To the Members,

Your Directors have a great pleasure in presenting the 31st Annual
Report together with the Audited Standalone & Consolidated Financial Statements of
your Company for the Financial Year ended March 31, 2023.

Financial Results

The Company's financial performance for the year ended March 31, 2023
is summarized below:

(Rs in Millions)


  

    
Particulars
    
Standalone
    
Consolidated
  
  

    

    
FY 2022-23
    
FY 2021-22
    
FY 2022-23
    
FY 2021-22
  
  

    
Revenue
    
32072.53
    
26404.91
    
32390.60
    
26786.07
  
  

    
Other Operating Income
    
14.22
    
24.30
    
15.94
    
26.72
  
  

    
Total Revenue
    
32086.75
    
26429.21
    
32406.54
    
26812.79
  
  

    
Add: Other Income
    
113.48
    
103.14
    
120.57
    
112.72
  
  

    
Total Income
    
32200.23
    
26532.35
    
32527.11
    
26925.51
  
  

    
Less: Total Expenditure
    
30736.67
    
24556.70
    
31023.96
    
24904.46
  
  

    
Profit before Finance cost, Depreciation, Amortisation
    Expenses and Tax
    
1463.56
    
1975.65
    
1503.15
    
2021.05
  
  

    
Less: i) Finance cost
    
31.68
    
32.01
    
39.02
    
40.07
  
  

    
ii) Depreciation and Amortisation Expenses
    
538.50
    
499.64
    
561.47
    
521.82
  
  

    
Profit before tax and exceptional items
    
893.38
    
1444.00
    
902.66
    
1459.16
  
  

    
Less: Exceptional items
    
-
    
91.40
    
-
    
91.40
  
  

    
Profit before tax and share of loss of an associate and a
    joint venture
    
-
    
-
    
902.66
    
1367.76
  
  

    
Less: share of loss of an Associate and a joint venture
    
-
    
-
    
85.23
    
60.34
  
  

    
Profit before tax
    
893.38
    
1352.60
    
817.43
    
1307.42
  
  

    
Less: i) Current Tax
    
227.07
    
343.01
    
228.33
    
343.59
  
  

    
ii) Deferred taxation
    
742
    
(5.75)
    
9.34
    
(1.38)
  
  

    
Profit after tax
    
658.89
    
1015.34
    
579.76
    
965.21
  




Performance of the Company

Standalone

Your Company, during the year under review earned revenue of Rs
32,086.75Million, against Rs 26,429.21 Million over the previous year. The profit before
Finance Cost, depreciation & amortization and tax was of Rs 1,463.56 Million as
against Rs 1,975.65 Million in the previous year.

The Profit After Tax for the current year is ^ 658.89 Million against ^
1,015.34 Million in the previous year.

Consolidated

Your Company, during the year under review earned revenue of ^
32,406.54 Million, against ^ 26,812.79 million over the previous year. The profit before
Finance Cost, depreciation & amortization, share of loss of an associate and joint
venture and tax was of ^ 1,503.15 Million as against ^ 2021.05 Million in the previous
year.

The Profit After Tax from continuing operations for the current year is
^579.76 Million against ^ 965.21 Million in the previous year.

Transfer to General Reserves

Your Directors do not propose to transfer any amount to general
reserves for the financial year ended March 31, 2023.

Dividend

Your Directors have pleasure in recommending a dividend of 50% i.e. ^
2.50/- per equity share of face value of ^ 5/- each for the financial year ended March 31,
2023 at their meeting held on May 25, 2023 amounting to ^ 231.99 Millions. The dividend
payout is subject to approval of members at the ensuing Annual General Meeting.

The Register of Members and Share Transfer Books will remain closed
from Wednesday, August 16, 2023 to Tuesday, August 22, 2023 (both days inclusive) for the
purpose of payment of dividend for the financial year ended March 31, 2023. The Annual
General Meeting is scheduled to be held on Tuesday, August 22, 2023.

Dividend Distribution Policy

In terms of Regulation 43A of the Securities and Exchange Board of
India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing
Regulations"), the Company has formulated and adopted a Dividend Distribution Policy
with the objective of providing clarity to its stakeholders on the profit distribution
strategies of the Company. During the year, the said Policy has been reviewed by the Board
of Directors of the Company. The policy hosted on the website of the Company at
https://www. heritagefoods.in/policy.

Share Capital

The Authorised Share Capital of the Company as on March 31, 2023 was ^
500,000,000/- divided into 9,60,00,000 equity shares of ^ 5/- each and 20,00,000
preference shares of ^ 10/- each. The paid up Equity Share Capital as on March 31, 2023
stood at ^ 46,39,80,000/- divided into 9,27,96,000 equity shares face value of ^ 5/- each.
During the year under review, the Company has not issued any shares with differential
voting rights, not granted any stock options and not issued any sweat equity share to its
employee(s)/director(s), however the Company has issued Rights shares the details of which
is mentioned below. As on March 31, 2023, none of the Directors of the Company holds any
instruments convertible into equity shares of the Company. The Company has not issued
equity shares with differential rights as to dividend, voting or otherwise as on March 31,
2023.

Rights Issue

During the year, the Board of Directors approved raising funds for the
Company by way of issue of securities (the "Issue") to the existing equity
shareholders of the Company on a rights basis aggregating up to ^23,19,90,000.

On 30th September 2022, the Board of Directors of your Company approved
to Issue 1 (One) fully paid-up equity shares for every 1 (One) fully paid-up Equity Shares
aggregating to 4,63,98,000 fully paid up equity shares of face value of ^5 each for cash
at a price of ^5 per equity share ("Right Issue Price") for an amount
aggregating to ^ 23,19,90,000 on a rights basis to the Eligible Equity Shareholders of the
Company as on the record date i.e. January 20, 2023, to meet working capital requirements
and for general corporate purposes.

The Company has appointed Chartered Finance Management Private Limited
(Formerly known as Chartered Finance Management Limited) as the Lead Manager(s)
("LM") and KFin

Technologies Limited as Registrar to the Issue ("Registrar"
or "Registrar to the Issue") and ICICI Bank Limited, Mumbai was the Banker to
the Issue. Subsequently the Board of Directors at their Meeting held on 13th January, 2023
approved the issue period i.e. from January 30, 2023 to February 13, 2023 and the last
date for On Market trading of Rights Entitlements was February 08 2023, and the basis of
allotment was approved on February 17, 2023 in consultation with BSE Limited, the
designated Stock Exchange and M/s. KFin Technologies Limited.

The Board of Directors at their meeting held on February 21st, 2023
allotted 4,63,98,000 fully paid up equity shares to the Shareholders of the Company as on
the record date fixed for the purpose of Rights Issue and further obtained the listing
approvals from BSE Limited and National Stock Exchange of India Limited on February 21,
2023 and February 22, 2023 respectively and received the trading approvals from BSE
Limited and National Stock Exchange of India Limited on February 24, 2023.

The proceeds from the Rights Issue were utilized towards issue expenses
and working capital requirements. The object of the Issue was fulfilled as mentioned in
the Letter of Offer submitted with BSE Limited and National Stock Exchange of India
Limited.

Utilization of Funds raised through Rights Issue

During the year under review the company has utilised the full amount
of Rs 23,19,90,000 raised through rights Issue for the following purposes.

1. Meeting Working Capital requirement of the Company

2. General Corporate purposes; and

3. Issue related expenses.

Demat suspense account/unclaimed suspense account

During the year under review the Company has issued and made allotment
of 4,63,98,000 equity shares of face value of Rs 5 each (Issue Shares) for cash at a price
of Rs 5 per Equity Share (Right Issue Price), aggregating up to Rs 23,19,90,000/- to the
Eligible Equity Shareholders of the Company on rights basis (Rights Equity Shares) in the
ratio of 1 (one) Rights Equity Share for every 1 (one) fully paid-up Equity Share (Rs 5/-
face value) held by the Eligible Equity Shareholders on the record date.

The Company has opened demat account in the name of HERITAGE FOODS
LIMITED for Rights Shares Unclaimed Suspense Account maintained with Stock Holding
Corporation Of India Limited, Reg. Office: 301, Centre Point, Dr. Babasaheb Ambedkar Road,
Parel , Mumbai - 400012, Maharashtra, India vide DPID IN301330 and client ID 41280635.

Out of the total number of eligible shareholders, 334 numbers of
shareholders who applied in the rights issue did not get the credit of shares due to their
incorrect details provided in the rights issue application all those shares were
transferred to Heritage Foods Limited - Rights Shares unclaimed suspense account.

In accordance with the requirement of Clause F of Schedule V of SEBI
(Listing Obligation and Disclosure Requirements) Regulations, 2015, the Company reports
the following details in respect of equity shares lying in the suspense account:


  

    
Particulars
    
No. of Shareholders
    
No. of equity shares
  
  

    
Aggregate number of shareholders and the outstanding shares
    transferred in the suspense account
    
334
    
168737
  
  

    
No. of shreholders who approached the company for transfer of
    shares from unclaimed suspense account as on March 31st , 2023
    
129
    
112104
  
  

    
No. of shareholders to whom shares were transferred from the
    Unclaimed Suspense account as on March 31st, 2023.
    
129
    
112104
  
  

    
Transferred to Investor Education and Protection fund
    Authority
    
NIL
    
NIL
  
  

    
Aggregate number of shareholders and the outstanding shares
    lying in the Unclaimed Suspense account as on March 31st, 2023.
    
*205
    
56633
  




*Out of the aggregate number of shareholders and the outstanding shares
lying in the Unclaimed Suspense account as on March 31, 2023, 60 shareholders holding
17,597 equity shares were transferred from the Unclaimed Suspense account as on 25th May,
2023. Hence as on the date of this report 145 shareholders holding 39,036 equity shares
are lying in the Unclaimed Suspense account.

