Heritage Foods Limited | 31st Annual Report 2022-23

H e r i t a g e F o o d s L i m i t e d | 3 1s t A n n u a l R e p o r t 2 0 2 2 - 2 3 Dairy Excellence A Heritage of

Contents 02-44 Corporate Overview Forward-looking statements Some information in this report may contain forward-looking statements which include statements regarding Company’s expected fi nancial position and results of operations, business plans and prospects etc. and are generally identifi ed by forward-looking words such as “believe,” “plan,” “anticipate,” “continue,” “estimate,” “expect,” “may,” “will” or other similar words. Forward-looking statements are dependent on assumptions or basis underlying such statements. We have chosen these assumptions or basis in good faith, and we believe that they are reasonable in all material respects. However, we caution that actual results, performances or achievements could diff er materially from those expressed or implied in such forward-looking statements. We undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. 45-177 Notice Management Discussion & Analysis Business Responsibility & Sustainability Report Boards Report Corporate Governance Statutory Reports 178-312 Standalone Consolidated Financial Statements To view or download this report online, please visit: www. heritagefoods.in or scan the QR code About Us 02 Heritage Novandie Stakeholder engagement 16 20 149 Prioritising good governance 34 243 Business model 10 45 Maintaining a sharp focus on quality 26 Our strategic pillars Heritage Nutrivet 18 14 135 106 Empowering our human assets 30 178 Vice-chairperson & Managing Director ’s message 06 Key Financial Ratios 22 Portfolio of products 12 67 Relying on technology and product innovation 28 Executive Director ’s message 08 Sustaining an eff icient supply chain 24 Board of Directors 36 Corporate information 44 Awards and accolades 41 Nurturing environmental sustainability Fulfi lling our social responsibility 38 39 10 years fi nancial highlights 43 Financial highlights 42 Future road map 40

A Heritage of Dairy Excellence For more than 3 decades, we have not only stayed true to our values and mission, but also created a diversifi ed product portfolio, which supports dairy farmers, delights consumers and serves their nutritional requirements. The result is a strong and sustainable Heritage of dairy excellence. The strength of our business model lies in our technologically advanced R&D infrastructure, quality control mechanism, deeply entrenched distribution network and above all strong and long-lasting relationships with 300,000+ dairy farmers. Our strategic investments, over the years, to modernise our processing facilities and optimise our supply chain are translating into tangible business outcomes. In FY2022-23, we have accomplished outstanding topline growth rate. This sterling performance is a testament of our ability to navigate challenges and leverage market opportunities with a consumer-centric approach. We will continue to leverage technology both in our processing and distribution network, streamline processes and adopt best practices to deliver industry-leading value to our consumers and all other stakeholders.

About Us Heritage Foods is a leading Indian dairy company that is rapidly expanding with the goal of serving farming community. With the help of more than 300,000 dairy farmers, we are committed to providing high-quality dairy products to consumers. Since its inception in 1992, Heritage Foods has consistently demonstrated a commitment to deliver superior quality fresh milk and milk products to numerous households. While maintaining a strong market presence in the states of Andhra Pradesh, Telangana, Karnataka and Tamil Nadu, we are constantly expanding our footprint with diverse products. Our products are now available in 11 states. Our product range now includes diff erent types of milk, curd, buttermilk, butter, ghee, paneer, and a variety of valueadded dairy products such as ice cream, fl avoured milk, lassi etc. We have earned a reputation for assuring the quality of products and we take great pride in adhering to strict hygiene standards for processing and packaging of our food products. Our technologically advanced R&D infrastructure, with stringent quality control measures, continue to benefi t our operational processes. Besides, our distribution network is supported by cutting-edge processing facilities spread across 11 states in India. We also have a presence in the renewable energy sector and have successfully established wind & solar power projects. Vision Delighting every home with Fresh & Healthy products and empowering the Farmer Legacy of providing superior quality products 31 years households served daily with healthy and fresh dairy products 1.5 million Heritage Foods Limited | 31st Annual Report 2022-23 02

To be a nationally recognised brand for Healthy and Fresh products with a revenue of INR 6000 Crores To anticipate, understand and respond to our customers’ needs by creating highquality products and making them available through innovative and convenient channels To embrace the right technology to delight our customers Advocating the balancing of economic, social and environmental aspects to create a better tomorrow Empowering the farmer community through our unique ‘Relationship Farming’ Model Be the Employer of Choice by nurturing entrepreneurship and promoting empowerment, alongside transparency Mission 03 About Us | Corporate Overview

About Us Key Highlights Operational highlights Technology integrated network Distribution networks Renewable energy installed capacity 10.50 MW State-of-the-art milk processing facilities 18 Milk procurement representatives 11300+ Heritage happiness points 146 Installed capacity of solar power 4.20 MW million litres milk chilling capacity per day 2.21 Heritage parlours 859 million litres milk processing capacity per day 2.65 Distribution vehicles across 11 states 1900+ Retail outlets 130,000+ Installed capacity of wind power 6.30 MW bulk coolers, mini chilling & chilling centres 201 Distributors deliver Heritage products daily to consumers’ doorsteps 6500+ Modern retail chains across India 27 Heritage Foods Limited | 31st Annual Report 2022-23 04

Growing presence Our geographic reach continues to expand further on the back of our strong distribution facilities that help to improve milk sourcing and increase the sale of milk and milk products. Milk & Milk Products sold in 11 diff erent states. Milk is procured from 9 states 05 About Us | Corporate Overview

Vice-chairperson & Managing Director’s message N. Bhuvaneswari Vice-Chairperson & Managing Director Our success in driving topline growth can be attributed to several key factors. Firstly, we have continued to focus on expanding our product portfolio and enhancing our existing offerings to meet the evolving needs and preferences of our consumers. Heritage Foods Limited | 31st Annual Report 2022-23 06

