6000
5000
4000
3000
2000
1000
0
18-Mar 19-Mar 20-Mar 21-Mar 22-Mar

Share Capital Reserves & Surplus Current Liabilities Other Liabilities

Total Liabilities Assets Fixed Assets Current Assets
Other Assets Total Assets Other Info Contingent Liabilities

Interpretation:
Based on the HFPL balance sheet statement from 2018 to 2022 and the graph above. 45
percent in 2017–2018, 42 percent in 2018–2019, 25 percent in 2019–2020, 18 percent in
2020–21, and 20 percent in 2021–2022.
The management balance sheet is expanding in this case, and performance is likewise good.
Consequently, the aforementioned balance sheet statement is true.

68
TEST OF HYPOTHESIS
H1 –There is a significant relationship between income statement and ratio performance of an
organization.

Alternative Hypothesis is Accepted .

TREND ANALYSIS OF HERITAGE PRIVATE LTD ON
INCOME STATEMENT
FOR THE YEAR ENDED OF 31-03-2018 TO 31-03-2022
Trend % Base year 2018

years net profit percentage Financial ratio percentage

2017-2018 62 26.83983 current ratio 6.77
2018-2019 83 35.93074 liquid ratio 6.98
2019-2020 -167 -72.2944 net profit ratio 53.4
2020-2021 151 65.36797 Operating Ratio 422.4
2021-2022 102 44.15584 Gross Profit 83.83
Total 231 573.38
Average 46.2 114.67

120

100

80

60

40

20

0
Net Profit Financial ratio

69
Hypothesis Results :
According to the H0 test, there is no correlation between the average net profit of a
corporation, which is 46.2, and its financial ratio, which is 114.67. There is a distinction
between H0 is Rejected, therefore.
The alternative hypothesis is that there is a significant link between net profit, which is 46.2,
and financial ratio, which is 114.67. Therefore, there is a distinction between H1 is
Accepted.

70
 CHAPTER-V
FINDINGS, SUGGESTIONS AND
CONCLUSION

71
5.1FINDINGS
1. The current ratio in 2021–2022 was 1.30.
2. The liquid ratio grew from 15% in the years 2020–2021 to 22% in the following years.
3. From 47.3 in the years 17–18 to 82.6 in the years 2021–2022, the operating ratio has
grown.
4. The gross profit ratio decreased from 19% in the 2019–2020 fiscal year to 17% in the
2021–2022 fiscal year.
5. When compared to the base year, the current obligations are lower.
6. Sales exhibit an annual tendency of growing growth.

72
5.2SUGGESTIONS
1) To manage the need for working capital efficiently, the company may consider boosting
different current assets and reducing current liabilities.
2) In the next fiscal years, the company may keep its gross profit at or around the 98 percent
level recorded in 2017–2018.
3. The business must search for new partnerships and responsibilities.
4) The corporation must get both short- and long-term financing in order to cover its
immediate needs.
5) The business must adopt new practises and technologies to draw in the new consumers.

73
5.3CONCLUSION
Despite using its own cash, the organisation still has to strengthen its liquidity position and
creditors' collection time. using effective management of its present obligations and assets.

The company's foreign debt progressively reduced. This is mostly because certain term loans
have been repaid. The growth in reserves and surplus is another factor contributing to the
decline in foreign debt.
The fact that the year was 425.67 Crs suggests that there may be market expansion for the
firm. In the years between 2018 and 2022, HERITAGE FOODS IND LTD undertook
research projects, modernization projects, and technology upgrades. For the aforementioned
expansion programmes, it only used surplus funds and refrained from taking on outside
debts, which is one of the company's wise long-term financial policies.

74
Annexure-1
INCOME STATEMENT AT THE YEAR OF 31-03-2018 TO 31-03-2022
Annual 22-Mar 21-Mar 20-Mar 19-Mar 18-Mar

Sales 2681 2473 2725 2514 2373

Other Income 11 8 303 140 403

Total Income 2692 2481 3029 2654 2776

Total 2551 2257 3159 2505 2667

Expenditure
EBIT 140 223 -129 149 108
Interest 4 19 22 21 18

Tax 34 53 15 44 27

Net Profit 102 151 -167 83 62

Annexure-2
BALANCE SHEET STATEMENT AT THE YEAR OF 31-03-2018 TO 31-03-2022
Equities & 22-Mar 21-Mar 20-Mar 19-Mar 18-Mar
Liabilities
Share Capital 23 23 23 23 23
Reserves & 634 569 433 776 751
Surplus
Current Liabilities 182 207 319 325 325

Other Liabilities 62 77 212 509 606

Total Liabilities 902 878 988 1634 1706

Assets
Fixed Assets 587 598 558 517 441
Current Assets 290 259 268 274 254

Other Assets 24 20 161 842 1010

Total Assets 902 878 988 1634 1706

Other Info
Contingent 0 9 31 11 34
Liabilities

75
BIBLIOGRAPHY
BOOKS: -

1. Khan, M Y and P K Jain, Financial Management, Tata McGraw-Hill

Publishing Co., New Delhi, 2008.

2. I M Pandey, Essentials of Financial Management, Vikas Publishing House Pvt

Ltd, New Delhi, 2009.

3. Ramesh, S and A Gupta, Venture Capital and the Indian Financial Sector,
Oxford university press, New Delhi, 2017.

JOURNALS: -
1. Leanzas xu, International Journal of Commerce and Management (Vol.13,
Issue 1), 2003.
2. Shashikala, Journal of Business & Financial Affairs 07 (02),
DOI: - 10.4172/2167-0234.1000337, January, 2019.

3. Mark E. Haskins, Darden Business Publishing cases. ISSN: 2474-7890,

20th January, 2018.
4. Suk Amal Datta, Working Capital Management through Financial Statements
Analysis of Paper Industries in West Bangal Management Accountant,
Vol.30 No.11, PP 826-832, 2013.

WEBSITES: -
1. www.googlefinance.com
2. www.heritagefoods.com
3. www.moneycontrol.com
4. www.investing.com

76