The voting rights on the shares outstanding in the suspense account as
on March 31, 2023 shall remain froze till the rightful owner of such shares claim the
shares.

Reclassification of Promoters group:

During the year under review, your Board of Directors has approved the
reclassification of the following shareholders from the Promoter group to public
shareholders, subject to the approval of shareholders and other regulatory/statutory
authorities as per the applicable provisions of SEBI (Listing and Disclosure Obligation
Requirement) Regulation, 2015, as amended from time to time:


  

    
• Mrs. Durga Ramakrishna
    
• Mrs. Neelima N P
  
  

    
• Mrs. Kathya N P
    
• Mr. N P Ramakrishna
  
  

    
• Mr. Sivasankara Prasad Alapati
  




These individuals have not been involved in the day-to-day affairs of
the company since a decade. Their names were included in the promoters group during the
Initial Public Offer of the company. However, considering their lack of active
involvement, it has been decided to reclassify them as public shareholders.

Deposits

Your Company has not accepted any deposits covered under Chapter V of
the Companies Act, 2013, i.e. within the meaning of Section 2(31) of the Companies Act,
2013 read with Rule 2(1)(c) of the Companies (Acceptance of Deposits) Rules, 2014 and as
such there are no such overdue deposits outstanding as on 31st March, 2023

Buy Back of shares

The Company has not bought back any of its shares during the Financial
Year ended March 31, 2023.

Particulars of Loans, Guarantees and Investments

Loans: During the year under review your Company has not given any
loans to any persons or body corporates as envisaged under Section 186 of the Companies
Act, 2013.

Guarantees: The Company has given corporate guarantee as at March 31,
2023 of ^ 20750 Millions for the credit facilities availed by its wholly owned subsidiary
Company namely M/s.

Heritage Nutrivet Limited (CIN: U15400TG2008PLC062054) (the outstanding
as on March 31, 2023 was ^78.82 Millions) from Kotak Mahindra Bank Limited for long term
loan and Working capital facilities and ^ 220 Million for the credit facilities availed by
its joint venture Company namely Heritage Novandie Foods Private Limited (CIN:
U74999TG2017PTC120860) (the outstanding as on March 31, 2023 was ^ 110.21 Million) from
ICICI Bank Limited for long term loan and working capital facilities.

Investments: During the year under review your Company has invested ^
55.00 million in the equity shares of its Joint Venture namely Heritage Novandie Foods
Private Limited.

Particulars of Contract or Arrangements made with Related Parties

The particulars of contracts or arrangements with related parties as
per Section 188 of the Companies Act, 2013 and rules made thereof as amended from time to
time and as per the Related Party Transaction (RPT) policy the Company during the
financial year ended March 31, 2023 in prescribed Form AOC-2 is annexed to this Board's
Report (Annexure-1). Further there are no materially significant related party
transactions during the year under review with Promoters, Directors, Key Managerial
Personnel's and their relatives, which may have potential conflict with interest of the
company at large. The related party transactions were placed before the audit committee
and also to the Board at their respective meetings for approval. All related party
transactions entered during the year were in the ordinary course of business and at arm's
length basis. Details of the related party transactions during the year are part of the
financial statements forming part of this Annual Report.

Material changes and commitments affecting financial position between
the end of the financial year and date of report

There are no material changes and commitments affecting financial
position of the company, which occurred after the end of the financial year i.e., March
31, 2023.

Change of Registered Office

During the year the Board of Directors at their meeting held on 13th
October, 2022 approved to shift the registered office of the Company within local limits
of the city of Hyderabad from #6-3-541/C, Panjagutta, Hyderabad - 500082 to

H.No.8-2-293/82/A/1286, Plot No: 1286, Road no. 1 & 65, Jubilee
Hills Hyderabad- 500033, Telangana, India, w.e.f. 01st December, 2022

Director's Responsibility Statement as required under Section 134
(3)(c) & (5) of the Companies Act, 2013.

The financial statements are prepared in accordance with the provision
of Section 129 read with Schedule III of the Companies Act, 2013 and the rules made
thereof, Ind-AS and Generally Accepted Accounting Principles (GAAP) under the historical
cost convention on accrual basis except the sale proceeds received under REC Mechanism of
the Renewable Energy. GAAP comprises mandatory accounting standards as prescribed under
Section 133 of the Companies Act, 2013 ('the Act'), read with Rule 7 of the Companies
(Accounts) Rules, 2014, the provisions of the Act and guidelines issued by the Securities
and Exchange Board of India (SEBI). There are no material departures from prescribed
accounting standards in the adoption of these standards.

The Board of Directors to the best of their knowledge and understand
confirm that:

• In the preparation of the annual accounts (Standalone &
Consolidated) for the financial year 2022-23, the applicable accounting standards have
been followed along with proper explanation relating to material departures.

• They have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company at the end of the
financial year 2022-23 and of the profit and loss of the Company for that period.

• They have taken Proper and sufficient care for the maintenance
of adequate accounting records in accordance with the provisions of the Companies Act,
2013 for safeguarding the assets of the company and for preventing and detecting fraud and
other irregularities if any,

• The annual accounts of the company have been prepared on a going
concern basis.

• They have laid down internal financial controls to be followed
by the company and that such internal financial controls are adequate and were operating
effectively; and

• They have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems were adequate and operating
effectively.

Management Discussion and Analysis

In terms of the provisions of SEBI (Listing Obligations &
Disclosure Requirements) Regulations, 2015 as amended from time to time, the Management's
Discussion and Analysis is provided in a separate section and forms an integral part of
this Report.

Corporate Governance

Corporate governance is an ethically driven business process that is
committed to values aimed at enhancing an organization's brand and reputation. This is
ensured by taking ethical business decisions and conducting business with a firm
commitment to values, while meeting stakeholders' expectations. It is imperative that your
company's affairs are managed in a fair and transparent manner. This is vital to gain and
retain the trust of the stakeholders.

In terms of Regulation 34 of the Securities Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter
"Listing Regulations") as amended from time to time, a Report on Corporate
Governance along with Compliance Certificate issued by Statutory Auditors of the Company
forms integral part of this Annual Report.

Business Review

Your Company has not changed its nature of business during the period
under review. Your Company continues to report results under two divisions i.e. Dairy
division and Renewable division, in operation across 11 States in India.

Dairy Business Overview

The dairy industry in India, is one of the most attractive among all
consumer foods segments for many reasons. In the global context, India has been the
largest producing and consuming nation in the world for many years now. With an estimated
annual production in excess of 210 million tonnes, India contributes to a quarter of all
world production and consumption. But what is more interesting for us is that while the
global dairy production and consumption is expected to maintain a growth rate of 1.6% year
on year, the rate of growth of the Industry in our country is probably 3 times faster. The
consumption growth in India is driven by a multitude of factors, primarily (1) fast pace
of growth of economy and disposable income, (2) accelerating urbanisation and the shift to
packaged products and finally (3) the growing demand for nutrition that fuels an aspiring
nation, driving higher per capita consumption and more occasions for dairy products.

The economics of the business and recent trends

While the mid-term to long-term outlook for the business is very robust
and promising, the industry has been through a rough patch in the last 12-15 months. At a
high level, the continuing inflationary pressures on the farm prices of raw milk has put
tremendous strain on the profitability of the industry in general. After a very long
period in time, the industry witnessed double digit inflation in raw milk procurement
prices, which was a result of the concurrent impact of multiple factors.

On the one hand, farmers were facing sequential increase of feed and
fodder prices as early as second half of 2021 due to climatic vagaries and input prices,
part of which naturally resulted in price increase of milk output at the farm level and
shrinkage in production, as farms became unviable. Furthermore, restrictions put by
pandemic limiting farmers ability to buy or breed new cattle and the rapid spread of Lumpy
Skin disease in many parts of the country, worsened the supply side further. On the other,
consumers in the post pandemic period significantly increased their food basket size,
especially for nutritious food such as dairy, rapidly increasing the demand side. The
resulting supply-demand gap led to the sequential inflation like we had never seen before.

We have also observed that in such turbulent times, buffalo dairy farms
have borne the brunt more than cow farms, as buffalo farms have higher maintenance costs.
This has pushed many farmers to shift from buffalo rearing to cow rearing. This naturally
results in the fat percentage of the average milk collected to come down, as cow milk has
lower percentage of fats. This has put serious pressure on the pricing of consumer fat
products such as Ghee and Butter and a potential shrinkage of shopping baskets for these
high value products in the coming quarter and the middleclass consumer may cut down on
some of the consumption occasions and quantities.

At the end of financial year 2022-23, most industry experts believe
that we may have reached the peak of this inflationary trend. In most of our procurement
regions, the farm prices have reached levels that make dairying quite lucrative attracting
the farmers back into raising production. Early indications of normal flush also give the
industry players confidence that raw material prices should soften towards the end of the
calendar year 2023. Having passed on large part of the raw material price increase to the
end consumers of dairy products, the economics of the business is expected to improve
towards end of the financial year 2023-24.

Dairy Market Forecast: As per the research report by IMARC Group, The
dairy market in India size reached INR 14,899.8 Billion in 2022. This is 13.1% higher than
their estimate of the industry in 2021, which is perfectly in line with the growth
estimates from many other sources. Looking forward, the report calls out that the market
is continuing the momentum with a CAGR of 13.2% during the next 5 year period, expecting
to reach INR 31,185.7 Billion by 2028.

One of the main factors driving the growth in the dairy industry in
India, is the evolution of consuming households from an unorganized to a relatively
organized sector, along with the increasing consumption of different value-added products,
such as curd, paneer, ghee, butter, cheese, etc.. Multiple sources, including IMARC,
estimate the share of organized and branded players contribution to liquid milk
consumption at around 40%. While this itself gives tremendous opportunity for players like
your

company to grow the packaged milk business, the opportunity in value
added products is even more attractive.