Dear Shareholders, I hope this message fi nds you in good health and high spirits. I am delighted to share with you the exciting news of Heritage Foods Ltd.’s remarkable performance in the fi nancial year 2022-23. Our Company has delivered substantial top-line growth, and I am pleased to report that we have achieved exceptional results. First and foremost, I would like to express my gratitude to each and every one of you for your unwavering support and confi dence in Heritage Foods. It is your trust and belief in our vision that has propelled us to new heights and enabled us to achieve such impressive growth. In FY2022-23, your Company witnessed a signifi cant increase in revenue, resulting in an outstanding top-line growth rate. We have not only met, but also exceeded our targets, demonstrating our ability to navigate challenges and seize opportunities in the market. This exceptional performance is a testament to our strong business fundamentals, strategic initiatives, and the hard work and dedication of our talented team. Our success in driving top-line growth can be attributed to several key factors. Firstly, we have continued to focus on expanding our product portfolio and enhancing our existing off erings to meet the evolving needs and preferences of our consumers. This consumers-centric approach has allowed us to capture new market segments and drive increased sales. Moreover, we have invested signifi cantly in modernizing our processing facilities and optimizing our supply chain. These investments have not only improved operational eff iciency, but also enabled us to scale our operations to meet the growing demand. By leveraging technology and adopting best practices, we have been able to streamline processes, reduce costs and deliver superior value to our customers. In addition, our unwavering commitment to quality and food safety has played a pivotal role in our success. We understand the importance of delivering products that meet the highest standards and we have implemented stringent quality control measures across our operations. This focus on quality has not only strengthened our brand reputation but also fostered consumer loyalty and trust. Looking ahead, we remain committed to our growth trajectory and are confi dent in our ability to capitalize on future opportunities. We will continue to invest in research and development, innovation, and marketing initiatives to drive sustained growth and expand our market reach. Our goal is to further enhance our competitive position and deliver long-term value to our stakeholders. As we celebrate this exceptional achievement, it is important for us to acknowledge the relentless eff orts and dedication of our entire workforce. Their commitment to excellence, resilience, and ability to adapt to changing market dynamics have been instrumental in our success. I extend my heartfelt appreciation and gratitude to each and every member of the Heritage Foods family. I would like to express my gratitude to our esteemed shareholders for their unwavering support and confi dence in Heritage Foods. Your trust and belief in our vision have been instrumental in our journey forward. We remain deeply committed to creating sustainable value for all our stakeholders. In conclusion, I would like to express my sincere gratitude once again to our shareholders for their unwavering support and trust. The remarkable top-line growth achieved by Heritage Foods in the fi scal year 2022-23 is a testament to our collective eff orts and strong foundation. We are committed to delivering sustainable value and long-term growth, and we look forward to embarking on this journey with your continued support. Warm regards, N. Bhuvaneswari Vice-Chairperson & Managing Director 07 Vice-chairperson & Managing Director ’s message | Corporate Overview

Executive Director’s message Dear shareholders, It is an absolute pleasure for me to look back on the year gone by gathering strength from a robust business model and an innovative approach to capitalise on new and emerging opportunities, we continue to lead Heritage as a progressive brand. Despite the challenging business environment, mostly on account of economic uncertainty, our Company has continued to thrive amidst diff iculty. Our commitment to quality and excellence encourages us to sustain our position as a leader in the dairy industry. With growing consumer awareness about health and fi tness, the consumption of dairy products have increased signifi cantly over the years. Along with quality concerns, consumers are now seeking value added dairy products to fulfi l their nutritional needs. At Heritage, we strive to provide superior quality, nutrient-enriched dairy products to our customers through continuous innovation and a strong emphasis on operational excellence. Throughout the year, we worked to add value to our product portfolio by investing in technologically advanced R&D infrastructure and consistently expanded our distribution network. Over the years, Heritage’s milk and products have been consumers favourites, our range of value-added products has been a primary growth driver. We continued on our path to add innovative and unique value-added products. During the year the company launched several new products in the ‘drinkable and ice-cream’ category to further enrich our product portfolio. We are also planning to broaden our geographical footprint and penetrate deeper into metropolitan cities. At present, we have sales networks in 11 Indian states and are expanding into several towns and semi-urban areas. I’m delighted to share that our company’s credit rating has been revised from A to A+, a testament to our commitment to create value for all our stakeholders and investors. Furthermore, we have a subsidiary company namely, Heritage Nutrivet, which focuses on caring for the nutrition of cattle and it will also be a trusted brand for procuring livestock feed. Along with a focus on expanding our distribution network, we have been strengthening our brand through our omni channel presence in retail trade and improvement of Heritage owned networks. To strictly adhere to the highest standards of quality, we continue to invest in state-of-the-art machinery and product innovation. Moreover, to improve our logistics facilities, we are using latest technology for route planning and it has helped us to lower transportation costs considerably. We continued on our path to add innovative and unique value-added products. During the year the company launched several new products in the ‘drinkable and ice-cream’ category to further enrich our product portfolio. Heritage Foods Limited | 31st Annual Report 2022-23 08

Resting on our digital capabilities, we aim to provide 24/7 service to consumers through our digital platforms. Additionally, we recently launched the Heritage VET+ app, which has helped numerous farmers to avail knowledge about animal care, feeding activities and disease awareness. We have strengthened our balance sheet by turning debt-free and having a healthy cash balance, which is consistent with our fi nancially responsible strategy. In the face of unexpected macroeconomic challenges, our tactics have shown to be successful. We are confi dently focusing on diversifying our product off ering as we move forward. We registered a net revenue of H32,087 million compared to H26,429 million in the previous fi nancial year. Our EBITDA and PAT stood at H1,449 million and H659 million. With a strategic roadmap for success, Heritage Food remains poised for long-term growth. Our emphasis on innovation, quality, and sustainability continue to be our guiding light. Besides, our dedicated and talented workforce continue to strengthen the foundation of the organisation and empower it to accomplish diff icult milestones. I would like to express my gratitude to our shareholders, farmers, distributors, customers, and our employees for their relentless support and belief in our company. We are excited to meet your expectations with prudent performances in the years ahead. N. Brahmani Executive Director N. Brahmani Executive Director 09 Executive Director ’s message | Corporate Overview