As per estimates of the same reports, including IMARC, the percentage
share of organized sector for Curd is around 9% and Paneer is around 4%. Even Ghee which
is mostly organized has only around 19% of the consumption coming from organized sector.
While these percentage contributions indicated are at a national level, even in the urban
areas where your company operates, the contribution of organized sector for value added
products like Curd, Paneer, Ghee, Ice-Cream, etc. do not exceed 50%. This gives tremendous
potential and opportunity for driving growth, especially in Value added products segments.

Increasing Demand for Milk and Value-Added Products:

With an increase in the spending power of the population, the demand
for milk and other value-added dairy products is expected to increase in the coming years.
In addition to greater buying power, consumers are also becoming increasingly health
conscious. This is aggressively driving the increasing share of dairy and other nutritious
products in the consumer basket. For example, many consumers are replacing sugar-laden
beverages with more nutritious milk-based beverages. There is also marked geo-spatial
shift that we are witnessing, in terms of urbanisation bringing more and more consumers to
urban centres with limited access to unorganized dairy players and the consolidation of
organized retail segment and their increasing share of the shopper basket.

Value-added products include curd, paneer, butter, cheese, paneer,
ghee, flavoured milk, Cold-coffee, Lassi, Buttermilk, IceCream, etc., which are products
that are produced by alteration and enrichment via use of additives, microbial
fermentation or simply mixing with liquid milk. These products usually have marginal
incremental cost, but much higher perceived value for the consumer, due to the special
occasions in which it is consumed, the potential for differentiation and the nutritional
benefits it offers the consumers. This gives the industry and your company to enjoy a much
higher margin than base milk products.

State-wise segment insights: Uttar Pradesh, Rajasthan, Madhya Pradesh
and Gujarat are some of the major milk producing states in India. Uttar Pradesh and Madhya
Pradesh are two of the largest milk-producing state because of high buffalo population,
they are both largely unorganized. Gujarat and Rajasthan have numerous cooperative dairy
milk unions, and primary milk cooperative societies play a crucial role in the production
of milk.

After these top states, Andhra Pradesh, Maharashtra, Punjab, Haryana,
Tamil Nadu, Karnataka and Telangana appear on the list. Your company is present with its
procurement network in all these states and in some of these states like AP, Maharashtra,
Tamil Nadu and Telangana, your company's procurement network is established with a strong
and deep procurement presence. Many of the states where your company operates its
procurement network are also among the most organized and among the fastest growing
milk-producing regions. This gives us great competitive advantage.

Government Initiatives and Support: Both the Union Government and the
various state Governments in the states where your company operates are taking several
progressive initiatives to promote the dairy industry. While Agriculture sector employs
the largest number of people in our country, dairying is probably the largest employer
within the Agriculture sector. It is estimated that around 80 million people are involved
in cattle breeding, cattle rearing, dairying and dairy products manufacturing and selling.

The support from the Government is across all these segments of the
industry, including support towards cattle breeding, clean milk production, dairy
development and feed fodder management. The Department of Animal Husbandry, NDDB, and
other government affiliated institutions manage these initiatives in a constructive way.
The manner in which Dairy industry would enhance milk production and upgrade milk
processing technologies, is also supervised by these departments/ agencies.

The company's operations and evolution in recent years:

Your Company was founded with a vision of 'Delighting every home with
fresh and healthy products and empowering the farmer' The company has made significant
progress on both these pillars in this financial year.

On the farm side, your company today collects milk from nearly 300,000
farmers, spread across more than 10,500 villages in 9 states. In this financial year, we
have opened 1457 new village level milk procurement centres, which brought in nearly 2
lakh plus litres of additional raw milk daily by the end of quarter 4. We have entered
Odisha state for procurement in this financial year. For the last 3 decades, the company
has strengthened its farmer- partner relations on 3 basic principles.

(1) Prompt and timely payment: The company holds the principle of
paying farmers for the milk collected promptly twice or thrice a month (depending on the
region). This means faster, but more importantly guaranteed cashflow for our farmers. This
year as well, as for the last 30+ years, your company has not even missed a single pay day
notwithstanding the bank holidays and other challenges.

(2) Transparency and accurate measurement: The company has a very
transparent mechanism to ensure that the measurement of solids in the milk collected is
absolutely accurate and is openly communicated to the farmers, so that our farm partners
know how much they have earned on any given day. Once a farmer starts pouring milk to
Heritage, they realize the gains they make because of this, which creates stickiness.

(3) Fair pricing: The company compensates the farmer for the milk
collected based on measurement of solids (fat and SNF) delivered. The prices are set in a
very fair manner and is competitive compared to any other option the farmer has

in the village. This helps us attract farmers in every village we
enter.

While these principles help your company go a long way in empowering
its farmers, the company also undertakes several other activities which go a long way in
growing farmer income and empowering them financially. Some of these initiatives are

• Dissemination of animal care and farm management information
through informative videos on VET+ mobile application, which has over 100,000 downloads
and monthly active users.

• Conducting veterinary camps throughout the year, through 17
veterinary doctors and many vet assistants

• Supply of high quality cattle feed and fodder seeds

• Training of farmers for better feed and fodder practices

• Facilitating loans for the purchase of cattle through commercial
banks/ NBFCs

• Facilitating Group personal accident coverage for farmers and
insurance for the cattle

Your company has farmer network about 0.3 million dairy farmers across
nine major milk producing States namely, Andhra Pradesh, Telangana, Karnataka, Tamil Nadu,
Maharashtra, Rajasthan, Punjab, Uttar Pradesh and Odisha. The direct route of milk
procurement enables it to maintain quality. The company added several chilling plants
through the year, to increase its procurement network and today operates 215 chilling
centres/ bulk coolers and procured an average of 1.4 Million litres of milk per day in
FY22-23, which is a growth of 17% over previous year. With this, the chilling capacity of
the company has grown to 2.2 million litres per day. Your company also operates 18 own
processing plants with installed milk processing capacity of 2.65 million litres per day.

On the consumer side, your company is already a pan India player and
our presence has grown deeper in the West and North Indian markets this year, in addition
to our strong presence in South India. This year, the company achieved an average full
year sales volume of 1.5 million litres per day, which is a growth of 11.2% in volumes and
21% in revenue over previous year. Value Added products, registered a strong volume growth
of 24.5% to cross 400 Metric tons per day average sale through the year and achieved a
revenue growth of 33%. Through the year, your company launched 14 new products, across
many product clusters and added several new customers. We expanded our presence in the
emerging channels like Quick commerce, with the addition of several new customers,
alongside deepening our presence in the general trade segments through 150+ new Heritage
Happiness Centres, which are franchisee operated stores-cum-neighbourhood distribution
centres.

During the year under review your Company has purchased the assets and
acquiring of procurement & sales network from M/s

Suguna Dairy Products (India) Private Limited to expand the Dairy
business of the Company to strengthen South Tamil Nadu and part of Kerala markets.

Renewable Energy Division:

Your Company strongly recognizes the responsibility towards protecting
the environment. As a forward-looking enterprise, it is strongly committed to extending
the Green' footprint.

Your Company is taking a lot of initiatives for conservation of energy.
Renewable energy was the major focus area in the last ten years. Now your Company has
10.50 MW of solar and wind power for captive consumption. Your Company is continuously
investing in latest technologies and efficiencies to conserve energy.

Renewable Energy Division of your Company had achieved the turnover of
78.22 Million during the year under review.

Subsidiary / Associate Companies

Your Company as on March 31, 2023 is having following
subsidiary/associate/joint venture Companies:

Heritage Nutrivet Limited

(CIN: U15400TG2008PLC062054)

A wholly owned Subsidiary Company operating with Animal Nutrition and
one of the leading Live Stock Feed & Feed Supplements Companies in Southern and
Western India, covering over 0.30 million farmers spread across five states viz., Andhra
Pradesh, Telangana, Tamil Nadu, Karnataka and Maharastra. Product quality is pivotal in
our endeavour towards "HEALTHY MILCH ANIMAL - HAPPY FARMER"

It is also proficient in providing cost-effective solutions for the
farmers facing ground reality. The products of the Heritage Nutrivet Limited are
innovatively engineered to serve varieties of needs of the animals. They segregate the
animal feed into dairy power, dairy milk, rich, dairy supreme, milk magic plus, gomitra,
gomitra plus.

Skil Raigam Power (India) Limited (CIN:U40102TG2009PLC063671)

An associate Company as per the provisions of Section 2(6) of the
Companies Act, 2013, which has been declared as Dormant Company as per Section 455(2) of
Companies Act, 2013 vide SRN: T42936765 dated September 22, 2021, the Company planned to
set up hydro power plant at Raigam, in Arunachal Pradesh. Your Company is having 43.33% of
shareholding in this Company.

Heritage Novandie Foods Private Limited (CIN: U74999TG2017PTC120860)

A 50:50 Joint Venture Company between Heritage Foods Limited (HFL),
Hyderabad, India and Novandie, France with an object to manufacture and market various
Fruit Yoghurts and other dairy products in India. The Company had started the commercial
production on February 16, 2021 and launched Yoghurt brand 'Mamie Yova' in India. The
Company is hoping to woo Indian consumers with its fruit-based yogurt and aims to have a
strong presence across 8-10 key cities in the next two years. Due to COVID out-break the
Company couldn't make the market penetration in large scale, however during the coming
financial year the company is expected to make more penetration in the market, to maximise
revenue and to minimise operation lossses.

The details of transaction are available in the AOC-1 which is forming
part of the consolidated financial statement. The gist of financial performance of the
Subsidiary/ Associate/Joint Venture companies is as follows.