Business model Pivoted on a sound value-creation approach Our Resources Inputs Process Our fi nances Our Vision What we do Our main stakeholders Our Mission Our Human Resource Our Manufacturing facilities Our suppliers/ distributors partners Sales & distributions Consumers reach Consumers Farmers Our technology enabled process Our relationships J7,367 mn net worth J8,292 mn gross assets 3,212 permanent employees 3,136 on temporary/contractual basis 2.65 MLPD Milk Processing Capacity 18 state-of-the-art Milk Processing Plants 6,500+ distributors 11,300+ Milk Procurement Representatives J10.88 mn R&D expenditure +1.5 Mn Households served daily 300,000+ dairy farmers engaged for milk procurement across 8 states in India Heritage Foods Limited | 31st Annual Report 2022-23 10

Output SDG Our core Values J32,087 mn turnover J659 mn PAT 221 employees covered under Career development programmes Presence across 16 e-commerce platforms 146 Heritage happiness points 859 Heritage parlours Milk procurement Collection centres Processing/ chilling centres Employees Communities Investors Present in 0.13 million general trade 1,900+ distribution vehicles across 11 states Adoption of advanced technology to fortify its network Direct payments are made to maintain transparency An average of 1.59 million liters per day of raw milk procured 11 Business model | Corporate Overview

Portfolio of products Milk Value added products Toned milk Curd UHT milk Lassi A2 full cream milk Sweets Standardized milk Butter milk Cow milk Milk shakes Paneer Whey drink Double Toned milk Flavoured milk Full cream milk Slim milk Cold coff ee Cheese Heritage Foods Limited | 31st Annual Report 2022-23 12

Fat products Ice cream Tubs Cow ghee Cones Table butter Family packs Bars Cooking butter Cups Fresh cream Kulfi Buff alo ghee Juicy bar Hi Aroma Ghee 13 Portfolio of products | Corporate Overview

Technical support is provided for creating awareness amongst dairy farmers for improving milk productivity and profi tability Heritage Nutrivet Heritage Nutrivet Limited (HNL) is our Wholly-owned subsidiary which provides livestock feed and feed supplements to dairy farmers. It also improves the health of livestock and enhances milk yield of cattle. 0.3 million farmers are served across Andhra Pradesh, Telangana, Karnataka, Tamilnadu, Haryana, Maharashtra, Odisha, Uttar Pradesh, Punjab and Rajasthan We aim to provide costeff ective dairy farming solutions to farmers Dairy cattle feed, Heritamin, Heritavit, HeritaCal and Heritaliv are innovatively engineered to serve the unique needs of livestock We have state-of-the art manufacturing facilities at Hindupur, Mallavali and Andhra Pradesh Heritage Foods Limited | 31st Annual Report 2022-23 14

Cattle feed products Feed supplements and veterinary medicine Fish Feed products Fish Feed Suppliments Products Dairy powder cattle feed Daily supreme cattle feed Herita Cal Herita Vit - C Herita - Liv Heritage Bypass cattle feed Heritage Milk Gold cattle feed Heritage milk magic cattle feed Heritage Bypass+ cattle feed Dairy milk rich cattle feed Dairy Bypass cattle feed Heritage Gomitra plus cattle feed Heritage Gomitra cattle feed Herita Vit Herita CalL Herita Liv Heritafen Plus Herita Min Herita CalG Floating Fish Feed Sinking Fish Feed 15 Heritage Nutrivet | Corporate Overview

Heritage Novandie Heritage Foods has formed a joint venture with Novandie, France to meet changing consumer preferences and off er value added products like fl avoured yoghurt and other dairy products. Entered a 50:50 partnership with French group, Andros to leverage the brand value of Novandie and introduce new-age products to the Indian market. We prioritise robust quality control of ingredients and processes, aided by our state-of the-art manufacturing facilities. Targeting Indian consumers who seek the perfect blend of health, taste and nutrition. Our supply chain ensures competitive pricing, adherence to premium packaging standards and maintenance of localised supply chains for sustaining a larger distribution network and quality assurance. Heritage Foods Limited | 31st Annual Report 2022-23 16

Products Stirred fruit yogurt We invest all of our expertise and creativity with a touch of quirkiness and exuberance towards awakening your taste buds. Our creamy yoghurt with chunky fruit bits can be enjoyed for breakfast, lunch, a late-afternoon snack, or as a guilt-free dessert. Yo Pop Drinkable Yogurt This range of fl avoured drinking yogurt is innovated exclusively for the Indian market. The Yo Pop range consists of a 125 ml serving of smooth, delicious and chilled fl avoured drink that can be gulped down to feel energised and refreshed. Natural French Yogurt This creamy, rich, natural french probiotic yogurt contains zero preservatives. This natural yoghurt provides consumers with numerous probiotic health benefi ts, making it a great standalone product for consumption or as a kitchen ingredient. French Yogurt (strawberry) French Yogurt (Lychee) French Yogurt (Blueberry) French Yogurt (Mango) Yo PoP (Pina Colada) Yo PoP (Banana) Yo PoP (Vanilla) Yo PoP (Mango) 17 Heritage Novandie | Corporate Overview

Quality Excellence E2E Technology Eff icient Supply Chain High Performance team Our strategic pillars Consumer Centricity Heritage Foods Limited | 31st Annual Report 2022-23 18

19 Our strategic pillars | Corporate Overview

Stakeholder engagement Fostering clear communication of ideas Stakeholders Employees Shareholder and investors Consumers Importance Channel of engagement We consider it essential to eff ectively engage with our stakeholders to analyse developments in the market, consumer concerns and expectations and identify opportunities. It also prepares us to mitigate threats and refi ne our operating metrics to deliver appropriate solutions. By involving stakeholders including employees, suppliers, consumers, investors, and policymakers in our decision-making process, we strive to ensure sustainable management and development of Heritage Foods. We ensure that employees are completely aligned to the core principles of Heritage Foods and we promote a culture that rewards ethical practices, encourages meritocracy and performance. A clear channel of communication with shareholders or investors enables us to lay a solid foundation for our long-term success. We aim to gather valuable insights about consumer preferences, needs and expectations through stakeholder engagement activities. Direct communication, through email, townhall interactions Email Website, Newspaper advertisements, stock exchange intimations, annual/ quarterly fi nancial results and investor meetings and conferences Exclusive Heritage parlours, Happiness points, e-commerce platforms and other modern retail chain. Heritage Foods Limited | 31st Annual Report 2022-23 20

Regulators Vendors and suppliers Communities and NGOs Regulators play an important role in our success as they encourage us to abide by the highest standards of safety, quality, and authenticity of our products. Vendors and suppliers are important stakeholders who ensure regular supply of raw material, equipment and services needed to produce, process, and distribute the products. Engagements with communities and nonprofi ts demonstrate our relentless pursuit for cultural preservation, social responsibility, and sustainability. Emails, one on one meetings con-calls, video conference Heritage happiness points and strong omni channel presence Directly through our CSR activities or through NTR Trust 21 Stakeholder engagement | Corporate Overview

Current ratio Debt equity ratio Debt Service coverage ratio Return on equity ratio/ investment ratio Inventory turnover ratio 1.44 0.22 14.26 9.43 9.28 Key Financial Ratios Heritage Foods Limited | 31st Annual Report 2022-23 22

HERITAGE OF DAIRY EXCELLENCE RELIES ON SUPPLY CHAIN EFFICIENCY, QUALITY ENHANCEMENT, TECHNOLOGY AND INNOVATION AND THE DYNAMISM OF OUR PEOPLE. Trade receivables turnover ratio Net Profi t Margin (%) Return on capital employed Trade payables turnover ratio Net capital turnover ratio 139.86 2.05% 10.60 57.92 24.04 23 Key Financial Ratios | Corporate Overview

Sustaining an efficient supply chain We have a strong supply chain management procedure that integrates advanced technology to optimise the supply chain and meet the changing needs of our consumer. Our continuous coordination and collaboration with stakeholders via technology assisted platforms help us in improving our visibility across the entire supply chain. Heritage happiness points Our happiness points help to deliver high-quality dairy products to customers’ doorsteps while adhering to strict quality and safety standards. The exclusive distribution wings sell the entire Heritage product range including milk, milk products, ice-cream/frozen dessert and drinkables etc. Heritage Foods Limited | 31st Annual Report 2022-23 24

Heritage parlours Retail trade Heritage Foods parlours have become a popular destination for people looking for highquality, nutritious, and hygienic dairy products and snacks. Our parlours sell a variety of dairy products and snacks including milk, curd, buttermilk, ghee, paneer and ice creams. General trade Modern retail chain e-commerce websites sell Heritage products 0.13million 27 16 Heritage Parlour 25 Sustaining an efficient supply chain | Corporate Overview

Maintaining a sharp focus on quality Heritage Foods Limited | 31st Annual Report 2022-23 26

Heritage Foods has earned the reputation of delivering some of the fi nest dairy products in the country. In order to maintain consistent quality and freshness of products, we lay great emphasis on the quality control process. From employing the best manufacturing and dairy processing techniques to adhering to stringent quality parameters, we are dedicated to sustain the highest standards of quality. 27 Maintaining a sharp focus on quality | Corporate Overview

Relying on technology and product innovation Technology Clapp VET+ DMS ZOHO SAP At Heritage, we strive to embrace technology to enhance our business operations and ensure eff iciency, quality control, exceptional customer service and sustainability. We are a technology-enabled business that is equipped to handle varied tasks including sales, maintaining connections with distributors, delivering dairy products to customers’ doorsteps, helping dairy farmers, and monitoring of employee performance through our digital platforms. The technology driven platforms introduced by Heritage Foods are: Customer Live Application (CLAPP) help employees at Heritage DIGIT Centres to streamline sales and costs. A one-stop shop for dairy animal management, Heritage VET+ focuses on educating and empowering dairy farmers by off ering remote primary veterinary care, information on nutrition and best practices in dairy management. Distributor Management System was created to streamline the primary and secondary sales process from the agent level to the counter sales level. A Digital Performance Module towards evaluate employee’s performance simpler, transparent and more eff icient. The SAP software provides multiple business functions with a single view of the truth. This helps us better manage complex business processes by giving employees of diff erent departments easy access to real-time insights across the enterprise. Heritage Foods Limited | 31st Annual Report 2022-23 28

Product innovation Recent product launches We have more than three decades of experience in the dairy industry and are renowned for our premium milk and milk products. We realise the importance of product innovation to sustain in a competitive market where customer preferences are constantly changing. It empowers us to off er cutting-edge, value-added products that satisfy customer expectations. Heritage Rasgulla Heritage Gulab Jamun Matka Kulfi Mawa Kulfi Paan Kulfi Gulkand Kulfi Ice Lolly –Kala Khatta Ice Lolly – Gol Gappa Heritage Creamilicious Curd Heritage GlucoShakti – Lemon, Orange, Pineapple Heritage Badam Charger (new formulation & Pack graphics) A-One Spiced Buttermilk in UHT Pack Cookies & Cream Milkshake Chocolate & Caramel Milkshake 29 Relying on technology and product innovation | Corporate Overview

Empowering our human assets At Heritage Foods, we believe that our people are our greatest asset. We are proud of our diverse and talented workforce that comprise individuals from diff erent backgrounds and with varying skill sets. Our employees are passionate about the work they do and are committed to delivering the highest standards of quality and customer service. With a focus on employee engagement, development, and empowerment, we strive to create a culture of excellence and inclusivity that fosters innovation, collaboration, and growth for all. During the year, we have implemented transformative HR and talent management initiatives. These initiatives implemented have had a profound impact on creating a thriving work environment, nurturing employee growth and development, and enhancing overall productivity. We digitise the employee experience, foster a culture of recognition and career development, promote an open off ice culture, strengthen core functions through specialised training, measure employee engagement through Gallup surveys, and introduce new KPIs and productivity assessment methods. Streamlining HR processes through digitalisation Streamlining HR processes has been a top priority for us, leading to a digital transformation journey aimed at enhancing the entire employee life cycle. Through the implementation of ‘HR ZOHO’ software and automation tools, we have signifi cantly improved eff iciency and accuracy in areas such as recruitment, onboarding, performance management, and off boarding. This digitisation initiative has not only reduced administrative burdens but also enhanced the overall employee experience. Star and ambassador recognition To celebrate the contributions of star performers and foster a culture of appreciation, we launched the ‘Star and Ambassador Recognition’ program. This initiative allows employees to nominate their peers for outstanding achievements and showcases their accomplishments through various channels. By recognising exceptional talent, we aim to instil a sense of pride and motivation throughout the organisation. Heritage Foods Limited | 31st Annual Report 2022-23 30