Rs in Millions


  

    
Particulars
    
Heritage Nutrivet Limited
    (Wholly Owned Subsidiary) year ended
    
Skil Raigam Power (India)
    Limited (Associate) year ended
    
Heritage Novandie Foods Private
    Limited (Joint Venture) year ended
  
  

    

    
31/03/2023
    
31/03/2022
    
31/03/2023
    
31/03/2022
    
31/03/2023
    
31/03/2022
  
  

    
Total Income
    
1080.92
    
959.97
    
0.01
    
-
    
31.31
    
16.82
  
  

    
Total Expenses
    
1064.88
    
944.32
    
0.04
    
28.91
    
202.59
    
13750
  
  

    
Profit/ (Loss) before tax
    
16.04
    
15.65
    
(0.03)
    
(28.91)
    
(171.28)
    
(120.68)
  
  

    
Current tax expense
    
1.26
    
0.58
    
-
    
-
    
-
    
-
  
  

    
Deferred tax benefit
    
3.69
    
4.48
    
-
    
-
    
-
    
-
  
  

    
Profit/ (loss) for the year
    
11.09
    
10.59
    
(0.03)
    
(28.91)
    
(171.28)
    
(120.68)
  




During the financial year under review, your Company has not
added/removed any subsidiaries, joint ventures or associate companies.

In accordance with Section 136 of the Companies Act, 2013, the audited
financial statements, including the consolidated financial statements and related
information of the Company and audited accounts of each of its Subsidiary, Associate and
Joint Venture are available on the website of your Company www.heritagefoods.in. These
documents will also be available for inspection during the business hours of the Company
at its registered office in Hyderabad, India.

Quality

Your Company continues the journey of delivering value to its
consumers/customers through significant investments in quality assurance programs.

Your Company adheres to international quality standard certifications
such as ISO 22000:2018 (Food Safety Management System), ISO 9001:2015 (Quality Management
System), ISO 45001:2018 (Occupational Health & Safety), ISO 14001:2015 (Environmental
Management System), ISO 50001:2018 (Energy Management System) and HALAL Certification by
JUHF. Your Company has also acquired AgMark, BIS, EIA and FSSC 22000 v 5.1 Certificates.

The Quality department of your company plays a crucial role in
implementing and driving large-scale change management initiatives that aim to improve
quality and increase productivity across the organization. By continuously updating its
practices and embracing new technologies, the department helps to streamline processes,
reduce waste, and enhance overall performance. Through its efforts, the Quality department
is instrumental in driving the company's success and achieving its goals.

Branding

"Heritage" as a brand reflects your company's identity, core
values and belief system. Your company is actively working on diversifying the products
portfolio in line with the current consumer trends and mission of bringing health,
nutrition & happiness to every home. During this year your brand came up with the
biggest integrated marketing campaign for curd under the theme-"Heritage curd makes
your Day" with 360 degree touch points covering TV, Digital and Out of Home. In the
coming years, your company shall further develop more integrated marketing campaigns based
on strong Consumer insights that will help to connect and build brand preference.

Awards & Recognitions

During the financial year 2022-23 your Company has received the
following awards and recognitions.

• Best South Brand Award at the Pride of India Brand Awards 2022

• Most Loved Brand award organized by Blinkit Brand Awards 2022

• Best Management Award by the Telangana Government

Human Resources and Industrial Relations

Your Company takes pride in the commitment, competence and dedication
shown by its employees in all areas of business. Your company ensures that it provides a
harmonious and cordial working environment to all its employees. To ensure good human
resources management, your Company focused on all aspects of the employee lifecycle. This
provides a holistic experience for the employee as well. During their tenure at the
Company, employees are motivated through various skill- development programs, engagement
and volunteering programs. Your company has put in continued efforts in building
capabilities of Human Resources with adoption of specific and targeted interventions. Your
Company has a structured induction process at all locations and management development
programs to upgrade skills of managers. Objective appraisal systems based on Key Result
Areas are in place for all employees.

Your Company is committed to nurture, enhance and retain talent through
superior Learning & Organizational Development.

The total strength of your Company employees as on March 31, 2023 was
3212

Investor Relationship

Investor relations is a critical function within a company that focuses
on building and maintaining relationships with its investors and stakeholders. It serves
as the bridge between the company's management team and its shareholders, analysts, and
the broader investment community. The primary goal of investor relations is to effectively
communicate the company's financial performance, strategic direction, and key developments
to the investment community.

Investor relations professionals play a vital role in managing the flow
of information between the company and its investors. They are responsible for
disseminating accurate and timely information, such as financial reports, earnings
releases, and regulatory filings, to ensure transparency and compliance. These
professionals also organize and participate in investor conferences, roadshows, and
earnings calls, where they provide updates on the company's performance and address
questions and concerns from investors.

Another crucial aspect of investor relations is building and
maintaining relationships with shareholders and analysts. Investor relations teams
proactively engage with institutional investors, retail shareholders, and
sell-side/buy-side analysts, providing them with insights into the company's operations,
industry trends, and financial outlook. These interactions help foster trust, credibility,
and long-term relationships, which are essential for attracting and retaining investors.

In addition to communication and relationship-building, investor
relations professionals also monitor and analyze market trends, investor sentiment, and
competitor activities. They assess the impact of market developments on the company's
valuation and help management understand and respond to changes in the investment
landscape. By staying abreast of market dynamics, investor relations teams can effectively
advise the company's leadership on investor concerns, expectations, and potential risks.

Overall, investor relations is a critical function that helps companies
establish and maintain productive relationships with their investors and the broader
investment community. By providing transparent and timely information, fostering
relationships, and monitoring market trends, investor relations professionals contribute
to enhancing the company's reputation, maximizing shareholder value, and supporting its
long-term growth objectives.

Credit Rating

The details of the credit rating are as follows:

a) Credit rating obtained by the company: in respect to long term and
short term debts

b) Name of the credit rating agency: Credit Rating Information Services
of India Limited (CRISIL)

i. Long term Rating: CRISIL A+/Stable

ii. Short term Rating: CRISIL A1

c) Date on which the credit rating was obtained: March 27, 2023 (valid
up to March 31, 2024)

d) Revision in the credit rating: Yes

e) Reasons provided by the rating agency for a downward revision: NA

Particulars of Employees and Related Disclosures

The table containing the names and other particulars of employees in
accordance with the provisions of Section 197(12) of the Companies Act, 2013, read with
Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014 are provided in Annexure-2A. A statement containing the names of every employee
employed throughout the financial year and in receipt of remuneration of ^10.20 million or
more per annum or employed for part of the year and in receipt of ^0.85 million or more in
a month under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 as amended from time to time are provided in Annexure-2B to this
report.

Details under Insolvency and Bankruptcy Code, 2016

No application is made, or any proceeding is pending against the
Company under Insolvency and Bankruptcy Code, 2016 during or as at the end of the year
under review.

Details of One Time Settlement

The Company did not evade any One Time Settlement (OTS) from banks or
Financial Institutions and hence giving disclosures on valuation of assets/securities at
the time of borrowing and at the time of OTS do not become applicable.

Information Technology and Digitization:

Implementation of IT & Digital Transformation Strategy has been a
key priority for Heritage Foods Limited for the year 2022-23. The Strategy was focused on
addressing the perspective of all the stakeholders, viz. Farmer, Consumer, Customer and
the Employee to achieve the desired outcomes of reducing the Cost, enhancing the
efficiency, consumer delight and enhancing revenue.

Introduction of various initiatives using Data Science such as grading
of MCCs & Representatives and Forecasting of SMP Price - have helped the Organisation
in taking data driven decisions. BI Dashboards have been deployed covering all major
functions such as; Sales, Procurement, Finance, Production, Purchase & Stores and
Human Resource.

Heritage CLapp (Customer Live Application) & DMS (Distributor
Management System) have given an edge in terms of streamlining the primary and secondary
sales process from Agent level up to the counter sales level in an authentic manner.

Vet+ app continued to widen its user base and the range of services
helping the Farmers with hassle free veterinary services and eventually enhancing their
income.

All the IT related initiatives combined have helped the organisation in
being consumer centric and farmer friendly while making Heritage as the best place to work
with for its employees.

Board Diversity

Board diversity offers several advantages. Here are some of the key
benefits of having diverse boards:

• Enhanced decision-making: Board diversity brings together
individuals from different backgrounds, experiences, and perspectives. This diversity of
thought and expertise can lead to more robust and well-rounded decision-making processes.
By considering a wider range of viewpoints, boards can avoid groupthink and make more
informed and innovative choices.

• Improved corporate governance: Diverse boards can contribute to
better corporate governance practices. When a board comprises individuals with diverse
skills, knowledge, and experiences, it ensures a more comprehensive oversight of the
company's activities. This can help in addressing conflicts of interest, promoting
transparency, and ensuring accountability.

• Increased creativity and innovation: Diversity stimulates
creativity and innovation within organizations. By incorporating diverse perspectives,
boards can foster a culture of openness, collaboration, and inclusivity. Different
viewpoints can challenge existing norms, encourage fresh ideas, and lead to more
innovative solutions and strategies.

• Enhanced problem-solving: Diverse boards tend to be more
effective in addressing complex problems. The varied backgrounds and experiences of board
members enable them to approach challenges from multiple angles. This diversity of
perspectives can result in more effective problem-solving and better outcomes for the
organization.

• Better understanding of customers and markets: India is a
diverse country with a wide range of cultures, languages, and consumer preferences. Having
diverse boards can provide valuable insights into the diverse needs and preferences of
customers in different regions and segments of the market. This understanding can help
companies tailor their products, services, and marketing strategies to effectively target
and serve diverse customer groups.

• Improved reputation and stakeholder trust: Companies with
diverse boards often enjoy a positive reputation for being inclusive and socially
responsible. Such companies are perceived as more attuned to societal values and needs.
Board diversity can enhance the company's brand image, attract diverse talent, and build
trust with stakeholders, including investors, customers, and employees.

• Mitigation of biases: Diverse boards can help mitigate
unconscious biases and promote fairness and equity. By ensuring representation from
different genders, ethnicities, age groups, and backgrounds, boards can counterbalance any
inherent biases and ensure a more equitable and inclusive decision-making process.