Recognising the importance of nurturing employee growth, we introduced comprehensive Career Development Planning. This initiative provides employees with personalised roadmaps for skill development, goal setting, and advancement within the organisation. Through regular 1:1 and coaching sessions, as well as targeted training opportunities, we empower our employees to shape their career trajectories. To build eff ective relationships and drive success, we implemented specialised training programs focused on developing employees’ emotional intelligence skills. We introduced on-the-job training (OJT) programs tailored to core specialised functions such as sales, distribution, and procurement. These initiatives aim to enhance employees’ competencies and equip them with the necessary tools to excel in their roles. Career development planning Emotional intelligence training and OJT for core specialised functions 31 Empowering our human assets | Corporate Overview

To drive organisational performance and ensure alignment with strategic objectives, we have introduced new Key Performance Indicators (KPIs) and productivity assessment initiatives. These metrics provide clear guidelines for measuring individual and team performance, fostering a culture of accountability and continuous improvement. By tracking progress To build a culture of transparency, collaboration, and innovation, we actively promote an open off ice culture where ideas fl ow freely and employees feel comfortable expressing their opinions. Initiatives such as town hall meetings, cross-functional project teams, and employee feedback forums encourage open communication, break down silos, and nurture a sense of belonging. New KPI and productivity assessment initiatives Fostering an open office culture Diversity & inclusion Diversity and inclusion are fundamental principles that direct how we manage talent, provide customer service, and engage with the community. We believe, having a diverse and inclusive workplace is crucial for our long-term success. We are dedicated to creating a culture that values and respects diff erent perspectives and fosters a collaborative working environment. At Heritage, we look forward to develop a workforce that represents the communities we serve and respond to their needs by encouraging fairness, inclusivity and equal opportunity. Female employees Male employees 62 3150 and setting ambitious goals, we aim to enhance productivity, optimise operational eff iciency, and deliver exceptional results. Heritage Foods Limited | 31st Annual Report 2022-23 32

Training and development We recognise the importance of constant skill development and training to create a future-ready workforce. With the availability of necessary tools, resources and opportunities, we seek to off er opportunities that enable individuals to succeed in their roles and accomplish career development goals. Our emphasis on a culture of continuous learning is expected to drive innovation, increase productivity, and provide superior value to our customers and stakeholders alike. Skilled Development Programs Conducted Participants in Training Total Training hours 5 2457 41180 33 Empowering our human assets | Corporate Overview

Prioritising good governance Heritage Foods is dedicated to establishing a comprehensive corporate governance strategy that acknowledges and safeguards the interests of shareholders, creditors, employees and all other stakeholders. We adhere to regulatory guidelines and strive to propagate ethical practices and transparency across the organisation. Quality Business ethics Keeping quality and safety fi rst, our factories are ISO 45001:2018 certifi ed, as per the standards set by the ‘Safety and Health Management system.’ We are also ISO 14001:2015 certifi ed, as per the guidelines set by the environment management system. We intend to treat our stakeholders and the environment with decency, fairness, and responsibility. Our emphasis on business ethics is likely to ensure long-term success and a positive market reputation. Heritage Foods Limited | 31st Annual Report 2022-23 34

Responsible sourcing Insider trading Data protection We focus on sustainable sourcing from farmers. It allows us to obtain raw material from farmers who engage in organic farming and environment-friendly practices. We adopted a Code of Conduct to control, monitor, and report trading in the Company’s securities in accordance with the provisions of the SEBI (Prohibition of Insider Trading) Regulations, 2015 (SEBI). Additionally, we adopted the Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information. Heritage Foods adheres to strict laws and regulations that govern the protection of personal data. We protect the interests of our customers and employees by implementing a comprehensive data protection policy. 35 Prioritising good governance | Corporate Overview

Board of Directors Growing with visionary leadership The Board of Directors at Heritage Foods plays a critical role in shaping the strategic direction of the company and ensuring its long-term success. Comprising experienced and accomplished professionals from diverse backgrounds, the Board brings a wealth of expertise and knowledge to the table. Non-Executive Independent Director Non-Executive Independent Director DIN: 00025063 DIN: 00371406 DIN: 01641633 DIN: 05170323 Mr. Rajesh Thakur Ahuja Mr. N Sri Vishnu Raju Graduated from Pune University Engineering College with a degree in Production Engineering. He completed the Owner President Management Program at Harvard University in the United States. In 1993, he founded Silver Line Wire Products as a manufacturer of plastic-coated wire products for household use. Graduated from Osmania University with a Bachelor ’s degree in Chemical Engineering. He is also a Harvard Business School alumnus who completed the OPM programme. He is the Founder, Chairman, and CEO of the EXCIGA Group. He has held several positions, including Founder and President of the Entrepreneurs Organization, Hyderabad, President of the CII’s (Confederation of Indian Industry) Young Indians, Hyderabad Chapter, and Member of the CII State Council. Non-Executive Independent Women Director Mrs. Aparna Surabhi Graduated from Bombay University with a Bachelor ’s degree in both commerce and law and has been a member of the Institute of Chartered Accountants of India (ICAI) since 1991. She has more than thirty years of experience handling various types of audits and has served as a consultant for numerous start-up businesses. Non-Executive Independent Director Mr. M P Vijay Kumar Is a Fellow Member of the Institute of Chartered Accountants of India (ICAI), the Institute of Cost and Management Accountants of India (ICMA), and the Institute of Company Secretaries of India (ICSI), with more than thirty years of experience. He also serves as a Member on the IFRS Interpretation committee of International Accounting Standards Board and IFRS Advisory Council of the IFRS Foundation, London. He served as Council Member of ICAI (2016-2022), was Chairman of Accounting Standards Board and Ex Off icio Member of NFRA (2019-2022). He was a member of MCA, SEBI and the CFO Forum in CII. He was awarded the Business World CFO of the Year for 2021 and among 100 most infl uential CFO’s in India by CIMA. Audit Committee Nomination & Remuneration Committee Stakeholders Relationship Committee Risk Management Committee Board Committees Chairman Member C M Corporate Social Responsibility Committee Management Committee Rights Issue Committee M M M C C M M M M M M M C M M C M M M C Heritage Foods Limited | 31st Annual Report 2022-23 36

DIN: 02921377 DIN: 00003730 DIN: 00003741 DIN: 02338940 Additional Director (Non-Executive Independent Director) Mr. A V Girija Kumar Non-Executive Director Dr. V Nagaraja Naidu Vice Chairperson/ Managing Director Mrs. N Bhuvaneswari Executive Director Mrs. N Brahmani Commerce Graduate, MBA, AIII and a Member of Financial Services Institutions Bureau under Ministry of Finance, Govt. of India. Former Chairman and Managing Director of Oriental Insurance Co. Ltd and held various positions in insurance sectors in India and outside India, also served as Independent Director in conglomerates and having more than forty years of experience. Postgraduate degree in commerce as well as a doctorate in fi nancial management. He began his career in 1972 at the Administrative Staff College of India in Hyderabad, and has held various positions in prestigious universities such as Professor, Dean Director, and Professor of Finance and Business Economics at the Postgraduate and Doctorate levels. For about ten years, he was the Registrar (Administrative Head) of the Dr. B R Ambedkar Open University. Dr. Naidu served as the Company’s Wholetime Director/Managing Director from 1995 to 2007 and is wellversed in the dairy industry. Bachelor of Arts and is a dynamic leader who has a vast business experience. Her leadership has been successful in guiding Heritage Foods. She is associated with Heritage Foods since 1994. She directs and keeps an eye on the overall operations of the Company. Graduated with a Bachelor of Science in Electrical Engineering from Santa Clara University in California and a Master of Business Administration from Stanford University. She holds a degree in communication engineering from Chaitanya Bharathi Institute of Technology in Hyderabad, India. She is associated with Heritage Foods since 2011. M C M C M M M M 37 Board of Directors | Corporate Overview

Nurturing environmental sustainability Heritage is deeply committed to promoting environmental sustainability and minimising its ecological impact. We contribute to the well-being of our stakeholders and the communities in which we operate by taking a holistic approach to sustainability. To reduce our dependence on fossil fuel, we are also continuously investing in renewable energy and strive to minimise our carbon footprint. We are supplying energy from on-site wind and solar power plants at 11 diff erent facilities, including Bangalore in Karnataka, Battiprolu, Bobbili, and Madanapalli in Andhra Pradesh, Kalluru and Mulugu in Telangana, and Sangvi in Maharashtra. Our wind power facilities are located in Chinahothur, Vajrakarur, and Beluguppa in the Ananthapur District of Andhra Pradesh. Renewable energy The Company being a responsible corporate citizen invested 452 Million till March 2023 under Green initiatives and 10.50 MW power is getting generated through renewable energy (Solar & Wind). About 55% of total electricity consumption is met through renewable energy sources. Installed capacity of solar power Installed capacity of wind power 4.20 MW 6.30 MW Heritage Foods Limited | 31st Annual Report 2022-23 38

Fulfilling our social responsibility Heritage fi rmly believes in contributing to the community and aims to make a positive diff erence to the society at large. To fulfi l our responsibilities towards marginalised communities, we engage in numerous corporate social responsibility initiatives that aspire to improve lives. We want to make communities stronger and more resilient by promoting cultural diversity, economic development, sustainable food systems, social connection, and health and well-being. We also work for the welfare of dairy farmers through our Heritage Farmers Welfare activities (HFWA). Over the past years, we have worked with numerous farmers to improve dairy productivity and the quality of life of dairy farmers. Throughout the year, we have also implemented various farmer empowerment initiatives to constantly support the upliftment of rural areas. Initiatives undertaken as part of our CSR programme: Enabled insurance coverage for farmers Conducted veterinary healthcare services Off ered fi nancial assistance to the needy Provisioned nutritious cattle feed cattle were treated 141,751 Farmers were benefi tted 60,178 Cattle health camps were conducted 2,288 39 Nurturing environmental sustainability / Fulfilling our social responsibility | Corporate Overview

Future roadmap Heritage Foods is guided by a clear roadmap that focuses on longterm growth, diversifi cation, technology and innovation, market expansion, and talent management. As a market leader in the dairy industry, we understand the importance of staying ahead of the curve and meeting our consumers’ changing needs. Our strategic initiatives are intended to capitalise on emerging trends and opportunities while leveraging our strengths. We are confi dent that by focusing on these key areas, we will be able to create long-term value for all of our stakeholders and maintain our market leadership in the coming years. We intend to increase milk procurement while also investing in villagelevel milk collection infrastructure, bulk coolers, and chilling centres. We are focused on increasing our value-added product share while providing nutrient-enriched products to consumers. We are leveraging our fl exible supply chain to expand into new geographical areas and expand our product portfolio. We aspire to be known as a leading manufacturer of healthy products nationwide. We intend to use technology to improve our cutting-edge facilities while focusing on quality control and product innovation. We strive to enhance stakeholder value creation by improving eff iciency across the value chain. By off ering fi nancial support to farmers and raising their socioeconomic standing, we aim to empower farmers through our CSR activities. Heritage Foods Limited | 31st Annual Report 2022-23 40

Best South Brand Award at the Pride of India Brand Awards 2022 Best Management Award by the Telangana Government Most Loved Brand award organized by Blinkit Brand Awards 2022 Awards and accolades 41 Future roadmap / Awards and accolades | Corporate Overview

Financial highlights Net Turnover (INR million) 24,823 FY19 26,811 FY20 24,070 FY21 26,429 FY22 32,087 FY 23 Net worth 8,050 FY19 4,623 FY20 5,938 FY21 6,605 FY22 7,367 FY 23 Profit Before Tax 1,287 FY19 724* FY20 1,962 FY21 1,353 FY22 893 FY 23 Gross fixed assets 5,551 FY19 6,318 FY20 7140 FY21 7376 FY22 8292 FY 23 EBITDA 1,924 FY19 1,402* FY20 2,565 FY21 1,873 FY22 1,449 FY 23 Net fixed assets 4,757 FY19 5,156 FY20 5563 FY21 5462 FY22 6011 FY 23 Profit After Tax 834 FY19 571* FY20 1452 FY21 1015 FY22 659 FY 23 * Before FVTPL (Standalone) Heritage Foods Limited | 31st Annual Report 2022-23 42