In summary, board diversity offers numerous advantages, including
improved decision-making, enhanced corporate governance, increased creativity and
innovation, better problemsolving, understanding of diverse markets, improved reputation,
and the mitigation of biases. These benefits contribute to the long-term success and
sustainability of organizations in the Indian business landscape. The Board has adopted
the Board Diversity Policy sets out the approach to diversity of the Board of Directors.
The Policy is available in the Company website, ie
www.heritagefoods.in>Investor>policy.

Meetings of the Board

The Board met Eight (8) times during the financial year 202223, the
details of which are given in the Corporate Governance Report forms part of this Annual
Report. The intervening gap between any two meetings was within the period prescribed by
the Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements)
Regulations, 2015.

Policy on Director's Appointment and Remuneration

The current policy is to have an appropriate mix of Executive and
Non-executive & Independent and Women Directors to maintain

the independence of the Board, and separate its functions of governance
and management. As on March 31, 2023, the Board consists of 7 members, 2 of them are
Executive/Whole- time directors, 1 is Non-Executive Director, 1 is Non-Executive
Independent Woman Director and 3 are Non-Executive Independent Directors. The Board
periodically evaluates the need for change in its composition and size.

The policy of your Company on directors' appointment and remuneration,
including criteria for determining qualifications, positive attributes, independence of a
director and other matters as provided under Section 178(3) of the Companies Act, 2013,
and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 was adopted
by the Board. It is affirmed that the remuneration paid to the Director(s) are as per the
terms laid out in the nomination and remuneration policy of the Company.

Directors and Officers insurance ('D and O insurance')

Your company has taken Directors and Officers insurance policy ('D and
O insurance') for all its Directors and members of the Senior Management as per Regulation
25(10) of SEBI (LODR), Regulations, 2015.

Declaration from Directors

Your Company has received necessary declaration from all Directors
stating that they are not debarred or disqualified from being appointed or continuing as
Directors of companies as per the Securities and Exchange Board of India, Reserve Bank of
India, Ministry of Corporate Affairs or any such other Statutory Authority.

Declaration by Independent Directors

Your Company has received necessary declaration from each independent
director stating that they met the criteria prescribed for independence under Section 149
of the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations & Disclosure
Requirements) Regulations, 2015 and the Board has confirmed its veracity and taken the
same on record.

Board Evaluation

As per the provisions of the Companies Act, 2013 and SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time
the Nomination and Remuneration Committee laid down criteria for performance evaluation of
individual director(s), the board and its committee(s). Accordingly, an annual evaluation
was carried out for the Board's performance, its Committees and individual director(s).

The Board performance evaluation is carried out through a structured
questionnaire which provides a clear and valuable feedback for Board effectiveness and
highlighting areas for further development.

The following are some of the broad issues that are considered in

performance evaluation questionnaire

• Ability to act on a fully informed basis, in good faith, with
due diligence and in the best interest of the company and the stakeholders.

• Optimum combination of knowledge, skill, experience and
diversity on the Board as well as its Committees.

• Relationships and effective communication among the Board
members.

• Effectiveness of individual non-executive and executive
directors and Committees of Board.

• Quality of the discussions, general information provided on the
company and its performance, papers and presentations to the Board.

• Risk management as well as processes for identifying and
reviewing risks.

• Well- defined mandate and terms of reference of Committee.

• Attendance at Board as well as Committee Meetings

• Procurement of Information, preparation for Board Meetings and
value of contribution at meetings

• Relationships with fellow Board members, the company secretary
and senior management and mutual trust and respect they stimulated within the Board.

• Keeping update with the latest developments in the areas of
governance and financial reporting

• Willingness to devote time and effort to understand the company
and its business

• Providing necessary guidance using their knowledge and
experience in development of corporate strategy, major plans of action, risk policy, and
setting performance objectives.

• Independence exercised in taking decisions, listening to views
of others and maintaining their views with resolute attitude

• Ability in assisting the Company in implementing the best
corporate governance practices.

• Capability in exercising independent judgement to tasks where
there is potential conflict of interest •

• Commitment in fulfilling the director's obligations fiduciary
responsibilities.

The Board of Directors received all evaluations from each Director
including Board as a whole and its committee based on the above criteria, discussed
various points and all points are satisfactory, no further action is required. There were
no actions pending from the previous year observations. The detailed format of Board
evaluation is available in the website of the Company i.e. https://www.heritagefoods.in/
uploads/ investors/pdf/ 15870145475 Board_&_Director_Evaluation_Framework.pdf

Training of Independent Directors

Every new independent director of the Board attends an orientation
program. To familiarize the new inductees with the strategy, operations and functions of
your Company, the Executive Directors/Senior Managerial Personnel make presentations to
the inductees about the Company's strategy, operations, product and service offerings,
markets, organization structure, quality and risk management etc.

Appointment/Re-Appointment

Mr. Angara Venkata Girija Kumar (DIN: 02921377) has been appointed as a
Non-Executive Independent Director of the Company w.e.f. June 01, 2023, for a period of 5
consecutive years, the said appointment is due for approval by shareholders at this Annual
General Meeting.

The approval of members through special resolution was taken on April
29, 2022 for Continuation of directorship as per Regulation 17(1A) of SEBI (Listing
Obligations and Disclosure Requirements), Regulations 2015 of Dr. V Nagaraja Naidu (DIN:
00003730) as a Non Executive Director after attaining the age of 75.

In order to comply with the provisions of section 152 (6) of the
Companies Act, 2013 and rules applicable thereunder, the appointment of Mrs. N. Brahmani
(DIN: 02338940) Executive Director is liable to retire by rotation at this Annual General
Meeting, being eligible offers herself for re-appointment.

The above proposed retirement by rotation shall not alter any terms and
conditions with regard to remuneration, tenure of appointment and such other terms and
conditions relating to her appointment as an Executive Director of the company for a term
of five year (w.e.f. 01.04.2019) as approved by the Members of the Company by way of
postal Ballot and remote e-voting, the results of which were declared on March 12, 2019.

Retirements and Resignations

During the year under review, none of the Directors retired or resigned
from the Board.

Key Managerial Personnel

During the year under review, the Company is having the following
persons as Key Managerial Personnel.


  

    
Name of the Official
    
DIN/M. No
    
Designation
  
  

    
Mrs. N. Bhuvaneswari
    
00003741
    
Vice Chairperson & Managing Director
  
  

    
Mrs. N. Brahmani
    
02338940
    
Executive Director
  
  

    
Mr. A Prabhakara Naidu Mr. Umakanta Barik
    
FCA200974 FCS 6317
    
Chief FinancialOfficer Company Secretary& Compliance
    Officer
  
  

    
Dr. M Sambasiva Rao
    
-
    
President
  
  

    
Mr. Srideep Madhavan Nair Kesavan*
    
-
    
Chief Executive Officer
  




* Hereinafter referred as Mr. Srideep M Kesavan Committees of the Board

The Committees of the Board focus on certain specific areas and make
informed decisions in line with the delegated authority.

The following Committees constituted by the Board function according to
their respective roles and defined scope:

a) Audit Committee

b) Nomination and Remuneration Committee

c) Corporate Social Responsibility Committee

d) Stakeholders' Relationship Committee

e) Risk Management Committee

f) Management Committee

g) Rights Issue Committee

A detailed note on the Board and its committees is provided under the
Corporate Governance Report section in this Annual Report. The composition of the
committees and compliances, as per the applicable provisions of the Act and Rules, are as
follows:


  

    
Name of the Committee
    
Composition of the Committee
    
Highlights of roles and responsibilities
  
  

    
Audit committee
    
Mrs. Aparna Surabhi (C)
    
• All recommendations made by the audit committee during
    the year were accepted by the Board.
  
  

    

    
Mr. N Sri Vishnu Raju (M)
    

  
  

    

    
Mr. Rajesh Thakur Ahuja (M)
    
• Reviewing, with the management, the quarterly
    financial statements before submission to the Board for approval.
  
  

    

    
Mr. M P Vijay Kumar (M)
    

  
  

    

    

    
• Approval or any subsequent modification of
    transactions of the Company with related parties.
  
  

    

    
Dr. V Nagaraja Naidu (M)
    

  
  

    

    

    
• Reviewing, with the management, the performance of
    statutory auditors and internal auditors, adequacy of internal control systems, etc.
  
  

    
Nomination and Remuneration
    
Mr. N Sri Vishnu Raju (C) Mr. Rajesh Thakur Ahuja (M)
    
• The committee oversees and administers executive
    compensation, operating under a written charter adopted by our Board of Directors.
  
  

    
Committee
    
Mrs. Aparna Surabhi (M) Mr. M P Vijay Kumar (M)
    
• The nomination and remuneration committee has framed
    the nomination and remuneration policy.
  
  

    
Corporate Social Responsibility Committee
    
Mr. Rajesh Thakur Ahuja (C) Mr. N Sri Vishnu Raju (M) Mrs. N
    Bhuvaneswari (M)
    
• To formulate and recommend to the Board, a Corporate
    Social Responsibility (CSR) Policy indicating activities to be undertaken by the Company
    in compliance with provisions of the Companies Act, 2013 and rules made there under.
  
  

    

    

    
• To monitor the implementation of the CSR Policy of the
    Company from time to time
  
  

    
Name of the Committee
    
Composition of the Committee
    
Highlights of roles and responsibilities
  
  

    
Stakeholders
    
Dr. V Nagaraja Naidu (C)
    
• The committee reviews and ensures redressal of
    investor grievances.
  
  

    
Relationship Committee
    
Mr. N Sri Vishnu Raju (M) Mr. Rajesh Thakur Ahuja (M) Mrs. N
    Bhuvaneswari (M)
    
• The committee noted that all the grievances of the
    investors have been resolved during the year.
  
  

    
Risk Management
    
Mr. Rajesh Thakur Ahuja (C)
    
• The purpose of the committee is to assist the Board in
    fulfilling its
  
  

    
Committee
    
Mr. N Sri Vishnu Raju (M)
    
corporate governance with regard to the identification,
    evaluation & mitigation of operational, strategic and environmental risks efficiently
  
  

    

    
Mrs. Aparna Surabhi (M)
    
and effectively.
  
  

    

    
Mrs. N Bhuvaneswari (M)
    
• The Company has developed and implemented a risk
    management framework that includes identification of elements of risk, if any, which in
    the opinion of the Board may threaten the existence of the Company.
  
  

    
Management
    
Mrs. Aparna Surabhi(C)
    
• Setting the strategic direction to guide and direct
    the activities of the
  
  

    
Committee
    
Mr. N Sri Vishnu Raju (M)
    
organization;
  
  

    

    
Mr. M P Vijay Kumar (M)
    
• Ensuring the effective management of the organization
    and its activities; and
  
  

    

    
Mrs. N Bhuvaneswari (M)
    
• Monitoring the activities of the organization to
    ensure they are in keeping with the founding principles, objects and values.
  
  

    
Rights Issue
    
Mrs. N Bhuvaneswari (C)
    
• To appoint, negotiate fees/remuneration/expenses
    and/or any other
  
  

    
Committee
    
Mr. N Sri Vishnu Raju (M) Mrs. Aparna Surabhi (M) Mrs. N
    Brahmani (M)
    
charges and enter into arrangements with Merchant banker(s),
    legal advisor(s), Banker(s), depository, registrar, Auditors, printer(s), monitoring
    agency if required and any other intermediaries, agencies or persons as may be required or
    desirable for giving effect to completion of rights issue process;
  
  

    

    

    
• finalise the budget for expenses of the Rights Issue;
  
  

    

    

    
• To provide any document or data to the intermediaries
    for the purpose of Rights issue.
  
  

    

    

    
• approve and adopt the draft Letter of Offer, Letter of
    Offer, Application Form and such other as documents, as may be required for the Rights
    Issue, and file or submit the same with SEBI, stock exchanges and other concerned
    authorities and issue the same to the equity shareholders of the Company;
  
  

    

    

    
• settle any question, difficulty or doubt of stock
    exchange, SEBI or such other authorities, whether regulatory or otherwise, as may be
    necessary in relation to the Rights Issue and that may arise in connection with the Rights
    Issue;
  
  

    

    

    
• To do all acts, deeds, matters and things which they
    may, in their discretion, deem necessary or desirable for the purpose of the Rights Issue
    including any modification/correction thereof.
  




In addition to its Code of Conduct and Ethics, key policies that have
been adopted by the Company are as follows:


  

    
Name of the policy
    
Brief description
  
  

    
Whistle-blower Policy (Policy on vigil mechanism)
    
The Company has adopted the whistle-blower mechanism for
    directors and employees to report concerns about unethical behavior, actual or suspected
    fraud, or violation of the Company's code of conduct and ethics. It also provides for
    adequate safeguards against victimization of employees who availed the mechanism and also
    provides for direct access to the Chairperson of the Audit Committee.
  
  

    
Insider Trading Policy and Code of Practices and Procedures
    for Fair Disclosure of Unpublished Price Sensitive Information
    
The Company has adopted a Code of Conduct to Regulate,
    Monitor & Report Trading by Insiders and Code of Practices and Procedures for Fair
    Disclosure of Unpublished Price Sensitive Information as per the SEBI (Prohibition of
    Insider Trading) Regulation 2015, with a view to regulate trading in securities by the
    Directors and Designated Persons while in possession of unpublished price sensitive
    information in relation to the Company and during the period when the Trading Window is
    closed and other certain situations. All Board of Directors and the designated employees
    have confirmed compliance with the Code.
  
  

    
Policy and procedure of inquiry in case of leak or suspected
    leak of unpublished price sensitive information ("upsi")
    
The Policy aims to provide a framework for inquiry in case of
    leak or suspected leak of Unpublished Price Sensitive Information.
  
  

    
Nomination and Remuneration Policy
    
This policy formulates the criteria for determining
    qualifications, competencies, positive attributes and independence for the appointment of
    a director (executive / non-executive) and also the criteria for determining the
    remuneration of the directors, key managerial personnel and senior management of the
    Company.
  
  

    
Corporate Social Responsibility Policy
    
The policy outlines the Company's strategy to bring about a
    positive impact on Society through programs relating to hunger, poverty, education,
    healthcare, environment, relief, disaster management etc., as per the provisions of the
    Companies Act, 2013.
  
  

    
Policy for Determining Material Subsidiaries
    
The policy is used to determine the material subsidiaries and
    material non-listed Indian subsidiaries of the Company and to provide the governance
    framework for them.
  
  

    
Related Party Transaction Policy
    
The policy regulates all transactions between the Company and
    its related parties
  
  

    
Policy on Preservation of Documents
    
The policy deals with the preservation of corporate records
    of the Company.
  
  

    
Archival Policy
    
The policy deals with the retention and archival of corporate
    records of the Company.
  
  

    
Business Responsibility Policy
    
This Policy endorses the Company's commitment to follow
    principles and core elements, in conducting its business, as laid down in the National
    Voluntary Guidelines on Social, Environmental and Economic responsibilities of Business.
  
  

    
Dividend Distribution Policy
    
This Policy is to ensure the right balance between the
    quantum of Dividend paid and amount of profits retained in the business for various
    purposes
  
  

    
Policy on Determination of Materiality of Events
    
The Policy is to determine materiality of events or
    information relating to the Company and to ensure timely and accurate disclosure on all
    material matters concerning the Company.
  
  

    
Risk Management Policy
    
This policy sets out the objectives and accountabilities for
    the management of risk within the Company such that it is structured, consistent and
    effective
  
  

    
Anti-Sexual Harassment - Safe work environment policy
    
The policy aims at providing a safe work environment for
    women at workplace
  
  

    
Code of Conduct to Regulate, Monitor & Report Trading by
    Insiders
    
This code Regulates any kind of Insider Trading by designated
    persons
  




Insurance

All properties and insurable interests of the Company have been fully
insured. Your Company also insured all its employees and contract labour working across
the Company.

Remuneration of Directors, Key Managerial Personnel and Senior
Management

The remuneration paid to the Directors, Key Managerial Personnel and
Senior Management is in accordance with the Nomination and Remuneration Policy formulated
in accordance with Section 178 of the Act and Regulation 19 of the Listing Regulations.

The information required under Section 197 of the Act read with
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of
Directors/ employees of the Company is set out in the Annexure-2 [A&B] to this report.

Auditors' & Auditor's Report

Statutory Auditors:

As per Section 139 of the Companies Act, 2013 ('the Act'), read with
the Companies (Audit and Auditors) Rules, 2014, the Members of the Company at their 30th
Annual General Meeting held in the year 2022, approved the appointment of M/s. Walker
Chandiok & Co. LLP, Chartered Accountants (FRN 001076N/ N500013), as the Statutory
Auditors of the Company for a term of 5 years i.e. from the conclusion of 30th Annual
General Meeting till the conclusion of ensuing 35th Annual General Meeting of the Company.

The Audit reports dated May 25, 2023 (Standalone

UDIN: 23207660BGYCIF3613) (Consolidated UDIN:

23207660BGYCIG4682) issued by M/s. Walker Chandiok & Co. LLP,
Chartered Accountants, Statutory Auditors on the Company's standalone and consolidated
financial statements for the financial year ended 2022-23 is part of the Annual Report.
There has been no qualification, reservation or adverse remark in their Report.

Cost Auditor / Records

As your Company is dealing with Skimmed Milk Powder and Renewable
energy for captive consumption, which require to maintain the cost records. Your Company
has maintained all the required records as specified by the Central Government under
sub-section (1) of Section 148 of the Companies Act, 2013 and the appointment of Cost
Auditor is not applicable for your Company.

Secretarial Auditors and Secretarial Standards

The Secretarial Audit was carried out by Mrs. Savita Jyoti, Partner,
M/s. Savita Jyoti Associates, Practicing Company Secretary (CP No:1796, M.No.3738),
Hyderabad - 500094, Telangana for the financial year 2022-23. The report issued by the
secretarial auditor dated 14th April, 2023 (UDIN: F003738E000096325) is annexed in
Annexure-3 and forms integral part of the Board's Report. There has been no qualification,
reservation or adverse remark in their Report.

In terms of Section 204 of the Companies Act, 2013 read with the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Board of
Directors appointed Mrs. Savita Jyoti, Partner, M/s. Savita Jyoti Associates, Practicing
Company Secretary (CP No:1796, M.No.3738), Hyderabad - 500094, Telangana as the
Secretarial Auditors of the Company for the financial year 2023-24.

In terms of Regulation 24(A) of SEBI (Listing Obligation and Disclosure
Requirements) Regulation, 2015 as amended from time to time, the Company has obtained the
Secretarial Compliance certificate from Mrs. Savita Jyoti, Partner, M/s. Savita Jyoti
Associates, Practicing Company Secretary (CP No: 1796, M.No.3738), Hyderabad - 500094,
Telangana is annexed in Annexure-3(i) and forms part of the Annual Report and the same was
also intimated to the Stock Exchanges where the shares of the Company are listed.

Pursuant to Regulation 34(3) and Schedule V Para C clause (10) (i) of
the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Company has
obtained a certificate from Mrs. Savita Jyoti, Partner, M/s. Savita Jyoti Associates,
Practicing Company Secretary (CP No:1796, M.No.3738), Hyderabad - 500094, Telangana is
annexed in Annexure-3(ii) and forms part of the Annual Report and the same was also
intimated to the Stock Exchanges where the shares of the Company are listed.