10 years financial highlights Particulars 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 Turnover 17,220 20,730 23,806 18,714 23,440 24,823 26,811 24,070 26,429 32,087 Other Income 50 70 66 37 72 111 83 84 103 113 Fair Value gain on Equity Securities - - - 2,468 3,954 1,311 2,945 - - - Total Income 17,270 20,800 23,871 21,219 27,466 26,245 29,839 24,154 26,532 32,200 EBITDA 987 881 1,365 1,490 1,333 1,924 (769) 2,565 1,873 1,449 Depreciation & Amortization 250 340 345 249 370 437 480 441 500 539 Interest 119 150 146 93 166 200 197 163 20 17 Loss due to changes in fair value of derivative liabilities - - - 385 3,870 1,311 5,116 48 - - Provision for Taxation 159 109 306 307 277 452 153 510 337 234 Profi t after Tax (PAT) 453 282 554 2,926 604 834 (1,600) 1,452 1,015 659 Cash Profi t/(Loss) 703 622 899 1,092 890 1,272 1,051 1,940 1,515 1,197 Proposed Dividend (%) 30 30 30 40 40 40 50 100 100 50 Proposed Dividend Amount (including tax on dividend) 81 84 84 112 112 112 116 232 232 232 Equity Share Capital 232 232 232 232 232 232 232 232 232 464 Reserves and Surplus 1,558 1,698 2,168 5,700 7,548 7,818 4,391 5,706 6,373 6,903 Net Worth 1,790 1,930 2,400 5,932 7,780 8,050 4,623 5,938 6,605 7,367 Gross Fixed Assets 4,196 4,623 5,184 3,050 4,632 5,551 6,318 7,140 7,376 8,292 Net Fixed Assets 2,715 2,807 3,120 2,874 4,247 4,757 5,156 5,563 5,462 6,011 Particulars 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 Earnings per share* (`) 9.90 6.16 12.11 31.98 6.60 9.12 (17.49) 15.87 11.10 7.19 Cash Earnings Per Share * (`) 15.37 13.60 19.65 11.93 9.73 13.90 11.49 21.20 16.56 13.07 Book Value Per Share (`) 19.29 20.80 25.86 63.92 83.84 86.75 49.82 63.99 71.17 79.39 Debt: Equity Ratio## 0.79:1 0.82:1 0.53:1 0.26:1 0.35:1 0.35:1 0.63:1 0.10:1 0.02:1 0.22:1 EBITDA/Turnover (%) 5.73 4.25 5.68 7.96 5.68 7.75 (2.87) 10.66 7.09 4.52 Net Profi t Margin (%) 2.63 1.36 2.33 15.64 2.58 3.36 (5.97) 6.03 3.84 2.05 RONW (%) 28.23 15.16 25.59 70.24 8.81 10.54 (25.25) 27.50 16.18 8.94 Key Indicators * EPS and Book Value per share has been adjusted for all the years on account of issue of rights issue during the year 2022-23 ## Debt includes non-current and current portion of long term borrowings, loans repayable on demand, deferred payment liabilities and lease liabilities. (Standalone) H in Million 43 Financial highlights / 10 years financial highlights | Corporate Overview

Corporate information * Key Managerial Personnel Board of Directors Mr. N Sri Vishnu Raju (DIN: 00025063) Non-Executive Independent Director Mr. Rajesh Thakur Ahuja (DIN: 00371406) Non-Executive Independent Director Mrs. Aparna Surabhi (DIN: 01641633) Non-Executive Independent Women Director Mr. M P Vijay Kumar (DIN: 05170323) Non-Executive Independent Director Mr. A V Girija Kumar (DIN : 02921377) Additional Director (Non-Executive Independent Director) (w.e.f. June 01, 2023) Dr. V Nagaraja Naidu (DIN: 00003730) Non-Executive Director Mrs. N Bhuvaneswari (DIN: 00003741) Vice Chairperson & Managing Director* Mrs. N Brahmani (DIN: 02338940) Executive Director* Senior Management Dr. M Sambasiva Rao President* Mr. Srideep M Kesavan Chief Executive Off icer* Mr. J Sambamurthy Chief Operating Off icer CA A Prabhakara Naidu (M.No:FCA 200974) Chief Financial Off icer* CS Umakanta Barik (M.No:FCS-6317) Company Secretary and Compliance Off icer* Board Committees Audit Committee Mrs. Aparna Surabhi, Chairperson Mr. N Sri Vishnu Raju Mr. Rajesh Thakur Ahuja Mr. M P Vijay Kumar Dr. V Nagaraja Naidu Nomination & Remuneration Committee Mr. N Sri Vishnu Raju, Chairperson Mr. Rajesh Thakur Ahuja Mrs. Aparna Surabhi Mr. M P Vijay Kumar Stakeholders Relationship Committee Dr. V Nagaraja Naidu, Chairperson Mr. N Sri Vishnu Raju Mr. Rajesh Thakur Ahuja Mrs. N Bhuvaneswari Risk Management Committee Mr. Rajesh Thakur Ahuja, Chairperson Mrs. Aparna Surabhi Mr. N Sri Vishnu Raju Mrs. N Bhuvaneswari CSR Committee Mr. Rajesh Thakur Ahuja, Chairperson Mr. N Sri Vishnu Raju Mrs. N Bhuvaneswari Management Committee Mrs. Aparna Surabhi, Chairperson Mr. N Sri Vishnu Raju Mr. M P Vijay Kumar Mrs. N Bhuvaneswari Rights Issue Committee Mrs. N Bhuvaneswari, Chairperson Mr. N Sri Vishnu Raju Mrs. Aparna Surabhi Mrs. N Brahmani Registered Office H. No. 8-2-293/82/A/1286 , Plot No. 1286, Road No-1 & 65, Jubilee Hills, Hyderabad - 500033, Telangana, India Tel: +91-40-23391221/2 CIN: L15209TG1992PLC014332 E-mail: hfl @heritagefoods.in www.heritagefoods.in Statutory Auditors Walker Chandiok & Co LLP Chartered Accountants (FRN: 001076N/N500013), Unit No – 1, 10th Floor, My Home Twitza, APIIC, Hyderabad Knowledge City, Raidurg (Panmaktha) Village, Serilingampally Mandal, Ranga Reddy District, Hyderabad – 500 081, Telangana Secretarial Auditor Savita Jyoti Associates Practicing Company Secretary #E-86, Sainikpuri Secunderabad- 500094 Telangana, India Internal Auditors J V S L & Associates, Chartered Accountants – Hyderabad Raju & Prasad, Chartered Accountants – Hyderabad (wef. April 01, 2023) E Phalguna Kumar & Co, Chartered Accountants – Tirupati Ch Veerababu & Co, Chartered Accountants – Guntur D H Rama Associates, Chartered Accountants – Ananthapur B V Rao & Co. LLP, Chartered Accountants – Vizag Rao & Shyam, Chartered Accountants – Vizag P Praveen & Associates Chartered Accountants – Nellore Khire Khandekar & Kirloskar, Chartered Accountants – Sangli M N S & Co, Chartered Accountants – Bengaluru R. Raghunathan, Chartered Accountants – Salem K. M. Mohandass & Co, Chartered Accountants – Chennai G M J & Co, Chartered Accountants – Mumbai Gupta Dua & Co, Chartered Accountants – New Delhi Bankers Consortium Bank of Baroda Union Bank of India ICICI Bank Limited Kotak Mahindra Bank Limited HDFC Bank Limited Listing BSE Limited, Mumbai National Stock Exchange of India Limited, Mumbai Registrar and Transfer Agents Kfi n Technologies Limited CIN: U72400TG2017PLC117649 Karvy Selenium Building, Tower B, Plot No. 31 & 32, Financial District, Gachibowli, Hyderabad - 500 032, Telangana Heritage Foods Limited | 31st Annual Report 2022-23 44

Notice to Members NOTICE is hereby given that the 31st Annual General Meeting (AGM) of the members of HERITAGE FOODS LIMITED will be held on Tuesday, August 22, 2023 at 10:00 a.m. (IST) through Video Conferencing (“VC”)/ Other Audio Visual Means (“OAVM”) to transact the businesses mentioned below. The venue of the meeting shall be deemed to be the Registered Office of the Company. ORDINARY BUSINESS: 1. To receive, consider and adopt: TheAuditedStandalone&ConsolidatedFinancial Statements of the Company for the Financial Year ended March 31, 2023, the Reports of the Board of Directors and Auditors’ thereon and in this regard, to consider and if thought fit, to pass, with or without modification(s), the following resolution as an Ordinary Resolution: “RESOLVED THAT the Audited Standalone and Consolidated Financial Statements of the Company for the financial year ended March 31, 2023 and the reports of the Board of Directors and Auditors’ thereon, as circulated to the members be and are hereby considered and adopted.” 2. Declaration of Dividend: To declare final dividend on equity shares at the rate of 50% i.e. ₹ 2.50/- per equity share of face value of ₹5/- (Five Rupees) each for the Financial Year ended March 31, 2023 and in this regard, to consider and if thought fit, to pass, with or without modification(s), the following resolution as an Ordinary Resolution: “RESOLVED THAT a final dividend at the rate of 50% i.e. ₹ 2.50/- per equity share of face value of ₹ 5/- each fully paid-up Equity Shares of the Company, as recommended by the Board of Directors be and is hereby approved for the financial year ended March 31, 2023.” 3. Re-appointment of Director Retiring by Rotation To appoint a Director in place of Mrs. N Brahmani (DIN: 02338940), who retires by rotation and being eligible, offers herself for re-appointment and in this regard, to consider and if thought fit, to pass, with or without modification(s), the following resolution as an Ordinary Resolution: “RESOLVED THAT in accordance with the provisions of Section 152 read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and other applicable provisions of the Companies Act, 2013 Mrs. N Brahmani (DIN: 02338940), who retires by rotation at this meeting and being eligible, offers herself for reappointment, be and is hereby appointed as a Director of the Company.” SPECIAL BUSINESS: 4. To appoint Mr. Angara Venkata Girija Kumar (DIN: 02921377) as a Non-Executive Independent Director of the company To consider and if thought fit, to pass with or without modification(s) the following resolution as SPECIAL RESOLUTION: “RESOLVED THAT pursuant to the provisions of Sections 149, 150 and 152 read with Schedule IV and other applicable provisions, if any, of the Companies Act, 2013 (“Act”) and the Companies (Appointment and Qualification of Directors) Rules, 2014(“Rules”) including any statutory modification(s) or re-enactment thereof for the time being in force and the applicable provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”), as amended, Mr. Angara Venkata Girija Kumar (DIN: 02921377), who was appointed as an Additional Director in the category of Non-Executive Independent Director of the company w.e.f. June 01, 2023, by the Board of Directors of the Company on the recommendation of Nomination and Remuneration Committee, pursuant to Section 161(1) of the Companies Act, 2013 and the Articles of Association of the Company and being eligible for appointment has submitted a declaration that he meets the criteria for independence as provided in Section 149(6) of theAct readwith the rules framed thereunder and Regulation 16(1)(b) of SEBI Listing Regulations and in respect of whom the Company has received notice in writing under Section 160(1) of the Act, from a member proposing his candidature for the office of an Independent Director, be and is hereby appointed as a Non- Executive Independent Director of the Company, to hold office for a term of 5 (five) consecutive years with effect from June 01, 2023 to May 31, 2028 and not liable to retire by rotation.” “RESOLVED FURTHER THAT the Board of Directors of the Company be and are hereby authorised to do all acts, deeds and things and to take all such steps as may be necessary, proper or expedient to give effect to this resolution and matters incidental consequential and connected therewith and to delegate all or any of its powers herein conferred to any Committee of Directors or Director(s) to give effect to the aforesaid resolution.” 5. Approval of request received from Mrs. Durga Ramakrishna N P, Person belonging to the Promoter Group for reclassification from “Promoter Group” category to “Public” category. To consider and if thought fit, to pass with or without modification(s), the following Resolution as an ORDINARY RESOLUTION: 45 Notice | Statutory Reports