Your Company has obtained a secretarial Audit Report of its wholly
owned subsidiary company namely Heritage Nutrivet Limited (CIN:U15400TG2008PLC062054) from
Mrs. Khusboo Laxmi Bhagat, Partner of M/s. KLB & Associates, Practicing Company
Secretary (CP No:14703, M.No.9376), Hyderabad- 500016, Telangana is annexed in Annexure-
3(iii) and forms part of the Annual Report.

Your Company is in compliance with all applicable Secretarial Standards
issued by the Institute of Company Secretaries of India, New Delhi for the financial year
ended March 31, 2023.

Internal Auditors

The Company has appointed external firms of Chartered Accountants
across India as internal auditors to conduct internal audit and to review internal
controls and operating systems and procedures as per the scope of the audit. The Internal
Audit Reports of the company are reviewed by the Audit Committee on monthly basis. The
Internal Auditors send the quarterly audit observations to the Company and the same were
presented quarterly by the lead internal auditor of the Company to the Audit Committee.
The Audit Committee along with Statutory Auditors and the management of the Company meets
all Internal Auditors

of the Company once in a year and review the internal controls and its
adequacy. The Board of Directors on recommendation of the Audit Committee
appoints/re-appoints the Internal Auditors every year in compliance with Section 138 of
the Act read with the Companies (Accounts) Rules, 2014. List of Internal Auditors is
provided in the corporate information section in the Annual Report.

Internal Audit & Control Systems

Internal audit and control systems play a crucial role in ensuring the
efficient and effective operation of organizations across various sectors. Internal audit
refers to the independent and objective examination of an organization's activities,
processes, and controls to assess their adequacy, reliability, and compliance with
relevant laws, regulations, and internal policies. The primary objective of internal audit
is to provide assurance to management and stakeholders that risks are identified, managed,
and mitigated appropriately.

Internal audit encompasses a wide range of activities, including
evaluating the effectiveness of internal controls, identifying areas of improvement,
assessing operational efficiency, detecting fraud and irregularities, and ensuring
compliance with legal and regulatory requirements. By conducting regular audits, internal
auditors help organizations identify potential weaknesses in their systems and processes,
allowing management to take proactive measures to address them.

Control systems, on the other hand, refer to the policies, procedures,
and practices put in place by management to safeguard assets, ensure accurate financial
reporting, and promote operational efficiency. These control systems aim to mitigate risks
and provide reasonable assurance that the organization's objectives are achieved.

The internal audit function is responsible for evaluating the design
and effectiveness of these control systems. Internal auditors assess whether the controls
are properly designed to mitigate risks and whether they are operating effectively in
practice. They conduct tests and reviews to identify control gaps, weaknesses, or
deviations from established policies and procedures. Based on their findings, they provide
recommendations to management for enhancing controls and improving processes, thus helping
the organization operate in a more efficient and risk-aware manner.

Effective internal audit and control systems contribute to better
governance, risk management, and internal controls within an organization. They provide
management and stakeholders with confidence that risks are managed appropriately,
financial information is reliable, and operations are conducted with integrity. By
continuously monitoring and evaluating controls, internal audit helps organizations stay
ahead of emerging risks, adapt to changing business environments, and enhance overall
performance and accountability.

Your Company has an Audit Committee consisting of Four Non-Executive
Independent Directors and one Non-Executive Director. The Audit Committee of the Board of
Directors and Statutory Auditors are periodically apprised of the internal audit findings
and corrective actions taken. The Audit Committee of the Board of Directors reviews the
adequacy and effectiveness of internal control system and suggests improvements if any for
strengthening them. Your Company has a robust Management Information System which is an
integral part of the control mechanism.

Listing and Custodian Fees

The equity shares of your Company are listed at BSE Limited, Mumbai and
National Stock Exchange of India Limited, Mumbai. The applicable annual listing fees were
paid before the due date. The annual custodian fees have also been paid to the
depositories before the due date.

Significant Material Orders Passed by the Regulators

There were no significant material orders passed by any
Regulators/Courts that would impact the going concern status of the Company and its future
operations.

Your Company has complied with all the Acts, Rules, Regulations and
Guidelines issued/prescribed by the Securities Exchange Board of India, Reserve Bank of
India, Ministry of Corporate Affairs and other statutory authorities.

Annual Return

The Annual Return as on March 31, 2023 as required under Section 92(3)
and Section 134(3)(a) of the Companies Act, 2013, will be hosted on the Company's website
(https://www. heritagefoods.in/annualreturn)

Internal Financial Control (IFC) and its adequacy

Your Company has adequate Internal Financial Controls as per Section
134(5)(e) of Companies Act, 2013, that commensurate with the size of the business and
nature of its operations, designed to provide reasonable assurance with regard to the
accuracy and completeness of the accounting records and timely preparation and provision
of reliable financial statements.

The Board has inter alia reviewed the adequacy and effectiveness of the
Company's internal financial controls relating to its financial statements.

Your Company has adopted necessary policies and procedures for ensuring
the orderly and efficient conduct of its business, including adherence to company's
policies,

the safeguarding of its assets, the prevention and detection of frauds
and errors, the accuracy and completeness of the accounting records, and the timely
preparation of financial information.

During the year, such controls were tested and no reportable material
weakness in the design or operation was observed by the consultant namely, CA JSS Sivarama
Prasad, Chartered Accountant (M No. 208735), and Kapasi Bangad & Co., Chartered
Accountant, (M. No. 202717) Hyderabad appointed by the Board of Directors of the company.

During the year no fraud by the Company or with the Company by its
officers or employees has been noticed / reported.

Declaration as per Section 134(3)(ca) of the Companies Act, 2013

During the year, the auditors have not reported any instances of frauds
committed by or against the Company by its Directors/Officers/ Employees to the Audit
Committee or Board under section 143(12) of the Companies Act, 2013 and rules made
thereof. Therefore no detail is required to be disclosed under Section 134 (3)(ca) of the
Act.

CEO & CFO Certification

The Vice Chairperson & Managing Director, Chief Executive Officer
and Chief Financial Officer of the Company have given annual certification on financial
reporting and internal controls to the Board in terms of Regulation 17(8) of the SEBI
(Listing Obligation & Disclosure Requirements) Regulation, 2015. Vice Chairperson
& Managing Director, Chief Executive Officer and Chief Financial Officer also give
quarterly certification on financial results while placing the financial results before
the Board in terms of Regulation 33(2) (a) of the SEBI (Listing Obligation &
Disclosure Requirements) Regulation, 2015. The annual certificates given by the
ViceChairperson & Managing Director, Chief Executive Officer and Chief Financial
Officer forms part of this Annual Report.

Corporate Social Responsibility (CSR)

Your Company has made Corporate Social Responsibility (CSR) an integral
part of its ethos and culture. Your company has constituted a Corporate Social
Responsibility Committee ("CSR Committee") in accordance with Section 135 of the
Companies Act, 2013. A robust system of reporting and monitoring has been put in place to
ensure effective implementation of planned CSR initiatives.

The CSR activities / projects as per the provisions of the Companies
Act, 2013 and rules made thereof, is undertaken directly by the Company or through a
registered trust or a registered society. During the Financial Year 2022-23 the CSR
Committee of the Board evaluated various options to

implement the CSR activities and decided to contribute the mandated CSR
amount to the following implementing Agency:


  

    
S. Name of the implement- no ing Agency
    
List of Activities
  
  

    
1. NTR Memorial Trust,
    
To carry out the activities
  
  

    
NTR Bhavan, Road
    
such as promoting education,
  
  

    
No. 2, Banjara Hills,
    
enhancing the vocational skill
  
  

    
Hyderabad -500034,
    
& supply of clean drinking
  
  

    
Telangana.
    
water, disaster management, relief and rehabilitation etc.
  




NTR Memorial Trust

NTR Memorial Trust is operating since 1997 towards the promoting and
preventive of health care of the needy groups, meeting the educational needs of
underprivileged students, advancing the concept of entrepreneurship and self-employment
and offering support and relief during disasters and lot more other initiatives for the
upliftment of the backward and needy population in the society.

The total CSR obligation of the Company for spending in FY 2022-23 was
Rs 30.36 million on ongoing/multiyear projects. The details of the CSR initiatives
undertaken by the Company on CSR activities during the year are set out in Annexure-4
forming part of the Board's Report in the format prescribed in the Companies (Corporate
Social Responsibility Policy) Rules, 2014.

These projects are in accordance with Schedule VII of the Companies
Act, 2013 and the Company's CSR Policy. The Policy is available at the Company's website
at www.heritagefoods.in.

Business Responsibility and Sustainability Report (BRSR)

Pursuant to regulation 34(2)(f) of SEBI (Listing Obligation and
Disclosure Requirements) Regulations, 2015, top 1000 listed entities based on their market
capitalisation as on 31st March every year, are required to submit their Business
Responsibility and Sustainability Report (BRSR) as a part of their Annual Report. The
Annual Report shall contain a Business Responsibility and Sustainability Report (BRSR)
describing the initiatives taken by the Company from an environmental, social and
governance perspective. BRSR has been designed as a tool to help companies understand the
principles and core elements of responsible business practices and start implementing
which reflect their adoption in the manner the company undertakes its business. Based on
the market capitalization of BSE as on March 31, 2023 your Company was in sl no. 876 under
top 1000 listed Company. In compliance with the regulation, the BRSR is provided in a
separate section and forms an integral part of this Report.

Energy Conservation, Technology Absorption & Foreign Exchange
Earnings & Outgo

The particulars as prescribed under Sub-section (3)(m) of Section 134
of the Companies Act 2013, read with the Companies (Accounts) Rules, 2014 are provided in
the Annexure-6 to the Board Report.

Transfer of Un-Claimed Dividends and Shares

Pursuant to Section 124(5) of the Companies Act, 2013 [Section 205C(2)
of the Companies Act, 1956] read with the Investor Education and Protection Fund Authority
(Accounting, Audit, Transfer and Refund) Rules, 2016 as amended from time to time the
unclaimed/ unpaid dividend amount of ^ 20,30,496 /- (Twenty Lakh Thirty Thousand Four
Hundred Ninety Six Only) for the year 2014-15 was transferred to the Investor Education
and Protection Fund during the financial year 2022-23.

In compliance with the provisions of Section 124 of the Companies Act,
2013, the Company has transferred 676 no. of equity shares belongs to 9 members of the
company to Investor Education and Protection fund Authority (IEPF) on November 16, 2022 of
those members who have not claimed the dividends for a continuous period of 7 years.

Pursuant to Section 124(5) of the Companies Act, 2013 [Section 205C (2)
of the Companies Act, 1956] read with the Investor Education and Protection Fund
(awareness and protection of Investors) Rules, 2001 as amended from time to time the
unclaimed/unpaid dividend and the shares thereof pertaining for the financial year 2015-16
shall be transferred to the Investor Education and Protection Fund during the financial
year 2023-24.

The information in respect of unclaimed/unpaid dividend & shares
thereto and the last date for claiming the dividend are given below:


  

    
Financial year ended
    
Date of Declaration of Dividend
    
Last date for claiming unpaid Dividend
    
Unclaimed/Unpaid Dividend as on
    March 31, 2023
  
  

    

    

    

    
Amount outstanding (? in Rupees)
    
No. of Shares
  
  

    
2015-16
    
19-08-2016
    
24-09-2023
    
17,10,513.00
    
5,70,171
  
  

    
2016-17
    
23-08-2017
    
27-09-2024
    
28,67,052.00
    
716,763
  
  

    
2017-18
    
30-08-2018
    
04-10-2025
    
14,62,160.00
    
7,31,080
  
  

    
2018-19
    
30-08-2019
    
04-10-2026
    
14,29,428.00
    
7,14,714
  
  

    
2019-20
    
28-08-2020
    
03-10-2027
    
16,39,023.50
    
5,00,471
  
  

    
2020-21
    
30-07-2021
    
03-09-2028
    
23,91,90700
    
5,52,238
  
  

    
2021-22
    
21-10-2021 (1st Interim Dividend)
    
25-11-2028
    
12,86,029.50
    
6,06,885
  
  

    
2021-22
    
29-07-2022 (Final Dividend)
    
02-09-2029
    
13,92,800.50
    
6,33,571
  




The voting rights on the shares outstanding shall remain frozen till
the rightful owner of such shares claim the shares. The company sends reminders to the
members concerned to claim the unclaimed and unpaid dividends & shares thereto before
they are transferred to the I EPF Authority as per the applicable provisions.

The members whose shares got transferred to IEPF Authority shall claim
the dividends and shares from IEPF Authority by submitting an online application in the
prescribed e-Form No. IEPF-5 available on the website www.iepf.gov.in and the procedure
prescribed thereon.

Mr. Umakanta Barik is the Nodal Officer who was appointed by the
Company under the provisions of IEPF.

Risk Management

Your Company have constituted a Risk Management Committee pursuant to
Section 134 (3) (n) of the Companies Act, 2013 & Regulation 21 of SEBI (Listing
Obligations & Disclosure Requirements) Regulations 2015, which has been entrusted with
the responsibility to assist the Board in (a) Overseeing and approving the Company's
enterprise risk management framework; and (b) Overseeing that all the risks that the
organization faces such as strategic, financial, credit, market, liquidity, security,
property, Information Technology, legal, regulatory, reputational and other risks have
been identified and assessed and there is an adequate risk management infrastructure in
place capable of addressing those risks.

The Committee had formulated a Risk Management Policy for dealing with
different kinds of risks which it faces in day to day

operations of the Company. Risk Management Policy of the Company
outlines different kinds of risks and risk mitigating measures to be adopted by the Board.
The Risk Management Procedure shall be reviewed by the Risk Management Committee and Board
of Directors on a half- yearly basis at the time of review of Financial Results of the
Company.

The policy is available in the Company website: www.
heritagefoods.in>Investor> policies

Policy on Sexual Harassment

The Company has always believed in providing a safe and harassment free
workplace for every woman working in Company's premises, through various interventions and
practices. The Company has adopted policy and constituted the Internal Complaint Committee
under Prevention of Sexual Harassment of Women at Workplace in accordance with the Sexual
Harassment

of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
as amended from time to time.

The Company has not received any complaints during the year. The
Company regularly conducts awareness programmes for its employees.

The following are the summary of sexual harassment complaints received
and disposed of during the year:


  

    
Sl No
    
Particulars
    
Status of the No. of complaints received and
    disposed off
  
  

    
1
    
Number of complaints on sexual harassment received
    
Nil
  
  

    
2
    
Number of complaints disposed off during the year
    
Nil
  
  

    
3
    
Number of cases pending for more than ninety days
    
Nil
  
  

    
4
    
Number of workshops or awareness programmes against sexual
    harassment carried out
    
The Company regularly conducts necessary
    awareness programmes for its employees
  
  

    
5
    
Nature of action taken by the employer or district officer
    
Nil
  




Vigil Mechanism policy

The Board of Directors of the Company had adopted the Whistle Blower
Policy in compliance with the provisions of Section 177 of the Companies Act, 2013 and
Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015. A mechanism has been established for employees to report concerns about unethical
behaviour, actual or suspected fraud, or violation of Code of Conduct and Ethics. It also
provides for adequate safeguards against the victimization of employees who avail of the
mechanism and allows direct access to the Chairperson of the Audit Committee in
exceptional cases. The Audit Committee reviews periodically the functioning of whistle
blower mechanism. No complaints have been received during the Financial Year ended March
31, 2023. No personnel have been denied access to the Audit Committee during the Financial
Year 2022-23.

The details of said vigil mechanism are given in Corporate Governance
Report, which forms part of this Annual Report. A copy of the Whistle Blower Policy is
available in the company's website i.e. www.heritagefoods.In.

Indian Accounting Standards (Ind AS)

The Company has adopted Indian Accounting Standards (Ind AS) with
effect from April 1, 2017 pursuant to Ministry of Corporate Affairs' notification of the
Companies (Indian Accounting Standards) Rules, 2015. The standalone and consolidated
financial statements of the Company, forming part of the Annual Report, have been prepared
and presented in accordance with all the material aspects of the Indian Accounting
Standards ('Ind AS') as notified under section 133 of the Companies Act 2013 read with the
Companies (Indian Accounting Standards) Rules 2015 (by Ministry of Corporate Affairs
('MCA')) and Regulation

33 of SEBI (Listing Obligations and Disclosure Requirements)
Regulation, 2015 as amended and relevant amendment rules issued thereafter and guidelines
issued by the Securities Exchange Board of India ("SEBI"). There was no revision
of Financial Statements (Standalone & Consolidated) and Board Reports during the year
under review.

Prevention of Insider Trading Code

As per SEBI (Prohibition of Insider Trading) Regulation, 2015 as
amended from time to time, the Company has adopted a Code of Conduct to Regulate,
Monitoring & Reporting of Trading by Insiders. The Company has appointed Mr. Umakanta
Barik, Company Secretary of the Company as Compliance Officer, who is responsible for
setting forth procedures and implementation of the code of conduct for trading in
Company's securities. During the year under review, there has been due compliance with the
said code.

Your Company is maintaining Structured Digital Database ('SDD'), the
database of unpublished price sensitive information (UPSI), shared internally or
externally, with the intent of keeping track as to who all were in the know of an UPSI
before it became public.

Acknowledgment and Appreciation

We, the Board of Directors, feel compelled to express our sincere
acknowledgment and heartfelt appreciation to the farmers, customers, consumers, investors,
bankers, vendors and all stakeholders who have played an invaluable role in our collective
success.

First and foremost, we extend our deepest gratitude to the farmers who
toil tirelessly to take-care of the milch animals and bring forth the bounties of nature.
Your unwavering commitment and dedication ensure a steady supply of high-quality milk that
form the foundation of our products. Without your labour and expertise, we would not be
able to deliver exceptional goods to our customers.

To our esteemed customers and consumers, we extend our utmost
appreciation. Your loyalty and trust in our brand inspire us to continuously improve and
exceed your expectations. Your invaluable feedback and support have guided us in refining
our products and services, ultimately enhancing the overall customer experience. We are
honoured to be a part of your lives and strive to consistently deliver excellence.

We would also like to express our gratitude to our investors for their
unwavering confidence in our vision and mission. Your financial backing and strategic
guidance have propelled our growth and enabled us to pursue innovation and expansion. Your
belief in our potential has been instrumental in transforming our ideas into reality, and
we remain committed to delivering sustainable returns on your investment.

To our esteemed bankers, we extend our sincere appreciation for your
trust and collaboration. Your unwavering support in providing financial solutions and
expertise has been instrumental in our operational efficiency and growth. Your partnership
has enabled us to navigate challenges and seize opportunities, and we are grateful for the
synergy we have cultivated together.

Last but not least, we would like to extend our heartfelt thanks to all
our stakeholders. Your collective efforts, dedication, and belief in our organization have
been the cornerstone of our achievements. We cherish the relationships we have built, and
we are committed to fostering open communication, transparency, and collaboration as we
move forward.

In conclusion, we wholeheartedly acknowledge and appreciate the
farmers, customers, consumers,vendors investors, bankers, and all stakeholders who have
contributed to our journey thus far. Your unwavering support and trust have been integral
to our success, and we look forward to continuing this partnership as we strive for new
heights together.


  

    

    
For and on behalf of HERITAGE FOODS LIMITED
  
  

    
Place : Hyderabad Date: May 25, 2023
    
N. BHUVANESWARI N. BRAHMANI Vice Chairperson & Managing
    Director Executive Director (DIN: 00003741) (DIN : 02338940)